Declaration

I undersigned here by declared that this

project work entitled “Financial statement
analysis - worked on STATE BANK OF
INDIA. Navsari ” is written & my own work
and is submitted by me to NLCCM, Navsari
toward the partial fulfilment for award BBA in
year 2008 – 2009, this is original report work
and report written there in is based on the
knowledge and material gained from the bank.
It is not to submit to any other university or
institutions for any other purpose.

1
 A
Project Report On

“Financial Statement Analysis”

Prepared At
“STATE BANK OF INDIA”
Submitted By

Mr. PRATIK N. KANSARA

T.Y.B.B.A.
(Sem-6 th)
Roll No. - 15

Under the guidance of

Ms. Hetal D. Tandel
(Lecturer, NLCCM)
Submitted To,

Naranlala College of Commerce & Management,

Navsari.

Veer Narmad South Gujarat University, Surat.

2008-2009
2
 COLLEGE CERTIFICATE

This is certify that project on “Financial statement

analysis “done at “STATE BANK OF INDIA,
NAVSARI.is submitted by MR. KANSARA PRATIK
N.,T.Y.B.B.A ,ROLL NO 15 to the NARAN LALA
COLLEGE OF COMMERCE & MANAGEMENT
,NAVSARI. In the partial fulfil ment in reqirement for
the Degree of Bachelor of Business Administration
FROM THE VEER NARMAD SOUTH GUJRAT
UNIVERSITY,SURAT .
____________________ ____________________

MS.H.D.Tandel , DR. R.C.GANDHI,

Guidance , DIRECTOR.
NLCCM.

3
 ACKNOWLEDGEMENT
“Experience is the best teacher.”Knowledge is one of
the most important tools.Only theoretical knowledge is not
exactly applicable in practical life,from this point of view
industrial training is important & necessary for a management
student .Theoritical knowledge is proved right only often it is
rightly applicable on practical base.

I also thankful to Mr. J.P.Garasia,Assist. Manager ,SBI

NAVSARI for providing mean opportunity to held a
project ,providing valuable information ,guidance & consist
co-operation through out the training programmed .

I am also thankful to Dr.R.C.Gandhi,

Director of Naranlala College of Commerce & Management,
Navsari, & Pro. Ms. Hetal .D. Tandel, my project guide, for
giving me an excellent and invaluable guidance during the
course.

MR. PRATIK N. KANSARA

4
 OBJECTIVES OF STUDY

To study the Annual report or financial position of

the company.

 To understand the day-to-day work carry

out by the organization.
To study the bank’s history in brief.
To draw meaningful and constructive measure based
on analysis.
To study the current existing position of SBI Bank’s
whole field.
To observe the cash inflow & outflow.
To check the profitability of bank.
To study the policy of the bank.
To analyse how the bank is managing its current
assets & current liabilities.

5
 LIMITATIONS OF STUDY

There is no activity that can be completed without any

limitation.The main limitation faced during the preparation of this
project report on “Financial Statement Analysis”of “SBI” is as
follows:-

 Time available for the completion of the project is very short,

hence much information could not be undertaken.

 The information collected through secondary data.Some of the

information might be wrong.

 The calculation & computation are based on valuable

information given by the bank.

 The report is based on the analysis of the last five years

data,which may not be sufficient in some cases.

 The analysis and conclusion made is as per my limited

understanding for this concerned subject.

6
 METODOLOGY
Preparing the project report is a research analysis,it involves
the process of collecting data,analyzing data & reporting data for absolute
results.

For the preparation of project report on “Financial Statement

Analysis” of “SBI Bank”.This project report is based on two types of data i.e.
(1)Primary data(2)Secondary data.

1).Primary data:-
Primary data is the data,which has not been collected & used by
somebody else before.In short,Primary data means the data specifically
collected for the project.I have collected data from the managers by asking
question because it is difficult for me to understand the study.

2)Secondary data:-
Secondary data is the data,which is collected from published source.I
have collected data from various sources such as bank’s annual report of
previous year,different document prepared by the bank and from various
reference books also.

After the data collection of both the sources, I have analyzed

the data & conducted various financial ststement analysis & prepared
various graphs.

After analyzing the data,I have derived a conclusion and have made
suggestions based on my analysis.

7
 SYNOPSIS

This project of “Financial Statement Analysis” of

State Bank of India is based on all financial information about the
bank. The objectives of bank & method of collecting data is clearly
define by this project report of bank.

The project includes the objectives - To study the

Annual report or financial position of the company, to understand the
day-to-day work carry out by the organization, to observe the cash
inflow & outflow,to check the profitability of bank To study the
policy of the bank etc.

.
. The project indicates the primary (direct) method of collection- as
bank’s annual report of previous year,different document prepared by
the bank and from various reference books ,from Indian statistical
year book,from various websites etc.

In short,this project report is the in- depth study of all kind

of “Financial Statements” of the bank which reflects the past,current
& future financial position of the bank.

Table of Contents
8
 Sr. No. Subject Page No.

 Declaration 1

 College Certificate 3

 Acknowledgement 4

 Objectives Of Study 5

 Limitations Of Study 6

 Methodology 7

 Synopsis 8

Ch-1. About SBI Bank’s Profile 11

Bank Information 13

History of the SBI bank 14

Management of SBI 18

Structure 19

Functions 22

Ch-2. Services of SBI bank 24

9
Ch-3. Capital Structure 56

Shareholding Pattern 57

Dividend 58

Balanceshhet Analysis 60

Cashflow Analysis 72

Ch-4. Profitability Ratio Analysis 75

Deposit Ratio Analysis 80

Operating Cashflows 88

Growth Indicators 91

Overall Conclusion 93

Bibliography 94

10
 Chapter-1.

About SBI Bank’s Profile

Spreading its arms around the world, the SBI’s
International Banking Group delivers the full range of cross-
border finance solutions through its four wings – the Domestic
division, the Foreign Offices division, the Foreign Department
and the International Services division.

The Domestic wing provides services like merchant

banking, shipping finance and project export finance. The Foreign
Offices wing offers the entire range of international trade and
industrial finance products, while the Kolkatta-based Foreign
Department undertakes treasury and currency operations.

The International Services division renders

specialized services like correspondent banking, global link services
and country and bank risk exposure monitoring. Being India’s largest
and most trusted commercial bank, the SBI offers you a network of
relationships unmatched in strength and span by any other Indian
financial entity.

The bank has a network of 66 offices/branches in 29

countries spanning all time zones. The SBI’s international presence is
supplemented by a group of Overseas and NRI branches in India and
correspondent links with over 522 leading banks of the world. SBI’s
offshore joint ventures and subsidiaries enhance its global stature.
11
 State Bank of India(SBI) is India’s largest
commercial bank. SBI has a vast domestic network of over 9,000
branches (approximately 14% of all bank branches )and commands
one-fifth of deposits and loans of all scheduled commercial banks
in India.

The State Bank Gpoup includes a network of

eight banking subsidiaries and several non- banking subsidiaries
offering merchant banking services,fund management, factoring
services,primary dealership in government securities ,credit cards
and insurance. The eight banking subsidiaries are:

1.State Bank of Bikaner and Jaipur(SBBJ)

2.State Bank of Hyderabad(SBH)

3.State Bank of India(SBI)

4. State Bank of Indore(SBIR)

5. State Bank of Mysore(SBM)

6. State Bank of Patiala(SBP)

7. State Bank of SAURASHTRA(SBS)

8. State Bank of Travancore(SBT)

12
 BANK INFORMATION
Head /Corporate office: New Administrative Bldg.
Madam Cama Road,
Mumbai– 400021.
Incorporation year: 1955
Ownership group: State Bank of India Group
Main activity: Banking services
Listed on: Bombay Stock Exchange (BSE)
Calcutta Stock Exchange
London Stock Exchange (FTSE)
National Stock Exchange (NSE)

13
 History of the SBI Bank
The origins of State Bank of India date back
to 1806 when the Bank of Calcutta(later called the Bank
of BENGAL)was established.In 1921,the Bank of
Bengal and two Presidency Banks(Bank of Madras and
Bank of Bombay) were amalgamated to form the
Imperial Bank of India.In 1955,the controlling interest
in the Imperial Bank of India was acquired by the
Reserve Bank of India and the State Bank of India came
into existence by an act of Parliament as successor to
the Imperial Bank of India.
Today,State Bank of India(SBI)has spread
its arms around the world and has a network of branches
spanning all time zones.SBI’s International Banking
Group delivers the full range of cross-border finance
solutions through its four wings-the domestic division,
the foreign department ,foreign offices division and the
international services division.

14
MILE STONES:

1949:Entactment of Banking Regulation Act,

1955:Nationalisation of State Bank of India,

1959: Nationalisation of State Bank of India’s

subsidiaies,
1961:Insurance cover extended to deposits,

1969: Nationalisation of 14 Major Banks,

1971:Creation of Credit guarantee corporation,

1975: Creation of regional rural banks,

1980: Nationalisation of seven banks with deposits over

200 crore.

15
 Mission
SBI Bank's mission is to be a world-class Indian Bank. The
Bank's aim is to build sound customer franchises across
distinct businesses so as to be the preferred provider of
banking services in the segments that the bank operates in and
to achieve healthy growth in profitability, consistent with the
bank's risk appetite. The bank is committed to maintain the
highest level of ethical standards, professional integrity and
regulatory compliance. SBI Bank's business philosophy is
based on four core values: Operational Excellence, Customer
Focus, Product Leadership and People.

