Financial Analysis
Content
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
VISION To emerge as a strong, vibrant and pro-active Bank/Financial Super Market and to positively contribute to the emerging needs of the economy through consistent harmonization of human, financial and technological resources and effective risk control systems. MISSION
To transform the customer banking experience into a fruitful and enjoyable one. To leverage technology for efficient and effective delivery of all banking services. To have bouquet of product and services tailor-made to meet customers aspirations. The pan-India spread of branches across all the state of the country will be utilized to further the socio economic objective of the Government of India with emphasis on Financial Inclusion.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Chapter 1
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
INDUSTRY PROFILE
HEAD LINES
Introduction Origin of word BANK Definition of Bank Traditional Banking Activity Banking system in India Structure of banking in India
While walking in the streets of any town or city you might have seen some signboards on buildings with names-Canara Bank, Punjab National Bank, State Bank of India, United Commercial Bank, etc. What do these names stand for? Did you ever try to know about them? If you enter any such building you will find some kind of a business office. You will see some employees sitting behind counters dealing with visitors standing in front of them. You will find that some are depositing money at one counter while some are receiving money at another counter. Behind the counters in the office you will see tables and chairs occupied by officers. On one side of the office you will also see a chamber (small partitioned room) where the manager is sitting with papers on his table. This is the office of a ¶Bank·. Let us know in detail about banks and their activities. You know people earn money to meet their day-to-day expenses on food, clothing, education of children, housing, etc. They also need money to meet future expenses on marriage, higher education of children, house building and other social functions. These are heavy expenses, which can be met if some money is saved out of the present
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wo ld witho t banking institutions. Banking is as i po tant as blood in the human body. Due to the development o banking advances are
increased and business activities developing so it is rightly said ´ The
development of banking is not only the root but also the result of the development of the business world.µ A ter independence, the
Indian government also has taken a series o steps to develop the banking sector. Due to considerable efforts of the government, today we have a number of banks such as Reserve Bank of India, State Bank of India, nationali ed commercial banks, Industrial Banks and co operative banks. India Banks contribute a lot to the development of agriculture, and trade and industrial sectors. Even today the banking systems of India possess certain limitations, bu t one can t doubt its important role in the development of the Indian economy.
Banking sector is the first and most important aspect of the economic-planning of a nation for the faster and speedy development of a nation; well-development and advanced bank ing sector is the precondition. In the most of developed countries of the world, there is very close relation between the business activities and banks. It is quite difficult to think the business activities without the existence in economy as blood in hum an body.
Thus, we can say that, there is a noteworthy contribution of banking sector in the development business of various fields such as, and
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1..1 1
ORIGIN OF WORD BANK GI F R BAN
The word bank is derived from, the Latin word ¶Bonous· or ¶Banca· means a bench. A bank refers to the function of accepting deposits, lending, repaying the deposited money of demand and functioning an agent whenever asked for. Now for healthy and rapid develop ment of any national economical structure, the development of banking is an inevitable pre-condition. Some authorities observe that the word bank s originally derived from the German word ¶bank· which means a joint stock fund. This word was Italiani ed into banco by the German when they were the rulers of measure part of Italy. This term was again change into ¶banck· by the French; afterwards, the Britishers converted this term into ¶ bank· which has now been universali ed. The term bank or banker is used in almost all countries of the world to denote a financial institution dealing in money. There are different views regarding the origin of the term ¶bank· In ancient Greece and Rome the practice of granting credit was widely prevalent. The books of the old Sanskrit law giver, Menu, are full of regulations governing credit. In, past (I) traders (II) ledgers and (III) goldsmiths performed banking activities. Some experts· opine that the term, ¶bancus· or ¶banque· means ¶bench·, and the term ¶bank· comes from these words. Ancient bankers and lenders used benches in the market place to do their lending business. When a banker failed in his business, the people broke his benches. The term, ¶bankrupt·, originated from such events.
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DEFINITION OF BANK D N TI N OF B N
A bank is an institution which deals in money. A Bank receives money in the form of deposits from the public, and lends money for the development of trade and commerce. Several economists have defined the term, ¶baking·, in various ways. From variou s definitions some of them as follow:
´Banking company is a company, which transects the business of banking in any state of India.µ Section S (5) of banking company act 1949.
´A ¶bank· or ¶banker· is one who, in the ordinary course of his business, receives money which he repays by honoring the cheques of persons from whom or on whose account he receives it.µ Hart Pofr.
´Bank is an establishment whi ch makes, to individuals, such advances of money as may be required and safely made and to which individuals entrust money which it is not required by them for use. µ Prof. Kenly ´Banking means where financial transactions of credit are done and bank means where draft, cheque, or credit paid by order, deposits of money or currency are accepted or assets, bonds, gold, silver, bills of exchange or promissory notes are accepted that kind of persons firms or companies having the place of business.µ Findlay sheraze
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"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; (Banking Act (Singapore), Section 2, Interpretation) "banking business" means the business of either or both of the following: 1. receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] ... or with a period of call or notice of less than that period; 2. paying or collecting cheques drawn by or paid in by customers Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking, the cheque has lost its primacy in most banking sy stems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques.
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TRADITIONAL BANKING ACTIVITIES R DI IO A B N NG A VI ES
Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment meth ods such as telegraphic transfer, EFTPOS, and ATM. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and
governments. Non-banks that provide payment services such as remittance companies are not normally conside red an adequate substitute for having a bank account. Banks borrow most funds from households and non -financial
businesses, and lend most funds to households and non -financial businesses, but non -bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings to
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HEAD NES
BANKING SYSTEM IN INDIA BAN N SY EM I N I
First Indian Bank The First Indian Joint tock Bank Recent History Of Indian Banking y Foundation Phase y Expansion phase y Consolidation phase y Reforms phase Nationalisation & Public ector Banking
In the economic development of a nation banks occupy an important place. Indian money market comprises both organi ed as well as unorgani ed sectors. The unorgani ed sectors include money lenders and indigenous bankers and largely cater to the needs of per son living in villages and small towns. Financial institutions in the organi ed sector have grown significantly. Among the institution in organi ed sector of the Indian money market commercial banks, Co -operative banks, regional rural banks, development ba nks etc.
In 1770, first Indian bank known as Bank of Hindustan was started and was closed down twenty years later. Later on, the East India Co. started three presidency banks with government
participation. These were:
Bank of Calcutta ² 1806 Bank of Bombay ² 1840 Bank of Madras ² 1843
Other banks such as
Allahbad Bank came into existence in 1865 Alliance Bank of simla in 1875.
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The first Indian joint stock bank known as Oudh Commercial Bank was setup in 1880 and Punjab National Bank was launched in 1894. There were as many as 648 commercial banks in India by the and of 1947 and as many as 161 banks failed during 1913-14. Thus, there was a great need of an institution to control and regulate banking in the country. As a result, the RBI was setup in 1935 for regulating the banks in the country.
A scheme of social control on banks was enforced through statutory measures with effect from 1 -2-1969. The banking industry saw a revolution after 14 major commercial bank s were nationali ed in June, 1982. More than 90 % of the bank deposits came under the control of the government.
Agricultural Credit Development, Rural Planning and Credit Cell and Agricultural Refinance and Development Corporation were
combined together to setup national bank for agriculture and rural development in July, 1982. Later, the Exim Bank and National Housing Bank were setup in 1984 and 1988 respectively.
RECE R EC E
HIS OR Y OF I HIS ORY OF I
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Indian banking system, over the years has gone through various phases after establishment of Reserve Bank of India in 1935 during the British rule, to function as Central Bank of the country. Earlier to creation of RBI, the central bank functions were being looked after by the Imperial Bank of India. With the 5 -year plan having acquired an important place after the independence, the Govt. felt that the private banks may not extend the kind of cooperation in providing credit support, the economy may need. In 1954 the All India Rural Credit Survey Committee submitted its report recommending creation of a strong, integrated, State-sponsored, State-partnered commercial
banking institution with an effective machinery of branches spread all
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over the country. The recommendations of this committee led to establishment of first Public Sector Bank in the name of State Bank of India on July 01, 1955 by acquiring the substantial part of share capital by RBI, of the then Imperial Bank of India. Similarly during 1956-59, as a result of re-organi ation of princely States, the associate banks came into fold of public sector banking. Another evaluation of the banking in India was undertaken during 1966 as the private banks were still not extending the required support in the form of credit disbursal, more particularly to the unorgani ed sector. Each leading industrial house in the country at that time was closely associated with the promotion and control of one or more banking companies. The bulk of the deposits collected, were being deployed in organised sectors of industry and trade, whil e the farmers, small entrepreneurs, transporters , professionals and self employed had to depend on money lenders who used to exploit them by charging higher interest rates. In February 1966, a Scheme of Social Control was set-up whose main function was to periodically assess the demand for bank credit from various sectors of the economy to determine the priorities for grant of loans and advances so as to ensure optimum and efficient utili ation of resources. The scheme however, did not provide any remedy. Though a no. of branches were opened in rural area but the lending activities of the private banks were not oriented towards meeting the credit requirements of the priority/weaker sectors. On July 19, 1969, the Govt. promulgated Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire 14 bigger commercial bank with paid up capital of Rs.28.50 Cr,deposits of Rs.2629 cr, loans of Rs.1813 cr and with 4134 branches accounting for 80% of advances. Subsequently in 1980, 6 more banks were nationalised which brought 91% of the deposits and 84% of the advances in Public Sector Banking. During December 1969, RBI introduced the Lead Bank Scheme on the recommendations of FK Nariman Committee.
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Meanwhile, during 1962 Deposit Insurance Corpora tion wasestablished to provide insurance cover to the depositors. In the post-nationalisation period, there was substantial increase in the no. of branches opened in rural/semi -urban centres bringing down the population per bank branch to 12000 appx. Durin g 1976, RRBs were established (on the recommendations of M. Narasimham Committee report) under the sponsorship and support of public sector banks as the 3rd component of multi -agency credit system for agriculture and rural development. The Service Area App roach was introduced during 1989. While the 1970s and 1980s saw the high growth rate of branch banking net-work, the consolidation phase started in late 80s and more particularly during early 90s, with the submission of report by the Narasimham Committee on Reforms in Financial Services Sector during 1991. In these five decades since independence, banking in India has evolved through four distinct phases: Foundation phase can be considered to cover 1950s and 1960s till the nationalisation of banks in 1969. The focus during this period was to lay the foundation for a sound banking system in the country. As a result the phase witnessed the development of neces sary legislative framework for facilitating re-organisation and consolidation of the banking system, for meeting the requirement of Indian economy. A major development was transformation of Imperial Bank of India into State Bank of India in 1955 and nationalisation of 14 major private banks during 1969. Expansion phase had begun in mid-60s but gained momentum after nationalisation of banks and continued till 1984. A determined effort was made to make banking facilities available to the masses. Branch network of the banks was widened at a very fast pace covering the rura l
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and semi-urban population, which had no access to banking hitherto. Most importantly, credit flows were guided towards the priority sectors. However this weakened the lines of supervision and affected the quality of assets of banks and pressuri ed their profitability and brought competitive efficiency of the system at a low ebb. Consolidation phase: The phase started in 1985 when a series of policy initiatives were taken by RBI which saw marked slowdown in the branch expansion. Attention was paid to impr oving house-keeping, customer service, credit management, staff productivity and
profitability of banks. Measures were also taken to reduce the structural constraints that obstructed the growth of money market.
Reforms phase The macro-economic crisis fac ed by the country in 1991 paved the way for extensive financial sector reforms which brought deregulation of interest rates, more competition, technological changes, prudential guidelines on asset classification and income recognition, capital adequacy, au tonomy packages etc.
BA K N A ION A ISA ION & PUB IC SECTOR BANKING BA K NA IONA ISA ION & PUB IC SEC TOR BANKING
Organised banking in India is more than two centuries old. Till 1935 all the banks were in private sector and were set up by individuals and/or industrial houses which collected deposits from individuals and used them for their own purposes. In the absence of any regulatory framework, these private owners of banks were at liberty to use the funds in any manner, they deemed appropriate and resultantly, the bank failures were frequent. Move towards State ownership of banks started with the nationalisation of RBI and passing of Banking Companies Act 1949. On the recommendations of All India Rural Credit Survey Committee, SBI Act was enacted in 1955 and Imperial Bank of India was transferred to
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SBI. Similarly, the conversion of 8 State -owned banks (State Bank of Bikaner and State Bank of Jaipur were two separate banks earlier and merged) into subsidiaries (now associates) of SBI during 1959 took place. During 1968 the scheme of ¶social control· was introduced, which was closely followed by nationalisation of 14 major banks in 1969 and another six in 1980. Keeping in view the objectives of nationalisation, PSBs undertook expansion of reach and services. Resultantly the number of branches increased 7 fold (from 8321 to more than 60000 out of which 58% in rural areas) and no. of people served per branch office came down from 65000 in 1969 to 10000. Much of this expansion has taken place in rural and semi-urban areas. The expansion is significant in t erms of geographical distribution. States neglected by private banks before 1969 have a vast network of public sector banks. The PSBs including RRBs, acount for 93% of bank offices and 87% of banking system deposits.
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1.5
HEAD LINES
STRUCURE OF BANKING IN INDIA ST UC F B KI G N I D A
STRUCTURE OF INDIAN BANKING Types of Bank
Reserve bank of India (central bank) y Foundation of RBI y Function of Reserve Bank of India Commercial banks y Public sector banks, y Private sector banks y Foreign banks. Co-Operative banks y Primary Credit Societies y Central Co-operative Banks y State Co-operative Banks Development banks
unorgani ed banks. Unorgani ed banking includes indigenous bankers and village money lenders. Organi ed banking includes the following,
The main four types are: Reserve bank of India (central bank) Commercial banks Co-Operative banks Development banks Others are: Exim banks Regional rural banks Land development banks National Bank for Agriculture and Rural Development (NABARD) Industrial Development Bank of India Small Industrial Development Bank of India
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
STRUCURE OF BANKING IN INDIA U R OF B N GI I DA
RRBS: Regional Rural Banks
N B RD: National Bank for griculture and Rural Development
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(1.5.A) CENTRAL BANK
A central bank is a special institution which controls and regulates the entire banking structure of country. It also strives to maintain monetary stability of the country. It also strives to maintain monetary stability of the country. Central bank is also the apex bank of country. Since it functions in the be st interest of the country and making profits is unknown to it, it is entrusted the right to issue currency notes. No other bank is allowed this right. It operates in close co-operation with the government for implanting economic policies, thereby promoting economic development. The central Bank of our country is Reserve Bank of India. Its establishment was made by the Reserve Bank of India act in 1935. In India, any person cannot do the business of banking without getting the license of Reserve Bank.
THE RESERVE BANK OF INDIA ((RBI)) THE RESERVE BANK OF INDIA RBI
The Reserve Bank of India (RBI, Hindi: ê÷íâùì í ð éÓ) is the central bank of India, was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934 [1]. The Central Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. Though originally privately owned, the RBI has been fully owned by the Government of India since nationali ation in 1949. Dr. Duvvuri Subbarao who succeeded Yaga Venugopal Reddy on September 2, 2008 is the current Governor of RBI. The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years.
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The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage. It has 22 regional offices, most of them in state capitals
FOUNDATION OF RBI: FOUNDATION OF RBI:
Manages currency notes of all denominators except one rupee note As a banker of Government, state Government, Commercial and co-operative banks. Monetary regulations Regulations on exchange value of rupee. As a represents Govt. of India in International Monetary India in International Monetary Fund (IMF)
FUNCTION OF RESERVE BANK OF INDIA: FUNCTION OF RESERVE BANK OF INDIA:
Rule currency notes greater than one rupee. As a Bank of Government, state Government, commercial and co operative banks. Regulation Monetary Regulations on exchange value of rupee. As a delegation of India in IMF (International monetary
Federation)
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(1.5.B) COMMERCIAL BANKS
Commercial banks accept money from the public and arrange for their productive use. They also carry out carry out lending of money to meet the needs of traders and business houses. The accepted deposits are always repayable on dema nd or on short notice. Commercial banks provide only short-term loans to trade and industry. Besides this, they also provide working capital finance, and also provide a number of subsidiary services.
Commercial Banks are banking institutions that accept deposits and grant short-term loans and advances to their customers. In addition to giving short -term loans, commercial banks also give medium-term and long-term loan to business enterprises.
Now-a-days some of the commercial banks are also providing housing loan on a long-term basis to individuals. There are also many other functions of commercial banks, which are discussed later in this lesson.
Types of Commercial banks:
Commercial banks are of three types Public sector banks, Private sector banks Foreign banks.
Public Sector Banks: These are banks where majority stake is held
by the Government of India or Reserve Bank of India. Examples of public sector banks are: State Bank of India, Corporation Bank, Bank of Boroda and Dena Bank, etc.
Private Sectors Banks: In case of private sector banks majority of
share capital of the bank is held by private individuals. These banks are registered as companies with limited liability. For example: The
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Jammu and Kashmir Bank Ltd., Bank of Rajasthan Ltd., Development Credit Bank Ltd, Lord Krishna Bank Ltd., Bharat Overseas Bank Ltd., Global Trust Bank, Vysya Bank, etc.
Foreign Banks: These banks are registered and have their
headquarters in a foreign country but operate their branches in our country. Some of the foreign banks operating in our country are Hong Kong and Shanghai Banking Corporation (HSBC), Citibank, American Express Bank, Standard & Chartered Bank, Grindlay·s Bank, etc. The number of foreign banks operating in our country has increased since the financial sector reforms of 1991.
STATE BAN K OF INDIA ((SBI)) STATE BANK OF INDIA SBI
In 1955, the imperial bank of India was nationali ed and renamed as State Bank of India. Today it is largest bank of India. As a commercial bank and views pointing to branches, it is world·s largest bank with 10,836 Branches.
Subsidiary Bank of SBI
State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Indore State Bank of Pateyala State Bank Of Saurashtra State Bank of Travancore
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NATIONA IZED BANKS: N AT I O N A I Z ED B AN K S :
Following 14 commercial banks were nationali ed on the 19 th July, 1969. Bank of India Canara Bank Central Bank of India Corporation bank Indian Bank Indian overseas bank Syndicate Bank UCO Bank Allahabad Bank Bank of Baroda Bank of Maharashtra Dena Bank Oriental Bank of Commerce Punjab & Sind Bank Union Bank of India United Bank of India Vijaya Bank IDBI Bank Other six banks were nationali ed on the 10 th April, 1980. State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Indore State Bank of Pateyala State Bank Of Saurashtra State Bank of Travancore
In October 1993, the New Bank of Indian and Punjab National Bank were merged.
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PRIV ATE SECTOR BANKS: PRIVATE SECTOR BANK S:
HDFC Bank ICICI Bank Federal Bank ING Vysya Bank Axis Bank (formerly UTI Bank) Yes Bank Bank of Rajasthan Bharat Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab City Union Bank Development Credit Bank Dhanalakshmi Bank Ganesh Bank of Kurundwad IndusInd Bank Jammu & Kashmir Bank Karnataka Bank Limited Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Nainital Bank Ratnakar Bank SBI Commercial and International Bank South Indian Bank Amazing Mercantile Bank Punjab National Bank Rupee Bank Saraswat Bank Tamilnad Mercantile Bank Thane Janata Sahakari Bank Bassein Catholic Bank
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(1.5.C) CO-OPERATIVE BANK
The short-term financial needs of farmers are met by co -operative banks. Agriculturists, petty farmers and artisans organize themselves on co-operative principle and form co -operative societies and banks. Co-operative banks raise funds through various means, besides receiving all kinds of deposits to make them av ailable as lend able funds to its members. In India, developed co -operative banks supply finance for agriculture and non-agriculture activities.
People who come together to jointly serve their common interest often form a co-operative society under the Co-operative Societies Act. When a co-operative society engages itself in banking business it is called a Co-operative Bank. The society has to obtain a licence from the Reserve Bank of India before starting banking business. Any co -operative bank as a society is to function under the overall supervision of the Registrar, Co-operative Societies of the State. As regards banking business, the society must follow the guideline s set and issued by the Reserve Bank of India.
Types of Co-operative Banks
There are three types of co-operative banks operating in our country. They are primary credit societies, central co-operative banks and state co-operative banks. These banks are organized at three levels, village or town level, district level and state level.
Primary Credit Societies: These are formed at the village or town
level with borrower and non-borrower members residing in one locality. The operations of each society are restricted to a small area so that the members know each other and are able to watch over the activities of all members to prevent frauds.
Central Co-operative Banks: These banks operate at the district
level having some of the primary credit societies belonging to the same district as their members. These banks provide loans to their members
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(i.e., primary credit societies) and function as a link between the primary credit societies and state co -operative banks.
State Co-operative Banks: These are the apex (highest level) cooperative banks in all the states of the country. They mobilise funds and help in its proper channelisation among various sectors. The money reaches the individual borrow ers from the state co-operative banks through the central co -operative banks and the primary credit societies.
SCHEDULED URBAN C O-OPERATIVE BANKS SCH EDULED UR BAN CO-OPERATIV E BAN KS
List of Scheduled Urban Co-operative Bank as on 31-3-2009 as per RBI Bank Ahmedabad Mercantile Co-Op Bank Ltd. Kalupur Commercial Co-op Bank Ltd. Madhavpura Mercantile Co-Op Bank Ltd. Mehsana Urban Co-Op Bank Ltd. Nutan Nagarik Sahakari Bank Ltd. Rajkot Nagrik Sahakari Bank Ltd. Sardar Bhiladwala Pardi Peoples Co-op Bank Ltd. Surat Peoples Co-op Bank Ltd. Amanath Co-operative Bank Ltd. Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. Charminar Co-op. Urban Bank Ltd. Vasavi Co-op Urban Bank LImited. Indian Mercantile Co-op Bank Ltd. Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd. Abhyudaya Co-operative Bank Ltd. Bangalore city co-operative bank. Bassein Catholic Co-operative Bank Limited. Bharat Co-operative Bank (Mumbai) Ltd. Bharati Sahakari Bank Limited. Bombay Mercantile Co-operative Bank Limited. Citizen Credit Co-operative Bank Ltd. Cosmos Co-operative Urban Bank Ltd. Dombivli Nagari Sahakari Bank Ltd. Goa Urban Co-operative Bank Limited. Greater Bombay Co-operative Bank Limited. Main Location Ahmedabad Kalupur Madhavpur Mehsana Ahmedabad Rajkot Bulsar Surat Bangalore Andhra Pradesh Hyderabad Hyderabad Lucknow Ichalkaranji Mumbai Bengaluru Vasai Mumbai Pune Mumbai Dadar Pune Dombivli Goa Mumbai
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Jalgaon Janata Sahakari Bank Ltd. Janakalyan Sahakari Bank Ltd. Janalaxmi Co-operative Bank Ltd. Janata Sahakari Bank Ltd. The Karnataka State Co-Operative Apex Bank Ltd Kalyan Janata Sahakari Bank Ltd. Karad Urban Co-operative Bank Ltd. Mahanagar Co-operative Bank Ltd. Mapusa Urban Co-operative Bank of Goa Ltd. Nagar Urban Co-operative Bank Ltd. Nasik Merchant's Co-operative Bank Ltd. New India Co-operative Bank Ltd. NKGSB Co-operative Bank Ltd. Parsik Janata Sahakari Bank Ltd. Pravara Sahakari Bank Ltd. Punjab & Maharashtra Co-operative Bank Ltd. Rupee Co-operative Bank Ltd. Sangli Urban Co-operative Bank Ltd. Saraswat Co-operative Bank Ltd. Shamrao Vithal Co-operative Bank Ltd. Solapur Janata Sahakari Bank Ltd. Thane Bharat Sahakari Bank Ltd. Thane Janata Sahakari Bank Ltd. The Kapol Co-operative Bank Ltd. Zoroastrian Co-operative Bank Ltd. Nagpur Nagrik Sahakari Bank Ltd. Shikshak Sahakari Bank Ltd. The Akola Janata Com.Co-operative Bank Ltd. The Akola Urban Co-operative Bank Ltd. The Khamgaon Urban Co-operative Bank Ltd.
Jalgaon Mumbai Mumbai Pune Bengaluru Kalyan Karad Mumbai Mapusa Ahmednagar Nasik Mumbai Mumbai Thane Ahmednagar Mumbai Pune Sangli Mumbai Mumbai Solapur Thane Thane Mumbai Mumbai Nagpur Nagpur Akola Akola Khamgaon
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(1.5.D) SPECIALISED BANKS
There are some banks, which cater to the requirements a nd provide overall support for setting up business in specific areas of activity. EXIM Bank, SIDBI and NABARD are examples of such banks. They engage themselves in some specific area or activity and thus, are called specialised banks. Let us know about them.
Export Import Bank of India (EXIM Bank): If you want to set up a business for exporting products abroad or importing products from foreign countries for sale in our country, EXIM bank can provide you the required support and assistance. The bank grants loans to exporters and importers and also provides information about the international market. It gives guidance about the opportunities for export or import, the risks involved in it and the competition to be faced, etc.
Small Industries Development Bank of India (SIDBI): If you want to establish a small-scale business unit or industry, loan on easy terms can be available through SIDBI. It also finances modernisation of small-scale industrial units, use of new technology and market activities. The aim and focus of SIDBI is to promote, finance an d develop small-scale industries.
National Bank for Agricultural and Rural Development (NABARD): It is a central or apex institution for financing agricultural and rural sectors. If a person is engaged in agriculture or other activities like handloom weaving, fishing, etc. NABARD can provide credit, both short-term and long-term, through regional rural banks. It provides financial assistance, especially, to co -operative credit, in the field of agriculture, small-scale industries, cottage and village indust ries
handicrafts and allied economic activities in rural areas.
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(1.5.E) EXCHANGE BANKS
There is a difference in financing of foreign trade and financing of internal trade. Generally a person carrying on international trade requires foreign currencies to meet his obligations. It is here that exchange banks play the role of financing the dealer for setting transactions involved in foreign trade. Though commercial banks undertake financing international trade, there are specialized banks for foreign exchange business. In India, there is the Export-Import Bank (EXIM).
(1.5.F) INVESTMENT OR INDUSTRIAL BANKS
Investment banks provide long -term credit to industries. They raise their funds by way of share capital, debentures, and long -term deposits from the public. They also raise funds by the issue of bonds for business corporations and government agencies. Usually they underwrite the fresh issue of shares and debentures of companies. Such banks also buy the entire issue of new securities of public limited companies and try to get them subscribed at a higher price by the public.
(1.5.G) LAND DEVELOPMENT BANKS
Land development banks were earlier known as land mortgage banks. In India, there are a limited number of such banks. They are special institutions providing long-term loans to agriculturists and farmers. They provide loans on the security of land and other immovable properties. They supply long -term funds for period
exceeding six years. Agriculturists and farmers need such funds for making permanent improvements to land and for buying farming machinery and equipment.
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(1.5.H) RURAL BANK
Rural Bank provides various advance facilities for manufacturing activities such as business, industry, and for the aim of rural economic development, the Rural Bank Act is passed in 1974. Rural Bank has given major contribution in the development of rural area.
(1.5.I) SAVING BANKS
Saving banks are specialized institutions which encourage the general public to save something from their earnings. In other words, such banks pool the small saving s of the lower and middle income sections of society. They are not banks in the true sense of the term and their main aim is to promote and collect the savings of the public. Not only the depositors are given interest, but they are allowed to withdraw in times of needs. The numbers of withdrawals are, however, restricted. Separate savings banks are organized in various nations. The government can also run a savings bank. In India, the Postal Department runs the Postal Saving Bank all over the country.
(1.5.J) DEPOSIT BANK V/S MIXED BANKS
The main function of a commercial bank is to accept deposits from the public and lend them to traders, industrialists and others for period not exceeding one year. The loans and advances p rovided for a short period are meant to supplement the working capital of trade and industry in times of need. This type of banking of attracting and accepting deposits and then lending for short period is known as deposit banking. Banks which follow such a system are called deposit banks.
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1.6
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FUNCTION OF BANK U CTI N F B N
General Bank s Function y Principal Function y Ancillary Function: Function of the Commercial Bank y primary functions y subsidiary functions
(1.6.A) GENERAL BANK]S FUNCTION
Principal Function:
Accounting Deposits Granting Advances
Ancillary Function:
Discounting of Bills & Cheques. Collection of Bills & Cheques. Remittance. Safe Custody of Articles. Safe Deposit Lockers. Conducting:
y Safe Deposit lockers
Issue of :
y y Letters of credit. Guarantees.
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(1.6.B) FUNCTION OF THE COMMERCIAL BANK
Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. So the main function of the commercial bank is as follow:
The functions of commercial banks are of two types. (A) Primary functions; and (B) Secondary functions. Let us discuss details about these functions.
PRIMARY FUNCTIONS
The primary functions of a commercial bank include: a) Accepting deposits; and b) Granting loans and advances. Accepting deposits The most important activity of a commercial bank is to mobilize deposits from the public. People who have surplus income and savings find it convenient to deposit the amounts with banks. Depending upon the nature of deposits, funds deposited with bank also earn interest. Thus, deposits with the bank grow along with the interest earned. If the rate of interest is higher, public are motivated to deposit more funds with the bank. There is also safety of funds deposited with the bank.
Grant of loans and advances The second important function of a commercial bank is to grant loans and advances. Such loans and advances are given to members of the public and to the business community at a higher rate of interest than allowed by banks on various deposit accounts. The rate of interest
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charged on loans and advances varies according to the purpose and period of loan and also the mode of repayment.
i) Loans A loan is granted for a specific time period. Generally commercial banks provide short-term loans. But term loans, i.e., loans for more than a year may also be granted. The borrower may be given the entire amount in lump sum or in instalmen ts. Loans are generally granted against the security of certain asset s. A loan is normally repaid in instalments. However, it may also be repaid in lump sum. ii) Advances An advance is a credit facility provided b y the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally grante d for a short period of time. Further the purpose of granting adv ances is to meet the day -to-day requirements of business. The rate of interest charged on advances varies from bank to bank. Interest is charged only on the amount withdrawn and not on the sanctioned amount. Types of Advances Banks grant short-term financial assistance by way of cash credit, overdraft and bill discounting. Let us learn about these. a) Cash Credit Cash credit is an arrangement whereby the bank allows the borrower to draw amount up to a specified limit. The amount is credited to the account of the customer. The customer can withdraw this amount as and when he requires. Interest is charged on the amount actually withdrawn. Cash Credit is granted as per terms and conditions agreed with the customers. b) Overdraft Overdraft is also a credit facility granted by bank. A customer who has a current account with the bank is allowed to withdraw more
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than the amount of credit balance in his account. It is a temporary arrangement. Overdraft facility with a specified limit may be allowed either on the security of assets, or on personal security, or both. c) Discounting of Bills Banks provide short-term finance by discounting bills, that is, making payment of the amount before the due date of the bills after deducting a certain rate of discount. The party gets the funds without waiting for the date of maturity of the bills. In case any bill is dishonoured on the due date, the bank can recover the amount from the customer.
SECONDARY FUNCTION
The subsidiary functions of a commercial bank constitute the agency services and the miscellaneous services.
Agency Services:One of the important functions of a banker is the services performed by him as an agent. The services as an agent are as under:
Collection of Interest and Dividend: The bank collects interest
or dividend as and when earned by the customers from securities. A very small charge is levied for the collection on behalf of the customer.
Collection and payment: Commercial banks also coll ect and
pay cheques, bills and promissory notes.
Executing standing orders: A customer may leave standing
instructions to a banker to make payments to certain individuals or institutions against his account. The banker usually charges small fees for such services.
Buying and selling of Securities: A commercial baker also
undertakes to purchase or sell stocks or shares on behalf of his customers.
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Remittance of Funds: It is convenient for banks to transfer
funds as they have a network of branches all over the country. The remittance of funds is done by mail transfer, telegraphic transfer, and bank draft.
Miscellaneous Services: Among the various function when they are many general utility personal or miscellaneous services rendered to the customers. The important ones are as under: Safety of Customer·s valuable: This is undertaken when they are kept in specially constructed rooms in the bank premises. Here the bank acts as a bailee of the goods as it is entrusted to its safe keeping. Usually there are two me thods of ensuring safety of customers· valuable. One is the acceptance of valuables ( e.g. documents of title, jeweler etc.) for safe custody, and the other is the provision of safe deposit vault (Lockers) on hire to customers. Foreign Exchange: Commercial banks also deal in foreign exchange transactions. They assist in foreign trade by
discounting foreign bills of exchange and sometime even have to arrange transport, insurance and warehousing of goods. Letters of Credit: A commercial bank can issue persona l and commercial letters of credit, enabling the customer to profit by the superior credit. Bankers as Referee: Commercial bankers certify the
respectability and financial standing of their customers. This service benefits businessmen who deal with the ban k·s
customers. Underwriting: - Banks often act as underwriters to local and municipal authorities or other public bodies. Banks also
underwrite for companies, corporations, and underwrite issues of Govt. loans, raised by municipal authorities, and industrial securities. Information & Statistics: - Several big banks have started the collection of information related to trade and business and
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provide the same to its customers. Some banks even publish monthly reviews containing financial and economic information.
