Final Project Reports SBI POS

1

ACCEPTABILTY OF SBI “POS” IN JEWELLERY BUSINESS

CHAPTER 1

INTRODUCTION OF PROJECT

2


1.1 WHAT IS POS?

Point of sale (also called as POS or Checkout) is the place where a retail

transaction is completed. It is the point at which a customer makes a payment to the merchant in

exchange for goods or services. At the point of sale the retailer would calculate the amount owed

by the customer and provide options for the customer to make payment. The merchant will also

normally issue a receipt for the transaction.

The POS in various retail industries uses customized hardware and software as

per their requirements. Retailers may utilize weighing scales, scanners, electronic and manual

cash registers, EFTPOS terminals, touch screens and any other wide variety of hardware and

software available for use with POS. For example, a grocery or candy store uses a scale at the

point of sale, while bars and restaurants use software to customize the item or service sold when

a customer has a special meal or drink request.

The modern point of sale is many times called as the Point of Service because it

is not just a point of sale but also a point of return or customer order. Additionally it includes

advanced features to cater to different functionality, such as inventory management, CRM,

financials, warehousing, etc., all built into the POS software. Prior to the modern POS, all of

these functions were done independently and required the manual re-keying of information,

which can lead to entry errors.

1.2 MEANING OF POS:

Merchant Acquiring Business is primarily referred to the mechanism of payment

for goods and services purchased through card (Debit Card or Credit Card).Bank provides a

device for swipe of the card and the payment is effected from the account linked to the card by

debiting the bank account in case of debit Card and account where the facility provided by credit

Card issuer.

3


1.3 HIGHLIGHTS OF THE PRODUCTS:

Installation and the maintenance of the device will be free of cost.

Merchant Discount Rate on SBI debit card0.65 % other bank debit card 0.75% for

transaction up to Rs.2000/- and 1.00% for transaction above Rs.2000/- Credit cards 1.5%.

POS machine is compatible for all Master and VISA cards.

For Service related queries to dedicated toll Free helpline 1800-425-0727 or email at

[email protected]

Direct credit to your account in T+1 day.

No rentals for PSTN (MTNL landline).

Wide range of POS terminals.

State Bank India is largest issuer of Debit Cards.

Transparency in dealing.

No hidden charges.

4


1.4 Unique Selling Points:

Zero cost for machine.

Free Maintenance

Free installation

No recurring expenditure

No annual maintenance charge

Free of cost training will be provided to merchant

No requirement of minimum business volume

No hidden charges

Cash back campaign for merchants for “on us” transactions from 01.06.2013 to 30.09.2013

Lowest merchant discount rate (MDR)with special rate for hospitals/nursing home/diagnostic centre and educational institutions

0% MDR for petrol pumps

0% MDR for on us transactions for pos in defense canteen

Available on three types of model on PSTN line, desktop GPRS and portable GPRS

Mapped with current or cash credit account

The telephone charges for swipping the card are local land line charges in case of PSTN line

For GPRS model sim card will be provided by bank. Minimum charges are applied for monthly rental and one time security deposit

Minimum requirement at sites e.g. only one power point and a telephone connection with STD facility is needed.

5


STATE BANK OF INDIA - Merchant Acquiring Business (MAB)

NEW RATES FOR MERCHANT DISCOUNT RATE (MDR) w.e.f 1st Sept 2012Particulars MDR for State

Bank (On Us)Debit Cards

MDR for Other Bank (Off Us)Debit Cards

MDR for Credit Cards (Floor rates)

MDR for Foreign cards (facility to be specified)

Transaction amount up to Rs. 2000

0.65% + service tax

0.75%+ service tax

1.50% + service tax

2.0%+ service tax

Transaction amount above Rs. 2000

0.65%+ service tax

1.0%+ service tax

1.50%+ service tax

2.0%+ service tax

Special concessional rates for Hospitals/Nursing home /diagnostic centers and Educational institutions:

Category Merchant Discount RatesEducational institutions

On Us:0.50%,off Us:0.75%,Upto Rs.2000/-And 1% above Rs.2000/-,credit card:1.20%

Hospitals/Nursing home /diagnostic centers

On Us:0.50%,off Us:0.75%,Upto Rs.2000/-And 1% above Rs.2000/-,credit card:1.50%

Zero % Merchant Discount Rates (MDR) for Petrol Pump and Zero % MDR for SBI Debit card for Defense Canteen.

Daily Transaction Statement through e-mail available. Subject to review every six months.

Three Types of Point of Sales (POS) machines available: 1. PSTN: available over Landline Phone – No rental – Local call charges apply

2. GPRS: Working with Sim card (Reliance) – with No call charges(i) DESKTOP GPRS (requires Electric connection): (ii) PORTABLE GPRS (Battery backup available):

Particular First 48 Months From 49th MonthDesktop GPRS (Rs.)

Portable GPRS (Rs.)

Desktop GPRS (Rs.)

Portable GPRS (Rs.)

Monthly rental (per terminal, including SIM charges)

220 + service tax

400 + service tax

Actual SIM charges (Presently Rs. 45/- plus service tax)

One time non-refundable security amount (At the time of installation only)

200 400 NA NA

6


7


STATE BANK OF INDIA - Merchant Acquiring Business (MAB):

SBI Point Of Sale (POS) machine from the most stable and largest PSU bank. Easy banking along with fast and secure transactions for card payments

Features:- Prompt Service, - Competitive Rates, - Fast e-Connectivity Options, - Latest terminals and technology, - Current account with all facilities,- No hidden charges, - Differential rate system,- Auto-Batch Closing on 3rd day - so no penalty for open batch.

1. Requirement:

Current Account / Cash Credit / Over Draft Account with any Branch of State Bank of India..

How to apply1) A simple application to be filled in2) An agreement to be signed with the Bank.

2. Advantages of installing a SBI POS machine:

SBI has over 40% market share of debit cards and huge customer base with branch network even in remote areas. This greatly increases our potential customers. Over a period of two years the daily average spend on SBI debit cards has gone up from 3.44 crores to 35 crores.

Total Card base in India ( March 11) – 248 million Debit Cards – 228 million (SBI – 91 mn) Credit Cards – 20 million (SBI – 2.5 mn)i. Cardholder

a) Need not carry cash, which is risky.

b) Maintains higher balances in the account resulting in higher interest on deposits.

c) Saves time and money in visiting bank Branch / ATM to withdraw money and spend the same at merchant outlet, who has to again deposit the same in Bank.

d) The time saved results in lower cost and higher productivity as time saved can be gainfully utilized.

e) Freedom Reward (loyalty points)

8


ii. Merchant

a) Cash handling is avoided.

b) The customers have tendency to higher purchases while using the card than cash thus more sales and higher profits.

c) Additional revenue stream from value added services.

d) The customer stickiness to merchant increases due to the facility.

e) The facility can also has provision for customer loyalty points which are widely used to

attract the customer to the outlet repeatedly.

f) Increase in Sales and increase in customer base

g) Customer attachment to shop due to additional facility.

h) Reduces process of cash handling, maintaining and depositing in bank.

i) Customer’s convenience

j) Record of all transactions available in the account and statements available in excel

provides operational convenience in recording sales of the units.

