Ratio Analysis Sbi

CONTENTS
CHAPTER CHAPTER NAME PAGE NO
1 INTRODUCTION 01-09
2 STATE BANK OF INDIA PROFILE 10-24
3 INDUSTRY PROFILE 25-41
4 THEORITICAL BACKGROUND 42-51
5 DATA ANALYSIS AND 52-63

INTERPRETATION
6 FINDING ,SUGGSTIONS AND 64-68

CONCLUSION
ANNEXURE 69-71
LIST OF TABLES
SL.NO Name of the Title Page No
5.1 Table shows the Basic earnings per Share 52
5.2 Table shows the Return on Assets 53
5.3 Table shows the Net Marin Ratio 54
5.4 Table shows the Income on Total Assets 55
5.5 Table shows the Net Profit Per Share Ratio 56
5.6 Table shows the Retention Ratio 57
5.7 Table shows the Dividend per Share 58
5.8 Table showing the Current Ratio 59
5.9 Table shows the Income Statement of State Bank of India 60
5.10 Table shows the Balance Sheet of State Bank of India 61
LIST OF GRAPHS
SL.NO Name of the Title Page No
5.1 Graphs shows the Basic earnings per Share 52
5.2 Graphs shows the Return on Assets 53
5.3 Graphs shows the Net Marin Ratio 54
5.4 Graphs shows the Income on Total Assets 55
5.5 Graphs shows the Net Profit Per Share Ratio 56
5.6 Graphs shows the Retention Ratio 57
5.7 Graphs shows the Dividend per Share 58
5.8 Graphs showing the Current Ratio 59
5.9 Graphs shows the Income Statement of State Bank of India 60
5.10 Graphs shows the Balance Sheet of State Bank of India 61
Ratio Analysis of State Bank of India
Chapter - 1
INTRODUCTION
1.1 Introduction
1.2 Review of literature
1.3 Statement of the problem
1.4 Objectives of the study
1.5 Scope of the study
1.6 Research methodology
1.7 Limitations of the study
Page 1
CHAPTER – 1
1.1 INTRODUCTION
Ratio Analysis is the process of examining a company‘s performance in the context

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

earn a return on its capital that is at least equal to the cost of that capital, to
profitably grow its operations, and to generate enough cash to meet obligations and
pursue opportunities. To meet this obligation the Ratio Analysis of the company is
very important.
Ratio Analysis is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues. Analysts and investors use Ratio
Analysis to compare similar firms across the same industry or to compare
industries or sectors in aggregate.
Indian monetary develops is dependent upon develops of the Indian steel industry.
While steel keeps on having reinforcement in customary segment, for example,

narrowing, lodging and ground transpiration unique steel are gently utilized as a
part of manures. Indian involves a focal position on the worldwide steel outline the
foundation of new best in class steel factories, procurement of worldwide scale
limits by players, constant modernization and up degree of request plants,
enhancing liveliness productivity and in reverse incorporation into worldwide
crude material source.
The banking sector is the life blood of any modern economy. It is one of the
important financial basements of the financial sector, which plays a vital role in the
functioning of an economy. It is very important for economic development of a
Page 2
country that it‘s financing requirements of trade, industry and agriculture are met
with higher degree of commitment and responsibility. The Indian banking sector is
broadly classified into scheduled banks and non-scheduled banks. The scheduled
banks are those included under the 2nd Schedule of the Reserve Bank of India Act,
1934. The scheduled banks are further classified into: nationalized banks; India
and its associates; Regional Rural Banks and other Indian private sector banks. The
term commercial banks refers to both scheduled and non-scheduled commercial
banks regulated under the Banking Regulation Act, 1949 integrally linked in
banking industry in gradually increasing. They role of mobilization of deposits and
disbursement of credit to various sector of banking industry. This will also reflect
health of the country.
The efficiency of financial system is strength of economy. A sound banking system

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

1. Manish Mittal and Arunna Dhademade (2005) they found that higher
profitability is the only major parameter for evaluating banking sector performance
from the shareholders point of view. It is for the banks to strike a balance between
commercial and social objectives. They found that public sector banks are less
profitable than private sector banks. Foreign banks top the list in terms of net
profitability. Private sector banks earn higher non-interest income than public
sector banks, because these banks offer more and more fee based services to
business houses or corporate sector. Thus there is urgent need for public sector
banks to provide such services to stand in competition with private sector banks.
2. Jha DK and D S Sarangi (2011): The Ratio Analysis of seven public sector
and private sector banks during the period 2009-10. They used three sets of ratio,
operating performance ratio, financial ratio and Efficiency ratio. The study
Page 3
revealed that Axis bank was on the top of these banks followed by ICICI, BOT,
PNB, SBI, IDBI and HDFC.
3. DR.D.GURUSWAMY, (2012), describes ―Analysis of Profitability

Performance of SBI‖ And Its Associates, the paper an attempt has been made to
analyze the profitability performance of SBI and its associates. The objectives of
the paper are to study the profitability of SBI and Its Associates and to analyze the
profitability performance of SBI and Its Associates. This paper is primarily based
on secondary data. In order to derive the open handed results from the information
collected through secondary data, various statistical tools like mean, S.D, variance,
CAGR, and ANOVA have been accomplished. The scope of the paper is confined
to all the banks of SBI group for a data period from 1996-97 to 2007-08. In the
present paper, for the purpose of evaluating the performance of SBI and its
associates, five profitability ratios have been considered. On the basis of analysis
of profitability ratios it is printout that all the five ratios shows fluctuating trend
during the study period in all the banks.
4. Dr.Dhanabhakyam & M.kavitha (2012) in their research used some important

ratio to analyze the Ratio Analysis of selected public sector banks such as ratio of
advances to assets, ratio of capital to deposit, ratio of capital to working fund, ratio
of demand deposit to total deposit, credit deposit ratio, return on average net worth
ratio, ratio of liquid assets to working fund etc.
5. Brindadevi .V(2013), A Study on Profitability Analysis of Private Sector

Banks In India- The objective of this study was overall profitability analysis of
different private sectors banks in India based on the performances of profitability
ratios like interest spread, net profit margin, return on long term fund, return on net
worth & return on asset. Profitability is a measure of efficiency and control it
indicates the efficiency or effectiveness with which the operations of the business
are carried on. Recording profitability for the past period or projecting profitability
for the coming period, measuring profitability is the most important measure of the
success of the business. A business that is not profitable cannot survive.
Page 4
Conversely, a business that is highly profitable has the ability to reward its owners
with a large return on their investment. Increasing profitability is one of the most
important tasks of the business managers. Managers constantly look for ways to
change the business to improve profitability. These potential changes can be
analyzed with a support of income statement and balance sheet.
6. Ms. Shikha Gupta (2014), An Empirical Study Of Ratio Analysis Of Icici

Bank- A Comparative Analysis,-The Bank works closely with ICICI Foundation
across diverse sectors and programs. As of 2014 it is the second largest bank in
India in terms of assets and market capitalization. ICICI bank emerged as a pioneer
venture on the horizon of offering an expanded range of banking products and
financial services for corporate and retail customers through its diverse delivery
channels and specialized subsidiaries in the areas of investment banking, asset
management, venture capital and insurance. In the light of its strategic importance
in the nation interest, it is crucial to evaluate the Ratio Analysis of the ICICI Bank.
And the present study focused on operational control, profitability and solvency
etc. This research paper is aimed to analyze and compare the Ratio Analysis of
ICICI Bank and offer suggestions for theimprovement of efficiency in the bank.
7. Loriya Chirag, Thakarshibhai (2014), study on A Profitability Analysis of

Banks in India- banks include commercial banks and the co-operative banks. This
study attempts to measure the relative profitability of Indian banks. For this study,
we have used public sector banks and private sector banks. It is very essential to
analyze how their profitability is influenced by number of factors which will
further suggest them where they need to concentrate more. In this article we have
analyzed of mean, standard deviation and ANOVA test have been used. The paper
concludes Profitability is the primary motivating force for any economic activity.
Business enterprise is essentially being an economic organization; it has to
maximize the welfare or the investment of its stakeholders. To this end, the
business Undertaking has to earn profit from operations. Profitability acts as a
yardstick to measure the effectiveness and efficiency of business effort for the
growth and success of any business entities.
Page 5
8. Dr. Kingshuk Adhikari, Nitashree Barman, Pinkumoni Kashyap (2014),

study on Profitability of State Bank of India: An Analysis-The paper attempts to
analyze the profitability of State bank of India for the period of seven years. Apart
from studying the trend of different components of both income and expenditure,
performance of the bank has been analyzed with the parameters like OPTWF,
ROA, ROE, ROI and EPS. There is a significant difference not only between the
components of income but also across the components of expenditure. The paper
concludes that the profitability performance of the SBI is not consistent during the
study period. The bank should focus more on diversification of income and should
also curtail operating expenses in order to improve profitability performance.
9. Urmila Bharti, Surender Singh (2014), describes a study on Liquidity and

