Financial Analysis

FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA
VISION
To emerge as a strong, vibrant and pro-active
Bank/Financial Super Market and to
positively contribute to the emerging needs of the
economy through consistent harmonization of
human, financial and technological resources and
effective risk control systems.
MISSION
 To transform the customer banking experience into a
fruitful and enjoyable one.
 To leverage technology for efficient and effective
delivery of all banking services.
 To have bouquet of product and services tailor-made
to meet customers aspirations.
 The pan-India spread of branches across all the state
of the country will be utilized to further the socio
THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 1

economic objective of the Government of India with

emphasis on Financial Inclusion.
Chapter 1
INDUSTRY
PROFILE

INDUSTRY PROFILE
HEAD LINES
 Introduction
 Origin of word ‘BANK’
 Definition of Bank
 Traditional Banking Activity
 Banking system in India
 Structure of banking in India
While walking in the streets of any town or city you might have
seen some signboards on buildings with names-Canara Bank, Punjab
National Bank, State Bank of India, United Commercial Bank, etc.
What do these names stand for? Did you ever try to know about them?
If you enter any such building you will find some kind of a business
office. You will see some employees sitting behind counters dealing with
visitors standing in front of them. You will find that some are
depositing money at one counter while some are receiving money at
another counter. Behind the counters in the office you will see tables
and chairs occupied by officers. On one side of the office you will also
see a chamber (small partitioned room) where the manager is sitting
with papers on his table.
This is the office of a ‘Bank’.
Let us know in detail about banks and their activities.
You know people earn money to meet their day-to-day expenses

on food, clothing, education of children, housing, etc. They also need
money to meet future expenses on marriage, higher education of
children, house building and other social functions. These are heavy
expenses, which can be met if some money is saved out of the present
income. Saving of money is also necessary for old age and ill health
when it may not be possible for people to work and earn their living.

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

days. They used to hoard money in their homes. With this practice,
savings were available for use whenever needed, but it also involved the
risk of loss by theft, robbery and other accidents. Thus, people were in
need of a place where money could be saved safely and would be
available when required. Banks are such places where people can
deposit their savings with the assurance that they will be able to
withdraw money from the deposits whenever required. People who wish
to borrow money for business and other purposes can also get loans
from the banks at reasonable rate of interest.
Bank is a lawful organization, which accepts deposits that

can be withdrawn on demand. It also lends money to
individuals and business houses that need it.
Banks also render many other useful services – like collection of bills,
payment of foreign bills, safe-keeping of jewelery and other valuable
items, certifying the credit-worthiness of business, and so on.
Banks accept deposits from the general public as well as from the
business community. Any one who saves money for future can deposit
his savings in a bank. Businessmen have income from sales out of
which they have to make payment for expenses. They can keep their
earnings from sales safely deposited in banks to meet their expenses
from time to time. Banks give two assurances to the depositors –
a. Safety of deposit, and

b. Withdrawal of deposit, whenever needed
On deposits, banks give interest, which adds to the original

amount of deposit. It is a great incentive to the depositor. It promotes
saving habits among the public. On the basis of deposits banks also

grant loans and advances to farmers, traders and businessmen for

productive purposes.
Thereby banks contribute to the economic development of the

country and well being of the people in general. Banks also charge
interest on loans. The rate of interest is generally higher than the rate
of interest allowed on deposits. Banks also charge fees for the various
other services, which they render to the business community and
public in general. Interest received on loans and fees charged for
services which exceed the interest allowed on deposits are the main
sources of income for banks from which they meet their administrative
expenses.
The activities carried on by banks are called banking activity.

‘Banking’ as an activity involves acceptance of deposits and lending or
investment of money. It facilitates business activities by providing
money and certain services that help in exchange of goods and services.
Therefore, banking is an important auxiliary to trade. It not only
provides money for the production of goods and services but also
facilitates their exchange between the buyer and seller.
You may be aware that there are laws which regulate the banking
activities in our country. Depositing money in banks and borrowing
from banks are legal transactions. Banks are also under the control of
government. Hence they enjoy the trust and confidence of people. Also
banks depend a great deal on public confidence. Without public
confidence banks cannot survive.
The development of banking in an inevitable precondition for the

healthy and rapid development of the national economic structure.
Banking institutions have contributed much to the development of the
developed countries of the world. Today we can’t imagine the business
world without banking institutions. Banking is as important as blood in

the human body. Due to the development of banking advances are

increased and business activities developing so it is rightly said, “The
development of banking is not only the root but also the result of
the development of the business world.” After independence, the
Indian government also has taken a series of steps to develop the
banking sector. Due to considerable efforts of the government, today we
have a number of banks such as Reserve Bank of India, State Bank of
India, nationalized commercial banks, Industrial Banks and co-
operative banks. India Banks contribute a lot to the development of
agriculture, and trade and industrial sectors. Even today the banking
systems of India possess certain limitations, but one can’t doubt its
important role in the development of the Indian economy.
Banking sector is the first and most important aspect of the

economic-planning of a nation for the faster and speedy development of
a nation; well-development and advanced banking sector is the
precondition. In the most of developed countries of the world, there is
very close relation between the business activities and banks. It is quite
difficult to think the business activities without the existence in
economy as blood in human body.
Thus, we can say that, there is a noteworthy contribution of

banking sector in the development of various fields such as,
agriculture, industries business activities, transportation and
communication.

1.1 ORIGIN OF WORD BANK
The word bank is derived from, the Latin word ‘Bonous’ or ‘Banca’
means a bench. A bank refers to the function of accepting deposits,
lending, repaying the deposited money of demand and functioning an
agent whenever asked for. Now for healthy and rapid development of
any national economical structure, the development of banking is an
inevitable pre-condition.
Some authorities observe that the word bank s originally derived
from the German word ‘bank’ which means a joint stock fund. This
word was Italianized into banco by the German when they were the
rulers of measure part of Italy. This term was again change into ‘banck’
by the French; afterwards, the Britishers converted this term into ‘
bank’ which has now been universalized. The term bank or banker is
used in almost all countries of the world to denote a financial
institution dealing in money.
There are different views regarding the origin of the term ‘bank’ In
ancient Greece and Rome the practice of granting credit was widely
prevalent. The books of the old Sanskrit law giver, Menu, are full of
regulations governing credit. In, past (I) traders (II) ledgers and (III)
goldsmiths performed banking activities. Some experts’ opine that the
term, ‘bancus’ or ‘banque’ means ‘bench’, and the term ‘bank’ comes
from these words. Ancient bankers and lenders used benches in the
market place to do their lending business. When a banker failed in his
business, the people broke his benches. The term, ‘bankrupt’,
originated from such events.

1.2 DEFINITION OF BANK
A bank is an institution which deals in money. A Bank receives money

in the form of deposits from the public, and lends money for the
development of trade and commerce. Several economists have defined
the term, ‘baking’, in various ways. From various definitions some of
them as follow:
“Banking company is a company, which transects the business

of banking in any state of India.”
 Section S (5) of banking company act 1949.
“A ‘bank’ or ‘banker’ is one who, in the ordinary course of his

business, receives money which he repays by honoring the cheques of
persons from whom or on whose account he receives it.”
 Hart Pofr.
“Bank is an establishment which makes, to individuals, such

advances of money as may be required and safely made and to which
individuals entrust money which it is not required by them for use.”
 Prof. Kenly
“Banking means where financial transactions of credit are done

and bank means where draft, cheque, or credit paid by order, deposits
of money or currency are accepted or assets, bonds, gold, silver, bills of
exchange or promissory notes are accepted that kind of persons firms
or companies having the place of business.”
 Findlay sheraze

"Banking business" means the business of receiving money on

current or deposit account, paying and collecting cheques drawn by or
paid in by customers, the making of advances to customers, and
includes such other business as the Authority may prescribe for the
purposes of this Act;
(Banking Act (Singapore), Section 2, Interpretation)
"banking business" means the business of either or both of the

following:
1. receiving from the general public money on current, deposit,

savings or other similar account repayable on demand or within
less than [3 months] ... or with a period of call or notice of less
than that period;
2. paying or collecting cheques drawn by or paid in by customers
Since the advent of EFTPOS (Electronic Funds Transfer at Point Of

Sale), direct credit, direct debit and internet banking, the cheque has
lost its primacy in most banking systems as a payment instrument.
This has led legal theorists to suggest that the cheque based definition
should be broadened to include financial institutions that conduct
current accounts for customers and enable customers to pay and be
paid by third parties, even if they do not pay and collect cheques.

1.3 TRADITIONAL BANKING ACTIVITIES
Banks act as payment agents by conducting checking or current

accounts for customers, paying cheques drawn by customers on the
bank, and collecting cheques deposited to customers' current accounts.
Banks also enable customer payments via other payment methods
such as telegraphic transfer, EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current

accounts, by accepting term deposits, and by issuing debt securities
such as banknotes and bonds. Banks lend money by making advances
to customers on current accounts, by making installment loans, and by
investing in marketable debt securities and other forms of money
lending.
Banks provide almost all payment services, and a bank account is

considered indispensable by most businesses, individuals and
governments. Non-banks that provide payment services such as
remittance companies are not normally considered an adequate
substitute for having a bank account.
Banks borrow most funds from households and non-financial

businesses, and lend most funds to households and non-financial
businesses, but non-bank lenders provide a significant and in many
cases adequate substitute for bank loans, and money market funds,
cash management trusts and other non-bank financial institutions in
many cases provide an adequate substitute to banks for lending
savings to

1.4 BANKING SYSTEM IN INDIA
HEAD LINES
 First Indian Bank
 The First Indian Joint Stock Bank
 Recent History Of Indian Banking
 Foundation Phase
 Expansion phase
 Consolidation phase
 Reforms phase
 Nationalisation & Public Sector Banking
In the economic development of a nation banks occupy an important

place. Indian money market comprises both organized as well as
unorganized sectors. The unorganized sectors include money lenders
and indigenous bankers and largely cater to the needs of person living
in villages and small towns. Financial institutions in the organized
sector have grown significantly. Among the institution in organized
sector of the Indian money market commercial banks, Co-operative
banks, regional rural banks, development banks etc.
In 1770, first Indian bank known as Bank of Hindustan was

started and was closed down twenty years later. Later on, the East
India Co. started three presidency banks with government
participation. These were:
Bank of Calcutta – 1806

Bank of Bombay – 1840
Bank of Madras – 1843
Other banks such as
Allahbad Bank came into existence in 1865

Alliance Bank of simla in 1875.

The first Indian joint stock bank known as Oudh Commercial

Bank was setup in 1880 and Punjab National Bank was launched in
1894. There were as many as 648 commercial banks in India by the
and of 1947 and as many as 161 banks failed during 1913-14. Thus,
there was a great need of an institution to control and regulate banking
in the country. As a result, the RBI was setup in 1935 for regulating
the banks in the country.
A scheme of social control on banks was enforced through

statutory measures with effect from 1-2-1969. The banking industry
saw a revolution after 14 major commercial banks were nationalized in
June, 1982. More than 90 % of the bank deposits came under the
control of the government.
Agricultural Credit Development, Rural Planning and Credit Cell

and Agricultural Refinance and Development Corporation were
combined together to setup national bank for agriculture and rural
development in July, 1982. Later, the Exim Bank and National Housing
Bank were setup in 1984 and 1988 respectively.
RECENT HISTORY OF INDIAN BANKING
Indian banking system, over the years has gone through various
phases after establishment of Reserve Bank of India in 1935 during the
British rule, to function as Central Bank of the country. Earlier to
creation of RBI, the central bank functions were being looked after by
the Imperial Bank of India. With the 5-year plan having acquired an
important place after the independence, the Govt. felt that the private
banks may not extend the kind of cooperation in providing credit
support, the economy may need. In 1954 the All India Rural Credit
Survey Committee submitted its report recommending creation of a
strong, integrated, State-sponsored, State-partnered commercial
banking institution with an effective machinery of branches spread all

over the country. The recommendations of this committee led to

establishment of first Public Sector Bank in the name of State Bank of
India on July 01, 1955 by acquiring the substantial part of share
capital by RBI, of the then Imperial Bank of India. Similarly during
1956-59, as a result of re-organization of princely States, the associate
banks came into fold of public sector banking.
Another evaluation of the banking in India was undertaken

during 1966 as the private banks were still not extending the required
support in the form of credit disbursal, more particularly to the
unorganized sector. Each leading industrial house in the country at
that time was closely associated with the promotion and control of one
or more banking companies. The bulk of the deposits collected, were
being deployed in organised sectors of industry and trade, while the
farmers, small entrepreneurs, transporters , professionals and self-
employed had to depend on money lenders who used to exploit them by
charging higher interest rates. In February 1966, a Scheme of Social
Control was set-up whose main function was to periodically assess the
demand for bank credit from various sectors of the economy to
determine the priorities for grant of loans and advances so as to ensure
optimum and efficient utilization of resources. The scheme however, did
not provide any remedy. Though a no. of branches were opened in rural
area but the lending activities of the private banks were not oriented
towards meeting the credit requirements of the priority/weaker sectors.
On July 19, 1969, the Govt. promulgated Banking Companies

(Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire
14 bigger commercial bank with paid up capital of Rs.28.50 Cr,deposits
of Rs.2629 cr, loans of Rs.1813 cr and with 4134 branches accounting
for 80% of advances. Subsequently in 1980, 6 more banks were
nationalised which brought 91% of the deposits and 84% of the
advances in Public Sector Banking. During December 1969, RBI
introduced the Lead Bank Scheme on the recommendations of FK
Nariman Committee.

Meanwhile, during 1962 Deposit Insurance Corporation wasestablished

to provide insurance cover to the depositors.
In the post-nationalisation period, there was substantial increase

in the no. of branches opened in rural/semi-urban centres bringing
down the population per bank branch to 12000 appx. During 1976,
RRBs were established (on the recommendations of M. Narasimham
Committee report) under the sponsorship and support of public sector
banks as the 3rd component of multi-agency credit system for
agriculture and rural development. The Service Area Approach was
introduced during 1989.
While the 1970s and 1980s saw the high growth rate of branch
banking net-work, the consolidation phase started in late 80s and more
particularly during early 90s, with the submission of report by the
Narasimham Committee on Reforms in Financial Services Sector during
1991.
In these five decades since independence, banking in India has evolved
through four distinct phases:
Foundation phase can be considered to cover 1950s and 1960s till the
nationalisation of banks in 1969. The focus during this period was to
lay the foundation for a sound banking system in the country. As a
result the phase witnessed the development of neces sary legislative
framework for facilitating re-organisation and consolidation of the
banking system, for meeting the requirement of Indian economy. A
major development was transformation of Imperial Bank of India into
State Bank of India in 1955 and nationalisation of 14 major private
banks during 1969.
Expansion phase had begun in mid-60s but gained momentum after

nationalisation of banks and continued till 1984. A determined effort
was made to make banking facilities available to the masses. Branch
network of the banks was widened at a very fast pace covering the rural

and semi-urban population, which had no access to banking hitherto.

Most importantly, credit flows were guided towards the priority sectors.
However this weakened the lines of supervision and affected the quality
of assets of banks and pressurized their profitability and brought
competitive efficiency of the system at a low ebb.
Consolidation phase: The phase started in 1985 when a series of

policy initiatives were taken by RBI which saw marked slowdown in the
branch expansion. Attention was paid to improving house-keeping,
customer service, credit management, staff productivity and
profitability of banks. Measures were also taken to reduce the
structural constraints that obstructed the growth of money market.
Reforms phase The macro-economic crisis faced by the country in

1991 paved the way for extensive financial sector reforms which
brought deregulation of interest rates, more competition, technological
changes, prudential guidelines on asset classification and income
recognition, capital adequacy, autonomy packages etc.
BANK NATIONALISATION & PUBLIC SECTOR BANKING
Organised banking in India is more than two centuries old. Till

1935 all the banks were in private sector and were set up by
individuals and/or industrial houses which collected deposits from
individuals and used them for their own purposes. In the absence of
any regulatory framework, these private owners of banks were at liberty
to use the funds in any manner, they deemed appropriate and
resultantly, the bank failures were frequent.
Move towards State ownership of banks started with the

nationalisation of RBI and passing of Banking Companies Act 1949. On
the recommendations of All India Rural Credit Survey Committee, SBI
Act was enacted in 1955 and Imperial Bank of India was transferred to

SBI. Similarly, the conversion of 8 State-owned banks (State Bank of

Bikaner and State Bank of Jaipur were two separate banks earlier and
merged) into subsidiaries (now associates) of SBI during 1959 took
place. During 1968 the scheme of ‘social control’ was introduced, which
was closely followed by nationalisation of 14 major banks in 1969 and
another six in 1980.
Keeping in view the objectives of nationalisation, PSBs undertook

expansion of reach and services. Resultantly the number of branches
increased 7 fold (from 8321 to more than 60000 out of which 58% in
rural areas) and no. of people served per branch office came down from
65000 in 1969 to 10000. Much of this expansion has taken place in
rural and semi-urban areas. The expansion is significant in terms of
geographical distribution. States neglected by private banks before
1969 have a vast network of public sector banks. The PSBs including
RRBs, acount for 93% of bank offices and 87% of banking system
deposits.

