Satya Project On OBC

A DETAIL ANALYSIS ON FINANCIAL STATEMENT WITH
REFERENCE TO ORIENTAL BANK OF COMMERCE,

VISAKHAPATNAM
A Project Report submitted for partial fulfillment for the award of Degree of
Master of Commerce
SRI GURAJADA APPARAO

GOVERNMENT DEGREE & PG COLLEGE
(NAAC accredited „A‟ Grade Institution)
Yellamanchili-531055, Visakhapatnam.
Submitted by
CHALLAPALLI SATYA GOWRI LAKSHMI
117235406013
Under the guidance of

Ms. N. Nirmala Kumari
M.Com, M.A, M.B.A, M.Phill, P.G.D.I.B, NET [Ph.D]
Head of the Department of Commerce

CERTIFICATE
This is to certify that the project work entitled “A DETAIL ANALYSIS ON

FINANCIAL STATEMENT WITH REFERENCE TO ORIENTAL BANK
OF COMMERCE, VISAKHAPATNAM” is a genuine work done by
CHALLAPALLI SATYA GOWRI LAKSHMI 117235406013, student of SRI
GURAJADA APPA RAO GOVERNMENT DEGREE & PG COLLEGE,
Yellamanchili for the award of Master of Commerce Degree from Andhra
University under the guidance and supervision.
PLACE: Visakhapatnam Ms. N. Nirmala Kumari
DATE: ASSISTANT PROFESSOR
2
DECLARATION
I Challapalli Satya Gowri Lakshmi, hereby declare that this project report
entitled “A DETAIL ANALYSIS ON FINANCIAL STATEMENT WITH
REFERENCE TO ORIENTAL BANK OF COMMERCE, VISAKHAPATNAM ” is
written and submitted by me under the guidance of R.Venkat Rao (Manager),

ORIENTAL BANK OF COMMERCE, VISAKHAPATNAM for the award of degree
Master of Commerce
Administration it is an original work. This project either full of part not from a
part of the requirement for any degree or diploma either.
Challapalli Satya Gowri Lakshmi
Reg no: 117235406013
Place: Yellamanchili
Date:
3
ACKNOWLEDGEMENTS
I express my sincere thanks to R.Venkat Rao (Manager), ORIENTAL BANK OF

COMMERCE, VISAKHAPATNAM for their guidance, encouragement, support
throughout my entire project work, without their timely guidance and advice
this project could not have been completed effectively.
I would like to express my sincere gratitude to Dr. K. Malyadri, Principal, Ms.

N. Nirmala Kumari Assistant professor, Head Of the Department, Department
of Commerce, Sri Gurajada AppaRao Government Degree & Pg College,
Yellamanchili, Visakhapatnam, Dist. for having given me an opportunity to do
this project
Finally, I would like to express my gratitude and thanks to my parents and

friends whose unremarkable encouragement had helped me throughout my
educational endeavor and to do this project work
Challapalli Satya Gowri Lakshmi
4
CONTENTS
S.NO. PARTICULARS Page No
1 INTRODUCTION TO THE INDUSTRY 06
2 INTRODUCTION TO THE ORGANIZATION 19
3 RESEARCH METHODOLOGY 52
4 ANALYSIS & INTERPRETATION 62
5 FACT & FINDINGS 72
6 CONCLUSION 76
7 BIBLIOGRAPHIES 77
5
INTRODUCTION TO THE INDUSTRY
Origin of the Word Bank‟s:
There seems no uniformity amongst the economist about the origin of the word Bank
According to some authors the word Bank, itself is derived from the word Bancus‖ or
Banque‖ that is a bench. The early bankers, the Jews in Lombardy, transacted their business
on benches in the market place, when, a banker failed, his Banco „was broken up by the
people; it was called Bankrupt. This etymology is however, ridiculed by mcleod on the
ground that The Italian Money changers as such were never called Banchier in the middle
ages. It is generally said that the word "Bank" has been originated in Italy. In the middle of
12th century there was a great financial crisis in Italy due to war. To meet the war expenses,
the government of that period a forced subscribed loan on citizens of the country at the
interest of 5% per annum. Such loans were known as 'Compare', 'minto' etc. The most
common name was "Monte'. In Germany the word 'Monte was named as 'Bank' or 'Banke'.
According to some writers, the word 'Bank' has been derived from the word bank.
It is also said that the word 'bank' has been derived from the word 'Banco' which means a
bench. The Jews money lenders in Italy used to transact their business sitting on benches at
different market places. When any of them used to fail to meet his obligations, his 'Banco' or
banch or bench would be broken by the angry creditors. The word 'Bankrupt' seems to be
originated from broken Banco. Since, the banking system has been originated from money
leading business; it is rightly argued that the word 'Bank' has been originated from the word
"Banco'. Whatever be the origin of the word Bank as Professor Ram Chandra Rao says, It
would trace the history of banking in Europe from the middle Ages. Today the word bank is
used as a comprehensive term for a number of institutions carrying on certain kinds of
financial business. In practice, the word 'Bank' means which borrows money from one class
of people and again lends money to another class of people for interest or profit.
6
Meaning of Bank:
A Bank is an institution which accepts deposits from the general public and extends loans to
the households, the firms and the government. Banks are those institutions which operate in
money. Thus, they are money traders, with the process of development functions of banks are
also increasing and diversifying now, the banks are not nearly the traders of money, they also
create credit. Their activities are increasing and diversifying. Hence it is very difficult to give
a universally acceptable definition of bank. "Banking business" means the business of
receiving money on current or deposit account, paying and collecting cheques drawn by or
paid in by customers, the making of advances to customers, and includes such other business
as the Authority may prescribe for the purposes of this Act
The history of banking began with the first prototype banks which were the merchants of the
world, who made grain loans to farmers and traders who carried goods between cities. This
was around 2000 BC in Assyria, India and Sumeria. Later, in ancient Greece and during the
Roman Empire, lenders based in temples made loans, while accepting deposits and
performing the change of money. Archaeology from this period in ancient China and India
also shows evidence of money lending.
The development of banking spread from northern Italy throughout the Holy Roman Empire,
and in the 15th and 16th century to northern Europe. This was followed by a number of
important innovations that took place in Amsterdam during the Dutch Republic in the 17th
century, and in London since the 18th century. During the 20th century, developments in
telecommunications and computing caused major changes to banks' operations and let banks
dramatically increase in size and geographic spread. The financial crisis of 2007–2008 caused
many bank failures, including some of the world's largest banks, and provoked much debate
about bank regulation.
7
BANKING IN INDIA
Indian Banking Regulation act 1949 section 5 (1) (b) of the banking
Regulation Act 1949 Banking is defined as.
Accepting for the purpose of the landing of investment of deposits of money from public
repayable on demand or other wise and withdraw able by cheques, draft, order or otherwise.
The Indian economy is emerging as a one of the strongest economy of the world with the
GDP growth of more than 8 % every year. A strongest banking industry is important in every
country and can have a significant affect in supporting economic development through
efficient financial services. Banking sector play a vital role in growth and development of
Indian economy. After liberalization the banking industry in India under gone major changes.
The process of liberalization and globalization has strongly influenced the Indian banking
sector. A stable and efficient banking sector is an essential precondition to increase the
economic level of a country. Liberalization policy introduced in the banking sector in India
led to consolidated competition, efficient allocation of resources and introducing innovative
methods for mobilizing of saving. The ability of banks to analyze its financial position for
improving its competitive position in the market place. Most banks in India are currently
focusing an expanding their service network. A growing Indian economy, expanding their
various segments. After the recommendations of Narshinham Committee report with the
entry of many private players. Indian banking industry has transformed into a customer
oriented market. It now consists of multiple products and customer groups and various
channels of distribution. It is well known fact that an effective and efficient banking system is
important for the long-run growth and development of the economy. So, there is needed to
make a comprehensive study into performance of banks in India.
A Banking Sector performs three primary functions in economy, the operation of the payment
system, the mobilization of savings and the allocation of saving to investment products.1
Banking industry has been changed after reforms process.
8
The Government has taken this sector in a basic priority and this service sector has been
changed according to the need of present days. Banking sector reforms in India Strive to
Banking industry has been changed after reforms process. The Government has taken this
sector in a basic priority and this service sector has been India Strive to Banking industry has
been changed after reforms process. The Government has taken this sector in a basic priority
and this service sector has been changed according to the need of present days. Banking
sector reforms in India Strive to increase efficiency and profitability of the banking
institutions as well as brought the existing banking institutions face to face with global
competition in globalization process. Different type of banks differs from each other in terms
of operations, efficiency, productivity, profitability and credit efficiency. Indian banking
sector is an important constituent of the Indian Financial System. The banking sector plays a
vital role through promoting business in urban as well as rural area in recent year, without a
sound and effective banking system, India can not be considered as a healthy economy.
The main objective of this study to understand of how a bank is able to use the available
resources to increase the profitability and performance of banks and banks in India are
performed well or not
Without a sound and effective banking system in India it cannot have a healthy economy.
The banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors. For the past
three decades India's banking system has several outstanding achievements to its credit. The
most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners
of the country. This is one of the main reasons of India's growth process.
9
British Period
The seventeenth century witnessed the coming into India of the English traders. The English
traders established their own agency houses at the port towns of Bombay, Calcutta and
Madras. These agency houses, apart from engaging in trade and commerce, also carried on
the banking business. The development of the means of transport and communication causing
deflection of trade and commerce along new routes, changing the nature of trade activities in
the country were the other factor which also contributed to the downfall of the indigenous
bankers. Partly to fill the void caused by their downfall and partly to finance the growing
financial requirements of English trade. The East India Company now came to favor the
establishment of the banking institutions patterned after the Western style.16
The First Joint Stock
Bank established in the country was the Bank of Hindustan founded in 1770 by the famous
English agency house of M/s. Alexander and Company. The Bengal Bank and The Central
Bank of India were established in 1785. The Bank of Bengal, the first of the three Presidency
Banks was established in Calcutta in 1806 under the name of bank of Calcutta. It was
renamed in 1809 on the grant of the charter as a Bank of Bengal. The two other presidency
banks, namely the bank of Bombay and the Bank of Madras, were established in 1840 and
1843 respectively. After the Paper Currency Act of 1862, however the right of the note issue
was taken away from them. The Presidency Banks had branches in important towns of the
country. The banking crisis of 1913 to 1917 however brought out the serious deficiencies in
the existing banking system in the country showing the need for effective co-ordination
through the establishment of the Central Bank. After repeated efforts, the three presidency
bank was fused into a single bank under the name of the Imperial Bank of India in 1921.
The bank was authorized to hold Government balances and manage public debt. It was not,
however, given power to issue notes. The issuing of the currency continued to be close
preserving of the Government of India. The branches of the bank were to work as clearing
houses. It was mainly a commercial bank competing with other banks. The Imperial Bank of
India was nationalized in 1955 by the SBI act. In the wake of the Swadeshi Movement, a
number of banks with Indian management were established in the country. The Punjab
National Bank Ltd. Was founded in 1895, The Bank of India Ltd in 1906, The Canara Bank
Ltd. in 1906. The Indian Bank Ltd. in 1907, the Bank of Baroda Ltd. in 1908, and the Central
10
Bank of India Ltd. in 1911.There have been a number of checks to progress to the Banking
Industry in the form of bank failures during the last over 100 years. The series of bank crisis
particularly during the time 1913–17, 1939–45 and 1948–53 wiped out many weak units.
Loss in trade or industry affected their credit and solvency. It may however, be stated that one
of the important reasons for the last banking crisis of 1948–53 was the partition of the
country into India and Pakistan. Most of the depositors who were Hindus migrated from
Pakistan to India while a major portion of the assets of the banks, which failed remained in
Pakistan. Although, Suggestions have been made from time to time that India ought to have a
Central Bank. The Royal Commission on Indian currency and finance recommended that a
Central Bank should be started in India so as to perfect her credit and currency organization.
From 1927 to 1933, there was a proposal and constitutional reforms law process has been
made. It was enacted in due course and became law on the 6th march 1934 and the Reserve
Bank of India started functioning with effect from 1st April 1935. Banking regulation act
was passed in 1949.
11
Banking After Independence in India:
First Phase: 1948 – 1969
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale
specially in rural and semi-urban areas. The country inherited a banking system that was
patterned on the British Banking System. There were many joint stock companies doing
banking business and they were concentrating mostly in major cities. Even the financing
activities of these banks were confined to the exports of Jute, Tea etc and traditional
industries like textile and sugar. There was no uniform law governing banking activity. An
immediate concern after the partition of the country was about bank branches located in
Pakistan and steps were taken to close some of them as desire by that country. In 1949, as
many as 55 banks either went into liquidation or went out of banking business. Banking did
not receive much attention of the policy makers and disjointed efforts were made towards the
regulation of the banking industry.
12
Second Phase: Nationalization 1969 – 1990
After independence, India adopted a socialist pattern of society as its goal. This means in non
technical language a society with wealth distributed as equitably as possible without making
the country a totalitarian state. In 1955, the Imperial Bank of India was nationalized and its
undertaking was taken over by State Bank of India. Its transformation into SBI has been
effective from July 1, 1955.19 there were 7 subsidiaries Banks. Their Associate Bank was
1960
The State Banks group including State Bank of Hyderabad, State Bank of Mysore, State Bank
of Travancore, State Bank of Bikaner and Jaipur, State Bank of Indore, State Bank of Patiala
and State Bank of Saurashtra. As regards the scheduled banks, there were complaints that
Indian Commercial Banks were directing their advances to the large and medium scale
industries and big business houses and that the sectors demanding priority such as agriculture,
small scale industries and exports were not receiving their due share. This was one of the
chief reasons for imposition of social control by amending the banking regulation act, with
effect from 1st February 1969. On 19th July 1969, 14 major banks were nationalized and
taken over they were as under
 The Central Bank of India Ltd

