1 mba
TRANSCRIPT
A STUDY ON ATTITUDE AND PREFERENCE
OF THE DEPOSITORS TOWARDS PUBLIC
DEPOSIT SCHEMES
PROJECT REPORT
Submitted by
S. MANOJ KUMAR
REGISTER No: 108001123043
in partial fulfillment for the award of the degree
of
MASTER OF BUSINESS ADMINISTRATION
SRI KRISHNA COLLEGE OF ENGINEERING AND TECHNOLOGY
SUGUNAPURAM, KUNIAMUTHUR, COIMBATORE-641008
JULY 2012
SRI KRISHNA COLLEGE OF ENGINEERING AND TECHNOLOGY
SUGUNAPURAM, COIMBATORE -641 008
SCHOOL OF MANAGEMENT
PROJECT WORK
JULY 2012
This is to certify that the project entitled
A STUDY ON ATTITUDE AND PREFERENCE OF THE DEPOSITORS
TOWARDS PUBLIC DEPOSIT SCHEMES
is the bonafide record of project work done by
S. MANOJ KUMAR
Register No: 108001123043
of MASTER OF BUSINESS ADMINISTRATION during the year 2010-2012.
Submitted for the Project Viva-Voce examination held on ________________
----------------------- -------------------------------
Project Guide Head of the Department
------------------------ ------------------------
Internal Examiner External Examiner
DECLARATION
I affirm that the project work titled A STUDY ON ATTITUDE AND PREFERENCE OF
THE DEPOSITORS TOWARDS PUBLIC DEPOSIT SCHEMES, being submitted in
partial fulfillment for the award of MBA degree is the original work carried out by me. It has not
formed the part of any other report submitted for award of any degree or diploma, either in this or any
other University.
MANOJ KUMAR .S
108001123043
I certify that the declaration made above by the candidate is true
Dr. R.SUNITHA
Assistant Professor
School of Management
ACKNOWLEDGEMENT
First and foremost, I thank God the Almighty for the successful completions of this project.
I take this opportunity to thank our Principal, Dr.S.Annadurai, and School of
Management, Sri Krishna College of Engineering and Technology providing me an
opportunity to do the project.
I take this opportunity to thank our Director, Dr. C. Ramakrishnan, School of
Management, Sri Krishna College of Engineering and Technology providing me an opportunity to
do the project.
My profound thanks to my project guide Mrs. R. Sunitha, Assistant Professor, School of
Management, Sri Krishna College of Engineering and Technology, for her valuable guidance and
timely help in accomplishing this task.
I also express my gratitude in words to Mr. K.S Viswanathan, President and secretary,
Sundaram industries limited for providing me an opportunity to undergo the project work in his
company.
I from bottom of my heart would like to express thanks to my parents, friends and others for
their encouragement and support to complete my project work.
MANOJ KUMAR.S
TABLE OF CONTENTS
CHAPTERNO.
TITLE PAGENO.
List of tables I
List of figures II
1.1 About the project 1
1.1.1 Hypothesis 2
1.1.2 period of study 2
1.2 Industry profile 3
1.2.1 TVS group of companies 3
1.3 Profile of the company 4
1.3.1 Rubber division 4
1.3.2 Tyre solution division 5
1.3.3 Vision and mission 5
1.3.4 Motto and aim 6
1.3.5 Concept of 5-s 6
1.3.6 Technology Of Sundaram Industries Limited 7
1.3.7 Manufacturing quality 7
1.3.8 Export of Sundaram Industries Limited 7
1.3.9 Awards Won By Sundaram Industries Limited 7
1.3.10 Policies of Sundaram Industries Limited 8
1.3.11 Acceptance of public deposits 8
1.3.12 Tenure of deposits 9
1.3.13 Limits for acceptance of deposits 9
1.3.14 Free Reserves & Paid Up Capital 10
1.3.15 Position of deposits accepted 10
1.3.16 Procedure for Invitation of accepts deposits 12
1.3.17 Public Deposits 12
1.3.18 Form and particulars of Advertisement 13
1.3.19 Content of the Advertisement 13
1.3.20 Register of Deposits 14
1.3.21 Return of Deposits 14
1.3.22 Power of Central Government 15
1.3.23 Penalty 15
1.3.24 Maintenance of Liquid Assets 15
1.3.25 Terms and Conditions of Deposits 16
1.3.26 Management of public deposit 22
1.3.27 Services offered to the depositors 25
1.3.28 Financial results of the company 26
1.3.29 Conclusion 26
1.4 Review of literature 27
1.5 Objectives 0f the Study 33
1.6 Scope of the Study 33
1.7 Research methodology 34
1.7.1 Research Design 34
1.7.1.1 Sampling Technique 341.7.1.2 Statistical tools used 34
1.7.1.3 Limitations of the Study 36
2. Data analysis and interpretation 37
2.1.1 Percentage analysis 372.1.2 Anova 472.1.3 Independent t-test 492.1.4 Correlation 512.2 Findings of the study 53
3 Suggestions and conclusion 563.1 Suggestions 563.2 Conclusion 58
Appendix I –Questionnaire 59Appendix II – Bibliography 63
LIST OF TABLES
Tables Particulars Page No
1.3.14 Paid up capital and free reserves from the period of 2005-2010 10
1.3.15 Position of deposits accepted by the period of 2005-2010 11
1.3.24 Liquid Asset Maintenance for the period of 2005-2010 16
1.3.25.4 Term Deposit Scheme interest rates 17
1.3.25.6 Cumulative deposit scheme interest rates 18
1.3.26.2 Term deposit scheme bi-monthly interest 22
1.3.26.3 Term deposit scheme-Quarterly interest 23
1.3.26.4 Cumulative deposit scheme 24
1.3.28 Profit and dividends 26
2.1.1.1 Marital Status 37
2.1.1.2 Monthly income 38
2.1.1.3 Monthly savings 39
2.1.1.4 Online fund transfer 40
2.1.1.5 Regular payment of interest 41
2.1.1.6 Promt repayment of principal 42
2.1.1.7 Friendly service 43
2.1.1.8 Easy procedure 44
2.1.1.9 Safety of principal 45
2.1.1.10 Reputation of the company 46
2.1.2.1 Reputation and promt 47
2.1.2.2 Safety and fixed deposit 48
2.1.3.1 regular payment, promtpay and friendly service with independent
t-test
49
Tables Particulars Page No
2.1.3.2 Compare with share bond and mutual fund 50
2.1.4.1 gold and insurance with correlation 51
2.1.4.2 NSc and fixed deposit with correlation 52
LIST OF FIGURES
FIGURENO
LIST OF FIGURES PAGENO
2.1.1.1 Marital Status 37
2.1.1.2 Monthly income 38
2.1.1.3 Monthly savings 39
2.1.1.4 Online fund transfer 40
2.1.1.5 Regular payment of interest 41
2.1.1.6 Promt repayment of principal 42
2.1.1.7 Friendly service 43
2.1.1.8 Easy procedure 44
2.1.1.9 Safety of principal 45
2.1.1.10 Reputation of the company 46
1
1.1 ABOUT THE PROJECT
Finance is the lifeblood for any business organization, the success of the business depends upon
the available and optimum utilization of finance. It may be defined as the provision of money at
the time when it is required. There are various modes through which a company can augment its
financial requirements. One of such sources is “Acceptance of Public Deposit”. Public deposits
are an important source of financing the medium term and long term requirements of the
company. The term ‘Public Deposit’ implies any money received by a company through the
deposits or loans collected from the public. The Public includes the general public, employees
and shareholders of the company but excludes the money relieved inform of shares and
debentures.
Acceptance of deposits by the companies on a large scale from the public had its beginning in
early sixties when companies engaged in textile manufacture in Coimbatore and Ahmadabad
started issuing advertisements openly inviting deposits from the public offering attractive rates
of interest, Until 1966, there were no restrictions of any kind over this practice and hence, all
types of companies started accepting deposits. In recent years, there have been several instance
of failure by many companies to refund the deposits on their maturity. In other cases, there has
been default by the companies even in the payment of interest due periodically on the deposits.
Hence, RBI stepped in the scenario and exercised its power under chapter 111 B of RBI Act,
1934. Separate directions applicable to both Non-Banking Financial companies (NBFC’S) and
Non-Banking Non-Financial companies (NBNFC’S) were \ issued in 1966 and to miscellaneous
companies in the year 1973.
Acceptance of public deposits is a unique feature of Indian financial system and there is no such
practice abroad of such direct acceptance of deposits by the companies. Since early sixties, the
company deposit market has grown by leaps and bounds. Today, company deposit market
has grown to approximately Rs.25000 Crores with a width of around 5 million depositors
hundreds of top companies belonging to reputed industrial houses like Tata Birla, Escort,
crodves, Tvc etc and Government company like HUD co are accepting deposits from the public.
