SUMMER TRAINING REPORT

ON

A STUDY OF LOANS AND ADVANCES OFFERED AT CANARA BANK

Submitted in partial fulfillment for the award of the degree of Master in Business Administration (2008- 2010)

Submitted To: Punjab Business School Chunni kalan

Submitted By: Aditya Balak Mehta MBA3rdSemester

PREFACE

Management training has gained rapid and tremendous importance over the past five years. Management was previously considered as an inborn art or talent Management training has gained rapid and tremendous importance over the past five years. Management was previously considered as an, but in todays fast developing world, these have been modified. I undertook six weeks (starting from 13th July 2009 to 26th August 2009) summer training in CANARA Bank As an essential and obligatory part of master program in business administration, curriculum of Punjab Technical, University. The report embodies the result of the project an extensive market research program was accomplished. We deem it as a matter of great fortune to get summer training at CANARA Bank khanna. The summer training was quite interesting, inspiring, satisfying, learning and academically awarding.

STUDENTS DECLARATION

I ADITYA BALAK MEHTA submitted my project report on STUDY OF LOANS & ADVANCES OFFERED AT CANARABANK. I have my training at canara bank. It is the original work done and the information provided in the study is authentic to the best of my knowledge.

Date: Place : Chunni kalan

Aditya Balak Mehta

ACKNOWLEDGEMENT

I would like to express my heart felt gratitude to all the persons involved in the process of preparing this report. Firstly I would like to thank Mr. Jagjit Singh Chief Manager for allowing me to do my six weeks summer training from Canara Bank. Secondly I would like to express my sincere thanks to my project guide Mr. Sucha Singh, Loan Manager, Mr. VIJAY RATAN, Officer, for his valuable support and guidance throughout the project and preparing this report. His constant appreciation of the work and support helped me immensely in the successful completion of my training period. It would be unfair on my part if dont express my thanks to the following persons who provided me with all possible records and helped me in every possible manner in carrying out the various studies I required in completing my training report. Mr. Paramjeet Kullar, Manager who guide me during my training. I am especially thankful to the staff of bank and payroll section for their patience to bear with me while interviewing the absentees for collection of primary data.

Executive Summary

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent. Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding. So Canara Bank is also involved in issuing loans.

Table of Contents

Section 1: Introduction to Project

1.

Introduction of loans Offered at Canara Bank Types of loans

2.

Section 2: Industry Profile 1. Introduction to Banking Sector 2. Scope of Banking Indus 3. Banking Opportunity

Section 3: Company Profile 1 2 3 4 5 History of Canara Bank Canara Bank in India Products Information Mission &Vision of Canara Bank Profile of Canara Bank

Section 4: Objectives Section 5: Research and Methodology Section 6: Analysis and Interpretations Section 7: Swot Analysis

Section 8: Limitations

Section 9: Recommendations

Section 10: Suggestions

Section 11: Annexure Bibliography Questionnaire Balance Sheet of Canara Bank Profit & Loss Account of Canara Bank Cash Flow Statement of Canara Bank

INTRODUCTION

INTRODUCTION

Canara Bank has been serving its customers since July 1906 and has undergone various stages of growth over hundred years of excellence. Founded by Shri Ammembal Subba Rao, the bank has attained nationalization in the year 1969. The banking operations are customer friendly and the bank has emerged as the largest nationalized bank in India.

Canara Bank Loans are offered to the customers to fulfill their monetary requirements.
Canara Bank provides all conventional banking facilities and various contemporary banking products. The various types of Canara Bank Loans, which are offered to the customers include: Personal Loan Home Loan Consumer Loan Vehicle Loan Educational Loan CEMAT Facilities Agricultural Loan

Canara Bank Car Loans:

The car loans by the Canara Bank are offered for buying new or used four wheelers. The loans are given to the salaried people with regular income and those who have the capacity to repay the loan amount. Corporate firms and business people are eligible for car loans. For new car loans, there is no ceiling on the loan amount. For the used cars, the bank offers finance for the cars that are older than 5 years.

Canara Bank Home Loans:

Canara Bank Home Loans are provided for the purchase or construction of houses and flats. The bank also offers loans for the renovation and furnishing of the existing house or flat. Loan amount subject to the maximum of Rs. 1,00,00,000 is provided to the customers. For site loans, the amount should be repaid within a period of 5 to 10 years. For other loans, the loan amount can be repaid within 5 to 20 years. Canara Bank Home Loans are also offered for the purchase or construction of companies or corporations.

Canara Bank Education Loans:

The educational loans by Canara Bank are provided to the meritorious students and the needy students. The funds are offered to the Indian students only. The loans are granted for pursuing graduate courses, professional courses and technical courses. Finance is provided by the Canara Bank for advanced studies abroad as well. The education loans are offered for the payment of fees, purchase of educational equipment and books. For study in India, the maximum loan amount that is provided is Rs. 7.50 lacs and for studies abroad, the ceiling is Rs.15 lacs. The loan amount needs to be repaid within 5 to 7 years.

Canara Bank Personal Loans:

Personal loans are offered by Canara Bank to fulfill various personal needs of the customers. The personal loans are provided to all who have the ability to repay the loan amount. Canara Bank Loans are also provided to the Non-Resident Indians.

CANARA BANK LOANS

Canara Bank provides provides loans to almost every section of the society. Some of the loans are mentioned as under:

Agriculture & Rural Credit Kisan Credit Loans for Agri- Clinic Minor Irrigation Loans Farm Machinery Loans Farm Development Loans Vehicle Loan for Agriculturists Loan for Plantation Crops Loan for Marine Fisheries Loan for Inland Fisheries Loan for Sericulture Loan for Purchasing Agricultural Land Loan for Poultry Export Credit for Agro Products Other Agricultural Loans Loans to SSIs Charter for SSIs

FOR WOMENS
The Centre for Entrepreneurship Development for Women was established by Canara Bank in India at the Bank's Corporate Office, Bangalore during the year 1988 with an objective of assisting the potential women entrepreneurs to select income generating activities and starting ventures of their own. Subsequently 9 such CEDs were opened and are functioning at Circle

Offices situated at various State Capitals. The CED at corporate office brings out a newsletter VIKAS everybody-monthly.

Mahila Banking branch:

An exclusive branch for women and Mahila banking division - an exclusive division for women within a branch opened, which is the 1st of kind in the banking industry. Details are enlisted below: Mahila Banking Branch, Jayanagar , Bangalore, Karnataka Mahila Banking Division, Mandipet Branch, Davangere, Karnataka Mahila Banking Division, M G Road Branch, Agra, UP Mahila Banking Division, N V Street Branch, Madurai, Tamil Nadu Mahila Banking Division, West Palace Road, Thrissur, Kerala Mahila Banking Division, West Hill, Kozhikode, Kerala Mahila Banking Division, Shimoga Main Branch, Karnataka

These specialized branch and divisions offer all banking services to women.

Loans & Advances:

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

KINDLY NOTE: Interest rates are subject to change at short intervals. Though all efforts are
being made to update the interest rates in our website, please obtain latest interest rates from your nearest branch.

