EXECUTIVE SUMMARY
Funds which means a stock of money and monetary
resources is always subject to change in its magnitude and
composition. A continuous change in the magnitude as well as
composition of funds is deemed as a flow of funds. Therefore,
flow of funds can be observed in the Financial Statements.
Financial Statements of any type of company
consist of the Balance Sheet and the Profit & Loss Account.
Balance Sheet consists of Liabilities and Assets which is also
called as Sources and Uses.
Balance Sheet has to be prepared according to the
Schedules. There are different schedules for different
companies. For example Fixed Asset schedule is 10 in Banking
Company whereas it is 5 in Corporate.
In other words, what is the Cost of Funds and after
deploying it what are they earning from it. Are the Cost of
Funds and Revenues matching or not.
It is also very important to see how the banks
manage liquidity. Are the banks able to satisfy the needs of the
customers or not & what are the different types of risk which is
associated with the funds of the banks & how much profitability
they are earning from these funds.
All the above concepts can be found from the
Balance Sheet and Profit & Loss Account itself. Balance Sheet is
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very much useful for the investors, and even for the
government.
INTRODUCTION
Banks acts as vital links between the policies of the
government and the various economic factors. Banks have
become the most important financial intermediaries in the era
of market-oriented economies by reflecting the performance of
the economy as a whole.
To analyze the performance of the banks, it is
instructive to take a brief overview of the principal assets and
liabilities as presented in the bank’s balance sheet and also its
revenues and expenses from the income statement. The main
objective in this project is to examine the balance sheet and
income statement of the bank in a manner to familiarize with
the sources and uses of the funds and the revenues and the
expenses of the banks.
A bank is a government-regulated, profit-making
business that operates in competition with other banks and
financial institution to serve the savings and credit needs of its
customers. The primary business of banks is accepting deposits
and lending money. Banks accept deposits from customers who
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want the safety and convenience of deposit services and the
opportunity to earn interest on their excess funds. Banks put
their depositors’ funds to profitable use by lending those funds
to others- to individuals for satisfying their personal needs, to
businesses for satisfying their working capital needs, to state
and local government units for public projects.
Banks safety and profitability depend on effective
management of a bank’s assets and liabilities. A bank’s total
pool of funds shifts constantly as funds flow in and out of the
bank. Funds management is planning and coordinating a bank’s
sources and uses of funds over time to achieve maximum
profitability and yet maintain adequate safety and liquidity
consistent with banking regulations and community needs.
FUNDS AND FLOW OF FUNDS-MEANING
According to Bonneville and Dewey, ‘funds’
constitute the prime importance in starting and operating any
business enterprise. The most significant of all financial
activities is the raising and management of funds. In the
ordinary parlance, the term funds mean cash, or at least cash
equivalent. In corporate statements, however, the so-called
funds statement usually refers to net working capital.
The word funds have different connotations for
various individuals. For the layman, it usually refers to cash; for
accountants and analysts, it most frequently refers to working
capital---current assets less current liabilities; it may refer to all
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the resources or to purchasing power. For others, it may refer to
the net quick or current assets--- cash, temporary investments
and net receivables, less current liabilities; or to net owners’
equity.
The words funds are closely related to the normal
decision- making process of a business, to accounting
statements, the balance sheet and the income statement. It is
related to a time span.
Fund which means a stock of money and monetary
resources is always subject to change in its magnitude and
composition. A continuous change in the magnitude as well as
in the nature of composition of funds is deemed as a flow of
funds. Such a profile which highlights the inflows and outflows
of funds is useful for the owners and lenders in order to ensure
profitability and safety of their investment in the concern.
The concept of ‘Fund Flow’ arises from the changes
that take place in the proprietor’s fund and the borrowed funds
(liabilities) and the resources or assets held against them.
These changes are an outcome of the movement of funds,
which take place as a result of the operations of the business.
While a change in a particular item of liability or asset can be
ascertained from time to time, changes in all the items of
assets and liabilities can be figured out only from balance
sheets. The changes that take place in these items over a given
period are reflected in the next balance sheet and so on. Flow
of funds can be observed in the Financial Statement.
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PREPARATION OF FINANCIAL STATEMENT IN
BANKS
According to Section 29 of the Banking Regulation
Act, 1949 banks will have to prepare the Balance Sheet and
Profit & Loss Account in the format set out in the third schedule
of the Act. The items that appear in the bank’s balance sheet
and profit and loss account are shown under different
schedules.
Form ‘A’ is the form of the balance sheet of a bank
and has 12 schedules under which the various assets and
liabilities are classified.
Form ‘A’
FORM OF BALANCE SHEET
Balance Sheet of XYZ Bank Ltd. As on 31st March
Particulars Schedul
e No
As on
31.3…….
Current
Year
As on
31.3…….
Previous
Year
CAPITAL AND LIABLITIES
Capital
Reserves and Surplus
1
2
6
Deposits
Borrowings
Others Liabilities and
Provisions
3
4
5
Total Rs
ASSETS
Cash and Balance with RBI
Balance with Banks and
Money at call
and Short Notice
Investments
Advances
Fixed Assets
Other Assets
6
7
8
9
10
11
Total Rs
Contingent Liabilities
Bills for Collection
12
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CAR (Capital Adequacy Ratio)
What is Capital Adequacy Ratio?
It is the measure of a bank’s financial strength
expressed by the ratio of its capital (net worth and
subordinated debt) to its risk-weighted credit exposure (loans).
It is also called CRAR-Capital to Risk-weighted Assets Ratio. The
Reserve Bank of India (RBI), currently prescribes a minimum
capital of 9% of risk-weighted assets, which is higher than the
internationally prescribed percentage of 8%. Most banks in
India have a capital adequacy is considered safer because if its
loans go bad, it can make up for its net worth.
Why do banks have to maintain CAR?
CAR is the ratio that measures a banks capacity to
meet time liabilities and risks like operational risks, credit risks
and other risks. Indians banks regulator, RBI, has prescribed a
minimum ratio to be maintained by the banking system. This is
done because the depositors are secured about their deposits
and banks have a cushion for their potential losses. In the face
of the financial crises seen in the last few years, maintenance of
CAR is mandated by the regulatory authorities to protect the
depositors.
What is risk weighting?
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Every financial asset carries a risk. The extent of risk,
however, varies. For instance, government bonds carry almost
no risk while loans to government-promoted companies carry
some risk. On the other hand, loans to a corporate carry 100%
risk weighted as the entire loan is exposed to risk. Degrees of
credit risk expressed as percentage weights have been
assigned by RBI to each such asset.
