CERTIFICATE

This is to certify that Kuljinder Kaur a student of MBA 2nd Roll no.1174398 (Finance) Ludhiana Group of colleges, chaukimann has undertaken the project entitled “Comparative analysis of public and private banks”. The work undertaken by her is the bonafide piece of work carried out under my direct supervision. This is an original piece and no part of this work has been submitted for any other degree. The assistance and guidance received during completion of project have been fully acknowledged.

Asst. Prof. Gauri Dhir

Ludhiana group of colleges, chaukimann

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DECLARATION
This is to certify that I, Kuljinder Kaur, student of Ludhiana Group of Colleges, Chaukimann, bearing roll no.1174398 has done my final project on “Comparative analysis of public and private banks”. This is an original piece of work. The findings in this report are based on the data collected by me. I have not copied the data from any previous report and have not been submitted for the award of any other degree.

Kuljinder Kaur MBA 2nd year Roll No.-1174398

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ACKNOWLEDGEMENT

I take the opportunity to present my vote of thanks to my project guide Asst. Prof. Gauri Dhir that really acted as lightning pillars to enlighten my way throughout this project. This project work would not have been possible without the kind assistance and guidance of many persons who indeed were helpful, cooperative and kind during the entire coursed of my project. I express my heartfelt appreciation for all those concerned. I would like to start right from the scratch i.e. my heartiest thanks to Asst. Prof. Gauri Dhir respected who provided me this project and gave me his able guidance & showed full interest at each and every step of project. Words fail me to express my regard towards Asst. Prof. Gauri Dhir , who was not only my project guide but also a good companion from whom I learnt a number of virtues of business and of life. I am highly indebted to some of my friends who showed me rays of light during the phase of darkness and helped to give this project a definite shape and showed this project a destination. Last but not least it was great learning experience for me. I am grateful to them for guiding me throughout during that time period.

(Kuljinder Kaur)

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CHAPTER – 1 INTRODUCTION 4 .

Venture capital. credit cards. Metamorphic changes took place in the Indian financial system during the eighties and nineties consequent upon deregulation and liberalization of economic policies of the government . which seems to direct the flow of banking services profitability 5 . An important agenda for every banker today is greater operational efficiency and customer satisfaction. Banks marketing can be defined as the part of management activity. etc.India began shaping up its economy and earmarked ambitious plan for economic growth. Consequently. Corporate banking. The mew watchword for the bank is pretty ambitious: customer delight. Internet banking. Consequently. consumer loans. a sea change in money and capital markets took place. which is designed to meet the requirement of individual customers and encourage their savings. caters to the need of corporate customers like bills discounting. checking account and the like.CHAPTER 1 INTRODUCTION The world of banking has assumed a new dimension at dawn of the 21st century with the advent of tech banking. services such as Demit. Retail banking. etc. includes payment of utility bills. banking may be classified as retail and corporate banking. on the other hand. thereby lending the industry a stamp of universality. managing cash. came into existence to cater to the needs of public. Portfolio Management. Application of marketing concept in the banking sector was introduced to enhance the customer satisfaction the policy of privatization of banking services aims at encouraging the competition in banking sector and introduction of financial services. opening letters of credit. In general. The introduction to the marketing concept to banking sectors can be traced back to American Banking Association Conference of 1958.

on a customer‟s order. in good old days. which it pays out. According to the view point. A bank connects customers that have capital deficits to customers with capital surpluses. IMPORTANCE OF BANKS 6 . “An establishment for the custody of money. EVOLUTION OF INDIAN BANKING Ancient banking system of India constituted of indigenous bankers. Italian money leaders were known as “Banchi” because they kept a special type of table to transact their business. The marketing concept basically requires that there should be thorough understanding of customer need and to learn about market it operates in. a banker is defined as a person who carries on the business of banking. “ A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities. and Collecting cheques for his customers. They have been carrying on their age-old banking operations in different parts of the country under different names. The modern age of banking constitutes the fundamental basis of economic growth. ” Under English common law. which is specified as:    Conducting current accounts for his customers Paying cheques drawn on him.to the customers.” According to Whitehead. either directly or through capital markets. Further the market is segmented so as to understand the requirement of the customer at a profit to the banks. DEFINITION OF BANK The Oxford dictionary defines the Bank as.

During the days of East India Company. Bank of Baroda. and Bank of Mysore were set up.Today banks have become a part and parcel of Kotak Bank's life. . Canara Bank. was set up in1894 with headquarters at Lahore. “The General Bank of India” was the first to join sector in the year 1786. These three banks were amalgamated in 1920 and Imperial Bank of India was established on 27th january1921. who has devoted a section of his work to deposit advance and laid down rules relating to rates of interest. Central Bank of India. It naturally arouses Kotak Bank's interest in knowing more about the „Bank‟ and the various men and the activities connected with it . The bank of Hindustan is reported to have continued till 1906 while the other two failed in them can time. Bank of Bengal (1809). 14 major banks of India were nationalized and on 15th April. mostly Europeans shareholders. Reserve Bank of India came in 1935. During the Mogul period. INDIAN BANKING SYSTEM Banking in India has its origin as early as the Vedic period. There was a time when dwellers of the city alone could enjoy their services. Thus. Punjab National Bank Ltd.The others that followed were the Bank of Hindustan and the Bengal bank. The great Hindu Jurist. Bank of India. 7 . 3. In the first half of the 19th century the East India Company established three banks: 1. it was turning over the agency houses to carry on the business. Between 1906 and 1913. they accelerate the economic growth of a country and steer the wheels of the economy towards its goals of “self reliance in all fields”. These three banks are also known as Presidency Banks were independent units and functioned well. Now banks o f f e r a c c e s s t o e v e n a c o m m o n m a n a n d traders and to all the other sections of the society. 1969. with the passing of time Imperial bank was taken over by the newly constituted State bank of India act in1955.In 1865 Allahabad Bank was established and first time exclusively by Indians. On July. Bank of Madras (1843. the indigenous Bankers played a very important role in lending money financing foreign trade and commerce. Bank of Bombay (1840). Indian Bank. It was believed that transition from money lending to banking must have occurred even before Manu. 2. 1980 six more commercial private banks were also taken over by the government. which started as private shareholders banks.

RESERVE BANK OF INDIA The Banking system is an integral sub-system of the financial system. It represents an important channel of collecting small savings from the households and lending it to the corporate sector. The Indian banking system has The Reserve Bank of India (RBI)as the apex body from all matters relating to the banking system. It‟s the “Central Bank” of India and act as the banker to all other banks. Functions of RBI: •Currency issuing authority •Banker to the government. •Banker to other Bank. •Framing of monetary policy. •Exchange control. •Custodian to foreign exchange and gold reserves. •Development activities. •Research and development in the banking sector.

CLASSIFICATION OF BANKS On the basis of Ownership

PUBLIC SECTOR BANKS Public sector banks are those banks that are owned by the government. The government owns these banks. In India 20 banks were nationalized in 1969and 1980 respectively. Social welfare is there main objective.

PRIVATE SECTOR BANKS These banks are those banks that are owned and run by private sector. An individual has control over these banks in proportion to the shares of the banks held by him.

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CO-OPERATIVE BANKS These are those banks that are jointly run by a group of individuals. Each individual has an equal share in these banks. Its shareholders manage the affairs of the bank. According to the Law

SCHEDULED BANK Schedule banks are the banks, which are included in the second schedule of the banking regulation act 1965.According to this schedule bank:  Must have paid-up capital and reserve of not less than Rs 500, 000.