For details: visit nearest SBI Branch. For After Sales service call: 1800 425 0727

CASH BACK CAMPAIGN for Merchants FROM 01/06/2013 TO 30/09/2013E-Circular No. CS&NB/CS&NB-MAB/2013-14 Dated 15.05.2013

Monthly Business through SBI Debit Cards Cash Back %

Rs.10,000 up to Rs.2,00,000 1%

Rs.2,00,000 and above 0.5% with minimum of 2000 and a cap of Rs.5,000 per MID

9


CHAPTER 2

INDUSTRY PROFILE

10


2.1 HISTORY OF BANKING:

1) WESTERN BANKING HISTORY:

Modern Western economic and financial history is usually traced back to the

coffeehouses of London. The London Royal Exchange was established in 1565. At that time

moneychangers were already called bankers, though the term "bank" usually referred to their

offices, and did not carry the meaning it does today. There was also a hierarchical order among

professionals; at the top were the bankers who did business with heads of state, next were the

city exchanges, and at the bottom were the pawn shops or "Lombard’s. Some European cities

today have a Lombard street where the pawn shop was located.

After the Antwerp, trade moved to Amsterdam. In 1609 the Amsterdamsche Wissel bank (Amsterdam Exchange Bank) was founded which made Amsterdam the financial centre of the world until the Industrial Revolution.

Banking offices were usually located near centers of trade, and in the late 17thcentury, the largest centers for commerce were the ports of Amsterdam, London, and Hamburg. Individuals could participate in the lucrative East India trade by purchasing bills of credit from these banks, but the price they received for commodities was dependent on the ships returning (which often didn't happen on time) and on the cargo they carried (which often wasn't according to plan). The commodities market was very volatile for this reason, and also because of the many wars that led to cargo Seizures and loss of ships.

2) GLOBAL BANKING:

In the 1970s, a number of smaller crashes tied to the policies put in place following the depression, resulted in deregulation and privatization of government-owned enterprises in the 1980s, indicating that governments of industrial countries around the world found private-sector solutions to problems of economic growth and development preferable to state-operated, semi-socialist programs. This spurred a trend that was already prevalent in the business sector, large companies becoming global and dealing with customers, suppliers, manufacturing, and information centre all over the world.

11


Global banking and capital market services proliferated during the 1980s and 1990s as a result of a great increase in demand from companies, governments, and financial institutions, but also because financial market conditions were buoyant and, on the whole, bullish. Interest rates in the United States declined from about 15% for two year U.S. Treasury notes to about 5% during the 20-year period, and financial assets grew then at a rate approximately twice the rate of the world economy. Such growth rate would have been lower, in the last twenty years, were it not for the profound effects of the internationalization of financial markets especially U.S. Foreign 17 investments, particularly from Japan, who not only provided the funds to corporations in the U.S., but also helped finance the federal government; thus, transforming the U.S. stock market by far into the largest in the world.

Nevertheless, in recent years, the dominance of U.S. financial markets has been disappearing and there has been an increasing interest in foreign stocks. The extraordinary growth of foreign financial markets results from both large increases in the pool of savings in foreign countries, such as Japan, and, especially, the deregulation of foreign financial markets, which has enabled them to expand their activities. Thus, American corporations and banks have started seeking investment opportunities abroad, prompting the development in the U.S. of mutual funds specializing in trading in foreign stock markets.

Such growing internationalization and opportunity in financial services has entirely changed the competitive landscape, as now many banks have demonstrated a preference for the “universal banking” model so prevalent in Europe. Universal banks are free to engage in all forms of financial services, make investments in client companies, and function as much as possible as a “one-stop” supplier of both retail and wholesale financial services.

Many such possible alignments could be accomplished only by large acquisitions, and there were many of them. By the end of 2000, a year in which a record level of financial services transactions with a market value of $10.5 trillion occurred, the top ten banks commanded a market share of more than 80% and the top five, 55%. Of the top ten banks ranked by market share, seven were large universal-type banks (three American and four European), and the remaining three were large U.S. investment banks who between them accounted for a 33% market share.

This growth and opportunity also led to an unexpected outcome: entrance into the market of other financial intermediaries: non-banks. Large corporate players were beginning to find their way into the financial service community, offering competition to established banks. The main services offered included insurances, pension, mutual, money market and hedge funds, loans and credits and securities. Indeed, by the end of2001 the market capitalization of the world’s 15 largest financial services providers included four non banks.

12


In recent years, the process of financial innovation has advanced enormously increasing the importance and profitability of non bank finance. Such profitability priory restricted to the non banking industry, has prompted the Office of the Comptroller of the Currency (OCC) to encourage banks to explore other financial instruments, diversifying banks' business as well as improving banking economic health. Hence, as the distinct financial instruments are being explored and adopted by both the banking and non banking industries, the distinction between different financial institutions is gradually vanishing.

3) MAJOR EVENTS IN BANKING HISTORY:

Florentine banking — The Medicis and Pittis among others Knights Templar- earliest Euro wide /Mideast banking 1100-1300. Banknotes — Introduction of paper money 1602 - First joint-stock company, the Dutch East India Company founded 1720 - The South Sea Bubble and John Law's Mississippi Scheme, which caused

a European financial crisis and forced many bankers out of business. 1781 - The Bank of North America was found by the Continental Congress 1800 - Rothschild family founds Euro wide banking. 1803 - The Louisiana Purchase was the largest land deal in history 1929 - Stock market crash 1989 - Junk bond scandal and charges against Michael Milken resulted in

new legislation for investment banks. 2001 - Enron bankruptcy, causing new legislation for annual reporting.

4) OLDEST PRIVATE BANKS:

Monte deiPaschi di Siena 1472 - present, the oldest surviving bank in the world. Founded in 1472 by the Magistrate of the city state of Siena, Italy.

C. Hoare & Co founded 1672. Barclays, which was founded by John Freame and Thomas Gould in1690 and renamed to

Barclays by Freame's son-in-law, James Barclay ,in 1736 Rothschild family 1700 – present. Hope & Co., founded in 1762.

13


5) OLDEST NATIONAL BANKS:

Bank of Sweden Bank of England Bank of America Swiss banking United States Banking The Pennsylvania Land Bank, founded in 1723 Imperial Bank of Persia (Iran)

6) HISTORY OF BANKING IN INDIA:

Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons for India’s growth.

The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money has become the order of the day.

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct Phases. They are as mentioned below:

• Early phase from 1786 to 1969 of Indian Banks

• Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.

• New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.

14


To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II andPhase III.

