CHAPTER-5 CONCLUSIONS AND SUGGESTIONS

5.1 CONCLUSIONS

1. The net worth of a business is also known as its book value, or as its owners’
equity. The net worth has been increasing in this period of time, it increased by
983.24 in 2016-17 and 9.44% in 2017-18 as shown in table no 6.
2.Total liabilities are the aggregate debt and financial obligations owned by a business
to individual and organization s at any specific period of time. During 2016-17 total
liabilities increased by 7.26% and in2017-18 it increased by 16.03% as seen in table
no 7.
3. Total assets is the total amount of assets owned by the bank. Assets are items of
economic value. Total assets in the year 2016-17 increased by 7.26% and in 2017-18
it increased by 16.03% seen in table no 8.
4. The most important and major assets for a bank, are advances and investments,
Advances in the year 2016-17 has deceased by 1.04% and increased by 22.60% in
2017-18. Investment are the major asset of the banking company. Investments have
increased at the decreasing rate. In 2016-17 it increased by 27.24% and 5.69 % in
2017-18as shown in table no 9.
5. Deposit refers to a portion of funds used as security or collateral for delivery of a
good. Deposits are increasing, during 2016-17 it increased by 2.36% and it increased
by 14.12% in 2017-18 seen in table no 10.
6. The comparative statement and profit and loss account shows the increase and
decrease in the items during the year 2015-2018. It shows that that all items are
increasing expect few items.
7. The operating income has increased over the year. During the year 2016-2017 it
increased by a slight change of 0.43 % of increment. And in year 2017-1018 it has
increased by 6.42%. it shows that the bank is turning a higher profit margin on its
revenues.
8.The interest earned over the years in the period 2017-18 is more than the previous
year. It has increased by 6.70% compared the the previous year which had a increase
of 5.21%.

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 5.2 SUGGESTIONS

• The reserved bank of India issued prudential norms for banking companies. According
to that more non-performing asset may lead to bankruptcy. Hence the bank tries to
reduce its non-performing assets to an extent. The prime motive of any type of business
is to earn profits. For banking company, rendering financial services and earning profits
are the primary objectives. As a nationalized bank, it also has the same objective. The
growth rate of the profit is decreasing. So, the bank has to improve its profits. For that
the bank needs concentrate on core and non-core activities.

• The major income for any financial institution is interest income. A banking company
will get more interest income only when it lends money for productive processes.
Advances are the major assets of a banking company. The bank tries to increase
advances because it is the core business of the bank. Increase in advances pays a way
to increase in interest income which increases the profit of the bank.

• The bank should try to control their borrowing. Because more borrowing leads to
increase in their expenses which reduces their profit. At the same time, low borrowing
is also not good for the company. the borrowing in the table no1 and table no 2 are
increasing at an increasing rate. Therefore, the bank should try to reduce the borrowing
which will automatically reduce interest expenses to a certain extent.

• Deposits are of two types. One is term deposits and the other is demand deposits. The
important source of funds for bank is deposits. More deposits mean the bank are
attracting the customers. The bank provides advances against his/her deposits to the
needy person. This provides the bank to get interest income as well as safety for the
funds. Therefore, the bank needs to increase their deposits.

• The bank needs to focus on the work than the work achieved. It means the bank has to
work on attracting the new clients and render them all types of financial services and
broaden then services they’ve been providing. This would eventually gain them profit.

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