Fundamental Analysis of Banking Sectors

“A STUDY ON FUNDAMENTAL ANALYSIS ON BANKING SECTOR”
A PROJECT SUBMITTED TO UNIVERSITY OF MUMBAI FOR

PARTIAL COMPLETION OF THE DEGREE OF MASTER IN
COMMERCE UNDER THE FACULTY OF
BANKING & FINANCE
SUBMITTED BY
ANKITA SHARAD THAKUR
ROLL NO:- 182
UNDER THE GUIDANCE OF
PROF. AASHA MARIAN
KERALEEYA SAMAJAM (REGD) DOMBIVLI, KANCHANGAON,

KHAMBALPADA, NR.RBT SCHOOL THAKURLI,DOMBIVLI (EAST)
THANE-DIST. MAHARASHTRA-421201
Kanchangaon, Khambalpada, N.r RBT school Thakuri, Dombivli (EAST),
Thane-DIST. Maharashtra 421201 (0251) 2470010/2449227.
E-mail: modelcollege@vsnl.net Website: www.model-college.com
CERTIFICATE
This is to certify that ANKITA SHARAD THAKUR has worked and duly completed his
Project Work for Master in Commerce under the Faculty of Management and his
project is entitled, “A STUDY ON FUNDAMENTAL ANALYSIS ON
BANKING SECTOR” under my supervision. I further certify that the entire
work has been done by the learner under my guidance and that no part of it has
been submitted previously for any Degree or Diploma of any University.
It is his own work and the facts reported by his personal findings and
investigations.
(Prof. AASHA MARIAN)

Date of Submission: Guiding Teacher
DECLARATION
I, the undersigned ANKITA SHARAD THAKUR hereby, declare that the work
embodied in this project work titled “A STUDY ON FUNDAMENTAL
ANALYSIS OF BANKING SECTOR”, forms my own contribution to the
research work carried out under the guidance of Prof. Kunal Chandika, is a result
of my own research work and has not been previously submitted to any other
University for any Degree/Diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.
MS. ANKITA SHARAD THAKUR
Certified by,
Prof. AASHA MARIAN

ACKNOWLEDGEMENT
To list who all have helped me in difficult because they are so numerous and
depth is so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance
to do this Project.
I would like to thank my In charge Principal Mr. Dr. Vinay Bhole for providing
the necessary facilities required for completion of this project.
I would like to express my sincere gratitude towards my project guide and

Coordinator Mr Thrivikraman MV whose guidance and care made the project
Successful.
I take this opportunity to thank Prof. AASHA MARIAN, for his moral support and
guidance.
I would like to thank my college Library, for having provided various reference
books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers who
supported me throughout my project.
Index
Chapter .no Title of the Chapter Page no.

1 Introduction 1-33
2 Research Methodology 34-36
3 Literature Review 37-54
4 Data Analysis, Interpretation & Presentation 55-75
5 conclusion 76-77
6 Bibliography 78-79
Introduction
Fundamental analysis is the process of evaluating security for creating forecasts
about its future price. Fundamental analysis includes estimations based on many
components related to stock, including:
• The global industry

• Company financial statements
• Company press releases
• News releases
• Domestic political conditions
• Trade agreements and external politics
• Competitor analysis
If some fundamental indicators of a company show data that has a bad impact,
this is likely to negatively reflect the share price. On the other hand, if there’s a
positive data release, like an outstanding earnings report, for example, this can
boost the stock price of the respective company.
Here are some examples of key performance indices that are commonly used to
analyze stocks fundamentally:
• Earnings per share (EPS)

• Price-to-earnings (P/E) ratio
• Price-to-book (P/B) ratio
• Return on equity
• Beta
Each of these key performance indices gives information that is helpful for
conducting a price analysis. You can buy the stock on the assumption that the
price will increase if your analysis shows that the price of the stock is about to
increase.
A Detailed Example of Fundamental Analysis
There’s no right way to do fundamental analysis, as stock trading is not as

accurate as a math problem. The same information in different industries and
different stocks will never mean the exact same thing. Here are a few of the most
important fundamental indicators.
Earnings Per Share (EPS)

The earnings per share relate to the portion of profit allocated to each of
the company’s shares. The EPS is an indication of the company’s profitability.
The higher the earnings per share, the better it is for the investor. A higher EPS
is a symbol of a healthy company.
At the same time, if the earnings per share are unusually high, this could
mean one of the following things. Earnings can decrease and get back to normal.
The price of the stock can increase to normalize the stock price compared to the
earnings.
Price-to-Earnings Ratio (P/E Ratio)

The price-to-earnings (P/E) ratio shows the company payouts compared to
the price of the stock. In other words, the P/E ratio shows whether a share of
stock pays well compared to its price. We calculate the P/E ratio by dividing the
price per share by the earnings per share.
For example, imagine that the price per share is $30 and the stock pays $2
earnings per share:
30 / 2 = 15
The lower the P/E ratio, the higher the earnings compared to the stock price.
At first sight, the lower the P/E ratio, the more attractive the stock. But if we
think carefully we will realize that unusually low P/E ratio could show extra
potential.
If the P/E ratio is too low, below 10 for example, this means that the price per
share is low compared to the earnings. This might mean that the stock is
undervalued in price and it can increase its price. The opposite is in force for the
high P/E ratio.
Price-to-Book Ratio (P/B Ratio)
The price-to-book ratio is an indication that shows how much the stock
worth compared to the book value of the company. If a company worth $10
million and has 500,000 shares outstanding, it will have a book value per share
of:
10,000,000 / 500,000 = $20 book value per share
If the stock trades at $80 per share, then the price-to-book ratio is:
80 / 20 = 4 P/B ratio
The P/B ratio = price per share divided by the book value per share.
If the P/B ratio is more than 1, this means investors believe that the stock will
grow at a faster pace, which is the reason why its price is higher than its book
value. In some cases, you can even see P/B ratios of 100 and more. This could
be a common parameter for the growth stocks.
Return on Equity (ROE)
The return on equity is a measurement that determines how efficient a company
is when using the shareholders’ equity. You calculate the ROE by dividing the
shareholders’ equity by the company’s net income. If a company has generated
$5 million this year and the shareholder equity is $50 million, this means the
ROE is:
50,000,000 / 5,000,000 = 10%
Note that you should calculate the ROE result as a percentage.
The higher the ROE, the more efficient the company is. If a company generates
a less than $5 million income this year (say $2 million) with the same
shareholders’ equity, this means it is less efficient:
50,000,000 / 2,000,000 = 4%
Here, the company has a lower ROE with the same shareholder’s equity,
meaning that it is less efficient.
Beta (β)
The beta gives information about the stock price’s correlation to the industry it
operates in. This happens by comparing the stock to a benchmark index. The
beta usually varies between -1 and 1. Sometimes values can go much lower than
-1 or much higher than 1.
Values above 0 mean that the stock correlates to the benchmark index. The
higher the beta, the higher the correlation. But the higher beta also means that
the volatility is higher as well, meaning that the risk of the asset increases.
Values below 0 mean that the stock is inversely correlated to the benchmark
index. It won’t be as a mirror image, but the ticks are likely to match. The lower
the beta, the higher the inverse correlation. However, the lower the beta, the
lower the volatility.
Fundamental Analysis (FA) is a holistic approach to study a business. When an
investor wishes to invest in a business for the long term (say 3 – 5 years) it
becomes extremely essential to understand the business from various
perspectives. It is critical for an investor to separate the daily short term noise in
the stock prices and concentrate on the underlying business performance. Over
the long term, the stock prices of a fundamentally strong company tend to
appreciate, thereby creating wealth for its investors.
We have many such examples in the Indian market. To name a few, one can
think of companies such as Infosys Limited, TCS Limited, Page Industries,
Eicher Motors, Bosch India, Nestle India, TTK Prestige etc. Each of these
companies have delivered on an average over 20% compounded annual growth
return (CAGR) year on year for over 10 years. To give you a perspective, at a
20% CAGR the investor would double his money in roughly about 3.5 years.
Higher the CAGR faster is the wealth creation process. Some companies such as
Bosch India Limited have delivered close to 30% CAGR. Therefore, you can
imagine the magnitude, and the speed at which wealth is created if one would
invest in fundamentally strong companies.
Fundamental analysis (FA) is a method of measuring a security's intrinsic value

by examining related economic and financial factors. Fundamental analysts
study anything that can affect the security's value, from macroeconomic factors
such as the state of the economy and industry conditions to microeconomic
factors like the effectiveness of the company's management.
The end goal is to arrive at a number that an investor can compare with a
security's current price in order to see whether the security is undervalued or
overvalued.
This method of stock analysis is considered to be in contrast to technical

analysis, which forecasts the direction of prices through an analysis of historical
market data such as price and volume
Understanding Fundamental Analysis
All stock analysis tries to determine whether a security is correctly valued

within the broader market. Fundamental analysis is usually done from a macro to
micro perspective in order to identify securities that are not correctly priced by
the market
Analysts typically study, in order, the overall state of the economy and then
the strength of the specific industry before concentrating on individual company
performance to arrive at a fair market value for the stock.
Fundamental analysis uses public data to evaluate the value of a stock or

any other type of security. For example, an investor can perform fundamental
analysis on a bond's value by looking at economic factors such as interest rates
and the overall state of the economy, then
studying information about the bond issuer, such as potential changes in its
credit rating.
For stocks, fundamental analysis uses revenues, earnings, future growth, return
on equity, profit margins, and other data to determine a company's underlying
value and potential for future growth. All of this data is available in a company's
financial statements (more on that below).
If the intrinsic value is higher than the current market price the stock is deemed
to be undervalued and a buy recommendation is given. If the intrinsic value is
lower than its market price the stock is considered overvalued and a sell
recommendation is issued.
Investors go long (purchasing with the expectation that the stock will rise in
price) companies that are strong, and go short (selling shares that you believe
will drop in value with the expectation of repurchasing them at a lower price)
companies that are weak.
This method of stock analysis is considered to be the opposite of technical

analysis, which forecasts the direction of prices through an analysis of historical
market data such as price and volume.
Quantitative and Qualitative Fundamental Analysis