Profitability Analysis of Commercial Banks in India – A Comparative Study,-
Liquidity is required to meet out the prompt demands of customers and
profitability is required to meet out the expenses of banks. But both the terms are
ontradictory in nature. If banks maintain more liquidity, their profitability decrease
and if they increase their profitability they will have to reduce their liquidity. In
this way, banks act as an engine for a business organization. So in the present study
an attempt has been made to evaluate the performance of different categories of
banks viz. public, private and foreign bank groups in India. For evaluating the
performance, eleven financial ratios have been used. These ratios further have been
categorized into two categories viz. liquidity and profitability. The period of study
cover the years 2005-06 to 2011-12. From the results, it has been found that during
the study period the liquidity and profitability position of public sector bank group
declined while it has improved in other two groups.
10. Dr. V.N. Sailaja Dr.N. Bindu Madhavi (2015), emphasis study on
―Comparison Of Capital Structure Of Public Sector Banks And Private Sector
Banks And Its Effect On Bank‘s Profitability‖ the capital structure and profitability
was analyzed by too many researchers in academic level. However, most of them
excluded banking industry due to different market structure and regulatory
frameworks. The differential point of banking industry with other financial
industries is minimum capital requirement that is 8% of equity capital. This
Page 6
requirement is for coverage of the bank's risk associated assets. Research is aiming
to analyze the relationship between capital structure of the public and private
sector banks and its profitability. The aim of the paper -To know the portion of
debt and equity in capital structure of selected banks, To find out the Weighted
Average Cost of Capital (WACC) of selected banks, To conduct comparative study
regarding capital structure of selected banks, To examine the effect of capital
structure on bank‘s profitability. Sample size is 3 private banks and 3 public banks
based on the convenience sampling technique which is one of the methods in non-
probability sampling methods. The paper concludes that sector banks is high as
compared to the private sector banks which can be overburden to the banks to pay
high amount of interest out of the profits.
11. AlpeshGajera (2015) in his research article an Ratio Analysis evaluation of

private and public sector banks found that there in significance difference in the
Ratio Analysis of these banks and private sector banks are performed better than
public sector banks in respect of capital adequacy ratio and Ratio Analysis.
12. Abhay Jaiswal and Chanchala Jain (2016), A Comparative Study of Ratio
Analysis of SBI and ICICI, The study is an attempt to analyze the Ratio Analysis
of SBI and ICICI banks. The State Bank of India, popularly known as SBI is one of
the leading bank of public sector in India. SBI has 14 Local Head Offices and 57
Zonal Offices located at important cities throughout the country. ICICI bank is the
second largest, leading bank of private sector in India.The Bank has 2,533
branches and 6,800 ATMs in India. The study is descriptive and analytical in
nature. The collected data was secondary in nature and collected from various
reports issued by these banks through internet. The comparison of Ratio Analysis
of these two banks was made on the basis of ratio analysis. The results indicated
that the SBI is performing well and financially sound than ICICI Bank. Also the
market position of SBI is better than ICICI in terms to earning per share, price ratio
per share and dividend payout ratio, but on the other hand ICICI bank is
performing well in terms of NPA and provision for NPA in comparison of SBI
bank.
Page 7
1.3 STATEMENT OF THE PROBLEM
Indian banking is the lifeline of the nation and its people. Banks play an important
role in Indian economy. It increases GDP around 7.7% and it generates
employment in the economy for about 1.5 million people. To sustain the
development of the economy banks need to focus on Ratio Analysis. If the banks
are not perform well it will affect on countries economy. if we take an example of
European Central Bank in Greek we can understand how it affects on countries
economy likewise we have many examples of banks which are closed down
because of poor Ratio Analysis. Therefore, this study is based on the Ratio
Analysis of the State bank of India to evaluate the financial strengthof the bank.
1.4 OBJECTIVES OF THE STUDY
 To study the available tools and techniques of state bank of India.
 To study the Ratio Analysis of State Bank of India.
 To analyze the liquidity, profitability performance of SBI.
1.5 SCOPE OF THE STUDY

The present study relates to the Ratio Analysis of the State Bank of India. It is
designed to analyze the Ratio Analysis of the State Bank of India. The study is
based on the annual reports of the company for the period of 5 years 2014- 15 to
2018-19. It includes liquidity, profitability and turnover ratio performance of the
State Bank of India.
Page 8
1.6 RESEARCH METHODOLOGY
The present study is based on secondary data. The analysis is based on liquidity,
profitability, turnover ratio which are calculated with the help of data from
financial statements of the State Bank of India. All the related to State Bank of
India Auditors reports, Internet, Books, Journals, Magazines and the like.
SOURCES OF DATA
Data is the fact, figures and other relevant materials, past and present, serving as
basis for the study and analysis. The design of the data collecting method is the
backbone of research design. The sources of data are varied. It depends upon the
nature of the study. Data can be distinguished as:
a) Primary Data:
Primary data is the data collected for the first time exclusively for the purpose of
achieving the objects of the project work. In this case the feedback received from
the respondent officers through issue of structured questionnaire to the chosen
sample is the primary data which is been collected.
b) Secondary Data:
Secondary data is the data which is already collected. In this case the sources
are collected through websites, catalogues of bank, newspapers, magazines etc.
1.7 LIMITATIONS OF THE STUDY
However I tried my level best in collecting the relevant information for my

research report, yet there are always some problems faced by the researcher. The
prime difficulties I faced in collection of information are discussed below:
 Analysis of the study was depended only on the information available in the
internet.
 Study was restricted to the period of 5 years.
 Detail study was not possible because of time constraints.
 Study process was restricted to the company‘s rules and regulations.
Page 9
Chapter – 2
STATE BANK OF INDIA PROFILE
2.1 Introduction
2.2 History
2.3 Vision, Mission and Values
2.4 Logo and slogan
2.5 Operations
2.6 Employees
2.7Milestones
2.8 Subsidiaries
2.9 Recent awards and recognition
2.10 Board of Directors
2.11 Services offered by the company
2.12 SWOT Analysis
Page 10
CHAPTER 2
STATE BANK OF INDIA PROFILE
2.1 Introduction
State Bank of India is an Indian multinational, Public Sector banking and financial
services company. It is a government-owned corporation with its headquarters in
Mumbai, Maharashtra. As of December 2013, it had assets of US$388 billion and
17,000 branches, including 190 foreign offices, making it the largest banking and
financial services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with Bank of
Baroda, Punjab National Bank and Bank of India.
The bank traces its ancestry to British India, through the Imperial Bank of India, to
the founding, in 1806, of the Bank of Calcutta, making it the oldest commercial
bank in the Indian Subcontinent. Bank of Madras merged into the other two
"presidency banks" in British India, Bank of Calcutta and Bank of Bombay, to
form the Imperial Bank of India, which in turn became the State Bank of India.
Government of India owned the Imperial Bank of India in 1955, with Reserve
Bank of India (India's Central Bank) taking a 60% stake, and renamed it the State
Bank of India. In 2008, the government took over the stake held by the Reserve
Bank of India.
State Bank of India is a regional banking behemoth and has 20% market share in
deposits and loans among Indian commercial banks.
2.2 History
The roots of the State Bank of India lie in the first decade of the 19th century,
when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2
June 1806. The Bank of Bengal was one of three Presidency banks, the other two
being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of
Madras (incorporated on 1 July 1843). All three Presidency banks were
incorporated as joint stock companies and were the result of royal charters. These
three banks received the exclusive right to issue paper currency till 1861 when,
with the Paper Currency Act, the right was taken over by the Government of India.
The Presidency banks amalgamated on 27 January 1921, and the re-organised
Page 11
banking entity took as its name Imperial Bank of India. The Imperial Bank of India
remained a joint stock company but without Government participation. Pursuant to
the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,
which is India's central bank, acquired a controlling interest in the Imperial Bank
of India. On 1 July 1955, the Imperial Bank of India became the State Bank of
India. In 2008, the government of India acquired the Reserve Bank of India's stake
in SBI so as to remove any conflict of interest because the RBI is the country's
banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act.
This made SBI subsidiaries of eight that had belonged to princely states prior to
their nationalization and operational take-over between September 1959 and
October 1960, which made eight state banks associates of SBI. This acquisition
was in tune with the first Five Year Plan, which prioritised the development of
rural India. The government integrated these banks into the State Bank of India
system to expand its rural outreach. In 1963 SBI merged State Bank of Jaipur (est.
1943) and State Bank of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est.
1911), which SBI acquired in 1969, together with its 28 branches. The next year
SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five
years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been
established in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao
Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by
the Maharaja. The new bank's first manager was Jall N. Broacha, a Parsi. In 1985,
SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the
acquirer as its affiliate, the State Bank of Travancore, already had an extensive
network in Kerala.
There has been a proposal to merge all the associate banks into SBI to create a
"mega bank" and streamline the group's operations.
The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from
seven to six. Then on 19 June 2009 the SBI board approved the absorption of State
Bank of Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held
the shares prior to its takeover by the government hold the balance of 1.7%.)
Page 12
The acquisition of State Bank of Indore added 470 branches to SBI's existing
network of branches. Also, following the acquisition, SBI's total assets will inch
very close to the 10 trillion mark (10 billion long scale). The total assets of SBI
and the State Bank of Indore stood at 9,981,190 million as of March 2009. The
process of merging of State Bank of Indore was completed by April 2010, and the
SBI Indore branches started functioning as SBI branches on 26 August 2010.
On October 7, 2013, Arundhati Bhattacharya became the first woman to be

appointed Chairperson of the bank.
2.3 Vision, Mission and Values
Vision
“To be the most trusted and preferred finance service provider worldwide”.
 My SBI.
 My Customer first.
 My SBI: First in customer satisfaction.
Mission
 We will be prompt, polite and proactive with our customers.

 We will speak the language of young India.
 We will create products and services that help our customers achieve their
goals.
 We will go beyond the call of duty to make our customers feel valued.
 We will be of service even in the remotest part of our country.
 We will offer excellence in services to those abroad as much as we do to
those in India.
 We will imbibe state of the art technology to drive excellence.
Page 13
Values
“To emerge as the leading company offering a comprehension range of banking

and finance products at competitive prices, ensuring high standards of customer
satisfaction and world class operating efficiency thereby becoming a model
banking sector in India in the post liberalization period”.
 We will always be honest, transparent and ethical.