1.5 STRUCURE OF BANKING IN INDIA
HEAD LINES
STRUCTURE OF INDIAN BANKING
Types of Bank
Reserve bank of India (central bank)
 Foundation of RBI
 Function of Reserve Bank of India
Commercial banks
 Public sector banks,
 Private sector banks
 Foreign banks.
Co-Operative banks
 Primary Credit Societies
 Central Co-operative Banks
 State Co-operative Banks
Development banks
Indian banking system comprises of both organized and

unorganized banks. Unorganized banking includes indigenous bankers
and village money lenders. Organized banking includes the following,
The main four types are:

Reserve bank of India (central bank)
Commercial banks
Co-Operative banks
Development banks
Others are:
Exim banks
Regional rural banks
Land development banks
National Bank for Agriculture and Rural Development
(NABARD)
Industrial Development Bank of India
Small Industrial Development Bank of India
STRUCURE OF BANKING IN INDIA

Reserve
 RRBS: Regional Rural Banks

 NABARD: National Bank for Agriculture and Rural Development
(1.5.A) Central Bank

A central bank is a special institution which controls and
regulates the entire banking structure of country. It also strives to
maintain monetary stability of the country. It also strives to maintain
monetary stability of the country. Central bank is also the apex bank of
country. Since it functions in the best interest of the country and
making profits is unknown to it, it is entrusted the right to issue
currency notes. No other bank is allowed this right. It operates in close
co-operation with the government for implanting economic policies,
thereby promoting economic development.
The central Bank of our country is Reserve Bank of India. Its
establishment was made by the Reserve Bank of India act in 1935. In
India, any person cannot do the business of banking without getting
the license of Reserve Bank.
THE RESERVE BANK OF INDIA (RBI)

The Reserve Bank of India (RBI, Hindi: भारतीय रिज़र्व बैंक) is the central
bank of India, was established on April 1, 1935 in accordance with the

provisions of the Reserve Bank of India Act, 1934 [1]. The Central Office
of the Reserve Bank was initially established in Kolkata but was
permanently moved to Mumbai in 1937. Though originally privately
owned, the RBI has been fully owned by the Government of India since
nationalization in 1949.
Dr. Duvvuri Subbarao who succeeded Yaga Venugopal Reddy on

September 2, 2008 is the current Governor of RBI.
The Reserve Bank of India was set up on the recommendations of the

Hilton Young Commission. The commission submitted its report in the
year 1926, though the bank was not set up for nine years.
The Preamble of the Reserve Bank of India describes the basic

functions of the Reserve Bank as to regulate the issue of Bank Notes
and keeping of reserves with a view to securing monetary stability in
India and generally to operate the currency and credit system of the
country to its advantage.
It has 22 regional offices, most of them in state capitals
FOUNDATION OF RBI:
Manages currency notes of all denominators except one rupee
note
As a banker of Government, state Government, Commercial and
co-operative banks.
Monetary regulations
Regulations on exchange value of rupee.
As a represents Govt. of India in International Monetary India in
International Monetary Fund (IMF)
FUNCTION OF RESERVE BANK OF INDIA:

Rule currency notes greater than one rupee.

As a Bank of Government, state Government, commercial and co-

operative banks.
Regulation Monetary
Regulations on exchange value of rupee.
As a delegation of India in IMF (International monetary
Federation)
(1.5.B) Commercial Banks

Commercial banks accept money from the public and arrange for
their productive use. They also carry out carry out lending of money to
meet the needs of traders and business houses. The accepted deposits
are always repayable on demand or on short notice. Commercial banks
provide only short-term loans to trade and industry. Besides this, they
also provide working capital finance, and also provide a number of
subsidiary services.
Commercial Banks are banking institutions that accept deposits

and grant short-term loans and advances to their customers. In
addition to giving short-term loans, commercial banks also give
medium-term and long-term loan to business enterprises.
Now-a-days some of the commercial banks are also providing

housing loan on a long-term basis to individuals. There are also many
other functions of commercial banks, which are discussed later in this
lesson.

Types of Commercial banks:

Commercial banks are of three types
Public sector banks,
Private sector banks
Foreign banks.
Public Sector Banks: These are banks where majority stake is held
by the Government of India or Reserve Bank of India.
Examples of public sector banks are: State Bank of India, Corporation
Bank, Bank of Boroda and Dena Bank, etc.
Private Sectors Banks: In case of private sector banks majority of
share capital of the bank is held by private individuals. These banks
are registered as companies with limited liability. For example: The
Jammu and Kashmir Bank Ltd., Bank of Rajasthan Ltd., Development
Credit Bank Ltd, Lord Krishna Bank Ltd., Bharat Overseas Bank Ltd.,
Global Trust Bank, Vysya Bank, etc.
Foreign Banks: These banks are registered and have their
headquarters in a foreign country but operate their branches in our
country. Some of the foreign banks operating in our country are Hong
Kong and Shanghai Banking Corporation (HSBC), Citibank, American
Express Bank, Standard & Chartered Bank, Grindlay’s Bank, etc. The
number of foreign banks operating in our country has increased since
the financial sector reforms of 1991.
STATE BANK OF INDIA (SBI)

In 1955, the imperial bank of India was nationalized and
renamed as State Bank of India. Today it is largest bank of India. As a
commercial bank and views pointing to branches, it is world’s largest
bank with 10,836 Branches.
Subsidiary Bank of SBI

State Bank of Bikaner and Jaipur
State Bank of Hyderabad

State Bank of Mysore

State Bank of Indore
State Bank of Pateyala
State Bank Of Saurashtra
State Bank of Travancore
NATIONALIZED BANKS:
Following 14 commercial banks were nationalized on the 19 th July,
1969.
Bank of India
Canara Bank
Central Bank of India
Corporation bank
Indian Bank
Indian overseas bank
Syndicate Bank
UCO Bank
Allahabad Bank
Bank of Baroda
Bank of Maharashtra
Dena Bank
Oriental Bank of Commerce
Punjab & Sind Bank
Union Bank of India
United Bank of India
Vijaya Bank

IDBI Bank
Other six banks were nationalized on the 10th April, 1980.
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of Mysore
State Bank of Indore
State Bank of Pateyala
State Bank Of Saurashtra
State Bank of Travancore
In October 1993, the New Bank of Indian and Punjab National

Bank were merged.
PRIVATE SECTOR BANKS:

HDFC Bank
ICICI Bank
Federal Bank
ING Vysya Bank
Axis Bank (formerly UTI Bank)
Yes Bank
Bank of Rajasthan
Bharat Overseas Bank
Catholic Syrian Bank
Centurion Bank of Punjab
City Union Bank
Development Credit Bank
Dhanalakshmi Bank
Ganesh Bank of Kurundwad
IndusInd Bank
Jammu & Kashmir Bank
Karnataka Bank Limited
Karur Vysya Bank
Kotak Mahindra Bank

Lakshmi Vilas Bank

Nainital Bank
Ratnakar Bank
SBI Commercial and International Bank
South Indian Bank
Amazing Mercantile Bank
Punjab National Bank
Rupee Bank
Saraswat Bank
Tamilnad Mercantile Bank
Thane Janata Sahakari Bank
Bassein Catholic Bank
(1.5.C) Co-Operative Bank

The short-term financial needs of farmers are met by co-operative
banks. Agriculturists, petty farmers and artisans organize themselves
on co-operative principle and form co-operative societies and banks.
Co-operative banks raise funds through various means, besides
receiving all kinds of deposits to make them available as lend able
funds to its members. In India, developed co-operative banks supply
finance for agriculture and non-agriculture activities.
People who come together to jointly serve their common interest often
form a co-operative society under the Co-operative Societies Act. When
a co-operative society engages itself in banking business it is called a
Co-operative Bank. The society has to obtain a licence from the Reserve
Bank of India before starting banking business. Any co-operative bank
as a society is to function under the overall supervision of the
Registrar, Co-operative Societies of the State.
As regards banking business, the society must follow the guidelines set
and issued by the Reserve Bank of India.
Types of Co-operative Banks

There are three types of co-operative banks operating in our country.

They are primary credit societies, central co-operative banks and state
co-operative banks. These banks are organized at three levels, village or
town level, district level and state level.
Primary Credit Societies: These are formed at the village or town
level with borrower and non-borrower members residing in one locality.
The operations of each society are restricted to a small area so that the
members know each other and are able to watch over the activities of
all members to prevent frauds.
Central Co-operative Banks: These banks operate at the district
level having some of the primary credit societies belonging to the same
district as their members. These banks provide loans to their members
(i.e., primary credit societies) and function as a link between the
primary credit societies and state co-operative banks.
State Co-operative Banks: These are the apex (highest level) co-
operative banks in all the states of the country. They mobilise funds
and help in its proper channelisation among various sectors. The
money reaches the individual borrowers from the state co-operative
banks through the central co-operative banks and the primary credit
societies.
SCHEDULED URBAN CO-OPERATIVE BANKS

List of Scheduled Urban Co-operative Bank as on 31-3-2009 as per RBI
Bank Main Location
Ahmedabad Mercantile Co-Op Bank Ltd. Ahmedabad
Kalupur Commercial Co-op Bank Ltd. Kalupur
Madhavpura Mercantile Co-Op Bank Ltd. Madhavpur
Mehsana Urban Co-Op Bank Ltd. Mehsana
Nutan Nagarik Sahakari Bank Ltd. Ahmedabad
Rajkot Nagrik Sahakari Bank Ltd. Rajkot
Sardar Bhiladwala Pardi Peoples Co-op Bank Ltd. Bulsar
Surat Peoples Co-op Bank Ltd. Surat
Amanath Co-operative Bank Ltd. Bangalore
Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. Andhra Pradesh
Charminar Co-op. Urban Bank Ltd. Hyderabad
Vasavi Co-op Urban Bank LImited. Hyderabad

Indian Mercantile Co-op Bank Ltd. Lucknow

Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd. Ichalkaranji
Abhyudaya Co-operative Bank Ltd. Mumbai
Bangalore city co-operative bank. Bengaluru
Bassein Catholic Co-operative Bank Limited. Vasai
Bharat Co-operative Bank (Mumbai) Ltd. Mumbai
Bharati Sahakari Bank Limited. Pune
Bombay Mercantile Co-operative Bank Limited. Mumbai
Citizen Credit Co-operative Bank Ltd. Dadar
Cosmos Co-operative Urban Bank Ltd. Pune
Dombivli Nagari Sahakari Bank Ltd. Dombivli
Goa Urban Co-operative Bank Limited. Goa
Greater Bombay Co-operative Bank Limited. Mumbai
Jalgaon Janata Sahakari Bank Ltd. Jalgaon
Janakalyan Sahakari Bank Ltd. Mumbai
Janalaxmi Co-operative Bank Ltd. Mumbai
Janata Sahakari Bank Ltd. Pune
The Karnataka State Co-Operative Apex Bank Ltd Bengaluru
Kalyan Janata Sahakari Bank Ltd. Kalyan
Karad Urban Co-operative Bank Ltd. Karad
Mahanagar Co-operative Bank Ltd. Mumbai
Mapusa Urban Co-operative Bank of Goa Ltd. Mapusa
Nagar Urban Co-operative Bank Ltd. Ahmednagar
Nasik Merchant's Co-operative Bank Ltd. Nasik
New India Co-operative Bank Ltd. Mumbai
NKGSB Co-operative Bank Ltd. Mumbai
Parsik Janata Sahakari Bank Ltd. Thane
Pravara Sahakari Bank Ltd. Ahmednagar
Punjab & Maharashtra Co-operative Bank Ltd. Mumbai
Rupee Co-operative Bank Ltd. Pune
Sangli Urban Co-operative Bank Ltd. Sangli
Saraswat Co-operative Bank Ltd. Mumbai
Shamrao Vithal Co-operative Bank Ltd. Mumbai
Solapur Janata Sahakari Bank Ltd. Solapur
Thane Bharat Sahakari Bank Ltd. Thane
Thane Janata Sahakari Bank Ltd. Thane
The Kapol Co-operative Bank Ltd. Mumbai
Zoroastrian Co-operative Bank Ltd. Mumbai
Nagpur Nagrik Sahakari Bank Ltd. Nagpur
Shikshak Sahakari Bank Ltd. Nagpur
The Akola Janata Com.Co-operative Bank Ltd. Akola
The Akola Urban Co-operative Bank Ltd. Akola
The Khamgaon Urban Co-operative Bank Ltd. Khamgaon

(1.5.D) Specialised Banks
There are some banks, which cater to the requirements and provide
overall support for setting up business in specific areas of activity.
EXIM Bank, SIDBI and NABARD are examples of such banks. They
engage themselves in some specific area or activity and thus, are called
specialised banks. Let us know about them.
Export Import Bank of India (EXIM Bank): If you want to set up a

business for exporting products abroad or importing products from
foreign countries for sale in our country, EXIM bank can provide you
the required support and assistance. The bank grants loans to
exporters and importers and also provides information about the
international market. It gives guidance about the opportunities for
export or import, the risks involved in it and the competition to be
faced, etc.
Small Industries Development Bank of India (SIDBI): If you want to

establish a small-scale business unit or industry, loan on easy terms
can be available through SIDBI. It also finances modernisation of
small-scale industrial units, use of new technology and market
activities. The aim and focus of SIDBI is to promote, finance and
develop small-scale industries.
National Bank for Agricultural and Rural Development (NABARD): It

is a central or apex institution for financing agricultural and rural

sectors. If a person is engaged in agriculture or other activities like

handloom weaving, fishing, etc. NABARD can provide credit, both
short-term and long-term, through regional rural banks. It provides
financial assistance, especially, to co-operative credit, in the field of
agriculture, small-scale industries, cottage and village industries
handicrafts and allied economic activities in rural areas.
(1.5.E) Exchange Banks

There is a difference in financing of foreign trade and financing of
internal trade. Generally a person carrying on international trade
requires foreign currencies to meet his obligations. It is here that
exchange banks play the role of financing the dealer for setting
transactions involved in foreign trade. Though commercial banks
undertake financing international trade, there are specialized banks for
foreign exchange business. In India, there is the Export-Import Bank
(EXIM).
(1.5.F) Investment or Industrial Banks

Investment banks provide long-term credit to industries. They
raise their funds by way of share capital, debentures, and long-term
deposits from the public. They also raise funds by the issue of bonds
for business corporations and government agencies. Usually they
underwrite the fresh issue of shares and debentures of companies.
Such banks also buy the entire issue of new securities of public limited
companies and try to get them subscribed at a higher price by the
public.
(1.5.G) Land Development Banks

Land development banks were earlier known as land mortgage
banks. In India, there are a limited number of such banks. They are
special institutions providing long-term loans to agriculturists and
farmers. They provide loans on the security of land and other

immovable properties. They supply long-term funds for period

exceeding six years. Agriculturists and farmers need such funds for
making permanent improvements to land and for buying farming
machinery and equipment.
(1.5.H) Rural Bank

Rural Bank provides various advance facilities for manufacturing
activities such as business, industry, and for the aim of rural economic
development, the Rural Bank Act is passed in 1974. Rural Bank has
given major contribution in the development of rural area.
(1.5.I) Saving Banks

Saving banks are specialized institutions which encourage the
general public to save something from their earnings. In other words,
such banks pool the small saving s of the lower and middle income
sections of society. They are not banks in the true sense of the term
and their main aim is to promote and collect the savings of the public.
Not only the depositors are given interest, but they are allowed to
withdraw in times of needs. The numbers of withdrawals are, however,
restricted. Separate savings banks are organized in various nations.
The government can also run a savings bank. In India, the Postal
Department runs the Postal Saving Bank all over the country.
(1.5.J) Deposit Bank V/s Mixed Banks

The main function of a commercial bank is to accept deposits
from the public and lend them to traders, industrialists and others for
period not exceeding one year. The loans and advances provided for a
short period are meant to supplement the working capital of trade and
industry in times of need. This type of banking of attracting and
accepting deposits and then lending for short period is known as

deposit banking. Banks which follow such a system are called deposit
banks.
1.6 FUNCTION OF BANK
HEAD LINES
 General Bank’s Function
 Principal Function
 Ancillary Function:
 Function of the Commercial Bank
 primary functions
 subsidiary functions
(1.6.A) General Bank’s Function

Principal Function:
 Accounting Deposits
 Granting Advances
Ancillary Function:
 Discounting of Bills & Cheques.
 Collection of Bills & Cheques.
 Remittance.
 Safe Custody of Articles.
 Safe Deposit Lockers.
 Conducting:
 Safe Deposit lockers
 Issue of :
 Letters of credit.

 Guarantees.
(1.6.B) Function of the Commercial Bank

Central Bank of India was the first Indian commercial bank
which was wholly owned and managed by Indians. So the main
function of the commercial bank is as follow:
The functions of commercial banks are of two types.

(A) Primary functions; and
(B) Secondary functions.
Let us discuss details about these functions.
PRIMARY FUNCTIONS
The primary functions of a commercial bank include:
a) Accepting deposits; and
b) Granting loans and advances.
Accepting deposits
The most important activity of a commercial bank is to mobilize
deposits from the public. People who have surplus income and savings
find it convenient to deposit the amounts with banks. Depending upon
the nature of deposits, funds deposited with bank also earn interest.
Thus, deposits with the bank grow along with the interest earned. If the
rate of interest is higher, public are motivated to deposit more funds
with the bank. There is also safety of funds deposited with the bank.

