finance ppt

1. OUTLINE OF THE PROJECT
In India, ‘small and medium enterprises’ (SME) is a generic term used to
describe small scale industrial (SSI) units and medium-scale industrial units.
The SME sector produces a wide range of industrial products such as food
products, beverage, tobacco and tobacco products, cotton textiles, wool, silk,
synthetic products, jute, hemp & jute products, wood & wood products,
furniture and fixtures, paper & paper products, printing publishing and allied
industries, machinery, machines, apparatus, appliances and electrical
machinery.SME sector also has a large number of service industries
The number of SSI working units (registered & unregistered) in India totaled
11.4 million in 2003-04—80.5 per cent

2. IMPORTANCE OF SME’S IN INDIA
 SSI is one of the significant segments of the Indian economy, contributing
about 7 per cent to the Indian GDP and providing employment to over 28
million people.
 The Indian SME segment’s current production value is almost Rs 816,000
crore.
 It contributes to around 40% of industrial production & exports.
 The SSI sector targets both domestic as well global markets.
 Globally, 99.7 per cent of all enterprises in the world are SME’s and the
balance 0.3 per cent are large-scale enterprises.
 According to the Ministry of Small Scale Industries, the number of
registered SSI units in India has increased from 11 million units in 2002-03
to 11.4 million units in 2003-04, up 3.6 per cent.

3. • The fixed investment grew by 5.04 per cent from Rs. 162,533
crore in 2002-03 to Rs. 170,726 crore in 2003-04.
• About 8,000 products are manufactured in the small-scale
sector.
• The industry groups—with a large share in the total
production of SSI’s such as textile products, wood, furniture,
paper, printing, and metal products—have recorded high
growth rates.
• The industry groups with a large share in exports are hosiery
and garments (29.0%), food products (21.4%) and, leather
products (18%).

4. NEED OF THE STUDY
 The market for international payments services is rapidly expanding as
SME’s search for a reliable platform that can serve their international
payments needs. Yet, even the largest global banks lack the local footprint
to deliver a truly global payment solutions.
 Many payment solutions, designed by the banking community, are aimed
at the large, multi-national companies but are not well suited for the SME
market.
 Bank model continues to push customer service through self-service
channels despite SME customer need for tailored, high touch service.
 Innovative payment solutions such as beneficiary management
are not currently supported by any global or regional banks.

5. SCOPE OF THE STUDY
 It aims at delivering quality, innovative and efficient products
and services to the SME customers through its professional
teams.
 The bank develops flexible lending policies that meet the
market needs. It also continues to streamline the approval
procedures to improve SME lending efficiency.
 It aims to become a first-class domestic bank with leading
performance in retail banking, credit card and SME, etc. as
well as advanced international standard management.
 The Bank provides its SME customers with an extensive
service platform in helping them solving financial problems
and improving efficiency of their capital utilization through
integration of service platforms of outlets, Internet banking
and phone banking,etc

6. OBJECTIVES
Primary objectives:
 To Study on recent economic slowdown on small and medium
enterprises customers and measures taken by banks.
Secondary Objectives:
 To identify the level of impact of global recession on
economy.
 To identify the share of the organization and frame measures
to overcome the recession.

7. RESEARCH METHODOLOGY
Research design:
A fundamental to the success of any project is research
design. It shows a plan of action to be carried out in
connection to the proposed research work.
There are three types of research design.
 Descriptive research design
 Exploratory research design
 Causal research design
In this study the researcher has planned to adopt Descriptive
research design

9. LIMITATION OF THE STUDY.
 It is difficult to develop formal method of observation and
recording.
 Due to lack of available time value of execution in the
organization. Sufficient discussion was not possible.
 The responses given by the respondents may be biased.
 It is difficult for the researchers to convince the respondents
during the data collection period.
Personal interviews are conducted for obtaining factual data
about the study.
 Most of the questions in the questionnaire are close ended
which did not reveal the information.

10. Descriptive research design:
This is undertaken in circumstances when the researcher is
interested in describing the characteristics of people of certain
group such as age , sex, education., a descriptive study is
necessary because the objective of the research is to answer
the who, what, when, where, and how of the subject under
investigation.
Sampling design:
Sampling area - INDIAN OVERSEAS BANK
Sample size - 70
customers.
Sampling technique - In this study, probability/random
sampling technique is adopted.
Sampling Method - Simple random sampling is used.

