modified report 2003

KJSomaiya Institute of Management Studies and Research Mumbai 1

ANALYSIS OF BANKrsquoS INVESTMENTS IN SLR SECURITIES SCOPE OF TREASURY PRODUCTS FOR RETAIL CUSTOMERS AND SUGGESTIONS

FOR PROFITABILITY

BY SUNANDA BANERJEE

UNDER THE GUIDANCE OF Mr Mukesh Kumar Prof Sridhar Shridharan Dealer- T amp I Department SBBJ Faculty KJSomaiya Institute of Mumbai Management Studies amp Research Mumbai

K J Somaiya Institute of Management Studies amp Research Mumbai

MAY-JUNE 2009

ACKNOWLEDGEMENT

I am highly indebted to Mr KSSubbaraman- Dy General Manager Mr RK Garg- Asst Gen Manager Domestic Treasury for their invaluable support without which the project could have not been worked out the way it has I am very much thankful to Mr Mukesh Kumar (Dealer- Domestic Treasury) who helped me immensely in understanding the basics and complexities of Treasury and Investments along with additions that made the quality of report better I would also like to extend a note of thanks to all other employees of SBBJ who helped me directly or indirectly in successful completion of my project I am also grateful to Prof Sridhar Shridharan who gave his precious inputs which also helped me to take the plunge of getting into an absolute different stream of finance Lastly I whole-heartedly thank Mr Barun Banerjee who lent his moral support all through the tough time of making mistakes and learning from the

ABSTRACT OBJECTIVE- The project aims to analyze Bankrsquos investment in SLR securities analyze the scope of treasury products for retail customers and give suggestions for profitability BACKGROUND- Treasury Management is one of the most important functions of a commercial Bank in India The main function of Treasury is Fund Management Management of CRR Investments and Trading Treasury also quotes forex rates for its retail and corporate customers Any such Bank in India is required to invest minimum 24 of their Demand and Time Liabilities (DTL) in SLR securities These investments are categorized into various other investments of SLR and Non- SLR like Government Securities Treasury Bills and Equity etc These altogether make the investment portfolio and form the major part of the bankrsquos profitability It is also important to see the various types of portfolios existing in the market and if any other could be applicable to the bankrsquos investment pattern The other part of the project involves finding qualitative information about possibility of scope of treasury products for retail customers This part mainly deals with what are the current services offered to individual customers from the treasury and what can be if any further scope for improvements in this segment PROBLEM FORMULATION- The problem lies in the fact that the Nationalized Banks are still facing few hurdles regarding their Investment Portfolio Management and are unable to bring a high level of diversification proportionate to the profits in their portfolios Also they are still not open for customized services for retail customers who can be potential profitable customers for investments SCOPE OF THE PROJECT- The project tries to cover all the aspects of a treasury and investment department its functions the working of the department in both the streams of rupee and forex and its importance It also tries to analyze the various types of investments the treasury deals in and how each affects the day to day and over all profitability of the bank The project tries to take a look at the basic idea of a portfolio and the need of a one by an individual or an organization different types of portfolios and how the bank is trying year on year to make a more effective portfolio which would give maximum returns along with balancing the risk factor The project also evaluates the scope of treasury products for retail customers as how this strategy inclusive of others can make an upward shift to the portfolio profitability of the bank keeping the expense in this expansion minimal METHODOLOGY- This is an exploratory research work in which primary data was collected by making a questionnaire and collecting relevant data from various bankers professionals in different areas management students and technical professionals from various sectors Various techniques were implied in the questionnaire like the nominal and ordinal scales to provide with questions with easily identifiable and better options to select an answer Secondary data was collected from websites research papers annual reports master circulars magazines newspapers etc The primary data was consolidated

for finding out the new customer expectations their knowledge in the Investment segment and how can the Bank help the customers in providing better services along with increasing their profitability The secondary and primary data is formatted in a sequence which would be easier to comprehend the flow of the report CONCLUSION- The report analyzed the working of the Treasury and Investment Department along with understanding the various with main focus on Investments especially SLR and Non- SLR Also it was on priority to seek how new channels can be enabled for investments by individuals The results of the survey done as a part of the project gave useful inputs to the suggestions for profitability It was concluded that few more inclusions in terms of aggressive investments and others can be done and consider whether there are other ways in which customer access to financial products and services can be improved

TABLE OF CONTENTS 1) ABOUT SBBJ 7 2) TREASURY 8

a) Introduction 8

b) Functions of Treasury 8

i Rupee Treasury 9

ii Forex Treasury 11 c) Importance of Treasury 12

3) INVESTMENT AN OVERVIEW 13

4) TYPES OF INVESTMENTS 15 5) SLR INVESTMENTS 18

a Introduction 18

b Classification of SLR Investments 19

C Types of SLR Investments 20

i Government Securities Market 20

ii SDL 22 iii T-Bills 22

6) NON- SLR INVESTMENTS 24 a Equity 24

bEquity Mutual Funds 24

cDebt Mutual Funds 26

dNon-SLR Bonds 27

e Commercial Paper 28

f Certificate of Deposits 28

7) INVESTMENT PORTFOLIO 30 a Introduction 30

b Basic Types of Portfolios 30

c Need of Portfolios 31

8) SBBJ INVESTMENT PORTFOLIO 32 a Introduction to SBBJ Investments 32

b Effect of External Environment amp Past Year Strategy 32

c Analysis of Bankrsquos Portfolio 34

9) SCOPE OF TREASURY PRODUCTS FOR RETAIL CUSTOMERS 36 a The Concept 36

b Role of SBBJ Brand Value amp Policies 36

c Real Time Gross Settlement amp National Electronic Fund Transfer 37

d Foreign Currency Non Resident (Bank) Account (FCNRB) 39

e Possibility of Application of the concept 39

f Assessment through primary data collection( Questionnaire) 40

g Change in profitability of the Bank 40

h Advantage to the Retail customer 41

10) SUGGESTIONS TO INCREASE IN PROFITABILITY 42 11) ANNEXURE APPENDIX amp LIST OF ABBREVATIONS 45 12) REFERENCES 52

1) ABOUT SBBJ State Bank of Bikaner amp Jaipur is the largest associate of State Bank of India and largest Bank of the Rajasthan state as well State Bank of Bikaner and Jaipur was established in 1963 after amalgamation of erstwhile State Bank of Jaipur (established in 1943) with State Bank of Bikaner (established in 1944) as a subsidiary of State Bank of India The Bank took over the business of the Govind Bank Pvt Ltd on 25041966 The Banks main area of operation is Rajasthan with presence at all-important centres in the country The Bank has 860 branches consisting of 849 business branches 8 service branches 2 asset recovery branches and 1 treasury branch and has sponsored 3 RRBs The Bank follows transparent corporate governance policies and is preparing itself for smooth migration to Basel II ONo table of contents entries foundn technology front during 2005-06 the Bank changed all branches to Core Banking Solution (CBS) The Bank has installed 453 ATMs and all ATMs are the part of over 10000 ATMs of State Bank Group Internet Banking has been extended to all branches for retail customers and selected branches for corporate customers The Bank has rolled out Business Process Reengineering (BPR) initiatives to improve operational efficiency and better customer service and is committed to offer value added to the customers The Bank has been earning profit continuously since its inception and the Banks business crossed the level of Rs 69312 crore with a net profit of Rs 40345 crore at the end of March 2009 Vision ldquoTo be a values driven modern bank aspiring for excellence in customer service perpetually enhancing shareholdersrsquo value and contributing to the economic development of the societyrdquo Mission ldquoTo continue to be a premier bank of Rajasthan with all India presence committed to empower its personnel for providing excellent personalized and quality customer service by adoption of modern technology achieving sustained and profitable growth in business thereby increasing shareholdersrsquo value and contributing to the welfare of the societyrdquo

2) TREASURY a) Introduction Treasury of a bank plans organizes and controls cash and borrowings so as to optimize interest and currency flows and minimizes the cost of funds It also plans and executes communication to enhance investorsrsquo and depositors confidence in the organization Treasury management (or treasury operations) includes management of an organizationrsquos holdings in and trading in government and corporate bonds currencies financial futures options and derivatives payment systems and the associated financial risk management All banks have departments devoted to treasury management as do larger corporations SBBJ the largest associate of SBI also has well equipped treasury department backed by the experienced professionals who support clients in managing their forex and interest rate exposures SBBJs treasury operations are channeled through the Rupee Treasury and the Forex Treasury The Rupee Treasury deals in the domestic money and debt markets while the Forex Treasury deals mainly in the local foreign exchange market The Integrated Risk Management Department located at Head Office in Jaipur monitors the nvestment risk and Asset-Liability Management (ALM) aspects of the Bank i

Products and Services o Asset Liability Management (ALM) The ALM function comprises management

of liquidity maturity profiles of assets and liabilities and interest rate risks o Investments SBBJ offers financial support through a wide spectrum of

investment products that can substitute the traditional credit avenues of a corporate like commercial papers preference shares non-convertible debentures securitized paper fixed and floating rate products

These products allow leveraging the flexibility of financial markets enabling efficient interest risk management and optimizing the cost of funds They can also be customized in terms of tenors and liquidity options SBBJ invests in these instruments issued by a company thus providing a dynamic substitute for traditional credit options The Rupee Treasury handles the bankrsquos domestic investments The bankrsquos trading operations are magnanimous in size and value in the domestic market and cover government securities corporate bonds call money and other instruments b Functions of Treasury The function of treasury now extends beyond mere control of monetary flows and positions Exchange rate and interest rate volatility in the wake of internationalization and deregulation of currency markets the need to increase control of credit risk in increasingly competitive markets and the appearance of new financial instruments have emphasized treasury management to become more forecast- based in its actions with more focus on the management of investments treasury deficits and different financial

risks Basic tasks are of minimizing financial costs of resources and maximizing returns on cash surplus thus providing with the necessary treasury funding in the desired currency at the appropriate time The core function of a treasury department at any bank is the measuring monitoring and controlling of interest rate risk (IRR) IRR is the risk that changes in prevailing interest rates will adversely impact the value of the banks assets and liabilities Generally speaking the department would forecast net interest income (NII) and measure the sensitivity of NII to changes in rates The output of the analysis of the investments would be supplied to the institutions ALCO (AssetLiability Management Committee) ALCO is responsible for overseeing a variety of asset and liability (ALM) activities including the establishment of guidelines for the banks risk tolerance levels The treasury department may further be tasked with ensuring IRR stays within guidelines set by ALCO by entering into a variety of financial transactions such as interest rate swaps futures contracts and so on

i Rupee Treasury The Rupee Treasury carries out the bankrsquos rupee-based treasury functions in the domestic market Broadly these include Asset Liability Management Investments and Trading The Rupee Treasury also manages the bankrsquos position regarding statutory requirements like the cash reserve ratio (CRR) and the statutory liquidity ratio (SLR) as per the norms prescribed by the Reserve Bank of India