Grant of loans and advances

The second important function of a commercial bank is to grant loans
and advances. Such loans and advances are given to members of the
public and to the business community at a higher rate of interest than
allowed by banks on various deposit accounts. The rate of interest
charged on loans and advances varies according to the purpose and
period of loan and also the mode of repayment.
i) Loans
A loan is granted for a specific time period. Generally commercial banks
provide short-term loans. But term loans, i.e., loans for more than a
year may also be granted. The borrower may be given the entire
amount in lump sum or in instalments. Loans are generally granted
against the security of certain assets. A loan is normally repaid in
instalments. However, it may also be repaid in lump sum.
ii) Advances
An advance is a credit facility provided by the bank to its customers. It
differs from loan in the sense that loans may be granted for longer
period, but advances are normally granted for a short period of time.
Further the purpose of granting advances is to meet the day-to-day
requirements of business. The rate of interest charged on advances
varies from bank to bank.
Interest is charged only on the amount withdrawn and not on the
sanctioned amount.
Types of Advances
Banks grant short-term financial assistance by way of cash credit,
overdraft and bill discounting.
Let us learn about these.
a) Cash Credit
Cash credit is an arrangement whereby the bank allows the
borrower to draw amount up to a specified limit. The amount is
credited to the account of the customer. The customer can withdraw
this amount as and when he requires. Interest is charged on the

amount actually withdrawn. Cash Credit is granted as per terms

and conditions agreed with the customers.
b) Overdraft
Overdraft is also a credit facility granted by bank. A customer who
has a current account with the bank is allowed to withdraw more
than the amount of credit balance in his account. It is a temporary
arrangement. Overdraft facility with a specified limit may be allowed
either on the security of assets, or on personal security, or both.
c) Discounting of Bills
Banks provide short-term finance by discounting bills, that is,
making payment of the amount before the due date of the bills after
deducting a certain rate of discount. The party gets the funds
without waiting for the date of maturity of the bills. In case any bill
is dishonoured on the due date, the bank can recover the amount
from the customer.
SECONDARY FUNCTION
The subsidiary functions of a commercial bank constitute the
agency services and the miscellaneous services.
 Agency Services:-
One of the important functions of a banker is the services performed
by him as an agent. The services as an agent are as under:
Collection of Interest and Dividend: The bank collects interest
or dividend as and when earned by the customers from
securities. A very small charge is levied for the collection on
behalf of the customer.
Collection and payment: Commercial banks also collect and
pay cheques, bills and promissory notes.
Executing standing orders: A customer may leave standing
instructions to a banker to make payments to certain individuals

or institutions against his account. The banker usually charges

small fees for such services.
Buying and selling of Securities: A commercial baker also
undertakes to purchase or sell stocks or shares on behalf of his
customers.
Remittance of Funds: It is convenient for banks to transfer
funds as they have a network of branches all over the country.
The remittance of funds is done by mail transfer, telegraphic
transfer, and bank draft.
 Miscellaneous Services: -
Among the various function when they are many general utility
personal or miscellaneous services rendered to the customers. The
important ones are as under:
Safety of Customer’s valuable: This is undertaken when they
are kept in specially constructed rooms in the bank premises.
Here the bank acts as a bailee of the goods as it is entrusted to
its safe keeping. Usually there are two methods of ensuring safety
of customers’ valuable. One is the acceptance of valuables ( e.g.
documents of title, jeweler etc.) for safe custody, and the other is
the provision of safe deposit vault (Lockers) on hire to customers.
Foreign Exchange: Commercial banks also deal in foreign
exchange transactions. They assist in foreign trade by
discounting foreign bills of exchange and sometime even have to
arrange transport, insurance and warehousing of goods.
Letters of Credit: A commercial bank can issue personal and
commercial letters of credit, enabling the customer to profit by
the superior credit.
Bankers as Referee: Commercial bankers certify the
respectability and financial standing of their customers. This
service benefits businessmen who deal with the bank’s
customers.
Underwriting: - Banks often act as underwriters to local and
municipal authorities or other public bodies. Banks also

underwrite for companies, corporations, and underwrite issues of

Govt. loans, raised by municipal authorities, and industrial
securities.
Information & Statistics: - Several big banks have started the
collection of information related to trade and business and
provide the same to its customers. Some banks even publish
monthly reviews containing financial and economic information.
Chapter 2

COMPANY PROFILE
HISTORY OF THE CENTRAL BANK OF INDIA
COMPAN
2.1
HEAD LINES
 Establishment of Bank
 Establishment of Bank in Gujarat
 Growth chart of bank
 Total branches of bank
 History of the Central Bank of India at Lal Darwaa, Surat
PROFILE
The Bank of India was started on 21 st December 1911 under the name
of the Central Bank of India by it’s under Shrwashrio Sir Soharabji
Pochhandwala. This bank suffered great State Bank in year 1913-1914
due to 1st World War or its effect on a monetary system.
It is really a pleasure to note “The Central Bank of India is the
only bank with first manages which was established by Indian
management. Then again in the year 1925-29 Bank had suffered
another set back by its enemy & specially the English cruel. Customer
of his bank started with drawing the deposits and again it was Sir
Pochhandwala personally set on the counters and paid the deposits to
the customer by managing the funds by his own Personal Prestige. The
banks payment counters were kept open for 24 hours throughout the
country and payment were made continuously. This very bold step of
Sir Pochhandwala Sahib created new faith amongst of the customers of
the bank once again proved that this mighty Bank is the only bank of
the Common people of India.
In Gujarat Central Bank first branch was opened at Gandhi Road,
Ahmedabad. During year 1930 to the date of nationalization of the
banking industries, this bank stood as number one in all India during

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

the total branches of the Central Bank of India through out of country
is 2848 out of which 1397 branches are rural whereas 644 branches
are in semi urban and 419 branches are functioning at urban center
and 621 branches are spread over in metro.
The total deposits of the bank as on above dated was Rs. 9932
Crore out of which 2036 Crore are in current a/c, 2714 are in saving
and 5172 are in time deposits.
A number of innovative and unique banking activities have been
launched by Central Bank of India and a brief mention of some of its
pioneering services are as under:
1911 First Indian Bank in True sense-established

1921 Introduction to the home saving safe deposit scheme to
build saving / thrift habit in all section of the society.
1923 Advance to industry by allotting shares, commercial
banking stated of initial stage.
1924 Landing Section introduced encourages habit to save
money by ladies.
1926 First ever in India safe deposit vault started at Head Office
Bomaby.
1927 Cheque system stated in home saving.
1929 To own and to assist the bank Tally Executive of Trusty
Co. Ltd. Established.
1931 First ever by any Indian banker-Overseas Branch at
London opened. Three years cash certificates issued.
Travelers’ cheque system in rupee currency started.
Indian banker sent abroad to study advance banking.
1932 To reserve deposits rights deposit benefits insurance co.
Ltd. Started.
1970 Recurring deposit scheme established.

Subsequently even after the nationalization of the Bank in the year

1969, Central Bank continued to introduce a number of innovative
banking services as under:-
1976 The Merchant Banking Cell was established.
1978 New facility for Customer Deposit Cash in any of 14
selected after of the country.
1980 Central card, the credit card of the Bank was introduced.
1985 For speedy Customers Services Automex Started. All
Regional Officer connected with the by own Secret-
national debtor too.
1986 Platinum deposit special scheme in Platinum Jubilee Year
for Long Term Deposit started. Central Card Scheme
expanded which crossed the territorial boundary of the
country central card which is a boon for Indians going
abroad.
1989 The housing subsidiary Cent Bank Home Finance Ltd.
was started with it does headquarter at Bhopal in Madhya
Pradesh.
1994 Quick Cheque Collection Service (QCC) & Express Service
was set up to enable speedy collection of outstation
cheques.
Further in line with the guidelines from Reserve Bank of India as

also the Government of India, Central Bank has been playing an
increasingly active role in promoting the key thrust areas of agriculture,
small scale industries as also medium and large industries. The Bank
also introduced a number of Self Employment Schemes to promote
employment among the educated youth.
Among the Public Sector Banks, Central Bank of India can be

truly described as an All India Bank, due to distribution of its large
network in 27 out of 28 States as also in 4 out of 7 Union Territories in
India. Central Bank of India holds a very prominent place among the
Public Sector Banks on account of its network of 3541 branches and

218 extension counters at various centres throughout the length and

breadth of the country.
In view of its large network of branches as also number of

savings and other innovative services offered, the total customer base of
the Bank at over 25 million account holders is one of the largest in the
banking industry.
Customers' confidence in Central Bank of India's wide ranging

services can very well be judged from the list of major corporate clients
such as ICICI, IDBI, UTI, LIC, HDFC as also almost all major corporate
houses in the country
HEAD OFFICE OR REGISTERED OFFICE OF CBI:

Chandar Mukh,
Narimpoint,
Mumbai-400021
ZONAL OFFICE OF CBI IN GUJARAT:
Zonal office,
Central Bank Building,
Lal Darwaza, Ahmedabad-390 001
Phone: - 5503586 Fax:- 5505995
Website: www.Centralbankofindia.co.in,
Email: - centralzonead1@sancharnet.in
BRANCHES OF THE CBI IN GUJARAT:

Non-
Computerized Total No of
City Name Computerized
Branches Branches
Branches
Ahmedabad 42 16 58
Anand 24 13 37
Baroda 19 14 33
Jamnagar 28 6 34
Rajkot 17 10 27
Surat 23 9 32
Total: 153 68 221

2.2 HISTORY OF THE CBI AT LALDARWAJA
The branch of the Central Bank of India at Lal-Darwaja was

established on dated 17th May, 1964 by Shri Dahyabhai Karshanji
Kosmada. In Surat city ago 45 years there was very few banks. So this
time there was not any bank near to this area. So people of this area
feel difficulty for banking transaction, if people want to transact with
bank then they went vent far away. This all difficulty understood by
Shri Dahyabhai Karshanji Kosmada and he had to decide to establish
the bank at Lal-Darwaja. The branch was established on dated 17 th
May, 1964. When bank was stated that time it had not any computer
system all work of the bank was done manually. After 33 year the bank
was made fully computerized on dated 25 th January, 1999. Then after
bank is well settle.
ADDRESS OF THE BRANCH:

The Central Bank of India (B.O),
Lal Darwaja,
Nr. Resham Bhavan,
Surat -395003. (Guj.)
Phone: - 0261- 2423145, 2428854, 2457038

2.3 ACTIVITIES OF THE CBI
HEAD LINES
 Deposits
 Cards
 Loans
 Other Services
 International banking
 Central Bank of India Net Banking
 Central Bank of India Web Sites
 Rate of Interest on Deposits
 Rate of interest on Loans
The various banking products and services on offer at Central Bank

include:
(2.3.a) DEPOSITS
 Money Multiplier Deposit Certificate (MMDC): In this the

interest keeps adding to the principal amount giving you an added
advantage to increase your deposits exponentially
 Monthly/Quarterly Interest Deposit Receipt (MIDR/QIDR): The
interest is added monthly/Quarterly. An account can be opened
for duration of 12 months to 120 months with a minimum balance
of Rs. 5000.
 Cent Uttam Scheme: This deposit scheme by Central Bank offers
you easy liquidity with high returns that allows you to withdraw a
part of the deposit whenever required.
 Other Special Savings Accounts: These include Senior Citizens
Savings Account, Tax Saving Deposit Schemes, Smart Deposit
Schemes, Super Deposit Schemes and Special Cent Bachat Khata

(2.3.b) CARDS
 Centralcard Electronics: This Central Bank Credit Card is

accepted in all master card electronic terminals in India and Nepal.
This can be both domestic and global.
 Centralcard: This card offers you the freedom of shopping at all
the merchant establishments in the country. The internationally
acceptable one is the International Central Master Card.
 Debit Card: Its the most safe and secure way of accessing your
account globally 24-hours a day at over 5.3 million merchant
establishments and 6 million ATM's
(2.3.c) LOANS
Housing Loans
Home Renovation Loan
Computer Loan
Personal Loan (Corporate and Non-Corporate)
Education Loans
Special Educational Loans
Finance For Trade
Car Loans
Loans For Commercial Vehicles
Agricultural Loans
Personal Loans For Pensioners And Teachers

(2.3.d) OTHER SERVICES
 raveler's Cheques: Issued in the denominations of Rs. 100, Rs.

500, Rs. 1000, Rs. 2500, and Rs. 5000 at a nominal charge of Re.1
per Rs.100.
 Gift Cheques: Available in denominations of Rs.11, Rs. 25, Rs.
51 and Rs. 101 free of cost and payable at any Central Bank of
India branch.
 Cash Management Services: These include collections that can
be Central's Cent QCC, Local Cheque collection and bulk cheque
collection services and payment products that include Demand
Drafts (DD), Dividend and Interest Warrants, Bank Telegraphic
Transfer (TT).
 Cent Bill Pay: This facility by Central Bank allows you to pay
your bills through the Internet. It is currently available in Mumbai
and is soon going to be launched in New Delhi, Pune, Ahmedabad,
Bangalore, Chennai, Hyderabad and Kolkata branches.
 Special Services: These include Insurance, Mutual Funds and
Demat Account services.
(2.3.e) INTERNATIONAL BANKING
 NRI Banking: Special NRI Savings Accounts, facilities to NRI's

Returning to India and Foreign Exchange services along with
Remittance Services are included in this
 Other Specialized Services: These include Repatriable and Non-
Repatriable services along with facilities for importers and
exporters.

(2.3.f) Central Bank of India Net Banking
Central Bank of India provides net banking facility to its customers, all
you have to do is login to your Internet Banking Account and access
the banking service you desire. The official website of Central Bank
gives you information about the public issue, issue price, share price,
share value and stock price along with news on the shares. Any enquiry
about the IPO refund, allotment status, registrar address, money
control, listing or the recruitment procedure is entertained on the
Central Bank site.
(2.3.g) Central Bank Website
An online branch and ATM locator is also available on the official

website of Central Bank of India. You can get the exact address and
location of your nearest Central Bank branches and ATM's/ also you
get full information on the ongoing interest rates on the various credit
and deposit schemes along with the service charges for the services
provided at Central Bank. Some addresses are provided below.

RATE OF INTEREST ON DEPOSIT
In the central bank of India the interest rate of the deposit on Fixed
Deposit applicable from dated 1st May 2000, this is show in the
following table:
Above
Rs.1 Crore and
Maturity Up to Rs.15 lacs
above
Period Rs.15 lacs to less than
Rs.1 Crore
Existing Revised
11.11.2009 11.11.2009 Rate rate
11.11.2009 21.12.2009
7 days-14 days 2.50 2.50 2.00 2.00
15 days to 45 days 3.25 3.50 2.50 2.50
46 days to 90 days 3.75 4.00 3.00 3.00
91 days to 179 days 5.00 5.00 3.50 3.50
180 days to 269 days 5.75 5.50 4.50 4.50
270 days to 364 days 6.25 6.00 5.00 5.50
1 year to less than 2 years 6.50 6.25 5.50 6.00
2 years to less than 3 years 6.75 6.50 5.50 6.00
3 years to less than 5 years 7.00 6.50 5.50 6.00
5 years and above 7.25 7.25 5.50

RATE OF INTEREST ON LOANS
LOANS
BPLR (w.e.f. 01.04.2009) 12.00% p.a.
Direct Housing Finance

Rate of Interest
Scheme - w.e.f. 10.11.2008
Processing Charges*
Upto Rs. Above Rs.
Floating Category
30 Lakhs 30 Lakhs
Upto 5 Yrs 9.00% 10.25% 1% of Loan Amount,
minimum Rs.1000/-
Over 5 Yrs & Less than 10 9.50% 10.75% 1% of Loan Amount,
Yrs. minimum Rs.1000/-
10 Yrs. & above 10.00% 11.25% 1% of Loan Amount,
minimum Rs.1000/-
Upto Rs. Above Rs.
Fixed Category Processing Charges
30 Lakhs 30 Lakhs
Upto 5 Yrs 10.00% 11.25% 1% of Loan Amount,
minimum Rs.1000/-
Over 5 Yrs & Less than 10 -NA- -NA- 1% of Loan Amount,
Yrs. minimum Rs.1000/-
10 Yrs. & above -NA- -NA- 1% of Loan Amount,
minimum Rs.1000/-
*- For changing from fixed Rate of Interest to Floating Rate of Interest,

1% Service Charges on the balance outstanding as on the date of
change over.
- For changing from floating Rate of Interest to Fixed Rate of Interest,

1% Service Charges on the balance outstanding as on the date of
change over.

Rate of
Personal Loan Processing Charges
Interest
Consumer Durable Loan BPLR - 0.25% Rs. 200/- per proposal
(Cent Buy)
Senior Citizen - Loan to BPLR NIL
Pensioner
For General Pensioners and for

ex-staff of Central Bank of India
drawing pension
Senior Citizen - Cent 10.00% Upfront Fees: 0.15% of loan amount
Swabhimaan (Reverse Mortgage subject to minimum of Rs. 500/- and
Loan) maximum of Rs.10,000/-
Personal Loan - Loan to BPLR Rs. 500/- per proposal
corporate employees
Personal Loan - Loan to Non- BPLR + 1.00% Rs. 500/- per proposal
Corporate Employees
Personal Loan - Loan to teachers BPLR - 1.25% Rs. 500/- per proposal
& Employees of Educational
Institute
Personal Loan - Loan to LIC BPLR 1% of loan amount, minimum Rs.
Agents 250/-
Rate of Processing
Vehicle Loan
Interest Charges
Two wheeler Loan
For new vehicles repayable upto 36 months BPLR - 2.00% Rs. 500/- per proposal
For new vehicles repayable beyond 36 BPLR - 1.00% Rs. 500/- per proposal
months
For second hand vehicles BPLR Rs. 500/- per proposal
Four wheeler Loan
For new vehicles repayable upto 36 months BPLR - 2.00% Rs. 2000/- per proposal
For new vehicles repayable beyond 36 BPLR - 1.00% Rs. 2000/- per proposal
months
For second hand vehicles BPLR Rs. 2000/- per proposal
Cent Vidyarthi - Education Loan Rate of Interest Processin

(Irrespective of Amount of Loan and
Normal IIT/ IIM g Charges
Place of study i.e. India or Abroad) Student Students
Male BPLR - BPLR - 2.50% Nil
2.00%
Female BPLR - BPLR - 3.00% Nil
2.50%
SC, ST, & Minority Community Student BPLR - BPLR - 3.00% Nil

(Female & Male) 2.50%
Name of
Scheme Rate of Interest Processing Charges
BPLR
Interest to be compounded monthly.

Concession of 50 basis points is
given if Employers Undertaking is
available.
Further concession of 50 basis
Scheme for points in RoI may be given if
Financing interest is serviced regularly during
Executive MBA the study period. Rs.10,000/- lump sum.
-Upto Rs. 25,000/- : NIL
-More than Rs. 25,000/- upto Rs. 2

Lakh: Rs. 250/- per proposal.
-More than Rs. 2 lakh upto Rs. 50

Cent Trade BPLR - 1% lakh: 0.5% of loan amount
Cent Vyapari BPLR - 1% Rs. 1000/- per proposal

BPLR + 1.00% for loan upto 3 years
1% of the loan amount subject to
BPLR + 2.00% for loan above 3 minimum of Rs.5,000/- and maximum
Cent Rental years of Rs.2.00 lakh.
Cent Computer BPLR Rs. 100/- per proposal

BPLR 1% of loan amount, minimum Rs.
Cent Liquid 500/-
Cent School BPLR - 1% NIL
Cent Jewel 10.00% Rs. 500/- per proposal
Cent Vivah 10.00% NIL
Cent Safar BPLR Rs. 1000/- per proposal
Cent Suvidha BPLR NIL

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

Chapter 3
INTRODU
CTION

INTRODUCTION
HEAD LINES
 Introduction of Project
 Objective of Project
 Potential of Project
 Limitation of Project
3.1 INTRODUCTION OF PROJECT
This project report is based on the financial analysis of the central

bank of india, and it includes various financial statement, numerical
data and it’s interpretation. From this project study, the organisation
would be able to know about their current and past financial position
and also able to make inter relation among last few years. In this project
there are many tools of financial analysis has been used like
 Ratio Analysis
 Comparative Statement Analysis
 Common Size Statement Analysis
 Trend Analysis
The tools of financial analysis (ratio analysis, Comparative

statement analysis, common size statement analysis, trend analysis) is
helps to know about the financial condition of bank for last few years by
comparing, analyzing and interpreting.
The ratio analysis of the CBI will make necessary comments on it
so as to provide complete idea and core ideology of the bank. So that we
can easily get idea about the financial condition of CBI and it’s potential
in future. Comparison of ratio of last few years can also helps to get
ranking of the comparative years to evaluate it on the various criteria.