PHASE I:

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the central banking authority. During those day’s public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postaldepartment was comparatively safer. Moreover, funds were largely given to traders.

PHASE II:

Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were nationalized.

15


Second phase of nationalization Indian Banking Sector Reform was carried out in1980 with seven more banks. This step brought 80% of the banking segment in India under the government ownership.

The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

• 1949: Enactment of Banking Regulation Act.• 1955: Nationalization of State Bank of India.• 1959: Nationalization of SBI subsidiaries.• 1961: Insurance cover extended to deposits.• 1969: Nationalization of 14 major banks.• 1971: Creation of credit guarantee corporation.• 1975: Creation of regional rural banks.• 1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

Phase III:

This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered For many crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.

16


2.2 REFORMS IN THE BANKING SECTOR :

The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a shift from Class banking to Mass banking. This in turn resulted in a significant growth in the geographical coverage of banks. Every bank has to earmark a minimum percentage of their loan portfolio to sectors identified as “priority sectors”. The manufacturing sector also grew during the 1970s in protected environs and the banking sector was a critical source. The next wave of reforms saw the nationalization of 6 more commercial banks in 1980. Since then the number scheduled commercial banks increased four-fold and the number of banks branches increased eight-fold.

After the second phase of financial sector reforms and liberalization of the sector inthe early nineties, the Public Sector Banks (PSB) s found it extremely difficult to complete with the new private sector banks and the foreign banks. The new private sector banks first made their appearance after the guidelines permitting them were issued in January 1993. Eight new private sector banks are presently in operation. These banks due to their late start have access to state-of-the-art technology, which in turn helps them to save on manpower costs and provide better services.

During the year 2000, the State Bank of India (SBI) and its 7 associates accounted for a 25% share in deposits and 28.1% share in credit. The 20 nationalized banks accounted for 53.5% of the deposits and 47.5% of credit during the same period. The share of foreign banks(numbering 42 ), regional rural banks and other scheduled commercial banks accounted for 5.7%, 3.9% and 12.2% respectively in deposits and8.41%, 3.14% and 12.85% respectively in credit during the year 2000.

17


2.3 CLASSIFICATION OF BANKS:

The Indian banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled bank sand scheduled banks. Scheduled banks comprise commercial banks and the cooperative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old / new domestic and foreign). These banks have over 67,000 branches spread across the country. The Indian banking industry is a mix of the public sector, private sector and foreign banks. The private sector banks area gain spilt into old banks and new banks.

SBI Groups Nationalized banks Indian Banks Foreign Banks

18


2.4 A SNAPSHOT OF THE BANKING INDUSTRY:

The Reserve Bank of India (RBI), as the central bank of the country, closely monitors developments in the whole financial sector.

The banking sector is dominated by Scheduled Commercial Banks (SBCs). As at end-March 2002, there were 296 Commercial banks operating in India. This included 27 Public Sector Banks (PSBs), 31 Private, 42 Foreign and 196 Regional Rural Banks. Also, there were 67 scheduled co-operative banks.

consisting of 51 scheduled urban co-operative banks and 16 scheduled state co-operative banks.

Scheduled commercial banks touched, on the deposit front, a growth of 14% as against 18% registered in the previous year. And on advances, the growth was 14.5% against 17.3% of the earlier year.

State Bank of India is still the largest bank in India with the market share of 20% ICICI and its two subsidiaries merged with ICICI Bank, leading creating the second largest bank in India with a balance sheet size of Rs. 1040bn.

Higher provisioning norms, tighter asset classification norms, dispensing with the concept of ‘past due’ for recognition of NPAs, lowering of ceiling on exposure to a single borrower and group exposure etc., are among the measures in order to improve the banking sector.

A minimum stipulated Capital Adequacy Ratio (CAR) was introduced to strengthen the ability of banks to absorb losses and the ratio has subsequently been raised from 8% to 9%. It is proposed to hike the CAR to 12% by 2004based on the Basle Committee recommendations.

Retail Banking is the new mantra in the banking sector. The home loans alone account for nearly two-third of the total retail portfolio of the bank. According to one estimate, the retail segment is expected to grow at 30-40% in the coming years.

Net banking, phone banking, mobile banking, ATMs and bill payments are the new buzz words that banks are using to lure customers.

19


With a view to provide an institutional mechanism for sharing of information on borrowers/potential borrowers by banks and Financial Institutions, the Credit Information Bureau (India) Ltd. (CIBIL) was set up in August 2000.

The Bureau provides a framework for collecting, processing and sharing credit information on borrowers of credit institutions. SBI and HDFC are the promoters of the CIBIL.

The RBI is now planning to transfer of its stakes in the SBI, NHB and National bank for Agricultural and Rural Development to the private players. Also, the Government has sought to lower its holding in PSBs to a minimum of 33% of total capital by allowing them to raise capital from the market.

Banks are free to acquire shares, convertible debentures of corporate and units of equity-oriented mutual funds, subject to a ceiling of 5% of the total outstanding advances (including commercial paper) as on March 31 of the previous year.

The finance ministry spelt out structure of the government-sponsored ARC called the Asset Reconstruction Company (India) Limited (ARCIL), this pilot project of the ministry would pave way for smoother functioning of the credit market in the country. The government will hold 49% stake and private players will hold the rest 51%- the majority being held by ICICI Bank (24.5%).

20


CHAPTER 3

COMPANY PROFILE OFSTATE BANK OF INDIA

21


3.1 HISTORY:

State Bank of India (SBI) is India's largest commercial bank. SBI has a vast domestic network of over 9000 branches (approximately 14% of all bank branches) and commands one-fifth of deposits and loans of all scheduled commercial banks in India. State Bank of India (SBI) is a Public Sector Banking Organization (PSB), in which the Government of India is the biggest shareholder. It is the largest bank in India and is ranked at 380 in 2008 Fortune Global 500 lists, and ranked 219 in 2008 Forbes Global 2000. Measured by the number of branch offices, SBI is the second largest bank in the world. SBI traces its ancestry back to the Bank of Calcutta, which was established in 1806; this makes SBI the oldest commercial bank in the Indian subcontinent. SBI provides various domestic, international and NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth.

The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later called the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other Presidency banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India. In 1955, the controlling interest in the Imperial Bank of India was acquired by the Reserve Bank of India and the State Bank of India (SBI) came into existence by an act of Parliament as successor to the Imperial Bank of India.

3.2 ASSOCIATE BANKS:

The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries offering merchant banking services, fund management, factoring services, primary dealership in government securities, credit cards and insurance.

The eight banking subsidiaries are:

1. State Bank of Bikaner and Jaipur (SBBJ)2. State Bank of Hyderabad (SBH)3. State Bank of Indore (SBIr)4. State Bank of Mysore (SBM)5. State Bank of Patiala (SBP)6. State Bank of Saurashtra (SBS)7. State Bank of India (SBI)8. State Bank of Travancore (SBT)

22


3.3 BRANCHES:

Today, State Bank of India (SBI) has spread its arms around the world and has a network of branches spanning all time zones. SBI's International Banking Group delivers the full range of cross-border finance solutions through its four wings –

The Domestic division, The Foreign Offices division, The Foreign Department and The International Services division.

