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Vaibhav Final

This document is a project report on the financial performance of State Bank of India submitted by Suriti Vaibhav to Palamuru University. It includes certificates from State Bank of India certifying the project work was completed under their supervision, as well as certificates from the principal of Sri Vasavi Degree & PG College and the project guide. The abstract indicates the report aims to analyze SBI's financial statements to evaluate economic conditions and aid management decision making. The contents page outlines the chapters will cover SBI's profile, the banking industry, theoretical background, data analysis and interpretation of SBI's financial performance.

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Vaibhav Suriti
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0% found this document useful (0 votes)
407 views78 pages

Vaibhav Final

This document is a project report on the financial performance of State Bank of India submitted by Suriti Vaibhav to Palamuru University. It includes certificates from State Bank of India certifying the project work was completed under their supervision, as well as certificates from the principal of Sri Vasavi Degree & PG College and the project guide. The abstract indicates the report aims to analyze SBI's financial statements to evaluate economic conditions and aid management decision making. The contents page outlines the chapters will cover SBI's profile, the banking industry, theoretical background, data analysis and interpretation of SBI's financial performance.

Uploaded by

Vaibhav Suriti
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 78

A PROJECT REPORT ON

“A STUDY OF FINANCIAL PERFORMANCE OF STATE BANK OF INDIA”

SRI VASAVI DEGREE & PG COLLEGE


MAHABUBNAGAR

SUBMITTED TO

PALAMURU UNIVERSITY for partial completion of the degree of


BBA (FINANCE)

Semester VI (2022-2023)
Under the faculty of Business management

SUBMITTED BY

SURITI VAIBHAV
2003305368044

Under the guidance of


AMJAD ALI KHAN

DEPARTMENT OF BUSINESS MANAGEMENT


SRI VASAVI DEGREE & PG COLLEGE
NEWTOWN, MAHABUBNAGAR, TELANGANA (509001)
भारतीय स्टे ट बैं क
STATE BANK OF INDIA

CERTIFICATE

This is to certify that SURITI VAIBHAV (20033053684044) the student of SRI VASAVI DEGREE

& PG COLLEGE, MAHABUBNAGAR has successfully completed this project work of “A

STUDY OF FINANCIAL PERFORMANCE OF STATE BANK OF INDIA” from 02-04-2023 to

04-05-2023 . During the

above period he was placed in the firm STATE BANK OF INDIA where she carried out his project.

The candidate was found to be enthusiastic and observant during his stint in STATE BANK OF

INDIA, and his performance has been assessed as excellent.

FOR
STATE BANK OF INDIA
CERTIFICATE OF PRINCIPAL

This is to certify that SURITI VAIBHAV (20033053684044) has worked and duly completed her
project work for the degree of Bachelor of Business Administration under the faculty of business
management and his project is entitled, “A STUDY OF FINANCIAL PERFORMANCE OF STATE
BANK OF INDIA” under my
supervision.

Date:

Place: Mahabubnagar.

Signature of principal
KONDA SWAMY
CERTIFICATE

DEPARTMENT OF BUSINESS MANAGEMENT

This is to certify that SURITI VAIBHAV (20033053684044) has worked and duly completed his
project Work for the degree of Bachelor of Business Administration under the faculty of Business
Management And his project is entitled, “A STUDY OF FINANCIAL PERFORMANCE OF
STATE BANK OF INDIA” under my guidance and supervision.

I furtherly certify that the entire work has been done by the learner under my guidance and that no
part Of it has been submitted previously for any degree or diploma of any university.

It is his own work and facts reported by his personal findings and investigation.

AMJAD ALI KHAN


PROJECT GUIDE
lOMoARcPSD|239 387 86

DECLARATION

I SURITI VAIBHAV (20033053684044), hereby declare that the project work entitled “A STUDY

OF FINANCIAL PERFORMANCE OF STATE BANK OF INDIA” is a record of independent and

bonafide work carried out by me under the supervision and guidance of MR. AMJAD ALI KHAN,

lecturer in department of commerce and business management, SRI VASAVI DEGREE & PG

COLLEGE MAHABUBNAGAR. The information and data given in the report is authentic to the best

of my knowledge. The report has not been submitted for the award of any degree, diploma,

associateship or other similar title of any other university or institute. I hereby further declare that all

information of this document has been obtained and presented in accordance with academic rules and

ethical conduct.

Place : Mahabubnagar

Date :
lOMoARcPSD|239 387 86

ACKNOWLEDGEMENT

I would like to take the opportunity to express my sincere gratitude to all the people who have helped

me with sound advice and able guidance. Above all, I express my external gratitude to the Lord

Almighty under whose divine guidance; I have been able to complete this report successfully. I would

like to express my sincere obligation to MR. KONDA SWAMY, principal of SRI VASAVI DEGREE

& PG COLLEGE for providing various facilities. I am thankful to MR. AMJAD ALI KHAN, whose

guidance and support throughout the training period helped me to complete this work successful. I

would also like to thank all the faculties of the department for their cooperation and interest in this

regard. I extend my hearty gratitude to the librarian and other library staff of our college for their

wholehearted cooperation I express my sincere thanks to my friends and family for their support in

completing this report successfully


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ABSTRACT

The main purpose of this study is to determine, forecast and evaluate the best of economic conditions
and company’s performance in the future. The other purpose of this study is to analyze the financial
statement and then give information for financial managers to make thorough decisions about their
business. The financial statement applies tools, analytical techniques and required methods for
business analysis. It is a diagnostic tool for evaluating financing activities, investment activities and
operational activities as well as an assessment tool for management decisions and other business
decisions. The analysis of financial statements, respectively the analysis of the financial reports are
used by managers, shareholders, investors and all other interested parties regarding the company's
state. Managers use financial reports to see the situation in which the company stands and then provide
information to shareholders, to see how reasonable are the investments made in the company. To
potential investors, the analysis of the financial statements of the company is very important, because,
first they want to know the actual state of the company and then decide whether to invest or not.
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CONTENTS

CHAPTER CHAPTER NAME PAGE NO

1 INTRODUCTION 13-18

2 STATE BANK OF INDIA PROFILE 19-30

3 INDUSTRY PROFILE 31-47

4 THEORITICAL BACKGROUND 32-55

5 DATA ANALYSIS AND 56-66


INTERPRETATION

6 FINDINGS, SUGGSTIONS & 67-70


CONCLUSION

7 ANNEXURE 71-78
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LIST OF TABLES
SL.NO Name of the Title Page No
5.1 Table shows the Basic earnings per Share 57
5.2 Table shows the Return on Assets 58
5.3 Table shows the Net Marin Ratio 59
5.4 Table shows the Income on Total Assets 60
5.5 Table shows the Net Profit Per Share Ratio 61
5.6 Table shows the Retention Ratio 62
5.7 Table shows the Dividend per Share 63
5.8 Table showing the Current Ratio 64
5.9 Table shows the Income Statement of State Bank of India 65
5.10 Table shows the Balance Sheet of State Bank of India 66
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LIST OF GRAPHS
SL.NO Name of the Title Page No
5.1 Graphs shows the Basic earnings per Share 57
5.2 Graphs shows the Return on Assets 58
5.3 Graphs shows the Net Marin Ratio 59
5.4 Graphs shows the Income on Total Assets 60
5.5 Graphs shows the Net Profit Per Share Ratio 61
5.6 Graphs shows the Retention Ratio 62
5.7 Graphs shows the Dividend per Share 63
5.8 Graphs showing the Current Ratio 64
5.9 Graphs shows the Income Statement of State Bank of India 65
5.10 Graphs shows the Balance Sheet of State Bank of India 66
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Chapter-1
INTRODUCTION
1.1 Introduction
1.2 Review of literature
1.3 Statement of the problems
1.4 Objectives of the study
1.5 Scope of the study
1.6 Research methodology
1.7 Limitations of the study

Chapter – 2
STATE BANK OF INDIA PROFILE
2.1 Introduction
2.2 History
2.3 Vision, Mission and Values
2.4 Logo and slogan
2.5 Operations
2.6 Employees
2.7Milestones
2.8 Subsidiaries
2.9 Recent awards and recognition
2.10 Board of Directors
2.11 Services offered by the company
2.12 SWOT Analysis
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CHAPTER-3

INDUSTRY PROFILE

3.1 Introduction

3.2 History of Banking

3.3 Evolution of Banking

3.4 Functions of Bank

3.5 Structure of Banking


3.6 Banking segments

3.7 Products of Banking Industry

CHAPTER-4

THEORITICAL BACKGROUND

4.1 Ratio Analysis

4.2 Common Size Statement

4.3 Comparative Statement


4.4 Trend Analysis

CHAPTER-5

DATA ANALYSIS AND INTERPRETATION

5.1 Table

5.2 Graph

5.3 Interpretation

Conclusion
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CHAPTER – 1
1.1 INTRODUCTION

Financial analysis is the process of examining a company’s performance in the context of its
industry and economic environment in order to arrive at a decision or recommendation. Often,
the decisions and recommendations addressed by financial analysts pertain to providing capital
to companies—specifically, whether to invest in the company’s debt or equity securities and at
what price. An investor in debt securities is concerned about the company’s ability to pay interest
and to repay the principal lent. An investor in equity securities is an owner with a residual interest
in the company and is concerned about the company’s ability to pay dividends and the
likelihood that its share price will increase.

Overall, a central focus of financial analysis is evaluating the company’s ability to earn a return
on its capital that is at least equal to the cost of that capital, to profitably grow its
operations, and to generate enough cash to meet obligations and pursue opportunities. To meet
this obligation the financial performance of the company is very important.

Financial performance is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues. Analysts and investors use financial
performance to compare similar firms across the same industry or to compare industries or
sectors in aggregate.

Indian monetary develops is dependent upon develops of the Indian steel industry.

While steel keeps on having reinforcement in customary segment, for example, narrowing,
lodging and ground transpiration unique steel are gently utilized as a part of manures. Indian
involves a focal position on the worldwide steel outline the foundation of new best in class
steel factories, procurement of worldwide scale limits by players, constant modernization
and up degree of request plants, enhancing liveliness productivity and in reverse
incorporation into worldwide crude material source.