Chapter 2
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COMPANY PROFILE
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HISTORY OF THE CENTRAL BANK OF INDIIA STO Y OF THE CE TRAL B NK OF IND A
HEAD LINES
Establishment of Bank Establishment of Bank in Gujarat Growth chart of bank Total branches of bank Histor of the Central Bank of India at Lal Darwaa, Surat
The Bank of India was started on 21st December 1911 under the name of the Central Bank of India by it·s under Shrwashrio Sir Soharabji Pochhandwala. This bank suffered great State Bank in year 1913-1914 due to 1st World War or its effect on a monetary system. It is really a pleasure to note ´The Central Bank of India is the only bank with first manages which was established by Indian management. Then again in the year 1925-29 Bank had suffered another set back by its enemy & specially the English cruel. Customer of his bank started with drawing the deposits and again it was Sir Pochhandwala personally set on the counters and paid the deposits to the customer by managing the funds by his own Personal Prestige. The banks payment counters were kept open for 24 hours throughout the country and payment were made continuously. This very bold step of Sir Pochhandwala Sahib created new faith amongst of the customers of the bank once again proved that this mighty Bank is the only bank of the Common people of India.
ï
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In Gujarat Central Bank first branch was opened at Gandhi Road, Ahmedabad. During year 1930 to the date of nationalization of the banking industries, this bank stood as number one in all India during Nationalization of the Bank on dated 19 th July 1969. As on 1 st February the total branches of the Central Bank of India through out of country is 2848 out of which 1397 branches are rural whereas 644 branches are in semi urban and 419 branches are functioning at urban center and 621 branches are spread over in metro. The total deposits of the bank as on above dated was Rs. 9932 Crore out of which 2036 Crore are in current a/c, 2714 are in saving and 5172 are in time deposits. A number of innovative and unique banking activities have been launched by Central Bank of India and a brief mention of some of its pioneering services are as under:
1911 First Indian Bank in True sense -established 1921 Introduction to the home saving safe deposit scheme to
build saving / thrift habit in all section of the society.
1923 Advance to industry by allotting shares, commercial
banking stated of initial stage.
1924 Landing Section introduced encourages habit to save
money by ladies.
1926 First ever in India safe deposit vault started at Head Office
Bomaby.
1927 Cheque system stated in home saving. 1929 To own and to assist the bank Tally Executive of Trusty
Co. Ltd. Established.
1931 First ever by any Indian banker-Overseas Branch at
London opened. Three years cash certificates issued. Travelers· cheque system in rupee cur rency started. Indian banker sent abroad to study advance banking.
1932 To reserve deposits rights deposit benefits insurance co.
Ltd. Started.
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1970 Recurring deposit scheme established.
Subsequently even after the nationalization of the Bank in the year 1969, Central Bank continued to introduce a number of innovative banking services as under: -
1976 The Merchant Banking Cell was established. 1978 New facility for Customer Deposit Cash in any of 14
selected after of the country.
1980 Central card, the credit card of the Bank was introduced. 1985 For speedy Customers Services Automex Started. All
Regional Officer connected with the by own Secret national debtor too.
1986 Platinum deposit special scheme in Platinum Jubilee Year
for Long Term Deposit started. Central Card Scheme expanded which crossed the territorial boundary of the country central card which is a boon for Indians going abroad.
1989 The housing subsidiary Cent Bank Home Finance Ltd.
was started with it does headquarter at Bhopal in Madhya Pradesh.
1994 Quick Cheque Collection Service (QCC) & Express Service
was set up to enable speedy collection of outstation cheques. Further in line with the guidelines from Reserve Bank of India as also the Government of India, Central Bank has been playing an increasingly active role in prom oting the key thrust areas of agriculture, small scale industries as also medium and large industries. The Bank also introduced a number of Self Employment Schemes to promote employment among the educated youth. Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to distribution of its large network in 27 out of 28 States as also in 4 out of 7 Union Territories in
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India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its network of 3541 branches and 218 extension counters at various centres throughout the length and breadth of the country. In view of its large network of branches as also number of savings and other innovative services offered, the total customer base of the Bank at over 25 million account holders is one of the largest in the banking industry. Customers' confidence in Central Bank of India's wide ranging services can very well be judged from the list of major corporate clients such as ICICI, IDBI, UTI, LIC, HDFC as also almost all major corporate houses in the country
HEAD OFFICE OR REGISTERED OFFICE OF CBI:
Chandar Mukh, Narimpoint, Mumbai-400021
ZONAL OFFICE OF CBI IN GUJARAT:
Zonal office, Central Bank Building, Lal Darwaza, Ahmedabad-390 001 Phone: - 5503586 Fax:- 5505995 Website: www.Centralbankofindia.co.in, Email: - [email protected]
BRANCHES OF THE CBI IN GUJARAT: City Name
Ahmedabad Anand Baroda Jamnagar
Computerized Branches
42 24 19 28
NonComputerized Branches
16 13 14 6
Total No of Branches
58 37 33 34
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2..2 2
Rajkot Surat Total:
HIISTORY OF THE CBI AT LALDARWAJA STORY F TH BI A LALDARWAJA
17 23 153
10 9 68
27 32 221
The branch of the Central Bank of India at Lal-Darwaja was established on dated 17 th May, 1964 by Shri Dahyabhai Karshanji Kosmada. In Surat city ago 45 years there was very few banks. So this time there was not any bank near to this area. So people of this area feel difficulty for banking transaction, if people want to transact with bank then they went vent far away. This all difficulty understood by Shri Dahyabhai Karshanji Kosmada and he had to decide to establish the bank at Lal-Darwaja. The branch was established on da ted 17 th May, 1964. When bank was stated that time it had not any computer system all work of the bank was done manually. After 33 year the bank was made fully computerized on dated 25 th January, 1999. Then after bank is well settle.
ADDRESS OF THE BRANCH:
The Central Bank of India (B.O), Lal Darwaja, Nr. Resham Bhavan, Surat -395003. (Guj.) Phone: - 0261- 2423145, 2428854, 2457038
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2..3 2
HEAD LINES
ACT IVIITIIES OF THE CBI A TIV T ES OF THE C I
Deposits Cards Loans Other Services International banking Central Bank of India Net Banking Central Bank of India Web Sites Rate of Interest on Deposits Rate of interest on Loans
The various banking products and services on offer at Central Bank include:
(2.3.A) DEPOSITS
Money Multiplier Deposit Certificate (MMDC): In this the
interest keeps adding to the principal amount giving you an added advantage to increase your deposits exponentially
Monthly/Quarterly Interest Deposit Receipt (MIDR/QIDR): The
interest is added monthly/Quarterly. An account can be opened for duration of 12 months to 120 months with a minimum balance of Rs. 5000.
Cent Uttam Scheme: This deposit scheme by Central Bank offers
you easy liquidity with high returns that allows you to withdraw a part of the deposit whenever required.
Other Special Savings Accounts: These include Senior Citizens
Savings Account, Tax Saving Deposit Schemes, Smart Deposit Schemes, Super Deposit Schemes and Special Cent Bachat Khata
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(2.3.B) CARDS
Centralcard Electronics: This Central Bank Credit Card is
accepted in all master card electronic terminals in India and Nepal. This can be both domestic and global.
Centralcard: This card offers you the freedom of shopping at all
the merchant establishments in the country. The internationally acceptable one is the International Central Master Card.
Debit Card: Its the most safe and secure way of accessing your
account globally 24-hours a day at over 5.3 million merchant establishments and 6 million ATM's
(2.3.C) LOANS
Housing Loans Home Renovation Loan Computer Loan Personal Loan (Corporate and Non -Corporate) Education Loans Special Educational Loans Finance For Trade Car Loans Loans For Commercial Vehicles Agricultural Loans Personal Loans For Pensioners And Teachers
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(2.3.D) OTHER SERVICES
raveler's Cheques: Issued in the denominations of Rs. 100, Rs.
500, Rs. 1000, Rs. 2500, and Rs. 5000 at a nominal charge of Re.1 per Rs.100.
Gift Cheques: Available in denominations of Rs.11, Rs. 25, Rs.
51 and Rs. 101 free of cost and payable at any Central Bank of India branch.
Cash Management Services: These include collections that can be
Central's Cent QCC, Local Cheque collection and bulk cheque collection services and payment products that include Demand Drafts (DD), Dividend and Interest Warrants, Bank Telegraphic Transfer (TT).
Cent Bill Pay: This facility by Central Bank allows you to pay your
bills through the Internet. It is currently available in Mumbai and is soon going to be launched in New Delhi, Pune, Ahmedabad, Bangalore, Chennai, Hyderabad and Kolkata branches.
Special Services: These include Insurance, Mutual Funds and
Demat Account services.
(2.3.E) INTERNATIONAL BANKING
NRI Banking: Special NRI Savings Accounts, facilities to NRI's
Returning to India and Foreign Exchange services along with Remittance Services are included in this
Other Specialized Services: These include Repatriable and NonRepatriable exporters. services along with faciliti es for importers and
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(2.3.F) CENTRAL BANK OF INDIA NET BANKING
Central Bank of India provides net banking facility to its customers, all you have to do is login to your Internet Banking Account and access the banking service you desire. The official website of Central Bank gives you information about the public issue, issue price, share price, share value and stock price along with news on the shares. Any enquiry about the IPO refund, allotment status, registrar address, money control, listing or the recruitment procedure is entertained on the Central Bank site.
(2.3.G) CENTRAL BANK WEBSITE
An online branch and ATM locator is also available on the official website of Central Bank of India. You can get the exact address and location of your nearest Central Bank branches and ATM's/ also you get full information on the ongoing interest rates on the various credit and deposit schemes along with the service charges for the services provided at Central Bank. Some addresses are provided below.
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RATE OF INTEREST ON DEPOSIT
In the central bank of India the interest rate of the deposit on Fixed Deposit applicable from dated 1st May 2000, this is show in the following table: Matu rity Period Up to Rs.15 lacs A bove Rs.15 lacs to l ess than Rs.1 Cro re 11.11.2009 2.50 3.50 4.00 5.00 5.50 6.00 6.25 6.50 6.50 7.25 Rs.1 Crore and above Existing Rate 11.11.2009 2.00 2.50 3.00 3.50 4.50 5.00 5.50 5.50 5.50 5.50 Revised rate 21.12.2009 2. 00 2. 50 3. 00 3. 50 4. 50 5. 50 6. 00 6. 00 6. 00
11.11.2009 7 days-14 days 15 d ays to 45 d ays 46 d ays to 90 d ays 91 d ays to 179 days 180 days to 269 d ays 270 days to 364 d ays 1 year to less th an 2 years 2 years to l ess than 3 years 3 years to l ess than 5 years 5 years and abo ve 2.50 3.25 3.75 5.00 5.75 6.25 6.50 6.75 7.00 7.25
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RATE OF INTEREST ON LOANS
LOANS
BPLR (w.e.f. 01.04.2009)
12.00% p.a.
Direct Housing Finance Scheme - w.e.f. 10.11.2008 Floating Category
Upto 5 Yrs Over 5 Yrs & Less than 10 Yrs. 10 Yrs. & above
Rate of Interest Processing Charges* Upto Rs. 30 Lakhs
9.00% 9.50% 10.00%
Above Rs. 30 Lakhs
10.25% 10.75% 11.25% 1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/-
Fixed Category
Upto 5 Yrs Over 5 Yrs & Less than 10 Yrs. 10 Yrs. & above
Upto Rs. 30 Lakhs
10.00% -NA-NA-
Above Rs. 30 Lakhs
11.25% -NA-NA-
Processing Charges
1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/-
*- For changing from fixed Rate of Interest to Floating Rate of Interest, 1% Service Charges on the balance outstanding as on the date of change over. - For changing from floating Rate of Interest to Fixed Rate of Interest, 1% Service Charges on the balance outstanding as on the date of
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change over.
Personal Loan
Consumer Durable Loan (Cent Buy) Senior Citizen - Loan to Pensioner For General Pensioners and for ex-staff of Central Bank of India drawing pension Senior Citizen - Cent Swabhimaan (Reverse Mortgage Loan) Personal Loan - Loan to corporate employees Personal Loan - Loan to NonCorporate Employees Personal Loan - Loan to teachers & Employees of Educational Institute Personal Loan - Loan to LIC Agents
Rate of Interest
BPLR - 0.25% BPLR
Processing Charges
Rs. 200/- per proposal NIL
10.00%
BPLR BPLR + 1.00% BPLR - 1.25%
Upfront Fees: 0.15% of loan amount subject to minimum of Rs. 500/- and maximum of Rs.10,000/Rs. 500/- per proposal Rs. 500/- per proposal Rs. 500/- per proposal
BPLR
1% of loan amount, minimum Rs. 250/-
Vehicle Loan
Two wheeler Loan For new vehicles repayable upto 36 months For new vehicles repayable beyond 36 months For second hand vehicles Four wheeler Loan For new vehicles repayable upto 36 months For new vehicles repayable beyond 36 months For second hand vehicles
Rate of Interest
BPLR - 2.00% BPLR - 1.00% BPLR
Processing Charges
Rs. 500/- per proposal Rs. 500/- per proposal Rs. 500/- per proposal
BPLR - 2.00% BPLR - 1.00% BPLR
Rs. 2000/- per proposal Rs. 2000/- per proposal Rs. 2000/- per proposal
Cent Vidyarthi - Education Loan (Irrespective of Amount of Loan and Place of study i.e. India or Abroad)
Rate of Interest
Normal Student IIT/ IIM Students
Processin g Charges
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Male Female SC, ST, & Minority Community Student (Female & Male)
BPLR 2.00% BPLR 2.50% BPLR 2.50%
BPLR - 2.50% BPLR - 3.00% BPLR - 3.00%
Nil Nil Nil
Name of Scheme
Rate of Interest
BPLR Interest to be compounded monthly. Concession of 50 basis points is given if Employers Undertaking is available. Further concession of 50 basis points in RoI may be given if interest is serviced regularly during the study period.
Processing Charges
Scheme for Financing Executive MBA
Rs.10,000/- lump sum. -Upto Rs. 25,000/- : NIL -More than Rs. 25,000/- upto Rs. 2 Lakh: Rs. 250/- per proposal. -More than Rs. 2 lakh upto Rs. 50 lakh: 0.5% of loan amount Rs. 1000/- per proposal 1% of the loan amount subject to minimum of Rs.5,000/- and maximum of Rs.2.00 lakh. Rs. 100/- per proposal 1% of loan amount, minimum Rs. 500/NIL Rs. 500/- per proposal NIL Rs. 1000/- per proposal NIL Rs. 500/- per proposal
Cent Trade Cent Vyapari
BPLR - 1% BPLR - 1% BPLR + 1.00% for loan upto 3 years BPLR + 2.00% for loan above 3 years BPLR BPLR BPLR - 1% 10.00% 10.00% BPLR BPLR 1% higher than Housing Loan Rate
Cent Rental Cent Computer Cent Liquid Cent School Cent Jewel Cent Vivah Cent Safar Cent Suvidha Cent Home Loan Plus
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Chapter 3
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HEAD LINES
Introduction of Project Objecti e of Project Potential of Project Limitation of Project
3.1 31
INTRODUCTION OF PROJECT N U O O R J
INTRODUCTION
This project report is based on the financial analysis of the central bank of india, and it includes various financial statement, numerical data and it·s interpretation. From this project study, the organisation would be able to know about their current and past financial position and also able to make inter relation among last few years. In this project there are many tools of financial analysis has been used like
Co arati Stat t A a ysis Co o Size Statement Ana ysis Trend Ana ysis
The tools of financial analysis (ratio analysis, Comparative statement analysis, common size statement analysis, trend analysis) is helps to know about the financial condition of bank for last few years by comparing, analyzing and interpreting.
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ûú
úùöù
ÿ ý üü ùø ÷ö õô
Ratio A
a ysis
51
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
The ratio analysis of the CBI will make necessary comments on it so as to provide complete idea and core ideology of the bank. So that we can easily get idea about the financial condition of CBI and it·s potential in future. Comparison of ratio of last few years can also helps to get ranking of the comparative years to evaluate it on the various criteria. The detail study of a bank·s trend analysis will be done and final conclusion will be brought out for know the reliability and operating performance of the central bank of India. It will provide final conclusion according to financial analysis. For the purpose of study the researcher has gathered data regarding the company and research work by two ways; primary data and secondary data. The researcher has gathered pri mary data through personal interview of manager and other working people, as the primary data seems to be best alternative for me. The researcher has also used secondary data source to collect information regarding company profile. For this purpose the res earcher has referred company·s websites.
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3..2 3
OBJECTIVE OF PROJECT O J VE OJ T
The main objective of project is to do financial analysis of the
central bank of India.
Secondly to study the present financial condition of the central
bank of India.
To study the capital structure of the central bank of India. To study the operating performance of the central bank of India. To study deposits, investment & pattern & loan & advance. To do Ratio Analysis for the CBI and make necessary comments
on it so as to provide complete idea and core ideology of the bank. So that we can easily get idea about the financial condition of CBI and it·s potential in future.
To make comparison of
criteria
ratio analysis of last few years and get
ranking of the comparative years to evaluate it on the various
3..3 3
POTENTIAL OF THE PROJECT PO TI L E ROJ
To know about the Central bank of India and also to compare the financial condition of bank for last few years by analyzing and interpreting.
To do Ratio Analysis for the CBI and make necessary comments
on it so as to provide complete idea and core ideology of the
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bank. So that we can easily get idea about the financial condition of CBI and it·s potential in future.
To make comparison of
criteria.
ratio analysis of last few years and get
ranking of the comparative years to evaluate it on the various
For the detail study of a bank·s trend analysis will be done and
final conclusion will be brought out for know the reliability and operating performance of the central bank of India.
Providing final conclusion according to financial analysis.
Above detailed explanation will provide complete idea of the project and in the last final conclusion will be made. So that the general people will get advise or suggestions to invest or s ave their money in the bank or not.
3..4 3
LIMITATION OF PROJECT L MI TI F OJ T
The data is mostly based on the secondary data so information
may be outdated or wrong
Mistake in the financial statement may be create effect on final
analysis
Final interpretation may be wrong due to mistake in calculation,
tabulating, analysis etc.
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Chapter 4
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THEORETICAL CONCEPT
HEAD LINES
Meaning of financial anal sis Limitation of financial anal sis Tools of financial anal sis y Ratio analysis y Comparative financial statements y Common size statements y Trend analysis.
4.1 1
MEANING OF FINANCIAL ANALYSIS N N O F N N A A AL SI
The purpose of the conventional revenue statement and balance sheet are to show, first, the result of operations for the period under review, and second, the assets and liability of the firm at the relevant date. But it is difficult to deduce any inference from the mass of figures included in the usual annual financial statement. So, in order to accurately gauge the financial health of the firm, it is generally necessary to regroup and analysis the figure as disclosed by these conventional statements to measure business performance.
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¡
£
56
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
The analysis of financial statement consists in breaking down a complex set of factors or figures in to simple elements. The analysis may generally be of two types:
Analysis of financial statements over a number of years ² in such a case the trend is important; Analysis of financial position of the concern as a particular date here the detailed position as disclosed by one set of financial statements is sought to be examined.
4..2 2
LIIMIITATIION OF FINANCIAL STATEMENT M T AT O F I A CI L TEMEN
The financial position of a business concern is affected by several factors- economic, social and financial, but only financial factors are being recorded in these financial statements. Economic and social factors are felt out. Thus the financial position disclosed by this statement is not correct and accurate.
The profit revealed by the profit and loss account and financial position disclosed by the balanced sheet cannot be exact: they are essentially interim reports. Exact position can be known when the business is liquidated.
Facts which have not been recorded in the financial books are not depicted in the financial statement. Only quantitative factors are taken into account. But qualitative factors such as reputation
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
and prestige of the business with the public, the efficiency
and
loyalty of its employees, integrity of management etc. which are equally important for the business success, are not capable of being translated in terms of money, and as such, they do not appear in the financial statement.
Money items are left to the personal judgment of the accountant. For instance, provision of depreciation, stock valu ation, bad debts provision etc. depends on the personal judgment of accountant.
On the account of convention of conservations the income statement may not disclose true income of the business since problem losses are considered while problem incomes are ignored.
The fixed assets are shown at cost less depreciation on the basis of ´going concern concept.µ But the value placed on the fixed assets may not be the same which may be realized on their sale.
The data contained in the financial statement are dumb ; they do not speak themselves. It is also worth while to note that human judgment is always involved in the interpretation of statement. It rarely happens that the users of financial statements may have the same opinion and meaning in respect of a particu lar accounting figure.
Information
conveyed
by
these
statements
mat
not
be
comparable on account of difference between dates of preparation of these statements. Different methods of accounting followed by different concerns or difference in the nature of business of different concern etc. may render the financial statements of two concerns impossible or difficult for the purpose of comparison.
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4..3 4
TOOLS OF FINANCIAL ANALYSIS TO S I AN IA A A SI
Financial analyses adopt the following tools for analysis of the financial statements. These are termed as method of financial analysis:
Ratio analysis Comparative financial statements Common size statements Trend analysis.
RATIO ANALYSIS
A ratio is only a comparison of the numerator with the denominator. The term ratio refers to the numerical or quantitative relationship between two figures. A ratio is the relationship between two figures, and obtained by dividing the former by the latter. Ratio are design to show how one number is related to another. It is wor ked out by
dividing one number by another.
Ratio analysis is important and age old technique of financial analysis. The data given in financial statements, in absolute from, are dump and are unable to communicate anything. Ratios are relative form of financial data and very useful technique to check upon the efficiency of
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a firm. Some ratios indicate the trend or progress or downfall of the firm.
Importance of ratio analysis:
The importances of ratio analysis are as follow: Aid to measure general efficiency: Ratios enable the mass of accounting data to be summarized and simplified. They act as an index of the efficiency of the enterprise. As such they served as instrument of management control.
Aid to measure financial solvency: Ratio are useful tools in the hands of management and other concerned to evaluate the firms performance over a period of
time by comparing the present ratio with the past ones. They point out firm·s liquidity position to meet its short term obligations and long ter m solvency.
Aid in forecasting and planning: Ratio analysis is an invaluable aid to management in the
discharge of its basic function such as planning, forecasting, control etc. the ratio that are derived after analyzing and
scrutinizing the past result, helps the management to prepared budgets to formulate policies and to prepared the future plan of action etc.
Facilitate decision making:
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It shows light on the degree of efficiency of the management and utilization of the assets and that is why it is called surveyor of efficiency. They help management in decision making.
Effective tool: Ratio analysis is help in making effective control of the businessmen. Ratio ensures secrecy.
Limitation of ratio analysis:
Ratio analysis is, as already mentioned, a widely- used tool of financial analysis. It is because ratio is simple and easy to understand. But they must be used very carefully. They suffer from various limitations. If due care is not taken, they might confuse than clarity the situation. Different firms may use these terms in different senses or the same firm may use them to mean different things at different times. Some of the limitations of the ratio analysis are given below:
Limitation of accounting records: Ratio analysis is based on financial st atements which are themselves subject to limitations. Thus, ratios calculated on the figures given in the financial statements, also suffers from similar limitation.
No allowances for price level changes: Due to change in price level of various years, com parison of ratio of such years cannot give correct conclusion. A change in the price level can seriously affect the validity of comparison of ratio computed for different time periods. For instance, a firm which has purchased an assets at a lower price, wi ll show a higher return, then the firm which has purchased the at an assets at a higher price.
Changes in accounting procedure:
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Comparison between two variables proves worth provided their basis of valuation is identical. But in reality, it is not possible, such as methods of valuation of stick or charging different firms for their valuation, and then comparison will practically be of no use.
Limited used of single ratio: A single ratio would not be able to convey anything. Ratio can be useful only when they are computed in a sufficient large number. If too many ratios are calculated, they are likely to instead of revealing meaningful conclusion.
Background is overlooked: When inter- firm comparison is made, they differ substantially in age, size, nature of product etc. when an inter firm comparison is made, these factors are not considered. Therefore, ratio analysis cannot give satisfactory result.
Changing policies: Ratio is computed on the basis of past result. Past is not an indicator of future. Ratios computed from historical data are used for predicting and projecting the likely events in the future. Such ratio may provide a glimpse of firm·s past performance. But forecast for nature may not be correct as several other factors like management policies, market condition etc. may induce future operations.
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COMMON SI E STATEMENTS
Ratio analysis apart, another useful way of analyzing financial statement is to convert them into common size statement by expressing absolute rupee amount into percentages. When this method is pursued the income statement exhibits each expense item or group of expense items as a percentage of net sales and net sales are taken as 100 percent
Common Size Financial Statements Common size ratios are used to compare financial statements of different-size companies, or of the same company over different periods. By expressing the items in proportion to some size-related measure, standardized financial statements can be created, revealing trends and providing insight into how the different companies compare. The common size ratio for each line on the financial statement is calculated as follows: Item of Interest Common Size Ratio = Reference Item For example, if the item of interest is inventory and it is referenced to total assets (as it normally would be), the common size ratio would be:
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Inventory Total ssets The ratios often are expressed as percentages of the reference amount. Common size statements usually are prepared for the income statement and balance sheet, expressing information as follows:
y y
Income statement items - expressed as a percentage of total revenue Balance sheet items - expressed as a percentage of total assets
The following example income statement shows both the dollar amounts and the common size ratios:
Common Size Income Statement
Income Statement
Revenue
¨ §¦
Income Statement
¥
70,134
oods So d
¦
100
For the balance sheet, the common size percentages are referenced to the total assets. The following sample balance sheet shows both the dollar amounts and the common size ratios:
Common Size Ba ance Sheet
¨
Balance Sheet Common-Size
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¥
Net Income
5,754
8.2
¥
Provision or Ta es
¦
3,766
5.4
¥
©
Interest E
ense
2,862
4.1
¥
O erating Income
©
12,382
17.7
¥
S &A E
§
ense
13,531
19.3
¥
ross Pro it
©
25,913
36.9
¥
Cost o
§
44,221
63.1
¤
Common Size Ratio for Inventory =
Common-Size
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Balance Sheet ASSETS Cash & Marketable Securities Accounts Receivable Inventory Total Current Assets 6,029 14,378 17,136 37,543 15.1% 36.0% 42.9% 93.9% 6.1% 100%
Property, Plant, & Equipment 2,442 Total Assets 39,985
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Total Liabilities & Equity 14,251 12,624 26,875 13,110 39,985 35.6% 31.6% 67.2% 32.8% 100%
The above common size statements are prepared in a vertical analysis, referencing each line on the financial statement to a total value on the statement in a given period. The ratios in common size statements tend to have less variation than the absolute values themselves, and trends in the ratios can reveal important changes in the business. Historical comparisons can be made in a time-series analysis to identify such trends. Common size statements also can be used to compare the firm to other firms. Comparisons Between Companies (Cross-Sectional Analysis) Common size financial statements can be used to compare multiple companies at the same point in time. A common -size analysis is especially useful when comparing companies of different sizes. It often
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is insightful to compare a firm to the best performing firm in its industry (benchmarking). A firm also can be compared to its industry as a whole. To compare to the industry, the ratios are calculated for each firm in the industry and an average for the indu stry is calculated. Comparative statements then may be constructed with the company of interest in one column and the industry averages in another. The result is a quick overview of where the firm stands in the industry with respect to key items on the fin ancial statements. Limitations As with financial statements in general, the interpretation of common size statements is subject to many of the limitations in the accounting data used to construct them. For example:
y
Different accounting policies may be used by different firms or within the same firm at different points in time. Adjustments should be made for such differences.
y
Different firms may use different accounting calendars, so the accounting periods may not be directly comparable.
COMPARATIVE STATEMENT
The benefits of a comparative statement are varied for a corporation. Because of the uniform format of the statement, it is a simple process to compare the gross sales of a given product or all products of the company with the gross sales generated in a previous month, quarter, or year. Comparing generated revenue from one period to a different period can add another dimension to analyzing the effectiveness of the sales effort, as the process makes it possible to identify trends such as a drop in revenue in spite of an increase in units sold. Along with being an excellent way to broaden the understanding of the success of the sales effort, a comparative statement can also help
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address changes in production costs. By comparing line items that catalog the expense for raw materials in one quarter with another quarter where the number of units produced is similar can make it possible to spot trends in expense increases, and thus help isolate the origin of those increases. This type of data can prove helpful to allowing the company to find raw materials from another source before the increased price for materials cuts into the overall profitability of the company. A comparative statement can be helpful for just about any organization that has to deal with finances in some manner. Even non -profit organizations can use the comparative statement method to ascertain trends in annual fund raising efforts. By making use of the comparative statement for the most recent effort and comparing the figures with those of the previous y ear·s event, it is possible to determine where expenses increased or decreased, and provide some insight in h ow to plan the following year·s event.
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Chapter 5
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HEAD LINES
Research Methodology y Meaning of Research. y Research Problem. y Research Design. y Sampling Design. y Data Collection method. y Analysis and interpretation of Data.
RESEA RCH METHODOLOGY ES EA C H M ET H O D L O Y
The procedure adopted for conducting the research requires a lot of attention as it has direct bearing on accuracy, reliability and adequacy of results obtained. It is due to this reason that research methodology, which we used at the time of conducting the research, needs to be elaborated upon. Research Methodology is a way to systematically study and solve the research problems. If a researcher wants t claim o his study as a good study, he must clearly state the methodology
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adapted in conducting the research the research so that it way be judged by the reader whether the methodology of work done is sound or not.
5.1
RESEARCH METHODOLOGY R R O OL GY
Meaning of Research. Research Problem. Research Design. Sampling Design. Data Collection method. Analysis and interpretation of Data.
MEANING OF RESEARCH
Research is defined as ´a scientific and systematic search for pertinent information on a specific topicµ. Research is an art of scientific investigation. Research is a systematized effort to gain now knowledge. It is a careful investigation or inquiry especially through search for new facts in any branch of knowledge. Research is an academic activity and this term should be used in a technical sense. Research comprises defining and redefining problems, formulating hypothesis or suggested solutions. Making deductions and reaching conclusions to determine whether they if the formulating hypothesis. Research is thus, an original contribution to the existing stock of
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knowledge making for its advancement. The search for knowledge through objective and systematic method of finding solutio ns to a problem is research.
RESEARCH PROBLEM
The first step while conducting research is careful definition of Research Problem. ´To ERR IS THE HUMANµ is a proverb which indicates that no one is perfect in this world. Every researcher has to face many problems which conducting any research that·s why problem statement is defined to know which type of problems a researcher has to face while conducting any study. It is said that, ´Problem well defined is problem half solved.µ Basically, a problem statement refers to some difficulty, which researcher experiences in the context of either a theoretical or practical situation and wants to obtain the solution for the same. The problem statement here is: ´To make a Financial Analysis of Financial statements of The Central Bank of Indiaµ
RESEARCH DESIGN
A research designs is the arrangement of conditions for collection and analysis data in a manner that aims to combine relevance to the research purpose with economy in procedure. Research Design is the conceptual structure with in which research in conducted. It
constitutes the blueprint for the collection measurement and analysis of data. Research Design includes and outline of what the researcher will do form writing the hypothesis and it operational implication to the final analysis of data. A research design is a framework for the study and is used as guide in collection and analyzing the data. It is a strategy specifying which approach will be used for gathering and analyzing the data. It also include s the time and cost budget since most
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studies are done under these two cost budget since most studies are done under theses tow constraints. The design is such studies must be rigid and not flexible and most focus attention on the following. 1. What is the study about? 2. Why is the study being made? 3. Where will the study be carried out? 4. What type of data is required? 5. Where can be required data be found? 6. What period of time will the study include? 7. What will be sample design? 8. What techniques of data collection will be used? 9. How will the data be analyzed?