 The Bank of India Ltd
 The Punjab National Bank Ltd
 The Bank of Baroda Ltd
 The United Commercial Bank Ltd
 The Canara Bank Ltd
 The United Bank of India Ltd
 The Dena Bank Ltd
 Syndicate Bank Ltd
 The Union Bank of India Ltd
 The Allahabad Bank Ltd
 The Indian Bank Ltd
 The Bank of Maharashtra Ltd
 The Indian Overseas Bank Ltd
13
Each bank was having deposits of more than Rs. 50 crore and having among themselves
aggregate deposits of Rs. 2632 crore with 4130 branches. On 15th April 1980, six more banks
were nationalized. These banks were:
 The Andhra Bank Ltd

 The Corporation Bank Ltd
 The New Bank of India Ltd
 The Oriental Bank of Commerce Ltd
 The Punjab & Sind Bank Ltd
 The Vijya Bank Ltd
There were some effects and achievements of nationalized banks. However, there are some
problems relating to NPAs, competition, competency, overstaffing, inefficiency etc. for the
nationalized bank.20
14
Third Phase
1991-2002 Economic Reforms The Indian economic development takes place in the realistic
world from 1991 Liberalization, Privatization and Globalization‖ policy. As per LPG policy
all restriction on the Indian economy was totally dissolved and the soundest phase for the
Indian banking system adopt over here. This also changed the scenario of the macro
economic world. The budget policy and suggestion provided by shri Dr Man Mohan Singh
and the Governor of Reserve Bank of India. As per the guideline the segments for
development is having various problem and so the importance of public sector cannot be
ignored. The country is flooded with foreign banks and their ATM stations. Efforts are being
put to give a satisfactory service to customers. Phone banking and net banking is introduced.
The entire system became more convenient and swift. Time is given more importance than
money The financial system of India has shown a great deal of resilience. It is sheltered from
any crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, and
the capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.
15
Banking Sector Reforms in India:
The Indian economic development takes place in the realistic world from the 1991
liberalization privatization globalization‖ policy. As per LPG policy all restriction on the
Indian economy was totally dissolved, and the soundest phase for the Indian banking system
adopt over here. This also changed the scenario of the Macro economic world. Banking
Sector reforms were initiated to upgrade the operating standard health and financial
soundness of the banks. The Government of India setup the Narasimham Committee in 1991,
to examine all aspects relating to structure, organization and functioning of the Indian
banking system the recommendations of the committee aimed at creating at competitive and
efficient banking system. Another committee which is Khan Committee was instituted by
RBI in December, 1997 to examine the harmonization of the role and operations of
development financial institutions and banks. It submitted its report in 1998. The major
recommendations were a gradual more towards universal banking, exploring the possibility
of gain full merger as between banks, banks and financial institutions.
Then the Verma Committee was established this committee recommended the need for
greater use of IT even in the weak public sector banks, restructuring of weak banks but not
merging them with strong banks, VRS for at least 25% of the staff. The Banking Sector
reforms aimed at improving the policy frame work, financial health and institutional
infrastructure, there two phase of the banking reforms. Narasimham Committee provided the
blue print for the initial reforms in banking sector following the balance of payment crisis in
1991.
Banking sector reforms was started in real sence from 1991 to on words. But it was
conducted under the various report presented by the various committee. It may happen that
the recommendation will not be the all and apply to the banks.
16
RBI
INTRODUCTION TO RESERVE BANK OF INDIA (RBI)
The reserve bank of India is a central bank and was established in April 1, 1935 in
accordance with the provisions of reserve bank of India act 1934. The central office of RBI is
located at Mumbai since inception. Though originally the reserve bank of India was privately
owned, since nationalization in 1949, RBI is fully owned by the Government of India. It was
inaugurated with share capital of Rs. 5 Crores divided into shares of Rs. 100 each fully paid
up.
RBI is governed by a central board (headed by a governor) appointed by the central

government of India. RBI has 22 regional offices across India. The reserve bank of India was
nationalized in the year 1949. The general superintendence and direction of the bank is
entrusted to central board of directors of 20 members, the Governor and four deputy
Governors, one Governmental official from the ministry of Finance, ten nominated directors
by the government to give representation to important elements in the economic life of the
country, and the four nominated director by the Central Government to represent the four
local boards with the headquarters at Mumbai, Kolkata, Chennai and 29 New Delhi. Local
Board consists of five members each central government appointed for a term of four years to
represent territorial and economic interests and the interests of cooperative and indigenous
banks.
The Reserve Bank regulates and supervises the nation‟s financial system. Different
departments of the Reserve Bank oversee the various entities that comprise India‟s financial
infrastructure. They oversee:
Commercial banks and all-India development financial institutions: Regulated by the