The banking sector is the life blood of any modern economy. It is one of the important
financial basements of the financial sector, which plays a vital role in the functioning of an
economy. It is very important for economic development of a

country that it’s financing requirements of trade, industry and agriculture are met with higher
degree of commitment and responsibility. The Indian banking sector is broadly classified into
scheduled banks and non-scheduled banks. The scheduled banks are those included under the
2nd Schedule of the Reserve Bank of India Act, 1934. The scheduled banks are further classified
lOMoARcPSD|239 387 86

into: nationalized banks; India and its associates; Regional Rural Banks and other Indian private
sector banks. The term commercial banks refers to both scheduled and non-scheduled
commercial banks regulated under the Banking Regulation Act, 1949 integrally linked in
banking industry in gradually increasing. They role of mobilization of deposits and disbursement of
credit to various sector of banking industry. This will also reflect health of the country.

The efficiency of financial system is strength of economy. A sound banking system efficiently
mobilized saving in productive sector and solvent system ensures the capabilities to meet the
depositor obligation. The banking sector is playing crucial role in socio-economic progress of the
country after independence. It is dominant in India as it accounts for more than half the assets of
financial sector.

1.2 REVIEW OF LITERATURE

1. Manish Mittal and Arunna Dhademade (2005) they found that higher profitability is the
only major parameter for evaluating banking sector performance from the shareholders point of
view. It is for the banks to strike a balance between commercial and social objectives. They
found that public sector banks are less profitable than private sector banks. Foreign banks
top the list in terms of net profitability. Private sector banks earn higher non-interest
income than public sector banks, because these banks offer more and more fee based
services to business houses or corporate sector. Thus there is urgent need for public sector
banks to provide such services to stand in competition with private sector banks.

2. Jha DK and D S Sarangi (2011): The financial performance of seven public sector and private
sector banks during the period 2009-10. They used three sets of ratio, operating performance
ratio, financial ratio and Efficiency ratio. The study revealed that Axis bank was on the top of
these banks followed by ICICI, BOT, PNB, SBI, IDBI and HDFC.

3. DR.D.GURUSWAMY, (2012), describes “Analysis of Profitability Performance of SBI” And


Its Associates, the paper an attempt has been made to analyze the profitability performance of
SBI and its associates. The objectives of the paper are to study the profitability of SBI and Its
Associates and to analyze the profitability performance of SBI and Its Associates. This paper is
primarily based on secondary data. In order to derive the open handed results from the
information collected through secondary data, various statistical tools like mean, S.D, variance,
CAGR, and ANOVA have been accomplished. The scope of the paper is confined to all the banks of
SBI group for a data period from 1996-97 to 2007-08. In the present paper, for the purpose of
evaluating the performance of SBI and its associates, five profitability ratios have been
considered. On the basis of analysis of profitability ratios it is printout that all the five ratios
shows fluctuating trend during the study period in all the banks.
lOMoARcPSD|239 387 86

4. Dr.Dhanabhakyam & M.kavitha (2012) in their research used some important ratio to analyze
the financial performance of selected public sector banks such as ratio of advances to assets, ratio
of capital to deposit, ratio of capital to working fund, ratio of demand deposit to total deposit,
credit deposit ratio, return on average net worth ratio, ratio of liquid assets to working fund etc.

5. Brindadevi .V(2013), A Study on Profitability Analysis of Private Sector Banks In India-


The objective of this study was overall profitability analysis of different private sectors banks
in India based on the performances of profitability ratios like interest spread, net profit margin,
return on long term fund, return on net worth & return on asset. Profitability is a measure of
efficiency and control it indicates the efficiency or effectiveness with which the operations of the
business are carried on. Recording profitability for the past period or projecting profitability for
the coming period, measuring profitability is the most important measure of the success of the
business. A business that is not profitable cannot survive.

6. Dr. Kingshuk Adhikari, Nitashree Barman, Pinkumoni Kashyap (2014), study on


Profitability of State Bank of India: An Analysis-The paper attempts to analyze the profitability of
State bank of India for the period of seven years. Apart from studying the trend of different
components of both income and expenditure, performance of the bank has been analyzed
with the parameters like OPTWF, ROA, ROE, ROI and EPS. There is a significant difference not
only between the components of income but also across the components of expenditure. The
paper concludes that the profitability performance of the SBI is not consistent during the study
period. The bank should focus more on diversification of income and should also curtail operating
expenses in order to improve profitability performance.

7. Urmila Bharti, Surender Singh (2014), describes a study on Liquidity and Profitability
Analysis of Commercial Banks in India – A Comparative Study,- Liquidity is required to meet
out the prompt demands of customers and profitability is required to meet out the expenses of
banks. But both the terms are ontradictory in nature. If banks maintain more liquidity, their
profitability decrease and if they increase their profitability they will have to reduce their
liquidity. In this way, banks act as an engine for a business organization. So in the present study an
attempt has been made to evaluate the performance of different categories of banks viz.
public, private and foreign bank groups in India. For evaluating the performance, eleven
financial ratios have been used. These ratios further have been categorized into two categories viz.
liquidity and profitability. The period of study cover the years 2005-06 to 2011-12. From the
results, it has been found that during the study period the liquidity and profitability position of
public sector bank group declined while it has improved in other two groups.

8. Dr. V.N. Sailaja Dr.N. Bindu Madhavi (2015), emphasis study on “Comparison Of
Capital Structure Of Public Sector Banks And Private Sector Banks And Its Effect On Bank’s
Profitability” the capital structure and profitability was analyzed by too many researchers in
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academic level. However, most of them excluded banking industry due to different market
structure and regulatory frameworks. The differential point of banking industry with other
financial industries is minimum capital requirement that is 8% of equity capital. This
requirement is for coverage of the bank's risk associated assets. Research is aiming to analyze the
relationship between capital structure of the public and private sector banks and its
profitability. The aim of the paper -To know the portion of debt and equity in capital
structure of selected banks, To find out the Weighted Average Cost of Capital (WACC) of
selected banks, To conduct comparative study regarding capital structure of selected banks, To
examine the effect of capital structure on bank’s profitability. Sample size is 3 private banks and
3 public banks based on the convenience sampling technique which is one of the methods in non-
probability sampling methods. The paper concludes that sector banks is high as compared to
the private sector banks which can be overburden to the banks to pay high amount of interest out
of the profits.

9. AlpeshGajera (2015) in his research article an financial performance evaluation of


private and public sector banks found that there in significance difference in the financial
performance of these banks and private sector banks are performed better than public sector
banks in respect of capital adequacy ratio and financial performance.

10. Abhay Jaiswal and Chanchala Jain (2016), A Comparative Study of Financial Performance of
SBI and ICICI, The study is an attempt to analyze the financial performance of SBI and ICICI
banks. The State Bank of India, popularly known as SBI is one of the leading bank of public sector
in India. SBI has 14 Local Head Offices and 57 Zonal Offices located at important cities
throughout the country. ICICI bank is the second largest, leading bank of private sector in
India.The Bank has 2,533 branches and 6,800 ATMs in India. The study is descriptive and
analytical in nature. The collected data was secondary in nature and collected from various reports
issued by these banks through internet. The comparison of financial performance of these two
banks was made on the basis of ratio analysis. The results indicated that the SBI is performing
well and financially sound than ICICI Bank. Also the market position of SBI is better than ICICI in
terms to earning per share, price ratio per share and dividend payout ratio, but on the other hand
ICICI bank is performing well in terms of NPA and provision for NPA in comparison of SBI bank.

1.3 STATEMENT OF THE PROBLEM

Indian banking is the lifeline of the nation and its people. Banks play an important role in Indian
economy. It increases GDP around 7.7% and it generates employment in the economy for
about 1.5 million people. To sustain the development of the economy banks need to focus on
financial performance. If the banks are not perform well it will affect on countries economy.
if we take an example of European Central Bank in Greek we can understand how it affects on
countries economy likewise we have many examples of banks which are closed down
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because of poor financial performance. Therefore, this study is based on the financial performance
of the State bank of India to evaluate the financial strength of the bank.

1.4 OBJECTIVES OF THE STUDY


• To study the available tools and techniques of state bank of India.

• To study the financial performance of State Bank of India.

• To analyse the liquidity, profitability performance of SBI.

1.5 SCOPE OF THE STUDY

The present study relates to the financial performance of the State Bank of India. It is designed to
analyse the financial performance of the State Bank of India. The study is based on the annual
reports of the company for the period of 4 years 2018-19 to 2021-22. It includes liquidity,
profitability and turnover ratio performance of the State Bank of India .

1.6 RESEARCH METHODOLOGY


The present study is based on secondary data. The analysis is based on liquidity, profitability,
turnover ratio which are calculated with the help of data from financial statements of the
State Bank of India. All the related to State Bank of India Auditors reports, Internet, Books,
Journals, Magazines and the like.

SOURCES OF DATA

Data is the fact, figures and other relevant materials, past and present, serving as basis for the
study and analysis. The design of the data collecting method is the backbone of research
design. The sources of data are varied. It depends upon the nature of the study. Data can be
distinguished as:

a) Primary Data:

Primary data is the data collected for the first time exclusively for the purpose of achieving the
objects of the project work. In this case the feedback received from the respondent officers
through issue of structured questionnaire to the chosen sample is the primary data which is
been collected.

b) Secondary Data:

Secondary data is the data which is already collected. In this case the sources are collected
through websites, catalogues of bank, newspapers, magazines etc.
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1.7 LIMITATIONS OF THE STUDY

However I tried my level best in collecting the relevant information for my research report,
yet there are always some problems faced by the researcher. The prime difficulties I faced in
collection of information are discussed below:

• Analysis of the study was depended only on the information available in the internet.

• Study was restricted to the period 4 years.

• Detail study was not possible because of time constraints.

• Study process was restricted to the company’s rules and regulations.


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Chapter – 2
STATE BANK OF INDIA PROFILE
2.1 Introduction
2.2 History
2.3 Vision, Mission and Values
2.4 Logo and slogan
2.5 Operations
2.6 Employees
2.7 Milestones
2.8 Subsidiaries
2.9 Recent awards and recognition
2.10 Board of Directors
2.11 Services offered by the company
2.12 SWOT Analysis
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CHAPTER 2

STATE BANK OF INDIA PROFILE

2.1 Introduction

State Bank of India is an Indian multinational, Public Sector banking and financial services
company. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra.
As of December 2013, it had assets of US$388 billion and 17,000 branches, including 190 foreign
offices, making it the largest banking and financial services company in India by assets.

State Bank of India is one of the Big Four banks of India, along with Bank of Baroda,
Punjab National Bank and Bank of India.

The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding,
in 1806, of the Bank of Calcutta, making it the oldest commercial bank in the Indian
Subcontinent. Bank of Madras merged into the other two "presidency banks" in British
India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of India, which in
turn became the State Bank of India. Government of India owned the Imperial Bank of
India in 1955, with Reserve Bank of India (India's Central Bank) taking a 60% stake, and renamed
it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank
of India.

