Upload
msvicky2133603
View
112
Download
6
Embed Size (px)
DESCRIPTION
vijaya bank,project
Citation preview
Executive Summary
The study is done to find the marketing activities of Vijaya bank The classification of its
product profile and its competitiveness with comparison to other bank was analyzed for
The balance sheet of the bank was analyzed and compared with the past year balance
sheets and ratio analysis was done to find the profitability liquidity and leverage ratios
The project and the survey were guided throughout by experts in specific areas
The analyzer had prepared a questionnaire at the beginning to start a survey of the
marketing activity of the bank A thorough industrial analysis comprising with the
company profile is done The project was also on the basis of some of the valuable inputs
from the customers of the particular bank to find out the positioning of the banks service
The survey was done on some of the randomly selected branches
The major findings were that the bank is lagging behind in video advertisements and it
has a tough competition from the corporation and syndicate bank The bank is much more
customer service oriented and the workforce present is much impressive The product
profile of the bank is also impressive where it is covering all the sections and places in
the society The bank are also high on practicing corporate social responsibility It was
also seen that the bank is very much concentrating in the print-advertisement section and
also customer call service
It is also the second bank in India to start with the mobile banking system which has a
good customer response The NPA ratio was fair in all the branches as consulted in the
research and its increasing number of branches across India was showing the progress of
the bank
1
Research Design
2
It is the conceptual structure within which the research is conducted It constitutes the
blue print for the collection measurement and analysis of data The design includes an
outline of what the researcher will do from writing the hypothesis and its operational
implication to the final analysis of data It constitutes the steps taken beginning with the
collection of data classifying analyzing and interpretation processing and finally putting
in textual form This is one important chapter of project and can be considered as skeletal
of project
Objective of the study To understand the analytical framework of project
marketing and to analyze mechanism at bank
To familiarize with the interrelationship among various aspects of banking
in Vijaya bank
To understand the importance of promotional and market analysis
To study the evaluations and understand the working in bank
Scope of your study The scope of the study is limited to marketing activity of Vijaya
Bank (branches) It will give an in depth theoretical and practical knowledge about the
marketing aspects This study also covers ratio analysis of the balance sheet of the bank
and also analyses the marketing activity of the bank
Methodology and limitation Methodology of Data Collection
As regarded to methodology normally both quantitative and qualitative
approaches are adopted In order to collect the data this study brings a live analysis based
on the live data collected from secondary type of data The techniques of ratio analysis
have been made use for the analysis of the financial statement of the bank
Interacting with executives functional in charge of various areas and
departments discussing informally
Referring to the secondary that is various project reports prepared by the
bank and desk guides available with the bank
Visiting official website of the bank and other related websites
3
Questionnaire was prepared for survey
Referring to news papers and various business magazines
Limitation of the study
The study is limited to then marketing activity of Vijaya Bank The
investigator could not cover all the branches which are providing similar
services
The data recorded was presumed to be authentic
This study curtails comparison as it is within the purview of only one
organization
4
Industry Profile
5
Overview
Banking in India has a long and elaborate history of more than 200 years The beginning
of this industry can be traced back to 1786 when the countryrsquos first bank Bank of
Bengal was established But the industry changed rapidly and drastically after the
nationalization of banks in 1969 As a result the public sector banks began experiencing
numerous positive changes and enormous growth Then came the much-talked-about
liberalization and economic reforms that allowed banks to explore new business
opportunities and not just remain constrained to generating revenues from mere
borrowing and lending This provided the Indian banking scenario a remarkable facelift
that only continues to get better with time However even today despite the foray of
foreign banks in the country nationalized banks continue to be biggest lenders in the
country This is primarily due to the size of the banks and the penetration of the networks
Nature of the Industry
Banks safeguard money and valuables and provide loans credit and payment services
such as checking accounts money orders and cashierrsquos checks Banks also may offer
investment and insurance products which they were once prohibited from selling As a
variety of models for cooperation and integration among finance industries have
emerged some of the traditional distinctions between banks insurance companies and
securities firms have diminished In spite of these changes banks continue to maintain
and perform their primary rolemdashaccepting deposits and lending funds from these
deposits
There are several types of banks which differ in the number of services they provide and
the clientele they serve Although some of the differences between these types of banks
have lessened as they begin to expand the range of products and services they offer there
are still key distinguishing traits Commercial banks which dominate this industry offer
a full range of services for individuals businesses and governments These banks come
in a wide range of sizes from large global banks to regional and community banks
Global banks are involved in international lending and foreign currency trading in
addition to the more typical banking services Regional banks have numerous branches
6
and automated teller machine (ATM) locations throughout a multi-state area that provide
banking services to individuals Banks have become more oriented toward marketing and
sales As a result employees need to know about all types of products and services
offered by banks Community banks are based locally and offer more personal attention
which many individuals and small businesses prefer In recent years online banksmdash
which provide all services entirely over the Internetmdashhave entered the market with some
success However many traditional banks have also expanded to offer online banking
and some formerly Internet-only banks are opting to open branches
Savings banks and savings and loan associations sometimes called thrift institutions are
the second largest group of depository institutions They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of individuals
Credit unions are another kind of depository institution Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to
the same labor union or church Members pool their savings and when they need money
they may borrow from the credit union often at a lower interest rate than that demanded
by other financial institutions
Federal Reserve banks are Government agencies that perform many financial services for
the Government Their chief responsibilities are to regulate the banking industry and to
help implement our Nationrsquos monetary policy so our economy can run more efficiently
by controlling the Nationrsquos money supplymdashthe total quantity of money in the country
including cash and bank deposits For example during slower periods of economic
activity the Federal Reserve may purchase government securities from commercial
banks giving them more money to lend thus expanding the economy Federal Reserve
banks also perform a variety of services for other banks For example they may make
emergency loans to banks that are short of cash and clear checks that are drawn and paid
out by different banks
7
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Research Design
2
It is the conceptual structure within which the research is conducted It constitutes the