Department of Banking Operations and Development, supervised by the Department of
Banking Supervision
Urban co-operative banks: Regulated and supervised by the Urban Banks Department
Regional Rural Banks (RRB), District Central Cooperative Banks and State Cooperative
Banks: Regulated by the Rural Planning and Credit Department and supervised by
NABARD
17
Non-Banking Financial Companies (NBFC): Regulated and supervised by the Department
of Non-Banking Supervision
OBJECTIVES OF RBI
 To regulate the financial policy and develop banking facilities through the country.
 To remain free from political influence and be in successful operation for maintaining
financial stability and credit.
 To act as the note issuing authority, bankers‟ bank and banker to government and to
promote the growth of the economy within the framework of the general economic
policy of the government, consistent with the need of maintenance of price stability.
 To assist the planned process of development of the Indian economy.
Government of India RBI, constituted a committee to review the arrangements for

institutional credit for agriculture and rural development (CRAFICARD) on 30 March 1979,
under the Chairmanship of Shri B.Sivaraman, to review the arrangements for institutional
credit for agriculture and rural development.
18
INTRODUCTION TO THE ORGANIZATION
Bahadur Lala Sohan lal ji the first Chairman of the Bank, founded OBC in 1943 in Lahore.
Within four years of its coming into existence, OBC had to face Partition. The bank had to
close down its branches in the newly formed Pakistan and shift its registered office from
Lahore to Amritsar. Lala Karam Chand Thapar, the then Chairman of the Bank, in a unique
gesture honoured the commitments made to the depositors from Pakistan and paid every
rupee to its departing customers.
The Bank has witnessed many ups and downs since its establishment. The period of 1970-76
is said to be the most challenging phase in the history of the Bank. At one time profit
plummeted to 175, that prompted the owner of the bank, the Thapar Group, to sell / close the
bank. Then employees and leaders of the Bank came forward to rescue the Bank. The owners
were moved and had to change their decision of selling the bank and in turn they decided to
improve the position of the bank with the active cooperation and support of all the
employees. Their efforts bore fruits and performance of the bank improved significantly. This
was the turning point in the history of the bank.
The bank was nationalised on 15 April 1980. At that time OBC ranked 19th among the 20
nationalised banks.
In 1997, OBC acquired two banks: Bari Doab Bank and Punjab Cooperative Bank. The
acquisition of these two banks brought with it no additional branches.
The bank has progressed on several fronts, crossing the Business Mix mark of ₹2 lac crores
as on 31 March 2010 making it the seventh largest Public Sector Bank in India.
On 14 August 2004, OBC amalgamated Global Trust Bank (GTB). GTB was a leading
private sector bank in India that was associated with various financial discrepancies leading
to a moratorium being imposed by RBI shortly before it merged into OBC. The acquisition
brought with it 103 branches, which increased OBC's branch total to 1092.
The bank offers a wide range of banking products and services such as deposit accounts,
loans, debit cards, credit cards (with tie up with SBI), Insurance products, ATMs, Internet
banking, Mobile Banking, Self-banking halls, call centre, etc.
19
The Bank has launched yet another people's participation in the planning process at grass root
level essentially to tackle the maladies of poverty. The Grameen Projects venture aims to
alleviate poverty plus identify the reasons responsible for the failure or success.
OBC is already implementing a GRAMEEN PROJECT in Dehradun District (UK) and

Hanumangarh District (Rajasthan). Formulated on the pattern of the Bangladesh Grameen
Bank, the Scheme has a unique feature of disbursing small loans ranging from ₹75 (~US
$1.50) onwards. The beneficiaries of the Grameen Project are mostly women.The Bank is
engaged in providing training to rural folk in using locally available raw material to produce
pickles, jams etc. This has provided self-employment and augmented income levels thus
reforming lives of rural folk and encouraging cottage industries in rural areas.
OBC launched yet another unique scheme christened 'The Comprehensive Village
Development Programme' on the auspicious day of Baisakhi, the 13th of April 1997 at three
villages in Punjab namely Rurki Kalan (District. Sangrur), Raje Majra (District. Ropar) and
Khaira Majha (District. Jaladhar) and two villages in Haryana, namely Khunga (District.
Jind) and Narwal (District. Kaithal). The pilot launch was a great success. Emboldened by the
success, Bank extended the programme to more villages. At present, it covers 15 villages; 10
in Punjab, 4 in Haryana and 1 in Rajasthan. The programme focuses on providing a
comprehensive and integrated package providing rural finance to the villagers with Village
Development as its focus, thus contributing towards infrastructural development and
augmentation of income for each farmer of the village. The Bank has implemented 14 point
action plan for strengthening of credit delivery to women and has designated 5 branches as
specialised branches for women entrepreneurs
20
Board of Directors
Sh. Mukesh Kumar Jain Managing Director & CEO
Sh. Himanshu Joshi Executive Director
Sh. Prashant Goyal Member of Board of Directors
Smt. Mala Srivas tava Member of Board of Directors
Sh. S. Ganesh Kumar Member of Board of Directors
Sh. Ashok Kumar Sharma Member of Board of Directors
Sh. Desh Deepak Khetrapal Member of Board of Directors
Sh. Sanjay Kapoor Member of Board of Directors
Sh. Madan Mohan Lal Verma Member of Board of Directors
21
Members of Top Management Team
Sh. S.K. Goyal Chief Vigilance Officer
Sh. Ashutosh Choudhary Memebrs of Top Management Team
Sh. Charanjit Singh Memebrs of Top Management Team
Sh. Kuldeep Bhalla Memebrs of Top Management Team
Sh. Pradeep Chauhan Memebrs of Top Management Team
Sh. Surender Singh Memebrs of Top Management Team
Sh. B.S. Jaitawat Memebrs of Top Management Team
Sh. H.K. Banga Memebrs of Top Management Team
Sh. H.K. Batra Memebrs of Top Management Team
Sh. Swarup Saha Memebrs of Top Management Team
Smt. Vidyavati Rudra Memebrs of Top Management Team
Sh. Manoj Saxena Memebrs of Top Management Team
Sh. S.C. Das Memebrs of Top Management Team
Sh. Shyam Tandon Memebrs of Top Management Team
Sh. Brijmohan Sharma Memebrs of Top Management Team
Sh. Jitenrda Mohan Singh Memebrs of Top Management Team
Sh. Ashwani Kumar Memebrs of Top Management Team
Sh. Navleen Kundra Memebrs of Top Management Team
Smt. Shashi Jain Memebrs of Top Management Team
Sh. P. Sreedhar Memebrs of Top Management Team
Sh. Joginder Singh Memebrs of Top Management Team
22
Sh. Sukesh Gupta Memebrs of Top Management Team
Sh. B.G. Sandhibigraha Memebrs of Top Management Team
23
VISION STATEMENT & MISSION STATEMENT
VISION STATEMENT
"TO BE A CUSTOMER FRIENDLY PREMIER BANK COMMITTED TO ENHANCING