How are risk weight assigned?
Different types of assets have different profiles in risk
value. CAR primarily adjusts for assets that are less risky by
allowing banks to ‘discount’ lower-risk assets. The specifics of
CAR calculation vary from country to country. In the most basic
application, government debt is allowed a 0% ‘risk weighting’-
that is, they are subtracted from total assets for purposes of
calculating the CAR.
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Characteristics of Financial Statement in
Banks
A bank’s financial statement is quite different from those
of a Firm or in any other Industry. A Simplified form of a typical
Bank’s balance sheet would appear as follows:
Rs. in
Crores
Liability
Am
t Asset Amt
Deposit : Cash 3
Short term 65
Loans & Advances
:
Medium term 20 Short term 30
Medium/Long
term 25
Borrowings 5 Investment 40
10
Capital &
surplus 10 Fixed asset 2
10
0 100
The Characteristics of the Above Financial Structure are
as follows:
The Sources of Funds are primarily in short term in Nature,
payable on demand or with short term maturities. Depositors
can renegotiate the term deposit rates as market Interest rates
change.
Financial leverage is very high, in other words, the equity base is
very low. This is risky and can lead to earnings volatility.
The proportion of fixed assets is very low.
A high proportion of banks funds are invested in loans and
advances or investments, all of which are subject to interest
rate volatility.
Besides, when deposit rate change, the consequent impact on
the cost of funds could create problems with the pricing of
portfolio of assets.
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Operating leverage is relatively low due to comparatively lower
fixed assets
SOURCES OF FUNDS-BANK’S LIABILITIES
Similar to the balance sheet of any other firm, the
banks’ balance sheet also has assets that represent
Application of Funds to generate revenue for the bank and
liabilities and net worth that form the Sources of the bank’s
funds.
However, within this framework, there are significant
differences in the basic composition of the assets and the
liabilities and how they contribute towards the revenues and
expenses of the bank.
The sources of the funds for the lending and
investments activities constitute the Liabilities of the bank’s
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balance sheet. The various sources through which the bank
raises funds for its business are broadly classified into the
following:
SOURCES OF FUNDS
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CAPITA
RESERVES ANDSURPLUS
DEPOSI
BORROWINGS
OTHER LIABLITIES AND PROVISIONS
Capital
The RBI has provided guidelines for the capital
requirement of the banks. The capital of the nationalized banks,
which is fully contributed by the government, will also include
the contributions made by the governments for participating in
the World Bank projects. For banks that are incorporated
outside India, and have branches in India, the capital will be the
amount they bring in by way of start-up capital as prescribed by
the RBI. Under this head amount of deposits kept with the RBI
under section 11(2) of the banking Regulation Act, 1949 is also
shown. According to this section, if the bank is not incorporated
in India, it will have to maintain a deposit with the RBI either in
cash or in the form of unencumbered approved securities or the
party in such securities. New banks will have to be incorporated
under the Indian Companies Act and have a minimum capital
requirement of Rs 100 crore. Banks will have to show in
their capital account the authorized, issued, subscribed and
called –up capital. The account will, however, be represented by
the paid-up capital which will be arrived at after deducting the
calls-in-arrears and adding up the paid-up value of forfeited
shares to the called-up capital.
The Purposes of Bank Capital
The most obvious purpose of bank capital (although
minor in comparison with other businesses) is that it provides
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funds for fixed-asset purchases-building, equipment, and other
physical assets-necessary to conduct the bank’s business. A
major difference between banks and other businesses is that
banks operate with a much lower level of capital than non-
financial businesses.
Capital is also the basis on which bank regulators set
limits on lending. These limits restrict the amount that can be
lent to any one borrower to a certain percentage of the bank’s
total capital. Such limitations force banks to diversify their
loans, thus protecting bank from concentrating funds in one or
two major loans that may lead to major losses. Finally capital is
the basis for market evaluations of bank performance.
Reserves and Surplus
The components under this item of the bank’s
liability will include statutory reserves, capital reserves, share
premium, revenue and other reserves and balance in profit and
loss account. These items are discussed below:
1. Statutory Reserves: Section 17 of the Banking Regulation
Act, 1949 which deals with the reserves fund account of the
bank provides that every banking company incorporated in
India shall create a reserve fund out of the balance of profit of
each year as disclosed in the profit and loss account. This
transfer of funds will be before any dividend is declared and the
amount will be equivalent to not less than 20 percent of the
profit.
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2. Capital Reserves: The surplus arising due to revaluation
will be considered as the capital reserve. It will not include any
amount that is regarded as free for distribution through the
profit and loss account. As stated earlier, if there is excess
depreciation on investments and the bank intends to reverse it,
then it shall be taken to capital reserve. Similarly, profit made
on sale of permanent investments shall also be taken to capital
reserves.
3. Revenue and Other Reserves: All other reserves other
than the capital; reserve will appear under this category of
reserve fund. Excess provision for depreciation in investments
will have to be appropriated to investment fluctuation reserve
account and be shown under this head. This amount will be
considered as Tier-2 capital and can be utilized for the
depreciation requirement on investment in securities, in the
future.
4. Share Premium: This item will show the premium on the
issue of share capital by the bank.
5. Balance in Profit and Loss Account: The profits
remaining after the appropriations are considered under this
heading.
Deposits
The equity capital and reserves of a bank form
relatively a small proportion of the total liabilities. Banks are
highly leveraged organizations, relying mainly on debt and the
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chief sources of funds are the deposits that are raised. These
deposits are grouped into various types depending on the
purpose and the maturity.
The deposits are broadly classified as deposits
payable on demand and deposits accepted for a term and
hence payable on a specified date. Deposits payable on
demand consist of current deposits and savings deposits.
However, the classification of these deposits for balance sheet
purpose will be as demand deposits, savings bank deposits and
term deposits.
Demand Deposits: these include balances in current account
and term deposits which have become due for payment but have
not been paid yet. These funds represent interest-free balances.
These accounts will be in the form of an operating account
primarily for a business concern.
1. Savings Deposits: these represent balances payable on
demand which is in the form of an operating account catering to
non-commercial purposes such as individuals, trusts, etc.
2. Term Deposits: Deposits that are repayable after a
specified term are included here. The minimum maturity period
for which term deposits can be accepted are 15 days to 10
years and in case of deposits of Rs.15 lakhs and above this
period can be relaxed in certain specific case.