11. o Simple random sampling:
In this method, every element in the population
has a known and equal chance of being selected as a
sample. This sampling is best suited when the
generalizability of the findings to the whole
population is the main objective of the study.
Data collection technique:
Both primary and secondary data will be used for this
study
Methods of data collection:
► Primary data: is collected through survey technique
Questionnaire .

12.  Secondary data is collected from
Journals,
Internet,
Magazines
Company's Record
Data analysis:
Once the data are collected, the information will be coded and
appropriate data analytic techniques will be used to obtain
meaningful information from the collected data. It involves
editing, coding and tabulating the collected data.

13. The statistical tools used for data analysis are
 Percentage analysis
 Chi square test
 ANOVA
 Rank Correlation analysis

14. PRODUCT PROFILE
MSME ACT 2009
 The government of India introduced the “Micro, Small and
Medium enterprises act 2009” (MSME ACT 2009) which has
been notified on June16, 2009 in the gazette of India and has
come into effect from October 2009.
 The act defines Micro, Small and medium enterprises, in
both manufacturing and services sector.

15. In case of enterprises engaged in manufacture or
production of goods, it will be called a:
 Micro enterprise if it’s investment in plant & machinery
does not exceed Rs.25 Lakhs.
 Small enterprise if the same exceeds RS.25 Lakhs but
does not exceed Rs.5 Crore.
 Medium enterprise if the same exceeds Rs.5 Crore but
does not exceed Rs.10 Crore.

16. In case of enterprises engaged in providing services
in relation to any industry it will be called a:
 Micro enterprise If its investment in equipments does not
exceed Rs.10Lakhs.
 Small enterprises if same exceed Rs.10 Lakhs but do not
exceed Rs.2 Crore.
 Medium enterprise if the same exceeds Rs.2 Crore but does
not exceed Rs.5Crore.

17. COMPANY PROFILE
• Indian Overseas Bank (IOB) was founded on February 10th
1937, by Shri.M.Ct.M. Chidambaram Chettyar, a pioneer in
many fields - Banking, Insurance and Industry with the twin
objectives of specializing in foreign exchange business and
overseas banking.
• IOB had the unique distinction of commencing business on
10th February 1937 (on the inaugural day itself) in three
branches simultaneously - at Karaikudi and Chennai in India
and Rangoon in Burma (presently Myanmar) followed by a
branch in Penang.

18. • During the period, IOB expanded its domestic activities and
enlarged its international banking operations.
• As early as in 1957, the Bank established a training centre
which has now grown into a Staff College at Chennai with 9
training centre's all over the country.
• IOB was the first Bank to venture into consumer credit. It
introduced the popular Personal Loan scheme during this
period.
• In 1968, IOB established a full-fledged department to cater
exclusively to the needs of the Agriculture sector.IOB was one
of the 14 major banks that was nationalized in 1969.

19. • On the eve of Nationalization in 1969, IOB had 195 branches
in India with aggregate deposits of Rs. 67.70 Crs. and
Advances of Rs. 44.90 Crs.
• In the same year Bharat Overseas Bank Ltd was created in
India with 30% equity participation from IOB to take over
IOB’s branch at Bangkok in Thailand.
• The Bank setup a separate Computer Policy and Planning
Department (CPPD) to implement the programme of
computerization, to develop software packages on its own and
to impart training to staff members in this field.

20. • IOB got autonomous status during 1997-98.
IOB had the distinction of being the first Bank in Banking
Industry to obtain ISO 9001.
• Certification for its Computer Policy and Planning Department
from Det Norske Veritas (DNV), Netherlands in September
1999.
• This Certification covers Design, Development,
Implementation and Maintenance of software developed in-
house, procurement and supply of hardware and execution of
turnkey projects.

21. • IOB started STAR services in December 1999 for speedy
realization of outstation cheques. Now the Banks has 14
STARS centres and one Controlling Centre for providing this
service.
• Mobile banking under SMS technology implemented in
Ahmedabad and Baroda. Pilot run of Phase I of the Internet
Banking commenced covering 34 branches in 5 Metropolitan
centres.
• IOB was one among the first to join Reserve Bank of India’s
negotiated dealing system for security dialing online.

