CONTENTS

CHAPTER NO. Synopsis List Tables PARTICULARS PAGE NO. 2 3-4

List of Charts

5-6

General Introduction

II

Introduction of the Study

23

III

Research Methodology

28

IV

Analysis & Interpretation

34

Findings

78

VI

Suggestions

81

VII

Conclusion

83

VIII

Bibliography

85

SYNOPSIS
A project study entitled on A study on Working Capital Management of the South Indian Bank With Special Reference to Assam Branch from the period of 2006-2010 has been undertaken to evaluate the Working Capital Management during the period of study analytical research design has been under taken by the researcher for the study.

LIST OF TABLE
Page No. 37

Sl. No.

PARTICULARS Comparative Statement of Current Asset & Current Liabilities From 2005 2007 Comparative Statement of Current Asset & Current Liabilities From 2006 2008 Comparative Statement of Current Asset & Current Liabilities From 2007 2009 Comparative Statement of Current Asset & Current Liabilities From 2008 2010 Comparative Statement of Current Asset & Current Liabilities From 2006 2010

38

39

40

42

Statement showing Net Working Capital of SIB During 2006-2010

49

Schedule of Changes in Working Capital SIB During 2006-2007

52

Schedule of Changes in Working Capital SIB During 2007-2008

54

Schedule of Changes in Working Capital SIB During 2008-2009

56

10

Schedule of Changes in Working Capital SIB During 2009-2010

58

Sl. No.

PARTICULARS

Page No. 60

11

Ratio Analysis of SIB for the period of 2006-2010

12

Cash to Current Assets Ratio of SIB for the period of 2006-2010

62

13

Net Working Capital of SIB for the period of 2006-2010

64

14

Borrowings to Total Liabilities Ratio of SIB for the period of 20062010

66

15

Investment to Total Asset Ratio of SIB for the period of 2006-2010

68

16

Advances to Total Asset Ratio of SIB for the period of 2006-2010

70

17

Advances to Current Asset Ratio of SIB for the period of 20062010 Deposits to Total Liabilities Ratio of SIB for the period of 20062010

72

18

74

LIST OF CHARTS

Sl. No.

PARTICULARS Comparative Statement of Current Asset & Current Liabilities From 2005 2007 Comparative Statement of Current Asset & Current Liabilities From 2006 2008 Comparative Statement of Current Asset & Current Liabilities From 2007 2009 Comparative Statement of Current Asset & Current Liabilities From 2008 2010 Comparative Statement of Current Asset & Current Liabilities From 2006 2010 Statement showing Net Working Capital of SIB During 20062010 Schedule of Changes in Working Capital SIB During 20062010 Schedule of Changes in Working Capital SIB During 20072008 Schedule of Changes in Working Capital SIB During 20082009 Schedule of Changes in Working Capital SIB During 20082010

Page No.

44

45

46

47

48

51

53

55

57

10

59

Sl. No. 11 12 13 14 15 16 17 18 Ratio Analysis

PARTICULARS

Page No. 61 63 65 67 69 71 73 75

Cash to Current Assets Ratio Net Working Capital Borrowings to Total Liabilities Ratio Investment to Total Asset Ratio Advances to Total Asset Ratio Advances to Current Asset Ratio Deposits to Total Liabilities Ratio

CHAPTER - I

GENERAL INTRODUCTION

INDUSTRY PROFILE

INDUSTRY PROFILE
Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980. Currently, India has 96 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake), 31 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively Early history Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which 9

almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center.

10

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India. Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally under capitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. 11

The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalised banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking". From World War I to Independence The period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following table: Authorised capital (Rs. Lakhs) 274 710 56 231 76 209

Years

Number of banks that failed 12 42 11 13 9 7

Paid-up Capital (Rs. Lakhs) 35 109 5 4 25 1

1913 1914 1915 1916 1917 1918

12

Post-independence The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."

The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalisation of major banks in India on 19 July 1969. Nationalisation By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the possibility to nationalise the 13

banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. The nationalised banks were credited by some, including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009.

14

Liberalisation In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The 15

Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. In recent years critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans. There are press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide

16

COMPANY PROFILE

17

COMPANY PROFILE THE SOUTH INDIAN BANK LIMITED

South Indian Bank Limited (BSE: 532218, NSE: SOUTHBANK) is a private sector bank headquartered at Thrissur in Kerala, India. It is headed by V A Joseph, Managing Director & CEO of the bank. South Indian Bank has 575 branches and extension counters spread across more than 23 states and union territories in India. It has set up around 344 ATMs all over India. The bank offers major services in various segments of accounts and deposits, loans, mutual funds, insurance, money transfers and other value added services. The Kerala Government had given permission to SIB to accept commercial taxes.

HISTORY South Indian Bank was formed on the 29th January 1929 by a group of 44 enterprising men, who with a capital of only Rs.22,000.00, joined together at Thrissur city to liberate the business community from the clutches of greedy money lenders. The bank gained the confidence and received the patronage of the public in increasing measure over the years and in the 1960s when there was a crisis in the banking industry in Kerala, South Indian Bank took over fifteen other smaller banks.

