Pratik Page

8/8/2019 Pratik Page

1/121

Declaration

I undersigned here by declared that this

project work entitled Financial statement

analysis - worked on STATE BANK OF

INDIA. Navsari is written & my own work

and is submitted by me to NLCCM, Navsari

toward the partial fulfilment for award BBA in

year 2008 2009, this is original report work

and report written there in is based on the

knowledge and material gained from the bank.

It is not to submit to any other university or

institutions for any other purpose.

1


2/121

A

Project Report On

Financial Statement AnalysisFinancial Statement AnalysisPrepared At

STATE BANK OF INDIASubmitted By

Mr. PRATIK N. KANSARAMr. PRATIK N. KANSARAT.Y.B.B.A.(Sem-6 th)

Roll No. - 15

Under the guidance ofMs. Hetal D. Tandel(Lecturer, NLCCM)

Submitted To,

Naranlala College of Commerce & Management,Navsari.

Veer Narmad South Gujarat University, Surat.

2008-2009

2


3/121

COLLEGE CERTIFICATE

This is certify that project on Financial statement

analysis done at STATE BANK OF INDIA,NAVSARI.is submitted by MR. KANSARA PRATIK

N.,T.Y.B.B.A ,ROLL NO 15 to the NARAN LALA

COLLEGE OF COMMERCE & MANAGEMENT

,NAVSARI. In the partial fulfil ment in reqirement for

the Degree of Bachelor of Business Administration

FROM THE VEER NARMAD SOUTH GUJRATUNIVERSITY,SURAT .

____________________ ____________________

MS.H.D.Tandel , DR. R.C.GANDHI,

Guidance , DIRECTOR.

NLCCM.

3


4/121

ACKNOWLEDGEMENT

Experience is the best teacher.Knowledge is one of

the most important tools.Only theoretical knowledge is notexactly applicable in practical life,from this point of view

industrial training is important & necessary for a management

student .Theoritical knowledge is proved right only often it is

rightly applicable on practical base.

I also thankful to Mr. J.P.Garasia,Assist. Manager ,SBI

NAVSARI for providing mean opportunity to held a

project ,providing valuable information ,guidance & consistco-operation through out the training programmed .

I am also thankful to Dr.R.C.Gandhi,

Director of Naranlala College of Commerce & Management,

Navsari, & Pro. Ms. Hetal .D. Tandel, my project guide, for

giving me an excellent and invaluable guidance during the

course.

MR. PRATIK N. KANSARA

4


5/121

OBJECTIVES OF STUDY

To study the Annual report or financial position of

the company.

To understand the day-to-day work carry

out by the organization.

To study the banks history in brief.

To draw meaningful and constructive measure based

on analysis.

To study the current existing position of SBI Banks

whole field.

To observe the cash inflow & outflow.

To check the profitability of bank.

To study the policy of the bank.

To analyse how the bank is managing its current

assets & current liabilities.

5


6/121

LIMITATIONS OF STUDY

There is no activity that can be completed without any

limitation.The main limitation faced during the preparation of thisproject report on Financial Statement Analysisof SBI is as

follows:-

Time available for the completion of the project is very short,

hence much information could not be undertaken.

The information collected through secondary data.Some of the

information might be wrong.

The calculation & computation are based on valuable

information given by the bank.

The report is based on the analysis of the last five years

data,which may not be sufficient in some cases.

The analysis and conclusion made is as per my limited

understanding for this concerned subject.

6


7/121

METODOLOGYPreparing the project report is a research analysis,it involves

the process of collecting data,analyzing data & reporting data for absolute

results.

For the preparation of project report on Financial Statement

Analysis of SBI Bank.This project report is based on two types of data i.e.

(1)Primary data(2)Secondary data.

1).Primary data:-

Primary data is the data,which has not been collected & used by

somebody else before.In short,Primary data means the data specifically

collected for the project.I have collected data from the managers by asking

question because it is difficult for me to understand the study.

2)Secondary data:-

Secondary data is the data,which is collected from published source.I

have collected data from various sources such as banks annual report of

previous year,different document prepared by the bank and from various

reference books also.

After the data collection of both the sources, I have analyzedthe data & conducted various financial ststement analysis & prepared

various graphs.

After analyzing the data,I have derived a conclusion and have made

suggestions based on my analysis.

7


8/121

SYNOPSIS

This project of Financial Statement Analysis of

State Bank of India is based on all financial information about thebank. The objectives of bank & method of collecting data is clearly

define by this project report of bank.

The project includes the objectives - To study the

Annual report or financial position of the company, to understand the

day-to-day work carry out by the organization, to observe the cash

inflow & outflow,to check the profitability of bank To study the

policy of the bank etc.

.

. The project indicates the primary (direct) method of collection- as

banks annual report of previous year,different document prepared bythe bank and from various reference books ,from Indian statistical

year book,from various websites etc.

In short,this project report is the in- depth study of all kind

of Financial Statements of the bank which reflects the past,current

& future financial position of the bank.

Table of Contents

8


9/121

Sr. No. Subject Page No.

Declaration 1

College Certificate 3

Acknowledgement 4

Objectives Of Study 5

Limitations Of Study 6

Methodology 7

Synopsis 8

Ch-1. About SBI Banks Profile 11

Bank Information 13

History of the SBI bank 14

Management of SBI 18

Structure 19

Functions 22

Ch-2. Services of SBI bank 24

9


10/121

Ch-3. Capital Structure 56

Shareholding Pattern 57

Dividend 58

Balanceshhet Analysis 60

Cashflow Analysis 72

Ch-4. Profitability Ratio Analysis 75

Deposit Ratio Analysis 80

Operating Cashflows 88

Growth Indicators 91

Overall Conclusion93

Bibliography 94

10


11/121

Chapter-1.

About SBI Banks Profile

Spreading its arms around the world, the SBIs

International Banking Group delivers the full range of cross-

border finance solutions through its four wings the Domestic

division, the Foreign Offices division, the Foreign Departmentand the International Services division.

The Domestic wing provides services like merchant

banking, shipping finance and project export finance. The Foreign

Offices wing offers the entire range of international trade and

industrial finance products, while the Kolkatta-based Foreign

Department undertakes treasury and currency operations.

The International Services division renders

specialized services like correspondent banking, global link services

and country and bank risk exposure monitoring. Being Indias largest

and most trusted commercial bank, the SBI offers you a network of

relationships unmatched in strength and span by any other Indian

financial entity.

The bank has a network of 66 offices/branches in 29

countries spanning all time zones. The SBIs international presence is

supplemented by a group of Overseas and NRI branches in India and

correspondent links with over 522 leading banks of the world. SBIs

offshore joint ventures and subsidiaries enhance its global stature.

11


12/121

State Bank of India(SBI) is Indias largest

commercial bank. SBI has a vast domestic network of over 9,000

branches (approximately 14% of all bank branches )and commands

one-fifth of deposits and loans of all scheduled commercial banks

in India.

The State Bank Gpoup includes a network of

eight banking subsidiaries and several non- banking subsidiaries

offering merchant banking services,fund management, factoring

services,primary dealership in government securities ,credit cardsand insurance. The eight banking subsidiaries are:

1.State Bank of Bikaner and Jaipur(SBBJ)

2.State Bank of Hyderabad(SBH)

3.State Bank of India(SBI)

4. State Bank of Indore(SBIR)

5. State Bank of Mysore(SBM)

6. State Bank of Patiala(SBP)

7. State Bank of SAURASHTRA(SBS)

8. State Bank of Travancore(SBT)

12


13/121

BANK INFORMATIONHead /Corporate office: New Administrative Bldg.

Madam Cama Road,Mumbai 400021.

Incorporation year: 1955Ownership group: State Bank of India GroupMain activity: Banking servicesListed on: Bombay Stock Exchange (BSE)Calcutta Stock ExchangeLondon Stock Exchange (FTSE)National Stock Exchange (NSE)

13


14/121

History of the SBI BankThe origins of State Bank of India date back

to 1806 when the Bank of Calcutta(later called the Bankof BENGAL)was established.In 1921,the Bank of

Bengal and two Presidency Banks(Bank of Madras and

Bank of Bombay) were amalgamated to form the

Imperial Bank of India.In 1955,the controlling interest

in the Imperial Bank of India was acquired by the

Reserve Bank of India and the State Bank of India came

into existence by an act of Parliament as successor to

the Imperial Bank of India.

