Professional Documents
Culture Documents
INTRODUCTION
Bank of India
member
of SWIFT (Society
for
Worldwide
Inter
Bank
Financial
Primary objective
To study the overall functions of the company and to understand the duties and
responsibilities performed by employee at different levels in the organization.
Secondary objective
To understand the history, growth profile, structure & future plans of the organization.
To understand the hierarchical structure followed in the organization
To conduct a SWOT analysis.
To determine the functions & procedure of various departments in the organization
To interact with the manager at different levels & to know their responsibilities &
routine activities.
To observe at their work place & to interact with them
1.4 CHAPTERIZATION
Chapter 1
The first chapter is the introductory chapter and includes the objectives of the study, Scope of
study, and chapter scheme.
Chapter 2
The second chapter is about the theoretical background
Chapter3
The third chapter is about industrial profile. This chapter includes the world, Indian & state
scenario of the industry.
Chapter 4
The third chapter is about the company profile and this includes history of the company
stating the objectives and developmental stages since inception, date of inception, ownership
status, capital structure, competitors, organization. This chapter also includes departmental
details also each departments structure, functions, procedure, duties and responsibilities,
policies and programmes.
Chapter5
The fifth chapter refers to SWOT analysis i.e., strength, weakness, threats and opportunities
of the organization also findings, recommendation and conclusion is included.
CHAPTER 2
LITRETURE REVIEW
Organizing
Organizing is the process of identifying and groping the work to be performed, defining
responsibility, delegating authority, establishing relationships, for the purpose of enabling
people to work most effectively together in accomplishing objectives
- Lousis. A. Allen
The act of creating activities and assigning suitable workers to complete these activities
successfully, efficiently and effectively. It requires a formal structure of authority and the
direction and flow of such authority through which work sub division are defined, arranged
and coordinated so that each part relates to other part in a united and coherent manner so as to
attain the prescribed objectives. it follows, therefore that the function of organizing is
concerned with:
1. Identifying the tasks that must be performed and grouping them whenever necessary
2. Assigning tasks to the personnel while defining their authority and responsibility.
2.2 Organization
An organization is the systematic arrangement of people working together in a structural way
to accomplish some specific purpose. Three common characteristics of an organization
People
Structure
9
Purpose
There are 2 concepts of organization
Static concept
Dynamic concept
Static concept:- under static concept the term organization is used as a structure, an entity
or a network of specified relationship. In this sense, organization is a group of people bound
together in a formal relationship to achieve common objectives. It lays emphasis on position
and not on individuals.
Dynamic concept:- under dynamic concept the term organization is used as a process of
an organizing activity. In this sense, organization is a process of organizing work, people and
the systems. It is concerned with the process of determining activities which may be
necessary for achieving an objective and arranging them in suitable groups so as to be
assigned to individuals. It considers organization as an open adoptive system and not as a
closed system. Dynamic concept lays emphasis on individuals and considers organization as a
continues process.
2.3 Departmentalization
It is the first step in the organizing process. Departmentalization refers to the process of
grouping activities into departments. There are different methods of departmentalization
1. Functional departmentalization
10
In functional departmentalization, departments are segregated i.e. separated from each other
based on functions or tasks they perform.
Examples of functional departmentalization include; production department, finance
department, marketing department, human resource (HR) department, etc. Here, all activities,
which are directly or indirectly connected with production are grouped together to make a
production department.
Fig no: 1
2. Process departmentalization
11
Fig no: 2
3. Product departmentalization
Fig no: 3
4. Geographic departmentalization
For example, a large company may operate globally through its different zonal departments
established on a country basis. In a similar context, a small business or firm may operate only
within city boundaries through its offices established in east zone, west zone, north zone and
south zone of the city
Fig no: 4
5. Customer departmentalization
In customer departmentalization, departments are separated from each other based on the
types or groups of customers to be handled or dealt with.
For example, customers can be classified under types such as, international or foreign
customers, inland or domestic customers, bulk purchasing or wholesale customers, retail
customers, etc.
Each group of customers needs different tactics and strategies to handle them better. Hence,
an appropriate customer departmentalization serves this purpose
13
Fig no: 5
6. Combined departmentalization
.
Fig no: 6
7. Time departmentalization
14
In time departmentalization, departments are separated based on the division of their working
time or job shifts.
For an example, departments can be made based on night shift, morning or regular shift,
evening shift, etc.
This method of departmentalization is generally seen among those organizations who render
24-hours emergency and/or essential public services for 365 days a year. Examples of such
organizations include; hospitals, hotels, airports, police, security, and so on.
Departmentalization done on a basis of division of work time is depicted in the following
image.
Fig no: 7
8. Number departmentalization
In number departmentalization, separate departments are made after analyzing and judging
the maximum limit up to which number of persons can be managed or educated or supervised
or taken care of. This method of departmentalization is generally used in schools and colleges
for making division of classes.
For example, students having numbers from 1 to 50 are made to sit in A division of their class
and so on. Military forces also use this method.
15
Departmentalization
by
numbers
is
depicted
in
the
image
Fig no: 8
Grouping of activities
Delegation of authority
Co-ordination of activity
Fig no: 9
16
given
below.111
departmental managers to the lower subordinates. The departmental heads are independent of
each other and enjoy equal status.
Functional Organization.
In this type of organization the personnel an their work are organized on the basis of the same
type of work of activities. All works of the same type are grouped together and brought under
one department managed by an executive who is an expert. Thus there are separate functional
departments, for the major functions of the business viz., engineering or production,
purchase, sales, finance personnel etc. Each department performs its specialized function for
the entire organization. For example, the purchase department deals with purchases on behalf
of the entire organization, and so on. Now-a-days almost all business concerns usually follow
some sort of functional plan to carry out the primary functions of business. However, it is the
rare to find a pure functional organization and there is always an element of line organization.
needs. The Line officers make the decisions and issue instructions to subordinates, the staff
officers have no authority to issue instructions. But in their decision-making function, the
Line officers receive advice and guidance from the Staff Officers.
Committee Organization.
A committee means a body of persons entrusted with discharging some assigned functions
collectively as a group. Committees may be permanent (standing) or temporary (adhoc)
bodies. Committee is found to exist in different areas and levels of an organizational
structure, in both business and non-business institutions. Because of its advantages, the
committees form of organization is very often preferred by different concerns. However, a
committee organization is rarely found in its pure form, it is usually found in addition to a
line and staff organization. The committee itself may be organized with line authority, it is
usually vested with powers of decision making and its execution. The committee then
assumes command authority in the organization and function as a group executive or 'plural
executive'. Where it is organized on staff authority it has merely an advisory function. The
example of a group executive is the board of a business company where the various
committees of directors (both standing and adoc) as well as other committees at lower levels
of organization are staff or advisory committees. The example committees at lower levels of
organization are staff or advisory committees. The example of a group executive of 'plural
executive' where it is organized on staff authority, it has merely an advisory functions
2.6 Authority
In context of a business organization, authority can be defined as the power and right of a
person to use and allocate the resources efficiently, to take decisions and to give orders so as
to achieve the organizational objectives. Authority must be well- defined. All people who
have the authority should know what is the scope of their authority is and they shouldnt
misutilize it. Authority is the right to give commands, orders and get the things done. The top
level management has greatest authority. Authority always flows from top to bottom. It
explains how a superior gets work done from his subordinate by clearly explaining what is
expected of him and how he should go about it. Authority should be accompanied with an
19
equal amount of responsibility. Delegating the authority to someone else doesnt imply
escaping from accountability. Accountability still rest with the person having the utmost
authority.