REVISION IN BPLR AND LENDING RATES

Bank's BPLR is revised to 13.25% with effect from 10.11.2008. Accordingly all the lending rates linked to BPLR is revised downwards by 0.75% with effect from 10.11.2008

REVISION IN LENDING RATES ON HOUSING LOANS TO CUSTOMERS

A) ROI on housing loans w.e.f. 10.11.2008:

REPAYMENT PERIOD RATE OF INTEREST FOR FRESH HOUSING LOANS SANCTIONED ON OR AFTER 10.11.2008 UptoRs. 30 lacs As on 09.11.08 Upto 5 years Above 5 years &upto 10 years Above 10 years & upto 25 years 10.25 10.50 Revised w.e.f. 10.11.2008 9.50 9.75 AboveRs. 30 lacs As on 09.11.08 11.00 11.25 Revised w.e.f. 10.11.2008 10.25 10.50

10.75

10.00

11.50

10.75

* Reset at the end of every 3 years. The revised rate of interest as above is applicable for fresh loans sanctioned on or after 10.11.2008.

ROI on all slabs linked to BPLR. Additional interest @ 0.25 % above the card rates for acquisition of second house/flat.

B) Margin for housing loans:

Margin Loans uptoRs.20 lacs (Cir.No.152/2007) New house/flat Old house/flat 20% 25 % Loans above Rs.20 lacs

20 % 25 %

C) Loans for acquiring second house/flat: Additional interest @ 0.25 % p.a. over and above the applicable rates. Margin @ 25 %.

Home Improvement Loan Rate of Interest: w.e.f 10.11.2008

IF HOME IMPROVEMENT LOAN (HIL) IS AVAILED ALONG WITH THE HOUSING LOAN OR AN EXISTING HOUSING LOAN IS OUTSTANDING IN OUR BANK THE RATE OF INTEREST (ROI) AS APPLICABLE TO HOUSING LOANS. IF THE HOME IMPROVEMENT LOAN IS AVAILED INDEPENDENTLY THE APPLICABLE ROI IS PREVAILING BPLR, Presently, 13.25% p.a.

Canara Site w.e.f 04.10.2008 Loans repayable in 5 years 15.00% 15.00%

Loans repayable in above 5 years term (Max of 10 years)

Canara jewel w.e.f 04.10.2008 SCHEME DISCONTINUED For existing Customer 15.00%

Canara tech w.e.f 04.10.2008 SCHEME DISCONTINUED For existing customer 15.00%

Canara travel w.e.f 04.10.2008 SCHEME DISCONTINUED - for existing customer 15.00%

Canara value w.e.f 04.10.2008 SCHEME DISCONTINUED For existing customer 15.00%

Canara Cash w.e.f 04.10.2008 15.00% p.a. On daily reducing balance, (Subject to change from time to time)

Can Mobile (Car Loan / Two-Wheeler Loan) w.e.f 10.11.2008 a. a. Car loan 12.50% p.a (fixed) - For fresh loans only

Canara Budget (Simple Personal Loan) w.e.f 04.10.2008 Floating Rate - 15.00% p.a.

Canara Pension w.e.f 07.08.2008 Floating Rate 12.50% p.a. A concessional rate for our Senior Citizens!

Teachers Loan scheme w.e.f 04.10.2008 Floating Rate -15.00% p.a. Revised Fixed rate w.e.f 07.11.2008 (xxii). CANARA RENT 15.25* Canararent where the lessees are - Navaratna PSUs, AAACos, Fortune 500 Cos, MNCs, Banks, Insurance Cos 15.75* Other than above (xxiii). CANARA MORTGAGE Fixed rate loans to be reset every 3 years 16.25* Revised Floating rate w.e.f 10.11.2008 13.25

13.75

15.00

Gold Loan/Swarna Loan Scheme w.e.f 04.10.2008 13.25%

Loans for Traders & Businessmen: w.e.f. 04.10.2008 Upto Rs.2 lakhs Above Rs.2 lacs including loans under priority sector 14.50% p.a. 15.00% p.a.(No Change).

Vidyasagar Loan for Students: Rate of Interest : (Subject to changes as advised by Bank / RBI from time to time): 1. Student satisfying DRI norms (irrespective of quantum of loan) 4.00%

(DRI:annual income less than Rs 7200 p.a) 2. Others Upto Rs.4 lakhs Above Rs.4 lakhs upto Rs. 7.50 lacs Above Rs. 7.50 lacs upto Rs. 20 lacs Above Rs.15.00 lacs upto Rs.20.00 lakhs *For students secured admission in IIT/ IIM/ ISB *for loans granted w.e.f. 09.07.2005 NOTE : 1. 0.50 % concession in ROI for prompt servicing of interest during study period. 2. Reduction of 1 % for all courses in all slabs / category for girl students for loans granted from 1.12.2005 to 30.6.2008. 12.50% 13.50% 11.25% 11.25% 10.75%

Canmahila Loan Scheme w.e.f 04.10.2008 15.00% p.a.

Doctor's Choice (Medical practitioners Loan Scheme) w.e.f 17.04.2007 Aggregate Limit Upto Rs 50000 >Rs. 50000 upto Rs. 2.00 lacs > Rs. 2 lacs upto Rs.5 lacs > Rs. 5 lacs upto Rs.10 lacs WORKING CAPITAL 11.00 11.50 11.75 12.75 TERM LOAN 11.50 12.00 12.25 13.25

IPO Financing: w.e.f. 04.10.2008 15.00% p.a.

Loans under ESOP Scheme : w.e.f. 04.10.2008 15.00% p.a.

Loans to assist employees to subscribe to shares of their own companies under reserve quota w.e.f. 04.10.2008 15.00% p.a.

Loans to individuals (Clean OD/DPN other than Teachers loan): 15.50% p.a.

BULC:(wef 04.10.2008) Upto 90 days Above 90 days Upto 180 days 14.00% p.a. 15.00% p.a.

Loans to individuals against other approved securities: w.e.f. 07.08.2008 15.00% p.a.

Loans against Debt oriented MFs: w.e.f. 04.10.2008 15.00% p.a.

Corporate Loan scheme : w.e.f. 07.08.2008 14.00% p.a.

STLR : w.e.f. 07.08.2008 14.00% p.a.

Canara Guide : w.e.f. 07.08.2008 12.75% p.a. Canara Jeevan : w.e.f 07.08.2008 Fixed 10.50% - Reset at end of 3 years

Canara Trade : w.e.f . 04.10.2008 14.00%

Types of Loans
1. Secured 2. Unsecured

Secured:
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan. A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security a lien on the title to the house until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer. A type of loan especially used in limited partnership agreements is the recourse note. A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss, using options or other hedging strategies to reduce lender risk A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible for a pre-settlement loan. This is considered a secured non-recourse debt due to the fact if the case reaches a verdict in favor of the defendant the loan is forgiven.

Unsecured:
Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be available from financial institutions under many different guises or marketing packages: credit card debt personal loans bank overdrafts credit facilities or lines of credit corporate bonds

The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.

