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Analysis Of f inancial Statements ofState bank of I ndia

A PROJECT REPORT

Under the guidance Of

Mr. Sharad Shukla

Submitted by

Prateek Oberai

Roll no. 1302002739

in parti al ful fi ll ment o f the requir ement

for the award of the degree

Of

MBA

IN

[Finance]

January 2015

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Bonafide Certificate

BONAFIDE CERTIFICATE

Certified that this project report titled Analysis Of financial Statements

of State bank of India is the bonafide work of Prateek Oberai, who

carried out the project work under my supervision.

SIGNATURE SIGNATURE

Mr. Rama Raman Pandey Mr. Sharad Shukla

HEAD OF THE DEPARTMENT FACULTY IN CHARGE

HLC Academy 2 nd floor Ajanta HLC Academy 2 nd floor Ajanta

Complex Alambagh, Lucknow Complex Alambagh, Lucknow

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ACKNOWLEDGEMENT

In order to accomplish a task, facts, situations and persons integrate

together to form a background. Greatness lies in being grateful and not

in being great. This research report is a result of contribution of distinct

personalities whose guidance here made my effort a producing one, as

no task is a single mans effort.

I would like to express my deep sense of gratitude to the

respectable guide distinguished personalities for their precious

suggestions and encouragement during the project.

The experience which is gained by me during this project is

essential for me at this turning point of my career.

I am thankful to my project guides Mr. Sharad Shukla, for kind

support and supervision under whose kind & constant guidance I had the

opportunity to expand my horizons and view the various problems from

different prospective. I am also thanking him for sparing his valuable

time to listen my problems and difficulties faced by me during the

completion of this project report.

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PREFACE

It was a privilege for us to work in a reputed organization- This has

given us an opportunity to work in a truly professional environment

where team work score over individual effort, where there is a helpful

atmosphere. A well planned, properly executed and evaluated training

helps a lot in inoculating good work culture. The project on Analysis Of

financial Statements of State bank of I ndi a .

has been made to facilitate effective understanding about the marketing

aspects.

The project training has provided me an opportunity to gain

practical experience, which has helped me to increase my sphere of

knowledge to a greater extent. I have tried to summarize all our

experience and knowledge acquired up till now, in this report. This

project is a keen effort to obtain the expected results and fulfill all the

information required.

At the end annexure and bibliography are given for

effective understanding.

Thank you for your interest in my project report.

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CONTENTS

Serial No. H eadings Page No.

1. Introduction 8

2. Financial Statement Analysis 65

3. Profit & loss A/c 66

4. Cash Flow 69

5. Balance Sheet 70

6. Ratio Analysis 74

7. Earning Quality 85

8. Summary of Ratios 90

9. Conclusion 94

10. Suggestion 96

11. References 98

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LIST OF TABLES

Serial No. L ist of Tables Page No.

1. Table: 1.1 74

2. Table: 1.2 76

3. Table: 1.3 78

4. Table: 1.4 79

5. Table: 1.5 80

6. Table: 2.1 81

7. Table: 2.2 83

8. Table: 3.1 85

9. Table: 3.2 87

10. Table: 3.3 88

11. Table: 3.4 89

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LIST OF FIGURES

Serial No. L ist of F igures Page No.

1. Figure: 1.1 74

2. Figure: 1.2 76

3. Figure: 1.3 78

4.

Figure: 1.4 79

5. Figure: 1.5 80

6. Figure: 2.1 81

7. Figure: 2.2 83

8. Figure: 3.1 85

9. Figure: 3.2 87

10. Figure: 3.3 88

11. Figure: 3.4 89

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The Indian capital markets have witnessed a transformation over the last

decade. India is now placed among the mature markets of the world. Key

progressive initiatives in recent years include:

The depository and share dematerialisation systems that have enhanced

the efficiency of the transaction cycle

Replacing the flexible, but often exploited, forward trading mechanism

with rolling settlement, to bring about transparency

The infotech -driven National Stock Exchange (NSE) with a national presence (for the benefit of investors across locations) and other

initiatives to enhance the quality of financial disclosures.

Corpor atization of stock exchanges.

The Money and Exchange Board of India (SEBI) has effectively been

functioning as an independent regulator with statutory powers.

Indian capital markets have rewarded Foreign Institutional Investors

(FIIs) with attractive valuations and increasing returns.

The Mumbai Stock Exchange continues to be the premier exchange in

the country with an increase in market capitalisation from US$ 40 billion

in 1990-1991 to US$ 203 billion in 1999-2000. The stock exchange has

about 6,000 listed companies and an average daily volume of about a

billion dollars

Many new instruments have been introduced in the markets, including

index futures, index options, derivatives and options and futures in select

stocks.

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Origin and Development of the industry

The Bombay Stock Exchange (BSE) is known as the oldest exchange in

Asia. It traces its history to the 1850s, when stockbrokers would gatherunder banyan trees in front of Mumbais Town Hall. The location of

these meetings changed many times, as the number of brokers constantly

increased. The group eventually moved to Dalal Street in 1874 and in

1875 became an official organization known as The Native Share &

Stock Brokers Association. In 1956, the BSE became the first stock

exchange to be recognized by the Indian Government under the MoneyContracts Regulation Act.

The Bombay Stock Exchange developed the BSE Sensex in 1986, giving

the BSE a means to measure overall performance of the exchange. In

2000 the BSE used this index to open its derivatives market, trading

Sensex futures contracts. The development of Sensex options along with

equity derivatives followed in 2001 and 2002, expanding the BSEs

trading platform.

Historically an open-cry floor trading exchange, the Bombay Stock

Exchange switched to an electronic trading system in 1995. It took the

exchange only fifty days to make this transition.

Capital market reforms in India and the launch of the Money and

Exchange Board of India (SEBI) accelerated the integration of the second

Indian stock exchange called the National Stock Exchange (NSE) in

1992. After a few years of operations, the NSE has become the largest

stock exchange in India.

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Three segments of the NSE trading platform were established one after

another. The Wholesale Debt Market (WDM) commenced operations in

June 1994 and the Capital Market (CM) segment was opened at the end

of 1994. Finally, the Futures and Options segment began operating in

2000. Today the NSE takes the 14th position in the top 40 futures

exchanges in the world.

In 1996, the National Stock Exchange of India launched S&P CNX Nifty

and CNX Junior Indices that make up 100 most liquid stocks in India.

CNX Nifty is a diversified index of 50 stocks from 25 different economysectors. The Indices are owned and managed by India Index Services and

Products Ltd (IISL) that has a consulting and licensing agreement with

Standard & Poors.

In 1998, the National Stock Exchange of India launched its web-site and

was the first exchange in India that started trading stock on the Internet in

2000. The NSE has also proved its leadership in the Indian financial

market by gaining many awards such as Best IT Usage Award by

Computer Society in India (in 1996 and 1997) and CHIP Web Award by

CHIP magazine (1999).

The National Stock Exchange of India was promoted by leading Financial

institutions at the behest of the Government of India, and wasincorporated in November 1992 as a tax-paying company. In April 1993,

it was recognized as a stock exchange under the Money Contracts

(Regulation) Act, 1956. NSE commenced operations in the Wholesale

Debt Market (WDM) segment in June 1994. The Capital Market

(Equities) segment of the NSE commenced operations in November

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1994, while operations in the Derivatives segment commenced in June

2000.

Since the early 1950s till the early 1990s, Indian policy makers had beennourishing the goal of Socialist pattern of society. They had been

following the development planning strategy of the former Soviet Russia

in a mixed economic framework. From July 1991, in the face of an

unprecedented foreign exchange crisis, Indian economy started

experiencing an IMF-World Bank dictated regime of liberalisation.

One aspect of this is financial liberalisation. There is a move towards

privatisation of nationalised banks these banks are selling their shares in

the stock market. Transnational banks are encouraged to operate in the

Indian banking sector. Attempts are made to attract foreign direct

investment in different sectors. There is an increasing entry of foreign

portfolio capital due to stock market liberalisation. People are encouraged

to invest in stocks through income tax benefits and abolition of capital

gains tax. There is a move to develop a national pension fund which will

be invested in different stocks to get returns out of which pension will be

provided to retired people. It is expected that boosting up of stock market

will accelerate the process of capital accumulation and growth.

