Financial Analysis

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

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 1


economic objective of the Government of India with emphasis on Financial Inclusion.


INDUSTRY PROFILE

Chapter 1

HEAD LINES

Introduction Origin of word ‘BANK’ Definition of Bank Traditional Banking Activity Banking system in India Structure of banking in India


INDUSTRY PROFILEINDUSTRY PROFILE

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 income. Saving of money is also necessary for old



age and ill health when it may not be possible for people to work and

earn their living.

The necessity of saving money was felt by people even in olden

days. They used to hoard money in their homes. With this practice,

savings were available for use whenever needed, but it also involved

the risk of loss by theft, robbery and other accidents. Thus, people

were in need of a place where money could be saved safely and

would be available when required. Banks are such places where

people can deposit their savings with the assurance that they will be

able to withdraw money from the deposits whenever required. People

who wish to borrow money for business and other purposes can also

get loans from the banks at reasonable rate of interest.

Bank is a lawful organization, which accepts deposits that

can be withdrawn on demand. It also lends money to

individuals and business houses that need it.

Banks also render many other useful services – like collection of bills,

payment of foreign bills, safe-keeping of jewelery and other valuable

items, certifying the credit-worthiness of business, and so on.

Banks accept deposits from the general public as well as from

the business community. Any one who saves money for future can

deposit his savings in a bank. Businessmen have income from sales

out of which they have to make payment for expenses. They can

keep their earnings from sales safely deposited in banks to meet

their expenses from time to time. Banks give two assurances to the

depositors –

a. Safety of deposit, and

b. Withdrawal of deposit, whenever needed



On deposits, banks give interest, which adds to the original

amount of deposit. It is a great incentive to the depositor. It promotes

saving habits among the public. On the basis of deposits banks also

grant loans and advances to farmers, traders and businessmen for

productive purposes.

Thereby banks contribute to the economic development of the

country and well being of the people in general. Banks also charge

interest on loans. The rate of interest is generally higher than the

rate of interest allowed on deposits. Banks also charge fees for the

various other services, which they render to the business community

and public in general. Interest received on loans and fees charged for

services which exceed the interest allowed on deposits are the main

sources of income for banks from which they meet their

administrative expenses.

The activities carried on by banks are called banking activity.

‘Banking’ as an activity involves acceptance of deposits and lending

or investment of money. It facilitates business activities by providing

money and certain services that help in exchange of goods and

services. Therefore, banking is an important auxiliary to trade. It not

only provides money for the production of goods and services but

also facilitates their exchange between the buyer and seller.

You may be aware that there are laws which regulate the

banking activities in our country. Depositing money in banks and

borrowing from banks are legal transactions. Banks are also under

the control of government. Hence they enjoy the trust and confidence

of people. Also banks depend a great deal on public confidence.

Without public confidence banks cannot survive.

The development of banking in an inevitable precondition for

the healthy and rapid development of the national economic



structure. Banking institutions have contributed much to the

development of the developed countries of the world. Today we can’t

imagine the business world without banking institutions. Banking is

as important as blood in the human body. Due to the development of

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.” After independence, the Indian government also has taken a

series of 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, nationalized 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, but 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 banking 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 human body.

Thus, we can say that, there is a noteworthy contribution of

banking sector in the development of various fields such as,

agriculture, industries business activities, transportation and

communication.



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 development 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 Italianized 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 universalized. 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.


ORIGIN OF WORD BANKORIGIN OF WORD BANK1.11.1


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 various definitions

some of them as follow:

“Banking company is a company, which transects the business

of banking in any state of India.”

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.”

Hart Pofr.

“Bank is an establishment which 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.”

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.”


DEFINITION OF BANKDEFINITION OF BANK1.21.2


Findlay

sheraze

"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 systems 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.



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

methods 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 considered 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


TRADITIONAL BANKING ACTIVITIESTRADITIONAL BANKING ACTIVITIES1.31.3

HEAD LINES

First Indian Bank The First Indian Joint Stock Bank Recent History Of Indian Banking

Foundation Phase Expansion phase Consolidation phase Reforms phase

Nationalisation & Public Sector Banking


many cases provide an adequate substitute to banks for lending

savings to

In the economic development of a nation banks occupy an important

place. Indian money market comprises both organized as well as

unorganized sectors. The unorganized sectors include money lenders

and indigenous bankers and largely cater to the needs of person

living in villages and small towns. Financial institutions in the

organized sector have grown significantly. Among the institution in

organized sector of the Indian money market commercial banks, Co-

operative banks, regional rural banks, development banks 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 – 1806

Bank of Bombay – 1840

Bank of Madras – 1843

Other banks such as


BANKING SYSTEM IN INDIABANKING SYSTEM IN INDIA1.41.4


Allahbad Bank came into existence in 1865

Alliance Bank of simla in 1875.

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 banks were nationalized

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.

RECENT HISTORY OF INDIAN BANKINGRECENT HISTORY OF INDIAN BANKING

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 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-organization 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 unorganized 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, while

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 utilization 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.

Meanwhile, during 1962 Deposit Insurance Corporation

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. During

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

Approach 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 rural 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 pressurized 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 improving 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 faced 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, autonomy packages etc.

BANK NATIONALISATION & PUBLIC SECTOR BANKINGBANK NATIONALISATION & PUBLIC SECTOR 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 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 terms 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.



Indian banking system comprises of both organized and

unorganized banks. Unorganized banking includes indigenous

bankers and village money lenders. Organized 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


STRUCURE OF BANKING IN INDIA STRUCURE OF BANKING IN INDIA1.5

HEAD LINES

STRUCTURE OF INDIAN BANKING

Types of Bank

Reserve bank of India (central bank) Foundation of RBI Function of Reserve Bank of India

Commercial banks Public sector banks, Private sector banks Foreign banks.

Co-Operative banks Primary Credit Societies Central Co-operative Banks State Co-operative Banks

Development banks


(NABARD)

Industrial Development Bank of India

Small Industrial Development Bank of India

STRUCURE OF BANKING IN INDIASTRUCURE OF BANKING IN INDIA

RRBS: Regional Rural Banks

NABARD: National Bank for Agriculture and Rural Development


Commercial banks

Development banks

Exim banks

State Co-Operative

banks

RRBS

NABARDForeign

bankIndian Bank

Public Sector

Private Sector

State Bank &It’s

Subsidiary

Nationalized Bank

Reserve Bank of India


(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 best 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: भा�रती�य रिरज़र्व बैं�क) 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 nationalization 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.

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)



(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 demand 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 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 BANK OF INDIA (SBI)STATE BANK OF INDIA (SBI)

In 1955, the imperial bank of India was nationalized 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



NATIONALIZED BANKS:NATIONALIZED BANKS:

Following 14 commercial banks were nationalized on the 19th 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 nationalized on the 10th 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.

PRIVATE SECTOR BANKS: PRIVATE SECTOR BANKS:

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

(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 available 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 guidelines

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 (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)

co-operative 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 borrowers from the state co-

operative banks through the central co-operative banks and the

primary credit societies.

SCHEDULED URBAN CO-OPERATIVE BANKSSCHEDULED URBAN CO-OPERATIVE BANKS

List of Scheduled Urban Co-operative Bank as on 31-3-2009 as per

RBI

Bank Main Location

Ahmedabad Mercantile Co-Op Bank Ltd. AhmedabadKalupur Commercial Co-op Bank Ltd. KalupurMadhavpura Mercantile Co-Op Bank Ltd. MadhavpurMehsana Urban Co-Op Bank Ltd. MehsanaNutan Nagarik Sahakari Bank Ltd. AhmedabadRajkot Nagrik Sahakari Bank Ltd. RajkotSardar Bhiladwala Pardi Peoples Co-op Bank Ltd. BulsarSurat Peoples Co-op Bank Ltd. SuratAmanath Co-operative Bank Ltd. BangaloreAndhra Pradesh Mahesh Co-Op Urban Bank Ltd. Andhra PradeshCharminar Co-op. Urban Bank Ltd. HyderabadVasavi Co-op Urban Bank LImited. HyderabadIndian Mercantile Co-op Bank Ltd. LucknowKallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd. IchalkaranjiAbhyudaya Co-operative Bank Ltd. MumbaiBangalore city co-operative bank. BengaluruBassein Catholic Co-operative Bank Limited. VasaiBharat Co-operative Bank (Mumbai) Ltd. Mumbai



Bharati Sahakari Bank Limited. PuneBombay Mercantile Co-operative Bank Limited. MumbaiCitizen Credit Co-operative Bank Ltd. DadarCosmos Co-operative Urban Bank Ltd. PuneDombivli Nagari Sahakari Bank Ltd. DombivliGoa Urban Co-operative Bank Limited. GoaGreater Bombay Co-operative Bank Limited. MumbaiJalgaon Janata Sahakari Bank Ltd. JalgaonJanakalyan Sahakari Bank Ltd. MumbaiJanalaxmi Co-operative Bank Ltd. MumbaiJanata Sahakari Bank Ltd. PuneThe Karnataka State Co-Operative Apex Bank Ltd BengaluruKalyan Janata Sahakari Bank Ltd. KalyanKarad Urban Co-operative Bank Ltd. KaradMahanagar Co-operative Bank Ltd. MumbaiMapusa Urban Co-operative Bank of Goa Ltd. MapusaNagar Urban Co-operative Bank Ltd. AhmednagarNasik Merchant's Co-operative Bank Ltd. NasikNew India Co-operative Bank Ltd. MumbaiNKGSB Co-operative Bank Ltd. MumbaiParsik Janata Sahakari Bank Ltd. ThanePravara Sahakari Bank Ltd. AhmednagarPunjab & Maharashtra Co-operative Bank Ltd. MumbaiRupee Co-operative Bank Ltd. PuneSangli Urban Co-operative Bank Ltd. SangliSaraswat Co-operative Bank Ltd. MumbaiShamrao Vithal Co-operative Bank Ltd. MumbaiSolapur Janata Sahakari Bank Ltd. SolapurThane Bharat Sahakari Bank Ltd. ThaneThane Janata Sahakari Bank Ltd. ThaneThe Kapol Co-operative Bank Ltd. MumbaiZoroastrian Co-operative Bank Ltd. MumbaiNagpur Nagrik Sahakari Bank Ltd. NagpurShikshak Sahakari Bank Ltd. NagpurThe Akola Janata Com.Co-operative Bank Ltd. AkolaThe Akola Urban Co-operative Bank Ltd. AkolaThe Khamgaon Urban Co-operative Bank Ltd. Khamgaon



(1.5.D) Specialised Banks

There are some banks, which cater to the requirements and 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 and

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

industries handicrafts and allied economic activities in rural areas.