The detail study of a bank’s trend analysis will be done and final
conclusion will be brought out for know the reliability and operating
performance of the central bank of India. It will provide final conclusion
according to financial analysis.
For the purpose of study the researcher has gathered data regarding the
company and research work by two ways; primary data and secondary
data.
The researcher has gathered primary data through personal interview of
manager and other working people, as the primary data seems to be best
alternative for me.
The researcher has also used secondary data source to collect
information regarding company profile. For this purpose the researcher
has referred company’s websites.

3.2 OBJECTIVE OF PROJECT
 The main objective of project is to do financial analysis of the

central bank of India.
 Secondly to study the present financial condition of the central

bank of India.
 To study the capital structure of the central bank of India.
 To study the operating performance of the central bank of India.
 To study deposits, investment & pattern & loan & advance.
 To do Ratio Analysis for the CBI and make necessary comments
on it so as to provide complete idea and core ideology of the
bank. So that we can easily get idea about the financial condition
of CBI and it’s potential in future.
 To make comparison of ratio analysis of last few years and get
ranking of the comparative years to evaluate it on the various
criteria
3.3 POTENTIAL OF THE PROJECT
To know about the Central bank of India and also to compare the
financial condition of bank for last few years by analyzing and
interpreting.
 To do Ratio Analysis for the CBI and make necessary comments

on it so as to provide complete idea and core ideology of the
bank. So that we can easily get idea about the financial condition
of CBI and it’s potential in future.
 To make comparison of ratio analysis of last few years and get
ranking of the comparative years to evaluate it on the various
criteria.

 For the detail study of a bank’s trend analysis will be done and
final conclusion will be brought out for know the reliability and
operating performance of the central bank of India.
 Providing final conclusion according to financial analysis.
Above detailed explanation will provide complete idea of the project and
in the last final conclusion will be made. So that the general people will
get advise or suggestions to invest or save their money in the bank or
not.
3.4 LIMITATION OF PROJECT

 The data is mostly based on the secondary data so information
may be outdated or wrong
 Mistake in the financial statement may be create effect on final
analysis
 Final interpretation may be wrong due to mistake in calculation,
tabulating, analysis etc.

Chapter 4
THEORETI
CAL
CONCEPT
THEORETICAL CONCEPT
HEAD LINES
 Meaning of financial analysis
 Limitation of financial analysis
 Tools of financial analysis
 Ratio analysis
 Comparative financial statements
 Common size statements
 Trend analysis.
4.1 MEANING OF FINANCIAL ANALYSIS
The purpose of the conventional revenue statement and balance

sheet are to show, first, the result of operations for the period under
review, and second, the assets and liability of the firm at the relevant
date. But it is difficult to deduce any inference from the mass of figures
included in the usual annual financial statement. So, in order to
accurately gauge the financial health of the firm, it is generally
necessary to regroup and analysis the figure as disclosed by these
conventional statements to measure business performance.
The analysis of financial statement consists in breaking down a

complex set of factors or figures into simple elements. The analysis may
generally be of two types:
Analysis of financial statements over a number of years – in such

a case the trend is important;

Analysis of financial position of the concern as a particular date-

here the detailed position as disclosed by one set of financial
statements is sought to be examined.
4.2 LIMITATION OF FINANCIAL STATEMENT
The financial position of a business concern is affected by several

factors- economic, social and financial, but only financial factors
are being recorded in these financial statements. Economic and
social factors are felt out. Thus the financial position disclosed by
this statement is not correct and accurate.
The profit revealed by the profit and loss account and financial
position disclosed by the balanced sheet cannot be exact: they
are essentially interim reports. Exact position can be known
when the business is liquidated.
Facts which have not been recorded in the financial books are
not depicted in the financial statement. Only quantitative factors
are taken into account. But qualitative factors such as reputation
and prestige of the business with the public, the efficiency and
loyalty of its employees, integrity of management etc. which are
equally important for the business success, are not capable of
being translated in terms of money, and as such, they do not
appear in the financial statement.
Money items are left to the personal judgment of the accountant.

For instance, provision of depreciation, stock valuation, bad

debts provision etc. depends on the personal judgment of

accountant.
On the account of convention of conservations the income

statement may not disclose true income of the business since
problem losses are considered while problem incomes are
ignored.
The fixed assets are shown at cost less depreciation on the basis
of “going concern concept.” But the value placed on the fixed
assets may not be the same which may be realized on their sale.
The data contained in the financial statement are dumb; they do

not speak themselves. It is also worth while to note that human
judgment is always involved in the interpretation of statement. It
rarely happens that the users of financial statements may have
the same opinion and meaning in respect of a particular
accounting figure.
Information conveyed by these statements mat not be

comparable on account of difference between dates of preparation
of these statements. Different methods of accounting followed by
different concerns or difference in the nature of business of
different concern etc. may render the financial statements of two
concerns impossible or difficult for the purpose of comparison.
4.3 TOOLS OF FINANCIAL ANALYSIS

Financial analyses adopt the following tools for analysis of the financial
statements. These are termed as method of financial analysis:
Ratio analysis
Comparative financial statements
Common size statements
Trend analysis.
 RATIO ANALYSIS
A ratio is only a comparison of the numerator with the denominator.

The term ratio refers to the numerical or quantitative relationship
between two figures. A ratio is the relationship between two figures,
and obtained by dividing the former by the latter. Ratio are design to
show how one number is related to another. It is worked out by
dividing one number by another.
Ratio analysis is important and age old technique of financial analysis.

The data given in financial statements, in absolute from, are dump and
are unable to communicate anything. Ratios are relative form of
financial data and very useful technique to check upon the efficiency of
a firm. Some ratios indicate the trend or progress or downfall of the
firm.
 Importance of ratio analysis:

The importances of ratio analysis are as follow:

Aid to measure general efficiency:
Ratios enable the mass of accounting data to be summarized and
simplified. They act as an index of the efficiency of the enterprise.
As such they served as instrument of management control.
Aid to measure financial solvency:

Ratio are useful tools in the hands of management and other
concerned to evaluate the firms performance over a period of
time by comparing the present ratio with the past ones. They
point out firm’s liquidity position to meet its short term
obligations and long term solvency.
Aid in forecasting and planning:

Ratio analysis is an invaluable aid to management in the
discharge of its basic function such as planning, forecasting,
control etc. the ratio that are derived after analyzing and
scrutinizing the past result, helps the management to prepared
budgets to formulate policies and to prepared the future plan of
action etc.
Facilitate decision making:

It shows light on the degree of efficiency of the management and
utilization of the assets and that is why it is called surveyor of
efficiency. They help management in decision making.
Effective tool:
Ratio analysis is help in making effective control of the
businessmen. Ratio ensures secrecy.
 Limitation of ratio analysis:

Ratio analysis is, as already mentioned, a widely- used tool of financial

analysis. It is because ratio is simple and easy to understand. But they
must be used very carefully. They suffer from various limitations. If due
care is not taken, they might confuse than clarity the situation.
Different firms may use these terms in different senses or the same
firm may use them to mean different things at different times. Some of
the limitations of the ratio analysis are given below:
Limitation of accounting records:

Ratio analysis is based on financial statements which are
themselves subject to limitations. Thus, ratios calculated on the
figures given in the financial statements, also suffers from similar
limitation.
No allowances for price level changes:

Due to change in price level of various years, comparison of ratio
of such years cannot give correct conclusion. A change in the
price level can seriously affect the validity of comparison of ratio
computed for different time periods. For instance, a firm which
has purchased an assets at a lower price, will show a higher
return, then the firm which has purchased the at an assets at a
higher price.
Changes in accounting procedure:

Comparison between two variables proves worth provided their
basis of valuation is identical. But in reality, it is not possible,
such as methods of valuation of stick or charging different firms
for their valuation, and then comparison will practically be of no
use.
Limited used of single ratio:

A single ratio would not be able to convey anything. Ratio can be

useful only when they are computed in a sufficient large number.
If too many ratios are calculated, they are likely to instead of
revealing meaningful conclusion.
Background is overlooked:
When inter- firm comparison is made, they differ substantially in
age, size, nature of product etc. when an inter firm comparison is
made, these factors are not considered. Therefore, ratio analysis
cannot give satisfactory result.
Changing policies:
Ratio is computed on the basis of past result. Past is not an
indicator of future. Ratios computed from historical data are
used for predicting and projecting the likely events in the future.
Such ratio may provide a glimpse of firm’s past performance. But
forecast for nature may not be correct as several other factors
like management policies, market condition etc. may induce
future operations.
 COMMON SIZE STATEMENTS

Ratio analysis apart, another useful way of analyzing financial

statement is to convert them into common size statement by expressing
absolute rupee amount into percentages. When this method is pursued
the income statement exhibits each expense item or group of expense
items as a percentage of net sales and net sales are taken as 100
percent
Common Size Financial Statements
Common size ratios are used to compare financial statements of

different-size companies, or of the same company over different periods.
By expressing the items in proportion to some size-related measure,
standardized financial statements can be created, revealing trends and
providing insight into how the different companies compare.
The common size ratio for each line on the financial statement is
calculated as follows:
Item of Interest
Common Size Ratio =
Reference Item
For example, if the item of interest is inventory and it is referenced to

total assets (as it normally would be), the common size ratio would be:
Inventory
Common Size Ratio for Inventory =
Total Assets
The ratios often are expressed as percentages of the reference amount.

Common size statements usually are prepared for the income
statement and balance sheet, expressing information as follows:
 Income statement items - expressed as a percentage of total revenue

 Balance sheet items - expressed as a percentage of total assets

The following example income statement shows both the dollar

amounts and the common size ratios:
Common Size Income Statement
Common-Size
Income Statement
Income Statement
Revenue 70,134 100%
Cost of Goods 44,221 63.1%
Sold
Gross Profit 25,913 36.9%
SG&A Expense 13,531 19.3%
Operating Income 12,382 17.7%
Interest Expense 2,862 4.1%
Provision for Taxes 3,766 5.4%
Net Income 5,754 8.2%
For the balance sheet, the common size percentages are referenced to
the total assets. The following sample balance sheet shows both the
dollar amounts and the common size ratios:
Common Size Balance Sheet
Common-Size
Balance
Balance
Sheet
Sheet
ASSETS
Cash & Marketable Securities 6,029 15.1%
Accounts Receivable 14,378 36.0%
Inventory 17,136 42.9%
Total Current Assets 37,543 93.9%
Property, Plant, & Equipment 2,442 6.1%
Total Assets 39,985 100%
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities 14,251 35.6%
Long-Term Debt 12,624 31.6%
Total Liabilities 26,875 67.2%
Shareholders' Equity 13,110 32.8%

Total Liabilities & Equity 39,985 100%
The above common size statements are prepared in a vertical analysis,

referencing each line on the financial statement to a total value on the
statement in a given period.
The ratios in common size statements tend to have less variation than
the absolute values themselves, and trends in the ratios can reveal
important changes in the business. Historical comparisons can be
made in a time-series analysis to identify such trends.
Common size statements also can be used to compare the firm to other
firms.
Comparisons Between Companies (Cross-Sectional Analysis)
Common size financial statements can be used to compare multiple

companies at the same point in time. A common-size analysis is
especially useful when comparing companies of different sizes. It often
is insightful to compare a firm to the best performing firm in its
industry (benchmarking). A firm also can be compared to its industry
as a whole. To compare to the industry, the ratios are calculated for
each firm in the industry and an average for the industry is calculated.
Comparative statements then may be constructed with the company of
interest in one column and the industry averages in another. The result
is a quick overview of where the firm stands in the industry with
respect to key items on the financial statements.
Limitations
As with financial statements in general, the interpretation of common

size statements is subject to many of the limitations in the accounting
data used to construct them. For example:

 Different accounting policies may be used by different firms or

within the same firm at different points in time. Adjustments
should be made for such differences.
 Different firms may use different accounting calendars, so the

accounting periods may not be directly comparable.
 COMPARATIVE STATEMENT
The benefits of a comparative statement are varied for a corporation.

Because of the uniform format of the statement, it is a simple process
to compare the gross sales of a given product or all products of the
company with the gross sales generated in a previous month, quarter,
or year. Comparing generated revenue from one period to a different
period can add another dimension to analyzing the effectiveness of the
sales effort, as the process makes it possible to identify trends such as
a drop in revenue in spite of an increase in units sold.
Along with being an excellent way to broaden the understanding of the

success of the sales effort, a comparative statement can also help
address changes in production costs. By comparing line items that
catalog the expense for raw materials in one quarter with another
quarter where the number of units produced is similar can make it
possible to spot trends in expense increases, and thus help isolate the
origin of those increases. This type of data can prove helpful to allowing
the company to find raw materials from another source before the
increased price for materials cuts into the overall profitability of the
company.
A comparative statement can be helpful for just about any organization

that has to deal with finances in some manner. Even non-profit
organizations can use the comparative statement method to ascertain
trends in annual fund raising efforts. By making use of the comparative

statement for the most recent effort and comparing the figures with
those of the previous year’s event, it is possible to determine where
expenses increased or decreased, and provide some insight in how to
plan the following year’s event.
Chapter 5

RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY
HEAD LINES
 Research Methodology
 Meaning of Research.
 Research Problem.
 Research Design.
 Sampling Design.
 Data Collection method.
 Analysis and interpretation of Data.
The procedure adopted for conducting the research requires a lot of

attention as it has direct bearing on accuracy, reliability and adequacy
of results obtained. It is due to this reason that research methodology,
which we used at the time of conducting the research, needs to be
elaborated upon. Research Methodology is a way to systematically
study and solve the research problems. If a researcher wants to claim
his study as a good study, he must clearly state the methodology
adapted in conducting the research the research so that it way be
judged by the reader whether the methodology of work done is sound or
not.
5.1 RESEARCH METHODOLOGY

Meaning of Research.
Research Problem.
Research Design.
Sampling Design.
Data Collection method.
Analysis and interpretation of Data.
 Meaning of Research
Research is defined as “a scientific and systematic search for

pertinent information on a specific topic”. Research is an art of
scientific investigation. Research is a systematized effort to gain now
knowledge. It is a careful investigation or inquiry especially through
search for new facts in any branch of knowledge. Research is an
academic activity and this term should be used in a technical sense.
Research comprises defining and redefining problems, formulating
hypothesis or suggested solutions. Making deductions and reaching
conclusions to determine whether they if the formulating hypothesis.
Research is thus, an original contribution to the existing stock of
knowledge making for its advancement. The search for knowledge
through objective and systematic method of finding solutions to a
problem is research.
 Research Problem
The first step while conducting research is careful definition of

Research Problem. “To ERR IS THE HUMAN” is a proverb which
indicates that no one is perfect in this world. Every researcher has to
face many problems which conducting any research that’s why problem
statement is defined to know which type of problems a researcher has
to face while conducting any study. It is said that,

“Problem well defined is problem half solved.”

Basically, a problem statement refers to some difficulty, which
researcher experiences in the context of either a theoretical or practical
situation and wants to obtain the solution for the same.
The problem statement here is:
“To make a Financial Analysis of Financial statements of The
Central Bank of India”
 Research Design
A research designs is the arrangement of conditions for collection and
analysis data in a manner that aims to combine relevance to the
research purpose with economy in procedure. Research Design is the
conceptual structure with in which research in conducted. It
constitutes the blueprint for the collection measurement and analysis
of data. Research Design includes and outline of what the researcher
will do form writing the hypothesis and it operational implication to the
final analysis of data. A research design is a framework for the study
and is used as guide in collection and analyzing the data. It is a
strategy specifying which approach will be used for gathering and
analyzing the data. It also includes the time and cost budget since most
studies are done under these two cost budget since most studies are
done under theses tow constraints.
The design is such studies must be rigid and not flexible and most
focus attention on the following.
1. What is the study about?
2. Why is the study being made?
3. Where will the study be carried out?
4. What type of data is required?
5. Where can be required data be found?
6. What period of time will the study include?
7. What will be sample design?
8. What techniques of data collection will be used?

9. How will the data be analyzed?

10. In what style will the report be prepared?
 TYPES OF RESEARCH DESIGN
 EXPERIMENTAL RESEARCH DESIGN

 EXPLORATORY RESEARCH DESIGN
 DESCRIPTIVE& DIAGNOSTIC RESEARCH
Exploratory Research Design: This research design is preferred when

researcher has a vague idea about the problem the researcher has to
explore the subject.
Experimental Research Design – The research design is used to
provide a strong basis for the existence of casual relationship between
two or more variables.
Descriptive Research Design – It seeks to determine the answers to
who, what, where, when and how questions. It is based on some
previous understanding of the matter.
Diagnostic Research Design It determines the frequency with which
something occurs or its association with something else.
 Research Design Used in this Project

Research Design chosen for this study is Descriptive Research Design.
Descriptive study is based on some previous understanding of the
topic. Research has got a very specific objective and clear cut data
requirements.
 Sampling Design

Sampling is necessary because it is almost impossible to examine the

entire parent population (i.e. the entire universe) various factors such
as time available cost, purpose of study etc. make it necessary for the
researchers to choose a sample. It should neither be too small nor too
big. It should be manageable. THE sample size of past 3 years is taken
for present study due to time limitation.
 DATA COLLECTIONS
The process of data collection begins after a research problem has been
defined and research design ahs been chalked out. There are two types
of data –
METHODS OF PRIMARY DATA

 OBSERVATION METHOD
 INTERVIEW METHODS
 QUESTIONAIRE METHOD
 SCHEDULE METHOD
PRIMARY DATA -
It is first hand data, which is collected by researcher itself. Primary
data is collected by various approaches so as to get a precise, accurate,
realistic and relevant data. The main tool in gathering primary data was
investigation and observation. It was achieved by a direct approach and
observation from the officials of the company.
SECONDARY DATA - it is the data which is already collected by
someone else. Researcher has to analyze the data and interprets the
results. It has always been important for the completion of any report.
It provides reliable, suitable, adequate and specific knowledge.
I took data comprise annual financial statement and past records.
Bank has provided me annual financial statement from 2006-07 to
2008-09 by help of which, I prepared my report.

The valuable cooperation extended by staff members contributed a lot

to fulfill the requirements in the collection of data in order to complete
the project. Various statistical tools are applied depending on the
research problem. In this study ratio analysis, comparative financial
statements analysis, and common size statements has been used for
analyzing and interpreting the result.

