Final Sbi Report Final

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RESEARCH REPORT

SUMMER INTERNSHIP PROGRAM

SUBMITTED BY:

SAUBHAGYA KUMAR SAHOO

ID NO.: SI/SK-161

SUBMITTED TO:

PLACEMENT CELL

NEW DELHI INSTITUTE OF MANAGEMENT

NEW DELHI

(APPROVED BY AICTE)

AND

GULF BULLS SECURITIES PVT LTD

FARIDABAD, HARYANA

NEW DELHI INSTITUTE OF MANAGEMANT Page 1(Approved by AICTE)

61-62 Tughlakabad Institutional AreaNewDelhi-110062



EQUITY VALUATION

OF

STATE BANK OF INDIA

SUBMITTED BY:


ID NO.: SI/SK-161

GULF BULLS SECURITIES PVT LTD





CERTIFICATE OF THE COMPANY





ACKNOWLEDGEMENT

It gives me immense gratification to place on records my profound gratitude sincere appreciation

to each and every one of those who have helped me in this endeavor.

Firstly I would like to thank Mr. Sachin Gupta for allowing me to do Summer internship

Training at Gulf Bulls Securities Pvt. Ltd.

I extend my sincere thanks to Mr. Animesh Aseem his continuous guidance, cooperation and

valuable suggestions to initiate and carry out the study.

I thank all the member of the Gulf Bulls Securities Pvt. Ltd. Who have guided me through the

working of the project.

Date: 30.06.09


SI/SK-161





PREFACE

Today in the banking sector every bank nationalized or private are striving to reach the pinnacle.Though in the national scenario the Govt./Nationalized banks are leading bank in the

metropolitan context the private banks are leading both in business as well as service.

STATE BANK OF INDIA has built its leadership by making itself as India’s largest commercial

bank having largest retail lender with great brand image, high market capitalization and also to

find place in the fortune global 500 list.

The Broad objective of the project is to analysis the movement of SBI share and trade in future

by taking into consideration the present economic scenario, movement of banking sector and

how much the SBI share is sensitive with the upcoming news and global effect. It gives a clear

picture about the movement of SBI share in different condition which helps the investors,

brokerage houses to invest in future.

This study is basically divided into five major parts. The first part of the report includes the

current economic scenario of India. The second part deals with the banking Industry and its

comparison with other industries. The third part includes the Introduction of State bank of India.The fourth part is related to historical analysis, upcoming and Global effect of SBI shares. The

last part deals with limitations, conclusion and suggestions.





TABLE OF CONTENTS

Sl.no

INDEXPAGE NO

1 Title Page 1-2

2 Certificate of the Company 3

3 Acknowledgement 4

4 Preface 5

5 Executive Summary of the Project -1 7

6 Economic scenario 10-24

7 Banking Industry 25-36

8 Profile of the SBI Group -2

9 Introduction 37-44

10 History 44-46

11 SBI Profile and market share 46-49

12 Work Description -3

13 Analysis 50-72

14 Historical Data 73

15 Upcoming & Global Effect 74-86

16 Finding & Analysis -4

17 Difficulties faced and Major Limitations 87

18 Conclusion & Suggestions -5 88-91





EXECUTIVE SUMMARY

1. Economic Scenario:

This part describes the economic position of the world and brief about the Indian Economy. The

position of fiscal and monetary policy, Tax structure, Balance of payment, Import, Export, Trade

Deficit, Foreign Exchange Reserves, FII, FDI, Special Economic Zones, IMF, Per Capital

Income, GDP, Investment, Savings, IIP, Unemployment, Inflation.

2. Banking Industry:

This part describes about the growth in Banking Industry, Several initiates taken by Government,

Innovation in Banking Industry, Barrier to entry and comparison of Banking Industry with other

sector and SWOT analysis of SBI.

3. Profile of SBI Group:

This part describes about the SBI Group which includes all the seven Banks, Foreign

subsidiaries, Non Banking Subsidiaries, Joint Ventures and the Management committee.

4. SBI Profile:

This part describes about the SBI profile, history, achievements and rewards achieved by SBI.

Details about the Share holding pattern, Dividend, Financial and Historical data.

5. Analysis

This part describes about the detail study of the movement of SBI shares in weekly, monthly and

yearly on the basis of Historical data.

6. Upcoming Effect

This part describes how the upcoming news i.e. Election result, dividend declared etc. effect the

SBI share price.

7. Global Effect

This part explain about the effect of changes in repo rate, reverse repo rate, CRR, SLR,

inflation , GDP and IIP effect the movement of SBI share price.





GULF BULLS SECURITIES

ABOUT COMPANY

Gulf bulls Securities Pvt. Ltd. a Company registered under the Companies Act, 1956 .Gulf bulls

is a professionally managed group headed by the directors, having vast experience in the stock

market. Besides the core promoters, the group is having its full fledged teams headed by young

and dynamic professionals like chartered accountants, company secretaries, MBAs, IT

professionals etc. to handle the various divisions of the company.

The Company has a balanced mix of revenues from emerging markets and is well positioned toleverage the growth potential offered by these markets. GBS provides investors a robust platform

to trade in Equities in NSE, BSE, and Derivatives in NSE. With its ability to evolve with the

changing environment the Company has been able to put itself to the forefront of stock broking

activities. With its network spreading across various parts of India, it has made a distinct mark

among the stock broking houses and high net worth corporate as well as individuals.

The company research team tracks the economy, industries and companies and provides the

latest information and analysis. The company content offers financial information, analysis,

investment guidance, news & views, and is designed to meet the requirements of everyone from

a beginner to a savvy and well-informed trader.

BUSINESS

• Equity

• Derivatives

• IPO

• Insurance

• Mutual Funds





BUSINESS PARTNERS

• SMC global

• Religare

• Karvy

MANAGEMENT TEAM

NAME DESIGNATION

Mr. Vivek Rana Chairman / Managing Director

Mr Rajiv Balhara Director

Mr. Kuldeep Sharma Director

Mr. Yajur Chaudhary Director

Mr. Rajneesh Aggarwal Director

Mr. Vipin Kumar Director

Mr. Gajraj Singh Director

Mr. Kanishk Dixit Director

MISSION

The Company Mission is to create and introduce the new definition of investments around the

Globe.





VISION

The Company Vision is to grow the business and make their presence across the World.

ECONOMIC SCENARIOWORLD ECONOMY

“United Nations Department of Economic and Social affairs (DESA) said the world economy isexpected to shrink by 2.6% in 2009 according to the pessimistic scenario of the forecast presented in January 09.

Source: The Economic Times DT 29.05.09

RECENT GROWTH TRENDS IN GLOBAL ECONOMY

Improving vital signs across the Globe from US GDP to Japanese factory output and Britishhouses prices hopes that the World economy was responding after months in intensive care.

USA

The US economy shrank 5.7% from the first quarter of 2008, less than the previous estimate of 6.1% and slightly worse than market expectations for a 5.5% fall.

JAPAN

The factory output rose to 5.2% in April, the biggest jump in more than half a century and

manufactures forecast further gains.

SOUTH KOREA

The industrial output expanded for a fourth straight month.

GERMAN

Retail sales showed a 0.5% month rise in April 09 while private consumption for the first quarter raised a similar amount despite a 3.8% contraction in GDP.

BRITAIN

The house prices registered a surprise rise in May-09 the second time in three months.





INDIAN ECONOMY

Over the last couple of decades, India has established itself as one of the fastest growing

economies in the world. India is also advancing towards the economical growth .The economy

has moved decisively to a higher growth phase. There is no doubt that the economy has moved

to a higher growth plane, with growth in GDP at market price exceeding 8 percent in every year

since 2003-04.

The economy of India is as diverse as it is large, with a number of major sectors including

manufacturing industries, agriculture, textiles and handicrafts, and services. Agriculture is a

major component of the Indian economy, as over 66% of the Indian population earns its

livelihood from this area.

The Indian economy entered the financial year 2008-09 with a buoyant growth rate. The average

growth rate during the recent four years namely 2004-05 to 2007-08 has been at record levelclose to 9 per cent when compared to the average growth rate of 5.6 per cent recorded during the preceding four years. There has been a moderation in the growth in the current year due to thefallout of the global crisis. Compared to other emerging economies, India has several strengthsthat can help mitigate the adverse effects of global financial crisis. The Government has takenseveral measures in this direction and the economy is expected to return to the high growthtrajectory.

FISCAL POLICY

• The union budget 2008-09 was presented with fiscal deficit estimated at 2.5% of

GDP and revenue deficit at 1% of GDP.

• The gross market borrowings for the current fiscal year 2008-09 pegged at Rs

3,06,000 crore, the Government has tripled its open market borrowing from the

original Rs 1,33,000 crore thus pushing up the fiscal deficit from 2.5% to 6%.

• A higher deficit and consequent borrowing by the Government will crowd the private

sector out and make an interest rate cut tough.

• The government on an average has been borrowing Rs 838.56 crore daily from the

open market to fund its fiscal deficit.

• 10 year government security shot up by 7 Bps to 6.36% on budget day itself.

• The movement in bond prices shows that the market is not comfortable with the

Government borrowing.

• The change in bond prices both short and long term is indicative of the cost of funds

in the banking system.





Year Fiscal Deficit Revenue Deficit

2004-05 125202 78338

2005-06 146435 92299

2006-07 142573 80222

2007-08 126912 52569

2008-09 326515 241273

The fiscal policy for the year 2009-10 will continue to be guided by the objectives of keeping theeconomy on the higher growth trajectory amidst global slowdown by creating demand through

increased public expenditure in identical sectors.

The medium term objective will be to revert to the path of fiscal consolidation at the earliest,

with improvement in the economic situation.

“India Inc can now forget about cheap credit because the cash strapped the credit market by

borrowing heavily from the banking system.”

Source: India Today DT 02.03.09 on Interim Budget.

The doubling of fiscal deficit may place pressure on interest rates unless accommodating policy

measures are taken. Even the fall in interest rates however, will be muted due to the government

massive borrowing.

Source: India Today DT 02.03.09 by Falguni Nayer, Managing Director Kotak Investment

Banking.

TAX





The Net Direct Tax collection falls short of Rs 6,000 crore than the government revised estimate

of Rs 3.45 lakh crore for 2008-09.But the net collection grew by 8.33% over the corresponding

period previous year.