22. PERFORMANCE HIGHLIGHTS
Deposits: Total deposits grew from Rs.70205 crore as on
30th June 2007 to Rs, 85001 crore as on 30th June 2008
registering an increase of Rs.14796 crore and growth
percentage of 21.08%.
 Advances: Gross Advances increased from Rs. 48610 crore
as on 30th June 2007 to Rs.63419 crore as on 30th June 2008,
recording an increase of Rs 14809 crore and growth
percentage of 30.46%.
 Net profit: Net profit for Q1 of 2008-09 is at Rs,255.97 crore
and this figure is lower by Rs.12.52 crores when compared to
the net profit of Rs.268.49 crore booked during Q1 of
2008-2009.

23.  Total income: Total income for Q1 of 2008-09 is at Rs.
2186.83. Crore while the same was at Rs.1907.79 crore
for Q1 of 2008-09. The increase in terms of percentage works
out to 14.63%. Interest Income has gone up to Rs.2217.08
crore from 1846.21 crore recording a percentage increase of
20.09%. Other income has gone down due to loss on sale and
category transfer loss on investments.
 Total expenses: Total expense for Q1 of 2008-09 is at
Rs.1945.64 crore and the same for the corresponding quarter
last year was at Rs.1498.62 crore, recording a percentage
increase of 29.83%. The interest expenses have gone up from
Rs.1137.20 crore to Rs.1490.91 crore with percentage increase
of 31.10%.

24.  Net interest margin: NIM was at 3.71% for the quarter
ended 30th June 2008 and the ratio is at 3.12% for the quarter
ended 30th June 2009.
 Total capital funds: Total capital funds of the bank increased
to Rs.8170 crore from Rs.7324 crores over one year period.
 Book value per share: Book value per share of the bank has
gone up to Rs.91.40 from Rs.76.12 over one year period

25. INDUSTRY PROFILE.
Indian Banking profile:
 Without a sound and effective banking system in India it
cannot have a healthy economy.
 The banking system of India should not only be hassle free but
it should be able to meet new challenges posed by the
technology and any other external and internal.
 In Indian banking system has reached even to remote corners
of the country.
 This is one of the main reason of India's growth process.
 The government regular policy for Indian bank since 1969 has
paid rich dividends with the nationalization of 14th major
private banks of India.

26.  The first bank in India, though conservative was established in
1786.
 The journey of indian banking system can be segregated into
three distinct phases,
• PHASE-1 Early phase from 1786 to 1969 of indian banks.
• PHASE-2 Nationalization of Indian banking and up to 1991
prior to indian banking system sector reforms.
• PHASE-3 New phase of indian banking system with the
advent of indian financial & banking sector reforms after
1991.

27. Vision of Banks:
• The banking scenario in India has already gained all the
momentum, with the domestic and international banks
gathering pace.
• The focus of all banks in India has shifted their approach to
cost determined by revenue minus profit.
• To survive in the long run, it is essential to focus on cost
saving.
• Now banks shifted their approach to the profit model, which
meant that banks aimed at higher profit maximization.

28. Future challenges of banks in India.
 The Indian banks are hopeful of becoming a global brand as
they are the major source of financial sector revenue and profit
growth.
 As a result of this, the profit for the indian banking industry is
also not far behind.
 The profit pool indian banking industry is probable to augment
from 2010 to 2015.
 The increase in the number of private banks, the domestic
credit market of India is established to grow.

29. REVIEW OF LITERATURE
1.Growth of Small Scale Industries in India
AUTHOR: JAILAL SAAW
JOURNAL: Industry and Trade, April – 2005
The expected growth was not there because of lot of root causes
to sickness and underdevelopment in the SME sector. This
article discussed about the slow growth rate of SMEs, dues to
several problems. Through my study I focused on the one
problem that is financial problems faced by the SME segment.
I concentrated on the credit facilities offered by the
governmental agencies as well as the commercial banks.