20
3. Creating Responsibility and Accountability - The delegation process does not end
once powers are granted to the subordinates. They at the same time have to be
obligatory towards the duties assigned to them. Responsibility is said to be the factor
or obligation of an individual to carry out his duties in best of his ability as per the
directions of superior. Responsibility is very important. Therefore, it is that which
gives effectiveness to authority. At the same time, responsibility is absolute and
cannot be shifted. Accountability, on the others hand, is the obligation of the
individual to carry out his duties as per the standards of performance. Therefore, it is
said that authority is delegated, responsibility is created and accountability is
imposed. Accountability arises out of responsibility and responsibility arises out of
authority. Therefore, it becomes important that with every authority position an equal
and opposite responsibility should be attached.
Therefore every manager i.e., the delegator has to follow a system to finish up the delegation
process. Equally important is the delegates role which means his responsibility and
accountability is attached with the authority over to here
2.8 Centralization
Is said to be a process where the concentration of decision making is in a few hands. All the
important decision and actions at the lower level, all subjects and actions at the lower level
are subject to the approval of top management. According to Allen, Centralization is the
systematic and consistent reservation of authority at central points in the organization
2.9 Decentralization
Is a systematic delegation of authority at all levels of management and in all of the
organization. In a decentralization concern, authority in retained by the top management for
taking major decisions and framing policies concerning the whole concern. Rest of the
authority may be delegated to the middle level and lower level of management.
21
22
CHAPTER 3
INDUSTRY PROFILE
3.1 INTRODUCTION
A bank is a commercial or state institution that provides financial services, including issuing
money in form of coins, banknotes or debit cards, receiving deposits of money, lending
money and processing transactions. A commercial bank accepts deposits from customers and
in turn makes loans based on those deposits. Some banks (called Banks of issue) issue
banknotes as legal tender. Many banks offer ancillary financial services to make additional
profit. For example: selling insurance products, investment products or stock broking. Most
banks also rent safe deposit boxes in their vault. Currently in most jurisdictions, commercial
banks are regulated and require permission to operate. Operational authority is granted by
bank regulatory authorities and provides rights to conduct the most fundamental banking
services such as accepting deposits and making loans.
A commercial bank is usually defined as an institution that both accepts deposits and makes
loans; there are also financial institutions that provide selected banking services without
meeting the legal definition of a bank. Banks have a long history, and have influenced
economies and politics for centuries. In history, the primary purpose of a bank was to provide
liquidity to trading companies. Banks advanced funds to allow businesses to purchase
23
inventory, and collected those funds back with interest when the goods were sold. For
centuries, the banking industry only dealt with businesses, not consumers.
Commercial lending today is a very intense activity, with banks carefully analysing the
financial condition of its business clients to determine the level of risk in each loan
transaction. Banking services have expanded to include services directed at individuals and
risks in these much smaller transactions are pooled. A bank generates a profit from the
differential between what level of interest it pays for deposits and other sources of funds, and
what level of interest it charges in its lending activities. This difference is referred to as the
spread between the cost of funds and the loan interest rate.
Historically, profitability from lending activities has been cyclic and dependent on the needs
and strengths of loan customers. In recent history, investors have demanded a more stable
revenue stream and banks have therefore placed more emphasis on transaction fees, primarily
loan fees but also including service charges on array of deposit activities and ancillary
services (international banking, foreign exchange, insurance, investments, wire transfers,
etc.). However, lending activities still provide the bulk of a commercial bank's income.
24
The development of banking spread through Europe also and a number of important
innovations took place in Amsterdam during the Dutch Republic in the 16th century and in
London in the 17th century. During the 20th century, developments in telecommunications
and computing resulting in major changes to the way banks operated and allowed them to
dramatically increase in size and geographic spread. The Late-2000s financial crisis saw
significant number of bank failures, including some of the world's largest banks, and much
debate about bank regulation.
still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company
that issues stock and requires shareholders to be held liable for the company's debt) It was not
the first though. That honour belongs to the Bank of Upper India, which was established in
1863, and which survived until 1913, when it failed, with some of its assets and liabilities
being transferred to the Alliance Bank of Simla.
Foreign banks too started to app, particularly in Calcutta, in the 1860s. The Comptoire
d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself
in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade
of the British Empire, and so became a banking centres.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in
1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established
in Lahore in 1895, which has survived to the present and is now one of the largest banks in
India.
Around the turn of the 20th Century, the Indian economy was passing through a relative
period of stability. Around five decades had elapsed since the Indian Mutiny, and the social,
industrial and other infrastructure had improved. Indians had established small banks, most of
which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks
and a number of Indian joint stock banks. All these banks operated in different segments of
the economy. The exchange banks, mostly owned by Europeans, concentrated on financing
foreign trade. Indian joint stock banks were generally undercapitalized and lacked the
experience and maturity to compete with the presidency and exchange banks. This
segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the
times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into
separate and cumbersome compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by
the Swadeshi movement. The Swadeshi movement inspired local businessmen and political
figures to found banks of and for the Indian community. A number of banks established then
26
have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of
Baroda, Canara Bank and Central Bank of India.
The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South
Canara ( South Kanara ) district. Four nationalised banks started in this district and also a
leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle
of Indian Banking".
During the First World War (19141918) through the end of the Second World War (1939
1945), and two years thereafter until the independence of India were challenging for Indian
banking. The years of the First World War were turbulent, and it took its toll with banks
simply collapsing despite the Indian economy gaining indirect boost due to war-related
economic activities.
At least 94 banks in India failed between 1913 and 1918 as indicated in the following table:
Years
Number of banks
that failed
Authorised capital
(Rs. Lakh)
Paid-up Capital
(Rs. Lakh)
1913
12
274
35
1914
42
710
109
1915
11
56
1916
13
231
1917
76
25
1918
209
Table no:1
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralyzing banking activities for months. India's independence marked the end of a regime of
theLaissez-faire for the Indian banking. The Government of India initiated measures to play
an active role in the economic life of the nation, and the Industrial Policy Resolution adopted
by the government in 1948 envisaged a mixed economy. This resulted into greater
involvement of the state in different segments of the economy including banking and finance.