INCOME TAX

The personal income tax collection for the fiscal year ended march 31, 2009 exceeded the

revised target of Rs 1.23 lakh by more Rs 1.000 crore.

CORPORATE TAX

The corporate tax was reduced to Rs 2.13 lakh crore against the revised estimates of Rs 2.22

lakh.

FRINGE BENEFIT TAX (FBT)

The FBT was increased to Rs 7116 crore showed a 12.38% growth over the previous year.

SECURITIES TRANSACTION TAX (STT)

The STT was slipped by 36.95% to Rs 5408 crore.

Source: The Economic Times DT 22.05.09.

GOODS AND SERVICE TAX (GST)

The UPA government is planning to introduce the goods and services tax (GST) form

01.04.2010 by which the consumer will pay a single rate of tax on goods and services sold across

India.


CENTRAL EXCISE

General Cenvat rate on all goods reduced from 16% to 14% to give a stimulus to the

manufacturing sector. Excise duty reduced on small cars, two wheelers and three wheelers from

16% to 12%.

CENTRAL SALES TAX (CST)

Central sales tax rate being reduced from 3% to 2% from Apr 1, 2008.





BANKING CASH TRANSACTION TAX (BCTT)

Banking cash transaction Tax being withdrawn with effect from Apr 1, 2009.

MONEYTARY POLICY

The changes in the domestic and global economy, impacting the price level and financial

stability, pose serious challenges in the conduct of monetary policy. The major thrust of the

monetary policy has been to facilitate the growth of the economy in a non- inflationary

environment.

DATE REPO

RATE

RE

REPO

RATE

CRR SLR

26.04.08 7.75

10.05.08 8.00

24.05.08 8.25

11.06.08 8.00 6.00

23.06.08 8.50 6.00

05.07.08 8.50

19.07.08 8.75

29.07.08 9.00 6.00

03.08.08 9.00

11.10.08 6.50

20.10.08 8.00 6.00

25.10.08 6.00

01.11.08 24.00

03.11.08 7.50 6.00

08.11.08 5.50





06.12.08 6.50 5.50

02.01.09 5.50 4.00

17.01.09 5.00

05.03.09 5.00 3.50

21.04.09 4.75 3.25

BALANCE OF PAYMENT (BOP)

The strength, resilience and stability of the country’s external sector arereflected by various indicators. These include a steady accretion to reserves,moderate levels of current account deficit, changing composition of capital

inflows, flexibility in exchange rates, sustainable external debt levels withelongated maturity profile and an increase in capital inflows.

CURRENT ACCOUNT

The current account Balance is Deficit by 22332 cr in absolute value in the period (Apr–Dec)

2008-09 as compared to a Deficit of 17034 cr in the last year from (Apr-Dec) 2007-08.

IMPORT

The import is increased by 225809 in US $ million in absolute value in the period (Apr–Dec)

2008-09 as compared to 171718 in US $ million in the last year from (Apr-Dec) 2007-08.

EXPORT

The import is increased by 131990 in US $ million in absolute value in the period (Apr–Dec)

2008-09 as compared to 112737 in US $ million in the last year from (Apr-Dec) 2007-08.





TRADE DEFICIT

There is a Trade Deficit of 93819 in US $ million in the period (Apr–Dec) 2008-09 as compared

to a Deficit of 58981 in US $ million in the last year from (Apr-Dec) 2007-08.

CAPITAL ACCOUNT

The capital account is increased to 24788 cr in absolute value in the period (Apr–Dec) 2008-09

as compared to 22357 cr in the last year from (Apr-Dec) 2007-08.

FOREIGN EXCHANGE RESERVES (FER)

In the wake of surge in capital flows and build up of current account surpluses , FER comprising

external assets like Foreign currency assets ( FCA) , gold, SDRS and reserve Tranche position in

the IMF that are readily available to and controlled by monetary authorities of management of

BOP , scaled new highs in recent years.

FER have recorded their highest growth in more than a year in the week following the general

elections results. The Forex reserves which include foreign currency assets, gold and drawing

rights with IMF rose to $ 6.4 billion to touch $260.6 billion during week ended May 22 09 the

highest weekly rise since April 2008.


FOREIGN INSTITUTIONAL INVESTORS (FII)

The net investment of foreign investors in the stock of Indian companies stood at $ 4.2 billion

(around Rs 20,473 crore) with most of the inflows coming in the month of May 09.

So far in 2009, FIIS have bought share worth Rs 1,96,021 crore while they sold equities values at

Rs 1,75,547 crore resulting in a net inflow of Rs 20,472 crore.





Source: The Economic Times 31.05.09

FOREIGN DIRECT INVESTMENT (FDI)

The FDI worth $11 billion flowed into the country between Oct 08 and March 09. In the full

fiscal (FY 09) FDI was almost flat at $ 13.8 billion. Out of the $33.6 billion FDI in the FY 09

only a third was invested in the second half while a bulk of it entered during the first half. This is

the first time since 1999 fiscal which recorded FDI at $ 2.5 billion and FII at a negative $61

million, that FDI inflows have offset FII outflows by such a huge margin.

YEAR Rs in crore

2001-02 6130

2002-03 5035

2003-04 4322

2004-05 6051

2005-06 8961

2006-07 22826

2007-08 34362

2008-09 33619


SPECIAL ECONOMIC ZONES

Another major policy issue in the trade sector which created a lot of heat was that of SEZs. TheSEZ Act, 2005, supported by SEZ Rules, came into effect on February 10, 2006. The main

objectives of the SEZ Act are generation of additional economic activity, promotion of exportsof goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities and development of infrastructure facilities. Various incentives andfacilities are offered to both – units in SEZs for attracting investments into SEZs (including





foreign investment) as well as for SEZ developers. These incentives and facilities areexpected to trigger a large flow of foreign and domestic investment in SEZs, particularly ininfrastructure and productive capacity, leading to generation of additional economic activity andcreation of employment opportunities. The SEZ Rules provide for different minimum landrequirements for Different classes of SEZs. Every SEZ is divided into a processing area where alone the SEZunits are set up and a non-processing area where the supporting infrastructure is to be created.

Developers of special economic zones (SEZ) and units inside such zones can from now on claimrefunds of taxes paid on all input services, regardless of whether the services are used inside or outside tax-free zones.


Developers can set up 2 or more adjacent SEZs and merge them without worrying about the area

limit of 5000 hectares.


INTERNATIONAL MONEYTARY FUND (IMF)

At present India has a shareholding of 1.91% in IMF with a quota of $4158.20 million in SDRS.

India may contribute $10-11 billion to the IMF as its contributions to the $500 billion that the

global institution is raising from 20 powerful nations for lending crisis stricken countries.


PER CAPITAL INCOME

The per capital monthly income of an average Indian has for the first time crossed the Rs 3,000mark on current price levels. The per capital figures may look a bit less impressive when

adjusted for inflation, reached only Rs 25,494 against Rs 25,661 per annum estimated in Feb-09.


MACROECONOMIC FRAMEWORK STATEMENT





Sl. NO Item Absolute value Percentage change

April - December April - December

Real Sector 2007-08 2008-09 2007-08 2008-09

1 GDP at factor cost (Rs. thousand crore) F

a) At current prices 4320.8 QE 4989.8 AE 14.3 15.5

b) At 1999-2000 prices 3129.7 QE 3351.6 AE 9.0 7.1

2 Index of industrial production (1) 258.6 268.7 9.2 3.9

3 Wholesale price index (Base 1993-94=100)(2) 219.0 230.1 4.8 5.1

4 Consumer price index (2001=100)(3) 134.0 147.0 5.5 9.7

5 Money Supply (M3) (Rs. hundred crore)(4) 3892.7 4235.1 11.7 10.6

6 Imports at current prices*

a) In Rs. Crore 693445 1003947 13.0 44.8

b) In US $ million 171718 225809 27.8 31.5

7 Exports at current prices*

a) In Rs. crore 454997 585594 9.2 28.7

b) In US $ million 112737 131990 23.5 17.1

8 Trade Deficit (in US$ million)* -58981 -93819

9 Foreign currency assets

a) In Rs. crore 1050485 1194790 39.6 13.7

b) In US $ million 266553 246603 56.6 -7.5

10 Current Account Balance (In US$ mill)@ -17034 -22332

Government Finances (in Rs. crore) #

1 Revenue receipts 355,646 375,937 26.6 5.7

2 Tax revenue (Net) 295,994 309,927 27.5 4.7

3 Non-tax revenue 59,652 66,010 22.4 10.7

4 Capital receipts (5+6+7) 118,607 221,279 15.4 86.6





5 Recovery of loans 3,304 2,974 -58.5 -10.0

6 Other receipts 37,725 43

7 Borrowings and other liabilities 77,578 218,262 -18.2 181.3

8 Total receipts (1+4) 474,253 597,216 23.6 25.9

9 Non-Plan expenditure 337,090 426,419 23.8 26.5

10 Revenue Account 280,050 403,758 10.3 44.2

Of which:

11 Interest payments 111,764 123,735 20.7 10.7

12 Capital Account 57,040 22,661 209.8 -60.3

13 Plan expenditure 137,163 170,797 23.0 24.5

14 Revenue Account 114,806 146,009 22.3 27.2

15 Capital Account 22,357 24,788 26.9 10.9

16 Total expenditure (9+13) 474,253 597,216 23.6 25.9

17 Revenue expenditure (10+14) 394,856 549,767 13.6 39.2

18 Capital expenditure (12+15) 79,397 47,449 120.4 -40.2

19 Revenue deficit (17-1) 39,210 173,830 -41.3 343.3

20 Fiscal deficit {16-(1+5+6)} 77,578 218,262 -18.2 181.3

21 Primary deficit (20-11) -34,186 94,527 -1639.9 376.5

GROSS DOMESTIC PRODUCT (GDP)

During the year 2008-09 annual real GDP growth (at constant 1999-2000 prices) is 6.7 per centas compared to the growth rate of 9.1 per cent during 2007-08. The nominal growth rates of GDP

at current market prices during the respective years are 14.9 per cent and 14.4 per cent. As suchthe GDP at current market prices for the year 2008-09 stands at Rs.54,26,277 crore as againstRs.47,23,400 crore in 2007-08. Due to the prevailing uncertainty in the world economy, the realGDP growth has been assumed at 7 per cent in 2009-10. After factoring in inflation expectation,the GDP growth (at current market prices) for 2009-10 is assumed at 11 per cent. Thus the GDP





for the year 2009-10 (at current market prices) is set at Rs.60, 21,426 crore. In the following twoyears, with the assumption that economy will start showing signs of revival, the real GDP growthhas been assumed at 8 and 9 per cent respectively. After factoring in medium term inflationexpectation, the GDP growth at current market prices is projected at 13 per cent and 13.4 per cent respectively for 2010-11 and 2011-12.