Stock market development has been an important part of financialliberalisation in the less developed countries (LDCs). In the pro-

liberalisation circle, stock market is assigned to play an important role in

the capitalist development of LDCs.

There are many studies supporting the positive link between stock market

development and growth. Let us mention some of the recent studies. One

important study was undertaken by Levine and Zervos (1998). Their

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cross-country study found that the Development of banks and stock

markets has a positive effect on growth. In another study Levine (2003)

argued that although theory provides ambiguous relationship between

stock market liquidity and economic growth, the cross-country data for

49 countries over the period 1976-93 suggest a strong and positive

relationship (see also Levine, 2001). Henry (2000) studied a sample of 11

LDCs and observed that stock market liberalisations lead to private

investment boom. Recently, Bekaert et al (2005) analysed data of a large

number of countries and observed that the stock market liberalisation

leads to an appro ximate 1 % increase in annual real per capita GDP

growth.

There are some economists who are sceptical. Long time back Keynes

(1936) compared the stock market with casino and commented: when the

capital development of a country becomes the by-product of the activities

of a casino, the job is likely to be ill- done.

Referring to the study of World Bank (1993) , Singh (1997) pointed out

that stock markets have played little role in the post-war industrialisation

of Japan, Korea and Taiwan. He argued that the recent move towards

stock market liberalisation is unlikely to help in achieving quicker

industrialisation and faster long- term economic growth in most of the

LDCs.

In this perspective this study examines the nature of relationship between

stock market and growth through capital accumulation in India.

Growth and Present Status of the industry

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The ever-growing and fast-maturing 'India Market' is a lucrative business

destination for developed countries. With 7-8% of GDP growth, huge

analytical, young and English speaking work force the 'pull' for

opportunities are luring. The bandwidth of 'India Market' is enviably wide

and very deep.

'Markets in India' are well protected by legal guidelines and efficient

administrators. With a liberal and proactive government at the center the

road ahead for 'Markets of India' is very rosy. 'Market India' has

witnessed exponential growth over past one and half decade. Foreseeingsure and substantial returns on investments (ROI) companies are pro-

actively listing on the stock market indexes. Government agencies once

much hated for red tape and bribes has shed its image. Professionalism is

their new mantra. Public Enterprises like IOC, ONGC, BHEL, NTPC,

SAIL, MTNL, BPCL, HPCL and GAIL, SBI, LIC, Hindustan

Antibiotics Limited, Air India etc. to name a few, are giving Private

Indian companies a good run for their Money. Private giants like Reliance

Industries Limited, Infosys, Tata, Birla Corporation, Jet Airways,

Ranbaxy, Biocon, Bajaj Auto, ICICI are breaking their own records every

financial years.

Indian Equity Market at present is a lucrative field for the investors andinvesting in Indian stocks are profitable for not only the long and

medium-term investors, but also the position traders, short-term swing

traders and also very short term intra-day traders. In terms of market

capitalization, there are over 2500 companies in the BSE chart list with

the Reliance Industries Limited at the top. There are about 22 stock

exchanges in India which regulates the market trends of different stocks.

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Generally the bigger companies are listed with the NSE and the BSE, but

there is the OTCEI or the Over the Counter Exchange of India, which

lists the medium and small sized companies. There is the SEBI or the

Money and Exchange Board of India which supervises the functioning of

the stock markets in India.

Thus, the growing financial capital markets of India being encouraged by

domestic and foreign investments is becoming a profitable business more

with each day. If all the economic parameters are unchanged Indian

Equity Market will be conducive for the growth of private equities andthis will lead to an overall improvement in the Indian economy.

Indian Stock Market including both NSE-National Stock Exchange and

the BSE-Bombay Stock Exchange have certainly taken a tremendous

beating in the past few weeks. We are sure most of us here knew that the

correction in the trading curve was round the corner which would be

healthy, and the markets would bounce back with the help of mutual fund

investments & buying of Indian stocks again. However the anticipation

went wrong, and the US recession story along with global and Indian

commodity prices have added fuel to the global equity market turmoil on

a whole.

1.5 Future of the industry

The stock market is booming in spite of the low agriculture output. The

monsoon is good in an overall sense but still the question remains who

takes the credit? The answer is the karma of the people. I appreciate the

Indian politicians and the industrialists who being pawns of destiny are

doing things positive and productive. India, as a country is running a very

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good period and the position of planets in the transit are giving wonderful

results.

Less than one percent of population own stocks and less than 1000individuals control the market, the majority being the FIIs, the promoters

of the company. The credit should go to media for making stock market

headlines.

In any case if you are long terms players then step-in and buy now and

forget for another 10 years. You will make a killing in the Indian markets.

Most of the tech companies and the main index will do well but slightly

in the lower side of expectations.

1.6 Structure, Processes and Governance of the industry

Under this, various processes involved in the industry will be discussed.

Other than this, the bodies governing the industry will also be brief upon

and and an endeavour will be made to understand the whole structure of

the industry.

1.6.1 Dematerialized Trading

Indian investor community has undergone see changes in the past few

years. India now has a very large investor population and ever increasing

volumes of trades. However, this continuous growth in activities has also

increased problems associated with stock trading. Most of these problems

arise due to the intrinsic nature of paper based trading and settlement, like

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theft or loss of share certificates. This system requires handling of huge

volumes of paper leading to increased costs and inefficiencies. Risk

exposure of the investor due to this trading in paper.

Some of these risks are:

1. Delay in transfer of shares.

2. Possibility of forgery on various documents leading to bad

deliveries, legal disputes etc.

3. Possibility of theft of share certificates in the market.

4. Multiplication or loss of share certificates in transit.

5. Prevalence of fake certificates in the market.

The physical form of holding and trading in Money also acts as a

bottleneck for broking community in capital market operations.

The introduction of NSE and BOLT has increased the reach of capital

market manifolds. The increase in number of investors participating in

the capital market has increased the possibility of being hit by a bad

delivery. The cost and time spent by the brokers for rectification of these

bad deliveries tends to be higher with the geographical spread of the

clients. The increase in trade volumes lead to exponential rise in the back

office operations thus limiting the growth potential of the broking

members. The inconvenience faced by investors (in areas that are far

flung and away from the main metros) in settlement of trade also limits

the opportunity for such investors, especially in participating in auction

trading. This has made the investors as well as broker wary of Indian

capital market. In this scenario, dematerialized trading is certainly a

welcome move.

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1.6.2 What is Dematerialization?

Dematerialization or Demat is a process whereby your Money like

shares, debentures etc, are converted into electronic data and stored incomputers by a Depository. Money registered in your name are

surrendered to depository participant (DP) and these are sent to the

respective companies who will cancel them after Dematerialization and

credit your depository account with the DP.

The Money on Dematerialization appear as balances in your depository

account. These balances are transferable like physical shares. If at a later

date, you wish to have these Demat Money converted back into paper

certificates; the Depository helps you to do this.

Dematerialization is the process of converting the Money held in physical

form (certificates) to an equivalent number of Money in electronic form

and crediting the same to the investors Demat account. DematerializedMoney do not have any certificate numbers or distinctive numbers and

are dealt only in quantity i.e.; the Money are fungible.

Dematerialization of your holdings is not mandatory. You can hold your

secure Demat form or in physical form. You can also keep part of your

holdings (in the same script) in Demat form & part in physical form.

However, Money specified by SEBI can be delivered only in Demat form

in the stock exchanges connected to NSDL and / or CDSL.

The Process

1. Surrendering of certificate to Depository Participants for

dematerialization.

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2. NSDL is informed by the DP through electronic connectivity.

3. Original share certificates are submitted to the registrar by the

DP.

4. The request for dematerialization from NSDL to the register.

5. The registrar credits an equivalent number of shares in the

account and informs NSDL.

6. The NSDL updates its own account and the depository

participants are informed.

1.6.3 Rematerialisation

Sometimes the investor may like to convert his electronic holdings back

into physical share certificate. The process undertaken for this purpose is

called rematerialisation. The investor has to make a request to the

depository participant for rematerialisation. The depository participant

puts forward the request to NSDL after verifying whether the investor in

having necessary security balances. NSDL in turn will intimate the

registrar who prints the certificate and dispatch the same to the investor.