The problem with defining the word fundamentals is that it can cover
anything related to the economic well-being of a company. They obviously
include numbers like revenue and profit, but they can also include anything from
a company's market share to the quality of its management.
The various fundamental factors can be grouped into two categories: quantitative
and qualitative. The financial meaning of these terms isn't much different from
their standard definitions. Here is how a dictionary defines the terms:
Quantitative – capable of being measured or expressed in numerical terms.
Qualitative – related to or based on the quality or character of something,
often as opposed to its size or quantity.
In this context, quantitative fundamentals are hard numbers. They are the
measurable characteristics of a business. That's why the biggest source of
quantitative data is financial statements. Revenue, profit, assets, and more can be
measured with great precision.
The qualitative fundamentals are less tangible. They might include the quality of
a company's key executives, its brand-name recognition, patents, and proprietary
technology.
Neither qualitative nor quantitative analysis is inherently better. Many analysts

consider them together.
Qualitative Fundamentals to Consider

There are four key fundamentals that analysts always consider when
regarding a company. All are qualitative rather than quantitative.
They include:
The business model:

What exactly does the company do? This isn't as straightforward as it
seems. If a company's business model is based on selling fast-food chicken, is it
making its money that way? Or is it just coasting on royalty and franchise fees?
Competitive advantage:
A company's long-term success is driven largely by its ability to maintain a
competitive advantage—and keep it. Powerful competitive advantages, such as
Coca Cola's brand name and Microsoft's domination of the personal computer
operating system, create a moat around a business allowing it to keep
competitors at bay and enjoy growth and profits. When a company can achieve a
competitive advantage, its shareholders can be well rewarded for decades
Management:
Some believe that management is the most important criterion for
investing in a company. It makes sense: Even the best business model is doomed
if the leaders of the company fail to properly execute the plan. While it's hard for
retail investors to meet and truly evaluate managers, you can look at the
corporate website and check the resumes of the top brass and the board
members. How well did they perform in prior jobs? Have they been unloading a
lot of their stock shares lately?
Corporate Governance:
Corporate governance describes the policies in place within an
organization denoting the relationships and responsibilities between
management, directors and stakeholders. These policies are defined and
determined in the company charter and its bylaws, along with corporate laws and
regulations. You want to do business with a company that is run ethically, fairly,
transparently, and efficiently. Particularly note whether management respects
shareholder rights and shareholder interests. Make sure their communications to
shareholders are transparent, clear and understandable. If you don't get it, it's
probably because they don't want you to.
Quantitative Fundamentals to Consider
Financial statements are the medium by which a company discloses
information concerning its financial performance. Followers of fundamental
analysis use quantitative information gleaned from financial statements to make
investment decisions. The three most important financial statements are income
statements, balance sheets, and cash flow statements.
The Balance Sheet

The balance sheet represents a record of a company's assets, liabilities and
equity at a particular point in time. The balance sheet is named by the fact that a
business's financial structure balances in the following manner:
Assets = Liabilities + Shareholders\' Equity
Assets represent the resources that the business owns or controls at a given
point in time. This includes items such as cash, inventory, machinery and
buildings. The other side of the equation represents the total value of the
financing the company has used to acquire those assets. Financing comes as a
result of liabilities or equity. Liabilities represent debt (which of course must be
paid back), while equity represents the total value of money that the owners have
contributed to the business - including retained earnings, which is the profit
made in previous years
The Income Statement
While the balance sheet takes a snapshot approach in examining a
business, the income statement measures a company's performance over a
specific time frame. Technically, you could have a balance sheet for a month or
even a day, but you'll only see public companies report quarterly and annually.
The income statement presents information about revenues, expenses and profit
that was generated as a result of the business' operations for that period.
Statement of Cash Flows

The statement of cash flows represents a record of a business' cash inflows
and outflows over a period of time. Typically, a statement of cash flows focuses
on the following cash-related activities:
Cash from investing (CFI): Cash used for investing in assets, as well as the
proceeds from the sale of other businesses, equipment or long-term assets
Cash from financing (CFF): Cash paid or received from the issuing and
borrowing of funds
Operating Cash Flow (OCF): Cash generated from day-to-day business

operations
The cash flow statement is important because it's very difficult for a business to
manipulate its cash situation. There is plenty that aggressive accountants can do
to manipulate earnings, but it's tough to fake cash in the bank. For this reason,
some investors use the cash flow statement as a more conservative measure of a
company's performance.
Tools of FA
The tools required for fundamental analysis are extremely basic, most of
which are available for free. Specifically you would need the following:
Annual report of the company – All the information that you need for FA is
available in the annual report. You can download the annual report from the
company’s website for free
Industry related data –

You will need industry data to see how the company under consideration is
performing with respect to the industry. Basic data is available for free, and is
usually published in the industry’s association website
Access to news –
Daily News helps you stay updated on latest developments happening both
in the industry and the company you are interested in. A good business news
paper or services such as Google Alert can help you stay abreast of the latest
news
MS Excel –
Although not free, MS Excel can be extremely helpful in fundamental

calculations
With just these four tools, one can develop fundamental analysis that can rival
institutional research. You can believe me when I say that you don’t need any
other tool to do good fundamental research. In fact even at the institutional level
the objective is to keep the research simple and logical.
Key features
• Fundamental Analysis is used to make long term investments

• Investment in a company with good fundamentals creates wealth
• Using Fundamental Analysis one can separate out an investment grade
company from a junk company
• All investment grade companies exhibit few common traits. Likewise all
junk companies exhibit common traits
• Fundamental analysis helps the analysts identify these traits
• Both Technical analysis and fundamental analysis should coexist as a part of
your market strategy
• To become a fundamental analyst, one does not require any special skill.
Common sense, basic mathematics, and a bit of business sense is all that is
required
• A core satellite approach to the capital allocation is a prudent market
strategy
• The tools required for FA are generally very basic, most of these tools are
available for free.
AN INTRODUCTION TO INDIAN BANKING SYSTEM
INTRODUCTION
The banking sector is the lifeline of any modern economy. It is one of the
important financial pillars of the financial sector, which plays a vital role in the
functioning of an economy. It is very important for economic development of a
country that its financing requirements of trade, industry and agriculture are met
with higher degree of commitment and responsibility. Thus, the development of
a country is integrally linked with the development of banking. In a modern
economy, banks are to be considered not as dealers in money but as the leaders
of development. They play an important role in the mobilization of deposits and
disbursement of credit to various sectors of the economy.
The banking system reflects the economic health of the country. The strength of
an economy depends on the strength and efficiency of the financial system,
which in turn depends on a sound and solvent banking system. A sound banking
system efficiently mobilized savings in productive sectors and a solvent banking
system ensures that the bank is capable of meeting its obligation to the
depositors.
In India, banks are playing a crucial role in socio-economic progress of the

country after independence. The banking sector is dominant in India as it
accounts for more than half the assets of the financial sector. Indian banks have
been going through a fascinating phase through rapid changes brought about by
financial sector reforms, which are being implemented in a phased manner.
The current process of transformation should be viewed as an opportunity to

convert Indian banking into a sound, strong and vibrant system capable of
playing its roleefficiently and effectively on their own without imposing any
burden on government.
After the liberalization of the Indian economy, the Government has announced a
number of reform measures on the basis of the recommendation of the
Narasimhan Committee to make the banking sector economically viable and
competitively strong.
The current global crisis that hit every country raised various issue regarding
efficiency and solvency of banking system in front of policy makers. Now, crisis
has been almost over, Government of India (GOI) and Reserve Bank of India
(RBI) are trying to draw some lessons. RBI is making necessary changes in his
policy to ensure price stability in the economy. The main objective of these
changes is to increase the efficiency of banking system as a whole as well as of
individual institutions. So, it is necessary to measure the efficiency of Indian
Banks so that corrective steps can be taken to improve the health of banking
system.
EVALUATION OF INDIAN BANKING
The period of last six decades has viewed many macro economic
development of India. The monitory, external and banking policies have
undergone several changes. The structural changes in the Indian financial system
specially in banking system has influence the evaluation of Indian Banking in
different ways. After the independence and implementation of banking reforms,
we can see the changes in the functioning of commercial banks. In order to
understand the changing role of commercial banks and the problems and
challenges, it would be appropriate to review the major development in the
Indian banking sector. Evaluation of Indian banking may be traced through four
distinct phases
1. Evolutionary phase (Prior to 1947)
2. Foundation phase (1947-1969)
3. Expansion phase (1969-1990)
4. Consolidation and Liberalization phase (1990 to till)
Evolutionary phase (Prior to 1947)
According to the Central Banking Enquiry Committee (1931), money lending

activity in India could be traced back to the Vadic period, i.e., 2000 to 1400 BC.
The existence of professional banking in India could be traced to the 500 BC.
Kautilya‟s Arthashastra, dating back to 400 BC contained references to
creditors, lenders and lending rates.
Banking was fairly varied to the credit needs for the trade, commerce,
agriculture as well as individuals in the economy, Mr. W.E. Preston, member,
Royal Commission on India Currency and finance set up in 1926, observed “…..
it may be accepted that a system of banking that was extremely suited to India‟s
then requirements was in force in that country many countries before the science
of banking become an accomplished fact in England.
They had their own inland bills of exchange or Hundis which were the major
instruments of transactions. The dishonoring of bundies was a rare at that time as
most banking worked on mutual trust, confidence and without securities. The
first western bank of a joint stock verity was Bank of Bombay, establishing 1720
in Bombay.
This was followed by bank of Hindustan in Calcutta, which was established in