18

MILESTONES

First among the private sector banks in Kerala to become a scheduled bank in 1946.

First bank in the private sector in India to open a Currency Chest in April 1992.

First private sector bank to open a NRI branch in November 1992. First bank in the private sector to start an Industrial Finance Branch in March 1993.

First among the private sector banks in Kerala to open an "Overseas Branch" in June 1993.

First bank in Kerala to develop an in-house, a fully integrated branch automation software.

First Kerala based bank to implement Core Banking System. Third largest branch network among Private Sector banks in India.[3]

KEY FIGURES FOR Q3 FY2009-2010

Revenues: 530.91 crore Profit After Tax: Rs 62.46 crore Stock Market Capitalization: Rs 1,574.75 crore as on Feb 23, 2010.

19

BOARD OF DIRECTORS

G A Shenai Chairman - Chairperson VA Joseph - Managing Director & CEO Abraham Thariyan - Executive Director A S Narayanamoorthy - Director C J Jose - Director Paul Chalissery - Director N J Kurian - Director Davy K Manavalan - Director Jose Alapatt - Director Mathew L Chakola - Director

NEW CORPORATE BRAND LOGO The bank, as part of the global brand building exercise, has signed 56 year old Malayali actor Mammootty as brand ambassador. The initial contract between the bank and actor was for three years which was later extended for five years.[7] South Indian Bank has also unveiled a new corporate logo that the bank says demonstrates the major transformation the bank has undergone since its inception, when the logo now being replaced was designed.

20

TIE-UP ING Life have a tie-up with SIB to collect insurance policy renewal payments for ING Life customers. SIB also has banc assurance arrangements with both Bajaj Allianz General Insurance Company Ltd for distribution of non-life insurance products and the Export Credit Guarantee Corporation of India for distribution of export risk cover. It has also tied up with ICICI Prudential AMC, Franklin Templeton, TATA Mutual Fund, Sundaram BNP Paribas, UTI Mutual Funds, Reliance Mutual Funds, HSBC Investments, HDFC Mutual Fund, Fidelity Fund Management Pvt. Ltd, Principal Mutual Funds, Fortis Investments, Birla Sun Life Asset Management Company Ltd and DSP Black Rock Mutual Funds, all mutual fund houses, for distribution of their mutual fund products.[10] In March, 2020, the bank signed an agreement with Sri Lanka's Hatton National Bank (HNB) for exchange of services and expertise between them. The MOU set out a framework between the two banks to enter into mutually beneficial arrangements to offer banking services to their respective customers. The tie-up was expected to foster trade-related cross border business like advising and confirming Letter of credit, negotiating and discounting of export-import bills and providing credit report of customers between the two countries. It would also enable the customers of HNB to utilize the services of Hadi Express Exchange, for which management support was provided by SIB.

21

Vision
To emerge as the most preferred bank in the country in terms of brand, values, principles with core competence in fostering customer aspirations, to build high quality assets leveraging on the strong and vibrant technology platform in pursuit of excellence and customer delight and to become a major contributor to the stable economic growth of the nation.

Mission
To provide a secure, agile, dynamic and conducive banking environment to customers with commitment to values and unshaken confidence, deploying the best technology, standards, processes and procedures where customer convenience is of significant importance and to increase the stakeholders value.

The Banks shares are listed on

The Cochin Stock Exchange Ltd (CSE) The Stock Exchange Mumbai (BSE) The National Stock Exchange of India Ltd Mumbai (NSE)

The stock code Number is 532218 (BSE).

22

CHAPTER - II

INTRODUCTION OF THE STUDY

23

INTRODUCTION TO THE STUDY

TITLE OF THE STUDY

A study on Working Capital Management of the South Indian Bank Ltd., With Special Reference to Assam Branch

24

OBJECTIVES OF THE STUDY

To study about the various components of Working Capital in South Indian Bank.

To analyze and evaluate the Working Capital Position of the South Indian Bank under the study.

To study the solvency position of South Indian Bank under the study. To forecast and plan the Working Capital for future carrier of action.

25

SCOPE OF THE STUDY

The study is conducted mainly to review the working capital management of south Indian bank for the period of five years from 2006-2010 as revealed from annual reports of the bank annual reports of the bank.

26

LIMITATIONS

Though the study was undertaken with sincere efforts there are few limitations for the study, which are as follows:

The study relied only upon the secondary data. Hence it is lacked the personal observations regarding the management of Working Capital in the bank.

The study was undertaken with the published financial statements of the bank selected for the study.

This study is restricted for a period of five years. Analysis is restricted to a period of two months.

27

CHAPTER - III

RESEARCH METHODOLOGY

28

RESEARCH METHODOLOGY
Period of Study: For the purpose of the study financial data have been collected from the annual report for a period of five years (i.e) from 2006-2010. The period of analysis is from December 2010 to January 2011.

