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PREFACE

An effort has been made to understand in detail about CORPORATE BANKING. The Corporatebanking services has been taken as an example to for the very same reasons.

Corporate banking focuses on offering a full range of services to multinationals, large domestic

corporate and institutional clients.

The need for Corporate Banking services in the present era are not only required by todays

corporate world but also play a very important component as a part of a commercial banks

services.

TABLE OF CONTENTS

Serial No. Contents Page No.

1. Corporate Banking

2. State bank of India History

3. Services of State Bank of India

4. SBI

Corporate Banking

5. Specialised Products

6. Conclusion and Recommendations


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CORPORATE BANKING

Corporate banking, also called corporate financing, is a specialized branch of finance that dealsspecifically with corporations and their needs. The job of a corporate banker is to enhance the

corporate value of the company--its overall worth, not just income--and to make sure that

financial risks are minimal. Managerial finance, which deals with the financial needs of all firms,

is a similar but more generalized field.

Function

A corporate banker or financier is expected to make a variety of long-term and short-term

decisions regarding the corporation's financial future. Most short-term decisions involve dealing

with cash flow, managing inventory and general questions of credit and debt. Long-term decisions

that a corporate banker would be responsible for involve what investments the company will makeand what dividends would be paid out to shareholders. Some corporations use specialized

investment bankers to design their investment portfolios and raise appropriate capital.

Types

The various short-term responsibilities of a corporate banker can be grouped together under the

heading of "working capital." This involves managing working capital and deciding how to handle

the corporation's short-term finances. Meanwhile, the long-term responsibilities can be gathered

together under the heading of "capital investment," which involves making decisions related to the

corporation's fixed assets and capital structure.

Benefits

A corporation deals with significantly larger sums of money than individuals or smaller firms, and

as a result there are a number of specialized tools and analysis disciplines that have evolved to

deal solely with the needs of corporations. Many of these disciplines have limited use outside of

the corporate field. Therefore it is a clear benefit to the firm to have someone who is familiar with

those tools.

Theories/Speculation

Risk management is a process that involves measuring what risks the corporation has to take and

how to minimize them. Many large firms will have their own risk management teams, but since

most financial risk a business is exposed to is a result of corporate financial decisions, it is

important for a corporate banker to be familiar with the discipline.


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Difference Between Corporate & Investment BankingCorporate & Investment banking is a term used to describe a range of banking and investment

products and services delivered to corporate clients, financial institutions, governments, agenciesand, in some cases, to wealthy or high-net-worth individuals and families.

Investment banking includes the development, marketing and trading of a large range of securities

and other financial instruments on the worlds financial markets. These include equities, which are

stocks or shares, commodities, fixed income or bonds, and currencies. All of these, which are

known as asset classes, can be traded directly or by using derivative instruments such as futures,

options and swaps.

These instruments can help clients manage their risks and also provide investment opportunities.

Contrary to common misconceptions, investment banking does not only encompass capital marketactivities. It also includes research into macro-economic trends and effects, and detailed analyses

of the performance and factors affecting specific industry sectors and individual companies.

In addition, investment banking traditionally includes the research and advisory services that

banks offer to its clients for their major transactions such as mergers & acquisitions and initial or

secondary offerings of their shares.

Corporate banking on the other hand is defined as those products and services that relate to the

lending activities between a bank and its clients. This could be a simple secured or unsecured

loan, or it could be a highly sophisticated structured finance transaction with many different banksor syndicates involved in the transaction. Cash management and trade finance also fall under the

definition of corporate banking.

To explain corporate banking in a better manner, I have studied all the services rendered by the

State Bank of India in detail.


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STATE BANK OF INDIA -HISTORY

The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of

Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal

was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15

April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks

were incorporated as joint stock companies and were the result of the royal charters. These three

banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a

right they retained until the formation of the Reserve Bank of India. The Presidency banks

amalgamated on 27 January 1921, and the re-organized banking entity took as its name Imperial

Bank of India. The Imperial Bank of India remained a joint stock company.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,

which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On 30

April 1955, the Imperial Bank of India became the State Bank of India. The government of

India recently acquired the Reserve Bank of India's stake in SBI so as to remove any conflict of

interest because the RBI is the country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight

state banks associates of SBI. A process of consolidation began on 13 September 2008, when

the State Bank of Saurashtra merged with SBI.

SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI

acquired in 1969, together with its 28 branches. The next year SBI acquired National Bank of

Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram

Baldeo Bank, which had been established in 1916 in Gwalior State, under the patronage of

Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender,

owned by the Maharaja. The new banks first manager was Jall N. Broacha, a Parsi. In 1985, SBI

acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its

affiliate, the State Bank of Travancore, already had an extensive network in Kerala
http://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Royal_charterhttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Central_Bankhttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Saurashtrahttp://en.wikipedia.org/wiki/Gwalior_Statehttp://en.wikipedia.org/wiki/Madho_Rao_Scindiahttp://en.wikipedia.org/wiki/Keralahttp://en.wikipedia.org/wiki/State_Bank_of_Travancorehttp://en.wikipedia.org/wiki/State_Bank_of_Travancorehttp://en.wikipedia.org/wiki/Keralahttp://en.wikipedia.org/wiki/Madho_Rao_Scindiahttp://en.wikipedia.org/wiki/Gwalior_Statehttp://en.wikipedia.org/wiki/State_Bank_of_Saurashtrahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Central_Bankhttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Royal_charterhttp://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcutta


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Transformation Journey In State Bank Of India

The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size,

number of branches, market capitalization and profits is today going through a momentous phaseof Change and Transformationthe two hundred year old Public sector behemoth is today stirring

out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a

run for their money.

