A STUDY ON

“RETAIL FINANCE IN BANK OF INDIA”

SUMMER TRAINING PROJECT REPORT

SUBMITTED TOWARDS PARTIAL FULFILLMENT
OF
POST GRADUATE DIPLOMA IN MANAGEMENT-IT
(Approved by AICTE, Govt. of India)
(Equivalent to MBA)

ACADEMIC SESSION
2009-2011
Submitted By:
Sachin Gupta
Roll No. : BM-09178
Under the Guidance of :
External Supervisor: Internal Supervisor:
Mr. K.C.Nama Dr. Vidya sekhri
Senior Branch Manager Area Chairperson-Finance
Bank Of India, Nayapura(kota) IMS, Ghaziabad

INSTITUTE OF MANAGEMENT STUDIES

C-238, BULANDSHAHR ROAD,
GHAZIABAD – 201009

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 A STUDY ON
“ RETAIL FINANCE IN BANK OF INDIA”
At BANK OF INDIA, KOTA

SUMMER TRAINING PROJECT REPORT

SUBMITTED TOWARDS PARTIAL FULFILLMENT
OF
POST GRADUATE DIPLOMA IN MANAGEMENT-IT
(Approved by AICTE, Govt. of India)
(Equivalent to MBA)

ACADEMIC SESSION
2009-2011
Submitted By:
Sachin Gupta
Roll No. : BM-09178
Under the Guidance of :

External Supervisor: Internal Supervisor:

Mr.K.C. NAMA Dr. Vidya Sekhri
Senior Branch Manager Area chairperson-Finance
Bank Of India IMS, Ghaziabad

INSTITUTE OF MANAGEMENT STUDIES

C-238, BULANDSHAHR ROAD,
GHAZIABAD – 201009

II
 DECLARATION

I hereby declare that the work which is being presented in the report: entitled
RETAIL FINANCE IN BANK OF INDIA in partial fulfillment of the requirement
for the award of the Post Graduate Diploma in Management and submitted to the
BANK OF INDIA is an authentic record of my own work carried out during a period
from May 2010-to- June 2010 under the supervision of my corporate guide MR.
K.C.NAMA (SENIOR BRANCH MANAGER) & DR. VIDYA SEKHRI
(PROJECT MENTOR). I have not submitted the matter presented in this report for
the award of any other degree or diploma.

Date: 22nd JULY 2010 SACHIN GUPTA

Place: GHAZIABAD (BM-09178)

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 CERTIFICATE

This is to certify that the work, which is presented in the report entitled “RETAIL
FINANCE IN BANK OF INDIA”, has been carried out by SACHIN GUPTA in
partial fulfillment for the report of summer internship of Post Graduate Diploma in
Management-IT of first year. This report is original and has not been submitted in part
or full to any other university for any other degree or diploma.
This is to certify that the above statement made by the candidate is correct to the best
of my knowledge.

DR. VIDYA SEKHRI

(PROJECT MENTOR)

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 ACKNOWLEDGEMENT

Perseverance, inspiration and motivation have always played a key role in the
success of any venture. A successful and satisfactory completion of any project is the
outcome of the invaluable aggregate contribution of different persons fully in radical
direction, explicitly or implicitly.
Whereas vast, varied and valuable reading efforts leads to substantial
acquisition of knowledge via books and allied information sources. True expertise
excludes from collateral practical works and experiences.
Words have never seemed as inadequate as now, when we are endeavoring to
express our heartfelt gratitude at the culmination of the project, to all those made it
possible. Even the best effort is waste without proper guidance and advice. We highly
solicit Shri K.C.Nama for launching us into this foray. At the same time we are
indebted to Shri Hariram Meena & Shri B. l. Meena for giving time-to-time
suggestion and their valuable guidance, co-operation, inspiration and keen
supervision to our project.
Thanks to other persons who have been the part & important assets of this
Journey of Bank of India Nayapura, Kota Shri Mukesh Mehra (C.T.O), Shri Prithvi
Singh (CTO), Shri RamnarayanJi, Shri NandlalJi (Nandu Bhaiyya), Shri Rajendra
Singh.

At this level of understanding it is often difficult to comprehend and assimilate a wide

spectrum of knowledge without proper guidance and advice. We are grateful to
Dr.Vidya Sekhri for her round the clock Enthusiastic Support, Noble Guidance and
Encouragement, which made this project successful.

People always say that I am an agnostic kind of person but here I want to
express gratitude towards my god. Thanks & love to my mother who is like god to me.
This pure work is whole-heartedly dedicated to her from whom I acquired the quality
of honesty & hard work.

At the same time we are indebted to Mr. Bill gates that provided us great
software as Microsoft office without the help of which this work could not be possible.

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 ABSTRACT

This project is based on the study of retail credit where most of the focus is on the
demand loan. Retail banking is quite broad in nature - it refers to the dealing of
commercial banks with individual customers, both on liabilities and assets sides of the
balance sheet. Fixed, current / savings accounts on the liabilities side; and loans e.g.,
personal, housing, car, and educational, on the assets side are the more important of
the products offered by banks.

“Retail banking is typical mass-market banking where individual customers use local
branches of larger commercial banks. Services offered include: savings and checking
accounts, mortgages, personal loans, debit cards, credit cards, and so”

The Retail Banking environment today is changing fast. The changing customer
demographics demands to create a differentiated application based on scalable
technology, improved service and banking convenience. Higher penetration of
technology and increase in global literacy levels has set up the expectations of the
customer higher than never before. Increasing use of modern technology has further
enhanced reach and accessibility.

