Canara Bank Priority Sector Analysis

Priority Sector Analysis 1.
INDUSTRY PROFILE:
Modern banking system manufactures money out of nothing is what is said about banking by Josiah Stamp, former director of the Bank of England. Banking Industry has undergone a major change in the way business is transacted. There has been considerable innovation and diversification. Banks havenow engaged in the areas of merchant banking, leasing, factoring,credit cards, mutual funds etc. by setting up their subsidiaries. In India, since the last four decades, tremendous changes have taken place in the banking industry. Banks have shed their traditional functions and have been innovating, improving and coming out with new types of services to cater to the emerging needs of their customers. Massive branch expansion in the rural and underdeveloped areas, mobilization of savings and diversification of credit facilities to neglected areas like small scale industrial sector, agricultural and other preferred areas like export sector have resulted in the widening and deepening of the financial infrastructure and transferred the fundamental character of class banking into mass banking.
Today, we are having a fairly well developed banking system with different classes of banks: The RBI as the fountain head of the system Public sector banks Private sector banks- old and new generation Foreign banks Regional banks and co-operative banks.
But the major challenges faced by banks today are how to cope with competitive forces and strengthen their balance sheet. Banks are groaning with the burden of NPAs. It is rightly felt that if not recovered, these will eat into the very vitals of banks. Another major anxiety is the high transaction cost of carrying NPAs in their books.
Department of MBA, PESIT
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Priority Sector Analysis

The Indian banks are subject to tremendous pressures to perform as otherwise their very survival would be at stake. IT plays an important role in the banking sector as it would not only ensure smooth passage of inter-related transactions over the electric medium but will also facilitate complex financial product innovation and product development. The application of IT and e-banking is becoming the order of the day with the banking system heading towards virtual banking. As an extreme case of e-banking,World Wide Banking (wwb) on the pattern of World Wide Web (www) can be visualized. That means all banks would be interlinked and individual bank identity, as far as the customer is concerned, does not exist. Customers would be able to do all their banking operations sitting in their offices or homes and operating through internet.
Banking landscape is changing very fast. Many new players with different muscle powers are entering the market. The Reserve Bank in its bid to move towards the best international banking practices will further sharpen the prudential norms and strengthen its supervisor mechanism. There will be more transparency and disclosures. Indias banking industry must strengthen itself significantly if it has to support the modern and vibrant economy which India aspires to be. While the burden for this change lies mainly with bank managements, an enabling policy and regulatory framework will also be critical to their success. The importance of banking sector is immense in the progress and prosperity of any state or country. The economic progress and prosperity comes from the well-rounded development and an impeccable banking management. Banks are expected to play a very useful role in the economic development and the emerging market will provide ample business opportunities to harness. HRM(Human Resources Management)is assuming to be of great importance. As banking in India will become more and more knowledge supported, human capital will emerge as the finest assets of the banking system. Ultimately banking is people and not just figures.
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Priority Sector Analysis 2. COMPANY PROFILE:

2.1. BACKGROUND AND INCEPTION:
The small seed of Canara Bank, founded as 'Canara Bank Hindu Permanent Fund' in 1906, by late Sri. Ammembal Subba Rao Pai, a philanthropist, blossomed into a limited company as 'Canara Bank Ltd.' in 1910 and became Canara Bank in 1969 after nationalization. FOUNDING PRINCIPLES: To remove superstition and ignorance To spread education among all to sub-serve the first principle To inculcate the habit of thrift and savings To transform the financial institution not only as the financial heart of the community but the social heart as well To assist the needy To work with sense of service and dedication To develop a concern for fellow human being and sensitivity to the surroundings with a view to make changes/remove hardships and sufferings. Canara Bank has gone through the various phases of growth over the hundred years of its existence. Growth of the Bank has been phenomenal, especially after nationalization in the year 1969, attaining the status of a national level player in terms of geographical reach and customers segments. Today, Canara Bank occupies a premier position in Indian banks. With an unbroken record of profits since its inception, Canara Bank has several firsts to its credit. These include: Launching of Inter-City ATM Network Obtaining ISO Certification for a Branch Articulation of Good Banking Banks Citizen Charter Commissioning of Exclusive Mahila Banking Branch Launching of Exclusive Subsidiary for IT Consultancy Issuing credit cards for farmers Providing Agricultural Consultancy Services
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Over the years the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad. As on June 2010, the Bank has further expanded its domestic presence. It has 3212 branches spread across all geographical segments. Keeping customer convenience at the forefront, the Bank provides a wide array of alternative delivery channels that include over 2150 ATMs- one of the highest among nationalized banks.The bank serves a clientele base exceeding 38 million.As on December 2010, the bank's total business had crossed Rs 4.53 lakh crore and it posted a net profit exceeding Rs 1,000 crore each for the three consecutive quarters during FY11. Canara Banks share is traded at the BSE at the rate of Rs.612. Under advanced payment and settlement system, all branches of the Bank have been enabled to offer Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facilities.
The Bank has also carved a distinctive mark, in various Corporate Social Responsibilities, namely serving national priorities, promoting rural development, enhancing rural self-employment through several Training Institutes and spearheading theFinancial Inclusion objective. Promoting an inclusive growth strategy, which has been formed as the basic plank of national policy agenda today, is in fact deeply rooted in the Bank's founding principles. "A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people". These insightful words of the founder continue to resonate even today in serving the society with a purpose. The growth story of Canara Bank in its first century was mainly due to the continued patronage of its valued customers, stakeholders, committed staff and remarkable leadership ability demonstrated by its leaders at the helm of affairs. The bank strongly believes that the next century is going to be equally rewarding and eventful not only in service of the nation but also in helping the Bank emerge as a "Global Bank with Best Practices". Sound founding principles, enlightened leadership, unique work culture and remarkable adaptability to changing banking environment have enabled Canara Bank to be a frontline banking institution of global standards.
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2.2. NATURE OF THE BUSINESS CARRIED:

Canara Bank offers services such as: Personal Banking - Savings and Deposits, Loan Products, Consultancy Services, Depository Services; Corporate Banking - Cash Management Services, Merchant Banking Services, IPO Monitoring Services; NRI banking - Remittance facilities; Priority andSME credit - Social Banking. Canara Bank, with the objective of offering One-Stop Banking Mart for the customers, forayed into diversified business activities by opening subsidiaries during late 1980s. Today, the Bank functions as a Financial Supermarket with as many as nine subsidiaries/sponsored entities/joint ventures in diversified areas which are: 1. Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited 2. Canara Robeco Asset Management Company Limited (CRAMC) 3. Canbank Financial Services Limited (Canfina) 4. Canbank Computer Services Limited (CCSL) 5. Canara Bank Securities Limited (CBSL) 6. Canbank Factors Limited (CFL) 7. Can Fin Homes Limited (CFHL) 8. Canbank Venture Capital Fund Limited (CVCFL) 9. Commercial Bank of India LLC(CBIL)
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2.3. VISION AND MISSION:
2.3.1. VISION: To emerge as a Best Practices Bank by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach.
2.3.2. MISSION: To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking.
2.3.3. QUALITY POLICY:
To provide total banking services to all customers. To continually review and improve the processes for TOTAL CUSTOMER SATISFACTION by implementing quality management system requirements as per IS/ ISO 9001.
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2.4. PRODUCT/SERVICES PROFILE:
PERSONAL BANKING Savings&Deposits CORPORATE BANKING Accounts & Deposits DepositProducts NRI BANKING PRIORITY & SME CREDIT SME Business
Loan Products
Canara e-Tax
ConsultancyServices One Time Settlement for M&SE
DepositoryServices
Loans & Advances
RemittanceFacilities
CED for Women
ConsultancyServices
Merchant Banking Services
Loans&Advances
Rural Development
CardServices,Ancillary IPO Monitoring Activity Services InternationalServices Cash Management
Agri-Consultancy
Agri-Marketing
InsuranceBusiness MutualFunds TechnologyProducts
Syndication Services
SME Marketing RRB Division Social Banking
Table 1: Product/Services Profile
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PERSONAL BANKING: DEPOSIT PRODUCTS Fixed Deposits: ANCILLARY SERVICES Safe deposit lockers Canara Visa Classic /MasterCard standard Global Card Kamadhenu Deposits Safe custody services Recurring Deposits Ashraya Deposits Canbank Auto Renewal Deposits (CARD) Canflexi Deposits Savings Bank Account Current Account Floating Rate Deposit Scheme
Table 2: Personal Banking
CARD SERVICES:
MUTUAL PRODUCTS CANARA
FUND
ROBECO
Mutual Fund Products
Canara Global Gold Card
HDFC Mutual Fund Products
Nominations 7day banking Extended banking hours
Canara Corporate Card
DD shopee Safe deposit lockers
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CORPORATE BANKING: ACCOUNTS & DESPOSITS Recurring deposits CANARA E-TAX LOANS & ADVANCES OTHER SEVICES
Current deposits
Direct Taxes Infrastructure (e-payment: pay direct financing taxes online) Customs payment Working capital through internet finance Export finance
Cash management services TUF scheme
Fixed deposits
Excise and service tax
Merchant banking services
Kamadhenu deposits
Term loans
IPO monitoring activity
Gold card schemes for Syndication services exporters

Table 3:Corporate Banking
NRI SERVICES: DEPOSIT PRODUCTS NRE(Non Resident External Rupee) account NRO(Non Resident Ordinary) account FCNR(Foreign Currency Non Resident) account Can shares Rupee drawing arrangement Can mortgage
Table 4: NRI Services
LOANS AND ADVANCES Housing loan
REMITTANCE FACILITIES Canbank Remit money scheme
OTHER SERVICES
Consultancy services
Home improvement loan Can jewel
SWIFT
Safe custody
Bank Western Union Remittance Scheme
Safe deposit lockers
Nomination facility
NRI service centre
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2.5. CANARA BANK BRANCHES:
2.5.1. IN INDIA: Canara Bank has 3212 branches spread across all geographical segments. These are spread over 25 States and 4 Union Territories of the country which are administered through

Head Office at Bangalore 34 Circle Offices
2.5.2. ABROAD: Canara Bank established its International Division in 1976, to supervise the functioning of various foreign departments, to give the required thrust to foreign exchange business, particularly exports and to meet the requirements of NRIs. Though small in size, the Bank's presence abroad has brought in considerable foreign business, particularly NRI deposits. The Bank has its presence abroad, as under: Canara Bank, London, UK (Branch) Indo Hong Kong International Finance Co Ltd (Subsidiary) Commercial Bank of India LLC, Moscow(A Joint Venture with State Bank of India) Canara Bank Shanghai Representative Office, Shanghai. Eastern Exchange Establishment, Doha, Qatar.(Management Contract and DD drawing facility on Canara Bank) Al Razouki international Exchange Company, Dubai, UAE.
Apart from the above Canara Bank has an Offshore Banking Unit at Noida, Delhi. In addition, many exchange companies situated at UAE, Kuwait, Bahrain and Oman have DD drawing agreement on Canara Bank.
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2.6. OWNERSHIP PATTERN:
Canara Bank Share holding pattern is as below: Sl No. Category # No. of shares Percentage of shareholding 1 2 3 4 5 6 7 Government of India Banks & Financial Institutions Mutual Funds Foreign Institutional investors Bodies Corporate NRIs/OCBs General public 300000000 45931757 4903743 66120225 4101867 339316 21603092 67.72 10.37 1.11 14.93 0.93 0.08 4.88
TOTAL
443000000
Table 5:Ownership Pattern
100
Figure 1: Shareholding Percentage
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Shareholding Pattern of Canara Bank

Government of India 4.88% 0.08% 0.93% 1.11% 10.37% 67.72% Corporate Bodies NRIs/OCBs Resident Individuals/HUFs/Trust etc.. Foreign Institutional Investors Banks and Financial Institutions Mutual Funds
14.93%
2.7. COMPETITORS:
2.7.1. PUNJAB NATIONAL BANK: Punjab NationalBank is the second largest state owned commercial bank in India with about 5017 branches across 764 cities. It was registered on May 19, 1894 under the Indian Companies Act with its office in Anarkali Bazaar Lahore. Its current Head Office is in New Delhi. The bank serves around60 million customers. The bank's total asset is valued atRs.5.00 Lac cr.Its current stock price is Rs.1122. Among PSU Banks, PNB is marching ahead at a good pace.
2.7.2. BANK OF BARODA: Bank of Baroda (BoB) was founded by the Maharajah of Baroda, Sir Sayajirao Gaekwad III on 20 July 1908 in the princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks of India, was nationalized on 19 July 1969, by the Government of India. BoB has total business of Rs.4.88 Lac cr, a network of 3,259 branches and offices, and about 1,521
Department of MBA, PESIT Page 12

ATMs. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, credit cards and asset management. Its current stock price is Rs.905.
2.7.3. BANK OF INDIA: Bank of India (BoI),set up in 1906,is a state-owned commercial bank with its headquarters in Mumbai. It too is Government-owned since nationalization in 1969. It has 3415 branches. BoI is a founder member of SWIFT (Society for Worldwide Inter-Bank Financial
Telecommunications) which facilitates provision of cost-effective financial processing and communication services. Its current stock price is Rs.452.
2.7.4. UNION BANK OF INDIA: Union Bank of India (UBI) is one of India's largest state-owned banks (the government owns 55.43% of its share capital), and is listed on the Forbes 2000. It was started in 1919 and is head quartered in Mumbai. Its total business is Rs.3.54 Lac cr.All of the bank's branches have been networked with its 1135 ATMs. Its online Telebanking facility is available to all its Core Banking Customers - individual as well as corporate. Its current stock price is Rs.334.
2.8. INFRASTRUCTURAL FACILITIES:

Canara Bank has the following Infrastructural Facilities 1. CBS Branches 2. ATMs 3. Video Conferencing in HO, RO, CO 4. Internet facility 5. Real Time Gross Settlement(RTGS) in CBS branches

6. Foreign exchange business 7. Treasury and Investment 8. Security arrangement 9. Automatic fire alarm system in all CBS branches 10. Fire proof cabinet in all CBS branches
2.9ACHIEVEMENTS/AWARDS:
AWARDS RECEIVED DURING 2008-09
Conferred 'First Rank' in India's Best Banks awards under the category 'Strength and Soundness' for 2006-07 by a survey conducted by Ernst & Young.
Best Performing Bank under Rural Employment Generation Programme, (REGP) of Khadi and Village Industries Commission (KVIC), in South Zone for the year 200708, instituted by the Ministry of MSME, Government of India.
Golden Peacock National Training Award 2008 for excellence in training. Global HR excellence in Training, an award conferred by the Asia Pacific HR Congress, the largest rendezvous of HR Professionals, at its Employer Branding Talent Management Congress held on 22nd and 23rd August 2008, Delhi.
Best Corporate Social Responsibility Practice Award, instituted by BSE, NASSCOM and Times Foundation.
The Bank won two Silver Corporate Collateral Awards for Best Corporate Ad in the Print Media and Best Corporate Film on Corporate Social Responsibility at the Public Relations Council of India Awards 2009.
RECEIVED DURING 2009-10
Best Bank in South Zone Award for the year 2008-09 in respect of lending under KVIC and PMEGP Schemes. The award was handed over by Dr.Manmohan Singh, Honble Prime Minister of India.
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The Bank received the Credit Guarantee Approval Certificate issued by CGTMSE from Shri Pranab Mukherjee, Honble Finance Minister of India
THE BANKS ACHIEVEMENTS INCLUDE:

Launching of Inter-City ATM Network Obtaining ISO Certification for a Branch Articulation of Good Banking Banks Citizen Charter Commissioning of Exclusive Mahila Banking Branch Launching of Exclusive Subsidiary for IT Consultancy Issuing credit card for farmers Providing Agricultural Consultancy Services
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2.10. WORK FLOW MODEL:
BOD BOARD OF DIRECTORS
HEAD OFFICE
CIRCLE OFFICE
MANAGER (at branch level) DIRECT LENDING NGOs FACILITATOR INDIRECT LENDING SHG GROUP (consisting of 12-20 members)
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2.10. FUTURE GROWTH AND PROSPECTS:
1. Canara Bank has plans to cover 12,000 villages with population less than 2,000 by March 2013 under financial inclusion programme: About 936 villages with more than 2,000 population and 2,700 villages with less than 2,000 population will be taken up in 2011-12, 7,500 villages with less than 2,000population will be covered in 2012-13.
2. It plans to issue equity shares to institutional investors, garnering $442 million (Rs 1,993crore) to expand its capital and support expansion plans. 3. It also plans to issue a 5.5-year benchmark dollar bond. 4. It is in advanced stages of getting banking licenses to operate in Qatar, Johannesburg and Frankfurt as it looks to ramp up its overseas business and is also applying for a license in New York and is exploring options in Nairobi and Nigeria. 5. It has signed a five year contract with Wipro Infotech, a leading provider of IT and business transformation services to drive Canara Bank's Regional Rural Bank (RRB) initiative. The contract is to provide a state-of-the-art, technology-driven, core banking solution for three of Canara Bank sponsored Regional Rural Banks -- Pragathi Gramin Bank, Karnataka, South Malabar Gramin Bank, Kerala, and Shreya Gramin, Uttar Pradesh.
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3. THE McKINSEYS 7S MODEL:

Mckinseys 7s model provides a useful framework for analyzing the strategic attributes of an organization. The seven variables, which the authors term "levers", all begin with the letter "S". The Mckinseys 7s model was developed by two persons Tom Peters and Robert Waterman, consultants at Mckinsey and Co. Strategy, structure and system can be considered as the Hardware of success while style, staff, skill and shared value can be seen as the software. Companies in which these soft elements are present are usually more successful at implementation of strategy. The hard elements of Mckinseys 7s model are feasible and easy to identify. They can be found in strategy statements, corporate plans, organizational charts and other documents. The four soft Ss are difficult to describe since capabilities, values and elements of corporate culture are continuously developing and changing. They are highly determined by the people at work in the organization. Therefore, it is much more difficult to plan or to influence the characteristics of the soft elements. Although, the soft factors are below the surface, they can have a great impact of the hard structures, strategies and systems of the organization.
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Figure 2: THE McKINSEYS 7S MODEL
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3.1. STRUCTURE
The structure consists of the organization chart and associated information that shows who reports to whom and how tasks are divided up and integrated. The organization structure of the Canara Bank follows theprinciple of unity of command, principle of order, principal of scalar chain and other principles of the organization. Organization structure of the Canara bank can be seen as 4 folds. The main structure of the Canara bank as a whole is as follows:
Board
Head office
Circle office
Branch
Branch
Branch
Figure 3: Structure
From the above chart we can see that the top reporting authority is the Board of directors and the next top authority is Head office. In total there is only one head office which is situated in Town hall, Bangalore, there are 30 circle offices and 3000 branches. Under the control of each Circle office there are a certain number of branches which has to report about its business/transactions to the circle office. Each branch manager has been given with certain sanctioning limits to sanction loan amount. In case, if he receives an application for a loan amount which is more than his sanctioning limit then he has to forward the same to next higher authority i.e., the circle office. The same process is applicable even in the case of circle office and head office. The Bank has eighteen wings in the Head Office, Bangalore. Its organization chart is as follows:
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3.2. STRATEGY
In simple terms strategy is to plan for the future with set goals and objectives. It is about planning and setting corporate goals and then defining the steps needed to achieve those goals.
CANARA BANKS CORPORATE OBJECTIVE: E-efficiency P-profitability O-organizational effectiveness C-customer centric H-hi-tech banking The Banks strategies to achieve their long term vision and objectives are: Retail lending: Canara Bank being one of the foremost banking companies sees retail lending as a very lucrative proposition of the banking business. Thus, Canara Bank has focused its attention on the retail lending. The strategy in this activity has been to improve the spreads and lending against better assets of better quality. Thus, this shall help to reduce the NPA in case of default in repayment since the liquidation of the asset would be easier. Core banking solutions: In order to boost business and to enhance the customer service and to have a centralized data regarding customer, the bank has adopted the strategy of CBS.The trust on technology has also helped the bank to reduce its operational costs especially the labor cost, provide better customer service & the match their competitors. NPA management: Higher NPA is detrimental to any bank since it erodes the wealth of the shareholders and the interests of the depositors. In this aspect Canara Bank has a clear strategy that is lending against assets & aggressive follow up. This ensures high recovery and better profitability.