The major steps to regulate banking included:
27
The Reserve Bank of India, India's central banking authority, was established in April
1934, but was nationalized on January 1, 1949 under the terms of the Reserve Bank of
India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).[1]
In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of India (RBI) "to regulate, control, and inspect the banks in India".
The Banking Regulation Act also provided that no new bank or branch of an existing
bank could be opened without a license from the SBI, and no two banks could have
common directors.
3.4 NATIONALISATION
28
Fig No:10
Banks Nationalisation in India: Newspaper Clipping, Times of India, July 20, 1969
Despite the provisions, control and regulations of Reserve Bank of India, banks in India
except the State Bank of India or SBI, continued to be owned and operated by private
persons. By the 1960s, the Indian banking industry had become an important tool to facilitate
the development of the Indian economy. At the same time, it had emerged as a large
employer, and a debate had ensued about the nationalization of the banking industry. Indira
Gandhi, then Prime Minister of India, expressed the intention of the Government of India in
the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts
on Bank Nationalisation."The meeting received the paper with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an ordinance
('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969'))
and nationalised the 14 largest commercial banks with effect from the midnight of July 19,
1969. These banks contained 85 percent of bank deposits in the country. Jayaprakash
Narayan, a national leader of India, described the step as a "masterstroke of political
sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking
Companies (Acquisition and Transfer of Undertaking) Bill, and it received the
presidential approval on 9 August 1969.
A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery.
With the second dose of nationalization, the Government of India controlled around 91% of
the banking business of India. Later on, in the year 1993, the government merged New Bank
of India with Punjab National Bank. It was the only merger between nationalized banks and
resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until
the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth
rate of the Indian economy.
3.5 LIBERALISATION
29
In the early 1990s, the then Narasimha Rao government embarked on a policy
of liberalization, licensing a small number of private banks. These came to be known as New
Generation tech-savvy banks, and included Global Trust Bank (the first of such new
generation banks to be set up), which later amalgamated with Oriental Bank of
Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along
with the rapid growth in the economy of India, revitalized the banking sector in India, which
has seen rapid growth with strong contribution from all the three sectors of banks, namely,
government banks, private banks and foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given
voting rights which could exceed the present cap of 10%, at present it has gone up to 74%
with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were
used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new
wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.
All this led to the retail boom in India. People not just demanded more from their banks but
also received more.
Currently (2010), banking in India is generally fairly mature in terms of supply, product range
and reach-even though reach in rural India still remains a challenge for the private sector and
foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered
to have clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body, with minimal
pressure from the government. The stated policy of the Bank on the Indian Rupee is to
manage volatility but without any fixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some time-especially
in its services sector-the demand for banking services, especially retail banking, mortgages
and investment services are expected to be strong. One may also expect M&as, takeovers,
and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced norms
in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by
them.
30
In recent years critics have charged that the non-government owned banks are too aggressive
in their loan recovery efforts in connection with housing, vehicle and personal loans. There
are press reports that the banks' loan recovery efforts have driven defaulting borrowers to
suicide.
3.6 Adoption of banking technology
The IT revolution had a great impact in the Indian banking system. The use of computers had
led to introduction of online banking in India. The use of the modern innovation and
computerisation of the banking sector of India has increased many folds after the economic
liberalisation of 1991 as the country's banking sector has been exposed to the world's market.
The Indian banks were finding it difficult to compete with the international banks in terms of
the customer service without the use of the information technology and computers.
Fig No:11
Number of branches of scheduled banks of India as of March 2005
The RBI in 1984 formed Committee on Mechanisation in the Banking Industry (1984) whose
chairman was Dr C Rangarajan, Deputy Governor, Reserve Bank of India. The major
recommendations of this committee were introducing MICR Technology in all the banks in
the metropolis in India. This provided use of standardized cheque forms and encoders.
In 1988, the RBI set up Committee on Computerisation in Banks (1988)headed by Dr. C.R.
Rangarajan which emphasized that settlement operation must be computerized in the clearing
houses of RBI in Bhubaneswar, Guwahati, Jaipur, Patna and Thiruvananthapuram. It further
stated that there should be National Clearing of inter-city cheques at Kolkata, Mumbai, Delhi,
Chennai and MICR should be made Operational. It also focused on computerisation of
branches and increasing connectivity among branches through computers. It also suggested
31
modalities for implementing on-line banking. The committee submitted its reports in 1989
and computerisation began form 1993 with the settlement between IBA and bank employees'
association.
In 1994, Committee on Technology Issues relating to Payments System, Cheque Clearing and
Securities Settlement in the Banking Industry (1994) was set up with chairman Shri WS Sara,
Executive Director, Reserve Bank of India. It emphasized on Electronic Funds Transfer
(EFT) system, with the BANKNET communications network as its carrier. It also said that
MICR clearing should be set up in all branches of all banks with more than 100 branches.
Committee for proposing Legislation on Electronic Funds Transfer and other Electronic
Payments (1995) emphasized on EFT system. Electronic banking refers to DOING
BANKING by using technologies like computers, internet and networking, MICR, EFT so as
to increase efficiency, quick service, productivity and transparency in the transaction.
Fig no:12
Number of ATMs of different Scheduled Commercial Banks of India as on end March 2005
Apart from the above mentioned innovations the banks have been selling the third party
products like Mutual Funds, insurances to its clients. Total numbers of ATMs installed in
India by various banks as on end March 2005 is 17,642.The New Private Sector Banks in
India is having the largest numbers of ATMs which is fall off site ATM is highest for the SBI
and its subsidiaries and then it is followed by New Private Banks, Nationalised banks and
foreign banks. While on site is highest for the Nationalised banks of India.
32
BANK GROUP
NATIONALISED BANKS
STATE BANK OF INDIA
OLD PRIVATE SECTOR
BANKS
NEW PRIVATE SECTOR
BANKS
FOREIGN BANKS
ON
NUMBER OF
SITE
BRANCHES
ATM
ATM
33627
13661
3205
1548
1567
3672
4772
5220
4511
800
441
1241
1685
1883
3729
5612
242
218
579
797
Table no:2
33
Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain
sum of money is deposited in the bank for a specified time period with a fixed rate of interest.
The rate of interest for Bank Fixed Deposits depends on the maturity period. It is higher in
case of longer maturity period. There is great flexibility in maturity period and it ranges from
34
15days to 5 years.
Current Account is primarily meant for businessmen, firms, companies, and public
enterprises etc. that have numerous daily banking transactions. Current Accounts are cheque
operated accounts meant neither for the purpose of earning interest nor for the purpose of
savings but only for convenience of business hence they are non-interest bearing accounts
iii) Demat Account
Demat refers to a dematerialised account. Demat account is just like a bank account where
actual money is replaced by shares. Just as a bank account is required if we want to save
money or make cheque payments, we need to open a Demat account in order to buy or sell
shares.
iv) Recurring Bank Deposits
Under a Recurring Deposit account (RD account), a specific amount is invested in bank on
monthly basis for a fixed rate of return. The deposit has a fixed tenure, at the end of which the
principal sum as well as the interest earned during that period is returned to the investor.
v) Reserve Bank of India
The Reserve Bank of India was established on April 1, 1935 in accordance with the
provisions of the Reserve Bank of India Act, 1934. Though initially RBI was privately
owned, it was nationalized in 1949. Its central office is in Mumbai where the Governor of
RBI sits.
vi) Savings Bank Account
Savings Bank Accounts are meant to promote the habit of saving among the citizens while
allowing them to use their funds when required. The main advantage of Savings Bank
Account is its high liquidity and safety.