Today,State Bank of India(SBI)has spread

its arms around the world and has a network of branches

spanning all time zones.SBIs International Banking

Group delivers the full range of cross-border finance

solutions through its four wings-the domestic division,the foreign department ,foreign offices division and the

international services division.

14


15/121

MILE STONES:

1949:Entactment of Banking Regulation Act,

1955:Nationalisation of State Bank of India,

1959: Nationalisation of State Bank of Indias

subsidiaies,

1961:Insurance cover extended to deposits,

1969: Nationalisation of 14 Major Banks,

1971:Creation of Credit guarantee corporation,

1975: Creation of regional rural banks,

1980: Nationalisation of seven banks with deposits over

200 crore.

15


16/121

Mission

SBI Bank's mission is to be a world-class Indian Bank. TheBank's aim is to build sound customer franchises across

distinct businesses so as to be the preferred provider of

banking services in the segments that the bank operates in and

to achieve healthy growth in profitability, consistent with the

bank's risk appetite. The bank is committed to maintain the

highest level of ethical standards, professional integrity and

regulatory compliance. SBI Bank's business philosophy is

based on four core values: Operational Excellence, Customer

Focus, Product Leadership and People.

16


17/121

GOAL AND OBJECTIVES

Business Objectives

The SBI branch was opened with the objectives to foster the trade between

India and Japan through trade finance products and to help Indian

Corporates to access the financial market in Japan.At these, two branches

SBI offers a wide range of services such as deposits,remittances,trade

finance solutions,syndicated loans etc.

.

Organizational Goals

SBIs main goalsare as follows:

Develop close relationships with financial services to customers,

Maintain its position as the premier finance institution in the country,

Transform ideas into viable and creative solutions,

Provide consistently high returns to shareholders, and

To grow through diversification by leveraging off the existing client

base.

17


18/121

INFORMATION ABOUT BOARD OF DIRECTORS AND

BOARD COMMITTEE

MANAGEMENT OF SBI

NAME DESIGNATIONO.P. Bhatt Chairman

Suman Kumar Berry Director

Ananta C. Kalita Director

Md. Salahuddin Ansari Director

Arun Ramanathan Director

Dilip C. Choksi Director

Rajiv Kumar Non-Official Part

Time Director

D. Sundaram Director

S.K. Bhattacharya Managing Director

Ashok Jhunjhunwala Director

Deva Nand Balodhi Director

Vasantha Bharucha Director

Shyamala Gopinath Director

S. Venkatachalam Director

18


19/121

R. Sridharan Managing Director

19


20/121

STRUCTURESBI GroupSBI Group consists of,A) Seven Associate Banks

State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore State Bank of Bikaner and JaipurB) One Wholly Owned Banking Subsidiary SBI Commercial and International BankC) Seven Non Banking Subsidiaries

SBI Capital Markets Merchant banking, lease and hire purchase SBI Funds Management Mutual fund SBI Gilts Govt. Securities SBI Factors & Commercial Service Factoring Services SBI Securities Investment banking SBI Cards and Payment Services Ltd SBI Life Insurance Company LtdE) Six Overseas Subsidiaries/Joint Ventures SBI(Canada)

SBI(California) SBI International (Mauritius) Ltd. Indo-Nigerian Merchant Bank Ltd. SBI Finance Inc., New York SBI Servicos Limitada, Sau Paulo

20


21/121

ORGANIZATION CHART OF FINANCE FUNCTION IN

BANK

Chairman

Vice Chairman

Executive Director

Managing Director

Senior General Manager

Chief Financial General Manager

Accounting and Officer and Treasurer

Taxation Group

Assistant Financial Account Manager Officer

Assistant

21


22/121

ORGANISATION STRUCTURE OF BRANCHBranch Manager

Personal Banker Teller Authorizer Clearinghouse Sales

Authorizer Executive

Personal Banker Teller

22


23/121

Functions

Branch manager

Require approval from BM for transaction more than 50,000 RS.

organising coordinating and motivating employees in the organization.

Develop his territory.

Personal Banker authorizer

After his approval, all the applications collect and checked by PB,

Executives go for further process to branch manager.

-Daily stock (welcome kit, debit pin number, cheque book, and debit card)

requires approval of PB authorizer.

Personal Banker

Maintain contacts with walk-in customers, existing customers and provide

satisfactory service to them.

Handle all the complaint of the customers and resolve it.

Maintain daily stock reports and take approval from the PB authorizer.

Teller Authorizer

He gives approval to all types cheques and DDs by checking all the details

and validity of it.

At the end of the day all the cash on hand in the bank require signature of

him.

23


24/121

Teller

Maintain daily transactions of cheque withdrawal, cheque deposits, cash

withdrawal cash deposit, fund transfer and DD etc.

Check the validity of all the above transactions.

Clearinghouse

All the cheques are being transferred to this department and it checks the

sign, balance amount in his/ her a/c, date of issuing.

It also maintains the transaction with other branches and banks.

DRF forms are being handled by this department.

Sales Executive

Generate new inquiries by cold calling and tele marketing.

Handle existing and new customers.

Maintain customer relation ships.

24


25/121

Chapter-2.

SERVICES(PRODUCTS) OF SBI BANK

PERSONAL BANKING

NRI SERVICES

AGRICULTURE / RURAL SERVICES

INTERNATIONAL BANKING

CORPORATE BANKING

SME SERVICES

SERVICES

GOVERNMENT BUSINESS

25


26/121

1.PERSONAL BANKING

DEPOSIT SCHEMES

Open an account with any of SBI branches, all of

them are fully computerised, and realise the advantage of vast

network. Place funds in Multi Option Deposit Scheme, a termdeposit which is not fixed at all and comes with a unique break-up

facility which provides you full liquidity as well as benefits of

higher rates of returns, through your savings bank account.

Alternately, keep that deposit intact by availing an overdraft

facility, to meet your occasional temporary funds requirements.

SBI products are designed with flexibility to suit our

personal requirements. Enjoy 24 hour banking facility through

Internet Banking/ widest network of ATMs.Experience a whole new world of Personal Banking

Branches (PBB) often dubbed as boutique branches by others.

Customer friendly knowledgeable staff will cater our financial

requirements with speed and efficiency in an excellent ambience.

The PBBs have different minimum thresholds for customers'

business to ensure the exclusive level of service.

26


27/121

PERSONAL FINANCEState Bank of India has a variety of schemes under Personal

Finance to satisfy varying needs of the banking public. The Bank

offers the following schemes with attractive rates of interest:

* Loan For ESOPS

* Housing Loan

* Easy Travel Loan

* Car Loan

* Educational Loan

* Personal Loan

* Property Loan

* Loan to Pensioners* Loan Against Shares/Debentures

* Festival Loans

* Medi-Plus Scheme

* Teachers-Plus Scheme

* Sainik-Plus Scheme

* Tribal-Plus Scheme

* EMI Calculator

* Credit Khazana

Many of SBI branches offer loans under Personal Finance. This

section also offers an EMI calculator to facilitate computation of

monthly repayment.

27


28/121

CORPORATE SALARY PACKAGE

SBI PRESENTS A NEW ATTRACTIVE PRODUCT FOR

EMPLOYEES OF CORPORATES & INSTITUTIONBENEFITS TO THE EMPLOYER

Provides a convenient way to manage salaries across a large

number of centres through Core Power.

Reduces employers paperwork and salary administration cost.

Employees receive instant credit of salaries.

TO THE EMPLOYEES

Employees will enjoy convenience of Anywhere Banking at the

largest network of

Core Banking Branches presently numbering 11400 plus across

the country.

Extensive alternative channels.

8500 plus ATMs of State Bank Group.

Free Internet Banking

Complete gamut of Banking Services including :-

Zero Balance Account facility

28


29/121

Retain same account number even when the account is

transferred to another branch.

Free Multi City Cheques/ SMS Alert/ e-statement/ internet

banking.

Easy overdraft upto 2 months salary repayment extendable to 6

months.

RTGS/NEFT, Demat facility, Systematic Investment Plan in

Mutual funds.

Concession in interest on loans.

Anywhere banking facility/ widest network of branches.

Range of other value added benefits.

29


30/121

2. NRI SERVICESWHO IS AN NON-RESIDENT INDIAN [NRI]

A Non Resident Indian (NRI) as per FEMA 1999 is an

Indian citizen or Foreign National of Indian Origin resident outside India

for purposes of employment, carrying on business or vocation incircumstances as would indicate an intention to stay outside India for an

indefinite period.An individual will also be considered NRI if his stay inIndia is less than 182 days during the preceding financial year.