The bank is entering into many new businesses with strategic tie ups Pension Funds, General

Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant

Acquisition, Advisory Services, structured products etc each one of these initiatives having a

huge potential for growth.

The Bank is forging ahead with cutting edge technology and innovative new banking models, to

expand its Rural Banking base, looking at the vast untapped potential in the hinterland and

proposes to cover 100,000 villages in the next two years.

It is also focusing at the top end of the market, on whole sale banking capabilities to

provide Indias growing mid / large Corporate with a complete array of products and services. It is

consolidating its global treasury operations and entering into structured products and derivative

instruments. Today, the Bank is the largest provider of infrastructure debt and the largest arranger

of external commercial borrowings in the country. It is the only Indian bank to feature in the

Fortune 500 list.


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The Bank is changing outdated front and back end processes to modern customer friendly

processes to help improve the total customer experience. With about 8500 of its own 10000

branches and another 5100 branches of its Associate Banks already networked, today it offers thelargest banking network to the Indian customer. The Bank is also in the process of providing

complete payment solution to its clientele with its over 21000 ATMs, and other electronic

channels such as Internet banking, debit cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning Centres spread all over the

country the Bank is continuously engaged in skill enhancement of its employees. Some of the

training programmes are attended by bankers from banks in other countries.

The bank is also looking at opportunities to grow in size in India as well as internationally. It

presently has 173 foreign offices in 33 countries across the globe. It has also 7 Subsidiaries

in India SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI

Cards - forming a formidable group in the Indian Banking scenario. It is in the process of raising

capital for its growth and also consolidating its various holdings.

Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and take

all employees together on this exciting road to Transformation. In a recently concluded mass

internal communication programme termed Parivartan the Bank rolled out over 3300 two day

workshops across the country and covered over 130,000 employees in a period of 100 days using

about 400 Trainers, to drive home the message of Change and inclusiveness. The workshops firedthe imagination of the employees with some other banks in India as well as other Public Sector

Organizations seeking to emulate the programme.

The CNN IBN, Network 18 recognized this momentous transformation journey, the State Bank of

India is undertaking, and has awarded the prestigious Indian of the Year Business, to its

Chairman, Mr. O. P. Bhatt in January 2008.


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SERVICES OF SBI

Personal BankingState Bank of India offers a wide range of services in the Personal Banking Segment which are

indexed here. The products are designed with flexibility to suit personal requirements.

SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme SBI Personal Loan Rates Of Interest

NRI Services

State Bank of India is the bank of choice for Indians wherever they live. With its vast network of

over 14,500 domestic branches, 53 dedicated NRI Branches in India, 173 Foreign Offices in 34

countries, Correspondent Banking relations with 475 global banks and tie up with 26 Exchange

Houses and 5 Banks across Middle East, NRIs can enjoy anywhere anytimebanking

facilities.

The product suite for NRIs ranges from Bank Deposits, Loans and Remittances to Investments,

Online Equity Trading, Structured Products, Mutual Funds and Insurance.

Agricultural Products

State Bank of India Caters to the needs of agriculturists and landless agricultural labourers

through a network of 8750 rural and semi-urban branches. Apart from the branches, there are 428

Agricultural Development Branches (ADBs) which also cater to agriculturists. They are theleaders in agri finance in the country with a portfolio of Rs. 64,000 crs in agri advances covering

around 80 lac accounts.

Their branches have covered a whole gamut of agricultural activities like crop production ,

horticulture , plantation crops, farm mechanization, land development and reclamation, digging of


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wells, tube wells and irrigation projects, forestry, construction of cold storages and godowns,

processing of agri-products, finance to agri-input dealers, allied activities like dairy, fisheries,

poultry, sheep-goat, piggery and rearing of silk worms.

To give special focus to agriculture lending Bank has also appointed agri specialists in various

disciplines to handle projects/ guide farmers in their agri ventures. Advances are given to

borrowers for very small activities covering poorest of the poor to hi-tech activities involving

large fund outlays.

Now we are setting up Agri Commercial Branches (ACBs) which will handle high value agri

financing involving large investments. It envisages lending through corporate partnerships and

other large enterprises for commodity financing, investment credit, other high value agriculture

segments like horticulture, floriculture & food processing etc. It also focuses on Agri related SMEincluding setting up of Rice and Dhal mills, seed processing industry, food processing industry,

large and small scale dairy units, etc.

Traditionally, rural business is associated with agriculture and allied activities. Of late however,

the trickledown effect of economic growth, renewed focus on infrastructure development, and

employment generation in rural areas have led to huge investment by the Government in rural

India, with a view to bridge the urban and rural divide.

