CONTENT

S.no. TITLE Page No.

1 Introduction 3

2 Research Design 24

3 Company Profile 26

4 Review Of Literature 38

5 Objectives & Scope Of 40

The Study
6 Analysis & 41
Interpretation of Data
7 Findings 66

8 Suggestions 67

9 Conclusion 68

10 Reference 69

1
2
 INTRODUCTION

Bank:

Bank is a business establishment that safeguards people’s money anduses it to

make loans and investments. People keep their money in banks rather than at home
for several reasons. Money is safer in a bank than at home. A checking account with a
bank provides an easy way to pay bills. Also, money deposited in many types of bank
accounts earns additional money for the depositor. People who put money in a bank
are actually lending it to the bank, which may pay them interest for the use of their
funds.

Banks are an essential part of business activity. Business companies borrow

from banks to buy new equipment and build new factories. People who do not have
enough money to pay the full price of a home, an automotive, or some other
product also borrow from banks. In these ways, banks promote the sale of a wide
range of goods and service.

Banking is nearly as old as civilization. The ancient Romans developed an

advanced banking system to serve their vast trade network. Which extended
throughout Europe Asia, and much of Africa in A.D.395, the Roman Empire split into
an eastern and a western section? The west Roman Empire fell in the late 400’s. And
most of its trade and financial networks were destroyed. Banking almost disappeared
from Western Europe. However, the Justinian code, a collection of laws issued in the
500’s in the east Roman Empire, included many banking laws.

3
Meaning of Bank:
Modern banking began to develop between the 1200’s and the 1600’sin Italy. The
word bank comes from the Italian word ban co or banca, meaning bench. Early Italian
bankers conducted their business on benches inthe street. Large banking firms were
established in Florence, Rome, Venice, and other Italian cities, and banking activities
slowly spread throughout Europe.

Banks in the United States differ greatly from those in most other countries.
Most of the sections of this article deal with banking practices and the history of
banks in the United States.

Definition:
The banking companies’ act of India defines “A bank is a financial institution which
accepts money from the public for the purpose of lending or investment repayable on
demand or otherwise withdraw able by cheques draft or otherwise”

Bank Services:
Safeguards deposits. Money in a bank is safe. Banks keep cash in fireresistant vaults
and are insured against the loss of money in a robbery. In the United States, Canada,
and many other countries, the government also insures bank deposits. This insurance
protects people from losing their money if the bank is unable to repay the funds.

4
 A bank is not only a safe place to keep money but also a profitable one, money placed in
a savings account earns interest at a specified annual rate. Manybanks also offer a special
account for which they issue a document called acertificate of deposit. Most CD accounts
pay a higher rate of interest than regular savings accounts do. However, the certificate
must be held for a certain period, such as one or two years, to earn this high rate of
interest. Banks also offer money market accounts. These accounts pay interest based on
current conditions in the money market. Which deals in corporation and government
short-term securities?

Providing a mean of payment. People who have money in a bank checking account can
pay bills by simply writing a check and mailing it. A check is a safe method of payment,
the canceled check provides written proof that payment was made.

Banks also offer negotiable order of withdrawal accounts, usually called NOW accounts.
Like a savings account, a NOW account pays interest. But the depositor can transfer funds
to someone else by writing a negotiable order of withdrawal, which is like a check.

Many banks also offer credit cards as a means of payment. People can pay for their
purchases at stores and other establishments by using the cards to charge sums up
to a total amount determined by the bank. The billers are paid directly by the bank.
The customer then receives a monthly bill from the bank to cover the amount charged.
In many cases, the cardholder can choose to pay only part of the bill; however,
cardholders must then pay a finance charge on the unpaid part.

Banks may also issue debit cards, which resemble credit cards. When a cardholder uses a
debit cards, the amount of the purchases is typically deducted

5
Directly. from the cardholder’s checking account. Some banks issue cards that can be used
either as debit cards or credit cards.

Electronic banking many banks have modernized their check-handling facilities with
computers and other electronic equipment. However, an even more advanced system may
completely eliminate the use of checks. This system called electronic funds transfer, transfers
money from one account to another. EFT includes five types of facilities and systems:

 Automated teller machines,

 Telephone- banking systems,
 Computer- banking systems,
 Automated clearing houses, and
 Point of sale terminals.

6
 Function of Bank:

Prof. Sayers in his book modern banking has desirable the functions of a modern bank
in the following words. Ordinary banking business consist of changing cash from
bank deposit for cash transferring bank deposits form one person to another and giving
deposits in exchanger of bill of exchange government bonds the secured promised of
businessmen to repay and so forth.

The above quotation briefly some ups the main function for the banks. The various
functions of modern bank are as followers:

1. Accepting deposits from the public:

Accepting various types of deposits is an important function of the
commercial bank those who have cash balance want to keep them in safe place i.e.,
deposit the some in bank they protect as well as provide a convenient method of
transfer found through cheques.
The bank accepts three types of deposits.
 Fixed deposit
 Current deposit
 Savings deposit

A fixed deposit is one where a customer keeps a certain amount of moneyin a bank
for specific period it carries higher rates of interest than that allowed to savings deposits
the longer the period the higher the interest rate and vice versa.

Current deposits are these deposits which can be withdrawals at any time by mean of
cheque the bank does not pay interest on current account deposits.

Savings deposits are those deposits on which the bank pays a certain rates of interest to
the depositors subject to certain condition. A person can open the account with a small
amount and go on depositing any amount the customersare expected to maintain a minimum
balance
7
 in the account. There is certain restriction with regarding to withdrawals.

2. Making loans and advances:

Bank receives deposits with a view to lend it is one of the most important
functions of banks direct loans and advances are given to all types of loans given
by the banks are as follows:
 Direct loans
 Cash credits
 Bill discounted
 Over drafts

3. Agency services:
 Customers can arrange for dividend to be sent to their banks and paid in to their
accounts.
 Orders for the purchase of sale of stock exchange securities are excited through
the banks.
 Banks will make application on behalf of their customer for all assortments
arising from new capital issues pay calls as they fall due.
 Obtain the share certification or documents of title.
 On certain agreed terms the banks will allow their hands to appear an approved
prospectors or other document as bankers for the issue of new capital.

8
  Banks under take payment of
a) Subscriptions
b) Premier
c) Rents
d) Collection of cheques, bills, promissory notes on behalf of
customer.
 It also acts as representative of customer to other banks and financial corporations.

