1 Mba

A STUDY ON ATTITUDE AND PREFERENCE

OF THE DEPOSITORS TOWARDS PUBLIC

DEPOSIT SCHEMES

PROJECT REPORT

Submitted by

S. MANOJ KUMAR

REGISTER No: 108001123043

in partial fulfillment for the award of the degree

of

MASTER OF BUSINESS ADMINISTRATION

SRI KRISHNA COLLEGE OF ENGINEERING AND TECHNOLOGY

SUGUNAPURAM, KUNIAMUTHUR, COIMBATORE-641008

JULY 2012

SRI KRISHNA COLLEGE OF ENGINEERING AND TECHNOLOGY

SUGUNAPURAM, COIMBATORE -641 008

SCHOOL OF MANAGEMENT

PROJECT WORK

JULY 2012

This is to certify that the project entitled

A STUDY ON ATTITUDE AND PREFERENCE OF THE DEPOSITORS

TOWARDS PUBLIC DEPOSIT SCHEMES

is the bonafide record of project work done by

S. MANOJ KUMAR

Register No: 108001123043

of MASTER OF BUSINESS ADMINISTRATION during the year 2010-2012.

Submitted for the Project Viva-Voce examination held on ________________

----------------------- -------------------------------

Project Guide Head of the Department

------------------------ ------------------------

Internal Examiner External Examiner

DECLARATION

I affirm that the project work titled A STUDY ON ATTITUDE AND PREFERENCE OF

THE DEPOSITORS TOWARDS PUBLIC DEPOSIT SCHEMES, being submitted in

partial fulfillment for the award of MBA degree is the original work carried out by me. It has not

formed the part of any other report submitted for award of any degree or diploma, either in this or any

other University.

MANOJ KUMAR .S

108001123043

I certify that the declaration made above by the candidate is true

Dr. R.SUNITHA

Assistant Professor

School of Management

ACKNOWLEDGEMENT

First and foremost, I thank God the Almighty for the successful completions of this project.

I take this opportunity to thank our Principal, Dr.S.Annadurai, and School of

Management, Sri Krishna College of Engineering and Technology providing me an

opportunity to do the project.

I take this opportunity to thank our Director, Dr. C. Ramakrishnan, School of

Management, Sri Krishna College of Engineering and Technology providing me an opportunity to

do the project.

My profound thanks to my project guide Mrs. R. Sunitha, Assistant Professor, School of

Management, Sri Krishna College of Engineering and Technology, for her valuable guidance and

timely help in accomplishing this task.

I also express my gratitude in words to Mr. K.S Viswanathan, President and secretary,

Sundaram industries limited for providing me an opportunity to undergo the project work in his

company.

I from bottom of my heart would like to express thanks to my parents, friends and others for

their encouragement and support to complete my project work.

MANOJ KUMAR.S

TABLE OF CONTENTS

CHAPTERNO.

TITLE PAGENO.

List of tables I

List of figures II

1.1 About the project 1

1.1.1 Hypothesis 2

1.1.2 period of study 2

1.2 Industry profile 3

1.2.1 TVS group of companies 3

1.3 Profile of the company 4

1.3.1 Rubber division 4

1.3.2 Tyre solution division 5

1.3.3 Vision and mission 5

1.3.4 Motto and aim 6

1.3.5 Concept of 5-s 6

1.3.6 Technology Of Sundaram Industries Limited 7

1.3.7 Manufacturing quality 7

1.3.8 Export of Sundaram Industries Limited 7

1.3.9 Awards Won By Sundaram Industries Limited 7

1.3.10 Policies of Sundaram Industries Limited 8

1.3.11 Acceptance of public deposits 8

1.3.12 Tenure of deposits 9

1.3.13 Limits for acceptance of deposits 9

1.3.14 Free Reserves & Paid Up Capital 10

1.3.15 Position of deposits accepted 10

1.3.16 Procedure for Invitation of accepts deposits 12

1.3.17 Public Deposits 12

1.3.18 Form and particulars of Advertisement 13

1.3.19 Content of the Advertisement 13

1.3.20 Register of Deposits 14

1.3.21 Return of Deposits 14

1.3.22 Power of Central Government 15

1.3.23 Penalty 15

1.3.24 Maintenance of Liquid Assets 15

1.3.25 Terms and Conditions of Deposits 16

1.3.26 Management of public deposit 22

1.3.27 Services offered to the depositors 25

1.3.28 Financial results of the company 26

1.3.29 Conclusion 26

1.4 Review of literature 27

1.5 Objectives 0f the Study 33

1.6 Scope of the Study 33

1.7 Research methodology 34

1.7.1 Research Design 34

1.7.1.1 Sampling Technique 341.7.1.2 Statistical tools used 34

1.7.1.3 Limitations of the Study 36

2. Data analysis and interpretation 37

2.1.1 Percentage analysis 372.1.2 Anova 472.1.3 Independent t-test 492.1.4 Correlation 512.2 Findings of the study 53

3 Suggestions and conclusion 563.1 Suggestions 563.2 Conclusion 58

Appendix I –Questionnaire 59Appendix II – Bibliography 63

LIST OF TABLES

Tables Particulars Page No

1.3.14 Paid up capital and free reserves from the period of 2005-2010 10

1.3.15 Position of deposits accepted by the period of 2005-2010 11

1.3.24 Liquid Asset Maintenance for the period of 2005-2010 16

1.3.25.4 Term Deposit Scheme interest rates 17

1.3.25.6 Cumulative deposit scheme interest rates 18

1.3.26.2 Term deposit scheme bi-monthly interest 22

1.3.26.3 Term deposit scheme-Quarterly interest 23

1.3.26.4 Cumulative deposit scheme 24

1.3.28 Profit and dividends 26

2.1.1.1 Marital Status 37

2.1.1.2 Monthly income 38

2.1.1.3 Monthly savings 39

2.1.1.4 Online fund transfer 40

2.1.1.5 Regular payment of interest 41

2.1.1.6 Promt repayment of principal 42

2.1.1.7 Friendly service 43

2.1.1.8 Easy procedure 44

2.1.1.9 Safety of principal 45

2.1.1.10 Reputation of the company 46

2.1.2.1 Reputation and promt 47

2.1.2.2 Safety and fixed deposit 48

2.1.3.1 regular payment, promtpay and friendly service with independent

t-test

49

Tables Particulars Page No

2.1.3.2 Compare with share bond and mutual fund 50

2.1.4.1 gold and insurance with correlation 51

2.1.4.2 NSc and fixed deposit with correlation 52

LIST OF FIGURES

FIGURENO

LIST OF FIGURES PAGENO

2.1.1.1 Marital Status 37

2.1.1.2 Monthly income 38

2.1.1.3 Monthly savings 39

2.1.1.4 Online fund transfer 40

2.1.1.5 Regular payment of interest 41

2.1.1.6 Promt repayment of principal 42

2.1.1.7 Friendly service 43

2.1.1.8 Easy procedure 44

2.1.1.9 Safety of principal 45

2.1.1.10 Reputation of the company 46

1

1.1 ABOUT THE PROJECT

Finance is the lifeblood for any business organization, the success of the business depends upon

the available and optimum utilization of finance. It may be defined as the provision of money at

the time when it is required. There are various modes through which a company can augment its

financial requirements. One of such sources is “Acceptance of Public Deposit”. Public deposits

are an important source of financing the medium term and long term requirements of the

company. The term ‘Public Deposit’ implies any money received by a company through the

deposits or loans collected from the public. The Public includes the general public, employees

and shareholders of the company but excludes the money relieved inform of shares and

debentures.

Acceptance of deposits by the companies on a large scale from the public had its beginning in

early sixties when companies engaged in textile manufacture in Coimbatore and Ahmadabad

started issuing advertisements openly inviting deposits from the public offering attractive rates

of interest, Until 1966, there were no restrictions of any kind over this practice and hence, all

types of companies started accepting deposits. In recent years, there have been several instance

of failure by many companies to refund the deposits on their maturity. In other cases, there has

been default by the companies even in the payment of interest due periodically on the deposits.

Hence, RBI stepped in the scenario and exercised its power under chapter 111 B of RBI Act,

1934. Separate directions applicable to both Non-Banking Financial companies (NBFC’S) and

Non-Banking Non-Financial companies (NBNFC’S) were \ issued in 1966 and to miscellaneous

companies in the year 1973.

Acceptance of public deposits is a unique feature of Indian financial system and there is no such

practice abroad of such direct acceptance of deposits by the companies. Since early sixties, the

company deposit market has grown by leaps and bounds. Today, company deposit market

has grown to approximately Rs.25000 Crores with a width of around 5 million depositors

hundreds of top companies belonging to reputed industrial houses like Tata Birla, Escort,

crodves, Tvc etc and Government company like HUD co are accepting deposits from the public.