These term deposits which can be raised from banks
and others will include fixed deposit, cumulative and recurring
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deposits, cash certificates, certificates of deposits, annuity of
deposits, deposits raised under various schemes, ordinary staff
deposits, FCNR deposits, etc. The deposits under special
schemes which are included here will be shown as demand
deposits when they mature for repayment.
All the deposits mentioned above will be classified as
Those from banks and
From others.
The deposits from banks will include deposits from
the banking system in India, co-operative banks, foreign banks
which may or may not have operations in India. The balance
sheet will also present the deposits segregating them into those
raised by branches in India and those raised by overseas
branches.
The Cost and pricing of Funding Instruments
A variety of factors influence the cost of deposits, the
single most important source of bank funds. Bank funding
sources have undergone profound changes in recent years, and
continued change and challenge are still on the horizon. The
deposit structures of most banks have been altered significantly
due to marked declines in traditional demand deposits and
rapid increases in the volume of time deposits. The sources of
most bank funds are now interest sensitive and increasingly
volatile. Competition for funds is intense, and effective
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management of a bank’s liabilities now requires a much more
aggressive approach to attracting and keeping funds.
Bank funds managers must determine the true costs
and appropriate prices of deposit accounts and must evaluate
the relative costs of various short-term sources of borrowed
funds.
Determining Deposit costs and prices
The changes in bank deposit structure coupled with
increased competition for funds, have forced many banks to look
more realistically at the true costs of obtaining funds and the
adequate pricing of bank products and services to offset the total
cost of funds. Recognizing the true cost of funding and recovering
those costs through accurate pricing are essential to bank
profitability and stability in the increasingly competitive and
complex financial services industry.
Borrowings
Borrowings of the bank will be shown as those made
within India and those made in the overseas markets. Borrowings
in India will consist of Borrowings/ refinance obtained from the
RBI, commercial banks (including co-operative banks) and other
institutions and agencies like IDBI, EXIM Bank of India, NABARD
etc. The borrowings made outside India will include the overseas
borrowings made by the Indian branches and the borrowings of
the foreign branches. The amount borrowed in the money market
will be shown under borrowings from other banks and other
institutions depending on the lender.
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These borrowings will not include interoffice
transactions. Further, the funds raised by the foreign branches
by way of Certificate of Deposits, notes, bonds, etc., should be
segregated into deposits, borrowings, etc., based on the
documentation.
The secured borrowings made in the above two
categories i.e. within and outside India will be shown separately
under this head.
Purchased and Borrowed Funds
Purchased or borrowed funds play a significant role in
bank funds management because they offer banks an
alternative means of liquidity apart from assets liquidation.
They also enable banks to compete for funds to expand their
earning assets rather than relying solely on funding from
deposits. All banks purchase or borrow funds from time to time
to met reserve deficiencies, but many banks with access to
national money markets also use purchased funds to enable
them to expand their assets significantly.
Comparing the Costs of Borrowed Funds
Comparing the costs of funds that banks borrow or
purchase is not as straightforward as cost comparisons on
various types of deposit instruments. Short-term borrowed
funds, or money market liabilities, are liabilities that a bank
incurs voluntarily to cover both expected and unexpected short-
term needs for funds. The costs of borrowing vary somewhat
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depending on the characteristics of the particular instrument
used, but the major determinants of cost with borrowed funds
are market supply and demand, as well as the efficiency of
funds managers in obtaining funds.
Other Liabilities and provisions
The other liabilities of the bank are grouped into the
following categories:
Bills Payable: This includes drafts, telegraphic transfers,
travelers’ cheques, mail transfers payable, bankers’ cheques
and other miscellaneous items.
Interoffice Adjustments: As mentioned earlier, while
discussing the assets side of the balance sheet, the credit
balance of the net interoffice adjustments will appear on the
liabilities side of the bank’s balance sheet.
Interest Accrued: The interest accrued but not due on
deposits and borrowings is entered under this heading. Interest
accrued and due is usually credited to the deposit account and
hence such amounts usually do not get reflected here.
Others: The other liability items include the net provision
for income tax after deducting the advance payment, tax
deducted at source, etc., and other taxes like interest tax. It
also includes the surplus in the aggregate in provisions for bad
debts account and for depreciation in securities. The
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contingency funds which are not disclosed as reserves but are
required to be included under this head are as follows:
the proposed dividend/transfer to government,
unexpired discount,
outstanding charges like rent, conveyance, etc.,
other liabilities that do not appear under any head such as
unclaimed dividend.
Provisions and funds kept for specific purposes and certain
types of deposits like staff security deposits, margin deposits,
etc., where the repayment is not free.
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APPLICATION OF FUNDS-BANK’s ASSETS
The funds mobilized by the bank, through various
sources will be deployed into various assets. The assets side of
a bank’s balance sheet consists of various items that fall into
the following broad categories:
APPLICATION OF FUNDS
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Cash
and
Balanc
es
with
Reser
ve
Bank
Balanc
es with
Banks
and
Money
at Call
and
Short
Notice
Investme
Advances
Fixed
Other Assets
Within the broad classification given above, lies a variety of assets, a detailed description of which is given below:
Cash and Balances with Reserve Bank of India
All cash assets of the banks are listed under this
account and it forms the most liquid account held by any bank.
Cash is held by banks to cover deposit withdrawals, meet
emergency expenses and handle unexpected credit demands
from customers. The cash assets consist of the following:
1. Cash in Hand: This asset item includes cash in hand,
including foreign currency notes and cash balances in the
overseas branches of the bank. These are held on the bank’s
premises to meet customer requests for withdrawal and loan
demands at short notice.
2. Balances with the RBI: Cash account also includes the
balances held by each bank with the RBI in order to meet the
statutory Cash Reserve Requirements (CRR). Cash will also be
held by banks in current account with various offices of the RBI.
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Cash maintained by a bank in the current chest is also reflected
here as an integral part of the balances. A currency chest is an
office, which is treated as a representative office of the RBI, but
is actually maintained by a bank in terms of specific approval
given to the bank by the RBI. Hence, cash balances with
currency chest are treated as if the cash is deposited with the
RBI and hence is accounted for the purpose of CRR.
Balances with Banks and Money at Call and Short
Notice
Primarily, assets under this category will be shown
separately as those maintained in India and abroad. The bank
balances include the amount held by the bank in the current
accounts and term deposit accounts, i.e. the current account
and other term deposit accounts, both within and outside India
should be shown separately. The bank accounts within India will
include all balances with banks, including co-operative banks.