2
The Company’s fixed deposits are quite popular among the investing community as it bears a
higher rate of interest, more safe. The degree of risk borne by the saver is generally much
greater if he hold deposit claims with Non-Banking Companies. These deposits are unsecured,
that is they are not backed up by any of the assets of the company. But the interest is
compounded every quarter (or) half year with amplifies the returns.
1.1.1 Hypothesis
To find out whether there exists any significant difference between respondents based on
the gender and online interest payment.
To find out whether there exists any significant difference between respondents
based on the Gender and Attitude about the deposit schemes (Easy Procedure).
1.1.2 Period of Study
The study covers a period of five financial years from 2005-06 to 2009-10 such data have been
collected from the corporate office of SICMDU.
3
1.2 INDUSTRY PROFILE
SIL is a flagship company of the prestigious TVS group. The company was incorporated on
19th may 1943 under the companies act, 1956. It was promoted by TVS as a wholly owned
subsidiary company of TVS Iyangar and son’s ltd. The company has three divisions viz rubber
division, tyre solutions divisions and solid tyre divisions.
1.2.1 TVS group of companies
The TVS group has its origin over decades. The company was established in the year 1913 by
Late Mr. T. V. Sundaram Iyengar (Founder). It is considered to be the 15th biggest industries in
the country. Companies with a work force of more than 30000 with an annual turnover of
approximately Rs. 3000 crores.
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1.3 PROFILE OF THE COMPANY
SIL is a deemed public company by virtue of sec 43 (A) of companies Act, 1956. It is
closely held company where majority of the shares are held by the TVS and sons limited
( Holding Company) and the remaining shares are held by the families of the founder. There are
three divisions of the company viz., Rubber Division, Tyre Solutions Division and Solid Tyre
Division. Rubber division manufactures automobile rubber products in India and has established
dominant position in the market place of focusing on a single goal to achieve a total customer
satisfaction. The company is evolved from the conceptual states of defining the customer needs,
production of quality products and adherity to delivery commitments. TVS Rubber has
evaluated the term “Customer satisfaction” to new heights. ‘TVS Rubber’ is a part of TVS
group, the largest components manufactures in India.
1.3.1 RUBBER DIVISION
The rubber division was started in the year 1962. The company manufactures rubber
products for the export and inland markets. Rubber division has two manufacturing units. One
at Kochadai, Madurai which mainly caters to the need of automobile industry in south India and
the other in New Delhi. The main object of rubber division is manufacturing of automobile
rubber products to be fitted into various sizes of cars. The brand name of the product is
“TVS Rubber” and it is considered to be “The best in India” and second in Asia. This division
offers a wide range of quality products for the following segments.
Automobile: Vehicle manufactures and system manufactures.
Non – Automobile: Industrial, dyence electrical, electronics, mining thermal, telecom,
railway and white goods and the products are.
Diaphragms
Grommets
Dust Covers
Gaskets
Tank Wheel Urbanization
5
Over the last decade, the company has made conscious efforts to increase exports of its
products. Presently, the goods are exported to countries like UK, USA, Germany, Japan, Taiwan,
Korea etc. Couple of years back the division has opened a full-fledged warehouse in USA to
serve the automobile industry there which follows the latest cost reduction technique called ‘Just
In Time’.
1.3.2 TYRE SOLUTION DIVISION
It has twenty three servicing units all over India. Its central administration office is at Chennai.
The division is doing servicing i.e. re-treading of all sizes of worn out tyres. Tyres re- treading
is using the latest technology, using cold curing process for re-treading of tyres. The brand name
of the product is ‘TVS TREAD’ with a work force of 1100 employees.
1.3.3 VISION AND MISSION OF SUNDARAM INDUSTRIES LIMITED:
Vision:
To be a company with the highest profitability in the industry by consistently exceeding
the customer expectation.
Mission:
To maintain leadership in automotive segments
To increase overall productivity
To achieve zero customer complaint status
To improve performance in development of products
To grow in exports replacement and non-auto segments
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1.3.4 MOTTO AND AIM OF SUNDARAM INDUSTRIES LIMITED:
Motto:
The company drives its division with its motto “performance overtakes promise”
Aim:
1. Zero breakdown
2. Zero defect
3. Zero accident
4. Zero mould failure
5. Zero customer complaint
6. Increase overall plant effectiveness by reducing losses
7. Education and multi skill development
8. To create give, clear and pleasuring work environment
1.3.5 Concept of 5-s in SUNDARAM INDUSTRIES LIMITED
The Japanese concept of “5S” in insisted in the division and every employee is made known his
role in 5S. Also executives are given the responsibility by taking care of each “S” and there by
taking continuous efforts for functioning this concept. The 5S concept refers to:
SEIRT - Proper arrangement and Tidiness
SEITON - Orderliness
SEISO - Cleanliness
SEILETSU - Standardization
SHITUSKE - Discipline and Training
7
1.3.6 Technology Of Sundaram Industries Limited:
The company has sophisticated machines in their factory. In rubber division 30 to 40
percent of machines are improved. The machineries are operated by specialized and technical
persons. Research and development unit, which is recognized by the ministry of science
and technology. Department of scientific and industrial research, Government of Indian.
1.3.7 Manufacturing quality:
The rubber division has the latest state of the art equipment and their manufacturing
processes are based on the lean manufacturing system. The beneficial elements of the system
such as Kaizen, effectiveness and efficiency through a highly skilled work force Rubber
division offers its customers the finest quality in any product category, quality is built in at all
stages of activity through continuous improvement of its process by internalizing the principles
of TPM (Total Production Management).
1.3.8 Export of SUNDARAM INDUSTRIES LIMITED:
Expanding opportunities and breaking geographical barriers, TVS rubber has made great in
roads into the global market with a reputation of consistent quality innovation and superior
service. At present rubber parts are exported to USA, UK, GERMANY, ITALY, DENMARK,
GREECE, FRANCE, AUSTRALIA, SINGAPORE, MALAYSIA, LABANON and MIDDLE
EAST. To serve the automobile industry in USA the company has opened a fully
fledged warehouse in USA which offers the cost reduction technique called JIT (just in time).
1.3.9 Awards Won By Sundaram Industries Limited
The company has received the TPM excellence award. In 2006, the company has achieved
TPM consultancy award. TVS Rubber is accredited of QS9000 and ISO-9001 standard and
the division has been receiving prestigious awards from Maruty Udyog Limited for the last
three years in succession since 2007. The division has also won the TPM experts from Japan.
8
1.3.10 Policies of SUNDARAM INDUSTRIES LIMITED
Quality policy:
To achieve customer satisfaction through manufacture and supply of quality products that
meet customer satisfaction.
Safety Policy:
To achieve zero accident by creating and maintaining on safe work method and practice to all
employees. In this day to day operations by constantly maintaining safety health and
environment standard.
TPM policy:
To become a world class organization by continuously enhancing performance of people
machine, products and practices through TPM.
1.3.11 ACCEPTANCE OF PUBLIC DEPOSITS
There was no control over the public deposits till Reserve Bank of India assumed the power to
regulate acceptance of public deposits from February 1964. For the purpose of exercising
regulatory control over the public deposits market, companies are classified as
Non-Banking Finance Company (NBFC)
Non-Banking Non Finance company (NBNFC)
9
Non-Banking Finance Company
NBFC means a company whose principal business is financing in whatever forms but not
qualities enough to be called a “Bank” as defined in the Banking Regulation Act
1979.NBFC include an investment or a hire purchase or a lease company or a mutual benefit
financial company.
Non-Banking Non Finance company
NBNFC include all manufacturing companies, trading companies engaged in shipping,
mining, hotel business and transportation. These companies are regulated by companies
(Acceptance of deposits) rules 1975. Thus, the function of regulating the acceptance of
deposits from public by NBNFC now vests with the central government; sec 58A of the
companies Act 1956 has empowered the central government to frame such rules in consultation
with RBI, prescribing the limits. The manner and the condition subject to which deposits may
be invited and accepted by such companies.
1.3.12 Tenure of deposits:
A company shall accepts or renew deposits which are repayable on demand or on notice or after
a period of less than 6 month or more than 36 month from the date of acceptance or renewal of
such deposits.
1.3.13 Limits for acceptance of deposits:
Under Rule 3(20) of the companies (Acceptance of Deposits) Rules 1975 a company other than
a Government company can accept deposit subject to the following ceiling. 25% of the
aggregate of paid up share capital and free reserves minus miscellaneous expenses not
written off, if any, In addition to the above limit, the company can accept deposits against
unsecured debenture or deposit from shareholders or deposits guaranteed by any other person
who at the time of giving the guarantee is a direction of the company up to a share capital and
free reserves.
