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Declaration

I undersigned here by declared that this project work entitled “Financial statement analysis - worked on STATE BANK OF INDIA. Navsari ” is written & my own work and is submitted by me to NLCCM, Navsari toward the partial fulfilment for award BBA in year 2008 – 2009, this is original report work and report written there in is based on the knowledge and material gained from the bank. It is not to submit to any other university or institutions for any other purpose.

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A Project Report On

“Financial Statement Analysis”
Prepared At

“STATE BANK OF INDIA”
Submitted By

Mr. PRATIK N. KANSARA
T.Y.B.B.A. (Sem-6 th) Roll No. - 15

Under the guidance of Ms. Hetal D. Tandel (Lecturer, NLCCM) Submitted To,

Naranlala College of Commerce & Management, Navsari. Veer Narmad South Gujarat University, Surat. 2008-2009
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COLLEGE CERTIFICATE
This is certify that project on “Financial statement analysis “done at “STATE BANK OF INDIA, NAVSARI.is submitted by MR. KANSARA PRATIK N.,T.Y.B.B.A ,ROLL NO 15 to the NARAN LALA COLLEGE OF COMMERCE & MANAGEMENT ,NAVSARI. In the partial fulfil ment in reqirement for the Degree of Bachelor of Business Administration FROM THE VEER NARMAD SOUTH GUJRAT UNIVERSITY,SURAT .
____________________ ____________________

MS.H.D.Tandel , Guidance , NLCCM.

DR. R.C.GANDHI, DIRECTOR.

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ACKNOWLEDGEMENT
“Experience is the best teacher.”Knowledge is one of the most important tools.Only theoretical knowledge is not exactly applicable in practical life,from this point of view industrial training is important & necessary for a management student .Theoritical knowledge is proved right only often it is rightly applicable on practical base. I also thankful to Mr. J.P.Garasia,Assist. Manager ,SBI NAVSARI for providing mean opportunity to held a project ,providing valuable information ,guidance & consist co-operation through out the training programmed .
I am also thankful to Dr.R.C.Gandhi, Director of Naranlala College of Commerce & Management, Navsari, & Pro. Ms. Hetal .D. Tandel, my project guide, for giving me an excellent and invaluable guidance during the course.

MR. PRATIK N. KANSARA

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OBJECTIVES OF STUDY
To study the Annual report or financial position of the company.

To understand the day-to-day work carry

out by the organization.
To study the bank’s history in brief. To draw meaningful and constructive measure based on analysis. To study the current existing position of SBI Bank’s whole field. To observe the cash inflow & outflow. To check the profitability of bank. To study the policy of the bank. To analyse how the bank is managing its current assets & current liabilities.

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LIMITATIONS OF STUDY
There is no activity that can be completed without any limitation.The main limitation faced during the preparation of this project report on “Financial Statement Analysis”of “SBI” is as follows: Time available for the completion of the project is very short, hence much information could not be undertaken.  The information collected through secondary data.Some of the information might be wrong.  The calculation & computation are based on valuable information given by the bank.  The report is based on the analysis of the last five years data,which may not be sufficient in some cases.  The analysis and conclusion made is as per my limited understanding for this concerned subject.

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METODOLOGY
Preparing the project report is a research analysis,it involves the process of collecting data,analyzing data & reporting data for absolute results. For the preparation of project report on “Financial Statement Analysis” of “SBI Bank”.This project report is based on two types of data i.e. (1)Primary data(2)Secondary data. 1).Primary data:Primary data is the data,which has not been collected & used by somebody else before.In short,Primary data means the data specifically collected for the project.I have collected data from the managers by asking question because it is difficult for me to understand the study. 2)Secondary data:Secondary data is the data,which is collected from published source.I have collected data from various sources such as bank’s annual report of previous year,different document prepared by the bank and from various reference books also.

After the data collection of both the sources, I have analyzed the data & conducted various financial ststement analysis & prepared various graphs.

After analyzing the data,I have derived a conclusion and have made suggestions based on my analysis.

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SYNOPSIS
This project of “Financial Statement Analysis” of State Bank of India is based on all financial information about the bank. The objectives of bank & method of collecting data is clearly define by this project report of bank. The project includes the objectives - To study the Annual report or financial position of the company, to understand the day-to-day work carry out by the organization, to observe the cash inflow & outflow,to check the profitability of bank To study the policy of the bank etc. . . The project indicates the primary (direct) method of collection- as bank’s annual report of previous year,different document prepared by the bank and from various reference books ,from Indian statistical year book,from various websites etc.

In short,this project report is the in- depth study of all kind of “Financial Statements” of the bank which reflects the past,current & future financial position of the bank.

Table of Contents
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Sr. No.

Subject

Page No. 1 3 4 5 6 7 8

 Declaration  College Certificate  Acknowledgement  Objectives Of Study  Limitations Of Study  Methodology

 Synopsis

Ch-1.

About SBI Bank’s Profile Bank Information History of the SBI bank Management of SBI Structure Functions

11 13 14 18 19 22

Ch-2.

Services of SBI bank

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Ch-3.

Capital Structure Shareholding Pattern Dividend Balanceshhet Analysis Cashflow Analysis

56 57 58 60 72

Ch-4.

Profitability Ratio Analysis Deposit Ratio Analysis Operating Cashflows Growth Indicators Overall Conclusion Bibliography

75 80 88 91 93 94

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Chapter-1.

About SBI Bank’s Profile
Spreading its arms around the world, the SBI’s International Banking Group delivers the full range of crossborder finance solutions through its four wings – the Domestic division, the Foreign Offices division, the Foreign Department and the International Services division. The Domestic wing provides services like merchant banking, shipping finance and project export finance. The Foreign Offices wing offers the entire range of international trade and industrial finance products, while the Kolkatta-based Foreign Department undertakes treasury and currency operations. The International Services division renders specialized services like correspondent banking, global link services and country and bank risk exposure monitoring. Being India’s largest and most trusted commercial bank, the SBI offers you a network of relationships unmatched in strength and span by any other Indian financial entity. The bank has a network of 66 offices/branches in 29 countries spanning all time zones. The SBI’s international presence is supplemented by a group of Overseas and NRI branches in India and correspondent links with over 522 leading banks of the world. SBI’s offshore joint ventures and subsidiaries enhance its global stature.
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State Bank of India(SBI) is India’s largest commercial bank. SBI has a vast domestic network of over 9,000 branches (approximately 14% of all bank branches )and commands one-fifth of deposits and loans of all scheduled commercial banks in India. The State Bank Gpoup includes a network of eight banking subsidiaries and several non- banking subsidiaries offering merchant banking services,fund management, factoring services,primary dealership in government securities ,credit cards and insurance. The eight banking subsidiaries are:

1.State Bank of Bikaner and Jaipur(SBBJ) 2.State Bank of Hyderabad(SBH) 3.State Bank of India(SBI) 4. State Bank of Indore(SBIR) 5. State Bank of Mysore(SBM) 6. State Bank of Patiala(SBP) 7. State Bank of SAURASHTRA(SBS) 8. State Bank of Travancore(SBT)

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BANK INFORMATION Head /Corporate office: New Administrative Bldg. Madam Cama Road, Mumbai– 400021. Incorporation year: 1955 Ownership group: State Bank of India Group Main activity: Banking services Listed on: Bombay Stock Exchange (BSE) Calcutta Stock Exchange London Stock Exchange (FTSE) National Stock Exchange (NSE)

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History of the SBI Bank
The origins of State Bank of India date back to 1806 when the Bank of Calcutta(later called the Bank of BENGAL)was established.In 1921,the Bank of Bengal and two Presidency Banks(Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India.In 1955,the controlling interest in the Imperial Bank of India was acquired by the Reserve Bank of India and the State Bank of India came into existence by an act of Parliament as successor to the Imperial Bank of India. Today,State Bank of India(SBI)has spread its arms around the world and has a network of branches spanning all time zones.SBI’s International Banking Group delivers the full range of cross-border finance solutions through its four wings-the domestic division, the foreign department ,foreign offices division and the international services division.

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MILE STONES: 1949:Entactment of Banking Regulation Act, 1955:Nationalisation of State Bank of India, 1959: Nationalisation of State Bank of India’s subsidiaies, 1961:Insurance cover extended to deposits, 1969: Nationalisation of 14 Major Banks, 1971:Creation of Credit guarantee corporation, 1975: Creation of regional rural banks, 1980: Nationalisation of seven banks with deposits over 200 crore.
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Mission
SBI Bank's mission is to be a world-class Indian Bank. The Bank's aim is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services in the segments that the bank operates in and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity and regulatory compliance. SBI Bank's business philosophy is based on four core values: Operational Excellence, Customer Focus, Product Leadership and People.