Chapter 6
ANALYSIS AND
INTERPRETATIO
OF THE DATA

CENTRAL BANK OF INDIA

LAL-DARWAJA, SURAT-395003
PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008
TOTAL
PARTICULAR AMOUNT Ps. Ps.
AMOUNT
(A) INCOME: -
(1) Interest earned :--
 Interest on Advances other

than Bank:
- Term Loans 40,65,337 23
- Demand Loans 2,44,360 95
- Cash Credits 4,55,539 08
- Over Draft 8,00,261 06
- Export / Import Loans - -
- Other
Sub-Total -------------- ---- 55,65,487 37
<ii> Interest on Advances to Banks: - -
<iii>Interest on Bills Purchased /

Discounted :
- Interest on bill purchased /
discounted / Negotiated
(Inland) 3227 00
- Int. on bills purchased /
Discounted / Negotiated - -
(Foreign)
- Overdue Interest on T.T.
- -
Discounted by others banks.
Sub-Total <iii> -------------- ---- 3227 00
<iv>Discount on Bills, TTS etc. - - - -

<v> Income on Investment (C.O. - - - -
Item)
<vi>Interest on Balances with - - - -
reserve Bank of India
<vii> Others:
- Interest Received from Branches
/ NBO
- Interest Received from central
office. 2,03,63,474 00
Sub-Total<vii> -------------- ---- 2,03,63,474 00
Total Interest Earned:- - - 2,59,28,971 37

(2) Other Income:--
 Commission Exchange Income:

(a)Commission / Brokerage :-
- Bill for collection 29,270 00
- Letter of credit - -
- Letter of guarantee(DPG) 28,177 35
- Bill purchase
- Payment of dividend - -
- Safe custody Accounts - -
- Sales & Purchase of Shares &
- -
Securities
- Under writing commission - -
- Incident / Service charges 4,62,121 01
- Processing charges 86,790 00
- Government Business
- -
Transaction
- Commission on travelers
- -
cheques
- Commission on bank
2,382 00
assurance-life
5,820 00
assurance non-life
- Commission on mutual fund
1,409 91
poducts
Sub-Total(a) -------------- ---- 616970 27
(b) Commission / Brokerage
(Foreign):-
- Bill for collection - -
- Letter of credit [export] - -
- Letter of credit [Import]
- Letter of guarantee / DPG - -
- Bill purchased Discounted - -
Sub-Total(b) -------------- ---- - -
(c) Exchange:-
- DD / TT (Inland) 2,58,983 19
- DD / TT (Foreign) - -
Sub-Total(c) -------------- ---- 2,58,983 19
Total of commission , Exchange &
- -
Brokerage (a + b + c) 8,75,953 46
<ii> Profit / Loss on sales of

- -
Investments (C.O. Item)
<iii> Profit & Loss on Revaluation

- -
of Investment

<iv> Profit & Loss on sale of land,

- -
Buildings & Other Assets.
<v> Profit & Loss on Exchanges

- -
Transactions
<vi> Income Earned by way of

dividends etc. From
- -
subsidiary and/or joint
ventures abroad / in India.
<vii> Miscellaneous Income: -

- Rent of safe Deposit Lockers 2,26,977
- Recovery received in accounts
- -
written off
- Rent received from occupants of
- -
bank’s own premises
- Others 1,446 80
Total of other income ( i to vii) -------------- ---- 11,04,376 46
TOTAL INCOME (1+2) - - 2,70,33,347 83
TOTAL
PARTICULAR AMOUNT Ps Ps
AMOUNT
2,39,49,366 95
(B) EXPENDITURE:-
(3) Interest Expected :-
<1> Interest on Deposit :

(a) Banks :-
- Demand Deposits - -
- Term Deposit - -
Sub-Total (a) ------------- ---- - -
(b) Others :-
1. Interest on Saving Deposit: 32,29,747 26
2. Interest on Term Deposits:
- Interest on Fixed Deposit 3,61,521 54
- Interest on Quarterly Deposit 3,79,189 10
- Interest on Money Multiplier
Deposit 69,63,617 12
- Interest on Recurring Deposit 24,549 60
- Interest on Khazana Deposit
- Interest on FCNR(B) Deposit 2,51,505 62
- Interest on Certificate of Dep. - -
- Interest on Other Term Deposit 1,84,753 80

Total of 2. -------------- ---- 81,65,136 84

Sub Total(a + b) 1,13,94,884 04
<ii> Interest on Reserve Bank of

- - - -
India / Inter Bank Borrowings
<iii> Interest Paid to Others - - - -

- Interest on Borrowing paid to - -
<iv> Others :-
- Interest Paid to Branches / NBO - -
- Interest paid to Central office 70,72,628 00
Sub-Total<iv> -------------- ---- 70,72,628
Total Interest Expended ( i to iv) -------------- ---- 1,84,67,512 04
(4) Operating Expenses :-
 Payments to and Provisions for

Employees:
- Basic pay / Personal pay 19,79,448 00
- Special Pay 1,79,672 12
- Dearness Allowances 6,92,567 00
- City compensatory Allowances 55,691 19
- House Rent Allowances 1,53,756 70
- Medical Aid 52,343 50
- Leave fare concession 10,576 00
- Leave Encashment 91,456 69
- Bonus 16,460 00
- Other Expenses 23,321 55
- Staff Welfare Expenses
- Contribution to provident fund 44,645 00
- Ex-gratia paid to pre. 1986
- -
retirees (C.O. Item)
Sub Total -------------- ---- 33,96,050 16
<ii> Rent, Taxes and Lighting :-

- Rent paid for office premises 1,99,368 00
- Rent paid for other premises 23,400 00
- Municipal / other Taxes on
bank’s property
- Lighting generator Expenses 68,860 00
Sub Total <ii> -------------- ---- 2,91,628 93
<iii> Printing & Stationary 31,285 59
<iv> Advertisement & publicity

<v> Depreciation on Bank’s

property ( C.O. Item) : -
- Depreciation on building - -
- Depreciation on Furniture &
- -
fixtures
Sub Total<v> -------------- ---- - -
<vi> Director’s Fees Allowances &

- -
Expenses
<vii> Auditor’s fees & Expenses :-

- Statutory central Auditors - -
- Branch Auditors - -
- Traveling and others expenses - -
Sub Total <vii> -------------- ---- - -
<viii> Law charges 3,57,942 00
<ix> Postages, Telegrams,

Telephones etc.:-
- Postage & Telegrams 4,142 00
- Telephones & Telex / Fax 3,697 00
- Amount paid for leased line 3,816 00
Sub Total <ix> -------------- ---- 8,365 00
<x> Repairs & Maintenance : -

- Bank’s own property - -
- Furniture & Fixtures 7,525 00
- Annual maintenance charge 4,264 00
Sub Total <x> -------------- ---- 11,889 00
<xi> Insurance: -
- Insurance - -
- Deposit Insurance - -
Sub Total <xi> -------------- ---- - -
<xii> Other Expenditure:-

- Traveling exp. 22,096 18
- Boarding exp. 4,326 00
- Local conveyance paid /
Reimbursed 21,748 00
- Diem allowances paid-officer 17,355 00
- Diem allowances paid-clerk 8,000 00
- Diem allowances paid-sub staff 780 00
- Reimbursement of conveyance

Exp. To eligible officers

- Petrol Exp. For motors vehicles - -
- Maintenance Exp. Of Transit
- -
House
- Entertainment Exp.
- Hospital exp. 5,913 50
- Wages paid to sweepers and
casual labor 3,460 00
- Petty cash Expenses 5,781 16
- Currency chest guarding exp. 2,70,000 00
- Clearing House Charges 1,14,035 00
- Fees for Revenue / Concurrent /
other Auditors 98,452 00
- Professional Fees paid - -
- Premium paid to ECGC & other
- -
corporations
- News papers / Journals 4,847 00
- Donations to Institution - -
- Others 12,594 93
Sub Total <xii> -------------- ---- 5,94,388 71
<xiii> Provisions and - -

Contingencies
Total Operating Expenses 46,91,548 46
TOTAL EXPENDITURE ( 3 + 4 ) -------------- ---- 2,31,59,060 86
PROFIT BALANCE ( A – B ) 38,74,287 14

5.1 COMPARATIVE STATEMENT ANALYSIS
COMPARATIVE BALANCE SHEET STATEMENT

COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS
PARTICULAR 2007 2008 2009

(A) CAPITAL AND LIABILITIES :-
(1) Capital (Fully owned by
central Government)
(2) Reserves & surplus
(3) Deposits:-
 Demand Deposit :-
- Current / call Deposit
a. From Bank
b. From Others 7,66,96,927 9,26,66,535 73335300
<II> Saving Bank Deposits 18,08,81,307 19,88,34,956 234270014
<III> Term Deposit :-

a. From Bank
b. From Others:-
- Fixed Deposits 1,04,58,175 1,08,30,348 4067737
- QID 1,43,19,795 1,54,89,177 28318799
- MMD 15,64,35,938 21,99,69,789 440504862
- Cent uttam Deposit 1,93,686 1,93,686 193686
- Recurring Deposit 8,71,946 7,38,298 860660
- FNCR 55,68,522 5445660 1461073
- Certificate of Deposit
- Other Term Deposit 41,65,526 50,57,513 10350157
Total Deposit(3) 44,95,97,826 54,92,25,958 793249310
(4) Borrowing
(5) Other Liabilities &

Provisions.
 Bills Payable :
- Bills payable / MIS Payable

- T.T.’S Payable
- Pay slips / Banker’s cheques 465980
Issued. 18,25,445 30,47,703
- Others 1,414 1,414 1414
<II> Inter-Office , Adjustment (Net)

i.e. Branch Adjustment)
<III> Interest Accrued :

- On Deposits 17,12,343 20,82,337 2522608
- On Borrowings
<IV> Other Liabilities:-
- Accrued Expenses 40,900 40,000 106600
- Reversal of Unrealized ,
Interest 1,12,392 1,12,392 237778
- Amount received from court
Receiver / Borrowers & held
pending adjustments 1,60,696 1,60,696
- Income tax & other Taxes to
be remitted 4,41,210 1327607
- Commission on guaranteed
LC 1,15,468 1,25,744 128300
- Advance rent Reserved from
locker holder. 3,19,510 2,83,837 320368
- Others 71,049 1,97,528 237662
Total other Liabilities &

Provisions(5) 43,68,593 64,83,486 5348317
TOTAL 45,39,66,419 55,57,09,445 798597627


(B) ASSETS:
(6) Cash & Balances with
Reserve Bank of India:-
 Cash :
- In Hand 57,41,098 71,86,591 15013378
- In Foreign Currency Notes
<II> Balance with Reserve Bank of

India :
- Incurrent Account
- In other Account
Total of (6) 57,41,098 71,86,591 15013378
(7) Balance with Banks And

Money at call and short
notice:
- In India
- out side in India
(8) Investments:
(9) Advances:
 Bill purchased and
33,60,423 31,82,025
discounted 3163004
<II> Cash credits, overdraft, &
loan repayable on demand
- Cash credit 4,79,01,002 4,74,63,883 51019908
- Overdraft 4,50,33,805 4,73,57,980 50128530
- Loan repayable on demand 43,65,180 49,53,204 5078500
<III> Term loan 9,70,48,629 11,65,89,119 135680795
Total Advances(9) 19,77,09,042 21,95,46,212 241907733
(10) Fixed Assets:-

- Premises (C.O. Item)
- Other Fixed Assets
( Including furniture &
Fixtures) 36,24,509 36,54,074 3455597
Total Fixed Asset(10) 36,24,509 36,54,074 3455597
(11) Other Assets:-

 Other Assets:-
- Inter office Adjustment
i.e. Branch Adjustment 24,61,58,808 32,43,38,322 537180116
- Stationary and stamps on
153379
hand 1,11,871 1,51,979

<II> Amount Not in the Nature of

Advances :-
- Prepaid expenses 11,000 11,000
- Advance to staff 15000
- Interest free advances to
317693
staff 57,76,50 4,71,450
- Deposit with Government and
9850
other Departments 9,850 9,850
- Staff loan advance 21700
- On account payments made
16250
to other
- Advance payment to land lord
31900
of office and other premises 20,100 11,700
- Amount paid to pensioners 1,14,080
- Difference in clearing 2,14,163 107990
- Others 2210 336313
- Miscellaneous Inter Branch
Transactions (MIBT):-
a. cash
b. Funds Transferred.
c. Staff and Advance against
LFC, TA, Salary etc.
d. Letter of credit claimed
e. D.D.s issued by other
Banks paid
f. other transaction 2,400 30728
- Share Application money
Total of other Assets(11) 24,68,91,680 32,43,22,567 538220919
TOTAL 45,39,66,419 55,57,09,445 798597627

COMPARATIVE PROFIT & LOSS A/C

COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS

(A) INCOME: -
(1) INTEREST EARNED :--

than Bank:
- Term Loans 19,31,691 40,65,337 5927523
- Demand Loans 2,19,085 2,44,360 216384
- Cash Credits 5,42,000 4,55,539 128102
- Over Draft 7,60,352 8,00,261 978901
- Export / Import Loans -
- Other
Sub-Total 34,53,099 55,65,487 7250910
<ii> Interest on Advances to Banks: -

Discounted :
(Inland) 3,227
Discounted / Negotiated -
(Foreign)
-
Sub-Total <iii> 3,227
<iv>Discount on Bills, TTS etc. - -

<v> Income on Investment (C.O. - -
Item)
<vi>Interest on Balances with - -
<vii> Others:
/ NBO
office. 1,63,38,545 2,03,63,474 32063360
Sub-Total<vii> 1,63,38,545 2,03,63,474 32063360

TOTAL INTEREST EARNED:- 1,97,94,871 2,59,28,971 39314270

2) OTHER INCOME:--

- Bill for collection 37,042 29,270 19247
- Letter of credit -
- Letter of guarantee(DPG) 84,500 28,177 7451
- Bill purchase
- Payment of dividend -
- Safe custody Accounts - 500
-
Securities
- Under writing commission -
- Incident / Service charges 5,66,506 4,62,121
- Processing charges 2,05,069 86,790 984341
-
Transaction
-
cheques
- Commission on bank 5000
2,382
assurance-life
25,825 5,820
assurance non-life
1,410
poducts
Sub-Total(a) 9,18,942 616970 1029459
(Foreign):-
- Bill for collection -
- Letter of credit [export] -
- Letter of guarantee / DPG -
- Bill purchased Discounted -
Sub-Total(b) -------------- -
(c) Exchange:-
- DD / TT (Inland) 2,77,269 2,58,983 290320
- DD / TT (Foreign) -
Sub-Total(c) 2,77,269 2,58,983 290320
Total of commission , Exchange
& Brokerage (a + b + c) 11,96,210 8,75,953 1319779

-
-
of Investment


-

-
Transactions

dividends etc. From
-

- Rent of safe Deposit Lockers 2,22,747 2,26,977 198869
-
written off
-
- Others 241 1,446
Total of Miscellaneous Income 2,22,988 2,28,423 198869
TOTAL OF OTHER INCOME

( I TO VII) 14,19,198 11,04,376 1518648
TOTAL INCOME (1+2) (A) 2,12,14,069 2,70,33,347 40832918

(B) EXPENDITURE:-
(3) INTEREST EXPECTED :-

(a) Banks :-
- Demand Deposits -
- Term Deposit -
Sub-Total (a) ------------- -
(b) Others :-
1. Interest on Saving Deposit: 30,32,755 32,29,747 3732257
- Interest on Fixed Deposit 3,43,883 3,61,521 120843
- Interest on Quarterly Deposit 3,40,490 3,79,189 947008
Deposit 43,76,405 69,63,617 19719599
- Interest on Recurring Deposit 87,978 24,549 22879
- Interest on uttam Deposit 14,810
- Interest on FCNR(B) Deposit 20,57,161 2,51,505

- Interest on Certificate of Dep. -

- Interest on Other Term Deposit 1,00,533 1,84,753 400864
Total of 2. 54,69,815 81,65,136 21211193
Sub Total(a + b) 85,04,570 1,13,94,884 24943450

- -
<iii> Interest Paid to Others - -

- Interest on Borrowing paid to -
<iv> Others :-
- Interest Paid to Branches / NBO -
- Interest paid to Central office 49,80,865 70,72,628 9450917
Sub-Total<iv> 49,80,865 70,72,628 9450917
TOTAL INTEREST EXPENDED

( I TO IV) 1,34,85,435 1,84,67,512 34394367
(4) OPERATING EXPENSES :-

Employees:
- Basic pay / Personal pay 21,14,272 19,79,448 2499604
- Special Pay 1,76,024 1,79,672 214447
- Dearness Allowances 5,57,341 6,92,567 1195133
- City compensatory Allowances 66,203 55,691 60884
- House Rent Allowances 1,60,099 1,53,756 164476
- Medical Aid 98,803 52,343 135792
- Leave fare concession 28,639 10,576 41200
- Leave Encashment 5,44,248 91,456 52076
- Bonus 5,824 16,460 4793
- Other Expenses 22,280 23,321 34510
- Contribution to provident fund 91,849 44,645 108610
-
Sub Total 33,75,763 33,96,050 4511525

- Rent paid for office premises 1,49,526 1,99,368 284143
- Rent paid for other premises 27,300 23,400 74400
bank’s property
- Lighting generator Expenses 67,983 68,860 86849
Sub Total <ii> 4,51,987 2,91,628 445392

<iii> Printing & Stationary 40,024 31,285 155505

- Depreciation on building -
-
fixtures
Sub Total<v> -------------- -

-
Expenses

- Statutory central Auditors -
- Branch Auditors -
- Traveling and others expenses -
Sub Total <vii> -------------- -
<viii> Law charges 11,700 3,57,942 6584

Telephones etc.:-
- Postage & Telegrams 13,696 Cr 4,142 Cr 6764
- Telephones & Telex / Fax 15,516 Dr 3,697 Dr 14073
- Amount paid for leased line 3,810 Dr
Sub Total <ix> 1,820 8,365 20837

- Bank’s own property -
- Furniture & Fixtures 39,105 7,525 47892
Sub Total <x> 39,105 11,889 53205
<xi> Insurance: -
- Insurance 4,895 -
- Deposit Insurance -
Sub Total <xi> 4,895 -------------- -

- Traveling exp. 17,493 22,096 136422
- Boarding exp. 893 9,326 8736
- Local conveyance paid / 35663
Reimbursed 3,356 21,748
- Diem allowances paid-officer 31,760 17,355 4575

