CHAPTER-1

INTRODUCTION

1.1 ABOUT THE INDUSTRY

The evolution of the modern commercial banking industry in India can be traced to
1786 with the establishment of bank of Bengal in Calcutta. Three presidency banks
were set up in Calcutta, Bombay, and Madras. In 1860, the limited liability concept
was introduced in banking, resulting in the establishment of joint stock banks like
Allah bad Bank ltd. , AXIS ltd. bank of Baroda ltd. and bank of India ltd. In 1921, the
three presidency banks were amalgamated to form the Imperial Bank of India, which
took on the role of a commercial bank, a bankers bank and a banker to the Govt. The
establishment of the RBI as the central bank of the country in 1935 ended the quasicentral banking role of the Imperial Bank of India. In order to serve the economy in
general and the rural sector in particular, the All India Rural Credit Survey Committee
recommended the creation of a state partnered bank taking over the Imperial Bank
of India and integrating with it, the former state owned and state associate banks.
Accordingly, the State bank of India (SBI) was constituted in 1955. Subsequently in
1959, the SBI (Subsidiary Bank) Act was passed, enabling the SBI to take over 8
former state-associate banks as its subsidiaries. I n 1969, 14 private banks were
nationalized followed by 6 private banks in 1980. Since 1991 many financial reforms
have been introduced substantially transforming the banking industry in India.

HDFC Bank Limited

is a major Indian financial services company based in India,

incorporated in August 1994, after the Reserve Bank of India allowed establishing private
sector banks. The Bank was promoted by the Housing Development Finance Corporation, a
premier housing finance company (set up in 1977) of India. HDFC Bank has 1,725 branches
and over 5,000 ATMs, in 780 cities in India, and all branches of the bank are linked on an
online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82
billion.[3] For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore
(US$875.56 million), up 33.1% from the previous fiscal. Total annual earnings of the bank
increased by 20.37% reaching at 24,263.4 crore (US$5.41 billion) in 2010-11.

It is one of the Big Four banks of India, along with State Bank of India, ICICI Bank and
Punjab National Bankits main competitors.

ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91
billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the
year ended March 31, 2011. The Bank has a network of 2,533 branches and 6,301 ATMs in
India, and has a presence in 19 countries, including India.
ICICI Bank offers a wide range of banking products and financial services to corporate and
retail customers through a variety of delivery channels and through its specialised subsidiaries
in the areas of investment banking, life and non-life insurance, venture capital and asset
management.
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches
in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National
Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE).

Punjab National Bank, was founded in 1894 and today is the second largest state-owned
commercial bank in India with about 5000 branches across 764 cities. It serves over 37
million customers. The bank has been ranked 248th biggest bank in the world by the Bankers
Almanac, London. The bank's total assets for financial year 2007 were about US$60 billion.
AXIS has a banking subsidiary in the UK, as well as branches in Hong Kong, Dubai and
Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai.
Punjab National Bank is one of the Big Four banks of India, along with ICICI Bank, State
Bank of India and HDFC Bankits main competitors.[2]

Allahabad Bank (Hindi: ), which began operations in 1865, now has its headquarters in Kolkata. Currently the bank has 2402 branches across the country. The Chairman
and Managing Director of the bank is Shri J P Dua. The bank has a branch in Hong Kong and
a representative office in Shenzen.

Andhra Bank was registered on 20 November 1923 and commenced business on 28

November 1923 with a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00
lakhs. The Bank crossed many milestones [clarification needed] and the Bank's Total Business as on
30.06.2008 stood at Rs.83,256 Crores with a Clientele base over 1.74 Crores. [citation needed] The
Bank is rendering services through 2139 Business Delivery Channels consisting of 1371
branches, 66 Extension Counters, 38 Satellite Offices and 664 ATMs spread over 21 States
and 2 Union Territories as at the end of June, 2008. All Branches are 100% computerized,
1186 units viz., 1101 Branches, 68 Extension Counters, 15 Service Centres networked under
Cluster Banking solution and providing "Any Branch Banking(ABB)". Real Time Gross
Settlement (RTGS) Facility and National Electronic Fund Transfer (NEFT) facility has been
introduced in 723 Branches. To provide value-added services [clarification needed] to Customers, the
Bank has set up its own 664 ATMs as on 30.06.2008. Of which 03 [clarification needed] Mobile ATMs
and two with Biometric access.