State Bank of India is present in 32 countries, where it has 82 offices serving the international needs of the bank's foreign customers, and in some cases conducts retail operations. The focus of these offices is India-related business.SBI has branches in these countries:

• Australia• Bahrain• Bangladesh• Belgium• Canada• France• Germany• Hong Kong• Israel• Japan• People's Republic of China• Republic of Maldives• Singapore• South Africa• Sri Lanka• Sultanate of Oman• The Bahamas• United Arab Emirates• U.K.• U.S.A.

23


3.4 GROUP COMPANIES:

Following are the group companies of SBI-

• SBI Capital Markets Ltd• SBI Mutual Fund (A Trust)• SBI Factors and Commercial Services Ltd• SBI DFHI Ltd• SBI Cards and Payment Services Pvt. Ltd• SBI Life Insurance Co. Ltd – Bancassurance (Life Insurance)• SBI Funds Management Pvt. Ltd• SBI Canada

3.5 GROWTH OF SBI

The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs. one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels ,or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favour of the guarantor, which was in turn endorsed to the bank.

Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities. A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole power of issuing paper currency within British India.

24


The task of management and circulation of the new currency notes was conferred on the presidency banks and the Government undertook to transfer the Treasury balances to the banks at places where the banks would open branches. None of the three banks had till then any branches (except the sole attempt and that too a short-lived one by the Bank of Bengal at Mirzapore in1839) although the charters had given them such authority. But as soon as the three presidency bands were assured of the free use of government Treasury balances at places where they would open branches, they embarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies of the three presidency banks covered most of the major parts and many of the inland trade centres in India. While the Bank of Bengal had eighteen branches including its head office, seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each.

The establishment of the Reserve Bank of India as the central bank of the country in1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for the transaction of government business at centres at which the central bank was not established. But it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers' bank by holding their surplus cash and granting them advances against authorized securities. The management of the bank clearing houses also continued with it at many places where the Reserve Bank did not have offices. The bank was also the biggest tendered at the Treasury bill auctions conducted by the Reserve Bank on behalf of the Government.

The establishment of the Reserve Bank simultaneously saw important amendments being made to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign exchange business and executor and trustee business for the first time. The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to more than six fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life.

25


When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country. In 1951, when the First Five Year Plan was launched, the development of rural India was given the highest priority. The commercial banks of the country including the Imperial Bank of India had till then confined their operations to the urban sector and were not equipped to respond to the emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the economy in general and the rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a state-partnered and state-sponsored bank by taking over the Imperial Bank of India, and integrating with it, the former state owned or state-associate banks. An act was accordingly passed in Parliament in May1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking system thus passed under the direct control of the State. Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (later called associates).

The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development. The State Bank of India was destined to act as the pace setter in this respect and lead the Indian banking system into the exciting field of national development.

State Bank of India has often acted as guarantor to the Indian Government, most notably during Chandra Shekhar's tenure as Prime Minister of India. With 10,000branches and a further 4000+ associate bank branches, the SBI has extensive coverage. Following its arch-rival ICICI Bank, State Bank of India has electronically networked most of its metropolitan, urban and semi-urban branches under its Core Banking System (CBS), with over 4500 branches being incorporated so far. The bank has the largest ATM network in the country having more than 5600 ATMs. The State Bank of India has had steady growth over its history, though the Harshad Mehta scam in 1992 marred its image.

In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. According to the Forbes 2000listing it tops all Indian companies. 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, and structured products etc – each one of these

26


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.

It is also focusing at the top end of the market, on whole sale banking capabilities to provide India’s 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.

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 the largest banking network to the Indian customer. The Bank is also in the process of providing complete payment solution to its clientele with its over 8500 ATMs, and other electronic channels such as Internet banking, debit cards, mobile banking, etc. With four national level Apex Training Colleges and54 learning Centers spread all over the country the Bank is continuously engaged in Skill enhancement of its employees. Some of the training programs 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 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in India – SBI Capital Markets, SBICAP Securities, SBIDFHI, 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 programmed termed ‘Parivartan’ the Bank rolled out over 3300 two day workshops across the country and covered over130,000 employees in a period of 100 days using about 400 Trainers, to drive home the message of Change and inclusiveness. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme.

27


3.6 I.T INITIATIVES AT SBI:

State Bank of India launched a project in 2002 to network more than 14,000 domestic and 70 foreign offices and branches. The first and the second phases of the project have already been completed and the third phase is still in progress. As of December2006, over 10,000 branches have been covered.

The new infrastructure serves as the bank's backbone, carrying all applications, such as the IP telephone network, ATM network, Internet banking and internal e-mail. The new infrastructure has enabled the bank to further grow its ATM network with plans to add another 3,000 by the end of 2007 raising the total number to 8,600. As of September 20, 2007 SBI has 7236 ATMs.

28


Chapter 4

Theoretical Aspects of the study

29


4.1 PORTER’S FIVE-FORCE MODEL:

Prof. Michael Porter’s competitive forces Model applies to each and every company as well as industry. This model with regards to the Banking Industry is presented below.

Porter’s FIVE-FORCE analysis for Indian banking industry

BARGAINING POWER OF SUPPLIERS

-Low supplier bargaining power

-Few alternatives available

-Subject to RBI Rules and Regulations

-Not concentrated

THREAT OF NEW ENTRANT

-Low barriers to entry

-Government policies are supportive

-Globalization and liberalization policy

-High exit barriers

INDUSTRY RIVARLY

Intense competition

Many private, public,

BARGAINING POWER OF CUSTOMERS

-High bargaining power

-Low switching cost

-Large no. of alternatives

-Homogeneous service by banks

-Full information available with customers

THREAT FROM SUBSTITUTES

High threat from substitutes

Like

Mutual funds,

T-bills,

Government securities

.

30


1. Rivalry among existing firms:

With the process of liberalization, competition among the existing banks has increased. Each bank is coming up with new products to attract the customers and tailor made loans are provided. The quality of services provided by banks has improved drastically.

2. Potential Entrants:

Previously the Development Financial Institutions mainly provided project finance and development activities. But they now entered into retail banking which has resulted into stiff competition among the exiting players

3. Threats from Substitutes:

Banks face threats from Non-Banking Financial Companies. NBFCs offer a higher rate of interest.

4. Bargaining Power of Buyers:

Corporate can raise their funds through primary market or by issue of GDRs, FCCBs. As a result they have a higher bargaining power. Even in the case of personal finance, the buyers have a high bargaining power. This is mainly because of competition.

