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EXECUTIVE SUMMARY
Due to the nature of banking and the important role of banks in the economy
in capital formation, banks should be more closely watched than any other types of
economic unit in the economy.
Indian banking system has transformed in recent years due to globalization
in the world market, which has resulted in fierce competition. Banking sector is
one of the fastest growing sectors in India. Today’s banking sector becoming more
complex. Evaluating Indian banking sector is not an easy task. There are so many
factors, which need to be taken care while differentiating good banks from bad
ones.
To evaluate the performance of banking sector we have chosen the CAMEL model
which measures the performance of banks from each of the important parameter
like Capital Adequacy, Assets Quality, Management Efficiency, Earning Quality
and Liquidity. The CAMEL supervisory improvement over the earlier system in
terms of frequency, coverage and focus. In the present study an attempt is made to
evaluate relative performance of banks using CAMEL approach. Each parameter
of CAMEL—Capital Adequacy, Asset Quality, Management Quality, Earning
Quality and Liquidity has been evaluated taking various ratios.
IntroductionThe Indian banking sector performed better in 2010-11 over the previous
year despite the challenging operational environment. The banking business of
Scheduled Commercial Banks (SCBs) recorded higher growth in 2010-11 as
compared with their performance during the last few years. Credit grew at 22.9 per
cent and deposits grew at 18.3 per cent in 2010-11 over the previous year.
Accordingly, the outstanding credit-deposit ratio of SCBs increased to 76.5 per
cent in 2010-11 as compared with 73.6 per cent in the previous year. Despite the
growing pressures on margins owing to higher interest rate environment, the return
on assets (RoA) of SCBs improved to 1.10 per cent in 2010- 11 from 1.05 per cent
in 2009-10. The capital to risk weighted assets ratio under both Basel I and II
frameworks at 13.0 per cent and 14.2 per cent, respectively in 2010-11 remained
well above the required minimum of 9 per cent. The gross NPAs to gross advances
ratio declined to 2.25 per cent in 2010-11 from 2.39 per cent in 2009-10,
displaying improvement in asset quality of the banking sector. Though there was
improvement in the penetration of banking services in 2010-11 over the previous
year, the extent of financial exclusion continued to be staggering. The number of
complaints received at the Banking Ombudsman offices witnessed decline in 2010-
11 over the previous year.
THE BANK
The word bank means an organization where people and business can invest or
borrow money; change it to foreign currency etc. According to Halsbury A Banker
is an individual, Partnership or Corporation whose sole pre-dominant business is
banking, that is the receipt of money on current or deposit account, and the
payment of cheque drawn and the collection of cheque paid in by a customer.
The Origin and Use of Banks
The Word “Bank” is derived from the Italian word “Banko” signifying a bench,
which was erected in the market-place, where it was customary to exchange money.
The Lombard Jews were the first to practice this exchange business, the first bench
having been established in Italy A.D. 808. Some authorities assert that the Lombard
merchants commenced the business of money-dealing, employing bills of exchange
as remittances, about the beginning of the thirteenth century. About the middle of
the twelfth century it became evident, as the advantage of coined money was
gradually acknowledged, that there must be some controlling power, some
corporation which would undertake to keep the coins that were to bear the royal
stamp up to a certain standard of value; as, independently of the µsweating¶ which
invention may place to the credit of the ingenuity of the Lombard merchants- all
coins will, by wear or abrasion, become thinner, and consequently less valuable; and
it is of the last importance, not only for the credit of a country, but for the easier
regulation of commercial transactions, that the metallic currency be kept as nearly as
possible up to the legal standard. Much unnecessary trouble and annoyance has been
caused formerly by negligence in this respect. The gradual merging of the business
of a goldsmith into a bank appears to have been the way in which banking, as we
now understand the term, was introduced into England; and it was not until long
after the establishment of banks in other countries-for state purposes, the regulation
of the coinage, etc. that any large or similar institution was introduced into England.
It is only within the last twenty years that printed cheques have been in use in that
establishment. First commercial bank was Bank of Venice which was established in
1157 in Italy.
IMPORTANCE OF THE STUDY
The project includes the objectives - to study the Annual report or financial
position of the company, to understand the day-to-day work carry out by the
organization, to observe the cash inflow & outflow,to check the profitability of
bank To study the policy of the bank etc.
. The project indicates the primary (direct) method of collection- as bank’s
annual report of previous year, different document prepared by the bank and
from various reference books ,from Indian statistical year book, from various
websites etc.
In short,this project report is the in- depth study of all kind of “Financial Statements and performance ” of the bank which reflects the past, current & future position of the bank.
