Profile Study of the Organization
The South Indian Bank is one of the earliest banks in South India. It has become a major player in banking. It has its operations all over the country and promises to deliver the experience of next generation banking. The business of SIB is growing at higher rate both in respect of deposits and advances. SIB offers a variety of loans for different categories of people. It extends two types of credit facilities to their corporate customers. The first type known as Working capital finance is extended to meet the day to day short term operational requirements of the borrower. The second type of finance in the form of short term and medium term loans is provided to customers to meet the long term capital requirements for setting up the new project, expansion and diversification of the existing project and so on. It is the funds of depositor‟s i.e., the general public that are mobilized by means of advances. Thus it is extremely important for the bank to assess the risk associated with the credit. The process of credit rating begins when the customer approaches the bank and applies for credit. The SIB has a special department called the Integrated Risk Management Department (IRMD).The branch forwards the application to the Regional Office which initially conduct a rating and sent for evaluation to IRMD. Based on the parameters set by the Board of SIB, the IRMD analyses the details and rates the prospective customer. If the bank finds the customer eligible, the loan is sanctioned. The South Indian Bank has a comprehensive credit management policy which was tailored to fall in line with the banking guidelines issued by the Reserve Bank of India. The study is based on the credit rating process of loans in South Indian Bank. Finance today, holds the key to all human activity. It consists of raising, providing and managing of all money, capital or fund of any type to be used in connection with the business. Banks being money transacting enterprises require finance as „raw material‟ for manufacturing the finished goods i.e., Credit. The upswing in the Indian economy, the younger population, the low penetration of banking services in the country and the host of other factors, the Indian banking sector today stands on the threshold of exponential growth. Without a sound and effective 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 cosmopolitan in India. In fact, Indian banking system has reached even to the remote corner of the country. This is one of the main reasons of India‟s growth process. According to PricewaterhouseCoopers (PwC) report, India could become the third largest banking hub in the world by 2040.
Banking in India
Banking in India originated in the last decades of 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origin back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969, the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980.
The word „bank‟ is derived from the Greek word "Banque" or Italian word "Banco". Both means a bench at which money lenders and money changers used to display their coins and transacts their business in...