A Person of Indian origin (PIO) is a citizen of any country other than

Pakistan, Bangladesh or Sri Lanka

Who

At any time held an Indian Passport,

He or any of his parents or grand parents was a citizen of India,

Is a spouse of an Indian Citizen or a person referred to above.

30


31/121

NRIs can open the following types of accounts with SBI:

NRE Rupee Accounts.

Savings Bank.

Current Accounts.

Term Deposits (Interest Paid out Quarterly). Special Term deposits (Interest compounded Quarterly).

Non-Resident (Ordinary) Account .

NRO A/cs - Rupee Accounts for crediting income in India.

Foreign Currency Non Resident Accounts.

Fixed Deposits in Pound Sterling, US Dollar Euro Canadian Dollar and

Australian Dollar

Resident Foreign Currency Accounts.

31


32/121

3.AGRICULTURE / RURAL SERVICESState Bank of India Caters to the needs of agriculturists and

landless agricultural labourers through a network of 6600 rural and semi-

urban branches.There are 972 specialized branches which have been set up in

different parts of the country exclusively for the development of agriculturethrough credit deployment.These branches include 427 Agricultural

Development Branches (ADBs) and 547 branches with Development

Banking Department (DBDs) which cater to agriculturists and 2 Agricultural

Business Branches at Chennai and Hyderabad catering to the needs of hitech

commercial agricultural projects.

Our branches have covered a whole gamut of agricultural

activities like crop production , horticulture , plantation crops, farm

mechanization, land development and reclamation, digging of wells, tube

wells and irrigation projects, forestry, construction of cold storages and

godowns, processing of agri-products, finance to agri-input dealers, alliedactivities like dairy , fisheries, poultry, sheep-goat, piggery and rearing of

silk worms.

The branch also has farmer's meet in villages to explain to

farmers about various schemes offered by the bank.

To give special focus to agriculture lending Bank has set up

agri business unit. Bank has also agri specialists in various disciplines to

handle projects/ guide farmers in their agri ventures. Advances are given for

very small activity covering poorest of the poor to hitech activities involving

large fund outlays.

32


33/121

Agricultural BankingState Bank of India's branches have covered a

whole gamut of agricultural activities like crop production ,

horticulture , plantation crops, farm mechanization, land

development and reclamation, digging of wells, tube wells andirrigation projects, forestry, construction of cold storages and

godowns, processing of agri-products, finance to agri-input dealers,

allied activities like dairy , fisheries, poultry, sheep-goat, piggery

refurbished second hand tractors, loans against pledge of

warehouse receipts, loans against produce stored by the farmer at

his own premises, loans against book debts of Arthias, mulberry

cultivation, rearing of silk worms and grainages. Infact Bank can

cover any other agricultural related activities undertaken.

33


34/121

Regional Rural BanksPost amalgamation Bank has got 16 RRBs with

a network of 2,351 branches spread over 115 districts and 16 states

in the Country. The aggregate deposits and advances of the

sponsored RRBs stood at Rs.13,573 crore and Rs.7,856 crorerespectively as on 31st March 2008. The profits have jumped from

Rs.32.77 crore as on March 2007 to Rs.115.68 as on March 2008.

During the year, a remittance product Grameen Pay Order (GPO)

was introduced for facilitating remittances from remote areas to

increase fee income in RRBs. Post amalgamation; RRBs have

broadbased their product profile by introducing Debt Swap

Scheme, Warehouse Receipt Financing.

34


35/121

4.INTERNATIONAL BANKING

Trade FinanceSBI Understand there is much stake involved in

Export Import business Global economic, political situations,

anything and every thing that affects you and your business. SBI

offers the trusted financial solution to all your complex Trade

finance related fund needs (both in Indian rupee and foreign

currencies).

The gamut of our services include credit for both pre shipment and

post shipment activities.

Export Revenue Rupee Export Credit (Pre-Shipment and Post-Shipment)

Pre-Shipment Export Credit

Post-Shipment Export Credit

PreShipment Credit in Foreign Currency (PCFC)

Getting Started - Opening a PCFC

Operating PCFC

Export Bill Rediscounting

Letter of Credit

Import Revenue

Foreign Currency import credit

Supplier's credit

35


36/121

CORRESPONDENT BANKINGThe Correspondent Banking Division develops and

maintains relationship with Banks and Financial Institutions across the

Globe. This network Correspondent Banks forms the foundation for all

international operations of SBI.SBI has correspondent banking relations with around 522

leading banks worldwide. The bank has deployed a dedicated Correspondent

Relations section to attend exclusively to create, nurture, cultivate and

continue relationship in correspondent banking.distribute their products for

various applications of the bank and its Customers.

Meanwhile, the banks Foreign Department, based in

Kolkata (Calcutta), handles all operational aspects of correspondent banking,

including all matters pertaining to the exchange of test keys and swift

authenticator keys (SAK), appointment of correspondents, maintenance and

reconciliation of Nostro accounts, and treasury management.The Rupee Vostro

accounts of International Banks and Institutions are maintained and serviced at

SBIs International Services branch (ISBM) at Mumbai and at Overseas

Branches at Kolkata (Calcutta), Chennai, Cochin, Bangalore and New Delhi.

ACU accounts are also serviced at the overseas branches.

36


37/121

PROJECT EXPORT FINANCEState Bank of India is an active participant in the area of

finance of Project export activities. These activities will mainly involve

financing the fund based and non fund based requirements of the project

exporters. Export of engineering goods on deferred payment terms

Execution of turnkey projects abroad

Execution of overseas civil construction contracts abroad

Exports of services are the contracts for export of consultancy, technical

and other services.

Project export contracts are generally of high value and exporters

undertaking them are required to offer competitive terms to be able to secure

orders from foreign buyers in the face of stiff international competition.

SBIs vast network of branches spread all over the country

which are authorized to handle trade related transactions,substantial presence

overseas with branches/offices in all major commercial centers of the world

covering all time zones and our strong network of correspondent relationship

with top ranking banks in several countries adds to our competitive strengths to

facilitate and meet various requirements of project exporters. More over we also

enjoy the comprehensive credentials in International banking community.

37


38/121

5.CORPORATE BANKINGCAG - A perfect strategic fit :

Market leader image

Focussed attention

Flexible & Customer - friendly credit policies

Structured Products - Fundbased & feebased

Timely, comprehensive and assured delivery

CAG - SBI's Proactive response to emerging market needs

CAG is Strategic Business Unit of SBI, set up exclusively to cater to

the specialised banking needs of top corporate clients of the country.

It was the direct outcome of SBI's structural reorganisation in the light

of Deregulation, Globalisation & Liberalisation of the Banking

Industry.

38


39/121

CAG - A Symbol of excellence

Quality Relationship Banking

Exclusive, highly skilled Relationship teams of dynamic and

motivated personnel, each attending to a select group of topCorporates providing a one-stop-shop for financial services

presently at Mumbai, New Delhi, Calcutta, Chennai and

Ahmedbad.

Delayered Credit process

Only two stage credit process consisting of appraisal and

assessment by the Relationship team and sanction by the

Credit Committee/Central Board, leading to quickest response

time in the industry.Offer of wider and sophisticated products

Apart from a variety of core credit products including

structured finance and multi-purpose short term corporate

loan, CAG offers an array of customer specific products like

Cash Management Product, Treasury & Forex products and

Merchant Banking products in association with SBI Capital

Markets Ltd., SBI Gilts Ltd. and other subsidiaries of SBI.

39


40/121

MID- CORPORATE GROUPMid-Corporate Group (MCG) has been set up in the bank

under Corporate Banking Group to cater to the various banking

requirements of Mid-Corporates. It provides business solutions to its

customers through its 28 dedicated branches all over the country.

A Mid-Corporate has been defined as a business entity

having annual turnover between Rs.25 crores to Rs.350 crores or an entity

having a minimum fund based limit of Rs.5 crores(including Term loans.)

Mid-Corporate Group has following focussed objectives for serving Mid-

Corporate Accounts:

Providing exclusive focussed attention on the banking requirements

of Mid-Corporates,

Providing various products to these Mid-Corporates through

Relationship Management model,

Improving Turn Around Time (TAT) for credit delivery;

Providing customised solutions to financial requirements of Mid-

Corporates.