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GOAL AND OBJECTIVES
Business Objectives The SBI branch was opened with the objectives to foster the trade between India and Japan through trade finance products and to help Indian Corporates to access the financial market in Japan.At these, two branches SBI offers a wide range of services such as deposits,remittances,trade finance solutions,syndicated loans etc.
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Organizational Goals SBI’s main goals are as follows:
 Develop close relationships with financial services to customers,

 Maintain its position as the premier finance institution in the country,  Transform ideas into viable and creative solutions,  Provide consistently high returns to shareholders, and  To grow through diversification by leveraging off the existing client base.

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INFORMATION ABOUT BOARD OF DIRECTORS AND BOARD COMMITTEE MANAGEMENT OF SBI NAME DESIGNATION  O.P. Bhatt Chairman  Suman Kumar Berry  Ananta C. Kalita  Md. Salahuddin Ansari  Arun Ramanathan  Dilip C. Choksi  Rajiv Kumar  D. Sundaram  S.K. Bhattacharya  Ashok Jhunjhunwala  Deva Nand Balodhi  Vasantha Bharucha  Shyamala Gopinath  S. Venkatachalam
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Director Director Director Director Director Non-Official Part Time Director Director Managing Director Director Director Director Director Director

 R. Sridharan

Managing Director

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STRUCTURE
SBI Group SBI Group consists of, A) Seven Associate Banks • State Bank of Hyderabad • State Bank of Indore • State Bank of Mysore • State Bank of Patiala • State Bank of Saurashtra • State Bank of Travancore • State Bank of Bikaner and Jaipur B) One Wholly Owned Banking Subsidiary • SBI Commercial and International Bank C) Seven Non Banking Subsidiaries • SBI Capital Markets Merchant banking, lease and hire purchase • SBI Funds Management Mutual fund • SBI Gilts Govt. Securities • SBI Factors & Commercial Service Factoring Services • SBI Securities Investment banking • SBI Cards and Payment Services Ltd • SBI Life Insurance Company Ltd E) Six Overseas Subsidiaries/Joint Ventures • SBI(Canada) • SBI(California) • SBI International (Mauritius) Ltd. • Indo-Nigerian Merchant Bank Ltd. • SBI Finance Inc., New York • SBI Servicos Limitada, Sau Paulo

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ORGANIZATION CHART OF FINANCE FUNCTION IN BANK
Chairman

Vice Chairman

Executive Director

Managing Director

Senior General Manager

Chief Financial Accounting and Taxation Group

General Manager Officer and Treasurer

Assistant Financial Officer

Account Manager

Assistant

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ORGANISATION STRUCTURE OF BRANCH
Branch Manager

Personal Banker Authorizer

Teller Authorizer

Clearinghouse

Sales Executive

Personal Banker

Teller

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Functions
Branch manager
 Require approval from BM for transaction more than 50,000 RS.  organising coordinating and motivating employees in the organization.  Develop his territory.

Personal Banker authorizer
 After his approval, all the applications collect and checked by PB, Executives go for further process to branch manager.  -Daily stock (welcome kit, debit pin number, cheque book, and debit card) requires approval of PB authorizer.

Personal Banker
 Maintain contacts with walk-in customers, existing customers and provide satisfactory service to them.  Handle all the complaint of the customers and resolve it.
 Maintain daily stock reports and take approval from the PB authorizer.

Teller Authorizer
 He gives approval to all types cheques and DDs by checking all the details and validity of it.  At the end of the day all the cash on hand in the bank require signature of him.
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Teller
 Maintain daily transactions of cheque withdrawal, cheque deposits, cash withdrawal cash deposit, fund transfer and DD etc.  Check the validity of all the above transactions.

Clearinghouse
 All the cheques are being transferred to this department and it checks the sign, balance amount in his/ her a/c, date of issuing.  It also maintains the transaction with other branches and banks.  DRF forms are being handled by this department.

Sales Executive
 Generate new inquiries by cold calling and tele marketing.  Handle existing and new customers.  Maintain customer relation ships.

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Chapter-2.
SERVICES(PRODUCTS) OF SBI BANK
 PERSONAL BANKING  NRI SERVICES  AGRICULTURE / RURAL SERVICES  INTERNATIONAL BANKING  CORPORATE BANKING  SME SERVICES  SERVICES  GOVERNMENT BUSINESS

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1.PERSONAL BANKING
 DEPOSIT SCHEMES Open an account with any of SBI branches, all of them are fully computerised, and realise the advantage of vast network. Place funds in Multi Option Deposit Scheme, a term deposit which is not fixed at all and comes with a unique break-up facility which provides you full liquidity as well as benefits of higher rates of returns, through your savings bank account. Alternately, keep that deposit intact by availing an overdraft facility, to meet your occasional temporary funds requirements. SBI products are designed with flexibility to suit our personal requirements. Enjoy 24 hour banking facility through Internet Banking/ widest network of ATMs. Experience a whole new world of Personal Banking Branches (PBB) often dubbed as boutique branches by others. Customer friendly knowledgeable staff will cater our financial requirements with speed and efficiency in an excellent ambience. The PBBs have different minimum thresholds for customers' business to ensure the exclusive level of service.

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 PERSONAL FINANCE
State Bank of India has a variety of schemes under Personal Finance to satisfy varying needs of the banking public. The Bank offers the following schemes with attractive rates of interest: * Loan For ESOPS * Housing Loan * Easy Travel Loan * Car Loan * Educational Loan * Personal Loan * Property Loan * Loan to Pensioners * Loan Against Shares/Debentures * Festival Loans * Medi-Plus Scheme * Teachers-Plus Scheme * Sainik-Plus Scheme * Tribal-Plus Scheme * EMI Calculator * Credit Khazana Many of SBI branches offer loans under Personal Finance. This section also offers an EMI calculator to facilitate computation of monthly repayment.

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 CORPORATE SALARY PACKAGE
SBI PRESENTS A NEW ATTRACTIVE PRODUCT FOR EMPLOYEES OF CORPORATES & INSTITUTION BENEFITS TO THE EMPLOYER Provides a convenient way to manage salaries across a large number of centres through Core Power.

 Reduces employer’s paperwork and salary administration cost.  Employees receive instant credit of salaries. TO THE EMPLOYEES  Employees will enjoy convenience of Anywhere Banking at the largest network of  Core Banking Branches presently numbering 11400 plus across the country.  Extensive alternative channels.  8500 plus ATMs of State Bank Group.  Free Internet Banking  Complete gamut of Banking Services including : Zero Balance Account facility

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 Retain same account number even when the account is transferred to another branch.  Free Multi City Cheques/ SMS Alert/ e-statement/ internet banking.  Easy overdraft upto 2 months salary repayment extendable to 6 months.  RTGS/NEFT, Demat facility, Systematic Investment Plan in Mutual funds.  Concession in interest on loans.  Anywhere banking facility/ widest network of branches.  Range of other value added benefits.

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2.NRI SERVICES
WHO IS AN NON-RESIDENT INDIAN [NRI] A Non Resident Indian (NRI) as per FEMA 1999 is an Indian citizen or Foreign National of Indian Origin resident outside India for purposes of employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period.An individual will also be considered NRI if his stay in India is less than 182 days during the preceding financial year. A Person of Indian origin (PIO) is a citizen of any country other than Pakistan, Bangladesh or Sri Lanka Who  At any time held an Indian Passport,  He or any of his parents or grand parents was a citizen of India,  Is a spouse of an Indian Citizen or a person referred to above.

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NRIs can open the following types of accounts with SBI:  NRE Rupee Accounts.  Savings Bank.  Current Accounts.  Term Deposits (Interest Paid out Quarterly).  Special Term deposits (Interest compounded Quarterly).  Non-Resident (Ordinary) Account .  NRO A/cs - Rupee Accounts for crediting income in India.  Foreign Currency Non Resident Accounts.  Fixed Deposits in Pound Sterling, US Dollar Euro Canadian Dollar and Australian Dollar  Resident Foreign Currency Accounts.

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3.AGRICULTURE / RURAL SERVICES
State Bank of India Caters to the needs of agriculturists and landless agricultural labourers through a network of 6600 rural and semiurban branches.There are 972 specialized branches which have been set up in different parts of the country exclusively for the development of agriculture through credit deployment.These branches include 427 Agricultural Development Branches (ADBs) and 547 branches with Development Banking Department (DBDs) which cater to agriculturists and 2 Agricultural Business Branches at Chennai and Hyderabad catering to the needs of hitech commercial agricultural projects. Our branches have covered a whole gamut of agricultural activities like crop production , horticulture , plantation crops, farm mechanization, land development and reclamation, digging of wells, tube wells and irrigation projects, forestry, construction of cold storages and godowns, processing of agri-products, finance to agri-input dealers, allied activities like dairy , fisheries, poultry, sheep-goat, piggery and rearing of silk worms. The branch also has farmer's meet in villages to explain to farmers about various schemes offered by the bank. To give special focus to agriculture lending Bank has set up agri business unit. Bank has also agri specialists in various disciplines to handle projects/ guide farmers in their agri ventures. Advances are given for very small activity covering poorest of the poor to hitech activities involving large fund outlays.