16
 GOAL AND OBJECTIVES

Business Objectives

The SBI branch was opened with the objectives to foster the trade between
India and Japan through trade finance products and to help Indian
Corporates to access the financial market in Japan.At these, two branches
SBI offers a wide range of services such as deposits,remittances,trade
finance solutions,syndicated loans etc.
.

Organizational Goals

SBI’s main goals are as follows:

 Develop close relationships with financial services to customers,

 Maintain its position as the premier finance institution in the country,

 Transform ideas into viable and creative solutions,
 Provide consistently high returns to shareholders, and
 To grow through diversification by leveraging off the existing client
base.

17
INFORMATION ABOUT BOARD OF DIRECTORS AND
BOARD COMMITTEE
MANAGEMENT OF SBI
NAME DESIGNATION
 O.P. Bhatt Chairman

 Suman Kumar Berry Director

 Ananta C. Kalita Director

 Md. Salahuddin Ansari Director

 Arun Ramanathan Director

 Dilip C. Choksi Director

 Rajiv Kumar Non-Official Part

Time Director

 D. Sundaram Director

 S.K. Bhattacharya Managing Director

 Ashok Jhunjhunwala Director

 Deva Nand Balodhi Director

 Vasantha Bharucha Director

 Shyamala Gopinath Director
 S. Venkatachalam Director
18
 R. Sridharan Managing Director

19
 STRUCTURE
SBI Group
SBI Group consists of,
A) Seven Associate Banks
• State Bank of Hyderabad
• State Bank of Indore
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Saurashtra
• State Bank of Travancore
• State Bank of Bikaner and Jaipur
B) One Wholly Owned Banking Subsidiary
• SBI Commercial and International Bank
C) Seven Non Banking Subsidiaries
• SBI Capital Markets Merchant banking, lease and hire purchase
• SBI Funds Management Mutual fund
• SBI Gilts Govt. Securities
• SBI Factors & Commercial Service Factoring Services
• SBI Securities Investment banking
• SBI Cards and Payment Services Ltd
• SBI Life Insurance Company Ltd
E) Six Overseas Subsidiaries/Joint Ventures
• SBI(Canada)
• SBI(California)
• SBI International (Mauritius) Ltd.
• Indo-Nigerian Merchant Bank Ltd.
• SBI Finance Inc., New York
• SBI Servicos Limitada, Sau Paulo

20
ORGANIZATION CHART OF FINANCE FUNCTION IN
BANK

Chairman

Vice Chairman

Executive Director

Managing Director

Senior General Manager

Chief Financial General Manager

Accounting and Officer and Treasurer
Taxation Group

Assistant Financial Account Manager

Officer

Assistant

21
 ORGANISATION STRUCTURE OF BRANCH
Branch Manager

Personal Banker Teller Authorizer Clearinghouse Sales

Authorizer Executive

Personal Banker Teller

22
 Functions
Branch manager
 Require approval from BM for transaction more than 50,000 RS.
 organising coordinating and motivating employees in the organization.
 Develop his territory.

Personal Banker authorizer

 After his approval, all the applications collect and checked by PB,
Executives go for further process to branch manager.
 -Daily stock (welcome kit, debit pin number, cheque book, and debit card)
requires approval of PB authorizer.

Personal Banker
 Maintain contacts with walk-in customers, existing customers and provide
satisfactory service to them.
 Handle all the complaint of the customers and resolve it.
 Maintain daily stock reports and take approval from the PB authorizer.

Teller Authorizer
 He gives approval to all types cheques and DDs by checking all the details
and validity of it.
 At the end of the day all the cash on hand in the bank require signature of
him.

23
Teller
 Maintain daily transactions of cheque withdrawal, cheque deposits, cash
withdrawal cash deposit, fund transfer and DD etc.
 Check the validity of all the above transactions.

Clearinghouse
 All the cheques are being transferred to this department and it checks the
sign, balance amount in his/ her a/c, date of issuing.
 It also maintains the transaction with other branches and banks.
 DRF forms are being handled by this department.

Sales Executive
 Generate new inquiries by cold calling and tele marketing.
 Handle existing and new customers.
 Maintain customer relation ships.

24
 Chapter-2.

SERVICES(PRODUCTS) OF SBI BANK

 PERSONAL BANKING
 NRI SERVICES
 AGRICULTURE / RURAL SERVICES
 INTERNATIONAL BANKING
 CORPORATE BANKING
 SME SERVICES
 SERVICES
 GOVERNMENT BUSINESS

25
1.PERSONAL BANKING
 DEPOSIT SCHEMES
Open an account with any of SBI branches, all of
them are fully computerised, and realise the advantage of vast
network. Place funds in Multi Option Deposit Scheme, a term
deposit which is not fixed at all and comes with a unique break-up
facility which provides you full liquidity as well as benefits of
higher rates of returns, through your savings bank account.
Alternately, keep that deposit intact by availing an overdraft
facility, to meet your occasional temporary funds requirements.
SBI products are designed with flexibility to suit our
personal requirements. Enjoy 24 hour banking facility through
Internet Banking/ widest network of ATMs.
Experience a whole new world of Personal Banking
Branches (PBB) often dubbed as boutique branches by others.
Customer friendly knowledgeable staff will cater our financial
requirements with speed and efficiency in an excellent ambience.
The PBBs have different minimum thresholds for customers'
business to ensure the exclusive level of service.

26
 PERSONAL FINANCE
State Bank of India has a variety of schemes under Personal
Finance to satisfy varying needs of the banking public. The Bank
offers the following schemes with attractive rates of interest:

* Loan For ESOPS

* Housing Loan
* Easy Travel Loan
* Car Loan
* Educational Loan
* Personal Loan
* Property Loan
* Loan to Pensioners
* Loan Against Shares/Debentures
* Festival Loans
* Medi-Plus Scheme
* Teachers-Plus Scheme
* Sainik-Plus Scheme
* Tribal-Plus Scheme
* EMI Calculator
* Credit Khazana

Many of SBI branches offer loans under Personal Finance. This

section also offers an EMI calculator to facilitate computation of
monthly repayment.

27
 CORPORATE SALARY PACKAGE

SBI PRESENTS A NEW ATTRACTIVE PRODUCT FOR

EMPLOYEES OF CORPORATES & INSTITUTION
BENEFITS TO THE EMPLOYER

 Provides a convenient way to manage salaries across a large

number of centres through Core Power.

 Reduces employer’s paperwork and salary administration cost.

 Employees receive instant credit of salaries.

TO THE EMPLOYEES

 Employees will enjoy convenience of Anywhere Banking at the

largest network of
 Core Banking Branches presently numbering 11400 plus across
the country.

 Extensive alternative channels.

 8500 plus ATMs of State Bank Group.

 Free Internet Banking

 Complete gamut of Banking Services including :-

 Zero Balance Account facility

28
 Retain same account number even when the account is
transferred to another branch.

 Free Multi City Cheques/ SMS Alert/ e-statement/ internet

banking.
 Easy overdraft upto 2 months salary repayment extendable to 6
months.
 RTGS/NEFT, Demat facility, Systematic Investment Plan in
Mutual funds.
 Concession in interest on loans.
 Anywhere banking facility/ widest network of branches.
 Range of other value added benefits.

29
2.NRI SERVICES
WHO IS AN NON-RESIDENT INDIAN [NRI]
A Non Resident Indian (NRI) as per FEMA 1999 is an
Indian citizen or Foreign National of Indian Origin resident outside India
for purposes of employment, carrying on business or vocation in
circumstances as would indicate an intention to stay outside India for an
indefinite period.An individual will also be considered NRI if his stay in
India is less than 182 days during the preceding financial year.
A Person of Indian origin (PIO) is a citizen of any country other than
Pakistan, Bangladesh or Sri Lanka

Who
 At any time held an Indian Passport,
 He or any of his parents or grand parents was a citizen of India,
 Is a spouse of an Indian Citizen or a person referred to above.

30
NRIs can open the following types of accounts with SBI:
 NRE Rupee Accounts.
 Savings Bank.
 Current Accounts.
 Term Deposits (Interest Paid out Quarterly).
 Special Term deposits (Interest compounded Quarterly).
 Non-Resident (Ordinary) Account .
 NRO A/cs - Rupee Accounts for crediting income in India.
 Foreign Currency Non Resident Accounts.
 Fixed Deposits in Pound Sterling, US Dollar Euro Canadian Dollar and
Australian Dollar
 Resident Foreign Currency Accounts.

31
3.AGRICULTURE / RURAL SERVICES
State Bank of India Caters to the needs of agriculturists and
landless agricultural labourers through a network of 6600 rural and semi-
urban branches.There are 972 specialized branches which have been set up in
different parts of the country exclusively for the development of agriculture
through credit deployment.These branches include 427 Agricultural
Development Branches (ADBs) and 547 branches with Development
Banking Department (DBDs) which cater to agriculturists and 2 Agricultural
Business Branches at Chennai and Hyderabad catering to the needs of hitech
commercial agricultural projects.
Our branches have covered a whole gamut of agricultural
activities like crop production , horticulture , plantation crops, farm
mechanization, land development and reclamation, digging of wells, tube
wells and irrigation projects, forestry, construction of cold storages and
godowns, processing of agri-products, finance to agri-input dealers, allied
activities like dairy , fisheries, poultry, sheep-goat, piggery and rearing of
silk worms.
The branch also has farmer's meet in villages to explain to
farmers about various schemes offered by the bank.
To give special focus to agriculture lending Bank has set up
agri business unit. Bank has also agri specialists in various disciplines to
handle projects/ guide farmers in their agri ventures. Advances are given for
very small activity covering poorest of the poor to hitech activities involving
large fund outlays.