The certificate has a new range of certificate numbers and new folio

number.

The Process

1. Investor requests the DP for rematerialisation.

2. The depository participant informs it to the NSDL.

3. NSDL intimates the Registrar.

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4. The Registrar of the company prints certificates with new

number and informs NSDL.

5. NSDL adjusts its account and passes on the details to the DP.

6. The certificates are dispatched to the investor.

1.6.4 What is Depository?

Depository functions like a Money bank, where the dematerialized

physical Money are traded and held in custody. This facilitates faster, risk

free and low cost settlement. Depository is much like a bank and

performs many activities that are similar to a bank. Following table

compares the two.

Bank Depository

Holds funds in accounts Holds Money in account

Transfers funds between accounts Transfers Money between accounts

Transfers without handling Money Transfers without handling Money

Safekeeping of Money Safekeeping of Money

1.6.5 NSDL and CDSL

At present there are two depositories in India, National MoneyDepository Limited (NSDL) and Central Depository Services Limited

(CDSL). NSDL is the first Indian depository; it was inaugurated in

November 1996. NSDL was set up with an initial capital of US$28mn,

promoted by Industrial Development Bank of India (IDBI), Unit Trust of

India (UTI) and National Stock Exchange of India Ltd. (NSEIL). Later,

State Bank of India (SBI) also became a shareholder.

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The other depository is Central Depository Services Limited (CDSL). It

is still in the process of linking with the stock exchanges. It has registered

around 20 DPs and has signed up with 40 companies. It had received a

certificate of commencement of business from SEBI on February 8, 1999.

These depositories have appointed different Depository Participants (DP)

for them. An investor can open an account with any of the depositories

DP. But transfers arising out of trades on the stock exchanges can take

place only amongst account- holders with NSDLs DPs. This is because

only NSDL is linked to the stock exchanges (nine of them including themain ones-National Stock Exchange and Bombay Stock Exchange).

In order to facilitate transfers between investors having accounts in the

two existing depositories in the country the Money and Exchange Board

of India has asked all stock exchanges to link up with the depositories.

SEBI has also directed the companies registrar and transfer agents to

effect change of registered ownership in its books within two hours of

receiving a transfer request from the depositories. Once connected to both

the depositories the stock exchanges have also to ensure that inter-

depository transfers take place smoothly. It also involves the two

depositories connecting with each other. The NSDL and CDSL have

signed an agreement for inter-depository connectivity.

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1.6.5 What is a DP?

A depository is like a bank where Money are held in

electronic(dematerialized) form. In India, there are two Depositories National Money Depositories Limited (NSDL) and Central Depository

Services Limited (CSDL).

Under the Depositories Act, investors can avail of the services of the

Depositories through Depository Participants (DP) such as ICICI bank.

DPs are like bank branches wherein shares in physical form need to be

deposited for converting the same to electronic (Demat) form.

NSDL carries out its activities through various functionaries called

business partners who include Depository Participants (DPs), issuing

corporate and their Registrars and Transfer Agents, Clearing

corporations/Clearing Houses etc. NSDL is electronically linked to each

of these business partners via a satellite link through Very Small ApertureTerminals (VSATs). The entire integrated system (including the VSAT

linkups and the software at NSDL and each business partners end) has

been named as the NEST [National Electronic Sett lement & Transfer]

system.

The investor interacts with the depository through a depository

participant of NSDL. A DP can be a bank, financial institution, a

custodian or a broker.

Just as one opens a bank account in order to avail of the services of a

bank, an investor opens a depository account with a depository

participant in order to avail of depository facilities.

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1.6.6 How to open a bank account with a DP

Opening a depository account is as simple as opening a bank account.

You can open a depository account with any DP convenient to you.

To open an account you have to:

1. Fill up the account opening form, which is available with the DP.

2. Sign the DP-client agreement, which defines the rights and duties

of the DP and the person wishing to open the account.

3. Receive your client account number (client ID).

4. This client ID along with your DP ID gives you a unique

identification in the Depository system

There is no restriction on the number of depository accounts a person can

open. However, if your existing physical shares are in joint names, youhave to open the account in the same order of names before you submit

your share certificates for demat. A sole holder of the share certificates

cannot add more names as joint holders at the time of dematerializing his

share certificates.

However, if the investor wants to transfer the ownership from his

individual name to a joint name, he should first open an account as the

sole holder (account A) and dematerialize the share certificates. He

should then open another depository account (account B) in which he is

the first holder and the other person is the second holder and make an off

market transfer of the shares from the account A to account B. The

investor will incur a charge on this transaction. Alternatively, the

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certificates can be transferred to the joint ownership and then sent for

Dematerialization.

Right now, as per the Companies Act, there is no nomination facility forshares (whether in the physical or in the electronic form). The nomination

facility for shares can be availed of only when the relevant provisions in

the Companies Act are amended. NSDL captures the details of the

nominee when the account is opened so as to offer the facility as soon as

the relevant amendments are effected in the Law.

A client can choose to open more than one account with same DP. In

addition to this, he has a choice of opening accounts with more than one

DP. However a

broker can open just one Clearing Member account per card/ stock

exchange for clearing purpose, but he can still open multiple beneficiary

accounts Beneficiary is the personal account wherein brokers can keeptheir personal holdings.

A broker has only one Clearing Member-pool-account. One Clearing

Member pool account is opened per card/ stock exchange to settle trades

in the dematerialized form. The Clearing Corporation/ House just deals

with one designated account for pay-in and payout and the broker's

clients know to which account they have to deliver and receive Money

from.

A clearing member cannot hold his personal holdings in his clearing

member account. A broker may deal in the depository system as a

clearing member only through a special account, known as the Clearing

Member account. This account can be used only for clearing purposes

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and not for holding his own Money in it. As this is a transitory account,

the Money held in this account are not eligible for corporate actions.

Therefore, the broker will have to open a separate beneficiary owner

account to hold his investments.

There is no compulsion for the client to open his account with the same

DP as that of his broker. Even if he has an account with another DP, he

can carry out normal business with his broker. There is no loss in

operational efficiency. But it is possible that opening account with his

broker's DP may work out to his advantage, as some DPs may offerspecial charge structure if the broker and his clients are dealing through

him.

1.6.7 Trading

Trading in dematerialized Money is quite similar to trading in physical

Money. The major difference is that at the time of settlement, instead of

delivery/ receipt of Money in the physical form, it is done through

account transfer.

An investor cannot trade in dematerialized Money through his DP.

Trading at the stock exchanges can be done only through a registeredtrading member (broker) of the stock exchange irrespective of whether

the Money are held in physical or dematerialized form. DPs role will only

be to facilitate settlement of trade in the dematerialized form, by

transferring Money from and to the account of the investor, for selling

and buying respectively.

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Trading in dematerialized Money is presently available at NSE, BSE,

CSE, DSE,LSE, MSE, ISE & OTCEI. These exchanges have a segment

exclusive for trading in dematerialized Money and a segment where

trades could be settled either in the physical or in the dematerialized form

as per the choice of the delivering client. In unified (erstwhile - physical)

segment Money can be delivered either in the physical form or in the

dematerialized form at the choice of the delivering party.

However, Money that have to be mandatorily settled in demat form (both

by institutional investors & all category of investors) cannot be settled in physical form. Also for Money that have to be mandatorily settled in

demat form by all categories of investors the concept of market lot is

eliminated i.e. the tradable lot is one share from the date they become

compulsory.

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1.6.8 Settlement

The settlement of trades in the stock exchanges is undertaken by the

clearing corporation (CC)/ clearing house (CH) of the correspondingstock exchanges. While the settlement of dematerialized Money is

effected through depository, the funds settlement is effected through the

clearing banks. The clearing members directly with the CC/ CH settle the

physical Money.

Exclusive Demat segment follows rolling settlement (T+5) cycle and the

unified (erstwhile - physical) segment follows account period settlement

cycle. In case of rolling settlement cycle, the account period is reduced to

one day.

