COMMERCIAL BANKS –

ASSET MANAGEMENT, LOANS & ADVANCES

AND INVESTMENTS
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Commercial Banks
•A commercial bank is a bank is a financial institution whose
primary activity is to act as a payment agent for customers and to
borrow and lend money
•A Commercial bank raises funds :
•by collecting  deposits from businesses and consumers
•via checkable deposits, savings deposits, and time (or term)
deposits
•It makes loans to businesses and consumers available.
•It also buys corporate bonds and government bonds
•Its primary liabilities are deposits
•Its primary assets are loans and bonds
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Commercial Banks In India

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Case Study on
State Bank Of India (SBI)

From Banks Point of

View

&
Investor Point Of View
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Introduction
State Bank Of India
• In existence for 200 years, largest commercial bank
• Full range of services, Corporate, Commercial and Retail
• OP Bhatt ,current Chairman
• Large ATM Network across the country

Share Holding In SBI

 St at e Bank of
6
India

sl ort no Cl anr et nI

ORGANISATION STRUCTURE
s ecr uos e R na mu H
noi t avonnI t cudor P
pi hsr edaeL et ar opr o C
er ut c urt s noi t asi nagr O

ec nanr evo G et ar opr o C

Customer Focused Organisation Structure

State Bank of India

Corporate Centre

Corporate Banking International Banking National Banking Associates &

Group Group Group Subsidiaries

Local Head
Project Corporate Leasing Offices 7 Associate 100% owned Non-Banking
Finance Accounts banking Subsidiaries &
SBU Group SBU Banks subsidiary Affiliates

Focus on Dedicated Focus on •Investment Banking

Infrastructre, focus on Top Infrastructre Development &
Commercial Personal Banking •Funds Management
Telecom, & Capital Network •Primary Dealership
Corporates Network
Transport & intensive •Factoring
Hydrocarbon projects •Credit Cards
financing •Insurance
Mid-sized SSIs/ •
corporates, Government Personal
Agriculture Business
large SSIs customers
/Small
& Agri. business

High net-
worth
Individuals
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SBI Branches and ATM Network

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SBI’s Market & Positioning

Stan C Citibank
hgi H

HSBC ABN Amro

ICICI Bank
Karur Vysya HDFC
Indus Bank
ING Vysya
State Bank of India

Bank of Baroda
Bank of India
ytil au Q eci vr eS

PNB
Andhra Bank
Canara Bank
Co-operative Banks
Rural Banks
woL

Rural Regional Urban

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From Bank’s Point Of View

SBI’s
Asset Management, Investments ,Loans
& Advances
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Components of a Bank Balance Sheet

Liabilities Assets
•Capital •Cash & Balances with RBI
•Reserve & Surplus •Bal. With Banks & Money at Call

•Deposits and Short Notices

•Borrowings •Investments

•Other Liabilities •Advances

•Fixed Assets

6. Other Assets

•We would be discussing on Assets

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Components of Assets
• Cash & Bank Balances with RBI
•

• I . Cash in hand
• (including foreign currency notes)
•

• II . Balances with Reserve Bank of India

• In Current Accounts
• In Other Accounts
•

•
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BALANCES WITH BANKS AND MONEY AT CALL &

SHORT NOTICE
I . In India
i) Balances with Banks
a) In Current Accounts
  b) In Other Deposit Accounts
ii) Money at Call and Short Notice
a) With Banks
  b) With Other Institutions
II . Outside India
a) In Current Accounts
b) In Other Deposit Accounts
c) Money at Call & Short Notice
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Investments
I . Investments in India in :
1)Government Securities (REC Bond)
2)Other approved Securities

3)Shares

4)Debentures and Bonds

5)Subsidiaries and Sponsored Institutions

6)Others (UTI Shares , Commercial Papers, COD & Mutual Fund

Units etc.)