(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.

(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 provided 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.

(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:

Safe Deposit lockers


FUNCTION OF BANK FUNCTION OF BANK1.6

HEAD LINES

General Bank’s Function Principal Function Ancillary Function:

Function of the Commercial Bank primary functions subsidiary functions


Issue of :

Letters of credit.

Guarantees.

(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 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 instalments. Loans are generally

granted against the security of certain assets. 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 by the bank to its customers.

It differs from loan in the sense that loans may be granted for longer

period, but advances are normally granted for a short period of time.

Further the purpose of granting advances 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

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 collect 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.

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 methods 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 personal 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 bank’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

provide the same to its customers. Some banks even publish

monthly reviews containing financial and economic information.


Chapter 2


COMPANY PROFILECOMPANY PROFILE

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.

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


COMPANY PROFILE

HISTORY OF THE CENTRAL BANK OF INDIAHISTORY OF THE CENTRAL BANK OF INDIA2.12.1

HEAD LINES

Establishment of Bank Establishment of Bank in Gujarat Growth chart of bank Total branches of bank History of the Central Bank of India at Lal Darwaa, Surat


Nationalization of the Bank on dated 19th July 1969. As on 1st 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 currency started.

Indian banker sent abroad to study advance banking.

1932 To reserve deposits rights deposit benefits insurance co.

Ltd. Started.

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 promoting 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 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 NameComputerize

dBranches

Non-Computerize

dBranches

Total No of Branches

Ahmedabad 42 16 58Anand 24 13 37Baroda 19 14 33Jamnagar 28 6 34Rajkot 17 10 27Surat 23 9 32


mailto:[email protected]

http://www.Centralbankofindia.co.in/


Total: 153 68 221

The branch of the Central Bank of India at Lal-Darwaja was

established on dated 17th 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

dated 17th 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 25th 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


HISTORY OF THE CBI AT LALDARWAJAHISTORY OF THE CBI AT LALDARWAJA2.22.2


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


ACTIVITIES OF THE CBIACTIVITIES OF THE CBI2.32.3

HEAD LINES

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


(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



(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

Non-Repatriable services along with facilities for importers and

exporters.



(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.



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:

MaturityMaturityPeriodPeriod

Up toUp toRs.15 lacsRs.15 lacs

AboveAboveRs.15 lacsRs.15 lacs

to less thanto less than Rs.1 CroreRs.1 Crore

Rs.1 Crore and above

11.11.200911.11.2009 11.11.200911.11.2009ExistingExisting

RateRate11.11.200911.11.2009

RevisedRevised raterate

21.12.200921.12.20097 days-14 days7 days-14 days 2.502.50 2.502.50 2.002.00 2.002.00 15 days to 45 days15 days to 45 days 3.253.25 3.503.50 2.502.50 2.502.50 46 days to 90 days46 days to 90 days 3.753.75 4.004.00 3.003.00 3.003.00 91 days to 179 days91 days to 179 days 5.005.00 5.005.00 3.503.50 3.503.50 180 days to 269 days180 days to 269 days 5.755.75 5.505.50 4.504.50 4.504.50 270 days to 364 days270 days to 364 days 6.256.25 6.006.00 5.005.00 5.505.50 1 year to less than 2 years1 year to less than 2 years 6.506.50 6.256.25 5.505.50 6.006.00 2 years to less than 3 years2 years to less than 3 years 6.756.75 6.506.50 5.505.50 6.006.00 3 years to less than 5 years3 years to less than 5 years 7.007.00 6.506.50 5.505.50 6.006.00 5 years and above5 years and above 7.257.25 7.257.25 5.505.50



RATE OF INTEREST ON LOANS

LOANS

BPLR (w.e.f. 01.04.2009) 12.00% p.a.

Direct Housing Finance Scheme - w.e.f.

10.11.2008Rate of Interest

Processing Charges*

Floating CategoryUpto Rs. 30 Lakhs

Above Rs. 30 Lakhs

Upto 5 Yrs 9.00% 10.25% 1% of Loan Amount, minimum Rs.1000/-

Over 5 Yrs & Less than 10 Yrs.

9.50% 10.75% 1% of Loan Amount, minimum Rs.1000/-

10 Yrs. & above 10.00% 11.25% 1% of Loan Amount, minimum Rs.1000/-

Fixed CategoryUpto Rs. 30 Lakhs

Above Rs. 30 Lakhs

Processing Charges

Upto 5 Yrs 10.00% 11.25% 1% of Loan Amount, minimum Rs.1000/-

Over 5 Yrs & Less than 10 Yrs.

-NA- -NA- 1% of Loan Amount, minimum Rs.1000/-

10 Yrs. & above -NA- -NA- 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

change over.

Personal Loan Rate of Interest

Processing Charges

Consumer Durable Loan (Cent Buy)

BPLR - 0.25% Rs. 200/- per proposal

Senior Citizen - Loan to Pensioner

For General Pensioners and for ex-staff of Central Bank of India drawing pension

BPLR NIL

Senior Citizen - Cent Swabhimaan (Reverse Mortgage Loan)

10.00% Upfront Fees: 0.15% of loan amount subject to minimum of Rs. 500/- and maximum of Rs.10,000/-

Personal Loan - Loan to corporate employees

BPLR Rs. 500/- per proposal

Personal Loan - Loan to Non-Corporate Employees

BPLR + 1.00% Rs. 500/- per proposal

Personal Loan - Loan to teachers & Employees of Educational Institute


Personal Loan - Loan to LIC Agents

BPLR 1% of loan amount, minimum Rs. 250/-

Vehicle Loan Rate of Interest

Processing Charges

Two wheeler Loan

For new vehicles repayable upto 36 months BPLR - 2.00% Rs. 500/- per proposal

For new vehicles repayable beyond 36 months


For second hand vehicles BPLR Rs. 500/- per proposal

Four wheeler Loan

For new vehicles repayable upto 36 months BPLR - 2.00% Rs. 2000/- per proposal

For new vehicles repayable beyond 36 months


For second hand vehicles BPLR 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 Processing ChargesNormal

StudentIIT/ IIM Students

Male BPLR - BPLR - 2.50% Nil



2.00%Female BPLR -

2.50%BPLR - 3.00% Nil

SC, ST, & Minority Community Student (Female & Male)

BPLR - 2.50%

BPLR - 3.00% Nil

Name of Scheme Rate of Interest Processing Charges

Scheme for Financing Executive MBA

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. Rs.10,000/- lump sum.

Cent Trade BPLR - 1%

-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

Cent Vyapari BPLR - 1% Rs. 1000/- per proposal

Cent Rental

BPLR + 1.00% for loan upto 3 years

BPLR + 2.00% for loan above 3 years

1% of the loan amount subject to minimum of Rs.5,000/- and maximum of Rs.2.00 lakh.

Cent Computer BPLR Rs. 100/- per proposal

Cent Liquid BPLR1% of loan amount, minimum Rs. 500/-

Cent School BPLR - 1% NIL

Cent Jewel 10.00% Rs. 500/- per proposal

Cent Vivah 10.00% NIL

Cent Safar BPLR Rs. 1000/- per proposal

Cent Suvidha BPLR NIL

Cent Home Loan Plus 1% higher than Housing Loan Rate Rs. 500/- per proposal



INTRODUCTION



INTRODUCTIONINTRODUCTION

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

Ratio Analysis

Comparative Statement Analysis

Common Size Statement Analysis

Trend Analysis

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 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


HEAD LINES

Introduction of Project Objective of Project Potential of Project Limitation of Project

INTRODUCTION OF PROJECTINTRODUCTION OF PROJECT3.13.1


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 primary 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 researcher

has referred company’s websites.



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 ratio analysis of last few years and get

ranking of the comparative years to evaluate it on the various

criteria

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

bank. So that we can easily get idea about the financial

condition of CBI and it’s potential in future.


OBJECTIVE OF PROJECTOBJECTIVE OF PROJECT3.23.2

POTENTIAL OF THE PROJECTPOTENTIAL OF THE PROJECT3.33.3


To make comparison of ratio analysis of last few years and get

ranking of the comparative years to evaluate it on the various

criteria.

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 save their money in

the bank or not.

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.


LIMITATION OF PROJECTLIMITATION OF PROJECT3.43.4


THEORETICAL CONCEPTTHEORETICAL CONCEPT


THEORETICAL

CONCEPTHEAD LINES

Meaning of financial analysis Limitation of financial analysis Tools of financial analysis

Ratio analysis Comparative financial statements Common size statements Trend analysis.

Chapter 4


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.

The analysis of financial statement consists in breaking down a

complex set of factors or figures into simple elements. The analysis

may generally be of two types:

Analysis of financial statements over a number of years – 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.


MEANING OF FINANCIAL ANALYSISMEANING OF FINANCIAL ANALYSIS4.14.1

LIMITATIONLIMITATION OF FINANCIAL STATEMENT OF FINANCIAL STATEMENT4.24.2


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 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

valuation, 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.” 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 particular 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.

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.


TOOLS OFTOOLS OF FINANCIAL ANALYSISFINANCIAL ANALYSIS4.34.3


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 worked 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 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 term 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:

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 statements 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, comparison 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, will show a

higher return, then the firm which has purchased the at an

assets at a higher price.

Changes in accounting procedure:

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.

COMMON SIZE 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:

Common Size

Ratio =

Item of

Interest

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:

Common Size Ratio for

Inventory =

Inventory

Total

Assets

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:

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

Common-Size

Income

Statement

Revenue 70,134 100%

Cost of Goods

Sold

44,221 63.1%

Gross Profit 25,913 36.9%

SG&A Expense 13,531 19.3%

Operating Income 12,382 17.7%

Interest Expense 2,862 4.1%

Provision for Taxes 3,766 5.4%

Net Income 5,754 8.2%

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 Balance Sheet

Balance

Sheet

Common-Size

Balance

Sheet

ASSETS

Cash & Marketable

Securities

6,029 15.1%

Accounts Receivable 14,378 36.0%

Inventory 17,136 42.9%

Total Current Assets 37,543 93.9%



Property, Plant, &

Equipment

2,442 6.1%

Total Assets 39,985 100%

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities 14,251 35.6%

Long-Term Debt 12,624 31.6%

Total Liabilities 26,875 67.2%

Shareholders' Equity 13,110 32.8%

Total Liabilities & Equity 39,985 100%

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 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 industry 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 financial 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:

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.