TERM LOANS
Term Loan is normally extended for acquisition of Land, Building and machinery, purchase of vehicles etc. and also along with working capital finance as composite loans. Term Loan is given both for industrial and non-industrial borrowers i.e. both for projects / activities involved in manufacture/processing/repairing and business / trading

activities etc. The project needs to establish technical feasibility and economic viability. Term loan is extended in different forms such as all rupee loans, foreign currency loans and Deferred Payment Guarantees (DPG) / acceptance facilities (other than foreign currency loans obtained from the foreign banks or branches of Indian Banks abroad without the back-up of DPGs issued by Banks in India). Repayment schedule for term loans would be stipulated based upon Debt Service Coverage Ratio, cash generation and repayment capacity. Repayment would be by way of periodic instalments with appropriate repayment holiday during implementation of the project. Rate of interest on term loans depend upon various factors like nature of the project, quantum of loan, risk rating, repayment period and structure of the debt. Securities for term loans per se would be as per general lending norms of the banks.

LOAN DELIVERY & EVALUATION:

1. Time norms for disposal of loan applications : The banks credit policy defines time norms for timely disposal of credit proposals. In this regard, following time norms shall be shall be adhered to in disposing a credit proposal and accordingly , token of services is issued to the applicant. 1. 2. 3. Loans up to Rs.25000/Kisan credit card- Branch powers Other Priority Sector advances (1) loans/ advances upto Rs. 25000/(2) loans/ advances over Rs. 25000/4. Export credit under gold card scheme (1) Sanction of fresh/ enhanced credit limits (2) Renewal of existing credit limits (3) Sanction of adhoc credit facilities 5. Export credit other than gold card scheme (1) Sanction of fresh/ enhanced credit limits (2) Renewal of existing credit limits (3) Sanction of adhoc credit facilities 45 days 30 days 15 days 25 days 15 days 7 days 2 weeks 8-9 weeks Within 15 days Max. 15 days

6.

Advances under Sole Banking, Multiple Banking Arrangement, Consortium & other than proposal: 1.Sanction of fresh/ enhanced credit limits 2.Renewal of existing credit limits 3. Sanction of adhoc credit facilities credit 60 days 45 days 30 days

CREDIT RISK MEASUREMENT:

The credit risk assessments help the bank to measure whether the potential borrowers will be able to meet their loan obligation in accordance with contractual agreements. All borrowers with the limit of Rs 200000/- and above are to be rated individually and under the appropriate risk rating models developed for the purpose.

Rating Models:
a. Risk Assessment Model (RAM): This model is applicable for the borrowal accounts with sanctioned limit of over Rs 2 crore. b. Manual Model: This model is applicable for the borrowal accounts with sanctioned limit of over Rs 20 lacs and not more than Rs.2 crore.

c. Small value Model: This model is applicable for the borrowal accounts with sanctioned limit of Rs 2 lacs and not more than Rs.20 lakh. d. Portfolio Model: The borrowal accounts of aggregate limits below Rs. 2 lacs and borrowal accounts where financial statement are not available are risk rated under portfolio model, duly grouping the accounts are near homogenous the accounts are near homogenous pool based on category of borrowers and loan schemes/segment. The model covers rating of borrowal accounts classified under priority and non

priority segments. The priority sector loans include both Direct and Indirect Agricultural loans, and non priority sector loans include those under schematic lending under retails schemes. A. Domestic Credit rating agencies: Credit analysis and research limited (CARE) CRISIL Limited FITCH INDIA Limited ICRA Limited

B. International Credit Rating Agencies: FITCH MOODYS STANDAD AND POORS

INDUSTRY PROFILE

INDUSTRY PROFILE
INTRODUCTION OF BANKING SECTOR
Banks in India have played a significant role in the development of the Indian economy. Banks continue to be the major financial intermediaries with a share of 64% of total financial assets. However, on-bank financial companies and development finance institutions are also emerging as alternative source of funding. In India, foreign bank account for only around 8% of the total assets of the banking system. A Bank has been moving into certain areas that were the exclusive domain of the development finance Institutions (DFIs),e.g. project finance and investment banking. MECHANISM FOR PRESERVING COMPETITION There is no separate agency/mechanism for preserving competition in the banking sector. Promoting competition is, however, one of the key objectives of financial sector reforms. The entry of new private sector and foreign banks and introduction of new products and technology and operational freedom to banks have ensured a competitive environment in the financial market. While the entry of foreign banks could definitely improve the competitive environment, they are not likely to weaken domestic banks. With better technology and expertise in offering specialized banking products such as derivatives, advisory services, trade finance, etc, the entry of foreign banks can enhance healthy competition and has a positive spillover effect on the domestic banks. The domestic banks would be under peer pressure to improve operational efficiency. The ongoing revolution in information and communication technology has, however, largely bypassed the Indian banking system given the low initial level of automation. The competitive environment created by financial sector reforms has nonetheless compelled the banks to gradually adopt modern technology, albeit to a limited extent, to maintain their market share.

There are various financial products that a bank offers to its customers such as- different types of accounts viz. Savings Account, Fixed Deposit Account and other facilities like Loans, Investments, Insurance etc. Since this sector is facing lot of competition, banks have to design their policies and strategies to attract more and more customers. It is a race to catch the position of market leader with maximum market share. MARKETING OF BANK SERVICES: It means designing good services as well as good delivery of these services. It covers following functions: Identification of customer needs, financial/service related Developing appropriate services/products to suit the needs and determining their prices. Setting up channels for their delivery and making the present and potential customers aware about their availability. Developing proper attitude, orientation and culture among the employees for delivering the services to the satisfaction of the customers.

SCOPE OF BANKING INDUSTRY: Banks have voluntarily taken on the entire task of mobilization of savings of the household sector, over the past several decades, and helped achieve impressive household savings rates of 20% of the Countrys GDP. We are already witnessing the ATMs progressing, Tele banking, and Home Banking, and the trends towards aggregation and cross selling of various financial products, such as Banking, Mutual Funds, and Insurance, to name just a few, are very evident. The ATMs may even be smart ATMs- using biometrics, to recognize customers by their voice face or fingerprints. In essence, the new generation ATMs will be retailing ports and will change the very face of banking as well as retailing. As we achieve higher economic growth, the demand for banking products and services will increase exponentially particularly, in areas outside the handful of major cities and towns. The entire banking industry is set to undergo dramatic and sweeping changes. BANKING OPPORTUNITY: INDIA CALLING It is not just the reports saying that foreign financial entities (GE Money, Goldman Sachs and Merrill Lynch to name a few) are showing interest in Indian banking sector, but the concerned authorities in the country also seem to be encouraging the same. Reserve Bank of Indias twin-

phased roadmap for facilitating entry of foreign banks into India seems to be a step towards fulfilling the key objectives of competition, consolidation and convergence in the sector. But what is it that is enticing the foreign entities to the Indian shores? Here, is the reasonFRAGMENTED MARKET Twenty seven PSU banks, 25 private banks, 30 foreign banks and a host of cooperative and regional rural banks do not in any sense implicate that In HALF OF THE PIEFY08 (Rs ) Advance s Market Share 1,955 SBI HDFC Bank 631 Canara Bank 476 472 PNB Bank of India 458 Bank of Baroda 356 ICICI Bank 177 Standard Chartered 162 4,687 Total