5. Bargaining Power of Suppliers:

With the advent of new financial instruments providing a higher rate of returns to the investors, the investments in deposits is not growing in a phased manner. The suppliers demand a higher return for the investments.

- Overall Analysis:

The key issue is how banks can leverage their strengths to have a better future. Since the availability of funds is more and deployment of funds is less, banks should evolve new products and services to the customers. There should be rational thinking in sanctioning loans, which will bring down the NPAs. As there is a expected revival in the Indian economy Banks have a major role to play. Funding corporate at a low cost of capital is a special requisite.

31


32


4.2 SWOT analysis:

The banking sector is also taken as a proxy for the economy as a whole. The performance of bank should therefore, reflect “Trends in the Indian Economy”. Due to the reforms in the financial sector, banking industry has changed drastically with the opportunities to the work with, new accounting standards new entrants and information technology. The deregulation of the interest rate, participation of banks in project financing has changed in the environment of banks.

The performance of banking industry is done through SWOT Analysis. It mainly helps to know the strengths and Weakness of the industry and to improve will be known through converting the opportunities into strengths. It also helps for the competitive environment among the banks.

a) STRENGTHS:

1. Availability of Funds:

There are seven lakh crores wroth of deposits available in the banking system. Because of the recession in the economy and volatility in capital markets, consumers prefer to deposit their money in banks. This is mainly because of liquidity for investors.

2. Banking network:

After nationalization, banks have expanded their branches in the country, which has helped banks build large networks in the rural and urban areas. Private Banks allowed to operate but they mainly concentrate in metropolis.

3. Large Customer Base:

This is mainly attributed to the large network of the banking sector. Depositors in rural areas prefer banks because of the failure of the NBFCs.

33


4. Low Cost of Capital:

Corporate prefers borrowing money from banks because of low cost of capital. Middle income people who want money for personal financing can look to banks as they offer at very low rates of interests. Consumer credit forms the major source of financing by banks.

b) WEAKNESS:

1. Loan Deployment:

Because of the recession in the economy the banks have idle resources to the tune of3.3 lakh crores. Corporate lending has reduced drastically.

2. Powerful Unions:

Nationalization of banks had a positive outcome in helping the Indian Economy as a whole. But this had also proved detrimental in the form of strong unions, which have a major influence in decision making. They are against automation.

3. Priority Sector Lending:

To uplift the society, priority sector lending was brought in during nationalization. This is good for the economy but banks have failed to manage the asset quality and their intensions were more towards fulfilling government norms. As a result lending was done for non-productive purposes.

4. High Non-Performing Assets:

Non-Performing Assets (NPAs) have become a matter of concern in the bankingindustry. This is because of change in the total outstanding advances, which has to bereduced to meet the international standards.

34


c) OPPORTUNITIES:

1. Universal Banking:

Banks have moved along the valve chain to provide their customers more products and services. For example: - SBI is into SBI home finance, SBI Capital Markets, SBI Bonds etc.

2. Differential Interest Rates:

As RBI control over bank reduces, they will have greater flexibility to fix their own Interest rates which depends on the profitability of the banks.

3. High Household Savings:

Household savings has been increasing drastically. Investment in financial assets has also increased. Banks should use this opportunity for raising funds.

4. Overseas Markets:

Banks should tape the overseas market, as the cost of capital is very low.

5. Interest Banking:

The advances in information technology have made banking easier. Business can effectively carried out through internet banking.

d) THREATS:

1. NBFCs, Capital Markets and Mutual funds:

There is a huge investment of household savings. The investments in NBFCs deposits, Capital Market Instruments and Mutual Funds are increasing. Normally these instruments offer better return to investors.

35


2. Change in the Government Policy:

The change in the government policy has proved to be a threat to the banking sector.

3. Inflation:

The interest rates go down with a fall in inflation. Thus, the investors will shift his investments to the other profitable sectors.

4. Recession:

Due to the recession in the business cycle the economy functions poorly and this has proved to be a threat to the banking sector. The market oriented economy and globalization has resulted into competition for market share. The spread in the banking sector is very narrow. To meet the competition the banks has to grow at a faster rates and reduce the overheads. They can introduce the new products and develop the existing services.

36


4.3 Literature Review:

15 November 2004

Proposal: Point of Sale for The Brighter Side

Most small businesses underestimate the importance of managing their inventory. They do not realize that many headaches and fire drills are caused by the lack of control and knowledge of their inventory. Whether it is a lack of knowledge of the quantity or specs of a certain product, businesses too frequently use outdated inventory systems. Insufficient systems do not allow them to get the most out of their inventory, because when used properly, inventory management systems allow businesses to make a concise, real time analysis of products and markets that help them make better business decisions. Inventory management systems also allow businesses to better serve their customers since they keep a detailed and accurate record of purchase histories and trends so they can reorder products more efficiently.

With a controlled inventory, management will be notified when products need to be rendered, are selling quickly or are disappearing due to theft. In essence, the business becomes organized and by controlling inventory, profits can increase. Inventory management allows businesses to make smart and informed decisions about promotions and specials since they are better able to monitor rate of turn for their merchandise. In addition, they let management know when a product is no longer profitable.

Products are the heart and soul of a business. Even with the best customer service, they will not be profitable without a commodity to sell. It is the purpose between the business and its customer. It was interesting to hear from Kelly O'Donnell, an owner for The Brighter Side, tell that her company does not use any inventory control whatsoever. The Brighter Side spends thousands of dollars on merchandise but does not systematically control how the products are doing or how much is left.

37


Chapter 5

Research Methodology

38


5.1 Objectives of study:

1. The main objective of this project is concerned with getting the opinion of people regarding

acceptability of point of sale machine

2. Develop positive attitude toward using the point of sale machine.

5.2 Research:

Research comprises defining and redefining the problem, formulating hypothesis, suggest solution, collecting, organizing, and evaluating data, reaching at a specific conclusion and at the same time careful evaluation of the conclusion.

Research can be defined as a careful investigation or inquiry especially through search for new facts in any branch of knowledge. Redman and Mory defines research as a systematized effort to gain new knowledge.

5.3 Marketing research:

According to Philip Kotler, “Marketing research is a systematic problem analyses, model building and fact finding for the purpose of improved decision making and control.”

Marketing research is the systematic gathering, recording, and analysis of data about marketing problems to facilitate decision-making. Marketing research is the systematic design, collection, analysis and reporting of data and finding relevant to a specific marketing situation facing the company.

The market research is an important element for any organization. Information regarding the nature, size, profitability of different markets, change in markets, and various factors affecting the organization likes economical factors, social factors; quality factors etc. can be studied through marketing research only. Along with that the future plans & policy, different decisions making are also done with the help of finding and recommendation of marketing research.

39


5.4 RESEARCH DESIGN:

“A research design is the arrangement of condition for collection and analysis of Data in a manner that aims to combine the relevance to the research purpose with Ceremony of procedure.”