Likewise, the balances with banks outside India will include
balances held by the domestic/foreign branches of the bank
with other banks, which are located outside India. However, the
balances maintained by the branches in India with their foreign
branches will be considered as inter- branch balances and shall
not be classified here. The other sub – class of asset that
appears under this category is, ‘Money at call and Short Notice.’
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All loans made in the interbank call money market that are
repayable within 15 days notice are included here. All loans that
are made outside India and which are classified as money at
call and short notice in those markets will also be included.
These secondary reserves (CRR and SLR from the primary
reserves), which are in the form of call loans and loans payable
at short notice, serve as a first line of defense when the bank
needs funds to meet withdrawal requirements at short notice.
The funds deployed in call market are shown separately
depending on whether they are deployed in India or abroad.
Investments
A major asset item in the balance sheet of a bank is
investments in various kinds of securities. Bank’s investments
are classified into six different baskets depending upon the
nature of security. These include:
Government Securities
Approved Securities
Shares
Debentures and Bonds
Subsidiaries and Bonds
Other investments
While the above – mentioned categories refer to the
investments made in the domestic market, bank’s can also
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invest in the overseas markets. The overseas investments will
include foreign government securities, subsidiaries and/or Joint
Ventures and other investments.
Advances
The most important asset item on the bank’s balance
sheet is advances. Advances, which represent the credit,
extended by the bank to its customers, form a major part of the
assets for all the banks. The assets account will be presented in
the balance sheet of a bank in three different formats. In the first
format, categorization will be based on the type/nature of the
asset, in the second format, advances will be categorized into
secured and unsecured advances and the third will consist of a
categorization based on the sectorial credit disbursements. The
total advances of all the three formats will be equal since the
same advances are presented in different ways.
As in the case of investments, the balance under the
advances is reflected in the balance sheet after reducing the
provisions. It will be helpful to know the following to understand it
better.
1. Net Bank Credit: This represents the total credit outstanding
in the books of the bank.
2. Gross Bank credit: Net Bank Credit plus Bills Rediscounted by
the bank with IDBI/SIDBI.
The bank will have to make provisions depending on
the level of NPAs. The figures reflected in the balance sheet are
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net of the provisions. It means that the figures in the balance
sheet will be net bank credit less provisions. The provisions on
account of NPAs are usually less than NPAs since in most of the
cases the provisions are not made to the extent of 100 percent.
Type/Nature of Advance: Given below is the
Classification of advances based on the nature/type of the
credit extended.
- Bills purchased and discounted: The amount that is
shown against this item in the balance sheet will be discounted/
purchased by banks from the client irrespective of whether they
are clean/documentary or domestic/foreign.
- Cash credits, overdrafts and repayable on demand:
Items under this category represent advances which are
repayable on demand though they may have a specific due
date.
- Term Loans: All term loans extended by the bank
including their outstanding balances are shown here. These
advances also have a specific due date, but they will not
become payable on demand.
Secured/Unsecured Advances : Based on the underlying
Security, advances are classified into the following categories:
- Secured by Tangible Assets: All advances are part of
advances, within/outside India, which is secured by tangible
assets, will be considered as secured assets.
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- Covered by Bank/Government Guarantees: Advances in
India and Outside India to the extent they are covered by
guarantees of Indian and Foreign government/banks and DICGC
and ECGC will be included here.
- Unsecured Advances: All advances that do not have any
security and which do not appear in the above two categories
will come under this category.
Sectorial Advances: Sectorial segregation will be done
separately for advances within and outside India.
Advances in India will be classified into the
following:
- Priority sector represents advances made to sectors which
are classified as priority sectors by the RBI.
- Public sector advances are those advances that are made
to central and state government and other government
undertakings. Advances extended to public sectors which are
eligible to be classified as priority sector should be shown under
the category of priority sector and not as public sector
advances.
- All advances made to the banking sector including the co-
operative banks will come under the head of banks.
- All the residual advances will appear under the head of
“others”. This includes non-priority advances given to the
private, joint and co-operative sectors.
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Further, if the advances provided by the banks are on
a consortium basis, the amount to be considered will be net of
the share from other participating banks/institutions.
Advances that are made outside India will be
classified into those extended to banks and those extended to
others. Advances to others will be classified as bills purchased
and discounted syndicated loans and others.
Fixed Assets
Fixed assets of the bank are classified into premises
and other fixed assets which include furniture and fixtures.
Premises which are wholly or partly owned by the bank for
business/residential purpose will be shown after considering the
additions or deductions made during the year and writing off
the depreciation. Further, if there is any write-off on reduction
of capital and revaluation of assets, then the revised figures
must be shown in the subsequent balance sheets for a period of
five years.
All fixed assets other than premises will appear as
other assets. These include furniture, fixtures and motor
vehicles. Cost of the assets as given in the preceding year’s
balance sheet will be adjusted for any additions and deductions
made during the year and the write- offs due to depreciation.
Other Assets
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The remainder of the items on the assets side of the
bank’s balance sheet is categorized as other assets. The
miscellaneous assets that appear here are:
Interoffice Adjustments: This shows the net position of
the interoffice accounts, domestic as well as overseas. The
debit balance obtained after aggregating all the interoffice
accounts will appear in this account. This will generally include
items in transit and unadjusted items. If the net balance shows
a credit, it will be shown on the liability side. Since 1998-99,
banks are required to make 100% provision for the net debit
position in their inter-branch accounts arising out of the
unrecognized entries (both credit and debit) outstanding for
more than 3 years as on March 31, every year.
Interest Accrued: Interest that can be realized in the
ordinary course will be considered. Included in this will be the
interest accrued, but not due on investments and advances and
interest due, but not collected on investments. Interest on
advances which are in the form of loans, overdrafts and cash
credit is debited to the respective accounts and hence no such
amount usually gets classified here. However, interest accrued
on bills purchased/discounted gets classified here. Hence, the
major item under this category will be interest on investments.
Tax Paid in Advance/Tax Deducted at Source: The
amount of tax deducted at source on securities and the
advance tax paid to the extent that they are not set-off against
relative tax provisions will appear under this item.
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Stationery and Stamps: Bulk purchase of stationery
which will be written off over a period of time will be considered
under this head of account.
Non-banking Assets Acquired in Satisfaction of
Claims: Items under this account include immovable
properties/tangible assets which are acquired by the bank in
satisfaction of bank’s claims on others.