32
 Agricultural Banking
State Bank of India's branches have covered a
whole gamut of agricultural activities like crop production ,
horticulture , plantation crops, farm mechanization, land
development and reclamation, digging of wells, tube wells and
irrigation projects, forestry, construction of cold storages and
godowns, processing of agri-products, finance to agri-input dealers,
allied activities like dairy , fisheries, poultry, sheep-goat, piggery
refurbished second hand tractors, loans against pledge of
warehouse receipts, loans against produce stored by the farmer at
his own premises, loans against book debts of Arthias, mulberry
cultivation, rearing of silk worms and grainages. Infact Bank can
cover any other agricultural related activities undertaken.

33
 Regional Rural Banks
Post amalgamation Bank has got 16 RRBs with
a network of 2,351 branches spread over 115 districts and 16 states
in the Country. The aggregate deposits and advances of the
sponsored RRBs stood at Rs.13,573 crore and Rs.7,856 crore
respectively as on 31st March 2008. The profits have jumped from
Rs.32.77 crore as on March 2007 to Rs.115.68 as on March 2008.
During the year, a remittance product – Grameen Pay Order (GPO)
was introduced for facilitating remittances from remote areas to
increase fee income in RRBs. Post amalgamation; RRBs have
broadbased their product profile by introducing Debt Swap
Scheme, Warehouse Receipt Financing.

34
4.INTERNATIONAL BANKING
 Trade Finance
SBI Understand there is much stake involved in
Export Import business Global economic, political situations,
anything and every thing that affects you and your business. SBI
offers the trusted financial solution to all your complex Trade
finance related fund needs (both in Indian rupee and foreign
currencies).

The gamut of our services include credit for both pre shipment and
post shipment activities.

Export Revenue
• Rupee Export Credit (Pre-Shipment and Post-Shipment)
• Pre-Shipment Export Credit
• Post-Shipment Export Credit
• PreShipment Credit in Foreign Currency (PCFC)
• Getting Started - Opening a PCFC
• Operating PCFC
• Export Bill Rediscounting
• Letter of Credit

Import Revenue
• Foreign Currency import credit
• Supplier's credit

35
 CORRESPONDENT BANKING
The Correspondent Banking Division develops and
maintains relationship with Banks and Financial Institutions across the
Globe. This network Correspondent Banks forms the foundation for all
international operations of SBI.
SBI has correspondent banking relations with around 522
leading banks worldwide. The bank has deployed a dedicated Correspondent
Relations section to attend exclusively to create, nurture, cultivate and
continue relationship in correspondent banking.distribute their products for
various applications of the bank and its Customers.
Meanwhile, the bank’s Foreign Department, based in
Kolkata (Calcutta), handles all operational aspects of correspondent banking,
including all matters pertaining to the exchange of test keys and swift
authenticator keys (SAK), appointment of correspondents, maintenance and
reconciliation of Nostro accounts, and treasury management. The Rupee Vostro
accounts of International Banks and Institutions are maintained and serviced at
SBI’s International Services branch (ISBM) at Mumbai and at Overseas
Branches at Kolkata (Calcutta), Chennai, Cochin, Bangalore and New Delhi.
ACU accounts are also serviced at the overseas branches.

36
 PROJECT EXPORT FINANCE
State Bank of India is an active participant in the area of
finance of Project export activities. These activities will mainly involve
financing the fund based and non fund based requirements of the project
exporters.
• Export of engineering goods on deferred payment terms
• Execution of turnkey projects abroad
• Execution of overseas civil construction contracts abroad
• Exports of services are the contracts for export of consultancy, technical
and other services.
Project export contracts are generally of high value and exporters
undertaking them are required to offer competitive terms to be able to secure
orders from foreign buyers in the face of stiff international competition.
SBI’s vast network of branches spread all over the country
which are authorized to handle trade related transactions,substantial presence
overseas with branches/offices in all major commercial centers of the world
covering all time zones and our strong network of correspondent relationship
with top ranking banks in several countries adds to our competitive strengths to
facilitate and meet various requirements of project exporters. More over we also
enjoy the comprehensive credentials in International banking community.

37
5.CORPORATE BANKING
CAG - A perfect strategic fit :
 Market leader image
 Focussed attention
 Flexible & Customer - friendly credit policies
 Structured Products - Fundbased & feebased
 Timely, comprehensive and assured delivery
CAG - SBI's Proactive response to emerging market needs
CAG is Strategic Business Unit of SBI, set up exclusively to cater to
the specialised banking needs of top corporate clients of the country.
It was the direct outcome of SBI's structural reorganisation in the light
of Deregulation, Globalisation & Liberalisation of the Banking
Industry.

38
CAG - A Symbol of excellence
 Quality Relationship Banking
 Exclusive, highly skilled Relationship teams of dynamic and
motivated personnel, each attending to a select group of top
Corporates providing a one-stop-shop for financial services
presently at Mumbai, New Delhi, Calcutta, Chennai and
Ahmedbad.
 Delayered Credit process
 Only two stage credit process consisting of appraisal and
assessment by the Relationship team and sanction by the
Credit Committee/Central Board, leading to quickest response
time in the industry.
 Offer of wider and sophisticated products
 Apart from a variety of core credit products including
structured finance and multi-purpose short term corporate
loan, CAG offers an array of customer specific products like
Cash Management Product, Treasury & Forex products and
Merchant Banking products in association with SBI Capital
Markets Ltd., SBI Gilts Ltd. and other subsidiaries of SBI.

39
 MID- CORPORATE GROUP
Mid-Corporate Group (MCG) has been set up in the bank
under Corporate Banking Group to cater to the various banking
requirements of Mid-Corporates. It provides business solutions to its
customers through its 28 dedicated branches all over the country.

A Mid-Corporate has been defined as a business entity

having annual turnover between Rs.25 crores to Rs.350 crores or an entity
having a minimum fund based limit of Rs.5 crores(including Term loans.)

Mid-Corporate Group has following focussed objectives for serving Mid-

Corporate Accounts:
 Providing exclusive focussed attention on the banking requirements
of Mid-Corporates,
 Providing various products to these Mid-Corporates through
Relationship Management model,
 Improving Turn Around Time (TAT) for credit delivery;
 Providing customised solutions to financial requirements of Mid-
Corporates.

40
 PROJECT FINANCE
Project Finance Strategic Business Unit
A one-stop-shop of financial services for new
projects as well as expansion, diversification and modernisation
of existing projects in infrastructure and non -infrastructure
sectors .
Expertise
Being India's largest bank and with the rich experience gained
over generation, SBI brings considerable expertise in
engineering financial packages that address complex financial
requirements.
Project Finance SBU is well equipped to provide a bouquet of
structured financial solutions with the support of the largest
Treasury in India (i.e. SBI's), International Division of SBI and
SBI Capital Markets Limited.
The global presence as also the well spread domestic branch
network of SBI ensures that the delivery of your project specific
financial needs are totally taken care of.
Lead role in many projects
Allied roles such as security agent, monitoring/TRA agent etc.

41
Infrastructure sector:
 Road & urban infrastructure
 Power and utilities
 Oil & gas, other natural resources
 Ports and airports
 Telecommunications

Non-infrastructure sector:
Manufacturing: Cement, steel, mining, engineering, auto components,
textiles, Pulp & papers, chemical & pharmaceuticals …
Services: Tourism & hospitality, educational Institutions, health
industry …
Expertise
 Rupee term loan
 Foreign currency term loan/convertible bonds/GDR/ADR
 Debt advisory service
 Loan syndication
 Loan underwriting
 Deferred payment guarantee
 Other customized products i.e. receivables securitisation,
e.t.c.

42
6. SME SERVICES
 BCSBI Code
This is a voluntary code, reflecting the bank’s positive
commitment to its Micro and Small Enterprise (MSE)
customers to provide easy, speedy and transparent access
to banking services in their day-to-day operations and in
times of financial difficulty. This Code is not only a
Charter of Rights of the MSE but also enshrines his
obligations vis-à-vis his bank.

43
 (FAQ) BCSBI Code

1. In what way is the Code of Bank’s Commitment to Micro

and Small Enterprises different from the existing
regulatory prescription of the Reserve Bank of India and
the Government policy framework?
The objective of the Code is not to replace the
existing regulatory framework but to complement it. Regulations
by themselves cannot ensure availability of quality service to all.
The Code seeks to achieve this through a positive and voluntary
commitment of the bankers to provide easy access to
transparent, speedy and efficient banking services. Banks are
also committed to provide products and services suiting the
needs of MSEs and to consider their financial difficulties
sympathetically.

2. Why is the scope of the Code confined to only Micro and

Small enterprises?
MSEs play a very significant role in
maintaining a balanced and sustainable growth of the economy,
through employment generation, development of entrepreneurial
skills and contribution to export earnings. The Report of the
Working Group on rehabilitation of sick SMEs has brought out
that this vibrant segment of the Indian economy has been
contributing over 39 per cent of the manufacturing sector output,
33 per cent of the national exports and providing employment to
nearly 312 lakh people through about 128 lakh units, located in
both the rural and urban areas across the country. The Third
Census of small enterprises conducted by the Government of
India in 2001-02 revealed that 95.5% of Micro & Small
Enterprises have been outside the purview of the jurisdiction of
financial structure and that there is a critical need to provide
banking services to fully exploit the potential of this sector.