Every project work requires research, successful completion of any project and

getting the genuine results from that depends upon the research method used by the researcher. A

research design is the specification of method and procedure for accruing the information

needed. It is overall operational pattern of frame work of project.

Descriptive study is used to study the situation. This study helps to describe the situation. A detail descriptive about present and past situation can be found out by the descriptive study. In this involves the analysis of the situation by using the secondary data.

The whole research process used by me is as follows.

(1)- Problem Formulation

(2)- Research design

(3)- Sample design

(4)- Source of data

(I)- Primary source of data

(II)- Secondary source of data

(5) - Collection of data

(6)- Analysis of data

(7)- Interpretation of data.

40


5.5 Methods of data collection:

The key for useful systems is the selection of the method for collecting data and

linking it to analysis and decision issue of the action to be taken. The accuracy of the collected

data is of great importance for drawing correct and valid conclusions from the detailed

investigations.

1. Primary data : -

The primary data are those which are collected a fresh hand for the first time and

thus happen to be original in character. There are several methods of collecting primary data,

particularly in survey and descriptive research.

Some important methods of collecting primary data are:

- Interview Method

- Questionnaire

2. Secondary data :

Secondary data are used means that are already available i.e. they refer to the data

which have already been collected and analyzed by someone else and which have already been

passed through the statistical process. Secondary data may either be published data or

unpublished data. In secondary data, the data were available on internet and company.

- Website

- Journal

- Reports of company

41


5.6 Sample Size: -

Response of 200 jewelers shop is my sample size.

5.7 Sample area:-

I have done my survey report from chandkheda, motera, RTO, akhabarnagar,

pragatinagar, D-cabin, k.k.nagar, nirnaynagar, ranip.

42


Chapter 6

Data Analysis

43


Age:

20 - Under 30 year 31-Under 40 year

41 -Under 50 year 51-Under 60 year

above 60 year

Particular No. of respondent21- Under 30 year 3831-Under 40 year 5041-Under 50 year 7051-Under 60 year 22above 60 year 20

20 - 30 30 - 40 40 - 50 50 - 60 60 & above0

10

20

30

40

50

60

70

80

38

50

70

22 20

Age

resp

onde

nt

INTERPRETATION:

Mostly owner of Jewellery business is under 41-50 year because 70 respondents out of 200 samples are given opinion in my survey. 50 respondents are under 31-40 year.38 respondents are under 21-30 year. 22 respondents are under 51-60 year. And 20 respondent are under 60&above year.

44


Since how many year in business?

1-5 year 6-10 year

11-15 year more than 15 year

PARTICULAR RESPONDENT1-5 year 236-10 year 4811-15 year 79more than 15 year 50

1-5 YEAR 6-10 YEAR 11-15 YEAR MPRE THAN 15 YEAR

0

10

20

30

40

50

60

70

80

90

23

48

79

50

HOW MANY YEAR

YEAR

RESP

ON

DEN

T

INTERPRETATION:

Mostly jewellery business is doing at very long time because 79 respondents out of 200 samples done the business last 11-15 year. 50 respondents doing the business at more than 15 year.48 respondents doing the business at 6-10 year. 23 respondents doing the business at 1-5 year.

45


1.In which type of firm you are doing the business?

Sole-proprietorship Partnership

Pvt.ltd.company Limited company

Other (pl. specify_________________)

PARTICULAR RESPONDENTSole-proprietorship 130Partnership 70

Sole-proprietorship Partnership0

20

40

60

80

100

120

140 130

70

FIRM

RESPONDENT

Type of firm

resp

onse

INTERPRETATION:

Mostly jewellery business is doing under sole-proprietorship form because 130 respondents out of 200 samples are doing the business under sole proprietorship and 70 respondents are doing business under partnership.

46


2. By which mode you accept payment from customer?

By cash By check

By debit card By credit card

Other (pl. specify_________________)

PARTICULAR RESPONDENTBy cash 120By cheque 15By debit card 20By credit card 30Other 15

By cash By cheque By debit card By credit card

Other 0

20

40

60

80

100

120

140120

15 2030

15

accept payment method

RESPONDENT

mode of Payment

Resp

onse

INTERPRETATION:

Mostly jewellery business accepts payment through cash basis. 120 respondents out of 200 samples are accept payment through cash.30 respondents is accept payment through credit card. 20 respondents are accept payment through debit card.15 respondents are accept payment through cheque. 15 respondents are accepting payment through other way.

47


3. Do you have SBI current account?

Yes No

PARTICULAR RESPONDENTYES 80NO 120

YES NO0

20

40

60

80

100

120

140

80

120

SBI CURRENT ACCOUNT

RESPONDENT

Resp

onse

INTERPRETATION:

120 respondents out of 200 samples have not current account in SBI branch. But 80 respondents have current account in SBI branch.

4. Do you have Landline telephone connection?

48


Yes No

YES NO0

20

40

60

80

100

120

140

160138

62

Landline connection

RESPONDENT

Resp

onse

INTERPRETATION:

138 respondents out of 200 samples have Landline connection but 62 respondents have not landline connection.


49


5. Are you aware of this SBI POS terminal?

Yes No

YES NO0

20406080

100120140160180200 182

18

Awareness of SBI POS Terminal

RESPONDENT

Resp

onse

INTERPRETATION:

182 respondents out of 200 samples are know about SBI pos terminal but 18 respondents are not know about SBI pos terminal.

6. How you came to know about this SBI POS machine?


50


Internet Poster

Bank Representative Other (pl. specify______________)

PARTICULAR RESPONDENTInternet 48Poster 37Bank Representative 55Other 70

Internet Poster Bank Representative Other 0

10

20

30

40

50

60

70

80

48

37

55

70

How to know about POS terminal

RESPONDENT

Sources

Resp

onse

INTERPRETATION:

70 respondents are know about POS terminal through by other way. 55 respondents are know about POS machine through bank representatives.48 respondents are know about POS terminal through internet and 37 respondents are know about POS terminal through poster.

7. Do you have SBI POS machine?

51


Yes No

YES NO0

20

40

60

80

100

120

140

68

132

SBI POS MACHINE

RESPONDENT

Resp

onse

INTERPRETATION:

132 respondents out of 200 samples have not SBI POS machine but 68 respondents have SBI POS machine.

IF YES, then


52


8. How long have you had your current SBI POS?

Less than 6 monthsBetween6 to 12 months More than 12 months

PARTICULAR RESPONDENTLess than 6 months 30Between 6 to 12 months 12More than 12 months 26

Less than 6 months

Between 6 to 12 months

More than 12 months

0

5

10

15

20

25

30

3530

12

26

Using SBI POS machine

RESPONDENT

Time duration

Resp

onse

INTERPRETATION:

Mostly SBI POS machine is using less than 6 months.30 respondents out of 68 samples are using SBI POS machine less than 6 month. 26 respondents are using SBI POS machine more than 12 months.12 respondents are using SBI POS machine between 6 to 12 months.