10
1.3.14 Free Reserves & Paid Up Capital:
Free reserves is defined as the aggregate of the balance in the share premium account,
capital and debenture redemption reserves and any other reserves shown or published in the
balance sheet of the company and created through an allocation of profits not being a reserve
created for repayment of any future liability or for depreciation in assets or for bad debts or a
reserve created by revaluation of the assets of the company. Paid up share capital is that part of
the subscribed share capital for which consideration in cash or otherwise has been received. It is
also the total amount paid up or credited as paid up on the subscribed capital.
Table 1.3.14 Shows paid up capital and free reserves from the period of 2005-2010.
Year Paid up
capital
Free reserves Miscellaneous
expenses
written off
Total Index
2004-2005 252 2163.65 91.51 2324.14 1002005-2006 252 3092.00 34.89 3309.11 142.382006-2007 252 3816.18 10.21 4057.97 174.602007-2008 252 4249.22 - 4501.22 193.672008-2009 252 4707.25 - 4959.25 213.382009-2010 252 11397.40 - 11649.4 501.23
Source: Secondary Data: Compiled from the records of the company.
It is observed from the table 1.3.14 that the index of the aggregate of paid up capital and free
reserves after adjusting the miscellaneous expenses showed an increasing trend throughout
the study period. Although, the company has earned a free reserve of Rs. 11397.40 in the year
2009-2010, this is much higher than the previous years because of profit on rate of investment.
1.3.15 Position of deposits accepted
The company can accept deposits up to 25% of aggregate of paid up share capital and free
reserves. In addition to this, the company can accept deposits against unsecured debenture or
from shareholder or any deposits guaranteed by any director to the maximum of 10% of the
aggregate of paid up are capital and free reserves.
11
Table 1.3.15 Shows position of deposits accepted by the period of 2005-2010.
Year 25% of the aggregatepaid up capital andfree reserves
10% of the aggregateof paid up capitaland free reservesless miscellaneousexpenses as anydeposit against andunsecured debentureor from share holderor any depositsguaranteed by anydirector
Deposits(Rs in lakhs)
Index for thedeposits
2004-2005 581.04 232.41 268.99 100
2005-2006 827.28 330.91 204.78 76.12
2006-2007 1014.49 405.80 165.90 61.67
2007-2008 1125.30 450.12 168.90 62.79
2008-2009 1239.81 495.92 154 57.25
2009-2010 2929.98 1171.99 158.8 59.04
It is observed from the table 1.3.15 that the total quantum of deposits accepted by the company
showed a mixed trend during the study period. This is due to the management decision of the
company on acceptance of public deposit
SUNDARAM INDUSTRIES LIMITED has Rs 252 lakhs as capital and Rs 11,397.40 lakhs as
reserve and surplus at the end of financial year 2009-2010 and can raise upto Rs 2.929.98 lakhs
as deposits. The actual quantum of deposits held on 31st march 2010 is Rs 158.82 lakhs which
is only 5% of the eligible limit.
12
1.3.16 Procedure for Invitation of accepts deposits:
The procedure for invitation or acceptance of deposits are as per sec 53B (2) of the
companies (Acceptance of Deposit) Rules 1975. These rules come into force with effect from
third February 1975 and have been amended several times. The important features of rules on
public deposit by the Non-Banking Corporate Sector are as below:
1.3.17 Public Deposits:
The companies (Acceptance of Deposits) Rules 1975 defines public deposit as any deposits of
money with and includes any amount borrowed by a company but does not include.
Any amount received from or guaranteed by central government.
Any amount received as a long from any banking company or from the SBI
Any amount received as a long from the financial institutional
Any amount received by a company from any other company
Security deposit received from an employee or agent
Advance recovered for supply of good and services
Any amount received towards subscription of shares or debentures and also pending
allotment and calls in advance
Any amount received in trust
Any amount received from a director of a company
Bonds or debenture secured by mortgage of immovable property of a company with
conversion options
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1.3.18 Form and particulars of Advertisement:
The company intending to invite deposits shall issue an advertisement in a leading English
newspaper and in one vernacular newspaper circulating is situated. Advertisement should be
field with the register of the company.Such advertisement may be issued only on the authority
and in the name of the board of directors of the company. The advertisement must state the date
on which the board of directors approved the text advertisement.
SUNDARAM INDUSTRIES LIMITED normally has its board meeting in the month of
September every year and decides about the acceptance of public deposits in the year to come.
The advertisement regarding such acceptance shall be put in the newspaper in the last
week of September and fresh acceptance of deposits shall be started from 1stOctober every year.
1.3.19 Content of the Advertisement
A. Name of the company
B. Date of incorporation
C. The business carried on by the company and its subsidiaries with the details of branches on
units if any
D. Brief particulars of the management of the compnay
E. Name and address and occupation of the directors
F. Profit of the company before and after making provision for the three financial year
immediately preceding the date of the advertisements
G. Dividend declared by the company in respect of said years
H. A summarized financial position of the company as in the two audited balance sheets
immediately preceding the date of advertisement
I. The amount which the company can raise by the way of deposits under these rules and
aggregate of deposits actually held on the last day of the immediately preceding financial year
J. The statement showing the amount of overdue claims other than the unclaimed deposits
K. The following declarations must also be given in the advertisement.
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i) That the company has compiled with the provisions of these rules.
ii) Compliances with these rules do not imply that repayment of the deposits is guaranteed by
the central Government
iii) The deposits accepted by the company are unsecured liabilities.
iv) The company is not in default in the repayment of any deposits or part thereof of any
interest. There upon in accordance with the terms and conditions of such deposits.
v) The advertisement issued in accordance with these rules is valid. until the expiry of six
months from the data of closing of the financial year in which it is issued or the date of on
which the balance sheet is laid before the company in general meeting whichever is earlier.
1.3.20 Register of Deposits
A company accepting deposits shall keep at its records and registers at head office on which
there shall be entered separately in the case of each depositor the following particulars:
a) Name and Address of the depositor
b) Date and Amount of each deposit
c) Duration of the deposit and date on which each deposit is repayable.
d) Rate of Interest.
e) Date or dates on which payment of interest will be made
f) Any other particulars relating to the deposits.
1.3.21 Return of Deposits
A company to which these rules apply shall on or before the 30th day of June of every year,
file with the Register of Companies, the prescribed form furnishing the information
contained therein as on the 31st March of that year duly certified by the Auditors of the company.
A copy of the said return shall also be simultaneously furnished to RBI.
15
1.3.22 Power of Central Government
If any question arises as to whether these rules or regulations are not applicable to the particular
company, such question shall be decided by the central Government in consultation with the
Reserve Bank of India.
1.3.23 Penalty
Rule 11 provides that any contravention for which no punishment is provided in the act is
punishable with fine up to Rs 500 and for continuous contravention.
1.3.24 Maintenance of Liquid Assets
The company should maintain liquid assets to the extent of 15% of the deposits maturing during
the financial year ending 31st March. The amount shall be deposited or invested before 30th
April of each year in the permitted investments specified by the companies (Acceptance of
deposits) Rules, 1975. The permitted investments are:
a) Deposit held with a scheduled bank free from lien of charge.
b) In encumbered securities of Central of State Government.
c) In encumbered securities approval under India’s Trust Act, 1882.
d) In encumbered bonds by Housing Development Finance Corporation Ltd.
16
As per the Companies (Acceptance of deposits) Rules, 1975, liquid assets have to be created on
or before 25th April every financial year closure.
Table 1.3.24 Shows Liquid Asset Maintenance for the period of 2005-2010.
YEARS Maturity as on 31st march ofthe financial years
(Rs in Lacs)
Index formaturityamount
Liquid assetcreated at %(Rs in Lacs)
Index forLiquidAssets
2005 – 2006 148.17 100 22.23 100
2006 – 2007 80.04 54 12.00 54
2007 – 2008 61.74 42 9.26 42
2008 – 2009 74.89 51 11.23 51
2009 – 2010 70.16 47 10.60 47
Source: Secondary data-Compiled from the records of the company
It is seen from the table 1.3.24 that the index of the maturity amount and the index for the
liquid assets showed a mixed trend during the study period. It is also observed that the
company has maintained the statutory requirement of 15 per cent of the maturity amount at the
end of each financial year promptly.
1.3.25 Terms and Conditions of Deposits
Terms and conditions are the ser of orderly procedures to be followed uniformly throughout the
process. Acceptances of public deposits also have similar set of terms and conditions
which are followed by the company.
1.3.25.1 Quantum of Deposits
Deposits are accepted in multiple of Rs.1000 subject to a minimum of Rs.3000 for deposit
account and accompanied by the prescribed application form which can be had from the
company. As a general rule, the deposit amount is not accepted in the form of liquid cash.
The deposit amount shall be paid to the company by means of ‘an Account Payee Cheque’ or ‘a
Crossed Cheque’ or ‘a demand draft on a scheduled bank drawn in favour of Sundaram
Industries Ltd, payable at Madurai.
17
1.3.25.2 Period of Deposit
The period or deposit will be one year, two years and three years provided that the company
may at its discretion accept/ agree to extend deposits for any period on such terms as may be
prescribed.