1770 by an agency house. This agency house and banks were close down in
1932. The first „Presidency Bank‟ was the Bank of Bengal established in
Calcutta on June 2, 1806 with a capital of Rs.50 Lakh. The Government
subscribed to 20 percent of its share capital and shared the privilege of
appointing directors with voting rights. The bank had the task to discounting the
treasury bills to provide accumulation to the Government. The bank was given
powers to issue notes in 1823. The Bank of Bombay was the second presidency
bank set up in 1840 with a capital of Rs. 52 Lakh, and the Bank of Madras the
third Presidency bank established in July 1843 with a capital of Rs. 30 Lakh.
The presidency banks were governed by Royal charters.
The presidency banks issued currency notes until the passing of the paper
currency Act, 1861, when this right to issue currency notes by the presidency
banks was taken over and that function was given to the Government. The
presidency bank act, which came into existence in 1876, brought the three
presidency banks under a common statute and imposed some restrictions on
their business. It prohibited them from dealing with risky business of foreign
bills and borrowing abroad for lending more than 6 months.
The presidency banks were amalgamated into a single bank, the Imperial Bank
of India, in 1921. The Imperial Bank of India was further reconstituted with the
merger of a number of banks belonging to old princely states such as Jaipur,
Mysore, Patiala and Jodhpur. The Imperial Bank of India also functioned as a
central bank prior to the establishment of the Reserve Bank in 1935. Thus,
during this phase, the Imperial Bank of India performed three set of functions
via commercial banking, central banking and the banker to the government.
The first Indian owned bank was the Allahabad Bank set up in Allahabad in
1865, the second, Punjab National Bank was set up in 1895 in Lahore, and the
third, Bank of India was set up in 1906 in Mumbai. All these banks were
founded under private ownership. The Swadeshi Movement of 1906 provided a
great momentum to joint stock banks of Indian ownership and many more Indian
commercial banks such as Central Bank of India, Bank of Baroda, Canara Bank,
Indian Bank, and Bank of Mysore were established between 1906 and 1913. By
the end of December 1913, the total number of reporting commercial banks in
the country reached 56 comprising 3 Presidency banks, 18 Class „A‟ banks
(with capital of greater than Rs.5 lakh), 23 Class „B‟ banks (with capital of Rs.1
lakh to 5 lakh) and 12 exchange banks. Exchange banks were foreign owned
banks that engaged mainly in foreign exchange business in terms of foreign bills
of exchange and foreign remittances for travel and trade. Class A and B were
joint stock banks. The banking sector during this period, however, was
dominated by the Presidency banks as was reflected in paid-up capital and
deposits
BANKING STRUCTURE IN INDIA
Indian banking system consists of “non scheduled banks” and “scheduled

banks”. Non scheduled banks refer to those that are not included in the second
schedule of the Banking Regulation Act of 1965 and thus do not satisfy the
conditions laid down by that schedule. Schedule banks refer to those that are
included in the Second Schedule of Banking Regulation Act of 1965 and thus
satisfy the following conditions: a bank must
(1) have paid up capital and reserve of not less than Rs. 5 lakh and
(2) satisfy the Reserve Bank of India (RBI) that its affairs are not conducted in a
manner detrimental to the interest of its deposits.
Scheduled banks consists of “scheduled commercial banks” and scheduled

cooperative banks. The former are further divided into four categories:
(1) public sector banks (that are further classified as “Nationalized Banks and
the “State Bank of India (SBI) banks”)
(2) private sector banks (that are further classified as “Old Private Sector
Banks” and “New Private Sector Banks” that emerged after 1991)
(3) foreign banks in India, and
(4) regional rural banks (that operate exclusively in rural areas to provide credit
and other facilities to small and marginal farmers, agricultural workers and small
entrepreneurs). These scheduled commercial banks except foreign banks are
registered in India under the Companies Act.
The SBI banks consist of SBI and five independently capitalized banking
subsidiaries. The SBI is the largest commercial bank in India in terms of profits,
assets, deposits, branches and employees and has 13 head offices governed each
by a board of directors under the supervision of a central board. It was originally
established in 1806 when the bank of Calcutta (latter called the Bank of Bengal)
was established, and then amalgamated as the Imperial Bank of India after the
merger with the bank of Madras and the Bank of Bombay. The Imperial Bank of
India was Nationalized and named SBI in 1955.
Nationalized banks refer to private sector banks that were nationalized (14
banks in 1969 and 6 in 1980) by the central government compared with the SBI
banks, nationalized banks are centrally governed by their respective head
offices.
In 1993, Punjab National Bank merged another nationalized bank, New

Bank of India, leading to a decline in total number of nationalized banks from 20
to 19.
Regional rural banks account for only 4% of total assets of scheduled

commercial banks.
As at the end of March 2001, the number of scheduled banks is a follows:

19 nationalized banks, 8 SBI banks, 23 old private sector banks, 8 new private
sector banks, 42 foreign banks, 196 regional rural banks and 67 cooperative
banks. But number of scheduled commercial banks in India as on 31 October,
2012 as follows: 26 public sector banks 20 private sector banks.
Banking Structure in India

Central Banks
Central banks are the top banking institutions for any country in the world.
In India, it is reserve bank of India. They are responsible for many things like
managing the currency, money supply in the system, foreign exchange, etc for
that country. These central banks are by and large owned by the government.
Non-scheduled Banks
Non-scheduled banks by definition are those which are not listed in the
2nd schedule of the RBI act, 1934. Banks with a reserve capital of less than 5
lakh rupees qualify as non-scheduled banks. Unlike scheduled banks, they are
not entitled to borrow from the RBI for normal banking purposes, except, in
emergency or “abnormal circumstances.” Jammu & Kashmir Bank is an
example of a non-scheduled commercial bank.
Cooperative Banks
The banks which are owned by the depositors are called cooperative
banks. These banks are generally coming under non-profit entities. Generally,
the banks in India are divided like scheduled banks, non-scheduled banks, and
central banks. Scheduled banks are those banks that are listed under the second
schedule of the RBI act came in 1934.
There are certain conditions that these banks have to follow in order to stay
in this category. Like these banks should follow the CRAR norms, and they need
to pay upfront reserves and capital of 50 lakhs, etc.
Scheduled Banks
By definition, any bank which is listed in the 2nd schedule of the Reserve
Bank of India Act, 1934 is considered a scheduled bank. The list includes the
State Bank of India and its subsidiaries (like State Bank of Travancore), all
nationalised banks (Bank of Baroda, Bank of India etc), regional rural banks
(RRBs), foreign banks (HSBC Holdings Plc, Citibank NA) and some co-
operative banks. These also include private sector banks, both classified as old
(Karur Vysya Bank) and new (HDFC Bank Ltd).
To qualify as a scheduled bank, the paid up capital and collected funds of

the bank must not be less than Rs5 lakh. Scheduled banks are eligible for loans
from the Reserve Bank of India at bank rate, and are given membership to
clearing houses.
Commercial Banks
The main task of the commercial bank is to lend and deposit the money
from corporations as well as the public. Thus, in India, there are two types of
commercial banks which exist. They are scheduled commercial banks and non-
scheduled commercial banks. But for day to day use, we prefer commercial
banks. The commercial banks in India are SBI, Axis Bank, HDFC, Axis bank,
etc.
There are certain conditions that these banks have to follow in order to stay
in this category. Like these banks should follow the CRAR norms, and they need
to pa Public Sector Banks:
Public Sector Banks
Refer to a type of commercial banks that are nationalized by the government of

a country. In public sector banks, the major stake is held by the government. In
India, public sector banks operate under the guidelines of Reserve Bank of India
(RBI), which is the central bank. Some of the Indian public sector banks are
State Bank of India (SBI), Corporation Bank, Bank of Baroda, Dena Bank, and
Punjab National Bank.
Private Sector Banks:
Refer to a kind of commercial banks in which major part of share capital is

held by private businesses and individuals. These banks are registered as
companies with limited liability. Some of the Indian private sector banks are
Vysya Bank, Industrial Credit and Investment Corporation of India (ICICI)
Bank, and Housing Development Finance Corporation (HDFC) Bank.
Foreign Banks
Refer to commercial banks that are headquartered in a foreign country, but

operate branches in different countries. Some of the foreign banks operating in
India are Hong Kong and Shanghai Banking Corporation (HSBC), Citibank,
American Express Bank, Standard & Chartered Bank, and Grindlay’s Bank. In
India, since financial reforms of 1991, there is a rapid increase in the number of
foreign banks. Commercial banks mark significant importance in the economic
development of a country as well as serving the financial requirements of the
general public. upfront reserves and capital of 50 lakhs, etc.
Regional Rural Bank
The main business of agricultural banks is to provide funds to farmers.