State Bank of India is a regional banking behemoth and has 20% market share in deposits and
loans among Indian commercial banks.

2.2 History

The roots of the State Bank of India lie in the first decade of the 19th century, when the
Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of
Bengal was one of three Presidency banks, the other two being the Bank of Bombay
(incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All
three Presidency banks were incorporated as joint stock companies and were the result of royal
charters. These three banks received the exclusive right to issue paper currency till 1861
when, with the Paper Currency Act, the right was taken over by the Government of India. The
Presidency banks amalgamated on 27 January 1921, and the re-organised banking entity took
as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but
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without Government participation. Pursuant to the provisions of the State Bank of India Act of
1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the
Imperial Bank of India. On 1 July 1955, the Imperial Bank of India became the State Bank
of India. In 2008, the government of India acquired the Reserve Bank of India's stake in SBI so as
to remove any conflict of interest because the RBI is the country's banking regulatory
authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This made SBI
subsidiaries of eight that had belonged to princely states prior to their nationalization and
operational take-over between September 1959 and October 1960, which made eight state
banks associates of SBI. This acquisition was in tune with the first Five Year Plan, which
prioritised the development of rural India. The government integrated these banks into the
State Bank of India system to expand its rural outreach. In 1963 SBI merged State Bank of Jaipur
(est. 1943) and State Bank of Bikaner (est.1944).

SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911), which
SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National Bank of
Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram
Baldeo Bank, which had been established in 1916 in Gwalior State, under the patronage of
Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender,
owned by the Maharaja. The new bank's first manager was Jall N. Broacha, a Parsi. In 1985, SBI
acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its
affiliate, the State Bank of Travancore, already had an extensive network in Kerala.

There has been a proposal to merge all the associate banks into SBI to create a "mega
bank" and streamline the group's operations.

The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra
merged with SBI, reducing the number of associate state banks from seven to six. Then on 19
June 2009 the SBI board approved the absorption of State Bank of Indore. SBI holds 98.3% in State
Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the
balance of 1.7%.)

The acquisition of State Bank of Indore added 470 branches to SBI's existing network of
branches. Also, following the acquisition, SBI's total assets will inch very close to the 10 trillion
mark (10 billion long scale). The total assets of SBI and the State Bank of Indore stood at
9,981,190 million as of March 2009. The process of merging of State Bank of Indore was
completed by April 2010, and the SBI Indore branches started functioning as SBI branches on 26
August 2010.
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The Israeli branch of the State Bank of India located in Ramat Gan. As of 31St December
2009, the bank had 151 overseas offices spread over 32 countries. It has branches of the parent
in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male
in the Maldives, Muscat, New York, Osaka, Sydney and Tokyo. It has offshore banking On
October 7, 2013, Arundhati Bhattacharya became the first woman to be appointed
Chairperson of the bank.

2.3 Vision, Mission and Values

Vision

“To be the most trusted and preferred finance service provider worldwide”.

• My SBI.

• My Customer first

. • My SBI: First in customer satisfaction.

Mission

• We will be prompt, polite and proactive with our customers.

• We will speak the language of young India.

• We will create products and services that help our customers achieve their goals.

• We will go beyond the call of duty to make our customers feel valued.

• We will be of service even in the remotest part of our country.

• We will offer excellence in services to those abroad as much as we do to those in India.

• We will imbibe state of the art technology to drive excellence.

Values
“To emerge as the leading company offering a comprehension range of banking and finance
products at competitive prices, ensuring high standards of customer satisfaction and world
class operating efficiency thereby becoming a model banking sector in India in the post
liberalization period”.

• We will always be honest, transparent and ethical.

• We will respect our customers and fellow associates.


lOMoARcPSD|239 387 86

• We will be knowledge driven.

• We will learn and we will share our learning.

• We will never take the easy way out.

• We will do everything we can to contribute to the community we work in.

• We will nurture pride in India.

2.4 Logo and slogan

The logo of the State Bank of India is a blue circle with a small cut in the bottom that depicts
perfection and the small man the common man - being the center of the bank's business. The
logo came from National Institute of Design(NID), Ahmedabad and it was inspired by Kankaria
Lake, Ahmedabad.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE WAY", "A BANK OF THE
COMMON MAN", "THE BANKER TO EVERY INDIAN", "THE NATION BANKS ON US"

2.5 Operations

SBI provides a range of banking products through its network of branches in India and overseas,
including products aimed at non-resident Indians (NRIs). SBI has 16 regional hubs and 57 zonal
offices that are located at important cities throughout India.

Domestic presence
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SBI has 18,354 branches in India. In the financial year 2012–13, its revenue was ₹2.005
trillion (US$28 billion), out of which domestic operations contributed to 95.35% of revenue.
Similarly, domestic operations contributed to 88.37% of total profits for the same financial
year.

Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by Government in
August 2014, SBI held 11,300 camps and opened over 3 million accounts by September, which
included 2.1 million accounts in rural areas and 1.57 million accounts in urban areas .

International presence

units in the Bahamas, Bahrain and Singapore, and representative offices in Bhutan and Cape Town.
It also has an ADB in Boston, USA. State Bank Of India operates several foreign subsidiaries or
affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius).

In 1982, the bank established a subsidiary, State Bank of India (California), which now has nine
branches - eight branches in the state of California and one in Washington, D.C. The 9th
branch was opened in Tustin, California on 7th March, 2010. The other seven branches in
California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego and
Bakersfield.

The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches,
four in the Toronto area and three in British Columbia.

In Nigeria, State Bank Of India operates as INMB Bank. This bank began in 1981 as the Indo-
Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now
has five branches in Nigeria.15.

In Nepal, State Bank Of India owns 50% of Nepal State Bank Of India Bank, which has
branches throughout the country. In Moscow, State Bank Of India owns 60% of Commercial Bank
of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.
The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.

In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US
$8 million in October 2005.

In January 2016, SBI opened its first branch in Seoul, South Korea following the continuous and
significant increase in trade due to the Comprehensive Economic Partnership Agreement signed
between New Delhi and Seoul in 2009
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State Bank of India (SBI) (NSE: SBIN, BSE: 500112, LSE: SBID) is the largest Indian banking and
financial services company (by turnover and total assets) with its headquarters in Mumbai, India. It
is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to
the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the
Indian Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of
Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State
Bank of India. The Government of India nationalized the Imperial Bank of India in 1955, with
the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008,
the Government took over the stake held by the Reserve Bank of India.

State Bank Of India provides a range of banking products through its vast network of branches in
India and overseas, including products aimed at non-resident Indians (NRIs). The State Bank
Group, with over 16,000 branches, has the largest banking branch network in India. It also has
around 130 branches overseas. With an asset base of $352 billion and $285 billion in deposits, it is
a regional banking behemoth and is one of the largest financial institutions in the world. It
has a market share among Indian commercial banks of about 20% in deposits and loans.

The State Bank of India is the 29th most reputed company in the world according to Forbes.16
Also State Bank Of India is the only bank featured in the coveted "top 10 brands of India" list in an
annual survey conducted by Brand Finance and The Economic Times in 2010.17

The State Bank of India is the largest of the Big Four banks of India, along with ICICI Bank, Punjab
National Bank and HDFC Bank—its main competitors. And" GUINNESS BOOK OF WORLD
RECORD” that 56 million transactions happening per day all over the world is definitely an
achievement.

2.6 EMPLOYEES

SBI is one of the largest employers in the country with 209,567 employees as on 31 March 2017,
out of which 23% were female employees and 3,179 (1.5%) were employees with disabilities. On
the same date, SBI had 37,875 Scheduled Castes (18%), 17,069 Scheduled Tribes (8.1%) and
39,709 Other Backward Classes (18.9%) employees. The percentage of Officers, Associates and
Subordinates was 38.6%, 44.3% and 16.9% respectively on the same date. Around 13,000
employees joined the Bank in FY 2016–17. Each employee contributed a net profit of
511,000 (US$7,200) during FY 2016–17

2.7 MILESTONE

• 1806: The Bank of Calcutta is established as the first Western-type bank.


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

• 1840: A sister bank, Bank of Bombay, is formed

. • 1843: Another sister bank is formed: Bank of Madras, which, together with Bank of Bengal
and Bank of Bombay become known as the presidency banks, which had the right to issue
currency in their regions.

• 1861: The Presidency Banks Act takes away currency issuing privileges but offers incentives to
begin rapid expansion, and the three banks open nearly 50 branches among them by the mid-
1870s. • 1876: The creation of Central Treasuries ends the expansion phase of the
presidency banks. • 1921: The presidency banks are merged to form a single entity, Imperial
Bank of India.

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

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

• 1972: SBI begins offering merchant banking services.

• 1986: SBI Capital Markets is created.

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

• 1998: SBI launches credit cards in partnership with GE Capital

• 2002: SBI networks 3,000 branches in a massive technology implementation.

• 2004: A networking effort reaches 4,000 branches.

• 2005: Raj Travels joins hands with SBI for travel loans. SBI opens branch at Vadakara. SBI enters
into agreement for bilateral sharing of ATMs with PNB on May 10, 2005.

• 2006: State Bank of India (SBI) has informed that Shri. Yogesh Agarwal has been appointed as
Managing Director on the Board of the Bank with effect from October 10, 2006 to the June 30,
2010 • 2007: The State Bank of India (SBI) has become the first foreign bank to set up a branch
in the Israel's diamond exchange. Besides diamonds, they also see huge potential in
telecommunications, hi-tech, chemicals, textiles, agriculture and water management, food
processing, pharma and health care.
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• 2008: State Bank of India (SBI) has informed that the Central Government,in
consultation with the Reserve Bank of India and in pursuance of clause (d) of Section 19 of the
State Bank of India Act, 1955 (23 of 1955), has nominated Dr. (Mrs.) Vasantha Bharucha as a part-
time non-official Director on the Central Board of State Bank of India for a period of three years
with effect from February 25, 2008, vice Shri Piyush Goel.

• 2009: State Bank of India, entered into an agreement with the government of Gujarat to
create a fund of Rs 5,000 crore for investing in equity of infrastructure projects.

• 2010: State Bank of India, with a debit card base of over 70 million, comprising SBI Cash Plus,
SBI Gold Debit Card and SBI Yuva Card, has added chip and PIN-based Platinum Debit Card to its
bouquet on March 26.