Considering that agriculture would continue to be significant driver of Indian economy, with the

possibilities of rapid growth in emerging areas like contract farming, agro-processing and agro-export zones, etc., a separate Agri Business Unit (ABU) with a distinct organizational structure

has been set up in the Bank and under noted objectives has been created in 2004:-

Providing focused attention on the banking requirements of the agriculture segment, Achieving 18% target under agricultural advances as required under priority sector norms, Focus on micro finance and SHG opportunities (now part of non-farm sector in Rural

Business),

Focus on Key Corporate and Institutional relationships in agriculture, emerging opportunities,and special initiatives, as may be necessary,

Focus on product development and management, Reduce NPA levels in Agriculture, Make agriculture a commercial proposition.


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ABU has four departments headed by Deputy General Managers:- Agri Business, Planning, Monitoring and Market Intelligence. Corporate and Institutional Relationship. Product Development and Marketing. RRBs & Lead Bank Department.

They also have an effective Marketing and recovery team in each region with responsibilities for

marketing and building relationships with dealers of agri-products, organizing promotional events

and for loan sanction, processing, monitoring and recovery.

International Banking

International banking services of State Bank of India are delivered for the benefit of its Indian

customers, non-resident Indians, foreign entities and banks through a network

of 173offices/branches in 33 countries as on 05th

Mar 2012, spread over all time zones. The

network is augmented by a cluster of Overseas and NRI branches within India and correspondent

links with over 483 banks, the world over. Bank's Joint Ventures and Subsidiaries abroad further

underline the Bank's international presence.

The services include corporate lending, loan syndications, merchant banking, handling Letters of

Credit and Guarantees, short-term financing, collection of clean and documentary credits andremittances.

The Bank has carved a niche for itself in the Euro land with branches located in Antwerp, Paris

and Frankfurt. Indian banks and corporates are able to avail single-window Euro services from the

Bank's Frankfurt branch.

Corporate Banking

SBI is a one shop providing financial products / services of a wide range for large , medium and

small customers both domestic and international.

Working Capital Financing

Assistance extended both as Fund based and Non-Fund based facilities to Corporate,Partnership firms , Proprietary concerns

Working Capital finance extended to all segments of industries and services sector such as IT


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Term Loans

To support capital expenditures for setting up new ventures as also for expansion, renovation etc.

Deferred Payment Guarantees

To support purchase of capital equipments.

Corporate Loans

For a variety of business related purposes to corporates.

Export Credit

To Corporates / Non Corporates

Strategic Business Units

(i) Corporate Accounts Group (CAG)

(ii)Project Finance

(iii) Lease Finance

An exclusive unit providing one s shopping to Corporate A dedicated set up specialized in financing of infrastructure and other large projects Exclusive set up for handling large ticket leases.

Pricing

SBI's Prime Lending Rates (PLR) is among the lowest. Presently Bank has two PLR's SBAR for loans payable on demand and upto one year SBMTLR for loans payable beyond one year.


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STATE BANK OF INDIA -CORPORATE BANKING

Corporate banking is defined as those products and services that relate to the lending activities

between a bank and its clients. This could be a simple secured or unsecured loan, or it could be ahighly sophisticated structured finance transaction with many different banks or syndicates

involved in the transaction. Cash management and trade finance also fall under the definition of

corporate banking.

Corporate Banking entails the following Key Points/aspects:

Assistance extended both as Fund based andNon-Fund based facilities to Corporates ,Partnership firms , Proprietary concerns

Working Capital finance extended to allsegments of industries and services sectorsuch as IT

WORKING CAPITALFINANCING

To support capital expenditures forsetting up newventures/expansion/renovation etc.

TERM LOANS

To support purchase of capitalequipments.

DEFERRED PAYMENT

GUIARANTEES

For a variety of business relatedpurposesCORPORATE LOANS

Corporate Accounts Group (CAG) /ProjectFinance Lease Finance

Exclusive unit providing one stop shopping toCorporates , dedicated set up specialised infinancing of infrastructure

EXPORT CREDIT

Prime lending ratesSTRATEGIC

BUSINESS UNITSTo Corporates / Non CorporatesPRICING


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PROFILE

The SBIs powerful Corporate Banking formation deploys multiple channels to deliver integrated

solutions for all financial challenges faced by the corporate universe.

The Corporate Banking Group and the National Banking Group are the primary delivery channels

for corporate banking products.

The Corporate Banking Group consists of dedicated Strategic Business Units that cater

exclusively to specific client groups or specialize in particular product clusters.

Foremost among these specialized groups is the Corporate Accounts Group (CAG), focusing on

the prime corporate and institutional clients of the countrys biggest business centers. The others

are the Project Finance unit and the Leasing unit.

The National Banking Group also delivers the entire spectrum of corporate banking products to

other corporate clients, on a nationwide platform.

Complete Range of Products and Services

The SBI offers an exhaustive range of financial products and services that answers any business or

market circumstance, to meet the most sensitive specificities of each client and each business

context.

It is committed to understanding the finest nuances of business objectives. Its team of highly

skilled and experienced product specialists helps to forecast and structure complex transaction

requirements.

KEY POINTS :

Complete Range ofProducts and Services

The SBI Edge


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The SBI Edge

Commanding unsurpassed respect and legacy in the Indian financial expanse, the SBI is

committed to offering you financial solutions that extract maximum value from business andmarket situations.