blue print for the collection measurement and analysis of data The design includes an
outline of what the researcher will do from writing the hypothesis and its operational
implication to the final analysis of data It constitutes the steps taken beginning with the
collection of data classifying analyzing and interpretation processing and finally putting
in textual form This is one important chapter of project and can be considered as skeletal
of project
Objective of the study To understand the analytical framework of project
marketing and to analyze mechanism at bank
To familiarize with the interrelationship among various aspects of banking
in Vijaya bank
To understand the importance of promotional and market analysis
To study the evaluations and understand the working in bank
Scope of your study The scope of the study is limited to marketing activity of Vijaya
Bank (branches) It will give an in depth theoretical and practical knowledge about the
marketing aspects This study also covers ratio analysis of the balance sheet of the bank
and also analyses the marketing activity of the bank
Methodology and limitation Methodology of Data Collection
As regarded to methodology normally both quantitative and qualitative
approaches are adopted In order to collect the data this study brings a live analysis based
on the live data collected from secondary type of data The techniques of ratio analysis
have been made use for the analysis of the financial statement of the bank
Interacting with executives functional in charge of various areas and
departments discussing informally
Referring to the secondary that is various project reports prepared by the
bank and desk guides available with the bank
Visiting official website of the bank and other related websites
3
Questionnaire was prepared for survey
Referring to news papers and various business magazines
Limitation of the study
The study is limited to then marketing activity of Vijaya Bank The
investigator could not cover all the branches which are providing similar
services
The data recorded was presumed to be authentic
This study curtails comparison as it is within the purview of only one
organization
4
Industry Profile
5
Overview
Banking in India has a long and elaborate history of more than 200 years The beginning
of this industry can be traced back to 1786 when the countryrsquos first bank Bank of
Bengal was established But the industry changed rapidly and drastically after the
nationalization of banks in 1969 As a result the public sector banks began experiencing
numerous positive changes and enormous growth Then came the much-talked-about
liberalization and economic reforms that allowed banks to explore new business
opportunities and not just remain constrained to generating revenues from mere
borrowing and lending This provided the Indian banking scenario a remarkable facelift
that only continues to get better with time However even today despite the foray of
foreign banks in the country nationalized banks continue to be biggest lenders in the
country This is primarily due to the size of the banks and the penetration of the networks
Nature of the Industry
Banks safeguard money and valuables and provide loans credit and payment services
such as checking accounts money orders and cashierrsquos checks Banks also may offer
investment and insurance products which they were once prohibited from selling As a
variety of models for cooperation and integration among finance industries have
emerged some of the traditional distinctions between banks insurance companies and
securities firms have diminished In spite of these changes banks continue to maintain
and perform their primary rolemdashaccepting deposits and lending funds from these
deposits
There are several types of banks which differ in the number of services they provide and
the clientele they serve Although some of the differences between these types of banks
have lessened as they begin to expand the range of products and services they offer there
are still key distinguishing traits Commercial banks which dominate this industry offer
a full range of services for individuals businesses and governments These banks come
in a wide range of sizes from large global banks to regional and community banks
Global banks are involved in international lending and foreign currency trading in
addition to the more typical banking services Regional banks have numerous branches
6
and automated teller machine (ATM) locations throughout a multi-state area that provide
banking services to individuals Banks have become more oriented toward marketing and
sales As a result employees need to know about all types of products and services
offered by banks Community banks are based locally and offer more personal attention
which many individuals and small businesses prefer In recent years online banksmdash
which provide all services entirely over the Internetmdashhave entered the market with some
success However many traditional banks have also expanded to offer online banking
and some formerly Internet-only banks are opting to open branches
Savings banks and savings and loan associations sometimes called thrift institutions are
the second largest group of depository institutions They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of individuals
Credit unions are another kind of depository institution Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to
the same labor union or church Members pool their savings and when they need money
they may borrow from the credit union often at a lower interest rate than that demanded
by other financial institutions
Federal Reserve banks are Government agencies that perform many financial services for
the Government Their chief responsibilities are to regulate the banking industry and to
help implement our Nationrsquos monetary policy so our economy can run more efficiently
by controlling the Nationrsquos money supplymdashthe total quantity of money in the country
including cash and bank deposits For example during slower periods of economic
activity the Federal Reserve may purchase government securities from commercial
banks giving them more money to lend thus expanding the economy Federal Reserve
banks also perform a variety of services for other banks For example they may make
emergency loans to banks that are short of cash and clear checks that are drawn and paid
out by different banks
7
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
It is the conceptual structure within which the research is conducted It constitutes the
blue print for the collection measurement and analysis of data The design includes an
outline of what the researcher will do from writing the hypothesis and its operational
implication to the final analysis of data It constitutes the steps taken beginning with the
collection of data classifying analyzing and interpretation processing and finally putting
in textual form This is one important chapter of project and can be considered as skeletal
of project
Objective of the study To understand the analytical framework of project
marketing and to analyze mechanism at bank
To familiarize with the interrelationship among various aspects of banking
in Vijaya bank
To understand the importance of promotional and market analysis
To study the evaluations and understand the working in bank
Scope of your study The scope of the study is limited to marketing activity of Vijaya
Bank (branches) It will give an in depth theoretical and practical knowledge about the
marketing aspects This study also covers ratio analysis of the balance sheet of the bank
and also analyses the marketing activity of the bank
Methodology and limitation Methodology of Data Collection
As regarded to methodology normally both quantitative and qualitative
approaches are adopted In order to collect the data this study brings a live analysis based
on the live data collected from secondary type of data The techniques of ratio analysis
have been made use for the analysis of the financial statement of the bank
Interacting with executives functional in charge of various areas and
departments discussing informally
Referring to the secondary that is various project reports prepared by the
bank and desk guides available with the bank
Visiting official website of the bank and other related websites
3
Questionnaire was prepared for survey
Referring to news papers and various business magazines
Limitation of the study