The callnotice money market is the most important segment in the Indian money market In this market banks and primary dealers (PDs) are allowed to both borrow and lend The ease of transactions as well as low transaction costs arising from sparse documentation with same day settlement of funds in callnotice money market acted as strong incentives for non-bank participants to prefer the call market for parking their short-term funds CallNotice money is designed for management of liquidity for a very short period of time ndash mostly overnight If the period is more than one day and up to 14 days it is called lsquoNotice moneyrsquo Money lent for 15 days to 1 year is called term money This market is purely an unsecured market as no collaterals are offered for securing the lendingborrowing There are no brokers in the call money market and trading is done over the phone Settlement is done between the participants through the current account maintained with the RBI The call market enables the banks and non-bank financial institutions to even out their day-to-day deficits and surpluses of money Commercial banks Co-operative Banks and Primary Dealers (PDs) are allowed to borrow and lend in this market Banks borrow in this money market for the following purpose

a To fill the gaps or temporary mismatches in funds flow b To meet the CRR amp SLR mandatory requirements as stipulated by the

Central bank c To meet sudden demand for funds arising out of large outflows

Thus call money usually serves the role of equilibrating the short-term liquidity position of banks By convention the term Money Market refers to the market for short-term requirement and deployment of funds Money market instruments are those instruments which have a maturity period of less than one year The most active part of the money market is the market for overnight call and term money between banks and institutions and Repo transactions Call Money Repo are very short-term Money Market products The below mentioned instruments are normally termed as money market instruments Money Market Instruments 1) Certificate of Deposit (CD) 2) Commercial Paper (CP) 3) Inter Bank Participation Certificates 4) Inter Bank term Money 5) Treasury Bills 6) Bill Rediscounting 7) Call Notice Term Money Mumbai Inter-bank Offer Rate - MIBOR The Committee for the Development of the Debt Market had studied and recommended the modalities for the development for a benchmark rate for the call money market Accordingly NSE had developed and launched the NSE Mumbai Inter-bank Bid Rate (MIBID) and NSE Mumbai Inter-bank Offer Rate (MIBOR) for the overnight money

market on June 15 1998 The success of the Overnight NSE MIBID MIBOR encouraged the Exchange to develop a benchmark rate for the term money market NSE launched the 14-day NSE MIBID MIBOR on November 10 1998 and the longer term money market benchmark rates for 1 month and 3 months on December 1 1998 The MIBIDMIBOR rate is used as a bench mark rate for majority of deals struck for Interest Rate Swaps Forward Rate Agreements Floating Rate Debentures and Term Deposits ii Forex Treasury The bankrsquos team of seasoned skilled and professional dealers tailors customized solutions that meet specific requirements and extract maximum value out of each market situation The bankrsquos dealing rooms provides trading facilities and employs state-of-the-art technology and information systems The Forex Treasury also structure and facilitate execution of derivatives including long term rupee-foreign currency swaps rupee-foreign currency interest rate swaps and cross currency swaps Various rates applicable in the forex market are described in short below Forex Spot Rate The current market rate at which a currency can be bought or sold is called foreign exchange spot rate It is the most commonly used rate and unless specifically mentioned as Cash Tom or Forward it is taken for granted to be Spot rate Cash Rate when settlement takes place on the date of the transaction Tom Rate when settlement takes place on the next working date from the transaction date Forward Rate when settlement takes place anytime beyond spot The spot Forex rate differs from the forward rate Forward rate refers to the exchange rate of a currency on a future date (anything beyond spot) Exchange Rate The rate at which one currency can be exchanged for another is called Exchange Rate An exchange rate will always have two currencies One is constant and is called the Base currency and the other keeps varying and is called the Variable currency The fluctuation in the exchange rate is depicted by the change in the variable currency Cross Currency Rates When one currency cannot be expressed in another currency a third currency is used as an intermediate and the resultant is called a Cross Currency London Interbank Offer Rate - LIBOR

It is an interest rate at which banks can borrow funds in marketable lot from other banks in the London Interbank market The British Bankersrsquo Association in London fixes the LIBOR on a daily basis at 11 lsquoOrsquo clock The LIBOR is derived from a filtered average of the worlds most creditworthy banks Interbank deposit rates for larger loans with maturities between overnight and one full year The LIBOR is the worlds most widely used benchmark for short-term interest rates Its important because it is the rate at which the worlds most preferred borrowers are able to borrow money c Importance of Treasury Treasury management or basic cash management propitiates the development of administrative techniques conducive to optimizing the level of disposable assets to be maintained by a company It is therefore essential to establish the right level of disposable assets to short-term financial investments at companies On the one hand it enables companies to carry on the normal transactions that arise in the course of their activities and avoid any treasury gaps On the other hand it helps them cover any unexpected needs for cash by acting as a preventive balance However there are also disadvantages in being too conservative as it is clear that having liquid assets available constitutes an opportunity cost for a company as the return on those assets is lower then the return on productive investments but there may still be transaction costs arising from the sale or purchase of financial assets and disadvantages in terms of taxation It is also characterized mainly with the act on the short-term liquidity of a company and at the same time affects those factors and processes that translate immediately into cash with the ultimate aim of increasing the profitability of the company and improving working capital management This vision of treasury management from a broad perspective covers three fundamental aspects as shown in the following figure -

The basic attribute is liquidity management through which the necessary disposable assets are obtained when required at the minimum possible cost This responsibility requires the forecasting of liquid asset flows the planning of short-term financing and investment sources and relationships with financial institutions and risk management The second attribute is working capital management which handles the disposable assets obtained from sales and collections and purchases and payments These two cash flows -payments and collections- are the principal source of financing and investment for business activity 3) INVESTMENT AN OVERVIEW In finance an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciates and is sold at a higher price Investments include the purchase of bonds stocks or real estate property So putting it in a filtered sense investment is the commitment of funds by buying securities or other monetary or paper (financial) assets in the money markets or capital markets or in fairly liquid real assets such as gold real estate or collectibles Valuation is the method for assessing whether a potential investment is worth its price Returns on investments will follow the risk-return spectrum Types of financial investments include shares other equity investment and bonds (including bonds denominated in foreign currencies) Trades in contingent claims or derivative securities do not necessarily have future positive expected cash flows and so are not considered assets or strictly speaking securities or investments Nevertheless since their cash flows are closely related to (or derived from) those of specific securities they are often studied as or treated as investments

Investments are often made indirectly through intermediaries such as banks mutual funds pension funds insurance companies collective investment schemes and investment clubs Though their legal and procedural details differ an intermediary generally makes an investment using money from many individuals each of whom receives a claim on the intermediary Within personal finance money used to purchase shares put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment In many instances the terms saving and investment are used interchangeably which confuse the distinction of the extent of risk factor attached with both For example many deposit accounts are labeled as investment accounts by banks for marketing purposes Whether an asset is a saving(s) or an investment depends on where the money is invested if it is cash then it is savings if its value can fluctuate then it is investment An investor profile or style defines an individuals preferences in investment decisions for example

o Short term trading (active management) or long term holding (buy and hold) o Risk averse or risk tolerant seeker o All classes of assets or just one (stocks for example) o Value stock growth stocks quality stocks defensive or cyclical stocks o Big cap or small cap stocks o Use or not of derivatives o Home turf or international diversification o Hands on or via investment funds and so on

The style profile is determined by

o Objective personal or social traits such as age gender income wealth family tax situation

o Subjective attitudes linked to the temper (emotions) and the beliefs (cognition) of the investor

One of the most important concepts is that of investment banking Evolved as a general entity of few banks it has gradually confirmed to be known as a financial institution that raises capital trades in securities and manages corporate mergers and acquisitions Investment banks profit from companies and governments by raising money through issuing and selling securities in the capital markets (both equity bond) and insuring bonds (selling credit default swaps) as well as providing advice on transactions such as mergers and acquisition A majority of investment banks offer strategic advisory services for mergers acquisitions divestiture or other financial services for clients such as the trading of derivatives fixed income foreign exchange commodity and equity securities Trading securities for cash or securities (ie facilitating transactions market-making) or the promotion of securities (ie underwriting research etc) was referred to as the sell side Dealing with the pension funds mutual funds hedge funds and the investing

public who consumed the products and services of the sell-side in order to maximize their return on investment constitutes the buy side All primary (urban) co-operative banks (PCBs) (scheduled as well as non-scheduled) are required to maintain stipulated level of cash reserve ratio (CRR) and statutory liquidity ratio (SLR) In regard to cash reserve the provisions of section 42 (1) of the Reserve Bank of India Act 1934 (RBI Act 1934) governs scheduled PCBs whereas non scheduled PCBs are governed by the provisions of section 18 of the Banking Regulation Act 1949 (As Applicable to Co-operative Societies) [(BR Act 1949(AACS)] The provisions of section 24 of the Act ibid govern maintenance of SLR for all banks (scheduled as well as non-scheduled) In case of Statutory Liquidity Ratio the terms of section 24 (1) and 24 (2A) (a) of the BR Act 1949 (AACS) state that every bank (scheduled and non-scheduled) is required to maintain on daily basis liquid assets the amount of which shall not be less than 25 per cent or such other percentage not exceeding 40 per cent as may be notified by RBI (at present the SLR is 24 of DTL) of its demand and time liabilities in India as on the last Friday of the second preceding fortnight So it is mandatory from regulatory side to maintain the specified liquidity ratio for a PSB Detailed descriptions of the relevant investments are given in the later chapters 4) TYPES OF INVESTMENTS There are many different types of investment for retail investors Broadly speaking they fit into four asset classes

i Short term deposits ii Bonds iii Property iv Shares

Within each asset class there are investments to suit different kinds of risk duration returns and liquidity There are also different ways of investing A brief description of each type of investment is presented here i Short term deposits Bank savings accounts

