Comparatiive Study On Banking Sector Mutual Funds at Networth

A
PROJECT REPORT
ON
COMPARATIVE STUDY ON BANKING SECTOR MUTUAL

FUNDS
AT
NETWORTH LIMITED
(Submitted in partial fulfillment of
The requirement for the award of the)
MASTER OF BUSINESS ADMINISTRATION

Submitted by
(2018-2020)
Under supervision of
SUMITTED TO
Department of Business Administration
VELAGAPUDI RAMAKRISHNA SIDDHARTHA ENGINEERING

COLLEGE(Autonomous)(Affiliated to JNTU, Kakinada)
DECLARATION
I, the undersigned, hereby declare that the project report

entitled
“(COMPARATIVE STUDY ON BANKING SECTOR MUTUAL

FUNDS)” carried out at (NETWORTH LIMITED). Is
my orginal work written and submitted by me in partial fulfillment of
Master
of Business Administration of (VELAGAPUDI RAMAKRISHNA SIDDHARTHA
ENGINEERING COLLEGE(Autonomous),JNTU, Kakinada). I also declare are
that
this project has not been submitted earlier in any other university or
institution.
Place:
Date:
ACKNOWLEDGEMENT
I take this oppourtunity to extend my profound thanks and deep sense of
gratitude to the authorities of (NETWORTH LIMITED). For giving
me the oppourtunity to under take this project work in their esteemed
organization. I profusely thanks
My sincere thanks to Honarable secretary

sri
Principal and my project HOD.
.and my internal guide For the kind
Encouragement and constant support
Extended in completion of this project work. From the bottom of my heart
Iam also thankful to all those who have incidentally helped me , through
Their valued guidance, co-operation and unstinted support during the course
Of my project work .
INDEX
CHAPTER-1
INTRODUCTION
SCOPE OF THE STUDY
OBJECTIVES OF THE STUDY
METHODOLOGY OF THE STUDY
LIMITATIONS OF THE STUDY
CHAPTER-2
INDUSTRY PROFILE
COMPANY PROFILE
CHAPTER-3
REVIEW OF THE LITERATURE
CHAPTER-4
DATA ANALYSIS AND
INTERPRETATION
CHAPTER-5
FINDINGS
CONCLUSION
SUGGESTION
BIBLIOGRAPHY
1
CHAPTER-1
INTRODUCTION
A Financial System is an important tool for a country that wants to develop

economically.The reason is that it helps in the creation of wealth by way of
investments.the rapid transformation in the banking industry over the last
decade has made the industry stronger,cleaner,transparent, efficient, faster,
disciplined and a lot more competitive. The banking industry in India has a huge
canvass of history ,which covers the traditional banking praticies from the
time of Britishers to the reforms period,nationalization to privatization of
banksand now increasing numbers of foreign banks in India.
In India the Reserve bank is the central banking institution. The RBI
regulates and operates the banking system in India. It supervises and
administers exchange control and banking regulations and administers the
government monetory policy. The banking system in India works according to
the guidelines issued by the RBI.
The banking sector is the backbone of the modern economy. The banks play
an important role in mobilisation of deposits and disbursement of credit to
various sectors of the economy.A bank is a financial institution whose purpose
is to receive deposits and lend money to individuals and business, disburse
payments, invest funds in securities for returns ,and safeguard money. It
services savings and current accounts provide credit to borrowers in the form of
loans and through credit cards, and act as trustees of its clients.
The use of the technology has brought a revolution in the working style of
the banks and it has pervaded each and every aspect of human life in a drastic
manner.Advent of anytime ,anywhere banking has become possible mobile
phones, Digital cameras,etcand appliances becoming east to use and that too,
in affordable prices. Together with that, the entry of plastic money has opened
new avenues for cashless transactions considered safer and more convenient .A
country’s financial system works in a set of financial markets, financial services
and financial institutions.
2
HISTORY:
The first banks were Bank of Hindustan and The general Bank of India,
established 1786.The largest bank, and the oldest still in existence,is the
Statebank of india,which is originated in the bank of Calcutta in june
1806,which almost immediately became the Bank of Bengal. This was one of
the three presidency banks,the other two being the Bank of Bombay and Bank
of Madras,all three of which were established under charters from the British
East India Company.
The three banks merged in 1921 to form Imperial Bank of india, which upon
India’s Independence,became the state Bank of India in 1955. For many years
the presidency banks acted as a quasi-central banks,as did their successors,until
the Reserve Bank of India,which was renamed as State Bank of India. In
1959,SBI took over control of eight private banks floated in the erstwhile
princely states and making them as its 100% subsidiaries.
In 1969 the Indian government nationalized all the major banks that it did
not already own and these have remained under government ownership. They
are run under a structure known as profit-making public sector(PSU)
STRUCTURE OF BANKING SECTOR
All banks which are included in the second schedule to the RBI ACT 1934 are
scheduled Banks. These banks comprise Scheduled Commercial Banks and
Scheduled cooperative banks.
RESERVE BANK OF INDIA:
The country had no central bank prior to the establishment of the RBI. The RBI
is India. It is called the Reserve Bank’ as it keeps the reserves of all commercial
banks.the supreme monetary and banking authority in the country and
controls the banking system
SCHEDULED AND NON SCHEDULED BANKS:
Schedule bank is a bank that is listed under the second schedule of the
RBI ACT 1934.In A Bank A scheduled bank is a bank that is listed under the
second schedule in order to be included under this schedule of the RBI Act,
banks have to fulfill certain conditions such as having a paid up capital and
reserves of at least 0.5 million and satisfying the Reserve the RBI Act, 1934. In
order that its affairs are not being conducted in a prejudicial to the interests of
its depositors.
3
Scheduled banks are further classified in to
 Commercial banks
 Cooperative banks
Non schedule banks are those which are not included in the second schedule
of the RBI ACT,1934.
COMMERCIAL BANKS:
Commercial banks may be defined as, any banking organizations that deals with
the deposits and loans of business organisation.
 Commercial banks issue bank cheques and drafts,as well as accept

money on term deposits.
 These banks act as a money lenders, by way of instalment loans and
overdrafts.
 These banks allow for a These banks allow for a of deposit accounts such
as savings and time deposits.
 These institutions are run to make a profit and owned by a group of
individuals.
Scheduled commercial banks:
Scheduled commercial banks account for a major portion of the business of

the scheduled banks.SCBs in India are categorized in to five groups based on
their ownership and nature of operations.
 State bank of India

 Nationalised banks/PUBs
 Private banks
 Foreign banks
TYPES :
PUBLIC SECTOR BANKS:
These are banks majority of share capital of the bank is held by the
government of india.
Examples : 1.SBI
2.Canara bank
4
3. Bank of india etc.,
PRIVATE SECTOR BANKS:
These are banks majority of share capital of the bank is held by the private
individuals.
These banks are registerd as companies with limited liability.
Examples: 1. ICICI Bank
2. Axis Bank
3.Hdfc Bank etc.,
FOREIGN BANKS:
These banks are registerd and have their headquartersin a foreign country but
operate their branches in our country.
Examples: 1. HSBC
2. Citi bank
3. standard chartered bank, etc.,
REGIONAL RURAL BANKS:
These banks are established under the provisions of an ordinance

promulgated on the 26th September 1975 and the rbi act,1976.
Objective :
The main objective to ensure sufficient institutional credit for agriculture and
other rural sectors.
COOPERATIVE BANKS:
1. Cooperative bank is a financial entity which belongs to its members, who are
at the same time the owners and the customers of their bank.
2.Cooperative banks are often created by persons belonging to the same local or
professional community or sharing a common interest.
3.Cooperative banks function on the basis of “no profit no-loss”.
TYPES OF BUSINESS OF BANKS:
 RETAIL BANKING
5
 WHOLESALE BANKING
 TREASURY OPERATIONS
 OTHER BANKING ACTIVITIES
ABOUT THE TOPIC:
What is Equity?
Equity is the ownership interest of investors in a business firm. Investors can own
equity shares in a firm in the form of common stock or preferred stock. Equity
ownership in the firm means that the original business owner no longer owns 100% of
the firm but shares ownership with others.On a company's balance sheet, equity is
represented by the following accounts: common stock, preferred stock, paid-in capital,
and retained earnings. Equity can be calculated by subtracting total liabilities from total
assets.
EQUITY ANALYSIS:-
Stock analysis is a term that refers to the evaluation of a particular trading instrument,
an investment sector or the market as a whole. Stock analysts attempt to determine
the future activity of an instrument, sector or market. There are two basic types of
stock analysis: fundamental analysis and technical analysis. Fundamental analysis
concentrates on data from sources including financial records, economic reports,
company assets and market share. Technical analysis focuses on the study of past
market action to predict future price movement.
Equity Analysis on Banking Sector

The main aim of this project is to analyze current growth trend of scripts of banking
in equity market. Based on the study of Indianeconomy.Research studies have
proved that investments in some shares with a longer tenure of investment have
yielded far superior returns than any other investment. However, this does not
mean all equity investments would guarantee similar high returns. Equities are
high-risk investments. One needs to study them carefully before investing.
Since 1990 till date, Indian stock market has returned about 17% to investors on an
6
average in terms of increase in share prices or capital appreciation annually. Besides
that on average stocks have paid 1.5 % dividend annually. Dividend is a percentage
of the face value of a share that a company returns to its shareholders from its annual
profits.Compared to most other forms of
7
investments, investing in equity shares offers the highest rate of return, if invested
over a longer duration.
Each investment alternative has its own strengths and weaknesses. Some options
seek to achieve superior returns (like equity), but with corresponding higher risk.
Other provide safety (like PPF) but at the expense of liquidity and growth. Other
options such as FDs offer safety and liquidity, but at the cost of return. Mutual funds
seek to combine the advantages of investing in arch of these alternatives while
dispensing with the shortcomings. Indian stock market is semi-efficient by nature and,
is considered as one of the most respected stock markets, where information is
quickly and widely disseminated, thereby allowing each security’s price to adjust
rapidly in an unbiased manner to new information so that, it reflects the nearest
investment value. And mainly after the introduction of electronic trading system, the
information flow has become much faster. But sometimes, in developing countries
like India, sentiments play major role in price movements, or say, fluctuations, where
investors find it difficult to predict the future with certainty.
Banks are the major part of any economic system. They provide a strong base to
Indianeconomy as well. Even in the share markets, the performance of banks shares
is ofgreat importance.
Thus, the performance of the share market, the rise and the fall of market is greatly
affected by the performance of the banking sector shares and this report revolves
around all factors, their understanding and a theoretical and technical analysis
8
RESEARCH METHODOLOGY
The process used to collect information and data for the purpose for making
business decisions. The methodology may include publication research ,
interviews , surveys and other research techniques, and could include present
and historical information.
The methodology of study consists of
• Source of data collection
• Statistical tools and techniques
Source of data collection:
The data has been collected through primary and secondary sources
 
primary data :-
  Discussion with branch manager
 
Live trading in the market
 
secondary data:-
  Books related to financial management
 
Web sites can be used as vital information source
Statistical tool and techniques:

The collected data needed for the analysis are:
• Comparative analysis of balance sheets

• Financial ratio’s
• The data has been analysed through different graphs for the selected banks.
9
OBJECTIVES:
The major objectives of the study:-
• To study and compare the performance of the banks in the banking sector.
• To help the investors for choosing to make their investments in banking

sector.
• To calculate the risk-return stock of banking sector.
• To understand the concept of investing in equity shares.
• Comparative analysis of 4 selected banks.
SCOPE
The scopes of the project are limited to understanding the basics of fundamental
analysis and technical analysis and apply it to take a decision of investing in banking
sector
LIMITATIONS

 The study is based on the datais given by the investors and the employee
which may not be 100% correct.

  very few investors and agents have a detail knowledge of the
Moreover,
study.
  The study is confined to only one sector.
 
The project has been limited to investment analysis of banking sector only.
10
INDUSTRY PROFILE
11
GLOBAL DERIVATIVES MARKET:
The global financial centers such as Chicago, New York, Tokyo and London dominate the
trading in derivatives. Some of the world’s leading exchanges for the exchange-traded
derivatives are:
Chicago Mercantile Exchange (CME) & London International financial Futures Exchange
(LIFFE) (for currency & Interest rate futures)
Philadelphia Stock Exchange (PSE), London stock Exchange (LSE) & Chicago Board options
exchange (CBOE) (for currency options)
New York Stock Exchange (NYSE) and London Stock Exchange (LSE) (for equity derivatives)
Chicago Mercantile Exchange (CME) and London Metal Exchange (LME) for commodities.
These exchanges account for a large portion of the trading volume in the respective
derivatives segment.
DEFINITION OF STOCK EXCHANGE:
"Stock exchange means anybody or individuals whether incorporated or not, constituted for
the purpose of assisting, regulating or controlling the business of buying, selling or dealing in
securities”.
"An association, organization or body of individuals, whether incorporated or not, established

for the purpose of assisting, regulating and controlling business in buying, selling and dealing
in securities."
It is an association of member brokers for the purpose of self-regulation and protecting the
interests of its members. It can operate only if it is recognized by the Government under the
securities contracts (regulation) Act, 1956. The recognition is granted under section 3 of the
Act by the central government, Ministry of Finance.
SECURITIES & EXCHANGE BOARD OF INDIA (SEBI):
SEBI was set up as an autonomous regulatory authority by the Government of India in 1988 "
to protect the interests of investors in securities and to promote the development of, and to
regulate the securities market and for matters connected therewith or incidental thereto." It is
empowered by two acts namely the SEBI Act, 1992 and the securities contract (regulation)
Act, 1956 to perform the function of protecting investor's rights and regulating the capital
markets.
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BOMBAY STOCK EXCHANGE (BSE):
The first and largest securities market in India, the Bombay Stock Exchange (BSE) was
established in 1875 as the Native Share and Stock Brokers' Association. Based in Mumbai,
India, the BSE lists over 6,000 companies and is one of the largest exchanges in the world.
The BSE has helped develop the country's capital markets, including the retail debt market,
and helped grow the Indian corporate sector.
This stock exchange, Mumbai, popularly known as "BSE" was established in 1875 as “The
Native share and stock brokers association", as a voluntary non-profit making association. It
has an evolved over the years into its present status as the premiere stock exchange in the
country. It may be noted that the stock exchanges the oldest one in Asia, even older than the
Tokyo Stock exchange which was founded in 1878. The exchange, while providing an
efficient and transparent market for trading in securities, upholds the interests of the investors
and ensures redressed of their grievances, whether against the companies or its own member
brokers.
It also strives to educate and enlighten the investors by making available necessary
informative inputs and conducting investor education programmes. A governing board
comprising of 9 elected directors, 2 SEBI nominees, 7 public representatives and an executive
director is the apex body, which decides the policies and regulates the affairs of the exchange.
The Executive director as the chief executive officer is responsible for the day today
administration of the exchange. The average daily turnover of the exchange during the year
2015 June was Rs 732483.12 crores
BSE INDICES:
In order to enable the market participants, analysts etc., to track the various ups and downs in
the Indian stock market, the Exchange has introduced in 1986 an equity stock index called
BSE-SENSEX that subsequently became the barometer of the moments of the share prices in
the Indian stock market.
It is a "Market capitalization-weighted" index of 30 component stocks representing a sample

of large, well-established and leading companies.
The base year of Sensex is 1978-79. The Sensex is widely reported in both domestic and
international markets through print as well as electronic media.
Sensex is calculated using a market capitalization weighted method. As per this

methodology, the level of the index reflects the total market value of all 30-component stocks
13
from different industries related to particular base period. The total market value of a
company is determined by multiplying the price of its stock by the number of shares
outstanding.
Statisticians call an index of a set of combined variables (such as price and number of shares)
a composite Index. An Indexed number is used to represent the results of this calculation in
order to make the value easier to work with and track over a time. It is much easier to graph
a chart based on Indexed values than one based on actual values world over majority of the
well-known Indices are constructed using “Market capitalization weighted method ".
In practice, the daily calculation of SENSEX is done by dividing the aggregate market value
of the 30 companies in the Index by a number called the Index Divisor. The Divisor is the
only link to the original base period value of the SENSEX. The Divisor keeps the Index
comparable over a period of time and if the reference point for the entire Index maintenance
adjustments. SENSEX is widely used to describe the mood in the Indian Stock markets. Base
year average is changed as per the formula
New base year average = Old base year average*(New market Value/old market value)
NSE’s DERIVATIVES MARKET:
The derivatives trading on the NSE commenced with S&P CNX Nifty index futures on June
12, 2000. The trading in index options commenced on June 4, 2001 and trading in options on
individual securities commenced on June 2, 2001, Single stock futures were launched on
November 9, 2001. Today, both in terms of volume and turnover, NSE is the largest
derivatives exchange in India. Currently, the derivatives contracts have a maximum of
3-month expiration cycles. Three contracts are available for trading, with 1 month, 2 month
& 3 month expiry. A new contract is introduced on the next trading day following of the
near month contract.
REGULATORY FRAMEWORK:
The trading of derivatives is governed by the provisions contained in the SC (R) Act, the
SEBI Act, and the regulations framed there under the rules and byelaws of stock exchanges.
In this chapter we look at the broad regulatory frame work for derivatives trading and the
14
requirement to become a member and authorized dealers of the F&O segment and the
position limits as they apply to various participants.
REGULATION FOR DERIVATIVE TRADING:
SEBI set up a 24-member committe under Chairmanship of Dr.L.C.Gupta develop the

appropriate regulatory framework for derivative trading in India. The committee submitted its
report in March 1998.
On May11, 1998 SEBI accepted the recommendations of the committee and approved the
phased introduction of derivatives trading in India beginning with stock index Futures.
SEBI also approved he “suggestive bye-laws” recommended by the committee for

regulation and control of trading and settlement of Derivative contract. The provision in the
SC(R) Act governs the trading in the securities.
The amendment of the SCR Act to include “DERIVATIVES” within the ambit of securities
in the SCR Act made trading in Derivatives possible within the framework of the Act.
Any exchange fulfilling the eligibility criteria as prescribed in the L.C.Gupta committee report
may apply to SEBI for grant of recognition under section 4 of the SCR Act, 1956 to start
Derivatives Trading.
The exchange shall have minimum 50 members.
The members of an existing segment of the exchange will not automatically become the
members of the derivatives segment. The members of the derivatives segment need to fulfill
the eligibility conditions as lay down by the L. C. Gupta committee.
The clearing and settlement of derivatives trades shall be through a SEBI approved clearing
corporation/clearing house. Clearing Corporation/Clearing House complying with the
eligibility conditions as lay down by the committee have to apply to SEBI for grant of
approval.
Derivatives broker/dealers and Clearing members are required to seek registration from SEBI.
This is in addition to their registration as brokers of existing stock exchanges. The minimum
net worth for clearing members of the derivatives clearing corporation/house shall be Rs.300
lakh. The net worth of the member shall be computed as follows:
Capital + Free reserves
Less non-allowable assets viz.,
Fixed Assets
Pledged securities
Member’s card
15
Non-allowable securities (unlisted securities)
Bad deliveries
Doubtful debts and advance
Prepaid expenses
Intangible Assets
30% marketable securities
The Minimum contract value shall not be less than Rs.2 Lakhs. Exchange should also submit
details of the futures contract they purpose to introduce.
The trading members are required to have qualified approved user and sales persons who have
passed a certification programmed approved by SEBI.
The L.C.Gupta committee report requires strict enforcement of “Know your customer” rule
and requires that every client shall be registered with the derivates broker.
The members of the derivatives segment are also required to make their clients aware of the
risks involved in derivatives trading by issuing to the client the Risk Disclosure and obtain a
copy of the same duly signed by the clients.
ELIGIBILITY OF ANY STOCK TO ENTER INTO THE DERIVATIVES