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 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 year’s event, it is possible to

determine where expenses increased or decreased, and provide

some insight in how to plan the following year’s event.



RESEARCH METHODOLOGY


Chapter 5


RESEARCH METHODOLOGYRESEARCH METHODOLOGY


HEAD LINES

Research Methodology Meaning of Research. Research Problem. Research Design. Sampling Design. Data Collection method. Analysis and interpretation of Data.


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 to claim his study as a good study, he must clearly state the

methodology 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.

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 topic”. Research is an art of


RESEARCH METHODOLOGYRESEARCH METHODOLOGY5.1


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

knowledge making for its advancement. The search for knowledge

through objective and systematic method of finding solutions to a

problem is research.

Research Problem

The first step while conducting research is careful definition of

Research Problem. “To ERR IS THE HUMAN” 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.”

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 India”

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 includes the time and cost budget since

most 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 – The research design is used to

provide a strong basis for the existence of casual relationship

between two or more variables.

Descriptive Research Design – 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.

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 small

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 chalked out. There are

two types of data –

METHODS OF PRIMARY DATA



OBSERVATION METHOD

INTERVIEW METHODS

QUESTIONAIRE METHOD

SCHEDULE METHOD

PRIMARY DATA -

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 past 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 has been

used for analyzing and interpreting the result.



ANALYSIS AND INTERPRETATION

OF THE DATA


Chapter 6


CENTRAL BANK OF INDIALAL-DARWAJA, SURAT-395003

PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008

PARTICULAR AMOUNT Ps.TOTAL

AMOUNTPs.

(A) INCOME: - (1) Interest earned :--

 Interest on Advances other than Bank:

- Term Loans 40,65,337 23 - Demand Loans 2,44,360 95 - Cash Credits 4,55,539 08 - Over Draft 8,00,261 06 - Export / Import Loans - - - Other

Sub-Total -------------- ---- 55,65,487 37

<ii> Interest on Advances to Banks:

- -

<iii>Interest on Bills Purchased / Discounted :

- Interest on bill purchased / discounted / Negotiated (Inland) 3227 00

- Int. on bills purchased / Discounted / Negotiated (Foreign)

- -

- Overdue Interest on T.T. Discounted by others banks.

- -

Sub-Total <iii> -------------- ---- 3227 00

<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. 2,03,63,474 00Sub-Total<vii> -------------- ---- 2,03,63,474 00

Total Interest Earned:-- -

2,59,28,971

37



(2) Other Income:--

 Commission Exchange Income:

(a)Commission / Brokerage :- - Bill for collection 29,270 00 - Letter of credit - - - Letter of guarantee(DPG) 28,177 35 - Bill purchase - Payment of dividend - - - Safe custody Accounts - - - Sales & Purchase of Shares &

Securities- -

- Under writing commission - - - Incident / Service charges 4,62,121 01 - Processing charges 86,790 00 - Government Business

Transaction - -

- Commission on travelers cheques

- -

- Commission on bank assurance-life

2,382 00

- Commission on bank assurance non-life

5,820 00

- Commission on mutual fund poducts

1,409 91

Sub-Total(a) -------------- ---- 616970 27 (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) 2,58,983 19 - DD / TT (Foreign) - -

Sub-Total(c) -------------- ---- 2,58,983 19Total of commission , Exchange & Brokerage (a + b + c)

- -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 80Total of other income ( i to vii) -------------- ---- 11,04,376 46

TOTAL INCOME (1+2)- -

2,70,33,347

83

PARTICULAR AMOUNT PsTOTAL

AMOUNTPs

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: 32,29,747 26 2. Interest on Term Deposits: - Interest on Fixed Deposit 3,61,521 54 - Interest on Quarterly Deposit 3,79,189 10 - Interest on Money Multiplier

Deposit 69,63,617 12 - Interest on Recurring Deposit 24,549 60 - Interest on Khazana Deposit



- Interest on FCNR(B) Deposit 2,51,505 62 - Interest on Certificate of Dep. - - - Interest on Other Term Deposit 1,84,753 80

Total of 2. -------------- ---- 81,65,136 84 Sub Total(a + b) 1,13,94,884 04

<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 70,72,628 00

Sub-Total<iv> -------------- ---- 70,72,628

Total Interest Expended ( i to iv)-------------- ----

1,84,67,512 04

(4) Operating Expenses :-

 Payments to and Provisions for Employees:

- Basic pay / Personal pay 19,79,448 00 - Special Pay 1,79,672 12 - Dearness Allowances 6,92,567 00 - City compensatory Allowances 55,691 19 - House Rent Allowances 1,53,756 70 - Medical Aid 52,343 50 - Leave fare concession 10,576 00 - Leave Encashment 91,456 69 - Bonus 16,460 00 - Other Expenses 23,321 55 - Staff Welfare Expenses - Contribution to provident fund 44,645 00 - Ex-gratia paid to pre. 1986

retirees (C.O. Item)- -

Sub Total -------------- ---- 33,96,050 16

<ii> Rent, Taxes and Lighting :- - Rent paid for office premises 1,99,368 00 - Rent paid for other premises 23,400 00 - Municipal / other Taxes on

bank’s property



- Lighting generator Expenses 68,860 00Sub Total <ii> -------------- ---- 2,91,628 93

<iii> Printing & Stationary 31,285 59

<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 3,57,942 00

<ix> Postages, Telegrams, Telephones etc.:-

- Postage & Telegrams 4,142 00 - Telephones & Telex / Fax 3,697 00 - Amount paid for leased line 3,816 00

Sub Total <ix> -------------- ---- 8,365 00

<x> Repairs & Maintenance : - - Bank’s own property - - - Furniture & Fixtures 7,525 00 - Annual maintenance charge 4,264 00

Sub Total <x> -------------- ---- 11,889 00

<xi> Insurance: - - Insurance - - - Deposit Insurance - -

Sub Total <xi> -------------- ---- - -

<xii> Other Expenditure:- - Traveling exp. 22,096 18 - Boarding exp. 4,326 00



- Local conveyance paid / Reimbursed 21,748 00

- Diem allowances paid-officer 17,355 00 - Diem allowances paid-clerk 8,000 00 - Diem allowances paid-sub staff 780 00 - Reimbursement of conveyance

Exp. To eligible officers - Petrol Exp. For motors vehicles - - - Maintenance Exp. Of Transit

House- -

- Entertainment Exp. - Hospital exp. 5,913 50 - Wages paid to sweepers and

casual labor 3,460 00 - Petty cash Expenses 5,781 16 - Currency chest guarding exp. 2,70,000 00 - Clearing House Charges 1,14,035 00 - Fees for Revenue / Concurrent /

other Auditors 98,452 00 - Professional Fees paid - - - Premium paid to ECGC & other

corporations - -

- News papers / Journals 4,847 00 - Donations to Institution - - - Others 12,594 93

Sub Total <xii> -------------- ---- 5,94,388 71

<xiii> Provisions and Contingencies

- -

Total Operating Expenses 

46,91,548 46

TOTAL EXPENDITURE ( 3 + 4 )-------------- ----

2,31,59,060

86

PROFIT BALANCE ( A – B ) 38,74,287 14



COMPARATIVE BALANCE SHEET STATEMENT


COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS

PARTICULAR 2007 2008 2009

(A) CAPITAL AND LIABILITIES :-

(1) Capital (Fully owned by central Government)

(2) Reserves & surplus

(3) Deposits:- Demand Deposit :- - Current / call Deposit a. From Bank b. From Others 7,66,96,927 9,26,66,535 73335300

<II> Saving Bank Deposits 18,08,81,307 19,88,34,956 234270014

<III> Term Deposit :- a. From Bank b. From Others:- - Fixed Deposits 1,04,58,175 1,08,30,348 4067737 - QID 1,43,19,795 1,54,89,177 28318799 - MMD 15,64,35,938 21,99,69,789 440504862 - Cent uttam Deposit 1,93,686 1,93,686 193686 - Recurring Deposit 8,71,946 7,38,298 860660 - FNCR 55,68,522 5445660 1461073 - Certificate of Deposit - Other Term Deposit 41,65,526 50,57,513 10350157


COMPARATIVE STATEMENT ANALYSISCOMPARATIVE STATEMENT ANALYSIS5.15.1


Total Deposit(3) 44,95,97,826 54,92,25,958 793249310

(4) Borrowing

(5) Other Liabilities & Provisions.

 Bills Payable : - Bills payable / MIS Payable - T.T.’S Payable - Pay slips / Banker’s cheques

Issued. 18,25,445 30,47,703465980

- Others 1,414 1,414 1414

<II> Inter-Office , Adjustment (Net) i.e. Branch Adjustment)

<III> Interest Accrued : - On Deposits 17,12,343 20,82,337 2522608 - On Borrowings<IV> Other Liabilities:- - Accrued Expenses 40,900 40,000 106600 - Reversal of Unrealized ,

Interest 1,12,392 1,12,392 237778 - Amount received from court

Receiver / Borrowers & held pending adjustments 1,60,696 1,60,696

- Income tax & other Taxes to be remitted 4,41,210 1327607

- Commission on guaranteed LC 1,15,468 1,25,744 128300

- Advance rent Reserved from locker holder. 3,19,510 2,83,837 320368

- Others 71,049 1,97,528 237662

Total other Liabilities & Provisions(5) 43,68,593 64,83,486 5348317

TOTAL 45,39,66,419

55,57,09,445 798597627




(B) ASSETS: (6) Cash & Balances with

Reserve Bank of India:- Cash : - In Hand 57,41,098 71,86,591 15013378 - In Foreign Currency Notes

<II> Balance with Reserve Bank of India :

- Incurrent Account - In other Account

Total of (6) 57,41,098 71,86,591 15013378

(7) Balance with Banks And Money at call and short notice:

- In India - out side in India

(8) Investments:(9) Advances: Bill purchased and

discounted33,60,423 31,82,025

3163004<II> Cash credits, overdraft, &

loan repayable on demand - Cash credit 4,79,01,002 4,74,63,883 51019908 - Overdraft 4,50,33,805 4,73,57,980 50128530 - Loan repayable on demand 43,65,180 49,53,204 5078500<III> Term loan 9,70,48,629 11,65,89,119 135680795

Total Advances(9) 19,77,09,042

21,95,46,212 241907733

(10) Fixed Assets:- - Premises (C.O. Item) - Other Fixed Assets ( Including furniture &