 We will respect our customers and fellow associates.
 We will be knowledge driven.
 We will learn and we will share our learning.
 We will never take the easy way out.
 We will do everything we can to contribute to the community we work in.
 We will nurture pride in India.
2.4 Logo and slogan
The logo of the State Bank of India is a blue circle with a small cut in the bottom
that depicts perfection and the small man the common man - being the center of the
bank's business. The logo came from National Institute of Design(NID),
Ahmedabad and it was inspired by Kankaria Lake, Ahmedabad.
Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE

WAY", "A BANK OF THE COMMON MAN", "THE BANKER TO EVERY
INDIAN", "THE NATION BANKS ON US"
Page 14
2.5 Operations
SBI provides a range of banking products through its network of branches in India
and overseas, including products aimed at non-resident Indians (NRIs). SBI has 16
regional hubs and 57 zonal offices that are located at important cities throughout
India.
Domestic presence
SBI has 18,354 branches in India. In the financial year 2012–13, its revenue
was ₹2.005 trillion (US$28 billion), out of which domestic operations contributed
to 95.35% of revenue. Similarly, domestic operations contributed to 88.37% of
total profits for the same financial year
Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by
Government in August 2014, SBI held 11,300 camps and opened over 3 million
accounts by September, which included 2.1 million accounts in rural areas and
1.57 million accounts in urban areas.
Page 15
International presence
The Israeli branch of the State Bank of India located in Ramat Gan. As of 31St
December 2009, the bank had 151 overseas offices spread over 32 countries. It has
branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran,
Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, New York,
Osaka, Sydney and Tokyo. It has offshore banking units in the Bahamas, Bahrain
and Singapore, and representative offices in Bhutan and Cape Town. It also has an
ADB in Boston, USA. State Bank Of India operates several foreign subsidiaries or
affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius).
In 1982, the bank established a subsidiary, State Bank of India (California), which
now has nine branches - eight branches in the state of California and one in
Washington, D.C. The 9th branch was opened in Tustin, California on 7th March,
2010. The other seven branches in California are located in Los Angeles, Artesia,
San Jose, Canoga Park, Fresno, San Diego and Bakersfield.
The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has
seven branches, four in the Toronto area and three in British Columbia.
In Nigeria, State Bank Of India operates as INMB Bank. This bank began in 1981
as the Indo-Nigerian Merchant Bank and received permission in 2002 to
commence retail banking. It now has five branches in Nigeria.15.
In Nepal, State Bank Of India owns 50% of Nepal State Bank Of India Bank,
which has branches throughout the country. In Moscow, State Bank Of India owns
60% of Commercial Bank of India, with Canara Bank owning the rest. In
Indonesia, it owns 76% of PT Bank Indo Monex. The State Bank of India already
has a branch in Shanghai and plans to open one in Tianjin.
In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it
acquired for US $8 million in October 2005.
In January 2016, SBI opened its first branch in Seoul, South Korea following the
continuous and significant increase in trade due to the Comprehensive Economic
Partnership Agreement signed between New Delhi and Seoul in 2009
State Bank of India (SBI) (NSE: SBIN, BSE: 500112, LSE: SBID) is the largest
Indian banking and financial services company (by turnover and total assets) with
its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to
Page 16
British India, through the Imperial Bank of India, to the founding in 1806 of the
Bank of Calcutta, making it the oldest commercial bank in the Indian
Subcontinent. Bank of Madras merged into the other two presidency banks, Bank
of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn
became State Bank of India. The Government of India nationalized the Imperial
Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and
renamed it the State Bank of India. In 2008, the Government took over the stake
held by the Reserve Bank of India.
State Bank Of India provides a range of banking products through its vast network
of branches in India and overseas, including products aimed at non-resident
Indians (NRIs). The State Bank Group, with over 16,000 branches, has the largest
banking branch network in India. It also has around 130 branches overseas. With
an asset base of $352 billion and $285 billion in deposits, it is a regional banking
behemoth and is one of the largest financial institutions in the world. It has a
market share among Indian commercial banks of about 20% in deposits and loans.
The State Bank of India is the 29th most reputed company in the world according
to Forbes.16 Also State Bank Of India is the only bank featured in the coveted "top
10 brands of India" list in an annual survey conducted by Brand Finance and The
Economic Times in 2010.17
The State Bank of India is the largest of the Big Four banks of India, along with
ICICI Bank, Punjab National Bank and HDFC Bank—its main competitors. And"
GUINNESS BOOK OF WORLD RECORD‖ that 56 million transactions
happening per day all over the world is definitely an achievement.
2.6 EMPLOYEES
SBI is one of the largest employers in the country with 209,567 employees as on
31 March 2017, out of which 23% were female employees and 3,179 (1.5%) were
employees with disabilities. On the same date, SBI had 37,875 Scheduled Castes
(18%), 17,069 Scheduled Tribes (8.1%) and 39,709 Other Backward Classes
(18.9%) employees. The percentage of Officers, Associates and Subordinates was
38.6%, 44.3% and 16.9% respectively on the same date. Around 13,000 employees
joined the Bank in FY 2016–17. Each employee contributed a net profit
of 511,000 (US$7,200) during FY 2016–17.
Page 17
2.7 MILESTONE
 1806: The Bank of Calcutta is established as the first Western-type bank.

 1809: The bank receives a charter from the imperial government and
changes its name to Bank of Bengal.
 1840: A sister bank, Bank of Bombay, is formed.
 1843: Another sister bank is formed: Bank of Madras, which, together with
Bank of Bengal and Bank of Bombay become known as the presidency
banks, which had the right to issue currency in their regions.
 1861: The Presidency Banks Act takes away currency issuing privileges but
offers incentives to begin rapid expansion, and the three banks open nearly
50 branches among them by the mid-1870s.
 1876: The creation of Central Treasuries ends the expansion phase of the
presidency banks.
 1921: The presidency banks are merged to form a single entity, Imperial
Bank of India.
 1955: The nationalization of Imperial Bank of India results in the formation
of the State Bank of India, which then becomes a primary factor behind the
country's industrial, agricultural, and rural development.
 1969: The Indian government establishes a monopoly over the banking
sector.
 1972: SBI begins offering merchant banking services.
 1986: SBI Capital Markets is created.
 1995: SBI Commercial and International Bank Ltd. are launched as part of
SBI's stepped-up international banking operations.
 1998: SBI launches credit cards in partnership with GE Capital.
Page 18
 2002: SBI networks 3,000 branches in a massive technology

implementation.
 2004: A networking effort reaches 4,000 branches.
 2005: Raj Travels joins hands with SBI for travel loans. SBI opens branch
at Vadakara. SBI enters into agreement for bilateral sharing of ATMs with
PNB on May 10, 2005.
 2006: State Bank of India (SBI) has informed that Shri. Yogesh Agarwal
has been appointed as Managing Director on the Board of the Bank with
effect from October 10, 2006 to the June 30, 2010
 2007: The State Bank of India (SBI) has become the first foreign bank to
set up a branch in the Israel's diamond exchange. Besides diamonds,
they also see huge potential in telecommunications, hi-tech,
chemicals, textiles, agriculture and water management, food
processing, pharma and health care.
 2008: State Bank of India (SBI) has informed that the Central
Government,in consultation with the Reserve Bank of India and in
pursuance of clause (d) of Section 19 ofthe State Bank of India Act, 1955
(23 of 1955), has nominated Dr. (Mrs.) Vasantha Bharucha as a part-time
non-official Director on the Central Boardof State Bank of India for
a period of three years with effect from February 25, 2008, vice Shri
Piyush Goel.
 2009: State Bank of India, entered into an agreement with the government
of Gujarat to create a fund of Rs 5,000 crore for investing in equity
of infrastructure projects.
 2010: State Bank of India, with a debit card base of over 70 million,
comprising SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has
added chip and PIN-based Platinum Debit Card to its bouquet on March
26.
 2011: SBI - Acquisition of SBICI Bank. P Choudhary has been appointed as

the new chairman of State Bank of India after getting clearance from the
government.
Page 19
 2012: SBI launched virtual debit cards to check online fraud and
promote Ecommerce
 2013: India's leading Public Sector lender the State Bank of India (SBI)
is stepping up efforts to expand its presence in the world's second
biggest economy with the lender set to launch its second branch in
China.
 2014: SBI announces 150% interim dividend
 2015: State Bank of India has launched a RuPay Platinum debit card in
Association with National Payment Corporation of India (NPCI). SBI
builds foundation for group CSR activities.
 2016: SBI opens first branch in South Korea. Govt asks SBI to merge five
associate banks.
 2017: SBI Acquired State Bank of Travancore, State Bank of Patiala , State
Bank of Hyderabad, State Bank of Bikaner & Jaipur , State Bank of Mysore.
Bhartiya Mahila Bank (BMB).
 2018: Launch of Doctor‘s SBI Card and Apollo SBI Card.
 2019: Launch of SME Business Card, OLA Money SBI Credit Card, Etihad
Guest SBI Card and Allahabad Bank SBI Card.
 2019: SBI Card enters the ‗9 Million Cards‘ club.
 2020: In February 2020, SBI card offered the biggest Initial public
offering of 2020.
Page 20
2.8 Subsidiaries:
Banking Subsidiaries
 State Bank of Bikaner and Jaipur (SBBJ)
 State Bank of Hyderabad (SBH)

 State Bank of Mysore (SBM)
 State Bank of Patiala (SBP)
 State Bank of Travancore (SBT)
Foreign Subsidiaries
 SBI International (Mauritius) Ltd.
 State Bank of India (California)

 State Bank of India (Canada)
 INMB Bank Ltd, Lagos
 BANK SBI Indonesia (SBII)
Non banking Subsidiaries
 SBI Capital Markets Ltd

 SBI Funds Management Pvt Ltd
 SBI Factors & Commercial Services Pvt Ltd
 SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
 SBI DFHI Ltd
 SBI General Insurance Company Limited
Joint Ventures
 SBI Life Insurance Company Ltd (SBI LIFE)
 SBI General Insurance Company Limited
Page 21
2.9 Recent awards and recognition
SBI was ranked 232nd in the Fortune Global 500 rankings of the world's biggest
corporations for the year 2016.
SBI was 50th most trusted brand in India as per the Brand Trust Report 2013, an
annual study conducted by Trust Research Advisory, a brand analytics company
and subsequently, in the Brand Trust Report 2014, SBI finished as India's 19th
most trusted brand in India.
2.10 Board of Directors
List of Directors on the Central Board of State Bank of India
Sl.No Name Designation
1. Shri Rajnish Kumar Chairman
2. Shri P.K. Gupta Managing Director
3. Shri Dinesh Kumar Khara Managing Director
4. Shri Arijit Basu Managing Director
5. Shri C.S. Setty Managing Director
6. Shri Sanjiv Malhotra Director
7. Shri Bhaskar Pramanik Director
8. Shri Basant Seth Director
9. Shri B. Venugopal Director
10. Dr.Purnima Gupta Director
11. Shri Sanjeev Maheshwari Director
Page 22
12. Shri Debasish Panda Director
13. Shri Chandan Sinha Director
Listings and shareholding
As on 31 March 2019, Government of India held around 58.59% equity shares in

SBI. Life Insurance Corporation of India is the largest non-promoter shareholder in
the company with 14.99% shareholding.
Shareholders Shareholding
Promoters: Government of India 58.60%
Banks & Insurance Companies 16.79%
FIIs/GDRs/OCBs/NRIs 12.04%
Mutual Funds & UTI 03.78%
Private Corporate Bodies 02.87%
Others 5.92%
Total 100.0%
The equity shares of SBI are listed on the Bombay Stock Exchange, where it is a
constituent of the BSE SENSEX index, and the National Stock Exchange of India,
Page 23
where it is a constituent of the CNX Nifty. Its Global Depository Receipts (GDRs)
are listed on the London Stock Exchange.
2.11 Services offered by the company:
 NRI Services
 Personal Banking
 International Banking
 Agriculture / Rural
 Corporate Banking
 SME
 Government Business
 Domestic Treasury
2.12 SWOT Analysis
1. The biggest bank in the country