The simplest kind of short term (or cash) investment is a savings account Returns are low compared to other investments but returns are guaranteed by the bank One can withdraw part or all the money whenever one wants (total liquidity) This makes them ideal for short term savings goals or as a place to keep your emergency fund - Theyre not a good investment option for medium or long term goals Bank fixed term investments The bank is given a lump sum for a set period (a fixed term) usually three six or 12 months by the customer The money is locked away for the fixed term In return it fetches a higher interest rate than one could get in a straight savings account These can be a good short or medium term investment depending on interest rates Interest rates are dynamic in nature ii Bonds A bond is issued by a government or a company One gives them money for a certain period and they promise to pay a certain interest rate and re-pay on maturity Bonds lock the money away for a set period of time but they can sometimes be traded Generally they arent a good short term investment Small investors dont usually invest directly in bonds its more usual to go through a managed fund Finance company debentures are a kind of bond The most important aspect of a bond price needs a mention here which is Yield Curve Bond prices change in the opposite direction (inversely proportional) of yield change Therefore lower bond yields are reflected in higher bond prices and vice versa Price volatility increases with maturity The longer the maturity the greater is the volatility factor The lack of credit quality and insufficient calls protection greatly affect price volatility These are few properties that affect the pricing of a bond The Yield to Maturity is actually the average rate of return of a bond taking into account its coupon rate and the capital gain loss on it iii Property Owning property rented to individuals or businesses can be a safe and profitable investment Returns from property investment come from rental income after deducting expenses and from the increase in the value of property over time iv Shares By investing in shares in a public company listed on a stock exchange one gets the right to share in the future income and value of that company The return comes in two ways

i Dividends paid out of the profits made by the company ii Capital gains made because youre able at some time to sell

your shares for more than you paid

Gains may reflect the fact that the company has grown or improved its performance or that the investment community sees that it has improved future prospects Any loss or gain in value is said to be realized if you sell the shares right there and then If you hold onto them the loss or gain is unrealized All of the listed company shares in a particular country or industry may increase or decrease in price because of rises and falls in economic confidence or changes in the particular industry There is a range of complex factors which influence share prices on a daily basis Therefore by investing in a wide range of companies operating in a range of industries and countries an investor has a good chance of making long-term gains Shares should be used as a long-term investment A look at the direct investment is important as it forms an integral part of an investment portfolio to see why some investors prefer to develop their own investment portfolios themselves SLR amp Non-SLR Investments- Managed funds allow investors access to markets which would otherwise be difficult to invest in But from a Bankrsquos perspective especially the treasury the investments are classified into SLR and Non- SLR investments A description of what actually SLR is its various affects on investment portfolio of a bank and its other aspects are dealt with in the next chapter

5) SLR INVESTMENTS

a Introduction Statutory Liquidity Ratio (SLR) is a term used in the regulation of banking in India It is the amount which a bank has to maintain in the form of

i Cash ii Gold valued at a price not exceeding the current market price iii Unencumbered approved securities (Government securities or

Gilts come under this) valued at a price as specified by the RBI from time to time

The quantum is specified as some percentage of the total demand and time liabilities (ie the liabilities of the bank which are payable on demand anytime and those liabilities which are accruing in one months time due to maturity) of a bank The Reserve Bank of India fixes this percentage The maximum and minimum limits for the SLR are 40 and 25 respectively Following the amendment of the Banking regulation Act (1949) in January 2007 the floor rate of 25 for SLR was removed Presently the SLR is 24 with effect from 8 November 2008 The objectives of SLR are

A To restrict the expansion of bank credit B To augment the investment of the banks in Government securities C To ensure solvency of banks A reduction of SLR rates looks eminent to support

the credit growth in India

The SLR is commonly used to contain inflation and fuel growth by increasing or decreasing it respectively This counter acts by decreasing or increasing the money supply in the system respectively Indian banksrsquo holdings of government securities (Government securities) are now close to the statutory minimum that banks are required to hold to comply with existing regulation While the recent credit boom is a key driver of the decline in banksrsquo portfolios of G-Sec other factors have played an important role recently These include interest rate increases changes in the prudential regulation of banksrsquo investments in G-Sec Most G-Secs held by banks are long-term fixed-rate bonds which are sensitive to changes in interest rates Increasing interest rates have eroded banksrsquo income from trading in G-Sec Recently a huge demand in G-Sec was seen by almost all the banks when RBI released around 108000 crore rupees in the financial system This was by reducing CRR SLR amp Repo rates and was amended to increase lending by the banks to the corporate and resolve liquidity crisis Providing economy with the much-needed fuel of liquidity to maintain the pace of growth rate becomes the most vital injection for a slowing economy However the exercise became futile with banks being over cautious of lending in highly shaky market conditions Banks invested almost 70 of this money to rather safe Govt securities than lending it to the corporate

Difference between SLR amp CRRSLR restricts the bankrsquos leverage in pumping more money into the economy On the other hand CRR or Cash Reserve Ratio is the portion of deposits that the banks have to maintain with the RBI Higher the ratio the lower is the amount that banks will be able to use for lending and investment The other difference is that to meet SLR banks can use cash gold or approved securities where as with CRR it has to be only cash CRR is maintained in cash form with RBI where as SLR is maintained in liquid form with banks themselves b Classification of SLR Investments The investments in the SLR securities are classified as Held till Maturity (HTM) Available for Sale (AFS) or Held for Trading (HFT) The securities held under AFS are marked to market on a regular basis and any depreciation has to provide at the end of the month The securities under HFT category are traded to take benefit of short-term fluctuations in the market I) Held to Maturity Securities with fixed or determinable payments and fixed maturity that a bank has positive intention and ability to hold to maturity may be classified as Held to Maturity For example investment in equity shares (including banksrsquo investment in the equity shares of their subsidiaries joint ventures) perpetual preference shares units of open ended mutual fund schemes and securities with a put option would not qualify for inclusion in HTM category A bank does not have a positive intention to hold to maturity an investment in a financial asset with a fixed maturity if (a) It intends to hold the financial asset for an undefined period (b) It stands ready to sell the financial asset in response to changes in market interest rates or risks liquidity needs changes in the availability of and the yield on alternative investments changes in financing sources and terms or changes in foreign currency risk (c) The issuer has a right to settle the financial asset at an amount significantly below its amortized cost Banks weed out ineligible securities held in HTM category and shift these securities to AFS category once in a year On such reclassification the difference between their book value and market value shall be accounted for in lsquoUnrealized gains losses on AFS portfoliorsquo Consequently the market value of the individual security on the date of shifting would become the book value of the security in the AFS portfolio Banksrsquo Boards fix internal limits for holdings in HTM category which are followed on a consistent basis at least for a period of 3 to 5 financial years without any change

(II) Held for Trading Trading generally reflects active and frequent buying and selling The securities acquired principally for the purpose of selling in the near term with the objective of generating profit from short term fluctuations in price interest rates may be classified as Held for Trading These securities are to be sold within 90 days Investments classified under lsquoHeld for Tradingrsquo category will be marked to market and provided for as indicated in the Trading policy of the Bank (III) Available for Sale Available for sale securities are those securities that are designated as available for sale or are not classified under HTM or HFT categories Banks shall include their investments in the equity shares of their subsidiaries associates joint ventures in AFS category As advised by RBI the investments classified under lsquoAvailable For Salersquo category will be marked to market at least at quarterly intervals and the net depreciation

C Types of SLR Investments

The SLR Investments are generally done in the form of i Government Securities (G-Secs) ii State Development Loans (SDL) iii T-Bills

i Government Securities Market The Commercial Banks in India are required to maintain the 24 of their Demand and Time Liabilities (DTL) as Statutory Liquidity Ratio (SLR) The SLR investment is to be maintained either in the form of Government Securities (G Sec) State Development Loans (SDL) and Treasury Bills (T Bills) Government of India and State Government fund the deficit in the annual budget through borrowings G-Secs or Government of India dated Securities are Rupees One hundred face-value units debt paper issued by Government of India in place of their borrowing from the market The term government securities encompass all Bonds amp T-bills issued by the Central Government state government These securities are normally referred to as gilt-edged as repayments of principal as well as interest are totally secured by sovereign They also provide reasonable returns and therefore offer the most suitable investment opportunity However these securities are subject to only one type of risk ie interest-rate risk Subject to changes in the overall interest rate scenario the price of these securities may appreciate or depreciateThe prices of Government Securities depend on interest rates The factors which govern the interest rates are mostly economy related and are commonly referred to as macroeconomic Some of these factors are 1) Demand for money 2) Government borrowings

3) Supply of money 4) Inflation rate 5) The Reserve Bank of India and the Government policies The Reserve Bank of India is the main regulator for the Indian Money Market Apart from its role as a regulator it has to simultaneously fulfill several other important objectives viz managing the borrowing program of the Government of India controlling inflation ensuring adequate credit at reasonable costs to various sectors of the economy managing the foreign exchange reserves of the country and ensuring a stable currency environment RBI controls the deployment of money through its policies on CRR SLR priority sector lending export refinancing guidelines on investment assets etc Another major area under the control of the RBI is the interest rate policy Earlier it used to strictly control interest rates through a directed system of interest rates Over the years RBI has moved slowly towards a regime of market determined controls Earlier the RBI used to issue straight coupon bonds ie bonds with a stated coupon payable periodically In the last few years new types of instruments have been issued These are- Inflation linked bonds These are bonds for which the coupon payment in a particular period is linked to the inflation rate at that time - the base coupon rate is fixed with the inflation rate (consumer price index-CPI) being added to it to arrive at the total coupon rate The idea behind these bonds is to make them attractive to investors by removing the uncertainty of future inflation rates thereby maintaining the real value of their invested capital FRB or Floating Rate Bonds These bonds come with a coupon floater which is usually a margin over and above a benchmark rate Eg the Floating Bond may be nomenclaturedenominated as +125 FRB YYYY (the maturity year) +125 coupon will be over and above a benchmark rate where the benchmark rate may be a six-month average of the implicit cut-off yields of 364-day Treasury bill auctions If this average works out 950 pa then the coupon will be established at 950 + 125 ie 1075pa Normally FRB (floaters) also bear a floor and cap on interest rates Interest so determined is intimated in advance before such coupon payment which is normally Semi-Annual Zero coupon bonds These are bonds for which there is no coupon payment They are issued at a discount to face value with the discount providing the implicit interest payment In effect zero coupon bonds are like long duration T - Bills Dated Securities A government paper which has its maturity tenure of more than one year is called a dated security At present there are Central Government dated securities with a tenor up to 30 years in the market AuctionSale Dated securities are sold through auctions A half yearly calendar is issued in case of Central Government dated securities indicating the amounts the period within which the auction will be held and the tenor of the security Fixed coupon securities are sometimes also sold on tap that is kept open for a few days The GoI and the RBI announce the auction dates through press release and advertising financial newspapers and wire agencies a few days (normally a week) before

the auction Subscriptions can be for a minimum amount of Rs10 000 and in multiples of Rs10 000 Auctions are conducted and bids are submitted electronically on PDO-NDS system Provident funds can submit their bids competitivenon-competitive to their respective custodian or to any bankPD who is an NDS member ii SDL The State Government loans are called SDLs i e State Development Loans The respective state governments issue these but the RBI coordinates the actual process of selling these securities Each state is allowed to issue securities up to a certain limit each year The planning commission in consultation with the respective state governments determines this limit Generally the coupon rates on state loans are marginally higher than those of GOI-Secs issued at the same time TThe procedure for selling of state loans the auction process and allotment procedure is similar to that for GOI-Sec State Loans also qualify for SLR status Interest payment and other modalities similar to GOI-Secs They are also issued in dematerialized form SGL also issued in the physical form (in the form of Stock Certificate) and are transferable No stamp duty is payable on transfer for State Loans as in the case of GOI-Secs In general State loans are much less liquid than GOI-Secs The tenor of state government securities is normally ten years State government securities are available for a minimum amount of Rs10 000 and in multiples of Rs10 000 These are available at a fixed coupon rate iii T-Bills Treasury bills are actually a class of Central Government Securities Government of India issues treasury bills commonly referred to as T-Bills against their short term borrowing requirements The T-Bill of below mentioned periods are currently issued by GovernmentReserve Bank of India in Primary Market 91-day and 364-day T-Bills All these are issued at a discount-to-face value and are redeemed at par For example a Treasury bill of Rs 10000 face value issued for Rs 9150 gets redeemed at the end of its tenure at Rs 10000 91 days T-Bills are auctioned under uniform price auction method where as 364 days T-Bills are auctioned on the basis of multiple price auction method Types of T-bills They are issued for different maturities viz 14-day 28 days (announced in Credit policy but yet to be introduced) 91 days 182 days and 364 days 14 days T-Bills had been discontinued recently 182 days T-Bills were not re-introduced Treasury bills are available for a minimum amount of Rs 25000 and in multiples of Rs 25000 Treasury bills are also issued under the Market Stabilization Scheme (MSS)