40


41/121

PROJECT FINANCE

Project Finance Strategic Business UnitA one-stop-shop of financial services for new

projects as well as expansion, diversification and modernisation

of existing projects in infrastructure and non -infrastructure

sectors .

ExpertiseBeing India's largest bank and with the rich experience gained

over generation, SBI brings considerable expertise in

engineering financial packages that address complex financial

requirements.

Project Finance SBU is well equipped to provide a bouquet of

structured financial solutions with the support of the largestTreasury in India (i.e. SBI's), International Division of SBI and

SBI Capital Markets Limited.

The global presence as also the well spread domestic branch

network of SBI ensures that the delivery of your project specific

financial needs are totally taken care of.

Lead role in many projects

Allied roles such as security agent, monitoring/TRA agent etc.

41


42/121

Infrastructure sector:

Road & urban infrastructure

Power and utilities

Oil & gas, other natural resources

Ports and airports

Telecommunications

Non-infrastructure sector:

Manufacturing: Cement, steel, mining, engineering, auto components,

textiles, Pulp & papers, chemical & pharmaceuticals

Services: Tourism & hospitality, educational Institutions, health

industry

Expertise Rupee term loan

Foreign currency term loan/convertible bonds/GDR/ADR

Debt advisory service

Loan syndication

Loan underwriting

Deferred payment guarantee

Other customized products i.e. receivables securitisation,

e.t.c.

42


43/121


44/121

(FAQ) BCSBI Cod e

1. In what way is the Code of Banks Commitment to Micro

and Small Enterprises different from the existing

regulatory prescription of the Reserve Bank of India andthe Government policy framework?

The objective of the Code is not to replace the

existing regulatory framework but to complement it. Regulations

by themselves cannot ensure availability of quality service to all.

The Code seeks to achieve this through a positive and voluntary

commitment of the bankers to provide easy access to

transparent, speedy and efficient banking services. Banks are

also committed to provide products and services suiting theneeds of MSEs and to consider their financial difficulties

sympathetically.

2. Why is the scope of the Code confined to only Micro and

Small enterprises?

MSEs play a very significant role in

maintaining a balanced and sustainable growth of the economy,

through employment generation, development of entrepreneurialskills and contribution to export earnings. The Report of the

Working Group on rehabilitation of sick SMEs has brought out

that this vibrant segment of the Indian economy has been

contributing over 39 per cent of the manufacturing sector output,

33 per cent of the national exports and providing employment to

nearly 312 lakh people through about 128 lakh units, located in

both the rural and urban areas across the country. The Third

Census of small enterprises conducted by the Government of

India in 2001-02 revealed that 95.5% of Micro & SmallEnterprises have been outside the purview of the jurisdiction of

financial structure and that there is a critical need to provide

banking services to fully exploit the potential of this sector.

44


45/121

3. If banks do not implement the Code, what is the recourse

left for the customers?

All banks have adopted a Model Grievance

Redressal policy framed by the IBA. All banks have a set of

internal Grievance Redressal Procedures for handling ofcomplaints with given specific time frame consistent with

External Grievance Redressal Mechanisms such as the Banking

Ombudsman Scheme. The Code even provides that if customers

are not satisfied with the banks response, they should not be

discouraged from escalating the complaints and should be

helped to take up the matter with the Banking Ombudsman.

Individual complaints are also dealt with by the Customer

Service Department of the Reserve Bank of India and if thecomplaints involve systemic issues, the BCSBI pursues the

matter with the banks for rectification of the systemic lapses.

4. What is the measure of compliance of banks with the

Code of Banks Commitment to Customers?

Banks have initiated several positive

measures to comply with the provisions of this Code. All banks

are now systematically distributing copies of the Code to all

their customers. Since this Code is, in a sense, a Charter of

Rights of the individual vis-a-vis his bank, this is an important

action on the part of the bank to voluntarily empower the

individual customer. Also, banks have adopted Model policies

for Cheque Collection, Grievance Redressal, Security

Repossession and Compensation and these are in public domain.

Transparency with regard to charges, fees and interest rates isnow apparent and all banks have a tariff schedule in public

domain. These are some of the positive features. BCSBI is in

continuous dialogue with banks towards achieving greater

compliance of the Code in letter and spirit.

45


46/121

7.SERVICES

INTERNET BANKINGInternet banking portal of our bank, enables its

retail banking customers to operate their accounts all across

India, removing the restrictions imposed by geography and time.

It's a platform that enables the customers to carry out their

banking activities from their desktop, aided by the power and

convenience of the Internet.

Availing the Internet banking services, you can do the

following normal banking transactions online:

o Self-account funds transfer across India.

o Third party transfers in the same brancho New account opening

o Demand Draft requests

o Standing instructions

o New Cheque-book request and much more.

46


47/121

Apart from these, the other salient value-added features

available are:

o Railway tickets booking,

o Utility bill payments

o LIC and other insurance premia payments,o SBI Mutual funds Investments

o Remit Subscription to PPF account,

o Credit card dues payments,

o Deposit your taxes,

o Donations to your religious inspirations

o Donations to Red Cross and such other organisations

o Setting up SMS alerts for transaction information.

47


48/121

MOBILE BANKING

MOBILE BANKING SERVICESAway from home, bills can be paid or

money sent to the loved ones or balance enquiries done

anytime 24x7!!!That is what SBI Freedom offers

-convenience, simple, secure, anytime and anywhere

banking.

The service is presently available on java

enabled mobile phones over SMS/ GPRS/ WAP as also

non java phones with GPRS connection. The service can

be availed over the free GPRS facilities offered by various

mobile service providers. The services for other non-Javamobile phones are under development and will be offered

using Unstructured Supplementary Services Data (USSD).

The following functionalities will be provided in the Phase

I :

-Funds transfer (within and outside the bank using NEFT)

-Enquiry services (Balance enquiry/ Mini statement)

-Request services (cheque book request)

-Bill Payment (Utility bills, credit cards)

-M Commerce (Mobile Top Up, Merchant payment, SBI

life insurance premium)

48


49/121

ATM SERVICES

STATE BANK NETWORKED ATM SERVICESState Bank offers you the convenience of over 8500 ATMs in

India, the largest network in the country and continuing to

expand fast! This means that you can transact free of cost at the

ATMs of State Bank Group (This includes the ATMs of State

Bank of India as well as the Associate Banks namely, State

Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank

of Indore, State Bank of Mysore, State Bank of Patiala, State

Bank of Saurashtra, and State Bank of Travancore) and wholly

owned subsidiary viz. SBI Commercial and International Bank

Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card.

49


50/121


51/121

DEMAT SERVICES

SBI offers Demat services that would ensure free transferability

of securities with speed, accuracy and security.

SBI is Depository Participant both with - National SecuritiesDepositories Limited (NSDL) and Central Depository Services

Limited (CDSL) through more than 1000 branches

Features & Benefits

As opposed to the earlier form of dealing in physical certificates

with delays in transaction, holding and trading in Demat form

has the following benefits:

Account Maintenance & Safe custody: FacilitatesMaintaining Security Balance in electronic form.

Dematerialization: Facilitates converting physical share

certificate into electronic balances.

Rematerialization: Facilitates converting the electronic

balances to physical (share certificate) form.

Account Transfers: Facilitates delivery/receipt of electronic

balances consequent to market / off-market trades.

Pledge/Hypothecation: Facilitates blocking securitiesbalance of borrowers in favour of lenders for obtaining Loans

/ advances against shares.

Initial Public offer: Facilitates faster and direct credit of

security balances into DP account on allotment through

public issue of companies.

Security Lending: Facilitates earning extra income on your

dematerialized holdings by the way of securities lending.

51


52/121

8. GOVERNMENT BUSINESS

GOVERNMENT ACCOUNTS

An Outline of Government Accounts Department

The Government Accounts Department (GAD) oversees thehandling of government business undertaken by our branches as

sub-agent of Reserve Bank of India. It is a co-ordinating agency

between the branches dealing in Central Government transactions

and Reserve Bank of India, CAS, Nagpur, on the one hand and

Accounting Authorities of Department of Central Government on

the other.

All authorised dealing/receiving branches report their Central

Government transactions on a daily basis to their respective

focal/nodal/link branches who consolidate and report to GAD, NaviMumbai. The main function of GAD is to settle Central

Government transactions reported by nodal/focal/link branches

with RBI, CAS, Nagpur.