Others: Other items primarily include claims that are in the
form of clearing items, unadjusted debit balances representing
additions to assets and deductions to liabilities and advances
provided to the employees of the bank. Losses that are incurred
over and above the capital, reserves and surplus will also
appear under this item. In respect of public sector banks, losses
incurred can be set-off with capital without the prior approval of
the government. Hence, all the accumulated losses are
reflected under the item “Other Assets” irrespective of whether
losses are in excess of capital or not. In all such cases it will be
appropriate to reduce the accumulated losses shown on the
asset side from the total of the balance sheet to arrive at
working funds/earning assets/total assets. Working Funds,
Earning Assets and Total Assets represent the same item and
are used interchangeably.
The assets and liabilities noted above will generate
revenues and create expenses for the bank. Banks will thus have
to balance their revenues against their expenses in such a way
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that there is adequate net income for them to sustain profitability
in that business.
Contingent Liabilities
A Contingent liability is an off Balance sheet item. A
Liability arises out of a present obligation as a result of past
events. Further settlement of liability is expected to result in an
outflow of resource, by way of payments to Creditors.
A Contingent liability, on the other hand, is a possible
obligation, which could arise depending on whether some
uncertain future event occurs. It could also arise where there is
a present obligation, but payment is not probable or amount
cannot be measured reliably.
Contingent liabilities in the case of banks can
generate substantial income while the going is good. A major
contributor to contingent liabilities is the non- funded business
that banks take such as issue of Letters of Credit, Opening
Letters of Guarantee and derivatives dealing.
The major risk in contingent liabilities is the
counterparty default risk. In the event of counterparty failing to
honour his commitment, the liability will crystallize into a fund-
based liability of the bank. Relatively higher fees for these
Services offset the higher risk.
33
MATCHING REVENUES AND COSTS OF
COMMERCIAL BANKS
A commercial bank deals in other people’s money. It
gathers funds on one hand, and, deploy them on other. The
problem is how to do this more effectively. For long the banks
followed the Traditional Approach called Asset management.
This meant putting funds, made available by the depositors to
the bank, to profitable use, or, deploying them in a balanced
mix of assets.
The traditional approach assumes multiple pools of
funds. Funds as they flow in to the bank are classified on the
basis of different time structures of different sources short,
medium or long; and, are assigned conceptually to different
pools, so as to permit matching of short sources with short uses
and long sources with long uses.
The traditional approach implicitly makes two further
assumptions:
Sources of funds are fixed and given and,
The liquidity is the overriding criterion for success.
But, the general analytical approach to determination
of the liquidity needs of a bank rests on the fundamental fact
that changes in needs - whether short-term or long-term – arise
from either changes in total deposits or in total customer loans
34
Basic underlying relationship assumed between the
costs and revenues are as follows:
Costs Resources
Services Revenues
All activities need resources and have therefore
costs. But, all activities do not directly result in services. There
are thus direct and indirect costs for services. A service is
identified on the criterion that it satisfies the need of the
customer and for which he would be willing to pay a price or a
service charge, i.e. it can be a source of revenue. Services
rendered by a commercial bank can be classified into two
categories: funds-related and non-funds-related.
35
Activities
Return and Cost of Funds in Banks
Return on Application of Funds
Total deployment of funds by a commercial bank during a
period can be divided in to large number of components. For
e.g. Let us assume that deployment of funds by banks is
divided into three broad categories:
Deployment in statutory and non-statutory requirements of
cash and liquidity reserves and it includes investment in liquid
governmental bonds or securities.
Deployment in lending to nationally determined high-
priority borrowers at concessional rate of interest.
Deployment in normal or competitive lending to the rest of
the borrowers at concessional and non concessional rates.
Similarly, the interest earned on the total deployment
of funds by a commercial bank during a period can be divided in
to three broad categories:
36
Total amount of interest earned from statutory and non-
statutory reserves of cash and liquidity reserves which includes
investment in liquid governmental bonds or securities.
Total amount of interest earned from lending to nationally
determined high-priority borrowers at concessional rate of
interest.
Total amount of interest earned from normal or competitive
lending to the rest of the borrowers at concessional and non
concessional rates.
The total amount of interest earned on a particular
component is divided with rate of interest earned from such
deployment of funds to get appropriate rate of earnings.
But, in order to arrive at an appropriate rate of
earnings on funds deployment by a bank, it is necessary to
deduct the allocated non-interest cost from out of interest
revenue and add the corresponding service charges or
commission recovered from the customers as non-interest
revenue.
Cost of Funds in Banks
Total sources of funds by a commercial bank during a period
can be divided in to large number of components. For e.g. Let
us assume that sources of funds by banks are divided into three
broad categories:
37
Sources from demand deposit such as savings account
deposit, current account deposit.
Sources from time deposit such as FD’s, recurring account.
Sources from long term borrowings, loans and advances.
Similarly, the interest paid on the total sources of
funds by a commercial bank during a period can be divided in to
three broad categories:
Interest cost to demand deposit such as savings account
deposit, current account deposit.
Interest cost to time deposit such as FD’s, recurring
account.
Interest cost to long term borrowings, loans and advances.
The total amount of interest cost on a particular
component is divided with rate of interest cost from such
sources of funds to get rate of cost of sources of funds:
But, in order to arrive at an appropriate rate of cost
of sources funds by a bank, it is necessary to deduct the
allocated non-interest revenue and add the non-interest cost
such as manpower, administrative and other operating cost.
Cost of Loanable Funds in Banks
A part of deposits received by a bank from the public
has to be deployed as cash reserves and as investment in
highly liquid assets, i.e., in government and other eligible bonds
and securities. The Cash Reserve Ratio and Statutory Liquidity
38
Ratio are laid down by the Reserve Bank of India. These assets
on average earn lower interest rates compared to what is on
average earned on loans and advances.
For working out cost of loanable funds, the loss
arising out of deployment under CRR and SLR obligations. The
loss is defined as the difference between the cost of funds, and
rate of earnings on obligatory deployment of funds.
Cost of Funds versus Cost of Loanable Funds
The definition of cost of funds is considered to be
most appropriate for all types of comparisons and decisions.
Reason is based on the following:
1. cost needs to be defined for the bank as a whole taking all
funds raised by the bank during the period such that total funds
raised from different sources equal total funds deployed in
cash, inventory and reserves, investments, loans and advances,
and other assets including fixed assets;
2. all funds are assumed to flow into a common pool, no
source of funds is related to any specific use or uses of fund;
3. cost of funds needs to be calculated totally, separately and
independently of the revenues arising from deployment of
funds; at no stage while measuring cost of funds they should
get mixed up with each other;
39
4. interest cost needs to be calculated in terms of effective
rates by relating average outstanding to actual amount of
interest paid, and not in terms of nominal rates; and
5. cost needs to be reckoned as total cost by adding
manpower and all other operating costs to the interest cost to
arrive at the overall cost of funds to the bank; and, similarly,
related service charges recovered need to be deducted.