53


9. Which of the following factor is motivating you to adopt SBI POS system? [Check all that apply]

Particular Highly important

Important Neutral Unimportant Highly

Unimportant

Additional payment method 26 14 21 4 3

Simplicity of usage 10 34 16 4 4

Easy of cash handling 46 10 5 5 2

To avoid robberies and thefts 12 36 14 4 2

Faster payment processing time 38 14 10 4 2

Additional payment method

Simplicity of usage

Easy of cash handling

To avoid robberies and thefts

Faster payment

processing time

0

5

10

15

20

25

30

35

40

45

50

Motivating factor for adopting SBI POS machine

Highly importantImportantNeutralUnimportantHighly Unimportant

Motivating Factor

resp

onse

INTERPRETATION:

54


Additional payment method, easy cash handling and faster payment processing time is highly important factor for adopt SBI POS system.

10. What is your perception about following factor with respect of SBI POS? [Check all that apply]

Particular Excellent Good Neutral Poor Very poor

Training on usage 20 30 10 5 3

Transaction time 10 20 35 2 1

Connectivity/network

10 45 8 3 2

Service of SBI 10 9 15 22 12

Accessing to funds 20 35 10 2 1

Response of SBI to your complaints

10 7 40 4 7

Security 40 12 10 5 1

Speed of service 7 14 28 11 8

55


Training o

n usage

Transac

tion time

Connectivit

y/netw

ork

Servi

ce of S

BI

Accessi

ng to fu

nds

Response

of SBI to

your c

omplaints

Secu

rity

Spee

d of serv

ice0

10

20

30

40

50

Perception about following factor with respect of SBI POS

ExcellentGoodNeutralPoorVery poor

Factor

Resp

onse

INTERPRETATION:

People believe that performance of training on usage factor is good. Performance of transaction time factor is neutral. Performance of connectivity factor is good. Performance of service of SBI bank factor is poor. Performance of Accessing to funds factor is good. Performance of response of SBI to your complaints factor is neutral. Performance of security factor is excellent. Performance of speed of service is neutral.

56


IF NOT, then

11. Which bank’s POS machine are you using?

HDFC ICICI

AXIS OTHER (pl.specify______________)

PARTICULAR RESPONDENTHDFC 63ICICI 20AXIS 25OTHER 24

HDFC ICICI AXIS OTHER0

10

20

30

40

50

60

70 63

2025 24

Other bank POS machine

RESPONDENT

Bank

Resp

onse

INTERPRETATION:

63 respondents out of 132 samples have HDFC POS machine.20 respondents have ICICI POS machine.25 respondents have AXIS POS machine. And 24 respondents have OTHER BANK POS machine.

57


12. How long have you had your current POS?

Less than 1 year 1 to 5 year More than 5 year

PARTICULAR RESPONDENTLess than 1 year 471 to 5 year 65More than 5 year 20

Less than 1 year 1 to 5 year More than 5 year0

10203040506070

5565

20

Using other POS machine

RESPONDENT

Time duration

Resp

onse

INTERPRETATION:

65 respondents out of 132 samples are using other bank POS machine last 1 to 5 year. 55 respondents are using other bank POS machine less than 1 year. 22 respondents are using other bank POS machine more than 5 year.

58


13. What are the reasons for not having SBI POS machine in our shop?

[Check all that apply]

Having other bank’s machine

Difficulty in usage

Transaction fees decrease the profit

Customer’s insistence to use cash

Transaction fees of SBI is high compare to other bank

Do not know much about POS SBI machine

Services may not be good

Other

PARTICULAR RESPONDENTHaving other bank’s machine 60Difficulty in usage 8Transaction fees decrease the profit 20Transaction fees of SBI is high compare to other bank 12Customer’s insistence to use cash 10Do not know much about POS SBI machine 5Services may not be good 10Other 7

59


Having o

ther ban

k’s m

achine

Difficu

lty in

usage

Transac

tion fees

decrea

se the p

rofit

Transac

tion fees

of SBI is

high co

mpare to

other ban

k

Customer’

s insis

tence

to use cas

h

Do not know m

uch ab

out POS S

BI mach

ine

Servi

ces m

ay not b

e good

Other0

10203040506070 60

820

12 10 5 10 7

why not having SBI POS machine?

RESPONDENT

Reasons

Resp

onse

INTERPRETATION:

Main two reasons responsible for not having SBI POS machine. first is having other bank`s machine and second is transaction fees decrease the the profit.

60


14. Would you recommend SBI POS machine to other?

Yes No

PARTICULAR RESPONDENTYes 109No 91

Yes No80

85

90

95

100

105

110

115

109

91

Recommended to other

RESPONDENT

Resp

onse

INTERPRETATION:

109 respondents are recommended SBI POS machine to other but 91 respondents are not recommended SBI POS machine to other.

61


T- TEST:

1.Additional payment method:

STEP 1: Hypothesis

Ho: µ = 3(additional payment is important factor)

Ho: µ > 3 (additional payment is less important factor)

STEP 2:Type of test

T-test

STEP 3:Alpha value

α(alpha) = 0.05

confidence interval = 95%

STEP 4: decisional rule

Degree of freedom = n-1= 68-1= 67

This test is one tailed, and the critical table t value is t= 0.05, 67= -0.5463

The decision rule is to reject the null the hypothesis if the observed test

statistics is greater than -0.5463

STEP 5: data

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

VAR00001 68 2.1765 1.14528 .13889

62


STEP 6: calculate the t-test

One-Sample Test

Test Value = 3

T Df Sig. (2-tailed) Mean Difference

95% Confidence Interval of the

Difference

Lower Upper

VAR00001 -5.930 67 .000 -.82353 -1.1007 -.5463

STEP 7: REJECTED OR ACCEPTED

The observed t-test value -5.930 is less than table t- test value -0.5463.

so null hypothesis is accepted.

STEP 8: BUSINESS IMPLICATIONS

Additional payment method is important for adopt the SBI POS SYSTEM

2.SIMPLICITY OF USAGE:

63


STEP 1: Hypothesis

Ho: µ = 3(simplicity of usage is important factor)

Ho: µ > 3 (simplicity of usage is less important factor)

STEP 2:Type of test

T-test

STEP 3: determine alpha value

α(alpha) = 0.05






statistics is greater than -0.3737

STEP 5: data



VAR00002 68 2.3824 1.00787 .12222


64


One-Sample Test

Test Value = 3



Difference

Lower Upper

VAR00002 -5.053 67 .000 -.61765 -.8616 -.3737


The observed t-test valuet= -5.053 is less than table t- test value -0.3737. so null hypothesis is accepted.