1.3.25.3 Resident
Deposits are accepted only from residents for joint deposits. The number of depositors shall not
exceed two in number. Such joint depositors will be accepted on ‘FORMOR OR SURVIVOR’
basis only.
1.3.25.4 Interest Rate
The following table depicts the various interest rates for the term deposits scheme I. The
interest rates are applicable from 1st Oct 2010.
Table 1.3.25.4 Shows Term Deposit Scheme interest rates.
Period of Deposit 1 year 2 years 3 years Frequency of Payment ofInterest
Rate of Interest 7.52 % 8.53 % 9.03 % Bi – Monthly
Rate of Interest 7.55 % 8.56 % 9.07 % Quarterly
Source: Secondary data: Application form as per annexure
It is seen from the Table 1.3.25.4 that the rate of interest is higher in case of three years deposits
and the quarterly payment of interest carries a higher interest rate than the bi-monthly interest
rates.
18
1.3.25.5 Accrual of Interest
Interest will accrue from the date of realization of cheque or draft where interest is
payable on bi-monthly basis (once in 2 months), it will be upto 31st January, 31st March, 31st
May, 30th July, 30th September and 30th November and as on the date of maturity.
1.3.25.6 Mode of Interest Payments
Interest was paid by means of interest warrants on the company’s banker viz., State Bank of
India, Madurai for which the company maintains as separate current account in the same bank.
Such payments of interest through interest warrants are now replaced from 1st April 2010
by online fund transfer of interest to the respective depositors account by proper
systematization of NEFT. In case of deposits that are received during the last 15 days of the 2
months period (in case of bi-monthly interest) and 3 months period (in case of quarterly interest),
interest for such broken period are paid along with the interest for the next period for
administration convenience.
The following table depicts the minimum amount of deposit in cumulative deposit scheme-II
with the various periodicities and the amount payable on maturity with the annual yield.
Table 1.3.25.6 shows Cumulative deposit scheme interest rates.
Period of Deposit Min Amount Amount Payableon Maturity
For EveryAdditional
Investment of Rs.1000/- Rupees
Annual Yield %PA
One Year 3000 3233 1078 7.76
Two Year 3000 3554 1184 9.23
Three Year 3000 3926 1309 10.29
Source: Secondary data: Application form as per annexure
It is seen from the Table 1.3.25.6 that the annual yield on the amount of deposit for various
periodicity shows an increasing trend ranging from 7.76 per cent for one year, 9.23 per cent for
two years and 10.29 percent for three years of deposits.
19
1.3.25.7. Joint Deposits
The company accepts the deposits in joint names, but it should not exceed two members both
the joint deposits holders must sign the application. Incase of joint deposits, all correspondence
will be addressed to the person whose name appears first on the deposit receipt. All
cheques/drafts/warrants for the payment of interest and/or principal amount will also be drawn
in favour of the first named depositor irrespective of any instructions to the contrary. Any
discharge by the first named depositor for payment of interest and/or the principal amount
shall be valid and binding on the joint holders and shall constitute a good discharge to the
company. The first named depositor will for all purposes be deemed as the beneficial owner of
the deposit and will be treated as payee for purposes of deduction of tax under section 194-A of
the Income Tax Act, 1961. In the event of the death of the first named depositor, all payments
on accounts of principal and/or interest will be made to the survivor on furnishing a death
certificate of the depositor first named and the company shall not recognize any other heir or
legal representative as being entitled to claim the principal and/or interest on the deposit. In
the event of death of a sole depositor or both the joint depositors, the amount/principal and/or
interest shall be paid to the heir/s that produce to the satisfaction of the company succession
certificate/letter of administration/probate of will from a competent jurisdiction in respect of the
decreased which should cover the deposited amount.
1.3.25.8. Tax Deducted At Source
1. Income tax wherever applicable, will be deducted at source from the interest payable in
terms of provision of the Income Tax Law in force from time to time. Non- assesses can
furnish declaration in the prescribed forms, Form 10, Form 15H so that tax may not be
deducted at source.
2. Where a depositor holds deposit in his individual name as well as jointly with another,
interest paid on these deposits would be aggregated for the purpose of tax deduction at
source, if applicable.
3. At present, tax is deductible if the aggregate amount of interest paid or payable during
the financial year exceeds Rs.5000/-
20
1.3.25.9 Change of Address
Intimation to the company regarding change of address, tax exemption and other
communications should be send so as to read the company at least 30 days before the date of
which the next payment of interest falls due, to be acted upon.
Interest will cease to accrue from the date of maturity of deposit. Excess interest paid if any will
be deducted from the principal amount at the time of repayment of deposit.
1.3.25.10 Renewal and Repayment
a) It is not obligatory on the part of the company to give any intimation or motive with
regard to due date of maturity of deposits.
b) For renewal, the term/cumulative deposit receipts should be surrendered duly discharged
without revenue stamps; along with the renewal application form duly filled in and signed by the
depositor before the date of maturity.
c) For repayment, the term/cumulative deposit receipt duly discharged on a Rs.1. revenue
stamp must be surrendered to the company at least one month before the date of maturity and
enable the company to repay the deposit amount on the due date.
d) Repayment of principal amount will be made only by means of an “Account Payee”
cheque/draft drawn on company’s Bankers at Madurai.
e) Notwithstanding the period fixed for repayment of deposit the company reserves as it
opinion the right to repay any of the deposits at any time before the date of maturity but not
before six months from the date of deposit/renewal.
f) The company reserves the right not to repay the deposit before the date of maturity. On
deciding to repay a deposit at the request of the depositor before the date of deposit/renewal, the
rate of interest payable on such deposits shall be in accordance with the provision of the
companies (Acceptance of Deposits) Rules,1975 as amended from time to time.
21
1.3.25.11 Deposit Receipt
In the event of loss or destruction of mutilation of a deposit receipt or interest warrant or
cheque or income tax deduction certificate, the company, as its sole discretion to issue a
duplicate subject to compliance by the depositors with such terms and conditions including
indemnity as the company may stipulate. All expenses in this connection will be borne by the
depositors. The deposit receipts are not transferable or negotiable.
1.3.25.12. General
a) The company will not accept or recognize any lien assignment charge or other encumbrance
on the deposit or receipt there on.
b) Where the due date of any payment fails on a holiday to the company the payment will be
made on the next working day.
c) The company reserves the right to reject any application for deposit or for renewal of deposit
without assigning any reason thereof.
d) The acceptance, renewal, repayment of deposits and interest payment are subject to the
companies (Acceptance of Deposits) Rules, 1975 and amended from time to time and are subject
to jurisdiction of Madurai only.
e) Nomination facility is available, but the nominee shall not be a joint depositor. The
prescribed form of nomination can be had on request.
f) Ban charge/DD commission if any incurred by the depositors on matters relating to
deposits will have to be borne only by the depositors.
22
1.3.26 MANAGEMENT OF PUBLIC DEPOSIT
Methods of rising and managing public deposits are complex in nature and hence adequate care
must be taken in each and every step in such process. The management of public deposit
scheme by the study unit, the Sundaram Industries Limited has been studied in this chapter.
1.3.26.1 Types of deposit schemes
Public deposits accepted are classified as ‘unsecured loans’ to the company. As per companies
(Acceptance of Deposits) rules, 1975, ‘No company with a net owned fund of less than Rs. 1
crore shall invite public deposits and such amount raised by way of deposits shall not exceed
25% of aggregate of paid-up capital and free reserves. The deposits are classified into two
categories on the basis of interest payments to the deposit holder. The following are the two
types namely, term deposits and cumulative deposits. Under term deposits, the interest is paid
once in two months and once in three months. But in cumulative deposit, is paid only as on the
date of maturity. The interest is calculated, compounded on the monthly basis. The term
deposits and cumulative deposits are accepted for one, two and three year’s terms.
1.3.26.2 Term deposit scheme bi-monthly interest
The interest rate in respect of bi-monthly interest yielding term deposits scheme and
comparison of interest rate for the period of 5 years from 2005-2006 to 2009-2010is shown in
the following table.
Table 1.3.26.2 Comparison of interest rate for a period of 5 years
Term deposit scheme- Bi-monthly interest
Years I Year Interest 2 Years Interest 3 Years Interest
2005 – 2006 6.52 % 7.02 % 7.52 %
2006 – 2007 7.52 % 8.03 % 8.53 %
2007 – 2008 9.03 % 9.54 % 10.04 %
2008 – 2009 9.03 % 9.54 % 10.04 %
2009 – 2010 7.52 % 8.53 % 9.03 %
23
Source: Secondary data compiled from the records of the company
It is seen from the table 1.3.26.2 the interest rates are increasing in the first three years, in the
fourth year the interest rate does not change and the interest rate decrease in the next year of
comparison It is to be observed that the interest rates are higher for the 2 and 3 years
deposits. The reason for decrease in the interest rates is the match with the prevailing bank rate
in the economy as per RBI guidelines.