52


53/121

Central Government transactions

All Central Government transactions (other than

those relating to Union Territories) are under Focal Point/Link Branch

system. Under the Focal Point system, the branches dealing inGovernment transactions report their transactions to the respective

Focal Point Branches. Focal Point Branches have been identified at a

centre where Pay & Accounts Office (PAO) of the concerned

Ministry/Department is established. All the branches handling the

transactions of a particular PAO report their transactions to the

identified Focal Point Branch for that PAO. These Focal Point

Branches, report the consolidated figures under various accounting

heads to GAD for final settlement with RBI, CAS, Nagpur. Thesettlement of these transactions is being handled by the under noted

Sections in GAD.

1) Union Ministries Expenditure Account (UMEA) Section:

2) Revenue Section:

3) Central Government Section:

All focal/link/nodal branches are required to report their Governmenttransactions to GAD for funds settlement with RBI, CAS, Nagpur in

an encoded communication format. This helps in electronic

processing of data.

53


54/121

PUBLIC PROVIDENT FUND - 1968Scheme introduced by Central Government in 1968. The Scheme

enables the members of the public to make contributions to the Fund

and obtain Income Tax rebate under the relevant provisions of the

Income Tax.

Eligibility

Individuals

Individuals on behalf of a minor

Minimum / Maximum Investment ( w.e.f. 15-11-2002 )

Minimum Rs.500/- per annum in multiples of Rs.5/-

Maximum Rs.70,000/- per annum

Duration

15 years

Can be extended for one or more blocks of 5 years

Account can be discontinued but repayment of subscriptions along

with interest only after 15 years.

Rate of Interest

8% per annum credited in account on 31st March every year

calculated on the minimum balance between 5th day and end of the

month.

Loans

Loan upto 25% of balance at the end of first financial year from third

to sixth year. Second loan can be taken on full payment of first loan.

54


55/121

SBI e-TAX

SBI e-tax : Online Tax Payment Facility

For Direct Tax payment through SBI e-tax:

Step 1: Visit www.onlinesbi.com and Click on "SBI e-tax".Step 2: Select Direct Taxes (OLTAS)".

Step 3: Select Challan Type.

Step 4: Enter Challan Details.

Step 5: Confirm Assessee details and SelectState Bank of

India.

Step 6: Log onto www.onlinesbi.com with Username and

Password.

Step 7: Enter tax details.Step 8: Confirm payment details.

Step 9: Print Instant Cyber Receipt and logout.

55


56/121

Chapter-3.

FINANCIAL ANALYSIS

OFSTATE BANK OF INDIA

56


57/121

Capital structureFrom Year To Year Share Authorized Issue Paid Up Shares Paid Up Paid Up

Capital Capital Nos. Value Capital

2007 2008 Equity Share 1,000.00 631.56 631470376 10 631.472006 2007 Equity Share 1,000.00 526.30 526298878 10 526.302005 2006 Equity Share 1,000.00 526.30 526298878 10 526.30

2004 2005 Equity Share 1,000.00 526.30 526298878 10 526.302003 2004 Equity Share 1,000.00 526.30 526298878 10 526.30

2002 2003 Equity Share 1,000.00 526.30 526298878 10 526.30

2001 2002 Equity Share 1,000.00 526.30 526298878 10 526.30

2000 2001 Equity Share 1,000.00 526.30 526298878 10 526.30

1999 2000 Equity Share 1,000.00 526.30 526298878 10 526.30

1996 2000 Equity Share 1,000.00 526.30 526298878 10 526.30

1995 1996 Equity Share 1,000.00 474.01 474009872 10 474.01

1994 1995 Equity Share 1,000.00 474.01 474009189 10 474.01

1993 1994 Equity Share 1,000.00 473.83 473828726 10 473.831991 1993 Equity Share 1,000.00 200.00 20000000 100 200.00

57


58/121

Share holding patternShare holding pattern as on : 31/12/2008

Face value 10.00

Promoter's holding

Indian Promoters 377207200 59.41

Sub total 377207200 59.41

Non promoter's holding Institutional investors

Banks Fin. Inst. and Insurance 54488550 8.58

FII's 66169927 10.42

Sub total 159634660 25.14

Other investors

Private Corporate Bodies 28339401 4.46

NRI's/OCB's/Foreign Others 379437 0.06

Govt 122428 0.02

Others 28413341 4.48

Sub total 57254382 9.02Grand total 634879997 100.00

58

General public 40783755 6.42


59/121

DividendYear Month Dividend (%)

2008 May 215

2007 May 140

2006 May 140

2005 May 125

2004 May 110

2003 Jun 85

2002 May 60

2001 May 50

2000 Jun 25

2000 Feb 25

1999 Jun 40

1998 Jun 40

1997 Jun 40

59


60/121

Div iden

0

5 0

1 0 0

1 5 0

2 0 0

2 5 0

May

May

May

May

May

Jun

May

May

Jun

Feb

Jun

Jun

Jun

20 0 82 0 0 72 0 0 62 0 0 52 0 0 42 0 0 32 0 0 22 0 0 12 0 0 02 0 0 01 9 9 91 9 9 81 9 9 7

D ivid

60


61/121


62/121

ASSETS SCHEDULE As on 31.03.2002 As on 31.03.2001Rs. Rs.

Cash and balances with

Reserve Bank of India 6 218725347 184958687

Balances with banks and

money at call & short notice 7 430576316 422133168

Investments 8 1451420317 1228764928

Advances 9 1208064653 1135902708

Fixed Assets 10 24152273 25933018Other Assets 11 149343577 158749596

TOTAL 3482282483 3156442105

62


63/121

ASSETS ANALYSISASSETS

Rs. Crore

Non-Annualized Mar-04 Mar-05 Mar-06 Mar-07 Mar-08Cash and bank balance 32645.82 53212.6 47136.44 60709.18 64930.16

Cash in hand 508.15 497.97 558.27 867.86 1052.58Deposit account 1010.57 1680.8 2675.95 3139.35 3296.56

Money at call 821 11038.61 9540.16 21185.8723085.95

Balance outside India 17305.82 23002.07 15924 17771.83 16546.53

Current account 460.31 3528.66 3931.51 9016.52 6529.48

Deposit account 1215.57 983.86 974.73 1306.01 2242.33

Money at call 1 5629.94 18489.55 11017.76 7449.3 7774.72

Balance with RBI 12906.42 16894.32 18344.78 17628.01 20819.95

Investments 54982.24 71286.52 91878.68 122876.5 145142

Government securities 39177.27 51752.76 68068.27 96416.82 117323Approved securities 7157.97 6464.39 5913.72 5704.99 5220.32

Assisted companies 0 0 0 0 0Subsidiaries/associates 1424.41 1540.13 1619.83 1338.62 1344.82

Mutual funds 0 0 2932.06 0 0

Others 7222.59 11529.24 13344.8 19416.05 21253.85

Investments outside India 2221.46 2690.45 3199.94 3976.49 4741.86

Advances & loans 74237.33 82359.84 98101.97 113590.3 120806.5

Bills receivables 7933.47 7741.25 9235.12 12840.01 11555.36

Short term/demand advances 43553.46 45991.24 54979.16 61197.15 64178.41

Term advances 22750.4 28627.35 33887.69 39553.11 45072.7

63


64/121

Secured advances 71884.05 77291.42 92161.81 90357.88 98526.09

Unsecured advances 2353.28 5068.42 5940.16 23232.39 22280.38

Advances to priority sector 19522.82 23090.38 25877.55 30153.35 31591.48

Advances to public sector 12088.19 13465.12 9490.49 20271.27 21990.35

Other assetsStock in trade 72.54 69.67 67.97 74.18 76.44

Stock others 72.54 69.67 67.97 74.18 76.44

Receivables 16228.42 13386.74 21842.28 13529.53 13794.38Accrued income 3005.48 3348.96 4278.57 5133.28 5737.66

Non-banking assets 0.22 0.24 0.25 1.26 0.27Inter office adjustments 2924.35 0 8760.74 58.89 0

Advance payment of tax 1647.34 2403.95 1957.55 2007.06 1861.14Other receivables 8651.03 7633.59 6845.17 6329.04 6195.31

Future lease rent receivable 0 0 0 0 102.66

Gross fixed assets 2347.61 3338.31 3976.97 4458.99 4678.09

Less: cumulativedepreciation 841.3 1144.65 1499.36 1865.68 2262.86

Net fixed assets 1506.31 2193.66 2477.61 2593.31 2415.23Land & building 653.62 687.74 749.86 855.88 920.32

Revalued assets 0 0 0 0 0Leased assets 289.33 1002.51 1386.51 1258.05 1434.53

Intangible assets/expensesn.w.o 0 0 0 2271.24 1063.54

TOTAL ASSETS 179672.7 222509 261505 315644.2 348541.2

64


65/121

DETAILED ANALYSIS OF ASSETS2003-04

The cash and bank balances amounted to Rs. 32645.82 crores. The money at call was low at821 crores. The bank wasmaintaining a balance of 12906.42 crores with RBI. The investmentsinIndia were worth 54982.24 crores. However there was no investment inmutual funds. Theinvestments outside India stood at 2221.46 crores.The figures were low, as the impact ofglobalization was not yet felt. Theadvances and loans amounted to 74237 crores which was41.32% of thetotal assets. Of this short-term loans amounted to 69.35% of the totalloans. Theratio of loans to priority and public sector stood at 1.6. Thepercentage of secured loans was 96.83%.