Working Out Cost of Funds for a Bank
For working out cost of funds and earnings from
funds needs a fund flow statement for a bank. This statement
can be worked out on the basis of the average balance sheet.
Then it can be modified and transformed into the funds flow
statement. Average deposits and average borrowings can
straightaway be taken as sources of funds. Similarly, average
cash, average balances with RBI and other banks, average
loans, advances and investments can be taken as uses or
deployment of funds. The difference between average capital
and reserves and average fixed assets, as also the difference
between average other liabilities and average other assets, can
be taken as either sources or uses of funds depending on
whether the difference is positive or negative. Due to averaging
effect, most of the time the two sides may not exactly equal.
The equality can be resorted after careful examination by
plugging the difference into the sources or uses side.
40
The True cost of Funds for the Bank
Interest cost of raising funds and interest earned
from deployment of funds need to be adjusted for non-interest
cost, manpower and other operating cost. Similarly, other
income received as commission, brokerage and service charges
also needs to be adjusted. It was found difficult to estimate
allocation of non-interest income to different components of
sources and uses of funds. Major part of this income is earned
through funds related activities and only a minor part emanates
from ancillary services like safe-deposit lockers. A rough
estimate indicated that of the total non-interest income earned
by the bank is about 70% came from the borrowers, 20% from
current depositors, 5%from savings deposits and only 5% from
ancillary services not directly related to deposits or advances.
Need to Calculate True Cost of Funds in Banks
Using the true and correct cost of funds for banks it is
found that banks lose of funds deployed as cash inventory or in
compliance of CRR and SLR requirements. The fact is that net
earnings on these are lower than the cost of funds. If the loss
has to be avoided or some profit earned, earnings rates on
these items need to be raised.
41
Therefore, the true rate of earnings from deployment
in cash is CRR and SLR and the true rate of earnings from
deployment in loans and advances.
Credit-Deposit Ratios of Banks
Large number of commercial banks in India today has
consistently low and declining credit-deposit ratios vis-à-vis the
rest of the banks. Improvement in credit-deposit ratio of a bank
may require efforts in two areas:
1. augmenting the loanable resources of the bank on one
hand, and
2. Making efforts to step up credit on the other hand.
One major reason for this is rise in the cash reserve
and statutory liquidity ratios over this period.
42
Liquidity Management in Banks
Liquidity is the ease with which an individual,
business firm or a financial institution can obtain cash by selling
non-cash assets. Providing liquidity to the customers is one of
the intermediation functions of banks. A bank is liquid if it can
meet all the demands made for cash against it at precisely
those times when cash is demanded. Moreover whatever
sources of funds bank may choose to draw upon must be
available at a reasonable cost and time.
Bank must maintain adequate liquidity in order to
provide for declines in deposits and other liabilities, to satisfy
unforeseen increases in demand for loans, and to permit
increased investment in particularly desirable earning assets
when such opportunities arise.
Liquidity, defined in its broadest sense, is the ability
to obtain needed cash quickly and at a reasonable cost.
Because needs for funds may be unpredictable and
43
uncontrollable, banks must maintain adequate liquidity to
ensure that cash, or access to it, can be obtained on short
notice and with little or no loss of capital. Liquidity is necessary
for banks to carry out daily business transactions, to cover
emergency needs for funds, to satisfy the bank customers’
demand for loans, and to provide flexibility in taking advantage
of especially favourable investment opportunities. Fund
managers must estimate and provide for liquidity needs as
efficiently and cost-effectively as possible.
Purposes of Liquidity
Liquidity enables a bank to answer a need for funds
when that need cannot be fully met by the steady growth of the
bank’s primary sources of funds.
A bank’s deposits do not grow steadily. Deposit levels
are influenced by national and local business conditions and
cannot be fully controlled or predicted with accuracy. The same
is true for loan demand. Uncertainty, therefore, is a
key characteristic of the banking business. As a result, banks
must build enough flexibility into their asset and liability
portfolios so that they can handle any unexpected needs for
funds.
Bankers seek the highest yields possible on their
investments and loans, but they must carefully consider how
much risk they are willing to take to achieve that objective.
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They must also ensure that the bank is compensated with
earnings proportionate to the risks assumed.
RISK ASSOCIATED WITH THE SOURCES AND
USES OF FUNDS IN BANKS
As it is truly said that, income or return is closely
related to risk. A bank may invest its entire fund in low-risk
Government securities from which it would earn a low income of
say 7%. Another bank may invest its entire fund in high risk
45
corporate equities and real estate and earn income of say, 25%.
However, the former would have safety of funds with low risk in
its favour while the latter would have higher profitability along
with the risk of incurring heavy losses. Thus, there is a direct
correlation between risks and returns.
Low risk investments are also quite liquid. They are
marketable as there are many buyers for the same. On the
other hand, high-risk loans are less liquid and less marketable.
As such, there is a trade-off between profitability and liquidity.
Banks usually carry the following basic risks:
I. Liquidity risk: It is the risk of meeting the liquidity needs of a
bank as and when they arise. It is measured as the ratio
between the liquidity outflow (e.g. withdrawal of deposit,
repayment of bank’s borrowings etc.) to liquidity inflow (e.g.
maturing assets, fresh deposits etc). a rough approximation of
liquidity risk would be: (Short-term securities – Short term
borrowings)/Total Deposits.
If a bank holds more of liquid assets, it would minimize liquidity
risk but earn a low income.
II. Interest rate risk: It is the risk arising out of changes in
interest rates and their impact on the income of a bank and
values of its assets and liabilities. The assets and the liabilities,
which are sensitive to interest rate changes, are called interest
sensitive. Interest rate risk can be roughly measured as the
ratio of interest sensitive assets to interest sensitive liabilities.
46
As ideal ratio is one that brings safety. If interest rate
fluctuates, the bank with an interest rate risk of one would have
equal to zero variation in interest income and interest cost and
the net impact on profit would be zero. If the ratio is above or
below one, the bank would have fluctuation in earnings,
depending on how fast the interest rate on advances increases
vis-à-vis the cost of deposits. A bank needs to take a view on
interest rate movement and shuffle the portfolio at short notice.