Simplicity of usage is important for adopt the SBI POS SYSTEM

3.EASY CASH HANDLING:

65


STEP 1: Hypothesis

Ho: µ = 3(Easy cash handling is important factor)

Ho: µ > 3 (Easy cash handling is less important factor)

STEP 2: Type of test

T-test


α(alpha) = 0.05






Statisticsis greater than -1.1035

STEP 5: data



VAR00003 68 1.6324 1.09141 .13235


66


One-Sample Test

Test Value = 3



Difference

Lower Upper

VAR00003 -10.333 67 .000 -1.36765 -1.6318 -1.1035

STEP 7:

REJECTED OR ACCEPTED

The observed t-test value t= -10.7949 is less than table t- test value

-1.1035 so null hypothesis is accepted.


Easy cash handling is important for adopt the SBI POS SYSTEM

4. TO AVOID ROBBERIES AND THEFT:

67


STEP 1: Hypothesis

Ho: µ = 3(Avoid robberies and theft is important factor)

Ho: µ > 3 (Avoid robberies and theft is less important factor)

STEP 2:Type of test

T-test


α(alpha) = 0.05






Statistics is greater than -0.5430.

STEP 5: data




VAR00004 68 2.2353 .91615 .11110

68


One-Sample Test

Test Value = 3



Difference

Lower Upper

VAR00004 -6.883 67 .000 -.76471 -.9865 -.5430



-0.5430 so null hypotheses are accepted.


Avoid robberies and theft is important for adopt the SBI POS SYSTEM

69


5.FASTER PROCESSING TIME:

STEP 1: Hypothesis

Ho: µ = 3 (faster processing time is important factor)

Ho: µ > 3 (faster processing time is less important factor)

STEP 2:Type of test

T-test


α(alpha) = 0.05






Statistics is greater than -0.9429

STEP 5: data



VAR00005 68 1.7941 1.08667 .13178

70



One-Sample Test

Test Value = 3

T df Sig. (2-tailed) Mean Difference


Difference

Lower Upper

VAR00005 -9.151 67 .000 -1.20588 -1.4689 -.9429



-0.9429 so null hypotheses is accepted.


Faster processing time is important for adopt the SBI POS SYSTEM.

71


6.SERVICE OF SBI:

STEP 1: Hypothesis

Ho: µ = 3(service of SBI is important factor)

Ha: µ > 3 (service of SBI is less important factor)

STEP 2:Type of test

T-test


α(alpha) = 0.05




This test is one tailed, and the critical table t value is t= 0.05, 67= 0.5668


Statistics is greater than 0.5668

STEP 5: data



VAR00011 68 3.2500 1.30870 .15870

72



One-Sample Test

Test Value = 3

T df Sig. (2-tailed) Mean Difference


Difference

Lower Upper

VAR00011 1.575 67 .120 .25000 -.0668 .5668


The observed t-test value t= 1.57 is greater than table t- test value

0.5668 so null hypotheses are rejected.


SBI should be improve the service.

73


Chapter 7

Findings

74


1. People believe that our money is more safe in SBI bank because It is government sector.

2. Brand image of SBI bank is high compare to private bank.

3. SBI is not serve good service to the customer. Lots of people compare with private bank. So customer of SBI is not satisfied.

4. Time consuming is high in any transaction.

5. HDFC covers market of POS more than 50% alone

6. HDFC gives POS MACHINE at fewer rates (1.20%) in credit card. Sometime rate may be changed according to customer.

7. KYC (KNOW YOUR CUSTOMER) rule for opening current account is tough compare to other bank.

8. Employees behavior toward customer is good.

9. SBI bank and its ATM machine is available everywhere. So it is very convenient for all SBI customers.

10.SBI has covered 40% market share of debit card but it is swipe in other bank POS machine. So other bank received benefit.

11.Some merchant says that our profit margin is very low so we can not bear the POS rate.

12. HDFC tie-up with mostly petrol pump & mall for POS system.

75


Chapter 8

Recommendations

76


1. SBI should be improved service.

2. Awareness of SBI POS machine should be increased in the market.

3. Cash back offer should be more than three month.

4. SBI should be increased market share of POS machine because SBI has already 40% market of debit card.

5. Response of complaint should be fast.

6. Service token system should be adopted in SBI branch for deposit the amount and any other transaction. Because other bank provide service token system. So it may be reduced time.

77


Chapter 9

LIMITATIONS

LIMITATIONS

78


It is said, “Nothing is perfect” and if the quite is true, I am sure

that there would be few shortcoming in this project also. Sincere efforts have

been made to eliminate discrepancies as far as possible but few would have

reminded due to limitations of the study. These are:

The primary data is collected through a structured questionnaire and

the sample size is only limited to 150 respondents.

The research was carried out in a short period.

The information given by the respondent might be biased some

of them might not be interested to given correct information.

Some of the respondents of the survey were unwilling to share

information.

Research survey is limited to Ahmadabad city only.

79


80


Chapter 10

Conclusion

81


CONCLUSION

At the end of our project we can say that we are really feeling happy after working for eight weeks with an India’s largest bank having a more then 10,000 branches in the world. We also learn how to deal with the customer and to maintain relation with them. We also developed skill of marketing. This project helps us to increase our practical knowledge in the banking sector as well as in our personal life. It will also helpful us for the future prospective. We have tried our level best to convince the customers.

SBI is a renowned bank all over India and Abroad also. The bank has taken a very wise step to survey the different areas in Ahmadabad city to study about POS acceptability in jewellary industries.

There are so many private sector banks as well as multinational banks coming up but very few are able to provide services that are up to the expectations of the industries. If this will continue, a time will come when the banking sector will saturate and there would be no scope for further development.

POS market is very important in the banking sector. According to my survey report I can say that HDFC covers most of the market of POS machine. It is prove in my survey report. T-test (hypothesis) & Bar chart (data interpretation) are used for data analysis in my project report. The findings and recommendations of the survey clearly reveal that there is a need of proper understanding of the services for POS ACCEPATABILITY in the market areas. This effort on the part of SBI to keep customers at the centre and understand their needs will surely prove as a important in the progress of the bank as well the banking sector as a whole.

With proper referencing, monitoring and examination of the weak areas of each zone, the bank can pitch into the prospective sectors of each region and fastly and gradually capture the major market share.

This positive note concludes the report. This may prove to be useful to the bank for achieving new heights. Wishing all the very best to the bank and its extremely dedicated staff.

82


Bibliography

83


84


Website:

www.sbi.co.in

www.rbiorg.com

www.wikipedia.com

Newspaper:

THE TIMES OF INDIA

ECONOMICS TIMES

Books:

1. Marketing Management -14th edition

Author: Philip Kotler

Publication: Pearson

Year: 2012

2. Business Research Methods – 11th edition

Author: Donald R Cooper, Pamela S schindler, J.k.sharma

Publication: Tata McGraw Hill

Year: 2012

http://www.wikipedia.com/

http://www.rbiorg.com/

http://www.sbi.co.in/

Documents

Final Project Reports SBI POS