30. 2. SME’s Main Bank Choice And Organizational Structure
Author:hiba EL HAJJ CHEHADE1 And
Ludovicvigneron
Source: Economic Times, page no: 2 Nov 2009
Abstract:
According to this, small banks that often have a decentralized
structure are more attractive when customers are opaque ones.
We propose to test this affirmation using a panel of 6.258
couples (main bank/SME) working in the French market. The
results of our several regressions show the existence of a
strong tie between the firm’s informational opacity and the
choice of a decentralized bank. Moreover, opaque firms are
more likely to be credit constrained if they choose a
hierarchical bank as their main bank.

31. 3. Comprehensive Legislation Needed
AUTHOR: Patnaik, S.M.
Article: Economic Times Source: page no: 10 DEC 2008.
Abstract:
In the year 2004 the author of this article expressed his
grief for an enactment to safe guard the SME sector. The
Government of India in the year 2006 came with the special
law for the protection of SME sector. Really it is a welcome
gesture for the safekeeping the SMEs. In my thesis I
discussed the intricacies and the implementation of the act
by the nodal agencies for the promotion of the SMEs

32. 4. Service Quality Provided By Public Sector Banks to SME
Customers: An Empirical Study in the Indian Context
AUTHOR: Popil D.N Rao
Publisher: King Universities. Source: vol -25 June 1, 2009.
Abstract:
In banking sector, the quality of customer service plays an
important role, particularly in the context of growing
competition and sustained business growth. The study is an
attempt to ascertain the service quality provided by Public
sector Banks to Small & Medium Enterprises which play a key
role in India’s economy. The major findings of the study have
been that majority of the respondents revealed that the credit
flow to SMEs sector is not sufficient and the Government will
have to initiate necessary steps for making the required funds
available easily on convenient terms. Delay in loan
application processing due to unhelpful nature of the staff
members, as claimed by the majority of the respondents..

33. 5. Banks Asked To Stem Industrial Sickness
AUTHOR: SAHNEY. M
Article: INDUSTRIAL INDIA Source: VOL 36, 12 DEC 2005.
Abstract:
Through this article the author tries to express the need for
banks intervention in the promotion of the SMEs. The officials
of the banks in India are belong to middle class families and
unaware of the industrial promotion and its need. Mere advice
to the bankers is not helpful. So for that reason Srimathi Indira
Gandhi Nationalized all private banks for the development of
agricultural sector in 1971.The MSME act 2006, instigates the
banks to provide the credit facilities without any hesitation to
the SMEs

34. 6. Financing for priority sectors.
AUTHOR: Nambiar, Asst.Manager.
Review: S.B.I monthly dec16, 2007
Abstract:
The article on the above topic paved the way for the thinking
strategy for the financing the small scale and medium scale
industries by the bank officers. The government of India
through its industrial policy clearly stated that the commercial
banks should give priority treatment to the SMEs. The nature
of the banking officials also discussed in the article. But that is
not sufficient to promote the SME sector because the sector
was totally neglected for the last several decades due to
invention. By enacting the MSME act, 2006, the government
of India clearly indicated the signal to the banking.

35. 7. Reviving Sick Units
AUTHOR: Ram Chandra K.S.
Article: “FINANCIAL EXPRESS” Source: page no:5 OCT 9,
2001
Abstract:
The above article discussed the reviving the sick SMEs in
various aspects, like providing technology, management
training, skilled labor, export promotion and giving finance.
The root cause for all the above problems is the financial
problem. The financial institution should provide sufficient
amount at an easy disbursal system to promote the SMEs. The
topic which I am preparing focused more on the credit facility
awareness and availability of several schemes for SMEs.

36. 8. Customer relationship management in the banking sector:
impact of internet usage by the SME customer
Author: Jham, Vim Source: International Journal of Business
Innovation and Research, Volume 4, Numbers 1-2, 30
November 2009, pp. 93-102(10) Publisher: Inderscience
Publishers
Abstract: Banks in India have succeeded in promoting new
services to its SME customers. Based on extant literature on
bank marketing, a questionnaire was designed. Then, in a
large-scale survey by means of personal and telephone
interviews, data was obtained from bank SME customers. This
paper focuses on the adoption of internet banking by existing
banks SME customers through an investigation of the factors
that influence SME customer's acceptance of internet banking
service. The questionnaire was designed from the literature
review. It included 29 variables which will help in enhancing
the satisfaction of the SME customer. The banks chosen for
the purpose of the study were the ones who have strong retail
presence and offer comprehensive range of information to the
customer.