Type of Day of Day of T-bills Auction Payment 91-day Wednesday Following Friday 182-day Wednesday of non-reporting week Following Friday

364-day Wednesday of reporting week Following Friday While 91-day T-bills are auctioned every week on Wednesdays 182-day and 364-day T-bills are auctioned every alternate week on Wednesdays The Reserve Bank of India issues a quarterly calendar of T-bill auctions which is available at the Banksrsquo website If the day of payment falls on a holiday the payment is made on the day after the holiday Payment by allottees at the auction is required to be made by debit to their custodianrsquos current account Provident funds can participate in all T-bill auctions either as competitive bidders or as non-competitive bidders Participation as non-competitive bidders would mean that provident funds donrsquot need to quote the price at which they desire to buy these bills The Reserve Bank allots bids to the non-competitive bidders at the weighted average price of the competitive bids accepted in the auction Allocations to non-competitive bidders are in addition to the amount notified for sale In other words provident funds do not face any uncertainty in purchasing the desired amount of T-bills from the auctions Banks Primary Dealers State Governments Provident Funds Financial Institutions Insurance Companies NBFCs FIIs (as per prescribed norms) NRIs amp OCBs can invest in T-Bills T-bills auctions are held on the Negotiated Dealing System (NDS) and the members electronically submit their bids on the system

6) NON- SLR INVESTMENTS Securities having SLR status as specified by RBI are eligible securities for investment by banks to meet their SLR commitments under Sec 24 (2-A) of the B R Act 1949 All other investments are Non- SLR investments As the name suggest investment in Non-SLR bonds cannot be considered eligible for SLR requirement These include PSU bonds Corporate bonds and even certain Government securities like Oil Bonds Food Bonds Fertilizer Bonds etc The Non-SLR Investments are classified into

a Equity b Equity Mutual Funds c Debt Mutual Funds d Non- SLR Bonds e Commercial Paper (CP) f Certificate of Deposit (CD)

a Equity

It is a financial instrument by which company invite the public to invest their money in the company and investor can become a partner of the company Generally when the company have insufficient money to expand its business it comes with equity shares When one purchases stocks or equities he becomes a part owner of the business This entitles the stakeholder to vote at the shareholders meeting and allows receiving any profits that the company allocates to its owners These profits are referred to as dividends While bonds provide a steady stream of income stocks are volatile That is they fluctuate in value on a daily basis Many stocks dont even pay dividends in which case the only way that one can make money is if the stock increases in value - which might not happen Compared to bonds stocks provide relatively high potential returns The Indian Equity Market is also the other name for Indian share market or Indian stock market The Indian market of equities is transacted on the basis of two major stock indices National Stock Exchange of India Ltd (NSE) and The Bombay Stock Exchange (BSE) the trading being carried on in a dematerialized form The physical stocks are in liquid form and cannot be sold by the investors in any market Two types of funds are there in the Indian Equity Market Venture Capital Funds and Private Equity Funds

b Equity Mutual Funds A mutual fund is a collection of stocks and bonds Mutual funds are set up with a distinct focus which can be nearly anything large stocks small stocks bonds from governments bonds from companies stocks and bonds stocks in certain industries stocks in certain countries etc The primary advantage of a mutual fund is that one can invest his money

without the time or the experience that are often needed to choose a sound investment The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them

Mutual Fund Operation Flow Chart

The advantages of investing in a Mutual Fund are Professional Management Diversification Convenient Administration Return Potential Low Costs Liquidity Transparency Flexibility Choice of schemes Tax benefits Well regulated There are many entities involved in the organization of a mutual fund It can be depicted with the help of the following diagram-

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position risk tolerance and return expectations etc This variety is mainly categorized as 1) By Structure

i Open- ended schemes ii Close- ended schemes iii Interval schemes

2) By Investment Objective i Growth schemes ii Income schemes iii Balanced schemes iv Money market schemes

3) Other Schemes

i Tax- saving schemes ii Special schemes iii Index specific schemes iv Sector specific schemes

Equity mutual funds are also known as stock mutual funds Many mutual funds invest primarily in companies of one of these sizes and are thus classified as large-cap mid-cap or small-cap funds Equity fund managers employ different styles of stock picking when they make investment decisions for their portfolios Some managers buy both kinds of stocks building a portfolio of both growth and value stocks Since equity funds invest in stocks they have the potential to generate more returns On the other hand they carry greater risks too Equity funds can be classified into diversified equity funds and sectoral equity funds

c Debt Mutual Funds

Debt funds offer a superior risk-adjusted proposition along with tax benefits From an inflation-adjusted perspective additional to liquidity of investments at low costs fixed income mutual funds compare very favorably to fixed deposits The significant part is that of the underlying fixed income nature of the product While the tax advantages are just one part the sheer variety of products available for every risk return and liquidity requirement is in itself a significant advantage Fixed Deposits generally have a lock-in-period wherein in a pre-mature withdrawal by an investor would mean a monetary penalty that would be charged to the investor Also certain funds offer regular income schemes where the interest payment is given to investor for his investment at regular intervals a facility not available with FDs Debt funds also tend to perform better in periods of economic slowdown Analysts believe that debt should be looked upon as an effective hedge against equity market volatility which lends stability in terms of value and income to a portfolio Some hybrid debt schemes take exposure in equities allowing investors participate in the stock markets as well

Debt funds have a fairly wide range of schemes offering something for all types of investors Liquid fund Liquid plus funds Short-term income funds GILT funds income funds and hybrid funds are some of the more popular categories For long-term investors income funds provide the best opportunity to gain from interest rate movements There are also the short-term plans for investors Fixed maturity plans have been gaining in popularity as they minimize the interest rate risk and offer reasonable returns to debt investors Income funds enjoy many of the tax benefits granted to plain-vanilla mutual fund products Favourable treatment of long term capital gains From a post-tax perspective mutual fund units score over bank FDs especially for those investors who are in the highest tax bracket Generally speaking there is a linear relationship between investment horizon and returns other things remaining the same The risks of investing in a debt fund are similar to that of other mutual funds Overall investments in debt funds score above other traditional investment avenues in terms of tax-adjusted returns liquidity and safety

d Non-SLR Bonds

Generally grouped under the general category called fixed-income securities the term bond is commonly used to refer to any securities that are founded on debt When we purchase a bond we are lending out our money to a company or government In return they agree to give us interest on our money and eventually pay us back the amount we lent out The main attraction of bonds is their relative safety and stability however come at a cost because there is little risk there is little potential return As a result there is lower rate of interest on bonds than other securities Public Sector Undertaking Bonds (PSU Bonds) These are Medium or long-term debt instruments issued by Public Sector Undertakings (PSUs) Most of the PSU Bonds are sold on Private Placement Basis to the targeted investors at market determined interest rates and issued in demat form In order to attract the investors and increase liquidity issuers get their bonds rated by rating agencies like CRISIL ICRA CARE etc Some of the issues may be guaranteed by Central State Government enabling them to get a better rating The bonds may carry call put option Corporate Bond Corporate Bonds are issued by public sector undertakings and private corporations for a wide range of tenors but normally up to 15 years However some Banks and Companies like Reliance have also issued Perpetual Bonds Compared to government bonds corporate bonds generally have a higher risk of default This risk depends of course upon the particular corporation issuing the bond its rating the current market conditions and the sector in which the Company is operating

Corporate bondholders are compensated for this risk by receiving a higher yield than government bonds Some corporate bonds have an embedded call option that allows the issuer to redeem the debt before its maturity date Some even carry a put-option for the benefit of the investors Other bonds known as convertible bonds allow investors to convert the bond into equity SBI DFHI is an active player in Non SLR Bonds e Commercial Paper Commercial Paper is an unsecured money market instrument issued in the form of a promissory note It was introduced in 1990 with the view to enable highly rated corporate borrowers to diversify their sources of short- term borrowings Now corporate primary dealers and All- India Financial Institutions (FI) are eligible to issue CP A corporate is eligible to issue CP only when

The tangible net worth of the company as per the latest audited balance sheet is not less than Rs 4 crore

Company has been sanctioned working capital by banks or FIs The borrowal account of the is classified as a Standard Asset by the banks or FIs

All eligible participants shall obtain the credit rating for issuance of Commercial Paper either from CRISIL ICRA CARE or the FITCH Ratings India Pvt Ltd or such other credit rating agency (CRA) as may be specified by the Reserve Bank of India from time to time for the purpose The minimum credit rating shall be P-2 of CRISIL or such equivalent rating by other agencies The issuers shall ensure at the time of issuance of CP that the rating so obtained is current and has not fallen due for review or is beyond maturity date CP can be issued for maturities between a minimum of 7 days and a maximum up to one year from the date of issue The aggregate amount of CP from an issuer shall be within the limit as approved by its Board of Directors or the quantum indicated by the Credit Rating Agency for the specified rating whichever is lower CP can be issued in denominations of Rs5 lakh or multiples thereof Amount invested by a single investor should not be less than Rs5 lakh (face value) Only a scheduled bank can act as an IPA (Issuing amp Paying Agent) for issuance of CP

f Certificate of Deposits

Certificates of Deposit (CDs) is a negotiable money market instrument and issued in dematerialized form or as a Usance Promissory Note for funds deposited at a bank or other eligible financial institution for a specified time period Various directives issued by the Reserve Bank of India as amended from time to time presently govern guidelines for issue of CDs CDs can be issued by i) scheduled commercial banks excluding Regional Rural Banks (RRBs) and Local Area Banks (LABs) and (ii) select all-India Financial Institutions that have been permitted by RBI to raise short-term resources within the umbrella limit fixed by RBI Banks have the freedom to issue CDs depending on their requirements An FI may issue CDs within the overall umbrella limit fixed by RBI ie issue of CD together with other instruments viz term money term deposits commercial

papers and inter-corporate deposits should not exceed 100 per cent of its net owned funds as per the latest audited balance sheet Minimum amount of a CD should be Rs1 lakh ie the minimum deposit that could be accepted from a single subscriber should not be less than Rs 1 lakh and in the multiples of Rs 1 lakh thereafter CDs can be issued to individuals corporations companies trusts funds associations etc Non- Resident Indians (NRIs) may also subscribe to CDs but only on non-repatriable basis which should be clearly stated on the Certificate Such CDs cannot be endorsed to another NRI in the secondary market CDs may be issued at a discount on face value BanksFIs are also allowed to issue CDs on floating rate basis provided the methodology of compiling the floating rate is objective transparent and market-based The issuing bankFI is free to determine the discountcoupon rate The interest rate on floating rate CDs would have to be reset periodically in accordance with a pre-determined formula that indicates the spread over a transparent benchmark Banks have to maintain the appropriate reserve requirements ie cash reserve ratio (CRR) and statutory liquidity ratio (SLR) on the issue price of the CDs Physical CDs are freely transferable by endorsement and delivery Demat CDs can be transferred as per the procedure applicable to other demat securities There is no lock-in period for the CDs