MARKET:
Non promoter holding (free float capitalization) not less than
Rs.750 crores from last 6 months.
Daily Average Trading value not less than 5 crores in last 6 months.
At least 90% of Trading days in last 6 months.
Non Promoters Holding at least 30%.
BETA not more than 4 (previous last 6 months)
16
17
COMPANY PROFILE
Networth Stock Broking Ltd. [NSBL]
NSBL is a member of the National Stock Exchangeof
India Ltd (NSE) and the Bombay Stock Exchange Ltd
(BSE) in the
Capital Market and Derivatives (Futures & Options)
segment. NSBL has also acquired membership of the
currency
derivatives segment with NSE, BSE, USE & MCX-SX. It
is Depository participants with Central Depository
Services India
(CDSL) and National Securities Depository (India)
Limited (NSDL). With a client base of around 100,000
loyal customers,
NSBL is spread across the country though its around
350 branches. NSBL is listed on the BSE since 1994.
18
Subsidiaries
Networth Wealth Solutions Ltd. [NWSL]
NWSL is into the business of delivery of Financial
Planning & Advice. It’s vision is to ‘Advice & Execute
money relatedsolutions to/for our customers in the most
Convenient & Consolidated manner, while making sure
that their experience
with us is always pleasant & memorable resulting in
positive advocacy’. The product & Services include
Financial
Planning, Life Insurance, On-line Trading Account,
Mutual Funds, Debentures/Bonds, General Insurance,
Loans and
Depository Services.
Networth Commodities & Investments
Limited [NCIL]
NCIL is the commodities arm of NSBL. It is a member at
the Multi Commodity Exchange of India (MCX),
National Commodity
& Derivatives Exchange (NCDEX) and ICEX & is
19
backed by solid research & analytics in Commodities.
Networth Soft Tech Ltd. [NSL]
NSL is an ISO 9001:2000 Certified Company. It is into
Application Development & maintenance. Building &
Implementation
of packaged software across various functions within
the Financial Services Industry is at its core. It also
provides data
center services which include hosting of websites,
applications & related services. It combines a unique
delivery model
infused by a distinct culture of customer satisfaction.
Ravisha Financial Services Pvt. Ltd. [RFSL]
RFSL is a RBI registered NBFC engaged in financing,
primarily it provides loan against securities.
Networth Insurance Broking Private
Limited [NIBPL]
NIBPL is engaged in Insurance Broking.
20
Our Group Companies
Networth Financial Services Limited [NFSL]
NFSL is a financial Services Company.
E Mail for Grievance :
Grievance@networthdirect.com
Vision :
To empower investors to take charge of their financial future & help them grow their networth
Mission :
Become a dominant player in the indian financial distribution space & make 'Networth' the
most sought after partner for any kind of investment option
Board of Directors
21
 B.Com;FCA. Distinguished entrepreneur having started his career as a practicing Chartered
Mr. S. P. Jain Accountant.Highly experienced in the field of financial services including stock broking, investment banking,
Director & corporate advisory, etc.
Chairman
Has been instrumental in phenomenal growth of Networth and SunCapital groups.
Mr. Randhir
Sisodiya
B.Tech; Over 13 years of experience in Capital Markets.
Executive Director
& CEO
Mr. Moheet
Agarwal
B.Com, M.B.A. More than 7 years of experience in Capital Markets.
Independent
Director
Mr. Praveen
Toshniwal B.COM, C.A. Over 6 years experience in Statutory & Internal audits of corporate & non-corporate bodies,
Independent tax Audit.
Director
Mr. Sanjay Motta

Independent B.COM, C.A. Over 10 years experience in the filed of Audit and taxation.
Director
Career
Every Networth employee is an asset - a unique talent that brings us

closer to achieving our goal of being global leaders in the sphere of
financial services.
22
That’s why Networth’s rise to a premier and versatile financial
organization in India has been, without doubt, a product of our
remarkable human resource base.
We are continually looking for bright, energetic individuals who can

align their talents to fulfill the individual needs of our clients, and in
the process, help usher Networth into an unsurpassable league. In
other words, we are looking for ambitious, inspired Networthians!
If you would like to be a part of our vibrant, cutting-edge work

environment and share the excitement of our collective vision, we
would be delighted to welcome you onboard.
PRODUCT AND SERVICES
With greater choices comes greater value. Networth offers you more
choices by providing a wide array of products and personalized
services, so you can take charge of your financial future with
confidence. So whether you are a new investor or a seasoned one, we
have the resources and advice you would need to make smart,
well-researched investments and help you grow your Networth.
Depository Equity & Services

Derivatives
Commodities
e-transact
General Currency my networth

Insurance One window Derivatives
23
all Products Grievance
Handling
Life Insurance
Call & Trade
Loans, Bonds & FD IPO
Mutual Funds
Consolidation
Financial
Planning
 We provide innovative & effective marketing support to our

business associates, which in turn helps them to acquire and retain
clients
We provide the best support in the industry, through
dedicated region wise associate support
24
CHAPTER-3
REVIEW OF LITERATURE
25
Literature review
A lot of investors trading in the financial markets with securities and stocks are trying
to foresee the market movements with the help of accessible information of the press.
This may concern the question will securities with higher prospective benefits get
greater revenues to securities with lower prospective benefits? These ideas can be
investigated using time research and deeper analysis. If a security is determined
precisely, the future return of the security will come to the beta at the securities market
line. Nevertheless, if it goes down that line then that states the security is understated
and it is overrated if it goes above the line. In any situation, regulations have to be
implemented.
Security market line is a line that shows the risks against revenue in the trading
market at a specified time and can expose all the securities that are in a good demand.
It is also called characteristic line or SML. Security market line really shows the
outcomes of the financial capital asset pricing model. It is also called CAPM formula.
Risk on the market is represented through the X-axis also called beta. Prospective
revenue is represented through the Y-axis. Securities risk premium is identified with
the help of security market line.
Security market line turns out to be an effective instrument in identifying if a security
involved in your Security market gives sensible prospective revenue for specified risks.
Your securities are represented on the chart with security market line. So, if the
securities risks against the prospective profits are situated above the line it is
undervalued security. It is so, as the trader supposes to get higher revenue for
specified risk. The asset that is situated below the line is overvalued. This can happen
when the trader can take less profit for the considered risk. Take this effective
knowledge for your consideration and use for earning profits.
26
O.B. Sayeed (1974) in his Ph.D. research examined correlates of organizational health
productivity and effectiveness in the SBI. The 90 study is related to productivity and
effectiveness. It is focus on the psychological aspect. There is neither a single comprehensive
study on “Critical Evaluation of Indian Banking Sector (with reference to Private Sector and
Public Sector Banks)” (1998-99 to 2002-03) nor any attempt has been made to analyse
contents of its profitability, productivity and financial efficiency after the new generated
private banks arrived. Hence present study is a humble effort to bridge the gap in the existing
literature.
Makrand (1979) studied the performance of public sector banks. He selected six quantitative
indicators for performance index. Which were branch expansion priority sector lending,
deposit mobilization export credit net profit to working funds and wages and cost of business
development? The main recommendations of his study were (i) counseling and expert opinion
to the priority sector lending on diversified activities is needed. (ii) The lower levelstaff
should also actively be involved in priority sector lending activities. (iii) Necessary lending
power should be vested with the branch managers.
M.R. Vyas (1991) studied financial performance of regional rural banks in Rajasthan. He
analysed the financial performance with the help of quick ratio, credit deposit ratio, and profit
to proprietor‟s capital ratio and working capital analysis. He concluded that regional rural
banks had a bright future as an effective instrument in the economic growth and up-liftment
of down trodden sections of Indian society particularly in rural area
M.N. Mishra (1992) in his paper evaluated the profitability of scheduled commercial banks
taking into account the interest and non - interest income and interest expenditure, manpower
expenses and other expenses. The Author has identified that the growing pre emption of funds
in the form of statutory liquidity ratio, cash reserve ratio, faster increase of expenses as
compared to the income, advances, and total investment than interest income and few more
factors have contributed to the declining profitability of Indian commercial banks.
Subramanian and Swami (1994) in their paper, Comparative performance of publc sector
banks in india” Prjanan, have analyzed and compared the efficiency in six public sector banks,
four private sector and three foreign banks for the year 1996-97. Operational efficiency is
27
calculatedin terms of total business and salary expenditure per employee. The analysis
revealed that higher per employee salary level need not result in poor efficiency and business
per employee efficiency co-efficient was also calculated. Among the PSBs, Bank of Baroda
registered the high efficiency and operating profit per employee. Among the private sector
banks Indus Bank followed by Citibank Registered highest and second highest operating
profit per employee respectively. However, among the Nationalized Banks there existed wide
variations in efficiency.
S. G. Hundekar (1995) studied the productivity aspects of the regional rural banks. He
examines growth and working of regional rural banks. He studied operational efficiency,
profitability and productivity in rural oriented Bijapur gramin bank. He concluded that
Bijapur gramin banks operating profitability has been very poor over the study period
because of its ineffectiveness in controlling the burden.
Zacharias Thomas (1997) studied on „Performance effectiveness of Nationalized Bank- A