22.7 %

7.3%

5.5%

5.5%

5.3%

4.1%

2.1%

1.9%

54.4%

Considering only scheduled commercial banks The fact that the top 8 banks account for barely 54 per cent of the market share suggests that several smaller players occupy the remaining 46 per cent. It is here that the foreign players see the opportunity. Also, since the new foreign players will not be allowed to expand freely, the ones taking the subsidiary route for expansion will not be subjected to rural branch norms (25 per cent of branches to be set up in rural areas) as well as priority sector lending requirement (35 per cent). They can thus concentrate their focus on the lucrative urban markets. The bottom line is- The optimism about the foreign participation in the banking sector has its own share of vices. While opening up the sector to more competition and consolidation, it is pertinent to safeguard the smaller domestic banks from getting cannibalized by their stronger foreign counterparts. With regulators like RBI and SEBI keeping a close watch we can hope that they do not fall prey to the vested interests of the foreign players.

COMPANY PROFILE

COMPANY PROFILE
BANK HISTORY
Founded as CANARA BANK Hindu Permanent Fund in 1906, by late Sri Ammembal Subba Rao Pai, a philanthropist, this small seed blossomed into a limited company as CANARA BANK Ltd.In 1910 and become Canara Bank in 1969 after nationalization.

"A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people" - A. Subba Rao Pai.

Founding Principles:1. To spread education among all to sub-serve the first principle. 2. To inculcate the habit of thrift and savings. 3. To transform the financial institution not only as the financial heart of the community but

the social heart as well.

4. To assist the needy. 5. To work with sense of service and dedication.

6. To develop a concern for fellow human being and sensitivity to the surroundings with a view to make changes/remove hardships and sufferings.
7. To develop the internet-banking service between their customers.

8. To assistance the educated or professional persons for their self employment. 9. To invest the savings of their investors in proper projects or in institutions. 10. Sound founding principles, enlightened leadership, unique work culture and remarkable adaptability to changing banking environment have enabled Canara Bank to be a frontline banking institution of global standards.

Significant milestones
Year 1st July Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000 shares 1906 1910 of Rs.50/- each, with 4 employees. Canara Hindu Permanent Fund renamed as Canara Bank Limited

1969 1976 1983 1984 1985 1987 1989 1989-90 1992-93

14 major banks in the country, including Canara Bank, nationalized on July 19 1000th branch inaugurated Overseas branch at London inaugurated Cancard (the Banks credit card) launched Merger with the Laksmi Commercial Bank Limited Commissioning of Indo Hong Kong International Finance Limited Canbank Mutual Fund & Canfin Homes launched Canbank Venture Capital Fund started Canbank Factors Limited, the factoring subsidiary launched Became the first Bank to articulate and adopt the directive principles of Good Banking. Became the first Bank to be conferred with ISO 9002 certification for one of its branches in Bangalore Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for catering exclusively to the financial requirements of women clientele. Maiden IPO of the Bank Launched Internet & Mobile Banking Services 100% Branch computerization Entered 100th Year in Banking Service

1995-96

2001-02 2002-03 2003-04 2004-05

2005-06

Launched Core Banking Solution in select branches Number One Position in Aggregate Business among Nationalized Banks Retained Number One Position in Aggregate Business among Nationalized Banks.

2006-07

Signed MoUs for Commissioning Two JVs in Insurance and Asset Management with international majors viz., HSBC (Asia Pacific) Holding and Robeco Groep N.V respectively

2007-08

Launching of New Brand Identity

PROFILE OF CANARA BANK:

A Brief Profile of the Bank Widely known for customer centricity, Canara Bank was founded by Shri Ammembal Subba Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a small port in Karnataka. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence. Growth of Canara Bank was phenomenal, especially after nationalization in the year 1969, attaining the status of a national level player in terms of geographical reach and clientele segments. Eighties was characterized by business diversification for the Bank. In June 2006, the Bank completed a century of operation in the Indian banking industry. The eventful journey of the Bank has been characterized by several memorable milestones. Today, Canara Bank occupies a premier position in the comity of Indian banks. With an unbroken record of profits since its inception, Canara Bank has several firsts to its credit. These include: Launching of Inter-City ATM Network Obtaining ISO Certification for a Branch Articulation of Good Banking Banks Citizen Charter Commissioning of Exclusive Mahila Banking Branch Launching of Exclusive Subsidiary for IT Consultancy Issuing credit card for farmers Providing Agricultural Consultancy Services

Vision:
To emerge as a Best Practices Bank by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach.

Mission:
To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking.

Canara Bank in India

Canara Bank in India has a history of nine decades and is the largest public sector banks in India. Canara Bank India has a deposit advance base of Rs.640 bn and Rs 332 bn (figure in the year 2002). Canara Bank of India has a total of 47,843 employees and is spread with 2409 branches throughout the country. Canara Bank India has an exposure to petroleum, engineering, infrastructure, factoring, investment management, venture capital, home finance and securities. Canara Bank entered Forex arena in 1953 with the opening of its first Foreign Exchange Department in Mumbai. The Bank has 5 forex dealing rooms located in Mumbai, New Delhi, Calcutta, Chennai and Bangalore in India and one in London branch. Can bank provides a wide range of services and products like sale and purchase of 7 world currencies, swap currency and forward bookings.

SHARES OF CANARA BANK:Canara Bank Shares are listed at Bangalore, Mumbai and National Stock exchanges. The Bank has appointed the under mentioned as its share transfer agent to whom communications regarding change of address, change in Bank Mandate, transfer of shares , Mandate for ECS etc. should be addressed. Karvy Consultants Ltd 46,Avenue, 4StreetNo.1BanjaraHills Hyderabad-500034

Interms of SEBI guidelines, the Registrar and Transfer agent of the Bank is extending the facility of simultaneous transfer -cum dematerialization of shares to the investors. On transfer of shares in the name of the transferee, they are being apprised to submit letters to their depository participants for dematerialization of shares. On receipt of Demat request forms, the shares are dematerialized and confirmation through electronic mode is sent. If the demat request number is not received within a period of 30 days, the duly transferred share certificate is dispatched to the transferee. Canara Bank Share holding pattern are as below: Government of India Mutual Funds/Other Institutions Rs.300.00 Crs Rs. 23.56 Crs 73.17% 5.75%

Awards/Accolades:
Received during 2007-08

First National Award, instituted by the Ministry of Micro, Small & Medium

Enterprises, Govt. of India for 'Excellence in Micro & Small Enterprises (MSE) Lending' for 2006-07.

'Golden Peacock Award for Corporate Social Responsibility' for the year

2007. Canara Bank is the first PSB to receive the award since its institution in the year 1991.

Golden Peacock National Training Award-2007, instituted by the Institute of

Directors, New Delhi, a pioneer in Quality Revolution.

Conferred the Business Superbrands Status for 2008. 'The Organization of the Year Award- for PR Excellence', instituted by Public

Relations Council of India.