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 Agricultural Banking
State Bank of India's branches have covered a whole gamut of agricultural activities like crop production , horticulture , plantation crops, farm mechanization, land development and reclamation, digging of wells, tube wells and irrigation projects, forestry, construction of cold storages and godowns, processing of agri-products, finance to agri-input dealers, allied activities like dairy , fisheries, poultry, sheep-goat, piggery refurbished second hand tractors, loans against pledge of warehouse receipts, loans against produce stored by the farmer at his own premises, loans against book debts of Arthias, mulberry cultivation, rearing of silk worms and grainages. Infact Bank can cover any other agricultural related activities undertaken.

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 Regional Rural Banks
Post amalgamation Bank has got 16 RRBs with a network of 2,351 branches spread over 115 districts and 16 states in the Country. The aggregate deposits and advances of the sponsored RRBs stood at Rs.13,573 crore and Rs.7,856 crore respectively as on 31st March 2008. The profits have jumped from Rs.32.77 crore as on March 2007 to Rs.115.68 as on March 2008. During the year, a remittance product – Grameen Pay Order (GPO) was introduced for facilitating remittances from remote areas to increase fee income in RRBs. Post amalgamation; RRBs have broadbased their product profile by introducing Debt Swap Scheme, Warehouse Receipt Financing.

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4.INTERNATIONAL BANKING  Trade Finance
SBI Understand there is much stake involved in Export Import business Global economic, political situations, anything and every thing that affects you and your business. SBI offers the trusted financial solution to all your complex Trade finance related fund needs (both in Indian rupee and foreign currencies). The gamut of our services include credit for both pre shipment and post shipment activities. Export Revenue • Rupee Export Credit (Pre-Shipment and Post-Shipment) • Pre-Shipment Export Credit • Post-Shipment Export Credit • PreShipment Credit in Foreign Currency (PCFC) • Getting Started - Opening a PCFC • Operating PCFC • Export Bill Rediscounting • Letter of Credit Import Revenue • Foreign Currency import credit • Supplier's credit

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 CORRESPONDENT BANKING
The Correspondent Banking Division develops and maintains relationship with Banks and Financial Institutions across the Globe. This network Correspondent Banks forms the foundation for all international operations of SBI. SBI has correspondent banking relations with around 522 leading banks worldwide. The bank has deployed a dedicated Correspondent Relations section to attend exclusively to create, nurture, cultivate and continue relationship in correspondent banking.distribute their products for various applications of the bank and its Customers. Meanwhile, the bank’s Foreign Department, based in Kolkata (Calcutta), handles all operational aspects of correspondent banking, including all matters pertaining to the exchange of test keys and swift authenticator keys (SAK), appointment of correspondents, maintenance and reconciliation of Nostro accounts, and treasury management. The Rupee Vostro accounts of International Banks and Institutions are maintained and serviced at SBI’s International Services branch (ISBM) at Mumbai and at Overseas Branches at Kolkata (Calcutta), Chennai, Cochin, Bangalore and New Delhi. ACU accounts are also serviced at the overseas branches.

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 PROJECT EXPORT FINANCE
State Bank of India is an active participant in the area of finance of Project export activities. These activities will mainly involve financing the fund based and non fund based requirements of the project exporters. • Export of engineering goods on deferred payment terms • Execution of turnkey projects abroad • Execution of overseas civil construction contracts abroad • Exports of services are the contracts for export of consultancy, technical and other services. Project export contracts are generally of high value and exporters undertaking them are required to offer competitive terms to be able to secure orders from foreign buyers in the face of stiff international competition. SBI’s vast network of branches spread all over the country which are authorized to handle trade related transactions,substantial presence overseas with branches/offices in all major commercial centers of the world covering all time zones and our strong network of correspondent relationship with top ranking banks in several countries adds to our competitive strengths to facilitate and meet various requirements of project exporters. More over we also enjoy the comprehensive credentials in International banking community.

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5.CORPORATE BANKING
CAG - A perfect strategic fit :  Market leader image  Focussed attention  Flexible & Customer - friendly credit policies  Structured Products - Fundbased & feebased  Timely, comprehensive and assured delivery CAG - SBI's Proactive response to emerging market needs CAG is Strategic Business Unit of SBI, set up exclusively to cater to the specialised banking needs of top corporate clients of the country. It was the direct outcome of SBI's structural reorganisation in the light of Deregulation, Globalisation & Liberalisation of the Banking Industry.

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CAG - A Symbol of excellence  Quality Relationship Banking  Exclusive, highly skilled Relationship teams of dynamic and motivated personnel, each attending to a select group of top Corporates providing a one-stop-shop for financial services presently at Mumbai, New Delhi, Calcutta, Chennai and Ahmedbad.  Delayered Credit process  Only two stage credit process consisting of appraisal and assessment by the Relationship team and sanction by the Credit Committee/Central Board, leading to quickest response time in the industry.  Offer of wider and sophisticated products  Apart from a variety of core credit products including structured finance and multi-purpose short term corporate loan, CAG offers an array of customer specific products like Cash Management Product, Treasury & Forex products and Merchant Banking products in association with SBI Capital Markets Ltd., SBI Gilts Ltd. and other subsidiaries of SBI.

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 MID- CORPORATE GROUP
Mid-Corporate Group (MCG) has been set up in the bank under Corporate Banking Group to cater to the various banking requirements of Mid-Corporates. It provides business solutions to its customers through its 28 dedicated branches all over the country. A Mid-Corporate has been defined as a business entity having annual turnover between Rs.25 crores to Rs.350 crores or an entity having a minimum fund based limit of Rs.5 crores(including Term loans.) Mid-Corporate Group has following focussed objectives for serving MidCorporate Accounts:  Providing exclusive focussed attention on the banking requirements of Mid-Corporates,  Providing various products to these Mid-Corporates through Relationship Management model,  Improving Turn Around Time (TAT) for credit delivery;  Providing customised solutions to financial requirements of MidCorporates.

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 PROJECT FINANCE Project Finance Strategic Business Unit
A one-stop-shop of financial services for new projects as well as expansion, diversification and modernisation of existing projects in infrastructure and non -infrastructure sectors .

Expertise
Being India's largest bank and with the rich experience gained over generation, SBI brings considerable expertise in engineering financial packages that address complex financial requirements. Project Finance SBU is well equipped to provide a bouquet of structured financial solutions with the support of the largest Treasury in India (i.e. SBI's), International Division of SBI and SBI Capital Markets Limited. The global presence as also the well spread domestic branch network of SBI ensures that the delivery of your project specific financial needs are totally taken care of. Lead role in many projects Allied roles such as security agent, monitoring/TRA agent etc.

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Infrastructure sector:  Road & urban infrastructure  Power and utilities  Oil & gas, other natural resources  Ports and airports  Telecommunications Non-infrastructure sector: Manufacturing: Cement, steel, mining, engineering, auto components, textiles, Pulp & papers, chemical & pharmaceuticals … Services: Tourism & hospitality, educational Institutions, health industry … Expertise  Rupee term loan  Foreign currency term loan/convertible bonds/GDR/ADR  Debt advisory service  Loan syndication  Loan underwriting  Deferred payment guarantee  Other customized products i.e. receivables securitisation, e.t.c.

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6. SME SERVICES  BCSBI Code This is a voluntary code, reflecting the bank’s positive commitment to its Micro and Small Enterprise (MSE) customers to provide easy, speedy and transparent access to banking services in their day-to-day operations and in times of financial difficulty. This Code is not only a Charter of Rights of the MSE but also enshrines his obligations vis-à-vis his bank.

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(FAQ) BCSBI Code
1. In what way is the Code of Bank’s Commitment to Micro and Small Enterprises different from the existing regulatory prescription of the Reserve Bank of India and the Government policy framework? The objective of the Code is not to replace the existing regulatory framework but to complement it. Regulations by themselves cannot ensure availability of quality service to all. The Code seeks to achieve this through a positive and voluntary commitment of the bankers to provide easy access to transparent, speedy and efficient banking services. Banks are also committed to provide products and services suiting the needs of MSEs and to consider their financial difficulties sympathetically. 2. Why is the scope of the Code confined to only Micro and Small enterprises? MSEs play a very significant role in maintaining a balanced and sustainable growth of the economy, through employment generation, development of entrepreneurial skills and contribution to export earnings. The Report of the Working Group on rehabilitation of sick SMEs has brought out that this vibrant segment of the Indian economy has been contributing over 39 per cent of the manufacturing sector output, 33 per cent of the national exports and providing employment to nearly 312 lakh people through about 128 lakh units, located in both the rural and urban areas across the country. The Third Census of small enterprises conducted by the Government of India in 2001-02 revealed that 95.5% of Micro & Small Enterprises have been outside the purview of the jurisdiction of financial structure and that there is a critical need to provide banking services to fully exploit the potential of this sector.