2. Has a separate act for itself. Thus, a special
privilege.
3. Biggest branch network in the country
Strength 4. First public sector to move to CBS
1. Huge amount of staff
2. Expected to experience high level of attrition due to
retirement of its top management
Weakness 3. Still carries the image of the old Govt. sector bank
1. Pool in talent to replace the going top management to
serve the next generation
2. Make better use of its CRM
Opportunity 3. Expansion into rural areas
1. Consolidation among private banks
2. New bank licenses by RBI
Threats 3. Foreign banks that have sophisticated products
Page 24
CHAPTER-3
INDUSTRY PROFILE
3.1 Introduction
3.2 History of Banking
3.3 Evolution of Banking
3.4 Functions of Bank
3.5 Structure of Banking
3.6 Banking segments
3.7 Products of Banking Industry
Page 25
CHAPTER – 3
INDUSTRY PROFILE
3.1 Introduction
Banking is a vital part of our daily life: At office, at business, at home, at school,
on travel everywhere we counter some aspect of banking. The significance of
banking in our day to day life is being felt increasingly. Money plays a leading role
in today‘s life. The first known currency was created by King Alyattes in
Lydia, now part of Turkey, in 6000BC. The first coin ever minted features a
roaring Lion. Coins then evolved into bank notes around 1661 AD. Then
afterwards the credit card was introduced in 1946. Commercial transactions have
increased in content and quantity from simple banker to international trading.
Hence the need arose for a third party who will assist for smooth transaction,
mediate between the seller and buyer, hold custody of money and goods, pay funds
and also to collect profits. That third party was the ―banker‖. As the number of
such mediators grew there is need to control. Such mediating agencies gave birth
to the concept of ―banks‖ and ―banking‖.
The Banking industry plays a dynamic role in the economic development of the
country. The growth story of an economy depends on the power of its banking
industry. Banks act as the store as well as the power house of the country‘s wealth.
They accept deposits from individuals and corporate and lends to the businesses.
They use the deposits collected for productive purposes which help in the capital
formation in the country.
Origin of Bank
The word bank was borrowed in Middle English from Middle French banque, from
Old Italian banca, from Old High German banc, bank means "bench or counter".
Benches were used as desks or exchange counters during the Renaissance by
Florentine bankers, who used to make their transactions on desks covered by green
tablecloths. Historically, some banks were called banks of deposit, and mainly held
-deposits of foreign and domestic currencies and arranged payment in foreign trade
transactions. Other banks created deposits that acted as a circulating medium of
money in a society. One of the earliest banks in this category, the Bank of Venice,
was formed when a group of the government‘s creditors combined and began using
government debt as a means of payment in trade.
Page 26
3. 2 History of Banking
 The Beginning of Banking Industry
The History of Banking began at about 2000BC of the ancient world when the
Merchant made grain loans to farmers and traders started carrying goods between
cities within the areas of Assyria and Babylonia. The Code of Hammurabi, dating
back to about 1772 BC, is one of the oldest interpreted writings that deal with
matters of contract and set the terms of a transaction. This code also included
standardized procedures for handling loans, interest, and guarantees.
Later on, in ancient Greece and during the Roman Empire, lenders based in
temples made loans and started accepting of deposits. Banking activities in Greece
are more varied and sophisticated than in any previous society. They took deposits,
made loans, changed money from one currency to another and tested coins for
weight and purity. They even engaged in book transactions. Moneylenders can be
found who will accept payment in one Greek city and arrange for credit in another,
avoiding the need for the customer to transport or transfer large numbers of coins.
Banking, in the modern sense of the word, can be traced to early Italy, to the rich
cities in the north such as Florence, Venice and Genoa. The development of
banking spread through Europe and a number of important innovations took place
in Amsterdam during the Dutch Republic in the 16th century and in London in the
17th century. Some of the earlier systems that facilitated trading/exchange of goods
were barter system and gift economies.
 Barter System
Barter system is an age-old method that was adopted by people to exchange their
services and goods. This system was used for centuries, before the invention of
money. People used to exchange the goods or services for other goods or services
in return. The advantage of bartering is that it does not involve money. You can
buy an item in exchange for some other thing you currently have, but don't want.
The barter system was one of the earliest forms of trading. It facilitated exchange
of goods and services, as money was not invented in those times. Barter system has
been in use Profile of Banking Industry throughout the world for centuries. The
invention of money did not result in the end of bartering services.
Page 27
 Gift Economy
A gift economy (or gift culture) is a society where valuable goods and services are
regularly given without any explicit agreement for immediate or future rewards.
The gifts are exchanged as per the usual informal duties, rather than an explicit
exchange of goods or services for money or some other commodity. Gift
economies were established before the advent of market economies, but slowly
disappeared as societies became more complex. Non-monetary societies operated
largely along the principles of gift economics and debt. When barter did in fact
occur, it was usually between complete strangers.
 Banking in 20th Century
During the 20th century, developments in telecommunications and computing

resulting in major changes to the way banks operated and allowed them to
dramatically increase in size and geographic spread. The Late-2000s financial
crisis saw significant number of bank failures, including some of the world's
largest banks. Following paragraph provides a snapshot of some developments in
the banking industry over the last century.
 1930s-1960s – The Great Depression
During the Crash of 1929 preceding the Great Depression, banking and brokerage
firms were operating with margin requirements of average ~10%. It meant that the
brokerage firms would lend $9 for every $1 an investor had deposited. When the
market fell, brokers called in these loans, which could not be paid back. Banks
began to fail as debtors defaulted on debt and depositors attempted to withdraw
their deposits. Government guarantees and Federal Reserve banking regulations to
prevent such panics were ineffective or not used. Bank failures led to the loss of
billions of dollars in assets. After the panic of 1929, and during the first 10 months
of 1930, 744 US banks failed and in all, over 9,000 banks failed during the 1930s.
The depression is said to be one of the factors leading to World War II and post-
war2 recovery period saw governments taking on a more active and larger role in
banking, leading to increased regulation. In response to this many countries
significantly increased financial regulation and established regulatory agencies to
oversee banking operations and during the post Second World War period two
organizations were created: The International Monetary Fund (IMF) and the World
Bank.
Page 28
 1970s-2000s - Deregulation & Globalization
During the 1970s, there was a number of small stock market crashes tied to the
regulations put in place after the Great Depression. These crashes controlled to the
deregulation of banking restrictions and privatization of government-owned
financial institutions. Global banking and capital market services increased during
the 1980s after deregulation of financial markets in a number of countries. The
1986 'Big Bang' in London allowing banks to access capital markets in new ways,
which led to significant changes to the way banks operated and accessed capital.
This period saw a significant internationalization of financial markets. American
corporations and banks started seeking investment opportunities abroad, prompting
the development in the U.S. of mutual funds specializing in trading of foreign
stock markets. Growing internationalization changed the competitive landscape, as
now many banks would function as much as possible as a ―one-stop‖ supplier of
both retail and wholesale financial services. Financial services continued to grow
through the 1980s and 1990s as a result of a great increase in demand from
companies, governments, and financial institutions.
 Beginning of 21st Century - The Decade of Internet Banking
The early 2000s were marked by consolidation of existing banks and entrance into
the market of other financial intermediaries: non-bank financial institution. Large
corporate players ventured into the financial service community, offering
competition to established banks. The main services offered included insurances,
compension, mutual, money market, loans and credits and securities.
The process of financial innovation advanced enormously in the first decade of the
21 century, and banks explored other profitable financial instruments, diversifying
banks' business and this had a positive impact on the economic wellness of the
banking industry. This decade marked the beginning of the era in which the
distinction between different financial institutions, banking and non-banking is
gradually vanishing. Technological advances during the decade shifted the way
banks operate from traditional branch banking to internet and e-banking.
 Late-2000s Financial Crisis
Subprime mortgage lending to borrowers with poor credit led to a financial crisis
in 2007. The crisis originated in the United States, but financial institutions around
the world were affected as banking industry was truly globalized at that point.
Page 29
Many institutions failed worldwide forcing central banks to take substantial

recovery measures to stabilize the banking system.
The Late-2000s financial crisis caused significant stress on banks around the
world. The global financial crisis forced governments around the world to re-
evaluate their financial regulations.
3.3 Evolution of the Indian Banking Industry:

The Indian banking industry has its foundations in the 18th century, and has had a
varied evolutionary experience since then. The initial banks in India were primarily
traders‘ banks engaged only in financing activities. Banking industry in the pre-
independence era developed with the Presidency Banks, which were transformed
into the Imperial Bank of India and subsequently into the State Bank of India. The
initial days of the industry saw a majority private ownership and a highly volatile
work environment. Major strides towards public ownership and accountability
were made with nationalisation in 1969 and 1980 which transformed the face of
banking in India. The industry in recent times has recognised the importance of
private and foreign players in a competitive scenario and has moved towards
greater liberalisation.
Page 30
In the evolution of this strategic industry spanning over two centuries, immense
developments have been made in terms of the regulations governing it, the
ownership structure, products and services offered and the technology deployed.
The entire evolution can be classified into four distinct phases.
 Phase I- Pre-Nationalization Phase (prior to 1955)
 Phase II- Era of Nationalization and Consolidation (1955-1990)
 Phase III- Introduction of Indian Financial & Banking Sector Reforms and
Partial Liberalisation (1990-2004)
 Phase IV- Period of Increased Liberalisation (2004 onwards)
3.4 Function of Bank
The act has identified various function of a Bank under following two words
 Primary Functions
 Secondary Functions
Page 31
1. Primary Function
a) Acceptance of deposits
The bank collects deposits from the public. These deposits can be of
different types, such as
 Savings Deposits.
 Fixed Deposits.
 Current Deposits.
 Recurring Deposits.
b) Granting of advances
The bank advances loans to the business community and other members of
the public. The rate charged is higher than what it pays on deposits. The
difference in the interest rates (lending rate and the deposit rate) is its profit.
The types of bank loans and advances are,
 Overdraft.
 Cash Credits.
 Loans.
 Discounting of bills of exchange.
2. Secondary Functions
a) Agency Services
The bank acts as an agent of its customers. The bank performs a number of
agency functions which includes,
 Transfer of Funds.
 Collection of Cheques.
 Periodic Payments.
 Portfolio Management.
 Periodic Collections.
 Other Agency Functions.
b) General utility Services
The bank also performs general utility functions, such as
 Issue of Drafts, Letter of Credits, etc.
 Locker Facility.
Page 32
 Underwriting of Shares.
 Dealing in Foreign Exchange.
 Project Reports.
 Social Welfare Programmes.
 Other Utility Functions.
This Banking regulation act of 1949 provided a clear form of work within which
the Banks were required to operate. After 1955 the imperial Bank was nationalized
and changed to state Bank of India by passing state Bank of India act 1955. Later
the press of nationalized of popular and successful Banks was undertaken in two
stages, that is once during the year 1969 and other time during 1980. The Banks
which were operating in small regional units they were given the support to
increase their branch network through nationalized. This nationalization has helped
to the Banks to reach the current stage.
3.5 Structure of Organized Indian Banking System
1. Reserve Bank of India:

Reserve Bank of India is the Central Bank of our country. It was established on
1st April 1935 accordance with the provisions of the Reserve Bank of India Act,
Page 33
1934. It holds the apex position in the banking structure. RBI performs various
developmental and promotional functions.
It has given wide powers to supervise and control the banking structure. It occupies
the pivotal position in the monetary and banking structure of the country. In many
countries central bank is known by different names.
For example, Federal Reserve Bank of U.S.A, Bank of England in U.K. and
Reserve Bank of India in India. Central bank is known as a banker‘s bank. They
have the authority to formulate and implement monetary and credit policies. It is
owned by the government of a country and has the monopoly power of issuing
notes.
2. Commercial Banks:
Commercial bank is an institution that accepts deposit, makes business loans and
offer related services to various like accepting deposits and lending loans and
advances to general customers and business man.
These institutions run to make profit. They cater to the financial requirements of
industries and various sectors like agriculture, rural development, etc. it is a profit
making institution owned by government or private of both.
3. Public Sector Banks:

Currently there are 21 Nationalised banks in India. The public sector accounts for
75 percent of total banking business in India and State Bank of India is the largest
commercial bank in terms of volume of all commercial banks.
Now from April 1, 2017 all the 5 associate banks of SBI and Bhartiya Mahila Bank
are merged with State Bank of India. After this merger now SBI is counted among
the top 50 largest banks of the world.
Page 34
Nationalised Banks in India are
1. Allahabad Bank
2. Andhra Bank
3. Bank of India
4. Bank of Baroda
5. Bank of Maharashtra
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. Indian Bank
11. Indian Overseas Bank
12. Oriental Bank of Commerce
13. Punjab & Sindh Bank
14. Punjab National Bank
15. State Bank of India
16. Syndicate Bank
17. UCO Bank
18. Union Bank of India
19. United Bank of India
20. Vijaya Bank
4. Private Sector Banks:

The private-sector banks in India represent part of the Indian banking sector that is
made up of both private and public sector banks. The "private-sector banks"
are banks where greater parts of stake or equity are held by
the private shareholders and not by government.
List of Private Sector Banks is:
Banks Established
1. Axis Bank (earlier UTI Bank) 1993(as
UTI Bank)
2. Bank of Punjab (actually an old
generation private bank since it was not
founded under post-1993 new bank
licensing regime)
Page 35
3. Centurion Bank Ltd. (Merged in

Bank of Punjab in late 2005 to become
1994
Centurion Bank of Punjab, acquired by
HDFC Bank Ltd. in 2008)
4. Development Credit Bank
(Converted from Co-operative Bank, 1995
now DCB Bank Ltd.)
5. ICICI Bank (previously ICICI and
then both merged;total merger 1996
SCICI+ICICI+ICICI Bank Ltd)
6. IndusInd Bank 1994
7. Kotak Mahindra Bank 2003
8. Yes Bank 2005
9. Balaji Corporation Bank Limited 2010
10. HDFC bank 1994
11. Bandhan bank 2015
12. IDFC Bank 2015
5. Foreign Banks:
A foreign bank with the obligation of following the regulations of both its home
and its host countries. Loan limits for these banks are based on the capital of the
parent bank, thus allowing foreign banks to provide more loans than other
subsidiary banks. Foreign banks are those banks, which have their head offices
abroad. CITI bank, HSBC, Standard Chartered etc. are the examples of foreign
bank in India. Currently India has 36 foreign banks.
6. Regional Rural Bank (RRB):

The government of India set up Regional Rural Banks (RRBs) on October 2, 1975.
The banks provide credit to the weaker sections of the rural areas, particularly the
small and marginal farmers, agricultural labourers, and small entrepreneurs. There
are 82 RRBs in the country. NABARD holds the apex position in the agricultural
and rural development. List of some RRBs is given below:
Page 36
7. Co-operative Bank:
Co-operative bank was set up by passing a co-operative act in 1904. They are
organised and managed on the principal of co-operation and mutual help. The main
objective of co-operative bank is to provide rural credit.
The cooperative banks in India play an important role even today in rural co-
operative financing. The enactment of Co-operative Credit Societies Act, 1904,
however, gave the real impetus to the movement. The Cooperative Credit Societies
Act, 1904 was amended in 1912, with a view to broad basing it to enable
organisation of non-credit societies.
Name of some co-operative banks India are:

1. Andhra Pradesh State Co-operative Bank Ltd
2. The Bihar State Co- operative Bank Ltd.
3. Chhatisgarh Rajya Sahakari Bank Maryadit
4. The Gujarat State Co-operative Bank Ltd.
5. Haryana Rajya Sahakari Bank Ltd.
Three tier structures exist in the cooperative banking:

i. State cooperative bank at the apex level.
ii. Central cooperative banks at the district level.
iii. Primary cooperative banks and the base or local level.
Scheduled and Non-Scheduled Banks:
The scheduled banks are those which are enshrined in the second schedule of the
RBI Act, 1934. These banks have a paid-up capital and reserves of an aggregate
value of not less than Rs. 5 lakhs, they have to satisfy the RBI that their affairs are
carried out in the interest of their depositors.
All commercial banks (Indian and foreign), regional rural banks, and state
cooperative banks are scheduled banks. Non- scheduled banks are those which are
not included in the second schedule of the RBI Act, 1934. At present these are only
three such banks in the country.
3.6 Banking segments

Banking sector has witnessed enormous growth in the past decades. The banks
have transformed themselves from traditional deposit and borrowing institutes to
large organizations offering a variety of products and services. Banks can be
classified in variety of ways based on various parameters like statue, segments,
Page 37
customers, products and services etc. Here we will discuss the most common
classifications used in Banking Industry:
• Banking Product Segments Prescribed by RBI.

• Banking Geographical Segments Prescribed by RBI.
• Key Banking Sectors Segments.
Banking Product Segments Prescribed by RBI
Reserve bank of India, prescribed four broad business segments in the year 2008,
viz. ‗Treasury‘, ‗Corporate / Wholesale Banking‘, ‗Retail Banking‘ and ‗Other
Banking Business‘. They have also prescribed ‗Domestic‘ and ‗International‘ as
the uniform geographic segments for the purpose of segment reporting under
accounting standard AS-17. These segments are briefly discussed below:
RBI Segment 1: Treasury
Treasury includes the entire investment portfolio comprising of funding and

investment activities. Treasury management refers to the process of management
of an enterprise's holdings, cash and working capital, with the ultimate goal of
managing the firm's liquidity and mitigating its operational, financial and
reputational risk. Treasury Management provides greater insight and control over
complex processes for managing funding, liquidity, and risk. Large banks have a
stronghold on the provision of treasury management products and services.
RBI Segment 2: Retail Banking
The Retail Banking would include exposures which fulfil the four criteria of
orientation, product, granularity and low value of individual exposures. These
retail exposures are laid down in Basel Committee on Banking Supervision
document "International Convergence of Capital Measurement and Capital
Standards: A Revised Framework". Orientation Criterion refers to the exposure is
to an individual person(s) or to a small business. Small business is one where the
total annual turnover is less than INR 50 crores. Product criterion exposure means
exposure on specified products specified as revolving credits, lines of credit,
overdrafts, term loans, instalment loans, student and educational loans, other leases
and small business facilities and commitments. It also includes housing loans.
Granularity criterion mandates that the aggregate exposure to one borrower should
Page 38
not exceed 0.2% of the overall retail portfolio. Further the ‗Low value of individual
exposures‘ criterion specifies the maximum aggregated retail exposure to one
borrower at Rs.5 crore.
RBI Segment 3: Corporate / Wholesale Banking
Wholesale Banking includes all advances to trusts, partnership firms, companies

and statutory bodies, which are not included under ‗Retail Banking‘.
RBI Segment 4: Other Banking Business
Others banking business segment includes all other banking operations not covered
under above 3 segments. It also covers all other residual operations such as para
banking transactions.
Banking Geographical Segments Prescribed by RBI
Geographic Segment 1: Domestic
Consumer and business banking is mostly targeted to domestic customers residing