In case of settlement of trades done in exclusive Demat segments, the

pay-in and pay out of funds and Money are effected on the same day

afternoon and evening (same day) thus reducing the blockage of fundsand limiting exposure to the clearing corporation.

Settlement of funds is effected through the clearing banks and

depository plays no role in this.

Settlement of Money is effected through NSDL depository system.

Clearing and settlement of the regular market trades is affected

through the clearing members of the clearinghouses of respectivestock exchanges. All trading members of stock exchanges are clearing

members of clearing houses. In addition, for settlement of institutional

trades, custodians are also allowed to act as clearing members.

Clearing members of clearinghouse, dealing in dematerialized Money

are expected to open a clearing account with any DP for the purpose

of settling trades in dematerialized Money. As, in the mixed (unified)

http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/http://www.indiainfoline.com/bisc/demat/

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segment, there is a possibility for all clearing members to receive

dematerialized Money, they are expected to open clearing accounts.

If there is any short delivery at the time of pay-in of Money, these

short positions are auctioned in the Demat segment as done in the

Unified (erstwhile-physical) segment.

For trades executed on Wednesday (TD 1):

Final/ Net obligation statement download - Friday (T+2nd working

day)

Settlement day (SD 1) i.e. pay in and pay out of funds and Money -

next Wednesday (T+5th working day)

Auction trade day (ATD 1) - next Thursday (T+6th working day)

Auction settlement day (ASD 1) - Monday (2nd working day from

auction trade day i.e. T+8th working day)

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Similarly, for trades executed on Thursday (TD 2):

Final/ Net obligation statement download - Monday (T+2nd

working day) Settlement day (SD 2) - next Thursday (T+5th working day)

Auction trade day (ATD 2) - next Friday (T+6th working day)

Auction settlement day (ASD 2) - Tuesday (2nd working day from

auction trade day i.e. T+8th working day)

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COMPANY

PROFILE

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INDUSTRY OVERVIEW

History:

Banking in India has its origin as carry as the Vedic period. It is believed

that the transition from money lending to banking must have occurred

even before Manu, the great Hindu jurist, who has devoted a section of

his work to deposits and advances and laid down rules relating to the

interest. During the mogal period, the indigenous bankers played a very

important role in lending money and financing foreign trade and

commerce. During the days of East India Company, it was to turn of the

agency houses top carry on the banking business. The general bank of

India was the first joint stock bank to be established in the year 1786.The

others which followed were the Bank of Hindustan and the Bengal Bank.

The Bank of Hindustan is reported to have continued till 1906, while the

other two failed in the meantime. In the first half of the 19 th Century the

East India Company established three banks; The Bank of Bengal in

1809, The Bank of Bombay in 1840 and The Bank of Madras in

1843.These three banks also known as presidency banks and were

independent units and functioned well. These three banks were

amalgamated in 1920 and The Imperial Bank of India was established on

the 27 th Jan 1921, with the passing of the SBI Act in 1955, the

undertaking of The Imperial Bank of India was taken over by the newly

constituted SBI. The Reserve Bank which is the Central Bank was createdin 1935 by passing of RBI Act 1934, in the wake of swadeshi movement,

a number of banks with Indian Management were established in the

country namely Punjab National Bank Ltd, Bank of India Ltd, PUBJAB

NATIONAL BANK Ltd, Indian Bank Ltd, The Bank of Baroda Ltd, The

Central Bank of India Ltd .On July 19 th 1969, 14 Major Banks of the

country were nationalized and in 15th

April 1980 six more commercial

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private sector banks were also taken over by the government. The Indian

Banking industry, which is governed by the Banking Regulation Act of

India 1949, can be broadly classified into two major categories, non-

scheduled banks and scheduled banks. Scheduled Banks comprise

commercial banks and the co-operative banks.

The first phase of financial reforms resulted in the nationalization of 14

major banks in 1969 and resulted in a shift from class banking to mass

banking. This in turn resulted in the significant growth in the

geographical coverage of banks. Every bank had to earmark a min

percentage of their loan portfolio to sectors identified as priority sectors

the manufacturing sector also grew during the 1970s in protected

environments and the banking sector was a critical source. The next wave

of reforms saw the nationalization of 6 more commercial banks in 1980

since then the number of scheduled commercial banks increased four-

fold and the number of bank branches increased to eight fold.

After the second phase of financial sector reforms and liberalization of

the sector in the early nineties. The PSBs found it extremely difficult to

complete with the new private sector banks and the foreign banks. The

new private sector first made their appearance after the guidelines

permitting them were issued in January 1993.

The Indian Banking System:Banking in our country is already witnessing the sea changes as the

banking sector seeks new technology and its applications. The best port is

that the benefits are beginning to reach the masses. Earlier this domain

was the preserve of very few organizations. Foreign banks with heavy

investments in technology started giving some Out of the world

customer services. But, such services were available only to selected few-

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the very large account holders. Then came the liberalization and with it a

multitude of private banks, a large segment of the urban population now

requires minimal time and space for its banking needs.

Automated teller machines or popularly known as ATM are the three

alphabets that have changed the concept of banking like nothing before.

Instead of tellers handling your own cash, today there are efficient

machines that dont talk but just dispense cash. Under the

Reserve Bank of India Act 1934, banks are classified as scheduled banks

and non-scheduled banks. The scheduled banks are those, which are

entered in the Second Schedule of RBI Act, 1934. Such banks are those,

which have paid- up capital and reserves of an aggregate value of not less

then Rs.5 lacs and which satisfy RBI that their affairs are carried out in

the interest of their depositors. All commercial banks Indian and Foreign,

regional rural banks and state co-operative banks are Scheduled banks.

Non Scheduled banks are those, which have not been included in the

Second Schedule of the RBI Act, 1934.

The organized banking system in India can be broadly classified into

three categories: (i) Commercial Banks (ii) Regional Rural Banks and

(iii) Co-operative banks. The Reserve Bank of India is the supreme

monetary and banking authority in the country and has the responsibility

to control the banking system in the country. It keeps the reserves of allcommercial banks and hence is known as the Reserve Bank .

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Current scenario:-

Currently (2007), the overall banking in India is considered as fairly

mature in terms of supply, product range and reach - even though

reach in rural India still remains a challenge for the private sector

and foreign banks. Even in terms of quality of assets and

Capital adequacy, Indian banks are considered to have clean, strong

and transparent balance sheets - as compared to other banks in

comparable economies in its region. The Reserve Bank of India is an

autonomous body, with minimal pressure from the Government

With the growth in the Indian economy expected to be strong for quite

some time especially in its services sector, the demand for banking

services especially retail banking, mortgages and investment services are

expected to be strong. Mergers & Acquisitions., takeovers, are much

more in action in India.One of the classical economic functions of the banking industry that has

remained virtually unchanged over the centuries is lending. On the one

hand, competition has had considerable adverse impact on the margins,

which lenders have enjoyed, but on the other hand technology has to

some extent reduced the cost of delivery of various products and services.

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Banks play important role in economic development of a country, like:

Banks mobilise the small savings of the people and make them

available for productive purposes.

Promotes the habit of savings among the people thereby offering

attractive rates of interests on their deposits.

Provides safety and security to the surplus money of the depositors

and as well provides a convenient and economical method of payment.

Banks provide convenient means of transfer of fund from one place to

another.

Helps the movement of capital from regions where it is not very useful

to regions where it can be more useful.

Banks advances exposure in trade and commerce, industry and

agriculture by knowing their financial requirements and prospects.

Bank acts as an intermediary between the depositors and the investors.

Bank also acts as mediator between exporter and importer who does

foreign trades.