2007-08 2008-09

Q1 Q2 Q3 Q4 A Q1 Q2 Q3 Q4 A

Agriculture 4.3 3.9 8.1 2.2 4.62 3.0 2.7 -0.8 2.7 1.9

Mining 0.1 3.8 4.2 4.7 3.2 4.6 3.7 4.9 1.6 3.7

Mfg 10.0 8.2 8.6 6.3 8.27 5.5 5.1 0.9 -1.4 2.52

Utilities 6.9 5.9 3.8 4.6 5.3 2.7 3.8 3.5 3.6 3.4

Construction 11.0 13.4 9.7 6.9 10.2 8.4 9.6 4.2 6.8 7.25

Transport, Hot, Com 13.1 10.9 11.7 13.8 12.37 13.0 12.1 5.9 6.3 9.32

Finance, Real Est. 12.6 12.4 11.9 10.3 11.8 6.9 6.4 8.3 9.5 7.77

Govt & Other Ser 4.5 7.1 5.5 9.5 6.65 8.2 9.0 22.5 12.5 13.05

GDP at Factor cost 9.2 9.0 9.3 8.6 9.02 7.8 7.7 5.8 5.8 6.77

INVESTMENT

Both private and public savings have contributed to higher overall savings. Private savings have

risen by 6.1 percent points of GDP over the Tenth five year plan period.

SAVINGS







ANNUAL AVERAGES

Description Weight 2007-08 2008-09

Food Products 90.8 198.2 179.2Beverages, Tobacco 23.8 498 575.9

Cotton Textiles 55.2 164 159.4

Wool, Silk and fibre 22.6 281.2 280.4

Jute 5.9 120.7 108.6

Textile Products 25.4 295.5 306.4

Wood , Furniture and Fixtures 27 127.9 114.7

Paper & Paper and Printing 26.5 255.3 258.6

Leather 11.4 167.8 156.1

Basic Chemicals 140 313.4 322.5

Rubber, Plastic, Petroleum and Coal 57.3 246.4 242.6

Non-Metallic Mineral 44 323.2 326.5

Metal and Alloy 74.5 312.7 325.1

Metal 28.1 172.9 166

Machinery and Equipment 95.7 394.4 428.7

Transport Equipment and Parts 39.8 378.4 386.7

Other Manufacturing Industries 25.6 357.4 359.2

Mining 104.7 171.6 175.6

Manufacturing 793.6 287.2 293.8

Electricity 101.7 217.7 223.7

General Index 1000 268 274.3





UNEMPLOYMENT

The Eleventh Plan envisages rapid growth in employment opportunities while ensuring

improvement in the quality of employment. The employment generation strategy of the Eleventh

Plan is also predicated on the reduction of underemployment and the movement of surplus

labour in agriculture sector to higher wage and more gainful employment in non-agriculturalsector. Employment in manufacturing is expected to grow at 4 per cent while construction and

transport and communication are expected to grow at 8.2 per cent and 7.6 per cent, respectively.

The projected increase in total labour force during the Eleventh Plan is 45 million. As against

this, 58 million employment opportunities would be created in the Eleventh Plan. This would be

greater than the projected increase in labour force leading to a reduction in the unemployment

rate to below 5 per cent.

YEAR UNEMPLOYMENT RATE (%)

2002 8.8

2003 8.8

2004 9.5

2005 9.2

2006 8.9

2007 7.8

2008 7.2

INFLATION





Inflation measured in terms of the WPI, were in the range of 3.8-6.9 per cent in 2003-04, 4.3-8.7 per cent in 2004-05, 3.3-5.7 per cent in 2005-06, 3.7-6.7 per cent in 2006-07 and 3.1-8.0 per cent during April-March 2007-08. The current fiscal year started with inflation at close to 8 per cent and reached double digits in the first week of June. It rose to a high of 12.9 per cent in thefirst week of August and continued to be over 12 per cent in September. In October 2008 it camedown to below 12 per cent and subsequently witnessed a sharp fall into single digit in the firstweek of November 2008. It has continued to decline since then except for a brief upswing in mid

January 2009 and as of the week ending January 31, 2009 was 4.39 per cent.

CENTRAL LOAN OUTSTANDING AGAINST EACH STATE IN CRORE

AS ON 31ST MARCH

STATE NAME DEBT

UP 21049

AP 15226

WB 14254

GUJARAT 10640

KARNATAKA 9700

MP 9380

ORISSA 8681

MAHARASHTRA 8504

BIHAR 8215

RAJASTHAN 7672

TN 7486

KERALA 5982





PUNJAB 3358

JHARKHAND 2489

CHHATTISGARH 2262

ASSAM 2136

HARYANA 2043

J&K 1852

HP 963

MANIPUR 922

GOA 681

TRIPURA 454

ARUNACHAL PRA 406

UTTARAKHAND 380

NAGALAND 323

MEGHALAYA 314

MIZORAM 308

SIKKIM 176

BANKING INDUSTRY

The growth in the Indian Banking Industry has been qualitative than quantitative and it isexpected to remain the same in the coming years. The country’s middle class accounts for over 320 million people. In correlation with the growth of the economy, rising income levels,increased standard of living and affordability of banking products are promising factors for continued expansion. The Indian banking industry is in the middle of an IT revolution, focusingon the expansion of retail and rural banking. Players are becoming increasingly customer- centricin their approach, which has resulted in innovative methods of offering new banking productsand services. Banks are now realizing the importance of being a big player and are beginning to

focus their attention on merger and acquisitions.

The favorable economic condition including the sustained acceleration in the pace of growth inindustrial sector, buoyancy in services sector and sharp spurt in real estate sector together again





facilitated rise in the advances of the banking sector. But now the public sector banks have alsowoken up with the market potential aggressively brought down their NPA levels and improvedtheir capital Adequacy ratios and scaled up their fee based income as well. As a result we findthat in the quarter ended June 2007 the Public sector banks reported better 45% growth in net profit than 35% growth registered by private sector banks. But on an overall perspective, adecent 43% growth in profits by the banking sector as a whole is quite credible. Many banks arehopeful of effecting significant NPA recoveries due to Securitization Act. Recoveries from the NPAs which have been provided for add to the other income. Thus going forward costcontainment and recovery management are the key challenges facing Indian banks to remaincompetitive.

STRUCTURE

The Indian banking system can be classified into nationalized banks, private banks andspecialized banking institutions. The industry is highly fragmented with 30 banking unitscontributing to almost 50% of deposits and 60% of advances. The Reserve Bank of India is theforemost monitoring body in the Indian Financial sector. It is a centralized body that monitorsdiscrepancies and shortcomings in the system.

Industry estimates indicate that out of 274 commercial banks operating in the country, 223 banks are in the public sector and 51 are in the private sector. These private sector banks include24 foreign banks that have begun their operations here. The specialized banking institutions that

include cooperatives, rural banks, etc. form a part of the nationalized banks category. There areabout 67,000 Branches of Scheduled banks spread across India. As far as the present scenario isconcerned the Banking Industry in India is going through a transitional phase.

Based on the projections made in the India vision 2020 prepared by the planning commissionand the Draft 10th plan, the report forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate. The total assets of all scheduled commercial banks by end March2010 is estimated at Rs 40, 90,000 crores.

SEVERAL MEASURES INITIATED BY THE RESERVE BANK OF INDIA BETWEENNOVEMBER 2008 AND JANUARY 2009.

Several measures initiated by the RBI have resulted in banks reducing their deposit rates between November 2008 and January 2009. The range for deposit rates for public sector banksvaried from 5.25 to 8.5 per cent, foreign banks at 5.25 to 7.75 per cent and private sector banksat 4 to 8.75 per cent.

GOVERNMENT INITIATIVES• Bank rate cuts announced in the stimulus packages.

• Cash withdrawals from bank will not attract tax from April 1, 2009 following abolition of the banking cash transaction tax (BCTT) in the Union Budget 2008-09.





• Inter-ATM usage transaction became free of charges effective April 1, 2009.

• Affidavit and photo should be enough for opening saving account.

• RBI has increased minimum value for high value clearing to Rs 5 lakh from May-09further to Rs 10 lakh by August and will be withdrawn completely by Nov-09.

•

An India owned company is one where the beneficial foreign ownership is less than 50%and where the right to appoint the board is with resident Indians.

EVENTS

In the post-crisis quarter caused due to collapse of Lehman Brothers, large corporate like Infosysmoved their deposits to State Bank of India (SBI), the country's largest bank. Infosys hasrevealed that it transferred deposits of nearly US$ 200.61 million from ICICI Bank to SBI lastyear.

Source: Annual Policy for 2008-09 of Reserve Bank of India

INNOVATIONS IN BANKING INDUSTRY

Over the years, the banking sector in India has seen a number of changes. Most of the banks

have begun to take an innovative approach towards banking with the objective of creating more

value for customers, and consequently the banks. Some of the significant changes in the Indian banking sector are discussed below:

• Technology for Value Creation:

Banks began to use technology to provide better quality of services at greater speed. Internet banking and mobile banking made it convenient for customers to do their banking fromgeographically diverse places.

• Rural India Catching Up:

With a majority of the Indian population living in rural areas, rural banking forms a vitalcomponent of the Indian banking system. Banks also sharpened their focus on rural markets andintroduced a variety of services geared to the special needs of their rural customers.

• Banking Beyond Banking:

While traditionally, banking meant 'borrowing and lending', in the latter part of the 20th century,the word took on a different meaning altogether. Banks no longer restricted themselves totraditional banking activities, but explored newer avenues to increase business and capture newmarkets.

