A Study On Post Demonetization Effect On Banking Activities

“A STUDY ON POST DEMONETISATION EFFECT ON BANKING ACTIVITIES”
Chapter-1
INTRODUCTION TO FINANCE
In our present day of economy, finance is referred as the provision of money at a

time of requirement .Every enterprise; small, medium or big requires finance to
carry on its operations and achieve its targets .In fact, finance is so indispensable
that it is rightly said that it is the “Life blood of an enterprise”. Without adequate
finance, an enterprise cannot think of its existence. The study of principles,
practices, procedures and problems concerning financial management of profit
making organization engaged in trade and commerce business is undertaken under
the discipline of “BUSINESS FINANCE”.
MEANING OF FINANCE
Finance is that business activity which is concerned with the acquisitions and
conversion of capital funds in meeting financial needs and overall objectives of
the business. In simple words, finance is basically a systematic methodology of
raising funds and allocating them, with a financial value, in an optimum manner to
achieve wealth maximization.
SC0PE OF FINANCE
The scope of finance or finance function is very wide. It covers all the financial
activities of a business enterprise, right from its inception to its growth and
expansion.
ACHARYA INSTITUTE OF GRADUATE STUDIES

Page 1
Finance or finance function covers the following financial activities in any

business enterprise:
 Planning of financial requirement.

 Selecting the pattern of investment project.
 Estimation of financial requirement for the investment projects.
 Selecting the suitable sources of finance.
Proper working capital management, i.e., cash management, receivables

management and inventory management.
NEED OF FINANCE
Business finance is required for the established of every business organization.

With the growth in activities, financial needs also grow. Funds are required for the
purchase of land and building, machinery and other fixed assets.
Besides this, finance is also needed to meet day-today expenses e.g. purchase of
raw material, payment of wages and salaries, electricity bills, telephone bills etc.
Expenses continue to be incurred until the goods are sold and money is recovered.
Finance is required to bridge the time gap between production and sales.
Besides producers, it may be necessary to change the office set up in order to

install computers. Renovation of facilities can be taken up only when adequate
funds are available. Funds are always required to meet the ups and downs of
business and unforeseen problems. Suppose, some manufacturer anticipates
shortage of raw materials after a period, obviously he would like to stock raw
materials. But he will be able to do so only when finance would be available. In

Page 2
this era of competition, lot of money is required to be spent on activities for

promoting sales like advertisement, personal selling etc,
FINANCE ALLOCATION
This deals with the procurement of funds and their effective utilization. In simple
words, it means allocation of finance on various business activities.
There are three major decisions to be made in the finance allocation process,
which are as follows:
 Financing Decision.
 Capital budgeting or Investment Decision.
 Dividend policy.
FINANCING DECISION
It is the decision through which funds are brought into the business from external
sources in order to invest in profitable projects and investments.
CAPITAL BUDGETING
Capital budgeting (or Investment appraisal) is the planning process used to

determine whether a firm’s long term investments as new machinery, replacement
machinery, new plants, new products, and research development projects are

Page 3
worth pursuing. Many formal methods are used in capital budgeting, including the
techniques such as:
 Accounting rate of return
 Net present value
 Profitability index
 Internal rate returns
 Modified internal rate of return
 Equivalent annuity
DIVIDEND POLICY
Dividend policy refers to the policy chalked out by companies regarding the
amount it would pay to their shareholders as dividend. With profit making comes
the question of utilizing the profit gainfully.
The companies have two options with them:
 They can retain these profits within the company

 They can pay these profits in the form of dividends to their shareholders
The dividend policy to be adopted by the company is based on these two options.
Once this is sorted out, a permanent dividend policy can be put into place. These
policies shape the attitude of the investors and the financial marketing general
towards the concerned company the policies are decided according to the current
and future financial positions of the company.
The preference and orientation of the investors also taken into account.

Page 4
The following are the types of dividend policies:
 Constant pay-out ratio

 Constant dollar dividend
TYPES OF FINANCE
 Public finance
 Private finance
PUBLIC FINANCE
It deals with the requirements, receipts and disbursements of funds in the

government institutions like state, local self-government and central government.
Public finance can be classified into:
 Government institution
 State government
 Local self-government
 Central government
PRIVATE FINANCE
It deals with the requirements, receipts and disbursement of funds in case of an

individual, a profit seeking business organization and non-profit business
organization.

Page 5
 Personal finance
 Business finance
 Finance of non-profit organization
 LOCAL SELF GOVERNMENT
PUBLIC FINANCE  STATE GOVERNMENT
 GOVERNMENT INSTITUTION.
I  CENTRAL GOVERNMENT
PRIVATE  PERSONAL FINANCE
FINANCE  BUSINESS FINANCE
 FINANCE OF NON PROFIT
ORGANISATION

Page 6
FINANCIAL MANAGEMENT
INTRODUCTION TO FINANCIAL MANAGEMENT
Financial management is an integral part of general management and not merely a

staff function, which is considered, only with administration of sources of funds.
It is concerned with raising and utilizing of the funds in an optimum and
economical manner so as to maximize the returns and wealth in various business
and investment opportunities.
MEANING OF FINANCIAL MANAGEMENT
Financial management is that managerial activity which is concerned with the

planning and controlling of the firm’s financial resources.
In general financial management deals with the effective and efficient utilization
of financial resources. It means creating balance among financial planning,
procurement of funds, profit administration and sources of funds.
DEFINITIONS OF FINANCIAL MANAGEMENT
According to Joseph and Massie, “Financial management is the operational

activity of a business that is responsible for raising and Effectively Utilizing funds
Raised necessary for efficient operations”.

Page 7
FINANCIAL MANAGEMENT CONCERNED WITH THREE

ACTIVITIES [3 A’S]
1. Anticipating financial needs- which mean estimation of funds required for
investment in financial assets and current liabilities or long term and short term
assets.
2. Acquiring financial resources-After anticipation of the required amount of
capital the next task is acquiring that is where and how to obtain the funds.
3. Allocating funds in business-which means the allocation of available funds
among best plans of assets to maximize shareholders wealth.
SCOPE OF FINANCIAL MANAGEMENT:
a. Financial management has coverage. It is exposed to new areas at present.

b. Importance of the subject has been increasing year after year, since the value
of money is decided by time alone.
c. “Money received today is more valuable than the same rupee which is
received in future”.
d. Earlier financial management and financial manager both were very simple
and limited but now it has enormous scope.
e. So to understand it better there are two approaches.
1. Traditional approach.
2. Modern approach

Page 8
TRADITIONAL APPROACH
 It was very simple and did not have more scope and coverage was very little.
 Role was limited.
 Covered only the activities relating to collection of funds.
 Manager could collect the funds needed by the company and prepare
accounts.
So this approach includes only the external sources of funds and internal
source of funds was excluded. Financial manager could not answer for any of the
questions and find problems which cannot be solved by this approach.
MODERN APPROACH
 It has more meaningful and its role increases.

 In this financial manager can solve the financial problems by the use of
various techniques.
 It collects funds not only from the external sources but also from the internal
sources.
 Total cost of the funds will be estimated.
 It reduces the risk and cost because of changes in the field of human sphere
due to technological improvements, increase in marketing operations, introduction
of computers have increased the role of financial management.
 It can decide how much funds would be needed and how they can be
allocated to achieve the financial standards.

Page 9
GOALS OR OBJECTIVES OF FINANCIAL MANAGEMENT
1. BASIC OBJECTIVES.
 Profit maximization
 Wealth maximization
 Maintenance of adequate liquid assets.
1. BASIC OBJECTIVES.
2. OTHER OBJECTIVES.
A) Profit maximization: Profit maximization is a common objective of every

company and everyone wants to earn more profit. And if funds are utilized
effectively automatically profit comes into business.
B. Wealth maximization: If profit maximization is for the short run then there
will be unhealthy for the growth survival and overall interest of the business. So it
is better to maximize the wealth and maximize the value of business.
C. Maintenance of adequate liquid assets in the firm.

Organization must maintain liquid assets to meet all short term obligations. And
current asset in the form of cash in hand or bank, marketable securities to be
maintained.
OTHER OBJECTIVES:
 Ensuring a fair return to shareholders.

 Maximum operational efficiency and efficient and effective utilization of fund

Page 10
FINANCIAL DECISIONS
Financial decisions are the procurement and effective utilization of

funds are crucial tasks. The main function or decision area of financial
management are popularly called financial decisions. The aspects covered in
financial decision are the volume of funds to be invested, types of assets to be
acquired, capital mix, pattern of distribution of profits, dividend policy decisions
and other similar aspects.
Financial decisions can be broadly divided into 4 categories
1. Requirement of funds decision.

2. Financing decision.
3. Investment decision.
4. Dividend decision.
1. Requirement of funds decision: In business requirement of funds and exact

timing have to be estimated.
Certain funds are required for long term purposes or for the working capital.
Forecasting the requirements of funds involves the use of various techniques like
budgetary control and long range planning.
2. Financing decision: After estimation of funds required, a decision regarding
various sources from where these funds would be raised.
A proper mix of various sources has to be worked out. And finance manager has
to carefully look into the existing capital structure and then decide about rising of
funds.