STAKEHOLDER VALUE"
MISSION STATEMENT
Provide quality, innovative services with state-of-the-art technology in line with customer
expectations. Enhance employees‟ professional skills and strengthen cohesiveness. Create
wealth for customers and other stakeholders.
24
Product and Services Offered by the Bank
Deposits
There are many products in retail banking like Fixed Deposit, Savings Account, Current
Account, Recurring Account, NRI Account, Corporate Salary Account, Free Demat Account,
Kid„s Account, Senior Citizen Scheme, Cheque Facilities, Overdraft Facilities, Free Demand
Draft Facilities, Locker Facilities, Cash Credit Facilities, etc.
They are listed and explained as follows:
Fixed Deposits
The deposit with the bank for a period, which is specified at the time of making the deposit, is
known as fixed deposit. Such deposits are also known as FD or term deposit . FD is repayable
on the expiry of a specified period. The rate of interest and other terms and conditions on
which the banks accepted FD were regulated by the RBI, in section 21 and 35Aof the
Banking Regulation Act 1949.Each bank has prescribed their own rate of interest and has
also permitted higher rates on deposits above a specified amount. RBI has also permitted the
banks to formulate FD schemes specially meant for senior citizen with higher interest than
normal.
Saving Accounts
Saving bank account is meant for the people who wish to save a part of their current income
to meet their future needs and they can also earn in interest on their savings. The rate of
interest payable on by the banks on deposits maintained in savings account is prescribed by
RBI. Now-a-days the fixed deposit is also linked with saving account. Whenever there is
excess of balance in saving account it will automatically transfer into fixed deposit and if
there is shortfall of funds in savings account, by issuing cheque the money is transferred from
fixed deposit to saving account. Different banks give different name to this product.
Current Accounts
A current account is an active and running account, which may be operated upon any number
of times during a working day. There is no restriction on the number and the amount of
withdrawals from a current account. Current account, suit the requirements of a big
businessmen, joint stock companies, institutions, public authorities and public corporation
etc.
25
Recurring Deposit
A variant of the saving bank a/c is the recurring deposit or cumulative deposit a/c introduced
by banks in recent years. Here, a depositor is required to deposit an amount chosen by him.
The rate of interest on the recurring deposit account is higher than as compared to the interest
on the saving account. Banks open such accounts for periods ranging from 1 to 10 years.
There curing deposit account can be opened by any number of persons, more than one person
jointly or severally, by a guardian in the name of a minor and even by a minor.
NRI Account
NRI accounts are maintained by banks in rupees as well as in foreign currency. Four types of
Rupee account can be open in the names of NRI: Apart from this, foreign currency account is
the account in foreign currency. The account can be open normally in US Dollar, Pound
Sterling, and Euro.
The accounts of NRIs are Indian millennium deposit, Resident foreign currency, housing
finance scheme for NRI investment schemes.
Corporate Salary account
Corporate Salary account is a new product by certain private sector banks, foreign banks and
recently by some public sector banks also. Under this account salary is deposited in the
account of the employees by debiting the account of employer. The only thing required is the
account number of the employees and the amount to be paid them as salary. In certain cases
the minimum balance required is zero. All other facilities available in savings a/c are also
available in corporate salary account.
Kid‟s Account
Children are invited as customer by certain banks. Under this, Account is opened in the name
of kids by parents or guardians. The features of kid„s account are free personalized cheque
book which can be used as a gift cheque, internet banking, investment services etc.
Senior Citizenship scheme
Senior citizens can open an account and on that account they can get interest rate somewhat
more than the normal rate of interest. This is due to some social responsibilities of banks
towards aged persons whose earnings are mainly on the interest rate.
Loans and Advances
The main business of the banking company is lending of funds to the constituents, mainly
traders, business and industrial enterprises. The major portion of a bank„s funds is employed
by way of loans and advances, which is the most profitable employment of its funds. There
are three main principles of bank lending that have been followed by the commercial banks
and they are safety, liquidity, and profitability. Banks grant loans for different periods like
short term, medium term, and long term and also for different purpose.
26
Personal Loans
This is one of the major loans provided by the banks to the individuals. There the borrower
can use for his/her personal purpose. This may be related to his/her business purpose. The
amount of loan is depended on the income of the borrower and his/her capacity to repay the
loan.
Housing Loans
NHB is the wholly own subsidiary of the RBI which control and regulate whole industry as
per the guidance and information. The purpose of loan is mainly for purchase, extension,
renovation, and land development.
Education Loans
Loans are given for education in country as well as abroad.
Vehicle Loans
Loans are given for purchase of scooter, auto-rickshaw, car, bikes etc. Low interest rates,
increasing income levels of people are the factors for growth in this sector. Even for second
hand car finance is available.
Professional Loans
Loans are given to doctor, C.A, Architect, Engineer or Management Consultant. Here the
loan repayment is normally done in the form of equated monthly.
Consumer Durable Loans
Under this, loans are given for acquisition of T.V, Cell phones, A.C, Washing Machines,
Fridge and other items.
Loans against Shares and Securities
Finance against shares is given by banks for different uses. Now-adays finance against shares
are given mostly in demat shares. A margin of 50% is normally accepted by the bank on
market value. For these loans the documents required are normally DP notes, letter of
continuing security, pledge form, power of attorney. This loan can be used for business or
personal purpose.
27
Retail Banking Services:
Credit Cards
A credit card is an instrument, which provides immediate credit facilities to its holder to avail
variety of goods and services at the merchant outlets. It is made of plastic and hence
popularly called as Plastic Money. Such cards are issued by bank to persons with minimum
income ranging between RS 50000 and RS 100000 per annum and are accepted by a variety
of business establishments which are notified by the card issuing bank. Some banks insist on
the cardholder being their customers while others do not. Few banks do not charge any fee
for issuing credit cards while others impose an initial enrolment fee and annual fee also. If the
amount is not paid within the time duration the bank charges a flat interest of 2.5%.Leading
Indian Banks such as: SBI, BOB, Canara Bank, ICICI, HDFC and a few foreign banks like
Citi Bank, Standard Chartered etc are the important issuers of credit card in India.
Debit Cards
It is a new product introduced in India by Citibank a few years ago in association with
MasterCard. A debit card facilitates purchases or payments by the cardholder .It debit money
from the account of the cardholder during a transaction. This implies that the cardholder can
spend only if his account permits.
Net Banking
This facilitates the customers to do all their banking operations from their home by using the
internet facility. With Net Banking one can carry out all banking and shopping transactions
safely and with total confidentiality.
Automated Teller Machines (ATM)
ATMs feature user-friendly graphic screens with easy to follow instructions. The ATMs
Interact with customers in their local language for increased convenience .ICICI Bank„s
ATM network is one of the largest and most widespread ATM network in India.
Smart Card
The smart card, a latest additional to the world of banking and information Technology has
emerged as the largest volume driven endproduct in the world due to its data portability,
security and convenience.
Smart Card is similar in size to today„s plastic payment card; it has a memory chip embedded
in it. The chip stores electronic data and programmes that are protected by advanced security
features. When coupled with a reader, the smart card has the processing power to serve many
different applications. As an access-control device, smart Cards make personal and business
data available only to appropriate users. To ensure the confidentiality of all banking service,
smart cards have mechanisms offering a high degree of security.
28
These mechanisms are based on private and public key cryptography combined with a digital
certificate, one of the most advanced security techniques currently available. In fact, it is
possible to connect to the web banking service without a smart card.
Banking Services
In this changing scenario, the role of banks is very important for the growth and development
of customers as well as economy. Banking Sector is offering traditional and other service as
under:
 Regular Saving and current accounts

 Regular fixed deposits
 ATM services
 Credit cards
 Demat cards
 Student banking
 Special NRI Services
 Home loan, Vehicle loan
 Tele and internet banking
 Online trading
 Business multiplies A/Cs
 Insurance
 Relief bonds & mutual fund
 Loans against shares
 Retail banking
 Special deposit scheme
 Senior citizen – special deposit schemed
 Other facilities for customers
 Innovative Strategy for the Success
Innovative strategy is not a new word today, to being in current market with increasing
market share need some extraordinary workout. As per our opinion these following strategy
can help banks to sustain and can increase their market share.
Developing Customized Services
Top management should focus on customer expectation and demands of existing customer
and new target audience. By customer survey and employee„s suggestion bank should
introduce new innovative / customized services to create a loyal customer and that loyal
customer will base to stand in tuff competition. Also allocate some additional power to
branch manager to create and provide a unique service for their customer as per local needs.
29
Services provided by the bank
FUNDS REMITTANCE/ TRANSFER FACILITIES
• Issue of demand draft

• Collection of bills and cheques
ESTABLISHMENT OF LC/ BG
Letter of credit:- A Letter of Credit (L/C) is a written document issued by the Buyers'
Banker (BBK), at a request of the Buyer (B), in favour of the Seller(S), whereby the Buyer's
Banker (BBK) gives an undertaking to the Seller(S) that, in the event of the Seller tendering
the Bill of Exchange to the Seller's Banker (SBK), along with all the required documents, in
strict compliance of all the terms and conditions stipulated in the L/C, the entire amount of
the bill will be paid to the Seller (S) by the Seller's Banker (SBK), on behalf of the Buyer's
Banker (BBK) immediately, as has been, in turn, undertaken by the buyer to his own
Banker(BBK).
Bank guarantee: - It is customary for the Bank, in normal course of business, to issue and
execute guarantees in favor of third parties on behalf of the customers. The Bank guarantees
are governed by various provisions as contained in the Indian Contract Act, 1872. The
commercial transactions, bank‟s customers are sometimes required to give a Bank Guarantee.
This is mostly as an alternate to keep cash as a security deposit. The third party who seeks the
guarantee, not being aware of the customer‟s financial standing prefers a bank guarantee. In
turn the Bank, which very well understands the financial standing of the customer, undertakes
the guarantee of the customer‟s financial commitments or performance of contracts by him.
The bank charges commission for this service, which depends on the security available and
the financial stability of the customer.
30
AGENCY FUNCTIONS
• Collecting of B/E, P-notes, cheques & securities

• Selling of products of insurance co./ MF
• Granting & issuing LC, traveler's cheque
• Agent for any govt., local authority, etc
MERCHANT BANKING
• Syndication of loans
• Venture capital finance
• Public issue management
• Corporate counseling
• Mergers & acquisitions
• Portfolio management services
• Investment counseling
E-BANKING
• Electronic payment system

• ATM
• Tele-banking
• Credit card and debit card
• Online banking
MOBILE BANKING
• Account services
• Credit card services
• DEMAT account
• Loan account services
• Bill services
• Other services
31
DEPOSIT SCHEMES FOR NRI's
Foreign Currency Nonresident (FCNR-B) Deposits :
• Tax Exemption
• Choice of Currency
• Remit in any Currency
• Minimum & Maximum Amount
• Joint account
• Power of Attorney (P/A)
• Nomination
Resident Foreign Currency (RFC):- Deposits Returning Indians for permanent settlement,
after staying abroad for not less than one year, can-
 Retain their savings in foreign currency in a RFC account.