• The Changing Face of Banking:





Many analysts predict still more revolutionary changes in the banking sector in India. Thechief of these are likely to be the concept of Universal Banks and the introduction of Smart Cardtechnology.

• Breakthrough in Funds Transfer:

Real Time Gross Settlement (RTGS) system is an electronic funds transfer system designed to

allow the real time settlement of interbank payments in a fully secure environment. It enablescompanies to transfer outstanding funds between banks in real time, thus allowing them to settle payments instantaneously and manage their working capital better. It is also expected to savesignificant amounts of money in interest payments on floating funds lying in banks.

BARRIER TO ENTRY

• The RBI prescribed a new minimum capital requirement (Rs 100 crores) for banks to be

considered for a license.

• Foreign ownership of Indian banks limited to 49% for healthy banks, 74% for banks

identified as distressed.

• State required to maintain minimum ownership of 51% of designated banks.

• India had strict entry restrictions for new banks.

• To maintain paid up capital of at least Rs 1 billion.

• To list shares on stock exchanges.

• To fulfill priority sector credit requirements.

• To have a ceiling of one percent of total voting rights held by a single foreign holder.

• Not to set up a subsidiary or mutual funds for at least three years.

• Use modern infrastructure facilities to provide good customer service.

• Foreign bank can operate either through wholly owned subsidiary through branches or

through a subsidiary with a foreign investment below 74% in an Indian private bank.

COMPETITION NATURE

There are several other challenges and issues that the banking industry face in the changingglobal scenario. Apart from their traditional banking functions, Indian banks have now startedoffering several value added product and services both in the wholesale as well as retail bankingsegments. Hence there is an increased demand for quality manpower for marketing and sales

operations. Though, at present, the interest rates are low due to the efforts of the government totame the current economic crisis, in normal circumstances Indian banks face stiff competitionfrom global banks. The levels of services rendered by the Indian banks still leave a lot more to bedesired. Only those banks which are able to meet the enhanced expectations of the costumers





will be able to survive in the churning that the sector is undergoing currently. The bankinginstitutions on their parts should find out new ways and means in terms of mergers &acquisitions and developing new business models to tap new markets. Banks should beencouraged to use technology and other innovative measures to tap the lower income and ruralmarkets.

Private sector banks and foreign banks have become price takers. The range of Prime LendingRates of public sector banks is 14.5-15.5 per cent, while private sector banks have a higher rangeof 15.0-17.5 per cent and foreign banks even higher at 17.0-18.5 per cent. Most public sector banks have a ceiling on spreads at 4.5 percentage points above the PLR, while private sector andforeign banks have typically ceilings of 5.0 and 6.25 percentages points over PLR, respectively.This means that the highest interest rate charged by public sector banks is 20.0 per cent, while private sector and foreign banks charge up to 22.5 per cent and 24.75 per cent, respectively. Theforeign banks as a group account for less than 10.0 per cent of total business of scheduledcommercial banks in terms of deposits but have about 20.0 per cent share of profits. The pictureis similar in case of private sector banks. There are explanations including quality of service. Butthe real issue is the market structure.

THE CREDIT SCENARIO

JAN08 JAN09

Bank Credit 21.4% 24.0%

Non-Food bank credit 22.0% 23.9%

Flow of Resources from Banking

Sector to Commercial Sector 21.7% 23.4%

Incremental Credit-Deposit Ratio 63.1% 81.4%

Scheduled Commercial Banks

Credit to the Commercial Sector 23.1% 27.0%





CREDIT EXPANSION AS ON JANUARY 2, 2009

TYPE INCREASED IN %

Public Sector Banks 28.6%

Scheduled Commercial Banks 24.0%

Foreign Banks 6.9%

Private Sector Banks 11.8%

DEPOSITS AS ON JANUARY 2, 2009

Public Sector Banks 24.2%

Scheduled Commercial Banks 21.2%

Foreign Banks 12.1%

Private Sector Banks 13.4%

PRIME LENDING RATES STOOD AS ON JANUARY 2009

Public Sector Banks 12.00% -12.50%

Foreign Banks 14.25% -15.50%

Private Sector Banks 14.75% -16.75%

COMPARATIVE ANALYSIS

BANKEX WITH AUTO INDUSTRIES





BANKEX WITH IT INDUSTRIES

BANKEX WITH POWER SECTOR

BANKEX WITH FMCG

BANKEX WITH CAPITAL GOODS

BANKEX WITH HDFC BANK

BANKEX WITH PUNJAB NATIONAL BANK





BANKEX WITH SBI

BANKEX WITH HDFC PNB SBI

SBI WITH HDFC PNB

COMPARATIVE ANALYSIS

Description SBI HDFC PNB DT

P/E Ratio 13.29 26.5 6.6 02.06.0

9

EPS 143.67 52.78 98.03 Mar-09

Sales 17342.39 4250.83 5242.57 Mar-09

Face value 10 10 10

Net profit

margin

11.67 12.82 12.68 Mar-09

Last dividend 290 100 200 May-09

Ret on Avg 13.72 13.83 19 Mar-09





Equity

Operation profit 11681.62 2197.25 3800.8 Mar-09

Interest 12500.45 2398.83 3336.04 Mar-09

Gross profit 5277.05 1570.52 1588.15 Mar-09Market cap 119100.89 59083.81 20765.6

6

04.06.0

9

52 week H/L 894-1935 774-1498 286-717 04.06.0

9

Share hold

pattern

Mar-09

Promoters 59.41 19.38 57.8

Int Investors 16.24 8.02 15.51

FIIS 7.97 25.7 14.86

Public and

others

16.38 46.9 11.83

SWOT ANALYSIS OF SBI

STRENGTH

• India’s largest commercial bank.

• Large network having 11448 branches including 92 offices overseas.

• Single largest retail lender in india.

• Only bank which provides home loan at 8% rate of interest.

• Only Indian bank to find place in the Fortune Global 500 list.

• Significant credit growth despite global meltdown.

• Great Brand image.

• Less bank service charges as compared to private bank.

• Operating profit is increased by 37% as compaired to last year.

• Net NPA reduced from 1.78% to 1.76% in 2008-09.

• Strong pick up in lending in Apr-09.

• Each branch having highly dedicated and skilled professionals.





WEEKNESS

• Customer service staff need training.

• No proper facility for uneducated customers.• Need to groom leaders for the future at all levels.

• Need to raise additional capital for funding Balance Sheet growth.

OPPORTUNITY

• Need to recuit more sales team and ralationship managers at strategic centres.

• Focus on corporate salary account.

• Increase ATM services in rural and semi urban areas.

• Increase dominance in Gold and Broking etc.

• All 11448 branches should be corporate internet banking enabled.

• Setting up call centre in India for all types of business.

• Demart account facility online.

• Investment should be made to improve Mobile banking, ATM services, upgradation of

core banking system, system security etc.

• Bank will advertise and promote different policies introduced by the insurance company

and convince their customer to buy.

• Initiatives should be taken to strengthen business in countries with strong linkage e.g.

USA, UK,UAE.

• Focus on fee income generation by providing value added services like B2B, B2C.

THREAT

• Potential NPAs arising in real estate and in the SME sectors may reduce the net profit.

• Staff cost have been increased due to the new hires of 33,703 staff for the FY 09.

• The liability as on Mar 09 has been increased due to the fall in interest rate.

• Operating expenses increased by 24% due to higher provisions of salary revision and

pensions.

• Providing less banking hr service to customer as compaired to private bank.

• Very high competition prevailing in the industry.





STATE BANK OF INDIA

INTRODUCTION

The roots of the State Bank of India rest the first decade of 19th century , when the bank of Calcutta , later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks wereincorporated as joint stock companies, and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the paper Currency Act, aright they retained until the formation of the Reserve Bank of India. The Presidency banksamalgamated on 27 January 1921, and the reorganized banking entity took as its name ImperialBank of India. The Imperial Bank of India continued to remain a Joint stock company.

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

which is India’s central bank, acquired a controlling interest in the Imperial Bank of India. On 30April 1955 the Imperial Bank of India became the State Bank of India.

In 1959 the Government passed the State Bank of India (Subsidiary Banks) Act, enabling theState Bank of India to take over eight former State-associated banks as its subsidiaries. On Sept13, 2008, State Bank of Saurashtra, one of its Associate Banks, merged with State Bank of India.

State Bank of India(SBI) is India’s largest commercial bank. SBI has a vast domestic network of over 16000 branches and commands one fifth of deposits and loans of all scheduled commercial bank in India. It is the only Indian bank to feature in the top 100 world banks in the FortuneGlobal 500 rating and various other rankings. Today state bank of India (SBI) has spread its armsaround the world and has a network of branches spanning all time zones.SBI’s InternationalBanking Group dilivers the full range of cross-border finance solutions through its four wings

the Domestic division, the foreign offices division, the Foreign Department and the InternationalServices division.SBI is the largest commercial bank in India in terms of profits, assets ,deposits, branches and employees, It has segregated its core business operations as Tressury operations.Corporate Banking Group , National Banking Group, International Banking Group, Associatesand Subsidiaries, Asset Quality and Information Technology.

SBI plays a vital role in providing working capital and term finance to the Indian industry. Dueto its large network of branches ,SBI has been able to garner a large chunk of deposits from therural sector. It is also a leader in the international banking business.

The state Bank Group includes a network of seven banks, and several non-banking subsidiariesoffering merchant banking services, fund management, factoring services, primary dealership ingovernment securities, credit cards and insurance.





SBI GROUP

1. State Bank of India

2. State Bank of Mysore3. State Bank of Indore4. State Bank of Patiala5. State Bank of Travancore6. State Bank of Bikaner and Jaipur 7. State Bank of Hyderabad

STATE BANK OF MYSORE

State Bank of Mysore was established in the year 1913 as Bank of Mysore Ltd. under the patronage of the erstwhile Govt. of Mysore, at the instance of the banking committee headed by

the great Engineer-Statesman, Late Dr. Sir M.Visvesvaraya. Subsequently, in March 1960, theBank became an Associate of State Bank of India. State Bank of India holds 92.33% of shares.