44
3. If banks do not implement the Code, what is the recourse
left for the customers?
All banks have adopted a Model Grievance
Redressal policy framed by the IBA. All banks have a set of
internal Grievance Redressal Procedures for handling of
complaints with given specific time frame consistent with
External Grievance Redressal Mechanisms such as the Banking
Ombudsman Scheme. The Code even provides that if customers
are not satisfied with the bank’s response, they should not be
discouraged from escalating the complaints and should be
helped to take up the matter with the Banking Ombudsman.
Individual complaints are also dealt with by the Customer
Service Department of the Reserve Bank of India and if the
complaints involve systemic issues, the BCSBI pursues the
matter with the banks for rectification of the systemic lapses.

4. What is the measure of compliance of banks with the

‘Code of Bank’s Commitment to Customer’s?

Banks have initiated several positive

measures to comply with the provisions of this Code. All banks
are now systematically distributing copies of the Code to all
their customers. Since this Code is, in a sense, a Charter of
Rights of the individual vis-a-vis his bank, this is an important
action on the part of the bank to voluntarily empower the
individual customer. Also, banks have adopted Model policies
for Cheque Collection, Grievance Redressal, Security
Repossession and Compensation and these are in public domain.
Transparency with regard to charges, fees and interest rates is
now apparent and all banks have a tariff schedule in public
domain. These are some of the positive features. BCSBI is in
continuous dialogue with banks towards achieving greater
compliance of the Code in letter and spirit.

45
7. SERVICES
 INTERNET BANKING
Internet banking portal of our bank, enables its
retail banking customers to operate their accounts all across
India, removing the restrictions imposed by geography and time.
It's a platform that enables the customers to carry out their
banking activities from their desktop, aided by the power and
convenience of the Internet.
Availing the Internet banking services, you can do the
following normal banking transactions online:
o Self-account funds transfer across India.
o Third party transfers in the same branch
o New account opening
o Demand Draft requests
o Standing instructions
o New Cheque-book request and much more.

46
Apart from these, the other salient value-added features
available are:
o Railway tickets booking,
o Utility bill payments
o LIC and other insurance premia payments,
o SBI Mutual funds Investments
o Remit Subscription to PPF account,
o Credit card dues payments,
o Deposit your taxes,
o Donations to your religious inspirations
o Donations to Red Cross and such other organisations
o Setting up SMS alerts for transaction information.

47
 MOBILE BANKING
MOBILE BANKING SERVICES
Away from home, bills can be paid or
money sent to the loved ones or balance enquiries done
anytime 24x7!!!That is what SBI Freedom offers
-convenience, simple, secure, anytime and anywhere
banking.

The service is presently available on java

enabled mobile phones over SMS/ GPRS/ WAP as also
non java phones with GPRS connection. The service can
be availed over the free GPRS facilities offered by various
mobile service providers. The services for other non-Java
mobile phones are under development and will be offered
using Unstructured Supplementary Services Data (USSD).

The following functionalities will be provided in the Phase

I:

-Funds transfer (within and outside the bank –using NEFT)

-Enquiry services (Balance enquiry/ Mini statement)

-Request services (cheque book request)

-Bill Payment (Utility bills, credit cards)

-M Commerce (Mobile Top Up, Merchant payment, SBI

life insurance premium)

48
 ATM SERVICES
 STATE BANK NETWORKED ATM SERVICES
State Bank offers you the convenience of over 8500 ATMs in
India, the largest network in the country and continuing to
expand fast! This means that you can transact free of cost at the
ATMs of State Bank Group (This includes the ATMs of State
Bank of India as well as the Associate Banks – namely, State
Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank
of Indore, State Bank of Mysore, State Bank of Patiala, State
Bank of Saurashtra, and State Bank of Travancore) and wholly
owned subsidiary viz. SBI Commercial and International Bank
Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card.

49
  KINDS OF CARDS ACCEPTED AT STATE BANK
ATMs

Besides State Bank ATM-Cum-Debit Card and State

Bank International ATM-Cum-Debit Cards following cards are also
accepted at State Bank ATMs: -

1) State Bank Credit Card

2) ATM Cards issued by Banks under bilateral sharing viz. Andhra

Bank,Axis Bank, Bank of India, The Bank of Rajasthan Ltd., Canara
Bank, Corporation Bank, Dena Bank, HDFC Bank, Indian Bank,
Indus Ind Bank, Punjab National Bank, UCO Bank and Union Bank
of India.

3) Cards issued by banks (other than banks under bilateral sharing)

displaying Maestro, Master Card, Cirrus, VISA and VISA Electron
logos

4) All Debit/ Credit Cards issued by any bank outside India displaying
Maestro, Master Card, Cirrus, VISA and VISA Electron logos

50
 DEMAT SERVICES

SBI offers Demat services that would ensure free transferability

of securities with speed, accuracy and security.
SBI is Depository Participant both with - National Securities
Depositories Limited (NSDL) and Central Depository Services
Limited (CDSL) through more than 1000 branches –
Features & Benefits

As opposed to the earlier form of dealing in physical certificates

with delays in transaction, holding and trading in Demat form
has the following benefits:
 Account Maintenance & Safe custody: Facilitates
Maintaining Security Balance in electronic form.
 Dematerialization: Facilitates converting physical share
certificate into electronic balances.
 Rematerialization: Facilitates converting the electronic
balances to physical (share certificate) form.
 Account Transfers: Facilitates delivery/receipt of electronic
balances consequent to market / off-market trades.
 Pledge/Hypothecation: Facilitates blocking securities
balance of borrowers in favour of lenders for obtaining Loans
/ advances against shares.
 Initial Public offer: Facilitates faster and direct credit of
security balances into DP account on allotment through
public issue of companies.
 Security Lending: Facilitates earning extra income on your
dematerialized holdings by the way of securities lending.

51
8. GOVERNMENT BUSINESS
 GOVERNMENT ACCOUNTS
An Outline of Government Accounts Department
The Government Accounts Department (GAD) oversees the
handling of government business undertaken by our branches as
sub-agent of Reserve Bank of India. It is a co-ordinating agency
between the branches dealing in Central Government transactions
and Reserve Bank of India, CAS, Nagpur, on the one hand and
Accounting Authorities of Department of Central Government on
the other.
All authorised dealing/receiving branches report their Central
Government transactions on a daily basis to their respective
focal/nodal/link branches who consolidate and report to GAD, Navi
Mumbai. The main function of GAD is to settle Central
Government transactions reported by nodal/focal/link branches
with RBI, CAS, Nagpur.

52
 Central Government transactions

All Central Government transactions (other than

those relating to Union Territories) are under Focal Point/Link Branch
system. Under the Focal Point system, the branches dealing in
Government transactions report their transactions to the respective
Focal Point Branches. Focal Point Branches have been identified at a
centre where Pay & Accounts Office (PAO) of the concerned
Ministry/Department is established. All the branches handling the
transactions of a particular PAO report their transactions to the
identified Focal Point Branch for that PAO. These Focal Point
Branches, report the consolidated figures under various accounting
heads to GAD for final settlement with RBI, CAS, Nagpur. The
settlement of these transactions is being handled by the under noted
Sections in GAD.

1) Union Ministries Expenditure Account (UMEA) Section:

2) Revenue Section:
3) Central Government Section:

All focal/link/nodal branches are required to report their Government

transactions to GAD for funds settlement with RBI, CAS, Nagpur in
an encoded communication format. This helps in electronic
processing of data.

53
  PUBLIC PROVIDENT FUND - 1968
Scheme introduced by Central Government in 1968. The Scheme
enables the members of the public to make contributions to the Fund
and obtain Income Tax rebate under the relevant provisions of the
Income Tax.

Eligibility
Individuals
Individuals on behalf of a minor
Minimum / Maximum Investment ( w.e.f. 15-11-2002 )
Minimum Rs.500/- per annum in multiples of Rs.5/-
Maximum Rs.70,000/- per annum

Duration
15 years
Can be extended for one or more blocks of 5 years
Account can be discontinued but repayment of subscriptions along
with interest only after 15 years.

Rate of Interest

8% per annum credited in account on 31st March every year

calculated on the minimum balance between 5th day and end of the
month.

Loans
Loan upto 25% of balance at the end of first financial year from third
to sixth year. Second loan can be taken on full payment of first loan.

54
 SBI e-TAX
SBI e-tax : Online Tax Payment Facility
For Direct Tax payment through SBI e-tax:
Step 1: Visit www.onlinesbi.com and Click on "SBI e-tax".
Step 2: Select Direct Taxes (OLTAS)".
Step 3: Select Challan Type.
Step 4: Enter Challan Details.
Step 5: Confirm Assessee details and SelectState Bank of
India.
Step 6: Log onto www.onlinesbi.com with Username and
Password.
Step 7: Enter tax details.
Step 8: Confirm payment details.
Step 9: Print Instant Cyber Receipt and logout.