Inter-office adjustments amounted to 2924 crores.This was attributed to the fact that reconciliation of inter-office accounts

continues for some time after the accounts are closed.Gross Assets were valued at 2347 crores. The

depreciation amount was 841.3 crores and themethod used was writtendown value method prescribed under the Income Tax Act.

Depreciation of leased assets was provided for oncapital recovery method. Leased Assetsvalued at 289.33 crores.

65


66/121


67/121

2005-06Cash and Bank Balance decreased but the cash in

hand increased marginally. Money at callfollowed the previous trend anddecreased. Money at call with RBI decreased by around 6000crores.Investments increased continuously. This year the bank invested inmutual funds, whichthereby increased investments. Advances and loans continued toincrease. But the ratio ofadvances to priority sector versus the publicsector changed radically. It increased from 1.6 to 3in two years. Thereceivables increases this year because of inter office adjustments of8760 crores.

67


68/121

2006-07On 30 March 2007, IRDA had granted license to the

joint venture for carrying out the lifeinsurance business in the country. InJune 2007, life insurance company has launched its firstproduct-Sanjeevan. It is a single-premium money-back product providing lifecover up to amaximum of 75 years of age. The company is also lookingat launching pension products in fewdays. During the year, the Bank,pursuant to the Voluntary Retirement Scheme for eligibleemployeesmade a payment in respect of encashment of leave salary amounting toRs.203.63crore. In terms of the accounting policy consistently followedby the Bank, the entire amount hasbeen charged to the Profit and Loss Account of the current year(accounting on payment basis)including an amount of Rs.123.19 crorebeing encashment of leave salary related to priorperiods, as determined

by an actuarial valuation. The amount of unsecured surged to23232.39crores. Advances to public sector which had gone down lastyear increased again. Receivablesagain went down due to less moneykept for inter office adjustments. Intangible assets showed at 2271.24crore

68


69/121

2007-08The Bank implemented a Voluntary Retirement

Scheme (VRS) for eligible employees during FY 2006-07. Expenditurethere of aggregated to Rs. 2271.24 crore, of which Rs. 853.19 crorewascharged to the Profit and Loss Account of FY 2006-07. Of thebalance, an amount of Rs. 354.51crore has been charged to the Profitand Loss Account of FY 2007-08. The remaining amount ofRs. 1083.54crore is being treated as deferred revenue expenditure included underSchedule 11

"Other Assets", to be amortized equally over a furtherperiod of 3 years in accordance with RBI guidelines. All the statisticsincreased as per the continuing trends.

69


70/121

CAPITAL AND LIABILITIES: BANKING COS.State Bank Of India Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Rs. Crore Non-

Annualized Capital 526.3 526.3 526.3 526.3 526.3

Equity capital 526.3 526.3 526.3 526.3 526.3Reserve funds & surplus 9081.88 9876.01 11620.98 12935.24 14698.08

Share premium reserves 3510.57 3510.57 3510.57 3510.57 3 510.57Statutory reserves 4321.46 5108.77 6595.83 7789.55 9686.6

Other specific reserves 172.17 53.1 58.09 557.43 781.22Revenue reserves 1077.68 1203.57 1456.49 1077.69 719.69

Deposits 131091.32 169041.93 196821.07 242828.37 270560.14

Demand deposits 27813.65 30692.03 36182.05 40328.08 42312.79

Saving deposits 29207.85 34321.25 41506.53 47893.42 56396.36

Term deposits 74069.82 104028.65 119132.49 154606.87 171850.99

Demand deposits from

banks 4400.39 4520.9 5206.04 5 641.56 6913.88

Term deposits from banks 3470.18 5793.73 5500.66 6499.52 6746.43

Deposits outside India 7542.58 8787.09 9182.34 7932.42 8011.33Borrowings 9080.79 10063.13 11193.41 15133.62 12781.6RBI 0 0 670.29 0 0

Banks 0.8 0 0 0.01 1.21

Financial institutions 836.77 1076.39 1669.6 2537.4 2152.61

Go v ernment 0 0 0 0 0

Foreign institutions 7255.87 8002.67 6938.18 8163.63 7170.12

Debentures & bonds 987.35 984.07 1915.34 4432.58 3457.66

Others 0 0 0 0 0

70


71/121

Secured loans 912.13 1413.11 2596.11 3067.01 2634.77Other liabilities &

Provisions 29892.37 33001.66 41343.19 44220.66 49644.18

Bills payable 8754.94 10796.43 10562.53 13598.42 13875.17

Inter office adjustment 0 555.41 0 0 4722.18Interest accrued and due 7619.88 10100.69 13080.79 16966.05 19285.58

Earmarked funds 0 0 0 0 0Others (incl. provisions) 13517.55 11549.13 17699.87 13656.19 11761.25

TOTAL LIABILITIES 179672.66 222509.03 261504.95 315644.19 348541.15Contingent liabilities

Bills for collection 0 9265.1 2309.78 8080.32 10176.6

Bills discounted 8646.15 0 0 0 0

Endorsement obligation 10830.12 9785.72 12941.7 12894.58 12591.26

Dispu t ed taxes 0 0 0 0 0

Letter s of credit 0 0 0 0 0

Future lease re n t payable 0 0 0 0 0

71


72/121


73/121

CASH FLOW ANALYSIS Cash FlowState Bank Of India Mar 04 Mar 05 Mar 06 Mar 07 Mar 08

Rs.CroreSOURCES OF CASH

Opening Balance 27752.75 32645.82 53212.59 47136.44 60709.19Revenue Inflow 1985.92 3488.81 4639.5 5241.89 7082.06

Non operating income 50.11 62.44 64.84 77.05 102.67

Sale of fixed assets 0 0 0 0 0

Sale of investments 0 0 0 166.78 0

Capital proceeds 0 0 0 0 0

Loan proceeds 0 0 1134.88 2520.98 0Decrease in operating assets 23889.98 42835.64 27779.14 46007.31 27731.76

Deposits 20390.15 37950.61 27779.14 46007.31 27731.76Advances 0 0 0 0 0

Others 3499.83 4885.03 0 0 0

Total cash inflow 53678.76 79032.71 86830.95 101150.5 95625.68

APPLICATION OF CASHDisbursements 0 0 0 0 0

Purchase of fixed assets 498.4 999.09 649.6 517.61 246.88

Purchase of investments 8177.6 16320.63 20075.65 0 0.09

Repayment of loans 4.71 3.28 4.6 3.74 974.93

73


74/121


75/121


76/121

Chapter-4. PROFITABILITY RATIOS

2004 2005 2006 2007 2008

In Percentage(%)Break-Even Yield Ratio 17.15 15.63 15.56 15.83 14.10

Cost of Funds Ratio 7.40 7.00 7.41 7.32 7.52Net Profit Margin 7.15 5.34 7.96 4.58 10.50

Adjusted Return On Net Worth 15.87 11.91 16.88 9.89 19.35

Reported Return On Net Worth 15.97 11.91 1 6.88 9.88 19.37

Liberalization and deregulation haveheightened competition among banks, which will onlyintensify withfinancial liberalization under the WTO regime, and banks in India willhave tobenchmark themselves against world class banks. In this context,the way to boost profitabilityand stay ahead is by developing

sophisticated and customized products, increasing volumes,monitoringrisks and reaching out to customers in diversified and distant markets byleveragingtechnology. In line with this, the Bank is also making all outefforts to adopt state-of-the-arttechnology with far reachingconsequences for efficiency and profitability.