REVIEW OF THE LITERATURE
Literature reviews that Indian banking system consist of a larger
structure on of financial institutions, Commercial banks, foreign financial
institutions. These structural transformations of Indian finance system can be
divided into three parts. First, the post independence period (1947-1968). The
Reserve bank of India, performed role as a supervisor and controller of
finance system. RBI, dominated over all the forms of finance controls in India.
In this time RBI, worked on financial stability, credit control, and regulation of
interest rates and formation banking structure. The second financial
repression, period <1969 to 1990> the movement commenced with the
nationalization of banks. This nationalization of commercial banks derives the
base for changes in finance and banking system. The result into interest rate
regulation and credit programmers deposit and banking working methods etc.
The third period known as financial reform and liberalization period. Started in
early 90’s. In that period government of India was more likely to more
liberalized. The three committee in 1985, vagual in 1987 and the Narasimham
committee 1991. The most influential recommendations made by the
committee of Narasimham regarding liberalization, consolidation and
privatization in banking system. And the government of India started a
financial reform era with the financial sector liberalization program. The main
aims of financial liberalization program is to regulate the rates of interest, cash
reserves and performance financial system consist of financial institute stocks
exchanges and banks. It makes liberalization program enhance the
importance of banking sector and make it more efficient and competitive.
Several research have been conducted to analyze the different aspects
of performance of State Bano Of India. But there are very few research and
literature available on the subject related to financial reforms and its impact on
the banks. The available literature and research are divided into four major
parts according to the area of research i.e literature related to:
1. Review of Literature related to Performance Appraisal of Banks
2. Review of Literature related to Policy Framework and
Recommendations for the Bank.
3. Review of Literature related to Impact of Reforms on State Bank Of
India.
4. Review of Literature related to Service Quality of SBI.
OBJECTIVE OF STUDY:
To evaluate the strength of State Bank of India by
using CAMELS model technique.
To study the Annual report or financial position of the
company.
To understand the day-to-day work carry
out by the organization.
To study the bank’s history in brief.
To draw meaningful and constructive measure based
on analysis.
To study the current existing position of SBI Bank’s
whole field.
To observe the cash inflow & outflow.
To check the profitability of bank.
To study the policy of the bank.
To analyse how the bank is managing its current
assets & current liabilities.
METODOLOGY
Preparing the project report is a research analysis,it involves the process of collecting data, analyzing data & reporting data for absolute results.
For the preparation of project report the data is based on two types of data i.e.(1)Primary data(2)Secondary data.
1).Primary data:-
Primary data is the data,which has not been collected & used by somebody else before.In short,Primary data means the data specifically collected for the project.I have collected data from the managers by asking question because it is difficult for me to understand the study.
2)Secondary data:-
Secondary data is the data, which is collected from published source. I have collected data from various sources such as bank’s annual report of previous year, different document prepared by the bank and from various reference books also.
After the data collection of both the sources, I have analyzed the data &
conducted various financial statement analysis & prepared various graphs.
After analyzing the data, I have derived a conclusion and have
made suggestions based on my analysis.
LIMITATIONS OF STUDY There is no activity that can be completed without any limitation.The main limitation faced during the preparation of this project report are as follows:-
Time available for the completion of the project is very short, hence much information could not be undertaken.
The information collected through secondary data.Some of the information might be wrong.
The calculation & computation are based on valuable information given by the bank.
The report is based on the analysis of the last five years data,which may not be sufficient in some cases.
The analysis and conclusion made is as per my limited understanding for this concerned subject.
SUMMARY
The main purpose of doing this project was to know about SBI and its
functioning. This helps to know in details about SBI in industry right from its
inception stage, growth and future prospects. It also helps in understanding
different prospects of SBI. The project study was done to ascertain the asset,
profi-loss, balance sheet and its function of SBI. Ultimately this would help in
understanding the benefits of SBI to investor and consumers.
CHAPTER-II
Company ProfileThe State Bank of India, the country’s oldest Bank and a premier in terms of
balance sheet size, number of branches, market capitalization and profits is today
going through a momentous phase of Change and Transformation – the two
hundred year old Public sector behemoth is today stirring out of its Public Sector
legacy and moving with an ability to give the Private and Foreign Banks a run for
their money.
The bank is entering into many new businesses with strategic tie ups –
Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile
Banking, Point of Sale Merchant Acquisition, Advisory Services, structured
products etc – each one of these initiatives having a huge potential for growth.
The Bank is forging ahead with cutting edge technology and innovative new
banking models, to expand its Rural Banking base, looking at the vast untapped
potential in the hinterland and proposes to cover 100,000 villages in the next two
years.