STRUCTURE OF BANKING SYSTEM Different countries of the world have different types of banking systems. However, commercial banking had grown under all these banking systems. To understand the structure of banking system, let us take up various types of banking systems one by one. These types are:

(1) UNIT BANKING Unit banking refers to a single bank which renders services and operates without any branches anywhere. This kind of banking system is common in the USA. Restrictive branching laws encourage large numbers of small, independently owned state banks, and large multibank holding companies owning numerous unit banks. Branching laws in most states have been eased in the last several years; permitting geographic expansion and branch banking .Unit banking operate one full banking service. “An independent unit bank is a corporation that operates one office and that is not related to other banks through either ownership or control. It will not drain out the financial resources of villages and small towns to big industrial centers and will ensure a balanced growth. Unit banking system has the following advantages: 1. Local Development:

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Unit banking is localized banking. The unit bank has the specialized knowledge of the local problems and serves the requirements of the local people in a better manner than branch banking. The funds of the locality are utilized for the local development and are not transferred to other areas 2. Promotes Regional Balance: Under unit banking system, there is no transfer of resources from rural and backward areas to the big industrial commercial centres. This tends to reduce regional in balance. (2) BRANCH BANKING: Branch banking center or financial center refers to a single bank which operates through various branches in a city or in different locations or out of the cities. This kind of banking system is common in India. Example. State Bank of India. It offers a wide array of face to face service to its customers. Historically, branches were housed in imposing buildings, often in a neoclassical architecture style. Today, branches may also take the form of smaller offices within a larger complex, such as a shopping mall. Services provided by a branch include cash withdrawals and deposits from a demand account with a bank teller, financial advice through a specialist, safe deposit box rentals, bureau de change, insurance sales (where it is allowed by law), etc. Other financial institutions reduce their costs by having no branches and are sometimes known as virtual banks. T h e branches in small localities can be initially operated at loss in expectation of future gains. The comparative study of unit banking and branch banking is a case of small scale banking versus large scale banking. It is evident that the scale is clearly titled towards branch banking. With the growth of large scale business it is no wonder that the trend is almost every country towards the branch banking i.e. big banks with a network of branches all over the country. Even in the U.S.A. The birth place of unit banking. The Bank of America has now more than 500 branches in the state of California itself.

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Types of branches Traditional or brick-and-mortar These are typically stand alone branches of a financial institution that often are contained in its own building.S. (3) CHAIN BANKING: Chain banking is a situation in which three or more banks that are independently chartered are controlled by a small group of people. They may be full service branches or limited service branches. This term was granted as a trademark by the U. The arrangement can also be managed with the establishment of interlocking directorates or boards of directors that effectively create a network between the banks without the need for some type of central holding company. Green Branch Green Branch is a federally registered trademark to denote the environmentally friendly construction and design of retail banking locations. In-store These are typically branches located in a retail space such as a grocery or discount store. They may include access to drive-through teller windows. The basis for the federal patent office‟s approval of PNC‟s trademark application included the determination that financial and banking services are not generally associated with environmentally friendly or ecologically efficient characteristics. and video banking systems. The mechanisms used to establish this type of arrangement normally involve securing enough stock between the individuals to have a controlling interest in each of the bank corporations involved. These branches typically offer full service banking including safe deposit boxes. 11 . videoconferencing. Patent and Trademark Office on 16 January 2007 to the PNC Financial Services Group. These branches have limited staff and typically include technology as a means to deliver banking services such as the use of automated teller machines. They generally do not include a drivethrough teller windows or safe deposit boxes.

and our wide range of global correspondent banking services. if the group establishes a banking relationship with the institution. with more than 3. Both the systems aim at gaining the advantages of large scale operations.000 strategic banking relationships worldwide. effectively creating an umbrella under which all the banks operate. The banks are able to pool their resources in case of emergency or when large amount of cash is required. increase profits. many banks may offer group seminars. You and your customers benefit from our international reach. a situation where all local branches of a bank are owned by a single banking institution. Also. We maintain one of the largest correspondent bank networks in the U. (5) CORRESPONDENT BANKING: Attract new business. the group banking model requires a holding company to own all the banks involved. Direct correspondent services Choose from more than 50 products and services that can help you meet your customers‟ banking needs. Chain banking is also different from branch banking. By contrast. and a bank contact which is generally more knowledgeable with the group's plan and needs. Some other benefits of group-banking plans include a single point of contact for the group. such as employees at a company.The concept of chain banking is different from group banking. Potential incentives for group banking can include lower interest rates. and overseas. (4) GROUP BANKING: A plan offered by banks that generally provides incentives for groups. including: 12 .S. in that the entities involved in the chain bank arrangement remain autonomous and are not owned by a single holding company. our relationship-based approach and high level of expertise. and function more efficiently by working with a correspondent bank that offers the advice and expertise you need to stay competitive. lower fees and discounts.

    Treasury management Credit services Foreign exchange International trade and finance 13 .

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a. Current account: Businessman who are required to withdraw money every new and then banks do not pay any interest on the account. Savings Account: This type of deposit suits to those who just want to keep their small savings in a bank and might need to withdraw them occasionally. Banks provide a certain rate of interest on the minimum balance kept by the depositor during the month. Such advances are usually made to other banks and financial institutions onl y. amount of deposit. Fixed or time deposit account: The receipt indicates the name of the depositor. Loans: 15 . he can withdraw the same after paying the discount to the bank. rate of interest and the period of deposit. If the depositor stands in need of the amount before the expiry of fixed period. Any sum or any number of withdrawals can be presented by such an account holder. It is called Fixed Deposit Receipt b. but they have to pay interest on extra amount they have withdrawn. Money at Call: It is the money lent for a very short period varying from 1 to 14 days. Overdrafts are allowed to provide temporary accommodation since the extra amount withdrawn is payable within a short period. Overdraft Facilities: Customers of good trading are allowed to overdraw from their current account. b. In the Interbank market it enables bank to make adjustment according to their liquidity requirements. c.PRIMARY FUNCTIONS: 1 People can deposit their cash balances in either of the following accounts to their convenience:a. c. This receipt is not transferable.

A) Agency Functions Banks act as agents to their customers in different ways:16 . which in fact is a bill of exchange. a negotiable instrument. e. f. Banks prefer to buy government securities as these are considered to be the safest investment. Under this method. general utility and social functions . SECONDARY FUNCTIONS Besides the above primary functions. Investment in Government Securities: Purchasing of government securities by the banks amount to advancing loans by them to the government. The debtor withdraws the amount within this limit. When the bank has satisfied itself regarding the soundness of the party. Although a cheque is not a legal tender money. Cheque system is the main credit instrument in the banking world. the serves as a medium of exchange in a limited way as it is a negotiable instrument. In the modern days they can also be used for transferring funds from one country to another. For example: I n d r a Vikas Patra: It enables the banks to meet requirement of statutory liquidity ratio (SLR) 3) Credit Creation: Cheque system of Payment of Funds A cheque. Discounting bill of exchange: It is another method of the making advances by the banks. d. Cash Credit: The Debtor is allowed to withdraw a certain amount on a given security. a loan is advanced. is the most popular credit instrument used by the client to make payments. bank gives advance to their clients on the basis of their bills of exchange before the maturity of such bills. drawn upon a banker. banks also perform may secondary functions such as agency functions.Loans are granted by the banks on securities which can be easily disposed off in the market. cheques can be and are used for transferring funds from one centre to another. Because of “clearing houses” and “clearing” operations of the banks. interest is charged by the bank on the amount actually withdrawn.

926. 1. the bank has reported net profit of 3. For the fiscal year 2010-11. etc. RETAIL BANKING SERVICES HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. interest etc. stock exchange members and banks. The Bank is positioned in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits.1% from the previous fiscal. The Bank launched its credit card business in late 2001.com are not available 24X7. By March 2009. With Finest of Technology and Best of Man power in Banking Industry HDFC BANK's retail services have become by and large the best in India and since the contribution to CASA i.i) Collection and Payment of Credit and Other Instruments: The Commercial banks collect and pay cheques.471 ATMs. in 996 cities in India.3 million). HDFC HDFC Bank Limited (BSE: 500180. Total annual earnings of the bank increased by 20. The Bank is also one of the leading players in the “merchant acquiring” business with over 70. 17 .com and hdfcsec. HDFC Bank has 1. etc. promissory notes. This has become a habit of HDFC Bank.1 Private Sector Bank. The bank is also a leading provider of for its corporate customers. HDFC Bank is one of the Big Four banks of India. The bank was promoted by the Housing Development Finance Corporation. rent. 2012. NSE: HDFCBANK. As of 30 September 2008 the bank had total assets of Rs. mutual funds. Loans.4 crore (US$4.30 crore (US$783.84 billion) in 2010-11. ICICI Bank and Punjab National Bank. up 33. hundies.37% reaching at 24..82 billion.263. and all branches of the bank are linked on an online real-time basis.HDFC BANK has full potential to become India No.1006. the bank had a total card base (debit and credit cards) of over 13 million. a premier housing finance company (set up in 1977) of India. NYSE: HDB) is an Indian financial services company that was incorporated in August 1994.000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments.e. along with: State Bank of India.986 branches and over 5. Bill Payments. total number of current and savings account of more than 50% . HDFC Bank website including hdfcbank. bills of exchange. HDFC Bank is the fourth largest bank in India by assets and the second largest bank by market capitalization as of February 24.