10. In what style will the report be prepared?
TYPES OF RESEARCH DESIGN
EXPERIMENTAL RESEARCH DESIGN EXPLORATORY RESEARCH DESIGN
DESCRIPTIVE& DIAGNOSTIC RESEARCH
Exploratory Research Design: This research design is preferred when researcher has a vague idea about the problem the researcher has to explore the subject. Experimental Research Design ² The research design is used to provide a strong basis for the existence of casual relationship between two or more variables. Descriptive Research Design ² It seeks to determine the answers to who, what, where, when and how questions. It is based on some previous understanding of the matter. Diagnostic Research Design It determines the frequency with which something occurs or its association with something else.
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RESEARCH DESIGN USED IN THIS PROJECT
Research Design chosen for this study is Descriptive Research Design. Descriptive study is based on some previous understanding of the topic. Research has got a very specific objective and clear cut data requirements.
SAMPLING DESIGN
Sampling is necessary because it is almost impossible to examine the entire parent population (i.e. the entire universe) various factors such as time available cost, purpose of study etc. make it necessary for the researchers to choose a sample. It should neither be too sm all nor too big. It should be manageable. THE sample size of past 3 years is taken for present study due to time limitation.
DATA COLLECTIONS
The process of data collection begins after a research problem has been defined and research design ahs been c halked out. There are two types of data ²
METHODS OF PRIMARY DATA
OBSERVATION METHOD INTERVIEW METHODS QUESTIONAIRE METHOD SCHEDULE METHOD
PRIMARY DATA -
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It is first hand data, which is collected by researcher itself. Primary data is collected by various approaches so as to get a precise, accurate, realistic and relevant data. The main tool in gathering primary data was investigation and observation. It was achieved by a direct approach and observation from the officials of the company. SECONDARY DATA - it is the data which is already collected by someone else. Researcher has to analyze the data and interprets the results. It has always been important for the completion of any report. It provides reliable, suitable, adequate and specific knowledge. I took data comprise annual financial statement and pa st records. Bank has provided me annual financial statement from 2006-07 to 2008-09 by help of which, I prepared my report. The valuable cooperation extended by staff members contributed a lot to fulfill the requirements in the collection of data in order to complete the project. Various statistical tools are applied depending on the research problem. In this study ratio analysis, comparative financial statements analysis, and common size statements ha s been used for analyzing and interpreting the result.
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Chapter 6
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CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008
PARTICULAR (A) INCOME: (1) Interest earned :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O. Item) <vi>Interest on Balances with reserve Bank of India <vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii> Total Interest Earned:-
AMOUNT
Ps.
TOTAL AMOUNT
Ps.
40,65,337 2,44,360 4,55,539 8,00,261 -
23 95 08 06 55,65,487 37
-------------- ----
3227 00 3227 00 -
-------------- ----
2,03,63,474 00 -------------- ----
2,03,63,474 00 2,59,28,971 37
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(2) Other Income:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection - Letter of credit - Letter of guarantee(DPG) - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges - Processing charges - Government Business Transaction - Commission on travelers cheques - Commission on bank assurance-life - Commission on bank assurance non-life - Commission on mutual fund poducts Sub-Total(a) (b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) (c) Exchange:- DD / TT (Inland) - DD / TT (Foreign) Sub-Total(c) Total of commission , Exchange & Brokerage (a + b + c) <ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment
29,270 00 28,177 35 -
4,62,121 01 86,790 00 2,382 00 5,820 00 1,409 91 ----------------616970 27
--------------
----
-
-
2,58,983 19 -------------- ----
2,58,983 19 8,75,953 46 -
-
-
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<iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers 2,26,977 - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others 1,446 80 Total of other income ( i to vii) -------------- ---TOTAL INCOME (1+2) PARTICULAR AMOUNT Ps
-
-
-
-
-
-
11,04,376 46 2,70,33,347 83 TOTAL Ps AMOUNT 2,39,49,366 95
(B) EXPENDITURE:(3) Interest Expected :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a) (b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit - Interest on Money Multiplier Deposit - Interest on Recurring Deposit - Interest on Khazana Deposit - Interest on FCNR(B) Deposit - Interest on Certificate of Dep. - Interest on Other Term Deposit Total of 2.
-------------
----
-
-
32,29,747 26 3,61,521 54 3,79,189 10 69,63,617 12 24,549 60 2,51,505 62 1,84,753 80 -------------- ----
81,65,136 84
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Sub Total(a + b) <ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> Total Interest Expended ( i to iv) (4) Operating Expenses :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item) Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises - Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii> <iii> Printing & Stationary <iv> Advertisement & publicity -
1,13,94,884 04 -
70,72,628 00 -------------- --------------------
70,72,628 1,84,67,512 04
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321
00 12 00 19 70 50 00 69 00 55
44,645 00 ----------------33,96,050 16
1,99,368 00 23,400 00
68,860 00 -------------- ----
2,91,628 93 31,285 59
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<v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses
--------------
----
<vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> -------------<viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams 4,142 - Telephones & Telex / Fax 3,697 - Amount paid for leased line 3,816 Sub Total <ix> --------------
----
- 3,57,942 00
00 00 00 ----
8,365 00
<x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures 7,525 00 - Annual maintenance charge 4,264 00 Sub Total <x> -------------- ---<xi> Insurance: - Insurance - Deposit Insurance
11,889 00
Sub Total <xi> --------------
----
-
-
<xii> Other Expenditure:- Traveling exp. - Boarding exp. - Local conveyance paid / Reimbursed - Diem allowances paid-officer - Diem allowances paid-clerk - Diem allowances paid-sub staff - Reimbursement of conveyance Exp. To eligible officers
22,096 18 4,326 00 21,748 17,355 8,000 780 00 00 00 00
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- Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. 5,913 - Wages paid to sweepers and casual labor 3,460 - Petty cash Expenses 5,781 - Currency chest guarding exp. 2,70,000 - Clearing House Charges 1,14,035 - Fees for Revenue / Concurrent / 98,452 other Auditors - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals 4,847 - Donations to Institution - Others 12,594 Sub Total <xii> -------------<xiii> Provisions and Contingencies Total Operating Expenses <i to xii> TOTAL EXPENDITURE ( 3 + 4 ) PROFIT BALANCE ( A ² B ) --------------
50 00 16 00 00 00 00 93 ----
5,94,388 71 - 46,91,548 46
----
2,31,59,060 86 38,74,287 14
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5.1 1
COMPARATIIVE STATEMENT ANALYSIIS C M ARAT VE STATEMENT ANA YS S
COMPARATIVE BALANCE SHEET STATEMENT
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS
PARTICULAR (A) CAPITAL AND LIABILITIES :(1) Capital (Fully owned by central Government) (2) Reserves & surplus (3) Deposits:<I> Demand Deposit :- Current / call Deposit a. From Bank b. From Others <II> Saving Bank Deposits <III> Term Deposit :a. From Bank b. From Others:- Fixed Deposits - QID - MMD - Cent uttam Deposit - Recurring Deposit - FNCR - Certificate of Deposit - Other Term Deposit Total Deposit(3) (4) Borrowing (5) Other Liabilities & Provisions. <I> Bills Payable : - Bills payable / MIS Payable
2007
2008
2009
7,66,96,927 18,08,81,307
9,26,66,535 19,88,34,956
73335300 234270014
1,04,58,175 1,43,19,795 15,64,35,938 1,93,686 8,71,946 55,68,522 41,65,526 44,95,97,826
1,08,30,348 1,54,89,177 21,99,69,789 1,93,686 7,38,298 5445660 50,57,513 54,92,25,958
4067737 28318799 440504862 193686 860660 1461073 10350157 793249310
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- T.T.·S Payable - Pay slips / Banker·s cheques Issued. - Others
465980 18,25,445 1,414 30,47,703 1,414 1414
<II> Inter-Office , Adjustment (Net) i.e. Branch Adjustment) <III> Interest Accrued : - On Deposits - On Borrowings <IV> Other Liabilities:- Accrued Expenses - Reversal of Unrealized , Interest - Amount received from court Receiver / Borrowers & held pending adjustments - Income tax & other Taxes to be remitted - Commission on guaranteed LC - Advance rent Reserved from locker holder. - Others Total other Liabilities & Provisions(5) TOTAL
17,12,343
20,82,337
2522608
40,900 1,12,392
40,000 1,12,392
106600 237778
1,60,696
1,60,696 4,41,210 1327607 128300 320368 237662
1,15,468 3,19,510 71,049
1,25,744 2,83,837 1,97,528
43,68,593 64,83,486 45,39,66,419 55,57,09,445
5348317 798597627
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PARTICULAR (B) ASSETS: (6) Cash & Balances with Reserve Bank of India:<I> Cash : - In Hand - In Foreign Currency Notes <II> Balance with Reserve Bank of India : - Incurrent Account - In other Account Total of (6) (7) Balance with Banks And Money at call and short notice: - In India - out side in India
2007
2008
2009
57,41,098
71,86,591
15013378
57,41,098
71,86,591
15013378
(8) Investments: (9) Advances: <I> Bill purchased and 33,60,423 31,82,025 discounted <II> Cash credits, overdraft, & loan repayable on demand - Cash credit 4,79,01,002 4,74,63,883 - Overdraft 4,50,33,805 4,73,57,980 - Loan repayable on demand 43,65,180 49,53,204 <III> Term loan 9,70,48,629 11,65,89,119 Total Advances(9) 19,77,09,042 21,95,46,212 (10) Fixed Assets:- Premises (C.O. Item) - Other Fixed Assets ( Including furniture & Fixtures) Total Fixed Asset(10) (11) Other Assets:<I> Other Assets:- Inter office Adjustment i.e. Branch Adjustment - Stationary and stamps on hand
3163004
51019908 50128530 5078500 135680795 241907733
36,24,509 36,24,509
36,54,074 36,54,074
3455597 3455597
24,61,58,808 1,11,871
32,43,38,322 1,51,979
537180116 153379
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<II> Amount Not in the Nature of Advances :- Prepaid expenses - Advance to staff - Interest free advances to staff - Deposit with Government and other Departments - Staff loan advance - On account payments made to other - Advance payment to land lord of office and other premises - Amount paid to pensioners - Difference in clearing - Others - Miscellaneous Inter Branch Transactions (MIBT):a. cash b. Funds Transferred. c. Staff and Advance against LFC, TA, Salary etc. d. Letter of credit claimed e. D.D.s issued by other Banks paid f. other transaction - Share Application money
11,000
11,000 15000 317693 9850 21700 16250
57,76,50 9,850
4,71,450 9,850
20,100
11,700 1,14,080 2,14,163 2210
31900 107990 336313
2,400
30728
Total of other Assets(11) 24,68,91,680 32,43,22,567 TOTAL 45,39,66,419 55,57,09,445
538220919 798597627
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COMPARATIVE PROFIT & LOSS A/C
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS
PARTICULAR (A) INCOME: -
2007
2008
2009
(1) INTEREST EARNED :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O. Item) <vi>Interest on Balances with reserve Bank of India <vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii>
19,31,691 2,19,085 5,42,000 7,60,352
40,65,337 2,44,360 4,55,539 8,00,261 55,65,487 -
5927523 216384 128102 978901
34,53,099
7250910
3,227 3,227 -
1,63,38,545 1,63,38,545
2,03,63,474 2,03,63,474
32063360 32063360
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TOTAL INTEREST EARNED:2) OTHER INCOME:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection - Letter of credit - Letter of guarantee(DPG) - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges - Processing charges - Government Business Transaction - Commission on travelers cheques - Commission on bank assurance-life - Commission on bank assurance non-life - Commission on mutual fund poducts Sub-Total(a) (b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) (c) Exchange:- DD / TT (Inland) - DD / TT (Foreign) Sub-Total(c) Total of commission , Exchange & Brokerage (a + b + c) <ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment
1,97,94,871
2,59,28,971
39314270
37,042 84,500
29,270 28,177 -
19247 7451
500
5,66,506 2,05,069
4,62,121 86,790 2,382
984341
5000 12919
25,825
5,820 1,410
9,18,942
616970
1029459
-------------2,77,269 2,77,269 11,96,210 2,58,983 8,75,953 290320 1319779 2,58,983
290320
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<iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others Total of Miscellaneous Income TOTAL OF OTHER INCOME ( I TO VII) TOTAL INCOME (1+2) (A)
-
-
-
2,22,747
2,26,977 -
198869
241 2,22,988
1,446 2,28,423
198869
14,19,198 2,12,14,069
11,04,376 2,70,33,347
1518648 40832918
PARTICULAR (B) EXPENDITURE:(3) INTEREST EXPECTED :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a) (b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit - Interest on Money Multiplier Deposit - Interest on Recurring Deposit - Interest on uttam Deposit - Interest on FCNR(B) Deposit
2007
2008
2009
------------30,32,755 3,43,883 3,40,490 43,76,405 87,978 14,810 20,57,161 32,29,747 3,61,521 3,79,189 69,63,617 24,549 2,51,505
3732257 120843 947008 19719599 22879
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- Interest on Certificate of Dep. - Interest on Other Term Deposit Total of 2. Sub Total(a + b) <ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> TOTAL INTEREST EXPENDED ( I TO IV) (4) OPERATING EXPENSES :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item) Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises - Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii>
1,00,533 54,69,815 85,04,570
1,84,753 81,65,136 1,13,94,884 -
400864 21211193 24943450 -
49,80,865 49,80,865
70,72,628 70,72,628
9450917 9450917
1,34,85,435
1,84,67,512
34394367
21,14,272 1,76,024 5,57,341 66,203 1,60,099 98,803 28,639 5,44,248 5,824 22,280 91,849
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321 44,645 -
2499604 214447 1195133 60884 164476 135792 41200 52076 4793 34510 108610
33,75,763
33,96,050
4511525
1,49,526 27,300
1,99,368 23,400
284143 74400
67,983 4,51,987
68,860 2,91,628
86849 445392
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<iii> Printing & Stationary <iv> Advertisement & publicity <v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses <vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> <viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams - Telephones & Telex / Fax - Amount paid for leased line Sub Total <ix> <x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures - Annual maintenance charge Sub Total <x> <xi> Insurance: - Insurance - Deposit Insurance Sub Total <xi> <xii> Other Expenditure:- Traveling exp. - Boarding exp. - Local conveyance paid / Reimbursed - Diem allowances paid-officer
40,024
31,285
155505
--------------
-------------11,700 3,57,942
6584
13,696 Cr 15,516 Dr 1,820
4,142 Cr 3,697 Dr 3,810 Dr 8,365
6764 14073 20837
39,105 39,105 7,525 4,264 11,889 47892 5313 53205
4,895
4,895 --------------
-
17,493 893 3,356 31,760
22,096 9,326 21,748 17,355
136422 8736 35663 4575
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- Diem allowances paid-clerk - Diem allowances paid-sub staff - Reimbursement of conveyance Exp. To eligible officers - Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. - Wages paid to sweepers and casual labor - Petty cash Expenses - Currency chest guarding exp. - Clearing House Charges - Fees for Revenue / Concurrent / other Auditors - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals - Donations to Institution - Others Sub Total <xii> <xiii> Provisions and Contingencies TOTAL OPERATING EXPENSES <I TO XII> TOTAL EXPENDITURE ( 3 + 4 ) (B) PROFIT BALANCE ( A ² B )
30,595
8,000 780 80
56,815 1,956 16,635 14,010 66,140 69,649 5,913 3,460 5,781 2,70,000 1,14,035 98,452 4,567 24,222 3,48,639 4,847 12,594 5,94,388 6252 1614 432464 42,71,936 46,91,548 5625512 4341 1414 20415 53414 78643 80895
1,77,57,371 34,56,698
2,31,59,060 38,74,287
40019879 813039
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4..2 4
TREND ANALYSIS OF BALANCESHEET T EN A A SI O BAL C EET
(By taking data of 2005 as a base year) 31/3/2005 31/3/2006 31/3/2007 31/3/2008 Advances Current A/c Saving A/c Time Deposit 171580590 59866450 160045556 164523560 165005256 68564840 150564500 202510595 197709042 76696927 180881307 192013589 219546212 92666535 198834956 257724467 31/3/2009 241907733 73335300 234270014 485643995
(Data In %) 31/3/2006 31/3/2007 31/3/2008 Growth in Advances Growth in Current A/c Growth in Saving A/c Growth in Time Deposit -3.8% 14.5% -5.9% 23.1% 19.8% 11.9% 20.1% -5.2% 11.0% 20.8% 9.9% 34.2% 31/3/2009
10.20% -20.90% 17.80% 88.40%
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Ad n s
30000000
25000000 197709042
241907733
219546212
20000000 15000000
10000000 50000000
171580590
165005256
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
G w
25.00% 20.00%
in Ad n s
19. 0%
15.00% 10.00%
5.00%
11.00%
10.20%
-5.00%
Interpretation
The amount of advances of CBI is increases since last 4 years,
but it is increasing with decreasing rate because in 2008 growth
rate of advances was 11
while in 2009 it 10.20
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
31/3/200
0.00%
-3. 0%
31/3/200 31/3/200 31/3/2009
93
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Cu
10000000 90000000 80000000 70000000 60000000 50000000 40000000 30000000 20000000 10000000 0
nt A/
92666535 76696927 73335300
68564840 59866450
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
owth in Cu
25.00%
5.00%
nt A/
20 80%
0.00%
5.00% 31/3/2006 31/3/2007 31/3/2008 31/3/2009
0.00% -5.00%
- 0.00% - 5.00%
-20.00% -25.00%
Interpretation
The amount of current a/c was in increasing rate since 2005, but
in 2009 it was decreased by 20
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
20.00%
14 50%
11 90%
-20 90%
94
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Savin A/
25000000 20000000
234270014 180881307 160045556 150564500 198834956
15000000
10000000 50000000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
owth in Savin A/
25.00% 20.00% 15.00% 10.00% 5.00%
0.00% -5.00% -10.00% 31/3/2006 31/3/2007 31/3/2008 31/3/2009
20.10%
1 . 0% 9.90%
#"
-5.90%
Interpretation
The amount of saving deposits of CBI is increases since last 4
years, but it is increasing with fluctuating growth rate because in
!
2007 growth rate of saving deposit was 20.1
!
,in 2008 it was
9.9 , while in 2009 it was again 17.80
!
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
95
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Ti
60000000
Deposit
485643995
50000000
40000000 30000000 202510595 257724467 164523560
20000000
10000000 0
192013589
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
owth in Ti e Deposit
100.00% 80.00%
60.00% 40.00%
88.40%
34.20% 23.10% -5.20%
$
31/3/2006 31/3/2007 31/3/2008 31/3/200
20.00% 0.00%
-20.00%
Interpretation
The amount of time deposit was increase with high rate of growth
in 2009 it was around double compare to 2008
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
96
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
4..3 4
TREND ANALYSIIS OF PROFIIT & LOSS A/C TREND NALYS S OF PRO T & LOS A/C
(By taking data of 2005 as a base year) (Amount in Rs.)
31/3/2005 Interest Earned Other income Total income Interest Expended Operating Expenses Total expenditure Profit 1,45,89,500 10,26,356 1,56,15,856 98,45,698 35,45,566 1,33,91,264 22,24,592
31/3/2006 1,50,98,785 12,05,560 1,63,04,345 1,02,56,565 38,58,580 1,41,15,145 21,89,200
31/3/2007 1,97,94,871 14,19,198 2,12,14,069 1,34,85,435 42,71,936 1,77,57,371 34,56,698
31/3/2008 2,59,28,971 11,04,376 2,70,33,347 1,84,67,512 46,91,548 2,31,59,060 38,74,287
31/3/2009 3,93,14,270 15,18,648 4,08,32,918 3,43,94,367 56,25,512 4,00,19,879 8,13,039
2006 Growth in Interest Earned Growth in Other income Growth in Total income Growth in Interest Expended Growth in Operating Expenses Growth in Total expenditure Growth in Profit 3% 17% 4% 4% 9% 5% -2%
2007 31% 18% 30% 31% 11% 26% 58%
2008 31% -22% 27% 37% 10% 30% 12%
2009 52% 38% 51% 86% 20% 73% -79%
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
97
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Interest Earned
45000000 40000000
39314270
35000000
30000000
25928971 19794871 1458 500
&
25000000
20000000
15098785
15000000
10000000
5000000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
rowth in Interest Earned
60%
50% 40% 30% 20% 10%
52%
31%
31%
3%
2006 2007 2008 2009
0%
Interpretation:
The amount of the interest earned was increased with increasing rate so it is good sign for the bank and profitability point of view, in 2007 and 2008 the growth rate was became stable but in 2009 it was
%
increased and became around 52
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
98
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Other in o e
1600000
1419198 1205560 1026356 1104376
1518648
1400000 1200000
1000000 800000
600000 400000
200000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Other in o e
50%
38%
40% 30%
17%
20%
10% 0%
18%
-10%
-20% -30%
2006
2007
2008
2009
-22%
Interpretation:
rate, while in 2008 it was decreased by 22 , so overall it is good sign for the bank
' '
The amount of other income was also increased with 38
of growth
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
99
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total in o e
45000000
40832918
40000000 35000000
30000000 25000000 20000000
27033347 21214069 15615856 16304345
15000000 10000000
5000000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Total in o e
60%
51%
50%
40% 30%
30%
27%
20%
10% 0%
4%
2006
2007
2008
2009
Interpretation:
The total income of the bank was also increased due to increases in the interest earning and other income
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
100
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Interest Expended
40000000
35000000 30000000
25000000 20000000
34394367
18467512 13485435 9845698 10256565
15000000 10000000
5000000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Interest Expended
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
86%
31% 4%
2006 2007
37%
2008
2009
Interpretation:
The amount of the interest expended was increased with increasing high compare to previous years. The reason may be that increased the dependability on the out side debt like deposits and borrowing. this is not good sign for the bank
) (
rate since 2005, but in 2009 it was increased by 86
which is very nd
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
101
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Operatin Expenses
6000000
5625512 4271936 4691548
5000000
4000000 3000000
3545566
3858580
2000000
1000000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Operatin Expenses
25%
20%
20% 15%
11% 9%
10%
10%
5%
0% 2006 2007 2008 2009
Interpretation:
The operating expenditure also increased with increasing rate since by 20
0
2005. In 2008 it was increased by 10
0
while in 2009 it was increased
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
102
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total expenditure
45000000 40000000
40019879
35000000
30000000
25000000
20000000
23159060 17757371 13391264 14115145
15000000
10000000
5000000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Total expenditure
80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009
73%
26% 5%
30%
Interpretation:
The total expense of the bank was increased with increasing rate, but in 2009 it was increased by 73 , increased
1 2
s said earlier that because of the
high increasing rate in interest expense the total expenses also
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
103
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Profit
4500000 4000000
3874287 3456698 2224592 2189200
3500000
3000000
2500000
2000000
1500000
1000000
813039
500000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Profit
80%
58%
60% 40% 20%
0% -20% -40%
12% -2%
2006 2007 2008 2009
-60% -80% -100%
-79%
Interpretation:
to increased in the level of the expenditure the profit margin was cut down. It is true that the income level of the bank was also increased but the increasing rate of income is less than the increasing rate of expenditure
3
The profit of the bank was decline by 79
the reason may be that due
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
104
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
4.4 4
COMMON SIZE STATEMENT ANALYSIS C MMON SIZE STATEM NT ANALYSIS
PROFIT & LOSS A/C OF CENTRAL BANK OF INDIA INCOME
TOTAL INTEREST EARNED:Term Loans Demand Loans Cash Credits Over Draft Interest on bill purchased Interest Received from central office. TOTAL OF COMMISSION , EXCHANGE & BROKERAG TOTAL OF MISCELLANEOUS INCOME TOTAL INCOME (1+2) (A)
2007
1931691 219085 542000 760352 3227 16338545 1196210 222988 21214069
2008
4065337 244360 455539 800261 20363474 875953 228423 27033347
2009
5927523 216384 128102 978901 32063360 1319779 198869 40832918
EXPENSES
INTEREST EXPENDED :Interest on Saving Deposit: Interest on Term Deposits: Interest paid to Central office OPERATING EXPENSES :Payments to and Provisions for Employees Rent, Taxes and Lighting Printing & Stationary Law charges Postages, Telegrams, Telephones etc. Repairs & Maintenance Insurance Other Expenditure TOTAL EXPENDITURE ( 3 + 4 ) (B)
2007
3032755 5469815 4980865
2008
3229747 8165136 7072628
2009
3732257 21211193 9450917
3375763 451987 40024 11700 1820 39105 4895 348639 17757368
3396050 291628 31285 357942 8365 11889 594388 23159058
4511525 445392 155505 6584 20837 53205 432464 40019879
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
105
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
COMMON SIZE PROFIT & LOSS A/C
INCOME
TOTAL INTEREST EARNED:Term Loans Demand Loans Cash Credits Over Draft Interest on bill purchased Interest Received from central office. TOTAL OF COMMISSION, EXCHANGE & BROKERAG TOTAL OF MISCELLANEOUS INCOME TOTAL INCOME (1+2) (A)
2007
93.31 9.11 1.03 2.55 3.58 0.02 77.02 5.64 1.05 100
2008
95.91 15.04 0.90 1.69 2.96 0.00 75.33 3.24 0.84 100
2009
96.28 14.52 0.53 0.31 2.40 0.00 78.52 3.23 0.49 100
EXPENSES
INTEREST EXPENDED :Interest on Saving Deposit: Interest on Term Deposits: Interest paid to Central office OPERATING EXPENSES :Payments to and Provisions for Employees Rent, Taxes and Lighting Printing & Stationary Law charges Postages, Telegrams, Telephones Repairs & Maintenance Insurance Other Expenditure TOTAL EXPENDITURE ( 3 + 4 ) (B)
2007
75.93 17.08 30.80 28.05 24.07 19.01 2.55 0.23 0.07 0.01 0.22 0.03 1.96 100
2008
79.74 13.95 35.26 30.54 20.26 14.66 1.26 0.14 1.55 0.04 0.05 0.00 2.57 100
2009
85.95 9.33 53.00 23.62 14.05 11.27 1.11 0.39 0.02 0.05 0.13 0.00 1.08 100
Interpretation:
From above analysis we can says that most portion of income of banks is comes from the interest earned on loan and advances
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
106
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
So the interest is one of the big sources of income generation for any bank
4
nother things is that the most of the expenditure is comes from the
interest payment on deposits, in case of CBI majority of expenses is accured due to the interest payment on term deposit
5
Composition of Total income out of 100
Co position of INCOME
100%
1.05%
0.84%
0.49% 3.23%
98%
96% 94%
3.24% 5.64%
92%
90% 88%
95.92% 93.31%
96.28%
2007
2008
2009
Composition of Total Expenses out of 100
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
5
8
B
8C
B
A@@9
nte est E rned
8 7
c
ssion Exc nge Broker ge
Miscellaneous income
6
107
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Co position of EXPENSES
120 100
24.07%
80
20.26% 79.74%
14.05% 85.95%
75.93%
60 40
20 0
2007
2008
2009
BALANCE SHEET OF CENTRAL BANK OF INDIA LIABILITIES
Deposits:Demand Deposit Saving Bank Deposits Term Deposit Tota other Liabi ities & Provisions TOTAL LIABILITIES
D D
2007
76696927 180881307 192013589 4368593 453966420
2008
92666535 198834956 257724468 6483486 555709446
ASSETS
Cash balance with RBI dvance Fixed ssets Other assets TOTAL ASSETS
E E
2007
5741098 197709042 3624599 246891680 453966419
2008
7186591 219546212 3654074 324322567 554709444
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
F
F
INTEREST EX ENDED
F
O ERATING EX ENSES
2009
73335300 234270015 485643995 5348317 798597627
2009
15013378 241907733 3455597 538220919 798597627
108
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
COMMON SIZE BALANCE SHEET
LIABILITIES
Deposits:Demand Deposit Saving Bank Deposits Term Deposit Tota other Liabi ities & Provisions TOTAL LIABILITIES
H H
2007
G G G G G G G G
2008
G G G G G G G G
2009
G G G G G G G G
16 39 42 0
89 84 30 96
16 35 46 1
68 78 38 17
9 29 60 0
18 34 81 67
100
100
100
ASSETS
Cash balance with RBI dvance Fixed ssets Other assets
TOTAL ASSETS
I I
2007
1 43 0 54 26 55 80 39
2008
1 39 0 58 30 58 66 47
2009
1 30 0 67 88 29 43 40
100
100
100
Co position of total Liabilit 2009
0.67% 9.18% 29.34%
60.81%
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
Q
QS
QP
QP
R
QP
Demand De
sit
Sa ing De
sits
Term De
sit
Liabilities & r visi ns
109
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Co position of total Liabilit 2008
1.17%
16.68%
46.38%
3 .78%
Demand Deposit Saving Deposits Term Deposit iabilities
T
rovisions
Co position of total Liabilit 2007
0.96% 16.89%
42.3%
39.84%
WV U
Demand Deposit
Saving Deposits
Term Deposit
iabilities
Co position of total Assets 2009
1.88%
30.29%
67.4%
0.43%
Cash balance with RBI
Advance
Fixed Assets
Other assets
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
WV
U
rovisions
110
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Co position of total Assets 2008
1.3% 39.58%
58.47%
0.66%
Cash balance with RBI Advance Fixed Assets Other assets
Co position of total Assets 2007
1.26% 43.55%
54.39%
0.8%
Cash balance with RBI Advance Fixed Assets Other assets
Interpretation :
The contribution of call deposits or demand deposit to the total
liability is decreased by year to year so it is not good sign for the bank. The main reason behind it may be that the current account facility provided by the bank is not very good compare to the other bank
The contribution of saving deposits to total liability is also
decreases by year to year.
The contribution of time deposit to the total liability is increases
by year to year so it is good sign for the bank, and it also
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
111
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
determine that the trust worthiness of peoples are built by year to year
The cash balance with RBI is also increases by year to year which
increase the confidence of investors toward bank
The contribution of the advances decreases by year to year which
is not good sign for the bank, reason may be the increasing rate if BPLR.
4.5 5
CENTRAL BANK OF INDIA AS WHOLE CEN A BAN OF I D A S HOL
Here the performance of the central bank of India as whole is given
BALANCE SHEET OF THE CENTRAL BANK OF INDIA AS WHOLE
( In Crore)
LIABILITIES
Total Share Capital
MAR '05
1,124.14
MAR '06
1,124.14
MAR '07
1,124.14
MAR '08
1,204.14
MAR '09
1,321.14
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
112
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Equity Share Capital Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities
1,124.14 0.00 1,617.50 523.57 3,265.21 60,751.67 139.69 60,891.36 4,439.32 68,595.89
1,124.14 0.00 1,810.19 507.64 3,441.97 66,482.65 310.81 66,793.46 4,445.61 74,681.04
324.14 800.00 2,179.84 485.85 3,789.83 82,776.28 782.01 83,558.29 5,659.97 93,008.09
404.14 800.00 2,699.95 2,038.67 5,942.76 110,319.67 449.10 110,768.77 7,244.26 123,955.79
404.14 917.00 3,081.99 2,008.92 6,412.05 131,271.85 804.25 132,076.10 9,167.07 147,655.22
ASSETS
Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Other Assets Total Assets
MAR '05
5,571.81
MAR '06
3,382.86
MAR '07
5,473.67
MAR '08
11,537.19
MAR '09
11,036.91
1,481.13 27,277.32 30,834.76 1,333.12 580.96 752.16 2,678.72 68,595.90
1,411.23 37,483.48 28,639.09 1,369.12 644.28 724.84 3,039.54 74,681.04
3,339.22 51,795.47 27,741.89 1,483.04 715.77 767.27 3,890.57 93,008.09
1,302.05 72,997.43 31,455.19 3,119.80 799.51 2,320.29 4,343.64 123,955.79
1,214.34 85,483.20 43,060.72 3,181.69 903.70 2,277.99 4,582.08 147,655.24
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
113
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Net Worth
7,000.00
6,412.05 5,942.76
6,000.00 5,000.00 3 265.21
3 789.83
3,000.00
2,000.00 1,000.00 0.00
Mar '05
Mar '06
Interpretation :
Net worth of the bank was increased with increasing rate from
to 2007, but in 2009 the increasing rate was became around 8 .
X
Deposits
140,000.00 120,000.00 100,000.00 80,000.00 60,751.67 82,776.28 110,319.67 131,271.85
66,482.65
60,000.00 40,000.00 20,000.00 0.00
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Interpretation :
The amount of the deposits is also increased with increasing rate
till 2008 but in 2009 the growth rate was fall by 19 .