It is also focusing at the top end of the market, on whole sale banking
capabilities to provide India’s growing mid / large Corporate with a complete array
of products and services. It is consolidating its global treasury operations and
entering into structured products and derivative instruments. Today, the Bank is the
largest provider of infrastructure debt and the largest arranger of external
commercial borrowings in the country. It is the only Indian bank to feature in the
Fortune 500 list.
The Bank is changing outdated front and back end processes to modern customer
friendly processes to help improve the total customer experience. With about 8500
of its own 10000 branches and another 5100 branches of its Associate Banks
already networked, today it offers the largest banking network to the Indian
customer. The Bank is also in the process of providing complete payment solution
to its clientele with its over 21000 ATMs, and other electronic channels such as
Internet banking, debit cards, mobile banking, etc.
With four national level Apex Training Colleges and 54 learning Centres
spread all over the country the Bank is continuously engaged in skill enhancement
of its employees. Some of the training programes are attended by bankers from
banks in other countries.
The bank is also looking at opportunities to grow in size in India as well as
Internationally. It presently has 82 foreign offices in 32 countries across the globe.
It has also 7 Subsidiaries in India – SBI Capital Markets, SBICAP Securities, SBI
DFHI, SBI Factors, SBI Life and SBI Cards - forming a formidable group in the
Indian Banking scenario. It is in the process of raising capital for its growth and
also consolidating its various holdings.
Throughout all this change, the Bank is also attempting to change old
mindsets, attitudes and take all employees together on this exciting road to
Transformation. In a recently concluded mass internal communication programme
termed ‘Parivartan’ the Bank rolled out over 3300 two day workshops across the
country and covered over 130,000 employees in a period of 100 days using about
400 Trainers, to drive home the message of Change and inclusiveness. The
workshops fired the imagination of the employees with some other banks
in India as well as other Public Sector Organizations seeking to emulate the
programme.
The CNN IBN, Network 18 recognized this momentous transformation
journey, the State Bank of India is undertaking, and has awarded the prestigious
Indian of the Year – Business, to its Chairman, Mr. O. P. Bhatt in January 2008.
The elephant has indeed started to dance.
The origin of the State Bank of India goes back to the first decade of the
nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2
June 1806. Three years later the bank received its charter and was re-designed as
the Bank of Bengal (2 January 1809 ). A unique institution, it was the first joint-
stock bank of British India sponsored by the Government of Bengal. The Bank of
Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank
of Bengal. These three banks remained at the apex of modern banking in India till
their amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into
existence either as a result of the compulsions of imperial finance or by the felt
needs of local European commerce and were not imposed from outside in an
arbitrary manner to modernise India's economy. Their evolution was, however,
shaped by ideas culled from similar developments in Europe and England, and was
influenced by changes occurring in the structure of both the local trading
environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework.
SWOT ANALYSIS OF SBI
STRENGTHS:-
It is the largest bank of India in terms of market share, revenue & asset.
As per recent data the bank has more than outlets & ATM centers.
It has its presence in 32 countries engaging currency trade all over the world.
The bank has merged with Stata Bank of Saurashtra, State Bank of Indore
and the bank is planning to go further acquisition in current FY-2012
It has the first mover advantage in commercial banking services
SBI has recently Changed its vision & mission statement showing sign up
inclination towards new age banking services
It has a powerful brand name over the country & overseas. It became the
synonymous for banking in rural area.
SBI has a portfolio of product and services. It succeeded in cross selling of
its product and services.
All the branches of SBI has core banking which enable the customer to bank
anywhere same as local bank.
Weakness:-
Lack of proper technology driven services when compared to private banks.
Employees show reluctance to solve issues quickly due to higher job
security and customers’ waiting period is long when compared to private
banks.
The banks spends a huge amount on its rented buildings.
SBI has the largest number of employees in banking sector, hence the bank
spends a considerable amount of its income in employee’s salary
compensation.
In spite of modernization, the bank still carries the perception of traditional
bank to new age customers.
SBI fails to attract salary accounts of corporate and many government sector
employees salary accounts are also shifted to private bank for ease of
operations unlike before.
It is fully computerized but lack of computer efficiency made the banking
very slow.
NPA in credit card is more.
Resistance from employees and trade union against merger of associate
bank.