The Senior Citizen Saving Scheme 2004 had been introduced by the Government of India for
the benefit of senior citizens who have crossed the age of 60 years. However, under some
circumstances the people above 55 years of age are also eligible to enjoy the benefits of this
scheme.
viii) Foreign Banks in India
Foreign banks have brought latest technology and latest banking practices in India. They have
helped made Indian Banking system more competitive and efficient. Government has come
up with a road map for expansion of foreign banks in India.
ix) Nationalised Banks
Nationalised banks dominate the banking system in India. The history of nationalised banks
in India dates back to mid-20th century, when Imperial Bank of India was nationalised (under
the SBI Act of 1955) and re-christened as State Bank of India (SBI) in July 1955.
x) Private Banks in India
initially all the banks in India were private banks, which were founded in the preindependence era to cater to the banking needs of the people. In 1921, three major banks i.e.
Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Bank of
India.
36
Nationalised banks dominate the banking system in India. The history of nationalised banks
in India dates back to mid-20th century, when Imperial Bank of India was nationalised (under
the SBI Act of 1955) and re-christened as State Bank of India (SBI) in July 1955. Then on
19th July 1960, its seven subsidiaries were also nationalised with deposits over 200 crores.
These subsidiaries of SBI were State Bank of Bikaner and Jaipur (SBBJ), State Bank of
Hyderabad (SBH), State Bank of Indore (SBIR), State Bank of Mysore (SBM), State Bank of
Patiala (SBP), State Bank of Saurashtra (SBS), and State Bank of Travancore (SBT).
However, the major nationalisation of banks happened in 1969 by the then-Prime Minister
Indira Gandhi. The major objective behind nationalisation was to spread banking
infrastructure in rural areas and make cheap finance available to Indian farmers. The
nationalised 14 major commercial banks were Allahabad Bank, Andhra Bank, Bank of
Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India,
Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of
Commerce (OBC), Punjab and Sind Bank, Punjab National Bank (PNB), Syndicate Bank,
UCO Bank, Union Bank of India, United Bank of India (UBI), and Vijaya Bank.
In the year 1980, the second phase of nationalisation of Indian banks took place, in which 7
more banks were nationalised with deposits over 200 crores. With this, the Government of
India held a control over 91% of the banking industry in India. After the nationalisation of
banks there was a huge jump in the deposits and advances with the banks. At present, the
State Bank of India is the largest commercial bank of India and is ranked one of the top five
banks worldwide. It serves 90 million customers through a network of 9,000 branches.
37
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Corporation Bank
Dena Bank
Indian Bank
Syndicate Bank
UCO Bank
Vijaya Bank
IDBI Bank
39
Kerala has a sound banking infrastructure. An effective financial system in the form of banks
and financial institutions offer economical lending and borrowing. Kerala has many
commercial, nationalized cooperative banks along with a wide network of informal entities
including money-lending agencies. With progressing time Kerala banking system has attained
a high benchmark. Here is a list of some of the banks in Kerala.
Banking was one of the more preferred lines of business in Kerala - as well as in the princely
states of Travancore and Cochin and the Malabar Province of British India) that originally
comprised it - in the twentieth century. A list of some of the Banks that operated in that
territory during that period are given below. Due to various reasons most of them were either
closed or amalgamated with other banks, leaving only a handful now.
Bank of New India Ltd - ....-1961 (Amalgamated with State Bank of Travancore)
Chalakudy Public Bank Ltd - ....-1964 (Amalgamated with Federal Bank Ltd)
Cochin Nayar Bank Ltd - ....-1964 (Amalgamated with State Bank of Travancore)
Cochin Union Bank Ltd - ....-1964 (Amalgamated with Federal Bank Ltd)
Federal Bank Ltd (originally known as Travancore Federal Bank) [3] - 1931-
Kottayam Orient Bank Ltd - ....-1961 (Amalgamated with State Bank of Travancore)
Latin Christian Bank Ltd - ....-1964 (Amalgamated with State Bank of Travancore)
40
Lord Krishna Bank Ltd - ....-2006 (Amalgamated with Centurion Bank of Punjab)
Palai Central Bank Ltd - 1927-60 (Liquidated by High Court of Kerala on the request
of Reserve Bank of India)
Quilon Bank Ltd - ....-1937 (Amalgamated to form Travancore National & Quilon
Bank Ltd)
State Bank of Travancore (originally known as Travancore Bank Ltd) [5] - 1945-
St George Union Bank Ltd - ....-1965 (Amalgamated with Federal Bank Ltd)
Thiya Bank Ltd - ....-1964 (Amalgamated with Lord Krishna Bank Ltd)
Venadu Bank Ltd - ....-1961 (Amalgamated with South Indian Bank Ltd)
41
Name of Banks
Websites
Allahabad Bank
www.allahabadbank.com
Bank of India
www.bankofindia.com
Canara Bank
www.canbankindia.com
www.csb.co.in
www.centurionbop.co.in
IndusInd Bank
www.indusind.com
www.dhanbank.com
www.federalbank.co.in
ICICI Bank
www.icicibank.com
IDBI Bank
www.idbibank.com
Indian Bank
www.indianbank.in
www.ingvysyabank.com
www.southindianbank.com
www.sbi.co.in
www.statebankoftravancore.com
Syndicate Bank
www.syndicatebank.in
Websites
www.abnamro.com
www.adcbindia.com
www.americanexpress.com
ANZ
www.anz-it.com
Citibank India
www.online.citibank.co.in
DBS Bank
www.dbs.com
42
HSBC
www.in.hsbc.com
www.standardchartered.com
CHAPTER 4
43
COMPANY PROFILE
: BANK OF INDIA
INCORPORATION YEAR
: 1906
CHAIRMAN
MANAGING DIRECTOR
REGISTERD OFFICE
44
BANDRA EAST,
MUMBAI -400051
URL
: HTTP://WWW.BANKOFINDIA.COM
NO: OF BRANCHES
LISTING
: BSE
INDUSTRY
: FINANCIAL SERVICES
PRODUCTS
REVENUE
TOTAL ASSET
OPERATING INCOME
NET INCOME
4.2 INTRODUCTION
Fig no: 13
bank, after State Bank of India, Punjab National Bank and Bank of Baroda. It has 4157
branches as on 21/04/2012, including 29 branches outside India, and about 1679 ATMs. The
bank
46
1. A
person
named
Ramakrishna
Dutt
set
up
the first
Bank of
India
in Calcutta (now Kolkata) in 1828, but nothing more is known about this bank.