Y
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
X
2005 to 2008, in 2008 it was increased by around 57
`
`
4,000.00
3 441.97
Mar '07
a
Mar '08
Mar '09
compare
114
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Advan es
90,000.00 80,000.00
85,483.20 72,997.43
51,795.47 37,483.48 27,277.32
70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Interpretation :
The amount of advances of bank is increased by year to year, and
b
43,060.72
31,455.19
in 2009 it was increased by about 17
Invest ents
50,000.00 45,000.00 40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00
30,834.76
28,639.09
27,741.89
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Interpretation :
The amount of the investment is also increased with increasing
c
rate in 2009 it was increased by 37
compare to previous year
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
115
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
PROFIT & LOSS A/C OF
CENTRAL BANK OF INDIA AS WHOLE
(Amt in CR)
INCOME
Interest Earned Other Income Total Income
Mar '05 Mar '06 Mar '07
5,204.88 938.87 6,143.75 5,385.58 551.24 5,936.82 6,234.21 561.83 6,796.04
Mar '08
Mar '09
7,995.54 10,455.19 902.35 1,069.97 8,897.89 11,525.16
EXPENDITURE
Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year
Mar '05 Mar '06 Mar '07
2,829.93 1,277.56 804.55 53.17 877.04 0.00 2,284.57 727.75 5,842.25 301.50 3,005.51 1,275.74 296.00 50.90 1,051.26 0.00 1,782.22 891.68 5,679.41 257.42 3,759.79 1,175.42 701.64 65.00 596.18 0.00 2,133.16 405.08 6,298.03 498.01
Mar '08
5,772.47 1,214.34 563.59 73.61 723.71 0.00 2,034.89 540.36
Mar '09
8,226.72 1,272.59 653.17 83.59 717.86 0.00 2,184.05 543.16
8,347.72 10,953.93 550.16 571.24
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
116
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(The amounts in the following charts are in CR)
Interest Earned
12,000.00
10,000.00
10,455.19 7,995.54
8,000.00 6,000.00
4,000.00 2,000.00
5,204.88
5,385.58
,234.21
0.00
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Interest Earned
35.0 30.0 25.0 20.0
15.8%
15.0 10.0 5.0 0.0
Mar '06 Mar '07 Mar '08 Mar '09
3.5%
Interpretation :
The amount of interest earned was increases with increasing rate
the healthiness condition of bank.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
d
It was increased by 31
in 2009 compare to 2008. So it shows
e
30.8% 28.3%
117
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total In o e
14,000.00
12,000.00 10,000.00 8,000.00 6,000.00
4,000.00 2,000.00 0.00
11,525.16 8,897.89 6,143.75 5,936.82 6,796.04
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Total In o e
35 30 25
20 15 10 5
30.9%
29.5%
14.5%
0 -5 -10
-3.4%
Mar '06 Mar '07 Mar '08 Mar '09
Interpretation :
Due to increases in interest earnings the income of the bank also
increases, but here the increasing rate with compare to previous year is almost equal for both 2008 and 2009, it is around 30 .
f
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
118
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Interest expended
9,000.00 8,000.00
8,226.72 5,772.47 3,759.79 2,829.93 3,005.51
7,000.00
6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Interest expended
60 50
40 30
53.5% 42.5%
25.1%
20 10
0
6.2%
Interpretation :
The amount of interest expended is also increases, but it is
increases with decreasing rate because in 2008 it was increased by 54 , while in 2009 it was increased by 42 .
g g
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Operatin Expenses
2,500.00 2,000.00 1,500.00
2,284.57 1,782.22
2,133.16
2,034.89
2,184.05
1,000.00 500.00
0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Operatin Expenses
25 20 15 10 5 0 -5 -10 -15 -20 -25
Mar '06 Mar '07
19.7% 7.3% -4.6%
Mar '08 Mar '09
-22%
Interpretation :
The operating expenses of the bank is on fluctuating rate
increased by 7 .
h
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h
because in 2008 it was decreased by 5
while in 2009 it was
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total Expenses
12,000.00
10,953.93 8,347.72 5,842.25 5,679.41 6,298.03
10,000.00
8,000.00 6,000.00
4,000.00
2,000.00 0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Total Expenses
35 30
25 20 15 10 5 0 -5
32.5%
31.2%
10.9%
-2.8%
Mar '06 Mar '07 Mar '08 Mar '09
Interpretation :
As increases in working of the bank the total expenditure of the
bank is also increases, but good things was that in 2008 it was
i i
increased by 33
while in 2009 it was increased by 31 .
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Net Profit for the Year
600
550.16 498.01
571.24
500
400
301.5
300
257.42
200
100 0
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Net Profit for the Year
100
80
93.5%
60
40 20
10.5%
3.8%
Mar '09
0
-20 Mar '06 Mar '07 Mar '08
-14.6%
-40
Interpretation :
The amount of profit of the bank was increased by decreasing
rate the reason behind it may be that the rate of growth in total income was decreased or almost equal but the rate of employee cost and administrative cost were increased
Other reason may be that the other income of the bank in 2008
the total income of the bank.
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p
p
grow by 60
while in 2009 it was grow just by 18
so it may cut
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
4.6 6
RA T IO A N A LY S IS RAT O N Y S
NET PROFIT MARGIN
Net pro it margin= Net Pro it before interest and ta es * 100
t s q q r
Sa es (operation
2005 6 21
u
2006 4 92
u
2007 7 69
u
2008 6 31
u
2009 4 99
u
Net profit margin
9
8 7 6.21 7.69 6.31
6
5
4.92
4.99
4
3
2
1
0
2005 2006 2007 2008 2009
Interpretation :
The net profit margin arising from business operation before
interest and tax is deducted. The convention is to express profit as a percentage of total operation of the bank.
Here the profit margin is declining so it is not good for the bank
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RETURN ON NET WORTH
Return on net worth= Net Profit after interest and ta es * 100 Net worth
v
2005 11 65
w
2006 9 07
w
2007 15 89
w
2008 15 46
w
2009 14 43
w
Return on Networth
18
15.89
11.65
16
14
15.46
14.43
12
10
9.07
8
6
4
2 0 2005 2006 2007 2008 2009
Interpretation :
This ratio expresses the net profit in terms of the equity
shareholders funds. This ratio indicates the return on the funds employed by them
Here there is not much more different in the return on Networth
since last three years so it is good sign for the bank.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RETURN ON ASSETS
Return on Assets= Net Profit after ta es * 100 Tota Assets
y x
2005 0 44
2006 0 34
2007 0 54
2008 0 44
2009 0 39
Return on Assets
0.6 0.5 0.44 0.54 0.44
0.4
0.3 0.2
0.39 0.34
0.1
0 2005 2006 2007 2008 2009
Interpretation :
The profitability of the firm is measured by establishing relation
of net profit with the total assets of the organization. The ratio indicates the efficiency of utilization of assets in generating revenue
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
DEBT-EQUITY RATIO
Debt-equity ratio= Long term debt
Share ho ders equity
2005 18 65:1
2006 19 41:1
2007 22 05:1
2008 18 64:1
2009 20 60:1
Debt-Equit Ratio
23
22.05
22 21
20.6 19.41
18.65
20 19 18 17
16 2005
18.64
2006
2007
2008
2009
Interpretation :
This ratio shows the relationship between the loan fund and
networth of the company. It shows the proportion of the dedts or borrowing funds to owner· fund, Here the ratio is high in 2009 compare to 2008 which is not good sign for the bank.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
DEBT TO TOTAL ASSETS RATIO
Debt to tota assets ratio=
Tota Debt Tota Assets
2005 0 89:1
2006 0 89:1
2007 0 90:1
2008 0 89:1
2009 0 89:1
Debt to Assets ratio
0.902 0.9
0.9
0.898
0.896
0.894
0.892
0.89
0.89
0.89
0.89
0.89
0.888
0.886 0.884 2005 2006 2007 2008 2009
Interpretation :
This ratio indicates that what proportion of the permanent
capital of the firm consist of long term debt. Here the proportion is same since last two years which shows the stability of the bank.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
INTEREST EXPENSE RATIO
Interest expense ratio= Interest expense * 100 Income
2005
2006
2007
2008
2009
Interest Expense Ratio
80 70 71.38
64.87 46.06
50.62
60 50
40 30
55.32
20 10
0 2005 2006 2007 2008 2009
Interpretation :
This Ratio indicates that what is the proportion of the total
interest expenses to the Income. So that we can know about profitability of firm. Here the proportion of the expenditure is increases so it may caused in the decreasing rate of profit.
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46 06
50 62
55 32
64 87
71 38
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
OPERATING EXPENSES RATIO
Operating expenses ratio= Operating Expenses *100 Income
2005
2006
2007
2008
2009
Operating Expense Ratio
40 35
37.19
30.02 31.39 22.87 18.95
30 25
20 15
10 5
0 2005 2006 2007 2008 2009
Interpretation :
This Ratio indicates that how much expenses has been spent on
selling and administration use of organization. This Ratio indicates that what is the proportion of the total Operating expenses to the Income. So that we can know about profitability of firm. Here the proportion of the operating expenditure is decreases so it is good sign for the bank, and it also shows the increases in the level of efficiency and utilization of resources
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37 19
30 02
31 39
22 87
18 95
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
INTEREST EXPENDED/INTEREST EARNED
Interest Expended/Interest Earned= Interest Expended *100 Interest Earned
2005
2006
2007
2008
2009
Interest Exp/Interest Ernd
90
80
70
78.69 72.2 54.37 55.81
60.31
60
50
40
30
20
10 0 2005 2006 2007 2008 2009
Interpretation :
This ratio indicates the proportion of the total interest expended
into the total interest earned. Means if in 2009 if the bank earned 100 rs as interest than they paid rs 79 as interest expended
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54 37
55 81
60 31
72 20
78 69
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RETURN ON SHARE HOLDERS FUNDS
Return on share ho ders· funds=
Profit after tax * 100 Share ho ders funds
2005
2006
2007
2008
2009
Return on Share holders' fund
25 20
15 10 13.41
22.15
22.84
21.62
11.45
5 0
2005 2006 2007 2008 2009
Interpretation :
Indicates the percentage return on share holders· funds, from the
above chart we can says that the rate of return on fund is about constant since last three years so it is good things for the bank point of view
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13 41
11 45
22 15
22 84
21 62
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Chapter 6
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FINDINGS & CONCLUSION
PERFORMANCE OF THE CENTRAL BANK OF INDIA, LAL DARWAJA
Performance of the bank according to Profit & Loss A/c
Overall rating of the Profit & Loss A/c (Best condition 5«4«3«2« Poor condition)
Criteria Profit Interest Earned Other income Tota income Interest Expended Operating Expenses Tota expenditure
2005 2006 2007 2008 2009 Average 3 3 4 5 1 32 2 2 3 3 5 3 2 3 3 3 4 3 2 2 3 3 5 3 3 3 3 2 1 24 3 2 2 2 1 2 3 3 3 2 1 24
Performance of bank out of 100
70
60 50
64%
60%
60%
60%
48% 40% 48%
40
30
20
10 0 Profit Interest Earned Other income Total income Interest Expended Operating Total Expenses expenditure
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
From the above table we can easily find out the overall performance of the bank If we talk about the overall profitability condition of the bank is around average condition because it falls at around 3.2 rating out of 5 which is quite near to the average
The income level of the central bank of India is quite better in 2009, the income from interest and other income is around best position, it is 5 and 4 respectively. Which show the better position in income earning, And if we talk about the overall income position then it is around average. The expenditure level was increased with increasing rate the overall rating of the expenses is into between poor and average which show the poor condition of the bank
Performance of the bank according to Balance sheet
Overall rati
of balance
eet (Best condition 5«4«3«2«1 Poor condition)
Criteria Advances Current A/c Saving A/c Time Deposit
2005 3 2 3 2
2006 2007 2008 2009 Average 2 3 3 4 3 3 3 4 3 3 2 3 3 4 3 2 2 3 5 2.8
Performance of bank out of 100%
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
61
60%
60
59 58
60%
60%
57
56%
56
55
54
Advances
Current A/c
Saving A/c
Time Deposit
The level of advances increased with increasing rate in 2009 it was in better position, if we talk about the overall performance of the bank in case of level of advances then it is around average The amount of deposits was also increased with increasing rate, when we talk about the average performance of bank for last five year then the position of current deposits, saving deposits and demand deposits fall in the average category.
PERFORMANCE OF PERFORMANCE OF THE CENTRAL BANK OF IINDIIA AS WHOLE THE CENTRAL BANK OF ND A AS WHOLE
Performance of the bank according to profit & Loss A/c
Overall rating of the Profit & Loss A/c (Best condition 5«4«3«2« Poor condition)
Criteria Interest Earned Tota Income Interest expended Operating Expenses Tota Expenses Net Profit for the Year
2005 2006 2007 2008 2009 Average 2 2 3 3 4 28 2 2 3 3 4 28 3 3 3 2 1 24 3 3 3 3 3 3 4 4 3 3 1 3 2 2 3 4 4 3
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
70 60
50
56%
56% 48%
40
30 20
10
0
Interest Earned Total Income
Interest expended
From the above table we can say that the overall condition of the central bank of India is at the average position because the rating fall at the average or near to average spot for all criteria
Performance of the bank according to Ba ance sheet
Overall rating of balance sheet (Best condition 5«4«3«2« Poor condition)
f
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h
Performance of bank out of 100
f
Criteria Net orth Deposits Advances Investments Tota Assets
e g
2005 2 2 1 3 2
2006 2 2 2 3 2
2007 2 3 3 3 3
d
Performance of bank out of 100
60%
60%
60%
Operating Expenses
Total Expenses Net Profit for the Year
2008 4 4 4 3 4
2009 Average 4 28 4 3 5 3 4 32 4 3
136
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Over all performan e
66
64% 60% 60% 60%
64 62 60 58
56 54 52
56%
Net Worth
Deposits
Advances
Investments
Total Assets
From the above chart we can say that the overall position of the central bank of India is average
NOTE
The rating of each criteria is given on the bases of the average of the five consecutive year
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Chapter 7
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RECOMMENDATION
Bank should improve the performance in case of the facility provided to the current account holder, because the facility provided by the bank is not very good. The dependability of the bank on out side fund is very high and so it may be very dangerous for the bank. If the bank wants to maintain their reputation then they have to improve the profitability by reducing the maximum cost. The infrastructural facility of the bank is very poor, because they till working with the old infrastructural facility
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
BIBLIOGRAPHY
BOOKS: Financia Management ² M. Y. Khan & P. K. Jain Financia Management ² I. M. Pandey Management Accounting ² R. S. N. Pi ai and Bagvati
REFERENCES: Indian banking system India banking 2010 Search engines ² oogle & Yahoo
www.Centralbankofindia.co.in
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
ANNEXURE
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008
PARTICULAR (A) INCOME: (1) Interest earned :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O.
AMOUNT
Ps.
TOTAL AMOUNT
Ps.
40,65,337 2,44,360 4,55,539 8,00,261 -
23 95 08 06 55,65,487 37
-------------- ----
3227 00 3227 00 -
-------------- ----
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Item) <vi>Interest on Balances with reserve Bank of India <vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii> Total Interest Earned:-
-
-
-
-
2,03,63,474 00 -------------- ----
2,03,63,474 00 2,59,28,971 37
(2) Other Income:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection 29,270 - Letter of credit - Letter of guarantee(DPG) 28,177 - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges 4,62,121 - Processing charges 86,790 - Government Business Transaction - Commission on travelers cheques - Commission on bank 2,382 assurance-life - Commission on bank 5,820 assurance non-life - Commission on mutual fund 1,409 poducts Sub-Total(a) -------------(b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) --------------
00 35 01 00 00 00 91 ---616970 27
----
-
-
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(c) Exchange:- DD / TT (Inland) - DD / TT (Foreign)
2,58,983 19 Sub-Total(c) -------------- ---Total of commission , Exchange & Brokerage (a + b + c)
2,58,983 19 8,75,953 46 -
<ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment <iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers 2,26,977 - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others 1,446 80 Total of other income ( i to vii) -------------- ---TOTAL INCOME (1+2) PARTICULAR AMOUNT Ps
-
-
-
-
-
-
-
-
11,04,376 46 2,70,33,347 83 TOTAL Ps AMOUNT 2,39,49,366 95
(B) EXPENDITURE:(3) Interest Expected :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a)
-------------
----
-
-
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit - Interest on Money Multiplier Deposit - Interest on Recurring Deposit - Interest on Khazana Deposit - Interest on FCNR(B) Deposit - Interest on Certificate of Dep. - Interest on Other Term Deposit Total of 2. Sub Total(a + b) <ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> Total Interest Expended ( i to iv) (4) Operating Expenses :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item)
32,29,747 26 3,61,521 54 3,79,189 10 69,63,617 12 24,549 60 2,51,505 62 1,84,753 80 -------------- ----
81,65,136 84 1,13,94,884 04 -
-
-
70,72,628 00 -------------- --------------------
70,72,628 1,84,67,512 04
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321
00 12 00 19 70 50 00 69 00 55
44,645 00 -
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises - Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii> <iii> Printing & Stationary <iv> Advertisement & publicity <v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses
--------------
----
33,96,050 16
1,99,368 00 23,400 00
68,860 00 -------------- ----
2,91,628 93 31,285 59
--------------
----
<vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> -------------<viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams 4,142 - Telephones & Telex / Fax 3,697 - Amount paid for leased line 3,816 Sub Total <ix> --------------
----
- 3,57,942 00
00 00 00 ----
8,365 00
<x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures 7,525 00 - Annual maintenance charge 4,264 00 Sub Total <x> -------------- ---<xi> Insurance: - Insurance
11,889 00
-
-
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Deposit Insurance
Sub Total <xi> --------------
----
-
-
<xii> Other Expenditure:- Traveling exp. 22,096 - Boarding exp. 4,326 - Local conveyance paid / 21,748 Reimbursed - Diem allowances paid-officer 17,355 - Diem allowances paid-clerk 8,000 - Diem allowances paid-sub staff 780 - Reimbursement of conveyance Exp. To eligible officers - Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. 5,913 - Wages paid to sweepers and casual labor 3,460 - Petty cash Expenses 5,781 - Currency chest guarding exp. 2,70,000 - Clearing House Charges 1,14,035 - Fees for Revenue / Concurrent / other Auditors 98,452 - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals 4,847 - Donations to Institution - Others 12,594 Sub Total <xii> -------------<xiii> Provisions and Contingencies Total Operating Expenses <i to xii> TOTAL EXPENDITURE ( 3 + 4 ) PROFIT BALANCE ( A ² B ) --------------
18 00 00 00 00 00
50 00 16 00 00 00 00 93 ----
5,94,388 71 - 46,91,548 46
----
2,31,59,060 86 38,74,287 14
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS
PARTICULAR (A) CAPITAL AND LIABILITIES :(1) Capital (Fully owned by central Government) (2) Reserves & surplus (3) Deposits:<I> Demand Deposit :- Current / call Deposit a. From Bank b. From Others <II> Saving Bank Deposits <III> Term Deposit :a. From Bank b. From Others:- Fixed Deposits - QID - MMD - Cent uttam Deposit - Recurring Deposit - FNCR - Certificate of Deposit - Other Term Deposit Total Deposit(3) (4) Borrowing (5) Other Liabilities & Provisions.
2007
2008
2009
7,66,96,927 18,08,81,307
9,26,66,535 19,88,34,956
73335300 234270014
1,04,58,175 1,43,19,795 15,64,35,938 1,93,686 8,71,946 55,68,522 41,65,526 44,95,97,826
1,08,30,348 1,54,89,177 21,99,69,789 1,93,686 7,38,298 5445660 50,57,513 54,92,25,958
4067737 28318799 440504862 193686 860660 1461073 10350157 793249310
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<I> Bills Payable : - Bills payable / MIS Payable - T.T.·S Payable - Pay slips / Banker·s cheques Issued. - Others
465980 18,25,445 1,414 30,47,703 1,414 1414
<II> Inter-Office , Adjustment (Net) i.e. Branch Adjustment) <III> Interest Accrued : - On Deposits - On Borrowings <IV> Other Liabilities:- Accrued Expenses - Reversal of Unrealized , Interest - Amount received from court Receiver / Borrowers & held pending adjustments - Income tax & other Taxes to be remitted - Commission on guaranteed LC - Advance rent Reserved from locker holder. - Others Total other Liabilities & Provisions(5) TOTAL
17,12,343
20,82,337
2522608
40,900 1,12,392
40,000 1,12,392
106600 237778
1,60,696
1,60,696 4,41,210 1327607 128300 320368 237662
1,15,468 3,19,510 71,049
1,25,744 2,83,837 1,97,528
43,68,593 64,83,486 45,39,66,419 55,57,09,445
5348317 798597627
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
PARTICULAR (B) ASSETS: (6) Cash & Balances with Reserve Bank of India:<I> Cash : - In Hand - In Foreign Currency Notes <II> Balance with Reserve Bank of India : - Incurrent Account - In other Account Total of (6) (7) Balance with Banks And Money at call and short notice: - In India - out side in India
2007
2008
2009
57,41,098
71,86,591
15013378
57,41,098
71,86,591
15013378
(8) Investments: (9) Advances: <I> Bill purchased and 33,60,423 31,82,025 discounted <II> Cash credits, overdraft, & loan repayable on demand - Cash credit 4,79,01,002 4,74,63,883 - Overdraft 4,50,33,805 4,73,57,980 - Loan repayable on demand 43,65,180 49,53,204 <III> Term loan 9,70,48,629 11,65,89,119 Total Advances(9) 19,77,09,042 21,95,46,212 (10) Fixed Assets:- Premises (C.O. Item) - Other Fixed Assets ( Including furniture &
3163004
51019908 50128530 5078500 135680795 241907733
36,24,509
36,54,074
3455597
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Fixtures) Total Fixed Asset(10) (11) Other Assets:<I> Other Assets:- Inter office Adjustment i.e. Branch Adjustment - Stationary and stamps on hand <II> Amount Not in the Nature of Advances :- Prepaid expenses - Advance to staff - Interest free advances to staff - Deposit with Government and other Departments - Staff loan advance - On account payments made to other - Advance payment to land lord of office and other premises - Amount paid to pensioners - Difference in clearing - Others - Miscellaneous Inter Branch Transactions (MIBT):a. cash b. Funds Transferred. c. Staff and Advance against LFC, TA, Salary etc. d. Letter of credit claimed e. D.D.s issued by other Banks paid f. other transaction - Share Application money
36,24,509
36,54,074
3455597
24,61,58,808 1,11,871
32,43,38,322 1,51,979
537180116 153379
11,000
11,000 15000 317693 9850 21700 16250
57,76,50 9,850
4,71,450 9,850
20,100
11,700 1,14,080 2,14,163 2210
31900 107990 336313
2,400
30728
Total of other Assets(11) 24,68,91,680 32,43,22,567 TOTAL 45,39,66,419 55,57,09,445
538220919 798597627
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
150
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS
PARTICULAR (A) INCOME: -
2007
2008
2009
(1) INTEREST EARNED :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O. Item) <vi>Interest on Balances with reserve Bank of India
19,31,691 2,19,085 5,42,000 7,60,352
40,65,337 2,44,360 4,55,539 8,00,261 55,65,487 -
5927523 216384 128102 978901
34,53,099
7250910
3,227 3,227 -
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
<vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii> TOTAL INTEREST EARNED:2) OTHER INCOME:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection - Letter of credit - Letter of guarantee(DPG) - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges - Processing charges - Government Business Transaction - Commission on travelers cheques - Commission on bank assurance-life - Commission on bank assurance non-life - Commission on mutual fund poducts Sub-Total(a) (b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) (c) Exchange:- DD / TT (Inland) - DD / TT (Foreign) Sub-Total(c) Total of commission , Exchange
1,63,38,545 1,63,38,545 1,97,94,871
2,03,63,474 2,03,63,474 2,59,28,971
32063360 32063360 39314270
37,042 84,500
29,270 28,177 -
19247 7451
500
5,66,506 2,05,069
4,62,121 86,790 2,382
984341
5000 12919
25,825
5,820 1,410
9,18,942
616970
1029459
-------------2,77,269 2,77,269 11,96,210 2,58,983 8,75,953 290320 1319779 2,58,983
290320
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
& Brokerage (a + b + c) <ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment <iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others Total of Miscellaneous Income TOTAL OF OTHER INCOME ( I TO VII) TOTAL INCOME (1+2) (A) -
-
-
-
2,22,747
2,26,977 -
198869
241 2,22,988
1,446 2,28,423
198869
14,19,198 2,12,14,069
11,04,376 2,70,33,347
1518648 40832918
PARTICULAR (B) EXPENDITURE:(3) INTEREST EXPECTED :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a) (b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit
2007
2008
2009
------------30,32,755 3,43,883 3,40,490 32,29,747 3,61,521 3,79,189
3732257 120843 947008
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Interest Deposit - Interest - Interest - Interest - Interest - Interest
on Money Multiplier on on on on on Recurring Deposit uttam Deposit FCNR(B) Deposit Certificate of Dep. Other Term Deposit Total of 2. Sub Total(a + b) 43,76,405 87,978 14,810 20,57,161 1,00,533 54,69,815 85,04,570 69,63,617 24,549 2,51,505 1,84,753 81,65,136 1,13,94,884 19719599 22879
400864 21211193 24943450 -
<ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> TOTAL INTEREST EXPENDED ( I TO IV) (4) OPERATING EXPENSES :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item) Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises
49,80,865 49,80,865
70,72,628 70,72,628
9450917 9450917
1,34,85,435
1,84,67,512
34394367
21,14,272 1,76,024 5,57,341 66,203 1,60,099 98,803 28,639 5,44,248 5,824 22,280 91,849
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321 44,645 -
2499604 214447 1195133 60884 164476 135792 41200 52076 4793 34510 108610
33,75,763
33,96,050
4511525
1,49,526
1,99,368
284143
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
154
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii> <iii> Printing & Stationary <iv> Advertisement & publicity <v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses <vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> <viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams - Telephones & Telex / Fax - Amount paid for leased line Sub Total <ix> <x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures - Annual maintenance charge Sub Total <x> <xi> Insurance: - Insurance - Deposit Insurance Sub Total <xi> <xii> Other Expenditure:-
27,300
23,400
74400
67,983 4,51,987 40,024
68,860 2,91,628 31,285
86849 445392 155505
--------------
-------------11,700 3,57,942
6584
13,696 Cr 15,516 Dr 1,820
4,142 Cr 3,697 Dr 3,810 Dr 8,365
6764 14073 20837
39,105 39,105 7,525 4,264 11,889 47892 5313 53205
4,895
4,895 --------------
-
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Traveling exp. - Boarding exp. - Local conveyance paid / Reimbursed - Diem allowances paid-officer - Diem allowances paid-clerk - Diem allowances paid-sub staff - Reimbursement of conveyance Exp. To eligible officers - Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. - Wages paid to sweepers and casual labor - Petty cash Expenses - Currency chest guarding exp. - Clearing House Charges - Fees for Revenue / Concurrent / other Auditors - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals - Donations to Institution - Others Sub Total <xii> <xiii> Provisions and Contingencies TOTAL OPERATING EXPENSES <I TO XII> TOTAL EXPENDITURE ( 3 + 4 ) (B) PROFIT BALANCE ( A ² B )
17,493 893 3,356 31,760 30,595
22,096 9,326 21,748 17,355 8,000 780
136422 8736 35663 4575
80 56,815 1,956 16,635 14,010 66,140 69,649 5,913 3,460 5,781 2,70,000 1,14,035 98,452 4,567 24,222 3,48,639 4,847 12,594 5,94,388 6252 1614 432464 42,71,936 46,91,548 5625512 4341 1414 20415 53414 78643 80895
1,77,57,371 34,56,698
2,31,59,060 38,74,287
40019879 813039
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
BALANCE SHEET OF THE CENTRAL BANK OF INDIA AS WHOLE
( In Crore)
LIABILITIES
Total Share Capital Equity Share Capital Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities
MAR '05
1,124.14 1,124.14 0.00 1,617.50 523.57 3,265.21 60,751.67 139.69 60,891.36 4,439.32 68,595.89
MAR '06
1,124.14 1,124.14 0.00 1,810.19 507.64 3,441.97 66,482.65 310.81 66,793.46 4,445.61 74,681.04
MAR '07
1,124.14 324.14 800.00 2,179.84 485.85 3,789.83 82,776.28 782.01 83,558.29 5,659.97 93,008.09
MAR '08
1,204.14 404.14 800.00 2,699.95 2,038.67 5,942.76 110,319.67 449.10 110,768.77 7,244.26 123,955.79
MAR '09
1,321.14 404.14 917.00 3,081.99 2,008.92 6,412.05 131,271.85 804.25 132,076.10 9,167.07 147,655.22
ASSETS
Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Other Assets
MAR '05
5,571.81
MAR '06
3,382.86
MAR '07
5,473.67
MAR '08
11,537.19
MAR '09
11,036.91
1,481.13 27,277.32 30,834.76 1,333.12 580.96 752.16 2,678.72
1,411.23 37,483.48 28,639.09 1,369.12 644.28 724.84 3,039.54
3,339.22 51,795.47 27,741.89 1,483.04 715.77 767.27 3,890.57
1,302.05 72,997.43 31,455.19 3,119.80 799.51 2,320.29 4,343.64
1,214.34 85,483.20 43,060.72 3,181.69 903.70 2,277.99 4,582.08
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total Assets
68,595.90
74,681.04
93,008.09
123,955.79
147,655.24
PROFIT & LOSS A/C OF
CENTRAL BANK OF INDIA AS WHOLE
(Amt in CR)
INCOME
Interest Earned Other Income Total Income
Mar '05 Mar '06 Mar '07
5,204.88 938.87 6,143.75 5,385.58 551.24 5,936.82 6,234.21 561.83 6,796.04
Mar '08
Mar '09
7,995.54 10,455.19 902.35 1,069.97 8,897.89 11,525.16
EXPENDITURE
Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year
Mar '05 Mar '06 Mar '07
2,829.93 1,277.56 804.55 53.17 877.04 0.00 2,284.57 727.75 5,842.25 301.50 3,005.51 1,275.74 296.00 50.90 1,051.26 0.00 1,782.22 891.68 5,679.41 257.42 3,759.79 1,175.42 701.64 65.00 596.18 0.00 2,133.16 405.08 6,298.03 498.01
Mar '08
5,772.47 1,214.34 563.59 73.61 723.71 0.00 2,034.89 540.36
Mar '09
8,226.72 1,272.59 653.17 83.59 717.86 0.00 2,184.05 543.16
8,347.72 10,953.93 550.16 571.24
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
158
VISION To emerge as a strong, vibrant and pro-active Bank/Financial Super Market and to positively contribute to the emerging needs of the economy through consistent harmonization of human, financial and technological resources and effective risk control systems. MISSION
To transform the customer banking experience into a fruitful and enjoyable one. To leverage technology for efficient and effective delivery of all banking services. To have bouquet of product and services tailor-made to meet customers aspirations. The pan-India spread of branches across all the state of the country will be utilized to further the socio economic objective of the Government of India with emphasis on Financial Inclusion.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
1
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Chapter 1
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
2
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
INDUSTRY PROFILE
HEAD LINES
Introduction Origin of word BANK Definition of Bank Traditional Banking Activity Banking system in India Structure of banking in India
While walking in the streets of any town or city you might have seen some signboards on buildings with names-Canara Bank, Punjab National Bank, State Bank of India, United Commercial Bank, etc. What do these names stand for? Did you ever try to know about them? If you enter any such building you will find some kind of a business office. You will see some employees sitting behind counters dealing with visitors standing in front of them. You will find that some are depositing money at one counter while some are receiving money at another counter. Behind the counters in the office you will see tables and chairs occupied by officers. On one side of the office you will also see a chamber (small partitioned room) where the manager is sitting with papers on his table. This is the office of a ¶Bank·. Let us know in detail about banks and their activities. You know people earn money to meet their day-to-day expenses on food, clothing, education of children, housing, etc. They also need money to meet future expenses on marriage, higher education of children, house building and other social functions. These are heavy expenses, which can be met if some money is saved out of the present
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
3
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THE S.P.B. COLLE E OF B SINESS A
CB
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INISTRATION
nd bo o in IA o n ol o p bli Al o
5
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o ld Today we can
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wo ld witho t banking institutions. Banking is as i po tant as blood in the human body. Due to the development o banking advances are
increased and business activities developing so it is rightly said ´ The
development of banking is not only the root but also the result of the development of the business world.µ A ter independence, the
Indian government also has taken a series o steps to develop the banking sector. Due to considerable efforts of the government, today we have a number of banks such as Reserve Bank of India, State Bank of India, nationali ed commercial banks, Industrial Banks and co operative banks. India Banks contribute a lot to the development of agriculture, and trade and industrial sectors. Even today the banking systems of India possess certain limitations, bu t one can t doubt its important role in the development of the Indian economy.