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3. If banks do not implement the Code, what is the recourse left for the customers? All banks have adopted a Model Grievance Redressal policy framed by the IBA. All banks have a set of internal Grievance Redressal Procedures for handling of complaints with given specific time frame consistent with External Grievance Redressal Mechanisms such as the Banking Ombudsman Scheme. The Code even provides that if customers are not satisfied with the bank’s response, they should not be discouraged from escalating the complaints and should be helped to take up the matter with the Banking Ombudsman. Individual complaints are also dealt with by the Customer Service Department of the Reserve Bank of India and if the complaints involve systemic issues, the BCSBI pursues the matter with the banks for rectification of the systemic lapses. 4. What is the measure of compliance of banks with the ‘Code of Bank’s Commitment to Customer’s? Banks have initiated several positive measures to comply with the provisions of this Code. All banks are now systematically distributing copies of the Code to all their customers. Since this Code is, in a sense, a Charter of Rights of the individual vis-a-vis his bank, this is an important action on the part of the bank to voluntarily empower the individual customer. Also, banks have adopted Model policies for Cheque Collection, Grievance Redressal, Security Repossession and Compensation and these are in public domain. Transparency with regard to charges, fees and interest rates is now apparent and all banks have a tariff schedule in public domain. These are some of the positive features. BCSBI is in continuous dialogue with banks towards achieving greater compliance of the Code in letter and spirit.
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7. SERVICES  INTERNET BANKING
Internet banking portal of our bank, enables its retail banking customers to operate their accounts all across India, removing the restrictions imposed by geography and time. It's a platform that enables the customers to carry out their banking activities from their desktop, aided by the power and convenience of the Internet. Availing the Internet banking services, you can do the following normal banking transactions online: o Self-account funds transfer across India. o Third party transfers in the same branch o New account opening o Demand Draft requests o Standing instructions o New Cheque-book request and much more.

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Apart from these, the other salient value-added features available are: o Railway tickets booking, o Utility bill payments o LIC and other insurance premia payments, o SBI Mutual funds Investments o Remit Subscription to PPF account, o Credit card dues payments, o Deposit your taxes, o Donations to your religious inspirations o Donations to Red Cross and such other organisations o Setting up SMS alerts for transaction information.

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 MOBILE BANKING MOBILE BANKING SERVICES
Away from home, bills can be paid or money sent to the loved ones or balance enquiries done anytime 24x7!!!That is what SBI Freedom offers -convenience, simple, secure, anytime and anywhere banking. The service is presently available on java enabled mobile phones over SMS/ GPRS/ WAP as also non java phones with GPRS connection. The service can be availed over the free GPRS facilities offered by various mobile service providers. The services for other non-Java mobile phones are under development and will be offered using Unstructured Supplementary Services Data (USSD). The following functionalities will be provided in the Phase I: -Funds transfer (within and outside the bank –using NEFT) -Enquiry services (Balance enquiry/ Mini statement) -Request services (cheque book request) -Bill Payment (Utility bills, credit cards) -M Commerce (Mobile Top Up, Merchant payment, SBI life insurance premium)

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 ATM SERVICES  STATE BANK NETWORKED ATM SERVICES
State Bank offers you the convenience of over 8500 ATMs in India, the largest network in the country and continuing to expand fast! This means that you can transact free of cost at the ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the Associate Banks – namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, and State Bank of Travancore) and wholly owned subsidiary viz. SBI Commercial and International Bank Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card.

49

 KINDS OF CARDS ACCEPTED AT STATE BANK ATMs Besides State Bank ATM-Cum-Debit Card and State Bank International ATM-Cum-Debit Cards following cards are also accepted at State Bank ATMs: 1) State Bank Credit Card 2) ATM Cards issued by Banks under bilateral sharing viz. Andhra Bank,Axis Bank, Bank of India, The Bank of Rajasthan Ltd., Canara Bank, Corporation Bank, Dena Bank, HDFC Bank, Indian Bank, Indus Ind Bank, Punjab National Bank, UCO Bank and Union Bank of India. 3) Cards issued by banks (other than banks under bilateral sharing) displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos 4) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card, Cirrus, VISA and VISA Electron logos

50

 DEMAT SERVICES SBI offers Demat services that would ensure free transferability of securities with speed, accuracy and security. SBI is Depository Participant both with - National Securities Depositories Limited (NSDL) and Central Depository Services Limited (CDSL) through more than 1000 branches –

Features & Benefits
As opposed to the earlier form of dealing in physical certificates with delays in transaction, holding and trading in Demat form has the following benefits:  Account Maintenance & Safe custody: Facilitates Maintaining Security Balance in electronic form.  Dematerialization: Facilitates converting physical share certificate into electronic balances.  Rematerialization: Facilitates converting the electronic balances to physical (share certificate) form.  Account Transfers: Facilitates delivery/receipt of electronic balances consequent to market / off-market trades.  Pledge/Hypothecation: Facilitates blocking securities balance of borrowers in favour of lenders for obtaining Loans / advances against shares.  Initial Public offer: Facilitates faster and direct credit of security balances into DP account on allotment through public issue of companies.  Security Lending: Facilitates earning extra income on your dematerialized holdings by the way of securities lending.

51

8. GOVERNMENT BUSINESS  GOVERNMENT ACCOUNTS An Outline of Government Accounts Department
The Government Accounts Department (GAD) oversees the handling of government business undertaken by our branches as sub-agent of Reserve Bank of India. It is a co-ordinating agency between the branches dealing in Central Government transactions and Reserve Bank of India, CAS, Nagpur, on the one hand and Accounting Authorities of Department of Central Government on the other. All authorised dealing/receiving branches report their Central Government transactions on a daily basis to their respective focal/nodal/link branches who consolidate and report to GAD, Navi Mumbai. The main function of GAD is to settle Central Government transactions reported by nodal/focal/link branches with RBI, CAS, Nagpur.

52

Central Government transactions
All Central Government transactions (other than those relating to Union Territories) are under Focal Point/Link Branch system. Under the Focal Point system, the branches dealing in Government transactions report their transactions to the respective Focal Point Branches. Focal Point Branches have been identified at a centre where Pay & Accounts Office (PAO) of the concerned Ministry/Department is established. All the branches handling the transactions of a particular PAO report their transactions to the identified Focal Point Branch for that PAO. These Focal Point Branches, report the consolidated figures under various accounting heads to GAD for final settlement with RBI, CAS, Nagpur. The settlement of these transactions is being handled by the under noted Sections in GAD. 1) Union Ministries Expenditure Account (UMEA) Section: 2) Revenue Section: 3) Central Government Section: All focal/link/nodal branches are required to report their Government transactions to GAD for funds settlement with RBI, CAS, Nagpur in an encoded communication format. This helps in electronic processing of data.

53

 PUBLIC PROVIDENT FUND - 1968
Scheme introduced by Central Government in 1968. The Scheme enables the members of the public to make contributions to the Fund and obtain Income Tax rebate under the relevant provisions of the Income Tax. Eligibility Individuals Individuals on behalf of a minor Minimum / Maximum Investment ( w.e.f. 15-11-2002 ) Minimum Rs.500/- per annum in multiples of Rs.5/Maximum Rs.70,000/- per annum Duration 15 years Can be extended for one or more blocks of 5 years Account can be discontinued but repayment of subscriptions along with interest only after 15 years. Rate of Interest 8% per annum credited in account on 31st March every year calculated on the minimum balance between 5th day and end of the month. Loans Loan upto 25% of balance at the end of first financial year from third to sixth year. Second loan can be taken on full payment of first loan.

54

 SBI e-TAX SBI e-tax : Online Tax Payment Facility For Direct Tax payment through SBI e-tax: Step 1: Visit www.onlinesbi.com and Click on "SBI e-tax". Step 2: Select Direct Taxes (OLTAS)". Step 3: Select Challan Type. Step 4: Enter Challan Details. Step 5: Confirm Assessee details and SelectState Bank of India. Step 6: Log onto www.onlinesbi.com with Username and Password. Step 7: Enter tax details. Step 8: Confirm payment details. Step 9: Print Instant Cyber Receipt and logout.

55

Chapter-3.