The study is limited to then marketing activity of Vijaya Bank The
investigator could not cover all the branches which are providing similar
services
The data recorded was presumed to be authentic
This study curtails comparison as it is within the purview of only one
organization
4
Industry Profile
5
Overview
Banking in India has a long and elaborate history of more than 200 years The beginning
of this industry can be traced back to 1786 when the countryrsquos first bank Bank of
Bengal was established But the industry changed rapidly and drastically after the
nationalization of banks in 1969 As a result the public sector banks began experiencing
numerous positive changes and enormous growth Then came the much-talked-about
liberalization and economic reforms that allowed banks to explore new business
opportunities and not just remain constrained to generating revenues from mere
borrowing and lending This provided the Indian banking scenario a remarkable facelift
that only continues to get better with time However even today despite the foray of
foreign banks in the country nationalized banks continue to be biggest lenders in the
country This is primarily due to the size of the banks and the penetration of the networks
Nature of the Industry
Banks safeguard money and valuables and provide loans credit and payment services
such as checking accounts money orders and cashierrsquos checks Banks also may offer
investment and insurance products which they were once prohibited from selling As a
variety of models for cooperation and integration among finance industries have
emerged some of the traditional distinctions between banks insurance companies and
securities firms have diminished In spite of these changes banks continue to maintain
and perform their primary rolemdashaccepting deposits and lending funds from these
deposits
There are several types of banks which differ in the number of services they provide and
the clientele they serve Although some of the differences between these types of banks
have lessened as they begin to expand the range of products and services they offer there
are still key distinguishing traits Commercial banks which dominate this industry offer
a full range of services for individuals businesses and governments These banks come
in a wide range of sizes from large global banks to regional and community banks
Global banks are involved in international lending and foreign currency trading in
addition to the more typical banking services Regional banks have numerous branches
6
and automated teller machine (ATM) locations throughout a multi-state area that provide
banking services to individuals Banks have become more oriented toward marketing and
sales As a result employees need to know about all types of products and services
offered by banks Community banks are based locally and offer more personal attention
which many individuals and small businesses prefer In recent years online banksmdash
which provide all services entirely over the Internetmdashhave entered the market with some
success However many traditional banks have also expanded to offer online banking
and some formerly Internet-only banks are opting to open branches
Savings banks and savings and loan associations sometimes called thrift institutions are
the second largest group of depository institutions They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of individuals
Credit unions are another kind of depository institution Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to
the same labor union or church Members pool their savings and when they need money
they may borrow from the credit union often at a lower interest rate than that demanded
by other financial institutions
Federal Reserve banks are Government agencies that perform many financial services for
the Government Their chief responsibilities are to regulate the banking industry and to
help implement our Nationrsquos monetary policy so our economy can run more efficiently
by controlling the Nationrsquos money supplymdashthe total quantity of money in the country
including cash and bank deposits For example during slower periods of economic
activity the Federal Reserve may purchase government securities from commercial
banks giving them more money to lend thus expanding the economy Federal Reserve
banks also perform a variety of services for other banks For example they may make
emergency loans to banks that are short of cash and clear checks that are drawn and paid
out by different banks
7
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Questionnaire was prepared for survey
Referring to news papers and various business magazines
Limitation of the study
The study is limited to then marketing activity of Vijaya Bank The
investigator could not cover all the branches which are providing similar
services
The data recorded was presumed to be authentic
This study curtails comparison as it is within the purview of only one
organization
4
Industry Profile
5
Overview
Banking in India has a long and elaborate history of more than 200 years The beginning
of this industry can be traced back to 1786 when the countryrsquos first bank Bank of
Bengal was established But the industry changed rapidly and drastically after the
nationalization of banks in 1969 As a result the public sector banks began experiencing
numerous positive changes and enormous growth Then came the much-talked-about
liberalization and economic reforms that allowed banks to explore new business
opportunities and not just remain constrained to generating revenues from mere
borrowing and lending This provided the Indian banking scenario a remarkable facelift
that only continues to get better with time However even today despite the foray of
foreign banks in the country nationalized banks continue to be biggest lenders in the
country This is primarily due to the size of the banks and the penetration of the networks
Nature of the Industry
Banks safeguard money and valuables and provide loans credit and payment services
such as checking accounts money orders and cashierrsquos checks Banks also may offer
investment and insurance products which they were once prohibited from selling As a
variety of models for cooperation and integration among finance industries have
emerged some of the traditional distinctions between banks insurance companies and
securities firms have diminished In spite of these changes banks continue to maintain
and perform their primary rolemdashaccepting deposits and lending funds from these
deposits
There are several types of banks which differ in the number of services they provide and
the clientele they serve Although some of the differences between these types of banks
have lessened as they begin to expand the range of products and services they offer there
are still key distinguishing traits Commercial banks which dominate this industry offer
a full range of services for individuals businesses and governments These banks come
in a wide range of sizes from large global banks to regional and community banks
Global banks are involved in international lending and foreign currency trading in
addition to the more typical banking services Regional banks have numerous branches
6
and automated teller machine (ATM) locations throughout a multi-state area that provide
banking services to individuals Banks have become more oriented toward marketing and
sales As a result employees need to know about all types of products and services
offered by banks Community banks are based locally and offer more personal attention
which many individuals and small businesses prefer In recent years online banksmdash
which provide all services entirely over the Internetmdashhave entered the market with some
success However many traditional banks have also expanded to offer online banking
and some formerly Internet-only banks are opting to open branches
Savings banks and savings and loan associations sometimes called thrift institutions are
the second largest group of depository institutions They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of individuals
Credit unions are another kind of depository institution Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to
the same labor union or church Members pool their savings and when they need money
they may borrow from the credit union often at a lower interest rate than that demanded
by other financial institutions
Federal Reserve banks are Government agencies that perform many financial services for