 Get the proceeds of FCNR (B)/NRE Deposits credited to this account.
Non Resident external (NRE):-Deposits can be placed in
 Savings Bank A/c

 Fixed Deposit A/c
Non Resident Ordinary (NRO) Deposits:-Where an Indian citizen having a resident
account leaves India and becomes non-resident, his resident account should be designated as
NRO account.
Where non-resident Indian receives income in India, he can open a NRO a/c with such funds.
32
CASH FLOW STATEMENT
INTRODUCTION
Cash plays a very important role in the entire economic life of a business. This movement of
cash is of vital important to the management.
A firm needs to make payments to its suppliers, to incur day- to- day expenses and to pay
salaries, wages, interest and dividend, etc. in fact, what blood is to a human body, cash is to a
business enterprise. It is very essential for a business to maintain adequate balances of cash.
But many a times, a concern operates profitably and yet it becomes very difficult to pay taxes
and dividend. This may be because:
Although huge profit have been earned yet cash may not been received.
Even if cash has been received, it may have drained out (used) for some other purposes.
AROUSE OF CASH FLOW STATEMENT:
The two basic financial statements, i.e., the balance sheet and profit loss account, provide the
essential basis information of the financial activities of a business, but their usefulness is
limited for analysis and planning purpose. The balance sheet does not disclose the cause for
changes in the assets and liabilities between two different points of time. The profit and loss
account also fails to disclose the reason for shortage of cash in spite of positive net incomes.
Thus, another statement, called Fund Flow statement, was prepared to show the changes in
the assets and liabilities from the end of one period of time. To underline the importance of
funds statements, the institute of chartered accounts of India (ICAI) issued
In June , 1981 Accounting Standard-3 dealing with the preparation of statement of changes in
financial posit ion. The statements of changes in financial position summarized , for the
period covered by it, the changes in the financial position including the sources from which
funds were obtained by the enterprise and the specific uses to which such funds were applied.
For this purpose, the term “funds” was defined as cash and cash equivalents or working
capital. The statement of changes in financial position also called Funds Flow Statement was
33
intended to provide a meaningful link between the balance sheet at the beginning and at the
end of a period and the profit and loss account for that period.
Although, the funds flow statement provide useful information, it useful Information, it
suffered from the following limitation:
1) The accounting standard (AS-3) allowed considerable flexibility regarding.
2) The meaning of the term „funds‟. As a result, some firms prepared this statement on
working capital basis, whereas other‟s prepared it on cash basis. However, in general, this
statement was prepared on working capital basis.
3) An S-3 did not provide any standard format for the preparation of funds flow statement. As
such, firms adapted different methods for preparing the statement making comparisons
difficult.
4) The funds statement, even when prepared on cash basis, did not disclose cash flows from
operating investing and financial activities separately. It merely provided information
regarding inflows and outflows of funds.
In view of the above limitations, there was a need for cash flow statement prepared in
standard format. The Financial Accounting Standard Board U.S.A, has emphasized the need
for cash flow statements as,
34
DEFINITION:-
“Financial reporting should provide information to help present and potential investors and
creditors amount others users in assessing the amounts, timing and uncertainty of prospective
cash receipts from dividends or interest and proceeds from the sales, operating needs, to
reinvest in operations and to pay cash dividends.”
A-S-3 Revised: Cash flow statements in March 1997. the revised accounting standard
supersedes AS-3 changes in financial position, issued in June 1981 as under:
“Information about the cash flows of an enterprise is useful in providing users of financial
statements with a basis to assess the ability or the enterprise to generate cash a cash
equivalents and the needs of the enterprises to utilize those cash flows. The economic
decision that is taken by users requires and equivalent of the ability of an enterprise to
generate cash and cash equivalents and the timing and certainty of their generation. The
statement deals with the provision of information about the historical changes in cash and
cash equivalents of an enterprise by means of a cash flow statement, which classified cash
flows during the period from operating, investing and financing activities.
A statement of changes in financial position on cash basis, commonly know as the “Cash
flow statement” summarizes the causes of changes in cash position between dates of two
balance sheets. It indicates the sources and uses of cash. The cash flow statement is similar to
the funds flow statement except that if focuses attention on cash instead of working capital. A
firm needs sufficient cash to pay debts maturing in the near future, to pay interest and other
expenses and to pay dividends to share holders.
35
MEANING OF CASH FLOW STATEMENT:-
It is a statement of cash flow and cash flow means the movement of cash in and cash out of a
business. Cash flow is a statement, which analyses the reason of changes in cash balance of
business between two dates.
OR
Cash flow statement is a statement, which describes the inflows (sources) and outflows (uses)
of cash and cash equivalents in an enterprise during a specific period of time.
Such a statement enumerates net effect of the various business transaction of cash and its
equivalents and takes into account receipt and disbursement of cash. According to AS-3
(Revised), an enterprise should prepare a cash flow statement and should present it for each
period for which financial statement are prepared. The term cash, cash equivalents and cash
flows are used in this statement with the following meanings:
1) Cash comprises cash on hand and demands deposit with banks.
2) Cash equivalents are short term, highly liquid investments that are readily convertible into
known amounts of cash and which are subjected to an insignificant risk of changes in value.
Cash equivalents are held for the purpose of meeting short-term cash commitments rather
than for investments or other purposes.
3) Cash flows are inflows and outflows of cash and cash equivalents. Flow of cash is said to
have taken place when any transaction makes changes in the amount of cash and cash
equivalents available before happening of the transaction makes changes in the amount of
cash and cash equivalents available before happening of the transaction. If the effect of
transaction results in the increase of cash and its equivalents, it is called an inflow (source)
and if it results in the decrease of total cash, it is known as outflow (use) of cash.
Cash flows exclude movement between items that constitute cash or cash equivalent because
these components are part of the cash management of an enterprises rather than part of its
operating, investing and financing activities.
4) Cash management includes the investments of excess cash in cash equivalents.
36
OBJECTIVES:-
1. Cash flow statement gives information about cash inflow from operations of business.
Such information is used by internal financial management for certain decision making e.g.,
repayment of long term loans, purchase of fixed assets. Etc.,
2. A cash flow statement discloses the speed at which the cash is being generating from
current assets such as debtors, bills receivable, stocks etc and the speed at which the current
liabilities such as creditors, bills payable etc., are being paid. Thus, it enables the
management to assess the true position of cash in future.
I A business may have made profit and yet is running short of cash. Similarly, a business may
have suffered a loss and still has sufficient cash balances. A cash flow statement reveals
reason for such increase or decrease of cash balance.
1) A cash flow statement prepared on an estimated basis for the next accounting period
enables the management to know how much cash can be received internally and how much it
should be arranged from outside. Such estimated amounts are used for preparing cash budget.
37
SCOPE:
a. An enterprise should prepare a cash flow statement and should present it for each period
for which financial statements are presented.
b. Users of an enterprise‟s financial statements are interested in how the enterprise generates
and uses cash and cash equivalents. This is the case regardless of the nature of the
enterprise‟s activities and irrespective of whether cash can be viewed as the product of
enterprise, as may be the case with a financial enterprise. Enterprises need cash to conduct
their operations, to pay their obligations, and to provide returns to their investor.
38
SIGNIFICANCE:-
I. Since a cash flow statement is based on the cash basis of accounting, it is very useful in the
evaluation of cash position of a firm.
II. A projected ash flow statement can be prepared in order to know the future cash positions
of a concern so as to enable a firm to plant and coordinate its financial operations properly.
By preparing this statement, a firm can come to know as to how much cash will be needed to
make various payments and hence the firm cash will plan to arrange for the future
requirements of cash.
III. A comparison of the historical and projected cash flow statements can be made so as to
find the variations and deficiency or otherwise in the performance so as to enable the firm to
take immediate and effective action.
IV. A series of a intra-firm cash flow statements reveals whether the firms liquidity (short-
term paying capacity ) is providing or deteriorating over a period of time and in comparison
to other firms over a given period of time.
V. Cash Flow statements help in planning the repayments of loans, replacement of fixed
assets and other similar long-term planning, of cash. It is also significant for capital budgeting
decisions.
It is better explain the cause for poor cash position in spite of substantial profits in a firm by
throwing light of various applications of cash made by the firm. It further helps in answering
some intricate questions like what happened to the net profits. Where did the net profits go!
Why more dividends could not be paid in spite of sufficient available profit.
Cash flow analysis is more useful and appropriate than funds flow analysis for short-term
financial analysis as in a very short period it is cash, which is more relevant, then the working
capital for forecasting the ability of the firm to meet its immediate obligations.
Cash flow statements prepared according to AS-3(Revised) is more suitable for making
comparisons than the funds flow statements as there is no standard for making comparisons
than the cash flow statements as there is no standard format used for same.
39
Cash flow statements provides information of all activities classified under operating,
investing and financing activities , the funds from such activities seperately. Thus, cash flow
statements os more useful than the funds statements.
40
CLASSIFICATION OF CASH FLOWS
According to AS-3(Revised) the cash flow statement should repert cash flow during the
period classified by operating, investing and financing activities. Thus, cash flows are
classified into three main categories:
1. Cash flow from operating activities
2. Cash flow from investing activities
3. Cash flow financing activities
41
CASH FLOW FROM OPERATING ACTIVITIES:
Operating activities are the principal revenue-producing activities of the enterprises and other
activities that are not investing or financing activities. It involves producing and selling goods
and services. Cash inflows from customers for sales of goods and services. Cash outflows
from operating activities includes payments to suppliers for materials, to employees for
services, and to the government for taxes.
The amount of cash flows arising from operating activities is a key indicators of the extent to
which the operation of the enterprise have generated sufficient cash flows to maintain the
operating capability of the enterprise, pay dividend, repay loans, and make new investments
without resources to external sources of financing. Information about the specific components
of historical operating cash flows is useful, in conjunction with other information, in
forecasting future operating cash flows.
Examples of cash flows from operating activities are:
a. Cash receipt from the sale of goods and the rendering of services;
b. Cash receipts from royalties, fees, commissions, and other revenue;
c. Cash payments to suppliers of goods and services;
d. Cash payments to and behalf of employees;
e. Cash receipt and cash payments of an insurance enterprise for premium and claims,
annuities and other policy benefits;
f. Cash payments or funds of income taxes unless they can be specifically identifying with
financing and investing activities; and
g. Cash receipt and payments relating to futures contracts , forward contracts, options
h. Contracts and swap contract when the contracts are held for dealing or trading purposes.
42
2) CASH FLOW FROM INVESTING ACTIVITIES:
Investing activities are the acquisition and disposal of long term assets and other activities not
included in cash equivalents. It involves acquiring and disposing fixed assets, buying and
selling financial securities , and disbursing and collecting loans. Cash inflows from investing
activities include receipt from the sale of assets (real as well financial), recovery of loans, and
collection of dividend and interest. Cash outflows from investing activities include payments
for the purchase of assets(real and financial) and disbursement of loans. The seperate
disclosures of cash flows arising from investing activities is important because the cash flows
represent the extent which expenditure have been made for resources intended to generate
future income and cash flows.
Examples of cash flows arising from investing activities are:
a) Cash payments to acquire fixed assets (including intangibles). these payments include
those relating to capitalized research & development costs and self constructed fixed a assets;
b) Cash receipts from disposal of fixed assets (including intangibles)
c) Cash payments to acquire shares, warrants, or debts instruments of other enterprises and
interests in joint ventures (other than payments for those instruments considered to be cash
equivalents and those held for dealing or trading purpose);
d) Cash receipt from disposal of shares, warrants or debt instruments of other enterprises
And interests in joint ventures (other than payments form those intruments considered to be
cash equivalents and those held for dealing or trading purposes);
e) Cash advances and loans made to third parties (other than advances and loans made by a
financial enterprise);
f) Cash receipts from the repayments of advances and loans made to third parties (other than
advances and loans of a financial enterprises);
g) Cash receipts for futures contracts, options contracts and swap contracts except when the
contracts are held for dealing or trading purposes or the receipts are classified as financing
activities.
43
h) Cash payments for futures contracts, forward contracts, option contracts and swap
contracts except when the contracts are held for dealing or trading purposes or the payments
are classified as financing activities.
44
CASH FLOW FROM FINANCING ACTIVITIES:
Financing activities are activities that result in changes in the size and composition of the
owners capital (including preference share capital in the case of a company ) and borrowings
of the enterprise. It involves raising money from lenders and shareholders, paying interest
and dividend and redeeming loans and share capital.
Cash inflows from financing activities include receipt from issues of securities and from
loans and deposits. Cash outflows from financing activities includes payments of interest on
various forms of borrowings, payments of dividends, retirements of borrowings and
redemption of capital.
Examples of cash flows from financing activities are :
a) Cash proceeds from issuing shares or other similar instruments.
b) Cash proceeds from issuing debentures, loans, notes, bonds, and other short-or-long-term
borrowing; and
c) Cash payments of amounts borrowed such as redemption of debentures, bonds, preference