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Chart Showing Three Different Sectors of Banks

i) Public Sector Banks

ii) Private Sector Banks

Public Sector Banks

SBI and Nationalized Regional

Rural

SUBSIDIARIES Banks Banks

SBI and subsidiaries

This group comprises of the State Bank of India and its seven

subsidiaries viz., State Bank of Patiala, State Bank of Hyderabad, State

Bank of Travancore, State Bank of Bikaner and Jaipur, State Bank of

Mysore, State Bank of Saurashtra, State Bank of India

State Bank of India (SBI) is the largest bank in India. If one

measures by the number of branch offices and employees, SBI is the

largest bank in the world. Established in 1806as Bank of Bengal it is the

oldest commercial bank in the Indian subcontinent. SBI provides various

domestic, international and NRI products and services, through its vast

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network in India and overseas. With an asset base of $126 billion and its

reach, it is a regional banking behemoth. The government nationalized

the bank in1955, with the Reserve bank of India taking a 60% ownership

stake. In recent years the bank has focused on two priorities, 1), reducing

its huge staff through Golden handshakeschemes known as the Voluntary

Retirement Scheme, which saw many of its best and brightest defect to

the private sector, and 2), computerizing its operations.

The State Bank of India traces its roots to the first decade of19th century,when the Bank of culcutta, later renamed theBank of bengal, was

established on 2 jun 1806. The government amalgamatted Bank of

Bengal and two other Presidency banks, namely, the Bank of Bombay

and the bank of Madras, and named the reorganized banking entity the

Imperial Bank of India. All these Presidency banks were incorporated

ascompanies, and were the result of theroyal charters. The Imperial Bankof India continued to remain a joint stock company. Until the

establishment of a central bank in India the Imperial Bank and its early

predecessors served as the nation's central bank printing currency.

The State Bank of India Act 1955, enacted by the parliament of India,

authorized the Reserve Bank of India, which is the central Banking

Organisationof India, to acquire a controlling interest in the Imperial

Bank of India, which was renamed the State Bank of India on30th April

1955.

In recent years, the bank has sought to expand its overseas operations by

buying foreign banks. It is the only Indian bank to feature in the top 100

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world banks in the Fortune Global 500 rating and various other rankings.

According to the Forbes 2000 listing it tops all Indian companies.

Nationalized banks

This group consists of private sector banks that were nationalized. The

Government of India nationalized 14 private banks in 1969 and another 6

in the year 1980. In early 1993, there were 28 nationalized banks i.e., SBI

and its 7 subsidiaries plus 20 nationalized banks. In 1993, the loss making

new bank of India was merged with profit making Punjab National Bank.

Hence, now only 27 nationalized banks exist in India.

Regional Rural banks

These were established by the RBI in the year 1975 of banking

commission. It was established to operate exclusively in rural areas to

provide credit and other facilities to small and marginal farmers,

agricultural laborers, artisans and small entrepreneurs.

Private Sector Banks

Private Sector Banks

Old private new privateSector Banks Sector Banks

Old Private Sector Banks

This group consists of the banks that were establishes by the privy

sectors, committee organizations or by group of professionals for the

cause of economic betterment in their operations. Initially, their

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operations were concentrated in a few regional areas. However, their

branches slowly spread throughout the nation as they grow.

New private Sector Banks

These banks were started as profit orient companies after the RBI opened

the banking sector to the private sector. These banks are mostly

technology driven and better managed than other banks.

Foreign banks

These are the banks that were registered outside India and had originated

in a foreign country. The major participants of the Indian financialsystem are the commercial banks, the financial institutions (FIs),

encompassing term-lending institutions, investment

institutions, specialized financial institutions and the state-level

development banks, Non-Bank Financial Companies (NBFCs) and other

market intermediaries such as the stock brokers and money-lenders. The

commercial banks and certain variants of NBFCs are among the oldest of

the market participants. The FIs, on the other hand, are relatively new

entities in the financial market place.

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IMPORTANCE OF BANKING SECTOR IN A GROWING

ECONOMY

In the recent times when the service industry is attaining greater

importance compared to manufacturing industry, banking has evolved as

a prime sector providing financial services to growing needs of the

economy.

Banking industry has undergone a paradigm shift from providing

ordinary banking services in the past to providing such complicated and

crucial services like, merchant banking, housing finance, bill discounting

etc. This sector has become more active with the entry of new players like

private and foreign banks. It has also evolved as a prime builder of the

economy by understanding the needs of the same and encouraging the

development by way of giving loans, providing infrastructure facilities

and financing activities for the promotion of entrepreneurs and other

business establishments.

For a fast developing economy like ours, presence of a sound financial

system to mobilize and allocate savings of the public towards productive

activities is necessary. Commercial banks play a crucial role in thisregard.

The Banking sector in recent years has incorporated new products in their

businesses, which are helpful for growth. The banks have started to

provide fee-based services like, treasury operations, managing

derivatives, options and futures, acting as bankers to the industry during

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the public offering, providing consultancy services, acting as an

intermediary between two-business entities etc.At the same time, the

banks are reaching

out to other end of customer requirements like, insurance premium

payment, tax payment etc. It has changed itself from transaction type of

banking into relationship banking, where you find friendly and quick

service suited to your needs. This is possible with understanding the

customer needs their value to the bank, etc. This is possible with the help

of well organized staff, computer based network for speedy transactions,

products like credit card, debit card, health card, ATM etc. These are the

present trend of services. The customers at present ask for convenience of

banking transactions, like 24 hours banking, where they want to utilize

the services whenever there is a need. The relationship banking plays a

major and important role in growth, because the customers now have

enough number of opportunities, and they choose according to their

satisfaction of responses and recognition they get. So the banks have to

play cautiously, else they may lose out the place in the market due to

competition, where slightest of opportunities are captured fast.

Another major role played by banks is in transnational business,

transactions and networking. Many leading Indian banks have spread outtheir network to other countries, which help in currency transfer and earn

exchange over it.

These banks play a major role in commercial import and export business,

between parties of two countries. This foreign presence also helps in

bringing in the international standards of operations and ideas. The

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liberalization policy of 1991 has allowed many foreign banks to enter the

Indian market and establish their business. This has helped large amount

of foreign capital inflow & increase our Foreign exchange reserve.

Another emerging change happening all over the banking industry is

consolidation through mergers and acquisitions. This helps the banks in

strengthening their empire and expanding their network of business in

terms of volume and effectiveness.

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CURRENT SCENARIO-

Currently (2007 ), overall, banking in India is considered as fairly mature

in terms of supply, product range and reach-even though reach in ruralIndia still remains a challenge for the private sector and foreign banks.

Even in terms of quality of assets and capital adequacy, Indian banks are

considered to have clean, strong and transparent balance sheets-as

compared to other banks in comparable economies in its region. The

Reserve Bank of India is an autonomous body, with minimal pressure

from the government. The stated policy of the Bank on the Indian Rupeeis to manage volatility-without any stated exchange rate-and this has

mostly been true.

With the growth in the Indian economy expected to be strong for quite

some time-especially in its services sector, the demand for banking

services-especially retail banking, mortgages and investment services are

expected to be strong. M&As, takeovers, asset sales and much more

action (as it is unravelling in China) will happen on this front in India.

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In March 2006, the Reserve Bank of India allowed Warburg Pincus to

increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%.

This is the first time an investor has been allowed to hold more than 5%

in a private sector bank since the RBI announced norms in 2005 that any

stake exceeding 5% in the private sector banks would need to be vetted

by them. Currently, India has 88 scheduled commercial banks (SCBs) -

28 public sector banks (that is with the Government of India holding a

stake), 29 private banks (these do not have government stake; they may

be publicly listed and traded on stock exchanges) and 31 foreign banks.

They have a combined network of over 53,000 branches and 17,000

ATMs . According to a report by ICRA Limited, a rating agency, the

public sector banks hold over 75 percent of total assets of the banking

industry, with the private and foreign banks holding 18.2% and 6.5%

respectively.

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Banking in India

1 Central Bank Reserve Bank of India

2 Nationalised

Banks

State Bank of India, Allahabad Bank,

Andhra Bank, Bank of Baroda, Bank of India,

Bank of Maharastra,PUBJAB NATIONAL

BANK, Central Bank of India, Corporation

Bank, Dena Bank, Indian Bank, Indian

overseas Bank,Oriental Bank of Commerce,

Punjab and Sind Bank, Punjab National Bank,UNION BANK, Union Bank of India, United

Bank of India, UCO Bank,and Vijaya Bank.