Page 11
3. Investment decision: It involves selection of assets in which funds are invested

by the firm. It also includes the issue of the shares from the investors.
4. Dividend decision: Dividend decision is concerned with the decision to play or

declare a dividend. Financial manager has to assist top management about
declaring dividend and amount to be retained in the business
INTRODUCTION TO INDIAN BANKING SYSTEM
MEANING OF BANKING SYSTEM: -
A banking system is a group or network of institutions that provide financial

services for us. These institutions are responsible for operating a payment system,
providing loans, taking deposits, and helping with investments.
DEFINITION OF BANKING SYSTEM:
Banking system in simple words refers to a chain of financial institutions that

provide financial services like deposits, loan, money transfer, etc. to individuals
and institutions with interest as the determining factor of the transaction. Banking
system plays the role of an intermediary between the ones saving and the ones
who borrow money for investments.
HISTORY OF BANKING SYSTEM IN INDIA:
Banking in India, in the modern sense, originated in the last decades of the 18th
century. Among the first banks were the Bank of Hindustan, which was
established in 1770 and liquidated in 1829–32; and the General Bank of India,

Page 12
established in 1786 but failed in 1791.The largest bank and the oldest still in
existence, is the State Bank of India (S.B.I). It originated as the Bank of Calcutta
in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one of the
three banks funded by a presidency government; the other two were the Bank of
Bombay in 1840 and the Bank of Madras in 1843. The three banks were merged
in 1921 to form the Imperial Bank of India, which upon India's independence,
became the State Bank of India in 1955. For many years the presidency banks had
acted as quasi-central banks, as did their successors, until the Reserve Bank of
India was established in 1935, under the Reserve Bank of India Act, 1934.In 1960,
the State Banks of India was given control of eight state-associated banks under
the State Bank of India (Subsidiary Banks) Act, 1959. These are now called its
associate banks. In 1969 the Indian government nationalised 14 major private
banks, one of the big bank was Bank of India. In 1980, 6 more private banks were
nationalised. These nationalised banks are the majority of lenders in the Indian
economy. They dominate the banking sector because of their large size and
widespread networks. The Indian banking sector is broadly classified into
scheduled and non-scheduled banks. The scheduled banks are those included
under the 2nd Schedule of the Reserve Bank of India Act, 1934. The scheduled
banks are further classified into: nationalised banks; State Bank of India and its
associates; Regional Rural Banks (RRBs); foreign banks; and other Indian private
sector banks. The term commercial banks refers to both scheduled and non-
scheduled commercial banks regulated under the Banking Regulation Act,
1949.Generally banking in India is fairly mature in terms of supply, product range
and reach-even though reach in rural India and to the poor still remains a
challenge. The government has developed initiatives to address this through the
Page 13
State Bank of India expanding its branch network and through the National Bank
for Agriculture and Rural Development (NABARD) with facilities like
microfinance
DEMONETISATION IN INDIA:
THE FIRST CURRENCY BAN:
In 1946, the currency note of Rs 1,000 and Rs 10,000 were removed from
circulation. The ban really did not have much impact, as the currency of such
higher denomination was not accessible to the common people. However, both the
notes were reintroduced in 1954 with an additional introduction of Rs 5,000
currency. Rs 500 and Rs 1000 notes were introduce in 1934 and after four years in
1938, Rs 10,000 notes were introduce.
THE SECOND:
That came in 1978; the then Prime Minister of India Morarji Desai announced the
currency ban taking Rs 1000, Rs 5000 and Rs 10,000 out of circulation. The sole
aim of the ban was to curb black money generation in the country.
SIMILARITIES IN 1978 AND 2016 BAN:
The note ban by Morarji Desai also aimed to drive away black money out of
circulation in the economy. Hence, The High Denomination Bank Notes
(Demonetization) Act was implemented. Narendra Modi announced the currency
ban is an address that was broadcasted across all news channels. Similarly, Desai

Page 14
announced the ban over the radio after which the banks were closed the following
day .Both the affairs were kept confidential.
2016 INDIAN BANKNOTE DEMONETISATION:
On 8 November 2016, the Government of India announced the demonetization of

all ₹500 (US$7.90) and ₹1,000 (US$16) banknotes of the Mahatma Gandhi
Series. The government claimed that the action would curtail the shadow economy
and crack down on the use of illicit and counterfeit cash to fund illegal activity
and terrorism. The sudden nature of the announcement and the prolonged cash
shortages in the weeks that followed created significant disruption throughout the
economy, threatening economic output. Prime Minister of India Narendra Modi
announced the demonetization in an unscheduled live televised address at 20:00
Indian Standard Time (IST) on 8 November. In the announcement, Modi declared
that use of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series would be
invalid past midnight, and announced the issuance of new ₹500 and ₹2000
banknotes of the Mahatma Gandhi New Series in exchange for the old banknotes.
The BSE SENSEX and NIFTY 50 stock indices fell over 6 percent on the day
after the announcement. In the days following the demonetization, the country
faced severe cash shortages with severe detrimental effects across the economy.
People seeking to exchange their bank notes had to stand in lengthy queues, and
several deaths were linked to the rush to exchange cash. Initially, the move
received support from several bankers as well as from some international
commentators. The move has also been criticized as poorly planned and unfair,
and was met with protests, litigation, and strikes against the government in several

Page 15
places across India. Debates also took place concerning the move in both houses
of parliament. The move reduced the country's industrial production and its GDP
growth rate. By the end of August 2017, 99% of the banned currency was
deposited in banks, leaving only around ₹14,000 crore of the total demonetized
currency discarded.
BANKING SECTOR
A State Bank of India branch remained open at night, and a long queue of people
waited outside the ATM to withdraw money. In the first four days after the
announcement of the step, about ₹3 trillion (US$47 billion) in the form of old
₹500 and ₹1,000 banknotes had been deposited in the banking system and
about ₹500 billion (US$7.9 billion) had been dispensed via withdrawals from
bank accounts, ATMs as well as exchanges over the bank counters. Within these
four days, the banking system has handled about 18 crore (180 million)
transactions. The State Bank of India reported to have received more than ₹300
billion (US$4.7 billion) in bank deposit in first two days after demonetization. A
spike in the usage of debit card and credit card post demonetization was also
reported. Between 10 November and 27 November, banks reported exchange and

Page 16
deposits of demonetized banknotes worth ₹8.45 trillion (US$130 billion)

(exchange of ₹339.48 billion (US$5.3 billion) and deposits of ₹8.11
trillion (US$130 billion).During this period, an amount of ₹2.16 lakh crore
(US$34 billion) had been withdrawn by people from their accounts. In Malda, a
district believed to be a transit-point for fake Indian currencies, a large sum of
cash deposits in dormant accounts was also reported. According to The Economic
Times, more than 80 percent of fake currency in India originates from Malda
district in West Bengal.
HUMAN TRAFFICKING
Nobel laureate Kailash Satyarthi and others working to fight human trafficking

said that the note ban had led to a huge fall in sex trafficking, but that the trade
had already begun rebounding by the following month. Satyarthi said the
demonetization would be effective in combating exploitation of children as well
as corruption and would be a great obstacle to traffickers. However, 2 months
later he expressed his disappointment on Rs 2000 notes being pushed into human
trafficking in absence of other concrete steps.
RADICAL GROUPS
The Demonetization has badly hit Maoist and Naxalites as well. The surrender
rate has reached its highest since the demonetization is announced.
Page 17
It is said that the money these organizations have collected over the years have left
with no value and it has caused them to reach to this decision.
The move also reportedly crippled Communist guerrilla groups (Naxalites)

financing through money laundering. On 10 November the police arrested a petrol
pump owner at Ranchi when he reportedly tried to deposit ₹2.5 billion, belonging
to a person affiliated with the banned Communist Party of India (Maoist).
According to Chhattisgarh Police demonetization has affected
the Naxalite activities. It is reported that insurgents have stashed more than
₹70 billion in the Bastar region. While Manohar Parrikar claimed that the move
has also helped in reducing the incidents of stone-pelting in the Kashmir
valley, his claim has been disputed.
HAWALA
Mumbai Police reported a setback to Hawala operations. Hawala dealers in Kerala

were also affected. The Jammu and Kashmir Police reported the effect of
demonetization on hawala transactions of separatists.
RAILWAYS
As of November 2016, Indian Railways did not have the option to make payment
with cards at the counters. After the demonetization move, the government
announced to make card payment options available at railway counters in the
country. The railways placed an order for 10,000 card reader machines in January
2017.

Page 18
CASH SHORTAGE
Queue at an ATM for ₹100 banknotes in Howrah, on 8 November 2016, 22:23 (IST)
The scarcity of cash due to demonetization led to chaos, and most people holding
old banknotes faced difficulties in exchanging them due to endless queues outside
banks and ATMs across India, which became a daily routine for millions of
people waiting to deposit or exchange the ₹500 and ₹1000 banknotes since 9
November. ATMs were running out of cash after a few hours of being functional,
and around half the ATMs in the country were non-functional. Sporadic violence
was reported in New Delhi, but there were no reports of any grievous
injury, people attacked bank premises and ATMs, and a ration shop was looted
in Madhya Pradesh after the shop owner refused to accept ₹500 banknotes.
The CMD of Punjab National Bank said that panic after demonetization started
fading on 19 November 2016. As of 18 December 2016, there were still long
queues at banks and ATMs. Three months after the withdrawal of banknotes, a
quarter of the ATMs were still short of cash.

Page 19
‘Live ATM Alert’ was a hashtag campaign started by a group of youngsters from

a Face book community called '7PM Status'.
It launched a campaign for crowd sourcing locations of ATMs in their vicinity

that were live and working. The public were asked to post the location and details
of ATMs that were live and dispensing cash, including hashtag Live ATM Alert
or by tagging the group in their post in Face book or Twitter. The group would in
turn collate all gathered information and broadcast it to their followers at regular
intervals.
The cash shortage was still ongoing in the month of April 2017, five months after
the demonetization. According to a survey, the situation was as bad as 83% of
people being unable to withdraw money in Hyderabad, while in Pune, the figure
was 69%.
DEATHS
In March 2017, the government stated that they received no official report on
deaths connected to demonetization.
Several people were reported to have died from standing in queues for hours to
exchange their old banknotes. Deaths were also attributed to lack of medical help
due to refusal of old banknotes by hospitals. As of 15 November 2016, the
attributed death toll was 25.And 33 deaths as of 18 November. In an
interview, Chief Minister of Delhi Arvind Kejriwal lashed out at a BBC reporter
who asked him to justify his 19 November claim that 55 deaths were linked to

Page 20
demonetization. By the end of the year, opposition leaders claimed that over 100
people had died due to demonetization.
STOCK MARKET CRASH
As a combined effect of demonetization and US presidential election, the stock

market indices dropped to an around six-month low in the week following the
announcement. The day after the demonetization announcement, BSE
SENSEX crashed nearly 1,689 points and NIFTY 50 plunged by over 541
points. By the end of the intraday trading section on 15 November 2016, the BSE
SENSEX index was lower by 565 points and the NIFTY 50 index was below 8100
intraday.
TRANSPORTATION HALTS
After the demonetization was announced, about 800,000 truck drivers were
affected with scarcity of cash, with around 400,000 trucks stranded at major
highways across India were reported. While major highway toll junctions on the
Gujarat and Delhi-Mumbai highways also saw long queues as toll plaza operators
refused the old banknotes. Nitin Gadkari, the Minister of Transport, subsequently
announced a suspension of toll collections on all national highways across India
until midnight of 11 November, later extended until 14 November and again until
midnight of 18 November, and yet again till 2 December.
AGRICULTURE