2

The Company’s fixed deposits are quite popular among the investing community as it bears a

higher rate of interest, more safe. The degree of risk borne by the saver is generally much

greater if he hold deposit claims with Non-Banking Companies. These deposits are unsecured,

that is they are not backed up by any of the assets of the company. But the interest is

compounded every quarter (or) half year with amplifies the returns.

1.1.1 Hypothesis

To find out whether there exists any significant difference between respondents based on

the gender and online interest payment.

To find out whether there exists any significant difference between respondents

based on the Gender and Attitude about the deposit schemes (Easy Procedure).

1.1.2 Period of Study

The study covers a period of five financial years from 2005-06 to 2009-10 such data have been

collected from the corporate office of SICMDU.

3

1.2 INDUSTRY PROFILE

SIL is a flagship company of the prestigious TVS group. The company was incorporated on

19th may 1943 under the companies act, 1956. It was promoted by TVS as a wholly owned

subsidiary company of TVS Iyangar and son’s ltd. The company has three divisions viz rubber

division, tyre solutions divisions and solid tyre divisions.

1.2.1 TVS group of companies

The TVS group has its origin over decades. The company was established in the year 1913 by

Late Mr. T. V. Sundaram Iyengar (Founder). It is considered to be the 15th biggest industries in

the country. Companies with a work force of more than 30000 with an annual turnover of

approximately Rs. 3000 crores.

4

1.3 PROFILE OF THE COMPANY

SIL is a deemed public company by virtue of sec 43 (A) of companies Act, 1956. It is

closely held company where majority of the shares are held by the TVS and sons limited

( Holding Company) and the remaining shares are held by the families of the founder. There are

three divisions of the company viz., Rubber Division, Tyre Solutions Division and Solid Tyre

Division. Rubber division manufactures automobile rubber products in India and has established

dominant position in the market place of focusing on a single goal to achieve a total customer

satisfaction. The company is evolved from the conceptual states of defining the customer needs,

production of quality products and adherity to delivery commitments. TVS Rubber has

evaluated the term “Customer satisfaction” to new heights. ‘TVS Rubber’ is a part of TVS

group, the largest components manufactures in India.

1.3.1 RUBBER DIVISION

The rubber division was started in the year 1962. The company manufactures rubber

products for the export and inland markets. Rubber division has two manufacturing units. One

at Kochadai, Madurai which mainly caters to the need of automobile industry in south India and

the other in New Delhi. The main object of rubber division is manufacturing of automobile

rubber products to be fitted into various sizes of cars. The brand name of the product is

“TVS Rubber” and it is considered to be “The best in India” and second in Asia. This division

offers a wide range of quality products for the following segments.

Automobile: Vehicle manufactures and system manufactures.

Non – Automobile: Industrial, dyence electrical, electronics, mining thermal, telecom,

railway and white goods and the products are.

Diaphragms

Grommets

Dust Covers

Gaskets

Tank Wheel Urbanization

5

Over the last decade, the company has made conscious efforts to increase exports of its

products. Presently, the goods are exported to countries like UK, USA, Germany, Japan, Taiwan,

Korea etc. Couple of years back the division has opened a full-fledged warehouse in USA to

serve the automobile industry there which follows the latest cost reduction technique called ‘Just

In Time’.

1.3.2 TYRE SOLUTION DIVISION

It has twenty three servicing units all over India. Its central administration office is at Chennai.

The division is doing servicing i.e. re-treading of all sizes of worn out tyres. Tyres re- treading

is using the latest technology, using cold curing process for re-treading of tyres. The brand name

of the product is ‘TVS TREAD’ with a work force of 1100 employees.

1.3.3 VISION AND MISSION OF SUNDARAM INDUSTRIES LIMITED:

Vision:

To be a company with the highest profitability in the industry by consistently exceeding

the customer expectation.

Mission:

To maintain leadership in automotive segments

To increase overall productivity

To achieve zero customer complaint status

To improve performance in development of products

To grow in exports replacement and non-auto segments

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1.3.4 MOTTO AND AIM OF SUNDARAM INDUSTRIES LIMITED:

Motto:

The company drives its division with its motto “performance overtakes promise”

Aim:

1. Zero breakdown

2. Zero defect

3. Zero accident

4. Zero mould failure

5. Zero customer complaint

6. Increase overall plant effectiveness by reducing losses

7. Education and multi skill development

8. To create give, clear and pleasuring work environment

1.3.5 Concept of 5-s in SUNDARAM INDUSTRIES LIMITED

The Japanese concept of “5S” in insisted in the division and every employee is made known his

role in 5S. Also executives are given the responsibility by taking care of each “S” and there by

taking continuous efforts for functioning this concept. The 5S concept refers to:

SEIRT - Proper arrangement and Tidiness

SEITON - Orderliness

SEISO - Cleanliness

SEILETSU - Standardization

SHITUSKE - Discipline and Training

7

1.3.6 Technology Of Sundaram Industries Limited:

The company has sophisticated machines in their factory. In rubber division 30 to 40

percent of machines are improved. The machineries are operated by specialized and technical

persons. Research and development unit, which is recognized by the ministry of science

and technology. Department of scientific and industrial research, Government of Indian.

1.3.7 Manufacturing quality:

The rubber division has the latest state of the art equipment and their manufacturing

processes are based on the lean manufacturing system. The beneficial elements of the system

such as Kaizen, effectiveness and efficiency through a highly skilled work force Rubber

division offers its customers the finest quality in any product category, quality is built in at all

stages of activity through continuous improvement of its process by internalizing the principles

of TPM (Total Production Management).

1.3.8 Export of SUNDARAM INDUSTRIES LIMITED:

Expanding opportunities and breaking geographical barriers, TVS rubber has made great in

roads into the global market with a reputation of consistent quality innovation and superior

service. At present rubber parts are exported to USA, UK, GERMANY, ITALY, DENMARK,

GREECE, FRANCE, AUSTRALIA, SINGAPORE, MALAYSIA, LABANON and MIDDLE

EAST. To serve the automobile industry in USA the company has opened a fully

fledged warehouse in USA which offers the cost reduction technique called JIT (just in time).

1.3.9 Awards Won By Sundaram Industries Limited

The company has received the TPM excellence award. In 2006, the company has achieved

TPM consultancy award. TVS Rubber is accredited of QS9000 and ISO-9001 standard and

the division has been receiving prestigious awards from Maruty Udyog Limited for the last

three years in succession since 2007. The division has also won the TPM experts from Japan.

8

1.3.10 Policies of SUNDARAM INDUSTRIES LIMITED

Quality policy:

To achieve customer satisfaction through manufacture and supply of quality products that

meet customer satisfaction.

Safety Policy:

To achieve zero accident by creating and maintaining on safe work method and practice to all

employees. In this day to day operations by constantly maintaining safety health and

environment standard.

TPM policy:

To become a world class organization by continuously enhancing performance of people

machine, products and practices through TPM.

1.3.11 ACCEPTANCE OF PUBLIC DEPOSITS

There was no control over the public deposits till Reserve Bank of India assumed the power to

regulate acceptance of public deposits from February 1964. For the purpose of exercising

regulatory control over the public deposits market, companies are classified as

Non-Banking Finance Company (NBFC)

Non-Banking Non Finance company (NBNFC)

9

Non-Banking Finance Company

NBFC means a company whose principal business is financing in whatever forms but not

qualities enough to be called a “Bank” as defined in the Banking Regulation Act

1979.NBFC include an investment or a hire purchase or a lease company or a mutual benefit

financial company.

Non-Banking Non Finance company

NBNFC include all manufacturing companies, trading companies engaged in shipping,

mining, hotel business and transportation. These companies are regulated by companies

(Acceptance of deposits) rules 1975. Thus, the function of regulating the acceptance of

deposits from public by NBNFC now vests with the central government; sec 58A of the

companies Act 1956 has empowered the central government to frame such rules in consultation

with RBI, prescribing the limits. The manner and the condition subject to which deposits may

be invited and accepted by such companies.

1.3.12 Tenure of deposits:

A company shall accepts or renew deposits which are repayable on demand or on notice or after

a period of less than 6 month or more than 36 month from the date of acceptance or renewal of

such deposits.

1.3.13 Limits for acceptance of deposits:

Under Rule 3(20) of the companies (Acceptance of Deposits) Rules 1975 a company other than

a Government company can accept deposit subject to the following ceiling. 25% of the

aggregate of paid up share capital and free reserves minus miscellaneous expenses not

written off, if any, In addition to the above limit, the company can accept deposits against

unsecured debenture or deposit from shareholders or deposits guaranteed by any other person

who at the time of giving the guarantee is a direction of the company up to a share capital and

free reserves.