3 Private Banks

Bank of Rajastan, Bharath overseas Bank,

Catholic Syrian Bank, Centurion Bank of

Punjab, City Union Bank, Development

Credit Bank, Dhanalaxmi Bank, FederalBank, Ganesh Bank of Kurundwad, HDFC

Bank, ICICI Bank, IDBI, IndusInd Bank, ING

Vysya Bank, Jammu and Kashmir Bank,

Karnataka Bank Limited, Karur Vysya Bank,

Kotek Mahindra Bank, Lakshmivilas Bank,

Lord Krishna Bank, Nainitak Bank, RatnakarBank,Sangli Bank, SBI Commercial and

International Bank, South Indian Bank, Tamil

Nadu Merchantile Bank Ltd., United Western

Bank, UTI Bank, YES Bank.

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STATE BANK OF INDIA

Not only many financial institution in the world today can claim the

antiquity and majesty of the State Bank Of India founded nearly two

centuries ago with primarily intent of imparting stability to the money

market, the bank from its inception mobilized funds for supporting both

the public credit of the companies governments in the three presidencies

of British India and the private credit of the European and India

merchants from about 1860s when the Indian economy book a significant

leap forward under the impulse of quickened world communications and

ingenious method of industrial and agricultural production the Bank

became intimately in valued in the financing of practically and mining

activity of the Sub- Continent Although large European and Indian

merchants and manufacturers were undoubtedly thee principal

beneficiaries, the small man never ignored loans as low as Rs.100 were

disbursed in agricultural districts against glad ornaments. Added to these

the bank till the creation of the Reserve Bank in 1935 carried out

numerous Central Banking functions.

Adaptation world and the needs of the hour has been one of the strengths

of the Bank, In the post depression exe. For instance when business

opportunities become extremely restricted, rules laid down in the book ofinstructions were relined to ensure that good business did not go post. Yet

seldom did the bank contravenes its value as depart from sound banking

principles to retain as expand its business. An innovative array of office,

unknown to the world then, was devised in the form of branches, sub

branches, treasury pay office, pay office, sub pay office and out students

to exploit the opportunities of an expanding economy. New business

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strategy was also evaded way back in 1937 to render the best banking

service through prompt and courteous attention to customers.

A highly efficient and experienced management functioning in a well

defined organizational structure did not take long to place the bank an

executed pedestal in the areas of business, profitability, internal discipline

and above all credibility A impeccable financial status consistent

maintenance of the lofty traditions if banking an observation of a high

standard of integrity in its operations helped the bank gain a pre- eminent

status. No wonders the administration for the bank was universal as key

functionaries of India successive finance minister of independent India

Resource Bank of governors and representatives of chamber of

commercial showered economics on it.

Modern day management techniques were also very much evident in the

good old days years before corporate governance had become a puzzled

the banks bound functioned with a high degree of responsibility and

concerns for the shareholders. An unbroken records of profits and a fairly

high rate of profit and fairly high rate of dividend all through ensured

satisfaction, prudential management and asset liability management not

only protected the interests of the Bank but also ensured that the

obligations to customers were not met. The traditions of the past

continued to be upheld even to this day as the State Bank years itself tomeet the emerging challenges of the millennium.

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ABOUT LOGO

THE PLACE TO SHARE THE NEWS ...

SHARE THE VIEWS

Togetherness is the theme of this corporate loge of SBI where the world

of banking services meet the ever changing customers needs andestablishes a link that is like a circle, it indicates complete services

towards customers. The logo also denotes a bank that it has prepared to

do anything to go to any lengths, for customers.

The blue pointer represent the philosophy of the bank that is always

looking for the growth and newer, more challenging, more promisingdirection. The key hole indicates safety and security.

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M I SSI ON, VI SI ON AND VAL UES

MISSION STATEMENT:

To retain the Banks position as premiere Indian Financial Service Group,

with world class standards and significant global committed to excellence

in customer, shareholder and employee satisfaction and to play a leading

role in expanding and diversifying financial service sectors while

containing emphasis on its development banking rule.

VISION STATEMENT:

Premier Indian Financial Service Group with prospective world-class

Standards of efficiency and professionalism and institutional values.

Retain its position in the country as pioneers in Development banking.

Maximize the shareholders value through high-sustained earnings per

Share.

An institution with cultural mutual care and commitment, satisfyingand

Good work environment and continues learning opportunities.

VALUES:

Excellence in customer service

Profit orientation

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Belonging commitment to Bank

Fairness in all dealings and relations

Risk taking and innovative Team playing

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PRODUCTS:

State Bank Of India renders varieties of services to customers

through the following products:

Personal Loan Product:

SBI Term Deposits SBI Recurring Deposits SBI Housing Loan SBI Car Loan SBI Educational Loan SBI Personal Loan SBI Loan For Pensioners Loan Against Mortgage Of Property Loan Against Shares & Debentures Rent Plus Scheme Medi-Plus Scheme Rates Of Interest

SBI Housing loan

SBI Housing loan or Mortgage Loan schemes are designed to make it

simple for you to make a choice at least as far as financing goes!

http://www.sbi.co.in/viewsection.jsp?id=0,1,19,114http://www.sbi.co.in/viewsection.jsp?id=0,1,19,114,190http://www.sbi.co.in/viewsection.jsp?id=0,1,20,115http://www.sbi.co.in/viewsection.jsp?id=0,1,20,117http://www.sbi.co.in/viewsection.jsp?id=0,1,20,118http://www.sbi.co.in/viewsection.jsp?id=0,1,20,119http://www.sbi.co.in/viewsection.jsp?id=0,1,20,121http://www.sbi.co.in/viewsection.jsp?id=0,1,20,120http://www.sbi.co.in/viewsection.jsp?id=0,1,20,122http://www.sbi.co.in/viewsection.jsp?id=0,1,20,429http://www.sbi.co.in/viewsection.jsp?id=0,1,20,125http://www.sbi.co.in/viewsection.jsp?id=0,16http://www.sbi.co.in/viewsection.jsp?id=0,16http://www.sbi.co.in/viewsection.jsp?id=0,1,20,125http://www.sbi.co.in/viewsection.jsp?id=0,1,20,429http://www.sbi.co.in/viewsection.jsp?id=0,1,20,122http://www.sbi.co.in/viewsection.jsp?id=0,1,20,120http://www.sbi.co.in/viewsection.jsp?id=0,1,20,121http://www.sbi.co.in/viewsection.jsp?id=0,1,20,119http://www.sbi.co.in/viewsection.jsp?id=0,1,20,118http://www.sbi.co.in/viewsection.jsp?id=0,1,20,117http://www.sbi.co.in/viewsection.jsp?id=0,1,20,115http://www.sbi.co.in/viewsection.jsp?id=0,1,19,114,190http://www.sbi.co.in/viewsection.jsp?id=0,1,19,114

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'SBI-Home Loans'

features:

No cap on maximum loan amount for purchase/ construction of

house/ flat

Option to club income of your spouse and children to compute

eligible loan amount

Provision to club expected rent accruals from property proposed to

compute eligible loan amount

Provision to finance cost of furnishing and consumer durables as

part of project cost

Repayment permitted upto 70 years of age

Free personal accident insurance cover

Optional Group Insurance from SBI Life at concessional premium

(Upfront premium financed as part of project cost)

Interest applied on daily diminishing balance basis

'Plus' schemes which offer attractive packages with concessional

interest rates to Govt. Employees, Teachers, Employees in Public

Sector Oil Companies.