FINANCIAL ANALYSIS OF STATE BANK OF INDIA

56

Capital structure
From Year To Year Share Authorized Issue Paid Up Shares Paid Up Paid Up Capital Capital Nos. Value Capital 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 631.56 526.30 526.30 526.30 526.30 526.30 526.30 526.30 526.30 526.30 474.01 474.01 473.83 200.00 631470376 526298878 526298878 526298878 526298878 526298878 526298878 526298878 526298878 526298878 474009872 474009189 473828726 20000000 10 10 10 10 10 10 10 10 10 10 10 10 10 100 631.47 526.30 526.30 526.30 526.30 526.30 526.30 526.30 526.30 526.30 474.01 474.01 473.83 200.00

2007 2006 2005 2004 2003 2002 2001 2000 1999 1996 1995 1994 1993 1991

2008 2007 2006 2005 2004 2003 2002 2001 2000 2000 1996 1995 1994 1993

Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share

57

Share holding pattern
Share holding pattern as on : 31/12/2008 Face value 10.00 Promoter's holding Indian Promoters 377207200 59.41 Sub total 377207200 59.41 Non promoter's holding Institutional investors Banks Fin. Inst. and Insurance 54488550 8.58 FII's 66169927 10.42 Sub total 159634660 25.14 Other investors Private Corporate Bodies 28339401 4.46 NRI's/OCB's/Foreign Others 379437 0.06 Govt 122428 0.02 Others 28413341 4.48 Sub total 57254382 9.02 Grand total 634879997 100.00 General public 40783755 6.42

58

Dividend
Year 2008 2007 2006 2005 2004 2003 2002 2001 2000 2000 1999 1998 1997 Month May May May May May Jun May May Jun Feb Jun Jun Jun Dividend (%) 215 140 140 125 110 85 60 50 25 25 40 40 40

59

D ivid e n d (% ) 250 200 150 D ivid e n d (% ) 100 50 0 Jun Jun May May May May May May May Feb Jun Jun Jun

2008 007 006 005 004 003 002 001 000 000 999 998 997 2 2 2 2 2 2 2 2 2 1 1 1

60

BALANCE SHEET OF THE STATE BANK OF INDIA AS ON 31ST MARCH 2008
CAPITAL AND LIABILITIES SCHEDULE As on 31.03.2008 As on 31.03.2007

Capital Reserves & Surplus Deposits Borrowings Other Liabilities and Provisions TOTAL

1 2 3 4 5

5262989 5262989 146980804 129352414 2705601437 2428283800 93239446 107010418 531197807 3482282483 486532484 3156442105

61

ASSETS
Cash and balances with Reserve Bank of India Balances with banks and money at call & short notice Investments Advances Fixed Assets Other Assets

SCHEDULE
6 7 8 9 10 11 TOTAL

As on 31.03.2002 As on 31.03.2001
Rs. 218725347 430576316 1451420317 1208064653 24152273 149343577 3482282483 Rs. 184958687 422133168 1228764928 1135902708 25933018 158749596 3156442105

62

ASSETS ANALYSIS ASSETS
Rs. Crore Non-Annualized Cash and bank balance Cash in hand Deposit account Money at call 23085.95 Balance outside India Current account Deposit account Money at call 1 Balance with RBI Investments Government securities Approved securities Assisted companies Subsidiaries/associates Mutual funds Others Investments outside India Advances & loans Bills receivables Short term/demand advances Term advances Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 32645.82 53212.6 47136.44 60709.18 64930.16 508.15 497.97 558.27 867.86 1052.58 1010.57 1680.8 2675.95 3139.35 3296.56 821 11038.61 9540.16 21185.87 17305.82 23002.07 15924 17771.83 16546.53 460.31 3528.66 3931.51 9016.52 6529.48 1215.57 983.86 974.73 1306.01 2242.33 5629.94 18489.55 11017.76 7449.3 7774.72 12906.42 16894.32 18344.78 17628.01 20819.95 54982.24 71286.52 91878.68 122876.5 145142 39177.27 51752.76 68068.27 96416.82 117323 7157.97 6464.39 5913.72 5704.99 5220.32 0 0 0 0 0 1424.41 1540.13 1619.83 1338.62 1344.82 0 0 2932.06 0 0 7222.59 11529.24 13344.8 19416.05 21253.85 2221.46 2690.45 3199.94 3976.49 4741.86 74237.33 82359.84 98101.97 113590.3 120806.5 7933.47 7741.25 9235.12 12840.01 11555.36 43553.46 45991.24 54979.16 61197.15 64178.41 22750.4 28627.35 33887.69 39553.11 45072.7

63

Secured advances 71884.05 77291.42 92161.81 90357.88 98526.09 Unsecured advances 2353.28 5068.42 5940.16 23232.39 22280.38 Advances to priority sector 19522.82 23090.38 25877.55 30153.35 31591.48 Advances to public sector 12088.19 13465.12 9490.49 20271.27 21990.35 Other assets Stock in trade 72.54 69.67 67.97 74.18 76.44 Stock others 72.54 69.67 67.97 74.18 76.44 Receivables 16228.42 13386.74 21842.28 13529.53 13794.38 Accrued income 3005.48 3348.96 4278.57 5133.28 5737.66 Non-banking assets 0.22 0.24 0.25 1.26 0.27 Inter office adjustments 2924.35 0 8760.74 58.89 0 Advance payment of tax 1647.34 2403.95 1957.55 2007.06 1861.14 Other receivables 8651.03 7633.59 6845.17 6329.04 6195.31 Future lease rent receivable 0 0 0 0 102.66 Gross fixed assets 2347.61 3338.31 3976.97 4458.99 4678.09 Less: cumulative depreciation 841.3 1144.65 1499.36 1865.68 2262.86 Net fixed assets 1506.31 2193.66 2477.61 2593.31 2415.23 Land & building 653.62 687.74 749.86 855.88 920.32 Revalued assets 0 0 0 0 0 Leased assets 289.33 1002.51 1386.51 1258.05 1434.53 Intangible assets/expenses n.w.o 0 0 0 2271.24 1063.54 TOTAL ASSETS 179672.7 222509 261505 315644.2 348541.2

64

DETAILED ANALYSIS OF ASSETS 2003-04 The cash and bank balances amounted to Rs. 32 645.82 crores. The money at call was low at821 crores. The bank was maintaining a balance of 12906.42 crores with RBI. The investmentsin India were worth 54982.24 crores. However there was no investment in mutual funds. Theinvestments outside India stood at 2221.46 crores. The figures were low, as the impact ofglobalization was not yet felt. The advances and loans amounted to 74237 crores which was41.32% of the total assets. Of this short-term loans amounted to 69.35% of the total loans. Theratio of loans to priority and public sector stood at 1.6. The percentage of secured loans was 96.83%. Inter-office adjustments amounted to 2924 crores. This was attributed to the fact that reconciliation of inter-office accounts continues for some time after the accounts are closed. Gross Assets were valued at 2347 crores. The depreciation amount was 841.3 crores and themethod used was written down value method prescribed under the Income Tax Act. Depreciation of leased assets was provided for on capital recovery method. Leased Assetsvalued at 289.33 crores.

65

2004-05 Cash and Bank Balance increased to 53212.6 (increase of 61% over the previous year) whileCash in Hand reduced to 497.97 crores. Money at call increased drastically this year. Due to thisfact the current account assets surged. The interest expenses on deposits (excluding RIBs) inIndia during 2004-05 recorded an increase of 17.5% as compared to the previous year, primarilydue to the increase in average level of deposits by 16.9% (excluding RIB deposits) duringthe year. While the maximum interest rate on domestic deposits came down from 12% at thebeginning of the fiscal to 10.5% at the end, the average cost of deposits registered a marginalincrease from 8.01% in 2003-04 to 8.05% in 2004-05. Introduction in May 2005 of term depositsfor a minimum period of 15 days (earlier, the minimum period for which a term deposit could betaken was 30 days) as well as the differential (higher) rates for single deposits of Rs.15 lakh andabove, contributed to the additional cost under this head. Investments increased by 40%. Investment in government securities contributed a lot. Investments in approved securitiesdecreased from the previous year. Advances and loans increased marginally. Stocks in tradedecreased to 69.67. Inter-office adjustments had been completed by the end of the accountingyear. Hence the receivables decreased. There was a drastic increase in amount of leased assets.

66

2005-06 Cash and Bank Balance decreased but the cash in hand increased marginally. Money at callfollowed the previous trend and decreased. Money at call with RBI decreased by around 6000crores. Investments increased continuously. This year the bank invested in mutual funds, which thereby increased investments. Advances and loans continued to increase. But the ratio ofadvances to priority sector versus the public sector changed radically. It increased from 1.6 to 3in two years. The receivables increases this year because of inter office adjustments of 8760 crores.

