INDUSTRY OVERVIEW

Definition Of Bank:

Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits
of money from the public, repayable on demand or otherwise and withdraw by cheque, draft
or otherwise."
-Banking Companies (Regulation) Act,1949

ORIGIN OF THE WORD BANK:-

The origin of the word bank is shrouded in mystery. According to one view point the Italian
business house carrying on crude from of banking were called banchi bancheri" According to
another viewpoint banking is derived from German word "Branck" which mean heap or
mound. In England, the issue of paper money by the government was referred to as a raising
a bank.

ORIGIN OF BANKING :

Its origin in the simplest form can be traced to the origin of authentic history. After
recognizing the benefit of money as a medium of exchange, the importance of banking was
developed as it provides the safer place to store the money. This safe place ultimately evolved
in to financial institutions that accepts deposits and make loans i.e., modern commercial
banks.
Banking system in India

Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans
or cosmopolitans in India. In fact, Indian banking system has reached even to the remote
corners of the country. This is one of the main reasons of India's growth process.

HISTORY OF BANKING IN INDIA

Banking in India has its origin as early or Vedic period. It is believed that the transitions from
many lending to banking must have occurred even before Manu, the great Hindu furriest,
who has devoted a section of his work to deposit and advances and laid down rules relating to
the rate of interest. During the mogul period, the indigenous banker played a very important
role in lending money and financing foreign trade and commerce.

During the days of the East India Company it was the turn of agency house to carry on the
banking business. The General Bank of India was the first joint stock bank to be established
in the year 1786. The other which followed was the Bank of Hindustan and Bengal Bank. The
Bank of Hindustan is reported to have continued till 1906. While other two failed in the
meantime. In the first half of the 19th century the East India Company established there
banks, The bank of Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Bombay
in1843. These three banks also known as the Presidency banks were the independent units
and functioned well. These three banks were amalgamated in 1920 and new bank, the
Imperial Bank of India was established on 27th January, 1921.

With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial Bank
of India was taken over by the newly constituted SBI. The Reserve Bank of India (RBI)
which is the Central bank was established in April, 1935 by passing Reserve bank of India act
1935. The Central office of RBI is in Mumbai and it controls all the other banks in the
country.

In the wake of Swadeshi Movement, number of banks with the Indian management were
established in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bank of
Baroda Ltd., Canara Bank. Ltd. on 19th July 1969, 14 major banks of the country were
nationalized and on 15th April 1980, 6 more commercial private sector banks were taken over
by the government.

The first bank in India, though conservative, was established in 1786. From 1786 till
today,the journey of Indian Banking System can be segregated into three distinct phases.
They areas mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector

Reforms.

New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase
III.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.

These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913,
Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank
of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline
the functioning and activities of commercial banks, the Government of India came up with
The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949
as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with
extensive powers for the supervision of banking in India as the Central Banking Authority.

During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.

Phase II
Government took major steps in this Indian Banking Sector Reform after independence.
In1955, it nationalized Imperial Bank of India with extensive banking facilities on a large
scale especially in rural and semi-urban areas. It formed State Bank of India to act as the
principal agent of RBI and to handle banking transactions of the Union and State
Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July,1969, major process of nationalization was carried out. It was the effort of the then
Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was
nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.

The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.

Phase III
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up
by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to
give a satisfactory service to customers. Phone banking and net banking is introduced. The
entire system became more convenient and swift. Time is given more importance than
money.

The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the
capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.

COMPANY PROFILE
The bank, 'The Kumbakonam Bank Limited' as it was then called was incorporated as a
limited company on 31st October, 1904. The first Memorandum of Association was signed
by twenty devoted and prominent citizens of Kumbakonam including Sarvashri R.
Santhanam Iyer, S.Krishna Iyer, V.Krishnaswami Iyengar and T.S.Raghavachariar.
T.S.Raghavachariar was the First Agent of the Bank.

In 1908, he was succeeded by Shri R. Santhanam Iyer who became the Secretary of the bank
under the amended Articles of Association which created the office of a Secretary to be in
charge of the Bank's Management in the place of the Agent, which post he held till his death
in 1926. He was succeeded by Shri. S. Mahalinga Managing Director of the from 1929 to
1963.

The bank in the beginning preferred the role of a regional bank and slowly but steadily built
for itself a place in the Delta District Thanjavur. The first Branch of the Bank was opened at
Mannargudi on 24th January 1930. Thereafter, branches were opened at Nagapattinam,
Sannanallur, Ayyampet, Tirukattupalli, Tiruvarur, Manapparai, Mayuram and Porayar within
a span of twenty five years. The Bank was included in the Second Schedule of Reserve Bank
of India Act, 1934, on 22nd March 1945.

The Bank celebrated its Golden Jubilee on 14th November, 1954 at Kumbakonam.

In 1957, the bank took over the assets and liabilities of the Common Wealth Bank Limited
and in the process annexed to it the five Branches of Common Wealth Bank Limited at
Aduthurai, Kodavasal, Valangaiman, Jayankondacholopuram and Ariyalur.

In 1963, Shri. R. A.Venkataramani Iyer took charge as the Chairman of the Bank which
position he held up to 1969.

In April, 1965, two other local banks viz., 'The City Forward Bank Limited' and 'The Union
Bank Limited' were amalgamated with the Bank under a scheme of amalgamation with the
resultant addition of six more branches viz., Kumbakonam-Town, Nannilam, Koradacherry,
Tiruvidaimarudur, Tirupanandal and Kuttalam. Consequently, the Bank's name was changed
to 'The Kumbakonam City Union Bank Limited'.
In November 1965, the bank's first branch at Madras was opened at Thiyagaraya Nagar. In
May, 1969 the Bank secured the services of Shri. O.R. Srinivasan, a former Officer of
Reserve Bank of India to be at the helm of affairs as Chairman and Chief Executive Officer
which event proved to be a turning point in the annals of the Bank. Under the new
Management the Branch Expansion got a fresh impetus and branches were opened at
Eravancheri, Sembanarkoil, Tiruchirapalli, Madurai, Thanjavur, Dindigul, Keelapalur,
Tirumakkottai, Kottur, Tiruvarur Town and Coimbatore during the period from March, 1968
to August, 1973.

In April, 1974 the bank secured the services of Shri. K.Srinivasan, another former Senior
Officer of Reserve Bank of India, as its Secretary. Shri. V.Narayanan was appointed as
Assistant Secretary of the Bank.

From July,1977 to September,1979 the bank has opened ten more branches including those at
George Town (Madras), Mount Road (Madras), Tirunelveli and Karaikudi.

The Bank celebrated its Platinum Jubilee on 9th December, 1979 at Kumbakonam with Dr.
Rajah Sir M.A.Muthiah Chettiar, Shri. G.Rengasamy Moopanar, Shri. Kosi.Mani and Shri.
M.V.Arunachalam as Guests of Honour.

The first branch outside the state of TamilNadu was opened at Sultanpet, Bangalore in
Karnataka in September,1980. Branches were also opened at the twin cities of Hyderabad
and Secunderabad in Andhrapradesh. In tune with the national image attached to the Bank,
the Bank's name was changed to 'City Union Bank Limited' with effect from December,
1987.

The Bank started its own Staff Training College on 21st August, 1989 at Kumbakonam with
the avowed objective of imparting need based and result oriented training to its Staff
Members irrespective of the cadre.

The bank has introduced computerisation in the year 1990 and all the Branches have been
computerised. The bank has entered into an agreement with Tata Consultancy Services
Limited for introducing Core Banking Solution [CBS] and all the branches have been
brought under Core Banking Solution [CBS] as on date.
Automated Teller Machines ( ATMs) have been installed at select centres where the Card
holders can withdraw cash, make balance enquiries and obtain Statement of accounts

The bank obtained license from Insurance Regulatory Authority of India (IRDA) to act as
Corporate Agent for selling insurance products and to provide value added services to the
public at large .The Bank has entered into Memoranda of understanding with Life Insurance
Corporation of India and National Insurance Company Limited for selling their insurance
products.

The Bank has tied up with Export Credit & Guarantee Corporation Limited [ECGC] for
marketing export credit insurance products through its branch network.

The Bank has also entered into a franchise agreement for the Money Transfer Service Scheme
of M/s UAE Exchange and Financial Service Ltd. ICICI, Doha Bank and Bank of India for
effective and speedy receipt of funds remitted form abroad .

The Bank has obtained License to function as Depository Participant under National
Securities Depository Limited.

In the glorious history of City Union Bank Limited, nearly one third of the period of its
existence and progress centered around a key person, namely, Shri.V.Narayanan. The
enviable leadership style of Shri. V. Narayanan and his vision for the consistent growth of the
bank in all spheres, his tireless efforts in augmenting the Bank's Business, widening the
branch network, maintaining harmonious industrial relations, ensuring the unique
achievement of not loosing not even a single man-day by way of labour unrest-a record of
sort in the country has earned name and fame not only for himself but to the bank in the
entire Banking Industry in India. His famous words of 'Take care of the bank; The
bank will take care of you' have made wonders in enhancing the morale and improving the
productivity of the workforce, the facts of which can be vouchsafed by the financial results
of the bank during his tenure as Chairman. But the bank has lost it's illustrious Chairman
Shri.V.Narayanan in an unexpected car accident near chennai on 5th November, 2004.

With the irreparable loss of Shri. V.Narayanan, the mantle of leading the bank to make his
dreams a reality fell on Shri.S.Balasubramanian who had joined the bank as an Officer in
1971 and risen to the rank of Executive Director during the Chairmanship of Shri. V.
Narayanan. The Board of Directors with the approval of Reserve Bank of India appointed
him as the Chairman & Chief Executive Officer of the Bank with effect from 31-1-2005.

In the year 2009, on receipt of approval from Reserve Bank of India, the Board appointed
Shri. P. Vaidyanathan [ Chartered Accountant, Cost Accountant and Company Secretary] as
the Non Executive Chairman of the Bank on 27-04-2009 and Shri.S.Balasubramanian as
Managing Director & Chief Executive officer of the Bank. Shri.P.Vaidyanathan has demitted
his office of Non-Executive Chairman of the Bank on 26-04-2011 on completion of two years
and Shri.S.Balasubramanian has demitted his office of Managing Director & Chief Executive
Officer on 30-04-2011.

Pursuant to the approvals received from Reserve Bank of India Shri.S.Balasubramanian

M.Sc.PGDFM.CAIIB has assumed charge as Non Executive Chairman of the bank and Dr.
N. Kamakodi, B.Tech. MBA.PhD.CAIIB who joined the services of the bank as Deputy
General Manager in June 2003, subsequently elevated to the rank of General Manager in
March,2005, Executive Director in October,2006 and that of Executive President in
January,2011 has been appointed as the Managing Director & Chief Executive Officer of the
bank with effect from 01-05-2011.

PRODUCTS ANS SERVICES

It includes sevices for both individual and corporate

1) Individual (Personal banking)

Saving Account

CUB Savings a/c metro

Junior India
Young India
Cub Excel

Deposits
 Fixed Deposits
Cash Certificate
SriChakra FD
SriChakra Cumulative
CUB Smart
Flexi Fix Deposits

Recurring Deposits

VIP Deposit Scheme

Monthly Saving Deposit

CUB Apoorva
Tax Saver
Tax Saver Gold Deposits
Tax Saver Siver Deposits
Insurance
Loans

Loans Against Deposits

CUB Yoha Vahana
CUB Vidyavani
CUB Easy Ride
CUB Swyam Graha
CUB Sulabh
CUB Consumer Loan
CUB Sona
Jewel Loans
CUB Bazar

Other Services
 ATM Services
RTGS/NEFT
Demand Draft
Standing Instruction
Nomination Facility
Financial Inclusion
Locker
OBJECTIVE AND SCOPE OF PROJECT

The basic objective of studying the ratios of the bank is to know the financial position of the
bank.

To know the borrowings of the bank as well as the liquidity position of the bank.

To study the current assets and current liabilities so as to know whether the share holders
could invest in City Union Bank or not.

To study the profits of the business and net sales of the business and to know the stock
reserve for sales of the business.
To know the solvency of the business and the capacity to give interest to the long term loan
lenders (debenture holders) and dividend to the share holders.

To study the balance of cash and credit in the organization.

Scope
1) Present employees of the bank

2) Some of the past employees of the bank

3) Customers of the bank.

4) Reports of the bank

Research

Definition

The process of gathering, analyzing and interpreting information about a market,

about a product or service to be offered for sale in
that market, and about the past, present and
potential customers for the product or service;
research into the characteristics, spending
habits, location and needs of your business's target
market, the industry as a whole, and the
particular competitors
you face.

Research has been defined in a number of different ways.

A broad definition of research is given by Phillip Kotler

"Marketing research is systematic problem analysis, model building and fact-finding for the
purpose of improved decision-king and control in the marketing of goods and services"

AMA states - "The systematic gathering, recording, and analyzing of data about problems
relating to the marketing of goods and services."
Research Methodology

Research methodology is a collective term for the structured process of conducting

research. There are many different methodologies used in various types of research
and the term is usually considered to include research design, data gathering and data
analysis.

Research methodologies can be quantitative (for example, measuring the number of

times someone does something under certain conditions) or qualitative (for example,
asking people how they feel about a certain situation). Research methodologies are
generally used in academic research to test hypotheses or theories. A good design
should ensure the research is valid, i.e. it clearly tests the hypothesis and not
extraneous variables, and that the research is reliable, i.e. It yields consistent results
every time.

Research Design

Donald R. Cooper had defined research design as follows:

The research design constitutes the blue-print for collection, measurement and
analysis of data. It aids the scientist in allocation of his limited resources by posing
crucial choices: Is the blueprint to include experiments, interviews, observations, the
analysis of
records, simulation, or some combination of these? Are the method of data collection
and research situation to be highly structured? Is an intensive study of a small sample
more effective than a less intensive study of a large sample? Should the analysis be
primarily qualitative or quantitative?"
Types of Research Design

Philosophical/discursive
This may cover a variety of approaches, but will draw primarily on existing literature,
rather than new empirical data. A discursive study could examine a particular issue,
perhaps from an alternative perspective. Alternatively, it might put forward a
particular argument or examine a methodological issue.

Literature review
This may be an attempt to summarise or comment on what is already known about a
particular topic. By collecting different sources together, synthesising and analysing
critically, it essentially creates new knowledge or perspectives. There are a number of
different forms a literature review might take. A systematic review will generally go
to great lengths to ensure that all relevant sources have been included. Details of the
search strategies used and the criteria for inclusion must be made clear.

Case study
This will involve collecting empirical data, generally from only one or a small
number of cases. It usually provides rich detail about those cases, of a predominantly
qualitative nature. There are a number of different approaches to case study work
and the principles and methods followed should be made clear.A case study generally
aims to provide insight into a particular situation and often stresses the experiences
and interpretations of those involved.

Survey
Where an empirical study involves collecting information from a larger number of
cases, perhaps using questionnaires, it is usually described as a survey. Alternatively,
a survey might make use of already available data, collected for another purpose. A
survey may be cross-sectional or longitudinal. Because of the larger number of cases,
a survey will generally involve some quantitative analysis.
 Experiment
This involves the deliberate manipulation of an intervention in order to determine
its effects. The intervention might involve individual pupils, teachers, schools or
some other unit. An experiment may compare a number of interventions with each
other, or may compare one to a control group. If allocation to these different
treatment groups is decided at random it may be called a true experiment; if
allocation is on any other basis it is usually called a quasi-experiment.

Observational Design

This type of research design draws a conclusion by comparing subjects against a

control group, in cases where the researcher has no control over the experiment.
There are two general types of observational designs. In direct observations, people
know that you are watching them. Unobtrusive measures involve any method for
studying behaviour where individuals do not know they are being observed. An
observational study allows a useful insight into a phenomenon and avoids the
ethical and practical difficulties of setting up a large and cumbersome research
project.

Descriptive Design
Descriptive research designs help provide answers to the questions of who, what,
when, where, and how associated with a particular research problem; a descriptive
study cannot conclusively ascertain answers to why. Descriptive research is used
to obtain information concerning the current status of the phenomena and to
describe "what exists" with respect to variables or conditions in a situation.

Correlational Design
A correlation is a relationship between two variables. These factors can be
characteristics, attitudes, behaviours, or events. Correlational research attempts to
determine if a relationship exists between the two variables, and the degree of that
relationship. A social researcher can use case studies, surveys, interviews, and
observational research to discover correlations. Correlations are positive, negative,
or nonexistent.
Data Collection
Data collection is any process of preparing and
collecting data, for example, as part of a process
improvement or similar project. The purpose of data
collection is to obtain information to keep on record,
to make decisions about important issues, or to pass
information on to others. Data are primarily
collected to provide information regarding a specific
topic.

Types of Data

Primary Data:

Data that has been collected from first-hand-experience is known as primary data. Primary
data has not been published yet and is more reliable, authentic and objective. Primary data
has not been changed or altered by human beings, therefore its validity is greater than
secondary data.
Sources of Primary Data:

Sources for primary data are limited and at times it becomes difficult to obtain data from
primary source because of either scarcity of population or lack of cooperation. Regardless of
any difficulty one can face in collecting primary data; it is the most authentic and
reliable data source. Following are some of the sources of primary data.

Experiments: Experiments require an artificial or natural setting in which to perform

logical study to collect data. Experiments are more suitable for medicine, psychological
studies, nutrition and for other scientific studies. In experiments the experimenter has to
keep control over the influence of any extraneous variable on the results.

Survey: Survey is most commonly used method in social sciences, management,

marketing and psychology to some extent. Surveys can be conducted in different
methods.

Questionnaire: is the most commonly used method in survey. Questionnaires are a

list of questions either open-ended or close -ended for which the respondent give
answers. Questionnaire can be conducted via telephone, mail, live in a public area, or
in an institute, through electronic mail or through fax and other methods.
Interview: Interview is a face-to-face conversation with the respondent. In interview
the main problem arises when the respondent deliberately hides information otherwise
it is an in depth source of information. The interviewer can not only record the
statements the interviewee speaks but he can observe the body language, expressions
and other reactions to the questions too. This enables the interviewer to draw
conclusions easily.
Observations: Observation can be done while letting the observing person know that
he is being observed or without letting him know. Observations can also be made in
natural settings as well as in artificially created environment.
Secondary Data:

Data collected from a source that has already been published in any form is called as
secondary data. The review of literature in nay research is based on secondary data. Mostly
from books, journals and periodicals.

Sources of Secondary Data:

Secondary data is often readily available. After the expense of electronic media and internet
the availability of secondary data has become much easier.

Published Printed Sources: There are variety of published printed sources. Their credibility
depends on many factors. For example, on the writer, publishing company and time and date
when published. New sources are preferred and old sources should be avoided as new
technology and researches bring new facts into light.

Books: Books are available today on any topic that you want to research. The use of
books start before even you have selected the topic. After selection of topics books
provide insight on how much work has already been done on the same topic and you
can prepare your literature review. Books are secondary source but most authentic one
in secondary sources.

Journals/periodicals: Journals and periodicals are becoming more important as far as

data collection is concerned. The reason is that journals provide up-to-date
information which at times books cannot and secondly, journals can give information
on the very specific topic on which you are researching rather talking about more
general topics.

Magazines/Newspapers: Magazines are also effective but not very reliable.

Newspaper on the other hand are more reliable and in some cases the information can
only be obtained from newspapers as in the case of some political studies.
Published Electronic Sources: As internet is becoming more advance, fast and reachable to
the masses; it has been seen that much information that is not available in printed form is
available on internet. In the past the credibility of internet was questionable but today it is
not. The reason is that in the past journals and books were seldom published on internet but
today almost every journal and book is available online. Some are free and for others you
have to pay the price.

Unpublished Personal Records: Some unpublished data may also be useful in some cases.
Diaries: Diaries are personal records and are rarely available but if you are conducting
a descriptive research then they might be very useful. The Anne Franks diary is the
most famous example of this. That diary contained the most accurate records
of Nazi wars.

Letters: Letters like diaries are also a rich source but should be checked for their
reliability before using them.

Governement Records: Government records are very important for marketing, management,
humanities and social science research.
Census Data/population statistics:

Health records

Educational institutes records

Public Sector Records:

NGOs's survey data

Other private companies records

Sample
Sampling
Sampling is a method of selecting experimental units from a population so that we can
make decision about the population.
Sampling Design
Sampling design is a design, or a working plan, that specifies the population
frame,sample size, sample selection, and estimation method in detail. Objective of the
sampling design is to know the characteristic of the population.
 Population
A group of individuals or items that share one or more characteristics from which data
can be gathered and analyzed.

Sampling Unit
A sampling unit is one of the units into which an aggregate is divided for the purpose of
sampling, each unit being regarded as individual and indivisible when the selection is
made.
In this project sample unit is 200.

Sample Size
The number of sampling units which are to be included in the sample. In the case of a
multi-stage sample this number refers to the number of units at the final stage in the
sampling. Sampling size is the number of observations used for calculating estimates of a
given population.
The sample size in this is 100.
Sampling Area
Population is the specific group of people, firms etc. which form the pivotal point of
research project. For developing and using the sample it becomes the primary duty of the
researcher to define the population from which to draw samples. Sample population is:
General Public, Friends and Relatives.
Sampling Area is Delhi & NCR Region.

Sampling Technique
Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot
study was done in order to know the accuracy of the Questionnaire. The final
Questionnaire was arrived only after certain important changes were done. Thus my
sampling came out to be judemental and convinent

Sampling Instruments
Things used for taking sampling or make a sample is termed as a sampling instruments.
For eg.: Questionnaire, internet, books etc.
DATA ANALSIS AND INTERPRETATION
 FINANCIAL ANALYSIS

Meaning Of Financial Statements

Financial statements refer to such statements which contains financial information about an
enterprise. They report profitability and the financial position of the business at the end of
accounting period. The team financial statement includes at least two statements which the
accountant prepares at the end of an accounting period. The two statements are: -

The Balance Sheet

Profit And Loss Account

They provide some extremely useful information to the extent that balance Sheet mirrors the
financial position on a particular date in terms of the structure of assets, liabilities and owners
equity, and so on and the Profit And Loss account shows the results of operations during a
certain period of time in terms of the revenues obtained and the cost incurred during the year.
Thus the financial statement provides a summarized view of financial positions and
operations of a firm.

Meaning Of Financial Analysis

The term financial analysis is also known as analysis and interpretation of financial
statements refers to the process of determining financial strength and weakness of the firm
by establishing strategic relationship between the items of the Balance Sheet, Profit and Loss
account and other operative data.
The first task of financial analysis is to select the information relevant to the decision under
consideration to the total information contained in the financial statement. The second step is
to arrange the information in a way to highlight significant relationship. The final step is
interpretation and drawing of inference and conclusions. Financial statement is the process of
selection, relation and evaluation.
Features of Financial Analysis

o To present a complex data contained in the financial statement in simple and

understandable form.

o To classify the items contained in the financial statement in convenient and rational
groups.

o To make comparison between various groups to draw various conclusions.

Purpose of Analysis of financial statements

To know the earning capacity or profitability.

To know the solvency.

To know the financial strengths.

To know the capability of payment of interest & dividends.

To make comparative study with other firms.

To know the trend of business.

To know the efficiency of mgt.

To provide useful information to mgt.

Procedure of Financial Statement Analysis

The following procedure is adopted for the analysis and interpretation of

financial statements:-

The analyst should acquaint himself with principles and postulated of accounting. He
should know the plans and policies of the management so that he may be able to find
out whether these plans are properly executed or not.

The extent of analysis should be determined so that the sphere of work may be
decided. If the aim is find out. Earning capacity of the enterprise then analysis of
income statement will be undertaken. On the other hand, if financial position is to be
studied then balance sheet analysis will be necessary.

The financial data be given in statement should be recognized and rearranged. It will
involve the grouping similar data under same heads. Breaking down of individual
components of statement according to nature. The data is reduced to a standard form.

A relationship is established among financial statements with the help of tools &
techniques of analysis such as ratios, trends, common size, fund flow etc.

The information is interpreted in a simple and understandable way. The significance

and utility of financial data is explained for help in decision making.

The conclusions drawn from interpretation are presented to the management in the
form of reports.
 Types Of Financial Analysis

There are different ways of analysis the financial statements:

1. On The Basis Of Process Of Analysis

a) Horizontal Analysis: This is used when the financial statement of a number of years
are to be analysed. Such analysis indicates the trends and the increase or decrease in
various items not only in absolute figures but also in percentage form. This analysis
indicates the strengths and weaknesses of the firm. This analysis is also called as
dynamic analysis because it also shows the trend of the business.

b) Vertical Analysis : This is used when financial statements of a particular year or on a

particular date are analyzed. For this type of analysis we generally use common size
statements and the ratio analysis. It involves a study of quantitative relationship
among various items of balance sheet and profit and loss account. This type of
analysis is static analysis because this is based on the financial results of one year.
Vertical analysis is useful when we have to compare the performance of different
departments of the same company.

Among these two types of analysis, horizontal analysis is more useful because it brings
out more clearly the trends of working of a firm. This gives us more concrete bases for
future planning.

2. On The Basis Of Information Available

a) Internal Analysis: This analysis is based on the information available to the business
firm only .Hence internal analysis is made by the management. Internal analysis is
more reliable and helpful for financial decisions.

b) External Analysis : This analysis is made on the basis of published

statements,reports and informations. This analysis is made by external parties such as
creditors,investors,banks,financial analysis etc. external analysis is less reliable in
comparison to internal analysis because of limited and often incomplete information.
 3. On The Basis Of Number Of Firms

a) Inter-Firm Analysis : When financial analysis of two or more companies or firms

are analyzed and compared over a number of accounting period, it is called inter-firm
analysis.

b) Intra -Firm Analysis : intra-firm analysis is concerned with the analysis of financial
performance of different units or departments or segments of the same enterprise or company.
Similarly when financial statements of two or more years of the same firm are analyzed and
compared it is also called as intra-firm analysis.

4. On The Basis Of Objectives

a) Accounting Analysis: Accounting analysis is analysis of past financial performance and

involves examining how generally accepted accounting principles and conventions have been
applied in arriving at the values of assets, liabilities, revenues and expenses.

b) Prospective Analysis : Prospective analysis involves developing forecasted financial

statements keeping in view the changes that are likely to shape and affect the business given
the assumptions about these changes and the limitation of the forecasting technique used.
This is quite complicated analysis.
Methods/Tools Of Financial Analysis

A number of methods can be used for the purpose of analysis of financial statements. These
are also termed as techniques or tools of financial analysis. Out of these, and enterprise can
choose those techniques which are suitable to its requirements. The principal techniques of
financial analysis are:-

a. Comparative financial statements

b. Common-size statements
c. Trend analysis
d. Ratio analysis
e. Funds flow analysis
f. Cash flow analysis
g. Break even point analysis

a. Comparative Financial Statements:

When financial statements figures for two or mote years are placed side-side to facilitate
comparison, these are called comparative Financial Statements. Such statements not only
show the absolute figures of various years but also provide for columns to indicate to increase
ort decrease in these figures from one year to another. In addition, these statements may also
show the change from one year to another on percentage form. Such cooperative statements
are of great value in forming the opinion regarding the progress of the enterprise.

b. Common- Size Statements:

Common size statements are such statements in which the items of financial statements are
covered into percentage of common base. In common-size income statement, by assuming
net sales as 100(i.e %)and other individual items are converted as percentage of this.
Similarly, in common size balance sheet ,total assets are assumed to be 100 (i.e %) and
individual assets are expressed as percentage.
c. Trend Analysis:

Trend percentage are very useful is making comparative study of the financial statements for
a number of years. These indicate the direction of movement over a long tine and help an
analyst of financial statements to form an opinion as to whether favorable or unfavorable
tendencies have developed. This helps in future forecasts of various items. For calculating
trend percentages any year may be taken as the base year. Each item of bease year is
assumed to be equal to 100 and on that basis the percentage of item of each year calculated.

d. Ratio Analysis:

Meaning :
Absolute figures expressed in financial statements by themselves are meaningfulness. These
figures often do not convey much meaning unless expressed in relation to other figures. Thus,
it can be say that the relationship between two figures, expressed in arithmetical terms is
called a ratio.
According to R.N. Anthony.

A ratio is simply one number expressed in terms of

another. It is found by dividing one number into the other.

TYPES OF RATIOS

1. Proportion or Pure Ratio or Simple ratio.

2. Rate or so many Times.
3. Percentage
4. Fraction.
CLASSIFICATION OF RATIOS

In view of the financial management or according to the tests satisfied,

various ratios have been classifieds as below:

Liquidity Ratios : These are the ratios which measure the short-term solvency or financial
position of a firm. These ratios are calculated to comment upon the short-term paying
capacity of a concern or the firms ability to meet its current obligations.

Long Term Solvency and Leverage Ratios : Long-term solvency ratios convey a firms
ability to meet the interest cost and repayment schedules of its long-term obligation e.g. Debit
Equity Ratio and Interest Coverage Ration. Leverage Ratios.

Activity Ratios: Activity ratios are calculated to measure the efficiency with which the
resource of a firm have been employed. These ratios are also called turnover ratios because
they indicate the speed with which assets are being turned over into sales e.g. debtors
turnover ratio.

Profitablity Ratios: These ratios measure the results of business operations or overall
performance and effective of the firm e.g. gross profit ratio, operating ratio or capital
employed. Generally, two types of profitability ratios are calculated.
(a) In relation to Sales, and
(b)In relation in Investment
FUNCTIONAL CLASSIFICATION IN VIEW OF
FINANCIAL MANAGEMENT OR CLASSIFICATION ACCORDING TO TESTS

Liquidity Ratios Long-term Activity Ratios Profitability Ratios

Solvency and
Leverage Ratios
-Current Ratio Financial Inventory Turnover In Relation to
-Liquid Ratio Operating Ratio. Sales.
(Acid) Test or Composite Debtors Turnover Gross Profit Ratio.
Quick Ratio. -Debt. Equity Ratio Operating Ratio.
-Absolute liquid or Ratio Fixed Assets Operating Profit
-Cash Ratio. -Debt to Total Turnover Ratio Ratio.
-Debtors Capital Ratio Total Asset Net Profit Ratio.
Turnover Ratio -Interest Turnover Ratio Expenses Ratio
-Creditors Turnover Coverage Ratio Working Capital In relation to
Ratio -Capital Gearing Turnover Ratio. investments
-Inventory Turnover Ratio Payables Turnover Return on
ratio Ratio Investments.
Capital Employed Return on capital.
Turnover Ratio Return on Equity
Capital.
Return on total
Resources
Earning per share.
Price Earning Ratio.

For the purpose of study secondary data has been used for this purpose various articles, journals and
annual reports of the bank has been studied. In this project various ratios were studied to find out the financial
position of bank. These ratios are as follows:
1. Capital Adequacy Ratio : Capital
Risk

2. Current Ratio : Current Assets

Current Liabilities

3. Quick Ratio : Quick Asset

Current Liabilities

4. Net Profit margin : Net Profit

Revenue

5. Net Profit to Total Funds : Net Profit

Total Funds

6. Interest Income to Total Income : Interest Income

Total Income

7. Asset Turnover Ratio : Sales or Revenue

Total Sales

8. Non Interest Income to Total Income : Non Interest income

Total Income

9. Return on asset : Net Income

Total Assets
 Profit loss account
(Rs crore)

Mar ' 15 Mar ' 14 Mar ' 13 Mar ' 12 Mar ' 11

Income

Operating income 2,698.86 2,545.93 2,188.75 1,696.77 1,218.41

Expenses

Material consumed - - - - -

Manufacturing expenses - - - - -

Personnel expenses 210.27 185.62 150.87 122.31 101.62

Selling expenses - - - - -

Adminstrative expenses 261.82 256.28 198.65 143.97 97.96

Expenses capitalized - - - - -

Cost of sales 472.10 441.90 349.52 266.28 199.57

Operating profit 335.27 317.49 274.49 233.47 220.45

Other recurring income 404.10 301.20 273.64 207.13 157.40

Adjusted PBDIT 739.38 618.69 548.13 440.61 377.86

Financial expenses 1,891.49 1,786.54 1,564.74 1,197.02 798.38

Depreciation 46.73 37.72 24.68 13.55 16.83

Other write offs - - - - -

Adjusted PBT -1,198.84 -1,205.57 -1,041.29 -769.97 -437.35

Tax charges 126.00 66.50 81.00 63.00 67.00

Adjusted PAT 384.13 347.07 322.02 280.25 215.05

Non recurring items 10.89 - - - -

Other non cash adjustments - - - - -

Reported net profit 395.02 347.07 322.02 280.25 215.05

Earnigs before appropriation 401.89 353.95 328.62 285.81 220.61

Equity dividend 52.26 45.05 39.38 34.16 28.71

Preference dividend - - - - -

Dividend tax 13.36 9.22 8.06 6.66 5.72

Retained earnings 336.27 299.67 281.17 244.99 186.18

 Cash flow

(Rs crore)

Mar ' 15 Mar ' 14 Mar ' 13 Mar ' 12 Mar ' 11

Profit before tax 395.02 347.07 322.02 280.25 215.05

Net cashflow-operating activity 130.65 412.40 618.04 -71.38 236.72

Net cash used in investing activity -64.33 -79.00 -67.96 -42.61 -22.09

Netcash used in fin. activity 290.83 75.73 84.29 -36.23 -28.51

Net inc/dec in cash and equivlnt 357.15 409.13 634.38 -150.21 186.12

Cash and equivalnt begin of year 2,179.62 1,770.49 1,136.11 1,286.32 1,100.20

Cash and equivalnt end of year 2,536.77 2,179.62 1,770.49 1,136.11 1,286.32
 Balance sheet
(Rs crore)

Mar ' 15 Mar ' 14 Mar ' 13 Mar ' 12 Mar ' 11

Sources of funds

Owner's fund

Equity share capital 59.66 54.27 47.44 40.82 40.50

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 2,635.87 1,970.66 1,593.22 1,202.28 966.12

Loan funds

Secured loans - - - - -

Unsecured loans 24,074.96 22,016.89 20,304.76 16,340.76 12,914.29

Total 26,770.48 24,041.82 21,945.42 17,583.85 13,920.91

Uses of funds

Fixed assets

Gross block 210.41 182.95 141.28 97.73 68.53

Less : revaluation reserve - - - - -

Less : accumulated depreciation - - - - -

Net block 210.41 182.95 141.28 97.73 68.53

Capital work-in-progress - - - - -

Investments 6,365.27 5,953.56 5,266.80 4,586.19 3,616.23

Net current assets

Current assets, loans & advances 793.18 580.86 15,798.51 393.16 364.98

Less : current liabilities & provisions 931.83 647.02 554.92 418.10 484.46

Total net current assets -138.66 -66.15 15,243.59 -24.94 -119.48

Miscellaneous expenses not written - - - - -

Total 6,437.02 6,070.35 20,651.68 4,658.99 3,565.28

Notes:

Book value of unquoted investments - - - - -

Market value of quoted investments - - - - -

Contingent liabilities 7,802.98 5,327.42 6,209.21 10,070.55 4,451.90

Number of equity sharesoutstanding (Lacs) 5965.68 5427.40 4099.52 4082.13 4050.31

 Ratio Analysis

Capital Adequacy Ratio:

A measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted

credit exposures.

Mar 12 Mar '13 Mar '14 Mar '15

12.57 13.98 15.01 16.52

Capital Adequacy Ratio

18

16

14

12
Axis Title

10

8 Capital Adequacy Ratio

0
Mar'12 Mar'13 Mar'14 Mar'15

Capital adequacy ratio (CAR) is a ratio of a bank's capital to its risk. National
regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and are
complying with their statutory Capital requirements. The formula for Capital Adequacy Ratio
is, (Tier 1 Capital + Tier 2 Capital)/Risk Weighted Assets. Capital adequacy ratio is the ratio
which determines the capacity of the bank in terms of meeting the time liabilities and other
risks such as credit risk, operational risk, etc. In the simplest formulation, a bank's capital is
the "cushion" for potential losses, which protects the bank's depositors or other lenders.
CURRENT RATIO:

Current Ratio may be defined as the relationship between current assets and current liabilities.
It shows the ratio of the short term assets and liabilities that a firm is having.

Mar 12 Mar '13 Mar '14 Mar '15

0.024 0.030 0.035 0.036

Curent Ratio
0.04

0.035

0.03

0.025

0.02
Curent Ratio
0.015

0.01

0.005

0
Mar'12 Mar'13 Mar'14 Mar'15

A relatively high current ratio is an indication that the firm is liquid and has the ability
to pay its current obligations in time as and when they become due. An increase in the current
ratio represent improvement in the liquidity position of the firm while a decrease in the
current ratio indicates that there has been deterioration in the liquidity position of the firm.
QUICK RATIO:

Liquid ratio is also known as Quick or Acid Test Ratio. Liquid assets refer to
assets which are quickly convertible into cash. Current Assets other stock and prepaid
expenses are considered as quick assets.

Mar 12 Mar '13 Mar '14 Mar '15

31.92 30.30 27.38 21.45

Quick Ratio
35

30

25

20

Quick Ratio
15

10

0
Mar'12 Mar'13 Mar'14 Mar'15

Usually, a high test ratio is an indication that the firm is liquid and has the ability to
meet its current or liquid liabilities in time and on the other hand a low quick ratio represent
that the firms liquidity position is not good. In this the liquidity of the bank is decresing due
to less awareness among the people,
Net Profit Margin

Net margin is the ratio of net profits to revenues for a company or business segment -
typically expressed as a percentage that shows how much of each dollar earned by the
company is translated into profits.

In percent

Mar 12 Mar '13 Mar '14 Mar '15

16.51 14.71 13.63 14.63

Net Profit Margin

18

16

14

12

10

8 Net Profit Margin

0
Mar'12 Mar'13 Mar'14 Mar'15

As per the analysis it can be seen that the net profit of the bank is going continuously
from the year 2012 onwards. In the year 2012 -13 the net profit was decreased upto some
percent. And again it was increased in 2014-15 as RBI did not stopped money flow in the
market.
Net Profit to total Funds

Net Profit Ratio tells about the net amont of profit the firm is earning with regards to the total
funds the company is having. This tells how much the company is earning per day and helps
in growth of the firm.

(Per cent)
Mar12 16.51
Mar13 14.71
Mar14 13.63
Mar15 14.63

Percentage
18

16

14

12

10

8 Percentage

0
Mar'12 Mar'13 Mar'14 Mar'15

Net profit to total assets is continue increasing till 2011 onwards .It means the bank is
able to utilize its assets. And then decrease to some extent in year 2013 and 2014 and then started
to increase afterwards that.
Interest Income to Total Income

This ratio helps in calculating the interest earned by the organization in regard of the interest
paid to the customers. This ratio basically used in the banking organization and other
financial institution .

Mar12 10.30
Mar13 10.59
Mar14 10.61
Mar15 10.21

Income
10.7

10.6

10.5

10.4

Income
10.3

10.2

10.1

10
Mar'12 Mar'13 Mar'14 Mar'15

Interest income of the bank started to increase after march 2012 and keeps
on increasing till august 2014 and then decreases to 10.21 till march 2015 due to
the high interest rate for loans due to which the advances for the banks.
Asset Turnover Ratio

Asset turnover ratio is the ratio of the value of a companys sales or revenues generated
relative to the value of its assets. The Asset Turnover ratio can often be used as
an indicator of the efficiency with which a company is deploying its assets in generating
revenue.

Mar 12 Mar '13 Mar '14 Mar '15

30.45 40.02 37.31 45.18

Ratio
50
45
40
35
30
25
Ratio
20
15
10
5
0
Mar'12 Mar'13 Mar'14 Mar'15

This shows that the bank can generate net sales from the assets of the bank that
continuously after march 2012 an increase to 40.02 in march 2013 and then decreases to
some extent in 2014 and then keeps increasing and become highest in 2015 increased about
15% from 2012 till 2015.
Non-Interest Income to Total Income

Mar12 1.26
Mar13 1.32
Mar14 1.26
Mar15 1.53

Non Interest Income

1.8

1.6

1.4

1.2

0.8 Non Interest Income

0.6

0.4

0.2

0
Mar'12 Mar'13 Mar'14 Mar'15

Other income such as interest earned by the banks by the way of charges deducted
such as cash handling charges and other income from incidental charges etc.
Return on Assets

Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives an idea as to how efficient management is at using its assets to generate
earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is
displayed as a percentage. Sometimes this is referred to as "return on investment".

Mar 12 Mar '13 Mar '14 Mar '15

1.52 1.40 1.38 1.41

Return on Assets
1.55

1.5

1.45

Return on Assets
1.4

1.35

1.3
Mar'12 Mar'13 Mar'14 Mar'15

Return on fixed assets in regard to this is decreasing year by year it was highest in 2012 and
than decrease tremendously to 1.38 in march 2014 and then again started to increase in the
year 2015.
 FINDINGS

It was found that this bank is very famous in the southern but slowly it is making an
effort to increase its base in the northern region .
It has been noticed that bank is growing tremendously from the past four top five
years facing some decrease in the margin.
More advertisement and promotions are needed to make the banks growth more in the
present scenario.
Perfoemance of the bank keeps on increasing year by year with the increase in the
data level and number of customers and the services due to which the customer base
and the profitability of the bank is increasing on the large face.
The main reason for the slow growth in the bank is high rate of advances as compared
to other banks as the customer is moving to other banks as result of higher interest
rates and large time period.
The influence of the social media is needed to make the bank more famous in the eyes
of the the persos that dont know about the bank.
By the way of its great performance and and high customer service and the quality of
service that is given to them is seen to be more efficient than other private sector and
public sector banks.
 CONCLUSION

On the basis of various techniques applied for the financial analysis of City Union Bank we
can arrive at a conclusion that the financial position and overall performance of the bank is
satisfactory. The income of the bank has increased over the period with a pace & the bank has
succeeded in maintaining a reasonable profitability position.

The bank has succeeded in increasing its share capital also which has increased around 45%
in the last 4 years. Individuals are the major shareholders. The major achievement of the bank
has been a tremendous increase in its deposits and other facilities of credit which has always
been its main objective. Fixed and current deposits have also shown an increasing trend.
Shareholders are also enjoying the increasing return on capital. Though the bank lies to more
of deposits than advances as the interest rates are comparatively high than other banks but
then also the bank is showing a tremendous growth. Though the bank is not so popular in the
northern side but it is fastly it is spreading its name in northern regions also and recently
rewarded as the best private bank in small sector banks and crossed the business target of
Rs.50 thousand crores in the last quarter.
 RECOMMENDATION AND SUGGESTIONS

Some of the recommendation and suggestion are as follows:

The attention is required on the areas of growth, profitability, service level.

To increase the profit of bank, bank should decrease their operating expenses and increase
their income.

To increase its liquidity, bank should keep some more cash in its hand instead of giving
more and more advances.

Introduce quality consciousness and standardization of the work system and procedures.

Make manager competitive and introduce spirit of market-orientation and culture of

working for customer satisfaction.

There is need to build the knowledge and skill bases among the employ eosin the context
of technology.

Performance measure should not only cover financial aspects i.e. quantitatively aspects
but also the qualitative aspects.

It is high time to focus on work than the work-achieved.

Bank should increase its retail portfolio.

Bank should manage its all risk such as credit, market and operational risk properly and
should be managed by a person who is highly skilled and qualified.
 ANNEXURE AND BIBLIOGRAPHY

References

Books :
o T.S Grewal, Analysis of Financial Statements, Sultan Chand
o Ashok Banerjee, Financial Accounting A managerial Emphasis
o Prasanna Chandra, Fundamentals of Financial Management

Internet Websites:
o www.cityunionbank.com
o www.rbi.org.in
o www.accountingformanagers.com
o www.google.com