2. The second Bank of India was incorporated in London in the year 1836 as an AngloIndian bank.
3.
The third bank named Bank of India was registered in Bombay (now Mumbai) in the
year 1864.
Financial Services
Lending
Bank of Baroda
Canara Bank
Punjab National Bank
Ge Money India
Indian Overseas Bank
NAME
INCORPORATED YEAR
: 2002
ZONAL MANAGER
47
OFFICE
URL
: HTTP://WWW.BANKOFINDIA.COM
NO OF BRANCHES
: 92
DEPARTMENT
Inception Date
Place
: Mumbai
Initial capital
: 50 lakh
48
Initial employee no
: 50 employees
Ownership
: Private
Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from
Mumbai. Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50
employees
Now the bank has around 29 branches abroad. Bank of India was the first Indian Bank to
open a branch outside the country, at London, in 1946 and Europe, Paris in 1974. Bank has
branches in foreign countries like London, New York, Paris, Tokyo, Hong-Kong and
Singapore, UK, Paris, Dubai, South Africa etc
The Bank has 3752 branches in India spread over all states/ union territories including
specialized branches. These branches are controlled through 50 Zonal offices. There are 29
branches/ offices (including five representative offices) and 3 Subsidiaries and 1 joint venture
abroad. The Bank came out with its maiden public issue in 1997 and follow on Qualified
Institutions Placement in February 2008.
The bank has its Zonal office at kaloor, Ernakulam. Across Kerala the bank has around 92
Branches and is administrated by this Zonal office. Bank also has one NRI Branch and a
Specialised Service Branch in Kerala. Bank has two ultra small branches in Kerala at
Thennor and Vadakemthala.
4.8 HISTORY
Bank of
a group of eminent
businessmen from Mumbai. The Bank was under private ownership and control till July
1969
when
it
was
nationalised
along
49
with
13
other
banks.
Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50
employees, the Bank has made a rapid growth over the years and blossomed into a mighty
institution with a strong national presence and sizable international operations. In business
volume, the Bank occupies a premier position among the nationalised banks.
The Bank has 3752 branches in India spread over all states/ union territories including
specialized branches. These branches are controlled through 50 Zonal offices. There are 29
branches/ offices (including five representative offices) and 3 Subsidiaries and 1 joint venture
abroad. The Bank came out with its maiden public issue in 1997 and follow on Qualified
Institutions Placement in February 2008. Total number of shareholders as on 30/09/2009 is 2,
15,790.
While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront
of introducing various innovative services and systems.
the successful blend of traditional values and ethics and the most modern infrastructure. The
Bank has been the first among the nationalised banks to establish a fully computerised branch
and ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a
Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System
in
1982,
for
evaluating/rating
its
credit
portfolio.
The Bank's association with the capital market goes back to 1921 when it entered into an
agreement with the Bombay Stock Exchange (BSE) to manage the BSE Clearing House. It is
an association that has blossomed into a joint venture with BSE, called the Shareholding Ltd.
to extend depository services to the stock broking community. Bank of India was the first
Indian Bank to open a branch outside the country, at London, in 1946, and also the first to
open a branch in Europe, Paris in 1974. The Bank has sizable presence abroad, with a
network of 29 branches (including five representative offices) at key banking and financial
centres viz. London, New York, Paris, Tokyo, Hong-Kong and Singapore. The international
business accounts for around 17.82% of Bank's total business.
4.8.1 HISTORY AT A GLANCE
50
1921: entered into an agreement with the Bombay Stock Exchange to manage its
clearing house.
1946: opened a branch in London, the first Indian bank to do so. This was also the
first post-WWII overseas branch of any Indian bank.
1969: The Government of India nationalized the 14 top banks, including Bank of
India. In the same year, the People's Democratic Republic of Yemen nationalized branch
in Aden, and the Nigerian and Ugandan governments forced to incorporate its branches in
those countries.
1974: opened a branch in Paris. This was the first branch of an Indian bank in Europe.
1976: The Nigerian government acquired 60% of the shares in Bank of India
(Nigeria).
51
1980: Bank of India (Nigeria) Ltd, changed its name to Allied Bank of Nigeria.
1986: acquired Paravur Central Bank (Karur Central Bank or Parur Central Bank)
in Kerala in a rescue.
1987: took over the three UK branches of Central Bank of India (CBI). CBI had been
caught up in the Sethia fraud and default and the Reserve Bank of India required it to
transfer its branches.
2006: plans to upgrade the Shenzen and Vietnam representative offices to branches,
and to open representative offices in Beijing, Doha, and Johannesburg. In addition, plans
to establish a branch in Antwerp and a subsidiary in Dar-es-Salaam, marking its return to
Tanzania after 37 years.
1970-1975: J N Saxena
1975-1977: C P Shah
1977-1980: H C Sarkar
1981-1984: N Vaghul
1984-1986: T. Tiwari
1987-1991: R. Srinivasan
52
1992-1995: G. S. Dahotre
1995-1997: G. Kathuria
1997-1998: M G Bhide
1998-2000: S Rajagopal
2000-2003: K V Krishanamurthy
2003-2005: M Venugopal
2005-2007: M. Balachandran
2007-2009:T.S.Narayanasami
4.9.1 Mission
"To provide superior, proactive banking services to niche markets globally, while providing
cost-effective, responsive services to others in our role as a development bank, and in so
doing, meet the requirements of our stakeholders".
4.9.2 Vision
"To become the bank of choice for corporates, medium businesses and up market retail
customers and to provide cost effective developmental banking for small business, mass
53
CHAIRMAN
Fig no:14
Shri. Alok Kumar Misra, Chairman & Managing Director, (From 05.08.2009)
54
Shri Alok Kumar Misra has taken over as the Chairman and Managing Director of Bank of
India with effect from 5th August, 2009. Shri Misra was the Chairman & Managing Director
of Oriental Bank of Commerce prior to the present assignment. Shri Misra held the post of
the Executive Director of Canara Bank from 24th March 2006 to 3rd June 2007 and the
Chairman & Managing Director of Oriental Bank of Commerce from 4th June 2007
2. Shri N. Seshadri
3. Shri. M S Raghavan
4. Shri Kuttappan K. Nair
5. Shri Umesh Kumar
6. Shri Pramod K. Panda
7. Shri Harvinder Singh
8. Shri P.M. Sirajuddin
9. Shri. Neeraj Bhatia
10. Shri Umesh Kumar Khaitan
11. Shri. Pramod Bhasin Radhe Mohan
ZONAL MANAGER
DEPUTY
ZONAL
MANAGER
55
SENIOR ERNAKULAM
MARKETI
CALICU
TRIVANDRU
MANAGER
NG
TEAM
T
M
CHIEF
MANAGER
(LAW, ARD)
SENIOR
MANAGER
(CREDIT)
SENIOR
MANAGER
(CSD)
MANAGER
(CMC)
CHIEF
MANAGER (HR,
MRKTG)
SM (ARD)
MANAGER
(LAW)
SENIOR
MANAGER
(HRD)
MANAGE
R (IR)
Fig no:15
SENIOR
MANAGER
(FAC)
SENIOR
MANAGER
(RMD)
MANAGER
(PLANNIN
G))
SENIOR
MANAGER
(IT)
4.13 DEPARTMENTS
Most of the organizations are to be started with the aim of maximizing profit.