II. Investments outside India :

Subsidiaries and/or Associates abroad
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Advances

A. i) Bills Purchased and Discounted

ii) Cash Credits, Overdrafts & Loans repayable on demand
iii) Term Loans

B. Particulars of Advances :
i) Secured by tangible assets (including advances against
Book Debts)
ii) Covered by Bank/ Government Guarantees
iii) Unsecured
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Fixed Asset
I. Premises
II. Other Fixed Assets (Including furniture and fixtures)

Other Assets
I. Interest accrued
  II. Tax paid in advance/tax deducted at source (Net of
Provisions)
  III. Stationery and Stamps
  IV. Non-banking assets acquired in satisfaction of claims
  V. Deferred Tax Asset (Net)
 VI. Others
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SBI’s Cash & Balances With RBI

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SBI’s Balances With Banks & Money At

Call & Short Notice
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SBI’s - Investments
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Outside
India
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SBI’s - Advances
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SBI’s - Diversified Advance Book

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SBI’s - Fixed Assets

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SBI’s - Other Assets

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Snapshot of SBI’s Total Assets

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From Customers point of view..

SBI & The General Public
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What are Investments ?

•Using savings to get returns in future is known as Investment

• Where to invest ???

• Physical Assets
•Real Estate ,Gold/ Jewellery

• Financial Assets
•Savings Bank Account
•Fixed Deposits
•Post office(Kisan vikas)
•Government Bonds
•Provident Funds
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SBI Investment Options

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SBI Investments
SBI CAPITAL Market Limited
•Primary Market
•Instruments issued for first time
•Used by
•Government/ Corporate /PSU’s
•IPO
•Initial Public Offering

•Secondary Market
•Trading of already issued (securities)
•Stocks
•Bonds
•Stock Exchange
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SBI Mutual Funds

•A mutual fund is a professionally managed type of collective
investment scheme that pools money from many investors and invests
it in stocks, bonds, short-term money market instruments, and/or
other securities

• Types of mutual fund schemes

•Open - ended Fund/ Scheme
•Close - ended Fund/ Scheme
•
•Growth scheme
•Income scheme
•Balanced scheme
•Tax Fund Scheme
•Money Market Fund
•Indexing Fund
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Important Terms
•Net Asset Value (NAV)

•Load or no-load charges

•Sales or repurchase/redemption price

• Systematic Investment Plan (SIP)

•Account Statement (CAMS)

•The investors redress their complaints(SEBI)

• Income earned from mutual fund is taxable under Income tax

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What are Loans?

• An amount of money granted by financial institutions
•
•To individuals/enterprises to carry out daily activities which are
prolonged in nature
•
•Against a security and assurance of repayment with interest
•
•SBI Offers various Loans for the customers.
 Documents Required For Loans
• Completed application form
• Passport size photograph
• Proof of Identity – PAN Card/ Voters ID/ Passport / Driving
License
• Proof of Residence – Recent Telephone Bill/ Electricity Bill/
Property tax receipt/ Passport/ Voters ID
• Proof of business address in respect of businessmen /
industrialists
• Sale Deed, Agreement of Sale, Letter of Allotment , Non
encumbrance certificate, Land/ Building Tax paid receipt etc.
(as applicable and subject to satisfaction report from our
empanelled lawyer)
• Copy of approved plan and approval from the Local Body
• Statement of Bank Account / Pass Book for last 6 months
 Home Loans

• Home Purchase Loans

• Home Improvement Loans
• Home Construction Loans
• Home Extension Loans
• Home Conversion Loans
• Land Purchase Loans
• Bridge Loans
 Interest rates

• Upto 30 lakhs: 8% (for 1 year), beyond 1 year: 9%

• Beyond 30 lakhs: 8% (for 1 year), beyond 1 year:
9.25%
• NO PROCESSING FEE TILL 30th Sept. 2009
 Loans for SME

• Loans issued starting Rs.25000 to 5 Crore under

various schemes
• No third party guarantee required
• Margin between 25% to 35%
• Repayment 3 to 5 years
• Interest Rates Minimum of 8.5% (depending upon scheme)
 Points for considering

• How badly do you need the money?

• Will it be to start up or expand your business?
• Or is it just to ensure things go smoothly?
• Are you in great risk if you don't receive the loan?
• Will your company fall without this boost in funding?
• What state is your business currently in?
• Growing, stable, falling?
• Businesses that are not fairing as well will not have as good
funding terms.
• How capable is your management?
• Without a key focus on what you are going to do with the money
it may not be easy to get a loan.
• Lenders are very keen on knowing what is going to be done with
the money, and how you plan on repaying it.
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References
•www.statebankofindia.com
•
• www.wikipedia.com
•
•www.sbicaps.com
•

Thank you..!!!
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