• 2011: SBI - Acquisition of SBICI Bank. P Choudhary has been appointed as the new chairman
of State Bank of India after getting clearance from the government.

•2012: SBI launched virtual debit cards to check online fraud and promote Ecommerce

• 2013: India's leading Public Sector lender the State Bank of India (SBI) is stepping up efforts to
expand its presence in the world's second biggest economy with the lender set to launch its
second branch in China.

• 2014: SBI announces 150% interim dividend

• 2015: State Bank of India has launched a RuPay Platinum debit card in Association with
National Payment Corporation of India (NPCI). SBI builds foundation for group CSR activities.

• 2016: SBI opens first branch in South Korea. Govt asks SBI to merge five associate banks.

• 2017: SBI Acquired State Bank of Travancore, State Bank of Patiala , State Bank of Hyderabad,
State Bank of Bikaner & Jaipur , State Bank of Mysore. Bhartiya Mahila Bank (BMB).

• 2018: Launch of Doctor’s SBI Card and Apollo SBI Card.

• 2019: Launch of SME Business Card, OLA Money SBI Credit Card, Etihad Guest SBI Card and
Allahabad Bank SBI Card.

• 2019: SBI Card enters the ‘9 Million Cards’ club.

• 2020: In February 2020, SBI card offered the biggest Initial public offering of 2020.

2.8 Subsidiaries:
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Banking Subsidiaries

• State Bank of Bikaner and Jaipur (SBBJ)

• State Bank of Hyderabad (SBH)

• State Bank of Mysore (SBM)

• State Bank of Patiala (SBP)

• State Bank of Travancore (SBT)

Foreign Subsidiaries

• SBI International (Mauritius) Ltd.

• State Bank of India (California)

• State Bank of India (Canada)

• INMB Bank Ltd, Lagos

• BANK SBI Indonesia (SBII)

Non banking Subsidiaries

• SBI Capital Markets Ltd

• SBI Funds Management Pvt Ltd

• SBI Factors & Commercial Services Pvt Ltd

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

• SBI DFHI Ltd

• SBI General Insurance Company Limited

Joint Ventures

• SBI Life Insurance Company Ltd (SBI LIFE)

• SBI General Insurance Company Limited

2.9 Recent awards and recognition

SBI was ranked 232nd in the Fortune Global 500 rankings of the world's biggest corporations for
the year 2016.
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SBI was 50th most trusted brand in India as per the Brand Trust Report 2013, an annual study
conducted by Trust Research Advisory, a brand analytics company and subsequently, in the
Brand Trust Report 2014, SBI finished as India's 19th most trusted brand in India. 2.10 Board
of Directors List of Directors on the Central Board of State Bank of India

2.10 Board of Directors


List of Directors on the Central Board of State Bank of India

SL No Name Desigation
1 Shri Rajinish Kumar Chairman
2 Shri P.K Gupta Managing Director
3 Shri Dinesh Kumar Managing Director
4 Shri Arijit Basu Managing Director
5 Shri C.S.Setty Managing Director
6 Shri Chandan Sinha Director
7 Shri Debasish Panda Director
8 Shri B.Venugopal Director

Listings and shareholding


As on 31 March 2019, Government of India held around 58.59% equity shares in SBI. Life
Insurance Corporation of India is the largest non-promoter shareholder in the company with
14.99% shareholding.

The equity shares of SBI are listed on the Bombay Stock Exchange,where it is a constituent of the
BSE SENSEX index,and the National Stock Exchange of India. where it is a constituent of the CNX
Nifty. Its Global Depository Receipts (GDRs) are listed on the London Stock Exchange.

2.11 Services offered by the company:

• NRI Services
• Personal Banking
• International Banking
• Agriculture / Rural
• Corporate Banking
• SME
• Government Business
• Domestic Treasury
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2.12 SWOT Analysis


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CHAPTER-3
INDUSTRY PROFILE
3.1 Introduction
3.2 History of Banking
3.3 Evolution of Banking
3.4 Functions of Bank
3.5 Structure of Banking
3.6 Banking segments
3.7 Products of Banking Industry
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CHAPTER – 3
INDUSTRY PROFILE

3.1 Introduction

Banking is a vital part of our daily life: At office, at business, at home, at school, on travel
everywhere we counter some aspect of banking. The significance of banking in our day to day
life is being felt increasingly. Money plays a leading role in today’s life. The first known currency
was created by King Alyattes in Lydia, now part of Turkey, in 6000BC. The first coin ever
minted features a roaring Lion. Coins then evolved into bank notes around 1661 AD. Then
afterwards the credit card was introduced in 1946. Commercial transactions have increased in
content and quantity from simple banker to international trading. Hence the need arose for
a third party who will assist for smooth transaction, mediate between the seller and buyer,
hold custody of money and goods, pay funds and also to collect profits. That third party was
the “banker”. As the number of such mediators grew there is need to control. Such mediating
agencies gave birth to the concept of “banks” and “banking”.

The Banking industry plays a dynamic role in the economic development of the country. The
growth story of an economy depends on the power of its banking industry. Banks act as the
store as well as the power house of the country’s wealth. They accept deposits from individuals
and corporate and lends to the businesses. They use the deposits collected for productive
purposes which help in the capital formation in the country.

Origin of Bank

The word bank was borrowed in Middle English from Middle French banque, from Old Italian
banca, from Old High German banc, bank means "bench or counter". Benches were used as desks
or exchange counters during the Renaissance by Florentine bankers, who used to make their
transactions on desks covered by green tablecloths. Historically, some banks were called banks of
deposit, and mainly held -deposits of foreign and domestic currencies and arranged payment in
foreign trade transactions. Other banks created deposits that acted as a circulating medium
of money in a society. One of the earliest banks in this category, the Bank of Venice, was formed
when a group of the government’s creditors combined and began using government debt as a
means of payment in trade.
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3. 2 History of Banking

• The Beginning of Banking Industry

The History of Banking began at about 2000BC of the ancient world when the Merchant made
grain loans to farmers and traders started carrying goods between cities within the areas of
Assyria and Babylonia. The Code of Hammurabi, dating back to about 1772 BC, is one of the oldest
interpreted writings that deal with matters of contract and set the terms of a transaction. This
code also included standardized procedures for handling loans, interest, and guarantees. Later on,
in ancient Greece and during the Roman Empire, lenders based in temples made loans and
started accepting of deposits. Banking activities in Greece are more varied and sophisticated than
in any previous society. They took deposits, made loans, changed money from one currency to
another and tested coins for weight and purity. They even engaged in book transactions.
Moneylenders can be found who will accept payment in one Greek city and arrange for credit in
another, avoiding the need for the customer to transport or transfer large numbers of coins.
Banking, in the modern sense of the word, can be traced to early Italy, to the rich cities in the
north such as Florence, Venice and Genoa. The development of banking spread through
Europe and a number of important innovations took place in Amsterdam during the Dutch
Republic in the 16th century and in London in the 17th century. Some of the earlier systems that
facilitated trading/exchange of goods were barter system and gift economies.

• Barter System
Barter system is an age-old method that was adopted by people to exchange their services and
goods. This system was used for centuries, before the invention of money. People used to
exchange the goods or services for other goods or services in return. The advantage of bartering
is that it does not involve money. You can buy an item in exchange for some other thing you
currently have, but don't want. The barter system was one of the earliest forms of trading. It
facilitated exchange of goods and services, as money was not invented in those times. Barter
system has been in use Profile of Banking Industry throughout the world for centuries. The
invention of money did not result in the end of bartering services.

• Gift Economy

A gift economy (or gift culture) is a society where valuable goods and services are regularly given
without any explicit agreement for immediate or future rewards. The gifts are exchanged as
per the usual informal duties, rather than an explicit exchange of goods or services for
money or some other commodity. Gift economies were established before the advent of
market economies, but slowly disappeared as societies became more complex. Non-monetary
societies operated largely along the principles of gift economics and debt. When barter did
in fact occur, it was usually between complete strangers.
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• Banking in 20th Century

During the 20th century, developments in telecommunications and computing resulting in major
changes to the way banks operated and allowed them to dramatically increase in size and
geographic spread. The Late-2000s financial crisis saw significant number of bank failures,
including some of the world's largest banks. Following paragraph provides a snapshot of some
developments in the banking industry over the last century.

• 1930s-1960s – The Great Depression

During the Crash of 1929 preceding the Great Depression, banking and brokerage firms were
operating with margin requirements of average ~10%. It meant that the brokerage firms would
lend $9 for every $1 an investor had deposited. When the market fell, brokers called in these
loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and
depositors attempted to withdraw their deposits. Government guarantees and Federal Reserve
banking regulations to prevent such panics were ineffective or not used. Bank failures led to the
loss of billions of dollars in assets. After the panic of 1929, and during the first 10 months of 1930,
744 US banks failed and in all, over 9,000 banks failed during the 1930s. The depression is said to
be one of the factors leading to World War II and post-war2 recovery period saw governments
taking on a more active and larger role in banking, leading to increased regulation. In response
to this many countries significantly increased financial regulation and established regulatory
agencies to oversee banking operations and during the post Second World War period two
organizations were created: The International Monetary Fund (IMF) and the World Bank.

• 1970s-2000s - Deregulation & Globalization

During the 1970s, there was a number of small stock market crashes tied to the regulations put in
place after the Great Depression. These crashes controlled to the deregulation of banking
restrictions and privatization of government-owned financial institutions. Global banking and
capital market services increased during the 1980s after deregulation of financial markets in a
number of countries. The 1986 'Big Bang' in London allowing banks to access capital markets in
new ways, which led to significant changes to the way banks operated and accessed capital. This
period saw a significant internationalization of financial markets. American corporations and banks
started seeking investment opportunities abroad, prompting the development in the U.S. of
mutual funds specializing in trading of foreign stock markets. Growing internationalization
changed the competitive landscape, as now many banks would function as much as possible as a
“one-stop” supplier of both retail and wholesale financial services. Financial services continued to
grow through the 1980s and 1990s as a result of a great increase in demand from companies,
governments, and financial institutions.
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• Beginning of 21st Century –

he Decade of Internet Banking The early 2000s were marked by consolidation of existing banks
and entrance into the market of other financial intermediaries: non-bank financial institution.
Large corporate players ventured into the financial service community, offering competition to
established banks. The main services offered included insurances, compensation, mutual, money
market, loans and credits and securities. The process of financial innovation advanced enormously
in the first decade of the 21century, and banks explored other profitable financial instruments,
diversifying banks' business and this had a positive impact on the economic wellness of the
banking industry. This decade marked the beginning of the era in which the distinction between
different financial institutions, banking and non-banking is gradually vanishing. Technological
advances during the decade shifted the way banks operate from traditional branch banking to
internet and e-banking.