Banking sector is the first and most important aspect of the economic-planning of a nation for the faster and speedy development of a nation; well-development and advanced bank ing sector is the precondition. In the most of developed countries of the world, there is very close relation between the business activities and banks. It is quite difficult to think the business activities without the existence in economy as blood in hum an body.
Thus, we can say that, there is a noteworthy contribution of banking sector in the development business of various fields such as, and
agriculture,
industries
activities,
transportation
communication.
ut
THE S.P.B. COLLE E OF B SINESS A
INISTRATION
Bankin in i
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1..1 1
ORIGIN OF WORD BANK GI F R BAN
The word bank is derived from, the Latin word ¶Bonous· or ¶Banca· means a bench. A bank refers to the function of accepting deposits, lending, repaying the deposited money of demand and functioning an agent whenever asked for. Now for healthy and rapid develop ment of any national economical structure, the development of banking is an inevitable pre-condition. Some authorities observe that the word bank s originally derived from the German word ¶bank· which means a joint stock fund. This word was Italiani ed into banco by the German when they were the rulers of measure part of Italy. This term was again change into ¶banck· by the French; afterwards, the Britishers converted this term into ¶ bank· which has now been universali ed. The term bank or banker is used in almost all countries of the world to denote a financial institution dealing in money. There are different views regarding the origin of the term ¶bank· In ancient Greece and Rome the practice of granting credit was widely prevalent. The books of the old Sanskrit law giver, Menu, are full of regulations governing credit. In, past (I) traders (II) ledgers and (III) goldsmiths performed banking activities. Some experts· opine that the term, ¶bancus· or ¶banque· means ¶bench·, and the term ¶bank· comes from these words. Ancient bankers and lenders used benches in the market place to do their lending business. When a banker failed in his business, the people broke his benches. The term, ¶bankrupt·, originated from such events.
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1.2 2
DEFINITION OF BANK D N TI N OF B N
A bank is an institution which deals in money. A Bank receives money in the form of deposits from the public, and lends money for the development of trade and commerce. Several economists have defined the term, ¶baking·, in various ways. From variou s definitions some of them as follow:
´Banking company is a company, which transects the business of banking in any state of India.µ Section S (5) of banking company act 1949.
´A ¶bank· or ¶banker· is one who, in the ordinary course of his business, receives money which he repays by honoring the cheques of persons from whom or on whose account he receives it.µ Hart Pofr.
´Bank is an establishment whi ch makes, to individuals, such advances of money as may be required and safely made and to which individuals entrust money which it is not required by them for use. µ Prof. Kenly ´Banking means where financial transactions of credit are done and bank means where draft, cheque, or credit paid by order, deposits of money or currency are accepted or assets, bonds, gold, silver, bills of exchange or promissory notes are accepted that kind of persons firms or companies having the place of business.µ Findlay sheraze
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"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; (Banking Act (Singapore), Section 2, Interpretation) "banking business" means the business of either or both of the following: 1. receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] ... or with a period of call or notice of less than that period; 2. paying or collecting cheques drawn by or paid in by customers Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking, the cheque has lost its primacy in most banking sy stems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques.
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TRADITIONAL BANKING ACTIVITIES R DI IO A B N NG A VI ES
Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment meth ods such as telegraphic transfer, EFTPOS, and ATM. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and
governments. Non-banks that provide payment services such as remittance companies are not normally conside red an adequate substitute for having a bank account. Banks borrow most funds from households and non -financial
businesses, and lend most funds to households and non -financial businesses, but non -bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings to
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1..4 1
HEAD NES
BANKING SYSTEM IN INDIA BAN N SY EM I N I
First Indian Bank The First Indian Joint tock Bank Recent History Of Indian Banking y Foundation Phase y Expansion phase y Consolidation phase y Reforms phase Nationalisation & Public ector Banking
In the economic development of a nation banks occupy an important place. Indian money market comprises both organi ed as well as unorgani ed sectors. The unorgani ed sectors include money lenders and indigenous bankers and largely cater to the needs of per son living in villages and small towns. Financial institutions in the organi ed sector have grown significantly. Among the institution in organi ed sector of the Indian money market commercial banks, Co -operative banks, regional rural banks, development ba nks etc.
In 1770, first Indian bank known as Bank of Hindustan was started and was closed down twenty years later. Later on, the East India Co. started three presidency banks with government
participation. These were:
Bank of Calcutta ² 1806 Bank of Bombay ² 1840 Bank of Madras ² 1843
Other banks such as
Allahbad Bank came into existence in 1865 Alliance Bank of simla in 1875.
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The first Indian joint stock bank known as Oudh Commercial Bank was setup in 1880 and Punjab National Bank was launched in 1894. There were as many as 648 commercial banks in India by the and of 1947 and as many as 161 banks failed during 1913-14. Thus, there was a great need of an institution to control and regulate banking in the country. As a result, the RBI was setup in 1935 for regulating the banks in the country.
A scheme of social control on banks was enforced through statutory measures with effect from 1 -2-1969. The banking industry saw a revolution after 14 major commercial bank s were nationali ed in June, 1982. More than 90 % of the bank deposits came under the control of the government.
Agricultural Credit Development, Rural Planning and Credit Cell and Agricultural Refinance and Development Corporation were
combined together to setup national bank for agriculture and rural development in July, 1982. Later, the Exim Bank and National Housing Bank were setup in 1984 and 1988 respectively.
RECE R EC E
HIS OR Y OF I HIS ORY OF I
IA BA KI G IA BA KI G
Indian banking system, over the years has gone through various phases after establishment of Reserve Bank of India in 1935 during the British rule, to function as Central Bank of the country. Earlier to creation of RBI, the central bank functions were being looked after by the Imperial Bank of India. With the 5 -year plan having acquired an important place after the independence, the Govt. felt that the private banks may not extend the kind of cooperation in providing credit support, the economy may need. In 1954 the All India Rural Credit Survey Committee submitted its report recommending creation of a strong, integrated, State-sponsored, State-partnered commercial
banking institution with an effective machinery of branches spread all
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over the country. The recommendations of this committee led to establishment of first Public Sector Bank in the name of State Bank of India on July 01, 1955 by acquiring the substantial part of share capital by RBI, of the then Imperial Bank of India. Similarly during 1956-59, as a result of re-organi ation of princely States, the associate banks came into fold of public sector banking. Another evaluation of the banking in India was undertaken during 1966 as the private banks were still not extending the required support in the form of credit disbursal, more particularly to the unorgani ed sector. Each leading industrial house in the country at that time was closely associated with the promotion and control of one or more banking companies. The bulk of the deposits collected, were being deployed in organised sectors of industry and trade, whil e the farmers, small entrepreneurs, transporters , professionals and self employed had to depend on money lenders who used to exploit them by charging higher interest rates. In February 1966, a Scheme of Social Control was set-up whose main function was to periodically assess the demand for bank credit from various sectors of the economy to determine the priorities for grant of loans and advances so as to ensure optimum and efficient utili ation of resources. The scheme however, did not provide any remedy. Though a no. of branches were opened in rural area but the lending activities of the private banks were not oriented towards meeting the credit requirements of the priority/weaker sectors. On July 19, 1969, the Govt. promulgated Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire 14 bigger commercial bank with paid up capital of Rs.28.50 Cr,deposits of Rs.2629 cr, loans of Rs.1813 cr and with 4134 branches accounting for 80% of advances. Subsequently in 1980, 6 more banks were nationalised which brought 91% of the deposits and 84% of the advances in Public Sector Banking. During December 1969, RBI introduced the Lead Bank Scheme on the recommendations of FK Nariman Committee.
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Meanwhile, during 1962 Deposit Insurance Corpora tion wasestablished to provide insurance cover to the depositors. In the post-nationalisation period, there was substantial increase in the no. of branches opened in rural/semi -urban centres bringing down the population per bank branch to 12000 appx. Durin g 1976, RRBs were established (on the recommendations of M. Narasimham Committee report) under the sponsorship and support of public sector banks as the 3rd component of multi -agency credit system for agriculture and rural development. The Service Area App roach was introduced during 1989. While the 1970s and 1980s saw the high growth rate of branch banking net-work, the consolidation phase started in late 80s and more particularly during early 90s, with the submission of report by the Narasimham Committee on Reforms in Financial Services Sector during 1991. In these five decades since independence, banking in India has evolved through four distinct phases: Foundation phase can be considered to cover 1950s and 1960s till the nationalisation of banks in 1969. The focus during this period was to lay the foundation for a sound banking system in the country. As a result the phase witnessed the development of neces sary legislative framework for facilitating re-organisation and consolidation of the banking system, for meeting the requirement of Indian economy. A major development was transformation of Imperial Bank of India into State Bank of India in 1955 and nationalisation of 14 major private banks during 1969. Expansion phase had begun in mid-60s but gained momentum after nationalisation of banks and continued till 1984. A determined effort was made to make banking facilities available to the masses. Branch network of the banks was widened at a very fast pace covering the rura l
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and semi-urban population, which had no access to banking hitherto. Most importantly, credit flows were guided towards the priority sectors. However this weakened the lines of supervision and affected the quality of assets of banks and pressuri ed their profitability and brought competitive efficiency of the system at a low ebb. Consolidation phase: The phase started in 1985 when a series of policy initiatives were taken by RBI which saw marked slowdown in the branch expansion. Attention was paid to impr oving house-keeping, customer service, credit management, staff productivity and
profitability of banks. Measures were also taken to reduce the structural constraints that obstructed the growth of money market.
Reforms phase The macro-economic crisis fac ed by the country in 1991 paved the way for extensive financial sector reforms which brought deregulation of interest rates, more competition, technological changes, prudential guidelines on asset classification and income recognition, capital adequacy, au tonomy packages etc.
BA K N A ION A ISA ION & PUB IC SECTOR BANKING BA K NA IONA ISA ION & PUB IC SEC TOR BANKING
Organised banking in India is more than two centuries old. Till 1935 all the banks were in private sector and were set up by individuals and/or industrial houses which collected deposits from individuals and used them for their own purposes. In the absence of any regulatory framework, these private owners of banks were at liberty to use the funds in any manner, they deemed appropriate and resultantly, the bank failures were frequent. Move towards State ownership of banks started with the nationalisation of RBI and passing of Banking Companies Act 1949. On the recommendations of All India Rural Credit Survey Committee, SBI Act was enacted in 1955 and Imperial Bank of India was transferred to
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SBI. Similarly, the conversion of 8 State -owned banks (State Bank of Bikaner and State Bank of Jaipur were two separate banks earlier and merged) into subsidiaries (now associates) of SBI during 1959 took place. During 1968 the scheme of ¶social control· was introduced, which was closely followed by nationalisation of 14 major banks in 1969 and another six in 1980. Keeping in view the objectives of nationalisation, PSBs undertook expansion of reach and services. Resultantly the number of branches increased 7 fold (from 8321 to more than 60000 out of which 58% in rural areas) and no. of people served per branch office came down from 65000 in 1969 to 10000. Much of this expansion has taken place in rural and semi-urban areas. The expansion is significant in t erms of geographical distribution. States neglected by private banks before 1969 have a vast network of public sector banks. The PSBs including RRBs, acount for 93% of bank offices and 87% of banking system deposits.
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1.5
HEAD LINES
STRUCURE OF BANKING IN INDIA ST UC F B KI G N I D A
STRUCTURE OF INDIAN BANKING Types of Bank
Reserve bank of India (central bank) y Foundation of RBI y Function of Reserve Bank of India Commercial banks y Public sector banks, y Private sector banks y Foreign banks. Co-Operative banks y Primary Credit Societies y Central Co-operative Banks y State Co-operative Banks Development banks
unorgani ed banks. Unorgani ed banking includes indigenous bankers and village money lenders. Organi ed banking includes the following,
The main four types are: Reserve bank of India (central bank) Commercial banks Co-Operative banks Development banks Others are: Exim banks Regional rural banks Land development banks National Bank for Agriculture and Rural Development (NABARD) Industrial Development Bank of India Small Industrial Development Bank of India
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
STRUCURE OF BANKING IN INDIA U R OF B N GI I DA
RRBS: Regional Rural Banks
N B RD: National Bank for griculture and Rural Development
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(1.5.A) CENTRAL BANK
A central bank is a special institution which controls and regulates the entire banking structure of country. It also strives to maintain monetary stability of the country. It also strives to maintain monetary stability of the country. Central bank is also the apex bank of country. Since it functions in the be st interest of the country and making profits is unknown to it, it is entrusted the right to issue currency notes. No other bank is allowed this right. It operates in close co-operation with the government for implanting economic policies, thereby promoting economic development. The central Bank of our country is Reserve Bank of India. Its establishment was made by the Reserve Bank of India act in 1935. In India, any person cannot do the business of banking without getting the license of Reserve Bank.
THE RESERVE BANK OF INDIA ((RBI)) THE RESERVE BANK OF INDIA RBI
The Reserve Bank of India (RBI, Hindi: ê÷íâùì í ð éÓ) is the central bank of India, was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934 [1]. The Central Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. Though originally privately owned, the RBI has been fully owned by the Government of India since nationali ation in 1949. Dr. Duvvuri Subbarao who succeeded Yaga Venugopal Reddy on September 2, 2008 is the current Governor of RBI. The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years.
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The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage. It has 22 regional offices, most of them in state capitals
FOUNDATION OF RBI: FOUNDATION OF RBI:
Manages currency notes of all denominators except one rupee note As a banker of Government, state Government, Commercial and co-operative banks. Monetary regulations Regulations on exchange value of rupee. As a represents Govt. of India in International Monetary India in International Monetary Fund (IMF)
FUNCTION OF RESERVE BANK OF INDIA: FUNCTION OF RESERVE BANK OF INDIA:
Rule currency notes greater than one rupee. As a Bank of Government, state Government, commercial and co operative banks. Regulation Monetary Regulations on exchange value of rupee. As a delegation of India in IMF (International monetary
Federation)
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(1.5.B) COMMERCIAL BANKS
Commercial banks accept money from the public and arrange for their productive use. They also carry out carry out lending of money to meet the needs of traders and business houses. The accepted deposits are always repayable on dema nd or on short notice. Commercial banks provide only short-term loans to trade and industry. Besides this, they also provide working capital finance, and also provide a number of subsidiary services.
Commercial Banks are banking institutions that accept deposits and grant short-term loans and advances to their customers. In addition to giving short -term loans, commercial banks also give medium-term and long-term loan to business enterprises.
Now-a-days some of the commercial banks are also providing housing loan on a long-term basis to individuals. There are also many other functions of commercial banks, which are discussed later in this lesson.
Types of Commercial banks:
Commercial banks are of three types Public sector banks, Private sector banks Foreign banks.
Public Sector Banks: These are banks where majority stake is held
by the Government of India or Reserve Bank of India. Examples of public sector banks are: State Bank of India, Corporation Bank, Bank of Boroda and Dena Bank, etc.
Private Sectors Banks: In case of private sector banks majority of
share capital of the bank is held by private individuals. These banks are registered as companies with limited liability. For example: The
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Jammu and Kashmir Bank Ltd., Bank of Rajasthan Ltd., Development Credit Bank Ltd, Lord Krishna Bank Ltd., Bharat Overseas Bank Ltd., Global Trust Bank, Vysya Bank, etc.
Foreign Banks: These banks are registered and have their
headquarters in a foreign country but operate their branches in our country. Some of the foreign banks operating in our country are Hong Kong and Shanghai Banking Corporation (HSBC), Citibank, American Express Bank, Standard & Chartered Bank, Grindlay·s Bank, etc. The number of foreign banks operating in our country has increased since the financial sector reforms of 1991.
STATE BAN K OF INDIA ((SBI)) STATE BANK OF INDIA SBI
In 1955, the imperial bank of India was nationali ed and renamed as State Bank of India. Today it is largest bank of India. As a commercial bank and views pointing to branches, it is world·s largest bank with 10,836 Branches.
Subsidiary Bank of SBI
State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Indore State Bank of Pateyala State Bank Of Saurashtra State Bank of Travancore
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NATIONA IZED BANKS: N AT I O N A I Z ED B AN K S :
Following 14 commercial banks were nationali ed on the 19 th July, 1969. Bank of India Canara Bank Central Bank of India Corporation bank Indian Bank Indian overseas bank Syndicate Bank UCO Bank Allahabad Bank Bank of Baroda Bank of Maharashtra Dena Bank Oriental Bank of Commerce Punjab & Sind Bank Union Bank of India United Bank of India Vijaya Bank IDBI Bank Other six banks were nationali ed on the 10 th April, 1980. State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Indore State Bank of Pateyala State Bank Of Saurashtra State Bank of Travancore
In October 1993, the New Bank of Indian and Punjab National Bank were merged.
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PRIV ATE SECTOR BANKS: PRIVATE SECTOR BANK S:
HDFC Bank ICICI Bank Federal Bank ING Vysya Bank Axis Bank (formerly UTI Bank) Yes Bank Bank of Rajasthan Bharat Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab City Union Bank Development Credit Bank Dhanalakshmi Bank Ganesh Bank of Kurundwad IndusInd Bank Jammu & Kashmir Bank Karnataka Bank Limited Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Nainital Bank Ratnakar Bank SBI Commercial and International Bank South Indian Bank Amazing Mercantile Bank Punjab National Bank Rupee Bank Saraswat Bank Tamilnad Mercantile Bank Thane Janata Sahakari Bank Bassein Catholic Bank
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(1.5.C) CO-OPERATIVE BANK
The short-term financial needs of farmers are met by co -operative banks. Agriculturists, petty farmers and artisans organize themselves on co-operative principle and form co -operative societies and banks. Co-operative banks raise funds through various means, besides receiving all kinds of deposits to make them av ailable as lend able funds to its members. In India, developed co -operative banks supply finance for agriculture and non-agriculture activities.
People who come together to jointly serve their common interest often form a co-operative society under the Co-operative Societies Act. When a co-operative society engages itself in banking business it is called a Co-operative Bank. The society has to obtain a licence from the Reserve Bank of India before starting banking business. Any co -operative bank as a society is to function under the overall supervision of the Registrar, Co-operative Societies of the State. As regards banking business, the society must follow the guideline s set and issued by the Reserve Bank of India.
Types of Co-operative Banks
There are three types of co-operative banks operating in our country. They are primary credit societies, central co-operative banks and state co-operative banks. These banks are organized at three levels, village or town level, district level and state level.
Primary Credit Societies: These are formed at the village or town
level with borrower and non-borrower members residing in one locality. The operations of each society are restricted to a small area so that the members know each other and are able to watch over the activities of all members to prevent frauds.
Central Co-operative Banks: These banks operate at the district
level having some of the primary credit societies belonging to the same district as their members. These banks provide loans to their members
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(i.e., primary credit societies) and function as a link between the primary credit societies and state co -operative banks.
State Co-operative Banks: These are the apex (highest level) cooperative banks in all the states of the country. They mobilise funds and help in its proper channelisation among various sectors. The money reaches the individual borrow ers from the state co-operative banks through the central co -operative banks and the primary credit societies.
SCHEDULED URBAN C O-OPERATIVE BANKS SCH EDULED UR BAN CO-OPERATIV E BAN KS
List of Scheduled Urban Co-operative Bank as on 31-3-2009 as per RBI Bank Ahmedabad Mercantile Co-Op Bank Ltd. Kalupur Commercial Co-op Bank Ltd. Madhavpura Mercantile Co-Op Bank Ltd. Mehsana Urban Co-Op Bank Ltd. Nutan Nagarik Sahakari Bank Ltd. Rajkot Nagrik Sahakari Bank Ltd. Sardar Bhiladwala Pardi Peoples Co-op Bank Ltd. Surat Peoples Co-op Bank Ltd. Amanath Co-operative Bank Ltd. Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. Charminar Co-op. Urban Bank Ltd. Vasavi Co-op Urban Bank LImited. Indian Mercantile Co-op Bank Ltd. Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd. Abhyudaya Co-operative Bank Ltd. Bangalore city co-operative bank. Bassein Catholic Co-operative Bank Limited. Bharat Co-operative Bank (Mumbai) Ltd. Bharati Sahakari Bank Limited. Bombay Mercantile Co-operative Bank Limited. Citizen Credit Co-operative Bank Ltd. Cosmos Co-operative Urban Bank Ltd. Dombivli Nagari Sahakari Bank Ltd. Goa Urban Co-operative Bank Limited. Greater Bombay Co-operative Bank Limited. Main Location Ahmedabad Kalupur Madhavpur Mehsana Ahmedabad Rajkot Bulsar Surat Bangalore Andhra Pradesh Hyderabad Hyderabad Lucknow Ichalkaranji Mumbai Bengaluru Vasai Mumbai Pune Mumbai Dadar Pune Dombivli Goa Mumbai
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Jalgaon Janata Sahakari Bank Ltd. Janakalyan Sahakari Bank Ltd. Janalaxmi Co-operative Bank Ltd. Janata Sahakari Bank Ltd. The Karnataka State Co-Operative Apex Bank Ltd Kalyan Janata Sahakari Bank Ltd. Karad Urban Co-operative Bank Ltd. Mahanagar Co-operative Bank Ltd. Mapusa Urban Co-operative Bank of Goa Ltd. Nagar Urban Co-operative Bank Ltd. Nasik Merchant's Co-operative Bank Ltd. New India Co-operative Bank Ltd. NKGSB Co-operative Bank Ltd. Parsik Janata Sahakari Bank Ltd. Pravara Sahakari Bank Ltd. Punjab & Maharashtra Co-operative Bank Ltd. Rupee Co-operative Bank Ltd. Sangli Urban Co-operative Bank Ltd. Saraswat Co-operative Bank Ltd. Shamrao Vithal Co-operative Bank Ltd. Solapur Janata Sahakari Bank Ltd. Thane Bharat Sahakari Bank Ltd. Thane Janata Sahakari Bank Ltd. The Kapol Co-operative Bank Ltd. Zoroastrian Co-operative Bank Ltd. Nagpur Nagrik Sahakari Bank Ltd. Shikshak Sahakari Bank Ltd. The Akola Janata Com.Co-operative Bank Ltd. The Akola Urban Co-operative Bank Ltd. The Khamgaon Urban Co-operative Bank Ltd.
Jalgaon Mumbai Mumbai Pune Bengaluru Kalyan Karad Mumbai Mapusa Ahmednagar Nasik Mumbai Mumbai Thane Ahmednagar Mumbai Pune Sangli Mumbai Mumbai Solapur Thane Thane Mumbai Mumbai Nagpur Nagpur Akola Akola Khamgaon
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(1.5.D) SPECIALISED BANKS
There are some banks, which cater to the requirements a nd provide overall support for setting up business in specific areas of activity. EXIM Bank, SIDBI and NABARD are examples of such banks. They engage themselves in some specific area or activity and thus, are called specialised banks. Let us know about them.
Export Import Bank of India (EXIM Bank): If you want to set up a business for exporting products abroad or importing products from foreign countries for sale in our country, EXIM bank can provide you the required support and assistance. The bank grants loans to exporters and importers and also provides information about the international market. It gives guidance about the opportunities for export or import, the risks involved in it and the competition to be faced, etc.
Small Industries Development Bank of India (SIDBI): If you want to establish a small-scale business unit or industry, loan on easy terms can be available through SIDBI. It also finances modernisation of small-scale industrial units, use of new technology and market activities. The aim and focus of SIDBI is to promote, finance an d develop small-scale industries.
National Bank for Agricultural and Rural Development (NABARD): It is a central or apex institution for financing agricultural and rural sectors. If a person is engaged in agriculture or other activities like handloom weaving, fishing, etc. NABARD can provide credit, both short-term and long-term, through regional rural banks. It provides financial assistance, especially, to co -operative credit, in the field of agriculture, small-scale industries, cottage and village indust ries
handicrafts and allied economic activities in rural areas.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(1.5.E) EXCHANGE BANKS
There is a difference in financing of foreign trade and financing of internal trade. Generally a person carrying on international trade requires foreign currencies to meet his obligations. It is here that exchange banks play the role of financing the dealer for setting transactions involved in foreign trade. Though commercial banks undertake financing international trade, there are specialized banks for foreign exchange business. In India, there is the Export-Import Bank (EXIM).
(1.5.F) INVESTMENT OR INDUSTRIAL BANKS
Investment banks provide long -term credit to industries. They raise their funds by way of share capital, debentures, and long -term deposits from the public. They also raise funds by the issue of bonds for business corporations and government agencies. Usually they underwrite the fresh issue of shares and debentures of companies. Such banks also buy the entire issue of new securities of public limited companies and try to get them subscribed at a higher price by the public.
(1.5.G) LAND DEVELOPMENT BANKS
Land development banks were earlier known as land mortgage banks. In India, there are a limited number of such banks. They are special institutions providing long-term loans to agriculturists and farmers. They provide loans on the security of land and other immovable properties. They supply long -term funds for period
exceeding six years. Agriculturists and farmers need such funds for making permanent improvements to land and for buying farming machinery and equipment.
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(1.5.H) RURAL BANK
Rural Bank provides various advance facilities for manufacturing activities such as business, industry, and for the aim of rural economic development, the Rural Bank Act is passed in 1974. Rural Bank has given major contribution in the development of rural area.
(1.5.I) SAVING BANKS
Saving banks are specialized institutions which encourage the general public to save something from their earnings. In other words, such banks pool the small saving s of the lower and middle income sections of society. They are not banks in the true sense of the term and their main aim is to promote and collect the savings of the public. Not only the depositors are given interest, but they are allowed to withdraw in times of needs. The numbers of withdrawals are, however, restricted. Separate savings banks are organized in various nations. The government can also run a savings bank. In India, the Postal Department runs the Postal Saving Bank all over the country.
(1.5.J) DEPOSIT BANK V/S MIXED BANKS
The main function of a commercial bank is to accept deposits from the public and lend them to traders, industrialists and others for period not exceeding one year. The loans and advances p rovided for a short period are meant to supplement the working capital of trade and industry in times of need. This type of banking of attracting and accepting deposits and then lending for short period is known as deposit banking. Banks which follow such a system are called deposit banks.
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1.6
HEAD LINES
FUNCTION OF BANK U CTI N F B N
General Bank s Function y Principal Function y Ancillary Function: Function of the Commercial Bank y primary functions y subsidiary functions
(1.6.A) GENERAL BANK]S FUNCTION
Principal Function:
Accounting Deposits Granting Advances
Ancillary Function:
Discounting of Bills & Cheques. Collection of Bills & Cheques. Remittance. Safe Custody of Articles. Safe Deposit Lockers. Conducting:
y Safe Deposit lockers
Issue of :
y y Letters of credit. Guarantees.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(1.6.B) FUNCTION OF THE COMMERCIAL BANK
Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. So the main function of the commercial bank is as follow:
The functions of commercial banks are of two types. (A) Primary functions; and (B) Secondary functions. Let us discuss details about these functions.
PRIMARY FUNCTIONS
The primary functions of a commercial bank include: a) Accepting deposits; and b) Granting loans and advances. Accepting deposits The most important activity of a commercial bank is to mobilize deposits from the public. People who have surplus income and savings find it convenient to deposit the amounts with banks. Depending upon the nature of deposits, funds deposited with bank also earn interest. Thus, deposits with the bank grow along with the interest earned. If the rate of interest is higher, public are motivated to deposit more funds with the bank. There is also safety of funds deposited with the bank.
Grant of loans and advances The second important function of a commercial bank is to grant loans and advances. Such loans and advances are given to members of the public and to the business community at a higher rate of interest than allowed by banks on various deposit accounts. The rate of interest
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
charged on loans and advances varies according to the purpose and period of loan and also the mode of repayment.
i) Loans A loan is granted for a specific time period. Generally commercial banks provide short-term loans. But term loans, i.e., loans for more than a year may also be granted. The borrower may be given the entire amount in lump sum or in instalmen ts. Loans are generally granted against the security of certain asset s. A loan is normally repaid in instalments. However, it may also be repaid in lump sum. ii) Advances An advance is a credit facility provided b y the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally grante d for a short period of time. Further the purpose of granting adv ances is to meet the day -to-day requirements of business. The rate of interest charged on advances varies from bank to bank. Interest is charged only on the amount withdrawn and not on the sanctioned amount. Types of Advances Banks grant short-term financial assistance by way of cash credit, overdraft and bill discounting. Let us learn about these. a) Cash Credit Cash credit is an arrangement whereby the bank allows the borrower to draw amount up to a specified limit. The amount is credited to the account of the customer. The customer can withdraw this amount as and when he requires. Interest is charged on the amount actually withdrawn. Cash Credit is granted as per terms and conditions agreed with the customers. b) Overdraft Overdraft is also a credit facility granted by bank. A customer who has a current account with the bank is allowed to withdraw more
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
than the amount of credit balance in his account. It is a temporary arrangement. Overdraft facility with a specified limit may be allowed either on the security of assets, or on personal security, or both. c) Discounting of Bills Banks provide short-term finance by discounting bills, that is, making payment of the amount before the due date of the bills after deducting a certain rate of discount. The party gets the funds without waiting for the date of maturity of the bills. In case any bill is dishonoured on the due date, the bank can recover the amount from the customer.
SECONDARY FUNCTION
The subsidiary functions of a commercial bank constitute the agency services and the miscellaneous services.
Agency Services:One of the important functions of a banker is the services performed by him as an agent. The services as an agent are as under:
Collection of Interest and Dividend: The bank collects interest
or dividend as and when earned by the customers from securities. A very small charge is levied for the collection on behalf of the customer.
Collection and payment: Commercial banks also coll ect and
pay cheques, bills and promissory notes.
Executing standing orders: A customer may leave standing
instructions to a banker to make payments to certain individuals or institutions against his account. The banker usually charges small fees for such services.
Buying and selling of Securities: A commercial baker also
undertakes to purchase or sell stocks or shares on behalf of his customers.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Remittance of Funds: It is convenient for banks to transfer
funds as they have a network of branches all over the country. The remittance of funds is done by mail transfer, telegraphic transfer, and bank draft.
Miscellaneous Services: Among the various function when they are many general utility personal or miscellaneous services rendered to the customers. The important ones are as under: Safety of Customer·s valuable: This is undertaken when they are kept in specially constructed rooms in the bank premises. Here the bank acts as a bailee of the goods as it is entrusted to its safe keeping. Usually there are two me thods of ensuring safety of customers· valuable. One is the acceptance of valuables ( e.g. documents of title, jeweler etc.) for safe custody, and the other is the provision of safe deposit vault (Lockers) on hire to customers. Foreign Exchange: Commercial banks also deal in foreign exchange transactions. They assist in foreign trade by
discounting foreign bills of exchange and sometime even have to arrange transport, insurance and warehousing of goods. Letters of Credit: A commercial bank can issue persona l and commercial letters of credit, enabling the customer to profit by the superior credit. Bankers as Referee: Commercial bankers certify the
respectability and financial standing of their customers. This service benefits businessmen who deal with the ban k·s
customers. Underwriting: - Banks often act as underwriters to local and municipal authorities or other public bodies. Banks also
underwrite for companies, corporations, and underwrite issues of Govt. loans, raised by municipal authorities, and industrial securities. Information & Statistics: - Several big banks have started the collection of information related to trade and business and
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
provide the same to its customers. Some banks even publish monthly reviews containing financial and economic information.
Chapter 2
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COMPANY PROFILE
2..1 21
HISTORY OF THE CENTRAL BANK OF INDIIA STO Y OF THE CE TRAL B NK OF IND A
HEAD LINES
Establishment of Bank Establishment of Bank in Gujarat Growth chart of bank Total branches of bank Histor of the Central Bank of India at Lal Darwaa, Surat
The Bank of India was started on 21st December 1911 under the name of the Central Bank of India by it·s under Shrwashrio Sir Soharabji Pochhandwala. This bank suffered great State Bank in year 1913-1914 due to 1st World War or its effect on a monetary system. It is really a pleasure to note ´The Central Bank of India is the only bank with first manages which was established by Indian management. Then again in the year 1925-29 Bank had suffered another set back by its enemy & specially the English cruel. Customer of his bank started with drawing the deposits and again it was Sir Pochhandwala personally set on the counters and paid the deposits to the customer by managing the funds by his own Personal Prestige. The banks payment counters were kept open for 24 hours throughout the country and payment were made continuously. This very bold step of Sir Pochhandwala Sahib created new faith amongst of the customers of the bank once again proved that this mighty Bank is the only bank of the Common people of India.