State Bank of India (SBI) is the largest Indian banking and financial services company (by
turnover and total assets) with its headquarters in Mumbai, India. It is state-owned. The bank
traces its ancestry to British India, through the Imperial Bank of India, to the founding in

1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian
Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta
and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of
India. The government of India nationalised the Imperial Bank of India in 1955, with the
Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008,
the government took over the stake held by the Reserve Bank of India.
SBI provides a range of banking products through its vast network of branches in India and
overseas, including products aimed at non-resident Indians (NRIs). The State Bank Group,
with over 16,000 branches, has the largest banking branch network in India. SBI has 14 Local
Head Offices and 57 Zonal Offices that are located at important cities throughout the country.
It also has around 130 branches overseas.
With an asset base of $352 billion and $285 billion in deposits, SBI is a regional banking
behemoth and is one of the largest financial institution in the world. It has a market share
among Indian commercial banks of about 20% in deposits and loans. T The State Bank of
India is the 29th most reputed company in the world according to Forbes Also SBI is the only
bank featured in the coveted "top 10 brands of India" list in an annual survey conducted by
Brand Finance and The Economic Times in 2010.
The State Bank of India is the largest of the Big Four banks of India, along with ICICI Bank,
Punjab National Bank and HDFC Bankits main competitors.

Bank of Baroda (BoB) is the third largest bank in India, after the State Bank of India and the
Punjab National Bank and ahead of ICICI Bank.[1] BoB has total assets in excess of Rs. 2.27
lakh crores, or Rs. 2,274 billion, a network of over 3,403 branches and offices, and about
1,100 ATMs. IT plans to open 400 new branches in the coming year. It offers a wide range of
banking products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialised subsidiaries and affiliates in the areas of
investment banking, credit cards and asset management. Its total business was Rs. 4,402
billion as of June 30.[2]
As of August 2010, the bank has 78 branches abroad and by the end of FY11 this number
should climb to 90. In 2010, BOB opened a branch in Auckland, New Zealand, and its tenth
branch in the United Kingdom. The bank also plans to open five branches in Africa. Besides

branches, BoB plans to open three outlets in the Persian Gulf region that will consist of ATMs
with a couple of people.
The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on 20 July 1908 in
the princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial
banks of India, was nationalised on 19 July 1969, by the government of India.

Canara Bank is a state-owned financial services company in India. It was established

in 1906, making it one of the oldest banks in the country. As on 2009 November, the
bank had a network of 3057 branches, spread across India. The bank also has offices
abroad in London, Hong Kong, Moscow, Shanghai, Doha, and Dubai.

AWARDS & RECOGNITIONS

Following are the recognition received by the Bank during the Year 2009:

Business World ,Best Bank Awards- Fastest Growing Large Bank

Business Today, Best Bank Awards - India's Best Bank, India's Fastest
Growing Bank, India's Most Consistent Bank

ET Intelligence Group-Best Bank 2009

NDTV Profit Business Leadership Awards 2009 -Best bank Private Sector

Forbes Fab 50-The Best of Asia Pacific's Biggest Listed Company

FE Best Banks Award-Best New Private Sector bank,Rank 1

Talisma - Customer Appreciation Award 2009

D & B Best Bank Awards - Best Private Bank

Lafferty Award - Best Annual Report-India

1.2 About the Company

Commercial banking services which includes merchant banking, direct finance

infrastructure finance, venture capital fund, advisory, trusteeship, forex, treasury and
other related financial services. As on 31-Mar-2009, the Group has 827 branches,
extension

counters

and

3,595

automated

teller

machines

(ATMs).