10

1.3.14 Free Reserves & Paid Up Capital:

Free reserves is defined as the aggregate of the balance in the share premium account,

capital and debenture redemption reserves and any other reserves shown or published in the

balance sheet of the company and created through an allocation of profits not being a reserve

created for repayment of any future liability or for depreciation in assets or for bad debts or a

reserve created by revaluation of the assets of the company. Paid up share capital is that part of

the subscribed share capital for which consideration in cash or otherwise has been received. It is

also the total amount paid up or credited as paid up on the subscribed capital.

Table 1.3.14 Shows paid up capital and free reserves from the period of 2005-2010.

Year Paid up

capital

Free reserves Miscellaneous

expenses

written off

Total Index

2004-2005 252 2163.65 91.51 2324.14 1002005-2006 252 3092.00 34.89 3309.11 142.382006-2007 252 3816.18 10.21 4057.97 174.602007-2008 252 4249.22 - 4501.22 193.672008-2009 252 4707.25 - 4959.25 213.382009-2010 252 11397.40 - 11649.4 501.23

Source: Secondary Data: Compiled from the records of the company.

It is observed from the table 1.3.14 that the index of the aggregate of paid up capital and free

reserves after adjusting the miscellaneous expenses showed an increasing trend throughout

the study period. Although, the company has earned a free reserve of Rs. 11397.40 in the year

2009-2010, this is much higher than the previous years because of profit on rate of investment.

1.3.15 Position of deposits accepted

The company can accept deposits up to 25% of aggregate of paid up share capital and free

reserves. In addition to this, the company can accept deposits against unsecured debenture or

from shareholder or any deposits guaranteed by any director to the maximum of 10% of the

aggregate of paid up are capital and free reserves.

11

Table 1.3.15 Shows position of deposits accepted by the period of 2005-2010.

Year 25% of the aggregatepaid up capital andfree reserves

10% of the aggregateof paid up capitaland free reservesless miscellaneousexpenses as anydeposit against andunsecured debentureor from share holderor any depositsguaranteed by anydirector

Deposits(Rs in lakhs)

Index for thedeposits

2004-2005 581.04 232.41 268.99 100

2005-2006 827.28 330.91 204.78 76.12

2006-2007 1014.49 405.80 165.90 61.67

2007-2008 1125.30 450.12 168.90 62.79

2008-2009 1239.81 495.92 154 57.25

2009-2010 2929.98 1171.99 158.8 59.04

It is observed from the table 1.3.15 that the total quantum of deposits accepted by the company

showed a mixed trend during the study period. This is due to the management decision of the

company on acceptance of public deposit

SUNDARAM INDUSTRIES LIMITED has Rs 252 lakhs as capital and Rs 11,397.40 lakhs as

reserve and surplus at the end of financial year 2009-2010 and can raise upto Rs 2.929.98 lakhs

as deposits. The actual quantum of deposits held on 31st march 2010 is Rs 158.82 lakhs which

is only 5% of the eligible limit.

12

1.3.16 Procedure for Invitation of accepts deposits:

The procedure for invitation or acceptance of deposits are as per sec 53B (2) of the

companies (Acceptance of Deposit) Rules 1975. These rules come into force with effect from

third February 1975 and have been amended several times. The important features of rules on

public deposit by the Non-Banking Corporate Sector are as below:

1.3.17 Public Deposits:

The companies (Acceptance of Deposits) Rules 1975 defines public deposit as any deposits of

money with and includes any amount borrowed by a company but does not include.

Any amount received from or guaranteed by central government.

Any amount received as a long from any banking company or from the SBI

Any amount received as a long from the financial institutional

Any amount received by a company from any other company

Security deposit received from an employee or agent

Advance recovered for supply of good and services

Any amount received towards subscription of shares or debentures and also pending

allotment and calls in advance

Any amount received in trust

Any amount received from a director of a company

Bonds or debenture secured by mortgage of immovable property of a company with

conversion options

13

1.3.18 Form and particulars of Advertisement:

The company intending to invite deposits shall issue an advertisement in a leading English

newspaper and in one vernacular newspaper circulating is situated. Advertisement should be

field with the register of the company.Such advertisement may be issued only on the authority

and in the name of the board of directors of the company. The advertisement must state the date

on which the board of directors approved the text advertisement.

SUNDARAM INDUSTRIES LIMITED normally has its board meeting in the month of

September every year and decides about the acceptance of public deposits in the year to come.

The advertisement regarding such acceptance shall be put in the newspaper in the last

week of September and fresh acceptance of deposits shall be started from 1stOctober every year.

1.3.19 Content of the Advertisement

A. Name of the company

B. Date of incorporation

C. The business carried on by the company and its subsidiaries with the details of branches on

units if any

D. Brief particulars of the management of the compnay

E. Name and address and occupation of the directors

F. Profit of the company before and after making provision for the three financial year

immediately preceding the date of the advertisements

G. Dividend declared by the company in respect of said years

H. A summarized financial position of the company as in the two audited balance sheets

immediately preceding the date of advertisement

I. The amount which the company can raise by the way of deposits under these rules and

aggregate of deposits actually held on the last day of the immediately preceding financial year

J. The statement showing the amount of overdue claims other than the unclaimed deposits

K. The following declarations must also be given in the advertisement.

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i) That the company has compiled with the provisions of these rules.

ii) Compliances with these rules do not imply that repayment of the deposits is guaranteed by

the central Government

iii) The deposits accepted by the company are unsecured liabilities.

iv) The company is not in default in the repayment of any deposits or part thereof of any

interest. There upon in accordance with the terms and conditions of such deposits.

v) The advertisement issued in accordance with these rules is valid. until the expiry of six

months from the data of closing of the financial year in which it is issued or the date of on

which the balance sheet is laid before the company in general meeting whichever is earlier.

1.3.20 Register of Deposits

A company accepting deposits shall keep at its records and registers at head office on which

there shall be entered separately in the case of each depositor the following particulars:

a) Name and Address of the depositor

b) Date and Amount of each deposit

c) Duration of the deposit and date on which each deposit is repayable.

d) Rate of Interest.

e) Date or dates on which payment of interest will be made

f) Any other particulars relating to the deposits.

1.3.21 Return of Deposits

A company to which these rules apply shall on or before the 30th day of June of every year,

file with the Register of Companies, the prescribed form furnishing the information

contained therein as on the 31st March of that year duly certified by the Auditors of the company.

A copy of the said return shall also be simultaneously furnished to RBI.

15

1.3.22 Power of Central Government

If any question arises as to whether these rules or regulations are not applicable to the particular

company, such question shall be decided by the central Government in consultation with the

Reserve Bank of India.

1.3.23 Penalty

Rule 11 provides that any contravention for which no punishment is provided in the act is

punishable with fine up to Rs 500 and for continuous contravention.

1.3.24 Maintenance of Liquid Assets

The company should maintain liquid assets to the extent of 15% of the deposits maturing during

the financial year ending 31st March. The amount shall be deposited or invested before 30th

April of each year in the permitted investments specified by the companies (Acceptance of

deposits) Rules, 1975. The permitted investments are:

a) Deposit held with a scheduled bank free from lien of charge.

b) In encumbered securities of Central of State Government.

c) In encumbered securities approval under India’s Trust Act, 1882.

d) In encumbered bonds by Housing Development Finance Corporation Ltd.

16

As per the Companies (Acceptance of deposits) Rules, 1975, liquid assets have to be created on

or before 25th April every financial year closure.

Table 1.3.24 Shows Liquid Asset Maintenance for the period of 2005-2010.

YEARS Maturity as on 31st march ofthe financial years

(Rs in Lacs)

Index formaturityamount

Liquid assetcreated at %(Rs in Lacs)

Index forLiquidAssets

2005 – 2006 148.17 100 22.23 100

2006 – 2007 80.04 54 12.00 54

2007 – 2008 61.74 42 9.26 42

2008 – 2009 74.89 51 11.23 51

2009 – 2010 70.16 47 10.60 47

Source: Secondary data-Compiled from the records of the company

It is seen from the table 1.3.24 that the index of the maturity amount and the index for the

liquid assets showed a mixed trend during the study period. It is also observed that the

company has maintained the statutory requirement of 15 per cent of the maturity amount at the

end of each financial year promptly.

1.3.25 Terms and Conditions of Deposits

Terms and conditions are the ser of orderly procedures to be followed uniformly throughout the

process. Acceptances of public deposits also have similar set of terms and conditions

which are followed by the company.

1.3.25.1 Quantum of Deposits

Deposits are accepted in multiple of Rs.1000 subject to a minimum of Rs.3000 for deposit

account and accompanied by the prescribed application form which can be had from the

company. As a general rule, the deposit amount is not accepted in the form of liquid cash.