55
Chapter-3.
FINANCIAL ANALYSIS
OF
STATE BANK OF INDIA

56
 Capital structure
From Year To Year Share Authorized Issue Paid Up Shares Paid Up Paid Up
Capital Capital Nos. Value Capital

2007 2008 Equity Share 1,000.00 631.56 631470376 10 631.47

2006 2007 Equity Share 1,000.00 526.30 526298878 10 526.30
2005 2006 Equity Share 1,000.00 526.30 526298878 10 526.30
2004 2005 Equity Share 1,000.00 526.30 526298878 10 526.30
2003 2004 Equity Share 1,000.00 526.30 526298878 10 526.30
2002 2003 Equity Share 1,000.00 526.30 526298878 10 526.30
2001 2002 Equity Share 1,000.00 526.30 526298878 10 526.30
2000 2001 Equity Share 1,000.00 526.30 526298878 10 526.30
1999 2000 Equity Share 1,000.00 526.30 526298878 10 526.30
1996 2000 Equity Share 1,000.00 526.30 526298878 10 526.30
1995 1996 Equity Share 1,000.00 474.01 474009872 10 474.01
1994 1995 Equity Share 1,000.00 474.01 474009189 10 474.01
1993 1994 Equity Share 1,000.00 473.83 473828726 10 473.83
1991 1993 Equity Share 1,000.00 200.00 20000000 100 200.00

57
 Share holding pattern
Share holding pattern as on : 31/12/2008
Face value 10.00
Promoter's holding
Indian Promoters 377207200 59.41
Sub total 377207200 59.41
Non promoter's holding Institutional investors
Banks Fin. Inst. and Insurance 54488550 8.58
FII's 66169927 10.42
Sub total 159634660 25.14
Other investors
Private Corporate Bodies 28339401 4.46
NRI's/OCB's/Foreign Others 379437 0.06
Govt 122428 0.02
Others 28413341 4.48
Sub total 57254382 9.02
Grand total 634879997 100.00
General public 40783755 6.42

58
 Dividend
Year Month Dividend (%)
2008 May 215
2007 May 140
2006 May 140
2005 May 125
2004 May 110
2003 Jun 85
2002 May 60
2001 May 50
2000 Jun 25
2000 Feb 25
1999 Jun 40
1998 Jun 40
1997 Jun 40

59
 D ivid e n d (% )

250

200

150
D ivid e n d (% )
100

50

Jun
Jun

Jun
Jun
Feb
Jun

May
May
May
May
May
May
May

2 0 0 82 0 0 72 0 0 62 0 0 52 0 0 42 0 0 32 0 0 22 0 0 12 0 0 02 0 0 01 9 9 91 9 9 81 9 9 7

60
BALANCE SHEET OF THE STATE BANK OF INDIA AS ON
31ST MARCH 2008
CAPITAL AND
LIABILITIES SCHEDULE As on 31.03.2008 As on 31.03.2007
Capital 1 5262989 5262989
Reserves & Surplus 2 146980804 129352414
Deposits 3 2705601437 2428283800
Borrowings 4 93239446 107010418
Other Liabilities and
Provisions 5 531197807 486532484
TOTAL 3482282483 3156442105

61
ASSETS SCHEDULE As on 31.03.2002 As on 31.03.2001
Rs. Rs.
Cash and balances with
Reserve Bank of India 6 218725347 184958687
Balances with banks and
money at call & short notice 7 430576316 422133168
Investments 8 1451420317 1228764928
Advances 9 1208064653 1135902708
Fixed Assets 10 24152273 25933018
Other Assets 11 149343577 158749596
TOTAL 3482282483 3156442105

62
 ASSETS ANALYSIS
ASSETS
Rs. Crore
Non-Annualized Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
Cash and bank balance 32645.82 53212.6 47136.44 60709.18 64930.16
Cash in hand 508.15 497.97 558.27 867.86 1052.58
Deposit account 1010.57 1680.8 2675.95 3139.35 3296.56
Money at call 821 11038.61 9540.16 21185.87
23085.95
Balance outside India 17305.82 23002.07 15924 17771.83 16546.53
Current account 460.31 3528.66 3931.51 9016.52 6529.48
Deposit account 1215.57 983.86 974.73 1306.01 2242.33
Money at call 1 5629.94 18489.55 11017.76 7449.3 7774.72
Balance with RBI 12906.42 16894.32 18344.78 17628.01 20819.95
Investments 54982.24 71286.52 91878.68 122876.5 145142
Government securities 39177.27 51752.76 68068.27 96416.82 117323
Approved securities 7157.97 6464.39 5913.72 5704.99 5220.32
Assisted companies 0 0 0 0 0
Subsidiaries/associates 1424.41 1540.13 1619.83 1338.62 1344.82
Mutual funds 0 0 2932.06 0 0
Others 7222.59 11529.24 13344.8 19416.05 21253.85
Investments outside India 2221.46 2690.45 3199.94 3976.49 4741.86
Advances & loans 74237.33 82359.84 98101.97 113590.3 120806.5
Bills receivables 7933.47 7741.25 9235.12 12840.01 11555.36
Short term/demand advances 43553.46 45991.24 54979.16 61197.15 64178.41
Term advances 22750.4 28627.35 33887.69 39553.11 45072.7

63
Secured advances 71884.05 77291.42 92161.81 90357.88 98526.09
Unsecured advances 2353.28 5068.42 5940.16 23232.39 22280.38
Advances to priority sector 19522.82 23090.38 25877.55 30153.35 31591.48
Advances to public sector 12088.19 13465.12 9490.49 20271.27 21990.35
Other assets
Stock in trade 72.54 69.67 67.97 74.18 76.44
Stock others 72.54 69.67 67.97 74.18 76.44
Receivables 16228.42 13386.74 21842.28 13529.53 13794.38
Accrued income 3005.48 3348.96 4278.57 5133.28 5737.66
Non-banking assets 0.22 0.24 0.25 1.26 0.27
Inter office adjustments 2924.35 0 8760.74 58.89 0
Advance payment of tax 1647.34 2403.95 1957.55 2007.06 1861.14
Other receivables 8651.03 7633.59 6845.17 6329.04 6195.31
Future lease rent receivable 0 0 0 0 102.66
Gross fixed assets 2347.61 3338.31 3976.97 4458.99 4678.09
Less: cumulative
depreciation 841.3 1144.65 1499.36 1865.68 2262.86
Net fixed assets 1506.31 2193.66 2477.61 2593.31 2415.23
Land & building 653.62 687.74 749.86 855.88 920.32
Revalued assets 0 0 0 0 0
Leased assets 289.33 1002.51 1386.51 1258.05 1434.53
Intangible assets/expenses
n.w.o 0 0 0 2271.24 1063.54
TOTAL ASSETS 179672.7 222509 261505 315644.2 348541.2

64
DETAILED ANALYSIS OF ASSETS
2003-04
The cash and bank balances amounted to Rs. 32
645.82 crores. The money at call was low at821 crores. The bank was
maintaining a balance of 12906.42 crores with RBI. The investmentsin
India were worth 54982.24 crores. However there was no investment in
mutual funds. Theinvestments outside India stood at 2221.46 crores.
The figures were low, as the impact ofglobalization was not yet felt. The
advances and loans amounted to 74237 crores which was41.32% of the
total assets. Of this short-term loans amounted to 69.35% of the total
loans. Theratio of loans to priority and public sector stood at 1.6. The
percentage of secured loans was 96.83%.
Inter-office adjustments amounted to 2924 crores.
This was attributed to the fact that reconciliation of inter-office accounts
continues for some time after the accounts are closed.
Gross Assets were valued at 2347 crores. The
depreciation amount was 841.3 crores and themethod used was written
down value method prescribed under the Income Tax Act.
Depreciation of leased assets was provided for on
capital recovery method. Leased Assetsvalued at 289.33 crores.

65
2004-05
Cash and Bank Balance increased to 53212.6
(increase of 61% over the previous year) whileCash in Hand reduced to
497.97 crores. Money at call increased drastically this year. Due to
thisfact the current account assets surged. The interest expenses on
deposits (excluding RIBs) inIndia during 2004-05 recorded an increase
of 17.5% as compared to the previous year, primarilydue to the increase
in average level of deposits by 16.9% (excluding RIB deposits) duringthe
year.
While the maximum interest rate on domestic
deposits came down from 12% at thebeginning of the fiscal to 10.5% at
the end, the average cost of deposits registered a marginalincrease from
8.01% in 2003-04 to 8.05% in 2004-05. Introduction in May 2005 of term
depositsfor a minimum period of 15 days (earlier, the minimum period for
which a term deposit could betaken was 30 days) as well as the
differential (higher) rates for single deposits of Rs.15 lakh andabove,
contributed to the additional cost under this head. Investments increased
by 40%.
Investment in government securities contributed a
lot. Investments in approved securitiesdecreased from the previous year.
Advances and loans increased marginally. Stocks in tradedecreased to
69.67. Inter-office adjustments had been completed by the end of the
accountingyear. Hence the receivables decreased. There was a drastic
increase in amount of leased assets.

66
2005-06
Cash and Bank Balance decreased but the cash in
hand increased marginally. Money at callfollowed the previous trend and
decreased. Money at call with RBI decreased by around 6000crores.
Investments increased continuously. This year the bank invested in
mutual funds, which
thereby increased investments. Advances and loans continued to
increase. But the ratio ofadvances to priority sector versus the public
sector changed radically. It increased from 1.6 to 3in two years. The
receivables increases this year because of inter office adjustments of
8760 crores.