SBI is ranked #292 globally in Fortune Global 500 list in 2011. STATE BANK OF INDIA State Bank of India (SBI) (NSE: SBIN. it had assets of US$ 370 billion with over 13. and Equities. If the website is not available they are asked to visit their home branch. The bank traces its ancestry to British India. Bank of Calcutta and Bank of Bombay to form Imperial Bank of India. through the Imperial Bank of India. These services are provided through the bank's Treasury team. which in turn became State Bank of India. DISTRIBUTION NETWORK HDFC Bank is headquartered in Mumbai and has a nationwide network of 2000 branches spread in 996 towns and cities across India. BSE: 500112. To comply with statutory reserve requirements.Customers of the HDFC Bank are requested to check the website availability 24 X 7 and if available can do the transaction. assets and market capitalization. As of March 2011.000 outlets including 150 overseas branches and agents globally.998 networked ATMs 2. LSE: SBID) is the largest banking and financial services company in India by revenue. Maharashtra. The Bank also has 5. It‟s a stateowned corporation with its headquarters in Mumbai.Foreign Exchange and Derivatives. to the founding in 1806 of the Bank of Calcutta. TREASURY Within this business. with the Reserve Bank of India taking a 60% stake. The government of India nationalized the Imperial Bank of India in 1955. and renamed it the State Bank of India. Bank of Madras merged into the other two presidency banks. Local Currency Money Market & Debt Securities. In 2008. the government took over the stake held by the Reserve Bank of India. The Treasury business is responsible for managing the returns and market risk on this investment portfolio. making it the oldest commercial bank in the Indian Subcontinent. 18 . the bank is required to hold 25% of its deposits in government securities. the bank has three main product areas .

HISTORY OF STATE BANK OF INDIA The roots of the State Bank of India rest in the first decade of 19th century. acquired a controlling interest in the Imperial Bank of India. SBI has acquired local banks in rescues. The Bank of Bengal was one of three Presidency banks. all use the same logo of a blue circle and all the associates use the "State Bank of" name. the State Bank of Saurashtra. followed by the regional headquarters' name. ASSOCIATE BANKS SBI has five associate banks. and the reorganized banking entity took as its name: Imperial Bank of India. On 30 April 1955. which had 120 branches. one of its associate banks. The Presidency banks amalgamated on 27 January 1921. the Imperial Bank of India became the State Bank of India. in 1985. On 13 September 2008. it acquired the Bank of Cochin in Kerala. merged with the State Bank of India. The Imperial Bank of India remained a joint stock company Pursuant to the provisions of the State Bank of India Act (1955). In 1959. the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). SBI was the acquirer as its affiliate. the Reserve Bank of India. later renamed the Bank of Bengal. enabling the State Bank of India to take over eight former state-associated banks as its subsidiaries. the government passed the State Bank of India (Subsidiary Banks) Act. the State Bank of Travancore. For instance. when the Bank of Calcutta. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act.  State Bank of Bikaner & Jaipur 19 . already had an extensive network in Kerala. All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. was established on 2 June 1806. The government of India recently 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. which is India's central bank. a right they retained until the formation of the Reserve Bank of India.

reducing the number of state banks from seven to six.119 crore as on March 2009. SBI Capital Markets Ltd 2. SBI Funds Management Pvt Ltd 3. Then on 19 June 2009 the SBI board approved the merger of its subsidiary. Total assets of SBI and the State Bank of Indore stood at Rs 998. and the SBI Indore Branches started functioning as SBI branches on 26 August 2010 NON-BANKING SUBSIDIARIES Apart from its five associate banks. emphasizing the development of rural India. following the acquisition.448 and over 21.77 The acquisition of State Bank of Indore added 470 branches to SBI's existing network of 12. SBI's total assets will inch very close to the Rs 10-lakh crore mark. SBI holds 98.000 ATMs. (Individuals who held the shares prior to its takeover by the government hold the balance of 1. SBI Factors & Commercial Services Pvt Ltd 20 . State Bank of Indore.    State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore Earlier SBI had only seven associate banks that constituted the State Bank Group. Originally. with itself. In tune with the first Five Year Plan. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline operations The first step towards unification occurred on 13 August 2008 when State Bank of Saurashtra merged with SBI.3% in State Bank of Indore. the then seven banks that became the associate banks belonged to princely states until the government nationalized them between October 1959 and May 1960. SBI also has the following non-banking subsidiaries: 1. the government integrated these banks into the State Bank of India system to expand its rural outreach. The process of merging of State Bank of Indore was completed by April 2010. Also.

the bank had a network of 3057 branches. a philanthropist. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence. In 1985. a branch in London. The bank changed its name to Canara Bank Limited in 1910 when it incorporated. As on 2009 November. In June 2006. Canara Bank occupies a premier position in the comity of Indian banks. In 1976. at Mangalore. attaining the status of a national level player in terms of geographical reach and clientele segments. established the Canara Hindu Permanent Fund in Mangalore. NSE: CANBK) is an Indian state-owned financial services company headquartered in Bangalore. Today. Moscow. Hong Kong. SBI DFHI Ltd 3. Widely known for customer centricity. in July 1906. on 1 July 1906. SBI Cards & Payments Services Pvt. Canara Bank acquired Lakshmi Commercial Bank in a rescue.4. the Bank completed a century of operation in the Indian banking industry. The eventful journey of the Bank has been characterized by several memorable milestones. Karnataka. Doha. Canara Bank inaugurated its 1000th branch. Eighties was characterized by business diversification for the Bank. making it one of the oldest banks in the country. Canara Bank was founded by Shri Ammembal Subba Rao Pai. then a small port in Karnataka. With an unbroken record of profits since its inception Ammembal Subba Rao Pai. a great visionary and philanthropist. The bank also has offices abroad in London. Shanghai. It was established in 1906. Canara Bank opened its first overseas office. Ltd. In 1983. 4000atms spread across India. (SBICPSL) 5. Growth of Canara Bank was phenomenal. 21 . especially after nationalization in the year 1969. CANARA BANK Canara Bank (BSE: 532483. and Dubai. India.

4. Life Insurance Corporation of India (LIC). To transform the financial institution not only as the financial heart of the community but the social heart as well. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I). In 1996 Canara Bank became the first Indian Bank to get ISO certification for “Total Branch Banking” for its Seshadripuram branch in Bangalore. Canara Bank opened its third foreign operation. To develop a concern for fellow human being and sensitivity to the surroundings with a view to make changes/remove hardships and sufferings.. FOUNDING PRINCIPLES     To remove superstition and ignorance. In 2008-9. The New India Assurance Company. (BSE: 532215. General Insurance Corporation Ltd. Canara Bank established a subsidiary in Hong Kong.. formerly UTI Bank. Canara Bank has now stopped opting for ISO certification of Branches. To spread education among all to sub-serve the first principle. To inculcate the habit of thrift and savings. To work with sense of service and dedication. after the Government of India allowed new private banks to be established. this one a branch in Shanghai. LSE: AXBC) is an Indian financial services firm that had begun operations in 1994. The Oriental Insurance Corporation and United India Insurance Company 22 . National Insurance Company Ltd. AXIS BANK Axis Bank Limited.    To assist the needy.In 1985. Indo Hong Kong International Finance.