• Late-2000s Financial Crisis

Subprime mortgage lending to borrowers with poor credit led to a financial crisis in 2007. The
crisis originated in the United States, but financial institutions around the world were affected as
banking industry was truly globalized at that point.

Many institutions failed worldwide forcing central banks to take substantial recovery
measures to stabilize the banking system. The Late-2000s financial crisis caused significant stress
on banks around the world. The global financial crisis forced governments around the world
to re-evaluate their financial regulations.

3.3 Evolution of the Indian Banking Industry:

The Indian banking industry has its foundations in the 18th century, and has had a varied
evolutionary experience since then. The initial banks in India were primarily traders’ banks
engaged only in financing activities. Banking industry in the pre-independence era developed
with the Presidency Banks, which were transformed into the Imperial Bank of India and
subsequently into the State Bank of India. The initial days of the industry saw a majority private
ownership and a highly volatile work environment. Major strides towards public ownership and
accountability were made with nationalisation in 1969 and 1980 which transformed the face of
banking in India. The industry in recent times has recognised the importance of private and
foreign players in a competitive scenario and has moved towards greater liberalisation
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In the evolution of this strategic industry spanning over two centuries, immense developments have
been made in terms of the regulations governing it, the ownership structure, products and
services offered and the technology deployed. The entire evolution can be classified into four
distinct phases.

• Phase I- Pre-Nationalization Phase (prior to 1955)

• Phase II- Era of Nationalization and Consolidation (1955-1990)

• Phase III- Introduction of Indian Financial & Banking Sector Reforms and Partial Liberalisation
(1990-2004)

• Phase IV- Period of Increased Liberalisation (2004 onwards)


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3.4 Function of Bank

The act has identified various function of a Bank under following two words

➢ Primary Functions

➢ Secondary Functions

1. Primary Function

a) Acceptance of deposits

The bank collects deposits from the public. These deposits can be of different types, such as •
Savings Deposits.

• Fixed Deposits.

• Current Deposits.

• Recurring Deposits.

b) Granting of advances

The bank advances loans to the business community and other members of the public. The rate
charged is higher than what it pays on deposits. The difference in the interest rates (lending
rate and the deposit rate) is its profit. The types of bank loans and advances are

• Overdraft.
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• Cash Credits.

• Loans.

• Discounting of bills of exchange.

2. Secondary Functions

a) Agency Services

The bank acts as an agent of its customers. The bank performs a number of agency functions
which includes,

• Transfer of Funds.

• Collection of Cheques.

• Periodic Payments.

• Portfolio Management.

•Periodic Collections.

• Other Agency Functions.

b) General utility Services

The bank also performs general utility functions, such as

• Issue of Drafts, Letter of Credits, etc.

• Locker Facility.

•Underwriting of Shares.

• Dealing in Foreign Exchange.

• Project Reports.

• Social Welfare Programmes.

• Other Utility Functions.

This Banking regulation act of 1949 provided a clear form of work within which the Banks were
required to operate. After 1955 the imperial Bank was nationalized and changed to state Bank of
India by passing state Bank of India act 1955. Later the press of nationalized of popular and
successful Banks was undertaken in two stages, that is once during the year 1969 and other time
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during 1980. The Banks which were operating in small regional units they were given the
support to increase their branch network through nationalized. This nationalization has helped to
the Banks to reach the current stage.

3.5 Structure of Organized Indian Banking System

1. Reserve Bank of India :

Reserve Bank of India is the Central Bank of our country. It was established on 1st April 1935
accordance with the provisions of the Reserve Bank of India Act 1934. It holds the apex
position in the banking structure. RBI performs various developmental and promotional
functions.

It has given wide powers to supervise and control the banking structure. It occupies the pivotal
position in the monetary and banking structure of the country. In many countries central bank is
known by different names.

For example, Federal Reserve Bank of U.S.A, Bank of England in U.K. and Reserve Bank of
India in India. Central bank is known as a banker’s bank. They have the authority to formulate and
implement monetary and credit policies. It is owned by the government of a country and has
the monopoly power of issuing notes.

2. Commercial Banks:
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Commercial bank is an institution that accepts deposit, makes business loans and offer related
services to various like accepting deposits and lending loans and advances to general
customers and business man.

These institutions run to make profit. They cater to the financial requirements of industries and
various sectors like agriculture, rural development, etc. it is a profit making institution owned by
government or private of both.

3. Public Sector Banks:

Currently there are 21 Nationalised banks in India. The public sector accounts for 75 percent of
total banking business in India and State Bank of India is the largest commercial bank in terms of
volume of all commercial banks

Now from April 1, 2017 all the 5 associate banks of SBI and Bhartiya Mahila Bank are merged with
State Bank of India. After this merger now SBI is counted among the top 50 largest banks of the
world.

Nationalised Banks in India are

1. Allahabad Bank

2. Andhra Bank

3. Bank of India

4. Bank of Baroda

5. Bank of Maharashtra

6. Canara Bank

7. Central Bank of India


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8. Corporation Bank

9. Dena Bank

10. Indian Bank

11. Indian Overseas Bank

12. Oriental Bank of Commerce

13. Punjab & Sindh Bank

14. Punjab National Bank

15. State Bank of India

16. Syndicate Bank

17. UCO Bank

18. Union Bank of India

19. United Bank of India

20. Vijaya Bank

4. Private Sector Banks:

The private-sector banks in India represent part of the Indian banking sector that is made up of
both private and public sector banks. The "private-sector banks" are banks where greater parts
of stake or equity are held by the private shareholders and not by government.

List of Private Sector Banks is


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5. Foreign Banks:

A foreign bank with the obligation of following the regulations of both its home and its host
countries. Loan limits for these banks are based on the capital of the parent bank, thus allowing
foreign banks to provide more loans than other subsidiary banks. Foreign banks are those
banks, which have their head offices abroad. CITI bank, HSBC, Standard Chartered etc. are the
examples of foreign bank in India. Currently India has 36 foreign banks.

6. Regional Rural Bank (RRB):

The government of India set up Regional Rural Banks (RRBs) on October 2, 1975. The banks
provide credit to the weaker sections of the rural areas, particularly the small and marginal
farmers, agricultural labourers, and small entrepreneurs. There are 82 RRBs in the country.
NABARD holds the apex position in the agricultural and rural development. List of some RRBs is
given below:

7. Co-operative Bank:

Co-operative bank was set up by passing a co-operative act in 1904. They are organised and
managed on the principal of co-operation and mutual help. The main objective of co-operative
bank is to provide rural credit

. The cooperative banks in India play an important role even today in rural co-operative
financing. The enactment of Co-operative Credit Societies Act, 1904, however, gave the real
impetus to the movement. The Cooperative Credit Societies Act, 1904 was amended in 1912,
with a view to broad basing it to enable organisation of non-credit societies.
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Name of some co-operative banks India are:

1. Andhra Pradesh State Co-operative Bank Ltd

2. The Bihar State Co-operative Bank Ltd.

3. Chhatisgarh Rajya Sahakari Bank Maryadit

4. The Gujarat State Co-operative Bank Ltd.

5. Haryana Rajya Sahakari Bank Ltd.

Three tier structures exist in the cooperative banking:

i. State cooperative bank at the apex level.

ii. Central cooperative banks at the district level.

iii. Primary cooperative banks and the base or local level.

Scheduled and Non-Scheduled Banks:

The scheduled banks are those which are enshrined in the second schedule of the RBI Act, 1934.
These banks have a paid-up capital and reserves of an aggregate value of not less than Rs. 5 lakhs,
they have to satisfy the RBI that their affairs are carried out in the interest of their depositors.

All commercial banks (Indian and foreign), regional rural banks, and state cooperative banks
are scheduled banks. Non- scheduled banks are those which are not included in the second
schedule of the RBI Act, 1934. At present these are only three such banks in the country.

3.6 Banking segments

Banking sector has witnessed enormous growth in the past decades. The banks have
transformed themselves from traditional deposit and borrowing institutes to large organizations
offering a variety of products and services. Banks can be classified in variety of ways based
on various parameters like statue, segments, customers, products and services etc. Here we
will discuss the most common classifications used in Banking Industry:

• Banking Product Segments Prescribed by RBI.

• Banking Geographical Segments Prescribed by RBI.

• Key Banking Sectors Segments.

Banking Product Segments Prescribed by RBI


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Reserve bank of India, prescribed four broad business segments in the year 2008, viz. ‘Treasury’,
‘Corporate / Wholesale Banking’, ‘Retail Banking’ and ‘Other Banking Business’. They have also
prescribed ‘Domestic’ and ‘International’ as the uniform geographic segments for the
purpose of segment reporting under accounting standard AS-17. These segments are briefly
discussed below:

RBI Segment 1: Treasury

Treasury includes the entire investment portfolio comprising of funding and investment
activities. Treasury management refers to the process of management of an enterprise's
holdings, cash and working capital, with the ultimate goal of managing the firm's liquidity
and mitigating its operational, financial and reputational risk. Treasury Management provides
greater insight and control over complex processes for managing funding, liquidity, and risk. Large
banks have a stronghold on the provision of treasury management products and services.

RBI Segment 2: Retail Banking

The Retail Banking would include exposures which fulfil the four criteria of orientation,
product, granularity and low value of individual exposures. These retail exposures are laid
down in Basel Committee on Banking Supervision document "International Convergence of
Capital Measurement and Capital Standards: A Revised Framework". Orientation Criterion refers
to the exposure is to an individual person(s) or to a small business. Small business is one where the
total annual turnover is less than INR 50 crores. Product criterion exposure means exposure on
specified products specified as revolving credits, lines of credit, overdrafts, term loans,
instalment loans, student and educational loans, other leases and small business facilities and
commitments. It also includes housing loans. Granularity criterion mandates that the aggregate
exposure to one borrower should not exceed 0.2% of the overall retail portfolio. Further the ‘Low
value of individual exposures’ criterion specifies the maximum aggregated retail exposure to one
borrower at Rs.5 crore.

RBI Segment 3: Corporate / Wholesale Banking

Wholesale Banking includes all advances to trusts, partnership firms, companies and
statutory bodies, which are not included under ‘Retail Banking’.

RBI Segment 4: Other Banking Business

Others banking business segment includes all other banking operations not covered under above
3 segments. It also covers all other residual operations such as para banking transactions.