They aim to provide a complete charge of trustee, executor to adviser services for
small charge. Most banks will undertake on behalf of their customer the preparation
of income tax return and claims for recovery of over paid tax.

4. General utility services:

It includes the issue of credit instruments like letter of credit and traveler’s
cheque.
 The acceptance of bills of exchange.
 The safe custody of valuable and documents.
 The transactions of foreign exchange business.
 Acting as a refer as to the respectabilities and financial standing of
customer and providing specialized advisory services to customers.

5. Overseas trading services:

Recognition of overseas trade has led modern banks to be set up
branches specializing in the finance of foreign trade and some banks in some
countries have been taken interest in export houses and factoring of
organizations.

9
They provide credit and enable the companies to release the capital ,which would
otherwise to tie up in the goods exported.

6. Information and other services:

 Some banks produce regular business on trade and economic conditions at home
and abroad and special report on commodities markets.
 Advice on appointment of suitable agents.
 For businessmen traveling abroad letters of introduction.
 On request banks obtain for customer for business purposes, confidential
opinions in the financial standing of companies.

 Unhealthy competition
 Double financing
 Poor and declining customer service.
 Declining profitability.
 Poor recovery of advances.

10
 Finance

Meaning of Finance:

Finance is one of the major elements, which activities the overall growth of the
economy. Finance is the life blood of economic activity. A well – knit financial
system directly contributes to the growth of the economy. An efficient financial
system calls for the effective performance of financial institutions, financial
instruments and financial markets.

Definition of Finance:

Finance can be broadly defined as the activity concerned with the planning,
raising, controlling and administering the funds used in the business.

-Guttmann and Doug ale

“Finance deals primarily with raising, administering and disbursing funds by

privately owned business units operating in non financial fields of industry.”

Prather and wert

11
Classifications of Finance:

The subject of finance has been traditional classified into two classes:

 Public finance
 Private finance

I. Public finance:
It deals with the requirements, receipts and disbursements of funds in
the government institutions like state, local self government and central
government of funds in case of an individual, a profit seeking business
organization and a non profit organization.

II. Private finance:

It is concerned with requirements, receipts and disbursements of funds
in cases of an individual a profit seeking business organization and non profit
organization.
Thus, private finance can be classified into:
a. Personal finance
b. Business finance
c. Finance of non profit organization

Personal finance deals with the analysis of principles and practices involved in managing
one’s own daily need of funds.

The study of principles, practices, procedures and problems concerning financial

management of profit making organization engaged in the field of industry, trade and
commerce is undertake under the discipline of business finance. The finance of non profit
organization is concerned with the practices,

12
 procedures and problem involved in financial management of
charitable ,religious, educational, and social and the other similar organizations.

Scope of Finance:

The main objectives of financial management are to arrange sufficient finance

for meeting short- term and long- term needs. These funds are procured at minimum
costs so that profitability of the business is memorized with these things in mind, a
financial manager with have to concentrate on the following areas of finance function.

 Estimating financial requirement:

The first task of a financial manager is to estimate short-term and long-
term financial requirement of his business for his purpose, he will prepare a
financial plan for working capital will have to be ascertained the estimations
should be based on sound financial the inadequacy of funds will adversely
affect the day working of the concern whereas of funds may
– a management to indulge in extravagant spending/speculative activities.
 Deciding capital structure:
The capital structure refers to the fund and proportion of different
securities for raising funds. After deciding about the quantum of funds required
it should be decided which type of securities should be raised it may be wise to
finance fixed assets through long term debt. Even here if period is longer, than
share capital may be most suitable long term should be employed to finance
working capital also. If not – then partially, entirely depending upon over
drafts and cash credits for meeting working capital needs may not be suitable.
A decision about various sources for

13
 funds should be linked to the cost of raising funds. If cost of raising funds is
very high then such sources may not be useful for long. A decision about the
kind of securities to be employed and the proportion in which these should be
used is an important decision which influences the short term and long term
financial planning an enterprise.

 Selecting a sources of finance:

After preparing a capital structure, an appropriate source of finance is
selected various sources from which finance may be raised include share
capital, debentures, financial instructions, commercial bank, public deposits etc.
if finance are needed for short periods then banks, public deposits and financial
institutions may be appropriate on the other hand. If long term finances are
required then share capital and debentures may be useful. If the concern does
not want to tie down assets as securities then public deposits may be suitable
source. If management does not want to dilute ownership then debentures
should be issued in to share. The need, purpose, object and cost involved may
be the factors influencing the selection of and suitable source of financing.

 Selecting a pattern of investment:

When finds have been procured than a decision about investment
pattern is to taken. The selection of an investment pattern is related to the rise
funds. A decision will have to be taken as which assets are to be purchased?
The funds will have to be spent first on first assets and then an appropriate will
be retained for working capital. Even in various categories of assets, a decision
about the type of fixed/other assets will be essential. While selecting a plant
and machinery, even different categories

14
 of them may be available. The decision making techniques such as capital
budgeting, opportunity cost analysis etc. may be applied in making decisions
about capital expenditures. While spending on various assets, the principles of
safety, profitability and liquidity should not be ignored. A balance should be
struck even in these principles. One may not like to invest on a project which
may be risky even through there may be more profits.

 Proper cash management:

Cash management is also an important task of finance manager. He has to
assets various cash needs at different times and then make arrangement for
arranging cash may be required to
 Purchases raw materials,
 Make payment to creditors,
 Meet wages bills,
 Meet day to day expenses.

The usual sources of cash may be

 Cash sales
 Collection of debts
 Short term arrangements will banks etc

The cash management should be such that neither there is a shortage of it and nor it is idle.
Any shortage of cash wills – the credit worthiness of the enterprise. The idle cash with the
business will mean that it is not properly used. It will be better if cash flow statement is
regularly prepaid so that one is able to find out various sources and applications. If cash is
spent on avoidable expenses then such spending may be curtailed. A proper idea on
sources.

15
 Objectives or goals of Finance:

Financial management is concerned with procurement & use of funds. It’s that
the firm is value / earnings are maximized. There are various alternative course has to
be evaluated in detail. The pros & cons of various decisions have to look into before
making a final selection. The decisions will have to take into consideration. The
commercial strategy of this of the business. Financial management provides a frame
work for selecting a proper course of action & deciding a viable commercial strategy.
The main objectives of a business are to maximize the owner’s economic welfare.