Case Study of Syndicate Bank‟ Thesis studied the performance effectiveness of Nationalized
Bank by taking Syndicate Bank as case study in his Ph.D. thesis. Thomas has examined
various aspects like growth and development of banking industry, achievements of Syndicate
Bank in relation to capital adequacy, quality of assets, Profitability, Social Banking, Growth,
Productivity, Customer Service and also made a comparative analysis of 'the performance
effectiveness of Syndicate Bank in relation to Nationalized bank. A period of ten years from
1984 to 1993-94 is taken for the study. This study is undertaken to review and analyze the
performance effectiveness of Syndicate Bank and other Nationalized banks in India using an
Economic Managerial- Efficiency Evaluation Model (EMEE Model) developed by researcher.
Thomas in this study found that Syndicate Bank got 5th Position in Capital adequacy and
quality of assets, 15th in Profitability, 14th Position in Social Banking, 8th in Growth, 7th in
Productivity and 15th position in Customer Service among the nationalized banks. Further, he
found that five nationalized banks showed low health performance, seven low priority
performance and eleven low efficiency performance in comparison with Syndicate Bank.
28
Berry Wilson (1997) Has studied on “Bank Capital and Bank Structure: A Comparative
Analysis of the US, UK and Canada” This study investigates a 100-year history of the
asset-risk and capital structure choices of the publiclytraded banks located in the UK, Canada
and US. These three countries were chosen because their diverse regulatory and banking
structures, while sharing common legal and cultural institutions. For example, the US has
historically fostered small banks, and a regulatory system split between national andstate
regulators. In contrast, Canada has sought financial-sector stability through a small number of
large nationally-branched banks that have acted cooperatively with bank rescues during
periods of crisis, prior to the presence of their central bank. Finally, the UK established an
early tradition of internationally-diversified banking assets and developed a "life-boat"
support system orchestrated by the Bank of England. These differences in bank structures and
regulatory framework form the basis of our analysis.
V.K. Bhatasana (1999) studied the appraisal of financial performance of State Bank of India
(1980 – 1995) particularly productivity and profitability of State Bank of India during the
study period, he observed adequacy of capital fund, growth in deposits, branch expansion in
rural area and less borrowing from Reserve Bank of India in this study period of State Bank
of India improved the productivity & profitability of State Bank of India among public sector
banks.
SBI Research Department (2000) “Performance analysis of 27 Public sector banks”

Economic Research Department of State Bank of India, is to analyze the Performance of the
27 Public Sector Banks for the year 1999-2000 vis-avis the preceding year. Selecting four
different categories of indicatorsBusiness Performance, Efficiency, Vulnerability and labor
productivity indicators, carried out the analysis. Altogether, 39 indicators were selected for
this purpose. For the purpose of analysis, 27 PSBs disaggregated into four groups, namely,
the SBI, ABs (7), the SBGs (8), the NBs (19). During 1999- 2000, the PSBs exhibited better
show in terms of several parameters studied above. Nevertheless, the problems of NPAs and
capital adequacy remain to be taken care of. Researchers in this paper opinioned that greater
operational flexibility and functional autonomy should be given to PSBs especially to
strengthen their capital base. Further, they felt that since net interest margin will continue to
remain compressed in a deregulated interest rate regime, a lot of effect would have to be
made to mitigate this through generation of noninterest income. As far as NPAs are concerned,
they believe' that, the outdated laws and regulations that pose hindrance to banks in getting
back their dues need to be suitably amended.
Prashanta Athma (2000) “Performance of Public Sector Banks – A Case Study of State Bank
of Hyderabad” made an attempt to evaluate the performance of Public Sector Commercial
Banks with special emphasis on State Bank of Hyderabad. The period of the study for
evaluation of performance is from 1980 to 1993-94, a little more than a decade. In this study,
29
Athma outlined the Growth and Progress of Commercial Banking in India and. analyzed the
trends in deposits, various components of profits of SBH, examined the trends in Asset
structure, evaluated the level of customer satisfaction and compared the performance of SBH
with other PSBs, Associate Banks of SBI and SBI. Statistical techniques like Ratios,
Percentages, Compound Annual rate of growth and averages are computed for the purpose of
meaningful comparison and analysis. The major findings of this study are that since
nationalization, the progress of banking in India has been very impressive. All three types of
Deposits have continuously grown during the study period, though the rate of growth was
highest in fixed deposits. A comparison of SBI performance in respect of resource
mobilization with other banks showed that the average growth of deposits of SBH is higher
than any other bank group. Profits of SBH showed an increasing trend indicating a more than
proportionate increase in spread than in burden. Finally, majority of the customers have given
a very positive opinion about the various statements relating to counter service offered by
SBI.
I M Pandey (2001) “Capital Structure and the Firm Characteristics: Evidence from an
Emerging Market”. This study examines the determinants of capital structure of Malaysian
companies utilizing data from 1984 to 1999. We classify data into four sub-periods that
correspond to different stages of Malaysian capital market. Debt is decomposed into three
categories: shortterm, long-term and total debt. Both book value and market value debt ratios
are calculated. The results of pooled OLS regressions show that profitability, size, growth,
risk and tangibility variables have significant influence on all types of debt. These results are
normally consistent with the results of fixed effect estimation with the exception that risk
variable loses its significance. Unlike the evidence from the developed markets, investment
opportunity(market-to-book value ratio) has no significant impact on debt policy in the
emerging market of Malaysia. Our results are generally robust to time periods, but the
significance of some variables changes over time. Profitability has a persistent and consistent
negative relationship with all types of debt ratios in all periods and under all estimation
methods. This confirms the capital structure prediction of the pecking order theory in an
emerging capital market.
RadhaT. (2002), in her Ph D Thesis, titled, “Impact of banking sector reforems on the
performance of commercial banks in India, in Andhra University, Visakhapattanam, was to
critically evaluate the impact of Banking Sector Reforms on the performance of Commercial
Banks in India. In this Study, Radha analysis the magnitude of deposits and borrowings, and
trends in branch expansion, advances and 48 investments, trends income and expenditure and
also studied the magnitude of achievements in priority sector advances, capital adequacy, CD
ratio, staff position in different bank groups and individual banks within the group. This study
covered the period 1989-90 to 1998-99. Simple statistical techniques like percentages and
growth rates were used in this study.
30
Major findings of the study are..: (i) Total Deposits of all Commercial Banks put together
may be divided as SBI (21.5 per cent), Associate Banks (6.6 per cent), Nationalized Banks
(58.6 per cent), Private Banks (6.9 per cent) and Foreign Banks (6.3 per cent) respectively, (ii)
In the total borrowings of SCBs, Nationalized banks, on an average, accounted for 39.42 per
cent followed with 22.77 per cent by Foreign Banks, 23.54 per cent by SBI, 7.76 per cent by
Private Banks and 3.47 percent by associate banks, (iii) In Branch expansion, Indian Private
Sector Banks, registered 21.36 per cent growth rate which is highest amongst SCBs, during
the study period, followed by Foreign Banks with 16.96 per cent, Associate Banks with 12.77
per cent, Nationalized Banks with 11.36 per cent, SBI with 6.23 per cent, (iv) Total
investments of Commercial Banks in India increased to Rs. 346271 Crore in 1998-99 from Rs.
97,199 Crore in 1989-90, (v) Priority Sector advances as proportion of net bank credit after
exceeding the target of 40 percent in 1991 has been continuously falling short of target up to
1999, (vi) Foreign Banks in India as a group achieved highest capital adequacy ratio
among all groups of SCBs, (vii) Among all Indian banking groups, Indian private sector
banks recorded highest CD ratio with 67.06 'per cent.
Saumitra N. Bhaduri (2002) “Determinants of capital structure choice: a study of the Indian
corporate sector” Existing empirical research on capital structure has been largely confined to
the United States and a few other advanced countries. This paper attempts to study the capital
structure choice of Less Developed Countries (LDCs) through a case study of the Indian
Corporate sector. The objective is to develop a model that accounts for the possibility of
restructuring costs in attaining an optimal capital structure and addresses the measurement
problem that arises due to the unobservable nature of the attributes influencing the optimal
capital structure. The evidence presented here suggests that the optimal capital structure
choice can be influenced by factors such as growth, cash flow, size, and product and industry
characteristics. The results also confirm the existence of restructuring costs in attaining an
optimal capital structure.
Narayan Rao sapar & Jijo Lukose (2002) “An Empirical Study on the Determinants of the
31
Capital Structure of Listed Indian Firms” This study presents empirical evidence on the
determinants of the capital structure of non-financial firms in India based on firm specific
data. A comparative analysis is done for pre-liberalization and post-liberalization periods. The
study period and sample firms for pre-liberalization period are 1990-1992 and 498,
respectively. The same for post-liberalization period are 1997-1999 and 1411. Empirical
results imply that tax effect and signaling effect play a role in financing decisions whereas
agency costs effect financing decision of big business houses and foreign firms. It is also
revealed that size of the firm and business risk became significant factors influencing the
capital structure during post-liberalization period.
Ram Mohan TT (2003) “Long run performance of public and private sector bank stocks” has
made an attempt to compare the three categories of banksPublic, Private and Foreign-using
Physical quantities of inputs and outputs, and comparing the revenue maximization efficiency
of banks during 1992-2000. The findings show that PSBs performed significantly better than
private sector banks but not differently from foreign banks. The conclusion points to a
convergence in performance between public and private sector banks in the post-reform era,
using financial measures of performance.
Singh R (2003) “Profitability management in banks under deregulate environment” has

analyzed profitability management of banks under the deregulated environment with some
financial parameters of the major four bank groups i.e. public sector banks, old private sector
banks, new private sector banks and foreign banks, profitability has declined in the
deregulated environment. He emphasized to make the banking sector competitive in the
deregulated environment. They should prefer noninterest income sources.
ICRA (2003),In a the paper titled “comparative study on Indian banking”, tried to analyse the
fast-changing environment, the Indian Bank's Association (IBA) has Commissioned ICRA
Advisory Services (ICRA) to carry out a study to benchmark the strengths and weaknesses of
Indian Banks against those of select international banks. The scope of work for the study is to
benchmark the performance of Indian Banks vis-a-vis select global banks along three
dimensions-structural factors, operational factors 44 and efficiency factors. As suggested by
IBA, 21 Indian Banks (those with asset over Rs. 20,000 Crore as on 31st March, 2003) and
Seven International Banks have been selected for the study. The parameters, which have been
32
used for benchmarking, are Risk weighted capital norms, Income Recognition norms, asset
classification norms, provisioning norms, which come under "Structural Parameters". Return
on Assets, Return on Equity, Net interest margin, Operating expense ratio and Asset quality
are concerned with "Operational Parameters". Business per employee, Business per branch,
Operating expenses per Branch, Establishment expenses per employee, profitability per
employee, profitability per Branch are 'Efficient Parameters'. ICRA Limited, in this study,
found that the profitability of Indian Banks in recent years compares well with that of the
global benchmark banks primarily because of the higher share of profit on the sale of
investments, higher leverage and higher net interest margins. However, many of these drivers
ofhigher profits of Indian Banks may not be sustainable. To ensure long-term profitability,
ICRA Ltd. suggest that Indian Banks should diversify their loans across several customer
segments; they should introduce robust risk scoring techniques to ensure better quality of
loans; they should reduce their operating expenses by upgrading banking technology and they
should improve the management of market risk.
Simon H. Kwan (2003) investigated operating performance in Asian countries. After

controlled for loan quality, liquidity, capitalization, and output mix, per unit banks operating
costs are found to vary significantly across Asian countries and over time. His further analysis
reveals that the country rankings of per unit labour and physical capital costs are highly
correlated, suggesting that there exist systematic differences in bank operating efficiency
across Asian countries. However, this measure of operating efficiency is found to be unrelated
to the degree of openness of the banking sector. His research also identified that Asian banks‟
operating costs were found to decline from 1992 to 1997, indicating that the banks were
improving their operating performance over time.
Keshar J. Baral (2004) “Determinants of Capital Structure: A Case Study of Listed