While the bank is strongly positioned to structure financial packages that anticipate the changing

business environment, its vast network--the worlds largestensures delivery channels of

unmatched reach, both in India and abroad.


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1. CORPORATE ACCOUNTS GROUP (CAG)

CAG - SBI's Proactive Response to Emerging Market NeedsCAG is Strategic Business Unit of SBI, set up exclusively to cater to the specialized banking

needs of top corporate clients of the country.

It was the direct outcome of SBI's structural reorganization in the light of Deregulation,

Globalization & Liberalization of the Banking Industry. Created in the year 1995,CAG's'' mission

is to:

KEY POINTS

CAG

SBI's Proactiveresponse to emergingmarket needs

A Symbol ofexcellence

One point contact

CAG - A PERFECT STRATEGICFIT

Market leader image

Focussed attention

Flexible & Customer - friendlycredit policies

Structured Products - Fundbased &feebased

Timely, comprehensive and assureddelivery

Competitive pricing

Highly skilled credit expertise

MISSION OF CAG

Focus on topcorporateclients

Establish itselfas the mostprofessional

outfit of its kindin the country

Render worldclass and cost

effectivefinancialservices

Evolve newproducts on a

sustained basis-customised tothe changingneeds of thecorporates

Stay aheadof

competitors


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CAG - A Symbol of excellence

Quality Relationship Banking

Exclusive, highly skilled Relationship teams of dynamic and motivated personnel, each attending

to a select group of top Corporates providing a one-stop-shop for financial services presently at

Mumbai, New Delhi, Calcutta, Chennai and Ahmadabad.

Delayered Credit process

Only two stage credit process consisting of appraisal and assessment by the Relationship team and

sanction by the Credit Committee/Central Board, leading to quickest response time in the

industry.

Offer of wider and sophisticated products

Apart from a variety of core credit products including structured finance and multi-purpose short

term corporate loan, CAG offers an array of customer specific products like Cash Management

Product, Treasury & Forex products and Merchant Banking products in association with SBI

Capital Markets Ltd., SBI Gilts Ltd. and other subsidiaries of SBI.

CAG - One point contact

Account Management Teams aid clients in securing any product from any of our variousassociates and subsidiaries as listed below:

For leasing requirements through our Leasing SBU Large Scale Project Finance through PF SBU Capital Market Requirements through SBICAPS Treasury and Investments through SBI GILTS and SBI SECURITIES Receivables factoring through SBI Factors Ltd. MID- CORPORATE GROUP


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2. MID- CORPORATE GROUP

The Mid Corporate Group takes care of Mid-sized corporates, with annual turnover of Rs 50crores and above and / or enjoying credit facilities in excess of Rs 10 crores either as working

capital or Term Loan with the Bank. Mid Corporate Group continue to play a major role in India's

economic development.

The Banks Mid Corporate Group offers a wide array of client focused products and services to

take care of overall banking requirements of the Mid-Corporate clients. Equipped with a talent

pool of teams well versed in credit, foreign exchange, derivatives and trade finance the Mid

Corporate Group provides customized solutions to meet the entire financial requirements of mid-

corporate clients.

The majority of Mid Corporate customers is located in about 50 business centers, and is serviced

by MCG's 64 specialized branches at all major centers, controlled through MCG regional offices

located at 10 most prominent business centers. In addition to the specialized branch network,

MCG serves Mid Corporate customers at other business centers through off-site model controlled

by Sales Hubs and involving Relationship Banking and Centralized Credit Processing facilities.

The Mid Corporate Group is headed by the Dy. Managing Director and Group Executive (MC).

The Chief General Manager (MCG) is in charge of Mid Corporate Regional Offices (MCROs) at

Ahmedabad, Bangalore, Chandigarh, Chennai, Hyderabad, Indore, Kolkata, Mumbai, New Delhiand Pune.

The MCROs are headed by General Managers under whom the Branches of the Group function.


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Core Credit Products:

Advances: Apart from usual credit products like cash credit, termloans etc., competitive interest rates are offered under

CP Linked WCDL, MIBOR linked WCDL and LIBOR

linked FCNB.

ForexCompetitive exchange rates are offered for Export and

Import transactions.

Government Business:Authorized branches in Mid-Corporate Group accepts

excise/other tax receipts.

Trade Finance Products:Trade Finance Products like LC & BG are available for

Mid Corporate accounts with competitive rates.

Cash Management Product

(CMP)

Cash Management Products are available for collections

and payments for all Mid Corporate accounts.

Derivatives:Treasury Department at Corporate Centre provides

consultancy for Derivatives to Mid Corporate accounts

to hedge various business risks.

Supply Chain Financing:Supply Chain Financing services are available on e-

platform to the Vendors and Dealers of Mid Corporate

accounts.

Technology Products:eTrade SBI for handling trade finance transactions by

customers from their offices, RTGS, NEFT for handling

remittances, net-banking for cash-flow management etc.