The main objective of finance they are:

 Profit Maximization
 Wealth Maximization.

 Profit Maximization:

Profit earning is the main aim of every economic activity. A business being an economic
institution must earn profit to cover its costs and provide funds for growth. No business can
survive without earning profit. Profit also serves as a protection against risks which cannot be
ensured.

 When profit earning is the aim of business then profit maximization should be the
obvious objective.
 Profitability is a barometer for measuring efficiency and economic prosperity of a
business enterprise, thus, profit maximization is justified on the ground of rationality.
 Economic and business conditions do not remain same at all the times. There may be
adverse business conditions like recession, depression, and serve competition.

16
 How ever, profit maximization objective has been criticized on many grounds. A firm
pursuing the objective of profit maximization starts exploiting workers and the consumers.
Hence, it is immoral and leads to a numbers of corrupt practices.

 Wealth maximization:
The concept of wealth maximization refers to the gradual growth of the values of assets
of the firm in terms of benefits it can produce. Any financial action can be judged in term
of the benefits. It produces less cost of action. The wealth maximization attained by a
company is reflected in the market value of shares.

 Implication’s of wealth maximization:

There is a rational in applying wealth maximizing policy as an operating
financial management policy. It serves the interests of suppliers of loaned capital,
employees, management and society. Besides shareholders, there are short term and long
term suppliers of funds who have financial interests in the concern.

17
 Functions of Finance:

i. Investment decision:
The investment decision relates to the selection of asset in which funds will
be invested by a firm. The assets which can be acquired fall into two broad
groups.
 Long term assets which will yield a return over a period of time in future.
 Short term or current assets defined as those assets which are the normal
cause of business are convertible into cash usually within a year.

a. Capital budgeting:
The long term investment decision is probably the most crucial financial decision of a firm. It
relates to the selection of an asset or investment proposal or course of action whose benefits are
likely to be available in future over the life time of the project. The long term assets can be
either new or old existing ones. The concepts and measurements of the cost of capital are thus,
other major aspects of the capital budgeting decision. The main elements of the capital
budgeting decisions are.
1. The total assets and their composition.
2. The business risk complexion of the firm.
3. Concept and measurement of the cost of capital.

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b. Working capital management:
Working capital management is an integral part of overall corporate
management. To a financial manager; a working capital sphere throws a
welcome challenge and opportunity. In view of the multiplicity of factors
exerting varied degrees of influence on working capital studies, a management
has to be alert to the internal, external and environmental developments and
constantly plan and review its working needs and strategy.

ii. Financial decision:

The following decision is broadly concerned with the asset mix or the
composition of the assets of a firm.
The concern of the following decision is with the financial mix or
capital structure or leverage. The term capital structure refers to the proportion
of debt and equity capital.
The financial decision of a firm relates to the choice of the proportion of
these sources to finance the investment requirements.
A capital structure with a reasonable proportion of debt and equity
capital is called the optimum capital structure.

19
 iii. Dividend policy decision:
The third major decision of finance is the decision relating to the
dividend policy. The dividend decision should be analyzed in relation to the
financing decision of a firm. Two alternatives are available in dealing with the
profits of a firm. They can be distributed to the shareholders in form of
dividend or they can be retained in the business. One significant element in the
dividend decision is, therefore the dividend pay out ratio.
The modern approach has broadened the scope of financial management which
involves the solutions of there major decisions, namely investment, financial
and dividend.

1.5. Financial analysis and interpretation:

Meaning:

The term financial analysis also known as analysis and interpretation of

financial statements refers to the process of determining financial strength and
weakness of the firm by establishing strategic relationship between the items of the
balance sheet, profit and loss account and other operative data.

Definitions:

According to Metcalf and Titard “It is a process of evaluating the relationship

between component parts of financial statement to obtain a better understanding of a
firm’s position and performance.”

Financial statement analysis is a process of evaluating of the relationship between

components part of the financial statements to obtain a better understanding of firm’s
position and performance. The financial analysis includes both analysis and interpretation.

20
 Types of financial analysis:

Different types of financial statement analysis can be made on the basis of.

 The nature of the analyst and the material used by him.

 The objective of the analysis.
 The modus operandi of the analysis.
 The nature of the analyst and the material used by him.
On the basis of financial statements analysis can be done by
external and internal analysis.

 External analysis:
It is made by those persons who are not connected with the
enterprise they do not have to the enterprise. They do not have access to
the detail record of the co and have to depend mostly on published
statements. Such type of analysis is made by investors, credit agencies,
government agencies and research scholars.

 Internal analysis:
It is made by those persons who have access to the books
accounts. Their members of the organization, analysis of financial
statement or other financial data for managerial purpose is the internal
type of analysis the internal analysis can be more receivable result than
the external analyst because every type of information is at is disposal.

21
 The objective of analysis:
On this basis the analysis can be long term and short term analysis.

 Long term analysis:

This analysis is made in order to study the long term financial stability,
solvency and liquidity as well as profitability and earning capacity of a
business concern. The purpose of making such type of analysis to know
whether in the long term the concern will be able to earn a minimum amount
which will sufficient to maintain a reasonable rate of investment and also to
provide the funds require for modernization, growth and development of
business to meet its cost of capital.

 Short term analysis:

This is made to determine the short term solvency, stability and liquidity
as well as earning capacity of the business. The purpose of these analyses is to
know whether in the short run a business concern will have adequate funds
readily available to meet its short term requirement and sufficient borrowing
capacity to meet contingences in the near future.

22
 Modus operandi analysis:
On the basis the analysis may be horizontal analysis and vertical
analysis.

 Horizontal analysis:
This analysis is made to review and analysis financial statement of a
number of year and therefore base on financial data taken from several years.
This is very useful for long term trend analysis and planning.

 Vertical analysis:
This analysis is made to review and analysis the financial statements of
one particular year only.

23
 RESEARCH DESIGN

Meaning:

“A research design is a logical and systematic plan prepared for directing a research
study. It specifies the objectives of the study, the methodology and techniques to be
adopted for achieving the objectives.”

Definition:
According to Claire Selltiz “A research design is the arrangement of conditions for collection
and analysis of data in a manner that aims to combine relevance to the research purpose with
economy in procedure.

Title of the study:

“A study on financial performance analysis and interpretation of Indian Bank Limited” with
special reference to Tumkur.

Statement of the problem:

Financial analysis is an important aspect of financial management for
any company. Financial analysis gives the first hand information about the
financial aspects. Financial performance, growth of the company as well as the
liquidity position and profitability of the banking institution.
But whether the financial analysis is viable or feasible ascertain has
been done.

24
Limitations of the study:

 The study is limited to Indian Bank, in Tumkur only.

 The study does not reveal details regarding low funds were raised and utilized.
 The study is limited to calculating financial position and
interpretation.
 The study is not confirmed to only past 4 years financial data of the bank.

25
 BANK PROFILE

Indian Bank

Indian bank, established in 1907, is a major Indian commercial bank headquartered in

Chennai (Madras), India. It has 22,000 employees, 1,657 branches and is one of the
big public sector banks of India. It has overseas branches in Colombo, Sri Lanka,
Singapore, and 229 correspondent banks in 69 countries. The government of India
nationalized the bank, along with 13 other major commercial banks, on 19 July 1969.

History

1907: Established on 15 August as part of the Swadeshi movement (Freedom

Movement in India). Though not a Chettiar Bank, some of the founders were Chettiars.
The key figure was V. Krishnaswamy Iyer, a lawyer in Madras, who had made a name
for himself defending claimants on Arbuthnot and co, which had failed the previous
year. In its early international expansion, Indian bank would open branches in cities
with important Chettiar populations.
1932: Indian Bank opened a branch in
Colombo. 1935: Indian opened a branch in
Jaffna.
1939: Indian Bank closed the Jaffna branch.
1940: Indian Bank opened a branch in Rangoon (Yangon).
1941: Indian Bank closed the Rangoon branch but opened branches in Singapore
(where future branch manager KB Pisharody (1915-1998) started his career in the
same year), and in Kuala Lumpur, Ipoh, and

26
Penang. The rapid advance of the Japanese army forced Indian bank to close all
its branches in Malaya and Singapore.
1942: Indian Bank closed the Colombo branch.
Post-WWII: Indian Bank reopened its Malayan and Singapore
branches. 1948: Indian Bank reopened its branch in Colombo.
1960s: Indian Bank acquired Mannargudi bank (est. 1932) and Salem bank (est. 1925).
1969: the government of India nationalized 14 top banks, including Indian Bank.
1973: Indian Overseas Bank, Indian Bank and united commercial Bank established united
Asian Bank Berhad in which Indian overseas Bank held 16.67% of the paid up capital, as
a result of a new banking law in Malaysia that prohibited foreign government banks from
operating in the country.
1978: Indian Bank becomes a technical adviser to P T Bank Rama in Indonesia, the result
of the merger of P T bank Masyarakat and P T Bank Ramayana.
1980: Indian Bank, Bank of Baroda, and union Bank of India established IUB
international finance, a licensed deposit taker in Hong Kong. Each of the three Banks took
an equal share in the joint venture.
1987: Indian Bank acquired Bank of Tanjore (Bank 0f Thanjavur) in Tamil Nadu in
rescue.
1998: Bank of Baroda bought out its partners in IUB intl. fin. In Hong Kong. Apparently
this was a response to regulatory changes following Hong Kong’s reversion. IUB become
Bank of Baroda (Hong Kong), a restricted license bank.
2007: Indian Bank celebrated its centenary year.

27
Diversified banking activities – 3 subsidiary companies
Indian Bank Merchant Banking Services
ltd Indian Bank Housing ltd.
Indian Fund Management ltd.

A Premier bank owned by the government of India

Total business crossed Rs. 1,24,413crores as on 31.03.2009

Operating profit increased to Rs. 2228.83crores as on
31.03.2009 Net profit increased to Rs. 1245.32crores as on
31.03.2009

Leadership in Rural Development

Pioneer in introducing self help groups and financial inclusion project in the
country Award winner for excellence in agricultural lending from honorable Union
Minister for finance
Best performer award for micro-finance activities in Tamil Nadu and union
territory puducherry from NABARD

Established 7 specialized exclusive microfinance branches called “micro sate” across the
country to cater the needs of urban poor through SHG (Self Help Group)/JLG (Joint
Liability Group) concepts
A special window for micro finance viz, micro credit Kendra’s are functioning in 44
rural/semi urban branches

28
 Organization Structure of Indian Bank

Chairman & Managing

Director

Executive Director

Head Office,
Chennai

Domestic International
Operations Operations

Circle offices Indian Domestic Foreign

subsidiaries Overseas Branches
and RRBs Business

Domestic
Branch
Banking

29
 Board of Directors of Indian Bank

Shri M S Sundara Rajan

Chairman & Managing Director

Shri Anup Sankar Bhattacharya Shri V. Rama Gopal

Executive Director Executive Director

Shri Shaktikanta Das Shri C R

Gopalasundaram (GOI Nominee Director) Director (RBI Nomin

30
Main City Branches of Indian Bank
AGRA

BANGALORE

CHENNAI

GOA

HYDERABAD

KERALA

KOLKATa

MUMBAI

NEW DELHI

Services Given By the Indian Bank

Indian Net banking

Indian Mobile banking

Indian Phone banking

E-Payment of indirect taxes

MCA Payment

Indian Jet Remit (RTGS)

NEFT

CMS Plus

31
Multicity Cheque Facility

Indian Bank Swarna Mudra

Credit Cards

ATM/Debit Cards

DP Services

Indian Bank Jeevan

Kalyan Jeevan Kalyan Plus

Indian Bank Varishtha

Indian Bank Arogyaraksha

E-Payment of Direct Taxes

Indian Bank Jeevan

Vidhya

Janashree Bhima Yojan (Launched in association with LIC)

Universal Health Care (Launched in association with UIIC Ltd)

Indian Bank Grihajeevan- Group Insurance Scheme for MortgageBorrowers

Indian Bank Home Suraksha- Group Insurance for Mortgage

Borrowers

32
Features

World wide acceptance

Acceptance at over 30 million VISA Merchant Establishments across the world

Acceptance at over 150,000 VISA Merchant Establishments in India

Indian Bank’s

Glod/Classic Credit Card through Visa

No joining fee, no renewal/annual

fee Free insurance coverage
Pay just 5% of the monthly outstanding and revolve the
balance Competitive pricing @ 1.99% pm on purchases
Access over 30 million VISA merchant
establishments Internet free credit period maximum of
45 days
Online shopping

Credit Period

Interest free credit period – usage of the credit card on the billing date of the month
would provide 45 days interest free credit where as using the card on previous day of
the billing date would give only 15 days interest free credit.
Payment period with in 15 days from the billing date.

33
Cash withdrawals

 Upto 40% of stipulated credit limits.

Withdrawal at
 Any of Indian Bank ATM
 Any VISA enabled ATM across India
 Any of VISA ATM worldwide
 Ant of the more than 30000 specified ATMs under sharing
arrangements like CASH TREE, MITR etc

Indian Bank Management Academy for Growth and

Excellence

Image which is the acronym for Indian bank management academy for growth and
excellence is the prestigious training academy of Indian bank

The academy stands at a quiet and peaceful locality of MRC Nagar Chennai India in a
sprawling complex, with modern amenities like air-conditioned class rooms, seminar halls,
indoor recreational facilities and a state-of-the-art auditorium.

The academy caters to the training needs of Indian bank, its subsidiaries and other members
of the banking fraternity. The academy also undertakes training of middle and senior
management personnel of government, public

34
sector and corporate companies. The infrastructure facilities are also available on
payment of stipulated fees to select group of corporate companies and other bodies.

The infrastructure facilities available at IMAGE are of international standards and this
learning institute is considered Asia’s finest. The following would substantiate the above:

Located in about 2 acres of land at the coziest of Chennai city enjoying

serene atmosphere conducive to learning and intellectual pursuits.
Surrounded by lush greenery and a mere stone’s throw away is the brilliant blue
waters of the Bay of Bengal.
Centrally air conditioned class rooms to accommodate 35 to 40
participants each.
Advanced computer center with state-of-the-art machines and facilities.

Stock Report

Indian Bank Board to consider interim dividend for 2021-22

Indian bank has announced that a meeting of the Board of Directors of the Bank will be held
on February 20, 2022, inter alia, to consider declaration of interim dividend for the year
2021-22 and fixation of record date to take record of shareholders eligible for the interim
dividend, if declared.

The stock was trading at Rs. 175, up by Rs. 2 or 1.16%. The stock hit an intraday high of Rs.
172.50.

The total traded quantity was 52264 compared to 2 week average of 26191.

35
Equity Bills

The following are the other highlights of the survey findings:

Credit quality of banks has been rated above par than China, Brazil, Russia, the UK
and the US, but at par with Hong Kong and Singapore and 85.72% of the respondents
felt at par with Japan.
Technology system of Indian banks have been rated more advanced than Brazil and
Russia, but below par with China, Japan, Hong Kong, Singapore, the UK and the US.
77.78% of public sector respondents were of the opinion that foreign banks should not
be allowed to play a greater role in the consolidation process.

20 Indian Banks in Top 500 Global Banking List

They may not be bankers to the world yet, but Indian banks have clearly set
their eyes on that. In a year that saw the worst recession for the global banking
industry with several big daddies collapsing, resilient Indian banks have improved
their brand value rapidly. There are 20 Indian banks in the brand finance global
banking 500, an annual international ranking by UK based brand finance plc, this
year.

The state Bank of India became the first Indian bank to break into the world’s
top50 list, according to the brand finance study that saw HSBC retain its top slot for
the third year in a row.

36
 “Indian banks need to recognize their inherent brand value potential and SBI’S
remarkable performance by breaking into the top 50 financial services brands offers a lesson
for others,’’ said Unni Krishnan, MD of brand finance India. SBI seems to be fast
transforming into a brand led business, with a broader, more holistic and sophisticated
approach to managing the brand and stakeholder relationships.

37
 REVIEW OF LITERATURE

Beaver. (1966), conducted of study on ratio analysis and identified the origin ratio analysis
to the early 1900 , when the analysis was confined to the current ratio for the evaluation of
creditworthiness. This ratio is expressed in is expressed in percentage. If the ratio is high it
show that the company is utilizing its assets in better way to generate its income. If the ratio
is less it shows that the company is in difficult position to meet its debt. Formula to find the
return on assets= net profit \total asset . Whereas net profit means the amount arriving after
deducting taxes also the expenses which taxes also. In addition to this he also explains about
the profit margin ratio (PMR) PMR is the ratio which express the relationship between profit
and sales .

Vijay Kumar . V, Mavaluri Pradeep and Boppana Nagarjuna (2006) . In their study
concluded that financial ratios are divided into five basic categories, are; liquidity activity,
debt , profitability , and market ratios. The ratios give valuable insight into the health of the
firm , the financial condition are profitability . Ross et al, (2007) proved that most researches
divide the financial ratios into four group i,e, profitability, solvency , liquidity and activity
ratios.,
Lucia Jenkins . (2009), has identified the use of many financial ratios which are
helpful in gaining more clear output of a particular company or firm ’s financial matter.
According to him he thinks that variable and fixed costs of the firms are very
important . variable costs are the costs which will increases or decreases the proportion
of the sales (eg. Electrical , bill rent ). Fixed costs are the costs which are fixed ,
whatever may be the sales the cost will be same ( eg. Rent , salaries) .
Ghos Santanu Kumar and Mondal Amitava (2009) in their study concluded that the
measurement of financial performance used in the analysis were return on equity , return on
assets and assets turnover ratio of Indian Banks.

38
Robert O. Edmister (2009) in his study “An Empirical Test of Financial Ratio analysis for
small Business ratios are designed to help evaluate financial statements”. Failure” developed
and empirically tested number of methods for analysis financial ratios to predicts to predict
the failure of small business.

Brigham and Ehrhardt (2010) stated that the “financial ratios are designed to help evaluate
financial statement.” Financial ratios are used as a planning and control tool. Financial ratio
analysis is used to evaluate the performance of of an organization. Deposits Virambhai /
management should try to increase the production, minimize the cost and operating expenses,
exercise, interest position proper control on liquidity , reduction of power, fuel, borrowing
funds, overheads , interest burden, etc.

Dr. S. Vijaya lakshmi. (2017). in the article titled,” A study on Financial Analysis of Bharti
Airtel Limited”, took a periods of 5 year from 2011-2016 for assessment of the company of
the company selected. The financial tools employed to measure the financial position was
ratio analysis. Under ratio analysis short term and long term ratios were used to see the
liquidity was profitability and stability level of the company.