1.3.26.3 Term deposit scheme-Quarterly interest
The interest rate in respect of quarterly interest yielding term deposit scheme and the comparison
of interest rate for the period of five years from 2005-2009 to 2009-2012 is shown in the
following table.
Table 1.3.26.3 Comparison of the interest rate for the period of 5 years
Term deposit scheme-Quarterly interest
Years I Year Interest 2 Years Interest 3 Years Interest
2005 – 2006 6.54 % 7.04 % 7.55 %
2006 – 2007 7.55 % 8.05 % 8.56 %
2007 – 2008 9.07 % 9.58 % 10.08 %
2008 – 2009 9.07 % 9.58 % 10.08 %
2009 – 2010 7.55 % 8.56 % 9.07 %
Source: Secondary data compiled from the records of the company
It is seen from the table 1.3.26.3 the interest rates are increasing in the first three years, in the
fourth year the interest rate does not change and the interest rate decrease in the next year of
comparision It is to be observed that the interest rates are higher for the 2 and 3 years
deposits. The reason for decrease in the interest rates is the match with the prevailing bank rate
in the economy as per RBI guidelines.
24
1.3.26.4 Cumulative deposit scheme
The interest rate in respect of bi-monthly interest yielding term deposit scheme and the
comparison of interest rates for the period of 5 years from 2005-2006 to 2009-2010 is shown in
the following table.
Table 1.3.26.4
Comparison of interest rate for the period of 5 years Cumulative deposit scheme
Years I Year Interest 2 Years Interest 3 Years Interest
2005 – 2006 6.70 % 7.49 % 8.38 %
2006 – 2007 7.76 % 8.64 % 9.64 %
2007 – 2008 9.38 % 10.42 % 11.61 %
2008 – 2009 9.38 % 10.42% 11.61 %
2009 – 2010 7.76 % 9.23 % 10.29%
Source: Secondary data compiled from the records of the company
It is more evident from the table 1.3.26.4 that the interest rate of cumulative deposit for the
period of 2005-2006 to 2009-2010 are increasing in the first 3 years and the interest rates
decrease in the next following 2 years. The reason for decreasing in the interest rates is the match
with the prevailing bank rate in the company as per RBI guildelines and also decrease in 1 year
and 2 year deposits
25
1.3.27 Services offered to the depositors:
SIL offers the following services voluntarily to the deposit holders in order to keep a cordial
relationship with them.
Renewal Intimation: The Company informs the deposits holders 30 days before the date of
maturity regarding renewal along with renewal application.
Remainder for un-presented interest warrants: On the basis of reconciliation of interest
warrant, the company duly reminds the deposit holders to whom the interest warrants were
issued but not presented for payments. In discussion with the person in-charge of public deposits
of Sundaram Industries, it is noted that reconciliation work and remainder to the deposit holders
for presenting the interest warrants was laborious and now that such heavy work load is off-
loaded because of online interest transfers to the respective deposit holders’ account.
Band charges: Bank charges in connection with refund of deposits accrued interest and
collection charges for interest warrants are borne by the company and instruments are
exchangeable at par at sixty centres of State Bank of India. Such centres of State Bank of India
were mentioned in the interest warrants itself earlier. As the company is practicing a novel idea
of transfer of funds to the depositors’ bank account directly, such charges are almost avoided.
Ceiling of rate of interest: The interest payable on the deposits cannot exceed 15%. The
interest rate cannot be computed by periods shorter than monthly interest rules. Moreover, the
rule does not specify whether the interest should be simple of compounded. As on date,
Sundaram Industries ltd has no practice of having brokers for collection of deposits.
26
1.3.28 Financial results of the company:
The profit before tax and after tax and the dividends by the company during period of ten
years from 2001 and 2010 have been presented in table below.
TABLE 1.3.28 PROFIT AND DIVIDENDS
Period
Profit
before tax
Profit
after tax
Dividend
Rs in lakhs
Amount %
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
939.06
556.10
820.10
1788.23
1921.88
2606.58
1417.47
1408.96
8658.60
939.06
522.10
715.10
1558.23
1861.88
2287.58
1098.47
1279.96
8288.35
675.36
201.60
395.64
1065.96
703.08
1408.68
546.84
713.16
1386.00
268
80
157
423
279
559
217
283
550
1.3.28 Conclusion
Sundaram Industries Ltd is a pioneer company in Madurai, backed up by the prestigious TVS
Group one of the market leaders in the industry. It is obvious that the company has a high motto
which is being achieved in day to day business of the company. The practice of high ethics of
the business and the latest management concepts augment the best customer service.
27
1.4 REVIEW OF LITERATURE
A brief review of literature would be of immense help to the researcher in gaining insight into the selected
problem. The researcher would gain good background knowledge of the problem by reviewing certain
studies.
Robert C. Vogel and Paul Burkett (Jul., 1986) This journal tells that A growing number of
successful savings-mobilization programs in developing countries, together with related studies,
indicate that safe, liquid deposit of reasonable yield can be crucial in raising the incomes of no
wealthy households. This is especially true under the inflationary conditions so common in
developing countries where the value of cash balance is rapidly eroded, thereby forcing no
wealthy households to save in the form of inflation hedges that often entail high transaction and
storage costs. Although some dissent continues, there is growing recognition that adequate
yields on deposits at FIs and other financial assets are essential.
Sandhu H.S & R.K. Goswami (1986). This journal reveals that when the banking system
increases its credit to meet the increased demand for credit in a growing economy, the
cheques drawn are paid out to various parties. Who in turn deposit these in their respective
banks. Consequently, deposits in the banking system is increase. A part of the credit extended
would be withdrawn in cash and only a balance would stay with the banks as deposits.
However the author were of the view that the demand for deposits would be considered to
be an increasing function of bank credit.
28
Dr. S. Raj Kumar (April 2005). He concluded that the growth of the financial system is,
indeed, vital to the process of economic development in any economy as it helps to mobilize
savings and channelize them in various sectors of the economy for the purpose of growth and
development. Economic development may be defined as “a progress where by an economy’s real
national income increases.”Thus, economic development refers to both process as well as an
increase in the real national income. A rise in the real national income is the growth of the
economy. Economic development is, thus, the cause or process whereas economic growth is its
effect or result. It may be said that economic development includes variations in the supply of
factors of production on the one hand and demand for the products based on economic and
non-economic factors on the other. But, the economic growth is the outcome of this long process
of development.
Ghosh, Saibal and Das, Abhiman (2006): The paper traces the determinants of
depositor discipline in Indian banking. Using data for the period 1997:1 to 2002:4, the findings
reveal that, while bank-specific factors are dominant in case of state-owned banks, systemic
variables tend to overwhelm bank-specific factors in explaining behaviour of depositors of
private banks. In case of private and foreign banks, policy announcements have an important
bearing on the dependent variable. For state-owned banks, larger asset translates into higher
deposit growth, suggesting that depositors are sensitive to the ‘too-big-to-fail’ effect. Finally,
insured depositors tend to exercise discipline by compelling banks to pay a higher price on
deposits.
Anand Singh Kablana, Vikas Kumar, Shelindar Kumar(March 2011).. (A Co-operative
Bank of Gujarat). It reveals that deposits are the main source of funds for any banking
institutions and as well as DCCB Ltd. The amount mobilized deposits are then lent in the
form of advances. The higher the amount of deposits mobilized, the higher is the funds
lent. The growth of deposits depends on savings. For economic growth to take place, it is
essential saving are mobilized and channelized for capital formation which, in turn,
accelerates economic growth. Co-operative banking is an important financial intermediary in
rural areas between savers and borrowers. DCCB mobilized by accepting deposits.
29
International Research Journal of Finance and Economics (2007)
At present, in the Turkish Republic of Northern Cyprus (TRNC), there is a limited guarantee on
savings deposits held by persons at banks and co-operative savings banks, administered by two
separate deposit insurance funds. This paper will focus on the insurance fund for banks, since
deposits held at co-operative savings banks are a small fraction of the total; in fact the two
biggest co-operative banks are grouped with the commercial banks, and as such are subject to
the same deposit insurance fund as the banks. Abolishing total guarantee put into practice in
order to prevent panic due to banking crisis, the limited guarantee on savings deposits, which is
in accordance with the European Union (EU) deposit insurance directive of 1994, has been
gradually reached. Even though this limited guarantee has the effect of preventing some
problems such as moral hazard it proved to be not enough to design an effective deposit
insurance scheme. To the effect that designing effective deposit insurance scheme
scientifically depends mainly on its structure, membership, coverage, funding and public
awareness. In this respect, the main aim of this paper is to dwell upon designing an effective
deposit insurance scheme for TRNC with particular emphasis on public awareness. Public
awareness has been examined by conducting a research towards depositors and bank staff.