the Government Their chief responsibilities are to regulate the banking industry and to
help implement our Nationrsquos monetary policy so our economy can run more efficiently
by controlling the Nationrsquos money supplymdashthe total quantity of money in the country
including cash and bank deposits For example during slower periods of economic
activity the Federal Reserve may purchase government securities from commercial
banks giving them more money to lend thus expanding the economy Federal Reserve
banks also perform a variety of services for other banks For example they may make
emergency loans to banks that are short of cash and clear checks that are drawn and paid
out by different banks
7
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Industry Profile
5
Overview
Banking in India has a long and elaborate history of more than 200 years The beginning
of this industry can be traced back to 1786 when the countryrsquos first bank Bank of
Bengal was established But the industry changed rapidly and drastically after the
nationalization of banks in 1969 As a result the public sector banks began experiencing
numerous positive changes and enormous growth Then came the much-talked-about
liberalization and economic reforms that allowed banks to explore new business
opportunities and not just remain constrained to generating revenues from mere
borrowing and lending This provided the Indian banking scenario a remarkable facelift
that only continues to get better with time However even today despite the foray of
foreign banks in the country nationalized banks continue to be biggest lenders in the
country This is primarily due to the size of the banks and the penetration of the networks
Nature of the Industry
Banks safeguard money and valuables and provide loans credit and payment services
such as checking accounts money orders and cashierrsquos checks Banks also may offer
investment and insurance products which they were once prohibited from selling As a
variety of models for cooperation and integration among finance industries have
emerged some of the traditional distinctions between banks insurance companies and
securities firms have diminished In spite of these changes banks continue to maintain
and perform their primary rolemdashaccepting deposits and lending funds from these
deposits
There are several types of banks which differ in the number of services they provide and
the clientele they serve Although some of the differences between these types of banks
have lessened as they begin to expand the range of products and services they offer there
are still key distinguishing traits Commercial banks which dominate this industry offer
a full range of services for individuals businesses and governments These banks come
in a wide range of sizes from large global banks to regional and community banks
Global banks are involved in international lending and foreign currency trading in
addition to the more typical banking services Regional banks have numerous branches
6
and automated teller machine (ATM) locations throughout a multi-state area that provide
banking services to individuals Banks have become more oriented toward marketing and
sales As a result employees need to know about all types of products and services
offered by banks Community banks are based locally and offer more personal attention
which many individuals and small businesses prefer In recent years online banksmdash
which provide all services entirely over the Internetmdashhave entered the market with some
success However many traditional banks have also expanded to offer online banking
and some formerly Internet-only banks are opting to open branches
Savings banks and savings and loan associations sometimes called thrift institutions are
the second largest group of depository institutions They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of individuals
Credit unions are another kind of depository institution Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to
the same labor union or church Members pool their savings and when they need money
they may borrow from the credit union often at a lower interest rate than that demanded
by other financial institutions
Federal Reserve banks are Government agencies that perform many financial services for
the Government Their chief responsibilities are to regulate the banking industry and to
help implement our Nationrsquos monetary policy so our economy can run more efficiently
by controlling the Nationrsquos money supplymdashthe total quantity of money in the country
including cash and bank deposits For example during slower periods of economic
activity the Federal Reserve may purchase government securities from commercial
banks giving them more money to lend thus expanding the economy Federal Reserve
banks also perform a variety of services for other banks For example they may make
emergency loans to banks that are short of cash and clear checks that are drawn and paid
out by different banks
7
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Overview
Banking in India has a long and elaborate history of more than 200 years The beginning
of this industry can be traced back to 1786 when the countryrsquos first bank Bank of
Bengal was established But the industry changed rapidly and drastically after the
nationalization of banks in 1969 As a result the public sector banks began experiencing
numerous positive changes and enormous growth Then came the much-talked-about
liberalization and economic reforms that allowed banks to explore new business
opportunities and not just remain constrained to generating revenues from mere
borrowing and lending This provided the Indian banking scenario a remarkable facelift
that only continues to get better with time However even today despite the foray of
foreign banks in the country nationalized banks continue to be biggest lenders in the
country This is primarily due to the size of the banks and the penetration of the networks
Nature of the Industry
Banks safeguard money and valuables and provide loans credit and payment services
such as checking accounts money orders and cashierrsquos checks Banks also may offer
investment and insurance products which they were once prohibited from selling As a
variety of models for cooperation and integration among finance industries have
emerged some of the traditional distinctions between banks insurance companies and
securities firms have diminished In spite of these changes banks continue to maintain
and perform their primary rolemdashaccepting deposits and lending funds from these
deposits
There are several types of banks which differ in the number of services they provide and
the clientele they serve Although some of the differences between these types of banks
have lessened as they begin to expand the range of products and services they offer there
are still key distinguishing traits Commercial banks which dominate this industry offer
a full range of services for individuals businesses and governments These banks come
in a wide range of sizes from large global banks to regional and community banks
Global banks are involved in international lending and foreign currency trading in
addition to the more typical banking services Regional banks have numerous branches
6
and automated teller machine (ATM) locations throughout a multi-state area that provide
banking services to individuals Banks have become more oriented toward marketing and
sales As a result employees need to know about all types of products and services
offered by banks Community banks are based locally and offer more personal attention
which many individuals and small businesses prefer In recent years online banksmdash
which provide all services entirely over the Internetmdashhave entered the market with some
success However many traditional banks have also expanded to offer online banking
and some formerly Internet-only banks are opting to open branches
Savings banks and savings and loan associations sometimes called thrift institutions are
the second largest group of depository institutions They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of individuals
Credit unions are another kind of depository institution Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to
the same labor union or church Members pool their savings and when they need money
they may borrow from the credit union often at a lower interest rate than that demanded
by other financial institutions