Research Design: Research Design is purely and simply the frame works the study that guides the collection and analysis of data. The research is intended to make a study about the Working Capital Management of South Indian Bank. Hence the Study design is analytical in nature.

Data Collection: The application of appropriate method and the adoption of a scientific frame of mind are essential requirement for any systematic study. Keeping this in view, the present study is based on secondary data, which have been collected from relevant published annual report of South Indian Bank.

Method of Data Analysis: The data collected were tabulated and charts were used for pictorial representation for analysis and interpretation.

29

Tools of Analysis The tools used in this study are: Comparative statement Common size statement Schedule of Changes in Working Capital Ratio Analysis related to working capital Least square method.

30

CONCEPTUAL FRAMEWORK OF WORKING CAPITAL MANAGEMENT Working Capital refers to short-term liquidity of the firm. Therefore analysis of the factor bringing about a change in the amount of networking capital is useful for decision making by shareholder, creditors, lenders and management. Working

Capital (Current Assets Current Liabilities) is a tool to measures that changes in the financial position of a concern. It excludes all the items which don not affect working capital e.g. payment of current liabilities, purchase of inventories on short-term credit collection of receivable and short-term borrowing. Though this items cause changes in individual accounts comprising the current assets and liabilities, they do not change in working capital itself. Therefore, the statement (i.e) the statement of changes in financial position is a useful tool for highlighting changes that have occurred in the financial operations between two balance sheet dates.

WORKING CAPITAL: Funds flow statement is based on the Working Capital concept of fund. However Working Capital is also a controversial terms. Gross Working Capital is the Total of Total Current Asset. Circulating Capital is the amount is the amount revolving in the cycle of cash-inventories-Receivables and cash. Net Working Capital is the excess of current Assets over Current Liabilities. Net Working Capital can be computed us the difference between Current Assets and Current Liabilities. All those assets which are converted into cash in the normal course of business within a one year or within operating cycle are known as Current Assets.

31

The intention is acquiring such assets must be to convert them into cash. The conversion has to take place in the normal course of business. The time span for the conversion should not exceed one year or operating cycle of the business. CURRENT LIABILITIES All those liabilities which are payable in cash in the normal course of business within periods of one year or within operating cycle are called Current Liabilities. Here also, the intention of contracting the liability must be pay it off in the normal course. The period of repayment should not exceed one year or the operating cycle. Thus, the long-term loans or debentures, etc., in the year of repayment also should not be treated as current liabilities because they were not intended to be paid off within one year out of current assets. PROVISIONS AGAINST CURRENT LIABILITIES AND ASSETS Provision for doubtful debts. Provision for discount on creditors. Provision made against trade investment are also current items. They reduce the respective current or liabilities. The following is the principles for preparation of Working Capital Statement. Increasing in Current Assets Increase Working Capital . Decrease in Current Asset Decrease Working Capital. Increase in Current Liability Decrease Working Capital. Decrease in Current Liability Increase Working Capital.

32

CASH MANAGEMENT
Cash, the most liquid assets, is of vital importance to the daily operations of business firms. While the production of corporation assets held in the form of the cash is very small often range between 1 percent and 3 percent, it efficient management is crucial to the solvency of the business in a very important sense. Cash is the focal point of fund flows in business. These are three motives for holding cash. Transaction motive, precautionary motive and speculative method. To enhance the efficiency of cash management is required for the following purpose. a). To ensure sufficient funds for the various requirements of business. b). To provide sufficient flexibility in cash planning. c). To maintain funds at the lowest cost possible and d). To maintain good image of business among creditors, shareholders and public. If surplus cash is available with the firm, then variety of options are available for investing like units ready forward, treasury bills, certificate of deposits, commercial papers, badla financing, inter-corporate deposits and bill discounting.

33

CHAPTER - IV

DATA ANALYSIS & INTERPRETATION

34

DATA ANALYSIS AND INTERPRETATION

COMPARATIVE STATEMENT OF CURRENT ASSETS AND CURRENT LIABILITIES The Comparative financial statements are statements of the financial position at different periods; of time. The elements of financial position are shown in a comparative form so as to give an idea of financial position at two or more periods. Any statement prepared in a comparative form will be covered in comparative statements. i). Absolute figures (Rupee amounts) ii). Changes in absolute figures i.e., increase or decrease in absolute figures.

35

COMMON SIZE STATEMENT OF CURRENT ASSETS AND CURRENT LIABILITIES The Common size Statements represent. The relationship different items of a financial statement with some common item by expressing ach item as percentage of that common item as a percentage of that common item. Here in this Common size statement each item is started as a percentage of the current assets and then each item as a percentage of Current Liabilities. The percentage for different item of Current Assets and Current Liabilities, are computed by dividing the absolute amount of that item by the common base and then multiplying by it 100. This percentage cell cut rated can be easing emperor with the corresponding percentage of some other periods. Thus, the Common Size Statement is useful not only in infra-firm. Compression but also in maturing infra-firm comparison or the same bear of far a several years. The following is the table Showing Common Size Statement of Current Assets and Current Liability from 2005-2006 to 2009-2010.