shares.
45
COMPONENTS OF CASH FLOWS
INPUT OF CASH FLOW STATEMENT
The basic information required for the preparation of a cash flow statement is obtained from
the following three sources:-
1) Comparative balance sheet at two points of time, i.e. in the beginning and at the end of the
accounting period.
2) Income statement of the current accounting period or the profit and loss account.
3) Some selected additional data to extract the hidden transactions.
46
PROCEDURE FOR PREPARING CASH FLOW STATEMENT
Cash flow statement is not a suitable of income statement i.e., a profit and loss account ,and
a balance sheet. It provides additional information and explains the reason for changes in
cash and cash equivalents, derived from financial statements at two points of time. The
procedure for preparing a cash flow statement is different from the procedures followed in
respect of profit and loss account and balance sheet. It is prepared with the help of financial
statement.
Step 1. Compute the net increase or decrease in cash and cash equivalents by making a
comparison of these accounts given in the comparative balance sheet.
Step 2. Calculate the net cash flow provided (used in) operating activities by analyzing the
profit and loss account, balance sheet and additional information. These are two methods of
converting net incomes into net cash flows from operating activities: the direct methods and
the indirect method.
Step3: Calculate the net cash flows from investing activities.
Step 4: Calculate the net cash flow from financing activities.
Step 5: Prepare a formal cash flow statement highlighting the net cash flow from (used in)
operating, investing and financing activities separately.
Step 6: Make an aggregate of net cash flows from the three activities and ensure that the
total net cash flow from the three activities and ensure that the total that the total net cash
flow is equal to the net increase or decrease in cash and cash equivalent as calculation in step
1.
Step 7: Report significant non –cash transaction that did not involve cash or cash equivalent
in a seperate schedule to the cash flow statement e.g., purchase of machinery against issue of
share capital or redemption of Debentures in exchange for share capital.
47
CASH FLOW STATEMENT
Rs. Rs.
Cash flow from operating activities
Receipts from customers ***
Paid to suppliers and employees (***)
Generated from operations ***
Tax paid (***)
Cash flow before extraordinary items ***
Ordinary items ***
Cash from (USED IN) operating activities ***
Or
Profit before tax and Extra ordinary items ***
Statements for Non cash and Non operating items of Individual Items such as
depreciation, foreign exchange loss on sale of fixed Assets, Interest income,
***
Dividend income, Interest expenses etc.,
***
Operating profits before working capital changes statement for changes in
current assets and current liabilities (list Individual Items)
***
Cash generated from (used) operation before tax

***
Income tax paid

*** ***
Cash flow before extra ordinary items

***
48
Extra ordinary items ***
Cash from (used in) operating activities
Cash flow from investing activities
Individual items of cash inflow and outflows from financing activities (such as
purchase/sale of fixed assets, purchase or sale of Investments interest received,
dividend etc.,)
***
Net cash from (used) investing activities
Cash flow from financing activities
Individual items of cash inflows and out flows from financing activities (such
as proceeds from issue of shares, long term borrowings, repayment of long term
borrowings, interest paid etc.,)
***
Increase (Decrease) in cash and cash equivalent at the beginning of the period
Cash and cash equivalent at the beginning of the period

***
Cash and cash equivalent at the end of the period
***
49
CASH FLOW STATEMENT
(for the year ended.......................)
PARTICULARS Rs. Rs,

CASH FLOW FROM OPERATING ACTIVITIES
EITHER
Cash receipts from customers ***
Cash paid to suppliers and employees (***)
Cash generated from operations ***
Income tax paid (***)
Extraordinary items ***
Cash from (used in Operating activities ***
Or
Profit before tax and extraordinary items investments for non-cash and non-
operating items list of individual items such as depreciation, foreign exchange
***
loss, on sale of fixed assets interest income, dividend income, interest expenses
etc.)
Profit before working capital changes

***
Investments of changes in current assets and current liabilities

***
(List of individual items)

***
50
Cash generated from (used in) operations before tax *** ***
Income tax paid ***
Extraordinary items (such as refund before tax
Cash from (used in) operating activities ***
Cash flow from Investing Activities
Individual items of cash inflows and outflows from financing activities ***
(Such as) purchase/sale of fixed assets purchase or sale of investment, interest *** ***
received, dividend etc.)
Net cash from (used in) investing activities

***
Cash flows from financing activities
***
Individual items of cash inflows and outflows from financing activities
***
Such as (proceeds from issues of shares, long term borrowing, repayments of
*** ***
long term borrowings, interest paid, dividend paid etc.)
***
Net cash from (used in) financing activities
***
Net Increase (Decrease) in cash and cash equivalents
***
Cash and cash equivalents at the beginning of the period
***
Cash and cash equivalents at the end of the period
51
RESEARCH METHODOLOGY
CASH FLOW STATEMENT FOR THE YEAR ENDED

MARCH 31, 2014 in thousands
Cash flow from operating activities 31.03.2014
Net Profit after Tax 1139,41,24
Provision for Tax (Net of deferred Tax) 439,71,30
Total (I) 1579,12,54
Adjustment for
Depreciation on Fixed Assets (Net of Revaluation Reserve) 129,33,15
Provision against Standard Assets 159,00,00
Provision for NPA advances 1686,46,87
Other Provisions 730,89,60
Interest on subordinate Debts 369,09,25
Amortisation of Expenses 0
Profit/Loss on Sale of Fixed Assets -12,13,50
Total (II) 3062,65,37
Operating Profit before changes in Operating Assets &
Liabilities Total (I)+(II) 4641,77,91
Changes in Operating Assets & Liabilities
Decrease/Increase in Investments -3041,67,41
Decrease/Increase in Advances -11811,24,63
Decrease/Increase in Deposits 17591,43,61
Decrease/Increase in Borrowings 184,28,18
Decrease/Increase in Other Assets -680,86,82
Decrease/Increase in Other Liabilities & Provisions 146,83,95
Total (III) 2388,76,88
Cash generated from Operations

Tax Paid (Net of Refund) -510,10,03
Net Cash from Operating Activities Total (A) 6520,44,76
52
Purchase of Fixed Assets (Net of Sales) -167,69,23
Total (B) -167,69,23
Cash Flow from Financing Activities