Opportunities:-
SBI’s merger with five more banks namely State Bank of Hydrabad, State bank of Patiala, State bank of Bikaner and Jaipur, State of bank of Travancore and State bank of Mysore are in approval stage
Mergers will result in expansion of market share to defend its number one position
SBI is planning to expand and invest in international operations due to good inflow of money from Asian Market
Since the bank is yet to modernize few of its banking operations, there is a better scope of using advanced technologies and software to improve customer relations
Young and talented pool of graduates and B schools are in rise to open new horizon to so called “old government bank”
Threats:- Net profit of the year has decline from 9166.05 in the year FY 2010 to 7,370.35 in the year FY2011 This shows the reduce in market share to its close competitor ICICI Other private banks like HDFC, AXIS bank etc FDIs allowed in banking sector is increased to 49% , this is a major threat to SBI as people tend to switch to foreign banks for better facilities and technologies in banking service Other government banks like PNB, Andhra, Allahabad bank and Indian bank are showing Customer prefer to switch to private banks and financial service providers for loans and mortgages, as SBI involves stringent verification procedures and take long time for processing
BUDGET HIGHLIGHTS:-
The government is committed to protect the financial health of PSB for
FY2012-13.
Govt. is proposed to provide 15888cr for capitalization of PSB.
Govt. is also examining the possibility of creating a financial holding
company to meet the capital requirement of PSB.
It has proposed to raise the target for agricultural credit to 575000 cr. this
move will increase the NPA of PSB.
FM proposed to enhance the additional subvention to 3%, it will be negative
for PSB in terms of NIM.
FM has made interest income up to Rs.10,000 from a saving bank account
exempted from tax, it will boost to mobilize the low cost deposit and provide
another attraction to draw customer.
Signal on interest rates.
HIGH LIGHT OF SBI Q3 RESULTS:-
SBI has reported a slippage of Rs.8,161 & 85% rising in provisioning.
Provision amount Rs.1200cr has set aside for Kingfisher (bad loan).
What is more ironical is kingfisher has become NPA even after debt recast
in 2010 for around Rs.7000 cr.
Other contributor to this slippage are iron ore & steel, sugar, textile, plastic.
Segment wise large corporate account for Rs.4,000cr., SME for Rs.21,00cr.,
agriculture loan Rs.1,100cr., retail Rs.400 cr. & Rs.600 from international
operation.
The gross NPA of bank touched a record 40,0098 crore.
Despite of massive provisioning the bank beat market & analyst forecast
Its net profit rise at Rs.3,263crore on higher interest income and margin.
Chairman Pratip Chaudhuri says NPA have plateaued.
DOWNGRADATION OF SBI
SBI was downgraded to D+ from C- , citing capital constraint quality and
quantity of assets in Octobert, 2011.
After this Bankex lost 22.93% & benchmark sensex fell 17.55%.
HDFC bank Ltd. Topped the chart in terms of market capitalisation.
Its market capitalisation has dropped 36.64% and wealth eroded by 65000
cr.
O.P. Bhatt who was helm for 5 years in his passion for regaining & market
tried to expand its loan book & mopped up deposit at high cost.
Some of these loans turned bad and slow down in economy worsened the
scenario further.
SOME RECENT STEPS TAKEN BY SBI:
IT has launched a one time settelement scheme for recovering bad loan in
MSME borrower.
IT has cut the interest rate on education loan 25-100bps
It has increased interest rate to 8% on deposit across various maturity below
one year.
It has plan to open around 100 branches in abroad in Nepal, Singapore,
Australia, U.S.A & Britain.
It has raised retail deposit rate by 25-100 bps.
CHALLENGES AHEAD:
In a path of global banking, There are so many challenges which are as
follows:
Higher capital requirement to meet basal- 3 target.
Slowdown in economy due to high interest & inflation
May face significant head winds due to tighter margin dip in credit growth.
Mounting pressure due to exposure to sensitive sector like power, aviation, textile, telecom.
Volatility of rupee may lead to further tightening of liquidity.
High chances of corporate debt restructuring.
Impose of pre-condition before capital infusion as it is invested Rs.1000 crore in life insurance business and providing para banking activities.
Monitoring of RBI its global operation as it has expand its global operation.
Quality of human capital will be the single most important defining factor as 80% of general maneger,65% of DGM, 58% OF AGM &44% OF CM would be retiring.
Liquidity deficit in banking sector.
CHAPTER-IIIROLE OF SBI AND IT’S
FUNCTION
HISTORICAL BACKGROUND
The origin of state Bank of India dates back to 2nd June 1806, when bank of
Kolkata was established in Kolkata. On 2nd January 1809, the Bank received its
charter and was redesignated as Bank of Bengal. It was the first joint stock Bank of
British India sponsored by the Govt. of Bengal. Later on the Bank of Bombay was
established on 15th April1840 and the Bank of Madras on Ist July1843. These three
Banks were governed by the royal charters, which were revised from time to time.