The deposit amount shall be paid to the company by means of ‘an Account Payee Cheque’ or ‘a

Crossed Cheque’ or ‘a demand draft on a scheduled bank drawn in favour of Sundaram

Industries Ltd, payable at Madurai.

17

1.3.25.2 Period of Deposit

The period or deposit will be one year, two years and three years provided that the company

may at its discretion accept/ agree to extend deposits for any period on such terms as may be

prescribed.

1.3.25.3 Resident

Deposits are accepted only from residents for joint deposits. The number of depositors shall not

exceed two in number. Such joint depositors will be accepted on ‘FORMOR OR SURVIVOR’

basis only.

1.3.25.4 Interest Rate

The following table depicts the various interest rates for the term deposits scheme I. The

interest rates are applicable from 1st Oct 2010.

Table 1.3.25.4 Shows Term Deposit Scheme interest rates.

Period of Deposit 1 year 2 years 3 years Frequency of Payment ofInterest

Rate of Interest 7.52 % 8.53 % 9.03 % Bi – Monthly

Rate of Interest 7.55 % 8.56 % 9.07 % Quarterly

Source: Secondary data: Application form as per annexure

It is seen from the Table 1.3.25.4 that the rate of interest is higher in case of three years deposits

and the quarterly payment of interest carries a higher interest rate than the bi-monthly interest

rates.

18

1.3.25.5 Accrual of Interest

Interest will accrue from the date of realization of cheque or draft where interest is

payable on bi-monthly basis (once in 2 months), it will be upto 31st January, 31st March, 31st

May, 30th July, 30th September and 30th November and as on the date of maturity.

1.3.25.6 Mode of Interest Payments

Interest was paid by means of interest warrants on the company’s banker viz., State Bank of

India, Madurai for which the company maintains as separate current account in the same bank.

Such payments of interest through interest warrants are now replaced from 1st April 2010

by online fund transfer of interest to the respective depositors account by proper

systematization of NEFT. In case of deposits that are received during the last 15 days of the 2

months period (in case of bi-monthly interest) and 3 months period (in case of quarterly interest),

interest for such broken period are paid along with the interest for the next period for

administration convenience.

The following table depicts the minimum amount of deposit in cumulative deposit scheme-II

with the various periodicities and the amount payable on maturity with the annual yield.

Table 1.3.25.6 shows Cumulative deposit scheme interest rates.

Period of Deposit Min Amount Amount Payableon Maturity

For EveryAdditional

Investment of Rs.1000/- Rupees

Annual Yield %PA

One Year 3000 3233 1078 7.76

Two Year 3000 3554 1184 9.23

Three Year 3000 3926 1309 10.29

Source: Secondary data: Application form as per annexure

It is seen from the Table 1.3.25.6 that the annual yield on the amount of deposit for various

periodicity shows an increasing trend ranging from 7.76 per cent for one year, 9.23 per cent for

two years and 10.29 percent for three years of deposits.

19

1.3.25.7. Joint Deposits

The company accepts the deposits in joint names, but it should not exceed two members both

the joint deposits holders must sign the application. Incase of joint deposits, all correspondence

will be addressed to the person whose name appears first on the deposit receipt. All

cheques/drafts/warrants for the payment of interest and/or principal amount will also be drawn

in favour of the first named depositor irrespective of any instructions to the contrary. Any

discharge by the first named depositor for payment of interest and/or the principal amount

shall be valid and binding on the joint holders and shall constitute a good discharge to the

company. The first named depositor will for all purposes be deemed as the beneficial owner of

the deposit and will be treated as payee for purposes of deduction of tax under section 194-A of

the Income Tax Act, 1961. In the event of the death of the first named depositor, all payments

on accounts of principal and/or interest will be made to the survivor on furnishing a death

certificate of the depositor first named and the company shall not recognize any other heir or

legal representative as being entitled to claim the principal and/or interest on the deposit. In

the event of death of a sole depositor or both the joint depositors, the amount/principal and/or

interest shall be paid to the heir/s that produce to the satisfaction of the company succession

certificate/letter of administration/probate of will from a competent jurisdiction in respect of the

decreased which should cover the deposited amount.

1.3.25.8. Tax Deducted At Source

1. Income tax wherever applicable, will be deducted at source from the interest payable in

terms of provision of the Income Tax Law in force from time to time. Non- assesses can

furnish declaration in the prescribed forms, Form 10, Form 15H so that tax may not be

deducted at source.

2. Where a depositor holds deposit in his individual name as well as jointly with another,

interest paid on these deposits would be aggregated for the purpose of tax deduction at

source, if applicable.

3. At present, tax is deductible if the aggregate amount of interest paid or payable during

the financial year exceeds Rs.5000/-

20

1.3.25.9 Change of Address

Intimation to the company regarding change of address, tax exemption and other

communications should be send so as to read the company at least 30 days before the date of

which the next payment of interest falls due, to be acted upon.

Interest will cease to accrue from the date of maturity of deposit. Excess interest paid if any will

be deducted from the principal amount at the time of repayment of deposit.

1.3.25.10 Renewal and Repayment

a) It is not obligatory on the part of the company to give any intimation or motive with

regard to due date of maturity of deposits.

b) For renewal, the term/cumulative deposit receipts should be surrendered duly discharged

without revenue stamps; along with the renewal application form duly filled in and signed by the

depositor before the date of maturity.

c) For repayment, the term/cumulative deposit receipt duly discharged on a Rs.1. revenue

stamp must be surrendered to the company at least one month before the date of maturity and

enable the company to repay the deposit amount on the due date.

d) Repayment of principal amount will be made only by means of an “Account Payee”

cheque/draft drawn on company’s Bankers at Madurai.

e) Notwithstanding the period fixed for repayment of deposit the company reserves as it

opinion the right to repay any of the deposits at any time before the date of maturity but not

before six months from the date of deposit/renewal.

f) The company reserves the right not to repay the deposit before the date of maturity. On

deciding to repay a deposit at the request of the depositor before the date of deposit/renewal, the

rate of interest payable on such deposits shall be in accordance with the provision of the

companies (Acceptance of Deposits) Rules,1975 as amended from time to time.

21

1.3.25.11 Deposit Receipt

In the event of loss or destruction of mutilation of a deposit receipt or interest warrant or

cheque or income tax deduction certificate, the company, as its sole discretion to issue a

duplicate subject to compliance by the depositors with such terms and conditions including

indemnity as the company may stipulate. All expenses in this connection will be borne by the

depositors. The deposit receipts are not transferable or negotiable.

1.3.25.12. General

a) The company will not accept or recognize any lien assignment charge or other encumbrance

on the deposit or receipt there on.

b) Where the due date of any payment fails on a holiday to the company the payment will be

made on the next working day.

c) The company reserves the right to reject any application for deposit or for renewal of deposit

without assigning any reason thereof.

d) The acceptance, renewal, repayment of deposits and interest payment are subject to the

companies (Acceptance of Deposits) Rules, 1975 and amended from time to time and are subject

to jurisdiction of Madurai only.

e) Nomination facility is available, but the nominee shall not be a joint depositor. The

prescribed form of nomination can be had on request.

f) Ban charge/DD commission if any incurred by the depositors on matters relating to

deposits will have to be borne only by the depositors.

22

1.3.26 MANAGEMENT OF PUBLIC DEPOSIT

Methods of rising and managing public deposits are complex in nature and hence adequate care

must be taken in each and every step in such process. The management of public deposit

scheme by the study unit, the Sundaram Industries Limited has been studied in this chapter.

1.3.26.1 Types of deposit schemes

Public deposits accepted are classified as ‘unsecured loans’ to the company. As per companies

(Acceptance of Deposits) rules, 1975, ‘No company with a net owned fund of less than Rs. 1

crore shall invite public deposits and such amount raised by way of deposits shall not exceed

25% of aggregate of paid-up capital and free reserves. The deposits are classified into two

categories on the basis of interest payments to the deposit holder. The following are the two

types namely, term deposits and cumulative deposits. Under term deposits, the interest is paid

once in two months and once in three months. But in cumulative deposit, is paid only as on the

date of maturity. The interest is calculated, compounded on the monthly basis. The term

deposits and cumulative deposits are accepted for one, two and three year’s terms.

1.3.26.2 Term deposit scheme bi-monthly interest

The interest rate in respect of bi-monthly interest yielding term deposits scheme and

comparison of interest rate for the period of 5 years from 2005-2006 to 2009-2010is shown in

the following table.