Excellence in the field of Khadi & Village Industries in South Zone for the year

2006-07, instituted by Khadi & Village Industries Commission, Ministry of Micro, Small & Medium Enterprises, Government of India. Received during 2008-09

Conferred 'First Rank' in India's Best Banks awards under the category

'Strength and Soundness' for 2006-07 by a survey conducted by Ernst & Young.

Best Performing Bank under Rural Employment Generation Programme,

(REGP) of Khadi and Village Industries Commission (KVIC), in South Zone for the year 200708, instituted by the Ministry of MSME, Government of India.

Golden Peacock National Training Award 2008 for excellence in training. Global HR excellence in Training, an award conferred by the Asia Pacific HR

Congress, the largest rendezvous of HR Professionals, at its Employer Branding Talent Management Congress held on 22nd and 23rd August 2008, Delhi.

Best Corporate Social Responsibility Practice Award, instituted by BSE,

NASSCOM and Times Foundation & The Bank won two Silver Corporate Collateral Awards for Best Corporate Ad in the Print Media and Best Corporate Film on Corporate Social Responsibility at the Public Relations Council of India Awards 2009.

Product Information

Product Information Deposits:- CANARA Bank offers wide variety of deposit products to suit customers
requirements. Coupled with convenience of networked branches, over 1800 ATMs and facility of E-channels like Internet and Mobile Banking, CANARA Bank brings banking at their doorstep. Customers have to select any of their deposit products and provide details online and banks representative will contact them for account opening.

1.

Savings Account: CANARA Bank offers its customers a

power packed Savings Account with a host of convenient features and banking channels to

transact through. Debit-cum-ATM card Value Added Saving Account Internet Banking Credit Cards.

Phone Banking Anywhere Banking Standing instructions Nomination facility Doorstep service

2.
the Fixed Deposit. Wide range of tenures Choice of investment plans Partial withdrawal permitted

Fixed Deposit: It ensures safety, flexibility, liquidity

and returns!!!! CANARA Bank offers its customers a combination of unbeatable features of

Safe custody of fixed deposit receipts Auto renewal possible Loan facility available Easy Deposit: Free Debit

 ATM card No need to open a Savings account. Options of Easy Withdrawal and Easy Loan Wide range of tenures Auto renewal possible Loan facility available

3.

Recurring Deposit: When expenses are high, people

may not have adequate funds to make big investments. But simply going ahead without saving for the future is not an option for them. Through CANARA Bank Recurring Deposit they can invest small amounts of money every month that ends up with a large saving on maturity. So they enjoy twin advantages- affordability and higher earnings. Encourages savings Loans against deposits available High rates of interest Non-applicability of Tax Deduction At Source The minimum balance of deposit is Rs.1,000p.m. and thereafter, in multiples of Rs.100 The minimum period is 6 months and thereafter, in multiples of 3 months.

4.

Salary Account: CANARA Bank Salary Account is a benefit-rich payroll account for
Employers and Employees. Easy disbursements of salaries Free 24 hour Phone Banking Free Internet Banking Reduces paperwork Saves remittance costs Employees receive instant credit of salaries Defense Banking Services All benefits of being an CANARA Bank account holder

5.

Senior Citizen Services: As a person reaches the age to

retire, he does have certain concerns whether his hard earned money is safe and secure

Whether his investments give him the kind of returns that he needs. That's why CANARA has an ideal banking service for those who are 60 years and above. The Senior Citizen Services from CANARA Bank has several advantages that are tailored to bring more convenience and enjoyment in their life. Higher Interest Rates Special Demand Loans against deposit Free collection of outstation cheques drawn on our locations Debit-cum-ATM card Internet Banking Phone Banking Anywhere Banking

 Nomination facility

6.

Kids Account: It's really important to help children

learn the value of finances and money management at an early age. Banking is a Serious business, but the bank makes banking a pleasure and at the same time children learn how to manage their personal finances. Secure childs future Teaches the child to be financially responsible and independent For children aged 1-18 years Choice of saving bank account, fixed deposit account or recurring deposit account Minimum balance at Rs.500 per quarter from savings bank Free personalized cheque book Free Domestic Debit Card for children above 10 years Facility to invest in GOI Relief Bonds and Mutual Funds Free Internet Banking Facility of shopping at Young Stars very own shopping page

7. Loans:
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.

OBJECTIVES

OBJECTIVES
To know various kind of loans offered by canara bank. To know the terms & conditions relating to loans. To know the economic mode of granting loans.

To conduct EDPs and Skill development programmes (EDPs) for different target groups. To assist potential Women Entrepreneurs to start/establish/run an Enterprise professionally. To guide existing entrepreneurs to improve the working and modernization of an existing unit. To co-ordinate with Government/Voluntary organizations engaged in promoting entrepreneurship among women. To offer counseling services to the Entrepreneurs existing as well as new. To assist in the formation of self-help groups. To assist the customers for different financial products in the market. To offer the new loan facilities to their customers and guide properly time to time. To help their customers time to time relating to new policies and guidelines of the Reserve Bank of India which is opted in the bank.

To develop the proper co-ordination between all the customers of the bank and the sent the appropriate information.

NEED FOR THE STUDY:

Banks are operating in the oligopolistic market condition with the sellers selling more or less same products but with some differentiation. Since, the prices are determined by the market forces, the only way banks can make profit is by providing differentiated products and services. The need for doing this project was to analyze the strategies employed by banks to provide d To find out the effectiveness of advertising campaign of banks. To identify the competition in the banking industry.

To analyze the satisfaction level among the banks customers with regard to the products and services offered to them. To find out awareness level in customers regarding the services of banks. To find out the effectiveness of advertising campaign of banks. To identify the competition in the banking industry. To analyze the satisfaction level among the banks customers with regard to the products and services offered to them. To analyze the paying capacity of the customers of the bank.

SCOPE:
The research zone selected by me was Khanna (Punjab).

FEATURES OF KHANNA:
Population: - rich crowded city. Geographical Location: - Khanna near to Mandi gobindgarh is an industrial area in Punjab. It is surrounded by many industries around it.

Rationale:
The rationale of doing this project was to get the clear understanding of the marketing strategy for selling various financial products by banks and develop analytical skills to analyze the performance and productivity of public sector and private sector banks through ratio analysis. The scope of research was limited to only Khanna. Khanna is a small city. Thus, the analysis can be biased and inaccurate. Because of scope being limited to Khanna the conclusions drawn may not hold true for other areas. The reluctance of the respondents to fill up the questionnaires was also a limitation.

Non-availability of the financial data of other private sector and public sector banks for the whole year on Internet posed a limitation in calculating and comparing ratios. The scope of learning in banking sector is very vast. But, because of time constraint the focus of knowledge was limited.

RESEARCH AND METHODOLOGY

RESEARCH AND METHODOLOGY

RESEARCH For doing the research on this project, I did the analysis of marketing of various financial products like savings account, fixed deposit account; demat account, loans, insurance etc. in CANARA Bank . A similar analysis was also done in other private sector banks like ICICI and public sector banks like State Bank of India. After that a comparative analysis by the means of pie chart and bar diagram was done between CANARA Bank v/s other Pvt. Sector Banks. I have also studied financial statement of CANARA Bank and compared it with other private sector banks and public sector banks, which gave an idea of the productivity and performance of these banks.