Briefly, the research findings show that both depositors and bank staffs are not aware of the
essentials of deposit insurance system in TRNC. Furthermore, banking institutions do not
have systematic program designed to create this public awareness considered as the
indispensable element of effective deposit insurance scheme.
30
European Journal of Economics, Finance and Administrative Sciences (2010)
The introduction of the Malaysian deposit insurance scheme is one of the many concerted
efforts determined to strengthen the protection of depositors, which in turn promotes financial
stability and development. The study investigates the effect of the introduction of deposit
insurance plan on bank risks given that a proper risk management is vital to maximise
shareholders’ return and to protect the interests of all stakeholders. Having analysed a small
panel data of the Malaysian local commercial banks from 2004-2007, the study finds that
explicit deposit insurance have mixed effects on bank risks. Generally, it is found that interest
rate risk and risk-weighted capital ratio deteriorate after the introduction of the explicit deposit
insurance scheme in Malaysia. Every federal or state credit union, state bank, federal or state
savings and loan association, savings and trust company and federal or state savings bank and
every national bank located in this state which compiles in all respects as to public deposits
with this chapter and will accept payments made by the state under s . 16 .412 may be
designated as a public depository and may receive and hold public deposits, subject to this
chapter. The commissioner of banking shall have the same powers and duties with regard to
making and continuing public deposits in national banks, federal and state credit unions, federal
and state savings banks and federal and state savings and loan associations as the powers and
duties exercised and performed by the commissioner of banking with regard to public
deposits, in state banks .
Ms. Vinodhini. (2010) studied, “A comparative study of fixed deposits schemes in private sector banks”.
In her study, she concluded that the depositors have expressed their desire to renew the deposits.
Ms. Meenakshi, (2008) who studied “The public deposits management in Sundaram industries”
concluded that the rate of interest offered to the public by the company is much higher than the rate of
interest paid by the company to SBI for its working capital financing”.
Mr. Raja Srinivasan, (2007) examined “The performance of public deposits” concluded in his study
that the terms and conditions laid down by the company are very scientific and in line with terms and
conditions of public deposit schemes of other reputed companies.
31
Ms. Kalaivani, (2003) studied “the public deposits schemes offered by TVS group companies”
concluded in her study that the company does not accept deposits from NR’S and suggested that
the company can mobilize deposits from NR’S to strengthen their business operations and also the
company can increase its net worth in future.
Mark Mobius, (2008) in his study on fixed deposits by the company has suggested that “The Company’s
fixed deposits are backed in limelight. The stock market is giving negative returns and the real return
on bank fixed deposits after adjusting inflation has also turned negative. This has given company an
opportunity to raise funds from investors. While offering them attractive returns through fixed deposits,
tighter liquidity in the market and higher cost borrowing are the main reasons behind companies reaching
out to investors to get deposits.
Nikhil Walavalkar,(2011) studied “Companies fixed deposits” that the companies are keen to borrow
from retail investors, given the liquidity Crunch in the market. A popular method is fixed deposits, similar
to the products banks offer. Individuals who seeks regular income welcome company FDs
Anil Chapra, (2011) examined the “preference of fixed deposits has concluded that the investors,
especially retires and those in the last years of employment, consider such fixed deposits.
32
REFERENCES
1) Robert C. Vogel and Paul Burkett (Jul., 1986), “Deposit Mobilization in
DevelopingCountries: The Importance of Reciprocity in Lending”, The Journal of
Developing Areas Vol. 20, No. 4 (Jul., 1986), pp. 425-438.
2) Sandhu H.S & R.K. Goswami(1986), “Determinants of commercial bank deposits in
India”-Indian Economic Journal, pg.73-79.
3) Dr. S. Raj Kumar (April 2005) “Deposit Mobilization of Indian Overseas
Bank in Thanjavur Main Branch”- Indian journal of finance, pg 24-32.
4) Ghosh, Saibal and Das, Abhiman (2006): “Depositor discipline in Indian
banking” Published in: Monetary Policy and Issues: New Research : pp. 139-163.
5) Anand Singh Kablana, Vikas Kumar, Shelindar Kumar (March 2011). “Deposits
Mobilization By Baroda District Central Co-operative Bank Ltd”. (A Co-operative Bank of
Gujarat), Indian journal of finance, pg 10-17.
6) International Research Journal of Finance and Economics, ISSN 1450-2887 Issue 7
(2007)
7) European Journal of Economics, Finance and Administrative Sciences, ISSN 1450-
2275 Issue 18 (2010)
33
1.5 Objectives 0f the Study
The following are major objectives of the study:
1. To study the existing procedures and management of public deposits in Sundaram
Industries, Madurai.
2. To study the attitude and preference of the depositors towards public deposit schemes in
Sundaram Industries, Madurai.
3. To study the factors which influence the depositors to make deposits in Sundaram
industries, Madurai.
4. To analyze the reasons for conversion of deposit schemes opted by the depositors.
5. To offer major findings and suggestions based on the study.
1.6 Scope of the Study
The present study is based on the utilization and management of public deposits to assess the
attitude and preference of depositors towards public deposit scheme of Sundaram industries.
However, it does not cover the other areas such as company’s preference to accept deposits for
their financial needs rather than trying other sources of funds, comparative study of public
deposits schemes offered by Sundaram industries and other companies.
34
1.7 RESEARCH METHODOLOGY
The present study is based on the primary data and secondary data. The primary data
have been collected structured interview schedule. The data have been collected from 110
depositors of Sundaram Industries Corporation, MDU who are the residents of Madurai
district. An interview schedule has been prepared after setting the objectives of the study.
The Secondary data has been collected from the statutory records, files and books of the
company maintained at their corporate office.
1.7.1 Research Design
The research undertaken by the researcher is “Descriptive Research”. The description research is
essentially a fact finding approach related to the present and abstracting generalizations by the
cross sectional study of current situation.
1.7.1.1 Sampling Technique
The sampling design used by the researcher is the stratified random sampling method. From
the total number of depositors, the researcher has taken to depositors for the study who are the
residents of Madurai district which pertains to approximately 20% of the total depositors of the
company.
1.7.1.2 Statistical tools used
The statistical tools for analysis:
Percentage analysis
ANOVA
Correlation
T-TEST
35
Percentage Analysis
The Percentage analysis is an effective tool to study the attributes of the respondents. Eachresponse by the respondent to a particular statement is plotted into frequency table andquantified. The entire response to the statement is considered as 100 percent and each of thechoice within the statement is measured as what percentage does it holds to the total response tothat particular statement.
ANOVA
Analysis of variance (ANOVA) is a collection of statistical models, and their associatedprocedures, in which the observed variance in a particular variable is partitioned into componentsattributable to different sources of variation.
In this simplest type of ANOVA, all of the variability in the data can be divided into two types:within-groups variability and between-groups variability.
Within-groups variability is the degree to which the scores of subjects in the same treatmentgroup differ from one another.
Between-groups variability is the degree to which the scores of different treatment groups differfrom one another.
Correlation
Correlation is a statistical technique that can show whether and how strongly pairs of variablesare related. In this study the correlation between the prospects of SHG members and theproblems of the SHG members are analysed and interpreted.
T-Test
"t" is the difference between two sample means measured in terms of the standard error of those
means, or "t" is a comparison between two group’s means which takes into account the differences in
group variation and group size of the two groups. The statistical hypothesis for the "t" test is stated as
the null hypothesis concerning differences.
36
1.7.1.3 Limitations of the Study:
Access to the annual reports and some files and important data could not be obtained as the
accounts are of confidential nature. Sample size is limited to 113 depositors who are the
residents of Madurai District only, as majority of the depositors are residing out of Madurai.
37
2. DATA ANALYSIS AND INTREPRETATION
2.1.1 PERCENTAGE ANALYSIS
Figure 2.1.1.1
INTERPRETATION:
The above table shows that 42 percent of the respondents have married, 40 Percent of the respondents
are unmarried and 17 percent of the respondents are widow.
INFERANCE:
Majority (42%) of the respondents are married.
Table 2.1.1.1 Marital Status
Frequency Percent Valid Percent Cumulative Percent
Valid Married 46 42.2 42.2 42.2
UnMarried 44 40.4 40.4 82.6
Widow 19 17.4 17.4 100.0
Total 109 100.0 100.0
38
Figure 2.1.1.2
INTERPRETATION:
The above table shows that 2 2 Percent of the respondents are below 15000 as monthly income, 18
percent of the respondents are 15001 to 30000 as monthly income, 35 Percent of the respondents are 30001
to 45000 as monthly income and 23 Percent of the respondents are above 45001 as monthly income.
INFERANCE:
Majority (35%) of the respondents are getting monthly income as 30001 to 45000.