67
 2006-07
On 30 March 2007, IRDA had granted license to the
joint venture for carrying out the lifeinsurance business in the country. In
June 2007, life insurance company has launched its firstproduct-
Sanjeevan. It is a single-premium money-back product providing life
cover up to amaximum of 75 years of age. The company is also looking
at launching pension products in fewdays. During the year, the Bank,
pursuant to the Voluntary Retirement Scheme for eligibleemployees
made a payment in respect of encashment of leave salary amounting to
Rs.203.63crore. In terms of the accounting policy consistently followed
by the Bank, the entire amount has
been charged to the Profit and Loss Account of the current year
(accounting on payment basis)including an amount of Rs.123.19 crore
being encashment of leave salary related to priorperiods, as determined
by an actuarial valuation. The amount of unsecured surged to
23232.39crores. Advances to public sector which had gone down last
year increased again. Receivablesagain went down due to less money
kept for inter office adjustments. Intangible assets showed at 2271.24
crore

68
 2007-08
The Bank implemented a Voluntary Retirement
Scheme (VRS) for eligible employees during FY 2006-07. Expenditure
there of aggregated to Rs. 2271.24 crore, of which Rs. 853.19 crore
wascharged to the Profit and Loss Account of FY 2006-07. Of the
balance, an amount of Rs. 354.51crore has been charged to the Profit
and Loss Account of FY 2007-08. The remaining amount ofRs. 1083.54
crore is being treated as deferred revenue expenditure included under
Schedule 11
"Other Assets", to be amortized equally over a further
period of 3 years in accordance with RBI guidelines. All the statistics
increased as per the continuing trends.

69
 CAPITAL AND LIABILITIES: BANKING COS.
State Bank Of India Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
Rs. Crore Non-
Annualized Capital 526.3 526.3 526.3 526.3 526.3
Equity capital 526.3 526.3 526.3 526.3 526.3
Reserve funds & surplus 9081.88 9876.01 11620.98 12935.24 14698.08
Share premium reserves 3510.57 3510.57 3510.57 3510.57 3 510.57
Statutory reserves 4321.46 5108.77 6595.83 7789.55 9686.6
Other specific reserves 172.17 53.1 58.09 557.43 781.22
Revenue reserves 1077.68 1203.57 1456.49 1077.69 719.69
Deposits 131091.32 169041.93 196821.07 242828.37 270560.14
Demand deposits 27813.65 30692.03 36182.05 40328.08 42312.79
Saving deposits 29207.85 34321.25 41506.53 47893.42 56396.36
Term deposits 74069.82 104028.65 119132.49 154606.87 171850.99
Demand deposits from
banks 4400.39 4520.9 5206.04 5 641.56 6913.88
Term deposits from banks 3470.18 5793.73 5500.66 6499.52 6746.43
Deposits outside India 7542.58 8787.09 9182.34 7932.42 8011.33
Borrowings 9080.79 10063.13 11193.41 15133.62 12781.6
RBI 0 0 670.29 0 0
Banks 0.8 0 0 0.01 1.21
Financial institutions 836.77 1076.39 1669.6 2537.4 2152.61
Go v ernment 0 0 0 0 0
Foreign institutions 7255.87 8002.67 6938.18 8163.63 7170.12
Debentures & bonds 987.35 984.07 1915.34 4432.58 3457.66
Others 0 0 0 0 0

70
 Secured loans 912.13 1413.11 2596.11 3067.01 2634.77
Other liabilities &
Provisions 29892.37 33001.66 41343.19 44220.66 49644.18
Bills payable 8754.94 10796.43 10562.53 13598.42 13875.17
Inter office adjustment 0 555.41 0 0 4722.18
Interest accrued and due 7619.88 10100.69 13080.79 16966.05 19285.58
Earmarked funds 0 0 0 0 0
Others (incl. provisions) 13517.55 11549.13 17699.87 13656.19 11761.25
TOTAL LIABILITIES 179672.66 222509.03 261504.95 315644.19 348541.15
Contingent liabilities
Bills for collection 0 9265.1 2309.78 8080.32 10176.6
Bills discounted 8646.15 0 0 0 0
Endorsement obligation 10830.12 9785.72 12941.7 12894.58 12591.26
Dispu t ed taxes 0 0 0 0 0
Letter s of credit 0 0 0 0 0
Future lease re n t payable 0 0 0 0 0

71
 DETAILED ANALYSIS OF CAPITAL AND LIABILITIES
Equity Capital remained constant at 526.3 crore. No
preference capital was issued. Neither any bonus was issued to
shareholders. Reserves and surplus increased every year from 9081
to1498 crores. Revenue reserves increased till 2000 and then began to
decrease as the bank began to diversify and invest more money in
restructuring. On the monetary front, liquidity conditions remained easy.
During 2007-08, the year-on-year growth in money supply (M3) at14.0%
was in line with the growth projected by RBI, as against 16.8% in 2006-
07, when growth was boosted by India Millennium Deposit inflows. For
the same reason, growth in aggregate deposits of all scheduled
commercial banks at 14.3% was lower than 18.4% during 2006-07.
Reflecting the deceleration in industrial production,
growth in non-food credit was lower at 12.8%during 2001-02 than the
growth of 14.9% in the previous year. During the same period,
theincrease in total flow of funds from banks including banks'
investments in bonds, debentures,shares, CPs, at 11.8% was also lower
than the increase of 15.7% during 2006-07. Depositsdoubled their
amounts in the last 5 years. Borrowings increased till 2007 and then
decreased in2008. Issue of debentures and bonds also decreased in
2008. This can be attributed to the factthat the borrowings from FII
decreased considerably due to Sept. 11 crisis. Also these
figuresdecreased in 2006 due to economic crisis of 2006. Inter-office
adjustments were added inliabilities in 2005 and 2008.

72
 CASH FLOW ANALYSIS
 Cash Flow
State Bank Of India Mar 04 Mar 05 Mar 06 Mar 07 Mar 08
Rs.Crore
SOURCES OF CASH
Opening Balance 27752.75 32645.82 53212.59 47136.44 60709.19
Revenue Inflow 1985.92 3488.81 4639.5 5241.89 7082.06
Non operating income 50.11 62.44 64.84 77.05 102.67
Sale of fixed assets 0 0 0 0 0
Sale of investments 0 0 0 166.78 0
Capital proceeds 0 0 0 0 0
Loan proceeds 0 0 1134.88 2520.98 0
Decrease in operating assets 23889.98 42835.64 27779.14 46007.31 27731.76
Deposits 20390.15 37950.61 27779.14 46007.31 27731.76
Advances 0 0 0 0 0
Others 3499.83 4885.03 0 0 0
Total cash inflow 53678.76 79032.71 86830.95 101150.5 95625.68
APPLICATION OF CASH
Disbursements 0 0 0 0 0
Purchase of fixed assets 498.4 999.09 649.6 517.61 246.88
Purchase of investments 8177.6 16320.63 20075.65 0 0.09
Repayment of loans 4.71 3.28 4.6 3.74 974.93

73
Loans to group companies 0 0 0 0 0
Loans to other companies 0 0 0 0 0
Tax paid 0 0 803.89 1017.59 1459.43
Dividend paid 199.46 231.57 233.68 306.57 290.13
Other cash expense 0 0 0 0 0
Increase in operating assets 12004.13 8122.51 17790.89 38277.29 27296.65
Deposits 0 0 0 0 0
Advances 12004.13 8122.51 17006.36 16921.22 9368.49
Others 0 0 784.53 21356.07 17928.16
Closing balance 32645.82 53212.59 47136.44 60709.19 64930.17
Total cash outflow 53530.12 78889.67 86694.75 100832 95198.28
Increase/Decrease in cash
balance 4893.07 20566.77 -6076.15 13572.75 4220.98
Cash flow before operating
assets charges 1985.92 3488.81 4639.5 5241.89 7082.06
Cash flow from operations 13871.77 38201.94 14627.75 12971.91 7517.17
Cash used in investing activity 8676 17319.72 20725.25 350.83 246.97
Cash from financing activity -4.71 -3.28 1130.28 2517.24 -974.93

74
 DETAILED CASH FLOW ANALYSIS
The basic purpose of cash flow statements is to provide
information about cash receipts and cash payments. The basic classifications of
cash flow are
- Operating (primary business activities, bank must generate a positive net cash flow
if it to
survive. It is a key measure of liquidity)
- Investing (cash flows from purchases and disposal of plant assets, Not necessarily
positive.
Growing businesses may have negative investing cash flow)
- Financing (cash flow of the bank with its owners and creditors. For e.g. Issuance of
stock,Growing businesses may have negative financing cash flow)
Cash flow from operations has decreased with the exception of 2004-05. This implies
that the
liquidity has been decreasing. The investing cash flow increased radically from 8676
to 17319
crores and then increased marginally to 20725 crores. However it fell sharply from
2005-06
to
2006-07 because the bank did not invest. Financing cash flow has been negative in
2003-04 asthe loan repayments have been exceeding loan proceeds. In 2005-07 the
loan proceeds
increased to a large amount and thereby exceeding the repayments. In 2008 again
the proceeds reduced to zero.