Special scheme to grant loans to finance Earnest Money Deposits

to be paid to Urban Development Authority/ Housing Board, etc. in

respect of allotment of sites/ house/ flat

No Administrative Charges or application fee

Prepayment penalty is recovered only if the loan is pre-closed

before half of the original tenure (not recovered for bulk payments

provided the loan is not closed)

Provision for downward refixation of EMI in respect of floating

rate borrowers who avail Housing Loans of Rs.5 lacs and above, to

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avail the benefit of downward revision of interest rate by 1% or

more

In-principle approval issued to give you flexibility while

negotiating purchase of a property

Option to avail loan at the place of employment or at the place of

construction

Attractive packages in respect of loans granted under tie-up with

Central/ State Governments/ PSUs/ reputed corporates and tie-up

with reputed builders (Please contact your nearest branch for

details)

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SERVICES:

DOMESTIC TREASURY

SBI VISHWA YATRA FOREIGN TRAVEL CARD

BROKING SERVICES

REVISED SERVICE CHARGES

ATM SERVICES

INTERNET BANKING

E-PAY

E-RAIL

RBIEFT

SAFE DEPOSIT LOCKER

GIFT CHEQUES

MICR CODES

FOREIGN INWARD REMITTANCES

http://www.sbi.co.in/viewsection.jsp?id=0,10,571http://www.sbi.co.in/viewsection.jsp?id=0,10,571http://www.sbi.co.in/viewsection.jsp?id=0,10,462http://www.sbi.co.in/viewsection.jsp?id=0,10,462http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,536http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,536http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,547http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,547http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,75http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,75http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,76http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,76http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,81http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,81http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,72http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,72http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,80http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,80http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,77http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,77http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,79http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,79http://www.sbi.co.in/viewsection.jsp?id=0,10,563http://www.sbi.co.in/viewsection.jsp?id=0,10,563http://www.sbi.co.in/viewsection.jsp?id=0,10,563http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,79http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,77http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,80http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,72http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,81http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,76http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,75http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,547http://www.sbi.co.in/viewsection.jsp?lang=0&id=0,10,536http://www.sbi.co.in/viewsection.jsp?id=0,10,462http://www.sbi.co.in/viewsection.jsp?id=0,10,571

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ATM SERVICES

STATE BANK NETWORKED ATM SERVICES

State Bank offers you the convenience of over 8000 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 (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 Indore, State Bank of Mysore, State Bank of Patiala, State

Bank of Saurashtra, and State Bank of Travancore) and wholly owned

subsidiary viz. SBI Commercial and International Bank Ltd., using the

State Bank ATM-cum-Debit (Cash Plus) card.

KINDS OF CARDS ACCEPTED AT STATE BANK ATMs

Besides State Bank ATM-Cum-Debit Card and State Bank International

ATM-Cum-Debit Cards following cards are also accepted at State Bank

ATMs: -

1) State Bank Credit Card

2) ATM Cards issued by Banks under bilateral sharing viz. Andhra

Bank,Axis Bank, Bank of India, The Bank of Rajasthan Ltd., PUBJAB

NATIONAL BANK, Corporation Bank, Dena Bank, HDFC Bank, Indian

Bank, Indus Ind Bank, Punjab National Bank, UCO Bank and Union

Bank of India.

3) Cards issued by banks (other than banks under bilateral sharing)

displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos

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STATE BANK INTERNATIONAL ATM-CUM-DEBIT CARD

Eligibility:

All Saving Bank and Current Account holders having accounts with

networked branches and are:

18 years of age & above Account type: Sole or Joint with Either or Survivor / Anyone or

Survivor

NRE account holders are also eligible but NRO account holders are

not.

Benefits:

Convenience to the customers traveling overseas Can be used as Domestic ATM-cum-Debit Card Available at a nominal joining fee of Rs. 200/- Daily limit of US $ 1000 or equivalent at the ATM and US $

1000 or equivalent at Point of Sale (POS) terminal for debittransaction

Purchase Protection*up to Rs. 5000/- and Personal Accident

cover*up to Rs. 2,00,000/-

Charges for usage abroad: Rs. 150+ Service Tax per cash

withdrawal Rs. 15 + Service Tax per enquiry.

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State Bank ATM-cum-Debit (State Bank Cash plus) Card :

Indias largest bank is proud to offer you unparalleled convenience viz.

State Bank ATM-cum-Debit(Cash Plus) card. With this card, there is no

need to carry cash in your wallet. You can now withdraw cash and make

purchases anytime you wish to with your ATM-cum-Debit Card.

Get an ATM-cum-Debit card with which you can transact for FREE at

any of over 8000 ATMs of State Bank Group within our country.

SBI GOLD INTERNATIONAL DEBIT CARDS

E-PAY

Bill Payment at Online SBI (e-Pay) will let you to pay your Telephone,

Mobile, Electricity, Insurance and Credit Card bills electronically over

our Online SBI website

E-RAIL

Book your Railways Ticket Online.

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The facility has been launched wef Ist September 2003 in association

with IRCTC. The scheme facilitates Booking of Railways Ticket

Online.

The salient features of the scheme are as under:

All Internet banking customers can use the facility.

On giving payment option as SBI, the user will be redirected to

onlinesbi.com. After logging on to the site you will be displayed

payment amount, TID No. and Railway reference no.

. The ticket can be delivered or collected by the customer.

The user can collect the ticket personally at New Delhi reservation

counter .

The Payment amount will include ticket fare including reservation

charges, courier charges and Bank Service fee of Rs 10/. The Bank

service fee has been waived unto 31st July 2006.

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SAFE DEPOSIT LOCKER

For the safety of your valuables we offer our customers safe deposit vault

or locker facilities at a large number of our branches. There is a nominal

annual charge, which depends on the size of the locker and the centre in

which the branch is located.

NRI HOME LOAN

SALIENT FEATURES

Purpose of Loan

Loans to NRIs & PIOs can be extended for the following purposes.

To purchase/construct a new house / flat

To repair, renovate or extend an existing house/flat

To purchase an existing house/flat

To purchase a plot for construction of a dwelling unit.

To purchase furnishings and consumer durables, as a part of the

project cost

AGRICULTURE / RURALState Bank of India Caters to the needs of agriculturists and landless

agricultural labourers through a network of 6600 rural and semi-urban

branches. here are 972 specialized branches which have been set up in

different parts of the country exclusively for the development of

agriculture through credit deployment. These branches include 427

Agricultural Development Branches (ADBs) and 547 branches with

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Development Banking Department (DBDs) which cater to agriculturists

and 2 Agricultural Business Branches at Chennai and Hyderabad catering

to the needs of hitech commercial agricultural projects.

THEORETICAL BACKGROUND OF CREDIT RISK MANAGEMENT

CREDIT:

The word credit comes from the Latin word credere, meaning

trust. When sellers transfer his wealth to a buyer who has agreed to pay

later, there is a clear implication of trust that the payment will be made at

the agreed date. The credit period and the amount of credit depend upon

the degree of trust.

Credit is an essential marketing tool. It bears a cost, the cost of the

seller having to borrow until the customers payment arrives. Ideally, that

cost is the price but, as most customers pay later than agreed, the extra

unplanned cost erodes the planned net profit.

RISK :

Risk is defined as uncertain resulting in adverse out come, adverse

in relation to planned objective or expectation. It is very difficult o

find a risk free investment. An important input to risk management isrisk assessment. Many public bodies such as advisory committees

concerned with risk management. There are mainly three types of risk

they are follows

Market risk Credit Risk

Operational risk

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Risk analysis and allocation is central to the design of any project

finance, risk management is of paramount concern. Thus

quantifying risk along with profit projections is usually the first

step in gauging the feasibility of the project. once risk have been

identified they can be allocated to participants and appropriate

mechanisms put in place.

MARKET RISK:

Market risk is the risk of adverse deviation of the mark to market value

of the trading portfolio, due to market movement, during the period

required to liquidate the transactions.

OPERTIONAL RISK:

Operational risk is one area of risk that is faced by all organization s.

More complex the organization more exposed it would be operational

risk. This risk arises due to deviation from normal and planned

FinancialRisks

O erational Risk

Market Risk

Credit Risk

Types of Financial Risks

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functioning of the system procedures, technology and human failure of

omission and commission. Result of deviation from normal functioning is

reflected in the revenue of the organization, either by the way of

additional expenses or by way of loss of opportunity.

CREDIT RISK:

Credit risk is defined as the potential that a bank borrower or

counterparty will fail to meet its obligations in accordance with agreed

terms, or in other words it is defined as the risk that a firms customer and

the parties to which it has lent money will fail to make promised

payments is known as credit risk

The exposure to the credit risks large in case of financial institutions,

such commercial banks when firms borrow money they in turn expose

lenders to credit risk, the risk that the firm will default on its promised

payments. As a consequence, borrowing exposes the firm owners to the

risk that firm will be unable to pay its debt and thus be forced to

bankruptcy.