SAMPLE SELECTION CRITERIA:

The sampling technique used for my research was Probability Sampling Technique i.e. number of items were selected at random.

DATA COLLECTION METHOD:

Primary data: Primary data was collected by the means of questionnaires which contained all closed ended questions except one open ended question for critical comments, if any. Besides this, personal interviews from the staff & customers of CANARA Bank. Secondary data: For the purpose of doing study of financial statement and other information, secondary data was collected from Internet, old records of the bank. Sample size:

The sample size was 150 respondents. In which mostly are the males who taking the loans for the different purposes. Mostly females are not taking risk. Conclusions and recommendations were given at the end of the project report.

Banking Sector- Results Review- A mixed bag

The Indian banking sector during the may to august quarter posted mixed results. Although this was on expected lines, some of the banks showed huge variations. Here we have three analytical groups to understand the result pattern. These are the public sector (PSU), private sector-ex ICICI Bank and ICICI Bank. The universe of banks for the said study is as follows:

Sr No 1 2 3 4 5 6 7 8 9 10

Public Sector State Bank of India Punjab National Bank Bank of Baroda CANARA Bank Oriental Bank of Commerce Bank of India Union Bank Corporation Bank Andhra Bank VIJAYA Bank

Private Sector ICICI Bank HDFC Bank UTI Bank HSBC Bank ING Vysya Bank Jammu and Kashmir Bank Kotak Bank Yes Bank IDBI Bank

DATA ANALYSIS & INTERPRETATION

DATA ANALYSIS & INTERPRETATION

Q1. Are you interested in taking loan?

Response Yes No

No. of response 70 30

Percentage % 67 33

Total

100

100

Interpretation: Under this, 100 peoples who are agreed to take loan for the different jobs, mostly all are the males who taking the risk and pay the install of loan in time. But 50 peoples can not take loan due to heavy interest rates and paying capacity, risk factor, mostly these are all females.

Q2. What kind of loan you want to avail? Response House loan Educational loan Personal loan Vehicle loan Total No. of response 15 35 21 29 100 Percentage % 15 35 21 29 100

Interpretation: 15% respondents want to avail house loan, 35% educational loan, 21%personal loan & 29% vehicle loan.

Q3. For how many years you want to avail loan?

Response Less than 1 Year 1 to 3 Year 3 to 5 Year More than 5 Year Total

No. of response 15 35 21 29 100

Percentage % 15 35 21 29 100

Interpretation: 15% respondents want to avail loan less than 1 year, 35% avail loan for 1 to 3years, 21%respondent avail loan for 3 to 5 years & 29% avail loan for more than 5 years.

Q4. Which Bank is preferred by you for making transactions relating to loans and advances? Banks No. of respondents Public Sector Bank 60 Private Sector Banks 25 Co-operative Sector Banks 15

INTERPRETATION:
The figures show that most of the respondents are transacting with the nationalized banks. The sum total is not 100(sample size being 100) because of 3 respondents having banking relationship with more than one bank. Other private banks include ICICI Bank, Co-operative Banks etc. While nationalized banks include State Bank Of India, Bank Of Baroda, Vijaya Bank, Punjab National Bank, Canara Bank, Corporation Bank etc.

Q5. Which class avail the maximum bank services? Occupation Business Service Self-employed Others

No. of respondents

35

38

11

16

INTERPRETATION:
The no. of respondents under service and business class was almost same. Others group includes students and housewives etc. who do not fall under any other category. The no. of respondents in self-employed group was the least. This is due to the randomly selected data.

Monthly Income (Rs.) No. of respondents

5,000-10,000 27

10,000-20,000 46

20,000 & above Nil 15 12

Q6. What kinds of accounts are used by customers according to their income?

INTERPRETATION:
Majority of the respondents fall under the middle-income group category. Most of these respondents were either businessmen or service class people. The respondents under the category of nil income were students and housewives. They usually operate their account on the basis of their savings and other sources.

Q7. How you prefer to pay your installments ? Response MONTHLY QUARTERLY ANNUALLY Total No. of response 25 40 35 100 Percentage % 25 40 35 100

INTERPRETATION:
The no. of respondent given in the question, out of which 25% respondent pay the installment monthly, 40% prefers quarterly and 35% respondent pay the installment yearly. According to requirement every respondent have different categories.

Comparison between CANARABank v/s other private sector banks v/s public sector banks:
The PSU sector showed strong core income growth due to robust business. Although interest income did not show a great picture, interest on advances figure gave a better indication. Despite no incremental growth in interest on investments, interest income still managed to post decent growth number on back of good growth in interest on advances. Employee expenses continued to grow at steady rate of around 17%. This figure is inclusive of the VRS expenses. The next fiscal figure is expected to show a lower growth, as most of the PSU banks are in their last year of VRS expenditure amortization. Provisioning for the PSU banking group registered a huge rise as

most of the top PSU banks refrained from transferring securities to the held to maturity (HTM) basket in the September quarter. The private sector banks stood out among the sector during the December quarter results. While most of the PSU peers posted negative growth in profits, the private sector peers managed to post a decent profit growth of 13%. The private sector banks posted a strong net interest income growth through higher level of growth in interest income. Drop in interest cost for CANARA Bank has kept the private bank groups interest cost with a marginal growth. Operating expenses for the private sector banks continue to grow at a much faster rate, at around 30%. The private sector banks have market linked pay structure for the employees apart from the strong thrust on retail lending which increases operating cost. Contrary to PSU peers, the private sector banking groups recorded fairly normal provisioning expenditure. Few banks in the PUBLIC ex CANARA Bank registered a drop in tax provisions. Most of these banks are those with negative profit growth, trying to shore up profits. The net interest income of CANARA Bank increased by 51.2%, which is more than other private and public sector banks. Though interest income of Private Banks excluding CANARA Bank was more than PSU Banks and HDFC Bank, the net interest income declined due to increase in interest expenses. Because of increase in net interest income of CANARA Bank, it recorded more growth in total income than that of other banks. PUBLIC Banks excluding CANARA Bank showed very little growth in operating profit because of high growth in operating expenses that is mainly due to employees pay structure and thrust on retail lending. The growth was almost equal in CANARA Bank and Other Banks. PAT decreased in PSU Banks because of considerable increase in provision and contingencies. It increased slightly in Pvt. Banks. It increased by 17.6% in CANARA Bank due to decrease in provision and contingencies Interest on advances is a major source of income in banks. It increased almost equally in CANARA Bank and Other Banks. But, it increased more in Public sec. Banks ex-CANARA Bank. Overall, it can be concluded that the performance of CANARA Bank is better than Private Banks.