within the country of registration. Domestic operations are the main market for
majority of deposits and advances.
Geographic Segment 2: International
Although generally the domestic market is primary revenue source for most of the
banks, banks also have significant global operations now days that contribute
significantly to their revenues. Private and other global banks have much larger
global operations and most of the smaller banks in India have comparatively
smaller international operations.
Key Banking Sectors
Based on types of banks and the products and services offered, the banks can be
further classified as banking industry sectors in the following four ways:
Page 39
1. Retail Banking
2. Commercial Banking
3. Investment Banking
4. Central Banks
This classification into sectors is based on the customer profile and products and
services offered by each type of bank.
Banking Industry Sector 1: Retail Banking
Retail banks are the banks that cater to the needs of individuals and the most
common format of banking that we experience. They include deposit oriented
banking institutions like saving banks, loan associations, credit unions, thrifts, and
other savings banks like postal.
Individuals are the targeted consumers for retail banking and banks offers variety
of products and services to this clientele including savings accounts, safe lockers,
fixed & recurring deposits, housing loans, consumer loans, personal loans and
unsecured and revolving loans, such as credit cards.
Banking Industry Sector 2: Commercial Banking:
This category represents corporate and business banking and includes commercial
and foreign banks. Commercial banks offer similar kind of products and services
as retail banks, however, as retail banks target individual consumers, commercial
banks are focused on corporates and commercial businesses. Products and services
include consumer and commercial deposits, business loans, mortgage and real
estate loans, overseas operations, investment in high-grade securities, and
industrial loans.
Banking Industry Sector 3: Investment Banking:
The products and services of this category include managing portfolios of financial
assets, trading in securities, fixed income, commodity and currency, corporate
advisory services for mergers and acquisitions, corporate finance, and debt and
equity underwriting. Trading activities include trading both on behalf of clients or
on the bank's own account.
Page 40
Banking Industry Sector 4: Central Banks:
Central banks are bankers‘ banks, and every country generally has one central bank
that occupies a central position in the banking system and acts as the highest
financial authority. The main function of this bank is to regulate and supervise the
whole banking system in the country. It is a banker's bank and controller of credit
in the country.
3.7 Products of the Banking Industry
The products of the banking industry broadly include deposit products, credit
products and customized banking services. Most banks offer the same kind of
products with minor variations. The basic differentiation is attained through quality
of service and the delivery channels that are adopted. Apart from the generic
products like deposits (demand deposits – current, savings and term deposits),
loans and advances (short term and long term loans) and services, there have been
innovations in terms and products such as the flexible term deposit, convertible
savings deposit (wherein idle cash in savings account can be transferred to a fixed
deposit), etc. Innovations have been increasingly directed towards the delivery
channels used, with the focus shifting towards ATM transactions, phone and
internet banking. Product differentiating services have been attached to most
products, such as debit/ATM cards, credit cards, nomination and demat services.
Page 41
Other banking products include fee-based services that provide non-interest

income to the banks. Corporate fee-based services offered by banks include
treasury products; cash management services; letter of credit and bank guarantee;
bill discounting; factoring and forfeiting services; foreign exchange services;
merchant banking; leasing; credit rating; underwriting and custodial services.
Retail fee-based services include remittances and payment facilities, wealth
management, trading facilities and other value added services.
Page 42
CHAPTER-4
THEORITICAL BACKGROUND
4.1 Ratio Analysis
4.2 Common Size Statement
4.3 Comparative Statement
4.4 Trend Analysis
Page 43
CHAPTER – 4
THEORITICAL BACKGROUND
Ratio Analysis principally reflects business sector outcomes and results that
shows overall financial health of the sector over a specific period of time. It
indicates that how well an entity is utilizing its resources to maximize the
shareholders wealth and profitability. Although a complete evaluation of a firm‘s
Ratio Analysis takes into account many other different kind of measures but most
common performance measurement used in the field of finance and statistical
inference is financial ratios.
One way to analyze Ratio Analysis is to calculate key financial ratios over the last
five years. Ratios can be compared year over year to measure progress and
performance. Financial ratios are a comparison of two or more elements of
financial data. They are expressed in percentage or as ratios.
Since each ratio tells you a little about the farm‘s financial story, it‘s important that
they be analyzed collectively. One ratio with good results or one with poor results
should not alone be the basis upon which to make management decisions,
especially decisions with transition planning implications. It is important to review
all the ratios over a period of five year timeline to reveal trends.
Trends with stable or improving performance are the strength when facing a
potential intergenerational transfer. Trends with declining performance can be a
weakness and should be analyzed carefully before proceeding.
Page 44
4.1 RATIO ANALYSIS
There are different types of ratios analysis that have been calculated by every
company to evaluate business performance. It is divided as below:
Type 1:– Profitability Ratios

This type of ratio analysis suggests the Returns that are generated from the
Business with the Capital Invested.
 Gross Profit Ratio

It represents the operating profit of the company after adjusting the cost of the
goods that are been sold. Higher the gross profit ratio, lower the cost of goods sold,
and greater satisfaction for the management.
Gross Profit Ratio Formula = Gross Profit/Net Sales*100.
 Net Profit Ratio

It represents the overall profitability of the company after deducting all the cash &
no cash expenses. Higher the net profit ratio, the higher the net worth and stronger
the balance sheet.
Net Profit Ratio Formula = Net Profit/Net Sales*100
 Operating Profit Ratio

It represents the soundness of the company and the ability to pay off its debt
obligations.
Operating Profit Ratio Formula = EBIT / Net sales*100
 Return on Capital Employed

It represents the profitability of the company with the capital invested in the
business.
Return on Capital Employed Formula = EBIT / Capital Employed
Type 2: – Solvency Ratios
These ratio analysis types suggest whether the company is solvent & is able to pay
off the debts of the lenders or not.
 Debt-Equity Ratio
This ratio represents the leverage of the company. A low debt equity ratio means
that the company has a lesser amount of debt on its books and is more equity
diluted.
Debt Equity Ratio Formula = Total Debt/Shareholders Fund
Where,
Total debt = long term + short term + other fixed payments shareholder funds =
equity share capital + reserves + preference share capital – fictitious assets.
 Interest Coverage Ratio
It represents how many times the company‘s profits are capable of covering
its interest expense. It also signifies the solvency of the company in the near future
since higher the ratio more comfort to the shareholders & lenders regarding
servicing of the debt obligations and smooth functioning of the business operations
of the company.
Interest Coverage Ratio Formula = EBIT / Interest Expense
Type 3: – Liquidity Ratios
These ratios represent whether the company has enough liquidity to meet its short
term obligations or not. Higher the liquidity ratios will increase more cash-rich the
company.
Page 46
 Current Ratio
It represents the liquidity of the company in order to meet its obligations in the
next 12 months. Higher the current ratio, the stronger the companies to pay its
current liabilities. However, a very high current ratio signifies that a lot of money
is been stuck in receivables that might not realize in the future.
Current Ratio Formula = Current Assets/Current Liabilities.
 Quick Ratio
It represents how cash-rich is the company to pay off its immediate liabilities in the
short term.
Quick Ratio Formula = Cash & Cash Equivalents+Marketable

Securities+Accounts Receivables/Current Liabilities.
Type 4:– Turnover Ratios
These ratios signify how efficiently the assets and liabilities of the company are
been used to generate revenue.
 Fixed Assets Turnover Ratio
Fixed asset turnover represents the efficiency of the company to generate revenue
from its assets. In simple terms, it is a return on the investment in fixed assets.
Net Sales = Gross Sales – Returns.
Net Fixed Assets = Gross Fixed Assets – Accumulated Depreciation.
Average Net Fixed Assets = (Opening Balance of Net Fixed Assets + Closing
Balance of Net Fixed Assets) / 2.
Fixed Assets Turnover Ratio Formula = Net Sales / Average Fixed Assets
 Inventory Turnover Ratio
Inventory Turnover Ratio represents how fast the company is able to convert its
inventory into sales. It is calculated in days signifying the time required to sell the
stock on an average. Average inventory is been considered in this formula since
the inventory of the company keeps on fluctuating throughout the year.
Inventory Turnover Ratio Formula = Cost of Goods Sold/Average Inventories
Page 47
 Receivable Turnover Ratio
Receivables Turnover Ratio reflects the efficiency of the company to collect its
receivables. It signifies how many times the receivables are been converted to
cash. A higher receivable turnover ratio also indicates that the company is
collecting money in cash.
Receivables Turnover Ratio Formula = Net Credit Sales/Average Receivables
Type 5:– Earnings Ratios
This ratio analysis type speaks about the returns that the company generates for its
shareholders or investors.
 Profit Earnings Ratio
PE Ratio represents the earnings multiple of the company, the market value of the
shares based on the profit earnings multiple. A high P/E Ratio is a positive sign for
the company since it gets a high valuation in the market for m&a opportunity.
P/E Ratio Formula = Market Price per Share/Earnings Per Share
 Earnings Per Share
Earnings Per Share represents the monetary value of the earnings of each
shareholder. It is one of the major components looked at by the analyst while
investing in equity markets.
Earnings Per Share Formula = (Net Income – Preferred Dividends) /
(Weighted Average of Shares Outstanding)
 Return on Net Worth
It represents how much profit the company generated with the invested capital
from equity & preference shareholders both.
Return on Net Worth Formula = Net Profit/Equity Shareholder Funds.
Equity Funds = Equity+ Preference+ Reserves -Fictitious Assets.
4.2 COMMON SIZE STATEMENTS

Common size analysis, also referred as vertical analysis, is a tool that financial
managers use to analyze financial statements. It evaluates financial statements by
expressing each line item as a percentage of the base amount for that period. The
Page 48
analysis helps to understand the impact of each item in the financial statement and
its contribution to the resulting figure.
The total assets or total liabilities or sale is taken as 100 and the balance items are
compared to the total assets, total liabilities or sales in terms of percentage. Thus, a
common size statement shows the relation of each component to the whole.
Separate common size statement is prepared for profit and loss account as
Common Size Income Statement and for balance sheet as Common Size Balance
Sheet.
a. Income Statement Common Size Analysis

The base item in the income statement is usually the total sales or total revenues.
Common size analysis is used to calculate net profit margin, as well as gross and
operating margins. The ratios tell investors and finance managers how the
company is doing in terms of revenues, and they can make predictions of future
revenues. Companies can also use this tool to analyze competitors to know the
proportion of revenues that goes to advertising, research and development, and
other essential expenses.
b. Balance Sheet Common Size Analysis
The balance sheet common size analysis mostly uses the total assets value as the
base value. On the balance sheet, the total assets value equals the value of total
liabilities and shareholders‘ equity. A financial manager or investor uses the
common size analysis to see how a firm‘s capital structure compares to rivals.
Page 49
They can make important observations by analyzing specific line items in relation
to the total assets.
Types of Common Size Analysis
 Vertical Analysis
Vertical analysis refers to the analysis of specific line items in relation to a base
item within the same financial period. For example, in the balance sheet, we can
assess the proportion of inventory by dividing the inventory line using total
assets as the base item.
 Horizontal Analysis
Horizontal analysis refers to the analysis of specific line items and comparing
them to a similar line item in the previous or subsequent financial period.
Although common size analysis is not as detailed as trend analysis using ratios,
it does provide a simple way for financial managers to analyze financial
statements.
4.3 COMPARATIVE STATEMENTS

The comparative financial statements are statements of the financial position at
different periods; of time. The elements of financial position are shown in a
comparative form so as to give an idea of financial position at two or more periods.
Any statement prepared in a comparative form will be covered in comparative
statements.
Types of Comparative Statements:
Page 50
a. Comparative Income Statement