36

COMPARATIVE STATEMENT OF CURRENT ASSET & CURRENT LIABILITIES FROM 2005- 2007
TABLE 1 (Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets 4331615 2680559 31334339 53652636 2000015 93999164 5460814 7973926 27393852 63702307 2845308 107376207 1129199 5293367 -10049671 845293 17317530 --3940487 --3940487 2005-2006 2006-2007 Increase Decrease

II. Current Liabilities 1 2 3 Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities 84923138 37256 5262247 90222641 95786598 7223 6071924 101865745 -30033 -30033 10863460 -809677 11673137

37

COMPARATIVE STATEMENT OF CURRENT ASSET & CURRENT LIABILITIES FROM 2006 - 2008
TABLE 2 (Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets Current Liabilities 1 2 3 Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities 95786598 7223 6071924 10186574 5 122392087 325055 6569030 129286172 ---27420429 26605491 317832 497106 27420429 5460814 7973926 2739385 63702307 2845308 10737620 7 6996701 12458035 34301326 79189121 2684707 135629890 1535887 4484109 6907474 15486814 -28414284 ----160601 160601 2006-2007 2007-2008 Increase Decrease

38

COMPARATIVE STATEMENT OF CURRENT ASSET & CURRENT LIABILITIES FROM 2007 2009
TABLE 3 (Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets Current Liabilities 1 2 3 Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities 12239208 7 325055 6569030 12928617 2 151561215 275851 7452416 159289482 -49204 -49204 29169128 -883386 30052514 6996701 12458035 34301326 79189121 2684707 13562989 0 9736487 7290001 45722249 104537496 2485518 169771751 2739786 -11420923 25348375 -39509084 -5168034 --199189 5367223 2007-2008 2008-2009 Increase Decrease

39

COMPARATIVE STATEMENT OF CURRENT ASSET & CURRENT LIABILITIES FROM 2008 2010 TABLE 4
(Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets Current Liabilities 1 2 3 Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities 15156121 5 275851 7452416 15928948 2 180923322 2570104 7301753 190795179 --150663 150663 29362107 2294253 -31656360 9736487 7290001 45722249 10453749 6 2485518 16977175 1 9977324 10381281 240837 3091280 ------2008-2009 2009-2010 Increase Decrease

60752032 15029783 118520274 13982778 2841120 355602

202472031 32700280

40

INTERPRETATION Comparative statement of current Assets and current liabilities during 20062010 show that the current Assets are increasing continuously and current liabilities have also increased and at the same time decreased also.

41

COMPARATIVE STATEMENT OF CURRENT ASSET & CURRENT LIABILITIES FROM 2006 - 2010 TABLE 5
(Rs.000's) Sl. No. I 1 2 3 4 5 Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets Current Liabilities 1 2 3 Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities 94.12 0.05 5.83 100 94.2 0.07 5.73 100 94.66 0.25 5.09 100 95.14 0.17 4.69 100 94.82 1.34 3.84 100 4.6 2.85 33.33 57.07 2.15 100 5.08 7.42 25.54 59.32 2.64 100 5.18 9.18 25.29 58.38 1.97 100 5.73 4.29 26.93 61.59 1.46 100 4.92 5.12 30 58.53 1.43 100 2006 (%) 2007 (%) 2008 (%) 2009 (%) 2010 (%)

42

INTERPRETATION : The common size statement states that the major portions of Current Assets are covered only Advances (i.e), more than 55% during 2006-2010. The current liabilities are equally distributed among Deposits, Borrowings and other Liabilities & Provisions

43

COMMON SIZE STATEMENT OF CURRENT ASSETS AND CURRENT LIABILITIES FOR THE YEAR 2006 CHART 1

CURRENT ASSETS
Current Assets 60 50 40 30 20 10 Current asset 0 Bank And Balance with

Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Advances Investment

Advances

Other Assets

CURRENT LIABILTIES ASSETS

100 90 80 70 60 50 40 30 20 10 0 Current Liabilities Borrowings

Current Liabilities Deposits Borrowings Other Liabilities & Provisions

44

COMMON SIZE STATEMENT OF CURRENT ASSETS AND CURRENT LIABILITIES FOR THE YEAR 2007 CHART 2

CURRENT ASSETS
Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment

70 60 50 40 30 20 10 0 Investment Cash and balance with Other Assets

Advances

Other Assets

CURRENT LIABILTIES ASSETS

100 90 80 70 60 50 40 30 20 10 0 Deposits Borrowings Other Liabilities & Provisions

Deposits Borrowings Other Liabilities & Provisions

45

COMMON SIZE STATEMENT OF CURRENT ASSETS AND CURRENT LIABILITIES FOR THE YEAR 2008 CHART 3

CURRENT ASSETS
70 60 50 40 30 20 10 0 Investment Cash and balance with Other Assets Advances Balance with Bank and Money at Call & Short notice Investment Cash and balance with Reserve Bank of India

Other Assets

CURRENT LIABILTIES ASSETS

100 90 80 70 60 50 40 30 20 10 0 Depos its Borrow ings Other Liabilities & Provis ions