Treasury management: With respect to the treasury management, Canara Banks strategy is effective fund management; this will help in improving the yield and ability to hedge the market risks by introduction of Real Time Gross Settlement, derivatives &Core Banking Solutions.
3.3. SYSTEM:
System consists of Formal and informal procedures that govern everyday activity, covering everything from Management Information System to the systems at the point of contact with the customer. Canara bank has been a pioneer in evolving several systems. Each of the system devised by the bank has its own characteristics and is the product of research and experience. The various systems introduced by the bank over the years were published in the form of a book entitled All about HRD systems in the year 1992. The same is reviewed and revised and the updated version is Our HRD systems.Their formal HRD systems consist of: Entry interview Training system Brain storming sessions Study circles Employee suggestion scheme Quality circles
3.3.1. THE ENTRY INTERVIEW SYSTEM: Canara bank has the system of Entry interview which aims to introduce the new entrants to the history, culture, tradition of the Bank and to show concern for proper settlement of the new entrants at work place and to ensure full devotion to work. METHODOLOGY: The details are to be immediately entered in the entry interview format. The entry interview format is only indicative and not exhaustive.

A copy of the report is to be sent to the section concerned at Circle Office, Staff Administration Section at ID Mumbai, Inspection Wing and HOSA section at HO. Staff section concerned has to analyze the same and guide the branches wherever required. Staff sections have to ensure the receipt of entry interview report by sending enclosed the formats to posting order itself. 3.3.2. TRAINING SYSTEM: It includes identification of trainees and their training needs, designing of programmes, programme inputs/ course content preparation, training pedagogy, selection of trainers and their training, external training in India and abroad, evaluation of training, interaction of executives with employees. 3.3.3. INFORMATION SYSTEM: The Canara Bank has well established Management Information System with three layers that is Lower Level or Operational Level Management Level Top Level or Strategic Level.
Management Information System is an integrated, user-machine system for providing information to support operations, management and decision-making functions in an organization using hardware, software, manual processes, models for planning and control and a database for storage.
3.4. SKILL:
Skills refer to dominating capabilities or dominating attributes that distinguish a firm from its competitors. Canara Bank has very good training programmes, which impart various necessary skill sets to its employees. Canara Bank is one of the premier banks in the country due to its strong fundamentals and quality customer orientation. Canara bank provides training to impart skills to their employees in the following functional areas:

1. Asset liability management 2. Customer credit 3. Housing finance 4. Retail finance 5. Rehabilitation of sick units 6. Trade finance 7. Relationship banking 8. Customer service 9. Handling of cheques, bills, hundis, promissory notes etc. Steps taken by Canara Bank to impart necessary skills Identification of trainees and their training needs: It is done at grassroots level by Branch/ section in charge. Regional offices then consolidate the training needs and submit the same to Circle Office. The Circle Office then draws the training plan in consultation with regional Staff Training College and forwards it to the apex college at Bangalore. Designing of the programmes: This is done on the basis of specific objectives of the programme, the target group and the current and emerging business scenario. Some training programmes designed are: 1. Induction courses 2. Supervisory development programmes 3. Management development programmes 4. Executive development programme Programme input/ course contents: The preparation of course manual/ material is centralized at STS. Subject committees have been formed at STC and these committees consist of experts in the functional areas. Training pedagogy: Pedagogical tools and techniques are determined based on the profile of the trainees, objectives of the training programme. The broadband of training methodology are: 1. Case studies

2. Group discussion 3. Quizzes, exercises and simulations 4. Role play 5. Presentation 6. Audio visuals 7. Lectures 8. Project assignment and business games Selection of trainers and their training: In-house trainers are selected by a process of interview or by selection based on experience, track record, oral and written communication skill, aptitude and flair for reading. External training in India and abroad: Besides the in-house training system, Canara Bank identifies and posts employees to many external training programmes both in India and in abroad, conducted by various institutes like IIMs, ISB, NIBM, ASCI, JNID, IDBRT, MDI, APRACA, etc. Evaluation of training: A structured questionnaire is admitted at the end of the programme to assess the quality change in knowledge, skill, and attitude of the trainees. Interaction of executives with employees: In specialized training programme executives from Head Office and Circle Offices are invited for inauguration, thus providing a good forum for interaction.
3.5. STYLE:
Style refers to how managers collectively spend their time and attention and how they use symbolic behaviour. It refers to pattern of action among the employees of the organization. Canara Bank management is very strict in following procedural aspects as laid down in memos and circulars issued from time to time and also various manuals. At the same time they are very much concerned about the welfare of the employees. The cordial relationship among the employees of the bank is maintained. In Canara Bank, superiors have confidence in subordinates. The subordinates feel free to discuss important matters about the job with their immediate superiors. To be precise in Canara Bank Participative Management / Leadership Styleis followed.
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Following are some of examples of the Canara Banks schemes where we can find the implementation of the participative management style by Canara Bank.
Employee suggestion scheme: Canara Bank has employee suggestion scheme (ESS), which aims at kindling innovative spirit of the employees and recognizing their valuable contribution by way of feasible suggestions. Features of the system are as follows: All cadres of employees of the bank can participate in this scheme except those working in O & M section, inspection wing, H O executives. Suggestions relating to enhancing quality of customer services, preventing frauds, delaying, weeding out duplication system and procedures, augmenting profitability, optimum benefit of computerization are highly acceptable from the employees. Suggestions relating to products/ services or process, etc., which are already engaging banks attention, suggestions relating to delegation of powers, increasing or decreasing rate of interest, commission, services charges, IR matters, etc., are not acceptable by the bank. Staff Meeting: Staff meeting is one of the oldest formal HRD systems of the bank being introduced in the year 1982. It is the most useful participative forum at branch/unit level enlisting involvement of all the employees in all the cadres in the effective functioning of the branch or office following all the features of the system. The concept basically aims at group synergy, team building, open culture, family feeling and talent reorganization. Staff meeting is to be conducted once in a month.
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3.6. STAFF:
It includes the companys human resource and how companies develop employees, train them, motivate and shape their basic values. The present staff strength of the bank is 42,724employees. Canara bank has a series of people building HRD initiatives. Canara Banks committed and efficient work force include: Technical people Specialist officers Chartered accountants Financial analyst Economist Marketing managers Lawyers Clerical staff Security officers
With the growing challenges of liberalized economy, the Canara Bank employment at different stages is trained to acquire motivation, leadership and knowledge to meet the increased requirements. Emphasis is laid on: 1. Training 2. Executive and management development schemes 3. Quality circles to generate innovative ideas and to discuss and to try to solve problems of various kinds 4. Employee suggestion schemes and staff meeting to implement participative management in the bank thereby motivating the employees 5. Study circles and brain storming sessions etc to improve the quality of the staff.
3.7. SHARED VALUES