Banks, today, offer a range of retail asset products, including home loans, automobile
loans, personal loans (for marriage, medical expenses etc), credit cards, consumer
loans (such as TV sets, personal computers etc) and, loans against time deposits and
loans against shares. Banks also may fund dealers who sell automobiles, two
wheelers, consumer durables and commercial vehicles. The share of retail credit in
total loans and advances was 21.3% at end-
March 2009.

Awareness of people towards the different types of loan offering by the banks in the
rural areas is quite low due to that they still prefer the money lender as well as the
documentation procedure is time consuming and difficult to understand by the rural
people.

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Both public & Private sector banks are catering to the need of the customer.
At the one hand Public sector banks are ensuring the customer that their money is safe
in safe in governments hand. Private sector bank are giving a hard competition to the
public sector by giving fast services and multifaceted services to the customer.

In this study we are trying to find out the factor on the basis of which the performance
of bank can be adjudged. The factor, which generally affects the banking system, is
generally being discussed in the study.

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 ABBREVIATION

APB ratio: Advance per branch ratio

APE: advance per employee ratio
Avg :Average
ATM: Automated Teller Machine
BOI: Bank of India
BOB: Bank of Baroda
BPB: Business per branch ratio
BPE ratio: Business per employee
CASA ratio: Current a/c saving a/c ratio
CAMELS: Capital Adequacy, Asset Quality, Management, Earnings, Liquidity,
Systems and Control
CRR ratio: Cash reserve ratio
CD ratio: Cash- Deposit ratio
DPB ratio: Deposit per branch ratio
DPE ratio: Deposit per employee ratio
NPA: non profitable asset
KYC: Know your Customer
SLR ratio: statutory liquidity ratio

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 TABLE OF CONTENT
S.NO. TITLE PAGE NO.
1 Candidate declaration III
2 Certificate IV
3 Acknowledgement V
4 Abstract VI
Abbreviation VIII
5 Table of content VIIII
6 List of figures XI
7 List of tables XII
CHAPTER-1 Introduction of bank 1
1.1 Distinction between bank & moneylender 2
1.2 Role of banking 3
1.3 Types of bank 4
1.4 Function of commercial bank 8
1.5 E-banking 10
CHAPTER-2 Justification 12
CHAPTER-3 Literature review 13
CHAPTER-4 Company profile 15
4.1 History & present 13
4.2 Some milestones 16
4.3 CMD since nationalization 18
4.4 BOI’s vision, mission, quality policy 19
4.5 Highlights for the year ended march 2010 19
CHAPTER-5 Objective of study 21
CHAPTER-6 Research methodology 22

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S.NO. TITLE PAGE NO.
CHAPTER-7 Data analysis 24
7.1 Profit & loss a/c 24
7.2 Balance Sheet 26
7.3 BOI comparative study of 2009 & 2010 28
7.4 Branches & ATM (Comparison with other bank) 29
7.5 Highlights of bank performance 31
7.6 Branches profitability ratio 32
7.7 Employee profitability ratio 34
7.8 Annual policy statement of RBI 35
7.9 CASA ratio 37
7.10 CD ratio 40
7.11 Net interest margin 40
7.12 Total business 41
7.13 Total deposit 41
CHAPTER-8 Ratio analysis 45
8.1 Capital adequacy ratios 40
8.2 Asset ratios 47
8.3 Management ratios 49
8.4 Earning ratios 50
8.5 Liquidity ratios 52
CHAPTER-9 CAMEL RATING 64
Findings 54
CHAPTER-10 Conclusion 66
Recommendation 67
Limitation 67
Bibliography 68

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LIST OF FIGURES

S.NO. TITLE PAGE NO.

1 Deposit of BOI 42
2 Advances of BOI 43

XI
LIST OF TABLES

S. NO. TABLE NAME PAGE NO.

1 Table 1: distinction between bank & moneylender 15
2 Table2: profit & loss account 24
3 Table 3: Balance Sheet 26
4 Table 4: BOI comparative study 2009-10 28
5 Table 5: Branches & ATMS 29
6 Table 6: Bank’s performance comparison 31
7 Table 7:Branches Profitability ratio 32
8 Table 8: Employee profitability ratio 34
9 Table 9 : Different rates 35
10 Table 10 : CASA ratio 45
11 Table 11: Debt-Equity ratio 45
12 Table 12: Advance-total asset ratio 46
13 Table 13: Security –investment ratio 46
14 Table 14: Gross NPA –Net advance ratio 47
15 Table 15:Net NPA –Net advance ratio 47
16 Table 16: Total loans-Total asset ratio 48
17 Table 17: Market value-Book value ratio 48
18 Table 18: Market value- face value 49
19 Table 19: Total Advances-total Deposits ratio 49
20 Table 20:Business per employee & profit per employee 49
21 Table 21: Interest Spread 50
22 Table 22: Net profit- Avg Asset 50
23 Table 23: Interest income-Total income 51
24 Table 24: Liquidity Asset –Total Asset ratio 52
25 Table 25: Govt securities-Total Asset ratios 52
26 Table 26: Approved Securities- Total Asset ratio 53
27 Table27: Liquidity Asset-Demand Deposit ratio 53
28 Table 28:Liquidity Asset-Total Deposit ratios 54
29 Table 29: Capital ratios 55
30 Table 30: Asset ratios 56

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31 Table 31: Management ratios 59
32 Table 32 : Earning ratios 61
33 Table 33 : Liquidity ratios 62
34 Table 34: camel rating 64

XIII