Companies of Nepal” In this paper, an attempt has been made to examine the determinants of
capital structure -size, business risk, growth rate, earning rate, dividend payout, debt service
capacity, and degree of operating leverage-of the companies listed to Nepal Stock Exchange
Ltd. as of July 16, 2003. Eight variables multiple regression model has been used to assess
the influence of defined explanatory variables on capital structure. In the preliminary analysis,
manufacturing companies, commercial banks, insurance companies, and finance companies
were included. However, due to the unusual sign problem in the constant term of the model,
manufacturing companies were excluded in final analysis. This study shows that size, growth
rate and earning rate are statistically significant determinants of capital structure of the listed
companies.
Abor (2005) seeks to investigate the relationship between capital structure and profitability of
33
listed firms on the Ghana Stock Exchange and find a significantly positive relation between
the ratio of short-term debt to total assets and ROE and negative relationship between the
ratio of long-term debt to total assets and ROE.
David Hutchison and Reymond A K Cox David (2006) have been studied on “The Causal
Relationship between Bank Capital and Profitability” This paper examines the causal
relationship between the return on equity and financial leveragae in the U.S. banking industry.
For the periods 1983-1989 and 1996-2002 we find there is a negative connection between
bank capital and equity profitability except for the best performing banks.
Singla H.K. (2008) “financial performance of banks in India” has examined that how
financial management plays a crucial role in the growth of banking. It is concerned with
examining the profitability position of the selected sixteen banks of banker index for a period
of six years (2001-06). The study reveals that the profitability position was reasonable during
the period of study when compared with the previous years. Strong capital position and
balance sheet place, Banks in better position to deal with and absorb the economic constant
over a period of time.
Jobin T (2009) “The Determinants of Bank Capital Structure” The paper shows that
dispraised deposit insurance and capital regulation were of second order importance in
determining the capital structure of large U.S. and European banks during 1991 to 2004.
Instead, standard cross-sectional determinants of non-financial firms‟ leverage carry over to
banks, except for banks whose capital ratio is close to the regulatory minimum. Consistent
with a reduced role of deposit insurance, we document a shift in banks‟ liability structure
away from deposits towards non-deposit liabilities. We find that unobserved time invariant
bank fixed effects are ultimately the most important determinant of banks‟ capital structures
and that banks‟ leverage converges to bank specific, time invariant targets.
Ugo Albertazzi and Leonard Gambacorta (2009) have been studied on “Bank Profitability and
the Business Cycle” An important element of the macro-prudential analysis is the study of the
link between business cycle fluctuations and banking sector profitability and how this link is
affected by institutional and structural characteristics. This work estimates a set of equations
for net interest income, non-interest income, operating costs, provisions, and profit before
taxes, for banks in the main industrialized countries and evaluates the effects on banking
profitability of shocks to both macroeconomic and financial factors. Distinguishing mainly
the euro area from Anglo-Saxon countries, the analysis also identifies differences in the
resilience of the respective banking systems and relates them to the characteristics of their
financial structure.
Reint Gropp and Florian Heider (2009) “The Determinations of Bank Capital Structure” The
34
paper shows that dispraised deposit insurance and capital regulation were of second order
importance in determining the capital structure of large U.S. and European banks during 1991
to 2004. Instead, standard cross-sectional determinants of non-financial firms‟ leverage carry
over to banks, except for banks whose capital ratio is close to the regulatory minimum.
Consistent with a reduced role of deposit insurance, we document a shift in banks‟ liability
structure away from deposits towards non-deposit liabilities. We find that unobserved time
invariant bank fixed effects are ultimately the most important determinant of banks‟ capital
structures and that banks‟ leverage converges to bank specific, time invariant targets.
Ade Salman and Riko Hendrawan (2009) Banks were knowned to have volatile capital
structure caused by their financial liquidity. This paper aims to examine the impact of capital
structure towards performance of two group of banks, conventional and Islamic banks, by
using profit efficiency approach. Two stages procedure were employed. In the first stage we
measure profit efficiency score for each bank in Indonesia during year 2002-2008 by using
distribution free approach (DFA). In the second stage we employ banks‟ capital ratio to
measure their impact towards their performance. Output from the first stage indicate that
bank‟s average profit efficiency scores equal to0,60. Whereas the maximum score equal to
0,78. So there is still room around 0,18 Indonesian banks to improve their performance. The
output also indicate the Islamic banks in Indonesia succeed to place their position at top 20%
highest profit efficiency score. Result from the second stage indicate that bank‟s capital ratio
have a negative effect on their profit efficiency. Futhermore, the negative effect happened to
be higher for the Islamic bank group compared to conventional bank.
Chowdhury, T. A. & Kashfia, A. (2009) have tried to analyze the development and growth of
Selected Private Commercial Banks of Bangladesh.In a developing country like Bangladesh
the banking system as a whole play a vital role in the progress of economic development. It is
observed that all the selected private commercial banks are able to achieve a stable growth of
branches, employees, deposits, loans and advances, net income, earnings per share during the
period of 2002-2006. Seven trend equations have been tested for different activities of the
private commercial banks. Among them the trend value of branches, employees, deposits and
net income are positive incase of all the selected banks. Square of correlation coefficient ( )
has also been tested for all trend equations. The r 2 2 of branches, deposits and net income is
more 15 than 0.5. This shows that branches, deposits and net income collectively influence
50% of the performance of the private commercial banks.
Ebru Caglayan (2010) has studied on “The Determinants of Capital Structure: Evidence from
the Turkish Banks” This paper examines the capital structure of banks, from the perspective
of the empirical capital structure literature, for non-financial firms by using the panel data
35
analysis method. It investigates which capital structure theories can explain the capital
structure choice of the banks. The paper also identifies two sub-periods to determine the
differences across determinants of capital structure in the different periods for Turkish banks
after the financial crises and restructuring periods. The findings show that size and market to
book have positive effects whereas tangibility and profitability have negative effects on the
book leverage in allperiods. The results of the analysis indicate some evidence of the pecking
order theory‟s expectations.
Gill, Amarjit, Nahum Biger, Neil Mathur, (2011) findings regarding the effect of capital
structure on profitability by examining the effect of capital structure on profitability of the
American service and manufacturing firms. A sample of 272 American firms listed on New
York Stock Exchange for a period of 3 years from 2005 – 2007 was selected. The correlations
and regression analyses were used to estimate the functions relating to profitability (measured
by return on equity) with measures of capital structure. Empirical results show a positive
relationship between short-term debt to total assets and profitability and between total debt to
total assets and profitability in the service industry. The findings of this paper show also a
positive relationship between short-term debt to total assets and profitability, long-term debt
to total assets and profitability, and between total debt to total assets and profitability in the
manufacturing industry.
Chandra Sekhar Mishra(2011) This study seeks to identify the determinants of Indian central
PSUs‟ capital structure. This is important since one does not come across many studies
related to the PSUs. Moreover in the post disinvestment phase, the PSUs in India have
become more market oriented in terms of raising funds. The gradual reduction in the
budgetary resources for the PSUs is also one of the reasons. The PSUs have got to depend
more on extra-budgetary resources (EBRs) for their needs. PSUs are also different in several
ways than their counterparts in the private sector. For this study a sample of 48 profit making
manufacturing PSUs is considered for the time period 2006 to 2010. Multiple regression has
been used to find out the factors affecting capital structure. The independent variables have
been considered keeping in view Agency Theory, Pecking Order Hypothesis and other
established capital structure models. The results suggest that the capital structure (Total
Borrowing to Total Assets) of the profit making PSUs is affected by Asset Structure (Net
Fixed Assets to Total Assets, NFATA), Profitability (Return on Assets, ROA) and Tax. Unlike
suggestion of pecking order hypothesis, growth (defined as growth in total assets) is
36
positivelyrelated to leverage. As predicted by theory NFATA and ROA are respectively
positively and negatively related to leverage. In contradiction to theory tax and leverage are
negatively related. Firms with less effective tax rate have gone for more debt. None of the
other variables like non-debt tax shield (NDTS), Volatility, Size were found to be significant.
37
CHAPTER-4
DATA ANALYSIS & INTERPRETATION
38
DATA COLLECTION
Fundamental Analysis:
Fundamental analysisrefers to the study of the core underlying elements that
influence the economy of a particular entity. It is a method of study that attempts to
predict price action and market trends by analyzing economic indicators, government
policy and societal factors within a business cycle framework. The fundamental
analysis of a company involves the following parameters:
1. Macroeconomic Analysis
2. Industry Analysis
3.Company analysis
How does an investor determine if a stock is undervalued, overvalued, or trading at fair

market value? With fundamental analysis, this may be done by applying the concept of
intrinsic value. If all the information regarding a corporation's future anticipated growth,
sales figures, cost of operations, and industry structure, among other things, are
available and examined, then the resulting analysis is said to provide the intrinsic
value of the stock. To a fundamentalist, the market price of a stock tends to move
towards its intrinsic value. If the intrinsic value of a stock is above the current market
price, the investor would purchase the stock. However, if the investor found through
analysis that the intrinsic value if a stock was below the market price for the stock, the
investor would sell the stock from their portfolio or take a short position in the stock.
1. Macroeconomic Analysis:
39
Change in rates by RBI:
Looking at the changing scenario, RBI keeps on changing rates such as Repo Rate,
Reverse Repo Rate and Cash Reserve Ratio. These rates have a direct relation with
Bank’s performance and in turn share prices are linked with bank’s performance.
Thus, a change in these rates or even a speculation of change in these rates affects
share prices.
Global Analysis:
Any change in global economy or in other words, global changes also affects Indian
Economy. For example: The recession was first observed in USA and later on it
caught its lead in other countries too. When it entered India, the share market
crashed literally. It affected many banks as ICICI and others, resulting in loss of
people’s confidence towards banks.
Change in Governments Policy:

The government takes desired steps and keeps on reviewing its policies, rules,
regulations and procedures. A change in FDI and FII inflow restrictions, entry exit
barriers for foreign banks in India, EXIM regulations, change in Basel norms, etc. form
a part of important government policies. For example if government allows entry of
foreign banks in India, then competition would rise, and it may happen that those
foreign banks may outperform and leave our own banks far behind. Thus, some
restriction would follow and this will definitely affect share prices.
Effect of Inflation on banking operations:

Several economists have found that countries with high inflation rates have
inefficiently small banking sectors and equity markets. This effect suggests that
inflation reduces bank lending to the private sector, which is consistent with the view
that a sufficiently high rate of inflation induces banks to ration credit.
Effect of monetary policy on Banking Sector:
Monetary policy affects banking sector in many ways. One way is through
creditMarkets. Because of imperfect information, incomplete contracts and imperfect
40
bankCompetition, monetary policy may affect banks’ loan supply. In particular,
expansive Monetary policy may increase banks’ loan supply directly (bank lending
channel), or Indirectly by improving borrowers’ net worth and, hence, by reducing the
agency costs of lending.
41
2. Industry Analysis:
Life Cycle Analysis:
Bank plays an important role in the economic development of the country. The entire
commercial and industrial activities are well knitted with the banks. One cannot
imagine the cessation of the banking activities even for a day. There may be an
economic crisis in the country if the banks stop functioning for some days.
In the early days, the banking business was confined to receiving of deposits and
lending of money. But the modern bankers undertake wide variety of functions to
assist their customers. Banks are like any other business in that they produce goods
and services to customers. Like any other businesses, their products have life cycles.
Cheques are in a decline phase of their life cycle and use of cheques is declining
rapidly and being replaced by electronic bill pay and debit cards. Internet Banking and
Electronic Bill pay are in their growth phase as more and more customers are using
these services. Cards or Cheque Cards are in their maturity phase as they are
accepted by nearly everyone. So overall, the banking industry is in a GROWTH
PHASE, as new measures are being adopted overtime so as to make transactions
speedy and easy.
Porter’s five forces analysis:
1. Threat of New Entrants. The average person can't come along and start up
abank, but there are services, such as internet bill payment, on which entrepreneurs
can capitalize. Banks are fearful of being squeezed out of the payments business,
because it is a good source of fee-based revenue. Another trend that poses a threat
is companies offering other financial services. Also, the possibility of a mega bank
entering into the market poses a real threat.
2.Power of Suppliers. The suppliers of capital might not pose a big threat, but
thethreat of suppliers luring away human capital does. If a talented individual is
working in a smaller regional bank, there is the chance that person will be enticed
away by bigger banks, investment firms, etc.
42
3. Power of Buyers. The individual doesn't pose much of a threat to the
bankingindustry, but one major factor affecting the power of buyers is relatively high
switching costs. If a person has a mortgage, car loan, credit card, checking account
and mutual funds with one particular bank, it can be extremely tough for that person to
switch to another bank. In an attempt to lure in customers, banks try to lower the price
of switching, but many people would still rather stick with their current bank. On the
other hand, large corporate clients have banks wrapped around their little fingers.
Financial institutions - by offering better exchange rates, more services, and exposure
to foreign capital markets - work extremely hard to get high-margin corporate clients.
4. Availability of Substitutes. There are plenty of substitutes in the bankingindustry.

Banks offer a suite of services over and above taking deposits and lending money, but
whether it is insurance, mutual funds or fixed income securities, chances are there is
a non-banking financial services company that can offer similar services. On the
lending side of the business, banks are seeing competition rise from unconventional
companies. Sony, General Motors and Microsoft all offer preferred financing to
customers who buy big ticket items
5. Competitive Rivalry. The banking industry is highly competitive. The

financialservices industry has been around for hundreds of years and just about
everyone who needs banking services already has them. Because of this, banks
must attempt to lure clients away from competitor banks. They do this by offering
lower financing, preferred rates and investment services. The banking sector is in a
race to see who can offer both the best and fastest services, but this also causes
banks to experience a lower ROA. They then have an incentive to take on high-risk
projects. In the long run, we're likely to see more consolidation in the banking industry.
Larger banks would prefer to take over or merge with another bank rather than spend
the money to market and advertise to people.
43
DATA ANALYSIS
To study the financial performance of the following selected Banks:

1. STATE BANK OF INDIA
2. ICICI BANK LIMITED
3. PUNJAB NATIONAL BANK
4. CANARA BANK
5. BANK OF BARODA
6. BANK OF INDIA
State Bank of India
Company Profile
Company Information
Headquarters: Mumbai, India

Year of Incorporation: 1806
Base interest rate: 9.75%
No. of branches: Over 14,000
No. of ATMs: Over 10,000
State Bank of India (SBI) is the India’s oldest and largest bank by revenue,
assets and market capitalization. SBI has launched various cost-effective
channels, such as SBI Tiny Card(biometrically enabled card), Kiosk
banking(internet enabled kiosk/computer
with biometric validation) and cell phonemessaging channel. The bank also has
more than 170branches in ~30 foreigncountries, including multiple locations inthe
US, Canada, and Nigeria.
“The objective of the lending rate cut is to improve demand for assets which in our
view could have a positive cascading effect on related industries”
KEY MANAGEMENT
MD & CEO: Mr. PratipChaudhari

Managing Director: Mr. Hemant G. Contractor
Managing Director: Mr. Diwakar Gupta
Managing Director: Mr. A. Krishna Kumar
44
45
The State Bank Group includes a network of eight banking subsidiaries and several
nonbanking
Subsidiaries
The Eight Banking subsidiaries are as follows:
– State Bank of Bikaner and Jaipur (SBBJ)

– State Bank of Hyderabad (SBH)
– State Bank of India (SBI)
– State Bank of Indore (SBIR)
– State Bank of Mysore (SBM)
– State Bank of Patiala (SBP)
– State Bank of Saurashtra (SBS)
– State Bank of Travancore (SBT)
Banking segments of SBI
Treasury: Includes investmentportfolio and tradingin foreign

exchangecontractsandderivative contracts.
Corporate/Wholesale: Comprises of lending activities of Corporate

AccountsGroup, Mid Corporate Accounts Group and Stressed Assets
ManagementGroup.
Retail :Comprises of branches in National Banking Group, which includes

personalbanking activities, including lending activities tocorporate customers.
Other Services: NRI Services, ATM Services, Demat Services,

E-Pay/E-RailBroking Services.
COMPANY PROFILE:
COMPANY INFORMATION:
Headquarters: Vadodra, India

46
47
BUSINESS OVERVIEW:
ICICI Bank (Industrial Credit and Investment Corporation of India) was

originally promoted in 1994 by ICICI Ltd.,
an Indian financial institution ICICI acquired Bank of Rajasthan througha
share swap in a non-cash deal that valued the bank of Rajasthan at
aboutRs.3,000 crores on 2010. This merger added over 450 branches of
ICICI to the network
The bank is currently in talks with Vodafone to bring a concept of
e-money into play
“The strategy of focusing on profitability, growth and risk management for fiscal
2012 resulted in better than the
expected results.”
KEY MANAGEMENT:
MD & CEO: Ms. ChandaKocchar

MD & CFO: Mr. N.S. Kannan
Executive Director: Mr. K. Ramkumar
Executive Director: Mr. Rajiv Sabharwal
Punjab National Bank

Company Profile
Company Information
Headquarters: New Delhi, India

48
Business Overview:
Punjab National Bank (PNB) is the largest nationalized Bank in

thecountry in terms of its branch network, totalbusiness,
advances,operating profit and low cost CASA deposits
Apart from offering banking products, the bank has also taken up
WealthManagement Services such as credit card / debit card; bullion
business; life/non-life insurance PNB Prernaand PNB Pragatiare two
corporate social responsibility initiatives undertaken by the bank.
“The status of the banking sector in 2013will depend on how the economy
behaves over the next one year”
Key Management:
Chairman & MD: Mr. K. R. Kamath
Executive Director: Mr. RakeshSethi
Executive Director: Mr. UshaA Subramanian
Executive Director: Mr. S. R. Bansal
Canara Bank
Company Profile
Company Information:
Headquarters: Bangalore, India

49
BUSINESS OVERVIEW:
Over the years, Canara Bank has been scaling up its market position to
emerge as a major 'Financial Conglomerate' with as many as nine
subsidiaries/sponsored institutions/joint ventures in India and abroad Besides
commercial banking, the Bank has also carved a distinctive mark in various
corporate social responsibilities areas, namely, serving national priorities,
promoting rural development and enhancing rural self-employment through
several training institutes
It is the first bank to introduce Centralized Solution for
ServiceUnits(CSSU), developed in-house adopting the latest technology
in the ITIndustry’
Key Management
Chairman &Managing Director: Mr. R. K. Dubey

Executive Director: Ms.Archana S. Bhargava
Executive Director: Mr. Ashok Kumar Gupta
COMPANY PROFILE
Headquarters: Baroda, India