Axis Bank was the first of the new private banks to have begun operations in 1994,
after the Government of India allowed new private banks to be established. The Bank
was promoted jointly by the Administrator of the specified undertaking of the Unit
Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e.
National Insurance Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The
Bank today is capitalized to the extent of Rs. 359.76 crores with the public holding
(other than promoters) at 57.79%.The Bank's Registered Office is at Ahmedabad and
its Central Office is located at Mumbai. The Bank has a very wide network of more
than 853 branches and Extension Counters (as on 30th June 2009). The Bank has a
network of over 3723 ATMs (as on 30th June 2009) providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve excellence.
History of bank:

Bank

was incorporated on 3rd December and Certificate of business on 14th December. The
Bank transacts banking business of all description. UTI Bank Ltd. was promoted by
Unit Trust of India, Life Insurance Corporation of India, General Insurance
Corporation of India and its four subsidiaries. The bank was the first private sector
bank to get a license under the new guidelines issued by the RBI.

1997: The Bank obtained license to act as Depository Participant with NSDL and
applied for registration with SEBI to act as `Trustee to Debenture Holders'. Rupees
100 crores was contributed by UTI, the rest from LIC Rs 7.5 crores, GIC and its four
subsidiaries Rs 1.5 crores each.
1998: The Bank has 28 branches in urban and semi urban areas as on 31 st July. All
the branches are fully computerized and networked through VSAT. ATM services are
available in 27 branches. The Bank came out with a public issue of 1,50,00,000 No. of
equity shares of Rs 10 each at a premium of Rs 11 per share aggregating to Rs 31.50
crores and Offer for sale of 2,00,00,000 No. of equity shares for cash at a price of Rs
21 per share. Out of the public issue 2,20,000 shares were reserved for allotment on
preferential basis to employees of UTI Bank. Balance of 3,47,80,000 shares were
offered to the public. The company offers ATM cards, using which account-holders
can withdraw money from any of the bank's ATMs across the country which is interconnected by VSAT. UTI Bank has launched a new retail product with operational
flexibility for its customers. UTI Bank will sign a co-brand agreement with the
market, leader, Citibank NA for entering into the highly promising credit card
business. UTI Bank promoted by India's pioneer mutual fund Unit Trust of India
along with LIC, GIC and its four subsidiaries.
1999: UTI Bank and Citibank have launched an international co-branded Credit card.
UTI Bank and Citibank have come together to launch an international co-branded
credit card under the MasterCard umbrella. UTI Bank Ltd has inaugurated an off site
ATM at Ashok Nagar here, taking the total number of its off site ATMs to 13.m
2000: The Bank has announced the launch of Tele-Depository Services for Its
depository clients. UTI Bank has launch of `iConnect', its Internet banking Product.
UTI Bank has signed a memorandum of understanding with equitymaster.com for ebroking activities of the site. Infinity.com financial Securities Ltd., an e-broking outfit
is Typing up with UTI Bank for a banking interface. Geojit Securities Ltd, the first
company to start online trading services, has signed a MoU with UTI Bank to enable
investors to buy\sell demat stocks through the company's website. India bulls have
signed a memorandum of understanding with UTI Bank. UTI Bank has entered into
an agreement with Stock Holding Corporation of India for providing loans against
shares to SCHCIL's customers and funding investors in public and rights issues.
ICRA has upgraded the rating UTI Bank's Rs 500 crore certificate of deposit
9