Federal Reserve banks are Government agencies that perform many financial services for
the Government Their chief responsibilities are to regulate the banking industry and to
help implement our Nationrsquos monetary policy so our economy can run more efficiently
by controlling the Nationrsquos money supplymdashthe total quantity of money in the country
including cash and bank deposits For example during slower periods of economic
activity the Federal Reserve may purchase government securities from commercial
banks giving them more money to lend thus expanding the economy Federal Reserve
banks also perform a variety of services for other banks For example they may make
emergency loans to banks that are short of cash and clear checks that are drawn and paid
out by different banks
7
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
and automated teller machine (ATM) locations throughout a multi-state area that provide
banking services to individuals Banks have become more oriented toward marketing and
sales As a result employees need to know about all types of products and services
offered by banks Community banks are based locally and offer more personal attention
which many individuals and small businesses prefer In recent years online banksmdash
which provide all services entirely over the Internetmdashhave entered the market with some
success However many traditional banks have also expanded to offer online banking
and some formerly Internet-only banks are opting to open branches
Savings banks and savings and loan associations sometimes called thrift institutions are
the second largest group of depository institutions They were first established as
community-based institutions to finance mortgages for people to buy homes and still
cater mostly to the savings and lending needs of individuals
Credit unions are another kind of depository institution Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to
the same labor union or church Members pool their savings and when they need money
they may borrow from the credit union often at a lower interest rate than that demanded
by other financial institutions
Federal Reserve banks are Government agencies that perform many financial services for
the Government Their chief responsibilities are to regulate the banking industry and to
help implement our Nationrsquos monetary policy so our economy can run more efficiently
by controlling the Nationrsquos money supplymdashthe total quantity of money in the country
including cash and bank deposits For example during slower periods of economic
activity the Federal Reserve may purchase government securities from commercial
banks giving them more money to lend thus expanding the economy Federal Reserve
banks also perform a variety of services for other banks For example they may make
emergency loans to banks that are short of cash and clear checks that are drawn and paid
out by different banks
7
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Interest on loans is the principal source of revenue for most banks making their various
lending departments critical to their success The commercial lending department loans
money to companies to start or expand a business or to purchase inventory and capital
equipment The consumer lending department handles student loans credit cards and
loans for home improvements debt consolidation and automobile purchases Finally the
mortgage lending department loans money to individuals and businesses to purchase real
estate
The money to lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that
consumers and businesses set up with the bank These deposits often earn interest for the
owner and accounts that offer checking provide an easy method for making payments
safely without using cash Deposits in many banks are insured by the Federal Deposit
Insurance Corporation which ensures that depositors will get their money back up to a
stated limit if a bank should fail
Technology is having a major impact on the banking industry For example many routine
bank services that once required a teller such as making a withdrawal or deposit are now
available through ATMs that allow people to access their accounts 24 hours a day Also
direct deposit allows companies and governments to electronically transfer payments into
various accounts Further debit cards which may also used as ATM cards
instantaneously deduct money from an account when the card is swiped across a machine
at a storersquos cash register Electronic banking by phone or computer allows customers to
pay bills and transfer money from one account to another Through these channels bank
customers can also access information such as account balances and statement history
Some banks have begun offering online account aggregation which makes available in
one place detailed and up-to date information on a customerrsquos accounts held at various
institutions
Advancements in technology have also led to improvements in the ways in which banks
process information Use of check imaging which allows banks to store photographed
checks on the computer is one such example that has been implemented by some banks
8
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Other types of technology have greatly impacted the lending side of banking For
example the availability and growing use of credit scoring software allows loans to be
approved in minutes rather than days making lending departments more efficient
Other fundamental changes are occurring in the industry as banks diversify their services
to become more competitive Many banks now offer their customers financial planning
and asset management services as well as brokerage and insurance services often
through a subsidiary or third party Others are beginning to provide investment banking
services that help companies and governments raise money through the issuance of stocks
and bonds also usually through a subsidiary As banks respond to deregulation and as
competition in this sector grows the nature of the banking industry will continue to
undergo significant change
Structure
The Indian banking system can be classified into nationalized banks private banks and
specialized banking institutions The industry is highly fragmented with 30 banking units
contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India
is the foremost monitoring body in the Indian Financial sector It is a centralized body
that monitors discrepancies and shortcomings in the system
Industry estimates indicate that out of 274 commercial banks operating in the country
223 banks are in the public sector and 51 are in the private sector These private sector
banks include 24 foreign banks that have begun their operations here The specialized
banking institutions that include cooperatives rural banks etc form a part of the
nationalized banks category
9
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Origin of the word
The name bank derives from the Italian word banco deskbench used during the
Renaissance by Florentine bankers who used to make their transactions above a desk
covered by a green tablecloth However traces of banking activity can found even in
ancient times In fact the word traces its origins back to the Ancient Roman Empire
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu from which the words banco and bank are
derived As a moneychanger the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Rome- that of the
Imperial Mint
Scope
The Banking sector is considered the most lucrative option in todayrsquos job market In the
industry a position in Treasury or Forex is considered right on top and this is followed by
careers in Private Banking Investment Banking and Retail Banking One could work in a
variety of areas in banking industry including Recurring Deposit account banking
officer probationary officer loan officer assessor personal loan officer home loan
officer home loan agent loan manager mortgage loan underwriter loan processing
officer accountant product marketing and sales executive and customer service
executive among others
In the Financial Services some of the important jobs include that of a stockbroker who is
essentially a person who buys and sells securities on behalf of individuals and institutions
for some commission While some brokers like to practice with individual clients others
work for institutions Brokers who work for institutional investors are often called
securities traders Many prefer to work as dealers advisors and securities analysts