The Bank has a widespread network of 671 branches (as on 31.01.2009) and 20 extensioncounters spread all over India which includes 6 specialized SSI branches, 4 Industrial Finance branches, 3 Corporate Accounts Branches, 4 specialized Personal Banking Branches, 10Agricultural Development Branches, 3 Treasury branches, 1 Asset Recovery Branch and 7Service Branches, offering wide range of services to the customers.

MANAGEMENT COMMITTEE

NAME DESIGNATION

Shri O.P. Bhatt ChairmanMr. DilipMavinkurve Managing DirectorMr. ARamakrishna

Chief GeneralManager

STATE BANK OF INDORE

State Bank of Indore popularly known as Indore Bank in Malwa Region, originally known asBank of Indore Ltd. was incorporated under a special charter of his highness MaharajaTukojirao Holker-III, the then ruler of this region.

In terms of State Bank of India (Subsidiary Banks) Act, 1959 the Bank of Indore Ltd. became asubsidiary of State Bank of India w.e.f. 1st January 1960 and was renamed as State Bank of Indore. The Bank acquired business of the Bank of Dewas Ltd. in 1962 and the Dewas Senior Bank Ltd. in 1965 and was up-graded to class 'A' category bank in 1971.






NAME DESIGNATIONShri O.P. Bhatt ChairmanSmt. Soundarakumar Managing Director

Shri Jiban Goswami Director

Shri S.A. Thimmiah Director

Shri L.K. Meena Director

Shri. Radhe Shyam Director

Shri S.C. Rathi Director

Shri. S.L. Tiwari Director

Shri Atul Pradhan DirectorShri A.K. Khandelwal Director

STATE BANK OF PATIALAHeritage of State Bank of Patiala dates back to the year 1917, when it was founded by Late His

Highness Bhupinder Singh, Maharaja of erstwhile Patiala state, with one branch by the name of

'Chowk Fort, Patiala' to begin with. The Bank, then known as the 'Patiala State Bank' was state

owned and setup for the explicit purpose of fostering growth of agriculture, trade and industry.

The constitution, scope and operations of the Bank underwent a sea change with the formation of

the Patiala and east Punjab States Union (PEPSU) in 1948.The Bank was then reorganized and

brought under the control of Reserve Bank of India.

It was christened as the Bank of Patiala. Another milestone in history of the Bank was its

becoming a subsidiary of the State Bank of India on 1st April, 1960 when it was named as the

State Bank of Patiala.


NAME DESIGNATION

Shri O.P. Bhatt Chairman

A C Varma Managing Director



http://www.statebankofindia.com/




STATE BANK OF TRAVANCORE

State Bank of Travancore (SBT) was originally established as Travancore Bank Ltd. in 1945sponsored by the erstwhile Princely State of Travancore. Under a special statute of the IndianParliament (SBI subsidiary Banks Act 1959) it has been made an Associate of the State Bank of India and a member of the State Bank Group, the largest banking group in India.

MANAGEMENTCOMMITTEE

NAME DESIGNATION


Mr. A K JagannathanManagingDirector

Mr. Mathur K NanjundaGeneral

Manager

STATE BANK OF BIKANER AND JAIPUR

One of the well-known banks of Rajasthan, State Bank of Bikaner and Jaipur came into being in1963 after the merger of State Bank of Bikaner and State Bank of Jaipur. Headquartered atJaipur, the bank has around 844 branches, spread all over the India. This technology driven bank has got all its branches migrated to Core Banking Solution (CBS) during 2005-06 and is providing Internet banking facilities to its customers.

MANAGEMENTCOMMITTEE

NAME DESIGNATION


Shri Arun ShandilyaManagingDirector

STATE BANK OF HYDERABAD

A subsidiary of State Bank of India, State Bank of Hyderabad was established as HyderabadState Bank on 8 August 1941. The Bank started its operations with the distinction of being thecentral bank of the princely state of Hyderabad, covering the present-day Telangana region of Andhra Pradesh, Hyderabad-Karnataka of Karnataka and Marathwada of Maharashtra, when itwas established. Apart from functioning as a commercial bank, it managed Osmania Sikka (thecurrency of Hyderabad in those days) and managed public debt as well. The first branch of theBank was established at Gun foundry, Hyderabad on 5 April 1942.









Hyderabad State Bank conducted the takeover of the assets and liabilities of the HyderabadMercantile Bank Ltd. in 1953. It was in the same year, when the Bank started its Governmentand Treasury business as an agent of the Reserve Bank of India. In 1956, the RBI took over theBank. Since then, Hyderabad State Bank came to be known as State Bank of Hyderabad (SBH),which was the subsidiary of RBI during the period. On 1 October 1959, SBH became asubsidiary of the State Bank of India.

MANAGEMENTCOMMITTEE

NAME DESIGNATION

O. P. Bhatt Chairman

Amitabha GuhaManagingDirector

Madhavi Sharma Director

Jiban Goswami Director

S. A. Thimmiah DirectorGajendra SinghRajukhedi Director

I. Ram Reddy Director

M Harshavardhan Director

FOREIGN SUBSIDIARIES:

• State Bank of India International (Mauritius) Ltd.

• State Bank of India (California).

• State Bank of India (Canada).

• INMB Bank Ltd, Lagos

STATE BANK OF INDIA INTERNATIONAL (MAURITIUS) LTD.

State bank of India International (Mauritius) Ltd is one of the first offshore banks to beestablished in Mauritius in 1990, with a paid up capital of USD 10 Million. The Bank has had aconsistent record of having earned profits since its very first year of operations. SBIIML with theexpertise of its management and personnel, is customer focused, and offers to all its clients, allover the world, high quality, cost effective professional services and innovative products.





MANAGEMENTCOMMITTEE

NAME DESIGNATION

M C MulayManagingDirector

STATE BANK OF INDIA (CALIFORNIA)

State Bank of India (California), a wholly owned subsidiary in California is a California StateChartered Bank and a member of the Federal Deposit Insurance Corporation. With four fullservice branches and a money transfer office, the Bank caters to the Banking needs of thecommunity, ethnic and non-ethnic alike, through various deposit and loan schemes. The Bank also provides Internet Banking, Tele-Banking, ATM service and Credit Cards.

MANAGEMENT

COMMITTEENAME DESIGNATION

Ms Neena BansilPresident &CEO

STATE BANK OF INDIA (CANADA)

State Bank of India (Canada) - a wholly owned subsidiary of State Bank of India - has beenoperating in Canada at four locations Toronto, Vancouver, Surrey and Mississauga, extendingvarious facilities to the Indians settled in Canada such as remittance of funds through a network of over 9000 offices of State Bank of India, the largest commercial bank in India and through the branches of its Associate Banks. SBI(C) has also been instrumental in fostering trade ties between India and Canada by extending financial, advisory and logistic support to Canadian and

Indian corporate.MANAGEMENTCOMMITTEE

NAME DESIGNATION

P NandakumaranPresident &CEO

INMB BANK LTD, LAGOS

A subsidiary of SBI, INMB Bank Ltd, (formerly Indo-Nigerian Merchant Bank Ltd) wasincorporated on 26.11.1981 under the Banking Act, 1969. The principle activity of the Bank is providing Banking Services, mainly to corporate clients. Such services include the granting of

loans and advances, equipment leasing, corporate finance activities, financial advisory services.





MANAGEMENTCOMMITTEE

NAME DESIGNATION

S S RanjanManagingDirector

NON- BANKING SUBSIDIARIES:

• SBI Capital Markets Ltd (SBICAP)

• SBI Funds Management Pvt Ltd (SBI FUNDS)

• SBI DFHI Ltd (SBI DFHI)

• SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS)

• SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI CAPITAL MARKETS LTD (SBICAP)

SBICAP undertakes merchant banking activities, advisory services, project appraisal, creditsyndication and securities broking. SBICAP’s current focus is on infrastructure project advisoryand syndication mandates, particularly in sectors, such as, urban infrastructure and power, whichare reckoned as the growth drivers. The other focus areas are public issues of equity, book- building issues, debt placements, broking, and sales and distribution.

SBI FUNDS MANAGEMENT PVT LTD (SBI FUNDS)

SBI FUNDS is the Asset Management Company (AMC) set up for managing the affairs of SBIMutual Fund.

SBI DFHI LTD (SBI DFHI)

SBI DFHI, a Primary Dealer (PD), undertakes trading in Government and Non-Governmentsecurities, in the Debt Markets. SBI DFHI Ltd came into existence in April 2004 with theamalgamation of Discount and Finance House of India (DFHI), a subsidiary of RBI & SBI GiltsLtd, a subsidiary of SBI. It is a major participant in the wholesale Debt Market both in thePrimary and Secondary Market segment with an outright turnover of Government Securities andTreasury Bills.

SBI FACTORS AND COMMERCIAL SERVICES PVT LTD (SBI FACTORS)

SBI Factors, a subsidiary of State bank of India (SBI) is one of the leading factoring companies

in India was established in February 1991 with the primary objective to provide domestic

factoring services to Small and Medium Enterprises (SMEs). SBI and its Associates Banks hold

70% stake in SBI Factors.





SBI CARDS & PAYMENTS SERVICES PVT. LTD. (SBICPSL)

1998 saw a new vista opening for the Indian credit card users. GE Capital Services, the largestissuer of private label credit cards in the world and State Bank of India, the largest Indian bank created two companies to address the market: namely, SBI Cards and Payment Services Ltd.(SBICPSL) and GE Capital Business Process management Services ltd. (GECBPMSL). The joint venture was set up to leverage the Brand equity, customer relationship and the unparallelednetwork of SBI and the technological processes and service capabilities of GE Capital to offer you products that are value for money and supported by quality and service.

JOINT VENTURES:

SBI LIFE INSURANCE COMPANY LTD (SBI LIFE).

SBI LIFE undertakes the business of life insurance and annuity in relation to all or any kinds of assurance. SBI LIFE leveraged the strength of its parent bank and its group. SBI and itsAssociate Banks became the Corporate Agents of SBI LIFE. SBI LIFE is now selling itsinsurance products through 2,400 branches of SBI Group.