Construction Equipment Loan:Line of credit for financing the requirement of existing

construction companies to purchase new machines /

equipments / vehicles for execution of construction

projects / standard construction equipments.
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3. PROJECT FINANCE

Project Finance Strategic Business Unit:A one-stop-shop of financial services for new projects as well as expansion, diversification and

modernization of existing projects in infrastructure and non -infrastructure sectors .

Expertise

Being India's largest bank and with the rich experience gained over generation, SBI bringsconsiderable expertise in engineering financial packages that address complex financial

requirements

Project Finance SBU is well equipped to provide a bouquet of structured financial solutionswith the support of the largest Treasury in India (i.e. SBI's), International Division of SBI and

SBI Capital Markets Limited. The global presence as also the well spread domestic branch network of SBI ensures that the

delivery of your project specific financial needs are totally taken care of.

Lead role in many projects Allied roles such as security agent, monitoring/TRA agent etc. Synergy with SBI caps (exchange of leads, joint attempt in bidding for projects, joint

syndication etc

Purpose Type of Loan Pricing

Rupee

Loans

Working

Capital

Cash Credit facility Based on credit risk rating

of the Company designedon the lines of

internationally accepted

models, ranging from

our Base Rate(BR) upwards.

Project &

Capex loans

Medium Term Loans 5-7

years or longer in exceptional

cases

Same as above - Base

Rate (BR) upwards.

Export Credits Packing Credit,

Post shipment , Forfeiting

RBI Defined LIBOR

linked and Market

Determined

Foreign

CurrencyLoans

Projects &

Work. Cap

External Commercial

Borrowings(ECBs) whichinclude Syndicated loans,

Stand-alone loans, Buyers'

Credit and Seller's Credit.

LIBOR linked


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Areas of in house expertise (in appraising projects) in infrastructure sector as well as non-

infrastructure sector.

Infrastructure sector: Non-infrastructure sector:

Road & urban infrastructure Power and utilities Oil & gas, other natural resources Ports and airports Telecommunications

Manufacturing: Cement, steel, mining, engineering, auto

components, textiles, Pulp & papers, chemical &

pharmaceuticals.

Services: Tourism & hospitality, educational Institutions,

health industry

Why Project Finance SBU?

Since its inception in 1995 the Project Finance SBU has built-up a strong reputation for it's in-

depth understanding of the infrastructure sector as well as non-infrastructure sector in India and

we have the ability to provide tailor made financial solutions to meet the growing & diversified

requirement for different levels of the project. The recent transactions undertaken by PF-SBU

include a wide range of projects undertaken by the Indian Corporates.

What's in it for corporate clients?

Single Window Solution Professional team Procedural ease

Appetite for large value

loans.

Proven ability to

arrange/syndicate loans.

Competitive pricing.

Dedicated group

with sector

expertise

Panel of legal

and technical

experts

Standardized information

requirements

Credit appraisal/ delivery time period

is minimized

Wide branch network ensuring ease

of disbursement.


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Eligibility

The infrastructure wing of PF SBU deals with projects wherein the project cost is more than Rs

100 Crores. The proposed share of SBI in the term loan is more than Rs.50 crores. In case ofprojects in Road sector alone, the cut off will be project cost of Rs.50 crores and SBI Term Loan

Rs. 25 Crores, respectively. The commercial wing of PF SBU deals with projects wherein, the

minimum project cost is Rs. 200 crores (Rs. 100 crores in respect of Services sector).

The minimum proposed term commitment is of Rs. 50 crores from SBI.


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4. PRODUCTS AND SERVICES

(A) INDUSTRIAL SECTOR

Working Capital Finance

SBI offers working capital finance to meet the entire range of short-term fund requirements that

arise within a corporates day-to-day operational cycle.

The SBI working capital loans can help a company in financing inventories, managing internal

cash flows, supporting supply chains, funding production and marketing operations, providing

cash support to business expansion and carrying current assets.

SBIs working finance products comprise a spectrum of funded and non-funded facilities ranging

from cash credit to structured loans, to meet the different demands from all segments of industry,

trade and the services sector. Funded facilities include cash credit, demand loan and bill

discounting. Demand loans are considered also under the FCNR (B) scheme. Non-funded

instruments comprise letters of credit (inland and overseas) as well as bank guarantees

(performance and financial) to cover advance payments, bid bonds etc.

Project Finance

The SBI has formed a dedicated Project Finance Strategic Business Unit to assess credit

proposals from and extend term loans for large industrial and infrastructure projects. Apart from

this, project term loans for medium sized projects and smaller clients are delivered through the

CAG and the NBG.

In general, project finance covers Greenfield industrial projects, capacity expansion at existing

manufacturing units, construction ventures or other infrastructure projects. Capital intensive

business expansion and diversification as well as replacement of equipment may be financed

through the project term loans.

Project finance is quite often channeled through special purpose vehicles and arranged against the

future cash streams to emerge from the project.

The loans are approved on the basis of strong in-house appraisal of the cost and viability of the

ventures as well as the credit standing of promoters .


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Deferred Payment Guarantees

SBI can extend deferred payment guarantees to industrial projects for obtaining imported

equipment. The DPG is a standby credit guaranteeing deferred payments, usually for payments forcapital goods, turnkey contracts etc.