36,24,509 36,54,074 3455597



Fixtures)Total Fixed Asset(10) 36,24,509 36,54,074 3455597

(11) Other Assets:- Other Assets:- - Inter office Adjustment i.e. Branch Adjustment 24,61,58,808 32,43,38,322 537180116 - Stationary and stamps on

hand 1,11,871 1,51,979153379

<II> Amount Not in the Nature of Advances :-

- Prepaid expenses 11,000 11,000 - Advance to staff 15000 - Interest free advances to

staff 57,76,50 4,71,450317693

- Deposit with Government and other Departments 9,850 9,850

9850

- Staff loan advance 21700 - On account payments made

to other16250

- Advance payment to land lord of office and other premises 20,100 11,700

31900

- Amount paid to pensioners 1,14,080 - Difference in clearing 2,14,163 107990 - Others 2210 336313 - 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 2,400 30728

- Share Application money

Total of other Assets(11)24,68,91,68

032,43,22,56

7 538220919

TOTAL45,39,66,41

955,57,09,44

5 798597627



COMPARATIVE PROFIT & LOSS A/C


COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS

PARTICULAR 2007 2008 2009(A) INCOME: -

(1) INTEREST EARNED :--


- Term Loans 19,31,691 40,65,337 5927523 - Demand Loans 2,19,085 2,44,360 216384 - Cash Credits 5,42,000 4,55,539 128102 - Over Draft 7,60,352 8,00,261 978901 - Export / Import Loans - - Other

Sub-Total 34,53,099 55,65,487 7250910


-


- Interest on bill purchased / discounted / Negotiated (Inland) 3,227


-

- Overdue Interest on T.T. -



Discounted by others banks.Sub-Total <iii> 3,227

<iv>Discount on Bills, TTS etc. - -<v> Income on Investment (C.O.

Item)- -


- -



office. 1,63,38,545 2,03,63,474 32063360Sub-Total<vii>

1,63,38,5452,03,63,47

432063360

TOTAL INTEREST EARNED:- 1,97,94,8712,59,28,97

1 393142702) OTHER INCOME:--


(a)Commission / Brokerage :- - Bill for collection 37,042 29,270 19247 - Letter of credit - - Letter of guarantee(DPG) 84,500 28,177 7451 - Bill purchase - Payment of dividend - - Safe custody Accounts - 500 - Sales & Purchase of Shares &

Securities-

- Under writing commission - - Incident / Service charges 5,66,506 4,62,121 - Processing charges 2,05,069 86,790 984341 - Government Business

Transaction -


-


2,3825000


25,825 5,82012919


1,410

Sub-Total(a) 9,18,942 616970 1029459 (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) 2,77,269 2,58,983 290320 - DD / TT (Foreign) -

Sub-Total(c) 2,77,269 2,58,983 290320Total of commission , Exchange & Brokerage (a + b + c) 11,96,210 8,75,953 1319779


-

<iii> Profit & Loss on Revaluation of Investment

-


-


-


-

<vii> Miscellaneous Income: - - Rent of safe Deposit Lockers 2,22,747 2,26,977 198869 - Recovery received in accounts

written off-


-

- Others 241 1,446Total of Miscellaneous Income 2,22,988 2,28,423 198869

TOTAL OF OTHER INCOME ( I TO VII) 14,19,198 11,04,376 1518648

TOTAL INCOME (1+2) (A) 2,12,14,0692,70,33,34

7 40832918




(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: 30,32,755 32,29,747 3732257 2. Interest on Term Deposits: - Interest on Fixed Deposit 3,43,883 3,61,521 120843 - Interest on Quarterly Deposit 3,40,490 3,79,189 947008 - Interest on Money Multiplier

Deposit 43,76,405 69,63,617 19719599 - Interest on Recurring Deposit 87,978 24,549 22879 - Interest on uttam Deposit 14,810 - Interest on FCNR(B) Deposit 20,57,161 2,51,505 - Interest on Certificate of Dep. - - Interest on Other Term Deposit 1,00,533 1,84,753 400864

Total of 2. 54,69,815 81,65,136 21211193 Sub Total(a + b)

85,04,5701,13,94,88

4 24943450


- -

<iii> Interest Paid to Others - - - Interest on Borrowing paid to -

<iv> Others :- - Interest Paid to Branches / NBO - - Interest paid to Central office 49,80,865 70,72,628 9450917

Sub-Total<iv> 49,80,865 70,72,628 9450917

TOTAL INTEREST EXPENDED ( I TO IV) 1,34,85,435

1,84,67,512 34394367

(4) OPERATING EXPENSES :-


- Basic pay / Personal pay 21,14,272 19,79,448 2499604 - Special Pay 1,76,024 1,79,672 214447 - Dearness Allowances 5,57,341 6,92,567 1195133



- City compensatory Allowances 66,203 55,691 60884 - House Rent Allowances 1,60,099 1,53,756 164476 - Medical Aid 98,803 52,343 135792 - Leave fare concession 28,639 10,576 41200 - Leave Encashment 5,44,248 91,456 52076 - Bonus 5,824 16,460 4793 - Other Expenses 22,280 23,321 34510 - Staff Welfare Expenses - Contribution to provident fund 91,849 44,645 108610 - Ex-gratia paid to pre. 1986

retirees (C.O. Item)-

Sub Total 33,75,763 33,96,050 4511525

<ii> Rent, Taxes and Lighting :- - Rent paid for office premises 1,49,526 1,99,368 284143 - Rent paid for other premises 27,300 23,400 74400 - Municipal / other Taxes on

bank’s property - Lighting generator Expenses 67,983 68,860 86849

Sub Total <ii> 4,51,987 2,91,628 445392<iii> Printing & Stationary 40,024 31,285 155505



- Depreciation on building - - Depreciation on Furniture &

fixtures -

Sub Total<v> -------------- -


-


- Statutory central Auditors - - Branch Auditors - - Traveling and others expenses -

Sub Total <vii> -------------- -

<viii> Law charges 11,700 3,57,942 6584


- Postage & Telegrams 13,696 Cr 4,142 Cr 6764



- Telephones & Telex / Fax 15,516 Dr 3,697 Dr 14073 - Amount paid for leased line 3,810 Dr

Sub Total <ix> 1,820 8,365 20837

<x> Repairs & Maintenance : - - Bank’s own property - - Furniture & Fixtures 39,105 7,525 47892 - Annual maintenance charge 4,264 5313

Sub Total <x> 39,105 11,889 53205

<xi> Insurance: - - Insurance 4,895 - - Deposit Insurance -

Sub Total <xi> 4,895 -------------- -

<xii> Other Expenditure:- - Traveling exp. 17,493 22,096 136422 - Boarding exp. 893 9,326 8736 - Local conveyance paid /

Reimbursed 3,356 21,74835663

- Diem allowances paid-officer 31,760 17,355 4575 - Diem allowances paid-clerk 30,595 8,000 - Diem allowances paid-sub staff 780 - Reimbursement of conveyance

Exp. To eligible officers 56,81580

- Petrol Exp. For motors vehicles - - Maintenance Exp. Of Transit

House-

- Entertainment Exp. - Hospital exp. 1,956 5,913 4341 - Wages paid to sweepers and

casual labor 16,635 3,4601414

- Petty cash Expenses 14,010 5,781 20415 - Currency chest guarding exp. 2,70,000 53414 - Clearing House Charges 66,140 1,14,035 78643 - Fees for Revenue / Concurrent /

other Auditors 69,649 98,45280895

- Professional Fees paid - - Premium paid to ECGC & other

corporations -

- News papers / Journals 4,567 4,847 6252 - Donations to Institution - - Others 24,222 12,594 1614

Sub Total <xii> 3,48,639 5,94,388 432464

<xiii> Provisions and -



ContingenciesTOTAL OPERATING EXPENSES

 42,71,936 46,91,548 5625512

TOTAL EXPENDITURE ( 3 + 4 ) (B)

1,77,57,3712,31,59,06

040019879

PROFIT BALANCE ( A – B ) 34,56,698 38,74,287 813039

(By taking data of 2005 as a base year)

31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009

Advances 171580590 165005256 197709042 219546212 241907733

Current A/c 59866450 68564840 76696927 92666535 73335300

Saving A/c 160045556 150564500 180881307 198834956 234270014

Time Deposit 164523560 202510595 192013589 257724467 485643995

(Data In %)

31/3/2006 31/3/2007 31/3/2008 31/3/2009

Growth in Advances -3.8% 19.8% 11.0% 10.20%


TREND ANALYSIS OF BALANCESHEETTREND ANALYSIS OF BALANCESHEET4.24.2


Growth in Current A/c 14.5% 11.9% 20.8% -20.90%

Growth in Saving A/c -5.9% 20.1% 9.9% 17.80%

Growth in Time Deposit 23.1% -5.2% 34.2% 88.40%

31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

50000000

100000000

150000000

200000000

250000000

300000000

171580590 165005256

197709042219546212

241907733

Advances



31/3/2006 31/3/2007 31/3/2008 31/3/2009

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

-3.80%

19.80%

11.00% 10.20%

Growth in Advances

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%

31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

90000000

100000000

5986645068564840

76696927

92666535

73335300

Current A/c



31/3/2006 31/3/2007 31/3/2008 31/3/2009

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

14.50%11.90%

20.80%

-20.90%

Growth in Current A/c

Interpretation

The amount of current a/c was in increasing rate since 2005,

but in 2009 it was decreased by 20%

31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

50000000

100000000

150000000

200000000

250000000

160045556 150564500

180881307198834956

234270014

Saving A/c



31/3/2006 31/3/2007 31/3/2008 31/3/2009

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

-5.90%

20.10%

9.90%

17.80%

Growth in Saving A/c

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%



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

100000000

200000000

300000000

400000000

500000000

600000000

164523560202510595 192013589

257724467

485643995

Time Deposit

31/3/2006 31/3/2007 31/3/2008 31/3/2009

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

23.10%

-5.20%

34.20%

88.40%

Growth in Time Deposit

Interpretation

The amount of time deposit was increase with high rate of

growth in 2009 it was around double compare to 2008


TREND ANALYSIS OF PROFIT & LOSS A/CTREND ANALYSIS OF PROFIT & LOSS A/C4.34.3


(By taking data of 2005 as a base year)

(Amount in Rs.)