D epos its Borrowings Other Liabilities & Provis ions

46

COMMON SIZE STATEMENT OF CURRENT ASSETS AND CURRENT LIABILITIES FOR THE YEAR 2009 CHART 4

CURRENT ASSETS
70 60 50 40 30 20 10 0 Investment Cash and balance with Other Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment

Advances

Other Assets

CURRENT LIABILTIES ASSETS

100 90 80 70 60 50 40 30 20 10 0 Deposits Borrowings Other Liabilities & Provisions

Deposits Borrowings Other Liabilities & Provisions

47

COMMON SIZE STATEMENT OF CURRENT ASSETS AND CURRENT LIABILITIES FOR THE YEAR 2010 CHART 5

CURRENT ASSETS
70 60 50 40 30 20 10 0 Investment Cash and balance with Other Assets Advances Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment

Other Assets

CURRENT LIABILTIES ASSETS

100 90 80 70 60 50 40 30 20 10 0 Deposits Borrowings Other Liabilities & Provisions

Deposits Borrowings Other Liabilities & Provisions

48

STATEMENT SHOWING NET WORKING CAPITAL OF SOUTH INDIAN BANK DURING 2006-2010 TABLE 6
(Rs.000's) Sl. No. I Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment 2006 2007 2008 2009 2010

4331615

5460814

6996701

9736487

9977324

2680559

7973926

12458035

7290001

10381281

3133433 9 5365263 6 2000015 9399916 4

27393852

34301326

45722249 10453749 6 2485518 16977175 1

60752032

Advances

63702307

79189121

118520274

Other Assets

2845308 10737620 7

2684707 13562989 0

2841120 202472031

Total Current Assets (A) II. 1 2 3 Current Liabilities Deposits Borrowings Other Liabilities & Provisions
Total Current Liabilities (B)

8492313 8 37256 5262247 9022264 1 3776523

95786598 7223 6071924 10186574 5 5510462

12239208 7 325055 6569030 12928617 2 6343718

15156121 5 275851 7452416 15928948 2 10482269

180923322 2570104 7301753 190795179 11676852

Working Capital (A-B)

49

INTERPRETATION :

Net working capital of South Indian Bank is higher during the year 2009-2010 (i.e)., 116,76,852 thousands when compared to previous years, and its shows that there is an increasing trend during the study.

50

STATEMENT SHOWING NET WORKING CAPITAL OF SOUTH INDIAN BANK DURING 2006-2010 CHART - 6
250000000 200000000 150000000 100000000 50000000 0 (Rs.000's)

51

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2006-2007

TABLE 7
(Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets (A) II 1 2 3 Current Liabilities Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities (B) Working Capital (A-B) Increase in Working Capital Total INTERPRETATION : From the above table we infer that the working capital has increased during 2005-2006. 52 84923138 37256 5262247 90222641 3776523 1733939 5510462 95786598 7223 6071924 10186574 5 5510462 -5510462 -17347563 1733939 17347563 -30033 -10863460 -809677 4331615 2680559 31334339 53652636 2000015 93999164 5460814 7973926 27393852 63702307 2845308 10737620 7 1129199 5293367 -10049671 845293 --3940487 --2006 2007 Increase Decrease

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2006-2007

CHART - 7
250000000 200000000 150000000 100000000 50000000 0 Other Liabilities & Working Capital (AB) Total
53

D ec reas e -- -- 3940487 --- 1086 3460 --

Inc reas e 11291 99 5293367 -- 10 049671 845293 -- 300 33 2006 5460814 797392 6 27393852 6370 2307 2845308 10737 6207 95786598 7223 2005 4331615 268055 9 31334339 5365 2636 2000015 93999 164 84923138 3725 6

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2007-2008

TABLE 8 (Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets (A) Current Liabilities 1 2 3 Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities (B) Working Capital (A-B) Increase in Working Capital Total INTERPRETATION From the above table we infer that the working capital has increased during 2006-2007. 95786598 7223 6071924 10186574 5 5510464 833254 6343718 12239208 7 325055 6569030 12928617 2 6343718 -6343718 -28414284 833254 28414284 ---26605491 317832 497106 5460814 7973926 2739385 63702307 2845308 10737620 7 6996701 12458035 34301326 79189121 2684707 13562989 0 1535887 4484109 6907474 15486814 -----160601 2007 2008 Increase Decrease

54

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2007-2008

CHART 8

300000000 250000000 200000000 150000000 100000000 50000000 0 Other Assets Total Current Borrowings Increase in Working Current Liabilities Inc reas e 1535887 4484109 6907474 15486814 2007 6996701 12458035 34301326 79189121 2006 5460814 7973926 2739385 63702307 Dec reas e -- -- -- --

55

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2008-2009

TABLE 9 (Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets (A) II 7 8 9 Current Liabilities Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities (B) Working Capital (A-B) Increase in Working Capital Total 12239208 7 325055 6569030 12928617 2 6343718 4138551 10482269 15156121 5 275851 7452416 15928948 2 10482269 -10482269 -39558288 4138551 39558288 -49204 -29169128 -883386 6996701 12458035 34301326 79189121 2684707 13562989 0 9736487 7290001 45722249 10453749 6 2485518 16977175 1 2739786 -11420923 25348375 --5168034 --199189 2008 2009 Increase Decrease

INTERPRETATION : From the above table we infer that the working capital has increased during 2007-2008.