75
 Chapter-4.
PROFITABILITY RATIOS
2004 2005 2006 2007 2008
In Percentage(%)
Break-Even Yield Ratio 17.15 15.63 15.56 15.83 14.10
Cost of Funds Ratio 7.40 7.00 7.41 7.32 7.52
Net Profit Margin 7.15 5.34 7.96 4.58 10.50
Adjusted Return On Net Worth 15.87 11.91 16.88 9.89 19.35
Reported Return On Net Worth 15.97 11.91 1 6.88 9.88 19.37
Liberalization and deregulation have
heightened competition among banks, which will onlyintensify with
financial liberalization under the WTO regime, and banks in India will
have tobenchmark themselves against world class banks. In this context,
the way to boost profitabilityand stay ahead is by developing
sophisticated and customized products, increasing volumes,monitoring
risks and reaching out to customers in diversified and distant markets by
leveragingtechnology. In line with this, the Bank is also making all out
efforts to adopt state-of-the-arttechnology with far reaching
consequences for efficiency and profitability.

76
25

20

15

10

0
C o s t R a ti o 7 .4 7 7 .4 1 7 .3 2 7 .5 2

B r e a k E v e n1 7 .1 5 1 5 .6 3 1 5 .5 6 1 5 .8 3 1 4 .1
R a ti o

YE AR 2004 2005 2006 2007 2008

77
 2008
• The Operating Profit of the Bank for 2007-08 stood at Rs.6,044.83 crore as
compared toRs.3,966.78 crore. in 2006-07, recording a growth of 52.39%. The Bank
has posted a NetProfit of Rs.2,431.62 crore for 2007- 08 as compared to
Rs.1,604.25 crore in 2006-07,registering a growth of 51.57%.
• It will be recalled that the Net Profit of 2006-07 was depressed by the IMD issue
expensesand VRS related expenses but was favorably impacted by write back of
excess provision forinvestment depreciation (net of tax).
• Similarly, in 2007-08, the Net Profit has been depressed by provision for
investmentdepreciation (including amortization of premium on `Held to Maturity'
category), as well as bypro-rata write off of deferred revenue expenditure relating to
VRS.
• On a fully comparable basis, the adjusted Net Profit of 2007-08 (Rs.2,841.76 crore)
hasrecorded a growth of 31.53% over the adjusted Net Profit of 2006-07
(Rs.2,160.48 crore).
• The growth in profit in 2007-08 has been achieved through increases, both in Net
InterestIncome and Fee Income. Profit on sale of investments in 2007-08 was
Rs.351.64 crore asagainst Rs.341.85 crore in 2006-07, and thus the increase under
this head contributed to thegrowth in profit of 2007-08 to the extent of only Rs. 9.79
crore.

78
 2007
• The Operating Profit of the Bank for 2006-07 before reckoning the one-time issue
expensesof India Millennium Deposits and the VRS related expenses charged off
during the year,stood at Rs.5263.16 cr. as compared to Rs.4202.50 cr. in 2005-2006,
recording an increaseof 25.24%.
• After accounting for the above expenditure, the Operating Profit for 2006-07 was
Rs.3966.78cr.
• The Published Net Profit of the Bank for 2006-07 is Rs.1604.25 cr. as compared
toRs.2051.55 cr in 2005-2006. The reduction was due to the IMD issue expenses
and VRSrelated expenses charged off during 2006-07, as afore said, which
depressed the profit byRs.640.98 cr. (net of tax).
• Further, write back of excess provision for investment depreciation (net of tax)
contributedonlyto the extent of Rs.84.75 cr to the Net Profit of 2006-07, as against
Rs.322.40 cr in 2005-06.
• The Net Profit, after adjusting for the above factors as applicable in both the years,
would be Rs.2160.48 cr in 2006-07as against Rs.1729.15 cr in 2005-06, i.e., a
growth of 24.94%.

79
 2006
• The Bank posted a Net Profit of Rs.2,051.55 crore for the year 1999-2000 as
againstRs.1,027.80 crore in 1998-99. The write-back of excess provision for
investmentdepreciation (net of tax) contributed to the extent of Rs.322.40 crore to the
growth in the NetProfit of 1999-2000, as against Rs.8.51 crore in 1998-99.
• It may also be recalled that the Net Profit of 1998-99 was affected to the extent
ofRs.207.47 crore (net of tax) by the charging off of the entire RIB issue expenses
during thatyear. Even after adjusting for both the above items of non-recurring
nature, the Net Profit forthe year 1999-2000 from pure operations recorded a strong
growth of 40.95% over 1998-99.
• The Operating Profit also recorded an increase of 21.77% from Rs.3,451.16 crore
toRs.4,202.50 crore.
• Income tax provision at Rs.978.5 crore was higher than the provision of Rs.383
crore madein 1998-99 on account of higher operating profit for the year, tax on the
amount of excessinvestment depreciation written back and levy of 10% surcharge on
income tax.

80
 DEPOSIT RATIOS
 2004 2005 2006 2007 2008
 In Percentage (%)
Demand Deposit of Total Deposits 15.63 16.60 18.38 18.15 21.21
Saving Deposit of Total Deposits 20.84 19.72 21.08 20.30 22.28
Time Deposit of Total Deposits 63.51 63.66 60.52 61.54 56.50
Deposits within India as % to Total Deposits 97.03 96.73 95.33 94.80 94.24
Deposits Outside India as % to Total Deposits 02.96 03.26 04.66 05.19 05.75

81
25

20

15
D e m a n d D e p o s it R a t io
S a vin g D e p o s it R a t io
10

0
1 2 3 4 5

82
2008:
• On the monetary front, liquidity conditions remained easy.
• During 2007-08, the year-on-year growth in money supply (M3) at 14.0% was in
line with the growth projected by RBI, as against 16.8% in 2006-07, when growth
was boosted by India Millennium Deposit inflows.
• For the same reason, growth in aggregate deposits of all scheduled commercial
banks at14.3% was lower than 18.4% during 2006-07.
• Reflecting the deceleration in industrial production, growth in non-food credit was
lower at12.8% during 2007-08 than the growth of 14.9% in the previous year.
• During the same period, the increase in total flow of funds from banks including
banks’ increase of 15.7% during 2006-07

83
• In this scenario, the overall stance of RBI’s monetary policy during 2007-08 was
provision ofadequate liquidity to support credit growth with a bias towards soft
interest rate regime.Reduction in the Bank Rate and Cash Reserve Ratio was
announced in October 2007 andmeasures to increase flexibility in deposit and
lending rates were also introduced.
During theyear, banking sector reforms continued to emphasize steps to secure the
soundness andstability of banks including improving asset quality, strengthening
prudential norms,streamlining credit delivery and, in general, making the Indian
banking system comparable to international standards.
• The Bank has sponsored 30 RRBs spread over 85 districts in 16 States with a
network of2,342 branches. The aggregate deposits and advances of the sponsored
RRBs stood at Rs.6,042.89 crore and Rs.2,559.32 crore respectively. During the
year ended 31st March2007, 24 of the Bank’s RRBs made profit, as against 26 in the
year ended 31st March 2006.
The Bank has, up to March 2008, contributed Rs.134.97 crore for re-capitalization of
the 29 RRBs taken up for financial restructuring.

84
 2007:
• Cost of deposits (excluding Resurgent India Bonds/ India Millennium Deposits)
witnessed areduction from 7.86% in 2005-2006 to 7.62% in 2006-07.
• In a major initiative this year, the Bank collected USD 5,497 million from the non-
residentsthrough the India Millenium Deposits (IMD) Programmer (a five year deposit
scheme),launched in October 2006. The IMD Programmer was aimed at raising long-
term resources for augmenting the country's forex reserves and for meeting the
financial needs ofinfrastructure projects.
• The domestic deposits of the Bank (excluding RIBs / IMDs) grew by Rs.19,300
crore (13.1%)during the year. Reflecting the thrust on Personal segment, these
deposits grew by Rs.15,901 crore (17.28%) and formed 57.95% of the total deposits
of the Bank as against56.5% at the end of March 2006.
2006:
• The Bank’s aggregate liabilities (excluding capital and reserves) rose by 17.6%
fromRs.2,12,107 crore as on the 31st March 1999 to Rs.2,49,358 crore as on the
31st March2006.
• The increase in liabilities was mainly contributed by increase in deposits. Global
deposits,including RIB deposits, stood at Rs.1,96,821 crore as on the 31st March
2000, representingan increase of 16.4% over the level as on the 31st March 2005.
Global deposits, excludingRIB deposits, grew by 18.4% from Rs.1,51,007 crore to
Rs.1,78,802 crore.
• In January 2006, a new product, ‘Personal Loan against Mortgage of Immovable
Property’,an omnibus scheme enabling individuals to take loans against their
immovable assets tomeet any financial requirement, was launched. It has become
popular owing to its flexibilityin terms of eligibility, purpose and mode of financing
(term loan or overdraft).

85
 2005:
• The interest expenses on deposits (excluding RIBs) in India during 2004-05
recorded anincrease of 17.5% as compared to the previous year, primarily due to the
increase inaverage level of deposits by 16.9% (excluding RIB deposits) during the
year.
• While the maximum interest rate on domestic deposits came down from 12% at
thebeginning of the fiscal to 10.5% at the end, the average cost of deposits
registered amarginal increase from 8.01% in 2003-04 to 8.05% in 2004-05.
• Introduction in May 2004 of term deposits for a minimum period of 15 days (earlier,
theminimum period for which a term deposit could be taken was 30 days) as well as
thedifferential (higher) rates for single deposits of Rs.15 lakh and above, contributed
to theadditional cost under this head.