31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009

Interest Earned 1,45,89,500 1,50,98,785 1,97,94,871 2,59,28,971 3,93,14,270Other income 10,26,356 12,05,560 14,19,198 11,04,376 15,18,648Total income 1,56,15,856 1,63,04,345 2,12,14,069 2,70,33,347 4,08,32,918Interest Expended 98,45,698 1,02,56,565 1,34,85,435 1,84,67,512 3,43,94,367Operating Expenses 35,45,566 38,58,580 42,71,936 46,91,548 56,25,512Total expenditure 1,33,91,264 1,41,15,145 1,77,57,371 2,31,59,060 4,00,19,879

Profit 22,24,592 21,89,200 34,56,698 38,74,287 8,13,039

2006 2007 2008 2009

Growth in Interest Earned 3% 31% 31% 52%

Growth in Other income 17% 18% -22% 38%

Growth in Total income 4% 30% 27% 51%

Growth in Interest Expended

4% 31% 37% 86%

Growth in Operating Expenses

9% 11% 10% 20%

Growth in Total expenditure 5% 26% 30% 73%

Growth in Profit -2% 58% 12% -79%



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

14589500 15098785

19794871

25928971

39314270

Interest Earned

2006 2007 2008 20090%

10%

20%

30%

40%

50%

60%

3%

31% 31%

52%

Growth in Interest Earned

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%



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1026356

1205560

1419198

1104376

1518648

Other income

2006 2007 2008 2009

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

17% 18%

-22%

38%

Growth in Other income

Interpretation:

The amount of other income was also increased with 38% of growth

rate, while in 2008 it was decreased by 22%, so overall it is good sign

for the bank



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

15615856 16304345

21214069

27033347

40832918

Total income

2006 2007 2008 20090%

10%

20%

30%

40%

50%

60%

4%

30%27%

51%

Growth in Total income

Interpretation:

The total income of the bank was also increased due to increases in

the interest earning and other income



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

9845698 1025656513485435

18467512

34394367

Interest Expended

2006 2007 2008 20090%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4%

31%37%

86%

Growth in Interest Expended

Interpretation:

The amount of the interest expended was increased with increasing

rate since 2005, but in 2009 it was increased by 86% which is very

high compare to previous years. The reason may be that increased

the dependability on the out side debt like deposits and borrowing.

And this is not good sign for the bank



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

1000000

2000000

3000000

4000000

5000000

6000000

35455663858580

42719364691548

5625512

Operating Expenses

2006 2007 2008 20090%

5%

10%

15%

20%

25%

9%11% 10%

20%

Growth in Operating Expenses

Interpretation:

The operating expenditure also increased with increasing rate since

2005. In 2008 it was increased by 10% while in 2009 it was increased

by 20%



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

13391264 1411514517757371

23159060

40019879

Total expenditure

2006 2007 2008 20090%

10%

20%

30%

40%

50%

60%

70%

80%

5%

26%30%

73%

Growth in Total expenditure

Interpretation:

The total expense of the bank was increased with increasing rate, but

in 2009 it was increased by 73%, As said earlier that because of the

high increasing rate in interest expense the total expenses also

increased



31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/20090

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

2224592 2189200

34566983874287

813039

Profit

2006 2007 2008 2009

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

-2%

58%

12%

-79%

Growth in Profit

Interpretation:

The profit of the bank was decline by 79% the reason may be that

due 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



PROFIT & LOSS A/COF CENTRAL BANK OF INDIA

INCOME 2007 2008 2009

TOTAL INTEREST EARNED:- Term Loans 1931691 4065337 5927523 Demand Loans 219085 244360 216384 Cash Credits 542000 455539 128102 Over Draft 760352 800261 978901 Interest on bill purchased 3227 Interest Received from central office. 16338545 20363474 32063360TOTAL OF COMMISSION , EXCHANGE & BROKERAG

1196210 875953 1319779

TOTAL OF MISCELLANEOUS INCOME 222988 228423 198869

TOTAL INCOME (1+2) (A)2121406

92703334

74083291

8

EXPENSES 2007 2008 2009

INTEREST EXPENDED :- Interest on Saving Deposit: 3032755 3229747 3732257 Interest on Term Deposits: 5469815 8165136 21211193 Interest paid to Central office 4980865 7072628 9450917

OPERATING EXPENSES :- Payments to and Provisions for Employees

3375763 3396050 4511525

Rent, Taxes and Lighting 451987 291628 445392 Printing & Stationary 40024 31285 155505 Law charges 11700 357942 6584 Postages, Telegrams, Telephones etc.

1820 8365 20837

Repairs & Maintenance 39105 11889 53205 Insurance 4895 Other Expenditure 348639 594388 432464

TOTAL EXPENDITURE ( 3 + 4 ) (B)1775736

82315905

84001987

9


COMMON SIZE STATEMENT ANALYSISCOMMON SIZE STATEMENT ANALYSIS4.44.4


COMMON SIZE PROFIT & LOSS A/C

INCOME 2007 2008 2009

TOTAL INTEREST EARNED:- 93.31 95.91 96.28 Term Loans 9.11 15.04 14.52 Demand Loans 1.03 0.90 0.53 Cash Credits 2.55 1.69 0.31 Over Draft 3.58 2.96 2.40 Interest on bill purchased 0.02 0.00 0.00 Interest Received from central office. 77.02 75.33 78.52TOTAL OF COMMISSION, EXCHANGE & BROKERAG 5.64 3.24 3.23TOTAL OF MISCELLANEOUS INCOME 1.05 0.84 0.49

TOTAL INCOME (1+2) (A) 100 100 100

EXPENSES 2007 2008 2009

INTEREST EXPENDED :- 75.93 79.74 85.95 Interest on Saving Deposit: 17.08 13.95 9.33 Interest on Term Deposits: 30.80 35.26 53.00 Interest paid to Central office 28.05 30.54 23.62

OPERATING EXPENSES :- 24.07 20.26 14.05Payments to and Provisions for Employees 19.01 14.66 11.27Rent, Taxes and Lighting 2.55 1.26 1.11Printing & Stationary 0.23 0.14 0.39Law charges 0.07 1.55 0.02Postages, Telegrams, Telephones 0.01 0.04 0.05Repairs & Maintenance 0.22 0.05 0.13Insurance 0.03 0.00 0.00Other Expenditure 1.96 2.57 1.08

TOTAL EXPENDITURE ( 3 + 4 ) (B) 100 100 100

Interpretation:

From above analysis we can says that most portion of income of

banks is comes from the interest earned on loan and advances

So the interest is one of the big sources of income generation for any

bank



Another 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

Composition of Total income out of 100%

2007 2008 20090%

10%20%30%40%50%60%70%80%90%

100%

93.31% 95.92% 96.28%

5.64% 3.24% 3.23%1.05% 0.84% 0.49%

Composition of INCOME

Interest Earned commission, Exchange, Brokerage Miscellaneous income

Composition of Total Expenses out of 100%



2007 2008 20090

20

40

60

80

100

120

75.93% 79.74%85.95%

24.07% 20.26% 14.05%

Composition of EXPENSES

INTEREST EXPENDED OPERATING EXPENSES

BALANCE SHEETOF CENTRAL BANK OF INDIA

LIABILITIES 2007 2008 2009

Deposits:-Demand Deposit 76696927 92666535 73335300Saving Bank Deposits 180881307 198834956 234270015Term Deposit 192013589 257724468 485643995Total other Liabilities & Provisions 4368593 6483486 5348317

TOTAL LIABILITIES 453966420 55570944679859762

7

ASSETS 2007 2008 2009

Cash balance with RBI 5741098 7186591 15013378Advance 197709042 219546212 241907733Fixed Assets 3624599 3654074 3455597Other assets 246891680 324322567 538220919

TOTAL ASSETS 453966419 55470944479859762

7



COMMON SIZE BALANCE SHEET

LIABILITIES 2007 2008 2009

Deposits:-Demand Deposit 16.89 16.68 9.18Saving Bank Deposits 39.84 35.78 29.34Term Deposit 42.30 46.38 60.81Total other Liabilities & Provisions 0.96 1.17 0.67

TOTAL LIABILITIES 100 10

0 100

ASSETS 2007 2008 2009

Cash balance with RBI 1.26 1.30 1.88Advance 43.55 39.58 30.29Fixed Assets 0.80 0.66 0.43Other assets 54.39 58.47 67.40

TOTAL ASSETS 100 100 100

9.18%

29.34%

60.81%

0.67%

Composition of total Liability 2009

Demand Deposit Saving Deposits Term Deposit Liabilities & Provisions



16.68%

35.78%

46.38%

1.17%



16.89%

39.84%

42.3%

0.96%



1.88%

30.29%

0.43%67.4%

Composition of total Assets 2009

Cash balance with RBI AdvanceFixed Assets Other assets



1.3%

39.58%

0.66%

58.47%



1.26%

43.55%

0.8%

54.39%



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



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.

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

MAR '05

MAR '06

MAR '07

MAR '08

MAR '09

Total Share Capital

1,124.14

1,124.14

1,124.14 1,204.14 1,321.14

Equity Share Capital

1,124.14

1,124.14 324.14 404.14 404.14


CENTRAL BANK OF INDIA AS WHOLECENTRAL BANK OF INDIA AS WHOLE4.54.5


Preference Share Capital 0.00 0.00 800.00 800.00 917.00

Reserves1,617.5

01,810.1

92,179.8

4 2,699.95 3,081.99Revaluation Reserves 523.57 507.64 485.85 2,038.67 2,008.92

Net Worth3,265.2

13,441.9

73,789.8

3 5,942.76 6,412.05

Deposits60,751.

6766,482.

6582,776.

28110,319.

67131,271.

85Borrowings 139.69 310.81 782.01 449.10 804.25

Total Debt60,891.

3666,793.

4683,558.

29110,768.

77132,076.

10Other Liabilities & Provisions

4,439.32

4,445.61

5,659.97 7,244.26 9,167.07

Total Liabilities

68,595.89

74,681.04

93,008.09

123,955.79

147,655.22

ASSETSMAR '05

MAR '06

MAR '07

MAR '08

MAR '09

Cash & Balances with RBI

5,571.81

3,382.86

5,473.67

11,537.19

11,036.91

Balance with Banks, Money at Call

1,481.13

1,411.23

3,339.22 1,302.05 1,214.34

Advances27,277.

3237,483.

4851,795.