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

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

Trend Analysis is a statistical tool that helps to determine future movements of a
variable on the basis of its historical trends. In simple words, it predicts future
behavior on the basis of past data. Under this method, a researcher collects
information from multiple time periods and plots the information on a horizontal
line to get some meaningful information. There is no specific amount of time for a
movement to become a trend. However, the longer the movement, the better it is.
TYPES OF TREND ANALYSIS
Page 51
 Uptrend
It is the trend when financial markets and assets move in upward directions,
resulting in an increase in the price. It is usually the time of boom in the economy,
where overall sentiments are favorable.
 Downtrend
In the downtrend or the bear market, the economy, financial markets, and assets
prices move in the downward direction. It is the time when companies shrink
operations and overall investor sentiment is not favorable.
 Sideways / horizontal trend

In this, the assets prices or the broader economy-level are not moving in any
direction, rather are moving sideways. This means, moving up for some time and
then down on the same level. It is a risky movement as investors are unsure of
what will happen to their investment.
CHAPTER - 5
DATA ANALYSIS AND INTERPRETATION
 Table
 Graph
 Interpretation
Page 53
CHAPTER - 5
DATA ANALYSIS and INTERPRETATION
Table No. 5.1: Basic Earnings per Share Ratio
The table showing the Basic Earnings per Share Ratio of SBI
(Base Year 2019-20)
Year Ratio Trend Analysis

2019-20 12.98 100.00
2016-17 13.43 103.47
2017-18 -7.67 -59.09
2018-19 0.97 7.47
2019-20 16.23 125.04
Graph No. 5.1
Ratio
20
15
10
5 Ratio
0
2015-16 2016-17 2017-18 2018-19 2019-20
-5
-10
Inference:
From the above table 1, it can be analyzed that, during 2017-18 the company had
the lowest basic earnings per ratio and during 2019-20 the company is having
highest ratio. Hence, the company‘s growth is increased by 25% during 5 years.
Page 54
Table No. 5.2: Return on Assets
The table showing the Return on Assets of SBI
(Base year 2019-20)

2019-20 0.42 100.00
2016-17 0.38 90.48
2017-18 -0.18 -42.86
2018-19 0.02 4.76
2019-20 0.36 85.71
Graph No. 5.2
Ratio
0.5
0.4
0.3
0.2
0.1 Ratio
0
2015-16 2016-17 2017-18 2018-19 2019-20
-0.1
-0.2
-0.3
Inference:
From the above table 2, it is determined that, during the study period
the return on assets has been decreased and the growth of the company is
decreased by 14.29% during 5 years.
Page 55
Table No. 5.3: Net Profit Margin Ratio
The table showing the Net Profit Margin Ratio of SBI
(Base Year 2019-20)

2019-20 6.06 100.00
2016-17 5.97 98.51
2017-18 -2.96 -48.84
2018-19 0.35 5.78
2019-20 5.63 92.90
Graph No. 5.3
Ratio
7
6
5
4
3
2
Ratio
1
0
-1 2015-16 2016-17 2017-18 2018-19 2019-20
-2
-3
-4
Inference:
From the above table 3, it can be noted that, during 5 years the company
is having lowest net profit margin ratio in the year 2017-18 and gradually increased
in the year 2019-20.
Page 56
Table No. 5.4: Income to Total Assets
The table showing interest Income to Total Assets of SBI
(Base Year 2015 – 16)

2019-20 6.95 100.00
2016-17 6.48 93.24
2017-18 6.38 91.80
2018-19 6.59 94.82
2019-20 6.51 93.67
Graph No. 5.4
Ratio
7
6.9
6.8
6.7
6.6
6.5
Ratio
6.4
6.3
6.2
6.1
6
2015-16 2016-17 2017-18 2018-19 2019-20
Inference:
From the above table 4, it can be stated that, during 5 years the
company had the lowest income to total assets i.e 93.24 in the year 2017-18 and in
the year 2018-19 it has increased by 94.82 and in the year 2019-20 the company
again decreased by 93.67.
Page 57
Table No. 5.5: Net Profit per Share Ratio
The table showing the Net Profit per Share Ratio of SBI
(Base Year 2019-20)

2019-20 12.82 100.00
2016-17 13.15 102.57
2017-18 -7.34 -57.25
2018-19 0.97 7.57
2019-20 16.23 126.60
Graph No. 5.5
Ratio
20
15
10
5 Ratio
0
2015-16 2016-17 2017-18 2018-19 2019-20
-5
-10
Inference:
From the above table 5, it can be interpreted that, during 5 years the
company is having the lowest net profit per share in the year 2017-18 and in the
year 2019-20 the company is having highest ratio.
Page 58
Table No. 5.6: Retention Ratio
The table showing Retention Ratio of SBI
(Base Year 2019-20)

2019-20 79.71 100.00
2016-17 79.88 100.21
2017-18 100 125.45
2018-19 100 125.45
2019-20 100 125.45
Graph No. 5.6
Ratio
120
100
80
60
Ratio
40
20
0
2015-16 2016-17 2017-18 2018-19 2019-20
Inference:
From the above table 6, it can be inferred that, the company had the
constant ratio in the year 2017-18, 2018-19 and 2019-20 during 5 years.
Page 59
Table – 7: Dividend per Share
The table showing the Dividend per Share of SBI
(Base Year 2019-20)

2019-20 2.6 100
2016-17 2.6 100
2017-18 0 000
2018-19 0 000
2019-20 0 000
Graph No. 5.7
Ratio
3
2.5
1.5
Ratio
1
0.5
0
2015-16 2016-17 2017-18 2018-19 2019-20
Inference:
From the above table 7, it can be understood that, in the first 2 years the
company had equal dividend per share and in the next 3 years the company had no
dividend per share during 5 years.
Page 60
Table – 8: Current Ratio
The table showing the Current Ratio of SBI
(Base Year 2019-20)

2019-20 0.81 100.00
2016-17 0.73 90.12
2017-18 0.71 87.65
2018-19 0.75 92.59
2019-20 0.74 91.36
Graph No. 5.8
Ratio
0.82
0.8
0.78
0.76
0.74
Ratio
0.72
0.7
0.68
0.66
2015-16 2016-17 2017-18 2018-19 2019-20
Inference:
From the above table 8, it can be inferred that, during 5 years the
company had the lowest current ratio in the year 2017-18.
Page 61
Table No. 5.9:

INCOME STATEMENT OF STATE BANK OF INDIA
(Base year 2019-20)
Annual 2015-16 2016-17 2017-18 2018-19 2019-20 T.A T.A T.A T.A T.A
2015-16 2016-17 2017-18 2018-19 2019-
20
Interest 163,998 175,518.24 220,499.32 242,868.65 257,323.59 100.00 107.02 134.45 148.09 156.91
Earned .30
Other 27,845.37 35,460.93 44,600.69 36,774.89 45,221.48 100.00 127.35 160.17 132.07 162.40
Income
Total 191,843.67 210,979.17 265,100.01 279,643.54 302,545.08 100.00 109.97 138.19 145.77 157.70
Income
Total 148,585.85 160,131.27 205,589.05 224,207.52 234,412.46 100.00 107.77 138.36 150.89 157.76
Expenditure
Operating 43,257.82 50,847.90 59,510.96 55,436.02 68,132.62 100.00 117.55 137.57 128.15 157.50
Profit
Provisions & 29,483.75 35,992.72 75,039.20 53,828.55 43,330.37 100.00 122.08 254.51 182.57 146.96
Contigencies
PBT 13,774.07 14,855.18 -15,528.24 1,607.47 24,802.25 100.00 107.85 -112.74 11.67 180.06
Tax 3,823.40 4,371.07 -8,980.79 745.25 10,314.13 100.00 114.32 -234.89 19.49 269.76
Net Profit 9,950.67 10,484.11 -6,547.45 862.22 14,488.12 100.00 105.36 -65.80 8.66 145.60
NPA
Gross NPA 98,172.80 112,342.99 223,427.46 172,753.60 149,091.85 100.00 114.43 227.59 175.97 151.87
Gross NPA 7 7 11 8 6 100 100 157.14 114.29 85.7143
(%)
Net NPA 55,807.02 58,277.38 110,854.70 658,947.40 51,871.30 100.00 104.43 198.64 114.29 92.95
Net NPA 4 4 6 3 2.23 100 100 150 75 55.75
(%)
Inference:
From the above Income Statement, it can be analyzed that the Interest Earned is
increased by 7% in the year 2019-20 and increased up to 56% in the year 2019-20
during 5 years. During 5 years the total income is less than the total expenditure.
Operating profit is increased by 57% in the year 2019-20. Provisions and
contingencies are highest in the year 2017-18 i.e. 254.52 and it was gradually
decreased to 146.96. Profit before tax is lesser in the year 2017-18. Tax is highest
Page 62
in the year 2019-20. Net profit is increased by 45% in the year 2019-20 and it is
lowest in the year 2017-18 during the study period.
Table No. 5.10:

BALANCE SHEET OF STATE BANK OF INDIA
(Base Year 2019-20)
Equities & 2019-20 Trend 2016-17 Trend 2017-18 Trend 2018-19 Trend 2019-20 Trend
Liabilities: Analy Analys Analys Analysis Analys
sis is is is
Share 776.28 100 797.35 102.71 892.46 114.97 892.46 114.97 892.46 114.97
Capital
Reserves & 143,498.16 100 187,488.7 130.66 218,236.10 152.08 220,021.3 153.33 231,114. 161.06
Surplus 1 6 97
Deposits 1,730,722.44 100 2,044,751. 118.14 2,706,343. 156.37 2,911,386. 168.22 3,241,62 187.3
39 29 01 0.73
Borrowings 323,344.59 100 317,693.6 98.25 362,142.07 111.99 403,017.1 124.64 314,655. 97.31
6 2 65
Liabilities & 159,276.08 100 155,235.1 97.46 167,138.08 104.94 145,597.3 91.41 163,110. 102.41
Provisions 9 0 10
Total 2,357,617.54 100 2,705,966. 114.78 3,454,752. 146.53 3,680,914. 156.13 3,951,39 167.6
Liabilities 30 00 25 3.92
Assets:
Fixed Assets 10,389.28 100 42,918.92 413.1 39,992.25 384.94 39,197.57 377.29 38,439.2 369.99
8
Loans & 1,463,700.42 100 1,571,078. 107.34 1,934,880. 132.19 2,185,876. 149.34 2,325,28 158.86
Advances 38 19 92 9.56
Investments 575,651.78 100 765,989.6 133.06 1,060,986. 184.31 967,021.9 167.99 1,046,95 181.87
3 72 5 4.52
Other Assets 307,876.07 100 325,979.3 105.88 418,892.84 136.06 488,817.8 158.77 540,710. 175.63
7 1 56
Page 63
Total Assets 2,357,617.54 100 2,705,966. 114.78 3,454,752. 146.53 3,680,914. 156.13 3,951,39 167.6
30 00 25 3.92
Other Info:
Capital 13 100 13 100 13 100 13 100 13 100