Shared values refers to the underlying attitude of the company; a combination of core values and core purpose. Core values are the guiding principles and doctrines that do not require external justification and the company would keep even if business circumstances changes.
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Canara bank staff holds the following common beliefs, mindset, and assumptions that shape how the organization behaves-its corporate culture: 1. Family culture 2. Focus on and belief in people 3. Commitments 4. Customer orientation 5. Open culture 6. Versatility 7. Community perception 8. Spirit of accepting challenge 9. Consistency Canara Bank is endowed with a rich tradition and culture, which is unique to it and has made it distinct. Canara Banks tradition: 1. Social service. 2. Serving to grow and growing to serve. 3. Excellence in service. 4. Helpfulness to others. 5. Commitment to the needy, help to spread education and improve the quality of life. 6. Commitment to the institution- sacrifice, loyalty and belonging. 7. Acceptability to everyone. 8. A work culture where family concept is practiced among working people. 9. Oneness while striving to reach the goals. 10. Receptivity to new ideas. The organization climate of Canara Bank is marked by display of belonging, loyalty, sacrifice, selflessness, and an attitude that the organization is part of each employees life.
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Priority Sector Analysis 4. SWOT ANALYSIS:

Identification of the threats and opportunities in the environment and the strengths and weakness of the firm is the cornerstone of business policy formulation. It is these factors which determine the course of action to ensure the survival of the firm. The environment might present many opportunities but a company might not have the strength to exploit all the opportunities. Similarly, sometimes a firm will not have the strength to meet the environmental threats. If a company, thus, finds that it will not have the competence to survive in a particular line of business, it will be prudent to give it up and concentrate on such business for which the firm is most competent.
4.1. STRENGTHS:
The bank was the first among banks to launch networked ATMs and obtain ISO certification. The bank is having 840 branches and 13 administrative units with ISO certification. Canara bank has a good brand name with an increase in market value of share. Canara bank has been a pioneer in evolving several HRD systems. The bank has won national HRD award for its HRD practices. The bank offers wide variety of services to the customer. Personal banking, commercial banking, international banking and NRI services offered by the bank provide the customer a wide range of choice with attractive schemes. The bank has already carved a niche in providing IT-based services, with 100% computerization of the branches, the bank provides a wide array of services such as networked ATMs, anywhere banking, Tele banking, mobile banking etc., Canara Bank has large number of branches-3212. Canara Bank has a unique training system and an apex college viz., the Staff Training College (STC) at Bangalore with 13 regional staff training colleges (RSTCs) spread across the country to impart necessary skills to the employees to provide quality services to the customers.
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Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad.
4.2. WEAKNESSES:
Delay in follow up on various accounts. Delay in crystallization of export bills discounted. Sanction terms and conditions were not complied with in many cases revealing inadequate/ineffective mechanism to monitor and follow-up of such cases. The stocks hypothecated to the Bank were not adequately insured/not insured in some cases.
4.3. OPPORTUNITIES
The Growth potentials or the opportunities are very huge as the bank had mainly concentrated on the southern region of the country in its earlier years. It has the opportunity to expand its business to other parts of the country wherein it can increase its customer base. The bank can become the world-class global bank by adopting global standards in its services and understanding global requirements. For the revival of the economy, both the central and state governments will be putting in place ambitious plans and programs for infrastructure development. This presents a major opportunity for banks to finance these investments.
4.4. THREATS:
Private Banks have started venturing into rural and semi urban areas by giving a severe competition for the bank. Majority of Senior and Middle Management is retiring during 2010-2012. Succession planning efforts are not visible for smooth transition and take over. Entry of MNC banks with new and latest technology; it takes several years for the bank to get itself updated with the same.
Priority Sector Analysis 5. ANALYSIS OF FINANCIAL STATEMENT:

DPR (Dec 2010) = Dividends per Share = 10 / 73.16 = 0.136 EPS Capital ratio March-10 March-09 March-08
Equity capital/ Total assets
0.15
0.18
0.23
Loan to deposit Ratio
March-10
March-09
March-08
Total loans/ Total deposits
0.72
0.74
0.70
Debt coverage ratio
March-10
March-09
March-08
Total debt/ Owners fund
18.85
19.18
18.38
Profit And Loss Account Ratios Interest Expended / Interest Earned Other Income / Total Income Operating Expense / Total Income Selling Distribution Cost Composition
March-10
March-09
March-08
69.71 4.93 21.65 0.09
72.44 4.74 19.93 0.13
75.09 4.61 21.48 0.29
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Interpretation: Operating expenses over total income has been increased in the year 2010 which has to be brought down and it can be achieved through efficiency of the management. Selling and Distribution cost has been decreased gradually by the year 2010 which is appreciable The Interest expended/ Interest earned has been decreased in the year 2010 when compared to the years 2008 and 2009. Hence the organization is efficient in management. The Loan to deposit ratio indicates how much the bank is relying on borrowed funds. So the higher the ratio, the more the bank is relying on borrowed funds. Here, at present the ratio has shown a decline indicating that the Bank has reduced its reliance on deposits. The debt coverage ratio determines the likelihood that a particular borrower will have the ability to pay back the money sought in loan.Ratio higher than 1 indicates that companys earnings is sufficient to absorb indebtedness. Canara Bank is at a superior situation in this regard.
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Priority Sector Analysis 6. LEARNING EXPERIENCE:

Canara Bank is a huge organization and getting associated with it was a pleasure. The 2 months in Canara Bank helped me to understand its organization structure. The topic I chose to conduct study is analysis of PRIORITY CREDIT which is a part of the Priority Sector. The project work undertaken at Canara Bank helped to get an insight into one of the much talked about issue today-financial inclusion: a priority sector initiative, and PRIORITY CREDIT in particular. It helped in understanding the importance of financial inclusion in our country. And also how the Reserve Banks initiative of financial inclusion has helped hundreds of thousands of people all across India who could earlier barred from financial services. The project helped to understand various schemes and initiatives offered by Canara Bank and the significance of the same. The kind of experience I gained in the organization changed my attitude towards public sector banks. It also made me to aspire to join the organization if I am privileged.
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Priority Sector Analysis 7. GENERAL INTRODUCTION:

7.1 STATEMENT OF THE PROBLEM:
The study on priority sector in Canara Bank is an attempt to know about the various schemes through which the Bank lends money to public in order to develop the priority sector to ensure smooth running. The study entitledPRIORITY SECTOR ANALYSIS WITH SPECIAL REFERENCE TO CANARA BANK gives an insight into the priority sector finance situation.
7.2 OBJECTIVES OF THE STUDY:

Objectives of the study are: To understand the nature of priority sector. To analyze allocation of funds in the various sectors of priority sector in Canara
bank. To find out the growth in those sectors of lending in Canara bank. To understand the schemes of Canara bank for meeting credit needs of priority
sector.
7.3 SCOPE OF STUDY:

To understand the financial requirements of the sector and various sources and means of finance. Policies of Canara bank to meet the requirements of the various sectors which comes under priority sector. Terms and condition of different loans scheme and procedures for sanctions of credit facility.
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7.4 METHODLOGY:
The data was collated from two main sources mainly: Primary data. Secondary data.
Primary data: The information was collected from inside the organization by interviewing the concerned officials employees of the organization. Secondary data: Secondary data was collated by Referring to past records of the company and annual reports. Websites, Bank journals etc.
7.5 LIMITATIONS OF THE STUDY:

The study is mainly based on the secondary data provided by the bank. As such it is subject to limitations of the secondary data. Lack of information which is confidential in nature prevented an in-depth study. The non-availability of relevant information. Limited for the time span allocated for the project study. Focused only on Canara Bank.
7.6 HISTORY OF PRIORITY CREDIT:

The Government of India through the instrument of Reserve Bank of India (RBI) mandates certain type of lending on the Banks operating in India irrespective of their origin. RBI sets targets in terms of percentage (of total money lent by the Banks) to be lent to certain sectors, which in RBI's perception would not have had access to organised lending market or

could not afford to pay the interest at the commercial rate. This type of lending is called Priority Sector Lending. Financing of Small Scale Industry, Small business, Agricultural Activities and Export activities fall under this category. This is also called directed credit in Indian Banking system. Financing Priority Sector in the economy is not strictly on commercial basis as not only the general approach is liberal but also the rate of interest charged on such loans is less. Export finance is, in fact, available at a discount of 20% or more on the normal rate of interest to Indian corporate. Part of the cost of this concession is borne by RBI by means of refinancing such loans at concessional rate. Indian Banks, therefore, contribute towards economic development of the country by subsidizing the business activities undertaken by entrepreneurs in the areas which are considering "priority sector" by RBI.
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Priority Sector Analysis 8. OVERVIEW OF PRIORITY SECTOR INDUSTRY IN INDIA:

At a meeting of the National Credit Council held in July 1968, it was emphasized that commercial banks should increase their involvement in the financing of priority sectors, viz., agriculture and small scale industries. The description of the priority sectors was later formalized in 1972 on the basis of the report submitted by the Informal Study Group on Statistics relating to advances to the Priority Sectors constituted by the Reserve Bank in May 1971. On the basis of this report, the Reserve Bank prescribed a modified return for reporting priority sector advances and certain guidelines were issued in this connection indicating the scope of the items to be included under the various categories of priority sector. Although initially there was no specific target fixed in respect of priority sector lending, in November 1974 the banks were advised to raise the share of these sectors in their aggregate advances to the level of 33 1/3 per cent by March 1979. At a meeting of the Union Finance Minister with the Chief Executive Officers of public sector banks held in March 1980, it was agreed that banks should aim at raising the proportion of their advances to priority sectors to 40 per cent by March 1985. Subsequently, on the basis of the recommendations of the Working Group on the Modalities of Implementation of Priority Sector Lending and the Twenty Point Economic Program by Banks, all commercial banks were advised to achieve the target of priority sector lending at 40 per cent of aggregate bank advances by 1985. Sub-targets were also specified for lending to agriculture and the weaker sections within the priority sector. Since then, there have been several changes in the scope of priority sector lending and the targets and subtargets applicable to various bank groups. On the basis of the recommendations of the Internal Working Group, set up in Reserve Bank to examine, review and recommend changes, if any, in the existing policy on priority sector lending including the segments constituting the priority sector, targets and sub-targets, etc. and the comments/suggestions received thereon from banks, financial institutions, public and the Indian BanksAssociation (IBA), it has been decided to include only those sectors that impact

large segments of population & the weaker sections, and which are employment-intensive, as part of the priority sector.
8.1 CATEGORIES OF PRIORITY SECTOR

The broad categories of priority sector for all scheduled commercial banks are as under: 1. Agriculture (Direct and Indirect finance): Direct finance to agriculture shall include short, medium and long term loans given for agriculture and allied activities directly to individual farmers, Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) of individual farmers without limit and to others (such as corporate, partnership firms and institutions) up to Rs. 20 lakh, for taking up agriculture/allied activities.
Indirect finance to agriculture shall include loans given for agriculture and allied activities.
2. Small Scale Industries (Direct and Indirect Finance): Direct finance to small scale industries (SSI) shall include all loans given to SSI units which are engaged in manufacture, processing or preservation of goods and whose investment in plant and machinery (original cost) excluding land and building does not exceed the amounts specified in Section I, appended.
Indirect finance to SSI shall include finance to any person providing inputs to or marketing the output of artisans, village and cottage industries, handlooms and to cooperatives of producers in this sector.
3. Small Business / Service Enterprises shall include small business, retail trade, professional &self-employed persons, small road & water transport operators and other service enterprises.
4. Micro Credit : Provision of credit and other financial services and products of very small amounts not exceeding Rs. 50,000 per borrower to the poor in rural, semi-urban and urban

areas, either directly or through a group mechanism, for enabling them to improve their living standards, will constitute micro credit.
5. Education loans: Education loans include loans and advances granted to only individuals for educational purposes up to Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad, and do not include those granted to institutions.
6. Housing loans: Loans up to Rs. 15 lakh for construction of houses by individuals, (excluding loans granted by banks to their own employees) and loans given for repairs to the damaged houses of individuals up to Rs.1 lakh in rural and semi-urban areas and up to Rs.2 lakh in urban areas.
8.2 RBI INITIATIVES FOR FINANCIAL INCLUSION:

RBI has started the following organizations to fulfill the vision of financial inclusion: Co-operative Movement Setting up of State Bank of India Nationalization of banks Lead Bank Scheme RRBs Service Area Approach Self Help Groups
Still failure due to following: Absence of Technology Absence of reach and coverage Delivery Mechanism Not having a Business model Rich have no compassion for poor
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Priority Sector Analysis 9. ANALYSIS AND INTERPRETATION
Table showing advances to all the major sectors in Priority Credit