74 billion) and a net profit of 1. Shikha Sharma was named as the bank's managing director and CEO on 20 April 2009. retail assets are around 57 per cent (Rs 28. Even over a longer period. 2011). retail exposures grew at a slower pace. a unique mobile payments solution using Axis Bank debit cards.UTI-I holds a special position in the Indian capital markets and has promoted many leading financial institutions in the country.800 crore in June 2006 to around 23 per cent of loan book of Rs. The Bank has loans now (as of June 2007) account for as much as 70 per cent of the bank‟s total loan book of Rs 2. If the sharp decline in the retail asset book in the past year in the case of Axis Bank is part of a deliberate business strategy. In the case of Axis Bank.68 million). Axis Bank announced the launch of 'AXIS CALL & PAY on atom'. The Bank has a network of over 6270 ATMs (as on 31st March. On 24 February 2010. Despite the slower growth of the retail book over a period of time and the outright decline seen in the past year. the bank‟s fundamentals are quite resilient. Axis Bank is the first bank in the country to provide a secure debit card-based payment service over IVR BRANCH NETWORK The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai.93 crore (US$361. With the high level of mid-corporate and wholesale corporate lending the bank has been doing. one would have expected the net 23 . The Bank has a very wide network of more than 1281 branches and Extension Counters (as on 31st December.41. retail loans have declined from 30 per cent of the total loan book of Rs 25.04 crore (US$2. As on the year ended 31 March 2009 the Bank had a total income of 13.000 crore.812.00. For HDFC Bank. this could have significant implications (not necessarily negative) for the overall future profitability of the business. P. 2010). J.280 crore (as of June 2007). After the Retirement of Mr. The bank changed its name to Axis Bank in April 2007 to avoid confusion with other unrelated entities with similar name.000 crore) of the total loans as of March 2007.745. At the end of September 2010. Nayak. while the overall asset growth for Axis Bank has been quite high and has matched that of the other banks.

63%.15 per cent seen in 200304. The bank. appears to have insulated such pressures.interest margins to have been under greater pressure. Interest margins. while they have declined from the 3.60 per cent and 4 per cent respectively. The Bank today is capitalized to the extent of Rs. 24 . The margins for ICICI Bank are lower despite its much larger share of the higher margin retail business. 409. since funding costs also are higher).200 feet above sea level. It is also listed in the top 100 most trusted brands of India in the Brand Trust report . though. Axis Bank operates the worlds highest ATM site at Thegu.90 crores with the public holding (other than promoters and GDRs) at 53. are still hovering close to the 3 per cent mark. Sikkim at 13. (The comparable margins for ICICI Bank and HDFC Bank are around 2.

CHAPTER – 2 REVIEW LITERATURE 25 .

KASPER ROSZBACH (2010) was found that the we use credit rating data from two Swedish banks to elicit evidence on these banks‟ loan monitoring ability. We test this hypothesis by comparing the pricing of loans for bank-dependent borrowers with the pricing of loans for borrowers with access to public debt markets. Loan spreads rise in recessions. This is evidence that bank credit ratings do contain valuable private information and suggests they may be be a reasonable basis for risk management.CHAPTER 2 REVIEW LITERATURE João A. banks with exploitable information should be able to raise their rates in recessions by more than is justified by borrower risk alone. However. 26 . C. We do so by comparing the ability of bank ratings to predict loan defaults relative to that of public ratings from the Swedish credit bureau. Our findings suggest that. controlling for loan. Since hold-up power increases with borrower risk. and that the magnitude of this effect is economically significant. indicating that risk analysis should be based on both public and bank ratings. We test the banks‟ abilility to forecast the credit bureau‟s ratings and vice versa. during recessions. banks do in fact charge higher rates to customers with limited outside funding options. The methods we use represent a new basket of straightforward techniques that enable both financial institutions and regulators to assess the performance of credit ratings systems. but firms with public debt market access pay lower spreads and their spreads rise significantly less in recessions.and firm-specific risk factors. public ratings are also found to have predictive ability for future bank ratings. Santos(2006) was found that the theory suggests that banks' private information about borrowers lets them hold up borrowers for higher interest rates. We show that one of the banks has a superior predictive ability relative to the credit bureau.

and argue that these activities were at the nexus of the crisis. in fact. We use a novel data set that includes credit spreads for hundreds of securitized bonds to trace the path of crisis from subprime-housing related assets into markets that had no connection to housing. the banking system became insolvent. These changes implied higher uncertainty about bank solvency and lower values for repo collateral. and examination of history can help understand the current situation and guide thoughts about reform of bank regulation. Indeed. A banking panic is a systemic event because the banking system cannot honor its obligations and is insolvent. 27 . making it less vulnerable to panic. Concerns about the liquidity of markets for the bonds used as collateral led to increases in repo “haircuts”: the amount of collateral required for any given transaction. not a retail panic.Gary B. the U. depositors ran to their banks and demanded cash in exchange for their checking accounts. Unable to meet those demands. Gorton (2009) was found that the „shadow banking system' at the heart of the current credit crisis is. In the earlier episodes. frequently with securitized bonds. banking system was effectively insolvent for the first time since the Great Depression.S. and resulting in the banking system being insolvent. The current panic involved financial firms 'running' on other financial firms by not renewing sale and repurchase agreements (repo) or increasing the repo margin ('haircut'). which is a very large. Andrew Metrick (2010) was found that the Panic of 2007-2008 was a run on the sale and repurchase market (the “repo” market). short-term market that provides financing for a wide range of securitization activities and financial institutions. was strongly correlated with changes in credit spreads and repo rates for securitized bonds. Unlike the historical banking panics of the 19th and early 20th centuries. Repo transactions are collateralized. a proxy for counterparty risk. With declining asset values and increasing haircuts. forcing massive deleveraging. We find that changes in the “LIB-OIS” spread. the current banking panic is a wholesale panic. the events starting in August 2007 are a banking panic. The earlier episodes have many features in common with the current crisis. New regulation can facilitate the functioning of the shadow banking system. a real banking system – and is vulnerable to a banking panic. We refer to the combination of securitization plus repo finance as “securitized banking”.

should manage the risk efficiently to survive in this highly uncertain world. almost three fourths of the member countries of the IMF experienced significant episodes of systemic crisis and associated bank failures. Credit risk is the oldest and biggest risk that a bank. Only those banks that have efficient risk management system will survive in the market in the long run. Better credit portfolio diversification enhances the prospects of the reduced concentration credit risk as empirically evidenced by direct relationship between concentration credit risk profile and NPAs of public sector banks. Financial Institutions. Kotreshwar (2006) was found that the risk is the fundamental element that drives financial behavior. The effective management of credit risk is a critical component of comprehensive risk management essential for long-term success of a banking institution. apparently easier said than done. We argue that commercial banks are distinguished by a more complex structure of information asymmetry arising from the presence of regulation. by virtue of its very nature of business. This has. risk is omnipresent in the real world. Consideration of corporate governance in banks is. India is no exception to this swing towards market-driven economy. However. the financial system would be vastly simplified. inherits. however. The future of banking will undoubtedly rest on risk management dynamics. Penny Ciancanelli (2000) was found that the wake of far reaching financial system reforms. therefore. acquired a greater significance in the recent past for various reasons. We show how regulation limits the power of markets to discipline the 28 . The aim of this paper is to demonstrate the limitations of that assumption and to propose an alternative conceptual framework more suitable to its analysis. Notably absent in the ensuing debates on the correlation between financial system reforms and systemic crisis was discussion of corporate governance in the affected banks and the role it may have played in the provoking financial crisis. Foremost among them is the wind of economic liberalization that is blowing across the globe. Without risk.G. however.