Security analysts are those who advise companies on floatationrsquos of shares as they are
expected to have sound knowledge of capital markets
Investment analysts are the backbone of the financial services sector They study the
financial reports of companies assess various statistical information profitability
projections compare financial results survey the industry as a whole and on the basis of
10
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
the available information and finally conclude to a decision Equity Analysts do jobs
similar to investment analysts and research the equity markets and make predictions
Indian Banking amp Insurance Industry
Banking business has a history of over 200 years From the times of the Bank of
Bengal(1806) the sector has been witnessing qualitative and quantitative changes
Main players during the pre-independence period were Credit Lyonnais Allahabad
Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve
Bank of India was proclaimed the Central Bank of India and was vested with
controlling powers over the commercial bank
With economic liberalization measures many private and foreign banking companies
were allowed to operate in the country Favorable economic climate and a variety of
other factors such as demand for wide range of financial products from various sections
of the society led to mutually beneficial growth to the banking sector and economic
growth process This was coincided by technology development in the banking
operations Today most of the Indian cities have networked banking facility as well as
Internet banking facility A customer is empowered to operate his account from any part
of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners
of the race
11
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
12
Scope of Banking amp Insurance Sectors in India
The financial sector in India has become stronger in terms of capital and the number
of customers
Exposure to worldwide competition and deregulation in Indian financial sector has
led to the emergence of better quality products and services Reforms have changed
the face of Indian banking and finance The banking sector has improved manifolds in
terms of capital adequacy asset classification profitability income recognition
provisioning exposure limits investment fluctuation reserve risk management etc
Diversifying into investment banking insurance credit cards depository services
mortgage financing securitization has increased revenues As large number of players
in various fields enters the market competition would be intensified by mutual funds
Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and
foreign players All this would lead to increased sophistication and technology in the
sector Corporate governance would come into the picture and other financial
institutions would have to reach global standards Also the limit for FDI in private
banks is increased to 74 and the limit for FII is 49 There are many challenges
ahead for the banking sector such as technology consumer satisfaction corporate
governance risk management etc and they are redefining their priorities which are
now focused on cost reduction product differentiation and customer centric services
Some of the major players in this sector are HDFC ICICI HSBC State Bank of India
Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc
The insurance sector has opened up for private insurance companies with the enactment
of IRDA Act 1999 A large number of companies are competing under both life and
general Insurance The FDI capequity in this sector is 26 and the proposals have to
be cleared by Insurance Regulatory and Development Authority (IRDA) established to
protect the interest of holder of Insurance policy and act as a regulator and facilitator in
the industry Some of the major players in this sector are LIC Max New York Life
Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance
Birla Sun Life Insurance etc Various types of policies and instruments are coming up
in the market to attract more customers Most of the population of India is not insured
hence there is a lot of scope in this sector and a number of companies are planning to
enter the sector Every futuristic individual would want himself to get insured
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Major Players in the Industry
Allahabad Bank
Andhra Bank
Axis Bank Ltd
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Industrial Development Bank of India Ltd
ING Vysya Bank Ltd
Jammu amp Kashmir Bank Ltd
Karnataka Bank Ltd
13
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Karur Vysya Bank Ltd
Kotak Mahindra Group
Lakshmi Vilas Bank Ltd
Lord Krishna Bank Ltd
North Kanara GSB Co-operative Bank
Oriental Bank of Commerce
PricewaterhouseCoopers Pvt Ltd
Punjab amp Sind Bank
Punjab National Bank
South Indian Bank Ltd
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore Ltd
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
14
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Vijaya Bank
Wallfort Financial Services Ltd
Wells Fargo
YES Bank Ltd
Performance of Industry
1048766 84 percent of the survey respondents described the performance of the banking
Industry as ldquoVery Goodrdquo in the fiscal 2004-05
1048766 newly granted autonomy would certainly make the PSBs more competitive and
Profitable said 88 per cent respondents though some more changes considered
Desirable (refer survey)
1048766 48 percent of overall respondents and 67 percent of private bank respondents
Expressed the need to relax the prescribed limit of single ownership and cross holding
cap in the Ownership and Governance guidelines for Private sector Banks
1048766 Although 72 percent of public amp private sector bank respondents expressed their
satisfaction with the recently devised road map for the foreign banks majority of
foreign Bank respondents (75 percent) expressed complete dissatisfaction with this
Roadmap
1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to
expand through Merger amp Acquisitions should have been less and equal number
voiced that the guidelines are not in line with international norms
1048766 Consolidation in the banking industry followed by Technological up gradation was
considered as key factors currently required to enhance the international
Competitiveness of the Indian banks
1048766 Free trade agreements (FTA) considered a positive step in the area of banking by
almost all respondents The available market size and the level of access provided to
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2
Indian banks in foreign countries should be the key factors in consideration while
15
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
entering into such agreements as highlighted by 76 percent of banks
1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority
expects increase by 05 percent
1048766 88 percent of Public and private sector banks considered HRD related issues as one of
the biggest challenge in the process of consolidation
1048766 83 percent respondent banks claim to have more than 85 level of technological
advancements in their banks with remaining banks stating it to be around 65-85
1048766 All our respondents emphasized that customer retention is significantly important for
the profitability of the banks
1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and
stricter security policies to safeguard and ensure the security of customer information
Some of the legal changes suggested are detailed in the survey
1048766 53 percent of respondent banks considered 6 months transition period to shift from
MIFOR rupee benchmarks for interest rate derivatives to be inadequate
1048766 Majority of banks felt that their Risk management framework for implementation of
BASEL II was well in place
1048766 53 percent of our survey respondents intend to increase their retail portfolio by more
than 25 in the year 2005-06
1048766 Rising Indebtedness followed by lack of Technological advancements were identified
as biggest challenges that could affect the future growth of Retail banking
1048766 80 percent of survey respondents did not agree with the notion that housing loan is
creating a bubble
1048766 Substantial progress made by banks in cleaning up the NPAs from their balance
sheets was largely attributed to SARFAESI Act and increased provisioning on
Doubtful debts by majority of survey respondents
1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was