50
51
BUSINESS OVERVIEW:
Bank of Baroda is a 103 year old State owned Bank with a good mix of modern
&contemporary personality, offering banking products and services to large
industrial, SME, retail & agricultural customers across the country
The Bank has developed an Integrated Global Treasury Solution in its major
territories such as the UK, UAE, Bahamas Bahrain, Honkong, Singapore,
Belgium, USA and India to reduce the cost of operations and improve funds
management.
“The Indian banking industry has always been resilient in facing challenges”
KEY MANAGEMENT:
Chairman & MD: Mr. M. D. Mallya
Executive Director: Mr. S. K. Jain
Executive Director: Mr. P. Srinivas
Executive Director: Mr. RanjanDhawan
BANK OF INDIA
COMPANY PROFILE
Headquarters: Mumbai, India

BUSINESS OVERVIEW:
Bank of India was founded on 7thSeptember, 1906 by a group of eminent

businessmen from Mumbai. The Bank was under private ownership and
control till July 1969, after which it was nationalized along with 13 other
banks
52
The Bank has a sizable presence abroad, with a network of 29
branches(including five representative office) at key banking and
financial centers such as London, New York, Paris, Tokyo, Hong-Kong
an Singapore. International business accounts for around 17.82% of the
Bank's totalbusiness
The bank is always looking forward to being more consumers centric and
reaching out especially in the rural belts of the country.
KEY MANAGEMENT:
Chairman & MD: Mr. V. R. Iyer

Executive Director: Mr. N. Seshadri
Executive Director: Mr. M. S. Raghvan
Executive Director: Mr. B. B. Sharma
53
DATA ANALYSIS AND INTERPRETATION
NET PROFIT MARGIN RATIO:
.TABLE 1.1
Profit margin ratio 2014 2015 2016 2017
STATE BANK OF 12.03 10.54 8.55 9.73

INDIA
ICICI BANK LTD 9.74 12.17 15.91 16.14
PNB BANK 13.76 15.64 14.56 12.09
CANARA BANK 9.61 10.89 13.77 15.65
BANK OF BARODA 12.86 15.37 17.18 15.37
BANK OF INDIA 13.96 15.89 8.59 10.25
54
CHART 1.1 shows the net profit ratio of selected banks which are as follows:-
20
18
16
2016
14
2017
12
2018
10
2019
8
STATE BANK ICICI BANK LTD PUNJAB CANARA BANK BANK BANK OF
OF INDIA NATIONAL OF BARODA INDIA
BANK
INTERPRETATION:
The net profit margin is a good way of comparing companies in the same industry,
since such companies are generally subject to similar business conditions. However,
the net profit margins are also a good way to compare companies in different
industries in order to gauge which industries are relatively more profitable. Alsocalled
net margin. A higher profit margin indicates a more profitable company
that has better control over its costs compared to its competitors. Profit margin.
Theprofit margin ratio, also known as the operating performance ratio, measures the
company’s ability to turn its sales into net income. To evaluate the profit margin, it
must be compared to competitors and industry statistics. It is calculated by dividing
net income by net sales
55
STATE BANK OF INDIA: In table 1.1 chart shows decreasing trend till 2016 and
from 2019 it shows increasing trend .
ICICI BANK: Its shows increasing trend.In 2016 and 2017 it has
slightly increase which indicate more profit margin.
PUNJAB NATIONAL BANK : Every year its fluctuating but only in 2015 it increases.
CANARA BANK: It shows increasing trend at increasing rate.
BANK OF BARODA: It has increases till 2016 but in 2017 it has decreases.
BANK OF INDIA: Every year it has fluctuate.
DIVIDEND PAY OUT RATIO:
TABLE 1.2:-
DIVIDEND PAYOUT RATIO 2016 2017 2018 2019
NET PROFIT
STATE BANK OF INDIA 22.90 23.36 26.03 22.59
ICICI BANK LTD 36.60 37.31 35.23 32.82
PUNJAB NATIONAL BANK 23.86 20.74 18.27 17.75
CANNARA BANK 24.53 18.51 15.88 14.09
BANK OF BARODA 17.22 20.90 17.76 16.22
BANK OF INDIA 12.23 16.34 24.61 17.85
56
57
Chart 1.2 which shows the dividend payout ratio of selected banks:-
40
35
30
25
2016
20
2017
15
2018
10 2019
0
STATE BANK OF ICICI BANK LTD PUNJAB CANARA BANK BANK OF BANK OF INDIA
INDIA NATIONAL BARODA
BANK
INTERPRETATION:
The part of the earnings not paid to investors is left for investment to provide for future
earnings growth. Investors seeking high current income and limited capital growth
prefer companies with high Dividend payout ratio. However investors seeking capital
growth may prefer lower payout ratio because capital gains are taxed at a lower rate.
High growth firms in early life generally have low or zero payout ratios. As they mature,
they tend to return more of the earnings back to investors
STATE BANK OF INDIA: There is a slightly increase inyear 2018 and decrease
in2019
ICICI BANK LTD:There is a decrease from year 2017 to 2019
PUNJAB NATIONAL BANK: There is decreasing trend in the following year
CANARA BANK:There is decreasing trend at faster rate
BANK OF BARODA:There is decrease in the year from 2017
BANK OF INDIA: There is increasing trend before the year 2018 but decrease
inyear 20179
58
EARNING PER SHARE:
TABLE 1.3 Shows the profitability ratios EPS
Earnings per share 2016 2017 2018 2019
STATE BANK OF 143.67 144.37 116.07 174.15

INDIA
ICICI BANK LTD 33.76 36.10 44.73 56.09
PUNJAB NATIONAL 98.03 123.86 139.94 144

BANK
CANARA BANK 38.17 50.55 73.69 90.88
BANK OF BARODA 61.14 83.96 108.33 121.79
BANK OF INDIA 57.26 33.15 45.54 46.66
Chart 1.3 shows the position of EPS ratio of selected banks which are as follows:
200
180
160
140
120
2016
100
2017
80
2018
60
2019
40
20
0
STATE BANK OF ICICI BANK PUNJAB CANARA BANK BANK OF BANK OF INDIA
INDIA NATIONAL BARODA
BANK
59
60
INTERPRETATION:-
The portion of a company’s profit allocated to each outstanding share of common
stock. Earnings per share serves as an indicator of a company’s profitability.
Earningsper share is generally considered to be the single most important variable
in determining a share’s price. It is also a major component used to calculate the
price-to-earnings valuation ratio
This chart shows that all selected banks are increasing, STATE BANK OF INDIA
reduced 144 in year 2017 to 116 in yr 2018 then again by 58 in year 2019 . ICICI
BANK, PUNJAB NATIONAL BANK ,CANARA BANK , BANK OF BARODA Shows
increasing trend but again bank of India reduced in year 2017 then again increase
gradually from year 2018.
DIVIDEN PER SHARE:
. TABLE 1.4 SHOWS PROFITABILITY RATIOS OF SECLECTED
Dividend per share 2016 2017 2018 2019
STATE BANK OF 29 30 30 35
INDIA
ICICI BANK LTD 11 12 14 16.50
PUNJAB NATIONAL 20 22 22 22
BANK
CANARA BANK 8 8 10 11
BANK OF BARODA 9 15 16.50 17
BANK OF INDIA 4 8 7 7
54
61
Chart 1.4 shows from the following:-
40
35
30
25
2016
20
2017
15
2018
10 2019
0
PUNJAB CANARA
STATE BANK ICICI BANK LTD BANK BANK OF BANK OF
OF INDIA NATIONAL BARODA INDIA
BANK
INTERPRETATION:
The sum of declared dividends for every ordinary share issued. Dividend per share
(DPS) is the total dividends paid out over an entire year (including interim dividends
but not including special dividends) divided by the number of outstanding ordinary
shares issued
This chart1.4 indicates a positive trend as all are increasing except BANK OF
INDIA.
62
CURRENT RATIO:
TABLE 1.5 OF 6 SECLECTED BANKS ACCORDING TO INCOMEWISE ARE AS

FOLLOWS:
CURRENT RATIO 2016 2017 2018 2019
STATE BANK OF 0.04 0.04 0.04 0.05

INDIA
ICICI BANK LTD 0.13 0.14 0.11 0.13
PUNJAB 0.02 0.02 0.03 0.02

NATIONAL BANK
CANNARA BANK 0.02 0.02 0.01 0.02
BANK OF BARODA 0.02 0.02 0.02 0.03
BANK OF INDIA 0.02 0.03 0.02 0.04
CHART 1.5 SHOWS THE POSITION OF SECLECTED BANKS AS FOLLOWS:-
0.16
0.14
0.12
0.1
2016
0.08
2017
0.06
2018
0.04
2019
0.02
0
PUNJAB CANARA
STATE BANK ICICI BANK BANK BANK OF BANK OF INDIA
OF INDIA NATIONAL BARODA
BANK
63
64
INTERPRETATION:
A liquidity ratio measures a company’s ability to pay short-term obligations.
This chart 1.5 indicates that there is frequent fluctuations except State Bank Of
India and Bank Of Baroda which has gradually increase in year 2017.
QUICK RATIO:
TABLE 1.6 SHOWS THE quick ratio of selected banks which are as follows:-
QUICK RATIO 2016 2017 2018 2019
STATE BANK OF 5.74 9.07 8.50 12.05

INDIA
ICICI BANK LTD 5.94 14.70 15.86 16.71
P & B BANK 9.75 20.47 22.24 23.81
CANARA BANK 9.17 11.29 26.98 30.86
BANK OF 9.62 21..88 26.38 28.00

BARODA
BANK OF INDIA 11.63 12.30 22.15 19.06
65
CHART 1.6 SHOWS the position of selected banks:-
35
30
25
20
2016
15
2017
10 2018
2019
0
STATE BANK OF ICICI BANK LTD P & B BANK CANARA BANK BANK OF BANK OF INDIA
INDIA BARODA
INTERPRETATION:
An indicator of a company’s short-term liquidity. The quick ratio measures a

company’s ability to meet its short-term obligations with its most liquid assets. The
higher the quick ratio, the better the position of the company.
This chart 1.6 indicates increasing or positive trend except BANK OF INDIA which
shows the downfall in year 2019
66
67
TABLE 1.7shows the gross non-performing assets: -
GROSS NON- 2016 2017 2018 2019