III. Credit risk: It is the risk arising out of default in the payment
of the interest and/ or principal of the loan amount. The ratio of
non-performing assets to total loan assets is a rough measure
of credit risk. Credit risk is higher if the bank has more of
low/medium rated loans, but the income from those loans is
also correspondingly more. If a bank decides to focus only on
quality loans the income from those loans is correspondingly
more. But if a bank decides to focus only on high quality loans,
its interest income will shrink because of less availability of
such assets and finer interest rate they attract.
IV. Capital Risk: It is the risk that arises from diminution of capital
due to losses. It measures how much the asset value may
decline before the position of depositors and creditors is
jeopardized. Capital adequacy is the bulwark against capital
risk. A bank with a capital-to-asset ratio of 10% will be in a
better position to absorb capital risk than the bank with the said
ratio of 5%. Capital risk is inversely related to Equity Multiplier
and to Return on Equity. Capital risk calls for higher capital
47
while ROE and Equity Multiplier call for higher debt. Banking
operations also face other risks like pre-payment risk, operation
risk, reputation risk etc.
PROFITABILITY IN BANKS
Profitability is an essential objective of bank funds
management. Strong profits are necessary to pay dividends
stockholder and build stockholder equity, to offset loan losses,
to pay ongoing operating expenses, and to expand products
and services.
However, bank profitability entails more than striving
for immediate maximum returns; rather, it is the profitable
management of the bank’s assets and liabilities over both the
short and long term. To be profitable, a bank must show healthy
short-term earnings; but it must manage liquidity, risk, and
earnings through recurring business cycles for long term
survival.
In fact, a bank’s location and the type of financial
service needs of its market area greatly influence the level of
the bank’s profitability. For this reason, any analysis of bank
profitability must be comparative. A bank’s performance must
be viewed in relation to records of its own past performance
and to the performance of banks of similar asset size, location,
and type of customer service markets.
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Profit is mainly the difference between the income
earned and the expenditure incurred to earn the said income
during the period i.e.
Profit = Income – Expenditure
It can also be written as:
Profit = Revenue – Expenditure / Cost
The equation can be replaced as:
P = R – C
Where,
P = profit of a bank for a period
R = total revenue earned by the bank during a period
C = total cost paid by the bank during a period
The revenue and cost can be further bifurcated as:
R = R1 + R2 & C = C1 + C2
Where,
R1 = revenue earned by way of interest on loans, advances and
investments
R2 = non-interest revenue earned by way of service charges
and commission on guarantees or remittances or collections
from its customers
C1 = cost incurred by way of interest paid out of deposits and
borrowings
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C2 = non-interest cost paid as expenses on manpower and
establishment for rendering services to customers
Therefore,
P = (R1 + R2) – (C1 + C2)
Now let us see an example of how the bank’s
profitability gets affected because of NPAs:
Effects of NPAs on Profitability of Banks
As we know, banks incur costs to mobilize funds and
earn interest on the loans. The difference between the costs of
deposits and yield on advances is a measure of the bank’s
profits. Impairment of loans has an adverse impact on the
profits, as impaired loans cease to generate income. A small
degree of impairment may not affect the profit of the bank but
a substantial level of NPAs results in losses. To the extent that
they do not generate any income the NON – Performing Assets
are a drag on the net interest income of the bank. The
impairment of the asset further requires provisioning at various
rates in accordance with the guidelines of the RESERVE BANK
50
OF INDIA depending on the stage of their non – performance.
These provisions are made out of the income generated by
other performing assets thereby creating further pressure on
the net interest income of the bank.
NPAs are a serious strain on the profitability of banks
as they cannot book income on such accounts and their funding
costs and provision requirements are a charge on their profits.
NPAs also carry 100% risk weightage and block capital for
maintaining Capital Adequacy Ratio. To that extent this is a
drain on the profitability of a bank.
AN ILLUSTRATION
An illustration of a simple balance sheet of a typical bank is given
below, which explains the effects of NPAs on bank profitability.
Balance Sheet
& Profit & loss Statement of XYZ Bank
(Rs. In crores)
Balance Sheet
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Sources(Liabilities) Uses(Assets)
Share
Capital
620 Cash 1,000
Reserves 1,240 Investments 7,150
Deposits 19,550 Loans & Advances 10,060
Inter Bank
Deposits
500 Bills 4,000
Borrowings 450 Fixed assets 150
22,360 22,360
Profit and Loss Account
Interest
Income
1,260 Interest
Expenses
1,560
Other Income 900 Other Expenses 350
2,160 1,910
Profit 250
Tax 70
Profit After
Tax
180
It may be observed that the Balance Sheet is healthy and the
bank has made healthy profits. Assuming that the loans and
advances are non – performing to the extent of 20% i.e. about Rs.
2,012 crores, the interest earnings will reduce to that extent (as
the interest income of Rs.1,260 crores will not be earned by the
bank). In addition, the cost of carrying the NPAs like the
52
Provisions and other expenses will add to the expenses and thus
the level of profits would substantially reduce.
CASE STUDY
An Illustration
Here, the case of a hypothetical bank, called XYZ
Bank, is taken to show measures of risks and returns. The
53
balance sheet of XYZ Bank is given below. Then shuffle the
portfolios, first towards low risk and then towards higher risks,
to observe their impact on returns/profits.
XYZ Bank
(Rs. in crores)
Balance Sheet as on 31st March, xxxx
Liabilities Assets
Capital 1,000 Cash Balances 6,900
Reserve &
Surplus
6,000 Balance with
banks, Money at
Call and Short
Notice
15,000
Current Account 30,000 Investments 15,000
Savings Deposits 30,000 Bills Purchased 20,000
Time Deposits 30,000 Cash Credit 20,000
Borrowings 3,000 Term Loans 20,000
Fixed Assets 3,100
Total 1,00,000 Total 1,00,00
0
Profit and Loss Statement for the year ended 31st
March, xxxx
Income Expenses
Interest Income 6,950 Interest Expenses 3,720
Other Income Other Expenses 2,000
6,950 5,720
Operating 1,230
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Income/profit
Tax 400
Net
Income/profit
830
XYZ Bank has total assets of Rs.1, 00,000 crores, out
of which earnings assets (i.e. excluding premises and cash
balances) are Rs.90, 000 crores. Among its assets, it is assumed
that only cash credit loans, bills purchased and investments are
affected by change in interest rate (term loans are at fixed rate
of interest). Hence, its rate sensitive assets are Rs. 55,000
crores. Similarly, among its liabilities, savings deposits, time
deposits and borrowings are affected by change in interest rate.