J. Pavithra…et.al.(2017) in paer titled,” A study on the analysis of the financial

performance with Reference to jeppier Cement Pvt. Ltd. The period of the study was taken
for 5 year from 2009-2013. Comparative financial statements, ratio and trends analysis was
employed to used the financial position over the years. It was found that the debtor’s ratio
had an increasing trend which is not considered a good sign for the company and concluded
overall profitability position to be good.

39
 Objectives & Scope of The Study

Objectives.

 To study the financial aspect of the company.

 To know the different financial schemes of Indian Bank Ltd.
 Partial Fulfillment of MBA Degree

 To Study the different ratio of the company to know which extend company
utilizing it’s resources.

 The analysis the financial position of the company

Scope.

The study of financial analysis and interpretation of Indian bank in tumkur the soundness
and the overall financial performance of the company over past 4 years. The scope of the
study also extends to understand whether rates analysis is an efficient in power sectors as
it is an analytical tool measuring growth trend.

40
 Analysis and Interpretation of Data

Meaning:
“Analysis is the process by which, the whole body of gathered data, facts, figures and
ideas, is converted into meaningful and usable information.”

The data is placed in its appropriate settings and consistent relationships, drawing
general inferences.

Facts and figures have to be seen in conjunction with the subjective reactions to them.
Facts and figures, raw and bare, do not speak for themselves. Analysis, intends to
yield answers to research questions or suggest hypotheses which involves, a number
of closely related operations.

The following are the procedures involved in the integrated operations of analysis of
data:

 Establishment of categories
 Tabulation of data
 Statistical analysis of data
 Interpretation of findings and generalizations

Meaning of Interpretation:

Interpretation refers to the task of drawing inferences from the collected facts after
analytical and experimental study.

It is only through proper interpretation that the researcher can expose relations and
processes that his/her findings.

41
 INDIAN BANK

Common size balance sheet as on 31-03-2019 and 31-03-2020

Particulars 2019 2020

Amount % Amount %
Assets:
Cash and balance with 2302,98,58 4.83 3729,45,06 6.64
Reserve Bank of India
Balance with banks & 2504,36,18 5.25 1088,30,09 1.93
money at call &short
notice
Investments 19017,00,00 39.92 20877,73,24 37.18
Advances 22484,64,12 47.20 29058,11,12 51.75
Fixed assets 518,74,93 1.08 551,17,85 0.98
Other assets 807,53,26 1.69 843,87,28 1.50

Liabilities:
share capital 743,82,00 1.56 829,77,00 1.47
preferences share capital 00.0 0 400.00 0.71
Equity share capital 743.82 1.56 429.77 0.76
Reserves and surplus 1747,57,63 3.66 3010,99,80 5.36
Deposits 40805,52,48 85.66 47090,90,63 83.86
Borrowings 1887,29,41 3.96 1936,45,33 3.44
Other liabilities and 2451,05,55 5.14 3280,51,88 5.84
provisions

42
 INDIAN BANK
Common size balance sheet as on 31-03-2020 and 31-03-2021

Particulars 2020 2021

Amount % Amount %

Assets:
Cash and balance with 3729,45,06 6.64 6432,94,46 9.12
Reserve Bank of India
Balance with banks & 1088,30,09 1.93 339,87,83 0.48
money at call &short
notice
Investments 20877,73,24 37.18 21915,06,65 31.08
Advances 29058,11,12 51.75 39838,71,38 56.50
Fixed assets 551,17,85 0.98 539,27,06 0.76
Other assets 843,87,28 1.50 1441,81,34 2.04

Liabilities:
share capital 829,77,00 1.47 829,77,00 1.17
preferences share capital 400.00 0.71 400.00 0.56
Equity share capital 429.77 0.76 429.77 0.60
Reserves and surplus 3010,99,80 5.36 4330,72,49 6.14
Deposits 47090,90,63 83.86 61045,94,73 86.58
Borrowings 1936,45,33 3.44 1283,23,98 1.81
Other liabilities and 3280,51,88 5.84 3018,00,52 4.28
provisions

43
 Particulars 2021 2022

Amount % Amount %
Assets:
Cash and balance with 6432,94,46 9.12 62115751 7.38
Reserve Bank of India
Balance with banks & 339,87,83 0.48 472,24,36 0.56
money at call &short
notice
Investments 21915,06,65 31.08 22800,56,66 27.10
Advances 39838,71,38 56.50 51465,28,10 61.17
Fixed assets 539,27,06 0.76 1594,22,47 1.89
Other assets 1441,81,34 2.04 1577,85,49 1.87

Liabilities:
share capital 829,77,00 1.17 829,77,00 0.98
preferences share capital 400.00 0.56 400.00 0.47
Equity share capital 429.77 0.60 429.77 0.51
Reserves and surplus 4330,72,49 6.14 6306,14,17 7.49
Deposits 61045,94,73 86.58 72581,83,10 86.28
Borrowings 1283,23,98 1.81 530,78,30 0.63
Other liabilities and 3018,00,52 4.28 3873,22,02 4.60
provisions

44
 Profit and Loss Account for the period of 2020 to
2021
Particulars Year ended Year ended

31-03-2020 31-03-2021
1. Income
Interest earned 4284,64,97 3364,51,66
Other income 733,21,04 463,23,36
Total 5017,86,01 3827,75,02
2. Expenditure
Interest expended Operating 2412,61,67 1854,33,83
expenses Provisions & 1246,64,99 1079,76,10
contingencies 598,82,63 389,17,36

Total 4258,09,29 3323,27,29

3. Profit/Loss
Net profit/loss for the year 759,76,72 504,47,73
77,06,61 (3830,14,06)
Loss brought forwards
----- 3830,14,00
Less: set off against the capital
836,83,33 504,47,67
Total
4. Appropriations
190,00,00 127,00,00
Transferred to statutory reserve
1,86,47 2,88,90
Transferred to capital reserve-
------- (556,98,70)
others
Transferred to investment
376,00,00 739,34,33
fluctuation reserve
128,93,10 101,00,00
Transferred to revenue reserve
32,00,00 ----- 14,16,53
Proposed equity dividend
27,35,02 77,06,61
Proposed preference dividend
80,68,74
Dividend distributed tax
836,83,33 504,47,67
Balance of profit carried over to balance sheet
Total
45
 Profit & Loss Account for the Period of 2021 to 2022:

Particulars Year ended Year ended

31-03-2021 31-03-2022
1. Income
Interest earned 6830,32,99 5212,97,93
Other income 1035,44,47 1005,68,78
Total 7865,77,46 6218,66,71
2. Expenditure
Interest expended Operating 4221,81,82 3159,07,67
expenses Provisions & 1415,12,62 1400,29,41
contingencies 983,50,72 650,55,70
Total 6620,45,16 5209,92,78

3. Profit/Loss
1245,32,30 1008,73,93
Net profit/loss for the
year Loss brought 84,26,09 80,68,74
forwards 132,58,39 1089,42,67
Total
4. Appropriations 313,00,00 252,00,00
Transferred to statutory reserve 24,12,72 1,37,48
Transferred to capital reserve- others 54,00,00 60,00,00
Special reserves u/s 36 (1) (viii) 110,9,19 ------
Investment reserves 531,00,00 434,71,90
Transferred to revenue reserve 15,00,00 15,00,00
Transferred to staff welfare fund 214,88,50 171,90,80
Proposed equity dividend 37,50,00 35,00,00
Proposed preference 42,89,28 35,16,40
dividend Dividend 84,26,09
86,08,70
distributed tax Balance of
profit 1329,58,39 1089,42,67
Total
46
 Table No. 4.1

Table showing Cash and Balances with Reserve Bank of India

Year Amount Percentage (%)

2018-19 2302,98,58 4.83

2019-20 3729,45,06 6.64

2020-21 6432,94,46 9.12

2021-22 6211,57,51 7.38

Interpretation:
The above table shows that there is an increase in the Cash and Balance with

Reserve Bank of India. During the year 2020-21 (9.12%) when compare to 2018-19

(4.83%), 2019-20 (6.64%) and 2021-22 (7.38%) respectively.

47
 Graph No. 4.1

The Graph showing Cash and Balances with Reserve Bank of India

10 9.12
9
8 7.38
6.64
7
6
4.83
5
4 percentage

3
2
1
0

2018-19 2019-20 2020-21 2021-22

Years

Interpretation:
The above table shows that there is an increase in the Cash and Balance with

Reserve Bank of India. During the year 2020-21 (9.12%) when compare to 2018-19

(4.83%), 2019-20 (6.64%) and 2021-22 (7.38%) respectively.

48
 Table No. 4.2

Table showing Balance with Banks and Money at Call and Short Notice

Year Amount Percentage (%)

2018-19 2504,36,18 5.25

2019-20 1088,30,09 1.93

2020-21 339,87,83 0.48

2021-22 472,24,36 0.56

Interpretation:
The above table shows that there is an slight increases in the balance with

banks and money at call and short notice during the year 2018-19 (5.25%) when

compare to 2019-20(1.93%), 2020-21(0.48%) and 2021-22 (0.56%)

respectively.

49
 Graph No. 4.2

The Graph showing Balance with Banks and Money at Call and Short
Notice

0.48 0.56

1.93 2018-19
2019-20
5.25
2020-21
2021-22

Interpretation:
The above table shows that there is an slight increases in the balance with

banks and money at call and short notice during the year 2018-19 (5.25%) when

compare to 2019-20(1.93%), 2020-2021 (0.48%) and 2021-2022 (0.56%)

respectively.

50
 Table No. 4.3

Table showing Investments

Year Amount Percentage (%)

2018-19 19017,00,00 39.92

2019-20 20877,73,24 37.18

2020-21 21915,06,65 31.08

2021-22 22800,56,66 27.10

Interpretation:

The above table shows that there is a slight increase in the total investment

during the year 2018-19 (39.92%) after 2019-20 (37.18%). There is a slight

decrease

on investment. When compare to 2020-21(31.08%) and 2021-22 (27.10%)

respectively.

51
 Graph No. 4.3

Graph showing

Investments

40

35

30

25

20

15

10

0
2018-19 2019-20 2020-21 2021-22
percentage 39.92 37.18 31.08 27.1

Interpretation:
The above table shows that there is a slight increase in the total investment

during the year 2018-19 (39.92%) after 2019-20 (37.18%). There isa slight decrease

on investment. When compare to 2020-21 (31.08%) and 2021-22 (27.10%)

respectively.

52
 Table No. 4.4 Table

showing Advances

Year Amount Percentage (%)

2018-19 22484,64,12 47.20

2019-20 29058,11,12 51.75

2020-21 39838,71,38 56.50

2021-22 51465,28,10 61.17

Interpretation:
The above table showing that there is an increases advances of year by year

and during the year 2021-22 (61.17%) when compare to 2018-19(47.20%), 2019-

20(51.75%) and 2020-21 (56.50%) respectively.

53
 Graph no. 4.4
Graph showing on Advances

70 61.17
56.5
60 51.75
47.2
50
40
30
20 percentage
10
0

2018-19 2019-20 2020-21 2021-22

Years

Interpretation:
The above table showing that there is an increases advances of year by year

and during the year 2021-22 (61.17%) when compare to 2018-19 (47.20%), 2019-20

(51.75%) and 2020-21 (56.50%) respectively.

54
 Table No. 4.5

Table showing Fixed Assets

Year Amount Percentage (%)

2018-19 518,74,93 1.08

2019-20 551,17,85 0.98

2020-21 539,27,06 0.76

2021-22 1594,22,47 1.89

Interpretation:

The above table shows that there is a slight increase in fixed assets during

the year 2021-22 (1.89%) and 2018-19 (1.08%) when compare to 2019-20

(0.98%) and 2020-21 (0.76%) respectively.

55
 Graph No. 4. 5

Graph showing Fixed

Assets

2
1.8
1.6
1.4
1.2
1
0.8

percentage
0.6
0.4
0.2
0

2018-19 2019-20 2020-21 2021-22

Years

Interpretation:

The above table shows that there is a slight increase in fixed assets during

the year 2021-22 (1.89%) and 2018-19 (1.08%) when compare to 2019-20

(0.98%) and 2020-21 (0.76%) respectively.