Table 2.1.1.2 Monthly income
Frequency Percent Valid Percent Cumulative Percent
Valid Below 15000 24 22.0 22.0 22.0
15001-30000 20 18.3 18.3 40.4
30001-45000 39 35.8 35.8 76.1
Above 45001 26 23.9 23.9 100.0
Total 109 100.0 100.0
39
Figure 2.1.1.3
INTERPRETATION:
The above table shows that 1 8 Percent of the respondents are below 5000 as monthly savings, 13
Percent of the respondents are 5001 to 10000 as monthly savings, 40 Percent of the respondents are 10001 to
15000 as monthly savings and 27 Percent of the respondents are above 15001 as monthly savings.
INFERANCE:
Majority (40%) of the respondents are having habit of saving 10001 to 15000 per month.
Table 2.1.1.3 Monthly savings
Frequency Percent Valid Percent Cumulative Percent
Valid Below 5000 20 18.3 18.3 18.3
5001-10000 15 13.8 13.8 32.1
10001-15000 44 40.4 40.4 72.5
Above 15001 30 27.5 27.5 100.0
Total 109 100.0 100.0
40
Table 2.1.1.4 Online fund transfer
Frequency Percent Valid Percent Cumulative Percent
Valid Highly Satisfied 40 36.7 36.7 36.7
Satisfied 50 45.9 45.9 82.6
Moderate 12 11.0 11.0 93.6
Dissatisfied 7 6.4 6.4 100.0
Total 109 100.0 100.0
Figure 2.1.1.4
INTERPRETATION:
The above table shows that 36 Percent of the respondents are highly preferring for online interest
payment and 45 percent of the respondents are satisfied for receiving the interest via online and 11 percent of the
respondents are moderate and 6.4 perce nt of the respondent are dissatisfied.
INFERANCE:
Majority (45%) of the respondents are highly satisfied for online interest payment.
41
Figure 2.1.1.5
INTERPRETATION:
The above table shows that 47 percent of the respondents are strongly agree for factor regular
payment of interest, 47 percent of the respondents are answered agree for the factor, 1 percent of the respondents
are answered disagree for the factor and 2.8 percent of the respondents are answered agree for the factor
INFERANCE:
Majority (47%) of the respondents are strongly agree for the factor regular
Table 2.1.1.5 Regular payment of interest
Frequency Percent Valid Percent Cumulative Percent
Valid Strongly agree 52 47.7 47.7 47.7
Agree 52 47.7 47.7 95.4
No opinion 2 1.8 1.8 97.2
Disagree 3 2.8 2.8 100.0
Total 109 100.0 100.0
42
Table 2.1.1.6 Promt repayment of principal
Frequency Percent Valid Percent Cumulative Percent
Valid Strongly agree 15 13.8 13.8 13.8
Agree 37 33.9 33.9 47.7
No opinion 16 14.7 14.7 62.4
Disagree 24 22.0 22.0 84.4
Strongly Disagree 17 15.6 15.6 100.0
Total 109 100.0 100.0
Figure 2.1.1.6
INTERPRETATION:
The above table shows that 1 3 percent of the respondents are strongly agree for factor prompt
repayment of principle, 33 percent of the respondents are answered agree for the factor, 14 percent of the
respondents are answered no opinion for the factor, 22 percent of the respondents are answered disagree for the
factor and 15 percent of the respondents are answered agree for the factor prompt repayment of principle
INFERANCE:
Majority (33%) of the respondents are agree for the factor Prompt repayment ofPrinciple amount.
43
Table 2.1.1.7 Friendly service
Frequency Percent Valid Percent Cumulative Percent
Valid Strongly agree 42 38.5 38.5 38.5
Agree 59 54.1 54.1 92.7
No opinion 7 6.4 6.4 99.1
Disagree 1 .9 .9 100.0
Total 109 100.0 100.0
Figure 2.1.1.7
INTERPRETATION:
The above table shows that 38 percent of the respondents are strongly agree for factor friendly
service, 54 percent of the respondents are answered agree for the factor, 6 percent of the respondents are answered
no opinion for the factor and .9 percent of the respondents are answered disagree for the factor
INFERANCE:
Majority (54%) of the respondents are agree for the factor friendly service.
44
Table 2.1.1.8 Easy procedure
Frequency Percent Valid Percent Cumulative Percent
Valid Strongly agree 35 32.1 32.1 32.1
Agree 60 55.0 55.0 87.2
No opinion 10 9.2 9.2 96.3
Disagree 4 3.7 3.7 100.0
Total 109 100.0 100.0
Figure 2.1.1.8
INTERPRETATION:
The above table shows that 32 percent of the respondents are strongly agree for factor Easy
procedure, 55 percent of the respondents are answered agree for the factor, 9 percent of the respondents are
answered no opinion for the factor and 3 percent of the respondents are answered disagree for the factor
INFERANCE:
Majority (55%) of the respondents are agree for the factor Easy Procedure.
45
Table 2.1.1.9 Safety of principal
Frequency Percent Valid Percent Cumulative Percent
Valid Strongly agree 8 7.3 7.3 7.3
Agree 34 31.2 31.2 38.5
No opinion 16 14.7 14.7 53.2
Disagree 26 23.9 23.9 77.1
Strongly Disagree 25 22.9 22.9 100.0
Total 109 100.0 100.0
Figure 2.1.1.9
INTERPRETATION:
The above table shows that 7 percent of the respondents are strongly agree for factor Safety of
Principle, 31 percent of the respondents are agree for factor, 14 percent of the respondents are no opinion for
factor, 23 percent of the respondents are d i sagree for factor, 22 percent of the respondents are strongly
d isagree for factor
INFERANCE:
Majority (31%) of the respondents are strongly agree for the factor Safety of principle
46
Table 2.1.1.10 Reputation of the company
Frequency Percent Valid Percent Cumulative Percent
Valid Strongly agree 4 3.7 3.7 3.7
Agree 15 13.8 13.8 17.4
No opinion 50 45.9 45.9 63.3
Disagree 25 22.9 22.9 86.2
Strongly Disagree 15 13.8 13.8 100.0
Total 109 100.0 100.0
Figure 2.1.1.10
INTERPRETATION:
The above table shows that 3 percent of the respondents are strongly agree for factor Safety of
Principle, 13 percent of the respondents are agree for factor, 45 percent of the respondents are no opinion for
factor, 22 percent of the respondents are d isagree for factor, 13 percent of the respondents are strongly
d isagree for factor
INFERANCE:
Majority (45%) of the respondents are no opinion for the factor Safety of principle.
47
2.1.2 ANOVA
Table 2.1.2.1 Reputation and promt
N Mean
Std.
Deviation Std. Error
95% Confidence Interval for
Mean
Minimum MaximumLower Bound Upper Bound
Reputation M 46 3.1739 .97307 .14347 2.8849 3.4629 1.00 5.00
UM 44 3.2045 .95429 .14387 2.9144 3.4947 1.00 5.00
W 19 3.7895 1.03166 .23668 3.2922 4.2867 2.00 5.00
Total 109 3.2936 .99352 .09516 3.1049 3.4822 1.00 5.00
Promt M 46 2.5000 1.16905 .17237 2.1528 2.8472 1.00 5.00
UM 44 3.2500 1.33164 .20075 2.8451 3.6549 1.00 5.00
W 19 3.1579 1.42451 .32681 2.4713 3.8445 1.00 5.00
Total 109 2.9174 1.32027 .12646 2.6668 3.1681 1.00 5.00
Hypothesis
H0: There is no significant difference between the Marital status and the Reputation andPromote payment
H1: There is significant difference between the Marital status and the Reputation and Promotepayment
Inference
There is no significant difference between the marital status and reputation
There is a significant difference between marital status and promote payment
Sum of Squares df Mean Square F Sig.
Reputation Between Groups 5.680 2 2.840 2.983 .055
Within Groups 100.926 106 .952
Total 106.606 108
Promt Between Groups 13.981 2 6.990 4.252 .017
Within Groups 174.276 106 1.644
Total 188.257 108
48
Table 2.1.2.2 Safety and fixed deposit
N Mean
Std.
Deviation Std. Error
95% Confidence Interval for
Mean
Minimum MaximumLower Bound Upper Bound
Safety 25-35 17 2.4118 .93934 .22782 1.9288 2.8947 1.00 5.00
36-45 37 3.2432 1.44155 .23699 2.7626 3.7239 1.00 5.00
46-55 38 3.5000 1.26811 .20571 3.0832 3.9168 1.00 5.00
56-65 17 3.4706 1.17886 .28592 2.8645 4.0767 2.00 5.00
Total 109 3.2385 1.31162 .12563 2.9895 3.4876 1.00 5.00
Fixed
doposit
25-35 17 3.3529 1.57881 .38292 2.5412 4.1647 1.00 5.00
36-45 37 3.3784 1.25502 .20632 2.9599 3.7968 1.00 5.00
46-55 38 3.0526 1.29338 .20981 2.6275 3.4778 1.00 5.00
56-65 17 2.3529 1.27187 .30847 1.6990 3.0069 1.00 5.00
Total 109 3.1009 1.35363 .12965 2.8439 3.3579 1.00 5.00
Sum of Squares Df Mean Square F Sig.