ï
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
In Gujarat Central Bank first branch was opened at Gandhi Road, Ahmedabad. During year 1930 to the date of nationalization of the banking industries, this bank stood as number one in all India during Nationalization of the Bank on dated 19 th July 1969. As on 1 st February the total branches of the Central Bank of India through out of country is 2848 out of which 1397 branches are rural whereas 644 branches are in semi urban and 419 branches are functioning at urban center and 621 branches are spread over in metro. The total deposits of the bank as on above dated was Rs. 9932 Crore out of which 2036 Crore are in current a/c, 2714 are in saving and 5172 are in time deposits. A number of innovative and unique banking activities have been launched by Central Bank of India and a brief mention of some of its pioneering services are as under:
1911 First Indian Bank in True sense -established 1921 Introduction to the home saving safe deposit scheme to
build saving / thrift habit in all section of the society.
1923 Advance to industry by allotting shares, commercial
banking stated of initial stage.
1924 Landing Section introduced encourages habit to save
money by ladies.
1926 First ever in India safe deposit vault started at Head Office
Bomaby.
1927 Cheque system stated in home saving. 1929 To own and to assist the bank Tally Executive of Trusty
Co. Ltd. Established.
1931 First ever by any Indian banker-Overseas Branch at
London opened. Three years cash certificates issued. Travelers· cheque system in rupee cur rency started. Indian banker sent abroad to study advance banking.
1932 To reserve deposits rights deposit benefits insurance co.
Ltd. Started.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
1970 Recurring deposit scheme established.
Subsequently even after the nationalization of the Bank in the year 1969, Central Bank continued to introduce a number of innovative banking services as under: -
1976 The Merchant Banking Cell was established. 1978 New facility for Customer Deposit Cash in any of 14
selected after of the country.
1980 Central card, the credit card of the Bank was introduced. 1985 For speedy Customers Services Automex Started. All
Regional Officer connected with the by own Secret national debtor too.
1986 Platinum deposit special scheme in Platinum Jubilee Year
for Long Term Deposit started. Central Card Scheme expanded which crossed the territorial boundary of the country central card which is a boon for Indians going abroad.
1989 The housing subsidiary Cent Bank Home Finance Ltd.
was started with it does headquarter at Bhopal in Madhya Pradesh.
1994 Quick Cheque Collection Service (QCC) & Express Service
was set up to enable speedy collection of outstation cheques. Further in line with the guidelines from Reserve Bank of India as also the Government of India, Central Bank has been playing an increasingly active role in prom oting the key thrust areas of agriculture, small scale industries as also medium and large industries. The Bank also introduced a number of Self Employment Schemes to promote employment among the educated youth. Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to distribution of its large network in 27 out of 28 States as also in 4 out of 7 Union Territories in
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its network of 3541 branches and 218 extension counters at various centres throughout the length and breadth of the country. In view of its large network of branches as also number of savings and other innovative services offered, the total customer base of the Bank at over 25 million account holders is one of the largest in the banking industry. Customers' confidence in Central Bank of India's wide ranging services can very well be judged from the list of major corporate clients such as ICICI, IDBI, UTI, LIC, HDFC as also almost all major corporate houses in the country
HEAD OFFICE OR REGISTERED OFFICE OF CBI:
Chandar Mukh, Narimpoint, Mumbai-400021
ZONAL OFFICE OF CBI IN GUJARAT:
Zonal office, Central Bank Building, Lal Darwaza, Ahmedabad-390 001 Phone: - 5503586 Fax:- 5505995 Website: www.Centralbankofindia.co.in, Email: - [email protected]
BRANCHES OF THE CBI IN GUJARAT: City Name
Ahmedabad Anand Baroda Jamnagar
Computerized Branches
42 24 19 28
NonComputerized Branches
16 13 14 6
Total No of Branches
58 37 33 34
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
2..2 2
Rajkot Surat Total:
HIISTORY OF THE CBI AT LALDARWAJA STORY F TH BI A LALDARWAJA
17 23 153
10 9 68
27 32 221
The branch of the Central Bank of India at Lal-Darwaja was established on dated 17 th May, 1964 by Shri Dahyabhai Karshanji Kosmada. In Surat city ago 45 years there was very few banks. So this time there was not any bank near to this area. So people of this area feel difficulty for banking transaction, if people want to transact with bank then they went vent far away. This all difficulty understood by Shri Dahyabhai Karshanji Kosmada and he had to decide to establish the bank at Lal-Darwaja. The branch was established on da ted 17 th May, 1964. When bank was stated that time it had not any computer system all work of the bank was done manually. After 33 year the bank was made fully computerized on dated 25 th January, 1999. Then after bank is well settle.
ADDRESS OF THE BRANCH:
The Central Bank of India (B.O), Lal Darwaja, Nr. Resham Bhavan, Surat -395003. (Guj.) Phone: - 0261- 2423145, 2428854, 2457038
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
2..3 2
HEAD LINES
ACT IVIITIIES OF THE CBI A TIV T ES OF THE C I
Deposits Cards Loans Other Services International banking Central Bank of India Net Banking Central Bank of India Web Sites Rate of Interest on Deposits Rate of interest on Loans
The various banking products and services on offer at Central Bank include:
(2.3.A) DEPOSITS
Money Multiplier Deposit Certificate (MMDC): In this the
interest keeps adding to the principal amount giving you an added advantage to increase your deposits exponentially
Monthly/Quarterly Interest Deposit Receipt (MIDR/QIDR): The
interest is added monthly/Quarterly. An account can be opened for duration of 12 months to 120 months with a minimum balance of Rs. 5000.
Cent Uttam Scheme: This deposit scheme by Central Bank offers
you easy liquidity with high returns that allows you to withdraw a part of the deposit whenever required.
Other Special Savings Accounts: These include Senior Citizens
Savings Account, Tax Saving Deposit Schemes, Smart Deposit Schemes, Super Deposit Schemes and Special Cent Bachat Khata
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(2.3.B) CARDS
Centralcard Electronics: This Central Bank Credit Card is
accepted in all master card electronic terminals in India and Nepal. This can be both domestic and global.
Centralcard: This card offers you the freedom of shopping at all
the merchant establishments in the country. The internationally acceptable one is the International Central Master Card.
Debit Card: Its the most safe and secure way of accessing your
account globally 24-hours a day at over 5.3 million merchant establishments and 6 million ATM's
(2.3.C) LOANS
Housing Loans Home Renovation Loan Computer Loan Personal Loan (Corporate and Non -Corporate) Education Loans Special Educational Loans Finance For Trade Car Loans Loans For Commercial Vehicles Agricultural Loans Personal Loans For Pensioners And Teachers
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(2.3.D) OTHER SERVICES
raveler's Cheques: Issued in the denominations of Rs. 100, Rs.
500, Rs. 1000, Rs. 2500, and Rs. 5000 at a nominal charge of Re.1 per Rs.100.
Gift Cheques: Available in denominations of Rs.11, Rs. 25, Rs.
51 and Rs. 101 free of cost and payable at any Central Bank of India branch.
Cash Management Services: These include collections that can be
Central's Cent QCC, Local Cheque collection and bulk cheque collection services and payment products that include Demand Drafts (DD), Dividend and Interest Warrants, Bank Telegraphic Transfer (TT).
Cent Bill Pay: This facility by Central Bank allows you to pay your
bills through the Internet. It is currently available in Mumbai and is soon going to be launched in New Delhi, Pune, Ahmedabad, Bangalore, Chennai, Hyderabad and Kolkata branches.
Special Services: These include Insurance, Mutual Funds and
Demat Account services.
(2.3.E) INTERNATIONAL BANKING
NRI Banking: Special NRI Savings Accounts, facilities to NRI's
Returning to India and Foreign Exchange services along with Remittance Services are included in this
Other Specialized Services: These include Repatriable and NonRepatriable exporters. services along with faciliti es for importers and
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(2.3.F) CENTRAL BANK OF INDIA NET BANKING
Central Bank of India provides net banking facility to its customers, all you have to do is login to your Internet Banking Account and access the banking service you desire. The official website of Central Bank gives you information about the public issue, issue price, share price, share value and stock price along with news on the shares. Any enquiry about the IPO refund, allotment status, registrar address, money control, listing or the recruitment procedure is entertained on the Central Bank site.
(2.3.G) CENTRAL BANK WEBSITE
An online branch and ATM locator is also available on the official website of Central Bank of India. You can get the exact address and location of your nearest Central Bank branches and ATM's/ also you get full information on the ongoing interest rates on the various credit and deposit schemes along with the service charges for the services provided at Central Bank. Some addresses are provided below.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RATE OF INTEREST ON DEPOSIT
In the central bank of India the interest rate of the deposit on Fixed Deposit applicable from dated 1st May 2000, this is show in the following table: Matu rity Period Up to Rs.15 lacs A bove Rs.15 lacs to l ess than Rs.1 Cro re 11.11.2009 2.50 3.50 4.00 5.00 5.50 6.00 6.25 6.50 6.50 7.25 Rs.1 Crore and above Existing Rate 11.11.2009 2.00 2.50 3.00 3.50 4.50 5.00 5.50 5.50 5.50 5.50 Revised rate 21.12.2009 2. 00 2. 50 3. 00 3. 50 4. 50 5. 50 6. 00 6. 00 6. 00
11.11.2009 7 days-14 days 15 d ays to 45 d ays 46 d ays to 90 d ays 91 d ays to 179 days 180 days to 269 d ays 270 days to 364 d ays 1 year to less th an 2 years 2 years to l ess than 3 years 3 years to l ess than 5 years 5 years and abo ve 2.50 3.25 3.75 5.00 5.75 6.25 6.50 6.75 7.00 7.25
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RATE OF INTEREST ON LOANS
LOANS
BPLR (w.e.f. 01.04.2009)
12.00% p.a.
Direct Housing Finance Scheme - w.e.f. 10.11.2008 Floating Category
Upto 5 Yrs Over 5 Yrs & Less than 10 Yrs. 10 Yrs. & above
Rate of Interest Processing Charges* Upto Rs. 30 Lakhs
9.00% 9.50% 10.00%
Above Rs. 30 Lakhs
10.25% 10.75% 11.25% 1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/-
Fixed Category
Upto 5 Yrs Over 5 Yrs & Less than 10 Yrs. 10 Yrs. & above
Upto Rs. 30 Lakhs
10.00% -NA-NA-
Above Rs. 30 Lakhs
11.25% -NA-NA-
Processing Charges
1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/1% of Loan Amount, minimum Rs.1000/-
*- For changing from fixed Rate of Interest to Floating Rate of Interest, 1% Service Charges on the balance outstanding as on the date of change over. - For changing from floating Rate of Interest to Fixed Rate of Interest, 1% Service Charges on the balance outstanding as on the date of
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
change over.
Personal Loan
Consumer Durable Loan (Cent Buy) Senior Citizen - Loan to Pensioner For General Pensioners and for ex-staff of Central Bank of India drawing pension Senior Citizen - Cent Swabhimaan (Reverse Mortgage Loan) Personal Loan - Loan to corporate employees Personal Loan - Loan to NonCorporate Employees Personal Loan - Loan to teachers & Employees of Educational Institute Personal Loan - Loan to LIC Agents
Rate of Interest
BPLR - 0.25% BPLR
Processing Charges
Rs. 200/- per proposal NIL
10.00%
BPLR BPLR + 1.00% BPLR - 1.25%
Upfront Fees: 0.15% of loan amount subject to minimum of Rs. 500/- and maximum of Rs.10,000/Rs. 500/- per proposal Rs. 500/- per proposal Rs. 500/- per proposal
BPLR
1% of loan amount, minimum Rs. 250/-
Vehicle Loan
Two wheeler Loan For new vehicles repayable upto 36 months For new vehicles repayable beyond 36 months For second hand vehicles Four wheeler Loan For new vehicles repayable upto 36 months For new vehicles repayable beyond 36 months For second hand vehicles
Rate of Interest
BPLR - 2.00% BPLR - 1.00% BPLR
Processing Charges
Rs. 500/- per proposal Rs. 500/- per proposal Rs. 500/- per proposal
BPLR - 2.00% BPLR - 1.00% BPLR
Rs. 2000/- per proposal Rs. 2000/- per proposal Rs. 2000/- per proposal
Cent Vidyarthi - Education Loan (Irrespective of Amount of Loan and Place of study i.e. India or Abroad)
Rate of Interest
Normal Student IIT/ IIM Students
Processin g Charges
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Male Female SC, ST, & Minority Community Student (Female & Male)
BPLR 2.00% BPLR 2.50% BPLR 2.50%
BPLR - 2.50% BPLR - 3.00% BPLR - 3.00%
Nil Nil Nil
Name of Scheme
Rate of Interest
BPLR Interest to be compounded monthly. Concession of 50 basis points is given if Employers Undertaking is available. Further concession of 50 basis points in RoI may be given if interest is serviced regularly during the study period.
Processing Charges
Scheme for Financing Executive MBA
Rs.10,000/- lump sum. -Upto Rs. 25,000/- : NIL -More than Rs. 25,000/- upto Rs. 2 Lakh: Rs. 250/- per proposal. -More than Rs. 2 lakh upto Rs. 50 lakh: 0.5% of loan amount Rs. 1000/- per proposal 1% of the loan amount subject to minimum of Rs.5,000/- and maximum of Rs.2.00 lakh. Rs. 100/- per proposal 1% of loan amount, minimum Rs. 500/NIL Rs. 500/- per proposal NIL Rs. 1000/- per proposal NIL Rs. 500/- per proposal
Cent Trade Cent Vyapari
BPLR - 1% BPLR - 1% BPLR + 1.00% for loan upto 3 years BPLR + 2.00% for loan above 3 years BPLR BPLR BPLR - 1% 10.00% 10.00% BPLR BPLR 1% higher than Housing Loan Rate
Cent Rental Cent Computer Cent Liquid Cent School Cent Jewel Cent Vivah Cent Safar Cent Suvidha Cent Home Loan Plus
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Chapter 3
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
HEAD LINES
Introduction of Project Objecti e of Project Potential of Project Limitation of Project
3.1 31
INTRODUCTION OF PROJECT N U O O R J
INTRODUCTION
This project report is based on the financial analysis of the central bank of india, and it includes various financial statement, numerical data and it·s interpretation. From this project study, the organisation would be able to know about their current and past financial position and also able to make inter relation among last few years. In this project there are many tools of financial analysis has been used like
Co arati Stat t A a ysis Co o Size Statement Ana ysis Trend Ana ysis
The tools of financial analysis (ratio analysis, Comparative statement analysis, common size statement analysis, trend analysis) is helps to know about the financial condition of bank for last few years by comparing, analyzing and interpreting.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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ûú
úùöù
ÿ ý üü ùø ÷ö õô
Ratio A
a ysis
51
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
The ratio analysis of the CBI will make necessary comments on it so as to provide complete idea and core ideology of the bank. So that we can easily get idea about the financial condition of CBI and it·s potential in future. Comparison of ratio of last few years can also helps to get ranking of the comparative years to evaluate it on the various criteria. The detail study of a bank·s trend analysis will be done and final conclusion will be brought out for know the reliability and operating performance of the central bank of India. It will provide final conclusion according to financial analysis. For the purpose of study the researcher has gathered data regarding the company and research work by two ways; primary data and secondary data. The researcher has gathered pri mary data through personal interview of manager and other working people, as the primary data seems to be best alternative for me. The researcher has also used secondary data source to collect information regarding company profile. For this purpose the res earcher has referred company·s websites.
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
3..2 3
OBJECTIVE OF PROJECT O J VE OJ T
The main objective of project is to do financial analysis of the
central bank of India.
Secondly to study the present financial condition of the central
bank of India.
To study the capital structure of the central bank of India. To study the operating performance of the central bank of India. To study deposits, investment & pattern & loan & advance. To do Ratio Analysis for the CBI and make necessary comments
on it so as to provide complete idea and core ideology of the bank. So that we can easily get idea about the financial condition of CBI and it·s potential in future.
To make comparison of
criteria
ratio analysis of last few years and get
ranking of the comparative years to evaluate it on the various
3..3 3
POTENTIAL OF THE PROJECT PO TI L E ROJ
To know about the Central bank of India and also to compare the financial condition of bank for last few years by analyzing and interpreting.
To do Ratio Analysis for the CBI and make necessary comments
on it so as to provide complete idea and core ideology of the
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
bank. So that we can easily get idea about the financial condition of CBI and it·s potential in future.
To make comparison of
criteria.
ratio analysis of last few years and get
ranking of the comparative years to evaluate it on the various
For the detail study of a bank·s trend analysis will be done and
final conclusion will be brought out for know the reliability and operating performance of the central bank of India.
Providing final conclusion according to financial analysis.
Above detailed explanation will provide complete idea of the project and in the last final conclusion will be made. So that the general people will get advise or suggestions to invest or s ave their money in the bank or not.
3..4 3
LIMITATION OF PROJECT L MI TI F OJ T
The data is mostly based on the secondary data so information
may be outdated or wrong
Mistake in the financial statement may be create effect on final
analysis
Final interpretation may be wrong due to mistake in calculation,
tabulating, analysis etc.
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Chapter 4
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THEORETICAL CONCEPT
HEAD LINES
Meaning of financial anal sis Limitation of financial anal sis Tools of financial anal sis y Ratio analysis y Comparative financial statements y Common size statements y Trend analysis.
4.1 1
MEANING OF FINANCIAL ANALYSIS N N O F N N A A AL SI
The purpose of the conventional revenue statement and balance sheet are to show, first, the result of operations for the period under review, and second, the assets and liability of the firm at the relevant date. But it is difficult to deduce any inference from the mass of figures included in the usual annual financial statement. So, in order to accurately gauge the financial health of the firm, it is generally necessary to regroup and analysis the figure as disclosed by these conventional statements to measure business performance.
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¡
£
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The analysis of financial statement consists in breaking down a complex set of factors or figures in to simple elements. The analysis may generally be of two types:
Analysis of financial statements over a number of years ² in such a case the trend is important; Analysis of financial position of the concern as a particular date here the detailed position as disclosed by one set of financial statements is sought to be examined.
4..2 2
LIIMIITATIION OF FINANCIAL STATEMENT M T AT O F I A CI L TEMEN
The financial position of a business concern is affected by several factors- economic, social and financial, but only financial factors are being recorded in these financial statements. Economic and social factors are felt out. Thus the financial position disclosed by this statement is not correct and accurate.
The profit revealed by the profit and loss account and financial position disclosed by the balanced sheet cannot be exact: they are essentially interim reports. Exact position can be known when the business is liquidated.
Facts which have not been recorded in the financial books are not depicted in the financial statement. Only quantitative factors are taken into account. But qualitative factors such as reputation
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and prestige of the business with the public, the efficiency
and
loyalty of its employees, integrity of management etc. which are equally important for the business success, are not capable of being translated in terms of money, and as such, they do not appear in the financial statement.
Money items are left to the personal judgment of the accountant. For instance, provision of depreciation, stock valu ation, bad debts provision etc. depends on the personal judgment of accountant.
On the account of convention of conservations the income statement may not disclose true income of the business since problem losses are considered while problem incomes are ignored.
The fixed assets are shown at cost less depreciation on the basis of ´going concern concept.µ But the value placed on the fixed assets may not be the same which may be realized on their sale.
The data contained in the financial statement are dumb ; they do not speak themselves. It is also worth while to note that human judgment is always involved in the interpretation of statement. It rarely happens that the users of financial statements may have the same opinion and meaning in respect of a particu lar accounting figure.
Information
conveyed
by
these
statements
mat
not
be
comparable on account of difference between dates of preparation of these statements. Different methods of accounting followed by different concerns or difference in the nature of business of different concern etc. may render the financial statements of two concerns impossible or difficult for the purpose of comparison.
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4..3 4
TOOLS OF FINANCIAL ANALYSIS TO S I AN IA A A SI
Financial analyses adopt the following tools for analysis of the financial statements. These are termed as method of financial analysis:
Ratio analysis Comparative financial statements Common size statements Trend analysis.
RATIO ANALYSIS
A ratio is only a comparison of the numerator with the denominator. The term ratio refers to the numerical or quantitative relationship between two figures. A ratio is the relationship between two figures, and obtained by dividing the former by the latter. Ratio are design to show how one number is related to another. It is wor ked out by
dividing one number by another.
Ratio analysis is important and age old technique of financial analysis. The data given in financial statements, in absolute from, are dump and are unable to communicate anything. Ratios are relative form of financial data and very useful technique to check upon the efficiency of
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a firm. Some ratios indicate the trend or progress or downfall of the firm.
Importance of ratio analysis:
The importances of ratio analysis are as follow: Aid to measure general efficiency: Ratios enable the mass of accounting data to be summarized and simplified. They act as an index of the efficiency of the enterprise. As such they served as instrument of management control.
Aid to measure financial solvency: Ratio are useful tools in the hands of management and other concerned to evaluate the firms performance over a period of
time by comparing the present ratio with the past ones. They point out firm·s liquidity position to meet its short term obligations and long ter m solvency.
Aid in forecasting and planning: Ratio analysis is an invaluable aid to management in the
discharge of its basic function such as planning, forecasting, control etc. the ratio that are derived after analyzing and
scrutinizing the past result, helps the management to prepared budgets to formulate policies and to prepared the future plan of action etc.
Facilitate decision making:
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It shows light on the degree of efficiency of the management and utilization of the assets and that is why it is called surveyor of efficiency. They help management in decision making.
Effective tool: Ratio analysis is help in making effective control of the businessmen. Ratio ensures secrecy.
Limitation of ratio analysis:
Ratio analysis is, as already mentioned, a widely- used tool of financial analysis. It is because ratio is simple and easy to understand. But they must be used very carefully. They suffer from various limitations. If due care is not taken, they might confuse than clarity the situation. Different firms may use these terms in different senses or the same firm may use them to mean different things at different times. Some of the limitations of the ratio analysis are given below:
Limitation of accounting records: Ratio analysis is based on financial st atements which are themselves subject to limitations. Thus, ratios calculated on the figures given in the financial statements, also suffers from similar limitation.
No allowances for price level changes: Due to change in price level of various years, com parison of ratio of such years cannot give correct conclusion. A change in the price level can seriously affect the validity of comparison of ratio computed for different time periods. For instance, a firm which has purchased an assets at a lower price, wi ll show a higher return, then the firm which has purchased the at an assets at a higher price.
Changes in accounting procedure:
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Comparison between two variables proves worth provided their basis of valuation is identical. But in reality, it is not possible, such as methods of valuation of stick or charging different firms for their valuation, and then comparison will practically be of no use.
Limited used of single ratio: A single ratio would not be able to convey anything. Ratio can be useful only when they are computed in a sufficient large number. If too many ratios are calculated, they are likely to instead of revealing meaningful conclusion.
Background is overlooked: When inter- firm comparison is made, they differ substantially in age, size, nature of product etc. when an inter firm comparison is made, these factors are not considered. Therefore, ratio analysis cannot give satisfactory result.
Changing policies: Ratio is computed on the basis of past result. Past is not an indicator of future. Ratios computed from historical data are used for predicting and projecting the likely events in the future. Such ratio may provide a glimpse of firm·s past performance. But forecast for nature may not be correct as several other factors like management policies, market condition etc. may induce future operations.
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COMMON SI E STATEMENTS
Ratio analysis apart, another useful way of analyzing financial statement is to convert them into common size statement by expressing absolute rupee amount into percentages. When this method is pursued the income statement exhibits each expense item or group of expense items as a percentage of net sales and net sales are taken as 100 percent
Common Size Financial Statements Common size ratios are used to compare financial statements of different-size companies, or of the same company over different periods. By expressing the items in proportion to some size-related measure, standardized financial statements can be created, revealing trends and providing insight into how the different companies compare. The common size ratio for each line on the financial statement is calculated as follows: Item of Interest Common Size Ratio = Reference Item For example, if the item of interest is inventory and it is referenced to total assets (as it normally would be), the common size ratio would be:
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Inventory Total ssets The ratios often are expressed as percentages of the reference amount. Common size statements usually are prepared for the income statement and balance sheet, expressing information as follows:
y y
Income statement items - expressed as a percentage of total revenue Balance sheet items - expressed as a percentage of total assets
The following example income statement shows both the dollar amounts and the common size ratios:
Common Size Income Statement
Income Statement
Revenue
¨ §¦
Income Statement
¥
70,134
oods So d
¦
100
For the balance sheet, the common size percentages are referenced to the total assets. The following sample balance sheet shows both the dollar amounts and the common size ratios:
Common Size Ba ance Sheet
¨
Balance Sheet Common-Size
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¥
Net Income
5,754
8.2
¥
Provision or Ta es
¦
3,766
5.4
¥
©
Interest E
ense
2,862
4.1
¥
O erating Income
©
12,382
17.7
¥
S &A E
§
ense
13,531
19.3
¥
ross Pro it
©
25,913
36.9
¥
Cost o
§
44,221
63.1
¤
Common Size Ratio for Inventory =
Common-Size
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Balance Sheet ASSETS Cash & Marketable Securities Accounts Receivable Inventory Total Current Assets 6,029 14,378 17,136 37,543 15.1% 36.0% 42.9% 93.9% 6.1% 100%
Property, Plant, & Equipment 2,442 Total Assets 39,985
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Total Liabilities & Equity 14,251 12,624 26,875 13,110 39,985 35.6% 31.6% 67.2% 32.8% 100%
The above common size statements are prepared in a vertical analysis, referencing each line on the financial statement to a total value on the statement in a given period. The ratios in common size statements tend to have less variation than the absolute values themselves, and trends in the ratios can reveal important changes in the business. Historical comparisons can be made in a time-series analysis to identify such trends. Common size statements also can be used to compare the firm to other firms. Comparisons Between Companies (Cross-Sectional Analysis) Common size financial statements can be used to compare multiple companies at the same point in time. A common -size analysis is especially useful when comparing companies of different sizes. It often
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is insightful to compare a firm to the best performing firm in its industry (benchmarking). A firm also can be compared to its industry as a whole. To compare to the industry, the ratios are calculated for each firm in the industry and an average for the indu stry is calculated. Comparative statements then may be constructed with the company of interest in one column and the industry averages in another. The result is a quick overview of where the firm stands in the industry with respect to key items on the fin ancial statements. Limitations As with financial statements in general, the interpretation of common size statements is subject to many of the limitations in the accounting data used to construct them. For example:
y
Different accounting policies may be used by different firms or within the same firm at different points in time. Adjustments should be made for such differences.
y
Different firms may use different accounting calendars, so the accounting periods may not be directly comparable.
COMPARATIVE STATEMENT
The benefits of a comparative statement are varied for a corporation. Because of the uniform format of the statement, it is a simple process to compare the gross sales of a given product or all products of the company with the gross sales generated in a previous month, quarter, or year. Comparing generated revenue from one period to a different period can add another dimension to analyzing the effectiveness of the sales effort, as the process makes it possible to identify trends such as a drop in revenue in spite of an increase in units sold. Along with being an excellent way to broaden the understanding of the success of the sales effort, a comparative statement can also help
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address changes in production costs. By comparing line items that catalog the expense for raw materials in one quarter with another quarter where the number of units produced is similar can make it possible to spot trends in expense increases, and thus help isolate the origin of those increases. This type of data can prove helpful to allowing the company to find raw materials from another source before the increased price for materials cuts into the overall profitability of the company. A comparative statement can be helpful for just about any organization that has to deal with finances in some manner. Even non -profit organizations can use the comparative statement method to ascertain trends in annual fund raising efforts. By making use of the comparative statement for the most recent effort and comparing the figures with those of the previous y ear·s event, it is possible to determine where expenses increased or decreased, and provide some insight in h ow to plan the following year·s event.
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Chapter 5
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HEAD LINES
Research Methodology y Meaning of Research. y Research Problem. y Research Design. y Sampling Design. y Data Collection method. y Analysis and interpretation of Data.
RESEA RCH METHODOLOGY ES EA C H M ET H O D L O Y
The procedure adopted for conducting the research requires a lot of attention as it has direct bearing on accuracy, reliability and adequacy of results obtained. It is due to this reason that research methodology, which we used at the time of conducting the research, needs to be elaborated upon. Research Methodology is a way to systematically study and solve the research problems. If a researcher wants t claim o his study as a good study, he must clearly state the methodology
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adapted in conducting the research the research so that it way be judged by the reader whether the methodology of work done is sound or not.
5.1
RESEARCH METHODOLOGY R R O OL GY
Meaning of Research. Research Problem. Research Design. Sampling Design. Data Collection method. Analysis and interpretation of Data.
MEANING OF RESEARCH
Research is defined as ´a scientific and systematic search for pertinent information on a specific topicµ. Research is an art of scientific investigation. Research is a systematized effort to gain now knowledge. It is a careful investigation or inquiry especially through search for new facts in any branch of knowledge. Research is an academic activity and this term should be used in a technical sense. Research comprises defining and redefining problems, formulating hypothesis or suggested solutions. Making deductions and reaching conclusions to determine whether they if the formulating hypothesis. Research is thus, an original contribution to the existing stock of
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knowledge making for its advancement. The search for knowledge through objective and systematic method of finding solutio ns to a problem is research.
RESEARCH PROBLEM
The first step while conducting research is careful definition of Research Problem. ´To ERR IS THE HUMANµ is a proverb which indicates that no one is perfect in this world. Every researcher has to face many problems which conducting any research that·s why problem statement is defined to know which type of problems a researcher has to face while conducting any study. It is said that, ´Problem well defined is problem half solved.µ Basically, a problem statement refers to some difficulty, which researcher experiences in the context of either a theoretical or practical situation and wants to obtain the solution for the same. The problem statement here is: ´To make a Financial Analysis of Financial statements of The Central Bank of Indiaµ
RESEARCH DESIGN
A research designs is the arrangement of conditions for collection and analysis data in a manner that aims to combine relevance to the research purpose with economy in procedure. Research Design is the conceptual structure with in which research in conducted. It
constitutes the blueprint for the collection measurement and analysis of data. Research Design includes and outline of what the researcher will do form writing the hypothesis and it operational implication to the final analysis of data. A research design is a framework for the study and is used as guide in collection and analyzing the data. It is a strategy specifying which approach will be used for gathering and analyzing the data. It also include s the time and cost budget since most
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studies are done under these two cost budget since most studies are done under theses tow constraints. The design is such studies must be rigid and not flexible and most focus attention on the following. 1. What is the study about? 2. Why is the study being made? 3. Where will the study be carried out? 4. What type of data is required? 5. Where can be required data be found? 6. What period of time will the study include? 7. What will be sample design? 8. What techniques of data collection will be used? 9. How will the data be analyzed?
10. In what style will the report be prepared?
TYPES OF RESEARCH DESIGN
EXPERIMENTAL RESEARCH DESIGN EXPLORATORY RESEARCH DESIGN
DESCRIPTIVE& DIAGNOSTIC RESEARCH
Exploratory Research Design: This research design is preferred when researcher has a vague idea about the problem the researcher has to explore the subject. Experimental Research Design ² The research design is used to provide a strong basis for the existence of casual relationship between two or more variables. Descriptive Research Design ² It seeks to determine the answers to who, what, where, when and how questions. It is based on some previous understanding of the matter. Diagnostic Research Design It determines the frequency with which something occurs or its association with something else.
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RESEARCH DESIGN USED IN THIS PROJECT
Research Design chosen for this study is Descriptive Research Design. Descriptive study is based on some previous understanding of the topic. Research has got a very specific objective and clear cut data requirements.
SAMPLING DESIGN
Sampling is necessary because it is almost impossible to examine the entire parent population (i.e. the entire universe) various factors such as time available cost, purpose of study etc. make it necessary for the researchers to choose a sample. It should neither be too sm all nor too big. It should be manageable. THE sample size of past 3 years is taken for present study due to time limitation.
DATA COLLECTIONS
The process of data collection begins after a research problem has been defined and research design ahs been c halked out. There are two types of data ²
METHODS OF PRIMARY DATA
OBSERVATION METHOD INTERVIEW METHODS QUESTIONAIRE METHOD SCHEDULE METHOD
PRIMARY DATA -
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It is first hand data, which is collected by researcher itself. Primary data is collected by various approaches so as to get a precise, accurate, realistic and relevant data. The main tool in gathering primary data was investigation and observation. It was achieved by a direct approach and observation from the officials of the company. SECONDARY DATA - it is the data which is already collected by someone else. Researcher has to analyze the data and interprets the results. It has always been important for the completion of any report. It provides reliable, suitable, adequate and specific knowledge. I took data comprise annual financial statement and pa st records. Bank has provided me annual financial statement from 2006-07 to 2008-09 by help of which, I prepared my report. The valuable cooperation extended by staff members contributed a lot to fulfill the requirements in the collection of data in order to complete the project. Various statistical tools are applied depending on the research problem. In this study ratio analysis, comparative financial statements analysis, and common size statements ha s been used for analyzing and interpreting the result.