56
 Table No. 4.6

Table showing Share Capital

Year Amount Percentage (%)

2018-19 743,82,00 1.56

2019-20 829,77,00 1.47

2020-21 829,77,00 1.17

2021-22 829,77,00 0.98

Interpretation:

The above table shows that there is a slight increase in the share capital

during the year 2018-19 (1.56%) when compare to 2019-20 (1.47%), 2020-21

(1.17%) and 2021-22 (0.98%) respectively.

57
 Graph No. 4.6

Graph showing Share Capital

1.56
1.47

1.17
0.98

2018-19 2019-20 2020-21 2021-22

Years

Interpretation:

The above table shows that there is a slight increase in the share capital during

the year 2018-19 (1.56%) when compare to 2019-20 (1.47%), 2020-21

(1.17%) and 2021-22 (0.98%) respectively.

58
 Table No. 4.7

Table showing Preference Share Capital

Year Amount (in cr.) Percentage (%)

2018-19 0.00 0

2019-20 400.00 0.71

2020-21 400.00 0.56

2021-22 400.00 0.47

Interpretation:

The above table shows that there is a slight increase in the preference share capital

during the year 2019-20 (0.71%), 2020-2021 (0.56%) and 2021-22 (0.47%) when

compare to 2018-19 are the nil on preference share capital.

59
 Graph No. 4.7

Graph Showing Preference Share Capital

percentage

0.71
0.56
0.47

2018-19 2019-20 2020-21 2021-22

Years

Interpretation:

The above table shows that there is a slight increase in the preference share capital

during the year 2019-20 (0.71%), 2020-21 (0.56%) and 2021-22 (0.47%) when

compare to 2018-19 are the nil on preference share capital.

60
 Table No. 4.8

Table showing Deposits

Year Amount Percentage (%)

2018-19 40805,52,48 85.66

2019-20 47090,90,63 83.86

2020-21 61045,94,73 86.58

2021-22 72581,83,10 86.28

Interpretation:

The above table shows that there is an increase in the deposits during the year2020-

21 (86.58%) and 2021-22 (86.28%) when compare to 2018-19 (85.66%)

and 2019-20 (83.86%) respectively.

61
 Graph No. 4.8

Graph showing Deposits

87
86.58
86.5 86.28

86 85.66
85.5
85

84.5

84 83.86

83.5
83

82.5

2018-19 2019-20 2020-21 2021-22

percentage
Years

Interpretation:

The above table shows that there is an increase in the deposits during the year2020-

21 (86.58%) and 2021-22 (86.28%) when compare to 2018-19 (85.66%)

and 2019-20` (83.86%) respectively.

62
 Table No. 4.9

Table showing Borrowings

Year Amount Percentage (%)

2018-19 1887,29,41 3.96

2019-20 1936,45,33 3.44

2020-21 1283,23,98 1.81

2021-22 530,78,30 0.63

Interpretation:

The above table shows that there is an increases in the borrowings during the

year 2018-19 (3.96%) and 2019-20 (3.44%) when compare to other two years

decreases in borrowings i.e., 2020-2021 (1.81%) and 2021-22 (0.63%) respectively.

63
 Graph No. 4.9

Graph Showing Borrowings

0.63

1.81
3.96

2018-19
2019-20
3.44
2020-21
2021-22

Interpretation:

The above table shows that there is an increases in the borrowings during the

year 2018-19 (3.96%) and 2019-20 (3.44%) when compare to other two years

decreases in borrowings i.e., 2020-2021(1.81%) and 2021-22 (0.63%) respectively.

64
 Findings Of The Common Size Balance
Sheet Statement on 2021-2022

 Cash and Balance with Reserves Bank of India are 4.83% and 6.64% of total
assets of the Bank.
 Balance with banks and money at call and short notice are 5.25% and1.93% of
total assets of the Bank.
 Investments are 39.92% and 37.18% of total assets of the Bank.
 Advances are 47.20% and 51.75% of total assets of the Bank.
 Fixed assets are 1.08% and 0.98% of total assets of the Bank.
 Other assets are 1.69% and 1.50% of total assets of the Bank.
 Share capitals are 1.56% and 1.47% of total liabilities of the Bank.
 Preference share capitals are 0.00% and 0.71% of total liabilities of the Bank.
 Equity share capitals are 1.56% and 0.76% of total liabilities of the Bank.
 Reserves and surplus are 3.66% and 5.36% of total liabilities of the Bank.
 Deposits are 85.66% and 83.86% of total liabilities of the Bank.
 Borrowings are 3.96% and 3.44% of total liabilities of the Bank.
 Other liabilities and provisions are 5.14% and 5.84% of the total liabilities

65
 SUGGESTIONS

1 Loans and advances are in better position they are than increasing year to year.
2 It is advisable for the bank has maximizing the loans and advances for the future
period.
3 Capital is decreasing year by year. So bank financial performance is not so good.
Hence bank has no prefect future.
4 Reserves and surplus are decreasing year to year. So bank financial performance is so
good.
5 The bank has to introduce more and more schemes for all sections particularly for low
income groups.

66
 CONCLUSIONS
Based on the findings recorded in the study the following conclusions are made.

Banking personnel are relatively well placed in the society reasonably good work
environment is made available to them. They are well qualified and have right
motivation. When they get so much from the society, they are a duty to give best
customers service.

Indian Bank is one of the well-established financial institutions accepted by the

community. This is the number one service bank in India. This bank Provides better
customer service than other banks. The top management account for only 1% of work
force and remaining staff in bank belong to award staff and supervisory staff category,
right form counter cleric to Manager, everybody should share the collective
responsibility of providing best customer service.

67
 REFERENCE
1. Kochanek , Stanley A. (1974) . Business and politics in India. University of California
press. P. 152 ISBN 978-0-520-02377-2.

2. Kumar (2008) , PP.38-9.

3. Kumar (2008) , P.40

4. Kumar (2008) , P.42

5. Kumar (2008) , P.41

6. Kumar (2008) , P.169

7. Kumar (2008) , P.44

8. ”Bank Merger News: Government unveils mega bank mergers to revive growth from 5-
year low India Business News – Times of India “. The Times of India . Retrieved 26
April 2020.

9. .Staff writer (30 August ) . 10 public sector banks to be merged into four” Mint .
Retrieved 30August 2019.

10. .Ghosh , Shyam (5March 2020). “ Three banks announce merger ratios . Livemint.
Retrieved 6 March 2020.

Website:- www.indianbank.in

68