4772,997.4

385,483.2

0Investments

30,834.76

28,639.09

27,741.89

31,455.19

43,060.72

Gross Block1,333.1

21,369.1

21,483.0

4 3,119.80 3,181.69Accumulated Depreciation 580.96 644.28 715.77 799.51 903.70Net Block 752.16 724.84 767.27 2,320.29 2,277.99

Other Assets2,678.7

23,039.5

43,890.5

7 4,343.64 4,582.08Total

Assets68,595.

9074,681.

0493,008.

09123,955.

79147,655.

24



Mar '05 Mar '06 Mar '07 Mar '08 Mar '090.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

3,265.21 3,441.973,789.83

5,942.766,412.05

Net Worth

Interpretation :

Net worth of the bank was increased with increasing rate from

2005 to 2008, in 2008 it was increased by around 57%

compare to 2007, but in 2009 the increasing rate was became

around 8%.


20,000.00

40,000.00

60,000.00

80,000.00

100,000.00

120,000.00

140,000.00

60,751.6766,482.65

82,776.28

110,319.67

131,271.85

Deposits

Interpretation :

The amount of the deposits is also increased with increasing

rate till 2008 but in 2009 the growth rate was fall by 19%.




10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

90,000.00

27,277.32

37,483.48

51,795.47

72,997.43

85,483.20

Advances

Interpretation :

The amount of advances of bank is increased by year to year,

and in 2009 it was increased by about 17%


5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.00

50,000.00

30,834.7628,639.09 27,741.89

31,455.19

43,060.72

Investments

Interpretation :

The amount of the investment is also increased with increasing

rate in 2009 it was increased by 37% compare to previous year

PROFIT & LOSS A/C OF THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 11

6


CENTRAL BANK OF INDIA AS WHOLE(Amt in CR)

INCOMEMar '05

Mar '06

Mar '07

Mar '08

Mar '09

Interest Earned 5,204.88

5,385.58

6,234.21

7,995.54

10,455.19

Other Income 938.87 551.24 561.83 902.35 1,069.97

Total Income 6,143.75

5,936.82

6,796.04

8,897.89

11,525.16

EXPENDITUREMar '05

Mar '06

Mar '07

Mar '08

Mar '09

Interest expended 2,829.93

3,005.51

3,759.79

5,772.47

8,226.72

Employee Cost 1,277.56

1,275.74

1,175.42

1,214.34

1,272.59

Selling and Admin Expenses

804.55 296.00 701.64 563.59 653.17

Depreciation 53.17 50.90 65.00 73.61 83.59Miscellaneous Expenses

877.04 1,051.26

596.18 723.71 717.86

Preoperative Exp Capitalised

0.00 0.00 0.00 0.00 0.00

Operating Expenses 2,284.57

1,782.22

2,133.16

2,034.89

2,184.05

Provisions & Contingencies

727.75 891.68 405.08 540.36 543.16

Total Expenses 5,842.25

5,679.41

6,298.03

8,347.72

10,953.93

Net Profit for the Year

301.50

257.42

498.01

550.16 571.24



(The amounts in the following charts are in CR)


2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

5,204.88 5,385.586,234.21

7,995.54

10,455.19

Interest Earned

Mar '06 Mar '07 Mar '08 Mar '090.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

3.5%

15.8%

28.3%30.8%

Interest Earned

Interpretation :

The amount of interest earned was increases with increasing

rate



It was increased by 31% in 2009 compare to 2008. So it shows

the healthiness condition of bank.


2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

6,143.75 5,936.826,796.04

8,897.89

11,525.16

Total Income

Mar '06 Mar '07 Mar '08 Mar '09

-10

-5

0

5

10

15

20

25

30

35

-3.4%

14.5%

30.9% 29.5%

Total Income

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%.




1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

2,829.93 3,005.513,759.79

5,772.47

8,226.72

Interest expended

0

10

20

30

40

50

60

6.2%

25.1%

53.5%

42.5%

Interest expended

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%.




500.00

1,000.00

1,500.00

2,000.00

2,500.002,284.57

1,782.22

2,133.16 2,034.892,184.05

Operating Expenses

Mar '06 Mar '07 Mar '08 Mar '09

-25

-20

-15

-10

-5

0

5

10

15

20

25

-22%

19.7%

-4.6%

7.3%

Operating Expenses

Interpretation :

The operating expenses of the bank is on fluctuating rate

because in 2008 it was decreased by 5% while in 2009 it was

increased by 7%.




2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

5,842.25 5,679.416,298.03

8,347.72

10,953.93

Total Expenses

Mar '06 Mar '07 Mar '08 Mar '09-5

0

5

10

15

20

25

30

35

-2.8%

10.9%

32.5% 31.2%

Total Expenses

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

increased by 33% while in 2009 it was increased by 31%.



Mar '05 Mar '06 Mar '07 Mar '08 Mar '090

100

200

300

400

500

600

301.5 257.419999999999

498.01550.16 571.24


Mar '06 Mar '07 Mar '08 Mar '09

-40

-20

0

20

40

60

80

100

120

-14.6%

93.5%

10.5%3.8%


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

grow by 60% while in 2009 it was grow just by 18% so it may

cut the total income of the bank.



NET PROFIT MARGIN

Net profit margin= Net Profit before interest and taxes *

100

Sales (operation)

2005 2006 2007 2008 2009

6.21 4.92 7.69 6.31 4.99

2005 2006 2007 2008 20090

1

2

3

4

5

6

7

8

9

6.21

4.92

7.69

6.31

4.99

Net profit margin

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


RATIO ANALYSISRATIO ANALYSIS4.64.6


RETURN ON NET WORTH

Return on net worth= Net Profit after interest and taxes *

100

Net worth

2005 2006 2007 2008 2009

11.65 9.07 15.89 15.46 14.43

2005 2006 2007 2008 20090

2

4

6

8

10

12

14

16

18

11.65

9.07

15.89 15.4614.43

Return on Networth

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.



RETURN ON ASSETS

Return on Assets= Net Profit after taxes * 100

Total Assets

2005 2006 2007 2008 2009

0.44 0.34 0.54 0.44 0.39

2005 2006 2007 2008 20090

0.1

0.2

0.3

0.4

0.5

0.6

0.44

0.34

0.54

0.44

0.39

Return on Assets

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



Debt-equity ratio

Debt-equity ratio= Long term debt

Share holders equity

2005 2006 2007 2008 2009

18.65:1 19.41:1 22.05:1 18.64:1 20.60:1

2005 2006 2007 2008 200916

17

18

19

20

21

22

23

18.65

19.41

22.05

18.64

20.6

Debt-Equity Ratio

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.



DEBT TO TOTAL ASSETS RATIO

Debt to total assets ratio= Total Debt

Total Assets

2005 2006 2007 2008 2009

0.89:1 0.89:1 0.90:1 0.89:1 0.89:1

2005 2006 2007 2008 20090.884

0.886

0.888

0.89

0.892

0.894

0.896

0.898

0.9

0.902

0.89 0.89

0.9

0.89 0.89

Debt to Assets ratio

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.



INTEREST EXPENSE RATIO

Interest expense ratio= Interest expense * 100

Income

2005 2006 2007 2008 2009

46.06% 50.62% 55.32% 64.87% 71.38%

2005 2006 2007 2008 20090

10

20

30

40

50

60

70

80

46.0650.62

55.32

64.8771.38

Interest Expense Ratio

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.



OPERATING EXPENSES RATIO

Operating expenses ratio= Operating Expenses *100

Income

2005 2006 2007 2008 2009

37.19% 30.02% 31.39% 22.87% 18.95%

2005 2006 2007 2008 20090

5

10

15

20

25

30

35

40 37.19

30.0231.39

22.87

18.95

Operating Expense Ratio

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



INTEREST EXPENDED/INTEREST EARNED

Interest Expended/Interest Earned= Interest Expended

*100

Interest Earned

2005 2006 2007 2008 2009

54.37% 55.81% 60.31% 72.20% 78.69%

2005 2006 2007 2008 20090

10

20

30

40

50

60

70

80

90

54.37 55.8160.31

72.278.69

Interest Exp/Interest Ernd

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



RETURN ON SHARE HOLDERS’ FUNDS

Return on share holders’ funds= Profit after tax * 100

Share holders funds

2005 2006 2007 2008 2009

13.41% 11.45% 22.15% 22.84% 21.62%

2005 2006 2007 2008 20090

5

10

15

20

25

13.4111.45

22.15 22.8421.62

Return on Share holders' fund

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




FINDINGS &

CONCLUSION

Chapter 6


FINDINGS & CONCLUSIONFINDINGS & 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…1 Poor condition)

Criteria 2005

2006

2007

2008

2009

Average

Profit 3 3 4 5 1 3.2Interest Earned 2 2 3 3 5 3Other income 2 3 3 3 4 3Total income 2 2 3 3 5 3Interest Expended 3 3 3 2 1 2.4Operating Expenses 3 2 2 2 1 2Total expenditure 3 3 3 2 1 2.4

Performance of bank out of 100%

Profit

Interes

t Ear

ned

Other

inco

me

Total

inco

me

Interes

t Exp

ended

Operati

ng Exp

ense

s

Total

expen

diture

0

10

20

30

40

50

60

70 64%60% 60% 60%

48%40%

48%

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 rating of balance sheet


Criteria 2005

2006

2007

2008

2009

Average

Advances 3 2 3 3 4 3Current A/c 2 3 3 4 3 3Saving A/c 3 2 3 3 4 3Time Deposit 2 2 2 3 5 2.8


Advances Current A/c Saving A/c Time Deposit54

55

56

57

58

59

60

61

60% 60% 60%

56%



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 INDIA AS WHOLETHE CENTRAL BANK OF INDIA AS WHOLE

Performance of the bank according to profit & Loss A/c

Overall rating of the Profit & Loss A/c


Criteria 2005

2006

2007

2008

2009

Average

Interest Earned 2 2 3 3 4 2.8Total Income 2 2 3 3 4 2.8Interest expended 3 3 3 2 1 2.4Operating Expenses 3 3 3 3 3 3Total Expenses 4 4 3 3 1 3Net Profit for the Year 2 2 3 4 4 3




Interest Earned Total Income Interest expended

Operating Expenses

Total Expenses Net Profit for the Year

0

10

20

30

40

50

60

70

56% 56%

48%

60% 60% 60%

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 Balance sheet

Overall rating of balance sheet


Criteria 2005 2006 2007 2008 2009 Average

Net Worth 2 2 2 4 4 2.8Deposits 2 2 3 4 4 3Advances 1 2 3 4 5 3Investments 3 3 3 3 4 3.2Total Assets 2 2 3 4 4 3




Net Worth Deposits Advances Investments Total Assets52

54

56

58

60

62

64

66

56%

60% 60%

64%

60%

Over all performance

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




RECOMMENDATION

Chapter 7


RECOMMENDATIONRECOMMENDATION

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



BIBLIOGRAPHYBIBLIOGRAPHY

BOOKS:

Financial Management – M. Y. Khan & P. K.