Adequacy
Ratios (%)
Gross NPA 7 100 7 100 11 157.14 8 114.29 6 85.71

(%)
Net NPA 4 100 4 100 6 150 3 75 2.23 55.75

(%)
Contingent 971,956.01 100 1,046,440. 107.66 1,162,020. 119.55 1,116,081. 114.83 1,214,99 125.01
Liabilities 93 69 46 4.61
Inference:
From the above balance sheet, it can be determined that, the company‘s
share capital is constant in the year 2017-18, 2018-19 and 2019-20. Reserves and
surplus and deposits are increasing year to year. During 5 years the borrowings are
highest in the year 2019. Deposits are more than the loans and advances.
Borrowings are highest in the year 2019.
Page 64
Chapter – 6
FINDINGS, SUGGESTIONS AND CONCLUSION
6.1 Findings
6.2 Suggestions
6.3 Conclusion
Page 65
FINDINGS, SUGGESTIONS AND CONCLUSION

6.1 FINDINGS
 The study of comparative study, common size analysis and trend analysis is
very good.
 The profitability position of the SBI is not good.
 The value of current ratio of SBI is irregular year after year.
 The net profit per share ratio is increased in the year 2019-20.
 The company needs to lower the deposits and it should increase the loans.
 The retention ratio indicates the equal ratio in the year 2017-18 to 2019-20.
 The dividend per share shows no value in the year 2017-18 to 2019-20.
 The Basic Earnings per share is increased by 25% during 5 years and in the
year 2017-18 it has the lowest earnings.
 The Return on Assets is decreased by 14.29% in the study of 5 years.
 The Net profit margin ratio has the lowest share in the year 2017-18 and it is
decreased by 7.1% in the year 2019-20.
 Income to total Assets has no negative value and it is decreased by 6.33%

during 5 years.
 Share capital is increased by 14.97% during the study period.
 Reserves and surplus is increased by 61% during 5 years.
 Deposits are increased by 87% in the year 2019-20.
 Borrowings are decreased by 3% during 5 years of study.

Page 66
 Liability and Provisions are increased by 2% during 5 years.
 Fixed Assets were lowest in the year 2019-20.
 Loans and Advances are increasing year after year in the study period.
 Investments are increased by 81% during 5 years.
 Other Assets are increased every year during 5 years.
 Interest Earned is increased by 56% in the year 2019-20.
Page 67
6.2 SUGGESTIONS
 Decline in profitability of the banking system due to increasing in deposits

and borrowings and decreasing in loans and advances.
 The performance of the company will affect the profitability of SBI.
 Bank has fallen a percentage in the year 2017-18 from the last 5 years.
 It might indicate that the company can no longer afford to pay dividend.
 The company has low current ratio so it should increase its current ratio
where it can meet its short term obligation smoothly.
 The bank should make efforts to increase the retention ratio for its further
growth and development.
 The bank basic earnings per share is tremendously increased and it is

advised that it should be continued for the following years.
 The bank has to take necessary steps to improve the return on assets.
Page 68
6.3 CONCLUSION
A sound financial system is indispensable for a healthy and vibrant economy. The
performance of any economy is to largest extent dependent on the performance of
the banking sector. Banks play a key role in improving economic efficiency by
channeling funds from resources surplus unit to those with better productive
investment opportunities. The financial system is dominated by banking industry.
However, the banking sector is very important for the economic development of a
country. The SBI is one of the leading banks of Public sector Bank in India. The
market position of SBI is better in the year 2019-20 during last 5 years. According
to this project I came to know that from the analysis of Ratio Analysis it is clear
that SBI had been incurred the loss during the year 2017-18. So the company
should focus on getting profits in the coming years.
Page 69
ANNEXURE
 BIBLIOGRAPHY
Page 70
BIBLIOGRAPHY
REFERENCE:
1. Manish Mittal and Arunna Dhademade (2005), ―A Comparative study on

profitability and productivity in Indian Banks‖, ISBN-978-81-7446-983-0.
2. Jha DK and D S Sarangi (2011), ―A comparative study on performance of new

generation banks in India‖ International journal of research in commerce and
management, volume : 2, no.1.
3. Dr. D. Guruswamy (2012) ―Analysis of profitability performance of SBI and its

Associates‖, ZENITH. International Journal of Business & Management Research
Voume : 2, Issue : 1, January 2012.
4. Dr. M. Dhanabhakyam and M. Kavitha ( 2012), ―Ratio Analysis of Selected

Public Sector Banks in India‖, International Journal of Multidisciplinary Research,
Volume : 2, Issue : 1.
5. Brinda Devi, V (2013), ―A Study of Profitability Analysis of Private Sector

Banks in India‖. IOSR Journal of Business and Management (IOSR-JBM), 13 (4),
45-50.
6. Ms. Shikha Gupta (2014) ―An Empirical Study of Ratio Analysis of ICICI Bank
- A Comparative Analysis‖ Publication IITM Journal of Business Studies, Vol. 1,
Issue 1.
7. Loriya Chirag, Thakarshibhai (2014), ―study on A Profitability Analysis of

Banks in India‖ Volume : 3, Issue : 12, Dec 2014, ISSN - 2250-1991.
8. Dr. Kingshuk Adhikari, Nitashree Barman, Pinkumoni Kashyap(2014), ―study

on Profitability of State Bank of India: An Analysis‖, Volume 6, Issue 12.
9. Urmila Bharti, Surender Singh (2014), describes ―A study on Liquidity and

Profitability Analysis of Commercial Banks in India‖ ISSN 0974-2239, Volume 4,
Number 11.
Page 71
10. Dr. V.N. Sailaja and Dr.N. Bindu Madhavi (2015) ―Comparison of capital
structure of public sector banks and private sector banks and its effect on bank‘s
profitability‖, IJMSRR, E- ISSN - 2349-6746, ISSN -2349-6738, Volume : 1,
Issue:11.
11. AlpeshGajera (2015), ―A comparative study on Ratio Analysis of private and

public sector banks with special reference to affecting factors and their impact on
performance indicators‖ Volume No. 4, Issue No. 05, ISSN No. 2250- 1991.
12. Abhay Jaiswal and Chanchala Jain( 2016), ―A Comparative Study of Ratio
Analysis of SBI and ICICI‖, Volume : 4, Issue : 3, E-ISSN: 2320-7639.
Article:
History of Banking in India in Brief (Before & After Independence), Neeraj

Mishra, 17th Feb 2019.
Annual report of STATE BANK OF INDIA 2016 - 2020
Websites:
www.kalyan-city.blogspot.com
www.wikipedia.org
www.slideshare.net
www.moneycontrol.com
Page 72

Ratio Analysis Sbi

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ratio Analysis Sbi

Uploaded by

Copyright:

Available Formats

CONTENTS

CHAPTER CHAPTER NAME PAGE NO

2 STATE BANK OF INDIA PROFILE 10-24

3 INDUSTRY PROFILE 25-41

4 THEORITICAL BACKGROUND 42-51

5 DATA ANALYSIS AND 52-63

6 FINDING ,SUGGSTIONS AND 64-68

1.2 Review of literature

1.3 Statement of the problem

1.4 Objectives of the study

1.5 Scope of the study

1.6 Research methodology

1.7 Limitations of the study

Ratio Analysis is the process of examining a company‘s performance in the context

Overall, a central focus of Ratio Analysis is evaluating the company‘s ability to

While steel keeps on having reinforcement in customary segment, for example,

The efficiency of financial system is strength of economy. A sound banking system

1.2 REVIEW OF LITERATURE

3. DR.D.GURUSWAMY, (2012), describes ―Analysis of Profitability

4. Dr.Dhanabhakyam & M.kavitha (2012) in their research used some important

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

6. Ms. Shikha Gupta (2014), An Empirical Study Of Ratio Analysis Of Icici

7. Loriya Chirag, Thakarshibhai (2014), study on A Profitability Analysis of

8. Dr. Kingshuk Adhikari, Nitashree Barman, Pinkumoni Kashyap (2014),

9. Urmila Bharti, Surender Singh (2014), describes a study on Liquidity and

11. AlpeshGajera (2015) in his research article an Ratio Analysis evaluation of

1.3 STATEMENT OF THE PROBLEM

1.4 OBJECTIVES OF THE STUDY

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

 To study the Ratio Analysis of State Bank of India.

 To analyze the liquidity, profitability performance of SBI.

1.5 SCOPE OF THE STUDY

1.6 RESEARCH METHODOLOGY

1.7 LIMITATIONS OF THE STUDY

However I tried my level best in collecting the relevant information for my

STATE BANK OF INDIA PROFILE

On October 7, 2013, Arundhati Bhattacharya became the first woman to be

2.3 Vision, Mission and Values

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

“To emerge as the leading company offering a comprehension range of banking

 We will always be honest, transparent and ethical.

Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU - ALL THE

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

 2002: SBI networks 3,000 branches in a massive technology

 2011: SBI - Acquisition of SBICI Bank. P Choudhary has been appointed as

 2014: SBI announces 150% interim dividend

 2018: Launch of Doctor‘s SBI Card and Apollo SBI Card.

 2019: SBI Card enters the ‗9 Million Cards‘ club.

 State Bank of Hyderabad (SBH)

 State Bank of India (California)

 SBI Capital Markets Ltd

 SBI General Insurance Company Limited

2.9 Recent awards and recognition

2.10 Board of Directors

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

Sl.No Name Designation

1. Shri Rajnish Kumar Chairman

2. Shri P.K. Gupta Managing Director

3. Shri Dinesh Kumar Khara Managing Director

4. Shri Arijit Basu Managing Director

5. Shri C.S. Setty Managing Director

6. Shri Sanjiv Malhotra Director

7. Shri Bhaskar Pramanik Director