They are worked on the co-operative principle. Long-term capital is provided by
land mortgage banks, nowadays called land-development banks, while short-
term loans are given by co-operative societies and co-operative banks. Long-
term loans are needed by the farmers for purchasing land or for permanent
improvements on land, while short-period loans help them in purchasing
implements, fertilizers and seeds. Such banks and societies are doing useful
work in India.
Functions of Commercial Banks:
Commercial banks are institutions that conduct business for profit motive by
accepting public deposits for various investment purposes.
The functions of commercial banks are broadly classified into primary functions
and secondary functions, which are shown in Figure
Functions of Commercial Banks

The functions of commercial banks (as shown in Figure-1) are discussed as
follows:
Primary Functions:
Refer to the basic functions of commercial banks that include the following:
Accepting Deposits:
Implies that commercial banks are mainly dependent on public deposits.

There are two types of deposits, which are discussed as follows:
• Demand Deposits
Refer to kind of deposits that can be easily withdrawn by individuals without

any prior notice to the bank. In other words, the owners of these deposits are
allowed to withdraw money anytime by simply writing a check. These deposits
are the part of money supply as they are used as a means for the payment of
goods and services as well as debts. Receiving these deposits is the main
function of commercial banks.
• Time Deposits
Refer to deposits that are for certain period of time. Banks pay higher interest
on rime deposits. These deposits can be withdrawn only after a specific time
period is completed by providing a written notice to the bank.
• Advancing Loans
Refers to one of the important functions of commercial banks. The public

deposits are used by commercial banks for the purpose of granting loans to
individuals and businesses. Commercial banks grant loans in the form of
overdraft, cash credit, and discounting bills of exchange.
Secondary Functions
Refer to crucial functions of commercial banks. The secondary functions can

be classified under three heads, namely, agency functions, general utility
functions, and other functions.
These functions are explained as follows:
Agency Functions
Implies that commercial banks act as agents of customers by performing

various functions, which are as follows:
• Collecting Checks
Refer to one of the important functions of commercial banks. The banks

collect checks and bills of exchange on the behalf of their customers through
clearing house facilities provided by the central bank.
• Collecting Income
Constitute another major function of commercial banks. Commercial banks

collect dividends, pension, salaries, rents, and interests on investments on behalf
of their customers. A credit voucher is sent to customers for information when
any income is collected by the bank.
• Paying Expenses
Implies that commercial banks make the payments of various obligations of

customers, such as telephone bills, insurance premium, school fees, and rents.
Similar to credit voucher, a debit voucher is sent to customers for information
when expenses are paid by the bank.
General Utility Functions
Include the following functions:
• Providing Locker Facilities
Implies that commercial banks provide locker facilities to its customers for
safe keeping of jewellery, shares, debentures, and other valuable items. This
minimizes the risk of loss due to theft at homes.
• Issuing Traveler’s Checks
Implies that banks issue traveler’s checks to individuals for traveling outside
the country. Traveler’s checks are the safe and easy way to protect money while
traveling.
• Dealing in Foreign Exchange
Implies that commercial banks help in providing foreign exchange to

businessmen dealing in exports and imports. However, commercial banks need
to take the permission of the central bank for dealing in foreign exchange.
• Transferring Funds
Refers to transferring of funds from one bank to another. Funds are

transferred by means of draft, telephonic transfer, and electronic transfer.
Other Functions
Include the following:
• Creating Money
Refers to one of the important functions of commercial banks that help in

increasing money supply. For instance, a bank lends Rs. 5 lakh to an individual
and opens a demand deposit in the name of that individual.
Bank makes a credit entry of Rs. 5 lakh in that account. This leads to
creation of demand deposits in that account. The point to be noted here is that
there is no payment in cash. Thus, without printing additional money, the supply
of money is increased.
• Electronic Banking
Include services, such as debit cards, credit cards, and Internet banking.
Types of Credit Offered by Commercial Banks:
A commercial bank offers short-term loans to individuals and organizations

in the form of bank credit, which is a secured loan carrying a certain rate of
interest.
There are various types of bank credit provided by a commercial bank

Bank Loan
Bank loan may be defined as the amount of money granted by the bank at a
specified rate of interest for a fixed period of time. The commercial bank needs
to follow certain guidelines to extend bank loans to a client. For example the
bank requires the copy of identity and income proofs of the client and a
guarantor to sanction bank loan. The banks grant loan to clients against the
security of assets so that, in case of default, they can recover the loan amount.
The securities used against the bank loan may be tangible or intangible, such as
goodwill, assets, inventory, and documents of title of goods.
The advantages of the bank loan are as follows
• Grants loan at low rate of interest

• Involves very simple process of loan granting
• Requires minimum document and legal formalities to pass the loan
• Involves good customer relationship management
• Consumes less time because of modern techniques and computerization
• Provides door-to-door facilities
In addition to advantages, the bank loan suffers from various imitations,
which are as follows:
• Imposes heavy penalty and legal action in case of default of loan

• Charges high rate of interest, if the party fails to pay the loan amount in
the allotted time
• Adds extra burden on the borrower, who needs to incur cost in preparing
legal documents for procuring loans
• Affects the goodwill of the organization, in case of delay in payment.
Cash Credit
Cash credit can be defined as an arrangement made by the bank for the clients
to withdraw cash exceeding their account limit. The cash credit facility is
generally sanctioned for one year but it may extend up to three years in some
cases. In case of special request by the client, the time limit can be further
extended by the bank.
The extension of the allotted time depends on the consent of the bank and
past performance of the client. The rate of interest charged by the bank on cash
credit depends on the time duration for which the cash has been withdrawn and
the amount of cash.
The advantages of the cash credit are as follows:
• Involves very less time in the approval of credit

• Involves flexibility as the cash credit can be extended for more time to
fulfill the need of the customers.
• Helps in fulfilling the current liabilities of the organization
• Charges interest only on the amount withdrawn by the customer. The
interest on cash credit is charged only on the amount of cash withdrawn
from the bank, not on the total amount of credit sanctioned.
The cash credit is one of the most important instruments of short-term

financing but it has some limitations.
• Requires more security for the approval of cash

• Imposes very high rate of interest
• Depends on the consent of the bank to extend the credit amount and the
time limit
Bank Overdraft
Bank overdraft is the quickest means of the short-term financing provided by

the bank. It is a facility in which the bank allows the current account holders to
overdraw their current accounts by a specified limit. The clients generally avail
the bank overdraft facility to meet urgent and emergency requirements. Bank
overdraft is the most popular form of borrowing and do not require any written
formalities. The bank charges very low rate of interest on bank overdraft up to a
certain time.
The advantages of the bank overdraft are as follows:
• Involves no documentation for the extension of overdraft amount

• Imposes nominal interest on the overdraft amount
• Charges fee only on the amount exceeding the account limit
The disadvantages of the bank overdraft are as follows:

• Incurs high cost for the clients, if they fail to pay the amount of overdraft
for a longer period of time
• Hampers the reputation of the organization, if it fails to pay the amount of
overdraft on time
• Allows the bank to deduct overdraft amount from the customers’ accounts
without their permission
Discounting of Bill
Discounting of bill is a process of settling the bill of exchange by the bank

at a value less than the face value before maturity date. According to Sec. 126 of
Negotiable Instruments, “a bill of exchange is an unconditional order in writing
addressed by one person to another, signed by the person giving it, requiring the
person to whom it is addressed to pay on demand or at fixed or determinable
future time a sum certain in money to order or to bearer.”
The facility of discounting of bill is used by the organizations to meet their

immediate need of cash for settling down current liabilities.
Conditions laid down by the bank for discounting of bill are as follows:
• Must be intended to specific purpose

• Must be enclosed with the signature of the two persons (company, bank or
reputed person)
• Must be less than the face value
• Must be produced before the maturity period.
Research
Methodology
This report is based on secondary data, Secondary data collection was given
more important since it is overheating factor in attitude studies.
One of the important use of Research Methodology is that it helps in

identifying the problem, collecting, analyzing the required information or data
and providing an alternative solution to the problem. It also helps in collecting
the vital information that is required by the Top Management to assist them for
the better decision making both day by day decisions and critical ones.
Research Design:- Correlational research design.
Data Collection Method:- Financial Statements.
Data Sources:- Secondary Data.
Data Collection Instruments:- Financial Statements.
Sample Design:- Data has been presented with the help of Ratio Analysis,
Liquidity Ratio, Investment Valuation Ratio.
Objective of Research
• The main objective of project is to do fundamental analysis of a banking
sector of companies.
• Secondly to study the present banking system in India.
• Analyze the information collected on balance sheet, profit & loss
statement, market prices etc.
• To do Ratio Analysis for the selected companies and make necessary
comments on it so as to provide complete idea and core ideology of the
company. So that investors can easily get idea about the fundamental
analysis of banking companies.
• To carry out financial and non-financial, analysis of banking sector as a
whole for the selected period.
• To provide Investment decision