Banking Geographical Segments Prescribed by RBI

Geographic Segment 1:
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Domestic Consumer and business banking is mostly targeted to domestic customers residing
within the country of registration. Domestic operations are the main market for majority of
deposits and advances.

Geographic Segment 2: International

Although generally the domestic market is primary revenue source for most of the banks, banks
also have significant global operations now days that contribute significantly to their
revenues. Private and other global banks have much larger global operations and most of
the smaller banks in India have comparatively smaller international operations.

Key Banking Sectors

Based on types of banks and the products and services offered, the banks can be further classified
as banking industry sectors in the following four ways:

1. Retail Banking

2. Commercial Banking

3. Investment Banking

4. Central Banks

This classification into sectors is based on the customer profile and products and services offered
by each type of bank.

Banking Industry Sector 1: Retail Banking

Retail banks are the banks that cater to the needs of individuals and the most common
format of banking that we experience. They include deposit oriented banking institutions like
saving banks, loan associations, credit unions, thrifts, and other savings banks like postal.

Individuals are the targeted consumers for retail banking and banks offers variety of products and
services to this clientele including savings accounts, safe lockers, fixed & recurring deposits,
housing loans, consumer loans, personal loans and unsecured and revolving loans, such as
credit cards.

Banking Industry Sector 2: Commercial Banking:

This category represents corporate and business banking and includes commercial and foreign
banks. Commercial banks offer similar kind of products and services as retail banks, however, as
retail banks target individual consumers, commercial banks are focused on corporates and
commercial businesses. Products and services include consumer and commercial deposits,
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business loans, mortgage and real estate loans, overseas operations, investment in high-
grade securities, and industrial loans.

Banking Industry Sector 3: Investment Banking:

The products and services of this category include managing portfolios of financial assets, trading
in securities, fixed income, commodity and currency, corporate advisory services for mergers
and acquisitions, corporate finance, and debt and equity underwriting. Trading activities
include trading both on behalf of clients or on the bank's own account

Banking Industry Sector 4: Central Banks:

Central banks are bankers’ banks, and every country generally has one central bank that occupies
a central position in the banking system and acts as the highest financial authority. The main
function of this bank is to regulate and supervise the whole banking system in the country. It is a
banker's bank and controller of credit in the country.

3.7 Products of the Banking Industry

The products of the banking industry broadly include deposit products, credit products and
customized banking services. Most banks offer the same kind of products with minor variations.
The basic differentiation is attained through quality of service and the delivery channels that
are adopted. Apart from the generic products like deposits (demand deposits – current,
savings and term deposits), loans and advances (short term and long term loans) and services,
there have been innovations in terms and products such as the flexible term deposit,
convertible savings deposit (wherein idle cash in savings account can be transferred to a fixed
deposit), etc. Innovations have been increasingly directed towards the delivery channels
used, with the focus shifting towards ATM transactions, phone and internet banking.
Product differentiating services have been attached to most products, such as debit/ATM cards,
credit cards, nomination and demote services.
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Other banking products include fee-based services that provide non-interest income to the
banks. Corporate fee-based services offered by banks include treasury products; cash
management services; letter of credit and bank guarantee; bill discounting; factoring and
forfeiting services; foreign exchange services; merchant banking; leasing; credit rating;
underwriting and custodial services. Retail fee-based services include remittances and
payment facilities, wealth management, trading facilities and other value added services
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CHAPTER-4
THEORITICAL BACKGROUND
4.1 Ratio Analysis
4.2 Common Size Statement
4.3 Comparative Statement
4.4 Trend Analysis
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CHAPTER – 4

THEORITICAL BACKGROUND
Financial performance principally reflects business sector outcomes and results that shows
overall financial health of the sector over a specific period of time. It indicates that how well an
entity is utilizing its resources to maximize the shareholders wealth and profitability. Although
a complete evaluation of a firm’s financial performance takes into account many other different
kind of measures but most common performance measurement used in the field of finance and
statistical inference is financial ratios. One way to analyse financial performance is to calculate key
financial ratios over the last five years. Ratios can be compared year over year to measure
progress and performance. Financial ratios are a comparison of two or more elements of
financial data. They are expressed in percentage or as ratios. Since each ratio tells you a little
about the farm’s financial story, it’s important that they be analysed collectively. One ratio with
good results or one with poor results should not alone be the basis upon which to make
management decisions, especially decisions with transition planning implications. It is important
to review all the ratios over a period of five year timeline to reveal trends. Trends with stable or
improving performance are the strength when facing a potential intergenerational transfer .
Trends with declining performance can be a weakness and should be analysed carefully before
proceeding.

4.1RATIO ANALYSIS

There are different types of ratios analysis that have been calculated by every company to
evaluate business performance. It is divided as below:
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Type 1:– Profitability Ratios .This type of ratio analysis suggests the Returns that are
generated from the Business with the Capital Invested.

• Gross Profit Ratio

It represents the operating profit of the company after adjusting the cost of the goods that
are been sold. Higher the gross profit ratio, lower the cost of goods sold, and greater satisfaction
for the management.

Gross Profit Ratio Formula = Gross Profit/Net Sales*100.

• Net Profit Ratio

It represents the overall profitability of the company after deducting all the cash & no cash
expenses. Higher the net profit ratio, the higher the net worth and stronger the balance sheet.

Net Profit Ratio Formula = Net Profit/Net Sales*100

• Operating Profit Ratio It represents the soundness of the company and the ability to pay
off its debt obligations.

Operating Profit Ratio Formula = EBIT / Net sales*100

• Return on Capital Employed

It represents the profitability of the company with the capital invested in the business.

Return on Capital Employed Formula = EBIT / Capital Employed

Type 2: – Solvency Ratios These ratio analysis types suggest whether the company is solvent & is
able to pay off the debts of the lenders or not.

• Debt-Equity Ratio

This ratio represents the leverage of the company. A low debt equity ratio means that the
company has a lesser amount of debt on its books and is more equity diluted.

Debt Equity Ratio Formula = Total Debt/Shareholders Fund Where,

Total debt = long term + short term + other fixed payments shareholder funds = equity share
capital + reserves + preference share capital – fictitious assets.

• Interest Coverage Ratio

It represents how many times the company’s profits are capable of covering its interest
expense. It also signifies the solvency of the company in the near future since higher the ratio
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more comfort to the shareholders & lenders regarding servicing of the debt obligations and
smooth functioning of the business operations of the company.

Interest Coverage Ratio Formula = EBIT / Interest Expense

Type 3: – Liquidity Ratios

These ratios represent whether the company has enough liquidity to meet its shortterm
obligations or not. Higher the liquidity ratios will increase more cash-rich the company.

Current Ratio

It represents the liquidity of the company in order to meet its obligations in the next 12
months. Higher the current ratio, the stronger the companies to pay its current liabilities.
However, a very high current ratio signifies that a lot of money is been stuck in receivables that
might not realize in the future.

Current Ratio Formula = Current Assets/Current Liabilities.

• Quick Ratio

It represents how cash-rich is the company to pay off its immediate liabilities in the short term.

Quick Ratio Formula = Cash & Cash Equivalents + Marketable Securities + Accounts
Receivables/Current Liabilities.

Type 4:– Turnover Ratios

These ratios signify how efficiently the assets and liabilities of the company are been used to
generate revenue.

• Fixed Assets Turnover Ratio

Fixed asset turnover represents the efficiency of the company to generate revenue from its assets.
In simple terms, it is a return on the investment in fixed assets.

Net Sales = Gross Sales – Returns.

Net Fixed Assets = Gross Fixed Assets – Accumulated Depreciation. Average Net Fixed Assets =
(Opening Balance of Net Fixed Assets + Closing Balance of Net Fixed Assets) / 2.

Fixed Assets Turnover Ratio Formula = Net Sales / Average Fixed Assets

• Inventory Turnover Ratio


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Inventory Turnover Ratio represents how fast the company is able to convert its inventory
into sales. It is calculated in days signifying the time required to sell the stock on an average.
Average inventory is been considered in this formula since the inventory of the company keeps
on fluctuating throughout the year. Inventory Turnover Ratio Formula = Cost of Goods
Sold/Average Inventories

Receivable Turnover Ratio

Receivables Turnover Ratio reflects the efficiency of the company to collect its receivables. It
signifies how many times the receivables are been converted to cash. A higher receivable
turnover ratio also indicates that the company is collecting money in cash.

Receivables Turnover Ratio Formula = Net Credit Sales/Average Receivables

Type 5:– Earnings Ratios

This ratio analysis type speaks about the returns that the company generates for its shareholders
or investors.

• Profit Earnings Ratio

PE Ratio represents the earnings multiple of the company, the market value of the shares based
on the profit earnings multiple. A high P/E Ratio is a positive sign for the company since it gets a
high valuation in the market for m&a opportunity.

P/E Ratio Formula = Market Price per Share/Earnings Per Share

• Earnings Per Share

Earnings Per Share represents the monetary value of the earnings of each shareholder. It is one
of the major components looked at by the analyst while investing in equity markets.

Earnings Per Share Formula = (Net Income – Preferred Dividends) / (Weighted Average of Shares
Outstanding)

• Return on Net Worth

It represents how much profit the company generated with the invested capital from equity &
preference shareholders both.

Return on Net Worth Formula = Net Profit/Equity Shareholder Funds. Equity Funds = Equity+
Preference+ Reserves -Fictitious Assets.

4.2 COMMON SIZE STATEMENTS


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Common size analysis, also referred as vertical analysis, is a tool that financial managers use
to analyse financial statements. It evaluates financial statements by expressing each line item as a
percentage of the base amount for that period. The analysis helps to understand the impact of
each item in the financial statement and its contribution to the resulting figure.

The total assets or total liabilities or sale is taken as 100 and the balance items are compared to
the total assets, total liabilities or sales in terms of percentage. Thus, a common size statement
shows the relation of each component to the whole. Separate common size statement is
prepared for profit and loss account as Common Size Income Statement and for balance sheet
as Common Size Balance Sheet.

a. Income Statement Common Size Analysis

The base item in the income statement is usually the total sales or total revenues. Common size
analysis is used to calculate net profit margin, as well as gross and operating margins. The ratios
tell investors and finance managers how the company is doing in terms of revenues, and they
can make predictions of future revenues. Companies can also use this tool to analyse
competitors to know the proportion of revenues that goes to advertising, research and
development, and other essential expenses.

b. Balance Sheet Common Size Analysis The balance sheet common size analysis mostly uses the
total assets value as the base value. On the balance sheet, the total assets value equals the
value of total liabilities and shareholders’ equity. A financial manager or investor uses the
common size analysis to see how a firm’s capital structure compares to rivals. They can
make important observations by analysing specific line items in relation to the total assets.