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Chapter 6
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CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008
PARTICULAR (A) INCOME: (1) Interest earned :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O. Item) <vi>Interest on Balances with reserve Bank of India <vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii> Total Interest Earned:-
AMOUNT
Ps.
TOTAL AMOUNT
Ps.
40,65,337 2,44,360 4,55,539 8,00,261 -
23 95 08 06 55,65,487 37
-------------- ----
3227 00 3227 00 -
-------------- ----
2,03,63,474 00 -------------- ----
2,03,63,474 00 2,59,28,971 37
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(2) Other Income:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection - Letter of credit - Letter of guarantee(DPG) - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges - Processing charges - Government Business Transaction - Commission on travelers cheques - Commission on bank assurance-life - Commission on bank assurance non-life - Commission on mutual fund poducts Sub-Total(a) (b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) (c) Exchange:- DD / TT (Inland) - DD / TT (Foreign) Sub-Total(c) Total of commission , Exchange & Brokerage (a + b + c) <ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment
29,270 00 28,177 35 -
4,62,121 01 86,790 00 2,382 00 5,820 00 1,409 91 ----------------616970 27
--------------
----
-
-
2,58,983 19 -------------- ----
2,58,983 19 8,75,953 46 -
-
-
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<iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers 2,26,977 - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others 1,446 80 Total of other income ( i to vii) -------------- ---TOTAL INCOME (1+2) PARTICULAR AMOUNT Ps
-
-
-
-
-
-
11,04,376 46 2,70,33,347 83 TOTAL Ps AMOUNT 2,39,49,366 95
(B) EXPENDITURE:(3) Interest Expected :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a) (b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit - Interest on Money Multiplier Deposit - Interest on Recurring Deposit - Interest on Khazana Deposit - Interest on FCNR(B) Deposit - Interest on Certificate of Dep. - Interest on Other Term Deposit Total of 2.
-------------
----
-
-
32,29,747 26 3,61,521 54 3,79,189 10 69,63,617 12 24,549 60 2,51,505 62 1,84,753 80 -------------- ----
81,65,136 84
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Sub Total(a + b) <ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> Total Interest Expended ( i to iv) (4) Operating Expenses :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item) Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises - Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii> <iii> Printing & Stationary <iv> Advertisement & publicity -
1,13,94,884 04 -
70,72,628 00 -------------- --------------------
70,72,628 1,84,67,512 04
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321
00 12 00 19 70 50 00 69 00 55
44,645 00 ----------------33,96,050 16
1,99,368 00 23,400 00
68,860 00 -------------- ----
2,91,628 93 31,285 59
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<v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses
--------------
----
<vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> -------------<viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams 4,142 - Telephones & Telex / Fax 3,697 - Amount paid for leased line 3,816 Sub Total <ix> --------------
----
- 3,57,942 00
00 00 00 ----
8,365 00
<x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures 7,525 00 - Annual maintenance charge 4,264 00 Sub Total <x> -------------- ---<xi> Insurance: - Insurance - Deposit Insurance
11,889 00
Sub Total <xi> --------------
----
-
-
<xii> Other Expenditure:- Traveling exp. - Boarding exp. - Local conveyance paid / Reimbursed - Diem allowances paid-officer - Diem allowances paid-clerk - Diem allowances paid-sub staff - Reimbursement of conveyance Exp. To eligible officers
22,096 18 4,326 00 21,748 17,355 8,000 780 00 00 00 00
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- Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. 5,913 - Wages paid to sweepers and casual labor 3,460 - Petty cash Expenses 5,781 - Currency chest guarding exp. 2,70,000 - Clearing House Charges 1,14,035 - Fees for Revenue / Concurrent / 98,452 other Auditors - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals 4,847 - Donations to Institution - Others 12,594 Sub Total <xii> -------------<xiii> Provisions and Contingencies Total Operating Expenses <i to xii> TOTAL EXPENDITURE ( 3 + 4 ) PROFIT BALANCE ( A ² B ) --------------
50 00 16 00 00 00 00 93 ----
5,94,388 71 - 46,91,548 46
----
2,31,59,060 86 38,74,287 14
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5.1 1
COMPARATIIVE STATEMENT ANALYSIIS C M ARAT VE STATEMENT ANA YS S
COMPARATIVE BALANCE SHEET STATEMENT
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS
PARTICULAR (A) CAPITAL AND LIABILITIES :(1) Capital (Fully owned by central Government) (2) Reserves & surplus (3) Deposits:<I> Demand Deposit :- Current / call Deposit a. From Bank b. From Others <II> Saving Bank Deposits <III> Term Deposit :a. From Bank b. From Others:- Fixed Deposits - QID - MMD - Cent uttam Deposit - Recurring Deposit - FNCR - Certificate of Deposit - Other Term Deposit Total Deposit(3) (4) Borrowing (5) Other Liabilities & Provisions. <I> Bills Payable : - Bills payable / MIS Payable
2007
2008
2009
7,66,96,927 18,08,81,307
9,26,66,535 19,88,34,956
73335300 234270014
1,04,58,175 1,43,19,795 15,64,35,938 1,93,686 8,71,946 55,68,522 41,65,526 44,95,97,826
1,08,30,348 1,54,89,177 21,99,69,789 1,93,686 7,38,298 5445660 50,57,513 54,92,25,958
4067737 28318799 440504862 193686 860660 1461073 10350157 793249310
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
82
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- T.T.·S Payable - Pay slips / Banker·s cheques Issued. - Others
465980 18,25,445 1,414 30,47,703 1,414 1414
<II> Inter-Office , Adjustment (Net) i.e. Branch Adjustment) <III> Interest Accrued : - On Deposits - On Borrowings <IV> Other Liabilities:- Accrued Expenses - Reversal of Unrealized , Interest - Amount received from court Receiver / Borrowers & held pending adjustments - Income tax & other Taxes to be remitted - Commission on guaranteed LC - Advance rent Reserved from locker holder. - Others Total other Liabilities & Provisions(5) TOTAL
17,12,343
20,82,337
2522608
40,900 1,12,392
40,000 1,12,392
106600 237778
1,60,696
1,60,696 4,41,210 1327607 128300 320368 237662
1,15,468 3,19,510 71,049
1,25,744 2,83,837 1,97,528
43,68,593 64,83,486 45,39,66,419 55,57,09,445
5348317 798597627
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
83
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
PARTICULAR (B) ASSETS: (6) Cash & Balances with Reserve Bank of India:<I> Cash : - In Hand - In Foreign Currency Notes <II> Balance with Reserve Bank of India : - Incurrent Account - In other Account Total of (6) (7) Balance with Banks And Money at call and short notice: - In India - out side in India
2007
2008
2009
57,41,098
71,86,591
15013378
57,41,098
71,86,591
15013378
(8) Investments: (9) Advances: <I> Bill purchased and 33,60,423 31,82,025 discounted <II> Cash credits, overdraft, & loan repayable on demand - Cash credit 4,79,01,002 4,74,63,883 - Overdraft 4,50,33,805 4,73,57,980 - Loan repayable on demand 43,65,180 49,53,204 <III> Term loan 9,70,48,629 11,65,89,119 Total Advances(9) 19,77,09,042 21,95,46,212 (10) Fixed Assets:- Premises (C.O. Item) - Other Fixed Assets ( Including furniture & Fixtures) Total Fixed Asset(10) (11) Other Assets:<I> Other Assets:- Inter office Adjustment i.e. Branch Adjustment - Stationary and stamps on hand
3163004
51019908 50128530 5078500 135680795 241907733
36,24,509 36,24,509
36,54,074 36,54,074
3455597 3455597
24,61,58,808 1,11,871
32,43,38,322 1,51,979
537180116 153379
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
84
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
<II> Amount Not in the Nature of Advances :- Prepaid expenses - Advance to staff - Interest free advances to staff - Deposit with Government and other Departments - Staff loan advance - On account payments made to other - Advance payment to land lord of office and other premises - Amount paid to pensioners - Difference in clearing - Others - Miscellaneous Inter Branch Transactions (MIBT):a. cash b. Funds Transferred. c. Staff and Advance against LFC, TA, Salary etc. d. Letter of credit claimed e. D.D.s issued by other Banks paid f. other transaction - Share Application money
11,000
11,000 15000 317693 9850 21700 16250
57,76,50 9,850
4,71,450 9,850
20,100
11,700 1,14,080 2,14,163 2210
31900 107990 336313
2,400
30728
Total of other Assets(11) 24,68,91,680 32,43,22,567 TOTAL 45,39,66,419 55,57,09,445
538220919 798597627
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
85
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
COMPARATIVE PROFIT & LOSS A/C
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS
PARTICULAR (A) INCOME: -
2007
2008
2009
(1) INTEREST EARNED :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O. Item) <vi>Interest on Balances with reserve Bank of India <vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii>
19,31,691 2,19,085 5,42,000 7,60,352
40,65,337 2,44,360 4,55,539 8,00,261 55,65,487 -
5927523 216384 128102 978901
34,53,099
7250910
3,227 3,227 -
1,63,38,545 1,63,38,545
2,03,63,474 2,03,63,474
32063360 32063360
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
86
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
TOTAL INTEREST EARNED:2) OTHER INCOME:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection - Letter of credit - Letter of guarantee(DPG) - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges - Processing charges - Government Business Transaction - Commission on travelers cheques - Commission on bank assurance-life - Commission on bank assurance non-life - Commission on mutual fund poducts Sub-Total(a) (b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) (c) Exchange:- DD / TT (Inland) - DD / TT (Foreign) Sub-Total(c) Total of commission , Exchange & Brokerage (a + b + c) <ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment
1,97,94,871
2,59,28,971
39314270
37,042 84,500
29,270 28,177 -
19247 7451
500
5,66,506 2,05,069
4,62,121 86,790 2,382
984341
5000 12919
25,825
5,820 1,410
9,18,942
616970
1029459
-------------2,77,269 2,77,269 11,96,210 2,58,983 8,75,953 290320 1319779 2,58,983
290320
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
87
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
<iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others Total of Miscellaneous Income TOTAL OF OTHER INCOME ( I TO VII) TOTAL INCOME (1+2) (A)
-
-
-
2,22,747
2,26,977 -
198869
241 2,22,988
1,446 2,28,423
198869
14,19,198 2,12,14,069
11,04,376 2,70,33,347
1518648 40832918
PARTICULAR (B) EXPENDITURE:(3) INTEREST EXPECTED :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a) (b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit - Interest on Money Multiplier Deposit - Interest on Recurring Deposit - Interest on uttam Deposit - Interest on FCNR(B) Deposit
2007
2008
2009
------------30,32,755 3,43,883 3,40,490 43,76,405 87,978 14,810 20,57,161 32,29,747 3,61,521 3,79,189 69,63,617 24,549 2,51,505
3732257 120843 947008 19719599 22879
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
88
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Interest on Certificate of Dep. - Interest on Other Term Deposit Total of 2. Sub Total(a + b) <ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> TOTAL INTEREST EXPENDED ( I TO IV) (4) OPERATING EXPENSES :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item) Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises - Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii>
1,00,533 54,69,815 85,04,570
1,84,753 81,65,136 1,13,94,884 -
400864 21211193 24943450 -
49,80,865 49,80,865
70,72,628 70,72,628
9450917 9450917
1,34,85,435
1,84,67,512
34394367
21,14,272 1,76,024 5,57,341 66,203 1,60,099 98,803 28,639 5,44,248 5,824 22,280 91,849
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321 44,645 -
2499604 214447 1195133 60884 164476 135792 41200 52076 4793 34510 108610
33,75,763
33,96,050
4511525
1,49,526 27,300
1,99,368 23,400
284143 74400
67,983 4,51,987
68,860 2,91,628
86849 445392
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
89
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
<iii> Printing & Stationary <iv> Advertisement & publicity <v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses <vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> <viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams - Telephones & Telex / Fax - Amount paid for leased line Sub Total <ix> <x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures - Annual maintenance charge Sub Total <x> <xi> Insurance: - Insurance - Deposit Insurance Sub Total <xi> <xii> Other Expenditure:- Traveling exp. - Boarding exp. - Local conveyance paid / Reimbursed - Diem allowances paid-officer
40,024
31,285
155505
--------------
-------------11,700 3,57,942
6584
13,696 Cr 15,516 Dr 1,820
4,142 Cr 3,697 Dr 3,810 Dr 8,365
6764 14073 20837
39,105 39,105 7,525 4,264 11,889 47892 5313 53205
4,895
4,895 --------------
-
17,493 893 3,356 31,760
22,096 9,326 21,748 17,355
136422 8736 35663 4575
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
90
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Diem allowances paid-clerk - Diem allowances paid-sub staff - Reimbursement of conveyance Exp. To eligible officers - Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. - Wages paid to sweepers and casual labor - Petty cash Expenses - Currency chest guarding exp. - Clearing House Charges - Fees for Revenue / Concurrent / other Auditors - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals - Donations to Institution - Others Sub Total <xii> <xiii> Provisions and Contingencies TOTAL OPERATING EXPENSES <I TO XII> TOTAL EXPENDITURE ( 3 + 4 ) (B) PROFIT BALANCE ( A ² B )
30,595
8,000 780 80
56,815 1,956 16,635 14,010 66,140 69,649 5,913 3,460 5,781 2,70,000 1,14,035 98,452 4,567 24,222 3,48,639 4,847 12,594 5,94,388 6252 1614 432464 42,71,936 46,91,548 5625512 4341 1414 20415 53414 78643 80895
1,77,57,371 34,56,698
2,31,59,060 38,74,287
40019879 813039
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
91
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
4..2 4
TREND ANALYSIS OF BALANCESHEET T EN A A SI O BAL C EET
(By taking data of 2005 as a base year) 31/3/2005 31/3/2006 31/3/2007 31/3/2008 Advances Current A/c Saving A/c Time Deposit 171580590 59866450 160045556 164523560 165005256 68564840 150564500 202510595 197709042 76696927 180881307 192013589 219546212 92666535 198834956 257724467 31/3/2009 241907733 73335300 234270014 485643995
(Data In %) 31/3/2006 31/3/2007 31/3/2008 Growth in Advances Growth in Current A/c Growth in Saving A/c Growth in Time Deposit -3.8% 14.5% -5.9% 23.1% 19.8% 11.9% 20.1% -5.2% 11.0% 20.8% 9.9% 34.2% 31/3/2009
10.20% -20.90% 17.80% 88.40%
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
92
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Ad n s
30000000
25000000 197709042
241907733
219546212
20000000 15000000
10000000 50000000
171580590
165005256
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
G w
25.00% 20.00%
in Ad n s
19. 0%
15.00% 10.00%
5.00%
11.00%
10.20%
-5.00%
Interpretation
The amount of advances of CBI is increases since last 4 years,
but it is increasing with decreasing rate because in 2008 growth
rate of advances was 11
while in 2009 it 10.20
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
31/3/200
0.00%
-3. 0%
31/3/200 31/3/200 31/3/2009
93
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Cu
10000000 90000000 80000000 70000000 60000000 50000000 40000000 30000000 20000000 10000000 0
nt A/
92666535 76696927 73335300
68564840 59866450
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
owth in Cu
25.00%
5.00%
nt A/
20 80%
0.00%
5.00% 31/3/2006 31/3/2007 31/3/2008 31/3/2009
0.00% -5.00%
- 0.00% - 5.00%
-20.00% -25.00%
Interpretation
The amount of current a/c was in increasing rate since 2005, but
in 2009 it was decreased by 20
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
20.00%
14 50%
11 90%
-20 90%
94
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Savin A/
25000000 20000000
234270014 180881307 160045556 150564500 198834956
15000000
10000000 50000000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
owth in Savin A/
25.00% 20.00% 15.00% 10.00% 5.00%
0.00% -5.00% -10.00% 31/3/2006 31/3/2007 31/3/2008 31/3/2009
20.10%
1 . 0% 9.90%
#"
-5.90%
Interpretation
The amount of saving deposits of CBI is increases since last 4
years, but it is increasing with fluctuating growth rate because in
!
2007 growth rate of saving deposit was 20.1
!
,in 2008 it was
9.9 , while in 2009 it was again 17.80
!
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
95
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Ti
60000000
Deposit
485643995
50000000
40000000 30000000 202510595 257724467 164523560
20000000
10000000 0
192013589
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
owth in Ti e Deposit
100.00% 80.00%
60.00% 40.00%
88.40%
34.20% 23.10% -5.20%
$
31/3/2006 31/3/2007 31/3/2008 31/3/200
20.00% 0.00%
-20.00%
Interpretation
The amount of time deposit was increase with high rate of growth
in 2009 it was around double compare to 2008
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
96
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
4..3 4
TREND ANALYSIIS OF PROFIIT & LOSS A/C TREND NALYS S OF PRO T & LOS A/C
(By taking data of 2005 as a base year) (Amount in Rs.)
31/3/2005 Interest Earned Other income Total income Interest Expended Operating Expenses Total expenditure Profit 1,45,89,500 10,26,356 1,56,15,856 98,45,698 35,45,566 1,33,91,264 22,24,592
31/3/2006 1,50,98,785 12,05,560 1,63,04,345 1,02,56,565 38,58,580 1,41,15,145 21,89,200
31/3/2007 1,97,94,871 14,19,198 2,12,14,069 1,34,85,435 42,71,936 1,77,57,371 34,56,698
31/3/2008 2,59,28,971 11,04,376 2,70,33,347 1,84,67,512 46,91,548 2,31,59,060 38,74,287
31/3/2009 3,93,14,270 15,18,648 4,08,32,918 3,43,94,367 56,25,512 4,00,19,879 8,13,039
2006 Growth in Interest Earned Growth in Other income Growth in Total income Growth in Interest Expended Growth in Operating Expenses Growth in Total expenditure Growth in Profit 3% 17% 4% 4% 9% 5% -2%
2007 31% 18% 30% 31% 11% 26% 58%
2008 31% -22% 27% 37% 10% 30% 12%
2009 52% 38% 51% 86% 20% 73% -79%
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
97
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Interest Earned
45000000 40000000
39314270
35000000
30000000
25928971 19794871 1458 500
&
25000000
20000000
15098785
15000000
10000000
5000000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
rowth in Interest Earned
60%
50% 40% 30% 20% 10%
52%
31%
31%
3%
2006 2007 2008 2009
0%
Interpretation:
The amount of the interest earned was increased with increasing rate so it is good sign for the bank and profitability point of view, in 2007 and 2008 the growth rate was became stable but in 2009 it was
%
increased and became around 52
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
98
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Other in o e
1600000
1419198 1205560 1026356 1104376
1518648
1400000 1200000
1000000 800000
600000 400000
200000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Other in o e
50%
38%
40% 30%
17%
20%
10% 0%
18%
-10%
-20% -30%
2006
2007
2008
2009
-22%
Interpretation:
rate, while in 2008 it was decreased by 22 , so overall it is good sign for the bank
' '
The amount of other income was also increased with 38
of growth
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
99
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total in o e
45000000
40832918
40000000 35000000
30000000 25000000 20000000
27033347 21214069 15615856 16304345
15000000 10000000
5000000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Total in o e
60%
51%
50%
40% 30%
30%
27%
20%
10% 0%
4%
2006
2007
2008
2009
Interpretation:
The total income of the bank was also increased due to increases in the interest earning and other income
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
100
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Interest Expended
40000000
35000000 30000000
25000000 20000000
34394367
18467512 13485435 9845698 10256565
15000000 10000000
5000000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Interest Expended
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
86%
31% 4%
2006 2007
37%
2008
2009
Interpretation:
The amount of the interest expended was increased with increasing high compare to previous years. The reason may be that increased the dependability on the out side debt like deposits and borrowing. this is not good sign for the bank
) (
rate since 2005, but in 2009 it was increased by 86
which is very nd
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
101
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Operatin Expenses
6000000
5625512 4271936 4691548
5000000
4000000 3000000
3545566
3858580
2000000
1000000 0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Operatin Expenses
25%
20%
20% 15%
11% 9%
10%
10%
5%
0% 2006 2007 2008 2009
Interpretation:
The operating expenditure also increased with increasing rate since by 20
0
2005. In 2008 it was increased by 10
0
while in 2009 it was increased
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
102
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total expenditure
45000000 40000000
40019879
35000000
30000000
25000000
20000000
23159060 17757371 13391264 14115145
15000000
10000000
5000000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Total expenditure
80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009
73%
26% 5%
30%
Interpretation:
The total expense of the bank was increased with increasing rate, but in 2009 it was increased by 73 , increased
1 2
s said earlier that because of the
high increasing rate in interest expense the total expenses also
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
103
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Profit
4500000 4000000
3874287 3456698 2224592 2189200
3500000
3000000
2500000
2000000
1500000
1000000
813039
500000
0
31/3/2005
31/3/2006
31/3/2007
31/3/2008
31/3/2009
Growth in Profit
80%
58%
60% 40% 20%
0% -20% -40%
12% -2%
2006 2007 2008 2009
-60% -80% -100%
-79%
Interpretation:
to increased in the level of the expenditure the profit margin was cut down. It is true that the income level of the bank was also increased but the increasing rate of income is less than the increasing rate of expenditure
3
The profit of the bank was decline by 79
the reason may be that due
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
104
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
4.4 4
COMMON SIZE STATEMENT ANALYSIS C MMON SIZE STATEM NT ANALYSIS
PROFIT & LOSS A/C OF CENTRAL BANK OF INDIA INCOME
TOTAL INTEREST EARNED:Term Loans Demand Loans Cash Credits Over Draft Interest on bill purchased Interest Received from central office. TOTAL OF COMMISSION , EXCHANGE & BROKERAG TOTAL OF MISCELLANEOUS INCOME TOTAL INCOME (1+2) (A)
2007
1931691 219085 542000 760352 3227 16338545 1196210 222988 21214069
2008
4065337 244360 455539 800261 20363474 875953 228423 27033347
2009
5927523 216384 128102 978901 32063360 1319779 198869 40832918
EXPENSES
INTEREST EXPENDED :Interest on Saving Deposit: Interest on Term Deposits: Interest paid to Central office OPERATING EXPENSES :Payments to and Provisions for Employees Rent, Taxes and Lighting Printing & Stationary Law charges Postages, Telegrams, Telephones etc. Repairs & Maintenance Insurance Other Expenditure TOTAL EXPENDITURE ( 3 + 4 ) (B)
2007
3032755 5469815 4980865
2008
3229747 8165136 7072628
2009
3732257 21211193 9450917
3375763 451987 40024 11700 1820 39105 4895 348639 17757368
3396050 291628 31285 357942 8365 11889 594388 23159058
4511525 445392 155505 6584 20837 53205 432464 40019879
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
105
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
COMMON SIZE PROFIT & LOSS A/C
INCOME
TOTAL INTEREST EARNED:Term Loans Demand Loans Cash Credits Over Draft Interest on bill purchased Interest Received from central office. TOTAL OF COMMISSION, EXCHANGE & BROKERAG TOTAL OF MISCELLANEOUS INCOME TOTAL INCOME (1+2) (A)
2007
93.31 9.11 1.03 2.55 3.58 0.02 77.02 5.64 1.05 100
2008
95.91 15.04 0.90 1.69 2.96 0.00 75.33 3.24 0.84 100
2009
96.28 14.52 0.53 0.31 2.40 0.00 78.52 3.23 0.49 100
EXPENSES
INTEREST EXPENDED :Interest on Saving Deposit: Interest on Term Deposits: Interest paid to Central office OPERATING EXPENSES :Payments to and Provisions for Employees Rent, Taxes and Lighting Printing & Stationary Law charges Postages, Telegrams, Telephones Repairs & Maintenance Insurance Other Expenditure TOTAL EXPENDITURE ( 3 + 4 ) (B)
2007
75.93 17.08 30.80 28.05 24.07 19.01 2.55 0.23 0.07 0.01 0.22 0.03 1.96 100
2008
79.74 13.95 35.26 30.54 20.26 14.66 1.26 0.14 1.55 0.04 0.05 0.00 2.57 100
2009
85.95 9.33 53.00 23.62 14.05 11.27 1.11 0.39 0.02 0.05 0.13 0.00 1.08 100
Interpretation:
From above analysis we can says that most portion of income of banks is comes from the interest earned on loan and advances
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
So the interest is one of the big sources of income generation for any bank
4
nother things is that the most of the expenditure is comes from the
interest payment on deposits, in case of CBI majority of expenses is accured due to the interest payment on term deposit
5
Composition of Total income out of 100
Co position of INCOME
100%
1.05%
0.84%
0.49% 3.23%
98%
96% 94%
3.24% 5.64%
92%
90% 88%
95.92% 93.31%
96.28%
2007
2008
2009
Composition of Total Expenses out of 100
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
5
8
B
8C
B
A@@9
nte est E rned
8 7
c
ssion Exc nge Broker ge
Miscellaneous income
6
107
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Co position of EXPENSES
120 100
24.07%
80
20.26% 79.74%
14.05% 85.95%
75.93%
60 40
20 0
2007
2008
2009
BALANCE SHEET OF CENTRAL BANK OF INDIA LIABILITIES
Deposits:Demand Deposit Saving Bank Deposits Term Deposit Tota other Liabi ities & Provisions TOTAL LIABILITIES
D D
2007
76696927 180881307 192013589 4368593 453966420
2008
92666535 198834956 257724468 6483486 555709446
ASSETS
Cash balance with RBI dvance Fixed ssets Other assets TOTAL ASSETS
E E
2007
5741098 197709042 3624599 246891680 453966419
2008
7186591 219546212 3654074 324322567 554709444
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
F
F
INTEREST EX ENDED
F
O ERATING EX ENSES
2009
73335300 234270015 485643995 5348317 798597627
2009
15013378 241907733 3455597 538220919 798597627
108
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
COMMON SIZE BALANCE SHEET
LIABILITIES
Deposits:Demand Deposit Saving Bank Deposits Term Deposit Tota other Liabi ities & Provisions TOTAL LIABILITIES
H H
2007
G G G G G G G G
2008
G G G G G G G G
2009
G G G G G G G G
16 39 42 0
89 84 30 96
16 35 46 1
68 78 38 17
9 29 60 0
18 34 81 67
100
100
100
ASSETS
Cash balance with RBI dvance Fixed ssets Other assets
TOTAL ASSETS
I I
2007
1 43 0 54 26 55 80 39
2008
1 39 0 58 30 58 66 47
2009
1 30 0 67 88 29 43 40
100
100
100
Co position of total Liabilit 2009
0.67% 9.18% 29.34%
60.81%
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
Q
QS
QP
QP
R
QP
Demand De
sit
Sa ing De
sits
Term De
sit
Liabilities & r visi ns
109
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Co position of total Liabilit 2008
1.17%
16.68%
46.38%
3 .78%
Demand Deposit Saving Deposits Term Deposit iabilities
T
rovisions
Co position of total Liabilit 2007
0.96% 16.89%
42.3%
39.84%
WV U
Demand Deposit
Saving Deposits
Term Deposit
iabilities
Co position of total Assets 2009
1.88%
30.29%
67.4%
0.43%
Cash balance with RBI
Advance
Fixed Assets
Other assets
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
WV
U
rovisions
110
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Co position of total Assets 2008
1.3% 39.58%
58.47%
0.66%
Cash balance with RBI Advance Fixed Assets Other assets
Co position of total Assets 2007
1.26% 43.55%
54.39%
0.8%
Cash balance with RBI Advance Fixed Assets Other assets
Interpretation :
The contribution of call deposits or demand deposit to the total
liability is decreased by year to year so it is not good sign for the bank. The main reason behind it may be that the current account facility provided by the bank is not very good compare to the other bank
The contribution of saving deposits to total liability is also
decreases by year to year.
The contribution of time deposit to the total liability is increases
by year to year so it is good sign for the bank, and it also
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
determine that the trust worthiness of peoples are built by year to year
The cash balance with RBI is also increases by year to year which
increase the confidence of investors toward bank
The contribution of the advances decreases by year to year which
is not good sign for the bank, reason may be the increasing rate if BPLR.
4.5 5
CENTRAL BANK OF INDIA AS WHOLE CEN A BAN OF I D A S HOL
Here the performance of the central bank of India as whole is given
BALANCE SHEET OF THE CENTRAL BANK OF INDIA AS WHOLE
( In Crore)
LIABILITIES
Total Share Capital
MAR '05
1,124.14
MAR '06
1,124.14
MAR '07
1,124.14
MAR '08
1,204.14
MAR '09
1,321.14
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Equity Share Capital Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities
1,124.14 0.00 1,617.50 523.57 3,265.21 60,751.67 139.69 60,891.36 4,439.32 68,595.89
1,124.14 0.00 1,810.19 507.64 3,441.97 66,482.65 310.81 66,793.46 4,445.61 74,681.04
324.14 800.00 2,179.84 485.85 3,789.83 82,776.28 782.01 83,558.29 5,659.97 93,008.09
404.14 800.00 2,699.95 2,038.67 5,942.76 110,319.67 449.10 110,768.77 7,244.26 123,955.79
404.14 917.00 3,081.99 2,008.92 6,412.05 131,271.85 804.25 132,076.10 9,167.07 147,655.22
ASSETS
Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Other Assets Total Assets
MAR '05
5,571.81
MAR '06
3,382.86
MAR '07
5,473.67
MAR '08
11,537.19
MAR '09
11,036.91
1,481.13 27,277.32 30,834.76 1,333.12 580.96 752.16 2,678.72 68,595.90
1,411.23 37,483.48 28,639.09 1,369.12 644.28 724.84 3,039.54 74,681.04
3,339.22 51,795.47 27,741.89 1,483.04 715.77 767.27 3,890.57 93,008.09
1,302.05 72,997.43 31,455.19 3,119.80 799.51 2,320.29 4,343.64 123,955.79
1,214.34 85,483.20 43,060.72 3,181.69 903.70 2,277.99 4,582.08 147,655.24
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Net Worth
7,000.00
6,412.05 5,942.76
6,000.00 5,000.00 3 265.21
3 789.83
3,000.00
2,000.00 1,000.00 0.00
Mar '05
Mar '06
Interpretation :
Net worth of the bank was increased with increasing rate from
to 2007, but in 2009 the increasing rate was became around 8 .
X
Deposits
140,000.00 120,000.00 100,000.00 80,000.00 60,751.67 82,776.28 110,319.67 131,271.85
66,482.65
60,000.00 40,000.00 20,000.00 0.00
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Interpretation :
The amount of the deposits is also increased with increasing rate
till 2008 but in 2009 the growth rate was fall by 19 .