67

 2006-07 On 30 March 2007, IRDA had granted license to the joint venture for carrying out the lifeinsurance business in the country. In June 2007, life insurance company has launched its firstproductSanjeevan. It is a single-premium money-back product providing life cover up to amaximum of 75 years of age. The company is also looking at launching pension products in fewdays. During the year, the Bank, pursuant to the Voluntary Retirement Scheme for eligibleemployees made a payment in respect of encashment of leave salary amounting to Rs.203.63crore. In terms of the accounting policy consistently followed by the Bank, the entire amount has been charged to the Profit and Loss Account of the current year (accounting on payment basis)including an amount of Rs.123.19 crore being encashment of leave salary related to priorperiods, as determined by an actuarial valuation. The amount of unsecured surged to 23232.39crores. Advances to public sector which had gone down last year increased again. Receivablesagain went down due to less money kept for inter office adjustments. Intangible assets showed at 2271.24 crore

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 2007-08 The Bank implemented a Voluntary Retirement Scheme (VRS) for eligible employees during FY 2006-07. Expenditure there of aggregated to Rs. 2271.24 crore, of which Rs. 853.19 crore wascharged to the Profit and Loss Account of FY 2006-07. Of the balance, an amount of Rs. 354.51crore has been charged to the Profit and Loss Account of FY 2007-08. The remaining amount ofRs. 1083.54 crore is being treated as deferred revenue expenditure included under Schedule 11 "Other Assets", to be amortized equally over a further period of 3 years in accordance with RBI guidelines. All the statistics increased as per the continuing trends.

69

CAPITAL AND LIABILITIES: BANKING COS.
Mar-04 Mar-05 Mar-06 526.3 526.3 11620.98 3510.57 6595.83 58.09 1456.49 196821.07 36182.05 41506.53 119132.49 Mar-07 Mar-08 526.3 526.3 526.3 526.3 9081.88 9876.01 3510.57 3510.57 4321.46 5108.77 172.17 53.1 1077.68 1203.57 131091.32 169041.93 27813.65 30692.03 29207.85 34321.25 74069.82 104028.65 4400.39 3470.18 7542.58 9080.79 0 0.8 836.77 0 7255.87 987.35 0 4520.9 5793.73 8787.09 10063.13 0 0 1076.39 0 8002.67 984.07 0 526.3 526.3 526.3 526.3 12935.24 14698.08 3510.57 3 510.57 7789.55 9686.6 557.43 781.22 1077.69 719.69 242828.37 270560.14 40328.08 42312.79 47893.42 56396.36 154606.87 171850.99

State Bank Of India Rs. Crore NonAnnualized Capital Equity capital Reserve funds & surplus Share premium reserves Statutory reserves Other specific reserves Revenue reserves Deposits Demand deposits Saving deposits Term deposits Demand deposits from banks Term deposits from banks Deposits outside India Borrowings RBI Banks Financial institutions Go v ernment Foreign institutions Debentures & bonds Others

5206.04 5 5500.66 9182.34 11193.41 670.29 0 1669.6 0 6938.18 1915.34 0

641.56 6913.88 6499.52 6746.43 7932.42 8011.33 15133.62 12781.6 0 0 0.01 1.21 2537.4 2152.61 0 0 8163.63 7170.12 4432.58 3457.66 0 0

70

Secured loans

912.13

1413.11

2596.11 3067.01

2634.77

Other liabilities & Provisions 29892.37 33001.66 41343.19 44220.66 49644.18 Bills payable 8754.94 10796.43 10562.53 13598.42 13875.17 Inter office adjustment 0 555.41 0 0 4722.18 Interest accrued and due 7619.88 10100.69 13080.79 16966.05 19285.58 Earmarked funds 0 0 0 0 0 Others (incl. provisions) 13517.55 11549.13 17699.87 13656.19 11761.25 TOTAL LIABILITIES 179672.66 222509.03 261504.95 315644.19 348541.15 Contingent liabilities Bills for collection 0 9265.1 2309.78 8080.32 10176.6 Bills discounted 8646.15 0 0 0 0 Endorsement obligation 10830.12 9785.72 12941.7 12894.58 12591.26 Dispu t ed taxes 0 0 0 0 0 Letter s of credit 0 0 0 0 0 Future lease re n t payable 0 0 0 0 0

71

DETAILED ANALYSIS OF CAPITAL AND LIABILITIES

Equity Capital remained constant at 526.3 crore. No preference capital was issued. Neither any bonus was issued to shareholders. Reserves and surplus increased every year from 9081 to1498 crores. Revenue reserves increased till 2000 and then began to decrease as the bank began to diversify and invest more money in restructuring. On the monetary front, liquidity conditions remained easy. During 2007-08, the year-on-year growth in money supply (M3) at14.0% was in line with the growth projected by RBI, as against 16.8% in 200607, when growth was boosted by India Millennium Deposit inflows. For the same reason, growth in aggregate deposits of all scheduled commercial banks at 14.3% was lower than 18.4% during 2006-07. Reflecting the deceleration in industrial production, growth in non-food credit was lower at 12.8%during 2001-02 than the growth of 14.9% in the previous year. During the same period, theincrease in total flow of funds from banks including banks' investments in bonds, debentures,shares, CPs, at 11.8% was also lower than the increase of 15.7% during 2006-07. Depositsdoubled their amounts in the last 5 years. Borrowings increased till 2007 and then decreased in2008. Issue of debentures and bonds also decreased in 2008. This can be attributed to the factthat the borrowings from FII decreased considerably due to Sept. 11 crisis. Also these figuresdecreased in 2006 due to economic crisis of 2006. Inter-office adjustments were added inliabilities in 2005 and 2008.

72

 

CASH FLOW ANALYSIS Cash Flow

State Bank Of India Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Rs.Crore SOURCES OF CASH Opening Balance 27752.75 32645.82 53212.59 47136.44 Revenue Inflow 1985.92 3488.81 4639.5 5241.89 Non operating income 50.11 62.44 64.84 77.05 Sale of fixed assets 0 0 0 0 Sale of investments 0 0 0 166.78 Capital proceeds 0 0 0 0 Loan proceeds 0 0 1134.88 2520.98 Decrease in operating assets 23889.98 42835.64 27779.14 46007.31 Deposits 20390.15 37950.61 27779.14 46007.31 Advances 0 0 0 0 Others 3499.83 4885.03 0 0 Total cash inflow 53678.76 79032.71 86830.95 101150.5 APPLICATION OF CASH Disbursements 0 0 0 0 Purchase of fixed assets 498.4 999.09 649.6 517.61 Purchase of investments 8177.6 16320.63 20075.65 0 Repayment of loans 4.71 3.28 4.6 3.74

60709.19 7082.06 102.67 0 0 0 0 27731.76 27731.76 0 0 95625.68 0 246.88 0.09 974.93

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Loans to group companies 0 0 0 Loans to other companies 0 0 0 Tax paid 0 0 803.89 Dividend paid 199.46 231.57 233.68 Other cash expense 0 0 0 Increase in operating assets 12004.13 8122.51 17790.89 Deposits 0 0 0 Advances 12004.13 8122.51 17006.36 Others 0 0 784.53 Closing balance 32645.82 53212.59 47136.44 Total cash outflow 53530.12 78889.67 86694.75 Increase/Decrease in cash balance 4893.07 20566.77 -6076.15 Cash flow before operating assets charges 1985.92 3488.81 4639.5 Cash flow from operations 13871.77 38201.94 14627.75 Cash used in investing activity 8676 17319.72 20725.25 Cash from financing activity -4.71 -3.28 1130.28

0 0 0 0 1017.59 1459.43 306.57 290.13 0 0 38277.29 27296.65 0 0 16921.22 9368.49 21356.07 17928.16 60709.19 64930.17 100832 95198.28 13572.75 5241.89 12971.91 350.83 2517.24 4220.98 7082.06 7517.17 246.97 -974.93

74

 DETAILED CASH FLOW ANALYSIS
The basic purpose of cash flow statements is to provide information about cash receipts and cash payments. The basic classifications of cash flow are - Operating (primary business activities, bank must generate a positive net cash flow if it to survive. It is a key measure of liquidity) - Investing (cash flows from purchases and disposal of plant assets, Not necessarily positive. Growing businesses may have negative investing cash flow) - Financing (cash flow of the bank with its owners and creditors. For e.g. Issuance of stock,Growing businesses may have negative financing cash flow) Cash flow from operations has decreased with the exception of 2004-05. This implies that the liquidity has been decreasing. The investing cash flow increased radically from 8676 to 17319 crores and then increased marginally to 20725 crores. However it fell sharply from 2005-06 to 2006-07 because the bank did not invest. Financing cash flow has been negative in 2003-04 asthe loan repayments have been exceeding loan proceeds. In 2005-07 the loan proceeds increased to a large amount and thereby exceeding the repayments. In 2008 again the proceeds reduced to zero.

75

Chapter-4.
PROFITABILITY RATIOS
2004
Break-Even Yield Ratio 17.15 Cost of Funds Ratio 7.40 Net Profit Margin 7.15 Adjusted Return On Net Worth 15.87 Reported Return On Net Worth 15.97

2005 2006 2007 In Percentage(%)
15.63 7.00 5.34 11.91 11.91 1 15.56 7.41 7.96 16.88 6.88 15.83 7.32 4.58 9.89 9.88

2008
14.10 7.52 10.50 19.35 19.37

Liberalization and deregulation have heightened competition among banks, which will onlyintensify with financial liberalization under the WTO regime, and banks in India will have tobenchmark themselves against world class banks. In this context, the way to boost profitabilityand stay ahead is by developing sophisticated and customized products, increasing volumes,monitoring risks and reaching out to customers in diversified and distant markets by leveragingtechnology. In line with this, the Bank is also making all out efforts to adopt state-of-the-arttechnology with far reaching consequences for efficiency and profitability.