PROFILE OF SHRI O.P.BHATT CHAIRMAN STATE BANK OF INDIA

Born on 7th March 1951, Mr. Om Prakash Bhatt started his banking career as a probationaryofficer with state bank of India in 1972. Mr. O.P.Bhatt has during his long career of 36 yearswith SBI, held several important assignments in India and abroad. He was the projectcoordinator for the Bank’s computerization project form where he moved on to RegionalManager at Jaipur and then as Executive Secretary to the then Chairman of the SBI Group. AsChairman, Mr. Bhatt is not only the Chief Executive of India’s largest commercial bank., he isalso the Head of the entire State Bank Group which consists of 7 domestic and 4 international banking subsidiaries, besides 5 non- banking subsidiaries and 1 joint Ventures. Besides chairingthese companies, Mr. Bhatt is also the chairman of the Banking and Financial InstitutionsCommittee of FICCI, Director on the board of several other companies like EXIM Bank andGIC and a member of the Boards of ICRIER, XLRI, IBPS, IDRBT, KVIC and National

cooperative Development Corporation.

STATE BANK OF INDIA

HISTORY

1806: The origin of State Bank of India was back to 1806 when the Bank of Calcutta (later

called the Bank of Bengal) was established.

1809: The Bank receives a charter from the imperial government and changes its name to Bank of Bengal.





1840: A sister bank, Bank of Bombay, is formed. 1843: Another sister bank is formed: Bank of Madras, which, together with Bank of Bengal andBank of Bombay become known as the presidency banks, which had the right to issue currencyin their regions.

1861: The Presidency Banks Act takes away currency issuing privileges but offers incentives to begin rapid expansion, and the three banks open nearly 50 branches among them by the mid-1870s.

1876: The creation of Central Treasuries ends the expansion phase of the presidency banks.

1921: The presidency banks are merged to form a single entity, Imperial Bank of India.

1955: The Nationalization of Imperial Bank of India results in the formation of the State Bank of India, which then becomes a primary factor behind the country's industrial, agricultural, and rural

development.

1969: The Indian government establishes a monopoly over the banking sector.

1972: SBI begins offering merchant banking services.

1986: SBI Capital Markets is created.

1995: SBI Commercial and International Bank Ltd. are launched as part of SBI's stepped-upinternational banking operations.

1998: SBI launches Credit cards in partnership with GE Capital.

2002: SBI networks 3,000 branches in a massive technology implementation. 2004: A networking effort reaches 4,000 branches.

2008 : State Bank of India has received the Reserve Bank of India’s approval in Nov for the proposed joint venture company with Society General Securities Services (SGSS), for offeringcustodial and related services in India.

State Bank of India has signed a Joint venture agreement with Insurance Australia Group in Novto form a Joint venture company which will be engaged in General Insurance business in India.

State Bank of India was adjudged the best bank of 2008 by London based 'The Banker' magazineof the Financial Times Group.





2009 : SBI has come out with special home loan rates for new borrowers at 8%- applicable for one year.

State Bank of India (SBI), a large financial services group operating in the banking industry, hasentered into an agreement with Telecom firm Tata Communications Ltd and C-Edge for the roll-out and management of 500 ATMs.

Tata Motors has appointed the country's largest lender, the State Bank of India (SBI) as anExclusive Booking agent for Nano.

The US based Reputation Institute ranked SBI among the Top 50 in a list of the world’s 200most Reputable Companies.

AWARS AND RECOGNITION DURING THE PAST 12 MONTHS

• Only Indian bank to find a place in the Fortune Globe 500 list.

• In the Forbes 2000 lists of largest companies in the world.• Awarded the “Bank of the year 2008 –India” by the Banker Magazine London.• Awarded “Best Bank” and “Most preferred Home loan” by Outlook Money Awards 08.• Won “Most preferred Bank” and “Most preferred Brand for Home loan” CNBC

consumer Awards Sep 08.

PROFILE

SBI MANAGEMENT

NAME DESIGNATIONShri Om PrakashBhatt Chairman

Shri S.k.Bhattacharyya

ManagingDirector

Shri R. Sridharan DirectorDr. Ashok

Jhunjhunwala Director

Shri Dileep C. Choksi DirectorShri S.Venkatachalam Director

Shri. D. Sundaram DirectorDr. Deva NandBalodhi Director

Prof. Mohd.Salahuddin DirectorDr. VasanthaBharucha Director





Dr. Rajiv Kumar DirectorShri ArunRamanathan DirectorSmt. ShyamalaGopinath DirectorShri Ashok Chawla

Director

KEY FIGURES

Face Value(Rs) 10.00PE ratio 13.29 02/06/09EPS(Rs) 43.23 March 09Sales(Rs crore) 17342.39 March 09 Net profit margin(%) 11.67 March 08Last dividend(%) 290.00 11/05/09Return on average equity 13.72 March 08

QUARTERLY RESULT (Rs Crore)

Particular March 09 Dec 08 Sep 08 June 08 March 08

Sales 17342.39 18030.34 15566.50 13799.20 13576.73

Interest 12500.45 12272.15 10111.15 8981.54 8776.14

Gross Profit 5277.05 4482.62 4193.21 3962.34 4373.13

EPS (Rs) 43.23 39.04 35.59 25.84 34.65

SHARE HOLDING

Promoters Holding: 59.41%Institutional Investor: 16.24%FIIS: 7.97%

Public and Others: 16.38%





SBI

(BSE Id: 500112 NSE Id: SBIN ISIN Id: INE062A01012

Face Value : Rs 10.00

Industry : BankingConstituent Indices : CNX 100,S&P CNX 500,S&P CNX

Nifty,SENSEX,BSE-100,BSE-200Market Cap : 1,19,100.89(Cr) as on 04-June-2009

52 week high price /:52 week lowprice:

894.00 – 1935.00

DIVIDEND

Year Dividend (%)

2003-04 110

2004-05 125

2005-06 140

2006-07 140

2007-08 215

2008-09 290

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31ST MARCH 2009

(Rs in crore)

SLNO PARTICULARS QUARTER ENDED YEAR ENDED

31.03.09

31.03.08

31.03.09

31.03.08

1Interest Earned(a+b+c+d)

17342.39

13576.73

63788.43

48950.31





(a) Interest on advances12083.61 9603.47

46404.71

35228.11

(b) Income on investment 4230.89 3211.7615574.11

11944.16

(c)Interest on balances withRBI 880.15 218.8 1474.38 1200.08

(d) Others 147.74 542.7 335.23 577.96

2 Other Income 4718.22 2817.212690.79 8694.93

3 Total Income22060.61

16393.93

76479.22

57645.24

4 Interest expended12500.45 8776.14

42915.29

31929.08

5 Operating expenses 4283.11 3244.66 15648.712608.61

(a) Employee cost 2349.6 1569.6 9747.31 7785.87(b) Other operating expenses 1933.51 1675.06 5901.39 4822.74

6 Total Expenditure (4+5)

16783.5

6 12020.8

58563.9

9

44537.6

9

7 Operating profit 5277.05 4373.1317915.23

13107.55

8(a)

Provisions andcontingencies 1377.66 1619.14 3734.57 2668.65

(b) Provision for NPA 1296.25 1066.98 2474.97 2000.94

9 Profit Before Tax 3899.39 2753.9914180.66 10438.9

10 Tax expenses 1157.08 870.74 5059.42 3709.78

11Net profit After Tax (9-10) 2742.31 1883.25 9121.24 6729.12

12Paid up equity sharecapital 634.88 631.47 634.88 631.47

13 Reserve57312.81

48401.19

57312.81

48401.19

14 Analytical Ratio(a) Share in RBI 59.41% 59.73% 59.41% 59.73%(b) Capital Adequacy Ratio

Base-1 12.97% 13.54% 12.97% 13.54%Base-2 14.25% 14.25%

(c ) EPS 43.23 34.65 143.77 126.62(d) NPA ratios

Gross NPA 15588.612837.34 15588.6

12837.34

Net NPA 9552.02 7424.33 9552.02 7424.33Percentage Gross NPAs 2.84% 3.04% 2.84% 3.04%Percentage Net NPAs 1.76% 1.78% 1.76% 1.78%

(e) Return on Assets 1.10% 1.10% 1.04% 1.01%





9Public share holding no of shares

257673022

254263176

257673022

254263176

Percentage of shareholding 40.59% 40.27% 40.59% 40.27%

10Promoters and GroupHoldings

Non- Encumbered no of shares

377207200

377207200

377207200

377207200

Percentage of share 100% 100% 100% 100%Per of shares of sharecapital 59.41% 59.73% 59.41% 59.73%

ANALYSIS

HIGH 995.25 02-Mar-09 RESISTANCE 985LOW 934.55 05-Mar-09 SUPPORT LEVEL 942

HIGH 953.05 13-Mar-09 RESISTANCE 940LOW 896.80 09-Mar-09 SUPPORT LEVEL 905



RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

CE

SUPPOR

T LEVEL



HIGH 987.80 16-Mar-09 RESISTANCE 980.00LOW 949.60 17-Mar-09 SUPPORT LEVEL 955.00

HIGH 1125.35 27.Mar-09 RESISTANCE 1100.00LOW 1023.45 23-Mar-09 SUPPORT LEVEL 1035.00



RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

CE

SUPPORT

LEVEL



HIGH 1145.35 03-Apr-09 RESISTANCE 1130.00LOW 1022.00 30-Mar-09 SUPPORT LEVEL 1040.00

HIGH 1140.40 10-Apr-09 RESISTANCE 1138.00LOW 1123.90 08-Apr-09 SUPPORT LEVEL 1125.00



SUPPORT

LEVEL

RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

CE




HIGH 1307.80 24-Apr-09 RESISTANCE 1295.00



RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

CE

SUPPORT

LEVEL



LOW 1232.60 22-Apr-09 SUPPORT LEVEL 1255.00




RESISTAN

CE

SUPPORT

LEVEL

RESISTANCE



HIGH 1366.95 07-May-09 RESISTANCE 1360.00LOW 1323.70 06-May-09 SUPPORT LEVEL 1326.00




SUPPORT

LEVEL

RESISTAN

CE

SUPPORT

LEVEL







RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

CE

SUPPORT

LEVEL



MONTHLY

HIGH 1295.85 18-Dec-08 RESISTANE 1286.00LOW 1040.25 02-Dec-08 SUPPORT LEVEL 1210.00

A - Issue bond at the rate of 8.9% for 15 years to raise 18000 crore on 18.12.08. So there is anintraday fluctuation of 101.9 on that day.