Ratio analysis:
Pvt Banks ex-ICICI CANARA Bank PSU Banks Bank

Growt Period to (Figures in %) Other Income Interest Interest Income Cost / Income Employee Cost/ Total Cost 67.3 68.4 (1.0) 32.6 34.3 (1.7) Expense/ 55.1 46.0 59.8 46.0 (4.8) (0.1) 53.7 48.0 55.6 42.5 (1.9) 5.5 Income/ Total 32.6 33.3 (0.7) 32.6 36.2 (3.6) 12/04 12/03 h (3) (3) (%) 12/04 12/03 Growth (3) (3) (%)

12/04 12/03 Growth

(3) 54.9

(3)

(%)

62.6 (7.7)

69.2

77.9 (8.7)

52.5 21.6

49.7 2.8 22.4 (0.8)

Ratio analysis shows the same trend for private banks as their PSU counterparts, the striking difference has been the cost to income ratio. Private Banks due to a rise in their operating expense reported a rise in cost to income ratio. Most of the rise has come through non-employee costs, which are a result of a greater thrust on retail products, which require a higher publicity budget and increased investment in infrastructure. The decline in interest expense to total income in CANARA Bank was more which shows that it has reduced its expenses in total income. Though other banks also reported the same, but it was less than CANARA Bank.

SWOT ANALYSIS

SWOT ANALYSIS
STRENGTH:
Brand name: CANARA Bank is the countrys largest bank in public sector and has a brand name. It is a brand that has ridden the crest of the recent consumerism in the country, and has become a strong case of how brands can drive businesses, and how to build a strong brand in a short time. Wider reach: CANARA Bank has been on an expansion spree. It is also leveraging on a large ATM network in order to augment its reach further. Due to the aggressive branch and ATM network expansion, the bank has been able to grow its retail assets significantly. Going forward, the bank is in a good position to tap the retail market due to its expanded reach. 10 to 7 banking: The banks working starts from 10a.m. to 7p.m. 6 days a week, even on Saturday, which is found to be very convenient for customers especially businessmen who can transact in bank before going to their business. This facility is not provided by even the countrys largest bank-State Bank of India. Anywhere cash deposit facility: The customers of CANARA Bank can deposit from any of its branches across the country. The transaction if free once a month and after that

nominal charge is to be paid, which is debited automatically from the amount being deposited. The charges are negligible. Efficient services: The bank deserves award for its efficient services from opening a simple saving account to providing other services like portfolio management and demat services. Customers are provided with hand-to-hand free kit of cheque book and ATM cum debit card. The bank also provides the facility of same day DD clearance to its customers. Cash Management Service (CMS): The current account holders are provided CMS facility in which all the cheques and DD are cleared the same day even if the cheques are out station. This facility is not meant for other account holders. Courteous services: The bank not only provides efficient but courteous services too. They are treated with due courtesy in every branch of CANARA Bank which gives its customers a feeling of comfort and satisfaction with all the queries being handled within the branch itself. Focus on customer convenience: The bank provides host of services under one roof. Mutual funds, trading in shares etc. to name a few.

WEAKNESS:
Strict guidelines: Some of the guidelines are considered strict and not suitable for every person as per the opinion of customers. For example: for opening savings account in CANARA Bank, the person has to deposit a minimum amount of Rs.3000 and quarterly average balance has to be Rs.2700. This is not considered justified by some customers who have less income and savings and cannot maintain such balance. This is also one of the reasons of closing of the account by the customers. Focus on class banking: The bank is mainly focused on class banking and not mass banking. But, the bank is witnessing mass banking in some locations. Thus, it is concentrating on eliminating the customers who are not giving any profit to the bank by imposing charges, the target being class people with high margins and savings. Less sales force: The bank is having less force than it needs to create more awareness among general public. Increase in the number of sales team can help the bank in expanding its network and customer base.

OPPORTUNITIES:

Growing niche market: There is the opportunity to explore the growing niche market in rural and semi-urban areas. Increase in income: The rising income of people with the economy being growing is also an opportunity to exploit. With increase in income, savings also increase and thus leading to increase in investment also. So, this opportunity can be exploited fully to increase the spread.

Growing customer awareness: These days, customers are getting more and more aware about the products of banks. They are now in a better position to decide which bank to choose to deal with. They want not just variety of services, but efficiency in delivering those services, which can give them satisfaction. CANARA bank being widely known for its efficiency in services can play on its strength and exploit this opportunity to the fullest.

Advancing technology: This sector is related with the technology. With the advancement in technology like future ATMs by using biometrics recognizing the customers by their face, voice or fingerprints can prove to be an opportunity. By imbibing such kinds of technological changes at the earliest, the bank can become NO.1 in changing technology with change in time.

Shift in preference of customers: The customers of many private banks are now changing their preference towards Nationalised banks because of some loopholes in Nationalized banks and filling of unsatisfied needs of customers by private sector banks. CANARA Bank with its brand name and wider reach can be the beneficiary because of this shift.

Changes in governments policies: The recent change in the governments policies also provides opportunities.

THREAT:
Competition: Competition in banking sector is growing at a rapid pace with the economy becoming liberalized and opening up of this sector to FDI. Foreign entrants are giving a challenge to domestic banks to provide something different to its customers. This poses a threat to banks and if not considered seriously by any bank, can become the reason for decline in the customer base.

LIMITATIONS

LIMITATIONS

Due to inflexibility in account opening it is difficult to convince customers.

No authentic evidence of customers is found.

No special facilities of loans to businessman are given in semi rural or rural area.

The facility of commercial loans and working capital finance also not provided.

The bank is not tapping untapped areas.

Lack of communication & delivery channels.

Lack of social banking.

Very less loan schemes for educated unemployed, women and for the education of poor children.

 Loans are not provided without security.

Loans are not provided at ease lot of paper work & documentation is involved.

The time bound period is the major limitation in research projects.

RECOMMENDATIONS

RECOMMENDATIONS

Recommendations: After conducting the survey, following recommendations can be

suggested to the bank. Hope they will help the bank in achieving excellence.

More customer convenience: Flexibility in account opening procedure should be

introduced on presenting authentic evidences by the customers. For example- accounts should be opened with cash also and the limit of quarterly average balance should be decreased.

Services for businessmen: The bank should provide special facilities to businessmen in
rural and semi-urban areas also. For example- the facility of commercial loans and working capital finance should be provided.

Rural Banking: The vast scope of rural banking in nearby places of khanna should be
explored through provision of crop loans, loans for agricultural equipments etc. The bank can also tap the untapped potential for banks presence by establishing more communication and delivery channels

Social Banking: The bank can promote social banking through provision of loan schemes to
educated unemployed, women and for the education of poor children. Such loans can be provided without any security and at lower rates of interest.

SUGESSTIONS

SUGESSTIONS
The cutthroat competition of 21st century demands not just a satisfied but delighted customer as a key to success in a service industry. As per the survey conducted, customers attitude is changing with the change in preference from nationalized to private sector banks because of wide difference in the efficiency of services provided. Long waiting lines, discourteous employees attitude, favoritism, lack of attention towards the convenience and comfort of customers are the loopholes that came in light during the data collection process. Many Indian public sector banks have even ignored the technological change, and have acceded market share to foreign banks and

new private banks. While on the other hand, CANARA Banks easy access in terms of wider reach, healthy organizational culture, courteous behavior of employees, customer focus and embracement of technology have been repeatedly appreciated. Also, improved advertising efforts, embracement of latest technology, more and more awareness about internet banking thus facilitating customers while providing solutions at their convenience and easy reach and an approach to target the lower income group constituting about 30% of the city population can serve to be the milestones in CANARAs success story..