These three Banks popularly referred to as Presidency Banks, remained at the apex
of modern banking in India till their amalgamation as the Imperial Bank of India
(IBI) on 27th january1921. The business of above mentioned Banks was initially
confined to discounting of bills of exchange. These Banks were also allowed to
issue notes which were acceptable for payment of public revenue within a
restricted geographical area. A major change in the conditions of operation of the
Banks occurred with the passing of the paper currency Act of 1861, which
abolished their right of note issue. The Banks embarked on branch expansion at a
rapid pace and by 1876, the branches, agencies and sub-agencies of the three
presidency banks covered most of the trade centers in India. The presidency banks
of Bengal, Bombay and Madras, with their 70 branches were merged in 1921 to
form the imperial Bank of India (IBI). The IBI took on the triple role of a
commercial bank, a banker’s bank and a Banker to Govt. The establishment of
Reserve Bank of India (RBI) as the central bank of country in 1935 ended the
quasi-central banking role of IBI. The IBI became an agent of RBI for the
transaction of govt. business at centers where RBI was not established. In 1951, the
first five year plan was launched and the development of rural India was given the
highest priority. The commercial Banks of the country included the Imperial Bank
of India had till then confined their operations to the urban sector andwere not
equipped to respond to the emergent needs of economic regeneration of the rural
areas. In order therefore to serve the economy in general and the rural sector in
particular the All India Rural Credit Survey Committee recommended the creation
of the state-partnered and state-sponsored bank by taking over the imperial Bank of
India and integrated with it the former state owned or state-associate banks. An Act
was accordingly passed in the parliament in May 1955 and State Bank of India
(SBI) was constituted on Ist July, 1955. The State bank of India thus came into
being with a new sense of social purpose aided by the 480 offices comprising
branches, sub-branches and three local head offices inherited from the imperial
Bank of India.
ORGANIZATIONAL STRUCTURE
The Bank’s management and organizational structure is sufficiently decentralized
to provide senior managers decision making responsibility within their business
units allowing them to continuously improve their management skills. In 1978, the
services of the Indian institute of management, Ahmadabad were engaged and on
their advice, the modular structure i.e. Zonal and regional offices were created
under each local head office to handle growth and achieve efficient branch
banking. The administrative structure was decentralized by making the controlling
offices near to operating offices. In 1994, the Bank engaged Mckinsey & co. a firm
of leading international consultants to help the bank identify strategies, structures,
systems etc. to face the new challenges and retain its eminent position in the Indian
banking industry. The present structure of the Bank is the outcome of the
comprehensive change programmes covering all aspects structure, system, process,
etc. implemented by the bank based on the diagnostic and recommendations of the
consultants. In order to exploit the synergies among the various SBUs having close
linkages or dealings with the same or integrated groups of customers they have
been grouped together under a few business groups, each being headed by a senior
executive of the rank Dy.
Managing Director. Each business group has full profit and loss responsibility for
the group and enjoys a high level of autonomy including control over human and
capital resource in order to achieve the Group’s business goals.
The organizational structure of the Bank is reviewed at periodic intervals and
wherever feasible departments are merged with a view to improves efficiencies.
The bank has carried out the exercise at corporate centre and is rolling it out at
local, regional and Zonal office levels.
The State Bank of India emerged as a pacesetter, with its operations carried out by the 480
offices comprising branches, sub offices and three Local Head Offices, inherited from the
Imperial Bank. Instead of serving as mere repositories of the community's savings and lending
to creditworthy parties, the State Bank of India catered to the needs of the customers, by
banking purposefully. The bank served the heterogeneous financial needs of the planned
economic development.
BranchesThe corporate center of SBI is located in Mumbai. In order to cater to different functions, there
are several other establishments in and outside Mumbai, apart from the corporate center. The
bank boasts of having as many as 14 local head offices and 57 Zonal Offices, located at major
cities throughout India. It is recorded that SBI has about 10000 branches, well networked to
cater to its customers throughout India.
ATM Services
SBI provides easy access to money to its customers through more than 8500 ATMs in India.
The Bank also facilitates the free transaction of money at the ATMs of State Bank Group, which
includes the ATMs of State Bank of India as well as the Associate Banks – State Bank of
Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You may also transact
money through SBI Commercial and International Bank Ltd by using the State Bank ATM-cum-
Debit (Cash Plus) card.