7) INVESTMENT PORTFOLIO a Introduction Modern portfolio theory (MPT) proposes how rational investors use diversification to optimize their portfolios and how a risky asset should be priced MPT models an assets return as a random variable and models a portfolio as a weighted combination of assets so that the return of a portfolio is the weighted combination of the assets returns Moreover a portfolios return is a random variable and consequently has an expected value and a variance Risk in this model is the standard deviation of return The model assumes that investors are risk averse meaning that given two assets that offer the same expected return investors will prefer the less risky one Thus an investor will take on increased risk only if compensated by higher expected returns Conversely an investor who wants higher returns must accept more risk The exact trade-off will differ by investor based on individual risk aversion characteristics The implication is that a rational investor will not invest in a portfolio if a second portfolio exists with a more favorable risk-return profile ndash ie if for that level of risk an alternative portfolio exists which has better expected returns Portfolio A portfolio is a combination of different investment assets mixed and matched for the purpose of achieving an investors goal(s) Items that are considered a part of a portfolio can include any asset one owns - from real items such as art and real estate to equities fixed-income instruments and their cash and equivalents For the purpose of this section we will focus on the most liquid asset types equities fixed-income securities and cash and equivalents An easy way to think of a portfolio is to imagine a pie chart whose portions each represent a type of vehicle to which you have allocated a certain portion of your whole investment The asset mix one chooses according to his her aims and strategy will determine the risk and expected return of your portfolio b Basic Types of Portfolios In general aggressive investment strategies - those that shoot for the highest possible return - are most appropriate for investors who for the sake of this potential high return have a high-risk tolerance (can stomach wide fluctuations in value) and a longer time horizon Aggressive portfolios generally have a higher investment in equities The conservative investment strategies which put safety at a high priority are most appropriate for investors who are risk- averse and have a shorter time horizon Conservative portfolios will generally consist mainly of cash and cash equivalents or high-quality fixed-income instruments

The main goal of a conservative portfolio strategy is to maintain the real value of the portfolio or to protect the value of the portfolio against inflation This portfolio would yield a high amount of current income from the bonds and would also yield long-term capital growth potential from the investment in high quality equities A moderately aggressive portfolio is meant for individuals with a longer time horizon and an average risk tolerance Investors who find these types of portfolios attractive are seeking to balance the amount of risk and return contained within the fund The portfolio would consist of approximately 50-55 equities 35-40 bonds 5-10 cash and equivalents The above asset classes can further be broken down into subclasses which also have different risks and potential returns For example an investor might divide the equity portion between large companies small companies and international firms The bond portion might be allocated between those that are short-term and long-term government versus corporate debt and so forth More advanced investors might also have some of the alternative assets such as options and futures in the mix So the number of possible asset allocations is practically unlimited c Need of Portfolios Different securities perform differently at any point in time so with a mix of asset types the entire portfolio does not suffer the impact of a decline of any one security When stocks go down one may still have the stability of the bonds in a portfolio Its really just the simple practice of famously said quote of not putting all your eggs in one basket If one spreads his her investments across various types of assets and markets one will reduce the risk of catastrophic financial losses Investments could include a mix of stocks bonds mutual funds and other investment vehicles A portfolio should also be balanced to help minimize exposure It can help you put an individualrsquos money to work allowing him to build wealth faster and helping to save for future events Whether a person is saving for retirement or want to buy a new house an investment portfolio properly managed can help him her get there So it can be summarized that a portfolio is needed to evaluated on a regular basis and increase the values of portfolio

8) SBBJ INVESTMENT PORTFOLIO

a) Introduction to SBBJ Investments

The total business of the bank has crossed Rs 69300 crore at the end of March 2009 State Bank of Bikaner amp Jaipur Ltd has announced the financial results for the quarter ended on 31-Mar-2009 The bank is targeting business growth of at least Rs 16300 crore in the current fiscal comprising deposits of Rs 9100 crore and advances of Rs 7200 crore as against Rs 9885 crore in FY09 The Net Sales was at Rs438733 crores for the year ended on 31-Mar-2009 against Rs352368 crores for the year ended on 31-Mar-2008 The Net Profit (Loss) was at Rs40345 crores for the year ended on 31-Mar-2009 against Rs315 crores for the year ended on 31-Mar-2008 As of 31st March 2009 the total investment of the Bank in SLR securities was Rs 971762 crore out of which Rs 735196 crore was invested in Central Government Securities Rs 196730 crores in State Development Loans (SDL) and Rs 39836 crore in Treasury Bills During the Financial Year 2008-09 SBBJ booked a profit of Rs 3268 crores from Sale of SLR securities Total turnover of the treasury department of SBBJ for the year ending March 2009 was Rs 1 2106437 crores Initially the strategy for the previous year can be assessed so as to see if there can be a pattern for investments which are not proving very advantageous And if not then which new paths can be discovered for the same purpose SBBJ INVESTMENTS AT A GLANCE As on 31st March 2009 total investments of State Bank of Bikaner and Jaipur (SBBJ) was Rs 1107516 crore as against Rs 1056608 crore as on 31st March 2008 Total investments as on 31st March 2007 were Rs 883111 crore Out of total investments of Rs 1107516 crore as on 31st March 2009 Rs 1041453 crore (9404) was SLR investments Under SLR investments Rs 824099 crore was categorized under HTM category (with no mark to market risk due to rise in interest rates) Under AFS category also Rs 121771 crore of investments was in Treasury Bills Investment in Treasury Bills also carries zero interest rate risk Only Rs 95583 crore of SLR investments was sensitive to interest rate risk (Details are given in the annexure) The investment profile of the Bank shows focus of treasury department on SLR investments Activity in Non SLR investments (Equity Equity Mutual Funds Non SLR Bonds and Certificate of Deposits) is very low Low Non-SLR investments denote low risk appetite of the bank for investments b Effect of External Environment amp Past Year Strategy

Effect of External Environment- Boosted by positive global cues and liquidity supportive measures by RBI the Indian markets had a spectacular rise in the month of April 09 with the Sensex rising 175 to close at 11403 and the Nifty rising 15 to close at 3474 Reflecting the return of risk appetite the emerging market bond spreads reduced This was reflected in the performance of the various capitalization-based indices with small cap and mid cap stocks performing better than the large cap stocks Similarly return of risk appetite was reflected in the sectoral indices with the Banks Capital Goods Metal and Realty indices outperforming the Sensex while Auto FMCG Consumer Durables Health Care IT Oil amp Gas Power and PSU lagging the Sensex For the month in cash equities FIIs were net buyers ofUSD13 billion while Mutual Funds were net buyers ofUSD8 million Even corporate results (ex financials) for the quarter ended March 09 that were declared (many large companies are yet to declare results) in the month of April showed signs of stabilization In its Annual policy announcement on 21st April 09 the RBI announced a cut in Repo (rate at which it lends) and reverse Repo (rate at which it absorbs excess cash) by 25 basis points to 475 and 325 respectively while stating it would ensure ample liquidity by continuing to take an active role in the borrowing program which would also help banks lower lending rates The RBI also extended many liquidity enhancing measures which were due to expire related to refinance of banks special term Repo for mutual funds NBFCrsquos and housing companies relation of ECB and FCCB norms and export credit In its annual report the RBI provided the following macro estimates for financial year ending March 2010 GDP growth is expected to be 6 M3 growth is expected from 17 to 19 deposit growth at 18 credit Growth at 20 while it expects inflation to reverse by midyear and rise to4by March 10 After the sharp rally in face of skepticism in April a lot of investors seem to be wary to dip their feet in the markets at current levels It may be noted however that the Indian markets are still available at reasonablecheap valuations when Sensex earnings yield is compared with long term government security yields And even though negative global news flow or unexpected election results may impact the markets in the short term it will only provide an entry opportunity to investors focusing on the long-term prospects of our nationrsquos capital markets Investors should use uncertainty and fear generated by such unexpected events to invest with a view that after a short dislocation economic growth would continue apace due to Indiarsquos inherently resilient domestic economic structure Focus on how value compares with price paid for a stake in the economic future of this country will help investors maintain calm in the face of storms while generating wealth on a sustainable basis A landmark event which happened in India in May 09 is the implementation of the New Pension Scheme which will benefit both government sector and private sector employees It will allow employees the choice of fund managers and asset classes including equities (to which they can allocate up to 50 of their portfolio) This will help create a steady flow of long-term money to the Indian equity markets In May 09 the market focused on the domestic political scene where results of the current Central Government elections drove sentiment Results of the Federal Reserve administered stress test on large US banks publication of other leading indicators of the

various developed economies and the global effort to control the swine flue epidemic also had a tough impact on overall sentiment throughout the world Past Year Strategy- The yield movement for the last 5 months of the year 08-09 shown in graph as under

10 YEAR YIELD

10 Yr Yield15 Yr Yield

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

For financial year 2008-09 the 10 year G sec yield on 824 2018 GS 2018 was 792 (Price Rs 10210) The sentiment in the market had weakened due to higher inflation c Analysis of Bankrsquos Portfolio As we look into the various investments made in the two fiscal years we need to take a clear view of the market scenario of that particular period Current period can be seen as the toughest period of recession in the past few decades Not going into much known details the focus can be centered on the financial and mainly the investment situation Due to oversupply in the market the fiscal stimulus turned out to be a disaster in terms of lending pattern of various international banks This led to high inflation which in turn led to interest rate cut This vicious cycle of lending and borrowing then paved way to increase in money supply and hence increase in bond prices People begin to make faster money Now all these cause and effects made a great impact on the duration of the bond prices The ldquodurationrdquo can be specified here as the actual timing of acquirement of the principal of the coupon Duration is the deciding factor for all type of investments whether long term or short term This duration also seeks to increase or decrease the pricing of various government or private bonds So it is very important to know that when interest rate movement takes place the short term bond prices tend to fluctuate less while the long term bond prices fluctuate less in comparison to the short term ones Hence when the prices go downward it increases the duration ie the return of the

coupon takes a longer time which definitely hurts the profitability sentiment of the investor The exhaustive data regarding the Investments done by SBBJ for the previous year as well as the current year is given in the section of Appendices As per the SBBJ investment guidelines (chapter-10) states that the entire investment portfolio of the bank (including SLR securities and Non-SLR securities) will be classified under three categories viz lsquoHeld to Maturityrsquo lsquoAvailable for Salersquo and lsquoHeld for Tradingrsquo However in the balance sheet the investments will continue to be disclosed as per the existing six classifications viz (I) Govt securities (ii) Other approved securities (iii) Shares (iv) Debentures amp Bonds (v) SubsidiariesJoint Ventures (vi) Others (CP Mutual Fund Units etc) In terms of above RBI guidelines the investments included under lsquoHeld to Maturityrsquo should not exceed 25 of the banks total investments However banks have been allowed (in September 2 2004) to exceed the limit of 25 per cent of total investments under HTM category provided

bull the excess comprises only of SLR securities and bull the total SLR securities held in the HTM category is not more than 25 per cent of

the DTL as on the last Friday of the second preceding fortnight The details of the portfolios are given in the Annexure section of the report It is for the reference purpose The portfolios are for the year 2007-08 2008-09