Corporate Term Loan

The SBI corporate term loans can support your company in funding ongoing business expansion,

repaying high cost debt, technology upgradation, R&D expenditure, leveraging specific cash

streams that accrue into your company, implementing early retirement schemes and

supplementing working capital.

Corporate term loans can be structured under the FCNR (B) scheme as well, with the option ofswitching the currency denomination at the end of interest periods. This will help you take

advantage of global interest rate trends vis--vis domestic rates to minimize your debt cost.

The banks corporate term loans are generally available for tenors from three to five years,

synchronized with your specific needs.

SBI corporate term loans may carry fixed or floating rates, as befits the exact requirement of the

client and the risk context. Again, these rates will be linked to the banks prime lending rate.

SBI corporate term loans can have a bullet or periodic repayment schedule, as required by theclient. The repayment mode may be linked to the cash accruals of the company.

The Banks expert credit crew gauges the applicants particular fund requirements and evaluates

the companys credit worthiness, factoring in the cash flows generated by it.

Structured Finance

SBI structured finance involves assembling unique credit configurations to meet the complex fund

requirements of large industrial and infrastructure projects. Structured finance can be a

combination of funded and non-funded facilities as well as other credit enhancement tools, leasecontracts for instance, to fit the multi-layer financial requirements of large and long-gestation

projects.


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SBI advantage in structured finance:

Being Indias largest bank and with the rich experience that it brings with it, SBI commands

formidable expertise in engineering financial packages that address complex requirements withminimum risk.

Further, SBI has firm relationships across the financial map of the world, which can be leveraged

to structure solutions that may necessitate the participation of several credit agencies.

Dealer Financing

SBI extends financial support to the corporate distribution networks, by providing bothworking capital finance and term loans to select dealers of identified companies.

This gives dealers to leverage their business relationship with major Corporates to avail lowcost credit.

Also, this type of financial solutions allows the corporate negotiate a better price with dealers.Dealer financing may be extended in the bill discounting form or simply as cash credit.

Channel Financing

Channel financing is an innovative finance mechanism by which the bank meets the variousfund necessities along your supply chain at the suppliers end itself, thus helping you sustain

a seamless business flow along the arteries of the enterprise.

Channel finance ensures the immediate realization of sales proceeds for the SBI clientssupplier, making it practically a cash sale. On the other hand, the corporate gets credit for a

duration equaling the tenor of the loan, enabling smoother liquidity management.

SBI has the worlds largest banking network of over 9,000 branches and this enables it todeliver the financial solution at your suppliers doorsteps, across the span of the country.

Equipment Leasing & Loan Syndication

The SBI has deployed a dedicated Strategic Business Unit for lease financing that is richly

experienced in arranging lease contracts for procuring expensive equipment for your project orplant. SBI arranges lease agreements as standalone contracts or as part of a structured package.

The SBI leverages its vast network of relationships to arrange syndicated credit products for

corporate clients and industrial projects. With its rich experience and strong reputation, SBIs

syndication desk can assemble large loan packages involving a ring of reputed financial entities,

domestic and international, that match the large credit requirements of infrastructure projects.


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(B) TRADE AND SERVICES SECTOR.

PurposeTo finance new trucks/tankers/trailers/tippers/luxury buses including takeover of existing similar

loans from other banks/institutions.

Eligibility

Profit making Corporates/Non-corporates (surface transport operators) owning more than 10 well-

maintained vehicles (including the proposed).

Quantum of finance

Minimum Rs. 10 lacs

Maximum Rs. 10 crores.

Repayment

Term Loan: Maximum 5 years. Repayment will be in Equated Monthly Installments (EMI),

starting two months after disbursement. Cash Credit: Repayable on demand, renewal every year.

Margin

20%

Term Loan

100 % of the cost of the chassis, inclusive of excise duty. Other expenses are to be borne by the

borrower. Where body building is not required, 80 % of the cost of the vehicle will be financed.An additional Term Loan limit, subject to a maximum of 20% of the original limit may be

sanctioned for repair of the vehicle, on or after the 3rd year if the loan account is regular.

Cash Credit

80% of the Receivables.

Prepayment

Term Loan: Maximum 1% p.a. on the pre-paid amount, for the residual period.

Rate of InterestFor Term loans, 8.50% p.a. with monthly rests and for Cash Credit, 11.75% p.a. with monthly

rests.


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Security Primary

Hypothecation of vehicles financed as well as book debts.

Collateral

i) At least 50% of the loan amount

ii) Personal guarantee of promoters and two third-party guarantors.

Insurance

As per Banks guidelines.

Applicability

Metro/urban/semi-urban centers.

Bill Finance

The banks bill finance product helps the Client to bridge the fund gap between the date ofsale of products to the receipt of payments.

The bank purchases the bill of exchange your company receives against a product sale, at adiscount, thus doing away with the delay in realizing the receivables.

The extent of discounting would amount to the interest calculated till the payments for theoriginal sale are realized, and will be determined on the basis of market interest rates as well

as the credit rating of the borrower.

Cash Credit for TradersSBI cash credit can be in the form of a running account, similar to an overdraft secured by a

charge on current assets that meets the frequent cash requirements of your trading cycle.