We first document the rise of shadow banking over the last three decades. we investigate whether bank performance is related to bank-level governance. A central idea of this paper is that the evolution of a bankruptcy “safe harbor” for repo has been a crucial feature in the growth and efficiency of shadow banking. We use this variation to evaluate the importance of factors that have been discussed as having contributed to the poor performance of banks during the credit crisis. its owners and its managers and argue that regulation must be seen as an external force. securitization to move assets of traditional banks off their balance sheets. and government-guaranteed insurance (used to stabilize demand deposits in the 20th century). but was not a central focus of the recent Dodd-Frank Law and thus remains largely unregulated. Gorton(2010) was found that the “shadow” banking system played a major role in the financial crisis. country-level governance. country-level 29 . which alters the parameters of governance in banks. More specifically. As for the rules themselves. there is significant variation in the cross-section of stock returns of large banks across the world during that period. Gary B.bank. We propose the use of insurance for MMMFs combined with strict guidelines on collateral for both securitization and repo as the best approach for shadow banking. This paper proposes principles for the regulation of shadow banking and describes a specific proposal to implement those principles. history has demonstrated two successful methods for the regulation of privately created money: strict guidelines on collateral (used to stabilize national bank notes in the 19th century). and repurchase agreements (“repo”) that facilitated the use of securitized bonds in financial transactions as a form of money. Stulz (2009) was found that the though overall bank performance from July 2007 to December 2008 was the worst since at least the Great Depression. helped by regulatory and legal changes that gave advantages to three main institutions of shadow banking: money-market mutual funds (MMMFs) to capture retail deposits from traditional banks. with regulatory control established by chartering new forms of narrow banks for MMMFs and securitization and using the bankruptcy safe harbor to incent compliance on repo Rene M. and so regulators can use access to this safe harbor as the lever to enforce new rules.

banks with more loans and more liquid assets performed better during the month following the Lehman bankruptcy. After accounting for country fixed effects. banks with more shareholder-friendly boards performed worse during the crisis.regulation. Allen N. in order to perform these functions. We argue that financial intermediation can resolve these liquidity problems that arise in direct lending. and bank capital requirements. We find that data on the U. Borrowers are concerned about liquidity because they are uncertain about their ability to continue to attract or retain funding. 30 . Berger (2003) was found that the corporate governance theory predicts that leverage We are also the first to employ a simultaneous-equations model that accounts for reverse causality from performance to capital structure. as well as buffer firms from the liquidity needs of their investors. economically significant.S. We also control for measures of ownership structure in the tests. and bank balance sheet and profitability characteristics before the crisis. and the results are statistically significant. and robust. and so did banks from countries with stronger capital supervision and more restrictions on bank activities Douglas W. A number of institutional features of a bank are therefore rationalized in the context of the functions it performs. We show the bank has to have a somewhat fragile capital structure. we provide some evidence that this may be because these supervisors required banks to raise more capital during the crisis and that doing so was costly for shareholders. banking industry are consistent with the theory. Though banks in countries with more powerful supervisors had worse stock returns. Banks that the market favored in 2006 had especially poor returns during the crisis. This model can be used to investigate important issues such as narrow banking. Large banks with more Tier 1 capital and more deposit financing at the end of 2006 had significantly higher returns during the crisis. Banks enable depositors to withdraw at low cost. Using conventional indicators of good governance. subject to bank runs. Investors desire liquidity because they are uncertain about when they will want to eliminate their holding of a financial asset. Diamond (1998) was found that both investors and borrowers are concerned about liquidity. Banks in countries with stricter capital requirement regulations and with more independent supervisors performed better.

CHAPTER – 3 RESEARCH METHODOLOGY 31 .

the „questionnaire Method‟ is used for collection of primary data by getting the questionnaires filled up by the people who have some knowledge about the particular knowledge of the field. (3.1) Primary Sources: . designing methods of data collection.1) Objectives of the Study: To compare the performance of these selected public and private banks operating in India.The required data is collected only from secondary sources.2) Scope of the Study: This project is to find out the impacts of the private and public banks and also find out the ratio analysis of the public and private banks.Primary data is that.  To study the financial position of the banks. The aim of this study is to evaluate thecomparative analysis of public and private sector bank. So. (3. which are collected afresh and happens to be in actual character. The Research Design is rigid and focuses on formulation of objectives. (3.CHAPTER 3 RESEARCH METHODOLOGY (3.  To know the liquidity& profitability position of the banks. This study is a Descriptive Research Study as it describes the facts and characteristics concerning by the bank. data analysis and reporting the findings.3) Research design: A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. (3. 32 .4) Data Collection: .4. collection of data.

(3. the result of the research may not give accurate and reliable information. o Internet. which is collected and compiled for different purposes which are used in research for this study.  Convenience-sampling technique is used for this study which may not give an exact representation of the population.Secondary data is the data. Therefore. o Balance sheet and profit & loss A /c.(3. Books and Bulletin.5.  Sometime the Bank may not give the true and fair information.6) Limitations of the Study  Research work was carried out in different banks working in Ludhiana only.2) Secondary Source: . The secondary data includes material collected from:o Magazines. o Journal. 33 .

CHAPTER .4 RATIO ANALYSIS & INTERPRETATION 34 .

the quick ratio (also sometimes called the acid test ratio) measures a business' liquidity. Current ratio = Current assets / Current liabilities QUICK RATIO Like the current ratio. CURRENT RATIO The current ratio is the standard measure of any business' financial health.1 RATIO ANALYSIS Ratio analysis is a technique of analysis and interpretation of financial statements. meaning it should be tracked monthly or quarterly. By keeping a close eye on this figure. It helps us understand the financial strengths and weaknesses of a firm. This will allow you to take early action to prevent your business from ending up in a difficult position. The ratios are useful only when they are further interpreted. meaning it has twice as many assets as liabilities. you will recognize if it begins to get out of line. The current ratio should be part of your business' basic financial planning. The standard current ratio for a healthy business is two. It calculates a business' 35 . Some of the ratios calculated have been explained below: . However. It will tell you whether your business is able to meet its current obligations by measuring if it has enough assets to cover its liabilities.CHAPTER 4 RATIO ANALYSIS AND ITS INTERPRETATION 4. many financial planners consider it a tougher measure than the current ratio because it excludes inventories when counting assets. A single ratio in itself does not make much of sense.

DEBT EQUITY RATIO = Total long term debts / shareholders funds PROPRIETORY RATIO The proprietory ratio establishes relationship between proprietors funds to total resources of the unit. A high debt equity ratio which indicates that the claims of outsider‟s (creditor‟s) are greater than those of owner‟s may not be considered by the creditors because it gives a lesser margin of safety for them at the time of liquidation of the firm. preferences share capital and reserves. surpluses and total resources refer to total assets .This relationship highlights the fact as what is the proportion of proprietors and outsiders in financing the total business. By tracking it monthly. especially for businesses that can tie up a lot of assets in inventory. we can keep an eye out for negative trends that could hamper our business' ability to meet its obligations. We can also use the quick ratio to evaluate the financial health of potential customers. A low ratio is considered as favorable from the long-term creditors point of view because a high proportion of owner‟s fund provide a larger margin of safety for them. This is an important planning tool. the higher your business' level of liquidity. since it also indicates whether a business can pay off its debts quickly. The higher the ratio is. A firm with a low quick ratio may be more likely to delay payments because its assets are tied up elsewhere. Where proprietors funds refer to Equity share capital.liquid assets in relation to its liabilities. 36 . Caution to be taken as a very high ratio may be unfavorable from the point of view of the firm as its hard to get credit without paying a very rate of interest and without accepting undue pressure and conditions of the creditors. Quick ratio = Quick assets / Current liabilities DEBT EQUITY RATIO The debt equity ratio is ideally 1:1. which usually corresponds to its financial health. The optimal quick ratio is 1 or higher.

Current assets to proprietors funds ratio = Current assets / Shareholders funds 37 . There is no „rule of thumb‟ for this ratio and depending upon the nature of the business there may be different ratio for different firms. Return on equity = Net profit after interest & tax . This ratio is a measure of the overall profitability. The company with higher ROE is favoured by the investors. The ratio indicates what portion of the net sales is left for the owners after all expenses have been met. Net profit is arrived at after taking into account both the operating and non operating items of incomes and expenses. plus reserve and retained earnings.Proprietory ratio = Proprietors funds / Total assets FIXED ASSETS TO NET WORTH RATIO The ratio establishes the relationship between fixed assets and shareholders funds i.pref. Fixed assets to net worth ratio = Fixed assets (after dep. dividend / Equity share capital NET PROFIT RATIO Net profit ratio expresses the relationship between net profit after taxes and sales.share capital .e. Net profit ratio = Net profit after tax / Net sales RATIO OF CURRENT ASSETS TO PROPRIETORS FUNDS The ratio indicates the extent to which proprietors funds are invested in current assets.) /shareholders funds RETURN ON EQUITY The purpose of this ratio is to find out how efficiency the funds supplied by the shareholders have been used.