SubsidiariesThe State Bank Group includes a network of eight banking subsidiaries and several non-
banking subsidiaries. Through the establishments, it offers various services including merchant
banking services, fund management, factoring services, primary dealership in government
securities, credit cards and insurance.
The eight banking subsidiaries are:
State Bank of Bikaner and Jaipur (SBBJ)
State Bank of Hyderabad (SBH)
State Bank of India (SBI)
State Bank of Indore (SBIR)
State Bank of Mysore (SBM)
State Bank of Patiala (SBP)
State Bank of Saurashtra (SBS)
State Bank of Travancore (SBT)
Products And Services
Personal Banking
SBI Term Deposits SBI Loan For Pensioners
SBI Recurring Deposits Loan Against Mortgage Of Property
SBI Housing Loan Loan Against Shares & Debentures
SBI Car Loan Rent Plus Scheme
SBI Educational Loan Medi-Plus Scheme
Other Services
Agriculture/Rural Banking
NRI Services
ATM Services
Demat Services
Corporate Banking
Internet Banking
Mobile Banking
International Banking
Safe Deposit Locker
RBIEFT
E-Pay
E-Rail
SBI Vishwa Yatra Foreign Travel Card
Broking Services
Gift Cheques
Total Advance to Total Asset Ratio
Year Total Advance(Rs.)
Total Asset(Rs.) Total
Deposit(Rs.)
Total advance to total deposit
(Rs.)
Total Advance to Total Asset Ratio
(%)2008-09 3373364935 5665652388 4355210894 77.45 59.542009-10 4167681862 7215263121 5374039409 77.55 57.762010-11 5425032042 9644320807 7420731280 73.10 56.252011-12 6319141520 10534137305 8041162268 78.58 59.982012-13 7567194480 12237362005 9339328130 81.02 61.83
2008-09 2009-10 2010-11 2011-12 2012-1368
70
72
74
76
78
80
82
Total Advance to Total Asset Ratio
otal Advance to Total Asset Ratio shows that how much amount the bank holds against its asset. Here in SBI Bank, from 2012 to 2013 this ratio is continuously increased after 2008 because increase in advances is more than increase in total assets which shows growth in investment. And that is good sign for the bank. During the year, total advances of the Bank grew by 19.75% in the previous year.
Total Advance to Total Asset Ratio shows that how much amount the bank holds against its assets. Here in SBI Bank, from 2011 to 2013 this ratio is continuously increased because increase in advances is more than increase in total assets which shows growth in investment. Bank’s advances remain well distributed across all verticals. Large Corporate advances have grown to Rs.1,08,741 crores in March’13, registering a growth of 23.38%. Mid-Corporate Advances increased to Rs.1,57,565 crores with increase 19.42% growth. Retail advances grew 22.04% from 1,34,849 crores in March’12 to Rs.1,64,576 crores in March’13. SME Advances of the
Bank rose by 22.80 & International advances went up by 12.66% to Rs.1,09,358 crores in March’13.
Government Securities to total Investment
Year Govt. Securities(Rs.)
Total Investment(Rs.) Govt. Securities to Total Investment
2008-09 1182708274 1491488825 158.212009-10 1411282709 1895012709 148.732010-11 2269600632 2759539569 164.222011-12 2267060163 2875635892 79.532012-13 2307414469 2855869958 81.57
2008-09 2009-10 2010-11 2011-12 2012-130
20
40
60
80
100
120
140
160
180
Govt. Securities to Total Investment
Govt. Securities to Total Investment
This shows the percentage of investment in govt securities. It is believed that the more investment in govt securities is a safe. As per norm stipulated by RBI the bank have to maintain SLR at the rate of 24%. In this year investment in govt securities was decreasing steeply from the last 2 years but still it is a good sign of the bank because it increasing their profitability.
Total Advance to Total Deposit Ratio
Year Deposits(Rs.) Advances(Rs.) Total Advance to
Total Deposit Ratio
2008-09 435521 337336 77.45
2009-10 537404 416768 77.552010-11 742073 542503 73.102011-12 804116 631914 78.582012-13 933933 756719 81.02
2008-09 2009-10 2010-11 2011-12 2012-130
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
Advances(Rs.)Deposits(Rs.)
INTERPRETATION:-
Deposits of SBI rose to 16.14% yoy from Rs.8,04,116 crores in March,12 to Rs. 9,33,933 crores in March’13, driven by CASA growth of 22.14%. With sustained 26.20% rise in Saving Bank deposits, CASA ratio improved from 46.67% in March’10 to 48.66% in March’13, an increase of 199bps.