9) SCOPE OF TREASURY PRODUCTS FOR RETAIL CUSTOMERS a The Concept

Product innovation is an integral part of any market development Generally at the beginning market participants try out the new product to see how it fits into their business model But to have a continuing commitment from the market participants the product must stand out on its own So for the same every organization needs to reinvent itself and come out with innovative or interesting (advantageous at the same time) to maintain and grow its market share and position Retail banking is important for millions of consumers worldwide and has a vital role to play in financial services industry of countries across the globe The sector has moved forward on many fronts from branches to the Internet from brands to business strategies and from off-the-shelf products to structured offerings Today consumers have increasingly started to take control of their personal finances and shop for various services in an increasingly competitive marketplace amp banks have responded by offering a blend of traditional and contemporary financial services The thriving financial markets and de-regulation (read lesser regulations) has attracted customers to increasingly invest in overseas markets Banks see a huge opportunity in this area as these customers instinctively turn to their bankers for their foreign exchange needs As customers are becoming better informed banks face challenges in providing attractive exchange rates and service the request to the satisfaction of the customer Technology has enabled them in quick client servicing transaction matching efficient accounting regulatory compliances tracking amp many more b Role of SBBJ Brand Value amp Policies

SBI is ranked 69 in the latest survey of most valued and known brands all over the world with a brand value of $144 billion down from $2852 billion However if SBIrsquos associate banks SBBJ being one of the three were added to the scoremdashas was done last yearmdashthen its ranking would have jumped to 56 and brand value to $187 billion SBBJ is the one of the most known name in the banking sector all over its home state and still it has managed to increase its customer base even when a number of private banks are coming up Also there is no doubt in the fact that SBBJ is not behind in its role of corporate governance SBBJ is one of the pioneers in banking in remote areas The bank has been holding the number one position in Rajasthan in financing entrepreneurs under Prime Ministers Rozgar Yojana Scheme consecutively for the last 5 financial years The bank has been amongst the first few PSB in the country to migrate all the branches to Core Banking Solution (CBS) Also during 2007-08 the bank has launched many value added services for its customers including the facility of Deduction of Tax at Source and e-payment of excise dutiesservice tax The bank has also declared the year 2008-09 as the Year of Retail and Customer Service

These insights are enough to prove the point that SBBJ carries a high brand value which would be very helpful once the bank is ready to take the plunge and get into new avenues of banking like the ones suggested in this report Better customer service will obviously lead to a more satisfied customer In this way the bank would not only be benefited financially but also gain more clientele base all over the country

c Real Time Gross Settlement amp National Electronic Fund Transfer The acronym RTGS stands for Real Time Gross Settlement RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a real time and on gross basis This is the fastest possible money transfer system through the banking channel Settlement in real time means payment transaction is not subjected to any waiting period The transactions are settled as soon as they are processed Gross settlement means the transaction is settled on one to one basis without bunching with any other transaction It is required for the following reasons

a Speedy settlement of large transactions is very necessary for an active and sustainable market

b Use of monetary management tools becomes simpler and more effective

Considering that money transfer takes place in the books of the Reserve Bank of India the payment is taken as final and irrevocable The RTGS system is primarily for large value transactions The minimum amount to be remitted through RTGS is Rs1 lakh There is no upper ceiling for RTGS transactions Under normal circumstances the beneficiary branches are expected to receive the funds in real time as soon as the remitting bank transfers funds The beneficiary bank has to credit the beneficiarys account within two hours of receiving the funds transfer message The remitting bank receives a message from the Reserve Bank that money has been credited to the receiving bank Based on this the remitting bank can advise the remitting customer that money has been delivered to the receiving bank It is expected that the receiving bank will credit the account of the beneficiary instantly If the money cannot be credited for any reason the receiving bank would have to return the money to the remitting bank within 2 hours Once the money is received back by the remitting bank the original debit entry in the customers account is reversed Generally the minimummaximum amount for RTGSNEFT transactions under Retail Internet Banking is

Type Minimum Maximum

RTGS Rs 1 Lakh Rs 5 Lakh

NEFT No Limit Rs 5 Lakh

Whereas the minimummaximum amount for RTGSNEFT transactions under Corporate Internet Banking is

RTGS Rs 1 Lakh No Limit

NEFT No Limit No Limit

On a typical day RTGS handles about 14000 transactions a day for an approximate value of Rs1 50000 crore RTGS in

National Electronic Funds Transfer (NEFT) system is a nation wide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch As on December 31 52427 branches of 89 banks are participating Steps are being taken to widen the coverage both in terms of banks and branches There is no restriction of centres or of any geographical area inside the country The system uses the concept of centralized accounting system and the banks accounts which are sending or receiving the funds transfer instructions gets operated at one centre ie Mumbai only The individual branches participating in NEFT could be located anywhere across the country The beneficiary gets the credit on the same day or the next day depending on the time of settlement The records for the SBBJ business done in RTGS and NEFT are shown below for a general reference purpose

Performance Highlights For The Year Ended March 2009 2007-2008 2008-2009 change RTGS No of

txns Amount (Rs in Crores)

No of txns

Amount (Rs in Crores)

No of txns

Inward 107844 14472893 216258 17238352 14082 3826 Outward 116716 17934256 294831 22406507 15227 4461 TOTAL 224560 22407149 511089 39644859 19759 8287 NEFT No of

No of txns

Inward 37246 19446 156478 76080 32514 29123 Outward 12134 7106 73270 36575 50384 41454 TOTAL 49380 26552 229748 112655 36828 32422 GRPT No of

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

TOTAL 1081 31097 32559 706913 - - Started in February 2008

PSG has managed and monitored the fund requirements of the branches promptly and efficiently

All entries have been resolved during the year TURNOVER The number of transactions has increased from 275014 as on

31032008 to 773296 as on 31032009 showing an increase of 18118 COMMISSION The commission earned during the year is Rs 3 57 8021312 INITIATIVES As per the instructions of RBI the concept of CFC (Customer

Facilitation Centre) was introduced at PSG Mumbai by our bank and all the queries from customers and other banksrsquo branches have been resolved quickly

d Foreign Currency Non Resident (Bank) Account (FCNRB)

Foreign Currency Non Resident (Banks) account is an investment avenue available to NRIs Accounts can be opened only in the form of term deposits and can be maintained in four currencies viz Pound sterling US Dollar Japanese Yen and the Euro Repayments under this scheme are made in foreign currency and therefore it offers the depositor protection against exchange rate fluctuations The tenor of the scheme ranges from 12 months to 36 months FCNR (B) loans are a low cost short-term funding source available to Indian corporate Banks have been permitted to provide foreign currency denominated loans to their customers from the resources mobilized under the FCNR (B) scheme RBI granted this permission to help banks to deploy their FCNR funds in a more commercially viable manner and make available a better avenue of credit at cheaper interest rates to resident borrowers At the same place FCNR (B) loans are a very crucial facility provided by the banks where No special permission is required from the regulatory authorities for availing FCNR (B) loans and the existing rupee credit limits can be converted into a foreign currency loan The interest rates and the tenor of the loans are left free to be decided by negotiation between banks and borrowers They are generally granted for period up to three years Normally loans under this scheme are not given for an amount less than USD 100000 Loans are generally denominated in the four currencies in which FCNR deposits are accepted viz US Dollar Euro Japanese Yen and Pound Sterling the US Dollar being the most popular currency of choice

e Possibility of Application of the concept There are great avenues of the treasury products to get to the market for individual customers A customer today looks for versatility in his profile So if the Bank is providing for new initiatives like that of CFC it is definitely possible to apply at least a

few of other retail concepts to Core Banking Services Adopting novel concepts not only enhances the brand position that the institution carries but also continuous improvements lead to a refined intellect at the organization The retailing though is not absolute a novice to SBBJ expanding its roots into the core services of the Bank

f Assessment through primary data collection (Questionnaire)

It is very important to know about the actual requirement in the market like what is the demand supply gap in the market and if there is a requirement of new services in terms of customer expectations For this purpose a direct approach will be helpful So a questionnaire is prepared and data is collected from 100 people belonging from various professions including 15 people of treasury department The department officialsrsquo inputs can be useful as they experience the day to day hurdles and know about what the customers want more from the bank and if there are any ways by which both the parties be benefited The questions included are divided into three sections to avoid ambiguity in analysis The three sections are divided as risk appetite and investment pattern knowledge of investment and return objectives comprising the first section having sixteen questions of the questionnaire The second section enquired about the individualrsquos knowledge of treasury and investments products as which monetary instruments make up a viable option to invest having five questions And the last section included customer expectations asking information as a customer service survey about what a bank customer especially a State Bank customer is expecting in terms of new services and how can be the present scenario can be improvised Out of 100 people to whom the questionnaire was sent 85 questionnaires returned and out of these 72 were valid as per the requirement of filled up options and single option choices The filled up questionnaires mainly consisted of age group of 21-40 This age group being the earning and investing age group is the most important for the survey

g Change in profitability of the Bank

RTGS can benefit the Bank in various ways like

i It would pave way to better customer service ii It has lower transaction costs involved init iii It would reduce the workload on the Bankers immensely as lesser

manual work is involved in RTGS iv Daily reconciliation would lead to a dip in manual errors increasing

efficacy and at the same time the organization credibility v Better efficient and optimum method for meeting CRR and other

obligations vi Higher revenue by way of commission vii No grid- lock settlement risk viii No more inter bank settlement would be required

NEFT proves very helpful to the bank as the RBI-EFT system is confined to the 15 centres where RBI is providing the facility where as there is no such restriction in NEFT as it is based on the centralized concept The detailed list of branches of various banks participating in NEFT system is available on our website The system also uses the state-of-the-art technology for the communication security etc and thereby offers better customer service NEFT is an electronic payment system to transfer funds from any part of country to any other part of the country and works on Net settlement unlike RTGS that works on gross settlement and EFT which is restricted to the fifteen centers only where RBI offices are located There is no value limit for individual transactions Indian Financial System Code (IFSC) is an alpha numeric code designed to uniquely identify the bank-branches in India This is 11-digit code with first 4 characters representing the banks code the next character reserved as control character (Presently 0 appears in the fifth position) and remaining 6 characters to identify the branch The MICR code has 9 digits to identify the bank-branch

h Advantage to the Retail customer Retail customers can be provided with a structure to provide medium to long-term capital appreciation by investing in stocks across the market capitalization range This scheme can be taken to be a mix of moderate and aggressive investment strategies