Types of Common Size Analysis

• Vertical Analysis

Vertical analysis refers to the analysis of specific line items in relation to a base item within the
same financial period. For example, in the balance sheet, we can assess the proportion of
inventory by dividing the inventory line using total assets as the base item.

• Horizontal Analysis
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Horizontal analysis refers to the analysis of specific line items and comparing them to a similar
line item in the previous or subsequent financial period. Although common size analysis is not
as detailed as trend analysis using ratios, it does provide a simple way for financial managers
to analyse financial statements.

4.3 COMPARATIVE STATEMENTS


The comparative financial statements are statements of the financial position at different
periods; of time. The elements of financial position are shown in a comparative form so as to
give an idea of financial position at two or more periods. Any statement prepared in a
comparative form will be covered in comparative statements.

Types of Comparative Statements:

a. Comparative Income Statement

Three important information are obtained from the Comparative Income Statement. They are
Gross Profit, Operating Profit and Net Profit. The changes or the improvement in the profitability
of the business concern is find out over a period of time. If the changes or improvement is not
satisfactory, the management can find out the reasons for it and some corrective action can be
taken.

b. Comparative Balance Sheet

The financial condition of the business concern can be find out by preparing comparative
balance sheet. The various items of Balance sheet for two different periods are used. The
assets are classified as current assets and fixed assets for comparison. Likewise, the liabilities
are classified as current liabilities, long term liabilities and shareholders’ net worth. The term
shareholders’ net worth includes Equity Share Capital, Preference Share Capital, Reserves and
Surplus and the like.

4.4 TREND ANALYSIS

Trend Analysis is a statistical tool that helps to determine future movements of a variable on the
basis of its historical trends. In simple words, it predicts future behaviour on the basis of
past data. Under this method, a researcher collects information from multiple time periods and
plots the information on a horizontal line to get some meaningful information. There is no specific
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amount of time for a movement to become a trend. However, the longer the movement, the
better it is.

TYPES OF TREND ANALYSIS

• Uptrend
It is the trend when financial markets and assets move in upward directions, resulting
in an increase in the price. It is usually the time of boom in the economy, where overall
sentiments are favourable.
• Downtrend
In the downtrend or the bear market, the economy, financial markets, and assets prices
move in the downward direction. It is the time when companies shrink operations and
overall investor sentiment is not favourable.
• Sideways / horizontal trend In this, the assets prices or the broader economy-level are
not moving in any direction, rather are moving sideways. This means, moving up for some
time and then down on the same level. It is a risky movement as investors are unsure of
what will happen to their investment.
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CHAPTER – 5
DATA ANALYSIS AND INTRERPRETATION
 Table
 Graph
 Interpretation
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CHAPTER – 5

DATA ANALYSIS and INTERPRETATION

Table No. 5.1: Basic Earnings per Share Ratio

The table showing the Basic Earnings per Share Ratio of SBI

(Base Year 2018-19)

Year Ratio Trend Analysis


2018-19 0.97 100
2019-20 16.23 1673.19
2020-21 22.87 2357.73
2021-22 35.49 3658.76

Graph No. 5.1

Ratio
40
35
30
25
20
Ratio
15
10
5
0
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 1, it can be analyzed that, during 2018-19 the company had the lowest
basic earnings per ratio and during 2021-22 the company is having highest ratio. Hence, the
company’s growth is increased during years
Table No. 5.2: Return on Assets

The table showing the Return on Assets of SBI

(Base year 2018-19)

Year Ratio Trend Analysis


2018-19 0.02 100
2019-20 0.36 1800
2020-21 0.45 2250
2021-22 0.63 3150

Graph No. 5.2

Ratio
0.7

0.6

0.5

0.4

0.3 Ratio

0.2

0.1

0
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 2, it is determined that, during the study period the return on
assets has been increased and the growth of the company is increased during 4 years.
Table No. 5.3: Net Profit Margin Ratio

The table showing the Net Profit Margin Ratio of SBI

(Base Year 2018-19)

Year Ratio Trend Analysis


2018-19 0.35 100
2019-20 5.63 1608.57
2020-21 7.69 2197.14
2021-22 11.49 3282.85

Graph No. 5.3

Ratio
14

12

10

6 Ratio

0
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 3, it can be noted that, during 4 years the company is having
lowest net profit margin ratio in the year 2018-19 and gradually increased in the year 2021-22.
Table No. 5.4: Income to Total Assets

The table showing interest Income to Total Assets of SBI

(Base Year 2018-19)

Year Ratio Trend Analysis


2018-19 6.59 100
2019-20 6.51 98.78
2020-21 5.84 88.61
2021-22 5.52 83.76

Graph No. 5.4

Ratio
6.8
6.6
6.4
6.2
6
5.8
Ratio
5.6
5.4
5.2
5
4.8
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 4, it can be stated that, during 4 years the
company had the highest income to total assets i.e 6.59 in the year 2018-19 and in the year
2019-20 it has decreased by 6.51 and in the year 2021-22 the company again decreased by 5.52.
Table No. 5.5: Net Profit per Share Ratio

The table showing the Net Profit per Share Ratio of SBI

(Base Year 2018-19)


Year Ratio Trend Analysis
2018-19 0.97 100
2019-20 16.23 1673.19
2020-21 22.87 2357.73
2021-22 35.49 3658.76

Graph No. 5.5

Ratio
40
35
30
25
20
Ratio
15
10
5
0
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 5, it can be interpreted that, during 4 years the
company is having the lowest net profit per share in the year 2018-19 and in the year 2021-
22 the company is having highest ratio.
Table No. 5.6: Retention Ratio
The table showing Retention Ratio of SBI

(Base Year 2018-19)

Year Ratio Trend Analysis


2018-19 100.00 100
2019-20 100.00 100
2020-21 82.50 82.5
2021-22 79.99 79.99

Graph No. 5.6

Ratio
120

100

80

60
Ratio
40

20

0
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 6, it can be inferred that, the company had the
constant ratio in the year 2018-19, 2019-20 and in next coming years slightly decreased during 4
years.
Table – 7: Dividend per Share
The table showing the Dividend per Share of SBI

(Base Year 2018-19)

Year Ratio Trend Analysis


2018-19 0.00 ---
2019-20 ---
0.00
2020-21 ---
4.00
2021-22 ---
7.10

Graph No. 5.7

Ratio
8
7
6
5
4
Ratio
3
2
1
0
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 7, it can be understood that, in the first 2 years the company
had no dividend per share and in the next 2 years the company had increased dividend per share
during 4 years.
Table – 8: Current Ratio
The table showing the Current Ratio of SBI

(Base Year 2018-19)

Year Ratio Trend Analysis


2018-19 0.38 100
2019-20 0.38 100
2020-21 0.43 113.15
2021-22 0.43 113.15

Graph No. 5.8

Ratio
0.44
0.43
0.42
0.41
0.4
0.39 Ratio

0.38
0.37
0.36
0.35
2018-19 2019-20 2020-21 2021-22

Inference:
From the above table 8, it can be inferred that, during 4 years the
company had the lowest current ratio in the year 2018-19 & 2019-20.
Balance Sheet Of State Bank Of India:

Particulars Mar 2022(₹).Cr Mar 2021(₹).Cr Mar 2020(₹).Cr Mar 2019(₹).Cr Mar
2018(₹).Cr
INCOME:
Interest Earned 275457.29 265150.63 257323.59 242868.65 220499.32
Other Income 40563.91 43496.37 45221.48 36774.89 44600.69
Total 316021.20 308647.00 302545.07 279643.54 265100.01
Total 284345.22 288236.53 288056.96 278781.31 271647.46

II. Expenditure
Interest expanded 154749.70 154440.63 159238.77 154519.78 145645.60
Payments 57561.99 50936.00 45714.97 41054.71 33178.68
to/Provisions for
Employees
Operating Expenses & 13590.80 12054.99 11110.88 10812.09 10599.37
Administrative
Depreciation 3248.59 3317.55 3303.81 3212.31 2919.47
Other Expenses, 43448.28 60356.71 58113.88 68437.19 88285.13
Provisions &
Contingencies
Provision for Tax 11427.30 10760.88 3063.67 -208.87 673.54
Fringe Benefit Tax 0.00 0.00 0.00 0.00 0.00
Deferred Tax 318.57 -3630.23 7510.99 954.12 -9654.33
Total 316021.20 308647.00 302545.07 279643.54 265100.01
Total 284345.22 288236.53 288056.96 278781.32 271647.46

III. Profit & Loss


Reported Net Profit 31675.98 20410.47 14488.11 862.23 -6547.45
Extraordinary Items -12.30 -17.41 -16.70 153.96 -28.73
Adjusted Net Profit 31688.28 20427.88 14504.81 708.27 -6518.72
Prior Year Adjustments 0.00 0.00 0.00 0.00 -6407.69
Profit brought forward -3600.84 -10498.30 -15226.06 -15078.57 0.32
IV. Appropriations
Transfer to Statutory Reserve 9502.79 6123.14 4346.43 258.67 0.00
Transfer to Other Reserve 6354.47 3820.03 5413.92 751.05 2123.74
Transfer to Government 6336.47 3569.84 0.00 0.00 0.00
/Proposed Dividend
Balance carried forward to 5881.40 -3600.84 -10498.30 -15226.06 -15078.57
Balance
Sheet
Equity Dividend % 710.00 400.00 0.00 0.00 0.00
Earnings Per Share-Unit Curr 35.49 22.87 16.23 0.97 0.00
Earnings Per Share(Adj)- 35.49 22.87 16.23 0.97 0.00
Unit Curr
Book Value- Unit Curr 287.64 258.05 233.34 219.91 217.69

INTERPRETATION:

SBI / State Bank of India financial statements offers an overview of the company's Revenue, Income
Statement, Balance Statement, Cash Flows and more. It helps to analyze the company's financial
position and its revenue to profit trend. SBI / State Bank of India reported a Net Income of Rs.
406,973.09 and an Operating Profit of Rs. 0.00 in the. The Total Liabilities stood at Rs. 5,117,914.11 in
the last year. The Earning Per Share (EPS) and Dividend Per Share (DPS) stood at Rs. 39.64 and Rs.
0.00 respectively. While, analyzing Financial Statements of a company is crucial, it is equally important
to look at the Share Price, Stock Performance, Fundamental Analysis, Technicals and Similar Stocks
Comparision. It gives a sense of whether the company is growing, stable or
CHAPTER – 6

FINDINGS, SUGGESTIONS & CONCLUSIONS

6.1 Findings

6.2 Suggestions

6.3 Conclusion
6.1 FINDINGS

 During the year 2018-2019 the company had the lowest basic earnings per share ratio i.e
0.97, trend analysis ratio is 100 and during the year 2021-2022 the company is having
the highest ratio i.e 35.49, trend analysis ratio is 3658.76%. hence the growth of the
company is increased during 4 years.