Term Loan for Asset Acquisition

The specialized product has been designed to help you purchase plant, machinery, land or other

physical assets required during the growth and expansion of the company.


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Letters of Credit

The SBI offers Letters of Credit to facilitate your purchases of goods in trading operations,both domestic and international. Backed by the SBIs strong reputation, you will be able tobuild better trust in trade and forge business relationships faster.

The banks vast network of branches and correspondent banks enables your enterprise tosustain a seamless flow of business on a wide platform.

Further, the banks informed trade finance crew can provide you with sophisticated credit andtrade information and market knowledge, helping you extract more value from business.

Bank Guarantees

The SBI guarantees the creditworthiness or the business capacity of its clients through its financial

and performance guarantees.


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5. CASH MANAGEMENT PRODUCT - SBI FAST

Brief Introduction

STATE BANK OF INDIA provides cash management services to Corporate Clients underthe brand name SBI FAST (Funds Available in Shortest Time).

SBI FAST ensures optimization of collections and payouts while ensuring predictability inthe cash flows.

SBI FAST ensures getting Funds in time, quick transfers, account reconciliation, easydisbursements, controlled processes and customized MIS.

SBI FAST eliminates the inherent delays of the traditional funds transfer mechanism andenhances liquidity to ensure optimum planning and utilization of funds.

SBI FAST also offers File upload facility on our web based portal and provides completeHost to Host facility (a secure, seamless file transfer facility)

SBI FAST Cash Management Services Offerings

1. Collections:

a. Local collections (cheques/drafts etc)

Collection of instruments tendered at various CMP collection centres. Depending on theclearing practices prevailing at the various centres (i.e. Day-0, Day-1, or Day-2),

Credit is afforded, as mandated, to the client's main account at the pooling centre the same dayas the proceeds are cleared.

Convenient collecting locations across the country with pooling facility at any of our branchesas per clients choice, which are physically connected to our central hub at Mumbai.

FEATURES & BENEFITS

CENTRALIZEDCONTROL OFCASH

INTEREST COSTREDUCTION ONBORROWINGS

ENHANCEDLIQUIDITY

CASHFORECASTING &SCHEDULING

EFFECTIVECONTROL OVERDISBURSEMENTS


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Instruments can be deposited at the collection centers either by their dealers / distributors /

representatives or through couriers as per the arrangement.

Client is not required to open any account at the Centre from which this facility is availed. Collection of instruments in General/MICR Clearing, drawn on local branch and drawn on

other local SBI Branches.

No correspondent arrangements. Collections are handled exclusively through our own networkand hence cost effective.

SBI is the acknowledged leader in the collection services. Centralized Reconciliation Support.b. Outstation cheques collection

Outstation Cheques can also be deposited at our CMP Cell branches and we afford GuaranteedCredit facility with credit available on Day 1 to Day 7.

Outstation cheques drawn on our own branches are paid the same day at very concessionalcharges.

c. Cash collection:

Facility of Cash Deposit at our CMP Cell branches on CMP software which facilitates automatic

pooling of funds with MIS. Cash pick up facility from clients end available at most major centres

d. Uncleared funds

Option of credit against Uncleared Instruments presented in General/MICR or High Valueclearing offered selectively at Bank's discretion.

A nominal limit is required to be set up to take care of returns.e. Balance sweep

Transfer of day-end-balances in collection accounts maintained at various CMP Centres acrossthe country to the pooling account.

Clients can use the account for crediting local and outstation collections as well as for meetingpayments and the residual balance at the end of the day swept to the main account.

Swept balances can be swept back to the respective accounts by reverse sweep at the beginningof next day.


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f. Debit transfers

Debit Balances in operating accounts, where drawls are permitted up to a pre-fixed daylightlimit, maintained at CMP centres transferred to the main account at the end of the day.

The facility dispenses the use of allocated limits and thereby ensures better control, for theclient over debits.

g. Customized MIS

Daily presentation/credit/return reports provided to the representative/dealer at the localcentre.

Daily location-wise/product-wise presentation/credit/return reports provided to the CorporateOffice through E-mails.

Customized weekly/fortnightly/monthly consolidated reports in soft-form, compatible withthe clients accounting system, through E-Mail/ Floppy/CD-ROM as required, for easier and

speedier reconciliation.

Daily Credit forecast reports through E-Mail. Uncluttered/Pure MIS is our USP since the product is operated entirely through SBIs own

network.

h.Electronic collections

1) Direct Debit

For Collection of invoice payment from Dealers, SIP/Premium etc.

Payment can be pulled from any account at any of our CBS (12,500). Mandate of Account holders required, which is validated by us.

2) RTGS/NEFT Receipts

Dealer codes are set up by the corporate. Funds received through RTGS/NEFT modes are credited to the Corporate pooling Account. MIS is generated giving Dealer Name, Invoice no and amount received.


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2. Payments

a. Real Time Gross Settlement

Inter Bank Product - Settlement through RBI. Minimum Transaction Amount Rs.2.0 lacs. Settlement on the day of transaction. Competitive market related rates Payment file upload facility available through SBI CMP Portal / Host to Host Connectivityb. National Electronic Fund Transfer

Inter Bank Product - Settlement through RBI. Used for amount less than Rs.2.0 lacs. Settlement on the same day or next day. Any NEFT enabled Bank anywhere. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivityc. Electronic Clearing Scheme

Electronic mode of payment at all 72 ECS centers and across India through NECS for banks oncorp. Banking.