Table 1.3.26.2 Comparison of interest rate for a period of 5 years

Term deposit scheme- Bi-monthly interest

Years I Year Interest 2 Years Interest 3 Years Interest

2005 – 2006 6.52 % 7.02 % 7.52 %

2006 – 2007 7.52 % 8.03 % 8.53 %

2007 – 2008 9.03 % 9.54 % 10.04 %

2008 – 2009 9.03 % 9.54 % 10.04 %

2009 – 2010 7.52 % 8.53 % 9.03 %

23

Source: Secondary data compiled from the records of the company

It is seen from the table 1.3.26.2 the interest rates are increasing in the first three years, in the

fourth year the interest rate does not change and the interest rate decrease in the next year of

comparison It is to be observed that the interest rates are higher for the 2 and 3 years

deposits. The reason for decrease in the interest rates is the match with the prevailing bank rate

in the economy as per RBI guidelines.

1.3.26.3 Term deposit scheme-Quarterly interest

The interest rate in respect of quarterly interest yielding term deposit scheme and the comparison

of interest rate for the period of five years from 2005-2009 to 2009-2012 is shown in the

following table.

Table 1.3.26.3 Comparison of the interest rate for the period of 5 years

Term deposit scheme-Quarterly interest


2005 – 2006 6.54 % 7.04 % 7.55 %

2006 – 2007 7.55 % 8.05 % 8.56 %

2007 – 2008 9.07 % 9.58 % 10.08 %

2008 – 2009 9.07 % 9.58 % 10.08 %

2009 – 2010 7.55 % 8.56 % 9.07 %


It is seen from the table 1.3.26.3 the interest rates are increasing in the first three years, in the

fourth year the interest rate does not change and the interest rate decrease in the next year of

comparision It is to be observed that the interest rates are higher for the 2 and 3 years

deposits. The reason for decrease in the interest rates is the match with the prevailing bank rate

in the economy as per RBI guidelines.

24

1.3.26.4 Cumulative deposit scheme

The interest rate in respect of bi-monthly interest yielding term deposit scheme and the

comparison of interest rates for the period of 5 years from 2005-2006 to 2009-2010 is shown in

the following table.

Table 1.3.26.4

Comparison of interest rate for the period of 5 years Cumulative deposit scheme


2005 – 2006 6.70 % 7.49 % 8.38 %

2006 – 2007 7.76 % 8.64 % 9.64 %

2007 – 2008 9.38 % 10.42 % 11.61 %

2008 – 2009 9.38 % 10.42% 11.61 %

2009 – 2010 7.76 % 9.23 % 10.29%


It is more evident from the table 1.3.26.4 that the interest rate of cumulative deposit for the

period of 2005-2006 to 2009-2010 are increasing in the first 3 years and the interest rates

decrease in the next following 2 years. The reason for decreasing in the interest rates is the match

with the prevailing bank rate in the company as per RBI guildelines and also decrease in 1 year

and 2 year deposits

25

1.3.27 Services offered to the depositors:

SIL offers the following services voluntarily to the deposit holders in order to keep a cordial

relationship with them.

Renewal Intimation: The Company informs the deposits holders 30 days before the date of

maturity regarding renewal along with renewal application.

Remainder for un-presented interest warrants: On the basis of reconciliation of interest

warrant, the company duly reminds the deposit holders to whom the interest warrants were

issued but not presented for payments. In discussion with the person in-charge of public deposits

of Sundaram Industries, it is noted that reconciliation work and remainder to the deposit holders

for presenting the interest warrants was laborious and now that such heavy work load is off-

loaded because of online interest transfers to the respective deposit holders’ account.

Band charges: Bank charges in connection with refund of deposits accrued interest and

collection charges for interest warrants are borne by the company and instruments are

exchangeable at par at sixty centres of State Bank of India. Such centres of State Bank of India

were mentioned in the interest warrants itself earlier. As the company is practicing a novel idea

of transfer of funds to the depositors’ bank account directly, such charges are almost avoided.

Ceiling of rate of interest: The interest payable on the deposits cannot exceed 15%. The

interest rate cannot be computed by periods shorter than monthly interest rules. Moreover, the

rule does not specify whether the interest should be simple of compounded. As on date,

Sundaram Industries ltd has no practice of having brokers for collection of deposits.

26

1.3.28 Financial results of the company:

The profit before tax and after tax and the dividends by the company during period of ten

years from 2001 and 2010 have been presented in table below.

TABLE 1.3.28 PROFIT AND DIVIDENDS

Period

Profit

before tax

Profit

after tax

Dividend

Rs in lakhs

Amount %

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

939.06

556.10

820.10

1788.23

1921.88

2606.58

1417.47

1408.96

8658.60

939.06

522.10

715.10

1558.23

1861.88

2287.58

1098.47

1279.96

8288.35

675.36

201.60

395.64

1065.96

703.08

1408.68

546.84

713.16

1386.00

268

80

157

423

279

559

217

283

550

1.3.28 Conclusion

Sundaram Industries Ltd is a pioneer company in Madurai, backed up by the prestigious TVS

Group one of the market leaders in the industry. It is obvious that the company has a high motto

which is being achieved in day to day business of the company. The practice of high ethics of

the business and the latest management concepts augment the best customer service.

27

1.4 REVIEW OF LITERATURE

A brief review of literature would be of immense help to the researcher in gaining insight into the selected

problem. The researcher would gain good background knowledge of the problem by reviewing certain

studies.

Robert C. Vogel and Paul Burkett (Jul., 1986) This journal tells that A growing number of

successful savings-mobilization programs in developing countries, together with related studies,

indicate that safe, liquid deposit of reasonable yield can be crucial in raising the incomes of no

wealthy households. This is especially true under the inflationary conditions so common in

developing countries where the value of cash balance is rapidly eroded, thereby forcing no

wealthy households to save in the form of inflation hedges that often entail high transaction and

storage costs. Although some dissent continues, there is growing recognition that adequate

yields on deposits at FIs and other financial assets are essential.

Sandhu H.S & R.K. Goswami (1986). This journal reveals that when the banking system

increases its credit to meet the increased demand for credit in a growing economy, the

cheques drawn are paid out to various parties. Who in turn deposit these in their respective

banks. Consequently, deposits in the banking system is increase. A part of the credit extended

would be withdrawn in cash and only a balance would stay with the banks as deposits.

However the author were of the view that the demand for deposits would be considered to

be an increasing function of bank credit.

28

Dr. S. Raj Kumar (April 2005). He concluded that the growth of the financial system is,

indeed, vital to the process of economic development in any economy as it helps to mobilize

savings and channelize them in various sectors of the economy for the purpose of growth and

development. Economic development may be defined as “a progress where by an economy’s real

national income increases.”Thus, economic development refers to both process as well as an

increase in the real national income. A rise in the real national income is the growth of the

economy. Economic development is, thus, the cause or process whereas economic growth is its

effect or result. It may be said that economic development includes variations in the supply of

factors of production on the one hand and demand for the products based on economic and

non-economic factors on the other. But, the economic growth is the outcome of this long process

of development.

Ghosh, Saibal and Das, Abhiman (2006): The paper traces the determinants of

depositor discipline in Indian banking. Using data for the period 1997:1 to 2002:4, the findings

reveal that, while bank-specific factors are dominant in case of state-owned banks, systemic

variables tend to overwhelm bank-specific factors in explaining behaviour of depositors of

private banks. In case of private and foreign banks, policy announcements have an important

bearing on the dependent variable. For state-owned banks, larger asset translates into higher

deposit growth, suggesting that depositors are sensitive to the ‘too-big-to-fail’ effect. Finally,

insured depositors tend to exercise discipline by compelling banks to pay a higher price on

deposits.

Anand Singh Kablana, Vikas Kumar, Shelindar Kumar(March 2011).. (A Co-operative

Bank of Gujarat). It reveals that deposits are the main source of funds for any banking

institutions and as well as DCCB Ltd. The amount mobilized deposits are then lent in the

form of advances. The higher the amount of deposits mobilized, the higher is the funds

lent. The growth of deposits depends on savings. For economic growth to take place, it is

essential saving are mobilized and channelized for capital formation which, in turn,

accelerates economic growth. Co-operative banking is an important financial intermediary in

rural areas between savers and borrowers. DCCB mobilized by accepting deposits.