identified as one of major problem in Indian Model of NPA management
1048766 Separate NPA norms for the farm and the SME sector were recommended by large
number of respondents
Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3
1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable
16
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
for about 3-5 years
1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds
of the credit flow has been on account of retail housing and other priority sector
loans Banks credit flow exposure to large Enterprises continues to remain buoyant
with recent indications that credit to agriculture and Micro credit has also picked up
1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced
lending
Company Profile
17
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
History
Vijaya Bank a medium sized bank with presence across India was founded on 23rd
October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore
Karnataka in India The objective of the founders was essentially to promote banking
habits thrift and entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank
steadily grew into a large All India bank with nine smaller banks merging with it during
the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram
Shetty who was then the Chief Executive of the bank The bank was nationalised on 15
April 1980
Growth and Nationalisation
Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri
MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited
with these mergers The bank was nationalised on 15 April 1980
Branches
The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as
at 03012009 that span all 28 states and 4 union territories in the country
Thrust on Information Technology
The Bank has chosen Finacle from Infosys as centralized banking solution In line with
the prevailing trends the bank has been giving greater thrust towards technological
18
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
upgradation of its operations The bank has network of 1101 branches 43 Extension
Counters and 364 ATMs
All 1101 branches 37 extension counters 12 service branches are functioning on CBS
platform and at 703 centers covering 100 of Banks business
Realising your constantly evolving and diverse needs the bank has diversified too
Entering several new areas such as credit card merchant banking hire purchase and
leasing and electronic remittance services
1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT
Vijaya Bank is one among the few banks in the country to take up principal membership
of VISA International and MasterCard International
The driving force behind Vijaya Banks every initiative has been its 12107 strong
dedicated workforce
Area of corporation
After obtaining the certificate of incorporation and certificate of commencement and
getting the draft of the memorandum of association and articles of association approved
Vijaya bank Ltd started functioning as per the provision of Indian companies act in a
small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore
Background
Type Public BSE 532401
Founded 1931 at Mangalore India
Headquarters Bangalore India
Key people Albert Tauro Chairman amp Managing Director
Industry Financial Commercial banks
19
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Employees 12107
Website httpwwwvijayabankcom
Organisational set up of bank as per 1931
20
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Organisational set up of the bank as per 2009
21
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Products amp Services
22
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Deposit Schemes
1 Savings Bank
2 V Platinum Savings Bank Account
3 Vijaya Saral Savings
4 Current Account
5 VStar Savings Scheme
6 Term Deposit
Loans amp Advances
1 Retail Lending Schemes
2 Loans Against Securities
3 Non Fund Based Facilities
4 Advances to Agriculture SSIs and Others
5 Government Sponsored Schemes
6 Special Schemes for Women
NRI Services
1 Deposits
2 Loans Remittances
3 FOREX Branches
4 FCNR(B) Branches
5 Helpline for NRIs
Remittance Collection and Facilities
1 FOREX Remittances
23
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
2 Inland Remittances
3 Electronic Remittance Services
4 Inward Outward Collection Instruments
Credit Cards
1 Domestic Cards
2 Global cards
3 Debit cards
Forex
1 FOREX market Information
2 Card Rates
3 Treasury
Other Services
1 Merchant Banking
2 Vijaya Rakshak
3 V-Arogya Bima Policy
4 Credit Cards
5 Mutual Funds
6 Leasing
7 Hiring
8 Purchases
Competitors of Vijaya bank
24
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Canara Bank
Corporation Bank
HDFC Bank Ltd
ICICI Bank Ltd
Indian Bank
IndusInd Bank Ltd
Karnataka Bank
ING Vysya Bank Ltd
Syndicate Bank
State Bank of India
Janatha corporative Bank
Financial analysis of Vijaya bank
25
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Ratio Analysis
As on
31-
Mar-09
31-Mar-
08 31-Mar-07
Profitability
Interest
IncomeTotal
Income () 8823 8797 9113
Non Interest
IncomeTotal
Income () 1177 1204 887
Reported Net
ProfitTotal Income
() 442 817 107
Net Interest
IncomeTotal
Income () 1895 1878 346
Net Interest Margin
() 317 262 442
Return Related
ROE ()
(PATshare
cap+res)100 834 1469 1747
ROA ()
042 064 078
Leverage amp Capital Measures
Customer
loansdeposits () 6504 6608 6442
Investments
Deposits () 3188 3465 3196
26
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Total
LiabilitiesNetworth 2691 2667 2288
Growth ()
Growth in Interest
Income 347 3774 2212
Growth in Interest
Expenses 3448 7465 3078
Growth in Employee
cost 4755 326 351
Growth in PAT -- 903 16115
Growth in Deposits 1373 2752 3571
Growth in
Borrowings -- 86844 --
Per Share
Book Value Per
Share (Rs) 481 432 427
Earnings Per Share
(Rs)(PATno of
shares) 605 833 764
Dividend Per Share
(Rs)(Dividends
paid no of equity
shares) -- -- --
Result of Financial analysis
27
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
PROFITABLITY- Though being a season of recession this year the company has ended
up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be
considered fair till than but if see the balance sheet there has been a considerable increase
in the fixed assets to 1001079 from 186177 which means that there should be increase
in the number of buildings and branches that should lead to more number of branches and
more number of accounts but besides this there are no signs of improvements in profit so
the profitability of Vijaya bank could be rated FAIR
RETURNS-Share capital and reserves have increased in this year considerably this
shows a good sign of market value and after considering environmental conditions we
can also see that the profit earned after tax this year was lesser than of the previous year
so the returns can be rated as GOOD
LEAVERAGE- The leverage ratio can be considered doing well as much down fall is
not observed and so it can be considered or rated VERY GOOD
The bankrsquos market value is seem to be increasing and though the returns are less but the
expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY
GOOD
28
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Data analysis and findingsData analysis and findings
29
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Analysis of the survey The survey was done with an objective to find the marketing
and promotional activity of some of the randomly selected branches in DK district of
Karnataka
Vijaya bank like any other national bank has various services like Vijaya tax saving
scheme v-Rakshak v-gen etc which is focusing on each and every age group and social
class of the society Vijaya bank as was started by a group of agriculturists as a bank of
agriculturists It is still focusing on the priority sector
The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya
bank who brought to my (surveyors) notice that bank is following a social concerned
practice in the rural banking area
The questionnaire prepared for the survey mainly was with a primary objective of finding
the important banking activity and business practices in the bank as a whole Efforts were
made to understand the relationship between the main bank and its branches also the bank
and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some
of the customers personally and took their valuable inputs
The questionnaire prepared was only given to the bank managers and the surveyor had
even referred the banks platinum jubilee book which was published in 2006 to understand