CONTRIBUTORS OF CREDIT RISK:

Corporate assets Retail assets Non-SLR portfolio May result from trading and banking book Inter bank transactions Derivatives

Settlement, etc

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Research Methodology

For the purpose of study secondary data has been used for this

purpose various articles, journals and annual reports of the bank has been

studied. In this project various ratios were studied to find out the financial

position of bank. These ratios are as follows:

1. Capital Adequacy Ratio : Capital

Risk

2. Debt Equity Ratio : Debit

Equity Funds

3. Net Turnover Margin Ratio : Net Profit

Net Sales (Operating Income)

4. Assets Turnover Ratio : Net Sales (Operating

Income)

Total Assets

5. Return on Equity : Net Income

Equity Share Capital

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6. Return on Assets Ratio : Net Profits

Average Total Assets

7. Price Earnings Ratio : Market Price of Shares

Earnings per Share

8. Debt Assets Ratio : Debit

Total Assets

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Financial Statement Analysis

A financial statement analysis consists of the application ofanalytical tools and techniques to the data in financial statements in order

to derive from them measurements and relationships that are significant

and useful for decision making.

Uses of Financial Statement Analysis:

Financial Statement Analysis can be used as a preliminaryscreening tool in the selection of stocks in the secondary market. It can be

used as a forecasting tool of future financial conditions and results. It may

be used as process of evaluation and diagnosis of managerial, operating

or other problem areas.

Sources of Financial Information:The financial data needed in the financial analysis come from

many sources. The primary source is the data provided by the company

itself in its annual report and required disclosures. The annual report

comprises of the income statement, the balance sheet, and the statement

of cash flows.

Tools of Financial Analysis:

In the analysis of financial statements, the analyst has a variety of

tools available to choose the best that suits his specific purpose. In this

report we will confine ourselves to Ratio Analysis based on information

provided from financial statements such as Balance Sheet and Profit &

Loss Account.

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Profit loss account

Mar 14 Mar 13 Mar 12 Mar 11 Mar 10

Income

Operating

income 32,369.69 32,747.36 38,250.39 39,467.92 28,457.13

Expenses

Material

consumed - - - - -

Manufacturing

expenses - - - - -

Personnel

expenses 2,816.93 1,925.79 1,971.70 2,078.90 1,616.75

Selling expenses 305.79 236.28 669.21 1,750.60 1,741.63

Administrative

expenses 4,909.00 7,440.42 7,475.63 6,447.32 4,946.69

Expenses

capitalized - - - - -

Cost of sales 8,031.72 9,602.49 10,116.54 10,276.82 8,305.07

Operating profit 7,380.82 5,552.30 5,407.91 5,706.85 3,793.56

Other recurring 7.26 305.36 330.64 65.58 309.17

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Mar 14 Mar 13 Mar 12 Mar 11 Mar 10

income

Adjusted PBDIT 7,388.08 5,857.66 5,738.55 5,772.43 4,102.73

Financial

expenses 16,957.15 17,592.57 22,725.93 23,484.24 16,358.50

Depreciation 562.44 619.50 678.60 578.35 544.78

Other write offs - - - - -

Adjusted PBT

-

10,131.51

-

12,354.42

-

17,665.98 5,194.08 3,557.95

Tax charges 1,609.33 1,600.78 1,830.51 1,611.73 984.25

Adjusted PAT 5,110.21 3,890.47 3,740.62 4,092.12 2,995.00

Nonrecurringitems 41.17 134.52 17.51 65.61 115.22

Other non cash

adjustments -2.17 - -0.58 - -

Reported net

profit 5,149.21 4,024.98 3,757.55 4,157.73 3,110.22

Earnings before

appropriation 8,613.59 6,834.63 6,193.87 5,156.00 3,403.66

Equity dividend 1,612.58 1,337.95 1,224.58 1,227.70 901.17

Preference

dividend - - - - -

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Mar 14 Mar 13 Mar 12 Mar 11 Mar 10

Dividend tax 202.28 164.04 151.21 149.67 153.10

Retained

earnings 6,798.73 5,332.63 4,818.07 3,778.63 2,349.39

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Cash Flow

Mar 14 Mar 13 Mar 12 Mar 11 Mar 10

Profit before tax 6,760.70 5,345.32 5,116.97 5,056.10 3,648.04

Net cash flow-

operating activity -6,908.92 1,869.21

-

14,188.49

-

11,631.15 23,061.95

Net cash used in

investing activity -2,108.82 6,150.73 3,857.88

-

17,561.11

-

18,362.67

Net cash used in fin.

Activity 4,283.20 1,382.62 1,625.36 29,964.82 15,414.58

Net inc/dec in cash

and equivalent -4,783.61 8,907.13 -8,074.57 683.55 20,081.10

Cash and equivalent

begin of year 38,873.69 29,966.56 38,041.13 37,357.58 17,040.22

Cash and equivalent

end of year 34,090.08 38,873.69 29,966.56 38,041.13 37,121.32

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BALANCE SHEET

Balance Sheet of SBI

Bank

------------------- in Rs. Cr. -------------------

Mar

'11Mar '10 Mar '09 Mar '08 Mar '07

12

mths12 mths 12 mths 12 mths 12 mths

Capitaland Liabilities:

Total Share Capital1,151.

821,114.89 1,463.29 1,462.68 1,249.34

Equity Share

Capital

1,15

1.821,114.89 1,113.29 1,112.68 899.34

Share ApplicationMoney

0.29 0.00 0.00 0.00 0.00

Preference Share

Capital0.00 0.00 350.00 350.00 350.00

Reserves

53,9

38.8

2

50,503.48 48,419.73 45,357.53 23,413.92

Revaluation

Reserves0.00 0.00 0.00 0.00 0.00

Net Worth

55,0

90.9

3

51,618.37 49,883.02 46,820.21 24,663.26

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Deposits

225,

602.

11

202,016.60218,347.8

2

244,431.0

5

230,510.1

9

Borrowings

109,

554.

28

94,263.57 67,323.69 65,648.43 51,256.03

Total Debt

335,

156.

39

296,280.17285,671.5

1

310,079.4

8

281,766.2

2

Other Liabilities &

Provisions

15,9

86.3

5

15,501.18 43,746.43 42,895.39 38,228.64

Total Liabilities

406,

233.

67

363,399.72379,300.9

6

399,795.0

8

344,658.1

2

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Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Assets

Cash & Balances

with RBI20,906.97 27,514.29 17,536.33 29,377.53

18,706.8

8

Balance with Banks,Money at Call

13,183.11 11,359.40 12,430.23 8,663.60 18,414.45

Advances216,365.9

0181,205.60

218,310.8

5

225,616.0

8

195,865.

60

Investments134,685.9

6120,892.80

103,058.3

1

111,454.3

4

91,257.8

4

Gross Block 9,107.47 7,114.12 7,443.71 7,036.00 6,298.56Accumulated

Depreciation4,363.21 3,901.43 3,642.09 2,927.11 2,375.14

Net Block 4,744.26 3,212.69 3,801.62 4,108.89 3,923.42

Capital Work In

Progress0.00 0.00 0.00 0.00 189.66

Other Assets 16,347.47 19,214.93 24,163.62 20,574.6316,300.2

6

Total Assets406,233.6

7363,399.71

379,300.9

6

399,795.0

7

344,658.

11

Contingent Liabiliti

es

883,774.7

7

694,948.84803,991.9

2

371,737.3

6

177,054.

18

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Bills for collection 47,864.06 38,597.36 36,678.71 29,377.5522,717.2

3

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Ratio Analysis

Capital Adequacy Ratio:

A measure of a bank's capital. It is expressed as a percentage of a

bank's risk weighted credit exposures.

Table: 1.1

Mar 10 Mar 11 Mar 12 Mar 13 Mar 14

11.12 11.56 10.09 11.93 13.21

Figures: 1.1

(Source: Calculated from the annual report of SBI Bank .)

11.1211.56

10.09

11.93

13.21

0

2

4

6

8

10

12

14

Mar 10 Mar 11 Mar 12 Mar 13 Mar 14

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Capital adequacy ratio (CAR) is a ratio of a bank's capital to its

risk. National regulators track a bank's