56

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2008-2009 CHART 9

350000000 300000000 250000000 200000000 150000000 100000000 50000000 0 Other Liabilities & Working Capital (AB) Total
57

D e c re a s e -- 5 1 6 8 0 3 4 -- -1 9 9 1 8 9 2 9 1 6 9 1 2 8 --

In c re a s e 2 7 3 9 7 8 6 -1 1 4 2 0 9 2 3 2 5 3 4 8 3 7 5 -- -49204 2008 9736487 7290001 45722249 104537496 2485518 169771751 151561215 275851 2007 6996701 12458035 34301326 79189121 2684707 135629890 122392087 325055

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2009-2010

TABLE 10 (Rs.000's) Sl. No. I 1 2 3 4 5 Particulars Current Assets Cash and balance with Reserve Bank of India Balance with Bank and Money at Call & Short notice Investment Advances Other Assets Total Current Assets (A) Current Liabilities 7 8 9 Deposits Borrowings Other Liabilities & Provisions Total Current Liabilities (B) Working Capital (A-B) Increase in Working Capital Total 15156121 5 275851 7452416 15928948 2 10482269 1194583 11676852 11676852 18092332 2 2570104 7301753 19079517 9 11676852 --32850943 -1194583 32850943 --150663 29362107 2294253 9736487 7290001 45722249 10453749 6 2485518 16977175 1 9977324 10381281 60752032 11852027 4 2841120 20247203 1 240837 3091280 15029783 13982778 355602 -----2009 2010 Increase Decrease

INTERPRETATION : From the above table we infer that the working capital has increased during 2008-2009

58

SCHEDULE OF CHANGES IN WORKING CAPITAL SOUTH INDIAN BANK DURING 2009-2010 CHART 10

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% In c re a s e in W o rk in g T o t a l C a p it a l

D e c re a s e -- -- -- -- -2 9 3 6 2 1 0 7 2 2 9 4 2 5 3 --

In c re a s e 2 4 0 8 3 7 3091280 15029783 1 3 9 8 2 7 7 8 3 5 5 6 0 2 -- -1 5 0 6 6 3 -2009 9977324 10381281 60752032 118520274 2841120 202472031 180923322 2570104 7301753 190795179 11676852 2008 9736487 7290001 45722249 104537496 2485518 169771751 151561215 275851 7452416 159289482 10482269

59

Current Assets Current Liabilties

RATIO ANALYSIS
Current Assets Current Ratio = Current Liabilties

Table - 11 Sl. No. Financial Year Current Assets (Rs. in 000's ) Current Liabilites (Rs. in 000's ) 90222641 101865743 129286172 15989482 190795179 Current Assets Ratio 1.04 1.05 1.04 1.06 1.06

1 2 3 4 5

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

93999164 107376207 135629890 169771751 202472031

INTERPRETATION : The Current Ratio indicates that the bank's current Ratio is more than the general norm (i.e.) 2:1

60

RATIO ANALYSIS
CHART 11

61

CASH TO CURRENT ASSETS RATIO

This ratio indicates the percentage of Cash to Current Assets. Since cash has been considered as high liquid asset, the higher the ratio greater the solvency position
x Cash & Bank Balances 100

Cash to Current Assets Ratio =

Current Assets TABLE 12 Cash & Bank Balance (Rs. In ) 7012174 13434740 19454736 17026488 20358605

Sl. No.

Financial Year

Current Assets

Cash to C.A. Ratio %

1 2 3 4 5

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

93999164 107376207 135629890 169771751 202472031

7.45 12.51 14.34 10.02 10.05

INTERPRETATION : From the above table we could identify that the cash position is good and it is high in the year 2007-2008. Cash to Current Asset ratio has decreasing during 2008-2009. In the year 20092010 the ratio is suddenly increasing 10.05%.

62

CASH TO CURRENT ASSETS RATIO

CHART 12

63

NET WORKING CAPITAL

This ratio measures the position of the bank. The bank having larger Net Working Capital has greater ability to meet its current obligations.

Net Working Capital Net Working Capital Ratio = Capital Employed Capital Employed = Capital + Reserve & Surplus Table 13 Sl. No. Financial Year Net Working Capital (Rs. in 000's) 3776523 5510462 6343718 10482269 11676852 Capital Employed (Rs. in 000's) 4552534 6408506 7239618 11609816 13040040 Net Working Capital Ratio 0.82 0.85 0.87 0.9 0.89

1 2 3 4 5

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

INTERPRETATION : The above table of networking capital ratio shows and increasing trend from 2006-09. So We could say that the bank was good in meeting its current obligations. But in the Year 2009-2010 it has decreased it shows that the bank has faced problem in the meeting its current obligations.