HIGH 1361.20 05-Jan-09 RESISTANCE 1225.00LOW 1041.75 23-Jan-09 SUPPORT LEVEL 1160.00



RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

CE

SUPPORT

LEVEL

A



HIGH 1194.00 13-Feb-09 RESISTANCE 1178.00

LOW 1024.15 26-Feb-09 SUPPORT LEVEL 1137.00

HIGH 1125.35 27-Mar-09 RESISTANCE 1035.00LOW 896.80 09-Mar-09 SUPPORT LEVEL 990.00

A – SBI cut deposit rate from 9 per cent to 8.5 per cent. So there is an intraday fluctuation of

98.1 on 03.03.09.



RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

SUPPORT

LEVEL

RESISTAN

SUPPORTLEVEL

A







RESISTAN

CE

SUPPORT

LEVEL



HIGH 1822.15 2-May-08 RESISTANCE 1625.00LOW 1024.65 1-Jul-08 SUPPORT LEVEL 1395.00

A – The repo rate is increased from 7.75 percent to 8 percent. So there is an intraday fluctuationof 97 on 12.06.08.

B - The repo rate is increased from 8.00 percent to 9 percent. So there is an intraday fluctuationof 103.75 on 29.07.08.

C - The JV with Australia insurance group was finalized. So there is an intraday fluctuation of 107 on 21.08.08.

HIGH 1543.90 16-Oct-08 RESISTANCE 1290.00LOW 896.80 09-Mar-09 SUPPORT LEVEL 1175.00

A – SBI announces to offer home loan to customer at 8 per cent on 02.02.09. So there is an

intraday fluctuation of 54.5 on that day.

B – The JV was signed with Australia insurance group. So there is an intraday fluctuation of

127.3 on 28.11.08.

C – The intraday fluctuation of 116 was found on 03.11.08 due to the decrease in repo rate from

8 percent to 7.5 percent by RBI.



RESISTAN

CE

SUPPORT

LEVEL

RESISTAN

CE

SUPPORT

LEVEL

AB

C

B CA



HIGH 1822.15 09-Mar-09 RESISTANCE 1560.00LOW 896.80 02-May-08 SUPPORT LEVEL 1105.00

A – The repo rate is reduced from 9 percent to 8 percent. So there is an intraday fluctuation of 137 on 20.10.08.

B – SBI announced to open 1500 more branches in the coming year. So there is an intradayfluctuation of 187.6 on 27.10.08.

BSE



RESISTAN

CE

SUPPORT

LEVEL

B

A



HISTORY

MONTH

HIGH LOW

DATE PRICE DATE PRICE

Apr 08 30-Apr-08 1,819.95 1-Apr-08 1,592.00

May 08 2-May-08 1,840.00 30-May-08 1,438.20

Jun 08 2-Jun-08 1,496.70 30-Jun-08 1,101.15

Jul 08 24-Jul-08 1,567.50 1-Jul-08 1,007.00

Aug 08 6-Aug-08 1,638.90 28-Aug-08 1,302.00

Sep 08 19-Sep-08 1,618.00 30-Sep-08 1,353.00

Oct 08 14-Oct-08 1,569.90 27-Oct-08 991.1

Nov 08 5-Nov-08 1,375.00 20-Nov-08 1,025.00

Dec 08 19-Dec-08 1,325.00 2-Dec-08 995.05

Jan 09 5-Jan-09 1,376.40 23-Jan-09 1,031.05

Feb 09 13-Feb-09 1,205.90 27-Feb-09 1,008.30

Mar 09 27-Mar-09 1,132.25 9-Mar-09 894.01Apr 09 17-Apr-09 1,355.00 1-Apr-09 980.01

May 09 29-May-09 1,869.10 11-May-09 1260.7

HIGHER FLUCTUATION IN INTRADAY

DATE SBI

SENSEX NEWS

12.06.08 97 522.78 Repo rate is increased from 7.75% to 8.00%.

29.07.08 103.75 425.98 Repo rate is increased from 8.50% to 9.00%.21-08-08 107 445.8 Finalize the insurance JV with Australia Group

20.10.08 137 514.77 Repo rate reduced from 9% to 8%.

27.10.08 187.6 1042 Announced to open 1500 More Branches.





03.11.08 116 260.51 Repo rate reduced from 8% to 7.5%.

24.11.08 106.9 340.09

25.11.08 127.3 533.4 JV Australia Group was signed

18.12.08 101.9 477.3 Issue Bond @8.90% for 15 yr raise 18,000 cr 02.02.09 54.5 314.61 Special home loan offer at 8%.

03.03.09 98.1 242.15 Cut deposit rates from 9% to 8.5%.

UP COMING NEWS EFFECT

GDP

IMF declared that the India’s Growth is likely to slow down to 6.25% in 2008-09 and further to

5.25% in 2009-10 due to falling corporate investment, deteriorating global outlook, weakening

profitability, confidence and tightening of financing conditions from foreign and non-bank

sources.


India is expecting a Growth of 7.1% and 7.7% growth is needed to meet the target of 7.1%.

Source: The Times of India DT 21.02.09

Date Share Closing Price

19.03.09 968.2

20.03.09 953.55

23.03.09 1023.45

24.03.09 1034.65

25.03.09 1050.05

After the announcement of this news we can see that there is no such good movement is SBIshare for few days.





ELECTION RESULT 2009

As everybody knows that the Election result will be announced on 16.05.09. So there is a huge

quantity of share purchased by the investors before 16 th may. Because the news are infavour of

UPA for a stable Government. The investors are expecting there should be a hike in the price of

SBI share if the UPA will come with majority.

Date Vol of share trade Closing share price

07.05.09 568138 1366.95

08.05.09 651697 1325.15

11.05.09 1397331 1260.7

12.05.09 917697 1295.45

13.05.09 1070081 1262.15

14.05.09 949688 1267.85

15.05.09 943734 1312.25

18.05.09 25059 1590.05

19.05.09 2720829 1754.45

DIVIDEND

SBI was announced to declare their Quarterly result and dividend on Saturday i.e. on 09.05.09.

The investors had unknown about the net profit and proposed dividend. So there is no such good

movement before few days. On 9th may 09 SBI net declared the net stood at Rs 9121.24 cr

reflecting a growth of 35.6% as compared to last year. The SBI board has proposed 290%

dividend.

DATEVOL OF SHARETRADE

CLOSING SHAREPRICE

06.05.09 924221 1323.707.05.09 568138 1366.95

08.05.09 651697 1325.15

11.05.09 1397331 1260.7





BUDGET

Indian Union Budget was announced on 16.02.09. The investors had not aware about the budget

result. So there was no such good movement before few days.

DATEVOL OF SHARETRADE

CLOSING SHAREPRICE

10.02.09 674957 1164.05

11.02.09 661075 1158.85

12.02.09 672928 1159.5

13.02.09 570090 1194

GLOBAL EFFECT NEW DELHI INSTITUTE OF MANAGEMANT Page 64

(Approved by AICTE)61-62 Tughlakabad Institutional Area

NewDelhi-110062



REPO RATE

Repo rate is the rate at which RBI lends money to commercial banks against approved

Government securities.

EFFECT ON BANKING SECTOR

Any changes in Repo rate affects the Net Interest Margins (NIMS) of the banks and interest cost

of corporate which affect the Stock prices of securities affect overall market sentiments.

Besides these there are lots of other indirect reasons which affect the prices of securities in the

event of such rate changes.

EFFECT ON SBI SHARE PRICE

Date Repo (old) Repo (new) Date Share Closing Price

25.07.08 1448.75

29.07.08 8.5% 9.0% 28.07.08 1418.05

29.07.08 1321.00

From the above figure it is clear that whenever there is an increase in REPO rate the SBI share

price decreasing.

REVERSE REPO RATE

Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks.


Banks are always happy to lend money to RBI since their money is in safe hands with a good

interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due

to these attractive interest rates. It can cause the money to be drawn out of the banking system.






Date Re repo (old) Re repo (new) Date Share Closing Price

20.04.09 1295.95

21.04.09 3.5% 3.25% 21.04.09 1255.35

From the above figure it is clear that whenever there is a decrease in RE REPO rate the SBI

share price decreasing.

CASH RESERVE RATION (CRR)

CRR is the Percentage of deposits every bank has to keep in its account with RBI. Thus bank

cannot use such money for lending purposes and thus increase/decrease of this ratio is used by

the RBI as a tool to curtail/inject liquidity in the system respectively.


Since banks does not earn any interest on such balances with RBI it increases there cost of funds

and consecutively there net interest margins(NIM) come under pressure .Due to this banking

sector stocks falls generally after CRR rate hike. Moreover to maintain NIM in the situation of

CRR hike banks are forced to increase their lending rates due to which interest cost of corporate

increases and consequently there profit growth rate falls and this result in market crash.


Date CRR O) CRR (N) Date Share Closing Price

26.04.08 7.5 7.75 25.04.08 1750.1





28.04.08 1736.65

10.05.08 7.75 8 09.05.08 1675.7

12.05.08 1663.35

24.05.08 8 8.25 23.05.08 1573.25

26.05.08 1537.711.10.08 7.5 6.5 08.10.08 1322.15

10.10.08 1352.15

13.10.08 1524.95

08.11.08 6 5.5 07.11.08 1249.25

10.11.08 1301.55

From the above figure it is clear that whenever there is an increase in CRR the SBI share price

decreases.

From the above figure it is clear that whenever there is a decrease in CRR the SBI share price

increases.





STATUTORY LIQUIDITY RATIO ( SLR)

SLR is the amount a commercial bank needs to maintain in the form of cash, gold or govt

approved securities (Bonds) before providing credit to its customers. SLR rate is determined andmaintained by the RBI in order to control the expansion of bank credit.EFFECT ON BANKING SECTOR

Any change in this rate affects Government borrowing programme as banks purchase

Government securities for meeting there SLR requirements. Banks can thus sell their surplus

securities and use the consideration for giving more loans.


Date SLR (O) SLR (N) Date Share Closing Price

06.11.08 1215.35

08.11.08 25.0 24.0 07.11.08 1249.25

10.11.08 1301.55

From the above figure it is clear that whenever there is a decrease in SLR the SBI share price

increases.