Thus, its rate sensitive liabilities are Rs.63, 000 crores.
Now, let us find out the various measures of returns
and risks of the XYZ Bank from the above data.
A. Measures of Returns :
1. Interest margin = (Interest Income – Interest Expenses)/
Earnings Assets
= (6,950-3,720)/90,000 = 3.59%
2. Net Profit margin = Net Income/Total Income
= 830/6,950 = 11.94%
3. Asset Utilization = Total Income/Total Assets
= 6,950/1, 00,000 = 6.95%
55
4. Return on Assets = Net Income/Total Assets
= 830/1, 00,000 = 0.83%
5. Equity Multiplier = Total Assets/Equity
= 1, 00,000/7,000 = 14.29
6. Return on Equity = Net Income/Equity
= 830/7,000 = 11.85%
B. Measure of Risk
1. Liquidity Risk = Short-term securities/Deposits
= 15,000/90,000 = 16.67%
(Balance with banks, Money at Call and Short Notice)
2. Interest Rate Risk = Interest Sensitive Assets/Interest
Sensitive Liabilities
= 55,000/63,000 = 0.87
3. Credit Risk = Medium quality loans/Total Assets
= 20,000/1, 00,000 = 20%
4. Capital Risk = Capital/Risk assets
= 7,000/7, 5000 = 9.33%
It may be mentioned here that the above parameters
are only approximate measures of risk and returns adopted only
for the purpose of illustration.
After the measures of risks and returns of XYZ Bank are computed, it may be possible to compare the same with similar measures of peer group banks to ascertain its
56
position in the industry and the scope for improvement on any of the said parameters. It is also possible to take into accounts the parameters prescribed by the regulatory/supervisory authorities and the parameters laid down by the bank’s Board of Directors/senior management, while adopting various management strategies to improve profitability.
FINDINGS OF THE STUDY
The study has given an insight into:
Components of various Sources and Uses of Funds of
banks’ Balance Sheet.
Components of Profit and Loss Account of a bank.
The impact of fluctuations of rates of interest on the
Source and Uses of Funds.
Importance of Revenues and Cost of funds in banks.
The need for maintaining liquidity in banks.
How the banks’ profitability gets affected.
LIMITATIONS OF THE STUDY
As the study of specific area is restricted, and time allotted
is very limited for making project. If time permits then
there would be a wide scope of study on specified topic.
Study/ Project on a specified topic have page constraint.
The information which is provided is not enough for in-
depth study of the topic.
57
If there would be work experience then there will be
different view of the study.
Due to lack of practical knowledge there is limited view of
the project.
PRIMARY DATA
What are the sources of funds for your bank?
The sources of funds for our banks are demand deposits, term deposits, savings deposits account, current deposits account and fixed deposits.
Under guidelines of RBI how much capital is required to do the banking business?
Under guidelines of RBI capital required to do the banking business is rupees 100 crore.
What type of deposit does your bank accepts from the customer?
Bank accepts deposits from customer are fixed deposits, recurring deposits, current account deposits and savings account deposits.
What are the factors for the cost of deposit which is the single most important source of bank fund?
Single most important source of bank fund is interest.
58
If your bank is in need of money than what are the sources of borrowings?
If bank is in need of money than the sources of borrowings are future public offer, right issue, bonds, call money and from RBI.
How does your bank mobilize the funds?
Bank mobilize the funds by way of opening new branch office, developing net banking, set up ATM’s and marketing the products.
Does there is any restriction from RBI for investment?
Yes there is restriction from RBI for investments.
In what type of securities does your bank invest the money more?
Our bank invests the money more in government securities, call money and treasury bills.
How does your bank calculate interest on loans and advances given to the customer?
Our bank calculates interest on loans and advances on the based on base rate or on monthly EMI’s.
What are the current CRR and SLR maintain by your bank?
The current CRR is 6% and SLR is 25% which is maintained by our banks.
59
How does your bank manage liquidity for day to day expenses?
Our bank manages liquidity for day to day expenses by accepting deposits from customers.
Which are the risk associated with sources and application of funds?
There is no risk associated sources of funds but there is risk associated with application of funds are NPA’s and unsecured loans given to customer’s.
Does NPAs affect the profitability of your bank?
Yes NPA’s affects profitability of our bank.
How your bank does measures the risk on loans given to customer?
Bank measures the risk on loans on financial statements, profit margins, credibility of customer and repaying ability etc
CONCLUSIONBanking industry in a large part of the world-both
developed and developing has been witnessing major
environmental changes during the last few decades. The
changes have been witnessed in political, economic, policy and
regulatory areas and have dramatically altered bank business
strategies, organizational structures, and critical management
areas and have related processes. The volatility of environment
surrounding the banking organizations has made it clear to the
banks managements that strategies and systems that were
60
adopted earlier could no more be relied upon to provide
solutions in the current environment.
The volatility of environment is relevant for the
banking system not only because its impacts a bank’s critical
functions of selling various products and services at competitive
prices or of raising resources. Importantly, the environment also
affects individuals, corporate and institutions to which the bank
sells various products and services. The environmental change
may operate either on the cost/income side. While a bank has
necessarily to respond to such changes, the severity of
competition requires banks to be proactive, anticipate such
changes and prepare themselves to face them.
It is in this context that the Sources and Uses of
funds of banks assume greater significance in order to maintain
sustainability of its operations.
BIBLOGRAPHY
TITLE AUTHOR PUBLICATION EDITION
FUNDAMENTALS OF INDIAN FINANCIAL
SYSTEM
VASANT DESAI HIMALAYA PUBLISHING
HOUSE
6TH
EDITION 2007
MANAGEMENT OF BANKING AND
JUSTIN PAUL AND
PERSON EDUCATION
1ST
EDITION
61
FINANCIAL SERVICES
PADMALATHA SURESH
2007
BANKING LAW AND PRACTICE
P.N. VARSHNEY SULTAN CHAND AND SONS
21ST
EDITION 2005
ARTICLE
SOURCE TOPIC DATE
ECONOMIC TIMES CAPITAL ADEQUACY RATIO
(CAR)
27TH JULY 2010
PRIMARY DATA
NAME OF THE INSTITUTION
NAME OF THE PERSON
DATE OF INTERVIEW
HDFC BANK Mr. VIPUL SHAH 24TH September 27, 2010
COLLECTION OF ARTICLES ECONOMIC TIMES
MINT NEWS PAPER
62