For
maximizing profit, the company should have a proper management system. Single person
cannot do every work in an organization. So for the smooth running of the work in an
organization are to be divided into different department according to their nature.
Departmentalization can be defined as the process of grouping of activities into units and sub
units for the purpose of administration, Administrative units and sub units. Sub units may be
as divisions, unit, branches, sections, jobs etc. The process of departmentalization is done in
all sections of the organization.
The top-level executive or Manager of the organization groups, the entire activities into major
divisions such as production, sales, finance etc. A senior executive of the organization
administers these divisions and they are to report to chief executive. The senior executives
assign duties to their juniors. So departmentalization is done on the basis of level of
management.
As soon as it becomes necessary, on account of volume of business, to divide the work in a
bank into divisions, each employing a group of clerks, such division is organized into a
department having a department head who is usually a teller, a head bookkeeper, or perhaps a
58
junior officer. In the very large banks the executive staffs is itself organized into groups, and
there may be a vice - president and one or two assistant cashiers in charge of each important
department.
The work of a department in a large bank is nothing more nor less than the work of a single
man in a small bank, apportioned among several men. For example, the receiving teller in a
five-man bank will take the deposit, count the cash, examine the checks, assort them as to
place payable, enter them upon the proper records and make a settlement or proof at the end
of the day. In a large bank each of these operations is performed by a different man or group
of clerks under the direction of the receiving teller, who is head of the department. It may be
that he himself will do very little if any of the detail work
59
4.14.1 PROFILE
Bank of Indias Kerala Zonal office has a well functioning Human Resource Department.
Human Resources Management or Personnel Management is a relative recent title for all
aspects of managing people in an organization. It represents a broad based understanding of
the development problems of people where management follows scientific ways and means
to solve the issues if any and to enhance the abilities of their personnel.
Human Resource Development base evolved out of different terms such as Personnel
Management, Personnel Administration; labour Relations, Industrial Relations etc.
They have a strong backup of a good healthy group of employees. The organisation has an
established frame work and has been adopting changes and practices in Human Resources
Development, with utmost respect to human values integrity and through a variety of services
by using appropriate training, motivation techniques and employee welfare activities.
4.11.2 FUNCTIONS
The key functions in HR are staff postings, transfers, deployment, deputation payment of
salary, maintenance of leave. Recruitment & Manpower planning, Welfare functions;
60
including statutory and non-statutory welfare measures, Grievance handling as per the
provisions of industrial disputes act and Maintaining discipline, Industrial relations, Job
specification, Staffing and training, annual performance appraisal, claims, settlement, job
rotation, etc.,
STAFF OFFICER
(HR)
MANAGER (HR)
STAFF OFFICER
(HRMS)
CLERICAL
STAFF
STAFF OFFICER
CLERICAL STAFF
Fig no:16
61
SENIOR MANAGER
(IR/HR)
4.14.6 HR POLICY
Promotion policy: well defined promotion policy for promotion for subordinate staff and
clerks. From clerical staff to officers, in officers cadre from JM-I to MM-II and outwards
up to TEG-VII.
Recruitment: subordinate staff is recruited from list provided by employment exchange.
In Clerical and officers cadre recruitment process is first done by IBPS. They conduct
written test selected candidates are interviewed in bank and recruited. There is transfer
62
policy for clerical cadre and officers cadre. Clerical staff is transferred generally within
the district only. Officers can be transferred posted anywhere in India and also in foreign
countries, as per banks recruitment
63
Profile
Industrial relations were founded by John R. Commons when he created the first academic
industrial relations program at the University of Wisconsin in 1920. Early financial support
for the field came from John D. Rockefeller, Jr. who supported progressive labour
management relations in the aftermath of the strike at a Rockefeller-owned coal mine in
Colorado. In Britain, another progressive industrialist, Montague Burton, endowed chairs in
industrial relations at Leeds, Cardiff and Cambridge in 1930, and the discipline was
formalized in the 1950s with the formation of the Oxford School by Allan Flanders and Hugh
Clegg.
Industrial relations are a multidisciplinary field that studies employment relationship.
Industrial relations are increasingly being called employment relations because of the
importance of non-industrial employment relationships. Many outsiders also equate industrial
relations to labour relations. Industrial relations studies examine various employment
situations, not just ones with a unionized workforce.
In bank of India IR department in head office deals with framing polices and guidelines for
the functioning of bank. They set certain rules for code of conduct for the employees and also
structure policies in accordance with the law and govt rules. The bank has each IR sub
departments in each Zonal office, they deals with monitoring the code of conduct of
employees and deals with any misconduct or frauds
64
Activities
IR in Zonal office deals with the disciplinary actions and proceedings. The process starts with
reporting of any fraud, audit report, customer complaints etc and the like to IR department.
When such reporting takes place the next stage is to fact find or investigation and this is done
by an authorised officer from bank. Then investigating officer submits his report. And the
report is verified or analysed by the IR department and an explanation is called from the
erring employees. if the report suggests any acts of misconduct by the employee. After receipt
of the explanation for the employee case is put up to the Internal Advisory Committee for
further classification as vigilance or non vigilance and subsequently actions is under taken.
65
4.15.1 PROFILE
The Securitization and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, allow banks and financial institutions to auction properties (residential and
commercial) and recover the dues, when borrowers fail to repay their loans. It enables banks
to reduce their non-performing assets (NPAs) by adopting measures for recovery or
reconstruction.
Banks declare the account as NPA as per RBI guidelines, if a borrower defaults on repayment
of his/her secured loan for three months at stretch, banks give him/her a 60-day period to
regularize the repayment, by issuing a demand notice under SARFAESI Act. On failure to do
so, banks may take possession of the security and auction it to recover the debt.
The Banks use the provisions of Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI Act) which appear to be draconian
in some cases while the Act is justified from another angle. The Bank has to follow the RBI
guidelines and the RBI circulars having binding nature from to time. It is known that the
Banks should follow the guidelines of Asset Classification prescribed by the Reserve Bank
of India in classifying any loan account as Non-performing Asset. The guidelines never
intended to unnecessarily and unreasonably harass the borrowers. The guidelines refers to the
significance of looking at risk factor, the value of security, track record of the borrower
66
and even getting the loan Account updated though Bank usually follows their internal
guidelines.