Literature review
State Bank of India (SBI Bank)
The State Bank of India (SBI Bank) was established in 1806, in Kolkata.
Three years after that, it acquired its charter and was re-designed as Bank of
Bengal in 1809. It was the very first joint-stock bank of India, which the Bengal
Government sponsored. Apart from Bank of Bengal, the Bank of Madras and the
Bank of Bombay was also part of this joint stock and remained at the centre of
the modern banking.
Initially, all three banks were Anglo-Indian creations and they came into play
due to the following three reasons-
• Lack of modernization of the Indian economy due to several arbitrary

reasons
• Local European commerce needs and requirements
• Compulsions imperial finance
The transformation or evolution of the State Bank of India came about due to the
ideas adopted from the same movements happening in England and Europe.
Another reason that contributed to this evolution was the changes and
modifications in the local trading environment, along with India’s economic
relationships with that of Europe and the global economic structure.
The current position of the State Bank of India (SBI Bank)
The State Bank of India is a giant in its own right, and there are several
reasons that contribute to that. It is the oldest bank in the country currently if you
go by the size of its balance sheet.
Additionally, its market capitalization, hundreds of bank branches and the

number of profits are helping it give stiff competition to other private sector
banks in the country
Presently, the bank is getting into a couple of new business with strategic
tie-ups, which have quite a large growth potential. Some of these tie-ups are
General Insurance, Pension Funds, Private Equity, Custodial Services, Mobile
Banking, Structured Products, Advisory Services, and Point of Sale Merchant
Acquisition etc.
Additionally, it is concentrating on wholesale banking capacities and the top

end of the market, in order to offer India’s corporate sector with numerous
services and products.
Gaining entry in the field of derivative instruments and structured products

along with the consolidation of the global treasury operations is also something
they are focusing on now.
As of now, the State Bank of India is the biggest arranger responsible for
external commercial borrowings in the country and is the biggest provider of
infrastructure debt. In addition, it is the sole Indian bank to be a part of the
Fortune 500 list.
Apart from banking, State Bank of India was also associated with non-
profit ventures since 1973, such as Community Services Banking. In such cases,
administrative offices and branches all over the country sponsor and take part in
a huge number of social causes and welfare activities.
Additionally, they had also launched three digital banking facilities, in

order to make financial transaction an easier affair for their customers.
Two of the digital banking facilities specialize in providing their

services at the customers’ doorstep by utilizing the method of TAB banking
(One for housing loan applicants and the other for customers looking to open a
savings account).
The third banking facility specializes in the KYC process (Know Your
Customer). The other services, which are offered by the State Bank of India, are
the following-
• Personal Banking
• Rural/ Agriculture
• Small and Medium Enterprise (SME)
• Domestic Treasury
• NRI Services
• International Banking
• Corporate Banking
• Government Business
Housing Development Finance Corporation (HDFC)
The HDFC Bank was incorporated on August 1994 by the name of 'HDFC
Bank Limited', with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995. The
Housing Development Finance Corporation (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up
a bank in the private sector, as part of the RBI's liberalization of the Indian
Banking Industry in 1994.
HDFC Bank is headquartered in Mumbai. The Bank at present has an

enviable network of over 1416 branches spread over 550 cities across India. All
branches are linked on an online real–time basis. Customers in over 500
locations are also serviced through Telephone Banking. The Bank also has a
network of about over 3382 networked ATMs across these cities.
The promoter of the company HDFC was incepted in 1977 is India's premier
housing finance company and enjoys an impeccable track record in India as well
as in international markets. HDFC has developed significant expertise in retail
mortgage loans to different market segments and also has a large corporate client
base for its housing related credit facilities. With its experience in the financial
markets, a strong market reputation, large shareholder base and unique consumer
franchise, HDFC was ideally positioned to promote a bank in the Indian
environment.
The shares are listed on the Bombay Stock Exchange Limited and The National
Stock Exchange of India Limited. The Bank's American Depository Shares (
ADS ) are listed on the New York Stock Exchange (NYSE) under the symbol
'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on
Luxembourg Stock Exchange.
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with

HDFC Bank was formally approved by Reserve Bank of India to complete the
statutory and regulatory approval process. As per the scheme of amalgamation,
shareholders of CBoP received 1 share of HDFC Bank for every 29 shares of
CBoP.
The merged entity now holds a strong deposit base of around Rs. 1,22,000
crore and net advances of around Rs. 89,000 crore. The balance sheet size of the
combined entity would be over Rs. 1,63,000 crore. The amalgamation added
significant value to HDFC Bank in terms of increased branch network,
geographic reach, and customer base, and a bigger pool of skilled manpower.
In a milestone transaction in the Indian banking industry, Times Bank

Limited (another new private sector bank promoted by Bennett, Coleman & Co.
/ Times Group) was merged with HDFC Bank Ltd., effective February 26, 2000.
This was the first merger of two private banks in the New Generation Private
Sector Banks. As per the scheme of amalgamation approved by the shareholders
of both banks and the Reserve Bank of India, shareholders of Times Bank
received 1 share of HDFC Bank for every 5.75 shares of Times Bank.
HDFC Bank offers a wide range of commercial and transactional banking
services and treasury products to wholesale and retail customers. The bank has
three key business segments:
Wholesale Banking Services – The Bank's target market ranges from large,
blue–chip manufacturing companies in the Indian corporate to small & mid–
sized corporates and agri–based businesses.
Retail Banking Services – The objective of the Retail Bank is to provide its
target market customers a full range of financial products and banking services,
giving the customer a one–stop window for all his/her banking requirements.
Treasury – Within this business, the bank has three main product areas –
Foreign Exchange and Derivatives, Local Currency Money Market & Debt
Securities, and Equities. The Treasury business is responsible for managing the
returns and market risk on this investment portfolio.
HDFC Securities (HSL) and HDB Financial Services (HDBFSL) are its
subsidiaries.
Services offered by the company:
Personal Banking
• Accounts & Deposits

• Loans
• Cards
• Forex
• Investments & Insurance
NRI Banking
• Accounts & Deposits

• Remittances
• Investments & Insurance Loans Payment Services
Wholesale Banking
• Corporate
• Small & Medium Enterprises
• Financial Institutions & Trusts
• Government Sector
Bank of Baroda (BOB)
Bank of Baroda is one of the leading commercial banks in India. The Bank's
solutions includes personal banking which includes deposits gen-next services
retail loans credit cards debit cards services and lockers; business banking which
includes deposits loans and advances services and lockers; corporate banking
which includes wholesale banking deposits loans and advances and services and
international business which includes non-resident Indian (NRI) services foreign
currency credits ECB offshore banking export finance import finance
correspondent banking trade finance and international treasury.
The Bank offers services such as domestic operations and For-ex operations.
They also offer rural banking services which include deposits priority sector
advances remittance collection services pension and lockers. They also offer fee-
based services such as cash management and remittance services. The Bank is
having their head office located at Baroda and their corporate office is located at
Mumbai. Bank of Baroda is one of India's largest banks with a strong domestic
presence spanning 5458 branches and 10027 ATMs and Cash Recyclers
supported by self-service channels. The bank has a significant international
presence with a network of 105 branches/offices subsidiaries spanning 23
countries. The bank has wholly owned subsidiaries including BOB Financial
Solutions Limited (erstwhile BOB Cards Ltd.) and BOB Capital Markets. Bank
of Baroda also has a joint venture for life insurance business with India First
Life Insurance. The bank owns 98.57% in The Nainital Bank.
The bank has also sponsored three Regional Rural Banks namely Baroda Uttar
Pradesh Gramin Bank Baroda Rajasthan Gramin Bank and Baroda Gujarat
Gramin Bank.Bank of Baroda was incorporated on July 20 1908 as a as a private
bank with the name The Bank of Baroda Ltd. The Bank was established with a
paid up capital of Rs 1 million and was founded by Maharaja Sayajirao III of
Baroda. In the year 1910 the Bank opened their first branch in the city of
Ahmedabad. In the year 1919 they opened their first branch in Mumbai City. In
the year 1953 the Bank opened first international branch at Mombasa Kenya.
During the period 1953-1969 the Bank opened three branches in Fiji five
branches in Kenya three branches in Uganda and one each in London and
Guyana.
In the year 1958 The Hind Bank merged with the Bank and in the year
1962 The New Citizen Bank Ltd amalgamated with the Bank. In the year 1964
The Umargaon Peoples' Bank & Tamilnadu Central Bank amalgamated with the
Bank. In July 1969 the Bank was nationalized and the name was changed from
'The Bank of Baroda Ltd' to 'Bank of Baroda'. During the period 1969 to 1974
they established three branches in Mauritius two branches in UK and one branch
in Fiji. They entered in the oil rich Gulf countries in the year 1974 with two
branches were opened in UAE one at Dubai and another at Abu Dhabi.In the
year 1976 the Bank sponsored the first of their 19 Regional Rural Banks thereby
seeking to complement their operations in rural heartland.
In the year 1977 they launched the 'Gram Vikas Kendra' (GVK) an innovative
model for integrated rural development. In the year 1984 the Bank launched
their Credit Card Operations. In the year 1988 The Traders Bank Ltd
amalgamated with the Bank. In the year 1991 the Bank established their housing
finance subsidiary BOB Housing. They also established subsidiaries for
businesses of credit cards (BOBCARDS) asset management (BOB AMC) and
capital market activities (BOB Caps).
In December 1996 the Bank entered the capital market with an Initial Public
Offering. In the year 1997 they opened a branch in Durban.In the year 1999 the
Bank commenced operations as a depository. Also Bareilly Corporation Bank
amalgamated with the Bank during the year. In the year 2000 the Bank
appointed Arthur Andersen India Pvt Ltd as risk management consultant for
setting up Comprehensive Risk Management Architecture for the Bank.In the
year 2001 they established a separate Risk Management Department and
specialized integrated treasury branch. In the year 2002 The Benares State Bank
Ltd merged with the Bank. They launched Debit Card project in affiliation with
VISA. In the year 2004 The South Gujarat Local Area Bank amalgamated with
the Bank. In June 1 2004 the Bank signed a MoU with National Insurance
Company Ltd for selling their non life insurance products under corporate
agency arrangement.During the year 2004-05 the Bank expanded their
interconnected ATM network to cross 501 spread over 180 centres in the
country.
Products & Services of BOB
Given below is the list of services offered by the Bank of Baroda:-
• Retail Banking
• Rural/Agri Banking
• Wholesale Banking
• SME Banking
• Wealth Management
• Demat
• Product Enquiry
• Internet Banking
• NRI Remittances
• Baroda e-Trading
• Interest Rates
• Deposit Products
• Loan Products
• ATM / Debit Cards
Bank of Baroda takes special care to look after the requirements of its
shareholders. Given below are the various benefits provided to the shareholders
of the bank:-
• Change of address or names of Shareholders