- Diem allowances paid-clerk 30,595 8,000

- Diem allowances paid-sub staff 780
- Reimbursement of conveyance 80
Exp. To eligible officers 56,815
- Petrol Exp. For motors vehicles -
-
House
- Hospital exp. 1,956 5,913 4341
- Wages paid to sweepers and 1414
casual labor 16,635 3,460
- Petty cash Expenses 14,010 5,781 20415
- Clearing House Charges 66,140 1,14,035 78643
- Fees for Revenue / Concurrent / 80895
other Auditors 69,649 98,452
- Professional Fees paid -
-
corporations
- News papers / Journals 4,567 4,847 6252
- Donations to Institution -
- Others 24,222 12,594 1614
Sub Total <xii> 3,48,639 5,94,388 432464
<xiii> Provisions and -

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

TOTAL EXPENDITURE ( 3 + 4 ) (B) 1,77,57,371 2,31,59,060 40019879
PROFIT BALANCE ( A – B ) 34,56,698 38,74,287 813039

4.2 TREND ANALYSIS OF BALANCESHEET
(By taking data of 2005 as a base year)
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Advances 171580590 165005256 197709042 219546212 241907733
Current A/c 59866450 68564840 76696927 92666535 73335300
Saving A/c 160045556 150564500 180881307 198834956 234270014
Time Deposit 164523560 202510595 192013589 257724467 485643995
(Data In %)
31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Advances -3.8% 19.8% 11.0% 10.20%
Growth in Current A/c 14.5% 11.9% 20.8% -20.90%
Growth in Saving A/c -5.9% 20.1% 9.9% 17.80%
Growth in Time Deposit 23.1% -5.2% 34.2% 88.40%

Advances
300000000
250000000 241907733
219546212
197709042
200000000
171580590 165005256
150000000
100000000
50000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Advances
25.00%
19.80%
20.00%
15.00%
11.00% 10.20%
10.00%
5.00%
0.00%
31/3/2006
-3.80% 31/3/2007 31/3/2008 31/3/2009
-5.00%
Interpretation
 The amount of advances of CBI is increases since last 4 years,
but it is increasing with decreasing rate because in 2008 growth
rate of advances was 11% while in 2009 it 10.20%

Current A/c
100000000
92666535
90000000
80000000 76696927
73335300
70000000
68564840
59866450
60000000
50000000
40000000
30000000
20000000
10000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Current A/c

25.00%
20.80%
20.00%
14.50%
15.00% 11.90%
10.00%
5.00%
0.00%
31/3/2006 31/3/2007 31/3/2008 31/3/2009
-5.00%
-10.00%
-15.00%
-20.00% -20.90%
-25.00%
Interpretation
 The amount of current a/c was in increasing rate since 2005, but
in 2009 it was decreased by 20%

Saving A/c
250000000 234270014
198834956
200000000
180881307
160045556
150564500
150000000
100000000
50000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Saving A/c

25.00%
20.10%
20.00% 17.80%
15.00%
9.90%
10.00%
5.00%
0.00%
31/3/2006 31/3/2007 31/3/2008 31/3/2009
-5.00%
-5.90%
-10.00%
Interpretation
 The amount of saving deposits of CBI is increases since last 4
years, but it is increasing with fluctuating growth rate because in
2007 growth rate of saving deposit was 20.1% ,in 2008 it was
9.9%, while in 2009 it was again 17.80%

Time Deposit
600000000
500000000 485643995
400000000
300000000
257724467
202510595 192013589
200000000 164523560
100000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Time Deposit

100.00%
88.40%
80.00%
60.00%
40.00% 34.20%
23.10%
20.00%
0.00% -5.20%
31/3/2006 31/3/2007 31/3/2008 31/3/2009
-20.00%
Interpretation
 The amount of time deposit was increase with high rate of growth
in 2009 it was around double compare to 2008

4.3 TREND ANALYSIS OF PROFIT & LOSS A/C
(By taking data of 2005 as a base year)

(Amount in Rs.)
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009

Interest
Earned 1,45,89,500 1,50,98,785 1,97,94,871 2,59,28,971 3,93,14,270
Other
income 10,26,356 12,05,560 14,19,198 11,04,376 15,18,648
Total
income 1,56,15,856 1,63,04,345 2,12,14,069 2,70,33,347 4,08,32,918
Interest
Expended 98,45,698 1,02,56,565 1,34,85,435 1,84,67,512 3,43,94,367
Operating
Expenses 35,45,566 38,58,580 42,71,936 46,91,548 56,25,512
Total
expenditure 1,33,91,264 1,41,15,145 1,77,57,371 2,31,59,060 4,00,19,879
Profit 22,24,592 21,89,200 34,56,698 38,74,287 8,13,039
2006 2007 2008 2009

Growth in Interest Earned 3% 31% 31% 52%
Growth in Other income 17% 18% -22% 38%
Growth in Total income 4% 30% 27% 51%
Growth in Interest Expended 4% 31% 37% 86%
Growth in Operating Expenses 9% 11% 10% 20%
Growth in Total expenditure 5% 26% 30% 73%
Growth in Profit -2% 58% 12% -79%

Interest Earned
45000000
40000000
39314270
35000000
30000000
25928971
25000000
19794871
20000000
14589500 15098785
15000000
10000000
5000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Interest Earned

60%
52%
50%
40%
31% 31%
30%
20%
10%
3%
0%
2006 2007 2008 2009
Interpretation:
The amount of the interest earned was increased with increasing rate
so it is good sign for the bank and profitability point of view, in 2007
and 2008 the growth rate was became stable but in 2009 it was
increased and became around 52%

Other income
1600000 1518648
1419198
1400000
1205560
1200000 1104376
1026356
1000000
800000
600000
400000
200000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Other income

50%
40% 38%
30%
17%
20%
18%
10%
0%
2006 2007 2008 2009
-10%
-20%
-22%
-30%
Interpretation:
The amount of other income was also increased with 38% of growth
rate, while in 2008 it was decreased by 22%, so overall it is good sign
for the bank

Total income
45000000
40832918
40000000
35000000
30000000 27033347
25000000
21214069
20000000
15615856 16304345
15000000
10000000
5000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Total income

60%
51%
50%
40%
30%
30% 27%
20%
10%
4%
0%
2006 2007 2008 2009
Interpretation:
The total income of the bank was also increased due to increases in the
interest earning and other income

Interest Expended
40000000
35000000
34394367
30000000
25000000
20000000 18467512
15000000 13485435
9845698 10256565
10000000
5000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Interest Expended

100%
90% 86%
80%
70%
60%
50%
40%
37%
31%
30%
20%
10%4%
0%
2006 2007 2008 2009
Interpretation:
The amount of the interest expended was increased with increasing
rate since 2005, but in 2009 it was increased by 86% which is very
high compare to previous years. The reason may be that increased the
dependability on the out side debt like deposits and borrowing. And
this is not good sign for the bank

0
Operating Expenses
6000000 5625512
5000000 4691548
4271936
4000000 3858580
3545566
3000000
2000000
1000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Operating Expenses

25%
20%
20%
15%
11%
10%
9%
10%
5%
0%
2006 2007 2008 2009
Interpretation:
The operating expenditure also increased with increasing rate since
2005. In 2008 it was increased by 10% while in 2009 it was increased
by 20%

1
Total expenditure
45000000
40019879
40000000
35000000
30000000
25000000 23159060
20000000 17757371
15000000 13391264 14115145
10000000
5000000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Total expenditure

80%
73%
70%
60%
50%
40%
30%
30% 26%
20%
5%
10%
0%
2006 2007 2008 2009
Interpretation:
The total expense of the bank was increased with increasing rate, but
in 2009 it was increased by 73%, As said earlier that because of the
high increasing rate in interest expense the total expenses also
increased

2
Profit
4500000
4000000 3874287
3456698
3500000
3000000
2500000 2224592 2189200

2000000
1500000
1000000 813039
500000
0
31/3/2005 31/3/2006 31/3/2007 31/3/2008 31/3/2009
Growth in Profit
80%
58%
60%
40%
20% 12%
-2%
0%
2006 2007 2008 2009
-20%
-40%
-60%
-79%
-80%
-100%
Interpretation:
The profit of the bank was decline by 79% the reason may be that due
to increased in the level of the expenditure the profit margin was cut
down. It is true that the income level of the bank was also increased
but the increasing rate of income is less than the increasing rate of
expenditure

3
4.4 COMMON SIZE STATEMENT ANALYSIS
PROFIT & LOSS A/C

OF CENTRAL BANK OF INDIA
INCOME 2007 2008 2009
TOTAL INTEREST EARNED:-
Term Loans 1931691 4065337 5927523
Demand Loans 219085 244360 216384
Cash Credits 542000 455539 128102
Over Draft 760352 800261 978901
Interest on bill purchased 3227
Interest Received from central office. 16338545 20363474 32063360
TOTAL OF COMMISSION , EXCHANGE & 1196210 875953 1319779
BROKERAG
TOTAL OF MISCELLANEOUS INCOME 222988 228423 198869
TOTAL INCOME (1+2) (A) 21214069 27033347 40832918
EXPENSES 2007 2008 2009

INTEREST EXPENDED :-
Interest on Saving Deposit: 3032755 3229747 3732257
Interest on Term Deposits: 5469815 8165136 21211193
Interest paid to Central office 4980865 7072628 9450917
OPERATING EXPENSES :-
Payments to and Provisions for 3375763 3396050 4511525
Employees
Rent, Taxes and Lighting 451987 291628 445392
Printing & Stationary 40024 31285 155505
Law charges 11700 357942 6584
Postages, Telegrams, Telephones etc. 1820 8365 20837
Repairs & Maintenance 39105 11889 53205
Insurance 4895
Other Expenditure 348639 594388 432464
TOTAL EXPENDITURE ( 3 + 4 ) (B) 17757368 23159058 40019879

4
COMMON SIZE PROFIT & LOSS A/C
INCOME 2007 2008 2009

TOTAL INTEREST EARNED:- 93.31 95.91 96.28
Term Loans 9.11 15.04 14.52
Demand Loans 1.03 0.90 0.53
Cash Credits 2.55 1.69 0.31
Over Draft 3.58 2.96 2.40
Interest on bill purchased 0.02 0.00 0.00
Interest Received from central office. 77.02 75.33 78.52
TOTAL OF COMMISSION, EXCHANGE & BROKERAG 5.64 3.24 3.23
TOTAL OF MISCELLANEOUS INCOME 1.05 0.84 0.49
TOTAL INCOME (1+2) (A) 100 100 100
EXPENSES 2007 2008 2009

INTEREST EXPENDED :- 75.93 79.74 85.95
Interest on Saving Deposit: 17.08 13.95 9.33
Interest on Term Deposits: 30.80 35.26 53.00
Interest paid to Central office 28.05 30.54 23.62
OPERATING EXPENSES :- 24.07 20.26 14.05

Payments to and Provisions for Employees 19.01 14.66 11.27
Rent, Taxes and Lighting 2.55 1.26 1.11
Printing & Stationary 0.23 0.14 0.39
Law charges 0.07 1.55 0.02
Postages, Telegrams, Telephones 0.01 0.04 0.05
Repairs & Maintenance 0.22 0.05 0.13
Insurance 0.03 0.00 0.00
Other Expenditure 1.96 2.57 1.08
TOTAL EXPENDITURE ( 3 + 4 ) (B) 100 100 100
Interpretation:
From above analysis we can says that most portion of income of banks
is comes from the interest earned on loan and advances
So the interest is one of the big sources of income generation for any
bank
Another things is that the most of the expenditure is comes from the
interest payment on deposits, in case of CBI majority of expenses is
accured due to the interest payment on term deposit

5
Composition of Total income out of 100%
Composition of INCOME
100% 1.05 0.84
3.24 0.49
3.23
5.64
90%
80%
70%
60%
50% 93.31 95.92 96.28
40%
30%
20%
10%
0%
2007 2008 2009
Miscellaneous income commission, Exchange, Brokerage Interest Earned
Composition of Total Expenses out of 100%
Composition of EXPENSES
120
100
24.07 20.26 14.05
80 85.95
79.74
75.93
60
40
20
0
2007 2008 2009
INTEREST EXPENDED OPERATING EXPENSES

6
BALANCE SHEET
OF CENTRAL BANK OF INDIA
LIABILITIES 2007 2008 2009
Deposits:-
Demand Deposit 76696927 92666535 73335300
Saving Bank Deposits 180881307 198834956 234270015
Term Deposit 192013589 257724468 485643995
Total other Liabilities & Provisions 4368593 6483486 5348317
TOTAL LIABILITIES 453966420 555709446 798597627
ASSETS 2007 2008 2009

Cash balance with RBI 5741098 7186591 15013378
Advance 197709042 219546212 241907733
Fixed Assets 3624599 3654074 3455597
Other assets 246891680 324322567 538220919
TOTAL ASSETS 453966419 554709444 798597627
COMMON SIZE BALANCE SHEET
LIABILITIES 2007 2008 2009

Deposits:-
Demand Deposit 16.89 16.68 9.18
Saving Bank Deposits 39.84 35.78 29.34
Term Deposit 42.30 46.38 60.81
Total other Liabilities & Provisions 0.96 1.17 0.67
10
TOTAL LIABILITIES 100 0 100
ASSETS 2007 2008 2009

Cash balance with RBI 1.26 1.30 1.88
Advance 43.55 39.58 30.29
Fixed Assets 0.80 0.66 0.43
Other assets 54.39 58.47 67.40
TOTAL ASSETS 100 100 100

7
Composition of total Liability 2009

0.67 9.18
29.34
60.81
Demand Deposit Saving Deposits Term Deposit Liabilities & Provisions

1.17
16.68
46.38
35.78

0.96
16.89
42.3
39.84

8
Composition of total Assets 2009
1.88
30.29
67.4 0.43
Cash balance with RBI Advance

Fixed Assets Other assets

1.3
39.58
58.47
0.66


1.26
43.55
54.39
0.8
Interpretation :

9
 The contribution of call deposits or demand deposit to the total

liability is decreased by year to year so it is not good sign for the
bank.
The main reason behind it may be that the current account
facility provided by the bank is not very good compare to the
other bank
 The contribution of saving deposits to total liability is also
decreases by year to year.
 The contribution of time deposit to the total liability is increases
by year to year so it is good sign for the bank, and it also
determine that the trust worthiness of peoples are built by year
to year
 The cash balance with RBI is also increases by year to year which
increase the confidence of investors toward bank
 The contribution of the advances decreases by year to year which
is not good sign for the bank, reason may be the increasing rate if
BPLR.
4.5 CENTRAL BANK OF INDIA AS WHOLE

0
Here the performance of the central bank of India as whole is given
BALANCE SHEET OF
THE CENTRAL BANK OF INDIA AS WHOLE
( In Crore)
LIABILITIE MAR MAR MAR MAR MAR
S '05 '06 '07 '08 '09
Total Share 1,124.1 1,124.1
Capital 1,124.14 4 4 1,204.14 1,321.14
Equity Share 1,124.1
Capital 1,124.14 4 324.14 404.14 404.14
Preference
Share Capital 0.00 0.00 800.00 800.00 917.00
1,810.1 2,179.8
Reserves 1,617.50 9 4 2,699.95 3,081.99
Revaluation
Reserves 523.57 507.64 485.85 2,038.67 2,008.92
3,265.2 3,441.9 3,789.8
Net Worth 1 7 3 5,942.76 6,412.05
60,751.6 66,482. 82,776. 110,319. 131,271.
Deposits 7 65 28 67 85
Borrowings 139.69 310.81 782.01 449.10 804.25
60,891. 66,793. 83,558. 110,768. 132,076.
Total Debt 36 46 29 77 10
Other
Liabilities & 4,445.6 5,659.9
Provisions 4,439.32 1 7 7,244.26 9,167.07
Total 68,595. 74,681. 93,008. 123,955. 147,655.
Liabilities 89 04 09 79 22
MAR MAR MAR MAR MAR

ASSETS
'05 '06 '07 '08 '09
Cash &
Balances 3,382.8 5,473.6 11,537.1 11,036.9
with RBI 5,571.81 6 7 9 1
Balance with
Banks, 1,411.2 3,339.2
Money at Call 1,481.13 3 2 1,302.05 1,214.34
27,277. 37,483. 51,795. 72,997.4 85,483.2
Advances 32 48 47 3 0
30,834. 28,639. 27,741. 31,455.1 43,060.7
Investments 76 09 89 9 2
1,369.1 1,483.0
Gross Block 1,333.12 2 4 3,119.80 3,181.69

1
Accumulated
Depreciation 580.96 644.28 715.77 799.51 903.70
Net Block 752.16 724.84 767.27 2,320.29 2,277.99
3,039.5 3,890.5
Other Assets 2,678.72 4 7 4,343.64 4,582.08
68,595. 74,681. 93,008. 123,955. 147,655.
Total Assets
90 04 09 79 24
Net Worth
7,000.00
6,412.05
5,942.76
6,000.00
5,000.00
4,000.00 3,789.83
3,265.21 3,441.97
3,000.00
2,000.00
1,000.00
0.00
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
Interpretation :
 Net worth of the bank was increased with increasing rate from
2005 to 2008, in 2008 it was increased by around 57% compare
to 2007, but in 2009 the increasing rate was became around 8%.
Deposits
140,000.00 131,271.85
120,000.00
110,319.67
100,000.00
82,776.28
80,000.00
66,482.65
60,751.67
60,000.00
40,000.00
20,000.00
0.00

2
Interpretation :
 The amount of the deposits is also increased with increasing rate
till 2008 but in 2009 the growth rate was fall by 19%.
Advances
90,000.00 85,483.20
80,000.00
72,997.43
70,000.00
60,000.00
51,795.47
50,000.00
40,000.00 37,483.48
30,000.00 27,277.32
20,000.00
10,000.00
0.00
Interpretation :
 The amount of advances of bank is increased by year to year, and
in 2009 it was increased by about 17%
Investments
50,000.00
45,000.00 43,060.72
40,000.00
35,000.00
30,834.76 31,455.19
30,000.00 28,639.09 27,741.89
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
Interpretation :

3
 The amount of the investment is also increased with increasing

rate in 2009 it was increased by 37% compare to previous year
PROFIT & LOSS A/C OF

CENTRAL BANK OF INDIA AS WHOLE
(Amt in CR)
Mar Mar Mar Mar Mar
INCOME
'05 '06 '07 '08 '09
Interest Earned 5,204.8 5,385. 6,234. 7,995.5 10,455.
8 58 21 4 19
Other Income 938.87 551.24 561.83 902.35 1,069.9
7
Total Income 6,143. 5,936. 6,796. 8,897. 11,525.
75 82 04 89 16
Mar Mar Mar Mar Mar