76

25

20

15

10

5

0 C o s t R a ti o 7 .4 B r e a k E v e n1 7 .1 5 R a ti o YE AR 2004 7 1 5 .6 3 2005 7 .4 1 1 5 .5 6 2006 7 .3 2 1 5 .8 3 2007 7 .5 2 1 4 .1 2008

77

 2008 • The Operating Profit of the Bank for 2007-08 stood at Rs.6,044.83 crore as compared toRs.3,966.78 crore. in 2006-07, recording a growth of 52.39%. The Bank has posted a NetProfit of Rs.2,431.62 crore for 2007- 08 as compared to Rs.1,604.25 crore in 2006-07,registering a growth of 51.57%. • It will be recalled that the Net Profit of 2006-07 was depressed by the IMD issue expensesand VRS related expenses but was favorably impacted by write back of excess provision forinvestment depreciation (net of tax). • Similarly, in 2007-08, the Net Profit has been depressed by provision for investmentdepreciation (including amortization of premium on `Held to Maturity' category), as well as bypro-rata write off of deferred revenue expenditure relating to VRS. • On a fully comparable basis, the adjusted Net Profit of 2007-08 (Rs.2,841.76 crore) hasrecorded a growth of 31.53% over the adjusted Net Profit of 2006-07 (Rs.2,160.48 crore). • The growth in profit in 2007-08 has been achieved through increases, both in Net InterestIncome and Fee Income. Profit on sale of investments in 2007-08 was Rs.351.64 crore asagainst Rs.341.85 crore in 2006-07, and thus the increase under this head contributed to thegrowth in profit of 2007-08 to the extent of only Rs. 9.79 crore.

78

 2007 • The Operating Profit of the Bank for 2006-07 before reckoning the one-time issue expensesof India Millennium Deposits and the VRS related expenses charged off during the year,stood at Rs.5263.16 cr. as compared to Rs.4202.50 cr. in 2005-2006, recording an increaseof 25.24%. • After accounting for the above expenditure, the Operating Profit for 2006-07 was Rs.3966.78cr. • The Published Net Profit of the Bank for 2006-07 is Rs.1604.25 cr. as compared toRs.2051.55 cr in 2005-2006. The reduction was due to the IMD issue expenses and VRSrelated expenses charged off during 2006-07, as afore said, which depressed the profit byRs.640.98 cr. (net of tax). • Further, write back of excess provision for investment depreciation (net of tax) contributedonlyto the extent of Rs.84.75 cr to the Net Profit of 2006-07, as against Rs.322.40 cr in 2005-06. • The Net Profit, after adjusting for the above factors as applicable in both the years, would be Rs.2160.48 cr in 2006-07as against Rs.1729.15 cr in 2005-06, i.e., a growth of 24.94%.

79

 2006 • The Bank posted a Net Profit of Rs.2,051.55 crore for the year 1999-2000 as againstRs.1,027.80 crore in 1998-99. The write-back of excess provision for investmentdepreciation (net of tax) contributed to the extent of Rs.322.40 crore to the growth in the NetProfit of 1999-2000, as against Rs.8.51 crore in 1998-99. • It may also be recalled that the Net Profit of 1998-99 was affected to the extent ofRs.207.47 crore (net of tax) by the charging off of the entire RIB issue expenses during thatyear. Even after adjusting for both the above items of non-recurring nature, the Net Profit forthe year 1999-2000 from pure operations recorded a strong growth of 40.95% over 1998-99. • The Operating Profit also recorded an increase of 21.77% from Rs.3,451.16 crore toRs.4,202.50 crore. • Income tax provision at Rs.978.5 crore was higher than the provision of Rs.383 crore madein 1998-99 on account of higher operating profit for the year, tax on the amount of excessinvestment depreciation written back and levy of 10% surcharge on income tax.

80

  

DEPOSIT RATIOS
2004 2005 2006 2007 In Percentage (%)
18.15 20.30 61.54 94.80 05.19

2008
21.21 22.28 56.50 94.24 05.75

Demand Deposit of Total Deposits 15.63 16.60 18.38 Saving Deposit of Total Deposits 20.84 19.72 21.08 Time Deposit of Total Deposits 63.51 63.66 60.52 Deposits within India as % to Total Deposits 97.03 96.73 95.33 Deposits Outside India as % to Total Deposits 02.96 03.26 04.66

81

25

20

15 D e m a n d D e p o s it R a t io S a vin g D e p o s it R a t io 10

5

0 1 2 3 4 5

82

2008: • On the monetary front, liquidity conditions remained easy. • During 2007-08, the year-on-year growth in money supply (M3) at 14.0% was in line with the growth projected by RBI, as against 16.8% in 2006-07, when growth was boosted by India Millennium Deposit inflows. • For the same reason, growth in aggregate deposits of all scheduled commercial banks at14.3% was lower than 18.4% during 2006-07. • Reflecting the deceleration in industrial production, growth in non-food credit was lower at12.8% during 2007-08 than the growth of 14.9% in the previous year. • During the same period, the increase in total flow of funds from banks including banks’ increase of 15.7% during 2006-07

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• In this scenario, the overall stance of RBI’s monetary policy during 2007-08 was provision ofadequate liquidity to support credit growth with a bias towards soft interest rate regime.Reduction in the Bank Rate and Cash Reserve Ratio was announced in October 2007 andmeasures to increase flexibility in deposit and lending rates were also introduced. During theyear, banking sector reforms continued to emphasize steps to secure the soundness andstability of banks including improving asset quality, strengthening prudential norms,streamlining credit delivery and, in general, making the Indian banking system comparable to international standards. • The Bank has sponsored 30 RRBs spread over 85 districts in 16 States with a network of2,342 branches. The aggregate deposits and advances of the sponsored RRBs stood at Rs.6,042.89 crore and Rs.2,559.32 crore respectively. During the year ended 31st March2007, 24 of the Bank’s RRBs made profit, as against 26 in the year ended 31st March 2006. The Bank has, up to March 2008, contributed Rs.134.97 crore for re-capitalization of the 29 RRBs taken up for financial restructuring. 

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 2007: • Cost of deposits (excluding Resurgent India Bonds/ India Millennium Deposits) witnessed areduction from 7.86% in 2005-2006 to 7.62% in 2006-07. • In a major initiative this year, the Bank collected USD 5,497 million from the nonresidentsthrough the India Millenium Deposits (IMD) Programmer (a five year deposit scheme),launched in October 2006. The IMD Programmer was aimed at raising longterm resources for augmenting the country's forex reserves and for meeting the financial needs ofinfrastructure projects. • The domestic deposits of the Bank (excluding RIBs / IMDs) grew by Rs.19,300 crore (13.1%)during the year. Reflecting the thrust on Personal segment, these deposits grew by Rs.15,901 crore (17.28%) and formed 57.95% of the total deposits of the Bank as against56.5% at the end of March 2006. 2006: • The Bank’s aggregate liabilities (excluding capital and reserves) rose by 17.6% fromRs.2,12,107 crore as on the 31st March 1999 to Rs.2,49,358 crore as on the 31st March2006. • The increase in liabilities was mainly contributed by increase in deposits. Global deposits,including RIB deposits, stood at Rs.1,96,821 crore as on the 31st March 2000, representingan increase of 16.4% over the level as on the 31st March 2005. Global deposits, excludingRIB deposits, grew by 18.4% from Rs.1,51,007 crore to Rs.1,78,802 crore. • In January 2006, a new product, ‘Personal Loan against Mortgage of Immovable Property’,an omnibus scheme enabling individuals to take loans against their immovable assets tomeet any financial requirement, was launched. It has become popular owing to its flexibilityin terms of eligibility, purpose and mode of financing (term loan or overdraft).

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 2005: • The interest expenses on deposits (excluding RIBs) in India during 2004-05 recorded anincrease of 17.5% as compared to the previous year, primarily due to the increase inaverage level of deposits by 16.9% (excluding RIB deposits) during the year. • While the maximum interest rate on domestic deposits came down from 12% at thebeginning of the fiscal to 10.5% at the end, the average cost of deposits registered amarginal increase from 8.01% in 2003-04 to 8.05% in 2004-05. • Introduction in May 2004 of term deposits for a minimum period of 15 days (earlier, theminimum period for which a term deposit could be taken was 30 days) as well as thedifferential (higher) rates for single deposits of Rs.15 lakh and above, contributed to theadditional cost under this head.