TOTAL ASSET TURNOVER RATIO This ratio establishes the relationship between net sales and average total assets. Total asset turnover ratio =Net sales / Average total assets 38 . A high ratio indicates a high degree of efficiency in the utilisation of total assets and a low ratio represents inefficient use of assets. This ratio measures the efficiency.

381 0.44 to 0..8 0.381 0. 39 .7 0.377 Hdfc bank Axis bank State bank of India Canara bank 0.69 0.72 0.43 0.326 0.6 0.363 0.INTERPRETATION : Current Ratio Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 0.51 over the last four years.69 0.513 0. Current Ratio of Axis Bank has been decreased from 0.83 0.377 0.1 0 0.396 0.46 0. We conclude that liquidity position of Canara bank is much better as compared to others because its Current ratio has been increased from 0.424 0.513 0.46 0.518 0.363 2011 2010 2009 2008 Interpretation Current Ratio of HDFC Bank has been improved from 0.396 0.72 0.424 0.389 0.396 0.51 to 0.43 0.3 0.326 over the last four years.326 0.4 to 0.4 0.83 0.518 0.389 0.396 0.2 0.44 0.44 0.5 0.8 over the last four years.9 0.

396 0.424 20082007 0.46 to 0.396 0.4 0.9 0. Quick Ratio of SBI Bank has been improved in year 2009 but it has been decreased in year 2010 and improved in 2011.6 0.396 0.51 to 0.424 0.326 0.51 over the last four years. 40 . Quick Ratio of Axis Bank has been decreased from 0.44 to 0.8 0.43 0.377 0. Quick Ratio of SBI Bank has been continuously increased from 0.518 0.513 0.72 0.69 20092008 0.7 0.46 0.72 0.46 0.83 0.2 0.389 0.518 0.3 0.389 0.377 Hdfc bank Axis bank State bank of India Canara bank 0.Quick Ratio Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010 0.44 0.363 0.381 0.69 0.326 0.83 over the last four years.83 20102009 0.513 0.43 0.363 2011 2010 2009 2008 Intrepretation Quick Ratio of HDFC Bank has been improved from 0.326 over the last four years.396 0.381 0.5 0.1 0 0.44 0.

64 15.139 200 180 160 140 120 100 80 60 40 20 0 188.91 32.Debt Equity Ratio Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 30.94 28.1928.29 162.38 28.64 63.98 42.25 84.72 6.216 6.314 12.19 20.72 188.6 63.98 42. 41 .139 2009 2008 81.94 32.38 30.21 12.37 15.216 20.21 6.25 Hdfc bank 84.37 17.58 17.58 28.29 162.314 6.6 81.91 Axis bank State bank of India Canara bank 2011 2010 Interpretation The solvency position of HDFC bank is better because they have lower debt equity ratio it means they depend on shareholders funds as compared to other banks.

046 0.06 0.089 0.089 0.06 0.08 0.069 0.09 0.079 0.07 0.05 0.068 Hdfc bank 0.06 0.1 0.097 0.08 0.053 0.09 0. We conclude that solvency position of HDFC Bank is better as compared to other banks.03 0.08 0.053 0.046 0.047 2011 2010 2009 2008 Interpretation Proprietory Ratio of HDFC Bank and Canara Bank has been increased it means they depend on proprietors funds not on outsiders funds.078 0. Proprietory Ratio of Axis Bank and SBI Bank has been decreased so it means they depend on outsiders funds.068 0.097 0. 42 .Proprietory Ratio Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 0.078 0.01 0 0.046 0.04 0.086 0.086 0.06 0.069 0.053 0.06 0.053 0.079 0.046 Axis bank State bank of India Canara bank 0.047 0.02 0.09 0.

102 0.FIXED ASSET TO NET WORTH RATIO Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 0.35 0.352 0.099 0.05 0 2011 2010 2009 0.073 0.292 0.2 0.073 0.06 0.292 0.06 0.15 0.1 0.062 0.068 0.158 0.25 0.064 Canara bank 2008 Interpretation Higher Ratio indicates high degree of efficiency in the utilization of fixed assets.009 0.085 0. So we conclude that efficiency of all banks have been increasing year by year.158 0.09 0.085 0.228 0.099 0.102 0.116 0.064 0.09 0.009 0.099 0.068 0.352 Hdfc bank Axis bank State bank of India 0.116 0.228 0.099 0.4 0.062 0. 43 .3 0.

44 .06 13.39 8.24 5.056 2.107 5.056 4.24 6.97 10. Canara Bank and Axis Bank are highly satisfied because it has been increased in last four years.918 3.907 8.918 4.39 Hdfc bank 7.17 6.34 8.206 5.198 6.994 11.198 4.22 14. ROE of SBI Bank has been declined in year 2011 so it is not favourable for investors.994 Axis bank State bank of India Canara bank 2010 2009 2008 Interpretation ROE of HDFC Bank .206 5.25 6.107 4. Higher Return on Equity shows favourable position of the banks.68 2.22 8.Return On Equity Capital Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 8.17 14.25 8.68 16 14 12 10 8 6 4 2 0 2011 11.97 10.34 3.907 7.06 13.

076 0.02 0 0.106 0.155 0.161 0.119 0.18 0.122 0.16 0.171 0.115 0.113 0.06 0.171 0.129 0.1 0.147 0.106 0.132 0. Axis Bank and Canara Bank have been increased over the last four years.Net Profit Ratio Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 0.12 0.107 0.113 0.122 0.139 0.14 0.095 Hdfc bank Axis bank State bank of India Canara bank 0.161 0.095 0.132 0.147 0.04 0.161 0. 45 .115 0. it shows their profitability position is better as compared to SBI Bank.161 0.076 2011 2010 2009 2008 Interpretation The Net Profits of HDFC Bank.08 0.155 0.129 0.119 0.107 0.139 0.

8 1.458 1.285 0.567 1.5 0.458 1.711 1.567 1.391 1.391 1. 46 .89 1. and depending upon the nature of the business.659 2.088 0.169 1.8 1.195 0.37 1.155 2.37 1. There is no rule of thumb.088 0 2011 2010 2009 2008 1.155 2 1.947 1.Ratio Of Current Assets To Proprietors Funds Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 1.285 Hdfc bank Axis bank State bank of India Canara bank Interpretation The ratio indicates the extent to which proprietors funds are invested in current assets.711 1.426 1.47 1.5 2.426 1.47 1.659 1.947 1.89 1.195 1.169 1.5 1 0.

159 0.185 0.178 0.185 0.157 0.163 0.185 0.164 0. As compare to all banks profitability position of HDFC bank is highly satisfied.18.05 0 2011 2010 2009 2008 0.157 0.183 0.1 0.154 0.172 0.164 0.178 0.163 0.185 0.18 0.15 0.176 0.162 0.216 0.159 0. in which ratio was 0.162 0.176 0. 47 .183 0.18 0.172 0.154 0.163 0.25 0.175 in year 2011 as compared to year 2010.158 Hdfc bank Axis bank State bank of India Canara bank Interpretation The total asset turnover ratio of HDFC bank has decreased to 0.158 0.Total Asset Turnover Ratio Particulars Hdfc bank Axis bank State bank of India Canara bank 20112010200920082010 2009 2008 2007 0.163 0.2 0.216 0.

CHAPTER – 5 FINDINGS 48 .

and SBI banks .   The Quick ratio of Canara bank is satisfied as compared to HDFC . liquidity position of Canara bank is better as compared to other banks.17.  Higher ratio indicates high degree of efficiency in the utilization of fixed assets.4 to 0.8 over the last four years. Ratio of current assets to proprietors fund has no thumb rule as it depends upon the nature of the business. The solvency position of HDFC bank is better because they have lower debt equity ratio it means they depend on shareholders funds as compared to other banks. SBI and Canara bank because its total asset turnover ratio is higher.CHAPTER -5 FINDINGS  The current ratio of Canara bank is better than other banks because its current ratio has been improved from 0.     ROE of HDFC Bank . AXIS . Higher ROE shows favourable position of the banks for investors. So. 49 .So its liquidity position is better than other banks.The Solvency position of HDFC is better as compared to other banks. we conclude that efficiency of all banks have been increasing year by year.12 to 0. The profitability position of Axis bank is better than other banks because is Net Profit ratio has increased 0. Canara Bank and Axis Bank are highly satisfied because it has been increased in the last four years . The profitability position of HDFC bank is highly satisfied as compared to Axis. So.  The Proprietory ratio of HDFC bank has increased it means they depend on proprietors funds not on outsiders funds .