37. Questionnaire
DEMOGRAPHIC DETAILS.
1. Name of the Respondents ______________.
2. Gender
(d) Male (b) Female
3. Age of the Respondent
(a) 25-35 yrs (b) 36- 46 yrs
(c) 46-56 yrs (d) above 56yrs.
4. Education Qualification.
(a) Diploma/ITI (b) UG
(c)PG (d) Any other professional course.
5. Martial Status
(a) Male (b) Female
6. Company Name ___________________________.

38. 7. Experience in the particular field
(a) 0-3yrs (b) 3-5yrs
(c) 5-7yrs (d) Above 7yrs.
8. Nature of Business ______________.
9. Annual Turnover ______________.
Other information
10. Are you satisfy with the services offered by INDIAN
OVERSEAS BANK?
(i) Yes (b) No.
11. How long you have account in INDIAN OVERSEAS
BANK?
(a) 0-2 yrs (b) 2-4 yrs
(c) 4-5 yrs (d) above 5yrs.

39. 12. What is your opinion on the Rate of Interest charged by
INDIAN OVERSEAS
BANK?
(a) High (b) Reasonable c) Low.
13. How the SME customers became aware of SMEs loans?
(a) Through Business Associates (b)ThroughNeighborhood
(c) Word of mouth (d) Personal enquiry
(e) Advertisement in TV/ News Paper. (f) If any other
mention_____________.
14. Do you receive sufficient information whenever overdraft
services charges are change?
(a) Yes (b) No

40. 15. In which mode mostly used for conducting business
transaction between Banks & SME customers?
(a) Personal visit by the customers (b) Computer/Internet.
(c) If any mention ____________.
16. Which is the most common means of receiving and making
payment for SME customers in INDIAN OVERSEAS
BANK?
(a) Cheque (b) Credit card
(c) Account transfers (d) On-line
(e) If others mention __________.
17. What are the problems faced by SME customers in INDIAN
OVERSEAS BANK?
(a) Long ‘Q’ (b) High cost of exchanging money at
banks
(c) Problem in converting the Accounting transaction system too
late
(d) Token system (e) if any plz mention ____________

41. 18. Whether SME customers have Business Account with other
banks?
(a) Yes (b) No
If yes why_____________________.
19. What are the services provide by INDIAN OVERSEAS
BANK to the customers?
(a) Commercial Mortgage (b) Business Loan
(c) Business current A/C (d) Business charging cards
20. What are the other Value Added services provided by
INDIAN OVERSEAS BANK to the Customers?
(a) Insurance (b) Personal A/C
(c) Over draft facility (d) Cash credit facility
(e) If any others plz mention______________________.

42. 21. Do you agree with the statement?
“Does the majority of SME customers are having a long lasting
relationship with
INDIAN OVERSEAS BANK”
(a) Strongly agree (b) Agree
(c) Neutral (d) Dis agree
(e) Strongly dis agree

43. 22. The Level of Satisfaction of SME customers with
3. Knowledge about business & requirement to customers.
4. CRM- in handling of complaints & grievance.
5. Availability of funding.
(a) Highly Satisfied (b) satisfied
(C) neutrally satisfied (d) less satisfied
(e) dis satisfied

44. 23. Due to economic slow down. What are the problems faced by
the customers?
(a) Shortage of money. (b) Allocation of funds.
(c) Credit limit (d) if any plz
specify________________________________.
24. What are the problems faced by Bank. Due to economic slow
down?
Mention the reason
___________________________________.
25. What are the measures taken by INDIAN OVERSEAS
BANK to retaining the existing as well as new customers?
_____________________________________.

45. LIMITATION OF THE STUDY.
 It is difficult to develop formal method of observation and
recording.
 Due to lack of available time value of execution in the
organization. Sufficient discussion was not possible.
 The responses given by the respondents may be biased.
 It is difficult for the researchers to convince the respondents
during the data collection period.
Personal interviews are conducted for obtaining factual data
about the study.
 Most of the questions in the questionnaire are close ended
which did not reveal the information.