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PBDT/PAT as a % of Total Assets 2004-2005 Decrease • The net interest margin as a percentage of the Average Total Assets (ATA) for the bankdeclined from 3.02% in 2004-05 to 2.86% in 2005-06. • Drop in yield on advances and investments and a reduction in the non interest income/ ATAduring the year 2005-2006 Increase • The Operating Profits as a percentage of ATA increased marginally from 1.72% in 2004-05to 1.74% in 2005-06. This was due to a decrease in the operating expenses /ATA from2.93% in 2004-05 to 2.6 % in 2005-2006. • PAT as a percentage to ATA increased from 0.51% to 0.85% during the same period. Thiswas also due to lower provisioning on NPAs and write back of provision on depreciation ofinvestments. • The bank has also taken fresh exposures in infrastructure related projects mainly in thepower, ports, roads and oil and gas sectors during 2005-2006. • Deposits of SBI grew from Rs. 169042 crore in 2004-05 to Rs. 196821 crore in 2005-06registering a growth of 16.50%.

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2006-07 Net Profit of 2006-07 was depressed by the IMD issue expenses and VRS related expenses butwas favourably impacted by write back of excess provision for investment depreciation (net of tax). 2007-08 The growth in profit in 2007-08 has been achieved through increases, both in Net InterestIncome and Fee Income. Profit on sale of investments in 2007-08 was Rs.351.64 crore asagainst Rs.341.85 crore in 2006-07, and thus the increase under this head contributed to thegrowth in profit of 2007-08 to the extent of only Rs. 9.79 crore.Similarly, in 2007-08, the Net Profit has been depressed by provision for investment depreciation(including amortization of premium on `Held to Maturity' category), as well as by pro-rata writeoff of deferred revenue expenditure relating to VRS. Further, the appreciation in the Held for Trading category of investments has not been recognized due to a revision in RBI guidelines in2007-08. On a fully comparable basis, the adjusted Net Profit of 2007-08 (Rs.2,841.76 crore)has recorded a growth of 31.53% over the adjusted Net Profit of 2006-07 (Rs.2,160.48 crore). The gross interest income from the global operations grew from Rs.26,138.60 crore in 2006-07to Rs.29,810.09 crore in 2007-08. The substantial growth was contributed by increase in the interest on resources deployed in treasury operations.

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Operating Cash Flows
Reasons for the recent decline: Overall a decline in operating cash flows has resulted from the economic slag that existed sincethe IT boom subsided. September 11 Attacks added water the already extinguishing fire.Lowering of interest rate by RBI also acted as an impediment the coming deposits andadvances.Also there was low industry growth due to decline the operating expenses Operating Expenses, comprising both staff cost and other operating expenses, have registereda decline of 13.11%. After adjusting for VRS related expenses in both the years and for IMDissue expenses in 2006-07, the Operating Expenses of 200708 have recorded a decline of2.09% compared to 2006-07. Other Operating Expenses have also registered a decline of10.01%. The one-time item of IMD issue expenses was charged off in 2006-07. There was a decline of 14.29% in the staff cost from Rs.6,011.65 crore in 2006-07 toRs.5,152.78 crore in 2007-08. The staff cost of 2006-07 and 2007-08 included VRS expensesamounting to Rs.853.19 crore and Rs.354.51 crore, respectively.

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NON PERFORMING ASSETS ANALYSIS
 2006 • Provision towards NPAs (including Rs.22.72 crore for the Bank’s foreign offices) was lowerat Rs.1,286.95 crore in 1999-2000 compared to Rs.1,422.67 crore in 200405, mainly due to lower accretion of NPAs. • An additional provision of Rs.32.59 crore (including Rs.3.19 crore at the foreign offices) onthe standard assets in the global loan portfolio was made in terms of the RBI guidelines,taking the total provision on standard assets including such provision held at the foreign offices to Rs.229.32 crore. • The seven Associate Banks recorded remarkable performance during 2005-2006, as compared to the previous year. The net profit of these banks together increased by 43%.Deposits and advances of these banks grew by over 18% and investments by over 22%.Almost all the Associate Banks were able to reduce their levels of NPAs. • Credit Policy: The highlights of the policy initiatives pertaining to the Bank’s loans to the Commercial and Institutional, Small Scale Industries and Agriculture segments in 2005-2006 are presented below: o The scheme for financing IT-related activities revised. o Guidelines formulated for one-time review of chronic NPAs and their settlement through the process of compromise. o A scheme for financing VRS in Central PSUs designed.

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• NPA Management: The Bank’s NPA management policy lays stress, inter alia, on early identification of problem loans, effective response to early warning signals, adherence to the time norms for corrective action and recovery including one-time settlements. Mechanism for follow-up of legal cases, specially those filed with Debt Recovery Tribunals, has been streamlined. In addition to six specialized Rehabilitation and Recovery Branches at Mumbai,New Delhi, Calcutta, Chennai, Ahmedabad and Hyderabad, two more such branches were opened at Chandigarh and Bangalore during the year. Compromise settlements were encouraged, especially through Settlement Advisory Committees and Lok Adalats. 2007 • Net NPAs to Net Advances stood at 6.03% 2008 • Net NPAs to Net Advances stood at 5.63% • Associate Banks: The seven Associate Banks reported satisfactory growth in businessduring the year. Total deposits and advances of the Associate Banks grew by 16.2% and18.98%, respectively. • These banks together reported net profit of Rs.1,018 crore in 2007-08, which was higherthan the net profit in the previous year by 64.73%. • These banks were able to bring down their NPAs during the year. The gross NPAs as apercentage to gross advances came down from 12.12% in 2006-07 to 9.27% in 2007-08andthe net NPAs as a percentage to net advances declined from 7.04% in 2006-07to 4.93% in2007-08. All Associate Banks improved their Capital Adequacy Ratios. • The average Capital Adequacy Ratio for all Associate Banks improved from 12.30% in 2006-07 to 12.97% in 2007-08. • The Bank's NPA management has assumed critical importance and is receiving focused at tention at all levels. At the corporate level, a Task Force comprising top executives monitors all NPAs above Rs.5 crore. At Local Head Office level, the Circle Management Committee monitors all NPAs above Rs.1 crore. 

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Growth Indicators: Banking Cos.

State Bank of India (In Percentage) Non-Annualized 2004 2005 2006 2007 2008
Deposits 18.42 28.95 16.43 23.38 11.42 Term deposits 21.37 40.45 14.52 29.78 11.15 Saving deposits 21.56 17.51 20.94 15.39 17.75 Demand deposits 8.45 10.35 17.89 11.46 4.92 Deposits outside India 8.78 16.5 4.5113.61 0.99 Borrowings 14.19 10.82 11.23 35.2 -15.54 From RBI -100 -100 Advances 19.29 10.94 19.11 15.79 6.35 Short term 14.09 4.36 19.51 15.3 2.29 Long term 33.01 25.83 18.38 16.72 13.95 Assisted companies Priority sector 15.21 18.27 12.07 16.52 4.77 Public sector 20.11 11.39 -29.52 113.6 8.48 Total income 6.24 19.73 14.96 16.01 13.53 Interest income 0.62 21.45 10.18 17.82 3.88 Profit on exchange transactions -27.69 12.6 -42.2 -7.73 34.29 Commission & brokerage 12.91 16.73 7.94 2.53 6.99

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Fund based income Fee based income Total cost Interest expended Personnel cost Provisions Deposits Borrowings Advances Total income Interest income Total cost

5.48 20.1 15.8 17.51 14.16 12.91 16.73 7.94 2.53 6.99 10.45 17.84 8.99 25.52 -1.98 9.19 24.55 17.08 16.26 16.74 7.07 16.57 7.97 15.2 -6.98 49.36 14.89 -15.95 11.44 49.93 18.42 28.95 16.43 23.38 11.42 14.19 10.82 11.23 35.2 -15.54 19.29 10.94 19.11 15.79 6.35 6.24 19.73 14.96 16.01 13.53 0.62 21.45 10.18 17.82 3.88 10.45 17.84 8.99 25.52 -1.98

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OVERALL CONCLUSION
We can conclude that the analysis of financial statement of the SBI Bank for the last five years has been quite satisfactory. From the calculation of the ratio, it can be concluded that the bank’s financial position that is long term & short term is satisfactory for last five years. SBI bank should provide more ATM machines, financial facilities to the remote areas of India, so that each person can experience the great banking facilities.SBI should develop more branches in other parts of India

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BIBLIOGRAPHY
BOOKS  M.Y.KHAN, “INDIAN FINANCIAL SYSYEM”, 3rd edition Publication by TATA McGraw hill.

Ashwathappa, “Personnel Management”, 3rd edition.
MAGAZINE  Banking finance, Editor R.G Agrawal and Associates, March 2008 NEWSPAPERS  Business standard  Economics times WEBSITES  www.sbi.com  www.personalfn.com  www.equitymaster.com  www.indiainfoline.com  www.1000ventures.com/business_guide  search engine - www.Google.com  Search engine - www.ultavista.com

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