Jain

Financial Management – I. M. Pandey

Management Accounting – R. S. N. Pillai and

Bagvati

REFERENCES:

Indian banking system

India banking 2010

Search engines – Google & Yahoo

www.Centralbankofindia.co.in



ANNEXURECENTRAL BANK OF INDIA

LAL-DARWAJA, SURAT-395003PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008

PARTICULAR AMOUNT Ps.TOTAL

AMOUNTPs.

(A) INCOME: - (1) Interest earned :--


- Term Loans 40,65,337 23 - Demand Loans 2,44,360 95 - Cash Credits 4,55,539 08 - Over Draft 8,00,261 06 - Export / Import Loans - - - Other

Sub-Total -------------- ---- 55,65,487 37


- -


- Interest on bill purchased / discounted / Negotiated (Inland) 3227 00


- -


- -

Sub-Total <iii> -------------- ---- 3227 00

<iv>Discount on Bills, TTS etc. - - - -<v> Income on Investment (C.O.

Item)- - - -


- - - -



office. 2,03,63,474 00



Sub-Total<vii> -------------- ---- 2,03,63,474 00 Total Interest Earned:-

- -2,59,28,97

137

(2) Other Income:--


(a)Commission / Brokerage :- - Bill for collection 29,270 00 - Letter of credit - - - Letter of guarantee(DPG) 28,177 35 - Bill purchase - Payment of dividend - - - Safe custody Accounts - - - Sales & Purchase of Shares &

Securities- -

- Under writing commission - - - Incident / Service charges 4,62,121 01 - Processing charges 86,790 00 - Government Business

Transaction - -


- -


2,382 00


5,820 00


1,409 91

Sub-Total(a) -------------- ---- 616970 27 (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) 2,58,983 19 - DD / TT (Foreign) - -

Sub-Total(c) -------------- ---- 2,58,983 19Total of commission , Exchange & Brokerage (a + b + c)

- -8,75,953 46




- -


- -


- -


- -


- -

<vii> Miscellaneous Income: - - Rent of safe Deposit Lockers 2,26,977 - Recovery received in accounts

written off- -


- -

- Others 1,446 80Total of other income ( i to vii) -------------- ---- 11,04,376 46

TOTAL INCOME (1+2)- -

2,70,33,347

83

PARTICULAR AMOUNT PsTOTAL

AMOUNTPs

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: 32,29,747 26 2. Interest on Term Deposits: - Interest on Fixed Deposit 3,61,521 54 - Interest on Quarterly Deposit 3,79,189 10



- Interest on Money Multiplier Deposit 69,63,617 12

- Interest on Recurring Deposit 24,549 60 - Interest on Khazana Deposit - Interest on FCNR(B) Deposit 2,51,505 62 - Interest on Certificate of Dep. - - - Interest on Other Term Deposit 1,84,753 80

Total of 2. -------------- ---- 81,65,136 84 Sub Total(a + b) 1,13,94,884 04


- - - -

<iii> Interest Paid to Others - - - - - Interest on Borrowing paid to - -

<iv> Others :- - Interest Paid to Branches / NBO - - - Interest paid to Central office 70,72,628 00

Sub-Total<iv> -------------- ---- 70,72,628

Total Interest Expended ( i to iv)-------------- ----

1,84,67,512

04

(4) Operating Expenses :-


- Basic pay / Personal pay 19,79,448 00 - Special Pay 1,79,672 12 - Dearness Allowances 6,92,567 00 - City compensatory Allowances 55,691 19 - House Rent Allowances 1,53,756 70 - Medical Aid 52,343 50 - Leave fare concession 10,576 00 - Leave Encashment 91,456 69 - Bonus 16,460 00 - Other Expenses 23,321 55 - Staff Welfare Expenses - Contribution to provident fund 44,645 00 - Ex-gratia paid to pre. 1986

retirees (C.O. Item)- -

Sub Total -------------- ---- 33,96,050 16

<ii> Rent, Taxes and Lighting :-



- Rent paid for office premises 1,99,368 00 - Rent paid for other premises 23,400 00 - Municipal / other Taxes on

bank’s property - Lighting generator Expenses 68,860 00

Sub Total <ii> -------------- ---- 2,91,628 93<iii> Printing & Stationary 31,285 59



- Depreciation on building - - - Depreciation on Furniture &

fixtures - -

Sub Total<v> -------------- ---- - -


- -


- Statutory central Auditors - - - Branch Auditors - - - Traveling and others expenses - -

Sub Total <vii> -------------- ---- - -

<viii> Law charges 3,57,942 00


- Postage & Telegrams 4,142 00 - Telephones & Telex / Fax 3,697 00 - Amount paid for leased line 3,816 00

Sub Total <ix> -------------- ---- 8,365 00

<x> Repairs & Maintenance : - - Bank’s own property - - - Furniture & Fixtures 7,525 00 - Annual maintenance charge 4,264 00

Sub Total <x> -------------- ---- 11,889 00

<xi> Insurance: - - Insurance - - - Deposit Insurance - -

Sub Total <xi> -------------- ---- - -



<xii> Other Expenditure:- - Traveling exp. 22,096 18 - Boarding exp. 4,326 00 - Local conveyance paid /

Reimbursed 21,748 00 - Diem allowances paid-officer 17,355 00 - Diem allowances paid-clerk 8,000 00 - Diem allowances paid-sub staff 780 00 - Reimbursement of conveyance

Exp. To eligible officers - Petrol Exp. For motors vehicles - - - Maintenance Exp. Of Transit

House- -

- Entertainment Exp. - Hospital exp. 5,913 50 - Wages paid to sweepers and

casual labor 3,460 00 - Petty cash Expenses 5,781 16 - Currency chest guarding exp. 2,70,000 00 - Clearing House Charges 1,14,035 00 - Fees for Revenue / Concurrent /

other Auditors 98,452 00 - Professional Fees paid - - - Premium paid to ECGC & other

corporations - -

- News papers / Journals 4,847 00 - Donations to Institution - - - Others 12,594 93

Sub Total <xii> -------------- ---- 5,94,388 71


- -

Total Operating Expenses 

46,91,548 46

TOTAL EXPENDITURE ( 3 + 4 )-------------- ----

2,31,59,060

86

PROFIT BALANCE ( A – B ) 38,74,287 14




COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS


(A) CAPITAL AND LIABILITIES :-

(1) Capital (Fully owned by central Government)

(2) Reserves & surplus

(3) Deposits:- Demand Deposit :- - Current / call Deposit a. From Bank b. From Others 7,66,96,927 9,26,66,535 73335300

<II> Saving Bank Deposits 18,08,81,307 19,88,34,956 234270014

<III> Term Deposit :- a. From Bank b. From Others:- - Fixed Deposits 1,04,58,175 1,08,30,348 4067737 - QID 1,43,19,795 1,54,89,177 28318799 - MMD 15,64,35,938 21,99,69,789 440504862 - Cent uttam Deposit 1,93,686 1,93,686 193686 - Recurring Deposit 8,71,946 7,38,298 860660 - FNCR 55,68,522 5445660 1461073 - Certificate of Deposit - Other Term Deposit 41,65,526 50,57,513 10350157

Total Deposit(3) 44,95,97,826 54,92,25,958 793249310

(4) Borrowing

(5) Other Liabilities &



Provisions. Bills Payable : - Bills payable / MIS Payable - T.T.’S Payable - Pay slips / Banker’s cheques

Issued. 18,25,445 30,47,703465980

- Others 1,414 1,414 1414

<II> Inter-Office , Adjustment (Net) i.e. Branch Adjustment)

<III> Interest Accrued : - On Deposits 17,12,343 20,82,337 2522608 - On Borrowings<IV> Other Liabilities:- - Accrued Expenses 40,900 40,000 106600 - Reversal of Unrealized ,

Interest 1,12,392 1,12,392 237778 - Amount received from court

Receiver / Borrowers & held pending adjustments 1,60,696 1,60,696

- Income tax & other Taxes to be remitted 4,41,210 1327607

- Commission on guaranteed LC 1,15,468 1,25,744 128300

- Advance rent Reserved from locker holder. 3,19,510 2,83,837 320368

- Others 71,049 1,97,528 237662

Total other Liabilities & Provisions(5) 43,68,593 64,83,486 5348317

TOTAL 45,39,66,419

55,57,09,445 798597627




(B) ASSETS: (6) Cash & Balances with

Reserve Bank of India:- Cash : - In Hand 57,41,098 71,86,591 15013378 - In Foreign Currency Notes

<II> Balance with Reserve Bank of India :

- Incurrent Account - In other Account

Total of (6) 57,41,098 71,86,591 15013378

(7) Balance with Banks And Money at call and short notice:

- In India - out side in India

(8) Investments:(9) Advances: Bill purchased and

discounted33,60,423 31,82,025

3163004<II> Cash credits, overdraft, &

loan repayable on demand - Cash credit 4,79,01,002 4,74,63,883 51019908 - Overdraft 4,50,33,805 4,73,57,980 50128530 - Loan repayable on demand 43,65,180 49,53,204 5078500<III> Term loan 9,70,48,629 11,65,89,119 135680795

Total Advances(9) 19,77,09,042

21,95,46,212 241907733

(10) Fixed Assets:- - Premises (C.O. Item)



- Other Fixed Assets ( Including furniture &

Fixtures) 36,24,509 36,54,074 3455597Total Fixed Asset(10) 36,24,509 36,54,074 3455597

(11) Other Assets:- Other Assets:- - Inter office Adjustment i.e. Branch Adjustment 24,61,58,808 32,43,38,322 537180116 - Stationary and stamps on

hand 1,11,871 1,51,979153379

<II> Amount Not in the Nature of Advances :-

- Prepaid expenses 11,000 11,000 - Advance to staff 15000 - Interest free advances to

staff 57,76,50 4,71,450317693

- Deposit with Government and other Departments 9,850 9,850

9850

- Staff loan advance 21700 - On account payments made

to other16250

- Advance payment to land lord of office and other premises 20,100 11,700

31900

- Amount paid to pensioners 1,14,080 - Difference in clearing 2,14,163 107990 - Others 2210 336313 - 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 2,400 30728

- Share Application money

Total of other Assets(11)24,68,91,68

032,43,22,56

7 538220919

TOTAL45,39,66,41

955,57,09,44

5 798597627




COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS

PARTICULAR 2007 2008 2009(A) INCOME: -

(1) INTEREST EARNED :--


- Term Loans 19,31,691 40,65,337 5927523 - Demand Loans 2,19,085 2,44,360 216384 - Cash Credits 5,42,000 4,55,539 128102 - Over Draft 7,60,352 8,00,261 978901 - Export / Import Loans - - Other

Sub-Total 34,53,099 55,65,487 7250910


-


- Interest on bill purchased / discounted / Negotiated (Inland) 3,227


-


-

Sub-Total <iii> 3,227



<iv>Discount on Bills, TTS etc. - -<v> Income on Investment (C.O.