 It is determined that during the study period the return on assets ratio has been increased
during 4 years the trend analysis ratios also has been increased in the 4 years from
100% to 3150%.

 During 4years the company is having lowest net profit margin ratio in the year 2018-2019
i.e 0.35 and gradually increased in the year 2021-2022 i.e 11.49. Trend has also been
increased in 4 years.

 Income to total assets ratio is also not constant/ not equal during the study of 4years it is
keeping on decreasing i.e ratios are like these 6.59 to 5.52. Trend has also decreased
from 100% to 83.76%.

 Company is having lowest net profit per share ratio in the year 2018-2019 and in the year
20201-2022 the company had its highest ratio of 35.49. Trend is also increased rapidly
since the year 2018-2019 to 2021-2022.
-
 It can be inferred that, the company had constant ratios in the year 2018-2019, and
2019-2020 during 4years.

 During the study of 4years the dividend per share ratio is 0.00 for the first two years i.e
2018-2019, 2019-2020 & slightly increased in next two years.

 During the study of 4 years the current ratio is constant for 2018-2019 & 2019-2020 i.e
0.38, & 0.43 for remaining two years i.e 2021-2022.

 SBI share has a market capitalization of Rs 5,11,782Cr. Within Banks sector, its market
cap rank is 3.
6.2 SUGGESTIONS

 The performance of the company will affect the profitability of SBI.

 The bank should make efforts to increase the retention ratio for its further growth and
development.

 The bank basic earnings per share is tremendously increased and it is advised that it
should be continued for the following years.

 It might indicate that the company can now afford to pay dividends.

 The company has lower current ratio less than 1 anything less than 1 is a cause for
concern. It means it has insufficient capital to pay off its short term debt.

 The company has low current ratio so it should increase its current ratio where it can
meet its short term obligation smoothly.

 Decline in profitability of the banking system due to increasing in deposits and


borrowings and also decreasing in loans and advances.
6.3 CONCLUSION

A Sound financial system is indispensable for a healthy and vibrant economy. The
performance of any economy is to largest extent dependent on the performance of the
banking sector. Banks play a key role in improving economic efficiency by channeling funds
from resources surplus unit to those with better productive investment opportunities. The
financial system is dominated by banking industry. However, the banking sector is very
important for the economic development of a country. SBI is one of the leading banks of
public sector bank in India. The market position of SBI is good compared with its past years.
So, the company should focus on getting profits in the coming years.
ANNEXURE

 BIBLIOGRAPHY
BIBLIOGRAPHY
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Article:
History of Banking in India in Brief (Before & After Independence), Neeraj
Mishra, 17th Feb 2019.

Annual report of STATE BANK OF INDIA 2018-2022.

WEBSITES:

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www.wikipedia.org
www.slideshare.net
www.moneycontrol.com
ANNEXURE

Balance sheet(2022-2021)

Particulars Mar 2022(₹).Cr Mar 2021(₹).Cr

SOURCES OF FUNDS
Capital 892.46 892.46

Reserves Total 279195.60 252982.723

Equity Share warrants 0.00 0.00


Equity Application Money 0.00 0.00
Deposits 4051534.12 3681277.08
Borrowings 4260543.38 417297.70
Other liabilities & Provisions 240431.59 191383.38
Other liabilities 0.00 0.00
TOTAL LIABILITIES 4998097.15 4543833.35

APPLICATION OF FUNDS:

Cash & Balance with RBI 257859.21 213201.54


Balance with Banks & money 136693.11 129837.17
at cell
Investments 1481445.47 1351705.21
Advances 2733966.59 2449497.79
Fixed Assets 37708.16 38419.24
Other Assets 350424.61 361172.40
Miscellaneous Expenditure not 0.00 0.00
written off
4998097.15 4543933.35
TOTAL ASSETS

Contingent Liability 2007083.44 1706949.91


Bills for collection 77730.12 56516.12
Balance sheet(2020-2019)

Particulars Mar 2020(₹).Cr Mar 2019(₹).Cr

SOURCES OF FUNDS
Capital 892.46 892.46

Reserves Total 231114.97 220021.36

Equity Share warrants 0.00 0.00


Equity Application Money 0.00 0.00
Deposits 3241620.73 2911386.01
Borrowings 314655.65 403017.12
Other liabilities & Provisions 171211.06 156679.49
Other liabilities 0.00 0.00
TOTAL LIABILITIES 3959494.87 3691996.44

APPLICATION OF FUNDS:

Cash & Balance with RBI 166735.78 176932.41


Balance with Banks & money 84361.23 45557.69
at cell
Investments 1046954.52 967021.95
Advances 2325289.56 2185876.92
Fixed Assets 38439.28 39197.57
Other Assets 297714.51 277409.89
Miscellaneous Expenditure not 0.00 0.00
written off
3959494.88 3691996.43
TOTAL ASSETS

Contingent Liability 1214994.61 1116081.46


Bills for collection 55758.16 70022.54
Balance sheet(2018)

Particulars Mar 2018(₹).Cr

SOURCES OF FUNDS
Capital 892.46

Reserves Total 218236.10

Equity Share warrants 0.00


Equity Application Money 0.00
Deposits 2706343.29
Borrowings 362142.07
Other liabilities & Provisions 178346.65
Other liabilities 0.00
TOTAL LIABILITIES 3465960.57

APPLICATION OF FUNDS:

Cash & Balance with RBI 150397.18


Balance with Banks & money 41501.46
at cell
Investments 1060986.72
Advances 1934880.19
Fixed Assets 39992.25
Other Assets 238202.77
Miscellaneous Expenditure not 0.00
written off
TOTAL ASSETS 3465960.57

Contingent Liability 1162020.70


Bills for collection 74027.90
Profit and loss account(2022-2021)

Particulars Mar 2022(₹).Cr Mar 2021(₹).Cr

INCOME:
Interest Earned 275457.29 265150.63
Other Income 40563.91 43496.37
Total 316021.20 308647.00
Total 284345.22 288236.53

II. Expenditure

Interest expanded 154749.70 154440.63


Payments to/Provisions for 57561.99 50936.00
Employees
Operating Expenses & 13590.80 12054.99
Administrative Expenses
Depreciation 3248.59 3317.55
Other Expenses, Provisions & 43448.28 60356.71
Contingencies
Provision for Tax 11427.30 10760.88
Fringe Benefit Tax 0.00 0.00
Deferred Tax 318.57 -3630.23
Total 316021.20 308647.00
Total 284345.22 288236.53

III. Profit & Loss

Reported Net Profit 31675.98 20410.47


Extraordinary Items -12.30 -17.41
Adjusted Net Profit 31688.28 20427.88
Prior Year Adjustments 0.00 0.00
Profit brought forward -3600.84 -10498.30

IV. Appropriations

Transfer to Statutory Reserve 9502.79 6123.14


Transfer to Other Reserve 6354.47 3820.03
Transfer to Government 6336.47 3569.84
/Proposed Dividend
Balance carried forward to 5881.40 -3600.84
Balance Sheet
Equity Dividend % 710.00 400.00
Earnings Per Share-Unit Curr 35.49 22.87
Earnings Per Share(Adj)- Unit 35.49 22.87
Curr
Book Value- Unit Curr 287.64 258.05
Profit and loss account(2019-2020)

Particulars Mar 2020(₹).Cr Mar 2019(₹).Cr

INCOME:
Interest Earned 257323.59 242868.65
Other Income 45221.48 36774.89
Total 302545.07 279643.54
Total 288056.96 278781.31

II. Expenditure

Interest expanded 159238.77 154519.78


Payments to/Provisions for 45714.97 41054.71
Employees
Operating Expenses & 11110.88 10812.09
Administrative Expenses
Depreciation 3303.81 3212.31
Other Expenses, Provisions & 58113.88 68437.19
Contingencies
Provision for Tax 3063.67 -208.87
Fringe Benefit Tax 0.00 0.00
Deferred Tax 7510.99 954.12
Total 302545.07 279643.54
Total 288056.96 278781.32

III. Profit & Loss

Reported Net Profit 14488.11 862.23


Extraordinary Items -16.70 153.96
Adjusted Net Profit 14504.81 708.27
Prior Year Adjustments 0.00 0.00
Profit brought forward -15226.06 -15078.57

IV. Appropriations

Transfer to Statutory Reserve 4346.43 258.67


Transfer to Other Reserve 5413.92 751.05
Transfer to Government 0.00 0.00
/Proposed Dividend
Balance carried forward to -10498.30 -15226.06
Balance Sheet
Equity Dividend % 0.00 0.00
Earnings Per Share-Unit Curr 16.23 0.97
Earnings Per Share(Adj)- Unit 16.23 0.97
Curr
Book Value- Unit Curr 233.34 219.91
Profit and loss account(2018)

Particulars Mar 2018(₹).Cr

INCOME:
Interest Earned 220499.32
Other Income 44600.69
Total 265100.01
Total 271647.46

II. Expenditure

Interest expanded 145645.60


Payments to/Provisions for 33178.68
Employees
Operating Expenses & 10599.37
Administrative Expenses
Depreciation 2919.47
Other Expenses, Provisions & 88285.13
Contingencies
Provision for Tax 673.54
Fringe Benefit Tax 0.00
Deferred Tax -9654.33
Total 265100.01
Total 271647.46

III. Profit & Loss

Reported Net Profit -6547.45


Extraordinary Items -28.73
Adjusted Net Profit -6518.72
Prior Year Adjustments -6407.69
Profit brought forward 0.32

IV. Appropriations

Transfer to Statutory Reserve 0.00


Transfer to Other Reserve 2123.74
Transfer to Government 0.00
/Proposed Dividend
Balance carried forward to -15078.57
Balance Sheet
Equity Dividend % 0.00
Earnings Per Share-Unit Curr 0.00
Earnings Per Share(Adj)- Unit 0.00
Curr
Book Value- Unit Curr 217.69

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