BIBLIOGRAPHY:

BIBLIOGRAPHY:

1.BOOKS AUTHORS
Kotler, Philip, Marketing Management, 12th edition, Prentice Hall of Private Ltd, 2007 Keller, Kevinlane, Marketing Management, 12th edition, Prentice Hall of Private Ltd, 2007 Kothari, C.R., Research Methodology, 2nd edition, New Age International(P) Ltd, 2004

2. NEWS PAPERS
Times of India, Date:- 23-06-09, Page no.15. Financial Express, Date:- 29-06-09, Page no.17 Economic Times, Date:-15-07-09, Page no.16

 Hindustan Times, Date:- 21-07-09, Page no.17

3. WEBSITES
www.canarabank.com www.financialexpress.com www.financialservices.com www.financialtimes.com www.financialterms.com

QUESTIONNAIRE

QUESTIONNAIRE
Dear Sir/Madam I am a student of Punjab business school, Chunni kalan, Disst. Fathegarh shahib And presently doing a project on A Study of Loans & Advances offered at Canara Bank. request you to kindly fill the questionnaire below and assure you that the data generated shall be kept confidential. . Please co-operate to fill this questionnaire.

Q1. Are you interested in taking loan?

(a) If YES ------------- ( refer to Q3) (b) If NO ------------Q2. Which Bank you prefer while taking loan?

(a) Public sector bank ---------(b) Private sector bank ----------

Q3. What kind of loan you want to avail from the bank?

(a) (b) (c) (d)

House loan -----------Educational loan --------Personal loan -----------Vehicle loan ------------

Q4. How much amount you required as loan?

(a) Rs 100000 to 500000 -------------(b) Rs 500000 to 1000000 ------------(c) More than above -----------Q5. For how many years you want to avail loan?

(a) 1 to 3 years ------------(b) 3 to5 years ------------(c) 5 to 10 years -----------

Q6. What kind of documents you should give as security to banks?

(a) Salary slips ----------(b) Registries ------------

Q7. How you prefer to pay your Installments?

(a) Monthly installments -----------(b) Quarterly installments ---------(c) Annually installments -----------

Q8. IN what ways you show your residential proof to bank while taking loan?

(a) (b) (c) (d)

I Card ------------Voter id ---------Electricity bill --------PAN NO -------------

Q9. Who is giving guarantee on your behalf to bank?

(a) Person within same bank -----------(b) Any other person -------------------(c) Any branch related to bank------------

Q10. Are you satisfied with the terms & condition relating to loans provided by the bank to you?

(a) Fully satisfied ------------(b) Partially satisfied -------------(c) Unsatisfied -------------

Q11. Any Suggestions & Recommendations ---------------------------

BACKGROUND DATA
1. Name _________________________________________

2. Sex:

(a) Male

(b) Female

3. Age:

(a) Below 18

(b) 18-35

(c) 35-50

(d) Above 50

4. Education:

(a) Under Graduate

(b) Graduate

(C) Post Graduate

5. Occupation:

(a) Service

(b) Profession

(c) Business

(d) Others

6. Income:

(a) Less than Rs. 50,000

(b) Rs. 50,000 to 1,50.000

(c) Rs. 1,50,000 to 3,00,000

(d) Rs. 3,00,000 & above

7. Address __________________________________________ __________________________________________ __________________________________________ 8.Phone no. __________________________________________

*Thanks for your valuable time and co-operation*

Financial Statements

BALANCE SHEET OF CANARA BANK

Balance Sheet of Canara Bank

Mar ' 09 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets 4,440.07 2,168.16 1,510.61 761.30 57,776.90 4,254.33 2,204.86 1,337.46 712.01 49,811.57 4,056.39 2,242.87 1,195.04 618.48 45,225.54 410.00 9,629.61 410.00 7,885.63 410.00 7,701.11 Mar ' 08 Mar ' 07

(In Crores)
Mar ' 06 Mar ' 05

410.00 6,608.86

410.00 5,582.04

1,86,892.51 1,54,072.42 1,42,381.45 1,16,803.23 96,908.42 1,96,932.12 1,62,368.06 1,50,492.57 1,23,822.09 1,02,900.46

1,718.60 113.38 1,030.13 575.09 36,974.18

1,577.53 116.92 904.72 555.90 38,053.88

Current assets, loans & advances 4,060.26 2,684.17 2,994.53 2,909.95 2,488.34 Less : current liabilities & 13,488.91 13,438.55 11,651.25 8,860.57 7,173.63 provisions Total net current assets -9,428.66 -10,754.38 -8,656.72 -5,950.62 -4,685.29 Miscellaneous expenses not written Total 49,109.55 39,769.21 37,187.30 31,598.66 33,924.48

Profit & Loss account of Canara Bank

Profit loss account Income Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings 1,877.15 23.83 1,890.63 3,791.61 1,928.00 901.24 2,829.24 12,401.25 173.64 2,655.59 500.00 2,071.59 0.83 2,072.42 2,072.42 328.00 55.75 1,688.67 1,661.28 45.65 1,789.39 3,496.32 1,364.92 750.34 2,115.26 10,662.94 169.97 1,945.29 340.00 1,563.92 1.09 1,565.01 1,565.01 328.00 56.00 1,181.01 1,609.29 39.28 1,226.51 2,875.08 1,359.04 668.65 2,027.69 7,337.73 148.18 1,879.51 250.00 1,420.32 0.49 1,420.81 1,420.81 287.00 48.78 1,085.03 1,515.30 21.61 1,300.38 2,837.29 1,131.79 619.13 1,750.91 5,130.01 145.03 1,605.88 200.00 1,342.83 0.39 1,343.22 1,343.22 270.60 38.00 1,034.62 1,380.15 14.31 1,388.46 2,782.92 1,094.61 357.97 1,452.57 4,421.50 132.95 1,319.63 170.00 1,109.09 0.42 1,109.50 1,109.50 225.50 30.65 853.36 18,120.85 15,524.19 11,571.85 9,099.08 8,299.02 (Rs Crores) Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Cash Flow Statement of Canara Bank

Cash flow Mar ' 09 Profit before tax Net cashflow-operating activity -990.03 Net cash used in investing activity -222.10 Netcash used in fin. activity -6.13 Net inc/dec in cash and equivlnt -1,218.26 Cash and equivalnt begin of year 17,878.04 Cash and equivalnt end of year 16,659.78 Mar ' 08 2,632.60 -262.41 -866.08 1,504.11 16,373.93 17,878.04 Mar ' 07 1,535.43 -191.07 2,206.02 3,550.38 12,823.55 16,373.93

(Rs Crore) Mar ' 06 Mar ' 05 3,790.34 -3,365.58 -157.51 -281.38 522.00 288.68 4,154.82 -3,358.28 8,668.73 12,027.01 12,823.55 8,668.73