RTGS system is very beneficial to the Retail customers in the following ways

i The RTGS payment mechanism is much safer than cheques ii They canrsquot get lost or stolen iii It eliminates postal courier expenses iv Ensure rapid timely and accurate transactions v There is no fear of refunds as in clearing vi The payments made are unconditional and irrevocable vii Payment is risk free viii Wider coverage with more than 47000 branches of various banks being RTGS enabled

10) SUGGESTIONS TO INCREASE IN PROFITABILITY Treasury is the most important function of any commercial Bank Apart from maintaining CRR and SLR as required by the RBI and Government regulations Treasury can act as a profit centre for the Bank In most of the Banks treasury in addition to managing liquidity is responsible for managing assets and liabilities trading in currencies and securities and developing new products High-performing treasuries systematically identify mitigate and profit from market riskmdashthat is risk associated with changes in interest rates Despite unfavorable market conditions during the financial year 2008-09 SBBJ Treasury posted as increase in profits by 1019 per cent to Rs 7602 crore against last year profit of Rs 6899 crore Most of the treasury profits came from sale of government securities and investments in liquid mutual funds To increase the treasury profits in the coming years the Bank can explore following measures

a To support the dealers a well-equipped research team is required particularly for investments in equity mutual funds and Non SLR Bonds

b Non-SLR bonds market is expanding very fast but the bank is not investing aggressively in the market Non-SLR bonds provide better yields than SLR securities

c Though the Bank has an approved policy for trading in derivatives the activity in derivatives has not been started In the complex financial market scenario where there is a lot of uncertainty appropriate derivative instruments can hedge interest rate risk Also trading in derivatives can be source of additional profits

d A suitable incentive structure should be formalized to increase trading profit in the treasury Performance based incentives can be introduced in line with treasuries of other Banks

e Working in treasury requires skills that come with experience It is a specialized job that requires totally different skills than normal banking operations So the Bank should consider selection and retention of qualified skilled and experienced officers

f Treasury Department is also using distinct ARN number for cross selling of Mutual Funds But this business is restricted only on reciprocal basis with other associate banks treasuries Bank can set up marketing and sales team to sell these products to other institutional investors HNIs and corporate to earn extra income The expert knowledge of treasury officials can also be provided to the branches to sell the market related products to the retail customers

g PORTFOLIO MANAGEMENT SERVICES (PMS)

Portfolio Management Services System can be set up in SBBJ to handle investment and regulatory related concerns of Institutional and high net worth investors Other Banks including State Bank of India is also providing similar facilities In the increasingly complex regulatory and investment environment of today even the most sophisticated investors are finding it difficult to address day to day investment concerns such as adherence to stated investment objectives security selection quality considerations Conformity to policy constraints and Investment returns

The suggestions given are a perception as a result of the understanding of the functioning of the department These can be proved fruitful if are implied on a basis of practicality and feasibility which may vary place-to-place and organization-to-organization

11) ANNEXURE APPENDIX AND LIST OF ABBREVATIONS Annexure- I

QUESTIONNAIRE PERSONAL INFORMATION 1) Name (optional) - __________________ 2) Age- 21-30 31-40 41-50 51-60 60 or over 3) Gender- Male Female 4) Your Occupation- ______________________ 5) Organization (optional) - ________________________ 6) Contact details - _________________________ 7) E-mail ID- __________________________ 8) Your current annual take-home income is

Under Rs100000 Between Rs100000 and Rs200000 Between Rs200000 and Rs500000 Between Rs500000 and Rs1000000 Over Rs1000000

A RISK TOLERANCE RETURN OBJECTIVES amp INVESTMENT PATTERN

1) How good is your knowledge of finance Im an expert in the field of finance Im proficient in finance I dont know much about finance but I keep myself updated about the developments Limited to knowing things like how the stock market is moving Im totally zero as far as knowledge of finance is concerned

2) When it comes to investing in stock or bond mutual funds (or individual stocks and bonds) I would describe myself as aan

Very inexperienced investor Somewhat inexperienced investor

Somewhat experienced investor Experienced investor

Very experienced investor

3) What is your primary objective for accumulating assets

Wealth preservation or emergency savings

Purchase of a home Education funding Retirement planninglong term wealth accumulation

4) Do you invest through Systematic Investment Planning (SIP) Yes No 5) I consider myself knowledgeable enough about the risks and potential returns associated with investing in stocks and other types of stocks

Strongly Agree Partially Agree Do not Agree Strongly Disagree

6) What is the time horizon you have to achieve your financial goal

0-5 years 6-10 years 11-14 years 15 years or longer

7) What factor would you consider most important before choosing an investment

How quickly I will be able to increase my wealth The opportunity for steady growth The amount of monthly income the investment will generate The safety of my investment principal

8) Using a scale of 1mdash5 (1 being least important and 5 being most important) circle the number that signifies the importance of accomplishing the following Least Important Most Important 1 2 3 4 5 Ans A Preserve my net worth ____ B Stay ahead of future inflation ____ C Increase my current investment income ____ D Fund college education ____ E Reduce my current tax burden ____ F Accumulate future incomewealth accumulation ____ G Invest for retirement ____ 9) How long do you expect to have your assets invested before converting to cash Less than 3 years 3-5 years 5-7 years 7-10 years 10-15 years 15 ndash20 years or more 10) As an investor where would you place yourself on a scale of 1-5 (as per the previous criteria) A Minimize losses and fluctuation as much as possible ____ B A balanced mix with some fluctuation and growth ____ C Maximum accumulation of assets regardless of risk or fluctuation _____ 11) Based on your investment goals which of the following objectives best describes your desired investment approach (Write one option below) A Current Income (Emphasis on maintaining purchasing power while generating high

current income with the opportunity for liquidity and preservation of capital) B Capital Preservation (Emphasis on capital preservation and liquidity with moderate

current income and limited capital appreciation) C Conservative Growth ampIncome (Emphasis on conservative growth of capital and inflation protection with currentfuture income and liquidity providing small potential for loss) D Balanced (Emphasis on inflation protection through intermediate term asset growth with the opportunity for currentfuture income and liquidity) E Capital Growth (Emphasis on capital growth and inflation protection with the opportunity for currentfuture income and liquidity) F Aggressive Growth (Emphasis on aggressive capital appreciation with likelihood of high fluctuation in asset value along with inflation protection and currentfuture income) G Total Equity (Emphasis on maximum long-term capital appreciation with likelihood of high fluctuation in asset value along with inflation protection) Answer- ______

12) Do you expect to save a similar amount that you generally save per year in the next few years Yes No 13) I can tolerate sharp ups and downs in the short-term value of my investments in return for potential long-term gains

Strongly Agree Agree Disagree Strongly Disagree 14) When the market goes down I tend to sell some of my riskier investments and put the money in safer investments I disagree I somewhat agree

I agree

15) Which of the following investments would you feel most comfortable with taking into consideration the risk return trade-off Equity securities of established companies

Mix of equity securities and government bonds Government bonds Certificate of deposit

16) Risk tolerance is the relative ability to accept measurable losses in the short-term in exchange for expected higher returns long-term My tolerance for risk is Very high

Moderately high Average Moderately low Very low

B KNOWLEDGE OF TREASURY PRODUCTS amp RETAIL INVESTMENTS 1) Do you have any knowledge of Treasury Department of a Bank Yes No 2) Do you invest in Equity Mutual Funds market stocks Yes No 3) If yes do you invest trade online Yes No 4) If Yes you invest through (please tick one) Online trading Brokers Both 5) If you are dealing through brokers (on phone) do you want to trade invest online Yes No C CUSTOMER EXPECTATIONS

1) Do you want your bank to do Wealth Management and Risk Management for you

Yes No

2) If yes then your preferred Investment will be (please tick one) Government securities Bank deposit Equity market Mutual fund Others please specify ____________________________

3) Do you want your Tax Planning to be done by your Bank Yes No

4) If yes then your preferred Tax saving Investment Options (rank as 1 being least and 4 being highest)

PPF NSC ELSS (Equity Linked Saving Scheme) Tax free Bank Deposits

5) Do you expect to get regular updates about various Investment options from your Bank

Yes No

6) Do you want personalized Investment advising at your branch city Yes No

7) At present is your branch advising you on your Investment Portfolio Management Yes No Annexure-II

STATE BANK OF BIKANER AND JAIPURTREASURY AND INVESTMENT DEPARTMENT

(Rs in crore) As on 31-Mar-09 Face Value Book Value Market Value Appreciation Depreciation Net Depreciation Amortisation Net Depreciation

Amortisation(i) Central Govt Securities required

(a) Available for Sale 891744000000 918692124336 912711075100 19506183632 25487232868 5981049236 0000000000(b) Held to Maturity 5937584000000 6144549059904 6144549059904 0000000000 0000000000 0000000000 0000000000(c) Held for Trading 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000

Total 6829328000000 7063241184240 7057260135004 19506183632 25487232868 5981049236 0000000000(ii) Govt Treasury Bills

(a) Available for Sale 1315045000000 1217710803764 1217710803764 0000000000 0000000000 0000000000 0000000000(c) Held for Trading 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000

Total 1315045000000 1217710803764 1217710803764 0000000000 0000000000 0000000000 0000000000(iii) State Govt Securities

(a) Available for Sale 34888000000 37139567200 36619777792 0417435592 0937225000 0519789408 0000000000(b) Held to Maturity 2115767100000 2096440457940 2096440457940 0000000000 0000000000 0000000000 0000000000

Total 2150655100000 2133580025140 2133060235732 0417435592 0937225000 0519789408 00000000001 Total Govt Securities

Available for Sale 2241677000000 2173542495300 2167041656656 19923619224 26424457868 6500838644 0000000000 6500838644Held to Maturity 8053351100000 8240989517843 8240989517843 0000000000 0000000000 0000000000 0000000000 0000000000Held for Trading 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000

(i+ii+iii) 10295028100000 10414532013143 10408031174499 19923619224 26424457868 6500838644 0000000000 65008386442 Other Trustee Securities

(a) Available for Sale 7000000000 6969200000 6686861000 0018544000 0300883000 0282339000 0000000000 0282339000(b) Held to Maturity 67302211000 67153511000 66325771000 0000000000 0827740000 0827740000 0000000000 0827740000

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Held for Trading 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000Total 13354745600 90300704548 84515952043 38713279068 44498031573 5784752506 0000000000 5784752506

4 Debentures amp Bonds(a) Available for Sale 60532159900 60891188275 58237732035 1003500000 3656956240 2653456240 0000000000 2653456240(b) Held to Maturity 65000000000 64820000000 64820000000 0000000000 0000000000 0000000000 0000000000 0000000000