Issue of Share Capital 8,08,75
Share Premium 141,91,24
Subordinate Bonds issued 0
Interest paid on Subordinate Bonds -369,09,25
Payment of Dividend/interim Dividend/Corporate Tax on
Dividend -454,36,16
Total (C ) -673,45,42
Net Changes in Cash & Cash Equivalents (A+B+C) 5679,30,11

Cash & Cash Equivalents at the beginning of the year 8589,61,87
Cash & Cash Equivalents at the end of the year 14268,91,98
(As per Schedules 6 & 7 to the financial statements)
53
MARCH 31, 2015 in thousands
Cash flow from operating activities 31.03.2015
Net Profit after Tax 497,07,53
Total (I) 634,77,35
Adjustment for
Provision against Standard Assets 318,00,00
Other Provisions 1283,03,56
Profit/Loss on Sale of Fixed Assets -8,39
Total (II) 4178,80,73
Operating Profit before changes in Operating Assets & Liabilities
Total (I)+(II) 4813,58,08
Decrease/Increase in Investments -7309,69,25
Decrease/Increase in Borrowings -2818,59,47
Decrease/Increase in Other Liabilities & Provisions -552,28,75
Total (III) -8393,54,93

Net Cash from Operating Activities Total (A) -4154,05,13
54
Total (B) -295,23,16

Issue of Share Capital 0
Share Premium 0
Subordinate Bonds issued 1500,00,00
Dividend -126,29,09
Total (C ) 956,16,86
Net Changes in Cash & Cash Equivalents (A+B+C) -3493,11,43

Cash & Cash Equivalents at the end of the year 10775,80,55
(As per Schedules 6 & 7 to the financial statements)
55
31.03.2016
Net Profit t after Tax 156,07,82
Total (I) 325,84,24
Adjustment for
Provision against Standard Assets -1,80,00
Other Provision -250,72,52
Profit/Loss on Sale of Fixed Assets -10,31,68
Total (II) 4048,09,40
Operating Profit before changes in Operating Assets & Liabilities

Total (I)+(II) 4373,93,64
Decrease/Increase in Investments 2730,86,87
Decrease/Increase in Borrowings 352,40,08
Decrease/Increase in Other Liabilities & Provisions -347,06,87
Total (III) -5245,42,24
Net Cash from Operating Activities Total (A) -1415,84,12
B Cash flow from Investing Activities
56
Total (B) -210,51,62
C Cash Flow from Financing Activities

Oriental Bank of Commerce
Share application money pending allotment 300,00,00
Subordinate Bonds issued 1000,00,00
Dividend -27,07,79 -119,09,40
Total (C ) 812,98,13
D Net Changes in Cash & Cash Equivalents (A+B+C) -813,37,61
Cash & Cash Equivalents at the end of the year (as per Schedules
6 & 7 to the financial statements) 9962,42,94
57
CASH FLOW STATEMENT FOR THE YEAR
ENDED MARCH 31, 2017
Net Profit/ (Net Loss) after Tax (1094,07,08)
Provision for Tax (Net of deferred Tax) (429,10,45)

Total (I) (1523,17,53)
Adjustment for
Transfer to General Reserve 0
Depreciation/ Amortization on Fixed Assets *68,32,30
Provision against Standard Assets (118,18,40)
Other Provision (494,52,02)
(Profit)/Loss on Sale of Fixed Assets -1,809
Total (II) 6439,22,41

Decrease/(Increase) in Investments 6281,55,11
Decrease/(Increase) in Advances (15141,20,01)
Decrease/(Increase) in Other Assets (5054,00,61)
(Decrease)/Increase in Deposits 10424,57,03
(Decrease)/Increase in Borrowings 5444,76,94
(Decrease)/Increase in Other Liabilities & Provisions 595,55,79
Total (III) 2551,24,25
Tax (Paid) / Refund - Net (344,26,92)
Net Cash from Operating Activities Total (A) 7123,02,21
58
Purchase of Fixed Assets (Net of Sales) (213,53,89)
Total (B) (213,53,89)
Share application money pending allotment (300,00,00)
Subordinate Bonds issued/(Redemption) - Net 1250,00,00
Interest paid on Subordinate Bonds (668,59,92)
Payment of Dividend/interim Dividend / Corporate Tax on
Dividend (27,07,79)
Total (C) 554,32,29
Net Changes in Cash & Cash Equivalents (A+B+C) D. 7463,80,61
Cash & Cash Equivalents at the end of the year (as per
Schedules 6 & 7 to the financial statements) 17426,23,55
*Net of Revaluation Reserve
59
CASH FLOW STATEMENT FOR THE YEAR
ENDED MARCH 31, 2018
Net Profit/ (Net Loss) after Tax (5871,74,37)
Provision for Tax (Net of deferred Tax) (222,68,15)

Total (I) (6094,42,52)
Adjustment for
Transfer to General Reserve 9,93,82
Depreciation/ Amortization on Fixed Assets 217,86,21
Provision against Standard Assets (387,00,00)
Other Provision 686,51,91
(Profit)/Loss on Sale of Fixed Assets -22,702
Total (II) 10749,45,06

Decrease/(Increase) in Investments (11381,84,29)
Decrease/(Increase) in Advances 11840,04,96
Decrease/(Increase) in Other Assets 5353,93,26
(Decrease)/Increase in Deposits (11993,32,26)
(Decrease)/Increase in Borrowings (2398,12,90)
(Decrease)/Increase in Other Liabilities & Provisions 128,69,26
Total (III) (8450,61,97)
Tax (Paid) / Refund - Net 156,67,78
Net Cash from Operating Activities Total (A) (3638,91,65)
60
Purchase of Fixed Assets (Net of Sales) (450,56,57)
Total (B) (450,56,57)
Share application money pending allotment 0
Subordinate Bonds issued/(Redemption) - Net (2500,00,00)
Interest paid on Subordinate Bonds (726,32,17)
Payment of Dividend/interim Dividend / Corporate Tax on
Dividend 0
Total (C) 344,67,83
Net Changes in Cash & Cash Equivalents (A+B+C) D. (3744,80,39)
Cash & Cash Equivalents at the end of the year (as per
Schedules 6 & 7 to the financial statements) 13681,43,16
61
ANALYSIS & INTERPRETATION
Net Cash from Operating Activities Total
Year Amount
2014 65204476
2015 -41540513
2016 -14158412
2017 71230221
2018 -36389165
Net Cash from Operating Activities

Total (A)
80000000.00
60000000.00
40000000.00
20000000.00 Net Cash from Operating

Activities Total (A)
0.00
2014 2015 2016 2017 2018
-20000000.00 Year Year Year Year Year
-40000000.00
-60000000.00
62
Year Amount
2014 -1676923
2015 -2952316
2016 -2105162
2017 -2135389
2018 -4505657

0.00
-500000.00 2014 2015 2016 2017 2018
-1000000.00 Year Year Year Year Year
-1500000.00
-2000000.00 Cash flow from Investing
-2500000.00 Activities
-3000000.00
-3500000.00
-4000000.00
-4500000.00
-5000000.00
63
Year Amount
2014 -6734542
2015 9561686
2016 8129813
2017 5543229
2018 3446783

10000000.00
8000000.00
6000000.00
4000000.00
2000000.00 Cash Flow from Financing
Activities
0.00
-2000000.00 2014 2015 2016 2017 2018
Year Year Year Year Year
-4000000.00
-6000000.00
-8000000.00
64
Cash & Cash Equivalents at the end of the year
Year Amount
2014 142689198
2015 107758055
2016 99624294
2017 174262355
2018 136814316
Cash & Cash Equivalents at the end of

the year
200000000.00
150000000.00
100000000.00 Cash & Cash Equivalents

at the end of the year
50000000.00
0.00
2014 2015 2016 2017 2018
Year Year Year Year Year
65
INTERPRETATION
 Cash flow statement show the cash from operating Activities Total
1) 2015-2014
2015 - (4154,05,13)
2014 - 6520,44,76
2015-2014 = ( 106744989)
 Cash flow statement show the cash from