the banks history and progress till date
The survey also was done on the basis of comparison of service between Vijaya bank and
State bank of India both Kinnigoli branch to find out the customer attending service
which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the
bank and saw two extremely different kind of service
30
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Findings from the survey The questionnaire prepared for the survey mainly was with a
primary objective of finding the important banking activity and business practices in the
bank as a whole Efforts were made to understand the relationship between the main bank
and its branches also the bank and customers relationship where MrShetty
DurgaprasadD (surveyor) had visited some of the customers personally and took their
valuable inputs
It was very surprising to find that the bank does not believes in video advertisements and
opts moreover for pamphlets and billboards though the pamphlets are designed in a very
catchy manner in such a competitive era it is necessary to have a video advertisements
The promotional activity is versatile where the bank is much focusing on service design
and corporate social responsibility The bank also focuses on the customer relationship
where each and every customer is been personally attended and also sometimes
recognised Throughout the analysis it was very clear that the bank was much focusing on
retaining the customers and making more customers by its warm and caring customer
attending service
The design of pamphlets was very much clear concise and complete where the efforts to
give maximum knowledge regarding a particular service where made Even it was found
that many of the people were migrating from other banks to Vijaya bank especially for
the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit
schemeWhen asked with the managers they said that serving the people is main
objective The bank has also taken step to educate and train the school children and the
rural people regarding banking through its extension
The managers put forth their views that proper and complete training should be given to
the senior work force regarding computerized bankingIt was even clear that the
employee satisfaction and Job satisfaction was present and the bank was making its
employee as a potetional advertisers of their organisation by their total service motive
The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo
31
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Surveyors input The major findings were that the bank is lagging behind in video
advertisements and it has a tough competition from the corporation and syndicate bank
The bank is much more customer service oriented and the workforce present is much
impressive The product profile of the bank is also impressive where it is covering all the
sections and places in the society It is also the second bank in India to start with the
mobile banking system which has a good customer response The NPA ratio was fair in
all the branches as consulted in the research and its increasing number of branches across
India was showing the progress of the bank
As a management student and also the customer of the bank the main suggestion would
be that the bank should go for an effective video advertisement as people would come to
know more about the bank The bank should also concentrate in some of institutional tie
ups to gear the business
The workforce present is very much effective but optimum utilization was lacking cause
training in the use of computers was very less among the senior level officers
The promotional activity has to be more stressed upon cause of the tough competition
from other banks The major problem in this particular bank is that some of the very
impressive and potetional offers and schemes like the VCC V-gen and tax saving
scheme is being unnoticed in the market even the banks prime customer lack knowledge
about such services present in the bank so the bank should much concentrate in making
the public realize the efficiency and potetional of such products through various
promotional activity
32
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional
activities at all in its activity towards making business as promotional activity is
necessary in any business so that the society and customer would know about the benefits
of the service and that are influenced to buy
Financial institutions should also pay attention to political environment and labour
conditions of the area where if any potetional project is to be located Strikes Lockouts
Industrial Peace and Communal Harmony in the area play a decisive role in examining
success or failure of the project Market and environmental analysis is much more of
importance before launching any of the service so Vijaya bank should also foresee the
exact market segment for each of its product cause many of the schemes are only suitable
to a particular location and class of people
Also we should consider the slowdown in the economy due to the recession as banks
suffered the most during this time but Vijaya bank was able to maintain the business
throughout The bank is also having a good workforce and also is recruiting fresh
employees which mean it is creating opportunities for growth in the income per person in
country
Vijaya bank can also be look upon as a bank which is functioning as a social business
entity cause of its interest taken in educating people and students in banking with the help
of its extension
33
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Annexure
Income
34
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Statement
31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)
ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI
Interest Income
Earned 5237825 8823 3983415 9011 2823112 9113
Commission
Exchange and
Brokerage
Income 128803 217 83819 19 66466 215
Lease Income 0 0 0 0 0 0
Dividend
Income 0 0 0 0 0 0
Miscellaneou
s Income 570007 96 353335 799 208323 672
Other Income 69881 1177 437154 989 274789 887
Total Income
(OI) 5936636 100 4420568 100 3097901 100
Interest
Expenditure 4113024 6928 3058418 6919 1751162 5653
Employee
Expenditure 597469 1006 404916 916 392139 1266
Depreciation 36981 062 30799 07 40131 13
Other
Operating
Expenditure 290249 489 265559 601 218448 705
Provision and
Contingencies 357412 602 383288 867 348268 1124
Total
Expenditure 5395136 9088 414298 9372 2750147 8877
35
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Pretax Income 5415 912 277588 628 347754 1123
Tax 27902 47 -8369 -189 1641 053
Extra Ordinary
and Prior Period
Items Net 0 0 0 0 0 0
Net Profit 26248 442 361278 817 331345 107
Adjusted Net
Profit 26248 442 361278 817 331345 107
Dividend -
Preference 096 0 0 0 0 0
Dividend -
Equity 50719 085 101439 229 100151 323
Balance Sheet
31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT
36
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Equity
Capital 2000 032 2000 036 433518 102
Preference
Capital 5000 08 0 0 0 0
Share
Capital 7000 113 2000 036 433518 102
Reserves
and Surplus 2215777 357 2025532 362 1463159 345
Deposits 54535425 8775 47952013 857 37604499 8878
Borrowings 619242 1 1918872 343 19814 047
Other
Provisions
and
Liabilities 4078641 656 3854374 689 2658176 628
Capital and
Liabilities
(BT) 62149084 9814 55950792 10049 42357492 100
Fixed
Assets 1001079 158 046 0 186177 044
Investment
s 17387703 2746 1661732 2985 12018405 2837
Advances 35468111 5601 31689216 5692 24223552 5719
Cash amp
Money at
Call 8107995 128 6097363 1095 5070123 1197
Other
Current
Assets 1361362 215 1272589 229 859235 203
Properties
and Assets
(BT) 6332625 100 55676534 100 42357492 100
37
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38
Questionnaire
1 Which sector does your branch gives importance
a Priority sector b non-priority sector
2 what kind of loan is more availed by the public from the bank
3 What kind of promotional activity is undertaken by the branch and the bank
4 What kind of delegation of authority is given to you as branch manager
5 Did the branch go for any tie ups till date Specify
6 What kind of workforce is present in the branch
7 Is there any promotional activity taken by the branch recently
8 How often do people migrate from other bank to your banking service
9 What kind of competition is the branch facing
10 Which scheme of the bank is doing expressively well Why
11 How often the regional or the main branch official would be visiting the branch
38