programmed to A1+. UTI Bank has tied up with L&T Trade.com for providing
customized online trading solution for brokers.
2001: UTI Bank launched a private placement of non-convertible debentures to rise
up to Rs 75 crores. UTI Bank has opened two offsite ATMs and one extension counter
with an ATM in Mangalore, taking its total number of ATMs across the country to
355. UTI Bank has recorded a 62 per cent rise in net profit for the quarter ended
September 30, 2001, at Rs 30.95 crore. For the second quarter ended September 30,
2000, the net profit was Rs 19.08 crore. The total income of the bank during the
quarter was up 53 per cent at Rs 366.25 crore.
2002: UTI Bank Ltd has informed BSE that Shri B R Barwale has resigned as a
Director of the Bank w.e.f. January 02, 2002. A C Shah, formerchairman of Bank of
Baroda, also retired from the banks board in the third quarter of last year. His place
continues to be vacant. M Damodaran took over as the director of the board after
taking in the reins of UTI. B S Pandit has also joined the banks board subsequent to
the retirement of K G Vassal. UTI Bank Ltd has informed that Shri Paul Fletcher has
been appointed as an Additional Director Nominee of CDC Financial Service
(Mauritius) Ltd of the Bank.And Shri Donald Peck has been appointed as an
Additional Director (nominee of South Asia Regional Fund) of the Bank. UTI Bank
Ltd has informed that on laying down the office of Chairman of LIC on being
appointed as Chairman of SEBI, Shri G N Bajpai, Nominee Director of LIC has
resigned as a Director of the Bank.
2002: B Paranjpe & Abid Hussain cease to be the Directors of UTI Bank.UTI Bank
Ltd has informed that in the meeting of the Board of Directors following decisions
were taken: Mr Yash Mahajan, Vice Chairman and Managing Director of Punjab
Tractors Ltd were appointed as an Additional Director with immediate effect. Mr N C
Singhal former Vice Chairman and Managing Director of SCICI was appointed as an
Additional Director with immediate effect. ABN Amro, UTI Bank in pact to share
ATM. UTI Bank Ltd has informed BSE that a meeting of the Board of Directors of
the Bank is scheduled to be held on October 24, 2002 to consider and take on record
the unaudited half yearly/quarterly financial results of the Bank for the half
year/Quarter ended September 30, 2002. UTI Bank Ltd has informed that Shri J M
Trivedi has been appointed as an alternate director to Shri Donald Peck with effect
from November 2, 2002.
10

2003: UTI Bank Ltd has informed BSE that at the meeting of the Board of Directors
of the company held on January 16, 2003, Shri R N Bharadwaj, Managing Director of
LIC has been appointed as an Additional Director of the Bank with immediate effect.UTI Bank, the private sector bank has opened a branch at Nellore. The bank's
Chairman and Managing Director, Dr P.J. Nayak, inaugurating the bank branch at GT
Road on May 26. Speaking on the occasion, Dr Nayak said. This marks another step
towards the extensive customer banking focus that we are providing across the
country and reinforces our commitment to bring superior banking services, marked by
convenience and closeness to customers. -UTI Bank Ltd. has informed the Exchange
that at its meeting held on June 25, 2003 the BOD have decided the following: 1) To
appoint Mr. A T Pannir Selvam, former CMD of Union Bank of India and Prof.
Jayanth Varma of the Indian Institute of Management, Ahmedabad as additional
directors of the Bank with immediate effect. Further, Mr. Pannir Selvam will be the
nominee director of the Administrator of the specified undertaking of the Unit Trust of
India (UTI-I) and Mr. Jayanth Varma will be an Independent Director. 2) To issue
Non-Convertible Unsecured Redeemable Debentures up to Rs.100 crs, in one or more
tranches as the Bank's Tier - II capital. -UTI has been authorized to launch 16 ATMs
on the Western Railway Stations of Mumbai Division. -UTI filed suit against financial
institutions IFCI Ltd in the debt recovery tribunal at Mumbai to recover Rs.85cr in
dues. -UTI bank made an entry to the Food Credit Programme it has made an entry
into the 59 cluster which includes private sector, public sector, old private sector and
co-operative banks. -Shri Ajeet Prasad, Nominee of UTI has resigned as the director
of the bank. -Banks Chairman and MD Dr. P. J. Nayak inaugurated a new branch at
Nellore.-UTI bank allots shares under Employee Stock Option Scheme to its
employees. -Unveils pre-paid travel card 'Visa Electron Travel Currency Card'
-Allotment of 58923 equity shares of Rs 10 each under ESOP. -UTI Bank ties up with
UK govt fund for contract farm in -Shri B S Pandit, nominee of the Administrator of
the Specified Undertaking of the Unit Trust of India (UTI-I) has resigned as a director
from the Bank wef November 12, 2003. -UTI Bank unveils new ATM in Sikkim.
2004:

Comes out with Rs. 500 mn Unsecured Redeemable Non-Convertible

Debenture Issue, issue fully subscribed -UTI Bank Ltd has informed that Shri Ajeet
Prasad, Nominee of the Administrator of the Specified Undertaking of the Unit Trust
of India (UTI - I) has been appointed as an Additional Director of the Bank w. e. f.
January 20, 2004.-UTI Bank opens new branch in Udupi-UTI Bank, Geojit in pact for
11

trading platform in Qatar -UTI Bank ties up with Shriram Group Cos -Unveils
premium payment facility through ATMs applicable to LIC UTI Bank customers
Metal junction (MJ)- the online trading and procurement joint venture of Tata Steel
and Steel Authority of India (SAIL)- has roped in UTI Bank to start off own
equipment for Tata Steel. -DIEBOLD Systems Private Ltd, a wholly owned subsidiary
of Diebold Incorporated, has secured a major contract for the supply of ATMs an
services to UTI Bank -HSBC completes acquisition of 14.6% stake in UTI Bank for .6
m -UTI Bank installs ATM in Thiruvananthapuram -Launches Remittance Card' in
association with Remit2India, a Web site offering money transfer services
2005: - UTI Bank enters into a banc assurance partnership with Bajaj Allianz General
for selling general insurance products through its branch network. -UTI Bank
launches its first Satellite Retail Assets Centre (SRAC) in Karnataka at Mangalore.
2006: -UBL sets up branch in Jaipur -UTI Bank unveils priority banking lounge.

VISION, MISSION AND VALUES

VisionTo be the preferred brand for total financial banking for both
corporate and individuals
Mission
Customer Service and Product Innovation tuned to diverse needs of
Individual and corporate clientele.
Continuous
Progressive

technology

up

gradation

globalization

and

while

maintaining

achieving

human

international

values.

standards.

Efficiency and effectiveness built on ethical practices.

Values
Customer Satisfaction through
Providing

quality

service

effectively

and

efficiently

Smile, it enhances your face value" is a service quality stressed on

Periodic Customer Service Audits
Maximization of StaReholder value
Success through Teamwork, Integrity and People

12

Vision 2015 and Core Values

VISION 2015:
To be the preferred financial solutions provider excelling in customer
delivery through insight, empowered employees and smart use of
technology
CO REVALUES
CUSTOMERCentricity
Ethics
Transparency
Teamwork
Ownership

13

ORGANIZATION STRUCTURE OF AXIS BANK

Figure: 1.2
14

SWOT ANALYSIS OF AXIS BANK

Strength
1.

Support of various promoters.

2.

High level of services.

3.

Knowledge of Indian market.

Weakness
1.

Market capitalization is very low.

2.

Not having good image.

3.

Not been able to position itself correctly.

Opportunities
1.

Growing Indian bank sectors.

2.

People are becoming more service oriented.

3.

Opportunities to be explored in global market.

Threats
1.

Threat from various competitors.

2.

Foreign banks

3.

Govt. banks, e.g. SBI, AXIS etc

4.

Private sector competitors like HDFC, AXIS

5.

Future market trends.

6.

Advent of MNC banks

15

16

Traditional banking activities: Banks act as payment agents by

conducting checking or current accounts for customers, paying
cheques drawn by customers on the bank, and collecting cheques
deposited to customers' current accounts. Banks also enable
customer payments via other payment methods such as telegraphic
transfer, EFTPOS, and ATM. Banks borrow money by accepting funds
deposited on current accounts, by accepting term deposits, and by
issuing debt securities such as banknotes and bonds. Banks lend
money by making advances to customers on current accounts, by
making installment loans, and by investing in marketable debt
securities and other forms of money lending. Banks provide almost
all

payment

services,

and

bank

account

is

considered

indispensable by most businesses, individuals and governments.

Non-banks that provide payment services such as remittance
companies are not normally considered an adequate substitute for
having a bank account. Banks borrow most funds from households
and non-financial businesses, and lend most funds to households
and non-financial businesses, but non-bank lenders provide a
significant and in many cases adequate substitute for bank loans,
and money market funds, cash management trusts and other nonbank financial institutions in many cases provide an adequate
substitute to banks for lending savings to
Accounting for bank accounts
Bank statements are accounting records produced by banks under
the various accounting standards of the world. Under GAAP and IFRS
there are two kinds of accounts: debit and credit. Credit accounts
are Revenue, Equity and Liabilities. Debit Accounts are Assets and
Expenses. This means you credit a credit account to increase its
balance, and you debit a debit account to increase its balance. This
also means you debit your savings account every time you deposit
money into it (and the account is normally in deficit), while you
17

credit your credit card account every time you spend money from it
(and the account is normally in credit).However, if you read your
bank statement, it will say the opposite that you credit your account
when you deposit money, and you debit it when you withdraw
funds. If you have cash in your account, you have a positive (or credit)
balance; if you are overdrawn, you have a negative (or deficit) balance. The reason for
this is that the bank, and not you, has produced the bank statement. Your savings
might be your assets, but the bank's liability, so they are credit accounts (which should
have a positive balance). Conversely, your loans are your liabilities but the bank's
assets, so they are debit accounts (which should have a also have a positive
balance).Where bank transactions, balances, credits and debits are discussed below,
they are done so from the viewpoint of the account holder which is traditionally what
most people are used to seeing.

MARKETING STRATEGY
THE SERVICE MARKETING MIX OF AXIS BANK
PRODUCT
The main products of AXIS Bank are Saving Account, Current
Account and Demat Account. The other products are Home loan,
personal loan, Insurance, Credit cards, etc.
For better marketing of products, the products are categorized
under Axis Bank and Axis Sales.
Products under Axis Bank are

Easy Access Saving Account

Saving Account for Women

Prime Saving Account

Senior Citizens Saving Account

18

Priority Banking

Corporate Salary Account

Trust /NGOs Saving Account

Resident Foreign Currency Account

Online Trading Account

Current Account

Term Deposits

Locker Facilities

NRI Services

Depository Services

Financial Advisory Services

Wealth Management Services

Insurance Solutions Life and General

Retail Loans

Credit Loans

Travel Currency Cards

Remittance Cards

Gift Cards

Saving Account

Current Account

Forex Department
19

Salary Accounts

Products under Axis Sales are

Home loan

Personal loan,

Demat Account

PRICE
The price of the product depends upon the services provided by the
Bank on the respective product to the customers. Detailed pricing
changes from time to time and the same can be found on the
website of Axis bank.
PLACE
Place plays an important role in tangibilizing service offerings.
Quality of service is perceived by many customers in the form of
place of delivery- locational appeal, interiors, ambience, etc. If a
bank is located in a crowded market the place or location will be a
negative tangibilizes. Providing excellent tangibles in the form of
place or location and interiors is particularly important for appealing
to the customers segment. More recently, some of the private banks
in India like AXIS Bank are providing very attractive tangibles in the
form of their locations, exteriors and interiors.
PROMOTION
Promotion can tangibilize services in different forms:

Visualization

Association

Physical representation
20

Documentation.

Visualization tangibilizes services through hoardings, TV and print

campaigns or advertisements. Physical representation in services
has a good promotional appeal to customers like use of colors to
symbolize wealth and status. Service providers use documentation
in their promotions in support of their claims for dependability,
popularity and responsiveness

STP OF BANKS
Segmentation:

banks consider the customer service as the base for

segmentation. These banks segment their market on the basis of
the customer who give emphasis on the services and believe in
using technically advance product.

Targeting:

banks are targeting the people of the urban and sub-urban areas
who believe in higher set of product and want speedy services.

Positioning:

banks are positioned as the technically advance and delivering

higher set of customer services.

COMPETITIVE STRATEGY OF AXIS BANK

o

For the private sector banks

Axis bank has differentiated against these banks on the base of the maximum area
coverage. In this group some banks have no reach to the some part of the country. So
Axis bank has got the advantage of reach in terms of this segment. The level of

21

service is same in almost all banks but Axis bank has also got the advantage of the
product innovation which not all the banks are doing in this group.
For the government sector banks

Axis bank has differentiated itself from this group on the base of the high level of
service quality and through product innovation. In terms of the reach Axis bank is
not anyway near to these but it has created a different set of segment of the people
who believe in the higher set of services.

For the International Banks

For these types of banks Axis bank differentiated itself on the base of the reach and
coverage to the people. The service level is some what same or these are providing
good services than Axis bank is

22

CHAPTER-2
LITERATURE REVIEW

23

2.1 STUDY OF PROFIT& LOSS A/C OF AXIS BANK

It is a financial statement, which shows net loss of a company for a specified period.
The accounting year means calendar year of 12 months or less or more than 12
months.
CONTENTS: This presents the revenues and expenses of a company and shows the
excess of revenues over expenses for profit and vice versa for a loss.
FORMAT: The Companies act does not provide any specific format for this account.
However it is required to be prepared on the basis of the instructions given in part ii of
schedule (VI) of the companies act.
MAIN ITEMS OF PROFIT AND LOSS ACCOUNT
Turnover or sales: The aggregate amount of sales and connected items with
the sales such as commission paid to sole-selling agents and other selling
agents and brokerage and discounts on sales other than usual trade discount.
Depreciation: The amount of depreciation of fixed assets and the arrears of
depreciation as per section 205(2) shall be disclosed by way of foot-note.
Interest on loans and debentures: Interest on loans and debentures has to be
stated separately. It will include the amount of interest paid as well as
outstanding.
Miscellaneous expenses: In this head items such as rates and taxes, insurance
premium etc., must be stated separately.
Preliminary expenses: Such expenses include the costs of formation of a
company and since their amount is usually large, it is not desirable to write off
them in one year.
Provision for taxation: The profit and loss account of a company must be
debited with the estimated liabilities for tax on the current profits at current
rates of taxation.
Unclaimed dividends: It is shown on the liabilities side of the balance sheet
under the heading current liabilities .
Interim dividends: It is an item of appropriation. It is transferred to the debit
side of the Profit and loss appropriation account.
24

 Final dividend as an item of the trial balance: This is shown in the debit side of
the appropriation section of the profit and loss account.
Proposed dividend or final dividend proposed: Since it is an adjustment item,
it has to be shown at two places- In the debit side of the profit and loss
appropriation account and on the liabilities side of the balance sheet under the
head current liabilities and provisions.
Political donations: It must be shown as a separate item in the profit and loss
account.
Dividend on interest income: This item is transferred to the credit side of the
profit and loss account.
Payment to auditors: It must be stated separately. This will include
consultancy fee, auditing fees management services etc.
Managerial remuneration: This includes the payments made to managerial
remuneration directors fee, pension, other allowances and commission.

STUDY OF BALANCE SHEET

The balance sheet is a financial snapshot of a company's condition at a single point in
time. A balance sheet contains a listing of the company's asset, liability and Capital
accounts. When someone, whether a creditor or investor, asks you how your company
is doing, want to have the answer ready and documented. The way to show off the
success of your company is a balance sheet. A balance sheet is a documented report of
your company's assets and obligations, as well as the residual ownership claims
against your equity at any given point in time. It is a cumulative record that reflects
the result of all recorded accounting transactions since your enterprise was formed.
You need a balance sheet to specifically know what your company's net worth is on
any given date. With a properly prepared balance sheet, you can look at a balance
sheet at the end of each accounting period and know if your business has more or less
value, if your debts are higher or lower, and if your working capital is higher or lower.
By analyzing your balance sheet, investors, creditors and others can assess your
ability to meet short-term obligations and solvency, as well as your ability to pay all
current and long-term debts as they come due. The balance sheet also shows the
25

composition of assets and liabilities, the relative proportions of debt and equity
financing and the amount of earnings that have had to retain. Collectively, external
parties to help assess your companys financial status, which is required by both
lending institutions and investors before they will allot any money toward your
business, will use this information.