Total 125532159900 125711188275 123057732035 1003500000 3656956240 2653456240 0000000000 26534562405 SubJoint Ventures

(a) Available for Sale 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 00000000006 Others (CP MFs etc)

Total 338087637890 370493954711 310176040126 7097859738 67415774323 60317914585 0000000000 60317914585Total Portfolio under(a) Available for Sale 2609435137688 2650981137134 2575441836160 66756802030 142296103004 75539300974 0000000000 75539300974(b) Held to Maturity 8236869716702 8424179434543 8423351694543 0000000000 0827740000 0827740000 0000000000 0827740000(c) Held for Trading 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000

Grand Total (a+b+c) as on310309 10846304854390 11075160571677 10998793530703 66756802030 143123843004 76367040974 0000000000 76367040974Investment in REPO as on 310309 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000Investment on 310309 (net of REPO) 10846304854390 11075160571677 10998793530703 66756802030 143123843004 76367040974 0000000000 76367040974Investment on 310308 $ (net of REPO) 10129671173200 10566079443346 10512173774775 57420211216 111325879788 67719399973 0000000000 67719399973Written cff 77767455912 0000000000 79494355896Growth over 31-Mar-2008 716633681190 509081128331 486619755928 9336590814 31797963216 86415096914 0000000000 88141996898 The amount of depreciationprovision of NPA bonds cannot be set off against the appreciation available

INVESTMENT PORTFOLIO

INVESTMENT PORTFOLIO (Rs in crore)

As on 31-Mar-08 Face Value Book Value Market Value Appreciation Depreciation Net Depreciation Amortisation Net DepreciationAmortisation

(i) Central Govt Securities required(a) Available for Sale 1617146000000 1625392686141 1589534014100 8429316592 44287988633 35858672041 0000000000(b) Held to Maturity 5248668000000 5598601288161 5598601288161 0000000000 0000000000 0000000000 0000000000(c) Held for Trading 125000000000 127963937165 123615000000 0000000000 4348937165 4348937165 0000000000

(a) Available for Sale 475853000000 480226632402 481514826336 3845570130 2557376196 -1288193934 0000000000(b) Held to Maturity 1498165100000 1487072698322 1487072698322 0000000000 0000000000 0000000000 0000000000

Total 1974018100000 1967299330724 1968587524658 3845570130 2557376196 -1288193934 00000000001 Total Govt Securities

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Grand Total (a+b+c) as on310308 10129656034600 10565899445392 10512017468730 57420211216 111302187879 67719399973 0000000000 67719399973Investment in REPO as on310308 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000 0000000000Investment on310308 (net of REPO) 10129656034600 10565899445392 10512017468730 57420211216 111302187879 67719399973 0000000000 67719399973Investment on 31032007 $ (net of REPO 8182772730491 8831110791436 8715898119374 46697873863 161910545925 147437663175 0000000000 147437663175Written cff 104496912042 0000000000 104496912042Growth over 31-Mar-2007 1946883304109 1734788653956 1796119349356 10722337353 -50608358046 24778648840 0000000000 24778648840 The amount of depreciationprovision of NPA bonds cannot be set off against the appreciation available

Appendix 1) Basel II- It is the second of the Basel Accords which are recommendations on banking laws and regulations issued by the Basel Committee It is an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face 2) Asset Liability Management- ALM is the practice of managing risks that arise due to mismatches between the assets and liabilities (debts and assets) It is a strategic management tool to manage interest rate risk and liquidity risk faced by banks other financial services companies and corporations done by matching the assets and liabilities according to the maturity pattern or matching the duration by hedging and by securitization3) Coupon Rates- A coupon rate of a bond is the amount of interest paid per year expressed as a percentage of the face value of the bond paid by the bond issuer to a bondholder 4) Vanilla option- A plain vanilla option is the standard type of option one with a simple expiration date and strike price and no additional features With an exotic option an additional contingency is added so that the option only becomes active once the underlying stock hits a set price point 5) Security receipt- 6) Non-bank financial companies- NBFCs are financial institutions that do not meet the legal definition of a bank ie one that does not hold a banking license NBFCs facilitate bank-related financial services such as investment risk pooling and market brokering Examples of these include insurance firms currency exchanges However they are not allowed to collect deposits from customers 7) Private Placement Basis- It is the term given for raising capital via private rather than public placement The result is the sale of securities to a relatively small number of investors due to which the placement does not have to be registered with the Securities and Exchange Commission Investors involved in private placements are usually large banks mutual funds insurance companies and pension funds 8) Arbitrage trading- the act of buying asset security in one market and selling simultaneously in another This restores equilibrium in various markets which are temporarily out of equilibrium 9) Proprietary trading- is a term used in investment banking to describe when the firms traders actively trade stocks bonds options commodities derivatives or other financial instruments with its own money as opposed to its customers money so as to make a profit for itself 10) Capital Asset Pricing Model- The CAPM is a model that describes the relationship trade off between risk and return It explains the behaviour of security prices and provides the mechanism to assess the impact of a proposed investment on a portfolio 11) Redemption Yield- It is just another name given to Yield to Maturity

Abbreviations-

1) DFHI- Discount and Finance House of India 2) KYC- Know Your Customer 3) FCY- Foreign Currency 4) DVP- Delivery vs Payment 5) SPV- Special Purpose Vehicle 6) Rf- Risk free rate of return 7) NCD- Non- Convertible Debenture 8) CRISIL- Credit Rating Information Services of India Ltd 9) ICRA- Investment Information and Credit Rating Agency of India Ltd

10) CARE- Credit Analysis and Research Ltd

12) REFERENCES 1 httpsbbjbankcomAbout_Ushistoryhtm 2 httpsbbjbankcomAbout_Usbnk_visionmissionhtm 3 httpwwwfimmdaorguseful_linksfaqasp 4 httpwwwrbiorginscriptsFAQViewaspxId=60 5 httpwwwrbiorginscriptsBS_EntireSearchaspxsearchString=treasury 6 wwwinvestopediacom 7 wwwcrisilcom 8 wwwsebigovin 9 httpwwwccilindiacom 10 httpwwwamfiindiacomshowhtmlaspxpage=mfconcept 11 wwwbankingrulescom 12 httpwwweurojournalscomirjfe_19_15pdf 13 httpenwikipediaorgwikiInvestment 14 httpwwwsortedorgnzhomesorted-sectionsinvestinginvestment-types 15 httpwwwanswerscomtopicstatutory-liquidity-ratiocite_note-0 16 httpwwwsbidfhicomnon-slr-bondshtm 17 httpenwikipediaorgwikiTalkInvestment_banking 18 httpwwwanswerscomtopicstatutory-liquidity-ratio 19 httpswww11ingretirementplanscomwebcalcjspwstypeOfInvestorjsp

20 wwwmfsiwebcomuploaded_filesInvestmentQuestionnairepdf 21 httpwwwdocstoccomdocs3606566Retail-Wealth-Management-Strategic-

Asset-Allocation-Questionnaire-Advisor-name-Client 22 httpwwwrbctrustcomquestionnaireindexhtml 23 httpwwwrbiorginscriptsbs_viewrtgsaspx 24 httprbidocsrbiorginrdocsRTGSDOCsListofRTGSBanksxls 25 httprbiorginscriptsFAQViewaspxId=60 26 httpenwikipediaorgwikiModern_portfolio_theory 27 httpwwwlivemintcom20090201230443World8217s-top-500-banks-wihtml 28 httpwwwreligareinportfolio_management_servicesasp 29 httpwwwmotilaloswalcomRetailRetailContentsaspxArticleID=cb84acb6-

c32c-469f-83d9-f72a78d8481e 30 httpsawaalibibocompersonal-finance-and-taxwho-know-about-portfolio-

management-services-451338html 31 httpeconomictimesindiatimescomarticleshowmsid-2568329flstry-

1cmshttpcontenticicidirectcomWhyonlineasp 32 httpwwwinvestopediacomarticlesbonds07fiportfolioasp 33 httpwwwindoindianscommoneywhyinvesthtm 34 httpwwwinvestopediacomarticles04111804asp 35 httpwwwinvestopediacomarticlesbonds07fiportfolioasp 36 httpenwwwwikipediaorgwikiBasel_II 37 httpwwwzensarcomindustries_BankingRetailhtml 38 httpwwwfsagovukpagesLibraryCommunicationSpeeches20061102_cbsht

Articles amp Books Referred 1) Background Paper on RTGS Functionality 28th June 2008 By A K Kale AGM (Payment Settlement Group)

T amp I Department Mumbai 2) Article of treasury Functions and Why It Gains Importance Myers amp Mjluf 1984 Chastain 1986 Harford 1999 3) Financial Management Text and Problems By M Y Khan amp P K Jain

SBBJ INVESTMENTS AT A GLANCE

a The Concept

Performance Highlights For The Year Ended March 2009

RTGS

NEFT

GRPT

saini data2pdf

310308

ACKNOWLEDGEMENT

I am highly indebted to Mr KSSubbaraman- Dy General Manager Mr RK Garg- Asst Gen Manager Domestic Treasury for their invaluable support without which the project could have not been worked out the way it has I am very much thankful to Mr Mukesh Kumar (Dealer- Domestic Treasury) who helped me immensely in understanding the basics and complexities of Treasury and Investments along with additions that made the quality of report better I would also like to extend a note of thanks to all other employees of SBBJ who helped me directly or indirectly in successful completion of my project I am also grateful to Prof Sridhar Shridharan who gave his precious inputs which also helped me to take the plunge of getting into an absolute different stream of finance Lastly I whole-heartedly thank Mr Barun Banerjee who lent his moral support all through the tough time of making mistakes and learning from the

a) Introduction 8

i Rupee Treasury 9

a Introduction 18

dNon-SLR Bonds 27

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a) Introduction 8

i Rupee Treasury 9

a Introduction 18

dNon-SLR Bonds 27

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a) Introduction 8

i Rupee Treasury 9

a Introduction 18

dNon-SLR Bonds 27

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a) Introduction 8

i Rupee Treasury 9

a Introduction 18

dNon-SLR Bonds 27

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

5) SLR INVESTMENTS

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a Equity

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

3) Other Schemes

c Debt Mutual Funds

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

d Non-SLR Bonds

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

10 YEAR YIELD

14112007

04122007

24122007

13012008

02022008

22022008

13032008

02042008

22042008

12052008

01062008

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

No of txns

Inward 842 29309 22122 529544 - - Outward 239 1788 10437 177369 - -

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

I agree

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

Yes No

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

Total 74302211000 74122711000 73012632000 0018544000 1128623000 1110079000 0000000000 11100790003 Shares

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

Total 86624811000 86405334750 85757271750 0000209500 0648272500 0648063000 0000000000 06480630003 Shares

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

Abbreviations-

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

a The Concept


RTGS

NEFT

GRPT

saini data2pdf

310308

Documents

modified report 2003