76


77/121


78/121

200 8 The Operating Profit of the Bank for 2007-08 stood at Rs.6,044.83 crore ascompared toRs.3,966.78 crore. in 2006-07, recording a growth of 52.39%. The Bankhas posted a NetProfit of Rs.2,431.62 crore for 2007- 08 as compared toRs.1,604.25 crore in 2006-07,registering a growth of 51.57%.

It will be recalled that the Net Profit of 2006-07 was depressed by the IMD issueexpensesand VRS related expenses but was favorably impacted by write back ofexcess provision forinvestment depreciation (net of tax). Similarly, in 2007-08, the Net Profit has been depressed by provision forinvestmentdepreciation (including amortization of premium on `Held to Maturity'category), as well as bypro-rata write off of deferred revenue expenditure relating toVRS. On a fully comparable basis, the adjusted Net Profit of 2007-08 (Rs.2,841.76 crore)hasrecorded a growth of 31.53% over the adjusted Net Profit of 2006-07(Rs.2,160.48 crore). The growth in profit in 2007-08 has been achieved through increases, both in Net

InterestIncome and Fee Income. Profit on sale of investments in 2007-08 wasRs.351.64 crore asagainst Rs.341.85 crore in 2006-07, and thus the increase underthis head contributed to thegrowth in profit of 2007-08 to the extent of only Rs. 9.79crore.

78


79/121

200 7 The Operating Profit of the Bank for 2006-07 before reckoning the one-time issueexpensesof India Millennium Deposits and the VRS related expenses charged offduring the year,stood at Rs.5263.16 cr. as compared to Rs.4202.50 cr. in 2005-2006,recording an increaseof 25.24%.

After accounting for the above expenditure, the Operating Profit for 2006-07 wasRs.3966.78cr. The Published Net Profit of the Bank for 2006-07 is Rs.1604.25 cr. as comparedtoRs.2051.55 cr in 2005-2006. The reduction was due to the IMD issue expensesand VRSrelated expenses charged off during 2006-07, as afore said, whichdepressed the profit byRs.640.98 cr. (net of tax). Further, write back of excess provision for investment depreciation (net of tax)contributedonlyto the extent of Rs.84.75 cr to the Net Profit of 2006-07, as againstRs.322.40 cr in 2005-06. The Net Profit, after adjusting for the above factors as applicable in both the years,would be Rs.2160.48 cr in 2006-07as against Rs.1729.15 cr in 2005-06, i.e., a

growth of 24.94%.

79


80/121

2006 The Bank posted a Net Profit of Rs.2,051.55 crore for the year 1999-2000 asagainstRs.1,027.80 crore in 1998-99. The write-back of excess provision forinvestmentdepreciation (net of tax) contributed to the extent of Rs.322.40 crore to thegrowth in the NetProfit of 1999-2000, as against Rs.8.51 crore in 1998-99.

It may also be recalled that the Net Profit of 1998-99 was affected to the extentofRs.207.47 crore (net of tax) by the charging off of the entire RIB issue expensesduring thatyear. Even after adjusting for both the above items of non-recurringnature, the Net Profit forthe year 1999-2000 from pure operations recorded a stronggrowth of 40.95% over 1998-99. The Operating Profit also recorded an increase of 21.77% from Rs.3,451.16 croretoRs.4,202.50 crore. Income tax provision at Rs.978.5 crore was higher than the provision of Rs.383crore madein 1998-99 on account of higher operating profit for the year, tax on theamount of excessinvestment depreciation written back and levy of 10% surcharge onincome tax.

80


81/121

DEPOSIT RATIOS 2004 2005 2006 2007 2008

In Percentage (%)Demand Deposit of Total Deposits 15.63 16.60 18.38 18.15 21.21

Saving Deposit of Total Deposits 20.84 19.72 21.08 20.30 22.28

Time Deposit of Total Deposits 63.51 63.66 60.52 61.54 56.50Deposits within India as % to Total Deposits 97.03 96.73 95.33 94.80 94.24

Deposits Outside India as % to Total Deposits 02.96 03.26 04.66 05.19 05.75

81


82/121

0

5

1 0

1 5

2 0

2 5

1 2 3 4 5

D e m a n d D ep

S a vin g D e p o s

82


83/121

2008: On the monetary front, liquidity conditions remained easy. During 2007-08, the year-on-year growth in money supply (M3) at 14.0% was inline with the growth projected by RBI, as against 16.8% in 2006-07, when growth

was boosted by India Millennium Deposit inflows. For the same reason, growth in aggregate deposits of all scheduled commercialbanks at14.3% was lower than 18.4% during 2006-07. Reflecting the deceleration in industrial production, growth in non-food credit waslower at12.8% during 2007-08 than the growth of 14.9% in the previous year. During the same period, the increase in total flow of funds from banks includingbanks increase of 15.7% during 2006-07

83


84/121

In this scenario, the overall stance of RBIs monetary policy during 2007-08 wasprovision ofadequate liquidity to support credit growth with a bias towards softinterest rate regime.Reduction in the Bank Rate and Cash Reserve Ratio wasannounced in October 2007 andmeasures to increase flexibility in deposit and

lending rates were also introduced.During theyear, banking sector reforms continued to emphasize steps to secure thesoundness andstability of banks including improving asset quality, strengtheningprudential norms,streamlining credit delivery and, in general, making the Indianbanking system comparable to international standards. The Bank has sponsored 30 RRBs spread over 85 districts in 16 States with anetwork of2,342 branches. The aggregate deposits and advances of the sponsoredRRBs stood at Rs.6,042.89 crore and Rs.2,559.32 crore respectively. During theyear ended 31st March2007, 24 of the Banks RRBs made profit, as against 26 in theyear ended 31st March 2006.The Bank has, up to March 2008, contributed Rs.134.97 crore for re-capitalization of

the 29 RRBs taken up for financial restructuring.

84


85/121

2007: Cost of deposits (excluding Resurgent India Bonds/ India Millennium Deposits)witnessed areduction from 7.86% in 2005-2006 to 7.62% in 2006-07. In a major initiative this year, the Bank collected USD 5,497 million from the non-residentsthrough the India Millenium Deposits (IMD) Programmer (a five year deposit

scheme),launched in October 2006. The IMD Programmer was aimed at raising long-term resources for augmenting the country's forex reserves and for meeting thefinancial needs ofinfrastructure projects. The domestic deposits of the Bank (excluding RIBs / IMDs) grew by Rs.19,300crore (13.1%)during the year. Reflecting the thrust on Personal segment, thesedeposits grew by Rs.15,901 crore (17.28%) and formed 57.95% of the total depositsof the Bank as against56.5% at the end of March 2006.2006: The Banks aggregate liabilities (excluding capital and reserves) rose by 17.6%fromRs.2,12,107 crore as on the 31st March 1999 to Rs.2,49,358 crore as on the31st March2006.

The increase in liabilities was mainly contributed by increase in deposits. Globaldeposits,including RIB deposits, stood at Rs.1,96,821 crore as on the 31st March2000, representingan increase of 16.4% over the level as on the 31st March 2005.Global deposits, excludingRIB deposits, grew by 18.4% from Rs.1,51,007 crore toRs.1,78,802 crore. In January 2006, a new product, Personal Loan against Mortgage of ImmovableProperty,an omnibus scheme enabling individuals to take loans against theirimmovable assets tomeet any financial requirement, was launched. It has becomepopular owing to its flexibilityin terms of eligibility, purpose and mode of financing(term loan or overdraft).

85


86/121

2005: The interest expenses on deposits (excluding RIBs) in India during 2004-05recorded anincrease of 17.5% as compared to the previous year, primarily due to theincrease inaverage level of deposits by 16.9% (excluding RIB deposits) during theyear.

While the maximum interest rate on domestic deposits came down from 12% atthebeginning of the fiscal to 10.5% at the end, the average cost of depositsregistered amarginal increase from 8.01% in 2003-04 to 8.05% in 2004-05. Introduction in May 2004 of term deposits for a minimum period of 15 days (earlier,theminimum period for which a term deposit could be taken was 30 days) as well asthedifferential (higher) rates for single deposits of Rs.15 lakh and above, contributedto theadditional cost under this head.