64

NET WORKING CAPITAL

CHART - 13

65

BORROWINGS TO TOTAL LIABILITIES RATIO

This ratio measures the portion of borrowings on Total Liabilities. This ratio is calculated as follows: Borrowings Borrowing to Total Liability Ratio = Total Liabilities Table 14 Borrowing to Total Liabilities Ratio (%) 0.03 0.66 0.02 0.16 1.26

Sl. No.

Financial Year

Borrowing (Rs. in 000's)

Total Liabilities (Rs. in 000's)

1 2 3 4 5

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

37256 7223 325055 275851 2570104

94775175 108274249 1356525790 170899298 203835219

INTERPRETATION : From the above table the infer that Borrowing to Total Liability Ratio is Fluctuating trend during the study and the year 2009-2010 the ratio seems to be high (i.e). 1.26%.

66

BORROWINGS TO TOTAL LIABILITIES RATIO

CHART 14

67

INVESTMENT TO TOTAL ASSET RATIO

This ratio represents the proportion of investment on Total Assets. This ratio can be calculated as follows. Investment Investment to Total Asset Ratio = Total Assets Table 15 Investment to Total Asset Ratio(%) 33.06 25.3 25.12 26.75 29.8

Sl. No.

Financial Year

Investment (Rs. in 000's)

Total Assets (Rs. in 000's)

1 2 3 4 5

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

31334339 27393852 34301326 45722249 60752032

94775175 108274248 136525790 170899298 203835219

INTERPRETATION : The investment to total Asset Ratio is decreasing trend during 2006-2008. But in the year 2009-2010 the ratio has suddenly increased to 29.80% while compare to previous years.

68

INVESTMENT TO TOTAL ASSET RATIO

CHART 15

69

ADVANCES TO TOTAL ASSET RATIO

This ratio measures the advances generated while making the Total Assets.
Advances to Total Asset Ratio =

Advances Total Assets

| Table 16 Advance to Total Assets Ratio (%) 56.61 58.83 58 61.16 58.14

Sl. No.

Financial Year

Advances (Rs. in 000's)

Total Assets (Rs. in 000's)

1 2 3 4 5

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

53652636 63702307 79189121 104537496 118520274

94775175 108274248 136525790 170899298 203835219

INTERPRETATION : Advances to total Assets Ratio has increasing trend 2006-2009 but in the year 2009-2010, the ratio has suddenly decreased to 58.14%

70

ADVANCES TO TOTAL ASSET RATIO CHART 16

71

ADVANCES TO CURRENT ASSET RATIO

This ratio measures the proportion of advances on Current Assets.
Advances to Current Asset Ratio =

Advances Advances x 100 Current Assets Assets Current

Table 17 Advance to Current Assets Ratio (%) 57.07 59.32 58.38 61.57 58.53

Sl. No.

Financial Year

Advances (Rs. in 000's)

Current Assets (Rs. in 000's)

1 2 3 4 5

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

53652636 63702307 79189121 104537496 118520274

93999164 107376207 135629890 169771751 202472031

INTERPRETATION :

The Advances to Current Assets ratio has an increasing trend during 2006-2007 and it has decrease in the year 2007-2008 and it has increased in the year 2008-2009 and suddenly it has decreased in the year 2009-2010 (i.e.) 58.53%

72

ADVANCES TO CURRENT ASSET RATIO

CHART 17

73

DEPOSITS TO TOTAL LIABILITIES RATIO

This Ratio represents the proportion of Deposits on Total Liabilities. The higher ratio, lesser the liquidity position of the bank.
Deposits to Total Liabilities Ratio = Table - 18 Sl. No . 1 2 3 4 5 Deposits to Total Liabilities % 0.89 0.88 0.09 0.88 0.88 Deposits Total Liabilities

Financial Year

Deposits (Rs. in 000's)

Total Liabilities (Rs. in 000's)

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

84923138 95786596 122392087 151561215 180923322

94775175 108274249 1356525790 170899298 203835219

INTERPRETATION :

The deposits to total liabilities ratio has fluctuating trend from 2006-2008 and in the year 2008-2010 it seems to be high (i.e.) 0.88%

74

DEPOSITS TO TOTAL LIABILITIES RATIO

CHART 18

75

LEAST SQUARE METHOD

Forecasting of the most important tasks before business these days is to make estimate for the future. This is done because the businessman is interested in finding out his future requirement of working capital. This following are steps in forecasting the future requirement of working capital. Collection of past data to understand the past behaviour. Planning the future requirement. In this analysis the requirement of working capital is forecast by using the statistical tool called the method of least squares. This method is most widely used in practice. It is a mathematical method and with its help a trend line is fitted to the data. The method a least squares may be used either to fit a straight-line trend (or) parabolic trend. The straight-line is represented by the equation. Y = a + bx The values of constants a and b can be determined by the following two equations. y = Na xy = b x2 So, A = y2 B = xy / x2

76

By the above formulas, the trend value scan be obtained for the given time period in the series. This is not possible in some other methods like method of moving average.