• Transmission of shares
• Transposition
• De-materializing Shares
• Investors Services Department
• Registrars & Share Transfer Agent
• Bonds related to Transfer
• Lodgment of Shares
• Duplicate Share Certificate
• Duplicate Dividend Warrants
• Revalidation
• Means of communication
• Investor Grievance Committee
• Electronic Clearing Services or ECS
• Stock Market Data
• Personal Services
• Deposits
• Gen-Next
• Loans
• Credit Cards & Debit Cards
• Services
• Lockers
• Corporate Services
• Wholesale Banking
• Deposits
• Loans
• Advances
• Services
• International Services
• NRI Services
• FGN Currency Credits (Foreign Currency Credits)
• ECB (External Communication Borrowings)
• FCNR (B) Loans
• Offshore Banking
• Finance in Export and Import
• Correspondent Banking Facility
• International Treasury
Treasury service of Bank of Baroda includes Domestic operations and Forex

operations.
Bank of Baroda Rural Services:-
• Domestic Services
• Deposits
• Priority Sector Advances
• Services
• Lockers
• Priority Sector Advances
• Small Scale Industries
• Small Business
• Retail Loans
• Schemes sponsored by the GOI (Government of India)
• Baroda General Credit Card Scheme (BGCC)
• Agriculture related Loans
• Bank of Baroda Home Loan
Bank of Baroda home loan is one of the most well known products of the
bank. It comes in various forms and is tailor made as per the requirements of the
different customers.
Bank of Baroda home loans are a prestigious part of the Bank of Baroda. The
bank was established in the year 1908. It has its headquarters in Mumbai. The
Bank of Baroda offers various types of loans and the home loans are an
important part of the package.
The need for new houses, flats, apartments, house construction, repairing an
existing house requires financial support. Bank of Baroda home loans is one of
the best financial support all such people who are looking for houses or trying to
repair existing houses can avail.
Axis bank
Axis Bank is the third largest private sector bank in India. The Bank offers the
entire spectrum of financial services to customer segments covering Large and
Mid-Corporates, MSME, Agriculture and Retail Businesses.
The Bank has a large footprint of 4,050 domestic branches (including

extension counters) with 11,801 ATMs & 4,917 cash recyclers spread across the
country as on 31st March, 2019. The overseas operations of the Bank are spread
over eleven international offices with branches at Singapore, Hong Kong, Dubai
(at the DIFC), Colombo, Shanghai and Gift City-IBU; representative offices at
Dhaka, Dubai, Abu Dhabi, Sharjah and an overseas subsidiary at London, UK.
The international offices focus on corporate lending, trade finance, syndication,
investment banking and liability businesses.
Axis Bank is one of the first new generation private sector banks to have
begun operations in 1994. The Bank was promoted in 1993, jointly by Specified
Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India),
Life Insurance Corporation of India (LIC), General Insurance Corporation of
India (GIC), National Insurance Company Ltd., The New India Assurance
Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The share holding of Unit Trust of India was
subsequently transferred to SUUTI, an entity established in 2003.
With a balance sheet size of Rs. 8,00,997 crores as on 31st March 2019,
Axis Bank has achieved consistent growth and with a 5 year CAGR (2013-14 to
2018-19) of 16% in Total Assets, 14% in Total Deposits, 17% in Total
Advances.
Accounts
• EasyAccess Savings Account
• Prime Savings account
• Salary Savings Account
• Power salute: A salute to the defence forces
• Azaadi
• Senior Privilege Savings Account
• For the woman of today – Smart Privilege Savings Account
• A complete banking solution for Trusts, Associations, Societies, Government

Bodies, Section 25 companies and NGOs
• Pension Savings Bank Account,
Deposits
• Fixed Deposits
• Recurring Deposits
• Encash 24
• Tax Saver Fixed Deposit

Loans
Welcome to the wide range of Axis Bank's Loan products. Put an end to your
financial troubles.
• Power Homes
• Power Drive
• Personal Power
• Study Power
• Asset Power
• Two Wheeler Loan
• Loan Against Security
• Consumer Power
Cards
Apart from Gold & Silver credit cards, Axis Bank provides
• Axis Bank Meal Card
• Axis Bank Gift Card
• LIC co-branded Annuity Card

Data Analysis,
Interpretation &
Presentation
Balance sheet of SBI (in crs)
SCHEDULE
PARTICULARS NO Mar-19 Mar-18
EQUITIES AND LIABLITIES
Equity Share Capital 1 892.46 892.46
Reserves and surplus 2 2,20,021.36 2,18,236.10
Deposits 3 29,11,386.01 27,06,343.29
Borrowings 4 4,03,017.12 362,142.07
Other Liablities and Provisions 5 1,45,597.30 1,67,138.08
Total CAPITAL AND LIABLITIES 36,80,914.25 34,54,752.00
ASSETS
Cash and Balance with RBI 6 1,76,932.42 1,50,397.18
Balance with Bank and Money at Call and Short 7
Notice 45,557.69 41,501.46
Investments 8 9,67,021.95 10,60,986.72
9 2,185,876.9 1,934,880.1
Advances 2 9
Fixed Assets 10 39,197.57 39,992.25
Other Assets 11 266,327.70 226,994.20
3,680,914.2 3,454,752.0
TOTAL ASSETS 5 0
Bills for Collection 12 70,022.54 74,027.90
1,116,081.4 1,162,020.6
Contingent Liablities 6 9
P&L of SBI (in Rs. Cr.)

Particular Mar-19 Mar-18
INCOME
Interest Earned 242,868.65 220,499.32
Other Income 36,774.89 44,600.69
TOTAL INCOME 279,643.54 265,100.01
EXPENDITURE
Interest expended 154,519.78 145,645.60
Employee Cost 41,054.71 33,178.68
Selling, Admin & Misc Expenses 80,130.64 89,778.77
Depreciation 3,212.31 2,919.47
Operating Expenses 69,823.86 59,818.51
Provisions & Contingencies 54,573.80 66,058.41
TOTAL EXPENSES 278,917.44 271,522.52
NET PROFIT FOR THE YEAR 726.1 -6,422.50

Balance sheet of HDFC (in crs)
SCHEDULE
Reserves and surplus 2 1,48,661.66 1,05,775.978
Deposits 3 9,23,140.93 7,88,770.64
Borrowings 4 1,17,085.13 1,23,104.97
Other Liablities and Provisions 5 55,108.33 45,763.72
Total CAPITAL AND LIABLITIES 12,44,540.71 10,63,934.32
ASSETS
Cash and Balance with RBI 6 46,763.62 1,04,670.47
Balance with Bank and Money at Call and Short Notice 7 34,584.01 18,244.61
Investments 8 2,90,587.88 2,42,200.24
Advances 9 819,401.22 658,333.09
Fixed Assets 10 4,030.01 3,607.20
Other Assets 11 49,173.97 36,878.70
TOTAL ASSETS 1,244,540.71 1,063,934.32
Contingent Liablities 1,024,715.12 875,488.23
P&L of HDFC (in Rs. Cr.)

INCOME
Interest Earned 105,160.74 85,287.84
Other Income 18,947.05 16,056.60
TOTAL INCOME 124,107.79 101,344.44
EXPENDITURE
Employee Cost 10,451.15 9,193.90
Depreciation 1,220.67 966.78
TOTAL EXPENSES 101,662.19 82,783.60
NET PROFIT FOR THE YEAR 22,445.61 18,560.84

Balance sheet of Bank of Baroda (in crs)
SCHEDULE
Reserves and surplus 2 45,410.73 42,864.41
Deposits 3 638,689.72 591,314.82
Borrowings 4 67,201.30 62,571.97
Total CAPITAL AND LIABLITIES 780,987.40 719,999.77
ASSETS
Cash and Balance with RBI 6 26,661.73 22,699.64
Investments 8 182,298.08 163,184.53
Advances 9 468,818.74 427,431.83
Fixed Assets 10 6,990.30 5,367.39
Other Assets 11 33,650.68 31,118.64
TOTAL ASSETS 780,987.40 719,999.77
Contingent Liablities 380,312.98 298,226.66
P&L of BOB (in Rs. Cr.)

INCOME
Interest Earned 49,974.11 43,648.54
Other Income 6,090.99 6,657.15
TOTAL INCOME 56,065.10 50,305.69
EXPENDITURE
Employee Cost 5,039.13 4,606.87
Depreciation 910.38 863.08
TOTAL EXPENSES 68,420.25 67,533.81
NET PROFIT FOR THE YEAR -12,355.15 -17,228.11

Balance sheet of AXIS (in crs)
SCHEDULE
Reserves and surplus 2 66,161.97 62,931.95
Deposits 3 548,471.34 453,622.72
Borrowings 4 152,775.78 148,016.14
Total CAPITAL AND LIABLITIES 800,996.53 691,329.58
ASSETS
Cash and Balance with RBI 6 35,099.03 35,481.06
Investments 8 174,969.28 153,876.08
Advances 9 494,797.97 439,650.30
Fixed Assets 10 4,036.64 3,971.68
Other Assets 11 59,988.01 50,376.62
TOTAL ASSETS 800,996.53 691,329.58
Contingent Liablities 755,765.27 735,297.70
P&L of AXIS (in Rs. Cr.)