29

International Research Journal of Finance and Economics (2007)

At present, in the Turkish Republic of Northern Cyprus (TRNC), there is a limited guarantee on

savings deposits held by persons at banks and co-operative savings banks, administered by two

separate deposit insurance funds. This paper will focus on the insurance fund for banks, since

deposits held at co-operative savings banks are a small fraction of the total; in fact the two

biggest co-operative banks are grouped with the commercial banks, and as such are subject to

the same deposit insurance fund as the banks. Abolishing total guarantee put into practice in

order to prevent panic due to banking crisis, the limited guarantee on savings deposits, which is

in accordance with the European Union (EU) deposit insurance directive of 1994, has been

gradually reached. Even though this limited guarantee has the effect of preventing some

problems such as moral hazard it proved to be not enough to design an effective deposit

insurance scheme. To the effect that designing effective deposit insurance scheme

scientifically depends mainly on its structure, membership, coverage, funding and public

awareness. In this respect, the main aim of this paper is to dwell upon designing an effective

deposit insurance scheme for TRNC with particular emphasis on public awareness. Public

awareness has been examined by conducting a research towards depositors and bank staff.

Briefly, the research findings show that both depositors and bank staffs are not aware of the

essentials of deposit insurance system in TRNC. Furthermore, banking institutions do not

have systematic program designed to create this public awareness considered as the

indispensable element of effective deposit insurance scheme.

30

European Journal of Economics, Finance and Administrative Sciences (2010)

The introduction of the Malaysian deposit insurance scheme is one of the many concerted

efforts determined to strengthen the protection of depositors, which in turn promotes financial

stability and development. The study investigates the effect of the introduction of deposit

insurance plan on bank risks given that a proper risk management is vital to maximise

shareholders’ return and to protect the interests of all stakeholders. Having analysed a small

panel data of the Malaysian local commercial banks from 2004-2007, the study finds that

explicit deposit insurance have mixed effects on bank risks. Generally, it is found that interest

rate risk and risk-weighted capital ratio deteriorate after the introduction of the explicit deposit

insurance scheme in Malaysia. Every federal or state credit union, state bank, federal or state

savings and loan association, savings and trust company and federal or state savings bank and

every national bank located in this state which compiles in all respects as to public deposits

with this chapter and will accept payments made by the state under s . 16 .412 may be

designated as a public depository and may receive and hold public deposits, subject to this

chapter. The commissioner of banking shall have the same powers and duties with regard to

making and continuing public deposits in national banks, federal and state credit unions, federal

and state savings banks and federal and state savings and loan associations as the powers and

duties exercised and performed by the commissioner of banking with regard to public

deposits, in state banks .

Ms. Vinodhini. (2010) studied, “A comparative study of fixed deposits schemes in private sector banks”.

In her study, she concluded that the depositors have expressed their desire to renew the deposits.

Ms. Meenakshi, (2008) who studied “The public deposits management in Sundaram industries”

concluded that the rate of interest offered to the public by the company is much higher than the rate of

interest paid by the company to SBI for its working capital financing”.

Mr. Raja Srinivasan, (2007) examined “The performance of public deposits” concluded in his study

that the terms and conditions laid down by the company are very scientific and in line with terms and

conditions of public deposit schemes of other reputed companies.

31

Ms. Kalaivani, (2003) studied “the public deposits schemes offered by TVS group companies”

concluded in her study that the company does not accept deposits from NR’S and suggested that

the company can mobilize deposits from NR’S to strengthen their business operations and also the

company can increase its net worth in future.

Mark Mobius, (2008) in his study on fixed deposits by the company has suggested that “The Company’s

fixed deposits are backed in limelight. The stock market is giving negative returns and the real return

on bank fixed deposits after adjusting inflation has also turned negative. This has given company an

opportunity to raise funds from investors. While offering them attractive returns through fixed deposits,

tighter liquidity in the market and higher cost borrowing are the main reasons behind companies reaching

out to investors to get deposits.

Nikhil Walavalkar,(2011) studied “Companies fixed deposits” that the companies are keen to borrow

from retail investors, given the liquidity Crunch in the market. A popular method is fixed deposits, similar

to the products banks offer. Individuals who seeks regular income welcome company FDs

Anil Chapra, (2011) examined the “preference of fixed deposits has concluded that the investors,

especially retires and those in the last years of employment, consider such fixed deposits.

32

REFERENCES

1) Robert C. Vogel and Paul Burkett (Jul., 1986), “Deposit Mobilization in

DevelopingCountries: The Importance of Reciprocity in Lending”, The Journal of

Developing Areas Vol. 20, No. 4 (Jul., 1986), pp. 425-438.

2) Sandhu H.S & R.K. Goswami(1986), “Determinants of commercial bank deposits in

India”-Indian Economic Journal, pg.73-79.

3) Dr. S. Raj Kumar (April 2005) “Deposit Mobilization of Indian Overseas

Bank in Thanjavur Main Branch”- Indian journal of finance, pg 24-32.

4) Ghosh, Saibal and Das, Abhiman (2006): “Depositor discipline in Indian

banking” Published in: Monetary Policy and Issues: New Research : pp. 139-163.

5) Anand Singh Kablana, Vikas Kumar, Shelindar Kumar (March 2011). “Deposits

Mobilization By Baroda District Central Co-operative Bank Ltd”. (A Co-operative Bank of

Gujarat), Indian journal of finance, pg 10-17.

6) International Research Journal of Finance and Economics, ISSN 1450-2887 Issue 7

(2007)

7) European Journal of Economics, Finance and Administrative Sciences, ISSN 1450-

2275 Issue 18 (2010)

33

1.5 Objectives 0f the Study

The following are major objectives of the study:

1. To study the existing procedures and management of public deposits in Sundaram

Industries, Madurai.

2. To study the attitude and preference of the depositors towards public deposit schemes in

Sundaram Industries, Madurai.

3. To study the factors which influence the depositors to make deposits in Sundaram

industries, Madurai.

4. To analyze the reasons for conversion of deposit schemes opted by the depositors.

5. To offer major findings and suggestions based on the study.

1.6 Scope of the Study

The present study is based on the utilization and management of public deposits to assess the

attitude and preference of depositors towards public deposit scheme of Sundaram industries.

However, it does not cover the other areas such as company’s preference to accept deposits for

their financial needs rather than trying other sources of funds, comparative study of public

deposits schemes offered by Sundaram industries and other companies.

34

1.7 RESEARCH METHODOLOGY

The present study is based on the primary data and secondary data. The primary data

have been collected structured interview schedule. The data have been collected from 110

depositors of Sundaram Industries Corporation, MDU who are the residents of Madurai

district. An interview schedule has been prepared after setting the objectives of the study.

The Secondary data has been collected from the statutory records, files and books of the

company maintained at their corporate office.

1.7.1 Research Design

The research undertaken by the researcher is “Descriptive Research”. The description research is

essentially a fact finding approach related to the present and abstracting generalizations by the

cross sectional study of current situation.

1.7.1.1 Sampling Technique

The sampling design used by the researcher is the stratified random sampling method. From

the total number of depositors, the researcher has taken to depositors for the study who are the

residents of Madurai district which pertains to approximately 20% of the total depositors of the

company.

1.7.1.2 Statistical tools used

The statistical tools for analysis:

Percentage analysis

ANOVA

Correlation

T-TEST

35

Percentage Analysis

The Percentage analysis is an effective tool to study the attributes of the respondents. Eachresponse by the respondent to a particular statement is plotted into frequency table andquantified. The entire response to the statement is considered as 100 percent and each of thechoice within the statement is measured as what percentage does it holds to the total response tothat particular statement.

ANOVA

Analysis of variance (ANOVA) is a collection of statistical models, and their associatedprocedures, in which the observed variance in a particular variable is partitioned into componentsattributable to different sources of variation.

In this simplest type of ANOVA, all of the variability in the data can be divided into two types:within-groups variability and between-groups variability.

Within-groups variability is the degree to which the scores of subjects in the same treatmentgroup differ from one another.

Between-groups variability is the degree to which the scores of different treatment groups differfrom one another.

Correlation

Correlation is a statistical technique that can show whether and how strongly pairs of variablesare related. In this study the correlation between the prospects of SHG members and theproblems of the SHG members are analysed and interpreted.

T-Test

"t" is the difference between two sample means measured in terms of the standard error of those

means, or "t" is a comparison between two group’s means which takes into account the differences in

group variation and group size of the two groups. The statistical hypothesis for the "t" test is stated as

the null hypothesis concerning differences.

36

1.7.1.3 Limitations of the Study:

Access to the annual reports and some files and important data could not be obtained as the

accounts are of confidential nature. Sample size is limited to 113 depositors who are the

residents of Madurai District only, as majority of the depositors are residing out of Madurai.

37

2. DATA ANALYSIS AND INTREPRETATION

2.1.1 PERCENTAGE ANALYSIS

Figure 2.1.1.1

INTERPRETATION:

The above table shows that 42 percent of the respondents have married, 40 Percent of the respondents

are unmarried and 17 percent of the respondents are widow.

INFERANCE:

Majority (42%) of the respondents are married.