Y
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
X
2005 to 2008, in 2008 it was increased by around 57
`
`
4,000.00
3 441.97
Mar '07
a
Mar '08
Mar '09
compare
114
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Advan es
90,000.00 80,000.00
85,483.20 72,997.43
51,795.47 37,483.48 27,277.32
70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Interpretation :
The amount of advances of bank is increased by year to year, and
b
43,060.72
31,455.19
in 2009 it was increased by about 17
Invest ents
50,000.00 45,000.00 40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00
30,834.76
28,639.09
27,741.89
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Interpretation :
The amount of the investment is also increased with increasing
c
rate in 2009 it was increased by 37
compare to previous year
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
PROFIT & LOSS A/C OF
CENTRAL BANK OF INDIA AS WHOLE
(Amt in CR)
INCOME
Interest Earned Other Income Total Income
Mar '05 Mar '06 Mar '07
5,204.88 938.87 6,143.75 5,385.58 551.24 5,936.82 6,234.21 561.83 6,796.04
Mar '08
Mar '09
7,995.54 10,455.19 902.35 1,069.97 8,897.89 11,525.16
EXPENDITURE
Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year
Mar '05 Mar '06 Mar '07
2,829.93 1,277.56 804.55 53.17 877.04 0.00 2,284.57 727.75 5,842.25 301.50 3,005.51 1,275.74 296.00 50.90 1,051.26 0.00 1,782.22 891.68 5,679.41 257.42 3,759.79 1,175.42 701.64 65.00 596.18 0.00 2,133.16 405.08 6,298.03 498.01
Mar '08
5,772.47 1,214.34 563.59 73.61 723.71 0.00 2,034.89 540.36
Mar '09
8,226.72 1,272.59 653.17 83.59 717.86 0.00 2,184.05 543.16
8,347.72 10,953.93 550.16 571.24
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(The amounts in the following charts are in CR)
Interest Earned
12,000.00
10,000.00
10,455.19 7,995.54
8,000.00 6,000.00
4,000.00 2,000.00
5,204.88
5,385.58
,234.21
0.00
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Interest Earned
35.0 30.0 25.0 20.0
15.8%
15.0 10.0 5.0 0.0
Mar '06 Mar '07 Mar '08 Mar '09
3.5%
Interpretation :
The amount of interest earned was increases with increasing rate
the healthiness condition of bank.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
d
It was increased by 31
in 2009 compare to 2008. So it shows
e
30.8% 28.3%
117
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total In o e
14,000.00
12,000.00 10,000.00 8,000.00 6,000.00
4,000.00 2,000.00 0.00
11,525.16 8,897.89 6,143.75 5,936.82 6,796.04
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Total In o e
35 30 25
20 15 10 5
30.9%
29.5%
14.5%
0 -5 -10
-3.4%
Mar '06 Mar '07 Mar '08 Mar '09
Interpretation :
Due to increases in interest earnings the income of the bank also
increases, but here the increasing rate with compare to previous year is almost equal for both 2008 and 2009, it is around 30 .
f
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
118
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Interest expended
9,000.00 8,000.00
8,226.72 5,772.47 3,759.79 2,829.93 3,005.51
7,000.00
6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Interest expended
60 50
40 30
53.5% 42.5%
25.1%
20 10
0
6.2%
Interpretation :
The amount of interest expended is also increases, but it is
increases with decreasing rate because in 2008 it was increased by 54 , while in 2009 it was increased by 42 .
g g
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Operatin Expenses
2,500.00 2,000.00 1,500.00
2,284.57 1,782.22
2,133.16
2,034.89
2,184.05
1,000.00 500.00
0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Operatin Expenses
25 20 15 10 5 0 -5 -10 -15 -20 -25
Mar '06 Mar '07
19.7% 7.3% -4.6%
Mar '08 Mar '09
-22%
Interpretation :
The operating expenses of the bank is on fluctuating rate
increased by 7 .
h
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
h
because in 2008 it was decreased by 5
while in 2009 it was
120
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total Expenses
12,000.00
10,953.93 8,347.72 5,842.25 5,679.41 6,298.03
10,000.00
8,000.00 6,000.00
4,000.00
2,000.00 0.00
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Total Expenses
35 30
25 20 15 10 5 0 -5
32.5%
31.2%
10.9%
-2.8%
Mar '06 Mar '07 Mar '08 Mar '09
Interpretation :
As increases in working of the bank the total expenditure of the
bank is also increases, but good things was that in 2008 it was
i i
increased by 33
while in 2009 it was increased by 31 .
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Net Profit for the Year
600
550.16 498.01
571.24
500
400
301.5
300
257.42
200
100 0
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
Net Profit for the Year
100
80
93.5%
60
40 20
10.5%
3.8%
Mar '09
0
-20 Mar '06 Mar '07 Mar '08
-14.6%
-40
Interpretation :
The amount of profit of the bank was increased by decreasing
rate the reason behind it may be that the rate of growth in total income was decreased or almost equal but the rate of employee cost and administrative cost were increased
Other reason may be that the other income of the bank in 2008
the total income of the bank.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
p
p
grow by 60
while in 2009 it was grow just by 18
so it may cut
122
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
4.6 6
RA T IO A N A LY S IS RAT O N Y S
NET PROFIT MARGIN
Net pro it margin= Net Pro it before interest and ta es * 100
t s q q r
Sa es (operation
2005 6 21
u
2006 4 92
u
2007 7 69
u
2008 6 31
u
2009 4 99
u
Net profit margin
9
8 7 6.21 7.69 6.31
6
5
4.92
4.99
4
3
2
1
0
2005 2006 2007 2008 2009
Interpretation :
The net profit margin arising from business operation before
interest and tax is deducted. The convention is to express profit as a percentage of total operation of the bank.
Here the profit margin is declining so it is not good for the bank
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
123
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RETURN ON NET WORTH
Return on net worth= Net Profit after interest and ta es * 100 Net worth
v
2005 11 65
w
2006 9 07
w
2007 15 89
w
2008 15 46
w
2009 14 43
w
Return on Networth
18
15.89
11.65
16
14
15.46
14.43
12
10
9.07
8
6
4
2 0 2005 2006 2007 2008 2009
Interpretation :
This ratio expresses the net profit in terms of the equity
shareholders funds. This ratio indicates the return on the funds employed by them
Here there is not much more different in the return on Networth
since last three years so it is good sign for the bank.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
124
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RETURN ON ASSETS
Return on Assets= Net Profit after ta es * 100 Tota Assets
y x
2005 0 44
2006 0 34
2007 0 54
2008 0 44
2009 0 39
Return on Assets
0.6 0.5 0.44 0.54 0.44
0.4
0.3 0.2
0.39 0.34
0.1
0 2005 2006 2007 2008 2009
Interpretation :
The profitability of the firm is measured by establishing relation
of net profit with the total assets of the organization. The ratio indicates the efficiency of utilization of assets in generating revenue
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
125
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
DEBT-EQUITY RATIO
Debt-equity ratio= Long term debt
Share ho ders equity
2005 18 65:1
2006 19 41:1
2007 22 05:1
2008 18 64:1
2009 20 60:1
Debt-Equit Ratio
23
22.05
22 21
20.6 19.41
18.65
20 19 18 17
16 2005
18.64
2006
2007
2008
2009
Interpretation :
This ratio shows the relationship between the loan fund and
networth of the company. It shows the proportion of the dedts or borrowing funds to owner· fund, Here the ratio is high in 2009 compare to 2008 which is not good sign for the bank.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
DEBT TO TOTAL ASSETS RATIO
Debt to tota assets ratio=
Tota Debt Tota Assets
2005 0 89:1
2006 0 89:1
2007 0 90:1
2008 0 89:1
2009 0 89:1
Debt to Assets ratio
0.902 0.9
0.9
0.898
0.896
0.894
0.892
0.89
0.89
0.89
0.89
0.89
0.888
0.886 0.884 2005 2006 2007 2008 2009
Interpretation :
This ratio indicates that what proportion of the permanent
capital of the firm consist of long term debt. Here the proportion is same since last two years which shows the stability of the bank.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
INTEREST EXPENSE RATIO
Interest expense ratio= Interest expense * 100 Income
2005
2006
2007
2008
2009
Interest Expense Ratio
80 70 71.38
64.87 46.06
50.62
60 50
40 30
55.32
20 10
0 2005 2006 2007 2008 2009
Interpretation :
This Ratio indicates that what is the proportion of the total
interest expenses to the Income. So that we can know about profitability of firm. Here the proportion of the expenditure is increases so it may caused in the decreasing rate of profit.
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
46 06
50 62
55 32
64 87
71 38
128
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
OPERATING EXPENSES RATIO
Operating expenses ratio= Operating Expenses *100 Income
2005
2006
2007
2008
2009
Operating Expense Ratio
40 35
37.19
30.02 31.39 22.87 18.95
30 25
20 15
10 5
0 2005 2006 2007 2008 2009
Interpretation :
This Ratio indicates that how much expenses has been spent on
selling and administration use of organization. This Ratio indicates that what is the proportion of the total Operating expenses to the Income. So that we can know about profitability of firm. Here the proportion of the operating expenditure is decreases so it is good sign for the bank, and it also shows the increases in the level of efficiency and utilization of resources
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
37 19
30 02
31 39
22 87
18 95
129
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
INTEREST EXPENDED/INTEREST EARNED
Interest Expended/Interest Earned= Interest Expended *100 Interest Earned
2005
2006
2007
2008
2009
Interest Exp/Interest Ernd
90
80
70
78.69 72.2 54.37 55.81
60.31
60
50
40
30
20
10 0 2005 2006 2007 2008 2009
Interpretation :
This ratio indicates the proportion of the total interest expended
into the total interest earned. Means if in 2009 if the bank earned 100 rs as interest than they paid rs 79 as interest expended
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
54 37
55 81
60 31
72 20
78 69
130
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RETURN ON SHARE HOLDERS FUNDS
Return on share ho ders· funds=
Profit after tax * 100 Share ho ders funds
2005
2006
2007
2008
2009
Return on Share holders' fund
25 20
15 10 13.41
22.15
22.84
21.62
11.45
5 0
2005 2006 2007 2008 2009
Interpretation :
Indicates the percentage return on share holders· funds, from the
above chart we can says that the rate of return on fund is about constant since last three years so it is good things for the bank point of view
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
13 41
11 45
22 15
22 84
21 62
131
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Chapter 6
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
132
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
FINDINGS & CONCLUSION
PERFORMANCE OF THE CENTRAL BANK OF INDIA, LAL DARWAJA
Performance of the bank according to Profit & Loss A/c
Overall rating of the Profit & Loss A/c (Best condition 5«4«3«2« Poor condition)
Criteria Profit Interest Earned Other income Tota income Interest Expended Operating Expenses Tota expenditure
2005 2006 2007 2008 2009 Average 3 3 4 5 1 32 2 2 3 3 5 3 2 3 3 3 4 3 2 2 3 3 5 3 3 3 3 2 1 24 3 2 2 2 1 2 3 3 3 2 1 24
Performance of bank out of 100
70
60 50
64%
60%
60%
60%
48% 40% 48%
40
30
20
10 0 Profit Interest Earned Other income Total income Interest Expended Operating Total Expenses expenditure
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
133
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
From the above table we can easily find out the overall performance of the bank If we talk about the overall profitability condition of the bank is around average condition because it falls at around 3.2 rating out of 5 which is quite near to the average
The income level of the central bank of India is quite better in 2009, the income from interest and other income is around best position, it is 5 and 4 respectively. Which show the better position in income earning, And if we talk about the overall income position then it is around average. The expenditure level was increased with increasing rate the overall rating of the expenses is into between poor and average which show the poor condition of the bank
Performance of the bank according to Balance sheet
Overall rati
of balance
eet (Best condition 5«4«3«2«1 Poor condition)
Criteria Advances Current A/c Saving A/c Time Deposit
2005 3 2 3 2
2006 2007 2008 2009 Average 2 3 3 4 3 3 3 4 3 3 2 3 3 4 3 2 2 3 5 2.8
Performance of bank out of 100%
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
61
60%
60
59 58
60%
60%
57
56%
56
55
54
Advances
Current A/c
Saving A/c
Time Deposit
The level of advances increased with increasing rate in 2009 it was in better position, if we talk about the overall performance of the bank in case of level of advances then it is around average The amount of deposits was also increased with increasing rate, when we talk about the average performance of bank for last five year then the position of current deposits, saving deposits and demand deposits fall in the average category.
PERFORMANCE OF PERFORMANCE OF THE CENTRAL BANK OF IINDIIA AS WHOLE THE CENTRAL BANK OF ND A AS WHOLE
Performance of the bank according to profit & Loss A/c
Overall rating of the Profit & Loss A/c (Best condition 5«4«3«2« Poor condition)
Criteria Interest Earned Tota Income Interest expended Operating Expenses Tota Expenses Net Profit for the Year
2005 2006 2007 2008 2009 Average 2 2 3 3 4 28 2 2 3 3 4 28 3 3 3 2 1 24 3 3 3 3 3 3 4 4 3 3 1 3 2 2 3 4 4 3
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70 60
50
56%
56% 48%
40
30 20
10
0
Interest Earned Total Income
Interest expended
From the above table we can say that the overall condition of the central bank of India is at the average position because the rating fall at the average or near to average spot for all criteria
Performance of the bank according to Ba ance sheet
Overall rating of balance sheet (Best condition 5«4«3«2« Poor condition)
f
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Performance of bank out of 100
f
Criteria Net orth Deposits Advances Investments Tota Assets
e g
2005 2 2 1 3 2
2006 2 2 2 3 2
2007 2 3 3 3 3
d
Performance of bank out of 100
60%
60%
60%
Operating Expenses
Total Expenses Net Profit for the Year
2008 4 4 4 3 4
2009 Average 4 28 4 3 5 3 4 32 4 3
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Over all performan e
66
64% 60% 60% 60%
64 62 60 58
56 54 52
56%
Net Worth
Deposits
Advances
Investments
Total Assets
From the above chart we can say that the overall position of the central bank of India is average
NOTE
The rating of each criteria is given on the bases of the average of the five consecutive year
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Chapter 7
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
RECOMMENDATION
Bank should improve the performance in case of the facility provided to the current account holder, because the facility provided by the bank is not very good. The dependability of the bank on out side fund is very high and so it may be very dangerous for the bank. If the bank wants to maintain their reputation then they have to improve the profitability by reducing the maximum cost. The infrastructural facility of the bank is very poor, because they till working with the old infrastructural facility
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BIBLIOGRAPHY
BOOKS: Financia Management ² M. Y. Khan & P. K. Jain Financia Management ² I. M. Pandey Management Accounting ² R. S. N. Pi ai and Bagvati
REFERENCES: Indian banking system India banking 2010 Search engines ² oogle & Yahoo
www.Centralbankofindia.co.in
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
ANNEXURE
CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008
PARTICULAR (A) INCOME: (1) Interest earned :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O.
AMOUNT
Ps.
TOTAL AMOUNT
Ps.
40,65,337 2,44,360 4,55,539 8,00,261 -
23 95 08 06 55,65,487 37
-------------- ----
3227 00 3227 00 -
-------------- ----
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Item) <vi>Interest on Balances with reserve Bank of India <vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii> Total Interest Earned:-
-
-
-
-
2,03,63,474 00 -------------- ----
2,03,63,474 00 2,59,28,971 37
(2) Other Income:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection 29,270 - Letter of credit - Letter of guarantee(DPG) 28,177 - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges 4,62,121 - Processing charges 86,790 - Government Business Transaction - Commission on travelers cheques - Commission on bank 2,382 assurance-life - Commission on bank 5,820 assurance non-life - Commission on mutual fund 1,409 poducts Sub-Total(a) -------------(b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) --------------
00 35 01 00 00 00 91 ---616970 27
----
-
-
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
(c) Exchange:- DD / TT (Inland) - DD / TT (Foreign)
2,58,983 19 Sub-Total(c) -------------- ---Total of commission , Exchange & Brokerage (a + b + c)
2,58,983 19 8,75,953 46 -
<ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment <iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers 2,26,977 - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others 1,446 80 Total of other income ( i to vii) -------------- ---TOTAL INCOME (1+2) PARTICULAR AMOUNT Ps
-
-
-
-
-
-
-
-
11,04,376 46 2,70,33,347 83 TOTAL Ps AMOUNT 2,39,49,366 95
(B) EXPENDITURE:(3) Interest Expected :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a)
-------------
----
-
-
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(b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit - Interest on Money Multiplier Deposit - Interest on Recurring Deposit - Interest on Khazana Deposit - Interest on FCNR(B) Deposit - Interest on Certificate of Dep. - Interest on Other Term Deposit Total of 2. Sub Total(a + b) <ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> Total Interest Expended ( i to iv) (4) Operating Expenses :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item)
32,29,747 26 3,61,521 54 3,79,189 10 69,63,617 12 24,549 60 2,51,505 62 1,84,753 80 -------------- ----
81,65,136 84 1,13,94,884 04 -
-
-
70,72,628 00 -------------- --------------------
70,72,628 1,84,67,512 04
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321
00 12 00 19 70 50 00 69 00 55
44,645 00 -
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises - Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii> <iii> Printing & Stationary <iv> Advertisement & publicity <v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses
--------------
----
33,96,050 16
1,99,368 00 23,400 00
68,860 00 -------------- ----
2,91,628 93 31,285 59
--------------
----
<vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> -------------<viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams 4,142 - Telephones & Telex / Fax 3,697 - Amount paid for leased line 3,816 Sub Total <ix> --------------
----
- 3,57,942 00
00 00 00 ----
8,365 00
<x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures 7,525 00 - Annual maintenance charge 4,264 00 Sub Total <x> -------------- ---<xi> Insurance: - Insurance
11,889 00
-
-
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- Deposit Insurance
Sub Total <xi> --------------
----
-
-
<xii> Other Expenditure:- Traveling exp. 22,096 - Boarding exp. 4,326 - Local conveyance paid / 21,748 Reimbursed - Diem allowances paid-officer 17,355 - Diem allowances paid-clerk 8,000 - Diem allowances paid-sub staff 780 - Reimbursement of conveyance Exp. To eligible officers - Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. 5,913 - Wages paid to sweepers and casual labor 3,460 - Petty cash Expenses 5,781 - Currency chest guarding exp. 2,70,000 - Clearing House Charges 1,14,035 - Fees for Revenue / Concurrent / other Auditors 98,452 - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals 4,847 - Donations to Institution - Others 12,594 Sub Total <xii> -------------<xiii> Provisions and Contingencies Total Operating Expenses <i to xii> TOTAL EXPENDITURE ( 3 + 4 ) PROFIT BALANCE ( A ² B ) --------------
18 00 00 00 00 00
50 00 16 00 00 00 00 93 ----
5,94,388 71 - 46,91,548 46
----
2,31,59,060 86 38,74,287 14
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CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS
PARTICULAR (A) CAPITAL AND LIABILITIES :(1) Capital (Fully owned by central Government) (2) Reserves & surplus (3) Deposits:<I> Demand Deposit :- Current / call Deposit a. From Bank b. From Others <II> Saving Bank Deposits <III> Term Deposit :a. From Bank b. From Others:- Fixed Deposits - QID - MMD - Cent uttam Deposit - Recurring Deposit - FNCR - Certificate of Deposit - Other Term Deposit Total Deposit(3) (4) Borrowing (5) Other Liabilities & Provisions.
2007
2008
2009
7,66,96,927 18,08,81,307
9,26,66,535 19,88,34,956
73335300 234270014
1,04,58,175 1,43,19,795 15,64,35,938 1,93,686 8,71,946 55,68,522 41,65,526 44,95,97,826
1,08,30,348 1,54,89,177 21,99,69,789 1,93,686 7,38,298 5445660 50,57,513 54,92,25,958
4067737 28318799 440504862 193686 860660 1461073 10350157 793249310
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<I> Bills Payable : - Bills payable / MIS Payable - T.T.·S Payable - Pay slips / Banker·s cheques Issued. - Others
465980 18,25,445 1,414 30,47,703 1,414 1414
<II> Inter-Office , Adjustment (Net) i.e. Branch Adjustment) <III> Interest Accrued : - On Deposits - On Borrowings <IV> Other Liabilities:- Accrued Expenses - Reversal of Unrealized , Interest - Amount received from court Receiver / Borrowers & held pending adjustments - Income tax & other Taxes to be remitted - Commission on guaranteed LC - Advance rent Reserved from locker holder. - Others Total other Liabilities & Provisions(5) TOTAL
17,12,343
20,82,337
2522608
40,900 1,12,392
40,000 1,12,392
106600 237778
1,60,696
1,60,696 4,41,210 1327607 128300 320368 237662
1,15,468 3,19,510 71,049
1,25,744 2,83,837 1,97,528
43,68,593 64,83,486 45,39,66,419 55,57,09,445
5348317 798597627
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PARTICULAR (B) ASSETS: (6) Cash & Balances with Reserve Bank of India:<I> Cash : - In Hand - In Foreign Currency Notes <II> Balance with Reserve Bank of India : - Incurrent Account - In other Account Total of (6) (7) Balance with Banks And Money at call and short notice: - In India - out side in India
2007
2008
2009
57,41,098
71,86,591
15013378
57,41,098
71,86,591
15013378
(8) Investments: (9) Advances: <I> Bill purchased and 33,60,423 31,82,025 discounted <II> Cash credits, overdraft, & loan repayable on demand - Cash credit 4,79,01,002 4,74,63,883 - Overdraft 4,50,33,805 4,73,57,980 - Loan repayable on demand 43,65,180 49,53,204 <III> Term loan 9,70,48,629 11,65,89,119 Total Advances(9) 19,77,09,042 21,95,46,212 (10) Fixed Assets:- Premises (C.O. Item) - Other Fixed Assets ( Including furniture &
3163004
51019908 50128530 5078500 135680795 241907733
36,24,509
36,54,074
3455597
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Fixtures) Total Fixed Asset(10) (11) Other Assets:<I> Other Assets:- Inter office Adjustment i.e. Branch Adjustment - Stationary and stamps on hand <II> Amount Not in the Nature of Advances :- Prepaid expenses - Advance to staff - Interest free advances to staff - Deposit with Government and other Departments - Staff loan advance - On account payments made to other - Advance payment to land lord of office and other premises - Amount paid to pensioners - Difference in clearing - Others - Miscellaneous Inter Branch Transactions (MIBT):a. cash b. Funds Transferred. c. Staff and Advance against LFC, TA, Salary etc. d. Letter of credit claimed e. D.D.s issued by other Banks paid f. other transaction - Share Application money
36,24,509
36,54,074
3455597
24,61,58,808 1,11,871
32,43,38,322 1,51,979
537180116 153379
11,000
11,000 15000 317693 9850 21700 16250
57,76,50 9,850
4,71,450 9,850
20,100
11,700 1,14,080 2,14,163 2210
31900 107990 336313
2,400
30728
Total of other Assets(11) 24,68,91,680 32,43,22,567 TOTAL 45,39,66,419 55,57,09,445
538220919 798597627
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CENTRAL BANK OF INDIA LAL-DARWAJA, SURAT-395003 COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS
PARTICULAR (A) INCOME: -
2007
2008
2009
(1) INTEREST EARNED :-<i> Interest on Advances other than Bank: - Term Loans - Demand Loans - Cash Credits - Over Draft - Export / Import Loans - Other Sub-Total<i> <ii> Interest on Advances to Banks: <iii>Interest on Bills Purchased / Discounted : - Interest on bill purchased / discounted / Negotiated (Inland) - Int. on bills purchased / Discounted / Negotiated (Foreign) - Overdue Interest on T.T. Discounted by others banks. Sub-Total <iii> <iv>Discount on Bills, TTS etc. <v> Income on Investment (C.O. Item) <vi>Interest on Balances with reserve Bank of India
19,31,691 2,19,085 5,42,000 7,60,352
40,65,337 2,44,360 4,55,539 8,00,261 55,65,487 -
5927523 216384 128102 978901
34,53,099
7250910
3,227 3,227 -
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<vii> Others: - Interest Received from Branches / NBO - Interest Received from central office. Sub-Total<vii> TOTAL INTEREST EARNED:2) OTHER INCOME:-<i> Commission Exchange Income: (a)Commission / Brokerage : - Bill for collection - Letter of credit - Letter of guarantee(DPG) - Bill purchase - Payment of dividend - Safe custody Accounts - Sales & Purchase of Shares & Securities - Under writing commission - Incident / Service charges - Processing charges - Government Business Transaction - Commission on travelers cheques - Commission on bank assurance-life - Commission on bank assurance non-life - Commission on mutual fund poducts Sub-Total(a) (b) Commission / Brokerage (Foreign):- Bill for collection - Letter of credit [export] - Letter of credit [Import] - Letter of guarantee / DPG - Bill purchased Discounted Sub-Total(b) (c) Exchange:- DD / TT (Inland) - DD / TT (Foreign) Sub-Total(c) Total of commission , Exchange
1,63,38,545 1,63,38,545 1,97,94,871
2,03,63,474 2,03,63,474 2,59,28,971
32063360 32063360 39314270
37,042 84,500
29,270 28,177 -
19247 7451
500
5,66,506 2,05,069
4,62,121 86,790 2,382
984341
5000 12919
25,825
5,820 1,410
9,18,942
616970
1029459
-------------2,77,269 2,77,269 11,96,210 2,58,983 8,75,953 290320 1319779 2,58,983
290320
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& Brokerage (a + b + c) <ii> Profit / Loss on sales of Investments (C.O. Item) <iii> Profit & Loss on Revaluation of Investment <iv> Profit & Loss on sale of land, Buildings & Other Assets. <v> Profit & Loss on Exchanges Transactions <vi> Income Earned by way of dividends etc. From subsidiary and/or joint ventures abroad / in India. <vii> Miscellaneous Income: - Rent of safe Deposit Lockers - Recovery received in accounts written off - Rent received from occupants of bank·s own premises - Others Total of Miscellaneous Income TOTAL OF OTHER INCOME ( I TO VII) TOTAL INCOME (1+2) (A) -
-
-
-
2,22,747
2,26,977 -
198869
241 2,22,988
1,446 2,28,423
198869
14,19,198 2,12,14,069
11,04,376 2,70,33,347
1518648 40832918
PARTICULAR (B) EXPENDITURE:(3) INTEREST EXPECTED :<1> Interest on Deposit : (a) Banks :- Demand Deposits - Term Deposit Sub-Total (a) (b) Others :1. Interest on Saving Deposit: 2. Interest on Term Deposits: - Interest on Fixed Deposit - Interest on Quarterly Deposit
2007
2008
2009
------------30,32,755 3,43,883 3,40,490 32,29,747 3,61,521 3,79,189
3732257 120843 947008
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Interest Deposit - Interest - Interest - Interest - Interest - Interest
on Money Multiplier on on on on on Recurring Deposit uttam Deposit FCNR(B) Deposit Certificate of Dep. Other Term Deposit Total of 2. Sub Total(a + b) 43,76,405 87,978 14,810 20,57,161 1,00,533 54,69,815 85,04,570 69,63,617 24,549 2,51,505 1,84,753 81,65,136 1,13,94,884 19719599 22879
400864 21211193 24943450 -
<ii> Interest on Reserve Bank of India / Inter Bank Borrowings <iii> Interest Paid to Others - Interest on Borrowing paid to <iv> Others :- Interest Paid to Branches / NBO - Interest paid to Central office Sub-Total<iv> TOTAL INTEREST EXPENDED ( I TO IV) (4) OPERATING EXPENSES :<i> Payments to and Provisions for Employees: - Basic pay / Personal pay - Special Pay - Dearness Allowances - City compensatory Allowances - House Rent Allowances - Medical Aid - Leave fare concession - Leave Encashment - Bonus - Other Expenses - Staff Welfare Expenses - Contribution to provident fund - Ex-gratia paid to pre. 1986 retirees (C.O. Item) Sub Total <i> <ii> Rent, Taxes and Lighting :- Rent paid for office premises
49,80,865 49,80,865
70,72,628 70,72,628
9450917 9450917
1,34,85,435
1,84,67,512
34394367
21,14,272 1,76,024 5,57,341 66,203 1,60,099 98,803 28,639 5,44,248 5,824 22,280 91,849
19,79,448 1,79,672 6,92,567 55,691 1,53,756 52,343 10,576 91,456 16,460 23,321 44,645 -
2499604 214447 1195133 60884 164476 135792 41200 52076 4793 34510 108610
33,75,763
33,96,050
4511525
1,49,526
1,99,368
284143
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Rent paid for other premises - Municipal / other Taxes on bank·s property - Lighting generator Expenses Sub Total <ii> <iii> Printing & Stationary <iv> Advertisement & publicity <v> Depreciation on Bank·s property ( C.O. Item) : - Depreciation on building - Depreciation on Furniture & fixtures Sub Total<v> <vi> Director·s Fees Allowances & Expenses <vii> Auditor·s fees & Expenses :- Statutory central Auditors - Branch Auditors - Traveling and others expenses Sub Total <vii> <viii> Law charges <ix> Postages, Telegrams, Telephones etc.:- Postage & Telegrams - Telephones & Telex / Fax - Amount paid for leased line Sub Total <ix> <x> Repairs & Maintenance : - Bank·s own property - Furniture & Fixtures - Annual maintenance charge Sub Total <x> <xi> Insurance: - Insurance - Deposit Insurance Sub Total <xi> <xii> Other Expenditure:-
27,300
23,400
74400
67,983 4,51,987 40,024
68,860 2,91,628 31,285
86849 445392 155505
--------------
-------------11,700 3,57,942
6584
13,696 Cr 15,516 Dr 1,820
4,142 Cr 3,697 Dr 3,810 Dr 8,365
6764 14073 20837
39,105 39,105 7,525 4,264 11,889 47892 5313 53205
4,895
4,895 --------------
-
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
- Traveling exp. - Boarding exp. - Local conveyance paid / Reimbursed - Diem allowances paid-officer - Diem allowances paid-clerk - Diem allowances paid-sub staff - Reimbursement of conveyance Exp. To eligible officers - Petrol Exp. For motors vehicles - Maintenance Exp. Of Transit House - Entertainment Exp. - Hospital exp. - Wages paid to sweepers and casual labor - Petty cash Expenses - Currency chest guarding exp. - Clearing House Charges - Fees for Revenue / Concurrent / other Auditors - Professional Fees paid - Premium paid to ECGC & other corporations - News papers / Journals - Donations to Institution - Others Sub Total <xii> <xiii> Provisions and Contingencies TOTAL OPERATING EXPENSES <I TO XII> TOTAL EXPENDITURE ( 3 + 4 ) (B) PROFIT BALANCE ( A ² B )
17,493 893 3,356 31,760 30,595
22,096 9,326 21,748 17,355 8,000 780
136422 8736 35663 4575
80 56,815 1,956 16,635 14,010 66,140 69,649 5,913 3,460 5,781 2,70,000 1,14,035 98,452 4,567 24,222 3,48,639 4,847 12,594 5,94,388 6252 1614 432464 42,71,936 46,91,548 5625512 4341 1414 20415 53414 78643 80895
1,77,57,371 34,56,698
2,31,59,060 38,74,287
40019879 813039
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
BALANCE SHEET OF THE CENTRAL BANK OF INDIA AS WHOLE
( In Crore)
LIABILITIES
Total Share Capital Equity Share Capital Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities
MAR '05
1,124.14 1,124.14 0.00 1,617.50 523.57 3,265.21 60,751.67 139.69 60,891.36 4,439.32 68,595.89
MAR '06
1,124.14 1,124.14 0.00 1,810.19 507.64 3,441.97 66,482.65 310.81 66,793.46 4,445.61 74,681.04
MAR '07
1,124.14 324.14 800.00 2,179.84 485.85 3,789.83 82,776.28 782.01 83,558.29 5,659.97 93,008.09
MAR '08
1,204.14 404.14 800.00 2,699.95 2,038.67 5,942.76 110,319.67 449.10 110,768.77 7,244.26 123,955.79
MAR '09
1,321.14 404.14 917.00 3,081.99 2,008.92 6,412.05 131,271.85 804.25 132,076.10 9,167.07 147,655.22
ASSETS
Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Other Assets
MAR '05
5,571.81
MAR '06
3,382.86
MAR '07
5,473.67
MAR '08
11,537.19
MAR '09
11,036.91
1,481.13 27,277.32 30,834.76 1,333.12 580.96 752.16 2,678.72
1,411.23 37,483.48 28,639.09 1,369.12 644.28 724.84 3,039.54
3,339.22 51,795.47 27,741.89 1,483.04 715.77 767.27 3,890.57
1,302.05 72,997.43 31,455.19 3,119.80 799.51 2,320.29 4,343.64
1,214.34 85,483.20 43,060.72 3,181.69 903.70 2,277.99 4,582.08
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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
Total Assets
68,595.90
74,681.04
93,008.09
123,955.79
147,655.24
PROFIT & LOSS A/C OF
CENTRAL BANK OF INDIA AS WHOLE
(Amt in CR)
INCOME
Interest Earned Other Income Total Income
Mar '05 Mar '06 Mar '07
5,204.88 938.87 6,143.75 5,385.58 551.24 5,936.82 6,234.21 561.83 6,796.04
Mar '08
Mar '09
7,995.54 10,455.19 902.35 1,069.97 8,897.89 11,525.16
EXPENDITURE
Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year
Mar '05 Mar '06 Mar '07
2,829.93 1,277.56 804.55 53.17 877.04 0.00 2,284.57 727.75 5,842.25 301.50 3,005.51 1,275.74 296.00 50.90 1,051.26 0.00 1,782.22 891.68 5,679.41 257.42 3,759.79 1,175.42 701.64 65.00 596.18 0.00 2,133.16 405.08 6,298.03 498.01
Mar '08
5,772.47 1,214.34 563.59 73.61 723.71 0.00 2,034.89 540.36
Mar '09
8,226.72 1,272.59 653.17 83.59 717.86 0.00 2,184.05 543.16
8,347.72 10,953.93 550.16 571.24
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
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