86
PBDT/PAT as a % of Total Assets
2004-2005 Decrease
• The net interest margin as a percentage of the Average Total Assets (ATA) for
the bankdeclined from 3.02% in 2004-05 to 2.86% in 2005-06.
• Drop in yield on advances and investments and a reduction in the non interest
income/ ATAduring the year
2005-2006 Increase
• The Operating Profits as a percentage of ATA increased marginally from 1.72% in
2004-05to 1.74% in 2005-06. This was due to a decrease in the operating
expenses /ATA from2.93% in 2004-05 to 2.6 % in 2005-2006.
• PAT as a percentage to ATA increased from 0.51% to 0.85% during the same
period. Thiswas also due to lower provisioning on NPAs and write back of provision
on depreciation ofinvestments.
• The bank has also taken fresh exposures in infrastructure related projects mainly in
thepower, ports, roads and oil and gas sectors during 2005-2006.
• Deposits of SBI grew from Rs. 169042 crore in 2004-05 to Rs. 196821 crore in
2005-06registering a growth of 16.50%.

87
2006-07
Net Profit of 2006-07 was depressed by the IMD issue expenses
and VRS related expenses butwas favourably impacted by write back of excess
provision for investment depreciation (net of tax).
2007-08
The growth in profit in 2007-08 has been achieved through
increases, both in Net InterestIncome and Fee Income. Profit on sale of investments
in 2007-08 was Rs.351.64 crore asagainst Rs.341.85 crore in 2006-07, and thus the
increase under this head contributed to thegrowth in profit of 2007-08 to the extent of
only Rs. 9.79 crore.Similarly, in 2007-08, the Net Profit has been depressed by
provision for investment depreciation(including amortization of premium on `Held to
Maturity' category), as well as by pro-rata writeoff of deferred revenue expenditure
relating to VRS. Further, the appreciation in the Held for
Trading category of investments has not been recognized due
to a revision in RBI guidelines in2007-08. On a fully comparable basis, the adjusted
Net Profit of 2007-08 (Rs.2,841.76 crore)has recorded a growth of 31.53% over the
adjusted Net Profit of 2006-07 (Rs.2,160.48 crore).
The gross interest income from the global operations grew from
Rs.26,138.60 crore in 2006-07to Rs.29,810.09 crore in 2007-08. The substantial
growth was contributed by increase in the interest on resources deployed in treasury
operations.

88
Operating Cash Flows
Reasons for the recent decline:
Overall a decline in operating cash flows has resulted from the
economic slag that existed sincethe IT boom subsided. September 11 Attacks added
water the already extinguishing fire.Lowering of interest rate by RBI also acted as an
impediment the coming deposits andadvances.Also there was low industry growth
due to decline the operating expenses
Operating Expenses, comprising both staff cost and other operating expenses,
have registereda decline of 13.11%. After adjusting for VRS related expenses in both
the years and for IMDissue expenses in 2006-07, the Operating Expenses of 2007-
08 have recorded a decline of2.09% compared to 2006-07. Other Operating
Expenses have also registered a decline of10.01%. The one-time item of IMD issue
expenses was charged off in 2006-07.
There was a decline of 14.29% in the staff cost from Rs.6,011.65 crore in 2006-07
toRs.5,152.78 crore in 2007-08. The staff cost of 2006-07 and 2007-08 included VRS
expensesamounting to Rs.853.19 crore and Rs.354.51 crore, respectively.

89
NON PERFORMING ASSETS ANALYSIS
 2006
• Provision towards NPAs (including Rs.22.72 crore for the Bank’s foreign offices)
was lowerat Rs.1,286.95 crore in 1999-2000 compared to Rs.1,422.67 crore in 2004-
05, mainly due to lower accretion of NPAs.
• An additional provision of Rs.32.59 crore (including Rs.3.19 crore at the foreign
offices) onthe standard assets in the global loan portfolio was made in terms of the
RBI guidelines,taking the total provision on standard assets including such provision
held at the foreign offices to Rs.229.32 crore.
• The seven Associate Banks recorded remarkable performance during 2005-2006,
as compared to the previous year. The net profit of these banks together increased
by 43%.Deposits and advances of these banks grew by over 18% and investments
by over 22%.Almost all the Associate Banks were able to reduce their levels of
NPAs.
• Credit Policy: The highlights of the policy initiatives pertaining to the Bank’s loans
to the Commercial and Institutional, Small Scale Industries and Agriculture segments
in 2005-2006 are presented below:
o The scheme for financing IT-related activities revised.
o Guidelines formulated for one-time review of chronic NPAs and their settlement
through the process of compromise.
o A scheme for financing VRS in Central PSUs designed.

90
• NPA Management: The Bank’s NPA management policy lays stress, inter alia, on
early identification of problem loans, effective response to early warning signals,
adherence to the time norms for corrective action and recovery including one-time
settlements. Mechanism for follow-up of legal cases, specially those filed with Debt
Recovery Tribunals, has been streamlined. In addition to six specialized
Rehabilitation and Recovery Branches at Mumbai,New Delhi, Calcutta, Chennai,
Ahmedabad and Hyderabad, two more such branches were opened at Chandigarh
and Bangalore during the year. Compromise settlements were encouraged,
especially through Settlement Advisory Committees and Lok Adalats.
2007
• Net NPAs to Net Advances stood at 6.03%

2008
• Net NPAs to Net Advances stood at 5.63%
• Associate Banks: The seven Associate Banks reported satisfactory growth in
businessduring the year. Total deposits and advances of the Associate Banks grew
by 16.2% and18.98%, respectively.
• These banks together reported net profit of Rs.1,018 crore in 2007-08, which was
higherthan the net profit in the previous year by 64.73%.
• These banks were able to bring down their NPAs during the year. The gross NPAs
as apercentage to gross advances came down from 12.12% in 2006-07 to 9.27% in
2007-08andthe net NPAs as a percentage to net advances declined from 7.04% in
2006-07to 4.93% in2007-08. All Associate Banks improved their Capital Adequacy
Ratios.
• The average Capital Adequacy Ratio for all Associate Banks improved from
12.30% in 2006-07 to 12.97% in 2007-08.
• The Bank's NPA management has assumed critical importance and is receiving
focused at tention at all levels. At the corporate level, a Task Force comprising top
executives monitors all NPAs above Rs.5 crore. At Local Head Office level, the Circle
Management Committee monitors all NPAs above Rs.1 crore.


91
 Growth Indicators: Banking Cos.
State Bank of India (In Percentage) Non-Annualized
2004 2005 2006 2007 2008

Deposits 18.42 28.95 16.43 23.38 11.42

Term deposits 21.37 40.45 14.52 29.78 11.15
Saving deposits 21.56 17.51 20.94 15.39 17.75
Demand deposits 8.45 10.35 17.89 11.46 4.92
Deposits outside India 8.78 16.5 4.5113.61 0.99
Borrowings 14.19 10.82 11.23 35.2 -15.54
From RBI -100 -100
Advances 19.29 10.94 19.11 15.79 6.35
Short term 14.09 4.36 19.51 15.3 2.29
Long term 33.01 25.83 18.38 16.72 13.95
Assisted companies
Priority sector 15.21 18.27 12.07 16.52 4.77
Public sector 20.11 11.39 -29.52 113.6 8.48
Total income 6.24 19.73 14.96 16.01 13.53
Interest income 0.62 21.45 10.18 17.82 3.88
Profit on exchange transactions -27.69 12.6 -42.2 -7.73 34.29
Commission & brokerage 12.91 16.73 7.94 2.53 6.99

92
Fund based income 5.48 20.1 15.8 17.51 14.16
Fee based income 12.91 16.73 7.94 2.53 6.99
Total cost 10.45 17.84 8.99 25.52 -1.98
Interest expended 9.19 24.55 17.08 16.26 16.74
Personnel cost 7.07 16.57 7.97 15.2 -6.98
Provisions 49.36 14.89 -15.95 11.44 49.93
Deposits 18.42 28.95 16.43 23.38 11.42
Borrowings 14.19 10.82 11.23 35.2 -15.54
Advances 19.29 10.94 19.11 15.79 6.35
Total income 6.24 19.73 14.96 16.01 13.53
Interest income 0.62 21.45 10.18 17.82 3.88
Total cost 10.45 17.84 8.99 25.52 -1.98

93
 OVERALL CONCLUSION
We can conclude that the analysis of financial
statement of the SBI Bank for the last five years has been quite
satisfactory.
From the calculation of the ratio, it can be
concluded that the bank’s financial position that is long term &
short term is satisfactory for last five years.
SBI bank should provide more ATM machines,
financial facilities to the remote areas of India, so that each
person can experience the great banking facilities.SBI should
develop more branches in other parts of India

94
BIBLIOGRAPHY

BOOKS
 M.Y.KHAN, “INDIAN FINANCIAL SYSYEM”, 3rd edition Publication by TATA
McGraw hill.

Ashwathappa, “Personnel Management”, 3rd edition.

MAGAZINE
 Banking finance, Editor R.G Agrawal and Associates, March 2008
NEWSPAPERS
 Business standard
 Economics times
WEBSITES
 www.sbi.com
 www.personalfn.com
 www.equitymaster.com
 www.indiainfoline.com
 www.1000ventures.com/business_guide
 search engine - www.Google.com
 Search engine - www.ultavista.com

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