Rs.in lakhs Small and Marginal Farmers
Years
Total Priority
Total Agricultur e
MSME
Weaker section
Housing
Educatio n
March '2006 March '2007 March'2008 March '2009 March'2010 March '2011 Dec'2011
30937 37844 43203 48763 59310 70757 72753
12032 15521 17996 20144 25052 29656 31179
6591 9852 14175 16316 24180 29558 29063
4423 5613 7528 10809 14631 17823 20012
3083 3981 5187 7679 10208 12634 14596
8083 7989 7022 7516 6941 7700 8236
955 1252 1737 2301 2896 3503 3898
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Graph Showing Growth in Total Priority Advances:
Total Priority advances

80000 70000 60000 50000 40000 30000 20000 10000 0 Total Priority advances
Years March '2006
Total Priority(amt. in lakhs) 30937
Growth rate
CAGR
March '2007 March'2008 March '2009 March'2010 March '2011
37844 43203 48763 59310 70757
18.25%
3.65%
12.40%
11.40%
17.78%
16.18%
Dec'2011
72753
2.74%
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Interpretation Advances to Total Priority at Canara Bank on March 2006 were Rs 30937 lakhs. The advances have increased over the years. As on December 2011, the advances to total priority more than doubled to Rs. 72753 lakhs. From the year 2010-2011 with a 4% increase in the number of accounts there has been a rise of around 19% in the amount sanctioned.
Page 42

Graph Showing Growth in Total Agriculture Advances:
Total Agriculture Advances

35000 30000 25000 20000 15000 10000 5000 0 Total Agriculture Advances
Years March '2006 March '2007 March'2008 March '2009 March'2010 March '2011 Dec'2011 Interpretation
Total Agriculture(amt. in lakhs) 12032 15521 17996 20144 25052 29656 31179
Growth rate
CAGR
22.48% 13.75% 10.66% 19.59% 15.52% 4.88%
4.50%
Agriculture advances has seen a constant growth throughout the years. This is mainly due to the importance of the government and the banks commitment to enrich the outcome obtained by the poor. Moreover agriculture has been a major source of income to the countrys poor and has seen a rise of 18% from 2010-2011.
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Graph Showing Growth in MSMEs:
Micro Small and Medium Enterprises

35000 30000 25000 20000 15000 10000 5000 0
Micro Small and Medium Enterprises
Years
MSME(amt. in lakhs) 6591 9852 14175 16316 24180 29558 29063
Growth Rate
CAGR
33.10% 30.50% 13.12% 32.52% 18.19% -1.70%
6.62%
Page 44
Interpretation Here also there has been a gradual rise in the amount advanced. This is a good sign indicating the growth in the small and medium enterprises and also a proof of rise in employment opportunities in that segment of the priority sector. RBI has also urged the bank in recent years to fund MSMEs which promise to contribute largely towards the overall sustained growth of the economy.
Page 45

Graph Showing Weaker Section Advances:
Weaker Section Advances

25000
20000
15000
10000
Weaker Section Advances
5000
Years
Weaker Section
Growth Rate
CAGR
4423 5613 7528 10809 14631 17823 20012

21.20% 25.44% 30.35% 26.12% 17.91% 10.94% 4.24%
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Interpretation This category involves the weaker section of the society. However in comparison to the other sectors the advances made to the weaker section is quite low. Most of the advances in this section was towards their welfare and development.
Page 47

Graph Showing Credit to Small and Margin Farmers:
Credit to small and margin farmers

16000 14000 12000 10000 8000 6000 4000 2000 0 Credit to small and margin farmers
Years
Small and Marginal Farmers
Growth Rate
CAGR
3083 3981 5187 7679 10208 12634 14596

22.56% 4.51%
23.25%
32.45%
24.77%
19.20%
13.44%
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Interpretation The growth rate in this section is quite high compared to the other sections. This is mainly due to the scope of finance that is made easily available to this section. The growth from 2009 is quite high because of the importance given by the bank towards this part of priority credit and also a need for the sustainable development of the poor in the country was stressed by the RBI.
Page 49

Graph Showing Housing Loan Advances:
Housing Loan Advances

8500
8000
7500
7000
Housing Loan Advances
6500
6000
Years
Housing
Growth Rate
CAGR
8083 7989 7022 7516 6941 7700 8236

-1.18% -13.77% 6.57% -8.28% 9.86% 6.51% -0.24%
Page 50
Interpretation The advances for housing loan are closely related to the market movements. It is evident that there was a drop in this sector by 13% in 2008, which was the year in which recession started seeping into the country. However post-recession there has been a rise again in the lending to this sector indicating more money entering the economy also the increase in the purchasing power of the people.
Page 51

Graph Showing Education Loan Advances:
Education Loan Advances

4500 4000 3500 3000 2500 2000 1500 1000 500 0 Education Loan Advances
Years
Education
Growth Rate
CAGR
955 1252 1737 2301 2896 3503 3898

23.72% 4.74%
27.92%
24.51%
20.55%
17.33%
10.13%
Page 52
Interpretation This is considered to be the most important and happening sector in the economy. This is mainly due to the growing need for a better and educated India in the future. The advances in this sector is mainly involving advances for foreign education. The importance and value given to this sector is more evident by the 266% increase in advances given in the last 5 yrs.
Page 53

BUDGET 2012:
The budget for FY2012 lays down the following w.r.t Financial Inclusion: The finance ministry is all set to increase the agriculture lending target by around 25% in the Budget for 2012-13 despite a sharp increase in the non-performing loans in the sector. In the last budget the government had increased the target to 4.75 lakh crore from 3.75 lakh crore in the year before. The scheme will ensure that the farmers will be able to avail short-term post-harvest loan at &5 as against the prevailing rate of 11-12%. If the banks fail to meet the target of the Priority Credit lending then they can buy loans of regional rural banks or micro finance institutions. RBI guidelines require banks to lend 40% of their adjusted net credit to the Priority Sector, which includes agriculture, small-scale industries and other weaker sections.
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Priority Sector Analysis 10. FINDINGS:

The initiatives at Canara Bank as part of their Financial Inclusion program have been successful to a large extent. The various schemes provided are popular with the target group they were intended at. These schemes have helped beneficiaries cultivate banking habits, access their accounts and eventually save money which would earn them interest. With respect to SHGs, there has been a considerable increase in the number of SHG accounts opened during the last 3 years. This has been due to the ease and convenience which people feel towards opening and operating such accounts. Also around 90% of the SHG accounts opened are groups formed by women. The No-frills account is one of the initiatives of RBI towards achieving total Financial Inclusion in the country. This scheme too has been a popular scheme with Canara Bank as the savings account can be maintained with zero balance. The growth in the number of accounts has more than doubled during the 3 financial years taken for the purpose of this study. The growth in Krishi Mitra Card scheme and Debt Swapping scheme has seen negative growth for a while. Whereas, the General Credit Card scheme has shown a positive increase in the number of accounts created all through the time period. The Differential Interest Rate scheme has been popular that is why the growth has been notable. Canara Bank has also introduced certain technological initiatives for the awareness of financial services. These are Bio Metric Cards- voice enabled device for banking transaction, Mobile Bio-Metric ATMs- vehicles (or mobile banks) go to places where there are no banks to conduct banking transactions and Canara Gramin Vikas Vahini- vehicles with the purpose to increase the bank reach coupled with power of information and knowledge on banking products, education, health, sanitation etc. Growth percentages compared between 2006 and 2011
Page 55

1. Total lending in priority sector increased in the year 2011 showing a positive growth of 56.27% compared to 2006. 2. There is also growth of about 59.42% in the direct agriculture lending from 2006 to 2011. 3. Indirect agriculture also showing hike of 37% and it is boosting the total agriculture lending. 4. Highest growth is recorded in the segment of education loan. Its about 266%. 5. The housing loan is showing a positive growth of 2.3%post-recession. 6. The weaker section lending has a positive figure in growth showing 75.18% from 20062011. 7. The total lending of small scale lending is increased 77.70% in the last 5 years which is a good sign in lending. 8. Out of 15 priority sectors 4 sectors have crossed the target for the year 2011, rest of the sectors are marginally close to the target at acceptable levels. 9. Higher level of Government interventions will help to maintain macro economy and price stability.
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11. Suggestions
1. Over the last 3 years repayment rates, have come down. There are higher risks of default, resulting in deterioration in the asset quality. Suitable steps like Re-structuring, Rescheduling and awareness program for better recovery to be undertaken. 2. Although there is a need to continue with priority sector prescriptions, the composition of the priority sector needs a re-look and review. Initially, sectors of the economy, which were not getting adequate bank credit, were included. Subsequently, a few other segments covering the small borrowers as also a few emerging sectors like development of computer software were added. However, considering that credit flow to some of these sectors has been satisfactory, the segments, which satisfy the following criteria, may be considered for inclusion in the priority sector: affect large sections of society; are of considerable importance to the national economy; benefit small borrowers and involve small loans; relate to those sectors which face difficulty in getting bank credit; and leads to substantial employment generation.
3. The importance of agriculture in the Indian. Agriculture may, therefore, continue as an important segment of priority sector. However, some of the extant provisions may need to be revised. 4. The focus of agricultural lending by banks should be on direct lending. With this end in view, Reserve Bank has been gradually phasing out the modes of indirect financing by banks under agriculture, particularly where no on-lending to farmers is involved. In this context, the following items have been considered for being ineligible for priority sector status: Loans to Electricity Boards for reimbursing the expenditure already incurred by them for providing low tension connection from step-down point to individual farmers for energizing their wells Finance for hire purchase schemes for distribution of agricultural machinery and implements.

5. In view of the need to provide more direct finance to SSI, the following types of lending, which are currently treated as indirect finance to SSI, may be considered for being ineligible for priority sector status: Credit provided to Government sponsored Corporations/organizations for onward lending to weaker sections Loans for setting up of industrial estates
6. Educational loans include loans and advances granted to individuals for educational purposes up to Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad, and not those granted to institutions. All advances granted by banks under special schemes, if any, introduced for the purpose may also be included under this category, provided they satisfy the above criteria. 7. Setting up of industrial consultancy services will help agriculturists, merchants, vendors and the bank to establish win-win deals for all the sectors. 8. An SME e-commerce portal may be set up under the Ministry of SSI where the buyers and sellers can meet and transact business.
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12. Conclusions:
Canara Bank has its own tradition of Excellence. The spirit-Beyond interests a
concern A concern towards society a concern towards its 45,000+ dedicate work force. A
tradition of business excellence blended with social obligation. That is why the Canara Bank rules the Indian banking arena with its own unique style. Since its inspection bank had been receiving many awards, the latest of which is the "Best CSR Practice Award -2008", constituted by BSE, NASSCOM and Times Foundation. Blessed by the great founder Sri Ammembal Subba Rao Pai, Canara Bank never looked back on its way of success. An award, recognitions, sammans and lots of success stories, the list goes on. The mantra behind all this glory and grandeur is Together we can I am proud to present this project on priority sector and advances. I have made an in depth study on the subject and presenting this report to the best of my capacity and knowledge. I thank the Management and staff of Canara Bank for giving me an opportunity to do this project and for all their co-operations.
Page 59

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Priority Sector Analysis 1.

Department of MBA, PESIT

Priority Sector Analysis

Department of MBA, PESIT

Priority Sector Analysis 2. COMPANY PROFILE:

Department of MBA, PESIT

Priority Sector Analysis

Department of MBA, PESIT

Priority Sector Analysis

2.2. NATURE OF THE BUSINESS CARRIED:

Department of MBA, PESIT

Priority Sector Analysis

2.3.3. QUALITY POLICY:

Department of MBA, PESIT

Priority Sector Analysis

ConsultancyServices One Time Settlement for M&SE

Loans & Advances

CED for Women

Merchant Banking Services

CardServices,Ancillary IPO Monitoring Activity Services InternationalServices Cash Management

InsuranceBusiness MutualFunds TechnologyProducts

SME Marketing RRB Division Social Banking

Table 1: Product/Services Profile

Department of MBA, PESIT

Priority Sector Analysis

MUTUAL PRODUCTS CANARA

Mutual Fund Products

Canara Global Gold Card

HDFC Mutual Fund Products

Nominations 7day banking Extended banking hours

Canara Corporate Card

DD shopee Safe deposit lockers

Department of MBA, PESIT

Priority Sector Analysis

Cash management services TUF scheme

Excise and service tax

Merchant banking services

IPO monitoring activity

Gold card schemes for Syndication services exporters

LOANS AND ADVANCES Housing loan

REMITTANCE FACILITIES Canbank Remit money scheme

Home improvement loan Can jewel

Bank Western Union Remittance Scheme

Safe deposit lockers

NRI service centre

Department of MBA, PESIT

Priority Sector Analysis

Head Office at Bangalore 34 Circle Offices

Department of MBA, PESIT

Priority Sector Analysis

Figure 1: Shareholding Percentage

Department of MBA, PESIT

Priority Sector Analysis

Shareholding Pattern of Canara Bank

Priority Sector Analysis

2.8. INFRASTRUCTURAL FACILITIES:

Priority Sector Analysis

RECEIVED DURING 2009-10

Department of MBA, PESIT

Priority Sector Analysis