INCOME
Interest Earned 54,985.77 45,780.31
Other Income 13,130.34 10,967.09
TOTAL INCOME 68,116.11 56,747.40
EXPENDITURE
Employee Cost 4,747.32 4,312.96
Depreciation 709.72 568.10
TOTAL EXPENSES 75,470.51 56,028.33
NET PROFIT FOR THE YEAR -7,354.41 719.08

Ratio comparison between SBI, HDFC, BOB AND Axis Bank
RATIO ANALYSIS :-
Ratio analysis is the process of examining and comparing financial information

by calculating meaningful financial statement figure percentages instead of
comparing line items from each financial statement.
Managers and investors use a number of different tools and comparisons to tell
whether a company is doing well and whether it is worth investing in. The most
common ways people analysis a company’s performance are horizontal analysis,
vertical analysis, and ratio analysis. Horizontal and vertical analyzes compare a
company’s performance over time and to a base or set of standard performance
numbers.
Ratio analysis compares relationships between financial statement accounts.

This means that one income statement or balance sheet account is being
compared to another. These relationships between financial statement accounts
will not only give a manager or investor an idea of the how healthy the business
is on a whole, it will also give them keen insights into business operations.
Liquidity Ratios
Liquidity ratios are an important class of financial metrics used to determine

a debtor's ability to pay off current debt obligations without raising external
capital. Liquidity ratios measure a company's ability to pay debt obligations and
its margin of safety through the calculation of metrics including the current ratio,
quick ratio, and operating cash flow ratio.
Types of Liquidity Ratio
• Current Ratio
• Quick Ratio or Acid test Ratio

Current Ratio
It is one of the most common ratios for measuring the short-term solvency
or the liquidity of the firm. It is the ratio between the Current Assets and Current
Liabilities. In other words, it measures whether there are enough current assets
to pay the current debts with a margin of safety for potential losses in the
realization of the current assets. Usually, the ideal current ratio is 2:1.
Current Ratio=Current Assets/Current Liabilities
Current Ratio Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

SBI 0.09 0.08 0.07 0.07 0.06
HDFC 0.05 0.04 0.06 0.07 0.04
BOB 0.05 0.05 0.04 0.05 0.02
AXIS 0.1 0.1 0.1 0.07 0.03
0.12
0.1
0.08
SBI
0.06 HDFC
BOB
0.04 AXIS
0.02
0
19-Mar 18-Mar 17-Mar 16-Mar 15-Mar
Quick Ratio
The Quick Ratio, also known as the Acid-test or Liquidity ratio, measures
the ability of a business to pay its short-term liabilities by having assets that are
readily convertible into cash. These assets are, namely, cash, marketable
securities, and accounts receivable. These assets are known as “quick” assets
since they can quickly be converted into cash.
Quick Ratio = [Current Assets – Inventory – Prepaid expenses] / Current

Liabilities
Quick Ratio Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

SBI 18.06 13.83 11.94 10.89 11.02
HDFC 16.61 17.48 11.19 14.51 12.69
BOB 21.94 21.18 19.38 18.27 20.78
AXIS 17.84 20.02 17.1 25.74 20.64
30
25
20
SBI
HDFC
15
BOB
AXIS
10
0
Profitability Ratios
Profitability ratios are financial metrics used by analysts and investors to

measure and evaluate the ability of a company to generate income (profit)
relative to revenue, balance sheet assets, operating costs, and shareholders’
equity during a specific period of time. They show how well a company utilizes
its assets to produce profit and value to shareholders.
A higher ratio or value is commonly sought-after by most companies, as this

usually means the business is performing well by generating revenues, profits,
and cash flow. The ratios are most useful when they are analyzed in comparison
to similar companies or compared to previous periods.
Types of Profitability Ratios
• Gross Profit Ratio
• Operating Profit Ratio
• Return on Assets
• Return on Equity
Gross Profit Ratio
Gross margin is a company's net sales revenue minus its cost of goods
sold (COGS). In other words, it is the sales revenue a company retains after
incurring the direct costs associated with producing the goods it sells, and the
services it provides. The higher the gross margin, the more capital a company
retains on each dollar of sales, which it can then use to pay other costs or satisfy
debt obligations. The net sales figure is simply gross revenue, less the returns,
allowances, and discounts.
Gross Profit ratio = gross profit /net sales x100
Gross profit margin Mar-19 Mar-18 Mar-17 Mar-16 Mar-15
SBI 7.62 6.81 8.22 9.28 10.82
HDFC 14.72 21.2 19.29 13.09 17.22
BOB -10.79 -21.64 -10.15 -26.54 12.11
AXIS -11.19 11.07 13.05 7.37 13.3
30
20
10
SBI
HDFC
0
19-Mar 18-Mar 17-Mar 16-Mar 15-Mar BOB
AXIS
-10
-20
-30
Net Profit Ratio
Also known as Net Profit Margin ratio, it establishes a relationship between

net profit earned and net revenue generated from operations (net sales). Net
profit ratio is a profitability ratio which is expressed as a percentage hence it is
multiplied by 100.
Net sales include both Cash and Credit Sales, on the other hand, net profit is
the net operating profit i.e. the net profit before interest and taxes. Net profit
ratio helps to find out net profit earned in comparison to revenue earned from
operations.
Net Profit Ratio = Net profit /net sales x100
Net profit Ratio Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

SBI 0.35 -2.96 5.97 6.06 8.59
HDFC 21.29 21.79 20.99 20.41 21.07
BOB 0.86 -5.57 3.27 -12.24 7.91
AXIS 8.5 0.6 8.26 20.06 20.73
25
20
15
10 SBI
HDFC
5 BOB
AXIS
0
-5
-10
-15
Return on Assets
Return on assets (ROA) is an indicator of how profitable a company is

relative to its total assets. ROA gives a manager, investor, or analyst an idea as
to how efficient a company's management is at using its assets to generate
earnings. Return on assets is displayed as a percentage.
Return on Assets= Total Assets / Net Income x100
Return on Assets Mar-19 Mar-18 Mar-17 Mar-16 Mar-15
SBI 0.02 -0.18 0.38 0.42 0.63
HDFC 1.71 1.69 1.64 1.68 1.73
BOB 0.05 -0.33 0.19 -0.8 0.47
AXIS 0.58 0.03 0.61 1.56 1.59
1.5
1
SBI
HDFC
0.5
BOB
AXIS
0
-0.5
-1
Return on Equity
Return on Equity is a two-part ratio in its derivation because it brings

together the income statement and the balance sheet, where net income or profit
is compared to the shareholders’ equity. The number represents the total return
on equity capital and shows the firm’s ability to turn equity investments into
profits. To put it another way, it measures the profits made for each dollar from
shareholders’ equity.
ROE = Net Income / Shareholders’ Equity x100
Return on Equity Mar-19 Mar-18 Mar-17 Mar-16 Mar-15
SBI 0.39 -3.37 6.69 6.89 10.2
HDFC 15.35 14.12 16.45 16.26 16.91
BOB 0.94 -5.6 3.43 -13.42 8.53
AXIS 7.01 0.43 6.59 15.46 16.46
20
15
10
SBI
5
HDFC
BOB
0
19-Mar 18-Mar 17-Mar 16-Mar 15-Mar AXIS
-5
-10
-15
Solvency Ratio
The solvency ratio is one of many metrics used to determine whether a company
can stay solvent. Other solvency ratios include debt-to-equity, total-debt-to-total-
assets, and interest coverage ratios.
The solvency ratio is a comprehensive measure of solvency, as it measures a

firm's actual cash flow—rather than net income—by adding back depreciation
and other non-cash expenses to assess the company’s capacity to stay afloat. It
measures this cash flow capacity in relation to all liabilities, rather than only
short-term debt. This way, the solvency ratio assesses a company's long-term
health by evaluating its repayment ability for its long-term debt and the interest
on that debt.
As a general rule of thumb, a solvency ratio higher than 20% is considered

to be financially sound; however, solvency ratios vary from industry to industry.
A company’s solvency ratio should, therefore, be compared with its competitors
in the same industry rather than viewed in isolation.
The solvency ratio terminology is also used in regard to insurance

companies, comparing the size of its capital relative to the premiums written,
and measures the risk an insurer faces of claims it cannot cover.
Types of solvency ratio
• Debt-Equity Ratio
• Interest Coverage Ratio

Debt-equity Ratio
This ratio is a measure of total debt, as compared to shareholder equity. As

an equation, you take your business’s total liabilities and divide them by your
shareholders’ equity.
In general, a high solvency ratio tends to indicate that a company is fiscally

sound, while a high debt-to-equity ratio suggests that the company over-utilized
debt to bankroll its growth. As interest levels continue to climb, companies may
suffer from volatile earnings. To prevent insolvency, business owners need to
focus on deferring costs, reducing debt and boosting overall profits.
Debt to Equity Ratio = Total Debt / Shareholders’ Equity
Debt-Equity Ratio Mar-19 Mar-18 Mar-17 Mar-16 Mar-15
SBI 0.06 0.06 0.06 0.07 0.07

HDFC 0.05 0.13 0.06 0.06 0.06
BOB 0.04 0.04 0.04 0.04 0.04
AXIS 0.06 0.08 0.07 0.06 0.06
0.14
0.12
0.1
0.08 SBI
HDFC
0.06 BOB
AXIS
0.04
0.02
0
Mar-19 Mar-18 Mar-17 Mar-16 Mar-15
Interest-coverage ratios
These ratios measure a company’s ability to keep up with interest payments,

which rise along with outstanding debt. As a business owner, you can calculate
interest-coverage ratio by dividing earnings before interest and tax (EBIT) by
interest expenses.
Typically, a company with an interest-coverage ratio of 1.5 or less is

viewed as financially unstable and may struggle to secure loans from banks and
other lenders. To boost your interest-coverage ratio, strive to reduce debt and
boost overall profits.
Interest Coverage Ratio= EBIT /Interest Expense
interest coverage ratio Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