CHAPTER – 6 CONCLUSION 50 .

So the new coming bank sector has to provide the carter to all the needs of the customers otherwise it is difficult to survive in the competition coming up. Banks need to have a better outlook towards to actually what customers are requiring. Entries of the private sector banks have made the competitions.CHAPTER -6 CONCLUSION These days are not only exposed of what type of service is being provided by banks in India but in the world as a whole. If a bank is not functioning properly it is being closed. scenario. In this. They expect much more than what is actually being provided. So it is difficult to face these types of conditions. 51 . it is imperative that banks adopt technology at an aggressive pace. Here a simple philosophy can work that customers are God and we need to follow this to survive and serve better. The banking sector is poised for explosive growth. They not only expect the safety to money but also best ways to invest that money which need needs to fulfilled.

CHAPTER – 7 BIBLIOGRAPHY 52 .

hdfcbank. ssi .com        ww w.org www.pdf www.indiainfoline.com www.securities.forex. http://www.com www.pdf http://www.com www. 53 .stockscharts.in/commonman/Upload/English/Content/PDFs/71207. com ww w.com www.com www.com www.hdfcbank.ac-markets.easyforex.rbi. i n www.CHAPTER 7 BIBLIOGRAPHY Internet links:             www.in/rdocs/Content/pdfs/nonschedulecoop.moneycontrol.rbi.indiainfoline.com/common/pdf/corporate/HDFC_Bank_Annual_Report_0809_I. pdf.com www.pdf http://rbidocs.org.google.ni c. r es e a rc h and m a rk et s .org.indiainfoline.etgmr.com www.rbi.com  www.com www.com www.karvy.com www.in/commonman/Upload/English/Content/PDFs/71206.com www.gftforex.org.rbi.idbi.com.

GUPTA 54 .public.org.axisindia..private.iba.. Retrieved 2010-08-20.banks/27399/ www. www.in/ www.hdfclife.axisbank.com/.co.in/ibavisn.  http://articles..hdfcsec.hdfcfund..indiatimes. Livemint.co.com/24x7banking/.com/mfonline en..com www.org.com/2009/01/14225111/HDFC-Bank8217s-advances-shr.knowledgestom.scribd.com www.com/guide/.business-standard./icai-for-branch-level-audit-of-private-sector-banks-..com www.com.org/wiki/HDFC_Bank www.bankbazaar./Internet-Banking.doc artinvestor. 2009-0114.hdfcbank.. www.sify.com https://www.aspx https://investor.ijimt./loans-98877-loansdet- ICAI_f.html.rates..axisbank.com/ www.pdf sm www.centurionbop.com/default..org/papers/140-M582.in/ www.economictimes.wikipedia.. http://www..Livemint 14th January 2009".com/.in › Publications www.com/2011-04-18/news/29444004_1_hdfc-bankq4-net-profit-cent-jump HDFC bank shrinks advances .org/wiki/Axis www..co.rbi.livemint.                     www.com/ www...in www.com Books referred:  FINANCIAL MANAGEMANT BY SHASHI K..statebankofindia.wikipedia.asp en..moneycontrol.igniter.

KOTHARI 55 .R. FINANCIAL MANAGEMANT BY KHAN AND JAIN RESEARCH METHODOLOGY :  C.

8 ANNEXURE 56 .CHAPTER .

433.88 20.510.52 7.44 10.00 7.356.00 324.20 2.301.91 3.00 545.70 -0.08 2.42 120.00 301.928.BALANCE SHEET AND PROFIT AND LOSS ACCOUNT HDFC Profit & Loss account of HDFC Bank 2011-10 Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 19.12 1.045.290.00 8.172.470.851.403.545.948.40 -2.98 0.532.in Rs.887.197.244.004.15 0.35 974.786.238.28 1.63 4.80 10.79 271.51 24.38 4.53 16.557.169.79 8.94 -0.911.34 0.77 100.63 19.26 359.36 3.72 9.983.49 0.932.455.96 2.41 5.66 1.38 12.926.22 0.00 2.522.82 497.590.810.10 2.39 3.06 1.574.26 3.00 470.11 17.04 2.29 52.935.41 1.20 17.23 64.115.730.802.20 1.90 3.82 2.21 4.93 3.59 2.53 84.034.289.00 425.12 0.03 3.836.29 91.89 8.295.00 767.18 3.205.395.65 4.38 72.38 ------------------.62 19. Cr.72 3.32 3.27 51.205.97 0.385.320.54 0.456.361.00 3.19 16.18 -0.57 6.30 2.332.83 394.20 44.40 165.00 7.435.818.907.703.87 85.00 549. ------------------2010-09 2009-08 2008-07 57 .62 124.00 344.

122.681.170.82 4.05 159.55 935.25 224.56 2.992.52 392.270.404.62 183.33 641.940.60 582.955.00 4.38 425.78 396.47 28.90 49.13 20.594.403.00 14.19 13.497.77 2008-07 354.58 2.86 1.244.18 2.43 0.23 100.707.Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 997.87 640.586.23 465.61 559.73 142.83 183.99 436.386.21 3.75 0.47 2.236.226.929.97 2.601.02 352.16 2.527. Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 25.62 344.00 11.37 5.06 222.54 2.249.356.85 324.982. Cr.100.394.46 16.176.522.915.02 159.74 457.142.44 12.568.69 133.175.352.431.80 0.455.532.956.426.87 28.90 1.38 400.91 133.615.23 0.553.99 1.64 892.768.15 6.63 2.402.914.69 180.835.42 22.052.62 4.00 0.211.393.41 14.522.43 0.00 25.86 277.50 497.11 125.174.in Rs.00 15.607.24 20.60 ------------------.818.44 12.13 0.94 222.04 0.270.60 4.073.94 17.92 0.458.497.13 470.817.31 17.092.176.979.73 0.939.81 0.24 8.27 208.28 14. ------------------2010-09 457.247.67 70.811.74 0.720.15 222.05 58.15 294.320.458.84 145.55 3.685.064.79 6.574.52 4.59 58.53 465.00 11.379.00 21.459.456.00 0.00 14.00 21.57 4.10 545.585.869.883.225.00 0.830.08 277.60 15.56 466.478.00 6.352.43 354.00 5.21 3.16 63.86 105.49 167.15 Balance Sheet of HDFC Bank 2011-10 Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities Assets Cash & Balances with RBI Balance with Banks.38 58 .706.00 24.41 98.65 0.56 2009-08 425.67 3.483.980.61 3.

796.394.15 248.141.52 116.941.348.34 6.058.88 8.15 85.35 76.75 0.00 776.08 7.00 912.62 6.87 4.993.48 5.02 9.87 106.959.915.55 9.205.76 144.968.36 14. Cr.87 2.92 14.888.74 31.75 0.05 0.080.151.785.523.962.660.935.329.747.19 990.78 42.00 1.00 0.00 246.66 6.950.45 48.60 67.07 47.619.90 2.00 1.30 0.12 0.15 306.322.06 763.66 165.14 8.00 1.73 6.43 58.69 0.57 0.37 300.14 529.121.00 18.66 7.904.35 0.48 12.479.23 0.34 9.841.98 7.09 96.810.319.00 14.69 -0.99 51.532.29 9.370.in Rs.65 236.898.50 2.00 1.31 9.141.929.56 215. ------------------2010-09 70.370.12 7.96 2.788.725.121.00 0.729.43 12.480.122.53 59 .00 1.00 1.754.17 12.50 12.905.038.691.495.00 0.Profit & Loss account of State Bank of India 2011-10 Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt 81.10 1.01 4.357.28 88.358.729.55 5.166.52 ------------------.94 679.34 9.65 7.089.123.00 0.39 0.31 5.867.00 0.398.479.96 14.23 932.023.00 31.76 6.430.609.07 300.165.18 2008-07 48.488.53 76.67 290.34 7.729.40 2.46 0.166.00 24.03 143.41 2009-08 63.