Useful for payment of interest, dividend, salary, pension to a large number of investors/ shareholders/ employees/ ex-employees.

Payment file upload facility available through SBI CMP Portal / Host to Host Connectivityd. Direct Credit

Intra-Bank of SBI for electronic payment that uses ' Core Power '. Settlement online & available between CBS branches (Over 12,500 & growing). Can be used for payment for Purchases, Rent, Incentives and Salaries etc. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity.e. Drafts

Meets Bulk Drafts requirement on day '0'. Facsimile signature enabled up to Rs.5.0 lacs. Printed with forwarding letter also. Provision for direct despatch to the beneficiary from our office. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivity


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f. Multi City Cheques

Client's facsimile signatures affixed for amount up to Rs.5 lacs. Printed with customized forwarding letter. Provision for direct despatch to the beneficiary. Maximum amount per cheque Rs.10 lacs. Payable at all CBS branches of the Bank. Payment file upload facility available through SBI CMP Portal / Host to Host Connectivityg. Dividend Warrants

All electronic and paper modes handled with widest reach. ECSAcross all 72 RBI/SBI/Other Bank Centres. RTGS/NEFTAcross all RTGS/NEFT enabled banks branches. Direct CreditsAcross all branches of SBI. Dividend Warrants Payable at par at all 12500 plus branches Validation of Instrument No. & amount at the time of payment. Drafts issued at any of the 12500plus branches. Regular paid / unpaid status provided


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SPECIALIZED PRODUCTS

Cash Management ProductThe bank offers a totally technology-driven cash management product, based on the satellite-

linked SBI FAST (for Funds Available in the Shortest Time) platform that connects 120 centers

spread across the country. Cash collections can be pooled at these centers at competitive rates.

Further, the clients cost centers at various locations can have a daily limit with the SBIs local

branch which can be swept automatically into your main account located at your corporate center.

Benefits of the SBI cash management product

Ensures a comfortable liquidity position within the corporation always and significantly bringdown transaction time and cost.

Further, the quicker, more efficient and better-controlled cash circulation can actually createprofit opportunities for the company.

The company will be better placed to forecast its cash positions and schedule related financialtransactions accordingly.

Channel Financing

Channel financing is an innovative finance mechanism by which the bank meets the various fund

necessities along the companys supply chain at the suppliers end itself, thus helping the client to

sustain a seamless business flow along the arteries of the enterprise.

Channel finance ensures the immediate realization of sales proceeds for the SBI cli ents supplier,

making it practically a cash sale. On the other hand, the corporate gets credit for a duration

equaling the tenor of the loan, enabling smoother liquidity management.

SBI has the worlds largest banking network of over 9,000 branches and this enables it to deliver

the financial solution at your suppliers doorsteps, across the span of the country.


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Construction Equipment Loan (CEL)

Line of credit for financing the requirement of existing construction companies, having credit

rating of SB-1 to SB-8 (new model), to purchase new machines / equipments / vehicles forexecution of construction projects / standard construction equipments.

Quantum and Pricing Rs.3.00 crores to Rs.100.00 crores. Linked to the Base Rate of the Bank as per credit rating of the company.

TenureUpto 4 years Repayment: In monthly installments.

However, variable repayment programme can also be considered based on the cash flow of the

company

OthersThe loan may be disbursed in several tranches, subject to minimum 10% of the sanctioned

amount for any tranche, within a period of maximum one year from the date of sanction

depending on requirement of equipments / machinery / vehicles within the specified time

frame.


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CONCLUSION AND RECOMMENDATIONS

The availability of funding for working capital purposes is much in the news at present. Potential

borrowers requiring finance need to plan much further in advance for forthcoming refinancing

while lenders have to operate within strictly imposed compliance and risk parameters.

Borrowers looking to refinance or obtain additional finance need advice as to the appetite of the

banks for lending, the best way to present to them for credit purposes and the likely timetable

they need to start planning further in advance and understand that increased preparation is likely.

Corporate banking focuses on offering a full range of services to multinationals, large domestic

corporate and institutional clients.

Corporate banking reflects banks strength in providing corporates clients in India, a wide away of

commercial, transactional and electronic banking product developments and a well- integrated

approach to relationship management.

Corporate banking services are an integral part of the corporate, investment banking and

markets (CIBM) structure, which focuses on offering a full range of services to multinational,

large domestic corporate and institutional clients. It can be concluded that the banks help

corporate in financial needs thus enabling them to run smoothly &effectively.

If we look at it from the corporate angle then the banks need to speed up their procedures and thus

enabling fast functioning of the work. It is seen that the corporates feel that the private banks are

rigid in their system and dont make concessions considering the urgency of the situation.

According to the banks they need the companies to have credit worthiness and clean chit

on their financial records. Hence it is suggested that the company maintain their financial

performance according to the rules and regulations. The corporates also need to pay off their

obligations on time which would help them to create a good impression on the banks and make

it easy for them for future borrowings

Documents

Final Hard Copy Cbm