Table 2.1.1.1 Marital Status

Frequency Percent Valid Percent Cumulative Percent

Valid Married 46 42.2 42.2 42.2

UnMarried 44 40.4 40.4 82.6

Widow 19 17.4 17.4 100.0

Total 109 100.0 100.0

38

Figure 2.1.1.2

INTERPRETATION:

The above table shows that 2 2 Percent of the respondents are below 15000 as monthly income, 18

percent of the respondents are 15001 to 30000 as monthly income, 35 Percent of the respondents are 30001

to 45000 as monthly income and 23 Percent of the respondents are above 45001 as monthly income.

INFERANCE:

Majority (35%) of the respondents are getting monthly income as 30001 to 45000.

Table 2.1.1.2 Monthly income


Valid Below 15000 24 22.0 22.0 22.0

15001-30000 20 18.3 18.3 40.4

30001-45000 39 35.8 35.8 76.1

Above 45001 26 23.9 23.9 100.0

Total 109 100.0 100.0

39

Figure 2.1.1.3

INTERPRETATION:

The above table shows that 1 8 Percent of the respondents are below 5000 as monthly savings, 13

Percent of the respondents are 5001 to 10000 as monthly savings, 40 Percent of the respondents are 10001 to

15000 as monthly savings and 27 Percent of the respondents are above 15001 as monthly savings.

INFERANCE:

Majority (40%) of the respondents are having habit of saving 10001 to 15000 per month.

Table 2.1.1.3 Monthly savings


Valid Below 5000 20 18.3 18.3 18.3

5001-10000 15 13.8 13.8 32.1

10001-15000 44 40.4 40.4 72.5

Above 15001 30 27.5 27.5 100.0

Total 109 100.0 100.0

40

Table 2.1.1.4 Online fund transfer


Valid Highly Satisfied 40 36.7 36.7 36.7

Satisfied 50 45.9 45.9 82.6

Moderate 12 11.0 11.0 93.6

Dissatisfied 7 6.4 6.4 100.0

Total 109 100.0 100.0

Figure 2.1.1.4

INTERPRETATION:

The above table shows that 36 Percent of the respondents are highly preferring for online interest

payment and 45 percent of the respondents are satisfied for receiving the interest via online and 11 percent of the

respondents are moderate and 6.4 perce nt of the respondent are dissatisfied.

INFERANCE:

Majority (45%) of the respondents are highly satisfied for online interest payment.

41

Figure 2.1.1.5

INTERPRETATION:

The above table shows that 47 percent of the respondents are strongly agree for factor regular

payment of interest, 47 percent of the respondents are answered agree for the factor, 1 percent of the respondents

are answered disagree for the factor and 2.8 percent of the respondents are answered agree for the factor

INFERANCE:

Majority (47%) of the respondents are strongly agree for the factor regular

Table 2.1.1.5 Regular payment of interest


Valid Strongly agree 52 47.7 47.7 47.7

Agree 52 47.7 47.7 95.4

No opinion 2 1.8 1.8 97.2

Disagree 3 2.8 2.8 100.0

Total 109 100.0 100.0

42

Table 2.1.1.6 Promt repayment of principal



Agree 37 33.9 33.9 47.7

No opinion 16 14.7 14.7 62.4

Disagree 24 22.0 22.0 84.4

Strongly Disagree 17 15.6 15.6 100.0

Total 109 100.0 100.0

Figure 2.1.1.6

INTERPRETATION:

The above table shows that 1 3 percent of the respondents are strongly agree for factor prompt

repayment of principle, 33 percent of the respondents are answered agree for the factor, 14 percent of the

respondents are answered no opinion for the factor, 22 percent of the respondents are answered disagree for the

factor and 15 percent of the respondents are answered agree for the factor prompt repayment of principle

INFERANCE:

Majority (33%) of the respondents are agree for the factor Prompt repayment ofPrinciple amount.

43

Table 2.1.1.7 Friendly service



Agree 59 54.1 54.1 92.7

No opinion 7 6.4 6.4 99.1

Disagree 1 .9 .9 100.0

Total 109 100.0 100.0

Figure 2.1.1.7

INTERPRETATION:

The above table shows that 38 percent of the respondents are strongly agree for factor friendly

service, 54 percent of the respondents are answered agree for the factor, 6 percent of the respondents are answered

no opinion for the factor and .9 percent of the respondents are answered disagree for the factor

INFERANCE:

Majority (54%) of the respondents are agree for the factor friendly service.

44

Table 2.1.1.8 Easy procedure



Agree 60 55.0 55.0 87.2

No opinion 10 9.2 9.2 96.3

Disagree 4 3.7 3.7 100.0

Total 109 100.0 100.0

Figure 2.1.1.8

INTERPRETATION:

The above table shows that 32 percent of the respondents are strongly agree for factor Easy

procedure, 55 percent of the respondents are answered agree for the factor, 9 percent of the respondents are

answered no opinion for the factor and 3 percent of the respondents are answered disagree for the factor

INFERANCE:

Majority (55%) of the respondents are agree for the factor Easy Procedure.

45

Table 2.1.1.9 Safety of principal



Agree 34 31.2 31.2 38.5

No opinion 16 14.7 14.7 53.2

Disagree 26 23.9 23.9 77.1


Total 109 100.0 100.0

Figure 2.1.1.9

INTERPRETATION:

The above table shows that 7 percent of the respondents are strongly agree for factor Safety of

Principle, 31 percent of the respondents are agree for factor, 14 percent of the respondents are no opinion for

factor, 23 percent of the respondents are d i sagree for factor, 22 percent of the respondents are strongly

d isagree for factor

INFERANCE:

Majority (31%) of the respondents are strongly agree for the factor Safety of principle

46

Table 2.1.1.10 Reputation of the company



Agree 15 13.8 13.8 17.4

No opinion 50 45.9 45.9 63.3

Disagree 25 22.9 22.9 86.2


Total 109 100.0 100.0

Figure 2.1.1.10

INTERPRETATION:

The above table shows that 3 percent of the respondents are strongly agree for factor Safety of

Principle, 13 percent of the respondents are agree for factor, 45 percent of the respondents are no opinion for

factor, 22 percent of the respondents are d isagree for factor, 13 percent of the respondents are strongly

d isagree for factor

INFERANCE:

Majority (45%) of the respondents are no opinion for the factor Safety of principle.

47

2.1.2 ANOVA

Table 2.1.2.1 Reputation and promt

N Mean

Std.

Deviation Std. Error

95% Confidence Interval for

Mean

Minimum MaximumLower Bound Upper Bound

Reputation M 46 3.1739 .97307 .14347 2.8849 3.4629 1.00 5.00

UM 44 3.2045 .95429 .14387 2.9144 3.4947 1.00 5.00

W 19 3.7895 1.03166 .23668 3.2922 4.2867 2.00 5.00

Total 109 3.2936 .99352 .09516 3.1049 3.4822 1.00 5.00

Promt M 46 2.5000 1.16905 .17237 2.1528 2.8472 1.00 5.00

UM 44 3.2500 1.33164 .20075 2.8451 3.6549 1.00 5.00

W 19 3.1579 1.42451 .32681 2.4713 3.8445 1.00 5.00

Total 109 2.9174 1.32027 .12646 2.6668 3.1681 1.00 5.00

Hypothesis

H0: There is no significant difference between the Marital status and the Reputation andPromote payment

H1: There is significant difference between the Marital status and the Reputation and Promotepayment

Inference

There is no significant difference between the marital status and reputation

There is a significant difference between marital status and promote payment

Sum of Squares df Mean Square F Sig.

Reputation Between Groups 5.680 2 2.840 2.983 .055

Within Groups 100.926 106 .952

Total 106.606 108

Promt Between Groups 13.981 2 6.990 4.252 .017

Within Groups 174.276 106 1.644

Total 188.257 108

48

Table 2.1.2.2 Safety and fixed deposit

N Mean

Std.

Deviation Std. Error

95% Confidence Interval for

Mean

Minimum MaximumLower Bound Upper Bound

Safety 25-35 17 2.4118 .93934 .22782 1.9288 2.8947 1.00 5.00

36-45 37 3.2432 1.44155 .23699 2.7626 3.7239 1.00 5.00

46-55 38 3.5000 1.26811 .20571 3.0832 3.9168 1.00 5.00

56-65 17 3.4706 1.17886 .28592 2.8645 4.0767 2.00 5.00

Total 109 3.2385 1.31162 .12563 2.9895 3.4876 1.00 5.00

Fixed

doposit

25-35 17 3.3529 1.57881 .38292 2.5412 4.1647 1.00 5.00

36-45 37 3.3784 1.25502 .20632 2.9599 3.7968 1.00 5.00

46-55 38 3.0526 1.29338 .20981 2.6275 3.4778 1.00 5.00

56-65 17 2.3529 1.27187 .30847 1.6990 3.0069 1.00 5.00

Total 109 3.1009 1.35363 .12965 2.8439 3.3579 1.00 5.00

Sum of Squares Df Mean Square F Sig.