Page 21
Transactions in the Indian agriculture sector are heavily dependent on cash and

were adversely affected by the demonetization of ₹500 and ₹1,000 banknotes.
Due to scarcity of the new banknotes, many farmers have insufficient cash to
purchase seeds, fertilizers and pesticides needed for the plantation of Rabi
crops usually sown around mid-November. Farmers and their unions conducted
protest rallies in Gujarat, Amritsar and Muzaffarnagar against the demonetization
as well as against restrictions imposed by the Reserve Bank of India on district
cooperative central banks which were ordered not to accept or exchange the
demonetized banknotes.
The demonetization led to unavailability of cash to pay for food products. The
reduction in demand that arose in turn led to a crash in the prices of crops.
Farmers were unable to recover even the costs of transportation from their fields
to the market from the low prices offered. The prices dropped as low as 50 paise
per kilo for tomatoes and onions. This forced the farmers across the country to
dump their products in desperation. Some farmers resorted to burying unsold
vegetables. Agricultural produce such as vegetables, food grains, sugarcane, milk
and eggs were dumped on roads. Some farmers dumped their produce in protest
against the government.
BUSINESS

Page 22
By the second week after demonetization of ₹500 and ₹1,000 banknotes, cigarette

sales across India witnessed a fall of 30–40%, while E-commerce companies saw
up to a 30% decline in cash on delivery (COD) orders. Several e-commerce
companies hailed the demonetization decision as an impetus to an increase
in digital payments, hoping that it would lead to a decline in COD returns which
could cut down their costs.
The demand for point of sales (POS) or card swipe machines increased. This led
to the acceleration of installation of POS machines According to data of Pine
Labs, the demand for its POS machines doubled after the decision. The company
stated that the debit card transactions rose by 108% and credit card transactions by
60% on 9 November 2016.
FORECASTS GDP GROWTH RATE
Global analysts cut their forecasts of India's GDP growth rate for the financial
year 2016-17 by 0.5 to 3 percent due to demonetization. India's GDP in 2016 is
estimated to be US$2.25 trillion; hence, each 1 per cent reduction in growth rate
represents a shortfall of US$22.5 billion (₹ 1.54 lakh crore) for the Indian
economy. According to Society Generale, India's quarterly GDP growth rates
would drop below 7% for an entire year at a stretch for the first time since June
2011.
 Goldman sachs
 Ambit Capital
 Emkay global

Page 23
 ICRA
 Fitch Ratings
 Morgan Stanley
 HSBC
 World bank
 ADB
DROP IN INDUSTRIAL OUTPUT
There was a reduction in industrial output as industries were hit by the cash
crisis. The Purchasing Managers' Index (PMI) fell to 46.7 in November from 54.5
in October, recording its sharpest reduction in three years. A reading above 50
indicates growth and a reading below shows contraction. This indicates a
slowdown in both, manufacturing and services industries. The PMI report showed
also showed that the reduction in inflation in November was due to shortage in
money supply.
The growth in eight core sectors such as cement, steel and refinery products,
which constitute 38% of the Index of Industrial Production (IIP), was only to 4.9
percent in November as compared with 6.6 percent in October.
INCOME TAX RAIDS AND CASH SEIZURES
The Finance Ministry instructed all revenue intelligence agencies to join the

crackdown on forex traders, hawala operators and jewelers besides tracking
movement of demonetized currency notes. It was reported that the Prime
Minister's Office (PMO) and the Prime Minister Modi himself were directly
coordinating the raids conducted by the Income Tax, Enforcement Directorate

Page 24
(ED) and other agencies. As of 23 December, PMO received around 700 calls
giving information about black money and it directly forwarded the information to
various law enforcement agencies for further action.
Income Tax departments raided various illegal tax-evasive businesses in Delhi,

Mumbai, Chandigarh, Ludhiana and other cities that traded with demonetized
currency. The Enforcement Directorate issued several FEMA notices to forex and
gold traders.
Large sum of cash in defunct notes were seized in different parts of the country.
In Chhattisgarh liquid cash worth of ₹4.4 million (US$69,000) was seized.
As of 28 December, official sources said that the Income Tax department detected
over ₹41.72 billion (US$660 million) of un-disclosed income and seized new
notes worth ₹1.05 billion (US$16 million) as part of its country-wide operations.
The department carried out a total of 983 search, survey and enquiry operations
under the provisions of the Income Tax Act and has issued 5,027 notices to
various entities on charges of tax evasion and hawala-like dealings. The
department also seized cash and jewellery worth over ₹5.49
billion (US$86 million) out of which the new currency seized (majority of them
₹2000 notes) is valued at about ₹1.05 billion (US$16 million). The department
also referred a total of 477 cases to other agencies like the CBI and the
Enforcement Directorate (ED) to probe other financial crimes like money
laundering, disproportionate assets and corruption

Page 25
SEIZURES OF ₹2000 NOTES
Huge amounts of cash in the form of new notes were seized all over the country
after the demonetization. As of December 2016, over 4 crore in new banknotes of
₹2000 were seized from four persons in Bangalore, ₹33 lakh in ₹2000 notes were
recovered from Manish Sharma, an expelled BJP leader in West Bengal, and ₹1.5
crore was seized in Goa. 900 notes of the new ₹2000 notes were seized from a
BJP leader in Tamil Nadu. Around ₹10 crore in new notes were seized
in Chennai.
As of 10 December, ₹242 crore in new notes had been seized. It was noted in the
media that while people were dying in queues to obtain a few thousand rupees in
cash, persons with the right connections were able to amass crores of rupees in
new notes, thus rendering the demonetization exercise futile
It was announced by the government that the seized notes will be brought into the
mainstream as soon as possible to ease out the cash problem. Earlier, agencies
kept all seized material, including cash seizures, in their strong rooms as evidence
till the case was adjudicated by the courts. The seized money was then deposited
into the Consolidated Fund of India. Sometimes, income tax cases took years to
resolve, still all seized material was kept in safe lockers of the tax department
JOB LOSSES
There was a loss of jobs due to demonetization, particularly in the unorganized

and informal sector and in small enterprises.

Page 26
EVASION ATTEMPTS
A jewellery store in a shopping mall with a notice "We accept ₹500 and ₹1000 notes", even after they were no
longer valid banknotes.
GOLD PURCHASES
In Gujarat, Delhi and many other major cities, sales of gold increased on 9

November, with an increased 20 to 30% premium surging the price as much
as ₹45,000 (US$710) from the ruling price of ₹31,900 (US$500) per 10 grams
(0.35 oz).
Income Tax officials raided multiple branches of Axis Bank and found bank
officials involved in money laundering acts, exchanging old notes for gold.
DONATIONS IN TEMPLES
In India, the cash deposited into hundis, or cash collection boxes in temples and
gurudwaras are exempted from inquiry by the tax department. This exemption is
sometimes misused to launder money. After the note ban, there was a spike in
donations in the form of the demonetized notes in temples. Authorities of Sri

Page 27
Jalakanteswarar temple at Vellore discovered cash worth ₹4.4 million

(US$69,000) from the temple hundi in the form of defunct notes.
MULTIPLE BANK TRANSACTIONS
There have been reports of people circumventing the restrictions imposed on exchange
transactions by conducting multiple transactions at different bank branches and also
sending hired people, employees and followers in groups to exchange large amounts of
banned currency at banks. In response, the government announced that it would start
marking customers with indelible ink. This was in addition to other measures proposed
to ensure that the exchange transactions are carried out only once by each person.
RAILWAY BOOKINGS
As soon as the demonetization was announced, it was observed by the Indian

Railways authorities that a large number of people started booking tickets particularly
in classes 1A and 2A for the longest distance possible, to get rid of unaccounted cash. A
senior official said, "On November 13, 42.7 million passengers were nationally booked
across all classes. Of these, only 1,209 were 1A and 16,999 for 2A. It is a sharp dip from
the number of passengers booked on November 9, when 27,237 passengers had booked
tickets in 1A and 69,950 in 2A."
The Railways Ministry and the Railway Board responded swiftly and decided that
cancellation and refund of tickets of value ₹10,000 and above will not be allowed by
any means involving cash. The payment can only be through cheque/electronic payment.
Tickets above ₹10,000 can be refunded by filing ticket deposit receipt only on
surrendering the original ticket. A copy of the PAN card must be submitted for any cash
transaction above ₹50,000.

Page 28
The railway claimed that since the Railway Board on 10 November imposed a number
of restrictions to book and cancel tickets, the number of people booking 1A and 2A
tickets came down.
MUNICIPAL AND LOCAL TAX PAYMENTS
As the use of the demonetized notes had been allowed by the government for the
payment of municipal and local body taxes, it led to people using the demonetized ₹500
and ₹1,000 notes to pay large amounts of outstanding and advance taxes. As a result ,
revenue collections of the local civic bodies jumped. The Greater Hyderabad Municipal
Corporation reported collecting about ₹1.6 billion (US$25 million) in cash payments of
outstanding and advance taxes, within 4 days.
The tax collection by local bodies have surged over 260% and more than 15,000 crore
more after 14 days of demonetization. The total indirect tax collection rose to 14.2%
only in the month of December according to Finance Minister Arun Jaitley
BACKDATED ACCOUNTING
The Enforcement Directorate raided several forex establishments making back dated

entries Money laundering using backdated accounting was carried out by co-operative
banks, jewelers, sellers of iPhones, and several other businesses.

Page 29
Chapter-2
Review of Literature
Arpit Guru and Shruti Kahanijow (2010) researcher analyzed the black money
income. Need for amendment in DTAA &ITEA and analyzed that black money is
spread everywhere in India up to a large extent which continuously stashed
towards abroad in a very large amount. The researcher also identified how black
money had caused menaces in our economy and in what ways it is used.
Sukanta Sarkar (2010) conducted a study on the parallel economy in India:

Causes, impacts & government initiatives in which the researcher focused on the
existence of causes and impacts of black money in India. According to the study,
the main reason behind the generation of black money is the Indian Political
System i.e. Indian govt. just focused on making committees rather than to

Page 30
implement it. The study concludes that laws should be implemented properly to
control black money in our economy.
Tax Research Team (2016) in their working paper stated in favor of

demonetization its main objective is to analyze the impact of demonetization on
Indian economy. This paper shows the impact of such a move on the availability of
credit, spending and level of activity and government finances.
Nithin and Sharmila (2016) studied demonetization and its impact on Indian
Economy. They opined that demonetization has short term negative impact on
different sectors of the economy and such impacts are solved when the new
currency notes are widely circulated in the economy.
They also argued that the government should clear all the problems created due to
demonetization and help the economy to work smoothly.
Nikita Gajjar (2016) deliberated a study on Black Money in India: Present Status
and Future Challenges and Demonetization. She described the framework, policy
options and strategies that Indian Government should adapt to tackle with this
issue and the future challenges to be faced by the Government. Vijay and Shiva
(2016) examined demonetization and its complete financial inclusion. They felt
that the rewards of demonetization are much encouraging and the demonetization
is in the long-term interest of the country. They expressed that it had given
temporary pain but it taught financial lessons. It influenced banking industries to
do considerably investment on digitalization of banking services.
Manpreet Kaur (2017) conducted a study on demonetization and impact on

Cashless Payment System. He said that the cashless system in the economy has
Page 31
many fruitful benefits less time-consuming, less cost; paper less transaction etc.
and he expected that the future transaction system in all the sectors is cashless
transaction system.
Lokesh Uke (2017) researched on demonetization and its effects in India. He

studied positive and negative impact of demonization in India. The study was
based on secondary data available in newspaper, magazines etc. The main purpose
of demonetization is to eradicate the black money and diminish the corruption. He
expressed that Government of India has become success to some extent.
Demonetization had negative impact for a short duration on Indian financial
markets. But he said that the real impact will be shown in future.
Sweta Singhal (2017) carried out research on Demonetization and E Banking in

India. It was a case study to check the awareness level of people of rural areas in
India about e-banking facilities and how much it has increased after
demonetization. A sample size of 100 was used with ANNOVA test to show that
rural people differ much with urban people in their awareness level as well as
usage level of e-banking. It was found that urban male youth have higher
awareness and usage of e-banking. She felt that the study shall also helpful for
banks to improve their e-banking facilities.
Mr Brijesh Singh and Dr. N. Babitha Thimmaiah (January 2017) in their

research paper studied the effect of demonetization in terms of “Won or lost”. By
using the secondary data method i.e. articles, they had conducted their study. In the
study report they had tried to explain the concept of cashless economy by taking
the reference of Woodford (2003). It is not all about how much money you are

Page 32
having in your wallet, you can pay by any of the bank card or banking transfer. In
the research paper they had show the effect of demonetization in the areas like,
cash rush, stock market, transportation, agriculture, banking, business, income tax,
railways etc. There are no exact proofs of exact black money holding in cash but
studies show that around 8% of black money is held in cash. According to the
Centre for Monitoring the Indian Economy (CMIE), the transaction cost of
demonetization until 30th December, 2016 is estimated around Rs. 1.28 lakh crore.
As per R. Gandhi, Deputy Governor of RBI, speaking on 7th December 2016, Rs.
11.5 lakh crore has been already deposited at bank out of total 14.5 lakh crore
which means still 3 lakh crore are unidentified.
Geeta Rani (November 2016) had presented the research paper to show the effect
of demonetization over the retail outlets. She had done her research work by taking
the primary data. She had used the Questionnaire method. This was filled by the 50
shopkeepers of the area. As a result she had been ready with some out comes
likewise 80% shopkeeper presented their view that from 9th November, 2016 to
10th December, 2016 there was 20% increase in sales due to accepting the old
notes. But after that sales had declined. Shopkeeper started paytm and cheque
system. Shopkeepers had extended credit period. Top brands like HUL, P&G had
affected with only decrease of 20% sales due to brand name. Moreover on the basis
of the study she had identified the effect of demonetization category wise.
Likewise, salty snacks sale decreased by 10%, chocolates sales had decreased by
50%, biscuits sales had decreased by 20%, juice/fruit drinks sales decreased by
20%, cigarettes sales decreased by 10%, mobile phones sales decreased by 70% ,
gold sales increased by 70% and durable goods sales decreased by 70%. She

Page 33
concluded her paper by giving the views that though demonetization is painful for
short term, but it will surely beneficial for the long run moreover most customers
are now adopting cashless means like paytm, debit card, cheques etc.
Sherline T.I (December 2016) has undertaken the research on “Demonetization as

a prelude to complete financial inclusion “. The main objective of the study was to
understand the importance of demonetization as a measure of financial inclusion.
Financial inclusion mainly stands for, the delivery of the financial services at the
affordable cost to the low income segments of society. As per the report financial
inclusion can boost the savings as well as credit availability. The study shows that
this move of the Government has likely to create long term benefits. Moreover
medium to long term Current account and saving account (CASA) ratio could
improve. Moreover demonetization would reduce cash transaction the real estates,
which may decrease the price of that avenues which make it affordable to general
public. Moreover the near future inflation will decrease due to less cash
transaction.
Chabi Gupta (December 2016) had studied about the payment banks and
demonetization. To explain her research point, she had firstly explained about the
Indian banking sector. Payment banks are generally niche banking set up by RBI,
payment banks provides small saving accounts and payment services mainly for
low income household, small businesses etc. Then she had explained the overall
impact of demonetization move. According to the Reserve Bank Of India (RBI)
figures, as of March 2016 currencies in circulation amounted to Rs.16,415 billion
of this 500 notes were of around 47.8%in value and 1000 were of 38.6% in value.
Jointly they had 86% value in the economy. Many banks like HDFC, ICICI and

Page 34
AXIS are exploring to launch the contact less debit and credit card. It will allow
the customers to use card without swipe.
CHAPTER – 3
RESEARCH DESIGN
RESEARCH
Research is a process in which the researchers wish to find out the end result for a
given problem and thus the solution helps in future course of action. The research
has been defined as “A careful investigation or enquiry especially through search
for new facts in branch of knowledge”.
TITLE OF THE STUDY
“A STUDY ON POST DEMONETISATION EFFECT ON BANKING

ACTIVITIES AT VIJAYA BANK”

Page 35
OBJECTIVES OF THE STUDY:
 To know and to understand the concept of demonetization.

 To identify the problems faced by the customers pre and post
demonetization.
 To know the effect of demonetization on the activities of banking sector.
 To suggest the bank in lending activities from mobilization of funds.
STATEMENT OF THE PROBLEM:
The banks are facing a problem of penalty on deposits and credit

growth has been anemic.
SCOPE OF THE STUDY.
1. To complete my academic project to get my Bachelor of Business

Administration.
2. To know the impact of demonetization on banking activities.
3. To know the problems faced by customer due to demonetization.
4. To know the service rendered by banks during demonetization period.

Page 36
LIMITATIONS:
1. Destruction of old currency units and printing of new currency new units
involve costs which has to be borne by the government.
2. Another problem is that majority of times this move is targeted towards
black money and rotated or used that money in other asset classes like real
estates , gold and so on than there is no guarantee that demonetization will help in
catching corrupt people.
3. Due to time consumption I could not meet the number of customers.
RESEARCH METHODOLOGY
Both Exploratory and conclusive research has been adopted to conduct the present
research. The research was conducted on 30 account holders / customers of the
Vijaya Bank and 10 employees of Vijaya Bank.
The Research Design suitable here is Exploratory Research. Because in this

research it has explored about unknown facts, which has been explained in the
findings part of the study. Conclusive research design for Descriptive
research is also suitable because to study in detail the Effectiveness of
Single window service to customers, wherein exploratory research it
cannot be dealt in detail.
Causal research in order to know the relationship between Banker

response and the satisfaction level of its customer’s i.e.., the way the

Page 37
Banker response to customer has an impact on the satisfaction level of

customers. Hence in order to identify this impact causal research has
been undertaken.
DATA COLLECTION
Data collection is the process of gathering and measuring information

on variables of interest, in an established systematic fashion that enables
one to answer stated research questions, test hypotheses, and evaluate
outcomes.
Types/Sources of research data: - Both primary and Secondary data has been be
used for the study.
 Primary Sources.
1. Data are collected through personal interviews and discussion with the
account holders / customers of Vijaya bank.
2. Data is also collected through discussion with employees of Vijaya Bank.
3. Schedule& questionnaire method of data collection are used to record

opinions of the respondents.
 Secondary Sources
1. Articles for the purpose of literature review are collected from the
suitable website.
Page 38
2. Industry profile is also collected from the website, thus using

secondary data for this purpose.
Sampling.
Sampling Element Account holders and employees.

Sampling Unit Account holders of Vijaya bank and
employees of Vijaya bank, hesaraghatta
road Branch, Bangalore.
Sample Size Account holders = 30
and Employees = 10
Survey Technique Questionnaire and Schedule
Sampling procedure:
From the large number of account holders of the bank, 30 customers were selected
from the bank based on their visit.
Tools and analysis techniques:
For this purpose tools and analysis techniques which will be used for survey is
questionnaire to collect information from the respondents. Having collected the
information, the information will be then represented by using statistical tools like
bar charts, pie charts.

Page 39
CHAPTER – 4
COMPANY PROFILE
LOGO
Industry: Financial commercial banks.
Founded: 23rd Oct 1931, 87 years ago at Mangalore, India.
Founder: Sri Attavara Balakrishna Shetty
Attavara Balakrishna Shetty, Founder Chairman of Vijaya Bank

Page 40
R.A.SANKARANARAYANAN
Managing Director and Chief Executive Officer
Key people: R A Sankara Narayanan
Headquarters: Bangalore, Karnataka, India
Owner: Government of India
Number of Employees: 15679[2016-2017]
Products: Consumer banking, corporate banking, finance and

insurance, investment banking, mortgage loans, private banking, wealth
management.

Page 41
CONSUMER BANKING
CORPORATE BANKING
FINANCE AND INSURANCE

Page 42
INVESTMENT BANKING
MORTGAGE LOAN
WEALTH MANAGEMENT

Page 43
Revenue: Increase ₹12,379 crore (US$1.9 billion) (2017)
Operating income: Increase ₹2,421 crore (US$380 million) (2017)
Net income: Increase ₹750.48 crore (US$120 million) (2017)
Total assets: Increase₹154,881.57 crore (US$24 billion) (2017)
Total Equity: Increase 932.56 crore (us$140 million) (2016)
Capital ratio: 12.73% (2017)
Vijaya Bank is a Fastest Growing public sector bank with its corporate office in
Bangalore, Karnataka, India. It is one of the nationalized banks in India. The bank
offers a wide range of financial products and services to customers through its
various delivery channels. The bank has a network of 2031 branches (as of March
2017) throughout the country and over 4000 customer touch points including 2001
ATMs.
HISTORY
Vijaya Bank was established by a group of farmers led by Shri. Attavara on 23

October 1931 in Mangalore in Dakshina Kannada District of Karnataka State.
Since it was established on the auspicious Vijayadashami Day, it was named
'Vijaya Bank'.
During the economic chaos created out of the Great Depression of 1927–30, Shri
AB Shetty approached leading Bunt personalities to start a bank with the objective
of extending credit facilities at a lower rate of interest to enable the farmers to
cultivate their lands and prevent them from falling into the clutches of money

Page 44
lenders. Accordingly, Shri AB Shetty involved 14 Bunts and established Vijaya

Bank on 23 October 1931. In the beginning the bank had an authorized capital of
Rs. 5 lakh and an issued capital of Rs. 2 lakh. The paid up capital was Rs. 8670.
YEAR OF EVENTS
2005
-Vijaya Bank ties up with TAFE
-Vijaya Bank sets up new branches
2007
- Vijaya Bank has informed that Shri G B Singh has been nominated as
GOI Nominee Director of the Bank vice Shri Atal Kumar Rai, vide
Letter dated August 20, 2007 received from Government of India,
Ministry of Finance, Department of Financial Services with immediate
Effect.
2008
- Vijaya Bank inked a memorandum of understanding with credit rating
Agency, Crisis, for rating its corporate customers.
- Vijaya Bank has inked a pact with Credit Analysis & Research Ltd
(CARE), one of the RBI accredited rating agency, to provide bank loan
Ratings to its corporate clients at a concessional fee.
-Vijaya Bank has informed that Shri. Sridhar Cherukuri has been
Page 45
Nominated as part-time non-official Director of the Bank with

Immediate effect, vide letter dated July 10, 2008 received from
Government of India, Ministry of Finance, Department of Financial
Services.
-Vijaya Bank has informed that Shri. Ranjan Shetty has been nominated
As Officer Employee Director of the Bank with immediate effect, vide
Letter dated September 09, 2008 received from Government of India,
Ministry of Finance, Department of Financial Services.
2009
- Vijaya bank has plans to issue 1,000 biometric smart cards to
Account-holders residing in villages by the end of this fiscal.
- Vijaya Bank forged an alliance with VE Commercial Vehicles, a
Leading auto brand, to become a preferred financier for the latter's
Commercial vehicles.
2013
- The Company has recommended a dividend of Rs. 2.50 per Share on
Banks Equity Share Capital and at 8.50% p.a.
- B.S. Rama Rao has been appointed as Executive Director of the
Company.
2014
- Mr. V. Kannan, Executive Director, Oriental Bank of Commerce as
Chairman & Managing Director, of the Bank.

Page 46
- The Bank has recommended a Final Dividend of Re. 1.00/- per Share
- Mr. Prakash Chandra Nalwaya has been appointed as, Non Official
Director of the Bank.
- Mr.Sanjay Kumar has been nominated as Government Nominee Director
On the Board of the Bank
GROWTH AND NATIONALISATION

The bank grew steadily since its inception. The bank became a scheduled bank in
1958. . Under the chairmanship of Shri. Mulki Sunder Ram Shetty, Vijaya Bank
steadily grew into a large All India Bank with 9 smaller banks merging with it
during 1963–1968. In 1965, the bank registered its own logo. The bank's head
office was shifted to Bangalore on November 11, 1969. The bank was
nationalized on 15 April 1980. At the time of nationalization, the bank had 571
branches, with a total business of Rs. 605.95 crore and staff strength of 9059.
The present head office building of the Bank at Mahatma Gandhi Road, Bangalore
was inaugurated on 26 October 1984
BUSINESS OPERATIONS
The bank's total business is over Rs.2, 29,000 crore comprising deposits of Rs. 1,
33,012 crore and advances of Rs. 96,821 crore as at 31 March 2017. Basically
being a retail bank, its top line growth owes quite a lot to the retail segments.
Retail advances of the bank constitute 30% of the gross credit.

Page 47
NETWORK AND DISTRIBUTION

As on 31 March 2017, the bank had a wide branch network of 2031 branches.
Improving the presence and performance under alternative delivery channels,
especially internet and mobile banking channel are key focus areas of the bank.
The bank has 2001 ATMs as on 31 March 2017. Vijaya Bank provides access to
over 2.21 lakh ATMs connected under National Financial Switch across the
country.
FINANCIAL INCLUSION INITIATIVES

The Bank has been actively pursuing the agenda of financial inclusion. The bank's
initiatives in this direction aim at financial empowerment and reaching banking
services to the rural masses. The Bank has been opening Basic Savings Bank
Accounts under Pradhan Mantri Jan Dhan Yojana and providing all the account
holders with Rupay debit cards. The bank participates in promoting social security
schemes such as Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan
Jyoti Bima Yojana and Atal Pension Yojana. The bank is also implementing the
modified Direct Benefit Transfer (DBT) programme of the Government of India.
CORPORATE SOCIAL RESPONSIBILITY

The bank has provided sanitation facilities to 56 govt. schools mostly in rural
areas. The bank has established 32 rural health centers where patients are provided
primary healthcare and medicine free of cost.

Page 48
UNIQUE CSR ACTIVITY: ADOPTION OF GIRL CHILD

As part of its corporate social Responsibility’ the Bank has devised a unique
programme to adopt girl children. The policy of Girl Child Adoption was
introduced by the bank in 2011 under which the bank adopts girl children from
SC/ ST/ OBC/ economically weaker sections / backward areas/ poor families from
the age of 5 years onwards to promote girl child education, mostly from rural and
backward areas. The bank has adopted 1163 girl children all over the country.
INITIATIVES
FREEBUZZ': missed call services to enable customers to know their account
balance easily
V-GYANSAGAR: a unique initiative taken by Vijaya Bank to impart financial
literacy to public. It is Android based mobile application that enables its
subscribers to receive regular updates on banking and financial news. It provides
explanation of banking terminologies.
V-ABACUS: This initiative enables the public to open a bank account by giving a
missed call. Tablet banking facility has been implemented.
V-QUICKPAY: a unique next generation bill payment service where bill
payment is made by scanning the QR code on the bill generated by the merchant.
There is no need to swipe credit or debit cards.
V-FEE HIVE: The bank's in-house software development team has developed an
application for collection of fees by educational institutions, collection of monthly
maintenance charges by housing societies, collection of fees by clubs.

Page 49
This application was implemented in various prestigious institutions like IIM-

Kozhikode, Mount Carmel College -Bangalore, Army Public School-Delhi,
MSRIT Bangalore and Vasari Pearl Apartment.
V-EWALLET: a unique secured small payment collection system designed using
UNIQUE-pull technology.
UPI: Vijaya Bank has recently rolled out Unified Payment Interface (UPI) which
is introduced by the RBI.
VIJAYA BANK SECURE INTERNET PAYMENT
Verified by Visa (VBV) is an easy to use, secured online payment service

from Vijaya Bank that lets you shop securely online with your existing Vijaya
Bank Visa Credit/Debit Card. This service through a simple checkout process,
confirms your identity when you make purchases on the Internet.
MASTERCARD® SECURECODE™
It is an easy to use, secured online payment service from Vijaya Bank that lets you
shop securely online with your existing Vijaya Bank MasterCard Credit Card.
This service through a simple checkout process, confirms your identity when you
make purchases on the Internet. Through a personal assurance message displayed
on the screen and which is shared only between you and the Vijaya Bank, the
authenticity of the page requesting your authentication is assured. We suggest you
to keep changing your password at regular intervals for increased safety.
DIRECTORS’ REPORT 2016-17

Page 50
The Board of Directors has pleasure in presenting the 37th Annual Report of the
Bank along with the audited Balance Sheet and Profit and Loss Account for the
year ended March 31, 2017.
PERFORMANCE HIGHLIGHTS OF THE BANK DURING THE YEAR

2016-17
CAPITAL, RESERVE & NET WORTH

The Authorized Capital of the Bank at present is `3000 Crore divided into 300
Crore shares of `10 each. At present, Government of India holds 70.33% Equity
Share Capital of the Bank. The total paid up (equity share) capital of the Bank is `
998.84 Crore. In March 2017 the Bank has allotted 6, 62, 85,025 equity shares of `
10 each to GOI at a premium of ` 23.19 per share on preferential basis with total
inflow of ` 220 Crore. For the year ended 31.03.2017, the total Reserves and
Surplus is ` 7152.64 Crore. The Net Worth of the Bank increased from ` 6550.50
Crore to ` 6976.90 Crore this year.
WORKING RESULTS
Net profit for the year 2016-17 increased from ` 382 Crore as on 31.03.2016 to `
750 Crore as on 31.03.2017, by registering a Y-o-Y growth rate of 96.56%. The
Operating Profit of the Bank has increased from ` 1549 Crore as on 31.03.2016 to
` 2421 Crore as on 31.03.2017, there by recording a growth rate of 56.32%.

Page 51
The Total Deposits of the Bank grew from ` 125441 Crore as on 31.03.2016 to
`133012 Crore as on 31.03.2017. The Retail Term Deposits of the Bank increased
from ` 44269 Crore as on 31.03.2016 to ` 47517 Crore as on 31.03.2017. The
Gross Advances of the Bank increased from ` 90,765 Crore as on 31.03.2016 to `
96821 Crore as on 31.03.2017. The Retail Advance of the Bank grew from `
23,593 Crore as on 31.03.2016 to ` 29335 Crore as on 31.03.2017. The Total
Business of the Bank grew from ` 2, 16,206 Crore as on 31.03.2016 to ` 2, 29,833
Crore as on 31.03.2017. The cost of deposits decreased from 7.34% in 2015- 16 to
6.50% in 2016-17. The Net Interest Margin of the Bank improved from 2.27% as
on 31.03.2016 to 2.77% as on 31.03.2017.
THE TREND IN FINANCIAL RESULTS OF THE BANK IS AS UNDER. (Rs. in crore)

Sl. Item 2017-18 2018-19 Annual
No. increase
1 Interest Income 12084 12379 2.45%
2 Interest Expenditure 9323 8873 -4.82%
3 Net Interest Income(1-2) 2761 3506 27.01%
4 Non-interest income 874 1651 88.96%
I. Profit on sale of 182 769 321.57%
investments
Ii. Other non-interest 691 882 27.60%
income
5 Net Total Income 3635 5158 41.90%
(3+4)
6 Operating expense 2086 2737 31.20%
I. Staff Expenses 1247 1748 40.17%
ii. Other operating 839 989 17.86%
expenses
Page 52
7 Operating profit 1549 2421 56.32%

8 Operating profit 1366 1652 20.91%
(excl. Treasury profit)
9 Provisions and 1167 1671 43.15%
Contingencies
10 Net Profit 382 750 96.56%
IMPORTANT PROFITABILITY RATIOS

Sl ITEMS 2017-18 2018-19
No. (%) (%)
1 Yield on Funds 8.77 8.14
2 Cost of Funds 6.77 5.83
3 Interest spread (1-2) 2.00 2.31
4 Yield on Advances 10.52 9.89
5 Cost of Deposits 7.34 6.50
6 Yield on Investments
(Excluding RIDF) 7.60 7.65
Excluding Trading Profit 8.07 9.32
Including Trading Profit
7 Other Operating Expenses 0.61 0.65

To Average Working Funds

Page 53
8 Cost – Income ratio 57.39 53.06
9 Establishment cost to average 0.91 1.15

working Funds
The Listing Page of Vijaya Bank presents the Incorporation Date, Public Issue
Date, Book Closure dates, Face Value, Key Listing information, Indices it is a part
of, and the Exchanges where the company is listed.
KEY DATES
 Incorporation Date-01/05/1931
 Public Issue Date-27/11/2000
 Year Ending Month- March
 AGM Month -June
 Book Closure Start Date-17/06/2017
 Book Closure End Date-23/06/2017
 Face Value-10.0
 Market Lot Of Equity Shares-1
 BSE Code-532401
 BSE Group- A
THE COMPANY FORMS A PART OF FOLLOWING INDICES –

 Nifty 500
 BSE 500
Page 54
LISTED ON
 Cochin Stock Exchange Ltd.
 MCX Stock Exchange
 National Stock Exchange of India Ltd.
 The Stock Exchange, Mumbai
CHAPTER – 5
DATA ANALYSIS AND
INTERPRETATION
1. SINCE WHEN YOU HAVE BEEN THE ACCOUNT HOLDER OF
THIS BANK.
Table No:5.1-showing since when you have been the

Page 55
account holder of this bank

Options Respondents Percentage (%)
Since 1 year 10 33%
Since 2 year 15 50%
Since 3-5 year 05 17%
TOTAL 30 100%
ANALYSIS
 From the above table we can known from since when the customer
are been the account holder of this bank.
 To analyze the above statement we have taken 30 respondents.
 Among the 30 respondents 10 respondents are the account holders
since from 1 year.
since from 1 to 3 years.
since from 3 to 5 years.

Page 56
Graph 5.1 showing since when you have been the account
holder of this bank
17%
33%
SINCE 1 YEAR
SINCE 1-3 YEAR
SINCE 3-5 YEAR
50%
INFERENCE
 From the above graph we can know from since when the customer
are been the account holder of this bank.
 Among the 100% respondents 33% respondents are the account
holder since from 1 year.
holders since from 1 to 3 years.
holders from 3 to 5 years.

Page 57
2. UNDERSTAND THE CONCEPT OF DEMONETISATION
Table :5.2-showing understand the concept of demonetisation

Option Respondents Percentage
Yes 20 67%
No 10 33%
ANALYSIS
 From the above table we come to know the concept of
demonetization.
 To analyze the above table we taken 30 respondents.
 Among the 30 respondents 20 respondents have accepted or agreed
that they understood the concept of demonetisation.
 Among the 30 respondents 10 respondents have not accepted or
agreed that have understood the concept of demonetisation.

Page 58
Graph 5.2 showing understand the concept of

demonitization
33%
Yes
No
67%
INFERENCE
 From the above graph we come to know the concept of
demonetisation.
 To analyze the above graph we have taken 30 respondents.
 Among the 100% respondents 67% respondents have accepted or
agreed that they have understood the concept of demonetisation.
 Among the 100% respondents 33% respondents have not accepted
or agreed that they have understood the concept of demonetisation.

Page 59
3. SERVICE PROVIDED BY VIJAYA BANK
Table:5.3-showing service provided by Vijaya bank

Option Respondents Percentage (%)
Yes 16 54%
No 14 46%
ANALYSIS
 From the above table we can understand the service provided by
Vijaya bank.
 To analyze the above table we have taken 30 respondents.
 Among the 30 respondents 26 respondents have agreed or accepted
that the service rendered by Vijaya bank is acceptable.
 Among the 30 respondents 14 respondents have not agreed or
accepted that the service rendered by Vijaya bank is acceptable.

Page 60
Graph 5.3 showing service provided by Vijaya Bank
Yes
No
46%
54%
INFERENCE
 From the above graph we can understand the service provided by
Vijaya bank.
 To analyze the above graph we have taken 30 respondents.
 Among the 100% respondents 54% respondents have agreed or
 Among the 100% respondents 46% respondents have not agreed or
4. CASH LESS TRANSACTION PUT STOP TO

CORRUPTION
Page 61
Table:5.4 showing cash less transaction puts stop to corruption

Yes 12 40%
No 18 60%
ANALYSIS
 From the above table we come to know that whether the cashless
transaction puts stop to corruption.
 To analyze the above statements we have taken 30 respondents.
 Among the 30 respondents 12 respondents have agreed that the
cash less transaction can stop the corruption to some extent and bring
changes in banking sector.
 Among the 30 respondents 18 respondents have not agreed that the
cash less transaction can stop the corruption to some extent and bring
changes in banking sector.

Page 62
Graph 5.4 showing cash less transactions puts stop to

corruption
Yes
No
40%
60%
INFERENCE
 From the above graph we come to know that whether the cash less
transaction puts stop to corruption.
 Among the 100% respondents 40% respondents have agreed that
the cash less transaction can stop the corruption to some extent and
bring changes in banking sector.
 Among the 100% respondents 60% respondents have not agreed
that the cash less transaction can stop the corruption to some extent and
bring changes in banking sector.

Page 63
5. IF YES, ARE YOU SATISFIED WITH THIS SYSTEM
Table:5.5-showing if yes, are you satisfied with this system

Satisfied 5 42%
Neither satisfied 3 25%
nor dissatisfied
Dissatisfied 4 33%
ANALYSIS
 From the above table we can know how satisfied are the customer
with this system.
 Among the 30 respondents 5 respondents are completely satisfied
with this system.
 Among the 30 respondents 3 respondents are neither satisfied nor
dissatisfied that is they are in neutral stage to accept this system.
 Among the 30 respondents 4 respondents are not satisfied with
system and they are not agreed to accept that cash less transaction stop
the corruption.

Page 64
Graph 5.5 showing if yes are you satisfied with the

system
Satisfied
36% 36% neither satisfied nor dissatisfied
Dissatisfied
27%
INFERENCE
 From the above graph we can know how satisfied are the customer
with this system.
 Among the 100% respondents 42% respondents are completely
satisfied with this system.
 Among the 100% respondents 25% respondents are neither
satisfied nor dissatisfied that is they are in neutral stage to accept this
system.
 Among the 100% respondents 33% respondents are not satisfied
with system and they are not agreed to accept that cash less transaction
stop the corruption.

Page 65
6. CORDIAL RELATIONSHIP BETWEEN BANKERS

AMD CUSTOMERS
Table:5.6-showing cordial relationship between bankers and

customers
Yes 15 50%
No 15 50%
ANALYSIS
 From the above table we will come to know the cordial
relationship between bankers and customers
 To analyze the above statement we have taken 40 respondents
 Among the 30 respondents 15 respondents that they have the
cordial relationship between customers and bankers and helps in
development of banking sector
 Among the 30 respondents 15 respondents say that they have no
cordial relationship between the customers and bankers and does not
helps in development of banking sector.

Page 66
Graph :5.6-showing cordial relationship between banker and

customer
1
2
50% 50%
INFERENCE
 From the above graph we will come to know the cordial
relationship between the bankers and customers.
 Among 100 % respondents 50 % respondents say that they have
cordial relationship between the customers and bankers and help in
development of banking sector.
 Among the 100% respondents 50% respondents say that they
have no cordial relationship between customers and bankers and do not
help in development of the banking sector.

Page 67
7. RECREATION FACILITIES FOR CUSTOMERS
Table:5.7-showing recreation facilities for the customers

Yes 19 63%
No 11 37%
ANALYSIS
 From the above table we come to known the recreation facilities
provided by bankers to customers
 Among the 30 respondents 19 respondents agree that they have
been provided recreation facilities in their bank provides recreation
facilities.
 Among the 30 respondents 11 respondents are not agreed that they
been provided recreation facilities in their bank and they are not ready
to accept that their bank provides recreation facilities.

Page 68
Graph 5.7 showing recreation facilities to the customers
37% Yes
No
63%
INFERENCE
 From the above graph we have come to known the recreation
facilities provided by the bank to the customers.
 Among the 100% respondents 63% respondents agree that they
have been provided recreation facilities in their bank and they are ready
to accept that their bank provides recreation facilities
 Among the 100% respondents 37% respondents are not agreed that
they have been provided recreation facilities in their bank and they are
not ready to accept that their bank provides recreation facilities.

Page 69
8. MORE IMPORTANCE GIVEN TO THE FACILITIES

IN YOUR BANK
Table 5.8-showing more importance given to the facilities in your

bank
Loan facilities 5 17%
Over draft 2 6%
facilities
ATM facilities 18 60%
Online banking 5 17%
ANALYSIS
 From the above table we can know the important facilities given in
your bank.
 Among the 30 respondents 5 respondents have been given more
importance to loan facilities.
importance to ATM facilities.
importance to online banking facilities.

Page 70
Graph 5.8 showing more importance given to the

facilities in your bank
17% 17%
loan facilities
over draft facilities
6% ATM facilities
online banking facilities
60%
INFERENCE
 From the above graph we can knows the important facilities given
in your bank
 To analyze above settlement we have taken 30 respondents.
 Among the 100% respondents 17% respondents have been given
more importance to loan facilities.
 Among the 100% respondents 6% respondents have been given
overdraft facilities.
 Among the 100%respondents 60%respondents have been given
more importance ATM facilities.
 Among the 100%respondents 17%respondents have been given
more importance to online banking facilities.

Page 71
9. DEMONITISATION CONCEPT BY NARENDRA MODI
Table 5.9-showing demonetisation concept by Narendra Modi

Yes 22 73%
No 8 27%
ANALYSIS
 From the above we can know the concept of demontisation by
Narendra Modi.
 Among the 30respondents 22 respondents have been agreed the
concept of demontisation system by Narendra Modi.
 Among the 30 respondents 8 respondents have not agreed the
concept of demontisation system by Narendra Modi.

Page 72
Graph 5.9 showing demonitisation concept by Narendra

modi
27% Yes
No
73%
INFERENCE
 From the above graph we can know the concept of demonetisation
by Narendra Modi.
 Among 100% respondents 73% respondents have agreed the
concept of demonetisation system by Narendra Modi.
the concept of demonetisation system by Narendra Modi.

Page 73
10 .SATISFACTORY LEVEL OF CHANGES BY

DEMONETISATI0N
Table :5.10-showing satisfactory level of changes by demonetisation

Satisfied 18 82%
Neither satisfied nor 2 9%
dissatisfied
Dissatisfied 2 9%
ANALYSIS
 From the above table we can know the satisfactory level of
changes by demonetisation.
 Among the 30 respondents 18 respondents have satisfied with the
changes made by demonetisation.
 Among the 30 respondents 2 respondents are in neutral stage that
is they are neither satisfied nor dissatisfied from the changes made by
demonetisation.
 Among the respondents 2 respondents dissatisfied by the changes
made by demonetisation.

Page 74
Graph 5.10 showing satisfactory level of changes by

demonitisation
9%
9%
Satisfied
neither satisfied nor dissatisfied
dissatisfied
82%
INFERENCE
 From the above graph we can know the satisfactory level of
changes by demonetisation.
 To analyze the above statement we have taken 30 respondents have
satisfied with the changes made by demonetisation.
 Among the 100% respondents 9% respondents are in neutral stage
that is they are neither satisfied nor dissatisfied from the changes made
by demonetisation.
 Among the 100% respondents 9% respondents dissatisfied by the
changes made by demonetisation.

Page 75
11. CUSTOMER RESPONSE ON IMPACT OF

DEMONETISATION
Table 5.11-showing customer response on impact of demonetisation
Agreed 12 40%
Neither agreed 10 34%
nor disagreed
Disagreed 8 26%
ANALYSIS
 From the above table we come to know the customer response on
impact of demonetisation.
 Among the 30 respondents 12 respondents have agreed that
demonetisation is a good concept and they agree the concept of
demonetisation.
 Neither among the 30 respondents 10 respondents are in neutral
stage that neither agree nor disagree the concept of demonetisation.
 Among the respondents 8 respondents are disagreed with the
concept of demonetisation.

Page 76
Graph 5.11 showing customers response to impact of

demonetisation
Agreed
26%
Neither agreed nor disagreed
Disagreed
40%
34%
ANALYSIS
 From the above graph we come to known the customer response
on impact of demonetisation.
demonetisation is a good concept and they agree the concept of
demonetisation.
 Neither among the 100% respondents 34% respondents are in
neutral stage that is they neither agree nor disagree the concept of
demonetisation.
 Among the 100% respondents 26% respondents are disagreed with
the concept of demonetisation.

Page 77
12. SERVICE RENDERED BY VIJAYA BANK

Table 5.12-showing service rendered by Vijaya bank
Very good 8 26%
Good 15 50%
Bad 6 20%
Very bad 1 4%
ANALYSIS
 From the above table we come to know the service rendered by
Vijaya bank to the customers.
 Among the 30 respondents 8 respondents have agreed that service
rendered by Vijaya bank is very good.
rendered by Vijaya bank is good.
rendered by Vijaya bank is bad.
 Among the 30 respondents 1 respondent have agreed that service
rendered by Vijaya bank is very bad.

Page 78
Graph 5.12 showing service rendered by Vijaya Bank

4%
20% 26%
Very good
Good
Bad
Very bad
50%
INFERENCE
 From the above graph we come to know the service rendered by
Vijaya bank to the customer.
service rendered by Vijaya bank is very good.
service rendered by Vijaya bank is good.
 Among the 100% respondents 20% respondents have experienced
that the service rendered by Vijaya bank is bad.
 Among the 100% respondents 4% respondents have experienced
that the service rendered by Vijaya bank is very bad.
12. BANKER RESPONSE TO CUSTOMERS

Page 79
Table:5.13-showing banker response to customers

Yes 23 77%
No 7 33%
ANALYSIS
 From the above table we come to known the banker response to the
customers.
 In the above table we have taken 30 respondents.
banker response to the customer is good and acceptable.
 Among the 30 respondents 7 respondents have not agreed that the
service rendered by the banker to the customer is good and not
acceptable.

Page 80
Graph 5.13 showing bankers response to customers
23%
Yes
No
77%
INFERENCE
 From the above graph we come to known the banker response to
the customers.
the banker response to the customers is good and acceptable.
that the service rendered by the banker to the customer is good and not
acceptable.

Page 81
13. RESPONSE OF CUSTOMERS TO SERVICE

RENDERED BY VIJAYA BANK.
Table: 5.14-showing response of customer to service rendered by
Vijaya bank.
Yes 26 86%
No 4 14%
ANALYSIS
 From the above we come to know the response of customer to
service rendered by Vijaya bank.
service rendered by Vijaya bank is good were we can understand the
response of customer in regarding service rendered by Vijaya bank.
 Among the 30 respondents 4 respondents are not agreed with the
service rendered by Vijaya bank.

Page 82
Graph 5.14 showing customers response to service

rendered by vijaya bank
14%
Yes
No
86%
INFERENCE
 From the above graph we come to known about the customer’s
response to service rendered by Vijaya bank.
 From the above graph among the 100% respondents 86%
respondents have agreed that service rendered by bank is good and
acceptable.
 From the above graph among the 100% respondents 14%
respondents have not agreed that service rendered by Vijaya bank good
and acceptable.

Page 83
14. WORKING EXPERIENCE IN VIJAYA BANK
Table:5.15 showing working experience in Vijaya bank

1 to 5 year 5 17%
5 to 10 year 8 26%
10 to 20 year 12 40%
More than 20 year 5 17%
ANALYSIS
 From the above table we come to know the working experience of
an employee in Vijaya bank.
 Among the 30 respondents 5 respondents have the working
experience of 1 to 5 years.
 From the above table we come to know that among the 30
respondents 8 respondents have the working experience of 5 to 10
years.
 From the above table says that among the 30 respondents 12
respondents has a working experience of 10 to 20 years.
 From the above table we come to know that among the 30
respondents 5 respondents have the working experience of more than 20
years.

Page 84
Graph 5.15 showing working experience in Vijaya Bank
17% 17%
1 to 5year
5 to 10year
10 to 20year
More than 20year
26%
40%
INFERENCE
 From the above table we come to know the working experience of
the employee in the bank.
 For the interpretation of the above statement we have taken 30
respondents.
 Among 100% respondents 17% respondents have a working
 Among 100% respondents 26% respondents have a working
 Among the 100% respondents 40% respondents have a working
 Among the 100% respondents 17% respondents have a working
experience of more than 20 years.

Page 85
15. MANAGING THE SITUATION OF

DEMONETISATION PERIOD
Table:5.16-showing managing the situation of demonetisation period
Yes 12 40%
No 18 60%
ANALYSIS
 From the above we come to know that how the employees
managed the situation of demonetisation period.
 In the above table we have taken 30 respondents to analyze the
above statement.
 Among the 30 respondents 12 respondents have agreed that they
could manage the situation in the demonetisation period and manage the
customer during the demonetisation periods.
 Among the 30 respondents 18 respondents have not agreed that
they could not manage the situation in the demonetisation period and
could not mange customer during the demonetisation period.

Page 86
Graph 5.16 showing managing the situation of

demonitisation period
Yes
40% No
60%
INFERENCE
 Above graph shows that the employees of bank manage the
situation of demonetisation period.
 In the above graph we have taken 30 respondents.
they could manage the customer during the demonetisation period.
 Among 100% respondents 60% respondents have not agreed that
they could manage the customer during the demonetisation period and
could not manage the customers in the bank.

Page 87
16. DEMONETISATION HELPS IN GROWTH OF

BANKING SECTOR
Table:5.17-showing demonetisation helps in growth of banking sector
Yes 19 63%
No 11 37%
ANALYSIS
 From the above table we will understand whether the
demonetisation will helps in growth in banking sector.
 Among the 30 respondents 19 respondents have agreed that
demonetisation helps in growth of banking sector and improves the
growth rate of bank.
 Among the 30 respondents 11 respondents have not agreed that
demonetisation helps in growth in banking sector.
 From the above table we can completely analyze that more number
of respondents has agreed to the point that demonetisation helps in
growth in banking sector.

Page 88
Graph 5.17 showing demonitisation helps in growth of

banking sector
37%
Yes
No
63%
INFERENCE
 From the above graph we come to know that how demonetisation
will helps in growth in banking sector.
demonetisation will help in growth in banking sector.
 From the above table among that 100% respondents 37% of the
respondents have not agreed that demonetisation will help in growth of
banking sector.
 From the above table we analyzed that 63% of respondents have
agreed that demonetisation will bring change in banking sector and
develop the growth of banks.

Page 89
17. CASH LESS TRANSACTION BRING CHANGES IN

BANKING SECTOR
Table:5.18-showing cash less transaction bring change in banking
sector
Yes 17 57%
No 13 43%
ANALYSIS
 From the above table we understand whether the cash less
transaction bring changes in banking sector.
 In the above table we can take 30 respondents.
 Among the 30 respondents 17 respondents have accepted that the
cash less transaction bring change in banking sector.
 Among the 30 respondents 13 respondents have not accepted that
cash less transaction bring change in banking sector.
 The above tables have showed how the opinion of respondents
being differs from one person to another person.

Page 90
Graph 5.18 showing cashless transaction bring change in

banking sector
43%
Yes
No
57%
INFERENCE
 From the above graph we come to know whether the cash less
transaction bring change in banking sector.
 We have taken 30 respondents for the above graph to analyze that
whether cash less transaction bring change in banking sector.
 Among the 100% respondents 57% respondents have accepted that
cash less transaction bring changes in banking sector.
 Among the 100% respondents 43% respondents have not accepted
that cash less transaction bring changes in banking sector.

Page 91
18. SUPPORT DEMONETISATION CONCEPT BY

EMPLOYEES OF BANK
Table:5.19-showimg support demonetisation concept by employees of
bank
Agree 22 73%
Disagree 5 17%
Neither agree nor 3 10%
disagree
ANALYSIS
 From the above table we understand how employees of bank
support the concept of demonetisation.
 Among the 30 respondents 22 respondents have agreed to support
the concept of demonetisation being employees of bank.
 Among the 30 respondents 5 respondents have disagreed to
support the concept of demonetisation being the employees of the bank.
 Among the 30 respondents 3 respondents have neither agreed nor
disagreed that is they are in neutral stage to support the concept of
demonetisation being the employees of the bank.

Page 92
Graph 5.19 showing support demonitisation concept by

employees of bank
10%
Agree
17% Disagree
Neither agree nor disagree
73%
INFERENCE
 From the above graph we can know the percentage of employees
who support the concept of demonetisation by the employees of the
bank.
 For the above graph we have taken 30 respondents.
 Among the 100% respondents 73% respondents have agreed to
 Among the 100% respondents 17% respondents have disagreed to
 Among the 100% respondents 10% respondents are in the neutral
stage where they neither agree nor disagree.

Page 93
CHAPTER-6
FINDINGS
SUGGESTION AND CONCLUSSION
FINDINGS
1. From this research I have analyzed what is the impact of

demonetisation on banking activities.
2. During the analysis period we come to known that majority
of the people known the concept of demonetisation.
3. From this research we come to know that Vijaya bank
perused good service to the customers during the
demonetisation.
4. Majority of the people accept that there will be growth in
the banking sector after demonetisation.
5. From this research we came to know that Vijaya bank will
provide the recreation facilities to the customer.
6. Majority of the customer says that the service provided by
the Vijaya bank is good.

Page 94
7. More number of customers says that bank employees were

able to manage the situation during demonetisation period.
8. Only less number of people accepts that cash less
transaction bring changes in banking sector.
9. Being the employees of bank majority of the employees
support the demonetisation concept.
10. During the study it was observed that Vijaya bank has been
functioning effectively.
11. Bank profits are increasing yearly.
12. Interest rates charged by the Vijaya bank on loans and
advances are reasonable and convenient to customers.
13. Major parts of its deposits are in the form of fixed deposit.
14. In its income the major parts is form the interest from
investment and loans.
15. Major parts of loan are going out in the form of housing
loans.
16. Banks look for the best service to be provided to the
customer.

Page 95
17. During demonetisation period Vijaya bank served the good

service to customers.
18. All the branches of the bank are fully air conditioned and
fully computerized.
19. The satisfactory level of customer in the bank is acceptable.
20. The banker’s response to the customer is well and good.
21. Total banking transaction is fully LAN system.
SUGGESTION
1. It is suggested to mobilization of funds in lending activities.

2. Cash reserves have to be increased to generate batter
performance.
3. Share capital has to be increased out of the total income in
future.
4. Banks has to introduce its website.
5. It has to increase its distribution network.
6. Bank has to introduce modern electronic machines.
7. It has to give better customer satisfaction.

Page 96
8. Suggestion on mobilization of funds in lending activities.

 Loans (a) deemed loan
(b) Term loan
 Cash credit
 Overdraft
 Discounting of bill
 Long term and short term loans
9. Try to give better customer satisfaction for the customers.
10. We suggest the bank for the mobilization of funds in
lending activities.
11. We suggest the bank to bring the awareness about cash less
transaction.
12. We suggest the bank to give more importance to online

banking facilities.
13. We suggest the bank to maintain the cordial relationship

between the customers.

Page 97
CONCLUSION
1. Finally from demonetisation concept it is possible to stop

counterfeit currency using for terrorism activities.
2. Black money: by demonetisation of higher currency suddenly
it will take out illegally stored money from holders.
3. Transparency: moving towards digital economy may bring
the transparency in the system.
4. Easy monitoring: digital payment easy to monitor cash flow.
5. Less chance of avoiding the taxes.
6. Transparency in the system will bring more invest from
foreign countries.
7. Losses to small vendors trade because of cash crunch.
8. Many people died because some hospitals not accepted old
money and rejected treat them.
9. The repeatedly changes in the government rules was
misleading the people.
10. Many people do not have bank accounts in rural areas and
hilly areas so they faced problems during demonetisation.
11. Lots of daily basis labours removed from the work

Page 98
ANNEXURE
FOR THE CUSTOMERS

1. How long have you been the customer of the bank?
 Since 1 year
 Since 1 to 3 year
 Since 3 to 5 years
2. Did you understand what exactly demonetisation is

 Yes
 No
3. Did Vijaya bank pursued you good service during the

demonetisation period
 Yes
 No
4. (a) Do you think corruption can stop through making cash

less transaction?
 Yes
 No

Page 99
(b) If yes, how satisfied are you with system

 Satisfied
 Neither satisfied nor dissatisfied
 Dissatisfied
5. During demonetisation period was the relationship between

banker and customer was cordial?
 Yes
 No
6. Does your bank conduct any recreation facilities for the

customer?
 Yes
 No
7. Which of the following facilities are given more

importance in your bank?
 Loan facilities
 Overdraft facilities
 ATM facilities
 Online banking facilities

Page 100
8. (a) Demonetisation was a good step taken by our Prime

Minister Narendra Modi?
 Yes
 No
(b) If yes, how satisfied you are with the change

 Satisfied
 Neither satisfied nor dissatisfied
 Dissatisfied
9. How the banker response to the customer was has an

impact of demonetisation on banking activities?
 Satisfied
 Neither satisfied nor dissatisfied
 Dissatisfied
10. How best Vijaya bank serves the customer?

 Very good
 Good
 Bad
 Very bad
11. Are the banker responses to the customer to be improved?

 Yes
 No
Page 101
12. Is the service provided by bank need to the improved?

 Yes
 No
FOR THE EMPLOYEES

1. From how many years you have been working in Vijaya
bank?
 1 to 5 years
 5 to 10 years
 10 to 20 years
 More than 20 years
2. Where you able to manage the customer during the

demonetisation period?
 Yes
 No
3. Do you think through demonetisation there will be growth

in banking sector?
 Yes
 No

Page 102
4. Can cashless transaction bring change and reduce

corruption?
 Yes
 No

Page 103
BIBLIOGRAPHY
BOOK REFERRED:
1. B. Mariyappa advanced financial management,

Himalaya publishing house (2008)
2. O.R. Krishna swami and B.J.Satyaprasad, Business
Research Methods, Himalaya publishing house (2006).
3. Annual financial reports of bank and journals of bank.
4. Shashi.k.Gupta, R.K.sharma and Neeli Gupta Financial

Accounting, kalyani publishers (2008).
REPORTS: Collected from Vijaya Bank.
WEBSITES:
www.wikipedia.com
www.vijayabank.com

Page 104

A Study On Post Demonetization Effect On Banking Activities

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Study On Post Demonetization Effect On Banking Activities

Uploaded by

Copyright:

Available Formats

“A STUDY ON POST DEMONETISATION EFFECT ON BANKING ACTIVITIES”

In our present day of economy, finance is referred as the provision of money at a

ACHARYA INSTITUTE OF GRADUATE STUDIES

Finance or finance function covers the following financial activities in any

 Planning of financial requirement.

Proper working capital management, i.e., cash management, receivables

Business finance is required for the established of every business organization.

Besides producers, it may be necessary to change the office set up in order to

ACHARYA INSTITUTE OF GRADUATE STUDIES

this era of competition, lot of money is required to be spent on activities for

Capital budgeting (or Investment appraisal) is the planning process used to

ACHARYA INSTITUTE OF GRADUATE STUDIES

The companies have two options with them:

 They can retain these profits within the company

ACHARYA INSTITUTE OF GRADUATE STUDIES

The following are the types of dividend policies:

 Constant pay-out ratio

It deals with the requirements, receipts and disbursements of funds in the

Public finance can be classified into:

It deals with the requirements, receipts and disbursement of funds in case of an

ACHARYA INSTITUTE OF GRADUATE STUDIES

 LOCAL SELF GOVERNMENT

PUBLIC FINANCE  STATE GOVERNMENT

PRIVATE  PERSONAL FINANCE

FINANCE  BUSINESS FINANCE

 FINANCE OF NON PROFIT

ACHARYA INSTITUTE OF GRADUATE STUDIES

INTRODUCTION TO FINANCIAL MANAGEMENT

Financial management is an integral part of general management and not merely a

MEANING OF FINANCIAL MANAGEMENT

Financial management is that managerial activity which is concerned with the

DEFINITIONS OF FINANCIAL MANAGEMENT

According to Joseph and Massie, “Financial management is the operational

Raised necessary for efficient operations”.

ACHARYA INSTITUTE OF GRADUATE STUDIES

FINANCIAL MANAGEMENT CONCERNED WITH THREE

SCOPE OF FINANCIAL MANAGEMENT:

a. Financial management has coverage. It is exposed to new areas at present.

ACHARYA INSTITUTE OF GRADUATE STUDIES

 It has more meaningful and its role increases.

ACHARYA INSTITUTE OF GRADUATE STUDIES

GOALS OR OBJECTIVES OF FINANCIAL MANAGEMENT

A) Profit maximization: Profit maximization is a common objective of every

C. Maintenance of adequate liquid assets in the firm.

 Ensuring a fair return to shareholders.

ACHARYA INSTITUTE OF GRADUATE STUDIES

Financial decisions are the procurement and effective utilization of

Financial decisions can be broadly divided into 4 categories

1. Requirement of funds decision.

1. Requirement of funds decision: In business requirement of funds and exact

ACHARYA INSTITUTE OF GRADUATE STUDIES

3. Investment decision: It involves selection of assets in which funds are invested

4. Dividend decision: Dividend decision is concerned with the decision to play or

INTRODUCTION TO INDIAN BANKING SYSTEM

MEANING OF BANKING SYSTEM: -

A banking system is a group or network of institutions that provide financial

DEFINITION OF BANKING SYSTEM:

Banking system in simple words refers to a chain of financial institutions that

HISTORY OF BANKING SYSTEM IN INDIA:

ACHARYA INSTITUTE OF GRADUATE STUDIES

THE FIRST CURRENCY BAN:

SIMILARITIES IN 1978 AND 2016 BAN:

ACHARYA INSTITUTE OF GRADUATE STUDIES