Cash flow from Investin Activities Total
2015 - (295,23,16)
2014 - (167,69,23)
2015-2014 = -1275393.00
 Cash flow statements shows the cash from Financing Actiuities Total
2015 - 956,16,86
2014 - (673,45,42)
2015-2014 = 16296228
 Cash flow statement shows the cash from Net profit Total
2015 – 10775,80,55
2014 - 14268,91,98
2015-2014= (34931143)
66
2)2015-2016
The statement of Cash Flow from Operating Activities shown as below
2016 :- (1415,84,12)
2015 :- ( 4154,05,13)
2015-2016 total=2738,21,01
The statement of Cash Flow from Investing Activities shown as below
2016 :- (210,51,62)
2015 :- ( 295,23,16)
2015-2016 total= 8,47,154
The statement of Cash Flow from Financing Activities shown as below
2016 :- 812,98,13
2015 :- 956,16,86
2015-2016 total=(143,18,73)
The statement of Cash Flow from Net cash profit shown as below
2016 :- 9962,42,94
2015 :- 10775,80,55
2015-2016 total=( 843,37,61)
67
2016-2017
1)cash flow statement show the from operating Activities total
2017 :- 7123,02,20
2016 :- ( 1415,84,12)
2016-2017 total= 85388633.00
2)cash flow statement show the from Investing Activities total
2017 :- (213,53,89)
2016 :- ( 210,51,62)
2016-2017 total= ( 30227)
3) cash flow statement show the from Financing Activities total
2017 :- 554,32,29
2016 :- 812,98,13
2016-2017 total=(258,65,84)
4) cash flow statement show the from Net cash profit total
2017 :- 17426,23,54
2016 :- 9962,42,94
2016-2017 total= 7463,80,60
68
2017-2018
1)cash flow statement show the from operating Activities total
2018 :- (3638,91,65)
2017 :- 7123,02,21
2017-2018 total= (107619386)
2)cash flow statement show the from Investing Activities total
2018 :- (450,56,57)
2017 :- ( 213,53,89)
2017-2018 total= (237,02,68)
3) cash flow statement show the from Financing Activities total
2018 :- 344,67,83
2017 :- 554,32,29
2017-2018 total=(209,64,46)
4) cash flow statement show the from Net cash profit total
2018 :- 1368,43,16
2017 :- 17426,23,55
2017-2018 total=( 3744,80,09)
69
OPERATING ACTIVITIES:-
Cash flows from Operating Activities, The must then reconcile not in come to net cash flows
by adding back non –cash expenses such as depreciation and amortization similar
adjustments are made for non –cash expenses or in come such as share-based compensation
or unrealized gains from foreign currency translation
Cash flow from operating activities is a section of the Statement of Cash Flows that is
included in a company's financial statements after the balance sheet and income statements.
... Net income is then adjusted for working capital changes and non-cash accruals that have
been made throughout the reporting period.
Investing Activities:-
Cash flow from investing activities is an item on the cash flow statement that reports the
aggregate change in a company's cash position resulting from investment gains or losses and
changes resulting from amounts spent on investments in capital assets, such as plant and
equipment.
When analyzing a company's cash flow statement, it is important to consider each of the
various sections that contribute to the overall change in its cash position. Negative cash flows
are not always indicative of poor performance. Often, firms have negative overall cash flows
for a period because of heavy investment expenditures.
FINANCING ACTIVITIES:-
Cash flow from financing activities is a section of a company‟s cash flow statement, which
shows the net flows of cash that are used to fund the company. Financing activities include
transactions involving debt, equity, and dividends.
Cash flow from financing activities provides investors with insight into a company‟s financial
strength and how well a company's capital structure is managed.
The cash flow statement is one of the three main financial statements that show the state of a
company's financial health, the other two being the balance sheet and income statement
NET CASH TOTAL:-
Net cash flow refers to the difference between a company's cash inflows and outflows in
a given period. In the strictest sense, net cash flow refers to the change in a company's cash
balance as detailed on its cash flow statement.
Net cash flow is also known as the "change in cash and cash equivalents." It is very important
to note that net cash flow is not the same as net income, free cash flow, or EBITDA.
70
Net cash flow is the fuel that helps companies expand, develop new products, buy back stock,
pay dividends, or reduce debt. It is what allows companies to conduct their day-to-day
business. This is why some people value net cash flow more than just about any other
financial measure, including earnings per share. Revenues and expenses are big drivers of net
cash flow.
71
FACT & FINDINGS
Statement of Financial in the year of 2014 – 15
Statement show in Depreciation on Fixed assets to be decreased -397237
It‟s the depreciation of fixed assets or sale of fixed assets
Show in the figure of net cash operating activities will be shown 397237
Shown the figure of cash flow for Investing Activities amount -4629239
That sum assets are purchased
Statement shown the figure of the cash flow for Financing Activities 162296228
The banking has large equity capital shares and EPS and book value is oppreiatable to
enhance the wealth of share holders
OBS Bank is maintaining sufficient cash reserves at all times
The financial activities of the bank are more satisfactory but fluctuations in corresponding
years
72
Statement show in Depreciation on Fixed assets to be decreased -131978
Show in the figure of net cash operating activities will be shown 2738,21,01
Shown the figure of cash flow for Investing Activities amount 8,47,154
Statement shown the figure of the cash flow for Financing Activities (143,18,73)
years
73
Statement show in Depreciation on Fixed assets to be decreased 875344
Show in the figure of net cash operating activities will be shown 85388633.
Shown the figure of cash flow for Investing Activities amount ( 30227)
Statement shown the figure of the cash flow for Financing Activities (258,65,84)
years
74
Statement show in Depreciation on Fixed assets to be decreased 1495391
Show in the figure of net cash operating activities will be shown (107619386)
Shown the figure of cash flow for Investing Activities amount (237,02,68)
Statement shown the figure of the cash flow for Financing Activities ( 3744,80,09)
years
75
Conclusion
To keep place with in the development of oriental Bank of commerce.
Information about cash flows of an financial institutions is useful in providing

uses of financial statements with basis to assess the ability of the financial institutions to
generate cash and cash equivalents and needs of the financial statements to utilize those
cash flows the economic decisions that are taken by uses require evaluation of the ability of
an financial statements to generate cash and cash equivalents and the timing and certainly of
their generation.
The as deals with the provision of information about the historical changes in cash and
cash equivalents of an financial institutions by means of a Cash Flow
Statement which classify Cash Flow during the period from operating investing and
financing activities.
76
BIBLIOGRAPHIES
https://en.wikipedia.org/wiki/Oriental_Bank_of_Commerce
WWW.RBI.ORG
http://shodhganga.inflibnet.ac.in/bitstream/10603/50588/8/08_chapter3.pdf
https://localfirstbank.com/content/different-types-of-banking-services/
https://en.wikipedia.org/wiki/History_of_banking
77

Satya Project On OBC

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A DETAIL ANALYSIS ON FINANCIAL STATEMENT WITH

REFERENCE TO ORIENTAL BANK OF COMMERCE,

SRI GURAJADA APPARAO

Under the guidance of

M.Com, M.A, M.B.A, M.Phill, P.G.D.I.B, NET [Ph.D]

Head of the Department of Commerce

This is to certify that the project work entitled “A DETAIL ANALYSIS ON

PLACE: Visakhapatnam Ms. N. Nirmala Kumari

DATE: ASSISTANT PROFESSOR

written and submitted by me under the guidance of R.Venkat Rao (Manager),

Challapalli Satya Gowri Lakshmi

Reg no: 117235406013

I express my sincere thanks to R.Venkat Rao (Manager), ORIENTAL BANK OF

I would like to express my sincere gratitude to Dr. K. Malyadri, Principal, Ms.

Finally, I would like to express my gratitude and thanks to my parents and

Challapalli Satya Gowri Lakshmi

1 INTRODUCTION TO THE INDUSTRY 06

2 INTRODUCTION TO THE ORGANIZATION 19

4 ANALYSIS & INTERPRETATION 62

5 FACT & FINDINGS 72

Origin of the Word Bank‟s:

Regulation Act 1949 Banking is defined as.

The First Joint Stock

First Phase: 1948 – 1969

 The Central Bank of India Ltd

 The Andhra Bank Ltd

INTRODUCTION TO RESERVE BANK OF INDIA (RBI)

RBI is governed by a central board (headed by a governor) appointed by the central

Commercial banks and all-India development financial institutions: Regulated by the

Government of India RBI, constituted a committee to review the arrangements for

OBC is already implementing a GRAMEEN PROJECT in Dehradun District (UK) and

Sh. Himanshu Joshi Executive Director

Sh. Prashant Goyal Member of Board of Directors

Smt. Mala Srivas tava Member of Board of Directors

Sh. S. Ganesh Kumar Member of Board of Directors

Sh. Ashok Kumar Sharma Member of Board of Directors

Sh. Desh Deepak Khetrapal Member of Board of Directors

Sh. Sanjay Kapoor Member of Board of Directors

Sh. Madan Mohan Lal Verma Member of Board of Directors

Sh. Ashutosh Choudhary Memebrs of Top Management Team

Sh. Charanjit Singh Memebrs of Top Management Team

Sh. Kuldeep Bhalla Memebrs of Top Management Team

Sh. Pradeep Chauhan Memebrs of Top Management Team

Sh. Surender Singh Memebrs of Top Management Team

Sh. B.S. Jaitawat Memebrs of Top Management Team

Sh. H.K. Banga Memebrs of Top Management Team

Sh. H.K. Batra Memebrs of Top Management Team

Sh. Swarup Saha Memebrs of Top Management Team

Smt. Vidyavati Rudra Memebrs of Top Management Team

Sh. Manoj Saxena Memebrs of Top Management Team

Sh. S.C. Das Memebrs of Top Management Team

Sh. Shyam Tandon Memebrs of Top Management Team

Sh. Brijmohan Sharma Memebrs of Top Management Team

Sh. Jitenrda Mohan Singh Memebrs of Top Management Team

Sh. Ashwani Kumar Memebrs of Top Management Team

Sh. Navleen Kundra Memebrs of Top Management Team

Smt. Shashi Jain Memebrs of Top Management Team

Sh. P. Sreedhar Memebrs of Top Management Team

Sh. Joginder Singh Memebrs of Top Management Team

Sh. B.G. Sandhibigraha Memebrs of Top Management Team

"TO BE A CUSTOMER FRIENDLY PREMIER BANK COMMITTED TO ENHANCING

They are listed and explained as follows: