Executive Summary

The study is done to find the marketing activities of Vijaya bank The classification of its

product profile and its competitiveness with comparison to other bank was analyzed for

The balance sheet of the bank was analyzed and compared with the past year balance

sheets and ratio analysis was done to find the profitability liquidity and leverage ratios

The project and the survey were guided throughout by experts in specific areas

The analyzer had prepared a questionnaire at the beginning to start a survey of the

marketing activity of the bank A thorough industrial analysis comprising with the

company profile is done The project was also on the basis of some of the valuable inputs

from the customers of the particular bank to find out the positioning of the banks service

The survey was done on some of the randomly selected branches

The major findings were that the bank is lagging behind in video advertisements and it

has a tough competition from the corporation and syndicate bank The bank is much more

customer service oriented and the workforce present is much impressive The product

profile of the bank is also impressive where it is covering all the sections and places in

the society The bank are also high on practicing corporate social responsibility It was

also seen that the bank is very much concentrating in the print-advertisement section and

also customer call service

It is also the second bank in India to start with the mobile banking system which has a

good customer response The NPA ratio was fair in all the branches as consulted in the

research and its increasing number of branches across India was showing the progress of

the bank

1

Research Design

2

It is the conceptual structure within which the research is conducted It constitutes the

blue print for the collection measurement and analysis of data The design includes an

outline of what the researcher will do from writing the hypothesis and its operational

implication to the final analysis of data It constitutes the steps taken beginning with the

collection of data classifying analyzing and interpretation processing and finally putting

in textual form This is one important chapter of project and can be considered as skeletal

of project

Objective of the study To understand the analytical framework of project

marketing and to analyze mechanism at bank

To familiarize with the interrelationship among various aspects of banking

in Vijaya bank

To understand the importance of promotional and market analysis

To study the evaluations and understand the working in bank

Scope of your study The scope of the study is limited to marketing activity of Vijaya

Bank (branches) It will give an in depth theoretical and practical knowledge about the

marketing aspects This study also covers ratio analysis of the balance sheet of the bank

and also analyses the marketing activity of the bank

Methodology and limitation Methodology of Data Collection

As regarded to methodology normally both quantitative and qualitative

approaches are adopted In order to collect the data this study brings a live analysis based

on the live data collected from secondary type of data The techniques of ratio analysis

have been made use for the analysis of the financial statement of the bank

Interacting with executives functional in charge of various areas and

departments discussing informally

Referring to the secondary that is various project reports prepared by the

bank and desk guides available with the bank

Visiting official website of the bank and other related websites

3

Questionnaire was prepared for survey

Referring to news papers and various business magazines

Limitation of the study

The study is limited to then marketing activity of Vijaya Bank The

investigator could not cover all the branches which are providing similar

services

The data recorded was presumed to be authentic

This study curtails comparison as it is within the purview of only one

organization

4

Industry Profile

5

Overview

Banking in India has a long and elaborate history of more than 200 years The beginning

of this industry can be traced back to 1786 when the countryrsquos first bank Bank of

Bengal was established But the industry changed rapidly and drastically after the

nationalization of banks in 1969 As a result the public sector banks began experiencing

numerous positive changes and enormous growth Then came the much-talked-about

liberalization and economic reforms that allowed banks to explore new business

opportunities and not just remain constrained to generating revenues from mere

borrowing and lending This provided the Indian banking scenario a remarkable facelift

that only continues to get better with time However even today despite the foray of

foreign banks in the country nationalized banks continue to be biggest lenders in the

country This is primarily due to the size of the banks and the penetration of the networks

Nature of the Industry

Banks safeguard money and valuables and provide loans credit and payment services

such as checking accounts money orders and cashierrsquos checks Banks also may offer

investment and insurance products which they were once prohibited from selling As a

variety of models for cooperation and integration among finance industries have

emerged some of the traditional distinctions between banks insurance companies and

securities firms have diminished In spite of these changes banks continue to maintain

and perform their primary rolemdashaccepting deposits and lending funds from these

deposits

There are several types of banks which differ in the number of services they provide and

the clientele they serve Although some of the differences between these types of banks

have lessened as they begin to expand the range of products and services they offer there

are still key distinguishing traits Commercial banks which dominate this industry offer

a full range of services for individuals businesses and governments These banks come

in a wide range of sizes from large global banks to regional and community banks

Global banks are involved in international lending and foreign currency trading in

addition to the more typical banking services Regional banks have numerous branches

6

and automated teller machine (ATM) locations throughout a multi-state area that provide

banking services to individuals Banks have become more oriented toward marketing and

sales As a result employees need to know about all types of products and services

offered by banks Community banks are based locally and offer more personal attention

which many individuals and small businesses prefer In recent years online banksmdash

which provide all services entirely over the Internetmdashhave entered the market with some

success However many traditional banks have also expanded to offer online banking

and some formerly Internet-only banks are opting to open branches

Savings banks and savings and loan associations sometimes called thrift institutions are

the second largest group of depository institutions They were first established as

community-based institutions to finance mortgages for people to buy homes and still

cater mostly to the savings and lending needs of individuals

Credit unions are another kind of depository institution Most credit unions are formed by

people with a common bond such as those who work for the same company or belong to

the same labor union or church Members pool their savings and when they need money

they may borrow from the credit union often at a lower interest rate than that demanded

by other financial institutions

Federal Reserve banks are Government agencies that perform many financial services for

the Government Their chief responsibilities are to regulate the banking industry and to

help implement our Nationrsquos monetary policy so our economy can run more efficiently

by controlling the Nationrsquos money supplymdashthe total quantity of money in the country

including cash and bank deposits For example during slower periods of economic

activity the Federal Reserve may purchase government securities from commercial

banks giving them more money to lend thus expanding the economy Federal Reserve

banks also perform a variety of services for other banks For example they may make

emergency loans to banks that are short of cash and clear checks that are drawn and paid

out by different banks

7

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Research Design

2

It is the conceptual structure within which the research is conducted It constitutes the

blue print for the collection measurement and analysis of data The design includes an

outline of what the researcher will do from writing the hypothesis and its operational

implication to the final analysis of data It constitutes the steps taken beginning with the

collection of data classifying analyzing and interpretation processing and finally putting

in textual form This is one important chapter of project and can be considered as skeletal

of project

Objective of the study To understand the analytical framework of project

marketing and to analyze mechanism at bank

To familiarize with the interrelationship among various aspects of banking

in Vijaya bank

To understand the importance of promotional and market analysis

To study the evaluations and understand the working in bank

Scope of your study The scope of the study is limited to marketing activity of Vijaya

Bank (branches) It will give an in depth theoretical and practical knowledge about the

marketing aspects This study also covers ratio analysis of the balance sheet of the bank

and also analyses the marketing activity of the bank

Methodology and limitation Methodology of Data Collection

As regarded to methodology normally both quantitative and qualitative

approaches are adopted In order to collect the data this study brings a live analysis based

on the live data collected from secondary type of data The techniques of ratio analysis

have been made use for the analysis of the financial statement of the bank

Interacting with executives functional in charge of various areas and

departments discussing informally

Referring to the secondary that is various project reports prepared by the

bank and desk guides available with the bank

Visiting official website of the bank and other related websites

3

Questionnaire was prepared for survey

Referring to news papers and various business magazines

Limitation of the study

The study is limited to then marketing activity of Vijaya Bank The

investigator could not cover all the branches which are providing similar

services

The data recorded was presumed to be authentic

This study curtails comparison as it is within the purview of only one

organization

4

Industry Profile

5

Overview

Banking in India has a long and elaborate history of more than 200 years The beginning

of this industry can be traced back to 1786 when the countryrsquos first bank Bank of

Bengal was established But the industry changed rapidly and drastically after the

nationalization of banks in 1969 As a result the public sector banks began experiencing

numerous positive changes and enormous growth Then came the much-talked-about

liberalization and economic reforms that allowed banks to explore new business

opportunities and not just remain constrained to generating revenues from mere

borrowing and lending This provided the Indian banking scenario a remarkable facelift

that only continues to get better with time However even today despite the foray of

foreign banks in the country nationalized banks continue to be biggest lenders in the

country This is primarily due to the size of the banks and the penetration of the networks

Nature of the Industry

Banks safeguard money and valuables and provide loans credit and payment services

such as checking accounts money orders and cashierrsquos checks Banks also may offer

investment and insurance products which they were once prohibited from selling As a

variety of models for cooperation and integration among finance industries have

emerged some of the traditional distinctions between banks insurance companies and

securities firms have diminished In spite of these changes banks continue to maintain

and perform their primary rolemdashaccepting deposits and lending funds from these

deposits

There are several types of banks which differ in the number of services they provide and

the clientele they serve Although some of the differences between these types of banks

have lessened as they begin to expand the range of products and services they offer there

are still key distinguishing traits Commercial banks which dominate this industry offer

a full range of services for individuals businesses and governments These banks come

in a wide range of sizes from large global banks to regional and community banks

Global banks are involved in international lending and foreign currency trading in

addition to the more typical banking services Regional banks have numerous branches

6

and automated teller machine (ATM) locations throughout a multi-state area that provide

banking services to individuals Banks have become more oriented toward marketing and

sales As a result employees need to know about all types of products and services

offered by banks Community banks are based locally and offer more personal attention

which many individuals and small businesses prefer In recent years online banksmdash

which provide all services entirely over the Internetmdashhave entered the market with some

success However many traditional banks have also expanded to offer online banking

and some formerly Internet-only banks are opting to open branches

Savings banks and savings and loan associations sometimes called thrift institutions are

the second largest group of depository institutions They were first established as

community-based institutions to finance mortgages for people to buy homes and still

cater mostly to the savings and lending needs of individuals

Credit unions are another kind of depository institution Most credit unions are formed by

people with a common bond such as those who work for the same company or belong to

the same labor union or church Members pool their savings and when they need money

they may borrow from the credit union often at a lower interest rate than that demanded

by other financial institutions

Federal Reserve banks are Government agencies that perform many financial services for

the Government Their chief responsibilities are to regulate the banking industry and to

help implement our Nationrsquos monetary policy so our economy can run more efficiently

by controlling the Nationrsquos money supplymdashthe total quantity of money in the country

including cash and bank deposits For example during slower periods of economic

activity the Federal Reserve may purchase government securities from commercial

banks giving them more money to lend thus expanding the economy Federal Reserve

banks also perform a variety of services for other banks For example they may make

emergency loans to banks that are short of cash and clear checks that are drawn and paid

out by different banks

7

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

It is the conceptual structure within which the research is conducted It constitutes the

blue print for the collection measurement and analysis of data The design includes an

outline of what the researcher will do from writing the hypothesis and its operational

implication to the final analysis of data It constitutes the steps taken beginning with the

collection of data classifying analyzing and interpretation processing and finally putting

in textual form This is one important chapter of project and can be considered as skeletal

of project

Objective of the study To understand the analytical framework of project

marketing and to analyze mechanism at bank

To familiarize with the interrelationship among various aspects of banking

in Vijaya bank

To understand the importance of promotional and market analysis

To study the evaluations and understand the working in bank

Scope of your study The scope of the study is limited to marketing activity of Vijaya

Bank (branches) It will give an in depth theoretical and practical knowledge about the

marketing aspects This study also covers ratio analysis of the balance sheet of the bank

and also analyses the marketing activity of the bank

Methodology and limitation Methodology of Data Collection

As regarded to methodology normally both quantitative and qualitative

approaches are adopted In order to collect the data this study brings a live analysis based

on the live data collected from secondary type of data The techniques of ratio analysis

have been made use for the analysis of the financial statement of the bank

Interacting with executives functional in charge of various areas and

departments discussing informally

Referring to the secondary that is various project reports prepared by the

bank and desk guides available with the bank

Visiting official website of the bank and other related websites

3

Questionnaire was prepared for survey

Referring to news papers and various business magazines

Limitation of the study

The study is limited to then marketing activity of Vijaya Bank The

investigator could not cover all the branches which are providing similar

services

The data recorded was presumed to be authentic

This study curtails comparison as it is within the purview of only one

organization

4

Industry Profile

5

Overview

Banking in India has a long and elaborate history of more than 200 years The beginning

of this industry can be traced back to 1786 when the countryrsquos first bank Bank of

Bengal was established But the industry changed rapidly and drastically after the

nationalization of banks in 1969 As a result the public sector banks began experiencing

numerous positive changes and enormous growth Then came the much-talked-about

liberalization and economic reforms that allowed banks to explore new business

opportunities and not just remain constrained to generating revenues from mere

borrowing and lending This provided the Indian banking scenario a remarkable facelift

that only continues to get better with time However even today despite the foray of

foreign banks in the country nationalized banks continue to be biggest lenders in the

country This is primarily due to the size of the banks and the penetration of the networks

Nature of the Industry

Banks safeguard money and valuables and provide loans credit and payment services

such as checking accounts money orders and cashierrsquos checks Banks also may offer

investment and insurance products which they were once prohibited from selling As a

variety of models for cooperation and integration among finance industries have

emerged some of the traditional distinctions between banks insurance companies and

securities firms have diminished In spite of these changes banks continue to maintain

and perform their primary rolemdashaccepting deposits and lending funds from these

deposits

There are several types of banks which differ in the number of services they provide and

the clientele they serve Although some of the differences between these types of banks

have lessened as they begin to expand the range of products and services they offer there

are still key distinguishing traits Commercial banks which dominate this industry offer

a full range of services for individuals businesses and governments These banks come

in a wide range of sizes from large global banks to regional and community banks

Global banks are involved in international lending and foreign currency trading in

addition to the more typical banking services Regional banks have numerous branches

6

and automated teller machine (ATM) locations throughout a multi-state area that provide

banking services to individuals Banks have become more oriented toward marketing and

sales As a result employees need to know about all types of products and services

offered by banks Community banks are based locally and offer more personal attention

which many individuals and small businesses prefer In recent years online banksmdash

which provide all services entirely over the Internetmdashhave entered the market with some

success However many traditional banks have also expanded to offer online banking

and some formerly Internet-only banks are opting to open branches

Savings banks and savings and loan associations sometimes called thrift institutions are

the second largest group of depository institutions They were first established as

community-based institutions to finance mortgages for people to buy homes and still

cater mostly to the savings and lending needs of individuals

Credit unions are another kind of depository institution Most credit unions are formed by

people with a common bond such as those who work for the same company or belong to

the same labor union or church Members pool their savings and when they need money

they may borrow from the credit union often at a lower interest rate than that demanded

by other financial institutions

Federal Reserve banks are Government agencies that perform many financial services for

the Government Their chief responsibilities are to regulate the banking industry and to

help implement our Nationrsquos monetary policy so our economy can run more efficiently

by controlling the Nationrsquos money supplymdashthe total quantity of money in the country

including cash and bank deposits For example during slower periods of economic

activity the Federal Reserve may purchase government securities from commercial

banks giving them more money to lend thus expanding the economy Federal Reserve

banks also perform a variety of services for other banks For example they may make

emergency loans to banks that are short of cash and clear checks that are drawn and paid

out by different banks

7

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Questionnaire was prepared for survey

Referring to news papers and various business magazines

Limitation of the study

The study is limited to then marketing activity of Vijaya Bank The

investigator could not cover all the branches which are providing similar

services

The data recorded was presumed to be authentic

This study curtails comparison as it is within the purview of only one

organization

4

Industry Profile

5

Overview

Banking in India has a long and elaborate history of more than 200 years The beginning

of this industry can be traced back to 1786 when the countryrsquos first bank Bank of

Bengal was established But the industry changed rapidly and drastically after the

nationalization of banks in 1969 As a result the public sector banks began experiencing

numerous positive changes and enormous growth Then came the much-talked-about

liberalization and economic reforms that allowed banks to explore new business

opportunities and not just remain constrained to generating revenues from mere

borrowing and lending This provided the Indian banking scenario a remarkable facelift

that only continues to get better with time However even today despite the foray of

foreign banks in the country nationalized banks continue to be biggest lenders in the

country This is primarily due to the size of the banks and the penetration of the networks

Nature of the Industry

Banks safeguard money and valuables and provide loans credit and payment services

such as checking accounts money orders and cashierrsquos checks Banks also may offer

investment and insurance products which they were once prohibited from selling As a

variety of models for cooperation and integration among finance industries have

emerged some of the traditional distinctions between banks insurance companies and

securities firms have diminished In spite of these changes banks continue to maintain

and perform their primary rolemdashaccepting deposits and lending funds from these

deposits

There are several types of banks which differ in the number of services they provide and

the clientele they serve Although some of the differences between these types of banks

have lessened as they begin to expand the range of products and services they offer there

are still key distinguishing traits Commercial banks which dominate this industry offer

a full range of services for individuals businesses and governments These banks come

in a wide range of sizes from large global banks to regional and community banks

Global banks are involved in international lending and foreign currency trading in

addition to the more typical banking services Regional banks have numerous branches

6

and automated teller machine (ATM) locations throughout a multi-state area that provide

banking services to individuals Banks have become more oriented toward marketing and

sales As a result employees need to know about all types of products and services

offered by banks Community banks are based locally and offer more personal attention

which many individuals and small businesses prefer In recent years online banksmdash

which provide all services entirely over the Internetmdashhave entered the market with some

success However many traditional banks have also expanded to offer online banking

and some formerly Internet-only banks are opting to open branches

Savings banks and savings and loan associations sometimes called thrift institutions are

the second largest group of depository institutions They were first established as

community-based institutions to finance mortgages for people to buy homes and still

cater mostly to the savings and lending needs of individuals

Credit unions are another kind of depository institution Most credit unions are formed by

people with a common bond such as those who work for the same company or belong to

the same labor union or church Members pool their savings and when they need money

they may borrow from the credit union often at a lower interest rate than that demanded

by other financial institutions

Federal Reserve banks are Government agencies that perform many financial services for

the Government Their chief responsibilities are to regulate the banking industry and to

help implement our Nationrsquos monetary policy so our economy can run more efficiently

by controlling the Nationrsquos money supplymdashthe total quantity of money in the country

including cash and bank deposits For example during slower periods of economic

activity the Federal Reserve may purchase government securities from commercial

banks giving them more money to lend thus expanding the economy Federal Reserve

banks also perform a variety of services for other banks For example they may make

emergency loans to banks that are short of cash and clear checks that are drawn and paid

out by different banks

7

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Industry Profile

5

Overview

Banking in India has a long and elaborate history of more than 200 years The beginning

of this industry can be traced back to 1786 when the countryrsquos first bank Bank of

Bengal was established But the industry changed rapidly and drastically after the

nationalization of banks in 1969 As a result the public sector banks began experiencing

numerous positive changes and enormous growth Then came the much-talked-about

liberalization and economic reforms that allowed banks to explore new business

opportunities and not just remain constrained to generating revenues from mere

borrowing and lending This provided the Indian banking scenario a remarkable facelift

that only continues to get better with time However even today despite the foray of

foreign banks in the country nationalized banks continue to be biggest lenders in the

country This is primarily due to the size of the banks and the penetration of the networks

Nature of the Industry

Banks safeguard money and valuables and provide loans credit and payment services

such as checking accounts money orders and cashierrsquos checks Banks also may offer

investment and insurance products which they were once prohibited from selling As a

variety of models for cooperation and integration among finance industries have

emerged some of the traditional distinctions between banks insurance companies and

securities firms have diminished In spite of these changes banks continue to maintain

and perform their primary rolemdashaccepting deposits and lending funds from these

deposits

There are several types of banks which differ in the number of services they provide and

the clientele they serve Although some of the differences between these types of banks

have lessened as they begin to expand the range of products and services they offer there

are still key distinguishing traits Commercial banks which dominate this industry offer

a full range of services for individuals businesses and governments These banks come

in a wide range of sizes from large global banks to regional and community banks

Global banks are involved in international lending and foreign currency trading in

addition to the more typical banking services Regional banks have numerous branches

6

and automated teller machine (ATM) locations throughout a multi-state area that provide

banking services to individuals Banks have become more oriented toward marketing and

sales As a result employees need to know about all types of products and services

offered by banks Community banks are based locally and offer more personal attention

which many individuals and small businesses prefer In recent years online banksmdash

which provide all services entirely over the Internetmdashhave entered the market with some

success However many traditional banks have also expanded to offer online banking

and some formerly Internet-only banks are opting to open branches

Savings banks and savings and loan associations sometimes called thrift institutions are

the second largest group of depository institutions They were first established as

community-based institutions to finance mortgages for people to buy homes and still

cater mostly to the savings and lending needs of individuals

Credit unions are another kind of depository institution Most credit unions are formed by

people with a common bond such as those who work for the same company or belong to

the same labor union or church Members pool their savings and when they need money

they may borrow from the credit union often at a lower interest rate than that demanded

by other financial institutions

Federal Reserve banks are Government agencies that perform many financial services for

the Government Their chief responsibilities are to regulate the banking industry and to

help implement our Nationrsquos monetary policy so our economy can run more efficiently

by controlling the Nationrsquos money supplymdashthe total quantity of money in the country

including cash and bank deposits For example during slower periods of economic

activity the Federal Reserve may purchase government securities from commercial

banks giving them more money to lend thus expanding the economy Federal Reserve

banks also perform a variety of services for other banks For example they may make

emergency loans to banks that are short of cash and clear checks that are drawn and paid

out by different banks

7

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Overview

Banking in India has a long and elaborate history of more than 200 years The beginning

of this industry can be traced back to 1786 when the countryrsquos first bank Bank of

Bengal was established But the industry changed rapidly and drastically after the

nationalization of banks in 1969 As a result the public sector banks began experiencing

numerous positive changes and enormous growth Then came the much-talked-about

liberalization and economic reforms that allowed banks to explore new business

opportunities and not just remain constrained to generating revenues from mere

borrowing and lending This provided the Indian banking scenario a remarkable facelift

that only continues to get better with time However even today despite the foray of

foreign banks in the country nationalized banks continue to be biggest lenders in the

country This is primarily due to the size of the banks and the penetration of the networks

Nature of the Industry

Banks safeguard money and valuables and provide loans credit and payment services

such as checking accounts money orders and cashierrsquos checks Banks also may offer

investment and insurance products which they were once prohibited from selling As a

variety of models for cooperation and integration among finance industries have

emerged some of the traditional distinctions between banks insurance companies and

securities firms have diminished In spite of these changes banks continue to maintain

and perform their primary rolemdashaccepting deposits and lending funds from these

deposits

There are several types of banks which differ in the number of services they provide and

the clientele they serve Although some of the differences between these types of banks

have lessened as they begin to expand the range of products and services they offer there

are still key distinguishing traits Commercial banks which dominate this industry offer

a full range of services for individuals businesses and governments These banks come

in a wide range of sizes from large global banks to regional and community banks

Global banks are involved in international lending and foreign currency trading in

addition to the more typical banking services Regional banks have numerous branches

6

and automated teller machine (ATM) locations throughout a multi-state area that provide

banking services to individuals Banks have become more oriented toward marketing and

sales As a result employees need to know about all types of products and services

offered by banks Community banks are based locally and offer more personal attention

which many individuals and small businesses prefer In recent years online banksmdash

which provide all services entirely over the Internetmdashhave entered the market with some

success However many traditional banks have also expanded to offer online banking

and some formerly Internet-only banks are opting to open branches

Savings banks and savings and loan associations sometimes called thrift institutions are

the second largest group of depository institutions They were first established as

community-based institutions to finance mortgages for people to buy homes and still

cater mostly to the savings and lending needs of individuals

Credit unions are another kind of depository institution Most credit unions are formed by

people with a common bond such as those who work for the same company or belong to

the same labor union or church Members pool their savings and when they need money

they may borrow from the credit union often at a lower interest rate than that demanded

by other financial institutions

Federal Reserve banks are Government agencies that perform many financial services for

the Government Their chief responsibilities are to regulate the banking industry and to

help implement our Nationrsquos monetary policy so our economy can run more efficiently

by controlling the Nationrsquos money supplymdashthe total quantity of money in the country

including cash and bank deposits For example during slower periods of economic

activity the Federal Reserve may purchase government securities from commercial

banks giving them more money to lend thus expanding the economy Federal Reserve

banks also perform a variety of services for other banks For example they may make

emergency loans to banks that are short of cash and clear checks that are drawn and paid

out by different banks

7

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

and automated teller machine (ATM) locations throughout a multi-state area that provide

banking services to individuals Banks have become more oriented toward marketing and

sales As a result employees need to know about all types of products and services

offered by banks Community banks are based locally and offer more personal attention

which many individuals and small businesses prefer In recent years online banksmdash

which provide all services entirely over the Internetmdashhave entered the market with some

success However many traditional banks have also expanded to offer online banking

and some formerly Internet-only banks are opting to open branches

Savings banks and savings and loan associations sometimes called thrift institutions are

the second largest group of depository institutions They were first established as

community-based institutions to finance mortgages for people to buy homes and still

cater mostly to the savings and lending needs of individuals

Credit unions are another kind of depository institution Most credit unions are formed by

people with a common bond such as those who work for the same company or belong to

the same labor union or church Members pool their savings and when they need money

they may borrow from the credit union often at a lower interest rate than that demanded

by other financial institutions

Federal Reserve banks are Government agencies that perform many financial services for

the Government Their chief responsibilities are to regulate the banking industry and to

help implement our Nationrsquos monetary policy so our economy can run more efficiently

by controlling the Nationrsquos money supplymdashthe total quantity of money in the country

including cash and bank deposits For example during slower periods of economic

activity the Federal Reserve may purchase government securities from commercial

banks giving them more money to lend thus expanding the economy Federal Reserve

banks also perform a variety of services for other banks For example they may make

emergency loans to banks that are short of cash and clear checks that are drawn and paid

out by different banks

7

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Interest on loans is the principal source of revenue for most banks making their various

lending departments critical to their success The commercial lending department loans

money to companies to start or expand a business or to purchase inventory and capital

equipment The consumer lending department handles student loans credit cards and

loans for home improvements debt consolidation and automobile purchases Finally the

mortgage lending department loans money to individuals and businesses to purchase real

estate

The money to lend comes primarily from deposits in checking and savings accounts

certificates of deposit money market accounts and other deposit accounts that

consumers and businesses set up with the bank These deposits often earn interest for the

owner and accounts that offer checking provide an easy method for making payments

safely without using cash Deposits in many banks are insured by the Federal Deposit

Insurance Corporation which ensures that depositors will get their money back up to a

stated limit if a bank should fail

Technology is having a major impact on the banking industry For example many routine

bank services that once required a teller such as making a withdrawal or deposit are now

available through ATMs that allow people to access their accounts 24 hours a day Also

direct deposit allows companies and governments to electronically transfer payments into

various accounts Further debit cards which may also used as ATM cards

instantaneously deduct money from an account when the card is swiped across a machine

at a storersquos cash register Electronic banking by phone or computer allows customers to

pay bills and transfer money from one account to another Through these channels bank

customers can also access information such as account balances and statement history

Some banks have begun offering online account aggregation which makes available in

one place detailed and up-to date information on a customerrsquos accounts held at various

institutions

Advancements in technology have also led to improvements in the ways in which banks

process information Use of check imaging which allows banks to store photographed

checks on the computer is one such example that has been implemented by some banks

8

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Other types of technology have greatly impacted the lending side of banking For

example the availability and growing use of credit scoring software allows loans to be

approved in minutes rather than days making lending departments more efficient

Other fundamental changes are occurring in the industry as banks diversify their services

to become more competitive Many banks now offer their customers financial planning

and asset management services as well as brokerage and insurance services often

through a subsidiary or third party Others are beginning to provide investment banking

services that help companies and governments raise money through the issuance of stocks

and bonds also usually through a subsidiary As banks respond to deregulation and as

competition in this sector grows the nature of the banking industry will continue to

undergo significant change

Structure

The Indian banking system can be classified into nationalized banks private banks and

specialized banking institutions The industry is highly fragmented with 30 banking units

contributing to almost 50 of deposits and 60 of advances The Reserve Bank of India

is the foremost monitoring body in the Indian Financial sector It is a centralized body

that monitors discrepancies and shortcomings in the system

Industry estimates indicate that out of 274 commercial banks operating in the country

223 banks are in the public sector and 51 are in the private sector These private sector

banks include 24 foreign banks that have begun their operations here The specialized

banking institutions that include cooperatives rural banks etc form a part of the

nationalized banks category

9

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Origin of the word

The name bank derives from the Italian word banco deskbench used during the

Renaissance by Florentine bankers who used to make their transactions above a desk

covered by a green tablecloth However traces of banking activity can found even in

ancient times In fact the word traces its origins back to the Ancient Roman Empire

where moneylenders would set up their stalls in the middle of enclosed courtyards called

macella on a long bench called a bancu from which the words banco and bank are

derived As a moneychanger the merchant at the bancu did not so much invest money as

merely convert the foreign currency into the only legal tender in Rome- that of the

Imperial Mint

Scope

The Banking sector is considered the most lucrative option in todayrsquos job market In the

industry a position in Treasury or Forex is considered right on top and this is followed by

careers in Private Banking Investment Banking and Retail Banking One could work in a

variety of areas in banking industry including Recurring Deposit account banking

officer probationary officer loan officer assessor personal loan officer home loan

officer home loan agent loan manager mortgage loan underwriter loan processing

officer accountant product marketing and sales executive and customer service

executive among others

In the Financial Services some of the important jobs include that of a stockbroker who is

essentially a person who buys and sells securities on behalf of individuals and institutions

for some commission While some brokers like to practice with individual clients others

work for institutions Brokers who work for institutional investors are often called

securities traders Many prefer to work as dealers advisors and securities analysts

Security analysts are those who advise companies on floatationrsquos of shares as they are

expected to have sound knowledge of capital markets

Investment analysts are the backbone of the financial services sector They study the

financial reports of companies assess various statistical information profitability

projections compare financial results survey the industry as a whole and on the basis of

10

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

the available information and finally conclude to a decision Equity Analysts do jobs

similar to investment analysts and research the equity markets and make predictions

Indian Banking amp Insurance Industry

Banking business has a history of over 200 years From the times of the Bank of

Bengal(1806) the sector has been witnessing qualitative and quantitative changes

Main players during the pre-independence period were Credit Lyonnais Allahabad

Bank Punjab National Bank and Bank of India With 1935 regulation the Reserve

Bank of India was proclaimed the Central Bank of India and was vested with

controlling powers over the commercial bank

With economic liberalization measures many private and foreign banking companies

were allowed to operate in the country Favorable economic climate and a variety of

other factors such as demand for wide range of financial products from various sections

of the society led to mutually beneficial growth to the banking sector and economic

growth process This was coincided by technology development in the banking

operations Today most of the Indian cities have networked banking facility as well as

Internet banking facility A customer is empowered to operate his account from any part

of the country UTI Bank ICICI HDFC Bank and Bank of Punjab are the main winners

of the race

11

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

12

Scope of Banking amp Insurance Sectors in India

The financial sector in India has become stronger in terms of capital and the number

of customers

Exposure to worldwide competition and deregulation in Indian financial sector has

led to the emergence of better quality products and services Reforms have changed

the face of Indian banking and finance The banking sector has improved manifolds in

terms of capital adequacy asset classification profitability income recognition

provisioning exposure limits investment fluctuation reserve risk management etc

Diversifying into investment banking insurance credit cards depository services

mortgage financing securitization has increased revenues As large number of players

in various fields enters the market competition would be intensified by mutual funds

Non Banking Finance Corporations (NBFCs) post offices etc from both domestic and

foreign players All this would lead to increased sophistication and technology in the

sector Corporate governance would come into the picture and other financial

institutions would have to reach global standards Also the limit for FDI in private

banks is increased to 74 and the limit for FII is 49 There are many challenges

ahead for the banking sector such as technology consumer satisfaction corporate

governance risk management etc and they are redefining their priorities which are

now focused on cost reduction product differentiation and customer centric services

Some of the major players in this sector are HDFC ICICI HSBC State Bank of India

Punjab National Bank IngVysya ABNAmro Bank Centurion Bank City Bank etc

The insurance sector has opened up for private insurance companies with the enactment

of IRDA Act 1999 A large number of companies are competing under both life and

general Insurance The FDI capequity in this sector is 26 and the proposals have to

be cleared by Insurance Regulatory and Development Authority (IRDA) established to

protect the interest of holder of Insurance policy and act as a regulator and facilitator in

the industry Some of the major players in this sector are LIC Max New York Life

Insurance Bajaj Allianz ICICI Prudential HDFC Standard Life Metlife Insurance

Birla Sun Life Insurance etc Various types of policies and instruments are coming up

in the market to attract more customers Most of the population of India is not insured

hence there is a lot of scope in this sector and a number of companies are planning to

enter the sector Every futuristic individual would want himself to get insured

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Major Players in the Industry

Allahabad Bank

Andhra Bank

Axis Bank Ltd

Bank of Baroda

Bank of India

Canara Bank

Central Bank of India

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Industrial Development Bank of India Ltd

ING Vysya Bank Ltd

Jammu amp Kashmir Bank Ltd

Karnataka Bank Ltd

13

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Karur Vysya Bank Ltd

Kotak Mahindra Group

Lakshmi Vilas Bank Ltd

Lord Krishna Bank Ltd

North Kanara GSB Co-operative Bank

Oriental Bank of Commerce

PricewaterhouseCoopers Pvt Ltd

Punjab amp Sind Bank

Punjab National Bank

South Indian Bank Ltd

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore Ltd

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

14

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Vijaya Bank

Wallfort Financial Services Ltd

Wells Fargo

YES Bank Ltd

Performance of Industry

1048766 84 percent of the survey respondents described the performance of the banking

Industry as ldquoVery Goodrdquo in the fiscal 2004-05

1048766 newly granted autonomy would certainly make the PSBs more competitive and

Profitable said 88 per cent respondents though some more changes considered

Desirable (refer survey)

1048766 48 percent of overall respondents and 67 percent of private bank respondents

Expressed the need to relax the prescribed limit of single ownership and cross holding

cap in the Ownership and Governance guidelines for Private sector Banks

1048766 Although 72 percent of public amp private sector bank respondents expressed their

satisfaction with the recently devised road map for the foreign banks majority of

foreign Bank respondents (75 percent) expressed complete dissatisfaction with this

Roadmap

1048766 75 percent of the foreign bank respondents expressed that time frame prescribed to

expand through Merger amp Acquisitions should have been less and equal number

voiced that the guidelines are not in line with international norms

1048766 Consolidation in the banking industry followed by Technological up gradation was

considered as key factors currently required to enhance the international

Competitiveness of the Indian banks

1048766 Free trade agreements (FTA) considered a positive step in the area of banking by

almost all respondents The available market size and the level of access provided to

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 2

Indian banks in foreign countries should be the key factors in consideration while

15

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

entering into such agreements as highlighted by 76 percent of banks

1048766 Rise in the interest rates imminent say 64 percent survey respondents Majority

expects increase by 05 percent

1048766 88 percent of Public and private sector banks considered HRD related issues as one of

the biggest challenge in the process of consolidation

1048766 83 percent respondent banks claim to have more than 85 level of technological

advancements in their banks with remaining banks stating it to be around 65-85

1048766 All our respondents emphasized that customer retention is significantly important for

the profitability of the banks

1048766 More than 70 percent of banks felt the need of advanced security softwarersquos and

stricter security policies to safeguard and ensure the security of customer information

Some of the legal changes suggested are detailed in the survey

1048766 53 percent of respondent banks considered 6 months transition period to shift from

MIFOR rupee benchmarks for interest rate derivatives to be inadequate

1048766 Majority of banks felt that their Risk management framework for implementation of

BASEL II was well in place

1048766 53 percent of our survey respondents intend to increase their retail portfolio by more

than 25 in the year 2005-06

1048766 Rising Indebtedness followed by lack of Technological advancements were identified

as biggest challenges that could affect the future growth of Retail banking

1048766 80 percent of survey respondents did not agree with the notion that housing loan is

creating a bubble

1048766 Substantial progress made by banks in cleaning up the NPAs from their balance

sheets was largely attributed to SARFAESI Act and increased provisioning on

Doubtful debts by majority of survey respondents

1048766 Absence of Secondary Market for the trading of security receipt issued by ARCs was

identified as one of major problem in Indian Model of NPA management

1048766 Separate NPA norms for the farm and the SME sector were recommended by large

number of respondents

Survey on Status of Indian banking Industry ndash Progress amp Agenda ahead 3

1048766 96 percent of all banks claim that the current growth of non-food credit is sustainable

16

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

for about 3-5 years

1048766 Detailed information on banks sectoral exposure of credit reveals that over two-thirds

of the credit flow has been on account of retail housing and other priority sector

loans Banks credit flow exposure to large Enterprises continues to remain buoyant

with recent indications that credit to agriculture and Micro credit has also picked up

1048766 71 percent of our survey respondents did not consider SMEs as an avenue of forced

lending

Company Profile

17

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

History

Vijaya Bank a medium sized bank with presence across India was founded on 23rd

October 1931 by the late Shri ABShetty and other enterprising farmers in Mangalore

Karnataka in India The objective of the founders was essentially to promote banking

habits thrift and entrepreneurship among the farming community of Dakshina Kannada

district in Karnataka State The bank became a scheduled bank in 1958Vijaya Bank

steadily grew into a large All India bank with nine smaller banks merging with it during

the 1963-68 The credit for this merger as well as growth goes to late Shri MSunder Ram

Shetty who was then the Chief Executive of the bank The bank was nationalised on 15

April 1980

Growth and Nationalisation

Vijaya Bank grew steadily by merging nine smaller banks into it between 1963-68 Shri

MSunder Ram Shetty who was then the Chief Executive of the bank is largely credited

with these mergers The bank was nationalised on 15 April 1980

Branches

The bank has built a network of 1065 branches45 Extension Counters and 352 ATMs as

at 03012009 that span all 28 states and 4 union territories in the country

Thrust on Information Technology

The Bank has chosen Finacle from Infosys as centralized banking solution In line with

the prevailing trends the bank has been giving greater thrust towards technological

18

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

upgradation of its operations The bank has network of 1101 branches 43 Extension

Counters and 364 ATMs

All 1101 branches 37 extension counters 12 service branches are functioning on CBS

platform and at 703 centers covering 100 of Banks business

Realising your constantly evolving and diverse needs the bank has diversified too

Entering several new areas such as credit card merchant banking hire purchase and

leasing and electronic remittance services

1031 - Branches offices are under RTGS and 1030 - Branches offices are under NEFT

Vijaya Bank is one among the few banks in the country to take up principal membership

of VISA International and MasterCard International

The driving force behind Vijaya Banks every initiative has been its 12107 strong

dedicated workforce

Area of corporation

After obtaining the certificate of incorporation and certificate of commencement and

getting the draft of the memorandum of association and articles of association approved

Vijaya bank Ltd started functioning as per the provision of Indian companies act in a

small bungalow with a tiled roof (Mangalore tiles) on Kadri road in Mangalore

Background

Type Public BSE 532401

Founded 1931 at Mangalore India

Headquarters Bangalore India

Key people Albert Tauro Chairman amp Managing Director

Industry Financial Commercial banks

19

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Employees 12107

Website httpwwwvijayabankcom

Organisational set up of bank as per 1931

20

Organisational set up of the bank as per 2009

21

Products amp Services

22

Deposit Schemes

1 Savings Bank

2 V Platinum Savings Bank Account

3 Vijaya Saral Savings

4 Current Account

5 VStar Savings Scheme

6 Term Deposit

Loans amp Advances

1 Retail Lending Schemes

2 Loans Against Securities

3 Non Fund Based Facilities

4 Advances to Agriculture SSIs and Others

5 Government Sponsored Schemes

6 Special Schemes for Women

NRI Services

1 Deposits

2 Loans Remittances

3 FOREX Branches

4 FCNR(B) Branches

5 Helpline for NRIs

Remittance Collection and Facilities

1 FOREX Remittances

23

2 Inland Remittances

3 Electronic Remittance Services

4 Inward Outward Collection Instruments

Credit Cards

1 Domestic Cards

2 Global cards

3 Debit cards

Forex

1 FOREX market Information

2 Card Rates

3 Treasury

Other Services

1 Merchant Banking

2 Vijaya Rakshak

3 V-Arogya Bima Policy

4 Credit Cards

5 Mutual Funds

6 Leasing

7 Hiring

8 Purchases

Competitors of Vijaya bank

24

Canara Bank

Corporation Bank

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Karnataka Bank

ING Vysya Bank Ltd

Syndicate Bank

State Bank of India

Janatha corporative Bank

Financial analysis of Vijaya bank

25

Ratio Analysis

As on

31-

Mar-09

31-Mar-

08 31-Mar-07

Profitability

Interest

IncomeTotal

Income () 8823 8797 9113

Non Interest

IncomeTotal

Income () 1177 1204 887

Reported Net

ProfitTotal Income

() 442 817 107

Net Interest

IncomeTotal

Income () 1895 1878 346

Net Interest Margin

() 317 262 442

Return Related

ROE ()

(PATshare

cap+res)100 834 1469 1747

ROA ()

042 064 078

Leverage amp Capital Measures

Customer

loansdeposits () 6504 6608 6442

Investments

Deposits () 3188 3465 3196

26

Total

LiabilitiesNetworth 2691 2667 2288

Growth ()

Growth in Interest

Income 347 3774 2212

Growth in Interest

Expenses 3448 7465 3078

Growth in Employee

cost 4755 326 351

Growth in PAT -- 903 16115

Growth in Deposits 1373 2752 3571

Growth in

Borrowings -- 86844 --

Per Share

Book Value Per

Share (Rs) 481 432 427

Earnings Per Share

(Rs)(PATno of

shares) 605 833 764

Dividend Per Share

(Rs)(Dividends

paid no of equity

shares) -- -- --

Result of Financial analysis

27

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Products amp Services

22

Deposit Schemes

1 Savings Bank

2 V Platinum Savings Bank Account

3 Vijaya Saral Savings

4 Current Account

5 VStar Savings Scheme

6 Term Deposit

Loans amp Advances

1 Retail Lending Schemes

2 Loans Against Securities

3 Non Fund Based Facilities

4 Advances to Agriculture SSIs and Others

5 Government Sponsored Schemes

6 Special Schemes for Women

NRI Services

1 Deposits

2 Loans Remittances

3 FOREX Branches

4 FCNR(B) Branches

5 Helpline for NRIs

Remittance Collection and Facilities

1 FOREX Remittances

23

2 Inland Remittances

3 Electronic Remittance Services

4 Inward Outward Collection Instruments

Credit Cards

1 Domestic Cards

2 Global cards

3 Debit cards

Forex

1 FOREX market Information

2 Card Rates

3 Treasury

Other Services

1 Merchant Banking

2 Vijaya Rakshak

3 V-Arogya Bima Policy

4 Credit Cards

5 Mutual Funds

6 Leasing

7 Hiring

8 Purchases

Competitors of Vijaya bank

24

Canara Bank

Corporation Bank

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Karnataka Bank

ING Vysya Bank Ltd

Syndicate Bank

State Bank of India

Janatha corporative Bank

Financial analysis of Vijaya bank

25

Ratio Analysis

As on

31-

Mar-09

31-Mar-

08 31-Mar-07

Profitability

Interest

IncomeTotal

Income () 8823 8797 9113

Non Interest

IncomeTotal

Income () 1177 1204 887

Reported Net

ProfitTotal Income

() 442 817 107

Net Interest

IncomeTotal

Income () 1895 1878 346

Net Interest Margin

() 317 262 442

Return Related

ROE ()

(PATshare

cap+res)100 834 1469 1747

ROA ()

042 064 078

Leverage amp Capital Measures

Customer

loansdeposits () 6504 6608 6442

Investments

Deposits () 3188 3465 3196

26

Total

LiabilitiesNetworth 2691 2667 2288

Growth ()

Growth in Interest

Income 347 3774 2212

Growth in Interest

Expenses 3448 7465 3078

Growth in Employee

cost 4755 326 351

Growth in PAT -- 903 16115

Growth in Deposits 1373 2752 3571

Growth in

Borrowings -- 86844 --

Per Share

Book Value Per

Share (Rs) 481 432 427

Earnings Per Share

(Rs)(PATno of

shares) 605 833 764

Dividend Per Share

(Rs)(Dividends

paid no of equity

shares) -- -- --

Result of Financial analysis

27

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Deposit Schemes

1 Savings Bank

2 V Platinum Savings Bank Account

3 Vijaya Saral Savings

4 Current Account

5 VStar Savings Scheme

6 Term Deposit

Loans amp Advances

1 Retail Lending Schemes

2 Loans Against Securities

3 Non Fund Based Facilities

4 Advances to Agriculture SSIs and Others

5 Government Sponsored Schemes

6 Special Schemes for Women

NRI Services

1 Deposits

2 Loans Remittances

3 FOREX Branches

4 FCNR(B) Branches

5 Helpline for NRIs

Remittance Collection and Facilities

1 FOREX Remittances

23

2 Inland Remittances

3 Electronic Remittance Services

4 Inward Outward Collection Instruments

Credit Cards

1 Domestic Cards

2 Global cards

3 Debit cards

Forex

1 FOREX market Information

2 Card Rates

3 Treasury

Other Services

1 Merchant Banking

2 Vijaya Rakshak

3 V-Arogya Bima Policy

4 Credit Cards

5 Mutual Funds

6 Leasing

7 Hiring

8 Purchases

Competitors of Vijaya bank

24

Canara Bank

Corporation Bank

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Karnataka Bank

ING Vysya Bank Ltd

Syndicate Bank

State Bank of India

Janatha corporative Bank

Financial analysis of Vijaya bank

25

Ratio Analysis

As on

31-

Mar-09

31-Mar-

08 31-Mar-07

Profitability

Interest

IncomeTotal

Income () 8823 8797 9113

Non Interest

IncomeTotal

Income () 1177 1204 887

Reported Net

ProfitTotal Income

() 442 817 107

Net Interest

IncomeTotal

Income () 1895 1878 346

Net Interest Margin

() 317 262 442

Return Related

ROE ()

(PATshare

cap+res)100 834 1469 1747

ROA ()

042 064 078

Leverage amp Capital Measures

Customer

loansdeposits () 6504 6608 6442

Investments

Deposits () 3188 3465 3196

26

Total

LiabilitiesNetworth 2691 2667 2288

Growth ()

Growth in Interest

Income 347 3774 2212

Growth in Interest

Expenses 3448 7465 3078

Growth in Employee

cost 4755 326 351

Growth in PAT -- 903 16115

Growth in Deposits 1373 2752 3571

Growth in

Borrowings -- 86844 --

Per Share

Book Value Per

Share (Rs) 481 432 427

Earnings Per Share

(Rs)(PATno of

shares) 605 833 764

Dividend Per Share

(Rs)(Dividends

paid no of equity

shares) -- -- --

Result of Financial analysis

27

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

2 Inland Remittances

3 Electronic Remittance Services

4 Inward Outward Collection Instruments

Credit Cards

1 Domestic Cards

2 Global cards

3 Debit cards

Forex

1 FOREX market Information

2 Card Rates

3 Treasury

Other Services

1 Merchant Banking

2 Vijaya Rakshak

3 V-Arogya Bima Policy

4 Credit Cards

5 Mutual Funds

6 Leasing

7 Hiring

8 Purchases

Competitors of Vijaya bank

24

Canara Bank

Corporation Bank

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Karnataka Bank

ING Vysya Bank Ltd

Syndicate Bank

State Bank of India

Janatha corporative Bank

Financial analysis of Vijaya bank

25

Ratio Analysis

As on

31-

Mar-09

31-Mar-

08 31-Mar-07

Profitability

Interest

IncomeTotal

Income () 8823 8797 9113

Non Interest

IncomeTotal

Income () 1177 1204 887

Reported Net

ProfitTotal Income

() 442 817 107

Net Interest

IncomeTotal

Income () 1895 1878 346

Net Interest Margin

() 317 262 442

Return Related

ROE ()

(PATshare

cap+res)100 834 1469 1747

ROA ()

042 064 078

Leverage amp Capital Measures

Customer

loansdeposits () 6504 6608 6442

Investments

Deposits () 3188 3465 3196

26

Total

LiabilitiesNetworth 2691 2667 2288

Growth ()

Growth in Interest

Income 347 3774 2212

Growth in Interest

Expenses 3448 7465 3078

Growth in Employee

cost 4755 326 351

Growth in PAT -- 903 16115

Growth in Deposits 1373 2752 3571

Growth in

Borrowings -- 86844 --

Per Share

Book Value Per

Share (Rs) 481 432 427

Earnings Per Share

(Rs)(PATno of

shares) 605 833 764

Dividend Per Share

(Rs)(Dividends

paid no of equity

shares) -- -- --

Result of Financial analysis

27

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Canara Bank

Corporation Bank

HDFC Bank Ltd

ICICI Bank Ltd

Indian Bank

IndusInd Bank Ltd

Karnataka Bank

ING Vysya Bank Ltd

Syndicate Bank

State Bank of India

Janatha corporative Bank

Financial analysis of Vijaya bank

25

Ratio Analysis

As on

31-

Mar-09

31-Mar-

08 31-Mar-07

Profitability

Interest

IncomeTotal

Income () 8823 8797 9113

Non Interest

IncomeTotal

Income () 1177 1204 887

Reported Net

ProfitTotal Income

() 442 817 107

Net Interest

IncomeTotal

Income () 1895 1878 346

Net Interest Margin

() 317 262 442

Return Related

ROE ()

(PATshare

cap+res)100 834 1469 1747

ROA ()

042 064 078

Leverage amp Capital Measures

Customer

loansdeposits () 6504 6608 6442

Investments

Deposits () 3188 3465 3196

26

Total

LiabilitiesNetworth 2691 2667 2288

Growth ()

Growth in Interest

Income 347 3774 2212

Growth in Interest

Expenses 3448 7465 3078

Growth in Employee

cost 4755 326 351

Growth in PAT -- 903 16115

Growth in Deposits 1373 2752 3571

Growth in

Borrowings -- 86844 --

Per Share

Book Value Per

Share (Rs) 481 432 427

Earnings Per Share

(Rs)(PATno of

shares) 605 833 764

Dividend Per Share

(Rs)(Dividends

paid no of equity

shares) -- -- --

Result of Financial analysis

27

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Ratio Analysis

As on

31-

Mar-09

31-Mar-

08 31-Mar-07

Profitability

Interest

IncomeTotal

Income () 8823 8797 9113

Non Interest

IncomeTotal

Income () 1177 1204 887

Reported Net

ProfitTotal Income

() 442 817 107

Net Interest

IncomeTotal

Income () 1895 1878 346

Net Interest Margin

() 317 262 442

Return Related

ROE ()

(PATshare

cap+res)100 834 1469 1747

ROA ()

042 064 078

Leverage amp Capital Measures

Customer

loansdeposits () 6504 6608 6442

Investments

Deposits () 3188 3465 3196

26

Total

LiabilitiesNetworth 2691 2667 2288

Growth ()

Growth in Interest

Income 347 3774 2212

Growth in Interest

Expenses 3448 7465 3078

Growth in Employee

cost 4755 326 351

Growth in PAT -- 903 16115

Growth in Deposits 1373 2752 3571

Growth in

Borrowings -- 86844 --

Per Share

Book Value Per

Share (Rs) 481 432 427

Earnings Per Share

(Rs)(PATno of

shares) 605 833 764

Dividend Per Share

(Rs)(Dividends

paid no of equity

shares) -- -- --

Result of Financial analysis

27

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Total

LiabilitiesNetworth 2691 2667 2288

Growth ()

Growth in Interest

Income 347 3774 2212

Growth in Interest

Expenses 3448 7465 3078

Growth in Employee

cost 4755 326 351

Growth in PAT -- 903 16115

Growth in Deposits 1373 2752 3571

Growth in

Borrowings -- 86844 --

Per Share

Book Value Per

Share (Rs) 481 432 427

Earnings Per Share

(Rs)(PATno of

shares) 605 833 764

Dividend Per Share

(Rs)(Dividends

paid no of equity

shares) -- -- --

Result of Financial analysis

27

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

PROFITABLITY- Though being a season of recession this year the company has ended

up with a net profit ratio of 42 which is nearly half to the last yearrsquos ratio It could be

considered fair till than but if see the balance sheet there has been a considerable increase

in the fixed assets to 1001079 from 186177 which means that there should be increase

in the number of buildings and branches that should lead to more number of branches and

more number of accounts but besides this there are no signs of improvements in profit so

the profitability of Vijaya bank could be rated FAIR

RETURNS-Share capital and reserves have increased in this year considerably this

shows a good sign of market value and after considering environmental conditions we

can also see that the profit earned after tax this year was lesser than of the previous year

so the returns can be rated as GOOD

LEAVERAGE- The leverage ratio can be considered doing well as much down fall is

not observed and so it can be considered or rated VERY GOOD

The bankrsquos market value is seem to be increasing and though the returns are less but the

expenses have also fallen to a large extent so Vijaya bank can be rated overall as VERY

GOOD

28

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Data analysis and findingsData analysis and findings

29

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Analysis of the survey The survey was done with an objective to find the marketing

and promotional activity of some of the randomly selected branches in DK district of

Karnataka

Vijaya bank like any other national bank has various services like Vijaya tax saving

scheme v-Rakshak v-gen etc which is focusing on each and every age group and social

class of the society Vijaya bank as was started by a group of agriculturists as a bank of

agriculturists It is still focusing on the priority sector

The survey was guided throughout by MrKGanesh Acharya a bank manager in Vijaya

bank who brought to my (surveyors) notice that bank is following a social concerned

practice in the rural banking area

The questionnaire prepared for the survey mainly was with a primary objective of finding

the important banking activity and business practices in the bank as a whole Efforts were

made to understand the relationship between the main bank and its branches also the bank

and customers relationship where MrShetty DurgaprasadD (surveyor) had visited some

of the customers personally and took their valuable inputs

The questionnaire prepared was only given to the bank managers and the surveyor had

even referred the banks platinum jubilee book which was published in 2006 to understand

the banks history and progress till date

The survey also was done on the basis of comparison of service between Vijaya bank and

State bank of India both Kinnigoli branch to find out the customer attending service

which was done by MrShetty DurgaprasadD (surveyor) who personally visited both the

bank and saw two extremely different kind of service

30

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Findings from the survey The questionnaire prepared for the survey mainly was with a

primary objective of finding the important banking activity and business practices in the

bank as a whole Efforts were made to understand the relationship between the main bank

and its branches also the bank and customers relationship where MrShetty

DurgaprasadD (surveyor) had visited some of the customers personally and took their

valuable inputs

It was very surprising to find that the bank does not believes in video advertisements and

opts moreover for pamphlets and billboards though the pamphlets are designed in a very

catchy manner in such a competitive era it is necessary to have a video advertisements

The promotional activity is versatile where the bank is much focusing on service design

and corporate social responsibility The bank also focuses on the customer relationship

where each and every customer is been personally attended and also sometimes

recognised Throughout the analysis it was very clear that the bank was much focusing on

retaining the customers and making more customers by its warm and caring customer

attending service

The design of pamphlets was very much clear concise and complete where the efforts to

give maximum knowledge regarding a particular service where made Even it was found

that many of the people were migrating from other banks to Vijaya bank especially for

the competitive benefits given in some of the schemes like vcc Jeevan Nidhi deposit

schemeWhen asked with the managers they said that serving the people is main

objective The bank has also taken step to educate and train the school children and the

rural people regarding banking through its extension

The managers put forth their views that proper and complete training should be given to

the senior work force regarding computerized bankingIt was even clear that the

employee satisfaction and Job satisfaction was present and the bank was making its

employee as a potetional advertisers of their organisation by their total service motive

The Bank is practicing its tag line very well which is ldquoA friend you can Bank uponrdquo

31

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Surveyors input The major findings were that the bank is lagging behind in video

advertisements and it has a tough competition from the corporation and syndicate bank

The bank is much more customer service oriented and the workforce present is much

impressive The product profile of the bank is also impressive where it is covering all the

sections and places in the society It is also the second bank in India to start with the

mobile banking system which has a good customer response The NPA ratio was fair in

all the branches as consulted in the research and its increasing number of branches across

India was showing the progress of the bank

As a management student and also the customer of the bank the main suggestion would

be that the bank should go for an effective video advertisement as people would come to

know more about the bank The bank should also concentrate in some of institutional tie

ups to gear the business

The workforce present is very much effective but optimum utilization was lacking cause

training in the use of computers was very less among the senior level officers

The promotional activity has to be more stressed upon cause of the tough competition

from other banks The major problem in this particular bank is that some of the very

impressive and potetional offers and schemes like the VCC V-gen and tax saving

scheme is being unnoticed in the market even the banks prime customer lack knowledge

about such services present in the bank so the bank should much concentrate in making

the public realize the efficiency and potetional of such products through various

promotional activity

32

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Conclusion

As a leading bank in the banking industry Vijaya bank should not neglect the promotional

activities at all in its activity towards making business as promotional activity is

necessary in any business so that the society and customer would know about the benefits

of the service and that are influenced to buy

Financial institutions should also pay attention to political environment and labour

conditions of the area where if any potetional project is to be located Strikes Lockouts

Industrial Peace and Communal Harmony in the area play a decisive role in examining

success or failure of the project Market and environmental analysis is much more of

importance before launching any of the service so Vijaya bank should also foresee the

exact market segment for each of its product cause many of the schemes are only suitable

to a particular location and class of people

Also we should consider the slowdown in the economy due to the recession as banks

suffered the most during this time but Vijaya bank was able to maintain the business

throughout The bank is also having a good workforce and also is recruiting fresh

employees which mean it is creating opportunities for growth in the income per person in

country

Vijaya bank can also be look upon as a bank which is functioning as a social business

entity cause of its interest taken in educating people and students in banking with the help

of its extension

33

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Annexure

Income

34

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Statement

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

ProfitLoss AC Rs mn OI Rs mn OI Rs mn OI

Interest Income

Earned 5237825 8823 3983415 9011 2823112 9113

Commission

Exchange and

Brokerage

Income 128803 217 83819 19 66466 215

Lease Income 0 0 0 0 0 0

Dividend

Income 0 0 0 0 0 0

Miscellaneou

s Income 570007 96 353335 799 208323 672

Other Income 69881 1177 437154 989 274789 887

Total Income

(OI) 5936636 100 4420568 100 3097901 100

Interest

Expenditure 4113024 6928 3058418 6919 1751162 5653

Employee

Expenditure 597469 1006 404916 916 392139 1266

Depreciation 36981 062 30799 07 40131 13

Other

Operating

Expenditure 290249 489 265559 601 218448 705

Provision and

Contingencies 357412 602 383288 867 348268 1124

Total

Expenditure 5395136 9088 414298 9372 2750147 8877

35

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Pretax Income 5415 912 277588 628 347754 1123

Tax 27902 47 -8369 -189 1641 053

Extra Ordinary

and Prior Period

Items Net 0 0 0 0 0 0

Net Profit 26248 442 361278 817 331345 107

Adjusted Net

Profit 26248 442 361278 817 331345 107

Dividend -

Preference 096 0 0 0 0 0

Dividend -

Equity 50719 085 101439 229 100151 323

Balance Sheet

31-Mar-09 BT 31-Mar-08 BT 31-Mar-07 BT

36

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Equity

Capital 2000 032 2000 036 433518 102

Preference

Capital 5000 08 0 0 0 0

Share

Capital 7000 113 2000 036 433518 102

Reserves

and Surplus 2215777 357 2025532 362 1463159 345

Deposits 54535425 8775 47952013 857 37604499 8878

Borrowings 619242 1 1918872 343 19814 047

Other

Provisions

and

Liabilities 4078641 656 3854374 689 2658176 628

Capital and

Liabilities

(BT) 62149084 9814 55950792 10049 42357492 100

Fixed

Assets 1001079 158 046 0 186177 044

Investment

s 17387703 2746 1661732 2985 12018405 2837

Advances 35468111 5601 31689216 5692 24223552 5719

Cash amp

Money at

Call 8107995 128 6097363 1095 5070123 1197

Other

Current

Assets 1361362 215 1272589 229 859235 203

Properties

and Assets

(BT) 6332625 100 55676534 100 42357492 100

37

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry

Questionnaire

1 Which sector does your branch gives importance

a Priority sector b non-priority sector

2 what kind of loan is more availed by the public from the bank

3 What kind of promotional activity is undertaken by the branch and the bank

4 What kind of delegation of authority is given to you as branch manager

5 Did the branch go for any tie ups till date Specify

6 What kind of workforce is present in the branch

7 Is there any promotional activity taken by the branch recently

8 How often do people migrate from other bank to your banking service

9 What kind of competition is the branch facing

10 Which scheme of the bank is doing expressively well Why

11 How often the regional or the main branch official would be visiting the branch

38

• Scope of Banking amp Insurance Sectors in India
• • Nature of the Industry
  • • Indian Banking amp Insurance Industry