INFLATION

Inflation is a rise in the general level of prices of goods and services in an economy over a periodof time.






Inflation reduces bank lending to private sector. Inflation is negatively associated with real

money market rates, real Treasury bill rates and real time deposit rates. As the inflation increases

the real rate of return on these instruments falls. Inflation has a dramatic negative impact on the

profitability of banks. The net interest margins, net profits, rate of return on equity and value

added by the banking sector all decline in real terms as inflation rises.


Date Previous Date Changes12.03.09 910.90 13.03.09 953.05

20.03.09 953.55 19.03.09 968.20

23.03.09 1023.45

26.03.09 1093.80 27.03.09 1125.35

The Inflation is reduced to 2.43% on 13.03.09, 0.44% on 20.03.09 and 0.27% on 27.03.09.

So from the above figure it is clear that whenever there is a decrease in inflation the closing

share price of SBI increases.

GROSS DOMESTIC PRODUCT (GDP)

The total market value of all final goods and services produced in a country in a given year,

equal to total consumer, investment and government spending, plus the value of exports, minus

the value of imports.


The increase in demand due to high GDP growth rates helps the corporate to show larger profits.Thus, more and more money is invested in buying stocks-by individuals, Indian corporate and

foreign institutions-leading to a sustained bullish run. So the bank turnover is mainly affected by

the GDP growth.







25-02-09 1037.75

26-02-09 1024.15

27.02.09 1027.10

There is a 7.7% growth needed in Q4 2008-09 to meet target of 7.1%.But the finance sector GDP

was reduced to 9.5% in Q3 2008-09 as compared to previous Quarter 11.9%.So there is no such

movement we can find in the share value mentioned above.

Source: The Times of India DT 26.02.09.

The declared Q3 GDP growth at 6 year low of 5.3% i.e. Agriculture (-) 2.2%, Industry 0.5% and

services 9.3% the total comes to 5.3%.

Source: The Times of India DT 28.02.09.


27.02.09 1027.10

02.03.09 995.25

03.03.09 975.85

04.03.09 957.55

05.03.09 934.55





INDEX OF INDUSTRIAL PRODUCTION (IIP)

Index of Industrial Production (IIP) is one of the Prime indicators of the economic development

for the measurement of trend in the behavior of the Industrial Production over a period of timewith reference to a chosen base year.


Indian Banking sector are very sensitive to IIP Numbers. A better IIP number would show a

positive growth on our banking sector.



09-04-09 1140.40

10-04-09 1140.40

13.04.09 1217.90

The index of industrial production (IIP) for February 09 rises 0.2%, a marginal improvement

over the 0.5% and 0.6% contraction seen in the preceding two months. So it is clear that SBI

share price is more sensitive with the increase in IIP.






LIMITATION

The Various Limitations are:

INADEQUATE AVAILABILITY OF DAT A : -

It is very difficult to collect the information about the economy and Industry as the Economic

Survey Report of the last year will be announced by the Finance Department on 3rd of July 2009.

CURRENT FINANCIAL DATA:-

It is very difficult to get the accurate financial data for the year 2008-09 because most of the

companies have not announced their unaudited balance sheet.

HISTORICAL DATA: -

As the share market is very sensitive with the upcoming news and global effect it is necessary to

collect the important event occurred in the past date wise which is not available correctly in any

web site.

MOVEMENT OF SHARE:-

The Major movement of share is mainly based on FDI and FII. The election result wasannounced on 16th May 09 and the Government is still not clear about which sector and up to

which percentage they allow FDI and FII. The SBI share is within 30 shares of Sensex and 50

Shares of Nifty and maintaining nearly Beta value equal to one so it is very difficult to do an

analysis of banking sector with other sector.





CONCLUSION

Today India share market is emerging as the fastest growing market. We can see a positive

growth in the share market after the announcement of election result on 16.05.09. The rapid

growth is mainly due to the permission of FII and FDI in few sectors by the stable Government.

To encourage the Brokerage houses and the Investors the Government of India is also planning

to withdrawn the Security Transaction Tax (STT) which will not only help the investors and

Brokerage houses but also helps to move the share market towards positive trend.

Due to the introduction of online trading account by several banks and brokerage houses more

investors are now a day’s interested to open the Demart account. The investors are now calculate

their profit, losses and other charges more transparently after the introduction of on line Tradingaccount.

Now most of the Brokerage houses are managing the investors fund with the help of

professionals and assuring a percentage of return to investors to encourage them.

Now the Reserve Bank of India is planning not to open door any wider for foreign banks to

acquire controlling stakes in private banks in wake of the Global financial turmoil. Various

banks from China, Japan and Middle East have evinced interest in buying controlling stake in

India banks. But RBI found that one of the major reasons for default of large foreign banks was

their Diversified Portfolio. So it helps the Indian banks to grow with less competition from

Foreign banks.

SBI

Since few months the whole world is suffering from recession which will affect the Index of

Industrial Production (IIP) of almost all the sector. But in the recession period also SBI have

maintained its strong Brand image of India’s largest commercial bank and the only Indian bank

to find place in the Fortune Global 500 list.

The NPA was reduced from 1.78 percent to 1.76 percent in the last financial year and also the

Bank shows a strong pick in lending in the month of Apr and May-09.





The operating profit of SBI was increased by 37% as compared to last year due to the

introduction of home loan at 8 percent for one year. Due to this scheme many customers are

jump from other Banks to SBI to avail the lower rate of interest which forces some Banking

Institution like HDFC has started charging borrowers up to 3 percent of the outstanding loan if they decide to prepay their loans by borrowing from other lenders.

As the economy is developing in the world and coming out of recession also the US market is

recovering very fast and our Government is also stable so it is the right time for the investor to

invest in the SBI shares both for the long term and short term period.

But during the analysis I found that the investors those are interested in short term investment i.e.

Intraday or Delivery for few days should watch the upcoming news and Global effect regularly

as SBI shares are more sensitive with the effects mentioned below.

UPCOMING EFFECT

PLR

The RBI may standardize the way banks calculate their prime lending rates the bench mark to fix

the floating components of loans and bar them from lending below their respective PLRs. The

decision can be expected by July end. After that no banks can lend the money below PLRs. So

after announcement it will definitely affect the SBI shares because now SBI is the only bank who

is providing home loan at 8 percent rate of interest.


FDI

According to (FDI notification in government parlance) 2 and 3 of 2009 the firm that has more

than 50 percent foreign investment whether by way of direct investment or portfolio holdings or

foreign currency debentures would be considered Foreign owned. But currently the ICICI is

holding 64 percent and HDFC is holding 74 percent of foreign investment. The RBI asking DIPP

(the agency set the foreign investment policy) and after the announcement of norms definitely

we can find a drastic change in the movement of banking shares.






GENERAL BUDGET

The general budget for the year 2009-10 will be presented on July 3rd

and the Economic survey,the annual report on the state of economy is likely to be presented on July 2nd 09. So definitely

after the announcement there will be a strong movement in the SBI share price.

GLOBAL EFFECT

MONETARY POLICY

Now a day in every short interval RBI is changing the Repo, Reverse Repo, CRR, SLR rate. So

investors should be very much aware of this type of news which will definitely affect the SBI

share price.

STAKE SALES IN PSU

The new UPA government is planning to sell stakes in PSU to raise resources for bridging

excess expenditure. India’s Fiscal Deficit stands around 6 percent of GDP. A high fiscal deficit

tends to hike the cost of capital for private sector as Government borrowing increases to fill the

gap between its revenue and expenditure. So after the budget announcement definitely it will

affect the banking share price.


FOREIGN INVESTMENT

Recently the Government is changing its norms for FDI and FII for different sector. So this type

of news can affect the SBI share price.

US BANKING

The most popular two banks in USA i.e. Bank of America and CITI Bank is under pressure from

US regulator to raise fresh capital. Also the CITI bank is planning to sell 11.73 percent stake in

India’s largest mortgage company HDFC. Because in the past due to collapse of Lehman

Brothers, large corporate like Infosys moved their deposits to SBI.


So it is the right time for the investors to invest in SBI share by taking into consideration of the

above facts.





SUGGESTIONS

By looking into the last year performance of SBI i.e. the growth in profit, reduced in NPA percentage, highest market capture and strong hold in the Market by providing different scheme

to customer time to time I am suggesting that it is the right time for the investors to invest in the

SBI shares for both short and long term period.

JUNE -09

ACTION: BUY

TARGET PRICE: Rs

STOP LOSS PRICE: Rs

AUG -09

ACTION: BUY

TARGET PRICE: Rs

STOP LOSS PRICE: Rs





BIBLIOGRAPHY

www.nseindia.com

www.bseindia.com

www.moneycontrol.com

www.yahoofinance.com

www.googlefinance.com

www.rbi.org.in

www.finmin.nic.in

www.indiabudget.nic.in

www.sebi.gov.in

www.timesofindia.com

www.economictimes.com

www.indiatoday.com

www.statebankofindia.com

www.sbhyd.com

www.sbp.co.in

www.sbbjbank.com

www.sbtonline.in

www.mysorebank.com

www.indorebank.org



http://www.nseindia.com/

http://www.bseindia.com/

http://www.moneycontrol.com/

http://www.yahoofinance.com/

http://www.googlefinance.com/

http://www.rbi.org.in/

http://www.finmin.nic.in/

http://www.indiabudget.nic.in/

http://www.sebi.gov.in/

http://www.timesofindia.com/

http://www.economictimes.com/

http://www.indiatoday.com/


http://www.sbhyd.com/

http://www.sbp.co.in/

http://www.sbbjbank.com/

http://www.sbtonline.in/

http://www.mysorebank.com/

http://www.indorebank.org/

http://www.nseindia.com/

http://www.bseindia.com/

http://www.moneycontrol.com/

http://www.yahoofinance.com/

http://www.googlefinance.com/

http://www.rbi.org.in/

http://www.finmin.nic.in/

http://www.indiabudget.nic.in/

http://www.sebi.gov.in/

http://www.timesofindia.com/

http://www.economictimes.com/

http://www.indiatoday.com/


http://www.sbhyd.com/

http://www.sbp.co.in/

http://www.sbbjbank.com/

http://www.sbtonline.in/

http://www.mysorebank.com/

http://www.indorebank.org/



Documents

Final Sbi Report Final