In some cases, the borrowers do not want to litigate the issues with the Bank and may try
their level best to get the default rectified and may try to get the account settled finally under
One-time Settlement Scheme. The Bank or the officers concerned in most of the cases
maintain written or oral communication with the borrowers when there is default. The
borrowers, in-turn, explains their difficulties in view of their long standing relationship with
the Bank and may seek some relaxation and may seek indulgence of the Bank to rectify the
default in repayment. This communication or negotiation happens before classifying any loan
Account as Non-performing Asset and even after the classification of account as NPA and
before initiating the proceedings under the provisions of SARFAESI Act, 2002. In some
cases, the borrowers negotiate with the Bank for rectifying the default or for a final
settlement even after the issuance of demand notice by the Bank under section 13 (2) of the
Act. When a borrower intends to avoid litigation, he may act upon the oral understanding
with the Bank. Sometimes, the understanding for rectification of default or settlement of
loan can be in writing also. While the rectification of default is oral in most of the cases, the
final settlement of the account is in writing normally.
4.15.2 ACTIVITIES
This department deals with banks all legal aspects and acts as an intermediary between court
and bank. Also carry out all activities with regards to assets recovery and its procedures. Law
department provides legal advices to the bank and stand as a nominee of bank with the
procedures of court.
Works in close coordination with various operational departments and tender legal advice in
policy and operational matters more particularly in areas relating to staff matters, vigilance
matters, disciplinary proceedings, long term and short term credit, infrastructure lending,
resource mobilization, premises matters, RRBs and Cooperatives. Appear before Labour
Commissioner in conciliation proceedings, consumer forum, and arbitration hearings.
Activities also constitute Preparation of brief to senior advocates or retired judges of High
Court, Supreme Court for obtaining their opinion in important matters.
67
Deputy Zonal
Manager
CHIEF MANAGER
(LAW, ARD)
MANAGER (ARD)
MANGER (LAW)
Fig no:17
68
4.16.1 Profile
Bank of India has a well functioning corporate service department, which take cares of all
needs and wants of the bank. Each Zonal office has a corporate service department which
looks after the branches in the respective area. Kerala Zonal office department is headed by a
Senior Manager and he reports to the deputy zonal manger and Senior Manager is assisted by
a Manager and Staff Officer.
4.16.2 Activities
The main activities to be carried out by this department is, looking after premises and
facilities of bank, new branch openings, dealing with complaints from customers, deals with
fraudulent of customers, acquisition of land in various centers for construction of office and
residential premises. Other functions are Monitoring of the Construction Work at various
locations, Maintenance work of office premises/staff quarters.
In case of any customer complaints registered;
If any complaint registered, ask the branch to give the facts about the case and branch
gives clarification.
Branch will give report to Zonal office and will try to resolve the issue
69
CSD dept. will also help the Branch in pursuing the complaintant to close the issue by
apologising.
Senior Manager
Manager
Officer
Clerk
Fig no:18
70
4.17.1 PROFILE
This department deals with the credit sanctioning in Kerala which is beyond the delegation of
individual branch. The team comprises of two Senior Manager and four Managers. Under the
Senior Manager credit there are three Managers in respect to the area they deals with as retail,
small and medium enterprises (SME) and other loans. And the second Senior Manager deals
with large borrowing cell (LBC). Retail deals with housing loans, education loans etc... LBC
deals with large business loans whereas SME deals with small and medium enterprise loans.
There are Staff Officers and clerks reporting to the Managers.
4.17.2 ACTIVITIES
This department deals with the sanctioning credits which are beyond the delegation of
individual branch. Usually high amounts credits are sanctioned from the Zonal office. The
amount differs in respect to the scale of the Managers in the branch. And proposals beyond
the power of ZLCC Zonal Level Credit Committee are submitted to NBGLCC. The SME
team is focused on providing financial services to small and medium enterprises, and offers
customers a range of products and services specifically tailored to meet their fund based and
non fund based requirements. Credit proposals from branches are first cleared by a credit risk
71
evaluation committee (CREC) and submitted to ZM. Upon receiving the clearance from ZM
the proposals are placed to ZLCC. Sanctions/approvals are made by the ZLCC.
ZONAL OFFFICER
Deputy Zonal
Manager
MANAGER
(RETAIL)
SENIOR MANGER
(LBC)
Manager
(SME)
Manager
(other loans)
72
STAFF OFFICER
STAFF OFFICER
CLERK
STAFF OFFICER
CLERK
CLERK
Fig no:19
4.18.1 PROFILE
Credit monitoring is a credit recovery assurance department of bank offered who are under
concerned of fraud or any lapse in return of credit to bank. In credit monitoring, an agency is
keeping constant watch on the advances portfolio of the bank to keep these assets (advances)
in good health, as performing assets so that they will keep on earning interest increases to the
bank. If they become Non-Performing Assets due to non repayment of interest and
instalments, they will stop earning interest and also the bank has to keep provision for these
NPAs from the profit earned by other performing assets. In a sense, credit monitoring could
be considered the stepped-up version of checking one's credit report one or two times a year:
instead of checking every six months, a credit monitoring agency checks all the time
4.18.2 ACTIVITIES
This department monitors the advances continuously to find out early warning symptoms of
the accounts becoming bad and takes timely corrective measures to prevent the accounts from
becoming NPAs. The adverse features are brought to notice of the concerned branches and
the department also contacts the borrowers directly for necessary corrective measures.
73
The department ensures that various internal control mechanisms like inceptions, review etc...
are effectively utilised by the branches to supervise the advances. The credits sanctioned are
monitored and controlling by this department. If loans are not paid back then this department
takes control and takes action. In a condition if EMI is not paid in time for a certain period
then it is given to asset recovery department for the recovery of the assets
ZONAL MANAGER
MANGER
SATF OFFICER
CLERK
74
Fig no:20
4.19.1 PROFILE
Marketing is the activity directed at satisfying the needs and wants through an exchange
process. It deals with products and services, pricing, placing and promoting the final product
of particular process. The marketing department is headed by Chief Manager marketing and
reports directly to the Zonal Manager.
In Kerala the bank has three marketing teams, in Calicut, Trivandrum and Ernakulam. They
look after the marketing activities of bank in Kerala. Teams travel along different places and
canvas customers for bank
4.19.2 ACTIVITY
The main activity of marketing team is to advertise the bank and canvas customers for having
accounts in bank. They familiarize the products and services of the bank to the customers and
potential customers. The function of the marketing department of a bank is to advertise about
the bank and reach more potential customers who would open accounts with the bank. They
usually start up a campaign or a promotional scheme explaining/offering a host of benefits
75
that come along with the process of account opening with the bank. Such a campaign usually
results in the increase in the customer base and increased revenue/profit for the banks..
Zonal manager
Chief Manager
Marketing teams
ERNAKULAM
TRIVANDRUM
76
CALICUT
Marketing executives
Marketing officers
Clerk
Fig no:21
77
several years. The Bank constantly strives to improve credit quality and maintain a risk
profile that is diverse in terms of borrowers, products and industry types.