Business per Employee
Business per Employee
Year Business per Employee(Rs.) Total (Rs.)Income
2008-09 35700 44007.59
2009-10 45600 57645.24
2010-11 55600 76479.22
2011-12 63600 85962.072012-13 70465 97218.95
2008-09 2009-10 2010-11 2011-12 2012-130
10000
20000
30000
40000
50000
60000
70000
80000
Business per Employee
Business per Employee
INTERPRETATION:-It shows how efficiently a particular bank is utilising its employees. Ideally a
bank wants the highest business per employees. As it denotes higher productivity. Increase in this is a positive sign of Bank finding ways to squeeze more sales revenue out of its each employee. In SBI it has gone up to 70465.
Profit Per Employee
Year Profit per Employee2008-09 236.812009-10 372.572010-11 473.772011-12 446.032012-13 384.63
2008-09 2009-10 2010-11 2011-12 2012-130
50
100
150
200
250
300
350
400
450
500
Profit per Employee
Profit per Employee
INTERPRETATION:-
It is a measure of how efficiently SBI is utilizing its employee. A bank wants highest profit per employee. In this year it has decrease to 384 from 446 in 2013. That is a good sign.
E- EARNING & PROFITABILITY1. Dividend Payout Ratio
Year Dividend Payout Ratio2008-09 14.02009-10 21.52010-11 29.02011-12 30.02012-13 30.0
2008-09 2009-10 2010-11 2011-12 2012-130
5
10
15
20
25
30
35
Dividend Payout Ratio
Dividend Payout Ratio
INTERPRETATION:-
It shows the percentage of profit shared with share holder. The higher the ratio the more will be the goodwill of company in share market. The dividend payout ratio is same as previous year that is 30% & and from last 5years constantly it is increasing. It shows better position in the market.
Return on Asset
ROA2008-09 0.842009-10 1.012010-11 1.042011-12 0.882012-13 0.71
2008-09 2009-10 2010-11 2011-12 2012-130
0.2
0.4
0.6
0.8
1
1.2
Column1
Column1
INTERPRETATION:-
It shows that how much return bank can get from their total asset. Higher ratio is good for bank. Because if ratio is increasing then we can say that the return of the bank is high. It has decreased from 88%t o 71%. So that bank should look after to use of assets efficiently & effectively.
Operating Profit by Average working Fund
Year Operating Profit(Rs.)
Average Working fund(Rs.) Operating Profit by Avg. Working fund
2008-09 15058.2 566565.2388 2.652009-10 17021.23 721526.3121 2.352010-11 20873 964432.0807 2.162011-12 23671.44 1053443.731 2.242012-13 32526.4 1223736.201 2.65
2008-09 2009-10 2010-11 2011-12 2012-130
0.5
1
1.5
2
2.5
3
Operating Profit by Avg. Working fund
Operating Profit by Avg. Work-ing fund
INTERPRETATION:-
Earning reflect the growth capacity and the financial health of the bank. High earnings signify high growth prospects. It shows core operations of SBI remain robust. The Operating Profit of the Bank for 2012-13 stood at Rs.25,335.57 crores as compared to Rs.18,320.91 crores in 2011-12 registering an excellent growth of 38.29%. The Bank has posted a Net Profit of Rs.8,264.52 crores for 2012-13 as compared to Rs.9,166.05 crores in 2009-10 registering a decline of 9.84%.
ANALYSISCOMPONENT RATINGS TO THE BANKS:-
Now, after analyzing the ratio next, task to do is to give weightage to all the parameters according to the importance of the ratios. Each component will be given weightage according to the importance of itself and ratios covered in that particular point. The total weightage allocated to the all parameters would be out of 100.
Overall ranking to the SBI:-Ratio Weightage SBI RatingsCapital Adequacy Out of 28% 1Capital Risk Adequacy Ratio 7% 1Debt Equity Ratio 7% 7Total Advance to Total Asset Ratio 7% 5Government Securities to Total Asset 7% 6Asset Quality Out of 14%Gross NPA to Total Loan 7% 5Net NPA to Total Loan 7% 6Management Out of 15%Total Advance to Total Deposits 5% 5Business per Employee 5% 5Profit per Employee 5% 2Earnings Out of 18 %Dividend payout Ratio 3% 4Return on Asset 3% 2Operating Profit to Average Working Fund 3% 5Net Profit to Average Asset 3% 2Interest Income to Total Income 3% 4Other income to Total Income 3% 3Liquidity Out of 25%Liquidity Asset to total Asset 5% 3Government Securities to Total Security 5% 1Approved Securities to Total Security 5% 1Liquidity Asset to Demand deposit 5% 1Liquidity Asset to Total Deposit 5% 3Total 100% =72
STATE BANK ATM SERVICES
State Bank offers you the convenience of 43,000+ ATMs in India, the largest network in the country and continuing to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group using any State Bank ATM-cum-Debit Card (This includes the ATMs of State Bank of India as well as the Associate Banks - namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.)