CALCULATION OF WORKING CAPITAL REQUIREMENT BY USING LEAST SQUARE METHOD FOR THE NEXT FIVE YEARS (IE.) 2011 - 2015

Table 19

Sl. No. 1 2 3 4 5

Year

Networking Capital (Y) 3776523 5510462 6343718 10482269 11676852 Y

x2

xy

2007 2008 2009 2010 2011

-2 -1 0 1 2

4 1 0 1 4

-7553046 -5510462 0 10482269 23353704

A = B =

N XY X
2

= =

37 789824 = 5 20772465 10

7557964.8 = 2077246.5

PROJECTED WORKING CAPITAL TREND FOR THE NEXT FIVE YEARS FROM 2011 2015
2011 2012 2013 2014 = = = = 7557964.8 7557964.8 7557964.8 7557964.8 + + + + 2077246.5 (3) 2077246.5 (4) 2077246.5 (5) 2077246.5 (6) 77 = = = = 13789704.3 15866950.8 17944197.3 20021443.8

2015

7557964.8

2077246.5 (7)

22098690.3

CHAPTER - V

FINDINGS

78

FINDINGS

1. Comparative Statement of Current Assets and current Liability during 2006-2010 shows that the Current Assets are increasing continuously and Current Liabilities have also increased and at the same time it has decreased also.

2. The Common Size Statement that the major portions of Current Assets are covered only by Advances (i.e) more than 55% during 2006-2010. The Current Liabilities are equally distributed among deposits.

3. Net Working Capitals South Indian Bank is higher during the year 2009-2010 (i.e) 11676852 thousands when compared to previous years, and it shows that there is an increasing rend during the study.

4. Schedule of Changes in Working Capital has increased during 2006-2010.

5. The Current Ratio indicates, that banks Current Ratio is more than the general norms (i.e). 2:1 during the study.

6. From the Cash to Current Assets Ratio we could identify that, the Cash position is good and it is high in the year 2007-2008, and it has decreasing trend during 2008-2010. decreased to 10.05% 79 In the year 2008-2009 the ratio has suddenly

7. Net Working Capital Ratio Shows an increasing trend from 2006-2009. So we could say that the bank was good in meeting its Current obligations. But in the year 2009-2010, it has decreased it shows that the bank has faced problem in meeting its current obligations.

8. The Investment to Total Assets Ratio has a decreasing trend during 2006-2009. But in the year 2009-2010 the ratio has suddenly increased to 29.80%. 9. The Advances to Total Assets Ratio has increasing trend during 2006-2009. But in the year 2009-2010 the ratio has suddenly decreased to 58.14%.

10. The Advances to Current Assets Ratio has trend during 2006-2007 and it has decreased in the year 2007-2008 and it has increased in the year 2008-2009 and suddenly it has decreased.

80

CHAPTER - VI

SUGGESTIONS

81

SUGGESTION

1. More than 55% of the total Assets are covered by the Advances and therefore it is suggested that the bank has to give more concentration in Advances.

2. The Net Working capital Ratio South Indian Bank is less than 10% and it shows that the bank is struggling to meet out is Current obligations and so it is suggested that the bank has to increase their Net Working Capital.

3. The Current Ratio of South Indian Bank is more than the ideal ratio (i.e) 2:1 during the study and therefore it is suggested that the bank could maintain the same in the future also.

4. The Cash position of South Indian Bank in the Current Assets is less than 3% during the study and it is suggested that the bank has to increase the cash position to maintain the solvency position.

5. South Indian Bank shall adopt forecasting procedure for estimating working Capital.

82

CHAPTER - VII

CONCLUSION

83

CONCLUSION

The Working Capital Analysis gave a birds view of the performance of South Indian Bank. Thought the study may be a post mortem examination on disruptive aspect, yet the reasoning deducted a drawn by Working Capital analysis would serve as a perspective norm to follow and program the fianc in a viable manner. The Working capital position of South Indian Bank is in progressive ad satisfactory. South Indian Bank has every opportunity to get its growth in future.

84

CHAPTER - VIII

BIBLIOGRAPHY

85

BIBLIOGRAPHY

Books : Kothari C.R. (1990) Research Methodology : Method and Techniques, Wishva Parkashan, New Delhi. PP115-117 Bodie. Z, Kane. A & Marcus. J : Essentials of Investments PP242-243

Websites : http://www.economywatch.com www.southindianbank.com http://www.indianmba.com http://www.banknetindia.com http://www.financialexpress.com

Journals : Lect. D.ramkumar(2003), Relationship Marketing The new tantra for life insurance sector. Department Of Management Studies, N.M.S.S. Vallaichamy Nadir College, Nagamalai, Madurai 625019 available at http://www.google.co.in/interstitial? url=http://www.indiaschools.com/marketing_029.htm. J.Mehra (2005), innovations in life insurance industry, the financial express, new delhi available at http://www.financialexpress.com .

86