------------------2010-09 634.82 0.30 721.431.44 37.50 205.828.00 0.053.121.20 585.47 0. Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 94.00 0. Cr.81 119.13 3.00 65.00 49.546.777.87 34.947.600.in Rs.00 48.336.053.413.03 721.88 634.34 9.727.94 51.294.62 15.112.46 Balance Sheet of State Bank of India 2011-10 Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities Assets Cash & Balances with RBI Balance with Banks.00 57.526.41 263.449.417.31 61.41 589.00 0.351.931.501.Balance c/f to Balance Sheet Total 0.011.29 1.66 537.57 13.17 48.15 285.713.35 5.00 57.534.223.68 795.401.073.432.70 742.790.85 1.786.34 9.478.77 105.127.312.73 295.39 0.503.857.768.95 332.04 1.403.964.116.986.32 736.57 964.20 804.19 0.69 0.092.053.988.37 166.223.60 907.39 1.652.00 65.73 51.27 8.06 6.038.953.20 ------------------.89 776.00 0.117.574.23 43.568.76 1.96 1.00 64.13 53.849.72 416.83 80.20 275.892.50 28.248.04 0.63 542.914.34 6.08 2008-07 631.733.290.57 0.23 103.949.22 234.166.189.28 8.713.08 614.00 0.65 756.47 631.00 635.023.395.917.33 4.65 3.04 933.403.314.26 44.70 1.35 83.63 7.736.73 2009-08 634.74 429.88 0.20 189.98 631.370.087.88 634.81 110.00 64.34 7.48 60 .719.88 0.729.07 11.47 152.18 35.032.362.27 964.131.45 295.736.757.06 912.32 0.526.76 55.932.40 635.139.413.603.697.831.501.96 10.59 93.432.90 4.

96 3.01 0.97 958.73 2.072.072.55 80.27 173.865.05 2.09 169.17 80.98 25.31 16.15 12.94 1.89 0.15 1.42 0.64 180.29 1.491.752.42 0.119.508.427.00 328.24 17.903.82 151.87 1.44 0.30 80.34 0.49 1.00 3.30 ------------------.00 2.00 0.509.700.08 480.826.00 4.13 18.00 90.064.00 328.751.in Rs.00 244.765.021.28 1.Profit & Loss account of Canara Bank 2011-10 Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt 23.00 202.00 379.666.10 19.817.00 70.36 1.565.35 865.071.481. Cr.70 2.78 13.65 155.200.00 3.00 305.89 0.00 405.74 2.80 14.30 567.00 4.00 1.75 50.74 2.30 614.01 384.146.565.308.420.00 0.10 4.79 756.021.877.00 0.890.00 0.731.84 1.965.944.00 61 .99 15.69 100. ------------------2010-09 18.107.473.01 0.88 110.00 487.03 383.000.00 56.00 3.42 0.33 802.01 2.00 55.82 21.00 38.13 1.75 2008-07 14.164.401.05 10.24 1.00 73.00 5.35 3.43 2.76 0.025.954.546.676.540.240.25 1.04 1.87 21.661.00 2009-08 17.693.83 1.00 1.025.64 1.193.43 0.00 410.662.43 0.203.

565. Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 22.00 3.39 25.00 6.01 Balance Sheet of Canara Bank 2011-10 Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities Assets Cash & Balances with RBI Balance with Banks.68 14.79 6.500.805.32 212.30 7.00 0.47 305.07 1.90 4.99 2.741.00 0.38 0.207.014.204.23 156.87 13.00 0.37 1.00 0.00 2.Balance c/f to Balance Sheet Total 0.04 49.33 62 .334.916.00 443.844.57 4.364.74 405.46 3.63 2.49 154.651.254.851.79 234.89 0.46 2.438.00 1.098.072.00 410.056.719.87 25.025.73 29.63 69.64 336.480.76 111.620.00 4.44 8.060.42 2. Cr.73 244.021.99 138.00 410.741.811.261.82 293.528.56 243.69 95.30 264.in Rs.79 8.61 193.74 2.467.078.699.55 180.684.693.63 202.26 219.16 12.42 0.949.00 7.859.671.95 4.645.61 2.528.132.929.039.75 169.359.299.440.15 336.206.488.337.645.15 1.629.46 2.51 7.517.892.841.216.76 ------------------.219.234.498.83 10.33 1.00 6.11 2.710.69 15.87 0.776.168.238.885.61 2.43 0.627.510.00 0.00 12.00 0.36 20.513.757.440.977.00 17.00 410.078.589.129.12 13.65 14.80 2008-07 410.79 4.00 4.09 2009-08 410.00 443. ------------------2010-09 410.804.972.40 57.00 2.676.092.86 10.686.17 180.00 9.77 186.622.17 83.933.46 0.92 4.00 0.92 264.91 219.036.00 0.02 21.65 308.80 136.041.41 0.65 13.25 107.00 3.072.09 110.

88 13.734.633.786.49 2.572.00 5.00 1.00 284. ------------------2010-09 11.94 60.99 867.03 0.638.53 1.632.07 2.154.32 2.57 0.59 8.00 1.419.10 0.00 1.00 395.36 0.815.32 1.45 3.84 670.00 2.87 3.00 62.06 120.92 0.77 836.50 600.62 0.31 11.53 0.43 6.31 567.00 5.862.05 234.069.61 158.454.896.96 670.00 82.005.66 1.00 251.09 4.37 7.613.27 2.57 100.88 7.55 2.01 251.49 0.945.36 ------------------.149.684.072.45 2009-08 10.583.25 952.00 2.398.60 -0.64 63 .45 0.591.43 0.52 0.02 3.90 2.502.87 1.78 15.59 3.11 1. Cr.55 0.00 420.82 1.732.55 0.00 670.750.81 4.00 245.406.59 289.64 0.42 1.00 50.08 16.427.in Rs.590.00 420.00 567.13 294.815.008.100.368.514.00 29.755.94 0.62 0.177.835.95 338.03 810.348.94 8.13 19.23 0.029.255.388.917.83 188.80 6.76 1.27 997.98 13.36 0.483.00 3.071.82 2.496.67 2.553.066.54 140.443.00 3.369.00 462.52 2008-07 7.91 4.Profit & Loss account of Axis Bank 2011-10 Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt 15.

661.86 242.969.374.27 0.384.125.22 5.505.17 0.588.46 180.330.426.58 59.647.632.305.80 26.23 1.84 78.10 Balance Sheet of Axis Bank 2011-10 Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities Assets Cash & Balances with RBI Balance with Banks.79 1.00 0.88 5.37 128.722.250.577.37 ------------------.06 104.09 3.906. Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 13.00 9.Balance c/f to Balance Sheet Total 4.974.214.71 2.28 0.12 242.369.32 395.04 284.82 2.947.348.647.83 189.99 9.51 109.77 6.50 7.745.45 1.77 46.37 429.03 2.41 57.015.469.624.577.22 17.33 794.107.87 296.19 0.473.626.49 142.00 18.300.410.55 0.407.19 57.62 3.17 0.55 410.80 117.569.01 1.722.998.35 1.24 3.01 359.400.48 127.267.71 357.85 9.87 2.21 5.39 29.597.15 147.169.46 22.343.69 81.185.69 87.741.815.44 16.06 180.00 16.88 215.428.56 104.044.854.04 93.522. Cr.713.13 64 .237.77 6.83 71.10 1.90 109.00 8.55 158.43 4.in Rs.06 2008-07 357.069.705.48 3.639.886.732.556.59 9.80 462.63 57.419.133.69 4.12 55.92 3.756.14 33.991.553.61 141.58 35.21 0.68 8.66 5.70 590.95 245.176.86 726.26 7.84 2009-08 359.427.100.165.77 410.00 10.556.250.00 15.028.559.770.713.11 10.58 0.00 8.67 147.208.198.901.98 942.784.16 7.79 0.17 405.49 1.862.00 18.62 2. ------------------2010-09 405.48 2.