KINDS OF CARDS ACCEPTED AT STATE BANK ATMs
Besides all debit cards issued by State Bank of India, following cards are also accepted at State Bank ATMs:
1) State Bank Credit Card
2) Cards issued by other banks displaying Maestro, Master Card, Cirrus, VISA, VISA Electron, and Rupay logos
3) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos
INTERNET BANKING
Internet banking portal of bank, enables its retail banking customers to operate their accounts from anywhere anytime, removing the restrictions imposed by geography and time. It's a platform that enables the customers to carry out their banking activities from their desktop, aided by the power and convenience of the Internet.
Using Internet banking services, you can do the following normal banking transactions online:
Funds transfer between own accounts.
Third party transfers to accounts maintained at any branch of SBI
Group Transfers to accounts in State Bank Group
Inter Bank Transfers to accounts with other Banks
Online standing instructions for periodical transfer for the above
Credit PPF accounts across branches
Request for Issue of Demand Draft Request for opening of new accounts
Request for closure of Loan Accounts
Request for Issue of Cheque Book
Apart from these, the other salient value-added features available are:
Utility bill payments
Online Ticket Booking for travel by Road, Rail and Air
SBILIFE, LIC and other insurance premia payments
SBI and other Mutual funds Investments
SBI and other Credit Card dues payments
Tax Payment – Income, Service, State Govt
Customs Duty Payment
Online Share Trading (eZ-trade@SBI)
Online Application for IPO
Fee Payment to select educational institutions including IITs and NITs
Truly smart services to cover most of your banking transactions. All this and much more, from your desktop.
Merchant Banking
As your strategic partner, SBI provide a broad and complimentary range of services to address business needs of India based corporate. Its expertise, insight and competitive rates in Foreign Currency loans, especially External Commercial Borrowings, Acquisition Finance, Reverse FDI’s etc make us a one stop solution offering bank for all your forex loan requirements.Also, we are the market leader on the Syndicated Loans League Tables in respect of Indian Corporate Forex Loan Requirements, for the past several years indicating our strong market standing and credentials.
International Presence of SBI
Regional office of the State Bank of India (SBI), India's largest bank, in Mumbai. The government of India is the largest shareholder in SBI.The bank has 52 branches, agencies or offices in 32 countries.
It has branches of the parent in Colombo, Dhaka, Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the Maldives, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town.
SBI operates several foreign subsidiaries or affiliates. In 1990 it established an offshore bank, State Bank of India (Mauritius). It has two subsidiaries in North America, State Bank of India (California), and State Bank of India (Canada). In 1982, the bank established its California subsidiary, which now has seven branches. The Canadian subsidiary was also established in 1982 and also has seven branches, four in the greater.
This bank was established in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria. In Nepal
SBI owns 50% of Nepal SBI Bank, which has branches throughout the country.
In Moscow SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia it owns 76% of PT Bank Indo Money
SUGGESTION& CONCLUSION
SUGGESTIONs The bank should adapt itself quickly to changing norms.
The bank should maintain globally standardized with the coming of BASEL-III requirement. The Bank should strengthen the internal position to cope with the international standard.
NPA level of SBI is very high so the bank should take some preventive action to reduce NPA. To reduce NPA level the bank should adopt some risk management techniques. And they should give loans to the customers, whose credit worthiness is good.
In State Bank of India, debt equity ratio is continuously rising over the years which are not good so they have to increase equity or reduce debts in their capital structure.
Bank has to give more advances in order to earn more interest. But they should have to also keep in mind the credit worthiness of the customers.
The bank should use some innovative product to compete with private banks & global banks.
ONCLUSIONState bank is the one largest public sector bank. It has shown tremendous
growth over the past 5 years. State bank of India has been able to withstand the acid test of CAMELS model. However it should not rest on its laurels. SBI will also open its branches outside India. NAP of SBI has also decreased from previous year. Its CASA deposits is more than any other banks.SBI is also giving more focus on retail banking sector. It should also gear up for BASEL-III norms which
are imminent in the near future. It should also strive for disruptive innovative banking practices to beat other stronger competitors, both in the domestic as well as international arena. All in all, State bank is a bank with sound fundamentals which is growing at a really fast pace but there are so many challenges which it must prepare itself for to sustain and succeed.