EXPENDITURE
'05 '06 '07 '08 '09
Interest expended 2,829.9 3,005. 3,759. 5,772.4 8,226.7
3 51 79 7 2
Employee Cost 1,277.5 1,275. 1,175. 1,214.3 1,272.5
6 74 42 4 9
Selling and Admin 804.55 296.00 701.64 563.59 653.17
Expenses
Depreciation 53.17 50.90 65.00 73.61 83.59
Miscellaneous 877.04 1,051. 596.18 723.71 717.86
Expenses 26
Preoperative Exp 0.00 0.00 0.00 0.00 0.00
Capitalised
Operating Expenses 2,284.5 1,782. 2,133. 2,034.8 2,184.0
7 22 16 9 5
Provisions & 727.75 891.68 405.08 540.36 543.16
Contingencies
Total Expenses 5,842. 5,679. 6,298. 8,347. 10,953.
25 41 03 72 93

Net Profit for the 301.50 257.42 498.01 550.16 571.24
Year

4
(The amounts in the following charts are in CR)
Interest Earned
12,000.00
10,455.19
10,000.00
7,995.54
8,000.00
6,234.21
6,000.00 5,204.88 5,385.58
4,000.00
2,000.00
0.00
Interest Earned
35.0
30.8
30.0 28.3
25.0
20.0
15.8
15.0
10.0
5.0 3.5
0.0
Mar '06 Mar '07 Mar '08 Mar '09

5
Interpretation :
 The amount of interest earned was increases with increasing rate
It was increased by 31% in 2009 compare to 2008. So it shows
the healthiness condition of bank.
Total Income
14,000.00
12,000.00 11,525.16
10,000.00
8,897.89
8,000.00
6,796.04
6,143.75 5,936.82
6,000.00
4,000.00
2,000.00
0.00
Total Income
35
30.9
29.5
30
25
20
14.5
15
10
0-3.4
Mar '06 Mar '07 Mar '08 Mar '09
-5
-10
Interpretation :

6
 Due to increases in interest earnings the income of the bank also

increases, but here the increasing rate with compare to previous
year is almost equal for both 2008 and 2009, it is around 30%.
Interest expended
9,000.00
8,226.72
8,000.00
7,000.00
6,000.00 5,772.47
5,000.00
4,000.00 3,759.79
2,829.93 3,005.51
3,000.00
2,000.00
1,000.00
0.00
Interest expended
60
53.5
50
42.5
40
30
25.1
20
10 6.2
Interpretation :
7
 The amount of interest expended is also increases, but it is

increases with decreasing rate because in 2008 it was increased
by 54%, while in 2009 it was increased by 42%.
Operating Expenses
2,500.00
2,284.57
2,133.16 2,184.05
2,034.89
2,000.00
1,782.22
1,500.00
1,000.00
500.00
0.00
Operating Expenses
25
19.7
20
15
10 7.3
5
0
Mar '06 Mar '07 -4.6'08
Mar Mar '09
-5
-10
-15
-20 -22
-25
Interpretation :
 The operating expenses of the bank is on fluctuating rate
because in 2008 it was decreased by 5% while in 2009 it was
increased by 7%.

8
Total Expenses
12,000.00
10,953.93
10,000.00
8,347.72
8,000.00
6,298.03
5,842.25 5,679.41
6,000.00
4,000.00
2,000.00
0.00
Total Expenses
35 32.5
31.2
30
25
20
15
10.9
10
0-2.8
Mar '06 Mar '07 Mar '08 Mar '09
-5
Interpretation :
 As increases in working of the bank the total expenditure of the
bank is also increases, but good things was that in 2008 it was
increased by 33% while in 2009 it was increased by 31%.

9
Net Profit for the Year

600 571.24
550.16
498.01
500
400
301.5
300 257.42
200
100
0
Net Profit for the Year

120
100 93.5
80
60
40
20 10.5
3.8
0
Mar '06 Mar '07 Mar '08 Mar '09
-14.6
-20
-40
Interpretation :
 The amount of profit of the bank was increased by decreasing
rate the reason behind it may be that the rate of growth in total
income was decreased or almost equal but the rate of employee
cost and administrative cost were increased
 Other reason may be that the other income of the bank in 2008
grow by 60% while in 2009 it was grow just by 18% so it may cut
the total income of the bank.

0
4.6 RATIO ANALYSIS
 NET PROFIT MARGIN
Net profit margin= Net Profit before interest and taxes * 100
Sales (operation)
2005 2006 2007 2008 2009

6.21 4.92 7.69 6.31 4.99
Net profit margin

9
8 7.69
7
6.21 6.31
6
4.92 4.99
5
4
3
2
1
0
2005 2006 2007 2008 2009
Interpretation :
 The net profit margin arising from business operation before
interest and tax is deducted. The convention is to express profit
as a percentage of total operation of the bank.
 Here the profit margin is declining so it is not good for the bank

1
 RETURN ON NET WORTH
Return on net worth= Net Profit after interest and taxes * 100
Net worth
2005 2006 2007 2008 2009

11.65 9.07 15.89 15.46 14.43
Return on Networth
18
15.89 15.46
16
14.43
14
12 11.65
10 9.07
8
0
2005 2006 2007 2008 2009
Interpretation :
 This ratio expresses the net profit in terms of the equity
shareholders funds. This ratio indicates the return on the funds
employed by them
 Here there is not much more different in the return on Networth
since last three years so it is good sign for the bank.

2
 RETURN ON ASSETS
Return on Assets= Net Profit after taxes * 100

Total Assets
2005 2006 2007 2008 2009

0.44 0.34 0.54 0.44 0.39
Return on Assets
0.6
0.54
0.5
0.44 0.44
0.4 0.39
0.34
0.3
0.2
0.1
0
2005 2006 2007 2008 2009
Interpretation :
 The profitability of the firm is measured by establishing relation
of net profit with the total assets of the organization. The ratio
indicates the efficiency of utilization of assets in generating
revenue

3
 Debt-equity ratio
Debt-equity ratio= Long term debt

Share holders equity
2005 2006 2007 2008 2009

18.65:1 19.41:1 22.05:1 18.64:1 20.60:1
Debt-Equity Ratio
23
22.05
22
21 20.6
20
19.41
19 18.65 18.64
18
17
16
2005 2006 2007 2008 2009
Interpretation :
 This ratio shows the relationship between the loan fund and
networth of the company. It shows the proportion of the dedts or
borrowing funds to owner’ fund, Here the ratio is high in 2009
compare to 2008 which is not good sign for the bank.

4
 DEBT TO TOTAL ASSETS RATIO
Debt to total assets ratio= Total Debt

Total Assets
2005 2006 2007 2008 2009

0.89:1 0.89:1 0.90:1 0.89:1 0.89:1
Debt to Assets ratio

0.9
0.9
0.9
0.9
0.9
0.89
0.89
0.89 0.89 0.89 0.89
0.89
0.89
0.89
0.88
2005 2006 2007 2008 2009
Interpretation :
 This ratio indicates that what proportion of the permanent
capital of the firm consist of long term debt. Here the proportion
is same since last two years which shows the stability of the
bank.

5
 INTEREST EXPENSE RATIO
Interest expense ratio= Interest expense * 100

Income
2005 2006 2007 2008 2009

46.06% 50.62% 55.32% 64.87% 71.38%
Interest Expense Ratio

80
71.38
70 64.87
60 55.32
50.62
50 46.06
40
30
20
10
0
2005 2006 2007 2008 2009
Interpretation :
 This Ratio indicates that what is the proportion of the total
interest expenses to the Income. So that we can know about
profitability of firm. Here the proportion of the expenditure is
increases so it may caused in the decreasing rate of profit.

6
 OPERATING EXPENSES RATIO
Operating expenses ratio= Operating Expenses *100

Income
2005 2006 2007 2008 2009

37.19% 30.02% 31.39% 22.87% 18.95%
Operating Expense Ratio

40
37.19
35
31.39
30.02
30
25 22.87
20 18.95
15
10
0
2005 2006 2007 2008 2009
Interpretation :
 This Ratio indicates that how much expenses has been spent on
selling and administration use of organization. This Ratio
indicates that what is the proportion of the total Operating
expenses to the Income. So that we can know about profitability
of firm. Here the proportion of the operating expenditure is
decreases so it is good sign for the bank, and it also shows the
increases in the level of efficiency and utilization of resources

7
 INTEREST EXPENDED/INTEREST EARNED
Interest Expended/Interest Earned= Interest Expended *100

Interest Earned
2005 2006 2007 2008 2009

54.37% 55.81% 60.31% 72.20% 78.69%
Interest Exp/Interest Ernd

90
80 78.69
72.2
70
60.31
60 54.37 55.81
50
40
30
20
10
0
2005 2006 2007 2008 2009
Interpretation :
 This ratio indicates the proportion of the total interest expended
into the total interest earned. Means if in 2009 if the bank earned
100 rs as interest than they paid rs 79 as interest expended

8
 RETURN ON SHARE HOLDERS’ FUNDS
Return on share holders’ funds= Profit after tax * 100

Share holders funds
2005 2006 2007 2008 2009

13.41% 11.45% 22.15% 22.84% 21.62%
Return on Share holders' fund

25
22.84
22.15 21.62
20
15 13.41
11.45
10
0
2005 2006 2007 2008 2009
Interpretation :
 Indicates the percentage return on share holders’ funds, from the
above chart we can says that the rate of return on fund is about
constant since last three years so it is good things for the bank
point of view

9
Chapter 6
FINDINGS
&
CONCLUSION

0
FINDINGS & CONCLUSION
PERFORMANCE OF
THE CENTRAL BANK OF INDIA, LAL DARWAJA
Performance of the bank according to Profit & Loss A/c

Overall rating of the Profit & Loss A/c
(Best condition 5…4…3…2…1 Poor condition)
Criteria 2005 2006 2007 2008 2009 Average
Profit 3 3 4 5 1 3.2
Interest Earned 2 2 3 3 5 3
Other income 2 3 3 3 4 3
Total income 2 2 3 3 5 3
Interest Expended 3 3 3 2 1 2.4
Operating Expenses 3 2 2 2 1 2
Total expenditure 3 3 3 2 1 2.4
Performance of bank out of 100%

70
64
60 60 60
60
50 48 48
40
40
30
20
10
From the above table we can easily find out the overall performance of
the bank
If we talk about the overall profitability condition of the bank is
around average condition because it falls at around 3.2 rating
out of 5 which is quite near to the average
1
The income level of the central bank of India is quite better in

2009, the income from interest and other income is around best
position, it is 5 and 4 respectively. Which show the better
position in income earning, And if we talk about the overall
income position then it is around average.
The expenditure level was increased with increasing rate the
overall rating of the expenses is into between poor and average
which show the poor condition of the bank
Performance of the bank according to Balance sheet

Overall rating of balance sheet
Advances 3 2 3 3 4 3
Current A/c 2 3 3 4 3 3
Saving A/c 3 2 3 3 4 3
Time Deposit 2 2 2 3 5 2.8

61
60 60 60
60
59
58
57
56
56
55
54
Advances Current A/c Saving A/c Time Deposit
The level of advances increased with increasing rate in 2009 it

was in better position, if we talk about the overall performance of
the bank in case of level of advances then it is around average

2
The amount of deposits was also increased with increasing rate,

when we talk about the average performance of bank for last five
year then the position of current deposits, saving deposits and
demand deposits fall in the average category.
PERFORMANCE OF
Performance of the bank according to profit & Loss A/c

Overall rating of the Profit & Loss A/c
Interest Earned 2 2 3 3 4 2.8
Total Income 2 2 3 3 4 2.8
Interest expended 3 3 3 2 1 2.4
Operating Expenses 3 3 3 3 3 3
Total Expenses 4 4 3 3 1 3
Net Profit for the Year 2 2 3 4 4 3

70
60 60 60
60 56 56
50 48
40
30
20
10
From the above table we can say that the overall condition of the
central bank of India is at the average position because the rating
fall at the average or near to average spot for all criteria

3
Performance of the bank according to Balance sheet

Overall rating of balance sheet
Net Worth 2 2 2 4 4 2.8
Deposits 2 2 3 4 4 3
Advances 1 2 3 4 5 3
Investments 3 3 3 3 4 3.2
Total Assets 2 2 3 4 4 3
Over all performance

66
64
64
62
60 60 60
60
58
56
56
54
52
Net Worth Deposits Advances Investments Total Assets
From the above chart we can say that the overall position of the
central bank of India is average
NOTE
The rating of each criteria is given on the bases of the average of the
five consecutive year

4
Chapter 7
RECOMMENDATION

5
RECOMMENDATION
 Bank should improve the performance in case of the

facility provided to the current account holder, because
the facility provided by the bank is not very good.
 The dependability of the bank on out side fund is very
high and so it may be very dangerous for the bank.
 If the bank wants to maintain their reputation then they
have to improve the profitability by reducing the maximum
cost.
 The infrastructural facility of the bank is very poor,
because they till working with the old infrastructural
facility

6
BIBLIOGRAPHY
BOOKS:
Financial Management – M. Y. Khan & P. K. Jain
Financial Management – I. M. Pandey
Management Accounting – R. S. N. Pillai and
Bagvati
REFERENCES:
Indian banking system
India banking 2010
Search engines – Google & Yahoo
www.Centralbankofindia.co.in

7
ANNEXURE
PROFIT & LOSS A/C FOR THE HALF YEAR ENDED 31-3-2008
TOTAL
PARTICULAR AMOUNT Ps. Ps.
AMOUNT
(A) INCOME: -
(1) Interest earned :--

than Bank:
- Term Loans 40,65,337 23
- Demand Loans 2,44,360 95
- Cash Credits 4,55,539 08
- Over Draft 8,00,261 06
- Export / Import Loans - -
- Other
Sub-Total -------------- ---- 55,65,487 37
<ii> Interest on Advances to Banks: - -

Discounted :
(Inland) 3227 00
Discounted / Negotiated - -
(Foreign)
- -
Sub-Total <iii> -------------- ---- 3227 00
<iv>Discount on Bills, TTS etc. - - - -

<v> Income on Investment (C.O. - - - -
Item)
<vi>Interest on Balances with - - - -
<vii> Others:
/ NBO
office. 2,03,63,474 00
Sub-Total<vii> -------------- ---- 2,03,63,474 00
Total Interest Earned:- - - 2,59,28,971 37

8
(2) Other Income:--

- Bill for collection 29,270 00
- Letter of credit - -
- Letter of guarantee(DPG) 28,177 35
- Bill purchase
- Payment of dividend - -
- Safe custody Accounts - -
- -
Securities
- Under writing commission - -
- Incident / Service charges 4,62,121 01
- Processing charges 86,790 00
- -
Transaction
- -
cheques
2,382 00
assurance-life
5,820 00
assurance non-life
1,409 91
poducts
Sub-Total(a) -------------- ---- 616970 27
(Foreign):-
- Bill for collection - -
- Letter of credit [export] - -
- Letter of guarantee / DPG - -
- Bill purchased Discounted - -
Sub-Total(b) -------------- ---- - -
(c) Exchange:-
- DD / TT (Inland) 2,58,983 19
- DD / TT (Foreign) - -
Sub-Total(c) -------------- ---- 2,58,983 19
Total of commission , Exchange &
- -
Brokerage (a + b + c) 8,75,953 46

- -

9

- -
of Investment

- -

- -
Transactions

dividends etc. From
- -

- Rent of safe Deposit Lockers 2,26,977
- -
written off
- -
- Others 1,446 80
Total of other income ( i to vii) -------------- ---- 11,04,376 46
TOTAL INCOME (1+2) - - 2,70,33,347 83
TOTAL
PARTICULAR AMOUNT Ps Ps
AMOUNT
2,39,49,366 95
(B) EXPENDITURE:-
(3) Interest Expected :-

(a) Banks :-
- Demand Deposits - -
- Term Deposit - -
Sub-Total (a) ------------- ---- - -
(b) Others :-
1. Interest on Saving Deposit: 32,29,747 26
- Interest on Fixed Deposit 3,61,521 54
- Interest on Quarterly Deposit 3,79,189 10
Deposit 69,63,617 12
- Interest on Recurring Deposit 24,549 60
- Interest on Khazana Deposit
- Interest on FCNR(B) Deposit 2,51,505 62

0
- Interest on Certificate of Dep. - -

- Interest on Other Term Deposit 1,84,753 80
Total of 2. -------------- ---- 81,65,136 84
Sub Total(a + b) 1,13,94,884 04

- - - -
<iii> Interest Paid to Others - - - -

- Interest on Borrowing paid to - -
<iv> Others :-
- Interest Paid to Branches / NBO - -
- Interest paid to Central office 70,72,628 00
Sub-Total<iv> -------------- ---- 70,72,628
Total Interest Expended ( i to iv) -------------- ---- 1,84,67,512 04
(4) Operating Expenses :-

Employees:
- Basic pay / Personal pay 19,79,448 00
- Special Pay 1,79,672 12
- Dearness Allowances 6,92,567 00
- City compensatory Allowances 55,691 19
- House Rent Allowances 1,53,756 70
- Medical Aid 52,343 50
- Leave fare concession 10,576 00
- Leave Encashment 91,456 69
- Bonus 16,460 00
- Other Expenses 23,321 55
- Contribution to provident fund 44,645 00
- -
Sub Total -------------- ---- 33,96,050 16

- Rent paid for office premises 1,99,368 00
- Rent paid for other premises 23,400 00
bank’s property
- Lighting generator Expenses 68,860 00
Sub Total <ii> -------------- ---- 2,91,628 93
<iii> Printing & Stationary 31,285 59

1

- Depreciation on building - -
- -
fixtures
Sub Total<v> -------------- ---- - -

- -
Expenses

- Statutory central Auditors - -
- Branch Auditors - -
- Traveling and others expenses - -
Sub Total <vii> -------------- ---- - -
<viii> Law charges 3,57,942 00

Telephones etc.:-
- Postage & Telegrams 4,142 00
- Telephones & Telex / Fax 3,697 00
- Amount paid for leased line 3,816 00
Sub Total <ix> -------------- ---- 8,365 00

- Bank’s own property - -
- Furniture & Fixtures 7,525 00
Sub Total <x> -------------- ---- 11,889 00
<xi> Insurance: -
- Insurance - -
- Deposit Insurance - -
Sub Total <xi> -------------- ---- - -