86


87/121


88/121

2006-07Net Profit of 2006-07 was depressed by the IMD issue expenses

and VRS related expenses butwas favourably impacted by write back of excessprovision for investment depreciation (net of tax).2007-08

The growth in profit in 2007-08 has been achieved throughincreases, both in Net InterestIncome and Fee Income. Profit on sale of investmentsin 2007-08 was Rs.351.64 crore asagainst Rs.341.85 crore in 2006-07, and thus theincrease under this head contributed to thegrowth in profit of 2007-08 to the extent ofonly Rs. 9.79 crore.Similarly, in 2007-08, the Net Profit has been depressed byprovision for investment depreciation(including amortization of premium on `Held toMaturity' category), as well as by pro-rata writeoff of deferred revenue expenditurerelating to VRS. Further, the appreciation in the Held for

Trading category of investments has not been recognized dueto a revision in RBI guidelines in2007-08. On a fully comparable basis, the adjustedNet Profit of 2007-08 (Rs.2,841.76 crore)has recorded a growth of 31.53% over theadjusted Net Profit of 2006-07 (Rs.2,160.48 crore).

The gross interest income from the global operations grew fromRs.26,138.60 crore in 2006-07to Rs.29,810.09 crore in 2007-08. The substantialgrowth was contributed by increase in the interest on resources deployed in treasuryoperations.

88


89/121

Operating Cash FlowsReasons for the recent decline:

Overall a decline in operating cash flows has resulted from theeconomic slag that existed sincethe IT boom subsided. September 11 Attacks addedwater the already extinguishing fire.Lowering of interest rate by RBI also acted as an

impediment the coming deposits andadvances.Also there was low industry growthdue to decline the operating expensesOperating Expenses, comprising both staff cost and other operating expenses,have registereda decline of 13.11%. After adjusting for VRS related expenses in boththe years and for IMDissue expenses in 2006-07, the Operating Expenses of 2007-08 have recorded a decline of2.09% compared to 2006-07. Other OperatingExpenses have also registered a decline of10.01%. The one-time item of IMD issueexpenses was charged off in 2006-07.There was a decline of 14.29% in the staff cost from Rs.6,011.65 crore in 2006-07toRs.5,152.78 crore in 2007-08. The staff cost of 2006-07 and 2007-08 included VRSexpensesamounting to Rs.853.19 crore and Rs.354.51 crore, respectively.

89


90/121

NON PERFORMING ASSETS ANALYSIS 200 6 Provision towards NPAs (including Rs.22.72 crore for the Banks foreign offices)was lowerat Rs.1,286.95 crore in 1999-2000 compared to Rs.1,422.67 crore in 2004-05, mainly due to lower accretion of NPAs.

An additional provision of Rs.32.59 crore (including Rs.3.19 crore at the foreignoffices) onthe standard assets in the global loan portfolio was made in terms of theRBI guidelines,taking the total provision on standard assets including such provisionheld at the foreign offices to Rs.229.32 crore. The seven Associate Banks recorded remarkable performance during 2005-2006,as compared to the previous year. The net profit of these banks together increasedby 43%.Deposits and advances of these banks grew by over 18% and investmentsby over 22%.Almost all the Associate Banks were able to reduce their levels ofNPAs. Credit Policy: The highlights of the policy initiatives pertaining to the Banks loansto the Commercial and Institutional, Small Scale Industries and Agriculture segments

in 2005-2006 are presented below:o The scheme for financing IT-related activities revised.o Guidelines formulated for one-time review of chronic NPAs and their settlementthrough the process of compromise.o A scheme for financing VRS in Central PSUs designed.

90


91/121

NPA Management: The Banks NPA management policy lays stress, inter alia, onearly identification of problem loans, effective response to early warning signals,adherence to the time norms for corrective action and recovery including one-timesettlements. Mechanism for follow-up of legal cases, specially those filed with Debt

Recovery Tribunals, has been streamlined. In addition to six specializedRehabilitation and Recovery Branches at Mumbai,New Delhi, Calcutta, Chennai,Ahmedabad and Hyderabad, two more such branches were opened at Chandigarhand Bangalore during the year. Compromise settlements were encouraged,especially through Settlement Advisory Committees and Lok Adalats.2007 Net NPAs to Net Advances stood at 6.03%

2008 Net NPAs to Net Advances stood at 5.63% Associate Banks: The seven Associate Banks reported satisfactory growth in

businessduring the year. Total deposits and advances of the Associate Banks grewby 16.2% and18.98%, respectively. These banks together reported net profit of Rs.1,018 crore in 2007-08, which washigherthan the net profit in the previous year by 64.73%. These banks were able to bring down their NPAs during the year. The gross NPAsas apercentage to gross advances came down from 12.12% in 2006-07 to 9.27% in2007-08andthe net NPAs as a percentage to net advances declined from 7.04% in2006-07to 4.93% in2007-08. All Associate Banks improved their Capital AdequacyRatios. The average Capital Adequacy Ratio for all Associate Banks improved from12.30% in 2006-07 to 12.97% in 2007-08.

The Bank's NPA management has assumed critical importance and is receivingfocused at tention at all levels. At the corporate level, a Task Force comprising topexecutives monitors all NPAs above Rs.5 crore. At Local Head Office level, the CircleManagement Committee monitors all NPAs above Rs.1 crore.

91


92/121

Growth Indicators: Banking Cos.

State Bank of India (In Percentage) Non-Annualized2004 2005 2006 2007 2008

Deposits 18.42 28.95 16.43 23.38 11.42Term deposits 21.37 40.45 14.52 29.78 11.15

Saving deposits 21.56 17.51 20.94 15.39 17.75Demand deposits 8.45 10.35 17.89 11.46 4.92

Deposits outside India 8.78 16.5 4.5113.61 0.99Borrowings 14.19 10.82 11.23 35.2 -15.54

From RBI -100 -100

Advances 19.29 10.94 19.11 15.79 6.35

Short term 14.09 4.36 19.51 15.3 2.29

Long term 33.01 25.83 18.38 16.72 13.95

Assisted companies

Priority sector 15.21 18.27 12.07 16.52 4.77

Public sector 20.11 11.39 -29.52 113.6 8.48Total income 6.24 19.73 14.96 16.01 13.53

Interest income 0.62 21.45 10.18 17.82 3.88Profit on exchange transactions -27.69 12.6 -42.2 -7.73 34.29

Commission & brokerage 12.91 16.73 7.94 2.53 6.99

92


93/121

Fund based income 5.48 20.1 15.8 17.51 14.16

Fee based income 12.91 16.73 7.94 2.53 6.99

Total cost 10.45 17.84 8.99 25.52 -1.98

Interest expended 9.19 24.55 17.08 16.26 16.74Personnel cost 7.07 16.57 7.97 15.2 -6.98

Provisions 49.36 14.89 -15.95 11.44 49.93Deposits 18.42 28.95 16.43 23.38 11.42

Borrowings 14.19 10.82 11.23 35.2 -15.54

Advances 19.29 10.94 19.11 15.79 6.35

Total income 6.24 19.73 14.96 16.01 13.53

Interest income 0.62 21.45 10.18 17.82 3.88

Total cost 10.45 17.84 8.99 25.52 -1.98

93


94/121

OVERALL CONCLUSIONWe can conclude that the analysis of financial

statement of the SBI Bank for the last five years has been quite

satisfactory.

From the calculation of the ratio, it can be

concluded that the banks financial position that is long term &

short term is satisfactory for last five years.

SBI bank should provide more ATM machines,

financial facilities to the remote areas of India, so that each

person can experience the great banking facilities.SBI should

develop more branches in other parts of India

94


95/121

BIBLIOGRAPHY

BOOKS

M.Y.KHAN, INDIAN FINANCIAL SYSYEM, 3rd edition Publication by TATA

McGraw hill.

Ashwathappa, PersonnelManagement, 3rdedition.

MAGAZINE

Banking finance, Editor R.G Agrawal and Associates, March 2008

NEWSPAPERS

Business standard

Economics times

WEBSITES

www.sbi.com

www.personalfn.com

www.equitymaster.com

www.indiainfoline.com

www.1000ventures.com/business_guide

search engine - www.Google.com

Search engine - www.ultavista.com

95


96/121

96


97/121

97


98/121


99/121

99


100/121

100


101/121

101


102/121

102


103/121

103


104/121

104


105/121

105


106/121

106


107/121

107


108/121

108


109/121

109


110/121

110


111/121

111


112/121

112


113/121

113


114/121

114


115/121

115


116/121

116


117/121

117


118/121

118


119/121

119


120/121


121/121

Documents

Pratik Page