Bank of India has risk management departments in each of its zone office. In Kerala Zonal
office the department is headed by a Senior Manager Risk Management, and Senior Manager
reports directly to Deputy Zonal Manager. There is a zonal level credit committee for
approving the credit and Senior Manager of risk management department is a member of it.
The Senior Manager analysis the risk in the sanctioning of credit and plays n important role
in sanctioning of credit
4.20.2 Activities
The credit department in Zonal office mainly deals with the minimising the credit risk of the
bank. The major activity is credit rating for approval of loans and other credits, and it is done
through credit risk evaluating. And in accordance with the credit rating the interest rate for
each approved credit is decided.
Each credit comes as a proposal in Zonal office and this will be evaluated and rated by this
department and then it will be passed to the zonal level credit sanctioning committee. The
committee consist of 5 members including Zonal Manager, Deputy Zonal Manager, Senior
Manager credit department, Senior Manager Risk Management, Senior Manager Risk
management and senior most Chief Manager in the zone.
DEPUTY ZONAL
MANAGER
78
SENIOR MANAGER
(RISK MANAGEMENT)
Fig no:22
importance on risk factor. On the basis of risk, branches are classified to High, Medium, Low
risk branches. Based on comparison to previous rating further classification is made to
Increasing, Stable or Decreasing. There is Zonal Audit Committee at each Zone, with
members as Deputy General Manager, Zonal Manager, Deputy Zonal Manager, Follow-Up
Audit Cell In-Charge, the Departmental Heads of Credit Department, Credit Monitoring
Department, Risk Management Department, Information Technology Department, and Asset
Recovery Department, etc.,
For Branches rated High, audit will be repeated after 12 months, for Medium rated branches
after 15 months and Low rating after 18 months. After the audit, Audit Report will be sent to
respective branches from Audit Office. Follow up Audit Cell at Zonal Office do follow up
with Branches who will rectify the irregularities and send compliance to Zonal Office.
4.21.2 Activities
The department has a Senior Manager who reports to directly to the zonal audit committee.
The follow up audit cell look after all related activities of zone after the audit. Each audit
report is forwarded to respective Zonal office and the follow-up audit cell in respective zone
does the follow up. They ask each branch to send the reasoning letter, if there is any need of
rectifying any activity of the branch. Then the branch rectifies the report and sends reply, the
FAC department checks this and reports to the head office. Again to check on branches a
discretionary audit is done.
Zonal manager
Deputy Zonal
Manager
Senior manager
(FAC) 80
Fig no:23
4.22.2 Activities
The major activities of this department comprise of; allocation of budgets to the branches
(advances, deposits, profit etc..) and monitoring the performance of branches under the
respective heads. They also under take the review of the performance on quarterly basis.
81
DEPUTY ZONAL
MANAGER
SENIOR
MANAGER
(PLANNING)
Fig no:24
82
Zonal office of bank India has an IT department, with a senior manger and Staff Officers
reporting to the respective Zonal Manager.
4.23.2 Activities
They facilitate implementation of banks IT policies and also keeping close watch on
procedures related to IT. The department deals with implementing banks IT security policies,
business continuity plans, and acting as the first contact points for disaster management. They
also certify the feasibility and making recommendations for smother operations at branches
and deciding as local IT infrastructure.
Zonal manager
SENIOR MANAGER
(IT)
STAFF OFFICER
STAFF OFFICER
Fig no:25
83
Chapter-5
84
STRENGTHS
o
o
o
o
o
o
o
Nationalized bank
107 years experience in banking service
Well established geographically
Experienced and committed personnel
Strong Capital support
Geographically Established market
Strong finance
OPPORTUNITIES
85
o
o
o
o
Growing market.
Increasing number of industries.
Financial inclusion
Increasing entrepreneurs
THREATS
o Entry of new generation banks in the town
o Increasing private finances
o Presence of other well established and local banks
Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50
employees, the Bank has made a rapid growth over the years and blossomed into a mighty
institution with a strong national presence and sizable international operations. In business
volume, the Bank occupies a premier position among the nationalised banks.
Now the Bank has 3752 branches in India spread over all states/union territories
including specialized branches. These branches are controlled through 50 Zonal offices.
There are 29 branches/ offices (including five representative offices) and three Subsidiaries
and one joint venture abroad. Total number of shareholders as on 30/09/2009 is 2, 15,790.
Some growth highlights of bank as on 31.12.2011:
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last year.
Gross profit per employee increased to rs16.45 lacs in the corresponding period of
previous year.
45.8%.
Robust 31.5% growth in non-interest income
Gross NPA ratio drops to 2.74% from 3.02% sequentially
NIM rises to 2.55 percent in quarter 3 from 2.43 percent in Q2 of current year.
ROA moves up sequentially to 0.80 percent in quater3 from 0.56%
Return on equity rises sequentially to 16.97% in Q3 from 12.07% in quarter two.
Cost to income ratio improved to 40.68% for Q3 fy-2011-12 from 47.30% for the
corresponding quarter of previous year as also 43.49% from the Q2 of current year.
Capital adequacy ratio (CRAR) stood at 11.18% as on 31st dec11 as per basel-11
The banks net worth as on 31st dec11 stood at RS17, 235 cr as compared to RS14451
cr in the corresponding previous year.
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5.6 FINDINGS
The study of the above SWOT analysis shows that the strengths and opportunities far
outweigh weaknesses and threats. Strengths and opportunities are fundamental and
weaknesses and threats are transitory.
5.7 SUGGESTIONS
1. Bank of India needs a better infrastructure facility, mainly for the zonal office in
Kerala.
2. As the number of ATM in Kerala is not sufficient, they should built more number of
ATM.
3. Even though the social interaction programmes are sufficient, Bank could include
more leisure programmes to get employees stress-free from routine works.
5.8 CONCLUSION
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The organization study at BANK OF INDIA was done with an objective to understanding
how an organization functions, what are its major departments and functioning of these
departments. The study at BANK OF INDIA provided the opportunity to learn the
organizational goals and objectives, various department that conduct critical functions and the
interrelation between them. Also the working of the various departments and their effective
coordination makes possible the growth and development of the firm as a whole. Generally
the study gave me awareness about the practical working of an organization and functions
regarding each department
BANK OF INDIA is observed to be an organization that not only has an objective of
working profitably but also a socially responsible organization that cares of different sections
of the society viz ; providing funds and financial assistance to various class of society.
The bank has established different departments based on functions like human resource,
marketing, credit, law, Asset Recovery department, Corporate Service Department, Planning
Department, Information Technology department, Risk management department.
.
5.9 BIBLIOGRAPHY
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Website References:
www.BOI.com
www.RBI.com
www.SARFAESI ACT.com
www.indianmirror.com/indian-industries/banks.html
Reference Books:
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