State Bank of India

State Bank of India is an Indian multinational, Public Sector banking and financial
services company. It is a government-owned corporation with its headquarters
in Mumbai, Maharastra and also its corporate office in Mumbai, Maharashtra. As of
December 2013, it had assets of US$388 billion and 17,000 branches, including 190
foreign offices, making it the largest banking and financial services company in India
by assets.
State Bank of India is one of the Big Four banks of India, along with Bank of
Baroda, Punjab National Bank and ICICI Bank.
The bank traces its ancestry to British India, through the Imperial Bank of India, to
the founding, in 1806, of the Bank of Calcutta, making it the oldest commercial bank
in the Indian Subcontinent. Bank of Madras merged into the other two "presidency
banks" in British India, Bank of Calcutta and Bank of Bombay, to form the Imperial
Bank of India, which in turn became the State Bank of India. Government of
India owned the Imperial Bank of India in 1955, with Reserve Bank of India (India's
Central Bank) taking a 60% stake, and renamed it the State Bank of India. In 2008,
the government took over the stake held by the Reserve Bank of India.
State Bank of India is a regional banking behemoth and has 20% market share in
deposits and loans among Indian commercial banks.
The roots of the State Bank of India lie in the first decade of the 19th century, when
the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June
1806. The Bank of Bengal was one of three Presidency banks, the other two being
the Bank of Bombay (incorporated on 15 April 1840) and the Bank of
Madras(incorporated on 1 July 1843). All three Presidency banks were incorporated
as joint stock companies and were the result of royal charters. These three banks
received the exclusive right to issue paper currency till 1861 when, with the Paper
Currency Act, the right was taken over by the Government of India. The Presidency

banks amalgamated on 27 January 1921, and the re-organised banking entity took
as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock
company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank
of India, which is India's central bank, acquired a controlling interest in the Imperial
Bank of India. On 1 July 1955, the imperial Bank of India became the State Bank of
India. In 2008, theGovernment of India acquired the Reserve Bank of India's stake in
SBI so as to remove any conflict of interest because the RBI is the country's banking
regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This
made SBI subsidiaries of eight that had belonged toprincely states prior to their
nationalization and operatonal take-over between September 1959 and October
1960, which made eight state banks associates of SBI. This acquisition was in tune
with the first Five Year Plan, which prioritised the development of rural India. The
government integrated these banks into the State Bank of India system to expand its
rural outreach. In 1963 SBI merged State Bank of Jaipur (est. 1943) and State Bank
of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911),
which SBI acquired in 1969, together with its 28 branches. The next year SBI
acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years
later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in
1916 in Gwalior State, under the patronage of Maharaja Madho Rao Scindia. The
bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja.
The new bank's first manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired
the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its
affiliate, the State Bank of Travancore, already had an extensive network in Kerala.
There has been a proposal to merge all the associate banks into SBI to create a
"mega bank" and streamline the group's operations. [11]
The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from

seven to six. Then on 19 June 2009 the SBI board approved the absorption of State
Bank of Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held the
shares prior to its takeover by the government hold the balance of 1.7%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing
network of branches. Also, following the acquisition, SBI's total assets will inch very
close to the 10 trillion mark (10 billion long scale). The total assets of SBI and
the State Bank of Indore stood at 9,981,190 million as of March 2009. The process
of merging of State Bank of Indore was completed by April 2010, and the SBI Indore
branches started functioning as SBI branches on 26 August 2010.
On October 7, 2013, Arundhati Bhattacharya became the first woman to be
appointed Chairperson of the bank

SBI sets up call centres for NPA recovery

State Bank of India is using every possible way to step up recoveries from nonperforming assets.The countrys largest lender has opened two call centres at
Gurgaon and Chennai to deal with NPAs and Special Mention Accounts those in a
zone in between standard assets and NPAs. It has also set up account tracking
centres at 14 local head offices. As a step to improve tracking and recovery, the bank
has begun assigning SMAs and NPAs to individual staff members. This step will
ensure a sense of ownership in dealing with stress asset cases, a senior official
said.
Domestic brokerage Motilal Oswal Securities, in its review of bank performance in
the third quarter, said NPAs had been increasing. Gross NPAs rose marginally to Rs
23,438 crore by end-December 2010 from Rs 23,205 crore at end- September. In 12
months, gross NPAs have grown by Rs 4,577 crore.

The banking sectors bad loans swelled after September 2008, due to the adverse
effect of the global financial crisis on companies, small and medium enterprises and
households.
This brought heightened awareness in detecting stress cases early and taking
corrective steps in time. SBI has formulated a new code to identify accounts from the
seventh day of default.
Keeping an eye on improving banks ability to withstand adverse events, Reserve
Bank of India asked all lenders to make 70 per cent provision on overall NPAs. It first
gave time till September 2010 to do so. SBI sought, and got, an extra year to do so.
It has since sought time till March 2012 to meet the 70 per cent mark.
Its provision coverage ratio, including technical write-offs, improved to 64 per cent at
the end of December 2010 from 62.7 per cent in the earlier quarter. The incremental
provisioning required for 70 per cent is pegged at Rs 2,000 crore, to be amortised
over three quarters. NPA provisions were Rs 1,630 crore, which included additional
provisions made to improve coverage ratio.
The total of restructured loans were Rs 32,750 crore. Of the restructured portfolio,
assets worth Rs 4,420 crore have slipped into NPAs.

SBI steps up recovery of bad loans

State Bank of India (SBI) is taking steps to clamp on bad loans that
include web-based tracking of assets and regular calls to stressed
accounts in the retail as well as real estate segments, Arundhati
Bhattacharya, chairman of the country's largest lender, has said.
In addition, the bank has initiated dynamic credit rating review of

borrowal accounts to capture deterioration in credit quality promptly

and initiate corrective action and facilitate correct pricing of risk, she
said in a message to shareholders ahead of the bank's July 2
annual general meeting.
During the year (2014-15), the bank has embarked on a number of
initiatives to clamp down on NPAs (non-performing assets). Some
of them are web-based assets tracking & monitoring and regular
calls to stressed accounts in the retail segment and real estate
sector to prevent slippages..., she said.
The bank's exposure in the retail segment, which includes housing,
auto, education and personal loans, increased to Rs 2.72 lakh
crore, from Rs 2.37 lakh crore at the end of March 2014.
Of this, gross NPAs in retail was Rs 2,528 crore at the end of March
2015. It has come down from Rs 3,034 crore at the end of 2013-14.
Besides, she said, the bank has also set up asset tracking centres
at all circles, and formed various committees to review stressed
assets periodically and suggest resolutions and turn around
strategies.
The banks gross NPA in absolute terms declined to Rs 56,725
crore while the net NPA came down to Rs 27,591 crore at the end
of March 2015.

During 2014-15, the banks asset quality improved NPAs or bad

loans were trimmed to 2.12 per cent of net advances as against
2.57 per cent at the end of the previous financial year.
At the same time, gross NPAs also came down to 4.25 per cent of
gross advances, from 4.95 per cent at the end of March 2014.
With regard to capital requirement, Bhattacharya said: As the pace
of economic activity gathers further momentum in the coming years,
the bank will be required to improve and strengthen its capital
planning processes to support future business growth.
Furthermore, she added, in view of the implementation of Basel-III
capital regulations, the transitional period for full implementation of
Basel-III capital regulations in India has already been extended up
to March 31, 2019, by the Reserve Bank of India.
SBI to sell around Rs 5000-cr non-performing assets to ARCs

For the first time in its over two centuries of history, State Bank of India (SBI)is
going all out to stem the rot by offloading around Rs 5,000 crore of its Rs 67,799
crore dud assets to ARCs before the end of the month.
The state-run bank had reported 5.73 per cent of its assets as bad loans in the
December quarter.
"There are 14 ARCs functioning today, and we have invited many of them to pick up
our stressed loans of around Rs 5,000 crore. We will definitely be offloading at
least a large portion of this to the highest bidders. The process should be concluded
before the end of the month," a senior SBI official said in Mumbai on Monday.

The move comes ahead of the tighter provisioning norms kicking in from next April,
which the Reserve Bank of India had announced in May 2013 when it had more than
doubled the provisioning for restructured loans to 5 from 2 per cent.
Earlier this month, chairperson Arundhati Bhattacharya had said in Kolkata
that "the bank was considering a proposal to sell NPAs in the current quarter. This
would be for the first time we would be selling NPAs to asset reconstruction
companies or ARCs." But she did not specify how much the bank was planning to
offload.
Normally ARCs pay 5-10 per cent of the total bad loans being bought pay in cash and
the rest could be security receipts (SRs), the SBI official cited earlier said, adding the
bank is confident of selling a good portion of the dud loans earmarked for offloading.
In the quarter to December alone, the lender had added as much as Rs 11,400 crore
in fresh bad loans or 5.73 per cent, taking its overall NPA mount to a whopping Rs
67,799 crore. This pulled down its net profit by a whopping 34 per cent to Rs Rs
2,234 crore, as the bank was forced to make Rs 3,428.6 crore towards loan provisions
up from Rs 2,766 crore a year ago.
The bank added Rs 11,400 crore in fresh slippages, including Rs 9,500 crore from
SMEs and mid-corporates and added Rs 6,165 crore into the restructured loan book
during the quarter, while a cleaning up of balancesheet resulted in a write-off of
around Rs 5,000 crore in Q3.
The bank is also expecting at least Rs 9,500 crore of loans being restructured in the
fourth qaurter.
As of the December quarter, as much as Rs 67,799 crore of its Rs 11,83,723 crore
assets or advances as classified as NPAs, or 5.73 per cent up from Rs 64,206 crore or
5.64 per cent in the previous quarter. While its net NPAs stood at Rs 37,167 crore or
3.24 per cent in Q3 and Rs 32,151 crore or 2.91 per cent in the previous quarter when
its total net NPA was at Rs 11,39,326 crore.
Media reports said banks, mostly state-run ones, are scurrying to sell close to Rs
43,000 crore to ARCs by the end of the month as the total bad assets in the system
rose to 4.1 per cent of the total advances. This is almost four times the amount that
were put up for auctions in the past quarter.

The urgency of bans come as the central bank under the new Governor Raghuram
Rajan has been encouraging lenders to clean up their books.
In his inaugural address on September 4 last, Rajan had famously said that
promoters of failed companies have no divine right to remain in control of such
companies.
The rush to offloan bad loans is also to guard them against higher loan loss
provisions that kick in from next March, by when all restructured loans would be
classified as non-performing accounts attracting higher provisions.
On May 30 last year, the RBI had tightened the norms for loan restructuring norms
by raising provisions to 5 per cent in line with the global practices, in a gradual
manner.
As per the RBI notification, provisioning on the newly restructured account was
raised to 5 per cent from June 1, 2013 from 2 per cent. However, for the old CRD
accounts it would be done in a phased manner till April 2015.
What was more important was that the RBI had said the existing "regulatory
forbearance" would no longer be available from April 1, 2015, therefore the urgency
of banks to offload bad loans now.
As per existing guidelines, an account after restructuring is not classified as NPA.
However, as per the new norms, restructured account would be treated as NPA.
The RBI had also said promoters of companies seeking CDR should bring in at least
20 per cent of banks' sacrifice or 2 per cent of the restructured debt as fresh equity

AXIS Bank
AXIS Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the, AXIS.

Life Insurance Corporation of India (LIC)

General Insurance Corporation Ltd.

Other four PSU companies, i.e.

National Insurance Company Ltd.,
The New India Assurance Company,
The Oriental Insurance Corporation and United Insurance Company Ltd.

The Bank today is capitalized to the extent of Rs. 280.51 Crores with the public holding
(other

than

promoters)

at

72.46

%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at
Mumbai. Presently the Bank has a very wide network of more than 469 branch offices and
Extension Counters. The Bank has a network of over 2016 ATMs providing 24hrs a day
banking convenience to its customers. This is one of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.
About Axis Bank
Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the, Unit Trust of India.
Life Insurance Corporation of India (LIC)
General Insurance Corporation Ltd.
Other four PSU companies, i.e.
National Insurance Company Ltd.,
The New India Assurance Company,
The Oriental Insurance Corporation and United Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 358.97 crores with the public holding (other
than promoters) at 57.59%.Presently; the Bank has a very wide network of more than 729
branch offices and Extension Counters. The Bank has a network of over 3171 ATMs
providing 24 hrs day banking. The Bank has strengths in both retail and corporate banking
and is committed to adopting the best industry practices internationally in order to achieve
excellence.

The latest offerings of the bank along with Dollar variant is the Euro and Pound Sterling
variants of the International Travel Currency Card. The Travel Currency Card is a signature
based pre-paid travel card which enables travelers global access to their money in local
currency of the visiting country in a safe and convenient way.
Mission of AXIS Bank:

Customer Service and Product Innovation tuned to diverse needs of

individual and corporate clientele.

Continuous

technology

upgradation

while

maintaining

human

values.

Progressive globalization and achieving international standards.

Efficiency and effectiveness built on ethical practices.

Axis Bank offers fast track loans for SMEs under the following schemes:
Mpower-Term Loan (Mpower-TL)
Axis Bank's Mpower-TL provides a hassle free way of meeting your business needs of
expansion and other long term funding requirements against the security of immovable
residential or commercial property. Mpower-TL is an EMI based loan and can be availed by
Partnership firms, Private Ltd. Companies and Trusts. Mpower-TL has the following features:

Loans upto Rs 5 crores*

Flexible repayment options of upto 10 years

Attractive market related interest rates

Fast processing and quick disbursement

Business Loan for Property

Looking to acquire an office space for your business? Axis Bank's BLFP offers you a
convenient way. It is an EMI based term loan and can be availed by Partnership firms, Private
Ltd. Companies and Trusts. BLFP has the following features:

Loans upto Rs 5 crores*

Flexible repayment options of upto 10 years

Attractive market related interest rates

Fast processing and quick disbursement

Power Rent
Having a rental income from commercial property leased out to reputed corporate or Public
Sector Units or Banks or Insurance Companies? Axis Bank's Power Rent is just the right
product for you. The product offering involves discounting the future receivables and
providing an upfront loan to the landlord, thus extending immediate liquidity in the hands of
the landlord. It is an EMI based term loan, which can be availed by Proprietors, Partnerships,
Private Ltd. Companies and Trusts. Power Rent has the following features:

Loans upto Rs 20 crores*

Flexible repayment options of upto 10 years

Attractive market related interest rates

Fast processing and quick disbursement

Power Trade
At Axis Bank we understand the unique needs of the trader segment and we have tailor
designed a specific product 'Power Trade' to meet your business needs. Axis Bank's Power
Trade is a hassle free and flexible credit facility for meeting your working capital
requirements like Cash Credit, Bills discounting, Export Credit, Bank Guarantee, Letter of
Credit or a term loan.

Loan upto Rs 2.5 crore*

Stock statements to be submitted quarterly*

Tenure - 1 year for Working capital and 3 years for Term Loans

Mpower-OD
Axis Bank's Mpower-OD helps you meet your short-term funding needs and allows you to
leverage every business opportunity that comes your way against the security of residential or
commercial property.

Loans upto Rs 2 crores*

Tenure - 1 year

Immovable Property as collateral

Attractive market related interest rates

Fast processing and quick disbursement

Enterprise Power
Axis Bank's Enterprise Power is a unique product designed keeping in mind the business
requirements of Micro and Small Enterprises (MSE).

Loans upto Rs. 1.00 crore*

Tenure-1 year for working capital and 3 years for term loan

Attractive market related interest rates

Fast processing and quick disbursement

Equipment Power

This product is a term loan facility with a tenor upto 48 months for purchase of construction,
medical and office equipments. There is a standard list of equipments, which the Bank would
finance under the scheme and the maximum exposure permitted under the product is Rs.
100.00 lacs.
Zero Collateral Loans to SSI Units (ZCL)
Collateral free product to facilitates the MSE and software/IT related services to avail both
working capital and term finance from the Bank. The facility is secured by guarantee cover of
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGMSE). Maximum loan
amount under the product is Rs. 50 lacs.

Small Medium Enterprise Standard

For a business on the growth phase with a wide range of opportunities to explore, timely
availability of credit is an integral ingredient needed to scale new heights. At Axis Bank we
understand this and endeavor to be not just a bank but also your financing partner, so that you
focus on your business needs whereas we cater to your financing needs.
Our services ranging from Funded to Non-Funded, from Short Term to Long Term and from
Credit to Trade Services ensures that you get finance the way it is best suited for your
business.
Our Service:
Cash Credit
We offer Cash Credit facilities to meet your day-to-day working capital needs. Cash Credit is
provided against the primary security of stock, debtors, other current assets, etc., and/or
collateral security of movable fixed assets, immovable property, personal or corporate
guarantee, etc. Interest is charged not on the sanctioned amount but on the utilized amount.
Working Capital Demand Loan
We also provide working capital facilities in the form of Working Capital Demand Loan
instead of cash credit facility. The primary or collateral security will be as mentioned in cash
credit facility. Here also interest is levied on the amount drawn rather than on the amount
utilized.
Export Finance
We provide finance for export activities in the form of Pre-Shipment Credit
against firm order and or Letter of Credit and Post shipment credit. Credit is
available for procuring raw materials, manufacturing the goods, processing and
packaging the goods and shipping the goods. Finance is provided in Indian or
foreign currency depending upon the need of the borrower.

Short Term Loan

You may enjoy Working Capital facilities to meet your day-to-day working capital
needs and Term Loan for your capex. However there may be occasions where
you may need ad hoc or short-term finance for general corporate purposes,
meeting temporary mismatches in working capital or for meeting contingent
expenses. In such situations we provide Short Term Loans for tenure upto a year
so as to ensure that your business runs smoothly.

Term Loan
Given the growth opportunities your business enjoys you may need long-term
funds for capex or capacity expansions or plant modernization and so on.
Keeping these requirements in mind we provide term loans upto acceptable
tenor with suitable moratorium, if required, and repayment options structured on
the basis of your estimated cash flows. These loans are primarily secured by a
first charge on the fixed assets acquired through the loan amount. Suitable
collateral security is also taken whenever required.

Clean Bill Discounting

We provide clean bill discounting facilities to fund your receivables. We discount
bills or receivables from your credit worthy clients and provide credit against
that. This facility is provided for a period of 3-6 months depending upon the
tenor of the bill.

LC Backed Bill Discounting

We discount trade bills drawn under Letters of Credit issued by reputed banks to
fund your receivables. This facility is provided for a period of 3-6 months
depending upon the tenor of the bill or Letter of Credit.

Co-Acceptance of Bills
We also provide co-acceptance of trade bills depending upon the need of the
borrower.

Credit Facilities against Guarantee or Stand by Letter of Credit issued by Foreign Banks
Various foreign companies set up subsidiary in India. We provide funding to such
companies against guarantees or SBLCs of acceptable foreign banks.

Letter of Credit
Apart from fund based working capital facilities we provide a range of Non-Fund
Based facilities such as Letter of credit, Bank Guarantees, Solvency certificates,
etc. Letter of Credit is provided to meet your trade purchases. These are
generally provided for 3-6 months depending upon your Trade cycle. Apart from
this we provide Import Letter of Credit for importing machinery or capital goods.
Such LCs are for tenure ranging from 1-3 years depending upon the need of the
borrower.

Bank Guarantee
We provide Bank Guarantee on behalf of our client to various other entities such
as Government, quasi govt bodies, corporate and so on. We provide a range of
guarantee such as Performance guarantee, financial guarantee, EPCG etc. The
tenure of Bank Guarantee range from 1 year to 10 years depending upon the
purpose of the guarantee.

Solvency Certificates
We also provide solvency certificate depending upon the need of the borrower.

Treatment of Accounts as NPA

The treatment of an asset as NPA should be based on the record of recovery.
Banks should not treat an advance as NPA merely due to existence of some
deficiencies which are of temporary in nature such as non-availability of

adequate drawing power, balance outstanding exceeding the limit, nonsubmission of stock statements and the non-renewal of the limits on the due
date, etc. Where there is a threat of loss, or the recoverability of the advances is
in doubt, the asset should be treated as NPA.

Where the accounts of the borrowers have been regularized by repayment of

overdue amounts through genuine sources (not by sanction of additional
facilities or transfer of funds between accounts), the accounts need not be
treated as NPA.

Treatment of NPA Borrower-wise and not Facility-wise:

In respect of a borrower having more than one facility with a bank, all the facilities
granted by the bank will have to be treated as NPA and not the particular facility or

part thereof which has become irregular.

However, in respect of consortium advances or financing under multiple banking
Arrangements, each bank may classify the borrowal accounts according to its own
Record of recovery and other aspects having a bearing on the recoverability of the
Advances.

Recognition of Income on Investment Treated as NPA:

The investments are also subject to the prudential norms on income recognition. Banks
should not book income on accrual basis in respect of any security irrespective of the
category in which it is included, where the interest/principal is in arrears for more than 90
days

comparative study of sbi and axis

NPA Ratios : sbi

i) Gross NPA
ii) Net NPA

Mar 15
56,725.34
27,590.58

Mar14
61,605.35
31,096.07

Mar13
51,189.39
21,956.48

70,000.00
60,000.00
50,000.00
40,000.00
Gross NPA

30,000.00

Net NPA
20,000.00
10,000.00
0.00
Mar'15

Mar'14

Mar'13

Mar'12

Mar12
39,676.46
15,818.85

NPA Ratio SBI

Mar15

i) % of Gross NPA
ii) % of Net NPA
Return on Assets %

Mar14

4.25
2.12
0.76

4.95
2.57
0.65

Mar13

Mar12

4.75
2.10
0.91

4.44
1.82
0.88

5
4.5
4
3.5
3
2.5

% of Gross NPA

% of Net NPA
Return on Assets %

1.5
1
0.5
0
Mar'15

Axis bank
NPA Ratios :
i) Gross NPA
ii) Net NPA

Mar'14

Mar'13

Mar15

4,110.19
1,316.7
1

Mar'12

Mar14

Mar13

Mar12

3,146.41

2,393.42

1,806.30

1,024.62

704.13

472.64

4,500.00
4,000.00
3,500.00
3,000.00
2,500.00

Gross NPA

2,000.00

Net NPA

1,500.00
1,000.00
500.00
0.00
Mar'15

Axis bank
i) % of Gross NPA
ii) % of Net NPA
Return on Assets %

Mar'14

Mar'13

Mar15
1.34
0.44
1.83

Mar'12

Mar14
1.22
0.40
1.78

Mar13
1.06
0.32
1.70

Mar12
0.94
0.25
1.68

2
1.8
1.6
1.4
1.2
% of Gross NPA

% of Net NPA

0.8

Return on Assets %

0.6
0.4
0.2
0
Mar'15

Mar'14

Mar'13

Mar'12