Safety Between Groups 15.134 3 5.045 3.104 .030
Within Groups 170.664 105 1.625
Total 185.798 108
Fixed deposit Between Groups 13.528 3 4.509 2.568 .058
Within Groups 184.362 105 1.756
Total 197.890 108
Hypothesis
H0: There is no significant difference between the age and safety and fixed deposit
H1: There is significant difference between the age and safety and fixed deposit
Inference
There is no significant difference between the age and fixed deposit
There is a significant difference between age and safety
49
2.1.3 INDEPENDENT T-TEST
Table 2.1.3.1 regular payment, promtpay and friendly service
Gender N Mean Std. Deviation Std. Error Mean
RegularP Male 56 1.0714 .25987 .03473
Female 53 2.1509 .49599 .06813
PromtPay Male 56 1.0714 .25987 .03473
Female 53 2.1321 .34181 .04695
FriendlyS Male 56 1.2500 .43693 .05839
Female 53 2.1698 .42679 .05862
Independent Samples Test
Levene's Test for Equality of Variances t-test for Equality of Means
F Sig. t df
RegularP Equal variances assumed 4.993 .028 -14.342 107
Equal variances not assumed -14.117 77.579
PromtPay Equal variances assumed 4.518 .036 -18.298 107
Equal variances not assumed -18.162 97.007
FriendlyS Equal variances assumed 2.844 .095 -11.110 107
Equal variances not assumed -11.117 106.890
Hypothesis
H0: There is no significant difference between the gender and regular payment, promotepayment and friendly service
H1: There is significant difference between the gender and regular payment, promote paymentand friendly service
Inference
There is no significant difference between the gender and friendly service
There is a significant difference between gender and regular payment and promote payment
50
Table 2.1.3.2 share bond and mutual fund
Gender N Mean Std. Deviation Std. Error Mean
Sharebond Male 56 1.0714 .25987 .03473
Female 53 2.1321 .34181 .04695
Mutualfund Male 56 1.0357 .18726 .02502
Female 53 2.0755 .26668 .03663
Independent Samples Test
Levene's Test for Equality of Variances t-test for Equality of Means
F Sig. t Df
Sharebond Equal variances assumed 4.518 .036 -18.298 107
Equal variances not assumed -18.162 97.007
Mutualfund Equal variances assumed 3.362 .070 -23.660 107
Equal variances not assumed -23.438 92.757
Hypothesis
H0: There is no significant difference between the gender and share bond and mutual fund
H1: There is significant difference between the gender and share bond and mutual fund
Inference
There is no significant difference between the age and mutual fund
There is a significant difference between age and share bond
51
2.1.4 CORRELATION
Table 2.1.4.1 gold and insurance
Mean Std. Deviation N
Gold 1.7064 .67086 109
Insurance 1.8624 .79893 109
Correlations
Gold Insurance
Gold Pearson Correlation 1 .874**
Sig. (2-tailed) .000
N 109 109
Insurance Pearson Correlation .874** 1
Sig. (2-tailed) .000
N 109 109
**. Correlation is significant at the 0.01 level (2-tailed).
INTERPRETATION:
The two factors are tested for correlation. Pearson’s correlation test was performed. The
all the above factors are both positively and negatively correlated with each others. The gold and
insurance are positively correlated.
52
Table 2.1.4.2 NSc and fixed deposit
Mean Std. Deviation N
NSC 1.3303 .62443 109
Fixeddeposit 1.5872 .61178 109
Correlations
NSC Fixeddeposit
NSC Pearson Correlation 1 .191*
Sig. (2-tailed) .047
N 109 109
Fixeddeposit Pearson Correlation .191* 1
Sig. (2-tailed) .047
N 109 109
*. Correlation is significant at the 0.05 level (2-tailed).
INTERPRETATION:
The two factors are tested for correlation. Pearson’s correlation test was performed. The
all the above factors are both positively and negatively correlated with each others. The NSC and
fixed deposit are positively correlated.
53
2.2 FINDINGS OF THE STUDY
The following are findings of the study.
It is observed that 42% of the respondents are married citizens.
Majority (35%) of the respondents are getting monthly income as 30001 to 45000.
Majority (40%) of the respondents are having habit of saving 10001 to 15000 per month.
Majority (45%) of the respondents are highly satisfied for online interest payment.
Majority (47%) of the respondents are strongly agree for the factor regular payment of interest.
Majority (33%) of the respondents are strongly agree for the factor Prompt repayment of
Principle amount.
Majority (55%) of the respondents are strongly agree for the factor friendly service.
Majority (91%) of the respondents are strongly agree for the factor Easy Procedure.
Majority (100%) of the respondents are strongly agree for the factor Safety of principle.
Majority (89%) of the respondents are strongly agree for the factor Reputation of the company.
Majority (57%) of the respondents are preferred to invest 31 to 45 percent of money in shares
and bonds.
Majority (43%) of the respondents are preferred to invest 16 to 30 percent of money in mutual
funds.
Majority (53%) of the respondents are preferred to invest 31 to 45 percent of money in fixed
deposits.
54
Majority (68%) of the respondents are preferred to invest less than 15 percent of money in NSC
& Postal Savings.
Majority (41%) of the respondents are preferred to invest 16 to 30 percent of money in
insurance.
Majority (59%) of the respondents are preferred to invest Above 46 percent of money in Gold.
Majority (43%) of the respondents are preferred to invest 31 to 45 percent of money in RealEstate.
The study indicates that 85 % of the respondents come to know about the public deposits scheme
offered by SIL through advertisement which the company publishes in leading English daily and
a vernacular daily.
Majority (46%) of the respondents are deposited in Cumulative deposit scheme.
Majority of the respondents prefer the ‘Safety’ as a factor to deposit in a company.
Majority (45%) of the respondents are deposited in three years deposit scheme.
Majority (58%) of the respondents are preferred quarterly frequency of interest.
Majority (84%) of the respondents are having one deposit.
Majority (84%) of the respondents are preferred for renewal.
Majority (76%) of the respondents are interest to deposit again.
Majority (63%) of the respondents are not aware of companies act.
Majority (86%) of the respondents are not opted for conversion of deposit.
Majority of the respondents are ranked for higher amount on maturity.
55
Majority (100%) of the respondents are recommending for deposit scheme.
In discussion with the president and secretary of the company, it is so prudent that the company
has accepted such deposits for the socio-welfare cause and actually it caters the needs of the
middle income groups and senior citizens to hold the investment at a higher secured place.
56
3 Suggestions and conclusion
3.1 Suggestions
The researcher has analyzed the depositor’s attitude and preference towards public
deposits scheme offered by SIL. The analysis has been carried out by applying certain
statistical tools such as fixed base indices, chi-square test and simple ranking table. The
findings of the study have enabled the researcher to offer the following suggestions.
The company can increase interest rates to attract more number of people.
The company can introduce several deposit schemes to attract the younger
generations in investing in company.
To attract more number of people to deposit, the company can extend the
advertisement in various media.
They can give prizes or gifts packages for those who hold more number of deposit
in the company.
Company can create awareness about the deposit schemes to all the employees those
who working in the all divisions of the company.
To increase deposit and to protect Employees Company can hold at least one deposit for
the employee.
The terms and conditions laid down by the company for public deposit scheme are
very scientific and in line with the terms and conditions of public deposit schemes of
highly reputed companies. This is yet another reason why the company is able to manage
public deposits very efficiently. The company may continue with the same and remain a
model for other companies to emulate.
57
With the advent of economic recession, Indian banks are facing heavy cash crunch thesedays.
The rate of inflation also proceeds at a faster pace. In order to keep the balance in the economy,
RBI takes quantitative measures by raising the bank rates from time to time with the latest
revision of increase in basis points of 25 basis point in the bank rates, the bank interest rates for
deposits has grown up to 9.75% PA and rates of senior citizens deposits has almost
reached 10.25% PA. In order to keep pace they extend higher interest rates on deposits
than public sector banks.
It is also worthwhile to mention that the most of the depositors in banks are now pre-closing
their existing deposits and making up new deposits to take up the competitive advantage of
revised higher interest offered by the banks. In this juncture, it is necessary for the company to
revise the rates for the depositors. This share enable the company to retain the existing
depositors and to attract the fresh depositors.
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3.2 CONCLUSION
The success of a scheme provided by a business enterprise largely depends on the how
best it serves and satisfies the depositors the attitude of the depositors keep changing. What
was bought yesterday is discarded today since the expectation of the depositors change from
time to time, public deposit scheme at SIL reaches the large portion of the middle income
group and it is the pioneer in the market, tailor made services cannot satisfy all the
depositors at all times. The company needs to understand the requirements of the depositors
and to serve them only best at all times which is its regular practise.