- Traveling exp. 22,096 18
- Boarding exp. 4,326 00
- Local conveyance paid /
Reimbursed 21,748 00
- Diem allowances paid-officer 17,355 00
- Diem allowances paid-clerk 8,000 00

2
- Diem allowances paid-sub staff 780 00

- Reimbursement of conveyance
Exp. To eligible officers
- Petrol Exp. For motors vehicles - -
- -
House
- Hospital exp. 5,913 50
- Wages paid to sweepers and
casual labor 3,460 00
- Petty cash Expenses 5,781 16
- Clearing House Charges 1,14,035 00
- Fees for Revenue / Concurrent /
other Auditors 98,452 00
- Professional Fees paid - -
- -
corporations
- News papers / Journals 4,847 00
- Donations to Institution - -
- Others 12,594 93
Sub Total <xii> -------------- ---- 5,94,388 71
<xiii> Provisions and - -

Contingencies
Total Operating Expenses 46,91,548 46
TOTAL EXPENDITURE ( 3 + 4 ) -------------- ---- 2,31,59,060 86
PROFIT BALANCE ( A – B ) 38,74,287 14

3

COMPARATIVE BALANCE SHEET STATEMENT FOR THE 3 YRS

(A) CAPITAL AND LIABILITIES :-
(1) Capital (Fully owned by
central Government)
(2) Reserves & surplus
(3) Deposits:-
 Demand Deposit :-
- Current / call Deposit
a. From Bank
b. From Others 7,66,96,927 9,26,66,535 73335300
<II> Saving Bank Deposits 18,08,81,307 19,88,34,956 234270014
<III> Term Deposit :-

a. From Bank
b. From Others:-
- Fixed Deposits 1,04,58,175 1,08,30,348 4067737
- QID 1,43,19,795 1,54,89,177 28318799
- MMD 15,64,35,938 21,99,69,789 440504862
- Cent uttam Deposit 1,93,686 1,93,686 193686
- Recurring Deposit 8,71,946 7,38,298 860660
- FNCR 55,68,522 5445660 1461073
- Certificate of Deposit
- Other Term Deposit 41,65,526 50,57,513 10350157
Total Deposit(3) 44,95,97,826 54,92,25,958 793249310
(4) Borrowing
(5) Other Liabilities &

Provisions.
 Bills Payable :
- Bills payable / MIS Payable
- T.T.’S Payable
- Pay slips / Banker’s cheques 465980
Issued. 18,25,445 30,47,703
- Others 1,414 1,414 1414
<II> Inter-Office , Adjustment (Net)

i.e. Branch Adjustment)

4
<III> Interest Accrued :

- On Deposits 17,12,343 20,82,337 2522608
- On Borrowings
<IV> Other Liabilities:-
- Accrued Expenses 40,900 40,000 106600
- Reversal of Unrealized ,
Interest 1,12,392 1,12,392 237778
- Amount received from court
Receiver / Borrowers & held
pending adjustments 1,60,696 1,60,696
- Income tax & other Taxes to
be remitted 4,41,210 1327607
- Commission on guaranteed
LC 1,15,468 1,25,744 128300
- Advance rent Reserved from
locker holder. 3,19,510 2,83,837 320368
- Others 71,049 1,97,528 237662
Total other Liabilities &

Provisions(5) 43,68,593 64,83,486 5348317
TOTAL 45,39,66,419 55,57,09,445 798597627

5

(B) ASSETS:
(6) Cash & Balances with
Reserve Bank of India:-
 Cash :
- In Hand 57,41,098 71,86,591 15013378
- In Foreign Currency Notes
<II> Balance with Reserve Bank of

India :
- Incurrent Account
- In other Account
Total of (6) 57,41,098 71,86,591 15013378
(7) Balance with Banks And

Money at call and short
notice:
- In India
- out side in India
(8) Investments:
(9) Advances:
 Bill purchased and
33,60,423 31,82,025
discounted 3163004
<II> Cash credits, overdraft, &
loan repayable on demand
- Cash credit 4,79,01,002 4,74,63,883 51019908
- Overdraft 4,50,33,805 4,73,57,980 50128530
- Loan repayable on demand 43,65,180 49,53,204 5078500
<III> Term loan 9,70,48,629 11,65,89,119 135680795
Total Advances(9) 19,77,09,042 21,95,46,212 241907733
(10) Fixed Assets:-

- Premises (C.O. Item)
- Other Fixed Assets
( Including furniture &
Fixtures) 36,24,509 36,54,074 3455597
Total Fixed Asset(10) 36,24,509 36,54,074 3455597
(11) Other Assets:-

 Other Assets:-
- Inter office Adjustment
i.e. Branch Adjustment 24,61,58,808 32,43,38,322 537180116
- Stationary and stamps on
153379
hand 1,11,871 1,51,979

6
<II> Amount Not in the Nature of

Advances :-
- Prepaid expenses 11,000 11,000
- Advance to staff 15000
- Interest free advances to
317693
staff 57,76,50 4,71,450
- Deposit with Government and
9850
other Departments 9,850 9,850
- Staff loan advance 21700
- On account payments made
16250
to other
- Advance payment to land lord
31900
of office and other premises 20,100 11,700
- Amount paid to pensioners 1,14,080
- Difference in clearing 2,14,163 107990
- Others 2210 336313
- Miscellaneous Inter Branch
Transactions (MIBT):-
a. cash
b. Funds Transferred.
c. Staff and Advance against
LFC, TA, Salary etc.
d. Letter of credit claimed
e. D.D.s issued by other
Banks paid
f. other transaction 2,400 30728
- Share Application money
Total of other Assets(11) 24,68,91,680 32,43,22,567 538220919
TOTAL 45,39,66,419 55,57,09,445 798597627

7
COMPARATIVE PROFIT & LOSS A/C FOR THE 3 YRS

(A) INCOME: -
(1) INTEREST EARNED :--

than Bank:
- Term Loans 19,31,691 40,65,337 5927523
- Demand Loans 2,19,085 2,44,360 216384
- Cash Credits 5,42,000 4,55,539 128102
- Over Draft 7,60,352 8,00,261 978901
- Export / Import Loans -
- Other
Sub-Total 34,53,099 55,65,487 7250910
<ii> Interest on Advances to Banks: -

Discounted :
(Inland) 3,227
Discounted / Negotiated -
(Foreign)
-
Sub-Total <iii> 3,227
<iv>Discount on Bills, TTS etc. - -

<v> Income on Investment (C.O. - -
Item)
<vi>Interest on Balances with - -
<vii> Others:
/ NBO
office. 1,63,38,545 2,03,63,474 32063360
Sub-Total<vii> 1,63,38,545 2,03,63,474 32063360
TOTAL INTEREST EARNED:- 1,97,94,871 2,59,28,971 39314270

2) OTHER INCOME:--

8
- Bill for collection 37,042 29,270 19247
- Letter of credit -
- Letter of guarantee(DPG) 84,500 28,177 7451
- Bill purchase
- Payment of dividend -
- Safe custody Accounts - 500
-
Securities
- Under writing commission -
- Incident / Service charges 5,66,506 4,62,121
- Processing charges 2,05,069 86,790 984341
-
Transaction
-
cheques
2,382
assurance-life
25,825 5,820
assurance non-life
1,410
poducts
Sub-Total(a) 9,18,942 616970 1029459
(Foreign):-
- Bill for collection -
- Letter of credit [export] -
- Letter of guarantee / DPG -
- Bill purchased Discounted -
Sub-Total(b) -------------- -
(c) Exchange:-
- DD / TT (Inland) 2,77,269 2,58,983 290320
- DD / TT (Foreign) -
Sub-Total(c) 2,77,269 2,58,983 290320
Total of commission , Exchange
& Brokerage (a + b + c) 11,96,210 8,75,953 1319779

-
-
of Investment

-
<v> Profit & Loss on Exchanges -

9
Transactions

dividends etc. From
-

- Rent of safe Deposit Lockers 2,22,747 2,26,977 198869
-
written off
-
- Others 241 1,446
Total of Miscellaneous Income 2,22,988 2,28,423 198869
TOTAL OF OTHER INCOME

( I TO VII) 14,19,198 11,04,376 1518648
TOTAL INCOME (1+2) (A) 2,12,14,069 2,70,33,347 40832918

(B) EXPENDITURE:-
(3) INTEREST EXPECTED :-

(a) Banks :-
- Demand Deposits -
- Term Deposit -
Sub-Total (a) ------------- -
(b) Others :-
1. Interest on Saving Deposit: 30,32,755 32,29,747 3732257
- Interest on Fixed Deposit 3,43,883 3,61,521 120843
- Interest on Quarterly Deposit 3,40,490 3,79,189 947008
Deposit 43,76,405 69,63,617 19719599
- Interest on Recurring Deposit 87,978 24,549 22879
- Interest on uttam Deposit 14,810
- Interest on FCNR(B) Deposit 20,57,161 2,51,505
- Interest on Certificate of Dep. -
- Interest on Other Term Deposit 1,00,533 1,84,753 400864
Total of 2. 54,69,815 81,65,136 21211193
Sub Total(a + b) 85,04,570 1,13,94,884 24943450

0

- -
<iii> Interest Paid to Others - -

- Interest on Borrowing paid to -
<iv> Others :-
- Interest Paid to Branches / NBO -
- Interest paid to Central office 49,80,865 70,72,628 9450917
Sub-Total<iv> 49,80,865 70,72,628 9450917
TOTAL INTEREST EXPENDED

( I TO IV) 1,34,85,435 1,84,67,512 34394367
(4) OPERATING EXPENSES :-

Employees:
- Basic pay / Personal pay 21,14,272 19,79,448 2499604
- Special Pay 1,76,024 1,79,672 214447
- Dearness Allowances 5,57,341 6,92,567 1195133
- City compensatory Allowances 66,203 55,691 60884
- House Rent Allowances 1,60,099 1,53,756 164476
- Medical Aid 98,803 52,343 135792
- Leave fare concession 28,639 10,576 41200
- Leave Encashment 5,44,248 91,456 52076
- Bonus 5,824 16,460 4793
- Other Expenses 22,280 23,321 34510
- Contribution to provident fund 91,849 44,645 108610
-
Sub Total 33,75,763 33,96,050 4511525

- Rent paid for office premises 1,49,526 1,99,368 284143
- Rent paid for other premises 27,300 23,400 74400
bank’s property
- Lighting generator Expenses 67,983 68,860 86849
Sub Total <ii> 4,51,987 2,91,628 445392
<iii> Printing & Stationary 40,024 31,285 155505

1

- Depreciation on building -
-
fixtures
Sub Total<v> -------------- -

-
Expenses

- Statutory central Auditors -
- Branch Auditors -
- Traveling and others expenses -
Sub Total <vii> -------------- -
<viii> Law charges 11,700 3,57,942 6584

Telephones etc.:-
- Postage & Telegrams 13,696 Cr 4,142 Cr 6764
- Telephones & Telex / Fax 15,516 Dr 3,697 Dr 14073
- Amount paid for leased line 3,810 Dr
Sub Total <ix> 1,820 8,365 20837

- Bank’s own property -
- Furniture & Fixtures 39,105 7,525 47892
Sub Total <x> 39,105 11,889 53205
<xi> Insurance: -
- Insurance 4,895 -
- Deposit Insurance -
Sub Total <xi> 4,895 -------------- -

- Traveling exp. 17,493 22,096 136422
- Boarding exp. 893 9,326 8736
- Local conveyance paid / 35663
Reimbursed 3,356 21,748
- Diem allowances paid-officer 31,760 17,355 4575
- Diem allowances paid-clerk 30,595 8,000
- Diem allowances paid-sub staff 780
- Reimbursement of conveyance 80
Exp. To eligible officers 56,815
- Petrol Exp. For motors vehicles -

2

-
House
- Hospital exp. 1,956 5,913 4341
- Wages paid to sweepers and 1414
casual labor 16,635 3,460
- Petty cash Expenses 14,010 5,781 20415
- Clearing House Charges 66,140 1,14,035 78643
- Fees for Revenue / Concurrent / 80895
other Auditors 69,649 98,452
- Professional Fees paid -
-
corporations
- News papers / Journals 4,567 4,847 6252
- Donations to Institution -
- Others 24,222 12,594 1614
Sub Total <xii> 3,48,639 5,94,388 432464
<xiii> Provisions and -

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

TOTAL EXPENDITURE ( 3 + 4 ) (B) 1,77,57,371 2,31,59,060 40019879
PROFIT BALANCE ( A – B ) 34,56,698 38,74,287 813039
BALANCE SHEET OF
3
( In Crore)
LIABILITIE MAR MAR MAR MAR MAR
S '05 '06 '07 '08 '09
Total Share 1,124.1 1,124.1
Capital 1,124.14 4 4 1,204.14 1,321.14
Equity Share 1,124.1
Capital 1,124.14 4 324.14 404.14 404.14
Preference
Share Capital 0.00 0.00 800.00 800.00 917.00
1,810.1 2,179.8
Reserves 1,617.50 9 4 2,699.95 3,081.99
Revaluation
Reserves 523.57 507.64 485.85 2,038.67 2,008.92
3,265.2 3,441.9 3,789.8
Net Worth 1 7 3 5,942.76 6,412.05
60,751.6 66,482. 82,776. 110,319. 131,271.
Deposits 7 65 28 67 85
Borrowings 139.69 310.81 782.01 449.10 804.25
60,891. 66,793. 83,558. 110,768. 132,076.
Total Debt 36 46 29 77 10
Other
Liabilities & 4,445.6 5,659.9
Provisions 4,439.32 1 7 7,244.26 9,167.07
Total 68,595. 74,681. 93,008. 123,955. 147,655.
Liabilities 89 04 09 79 22
MAR MAR MAR MAR MAR

ASSETS
'05 '06 '07 '08 '09
Cash &
Balances 3,382.8 5,473.6 11,537.1 11,036.9
with RBI 5,571.81 6 7 9 1
Balance with
Banks, 1,411.2 3,339.2
Money at Call 1,481.13 3 2 1,302.05 1,214.34
27,277. 37,483. 51,795. 72,997.4 85,483.2
Advances 32 48 47 3 0
30,834. 28,639. 27,741. 31,455.1 43,060.7
Investments 76 09 89 9 2
1,369.1 1,483.0
Gross Block 1,333.12 2 4 3,119.80 3,181.69
Accumulated
Depreciation 580.96 644.28 715.77 799.51 903.70
Net Block 752.16 724.84 767.27 2,320.29 2,277.99
3,039.5 3,890.5
Other Assets 2,678.72 4 7 4,343.64 4,582.08
Total Assets 68,595. 74,681. 93,008. 123,955. 147,655.

4
90 04 09 79 24
PROFIT & LOSS A/C OF

CENTRAL BANK OF INDIA AS WHOLE
(Amt in CR)
Mar Mar Mar Mar Mar
INCOME
'05 '06 '07 '08 '09
Interest Earned 5,204.8 5,385. 6,234. 7,995.5 10,455.
8 58 21 4 19
Other Income 938.87 551.24 561.83 902.35 1,069.9
7
Total Income 6,143. 5,936. 6,796. 8,897. 11,525.
75 82 04 89 16
Mar Mar Mar Mar Mar

EXPENDITURE
'05 '06 '07 '08 '09
Interest expended 2,829.9 3,005. 3,759. 5,772.4 8,226.7
3 51 79 7 2
Employee Cost 1,277.5 1,275. 1,175. 1,214.3 1,272.5
6 74 42 4 9
Selling and Admin 804.55 296.00 701.64 563.59 653.17
Expenses
Depreciation 53.17 50.90 65.00 73.61 83.59
Miscellaneous 877.04 1,051. 596.18 723.71 717.86
Expenses 26
Preoperative Exp 0.00 0.00 0.00 0.00 0.00
Capitalised
Operating Expenses 2,284.5 1,782. 2,133. 2,034.8 2,184.0
7 22 16 9 5
Provisions & 727.75 891.68 405.08 540.36 543.16
Contingencies
Total Expenses 5,842. 5,679. 6,298. 8,347. 10,953.
25 41 03 72 93

Net Profit for the 301.50 257.42 498.01 550.16 571.24
Year

5

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FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA

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

economic objective of the Government of India with

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 2

You know people earn money to meet their day-to-day expenses

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 3

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

Bank is a lawful organization, which accepts deposits that

a. Safety of deposit, and

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

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 4

grant loans and advances to farmers, traders and businessmen for

Thereby banks contribute to the economic development of the

The activities carried on by banks are called banking activity.

The development of banking in an inevitable precondition for the

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 5

the human body. Due to the development of banking advances are

Banking sector is the first and most important aspect of the

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

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 6

1.1 ORIGIN OF WORD BANK

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 7

1.2 DEFINITION OF BANK

A bank is an institution which deals in money. A Bank receives money

“Banking company is a company, which transects the business

“A ‘bank’ or ‘banker’ is one who, in the ordinary course of his

“Bank is an establishment which makes, to individuals, such

“Banking means where financial transactions of credit are done

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 8

"Banking business" means the business of receiving money on

(Banking Act (Singapore), Section 2, Interpretation)

"banking business" means the business of either or both of the

1. receiving from the general public money on current, deposit,

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 9

1.3 TRADITIONAL BANKING ACTIVITIES

Banks act as payment agents by conducting checking or current

Banks borrow money by accepting funds deposited on current

Banks provide almost all payment services, and a bank account is

Banks borrow most funds from households and non-financial

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 10

1.4 BANKING SYSTEM IN INDIA

In the economic development of a nation banks occupy an important

In 1770, first Indian bank known as Bank of Hindustan was

Bank of Calcutta – 1806

Other banks such as

Allahbad Bank came into existence in 1865

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 11

The first Indian joint stock bank known as Oudh Commercial

A scheme of social control on banks was enforced through

Agricultural Credit Development, Rural Planning and Credit Cell

RECENT HISTORY OF INDIAN BANKING

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 12

over the country. The recommendations of this committee led to

Another evaluation of the banking in India was undertaken

On July 19, 1969, the Govt. promulgated Banking Companies

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 13

Meanwhile, during 1962 Deposit Insurance Corporation wasestablished

In the post-nationalisation period, there was substantial increase

Expansion phase had begun in mid-60s but gained momentum after

THE S.P.B. COLLEGE OF BUSINESS ADMINISTRATION 14

and semi-urban population, which had no access to banking hitherto.

Consolidation phase: The phase started in 1985 when a series of

Reforms phase The macro-economic crisis faced by the country in