Safety Between Groups 15.134 3 5.045 3.104 .030

Within Groups 170.664 105 1.625

Total 185.798 108

Fixed deposit Between Groups 13.528 3 4.509 2.568 .058

Within Groups 184.362 105 1.756

Total 197.890 108

Hypothesis

H0: There is no significant difference between the age and safety and fixed deposit

H1: There is significant difference between the age and safety and fixed deposit

Inference

There is no significant difference between the age and fixed deposit

There is a significant difference between age and safety

49

2.1.3 INDEPENDENT T-TEST

Table 2.1.3.1 regular payment, promtpay and friendly service

Gender N Mean Std. Deviation Std. Error Mean

RegularP Male 56 1.0714 .25987 .03473

Female 53 2.1509 .49599 .06813

PromtPay Male 56 1.0714 .25987 .03473

Female 53 2.1321 .34181 .04695

FriendlyS Male 56 1.2500 .43693 .05839

Female 53 2.1698 .42679 .05862

Independent Samples Test

Levene's Test for Equality of Variances t-test for Equality of Means

F Sig. t df

RegularP Equal variances assumed 4.993 .028 -14.342 107

Equal variances not assumed -14.117 77.579

PromtPay Equal variances assumed 4.518 .036 -18.298 107


FriendlyS Equal variances assumed 2.844 .095 -11.110 107


Hypothesis

H0: There is no significant difference between the gender and regular payment, promotepayment and friendly service

H1: There is significant difference between the gender and regular payment, promote paymentand friendly service

Inference

There is no significant difference between the gender and friendly service

There is a significant difference between gender and regular payment and promote payment

50

Table 2.1.3.2 share bond and mutual fund

Gender N Mean Std. Deviation Std. Error Mean

Sharebond Male 56 1.0714 .25987 .03473

Female 53 2.1321 .34181 .04695

Mutualfund Male 56 1.0357 .18726 .02502

Female 53 2.0755 .26668 .03663

Independent Samples Test

Levene's Test for Equality of Variances t-test for Equality of Means

F Sig. t Df

Sharebond Equal variances assumed 4.518 .036 -18.298 107


Mutualfund Equal variances assumed 3.362 .070 -23.660 107


Hypothesis

H0: There is no significant difference between the gender and share bond and mutual fund

H1: There is significant difference between the gender and share bond and mutual fund

Inference

There is no significant difference between the age and mutual fund

There is a significant difference between age and share bond

51

2.1.4 CORRELATION

Table 2.1.4.1 gold and insurance

Mean Std. Deviation N

Gold 1.7064 .67086 109

Insurance 1.8624 .79893 109

Correlations

Gold Insurance

Gold Pearson Correlation 1 .874**

Sig. (2-tailed) .000

N 109 109

Insurance Pearson Correlation .874** 1


N 109 109

**. Correlation is significant at the 0.01 level (2-tailed).

INTERPRETATION:

The two factors are tested for correlation. Pearson’s correlation test was performed. The

all the above factors are both positively and negatively correlated with each others. The gold and

insurance are positively correlated.

52

Table 2.1.4.2 NSc and fixed deposit

Mean Std. Deviation N

NSC 1.3303 .62443 109

Fixeddeposit 1.5872 .61178 109

Correlations

NSC Fixeddeposit

NSC Pearson Correlation 1 .191*


N 109 109

Fixeddeposit Pearson Correlation .191* 1


N 109 109

*. Correlation is significant at the 0.05 level (2-tailed).

INTERPRETATION:

The two factors are tested for correlation. Pearson’s correlation test was performed. The

all the above factors are both positively and negatively correlated with each others. The NSC and

fixed deposit are positively correlated.

53

2.2 FINDINGS OF THE STUDY

The following are findings of the study.

It is observed that 42% of the respondents are married citizens.

Majority (35%) of the respondents are getting monthly income as 30001 to 45000.

Majority (40%) of the respondents are having habit of saving 10001 to 15000 per month.

Majority (45%) of the respondents are highly satisfied for online interest payment.

Majority (47%) of the respondents are strongly agree for the factor regular payment of interest.

Majority (33%) of the respondents are strongly agree for the factor Prompt repayment of

Principle amount.

Majority (55%) of the respondents are strongly agree for the factor friendly service.

Majority (91%) of the respondents are strongly agree for the factor Easy Procedure.

Majority (100%) of the respondents are strongly agree for the factor Safety of principle.

Majority (89%) of the respondents are strongly agree for the factor Reputation of the company.

Majority (57%) of the respondents are preferred to invest 31 to 45 percent of money in shares

and bonds.

Majority (43%) of the respondents are preferred to invest 16 to 30 percent of money in mutual

funds.

Majority (53%) of the respondents are preferred to invest 31 to 45 percent of money in fixed

deposits.

54

Majority (68%) of the respondents are preferred to invest less than 15 percent of money in NSC

& Postal Savings.

Majority (41%) of the respondents are preferred to invest 16 to 30 percent of money in

insurance.

Majority (59%) of the respondents are preferred to invest Above 46 percent of money in Gold.

Majority (43%) of the respondents are preferred to invest 31 to 45 percent of money in RealEstate.

The study indicates that 85 % of the respondents come to know about the public deposits scheme

offered by SIL through advertisement which the company publishes in leading English daily and

a vernacular daily.

Majority (46%) of the respondents are deposited in Cumulative deposit scheme.

Majority of the respondents prefer the ‘Safety’ as a factor to deposit in a company.

Majority (45%) of the respondents are deposited in three years deposit scheme.

Majority (58%) of the respondents are preferred quarterly frequency of interest.

Majority (84%) of the respondents are having one deposit.

Majority (84%) of the respondents are preferred for renewal.

Majority (76%) of the respondents are interest to deposit again.

Majority (63%) of the respondents are not aware of companies act.

Majority (86%) of the respondents are not opted for conversion of deposit.

Majority of the respondents are ranked for higher amount on maturity.

55

Majority (100%) of the respondents are recommending for deposit scheme.

In discussion with the president and secretary of the company, it is so prudent that the company

has accepted such deposits for the socio-welfare cause and actually it caters the needs of the

middle income groups and senior citizens to hold the investment at a higher secured place.

56

3 Suggestions and conclusion

3.1 Suggestions

The researcher has analyzed the depositor’s attitude and preference towards public

deposits scheme offered by SIL. The analysis has been carried out by applying certain

statistical tools such as fixed base indices, chi-square test and simple ranking table. The

findings of the study have enabled the researcher to offer the following suggestions.

The company can increase interest rates to attract more number of people.

The company can introduce several deposit schemes to attract the younger

generations in investing in company.

To attract more number of people to deposit, the company can extend the

advertisement in various media.

They can give prizes or gifts packages for those who hold more number of deposit

in the company.

Company can create awareness about the deposit schemes to all the employees those

who working in the all divisions of the company.

To increase deposit and to protect Employees Company can hold at least one deposit for

the employee.

The terms and conditions laid down by the company for public deposit scheme are

very scientific and in line with the terms and conditions of public deposit schemes of

highly reputed companies. This is yet another reason why the company is able to manage

public deposits very efficiently. The company may continue with the same and remain a

model for other companies to emulate.

57

With the advent of economic recession, Indian banks are facing heavy cash crunch thesedays.

The rate of inflation also proceeds at a faster pace. In order to keep the balance in the economy,

RBI takes quantitative measures by raising the bank rates from time to time with the latest

revision of increase in basis points of 25 basis point in the bank rates, the bank interest rates for

deposits has grown up to 9.75% PA and rates of senior citizens deposits has almost

reached 10.25% PA. In order to keep pace they extend higher interest rates on deposits

than public sector banks.

It is also worthwhile to mention that the most of the depositors in banks are now pre-closing

their existing deposits and making up new deposits to take up the competitive advantage of

revised higher interest offered by the banks. In this juncture, it is necessary for the company to

revise the rates for the depositors. This share enable the company to retain the existing

depositors and to attract the fresh depositors.

58

3.2 CONCLUSION

The success of a scheme provided by a business enterprise largely depends on the how

best it serves and satisfies the depositors the attitude of the depositors keep changing. What

was bought yesterday is discarded today since the expectation of the depositors change from

time to time, public deposit scheme at SIL reaches the large portion of the middle income

group and it is the pioneer in the market, tailor made services cannot satisfy all the

depositors at all times. The company needs to understand the requirements of the depositors

and to serve them only best at all times which is its regular practise.

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