SBI 6.45 6.65 6.36 6 6.26
HDFC 7.2 7.79 7.46 7.79 8
BOB 6.23 5.91 6.47 6.33 5.48
AXIS 6.37 5.9 6.85 6.92 7.34
6
SBI
5
HDFC
4 BOB
3 AXIS
0
Turn Over Ratio
The turnover ratio or turnover rate is the percentage of a mutual fund or other
portfolio's holdings that have been replaced in a given year (calendar year or
whatever 12-month period represents the fund's fiscal year).
For example, a mutual fund investing in 100 stocks and replacing 50 stocks
during one year has a turnover ratio of 50%. Some funds hold their equity
positions for less than 12 months, meaning their turnover ratios exceed 100%.
If a portfolio's turnover ratio exceeds 100%, it doesn't necessarily mean that

every single holding has been replaced, however. The ratio seeks to reflect the
proportion of stocks that have changed in recent years.
The turnover ratio varies by the type of mutual fund, its investment objective
and/or the portfolio manager's investing style. For example, a stock market index
fund usually will have a low turnover rate, since it just duplicates a particular
index, and the component companies in indexes don't change that often. But a
bond fund will often have high turnover because active trading is an inherent
quality of bond investments.
Actively managed mutual funds with a low turnover ratio reflect a buy-and-hold
investment strategy; those with high turnover ratios indicate an attempt to profit
by a market-timing approach. An aggressive small-cap growth stock fund will
generally experience higher turnover than a large-cap value stock fund.
Types of Turn Over Ratio
• Fixed Asset Turn Over Ratio
• Debtors Turn Over Ratio

Fixed Asset Turn Over Ratio
The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure
operating performance. This efficiency ratio compares net sales (income
statement) to fixed assets (balance sheet) and measures a company's ability to
generate net sales from its fixed-asset investments, namely property, plant, and
equipment (PP&E).
The fixed asset balance is used as a net of accumulated depreciation. A higher

fixed asset turnover ratio indicates that a company has effectively used
investments in fixed assets to generate sales.
Fixed Asset Turnover = Net Sales / Fixed Assets
Fixed Asset Turn Over Ratio Mar-19 Mar-18 Mar-17 Mar-16 Mar-15
SBI 0.07 0.07 0.07 0.07 0.08
HDFC 0.09 0.09 0.09 0.1 0.1
BOB 0.07 0.06 0.06 0.07 0.06
AXIS 0.08 0.07 0.08 0.09 0.09
0.12
0.1
0.08
SBI
0.06 HDFC
BOB
0.04 AXIS
0.02
0
Debtors Turn Over Ratio
The Debtors Turnover Ratio also called as Receivables Turnover Ratio shows
how quickly the credit sales are converted into the cash. This ratio measures the
efficiency of a firm in managing and collecting the credit issued to the customers
One important thing that needs to be taken care of is, generally the companies
use total sales in the place of net sales, which gives an inflated turnover ratio.
Thus, while calculating this ratio, only the net credit sales is to be taken into
consideration.
Debtors Turnover Ratio = Net Credit Sales/ Account Receivable.
Debtors Turn Over Ratio Mar-19 Mar-18 Mar-17 Mar-16 Mar-15
SBI 0.12 0.13 0.12 0.12 0.12
HDFC 0.13 0.13 0.14 0.15 0.15
BOB 0.11 0.11 0.11 0.11 0.1
AXIS 0.12 0.11 0.13 0.13 0.14
0.16
0.14
0.12
0.1
SBI
0.08 HDFC
BOB
0.06
AXIS
0.04
0.02
0
Earning Per Share
Earnings per share (EPS) is calculated as a company's profit divided by the

outstanding shares of its common stock. The resulting number serves as an
indicator of a company's profitability. It is common for a company to report EPS
that is adjusted for extraordinary items and potential share dilution. The higher a
company's EPS, the more profitable it is considered.
The earnings per share value are calculated as the net income (also known as
profits or earnings) divided by the available shares. A more refined calculation
adjusts the numerator and denominator for shares that could be created through
options, convertible debt, or warrants. The numerator of the equation is also
more relevant if it is adjusted for continuing operations.
EPS = net income - preferred dividends / average outstanding common

shares
EPS Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

SBI 2.58 -5.34 0.31 15.95 22.76
HDFC 48 78.65 67.76 57.18 48.84
BOB 4.16 -8.17 7.88 -21.93 18.22
AXIS 6.83 19.61 1.86 16.54 35.12
140
120
100
80 AXIS
BOB
60
HDFC
40 SBI
20
0
-20
Conclusion
CONCLUSION
Financial reports are required by law and are published both quarterly and
annually. Management discussion and analysis (MD&A) gives investors a better
understanding of what the company does and usually points out some key areas
where it performed well. Audited financial reports have much more credibility
than unaudited ones. The balance sheet lists the assets, liabilities and
shareholders' equity. For all balance sheets: Assets = Liabilities + Shareholders'
Equity. The two sides must always equal each other (or balance each other).
The income statement includes figures such as revenue, expenses, earnings and
earnings per share. For a company, the top line is revenue while the bottom line
is net income.
The income statement takes into account some non-cash items, such as
depreciation. In Fundamental analysis is very useful to understand the overall
company. industry, and economy. From the comparison thus drawn, it can be
concluded that HDFC Bank and AXIS Bank which a private sector bank offers
a larger number of products and services than the State Bank of India although
the SBI and BOB has, in fact, a much better overall earning., being a PSU, than
the HDFC and AXIS BANK.
Always read the notes to the financial statements. They provide more in-depth
information on a wide range of figures reported in the three financial statements.
Ratio Analysis is the basic tool of financial analysis and Financial analysis itself
is an important part of any business planning process as SWOT, being basic tool
of the strategic analysis plays a vital role in a business planning process and no
SWOT analysis would be complete without an analysis of companies financial
position. In this way Ratio Analysis is very important part of whole business
strategic planning.
Bibliography
Bibliography
Information and data used in the project has been collected from the following
sources
Websites
www.moneycontrol.com
www.capitalmarket.com
www.wikipedia.com
www.bankbazzar.com
www.ndtv.com

Fundamental Analysis of Banking Sectors

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“A STUDY ON FUNDAMENTAL ANALYSIS ON BANKING SECTOR”

A PROJECT SUBMITTED TO UNIVERSITY OF MUMBAI FOR

ANKITA SHARAD THAKUR

ROLL NO:- 182

UNDER THE GUIDANCE OF

PROF. AASHA MARIAN

KERALEEYA SAMAJAM (REGD) DOMBIVLI, KANCHANGAON,

(Prof. AASHA MARIAN)

MS. ANKITA SHARAD THAKUR

Prof. AASHA MARIAN

I would like to express my sincere gratitude towards my project guide and

Chapter .no Title of the Chapter Page no.

• The global industry

• Earnings per share (EPS)

A Detailed Example of Fundamental Analysis

There’s no right way to do fundamental analysis, as stock trading is not as

Earnings Per Share (EPS)

Price-to-Earnings Ratio (P/E Ratio)

Price-to-Book Ratio (P/B Ratio)

10,000,000 / 500,000 = $20 book value per share

50,000,000 / 5,000,000 = 10%

Note that you should calculate the ROE result as a percentage.

Fundamental analysis (FA) is a method of measuring a security's intrinsic value

This method of stock analysis is considered to be in contrast to technical

Understanding Fundamental Analysis

All stock analysis tries to determine whether a security is correctly valued

Fundamental analysis uses public data to evaluate the value of a stock or

This method of stock analysis is considered to be the opposite of technical

Quantitative and Qualitative Fundamental Analysis

Neither qualitative nor quantitative analysis is inherently better. Many analysts

Qualitative Fundamentals to Consider

The business model:

The Balance Sheet

Assets = Liabilities + Shareholders\' Equity

Statement of Cash Flows

Operating Cash Flow (OCF): Cash generated from day-to-day business

Industry related data –

Although not free, MS Excel can be extremely helpful in fundamental

• Fundamental Analysis is used to make long term investments

In India, banks are playing a crucial role in socio-economic progress of the

The current process of transformation should be viewed as an opportunity to

EVALUATION OF INDIAN BANKING

2. Foundation phase (1947-1969)

3. Expansion phase (1969-1990)

4. Consolidation and Liberalization phase (1990 to till)

Evolutionary phase (Prior to 1947)

According to the Central Banking Enquiry Committee (1931), money lending

This was followed by bank of Hindustan in Calcutta, which was established in

BANKING STRUCTURE IN INDIA

Indian banking system consists of “non scheduled banks” and “scheduled

Scheduled banks consists of “scheduled commercial banks” and scheduled

(3) foreign banks in India, and

In 1993, Punjab National Bank merged another nationalized bank, New

Regional rural banks account for only 4% of total assets of scheduled

As at the end of March 2001, the number of scheduled banks is a follows:

Banking Structure in India

To qualify as a scheduled bank, the paid up capital and collected funds of

Public Sector Banks

Refer to a type of commercial banks that are nationalized by the government of

Private Sector Banks:

Refer to a kind of commercial banks in which major part of share capital is

Refer to commercial banks that are headquartered in a foreign country, but