PERFORMING ASSETS
STATE BANK OF INDIA 15,714.00 19,534.89 25,326.29 39,676.46
ICICI BANK LTD 9,649.31 9,480.65 10,034.26 9,475.33
PUNJAB NATIONAL 2,506.90 3,214.41 4,379.39 8,719.62

BANK
CANARA BANK 2,167.97 2,590.31 3,137.36 4,031.75
BANK OF BARODA 1,842.92 2,400.69 3,152.50 4,464.75
BANK OF INDIA 2,470.88 4,882.65 4,811.55 5,893.97
CHART 1.7 shows the movements of bank positions below: -
45000
40000
35000
30000
25000
2016
20000 2017
15000 2018
10000 2019
5000
0
STATE BANK ICICI BANK PUNJAB CANARA
LTD BANK BANK OF BANK OF INDIA
OF INDIA NATIONAL BARODA
BANK
DATA INTERPRETATION:-
A debt obligation where the borrower has not paid any previously agreed
upon interest and principal repayments to the designated lender for an
extended period of time. The nonperforming asset is therefore not
yielding any income to the lender in the form of principal and interest
68
payments. Chart 1.7 shows a positive trend forevery selected banks
except ICICI BANK LTD which shows fluctuations in every year.
CHAPTER-5
FINDINGS
SUGGESTIONS
CONCLUSION
69
FINDINGS
From the data analysis and interpretations of the ratios of six selected
banks the following findings have been given:
1. State bank of India: - In net profit margin ratio 2019 it has decrease in
year2018 from 10.54 to 8.55 i.e 1.99 times and again it has increased in 2016
1.18 times. In dividend payout ratio it has gradually increase in year 2017 by
0.46 times, in tear 2018 by 2.67 times which has reduced again in year 2019 by
3.47 times. Earnings per share have increase in year 2019 by 58.08 times
which has decrease in year
2019 by 28.30 times. Dividend per share and Non-performing assets has
also increase in every year. Current ratio has increase form 0.1 times in year
2019 and quick ratio has also frequently increases.
2. ICICI BANK LTD: -net profit margin, it has gradually increases in every
year. In2017 dividend payout ratio increases by 1 times but again it slowly it
starts decreasing. Earnings per share, dividend per share & quick ratio
increases frequently in every year. Current ratio there is frequent fluctuations.
Non-performing assets fluctuates in every year.
3. PUNJAB NATIONAL BANK: - From year 2016 net profit margin has
graduallyincrease but in year 2016 it has reduced to 2.47 times. Dividend
payout ratio has decreased in every year frequently but Earning per share,
70
Dividend per share , Quick ratio& Non-performing assets has increase
frequently in every year. Current ratio has increase in year 2018 by 0.01 times
and remains same in every 3 years.
4. CANARA BANK: -net profit margin ratio, Earnings per share has
frequentlyincreased in every year but dividend payout ratio has decreased
gradually in every year. Dividend per share increases by 1 times in year 2019.
In 2016 current ratio has decrease by 0.01 times and remains same in all the 3
years. Quick ratio has increases slowly in every year.
5. BANK OF BARODA: -net profit margin ratio has slowly increases in year
2016but in 2019 it has decreases by 2 times in year 2019.dividend payout
ratio has frequent fluctuates in every year. Earnings per share Quick ratio,
dividend per share& Non-performing assets has increases slowly in every
year. Current ratio increases in year 2019 by 0.01 times.
6. BANK OF INDIA: - Net profit margin ratio has gradually increase but in year
2016it has reduced to 7 times and again it has increase. Dividend payout ratio
has slowly increased but in 2019 it decreases by 7 times. Earnings per share
have decrease in year 2015 by 24 times and again started increasing.
Dividend per share has increased by 4 times in year 2017and form year 2018 it
started decreasing. Currentratio has frequent fluctuations by 0.01 times and
quick ratio has increases every year slowly. Non – performing assets has
increases in every year.
SUGGESTIONS
High growth of Indian Economy:
The growth of the banking industry is closely linked with the growth of the
overall economy. India is one of the fastest growing economies in the world
and is set to remain on that path for many years to come. This will be
backed by the stellar growth in infrastructure, industry, services and
agriculture. This is expected to boost the corporate credit growth in the
economy and provide opportunities to banks to lend to fulfill these
requirements in the future.
Rising per capita income:
71
The rising per capita income will drive the growth of retail credit. Indians have a
conservative outlook towards credit except for housing and other necessities.
However, with an increase in disposable income and increased exposure to a
range of products, consumers have shown a higher willingness to take credit,
particularly, young customers. A study of the customer profiles of different types
of banks, reveals that foreign and private banks share of younger customers is
over 60% whereas public banks have only 32% customers under the age of 40.
Private Banks also have a much higher share of the more profitable mass
affluent segment.
New channel – Mobile banking is expected to become the second

largest channel for banking after ATMs:
New channels used to offer banking services will drive the growth of banking
industry exponentially in the future by increasing productivity and acquiring new
customers. During the last decade, banking through ATMs and internet has
shown a tremendous growth, which is still in the growth phase.
Financial Inclusion Program:
Currently, in India, 41% of the adult population doesn’t have bank accounts,
which indicates a large untapped market for banking players. Under the
Financial Inclusion Program, RBI is trying to tap this untapped market and the
growth potential in rural markets by volume growth for banks. Financial
inclusion is the delivery of banking services at an affordable cost to the vast
sections of disadvantaged and low income groups.
Investors shouldn’t be depending upon the rumors and TV news which

might affect the shares only for a short span of time.
The banks can expand its network by increasing its
branches.Investments are to be made in those banks which give fairly
good returns, dividends every year.
Financial inclusion initiatives also need to be taken care of as India
fares very poorly on this regard as half the population does not have
access to banking services.
72
CONCLUSION
The economic growth of the country is an apt indicator for the growth
of the banking sector. The Indian economy is projected to grow at a
rate of 5-6 percent34 and the country’s banking industry is expected
to reflect this growth.
The onus for this lies in the capabilities of the Reserve Bank of India
as an able central regulatory authority, whose policies have shielded
Indian banks from excessive leveraging and making high risk
investments.
During 2017-19, majority of public sector banks failed to meet the

priority sector target. Though at an aggregate level, foreign banks’
performance was better as compared to domestic banks, bank-wise
data revealed that some foreign banks also failed to meet the priority
sector lending target.
Performance of banks during 2018-19 was conditioned by slowdown

in the domestic economy coupled with higher interest rate
environment.
There are emergingchallenges, which appear in the forms

ofconsolidation; recapitalization, prudentialregulation weak banks, and
non-performing assets,legal framework etc. needs urgent attention.
Thepaper concludes that, from a regulatoryperspective, the recent
developments in thefinancial sector have led to an appreciation of
thelimitations of the present segmental approach tofinancial regulation
and favors adopting aconsolidated supervisory approach to
financialregulation and supervision, irrespective of itsstructural design.
The Indian banking sector has been relatively well shielded by the
central bank and has managed to sail through most of the crisis. But,
currently in light of slowing domestic GDP growth, persistent inflation,
asset quality concerns and elevated interest rates, the investment cycle
has been wavering in the country.
73
74

Comparatiive Study On Banking Sector Mutual Funds at Networth

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COMPARATIVE STUDY ON BANKING SECTOR MUTUAL

(Submitted in partial fulfillment of

The requirement for the award of the)

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

VELAGAPUDI RAMAKRISHNA SIDDHARTHA ENGINEERING

I, the undersigned, hereby declare that the project report

“(COMPARATIVE STUDY ON BANKING SECTOR MUTUAL

I take this oppourtunity to extend my profound thanks and deep sense of

gratitude to the authorities of (NETWORTH LIMITED). For giving

me the oppourtunity to under take this project work in their esteemed

organization. I profusely thanks

My sincere thanks to Honarable secretary

Principal and my project HOD.

.and my internal guide For the kind

Encouragement and constant support

Extended in completion of this project work. From the bottom of my heart

A Financial System is an important tool for a country that wants to develop

STRUCTURE OF BANKING SECTOR

RESERVE BANK OF INDIA:

SCHEDULED AND NON SCHEDULED BANKS:

 Commercial banks issue bank cheques and drafts,as well as accept

Scheduled commercial banks:

Scheduled commercial banks account for a major portion of the business of

 State bank of India

PUBLIC SECTOR BANKS:

PRIVATE SECTOR BANKS:

These banks are registerd as companies with limited liability.

Examples: 1. ICICI Bank

3.Hdfc Bank etc.,

3. standard chartered bank, etc.,

REGIONAL RURAL BANKS:

These banks are established under the provisions of an ordinance

3.Cooperative banks function on the basis of “no profit no-loss”.

TYPES OF BUSINESS OF BANKS:

ABOUT THE TOPIC:

Equity Analysis on Banking Sector

The methodology of study consists of

• Source of data collection

• Statistical tools and techniques

Source of data collection:

Statistical tool and techniques:

• Comparative analysis of balance sheets

The major objectives of the study:-

• To help the investors for choosing to make their investments in banking

• To calculate the risk-return stock of banking sector.

• To understand the concept of investing in equity shares.

• Comparative analysis of 4 selected banks.

DEFINITION OF STOCK EXCHANGE:

"An association, organization or body of individuals, whether incorporated or not, established

SECURITIES & EXCHANGE BOARD OF INDIA (SEBI):

It is a "Market capitalization-weighted" index of 30 component stocks representing a sample

Sensex is calculated using a market capitalization weighted method. As per this

NSE’s DERIVATIVES MARKET:

REGULATION FOR DERIVATIVE TRADING:

SEBI set up a 24-member committe under Chairmanship of Dr.L.C.Gupta develop the

SEBI also approved he “suggestive bye-laws” recommended by the committee for

The exchange shall have minimum 50 members.

Capital + Free reserves

Less non-allowable assets viz.,

Doubtful debts and advance

30% marketable securities