Item)- -


- -



office. 1,63,38,545 2,03,63,474 32063360Sub-Total<vii>

1,63,38,5452,03,63,47

432063360

TOTAL INTEREST EARNED:- 1,97,94,8712,59,28,97

1 393142702) OTHER INCOME:--


(a)Commission / Brokerage :- - Bill for collection 37,042 29,270 19247 - Letter of credit - - Letter of guarantee(DPG) 84,500 28,177 7451 - Bill purchase - Payment of dividend - - Safe custody Accounts - 500 - Sales & Purchase of Shares &

Securities-

- Under writing commission - - Incident / Service charges 5,66,506 4,62,121 - Processing charges 2,05,069 86,790 984341 - Government Business

Transaction -


-


2,3825000


25,825 5,82012919


1,410

Sub-Total(a) 9,18,942 616970 1029459 (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) 2,77,269 2,58,983 290320 - DD / TT (Foreign) -

Sub-Total(c) 2,77,269 2,58,983 290320Total of commission , Exchange & Brokerage (a + b + c) 11,96,210 8,75,953 1319779


-


-


-


-


-

<vii> Miscellaneous Income: - - Rent of safe Deposit Lockers 2,22,747 2,26,977 198869 - Recovery received in accounts

written off-


-

- Others 241 1,446Total of Miscellaneous Income 2,22,988 2,28,423 198869

TOTAL OF OTHER INCOME ( I TO VII) 14,19,198 11,04,376 1518648

TOTAL INCOME (1+2) (A) 2,12,14,0692,70,33,34

7 40832918

PARTICULAR 2007 2008 2009(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: 30,32,755 32,29,747 3732257 2. Interest on Term Deposits: - Interest on Fixed Deposit 3,43,883 3,61,521 120843 - Interest on Quarterly Deposit 3,40,490 3,79,189 947008 - Interest on Money Multiplier

Deposit 43,76,405 69,63,617 19719599 - Interest on Recurring Deposit 87,978 24,549 22879 - Interest on uttam Deposit 14,810 - Interest on FCNR(B) Deposit 20,57,161 2,51,505 - Interest on Certificate of Dep. - - Interest on Other Term Deposit 1,00,533 1,84,753 400864

Total of 2. 54,69,815 81,65,136 21211193 Sub Total(a + b)

85,04,5701,13,94,88

4 24943450


- -

<iii> Interest Paid to Others - - - Interest on Borrowing paid to -

<iv> Others :- - Interest Paid to Branches / NBO - - Interest paid to Central office 49,80,865 70,72,628 9450917

Sub-Total<iv> 49,80,865 70,72,628 9450917

TOTAL INTEREST EXPENDED ( I TO IV) 1,34,85,435

1,84,67,512 34394367

(4) OPERATING EXPENSES :-


- Basic pay / Personal pay 21,14,272 19,79,448 2499604 - Special Pay 1,76,024 1,79,672 214447 - Dearness Allowances 5,57,341 6,92,567 1195133 - City compensatory Allowances 66,203 55,691 60884 - House Rent Allowances 1,60,099 1,53,756 164476



- Medical Aid 98,803 52,343 135792 - Leave fare concession 28,639 10,576 41200 - Leave Encashment 5,44,248 91,456 52076 - Bonus 5,824 16,460 4793 - Other Expenses 22,280 23,321 34510 - Staff Welfare Expenses - Contribution to provident fund 91,849 44,645 108610 - Ex-gratia paid to pre. 1986

retirees (C.O. Item)-

Sub Total 33,75,763 33,96,050 4511525

<ii> Rent, Taxes and Lighting :- - Rent paid for office premises 1,49,526 1,99,368 284143 - Rent paid for other premises 27,300 23,400 74400 - Municipal / other Taxes on

bank’s property - Lighting generator Expenses 67,983 68,860 86849

Sub Total <ii> 4,51,987 2,91,628 445392<iii> Printing & Stationary 40,024 31,285 155505



- Depreciation on building - - Depreciation on Furniture &

fixtures -

Sub Total<v> -------------- -


-


- Statutory central Auditors - - Branch Auditors - - Traveling and others expenses -

Sub Total <vii> -------------- -

<viii> Law charges 11,700 3,57,942 6584


- Postage & Telegrams 13,696 Cr 4,142 Cr 6764 - Telephones & Telex / Fax 15,516 Dr 3,697 Dr 14073 - Amount paid for leased line 3,810 Dr



Sub Total <ix> 1,820 8,365 20837

<x> Repairs & Maintenance : - - Bank’s own property - - Furniture & Fixtures 39,105 7,525 47892 - Annual maintenance charge 4,264 5313

Sub Total <x> 39,105 11,889 53205

<xi> Insurance: - - Insurance 4,895 - - Deposit Insurance -

Sub Total <xi> 4,895 -------------- -

<xii> Other Expenditure:- - Traveling exp. 17,493 22,096 136422 - Boarding exp. 893 9,326 8736 - Local conveyance paid /

Reimbursed 3,356 21,74835663

- Diem allowances paid-officer 31,760 17,355 4575 - Diem allowances paid-clerk 30,595 8,000 - Diem allowances paid-sub staff 780 - Reimbursement of conveyance

Exp. To eligible officers 56,81580

- Petrol Exp. For motors vehicles - - Maintenance Exp. Of Transit

House-

- Entertainment Exp. - Hospital exp. 1,956 5,913 4341 - Wages paid to sweepers and

casual labor 16,635 3,4601414

- Petty cash Expenses 14,010 5,781 20415 - Currency chest guarding exp. 2,70,000 53414 - Clearing House Charges 66,140 1,14,035 78643 - Fees for Revenue / Concurrent /

other Auditors 69,649 98,45280895

- Professional Fees paid - - Premium paid to ECGC & other

corporations -

- News papers / Journals 4,567 4,847 6252 - Donations to Institution - - Others 24,222 12,594 1614

Sub Total <xii> 3,48,639 5,94,388 432464


-

TOTAL OPERATING EXPENSES 42,71,936 46,91,548 5625512





TOTAL EXPENDITURE ( 3 + 4 ) (B)

1,77,57,3712,31,59,06

040019879

PROFIT BALANCE ( A – B ) 34,56,698 38,74,287 813039

BALANCE SHEET OF THE CENTRAL BANK OF INDIA AS WHOLE

( In Crore)

LIABILITIES

MAR '05

MAR '06

MAR '07

MAR '08

MAR '09

Total Share Capital

1,124.14

1,124.14

1,124.14 1,204.14 1,321.14

Equity Share Capital

1,124.14

1,124.14 324.14 404.14 404.14

Preference Share Capital 0.00 0.00 800.00 800.00 917.00

Reserves1,617.5

01,810.1

92,179.8

4 2,699.95 3,081.99Revaluation Reserves 523.57 507.64 485.85 2,038.67 2,008.92

Net Worth3,265.2

13,441.9

73,789.8

3 5,942.76 6,412.05

Deposits60,751.

6766,482.

6582,776.

28110,319.

67131,271.

85Borrowings 139.69 310.81 782.01 449.10 804.25

Total Debt60,891.

3666,793.

4683,558.

29110,768.

77132,076.

10Other 4,439.3 4,445.6 5,659.9 7,244.26 9,167.07



Liabilities & Provisions 2 1 7

Total Liabilities

68,595.89

74,681.04

93,008.09

123,955.79

147,655.22

ASSETSMAR '05

MAR '06

MAR '07

MAR '08

MAR '09

Cash & Balances with RBI

5,571.81

3,382.86

5,473.67

11,537.19

11,036.91

Balance with Banks, Money at Call

1,481.13

1,411.23

3,339.22 1,302.05 1,214.34

Advances27,277.

3237,483.

4851,795.

4772,997.4

385,483.2

0Investments

30,834.76

28,639.09

27,741.89

31,455.19

43,060.72

Gross Block1,333.1

21,369.1

21,483.0

4 3,119.80 3,181.69Accumulated Depreciation 580.96 644.28 715.77 799.51 903.70Net Block 752.16 724.84 767.27 2,320.29 2,277.99

Other Assets2,678.7

23,039.5

43,890.5

7 4,343.64 4,582.08Total

Assets68,595.

9074,681.

0493,008.

09123,955.

79147,655.

24

PROFIT & LOSS A/C OF CENTRAL BANK OF INDIA AS WHOLE

(Amt in CR)

INCOMEMar '05

Mar '06

Mar '07

Mar '08

Mar '09

Interest Earned 5,204.88

5,385.58

6,234.21

7,995.54

10,455.19

Other Income 938.87 551.24 561.83 902.35 1,069.97

Total Income 6,143.75

5,936.82

6,796.04

8,897.89

11,525.16



EXPENDITUREMar '05

Mar '06

Mar '07

Mar '08

Mar '09

Interest expended 2,829.93

3,005.51

3,759.79

5,772.47

8,226.72

Employee Cost 1,277.56

1,275.74

1,175.42

1,214.34

1,272.59

Selling and Admin Expenses

804.55 296.00 701.64 563.59 653.17

Depreciation 53.17 50.90 65.00 73.61 83.59Miscellaneous Expenses

877.04 1,051.26

596.18 723.71 717.86

Preoperative Exp Capitalised

0.00 0.00 0.00 0.00 0.00

Operating Expenses 2,284.57

1,782.22

2,133.16

2,034.89

2,184.05

Provisions & Contingencies

727.75 891.68 405.08 540.36 543.16

Total Expenses 5,842.25

5,679.41

6,298.03

8,347.72

10,953.93


301.50

257.42

498.01

550.16 571.24

Documents

Financial Analysis