THE DIFFERENT ASSETS

Current assets: Current assets include cash and other assets that in
the normal course of events are converted into cash within the
operating cycle. For example, a manufacturing enterprise will use
cash to acquire inventories of materials. These inventories of
materials are converted into finished products and then sold to
customers. Cash is collected from the customers. This circle from
cash back to cash is called an operating cycle. In a merchandising
business one part of the cycle is eliminated. Materials are not
purchased for conversion into finished products. Instead, the
finished products are purchased and are sold directly to the
customers. Several operating cycles may be completed in a year, or
it may take more than a year to complete one operating cycle. The
time required to complete an operating cycle depends upon the
nature of the business. It is conceivable that almost all of the assets
that are used to conduct your business, such as buildings,
machinery, and equipment, can be converted into cash within the
time required to complete an operating cycle. However, your current
assets are only those that will be converted into cash within the
normal course of your business. The other assets are only held
because they provide useful services and are excluded from the
current asset classification. If you happen to hold these assets in the
regular course of business, you can include them in the inventory
under the classification of current assets. Current assets are usually
listed in the order of their liquidity and frequently consist of cash,

26

temporary

investments,

accounts

receivable,

inventories

and

prepaid expenses.
Cash: Cash is simply the money on hand and/or on deposit
that is available for general business purposes. It is always
listed first on a balance sheet. Cash held for some designated
purpose, such as the cash held in a fund for eventual retirement of a bond
issue, is excluded from current assets.
Marketable Securities: These investments are temporary and are made from
excess funds that you do not immediately need to conduct operations. Until
you need these funds, they are invested to earn a return.
Accounts Receivable: Simply stated, accounts receivables are the amounts
owed to you and are evidenced on your balance sheet by promissory notes.
Accounts receivable are the amounts billed to your customers and owed to you
on the balance sheet's date. You should label all other accounts receivable
appropriately and show them apart from the accounts receivable arising in the
course of trade. If these other amounts are currently collectible, they may be
classified as current assets.
Inventories: Your inventories are your goods that are available for sale,
products that you have in a partial stage of completion, and the materials that
you will use to create your products. The costs of purchasing merchandise and
materials and the costs of manufacturing your various product lines are
accumulated in the accounting records and are identified with either the cost of
the goods sold during the fiscal period or as the cost of the inventories
remaining.
Prepaid expenses: These expenses are payments made for services that will be
received in the near future. Strictly speaking, your prepaid expenses will not
be converted to current assets in order to avoid penalizing companies that
choose to pay current operating costs in advance rather than to hold cash.
Often your insurance premiums or rentals are paid in advance.
Investments: Investments are cash funds or securities that you hold for a designated
purpose for an indefinite period of time. Investments include stocks or the bonds you
27

may hold for another company, real estate or mortgages that you are holding for
income-producing purposes. Your investments also include money that you may be
holding for a pension fund.
Plant Assets: Often classified as fixed assets, or as plant and
equipment, your plant assets include land, buildings, machinery,
and equipment that are to be used in business operations over a
relatively long period of time. It is not expected that you will sell
these assets and convert them into cash. Plant assets simply
produce income indirectly through their use in operations.
Intangible Assets: other fixed assets that lack physical substance
are referred to as intangible assets and consist of valuable rights,
privileges or advantages. Although your intangibles lack physical
substance, they still hold value for your company. Sometimes the
rights, privileges and advantages of your business are worth more
than all other assets combined.
Other Assets: During the course of preparing balance sheet you will
notice other assets that cannot be classified as current assets,
investments, plant assets, or intangible assets. These assets are
listed on your balance sheet as other assets. Frequently, your other
assets consist of advances made to company officers, the cash
surrender value of life insurance on officers, the cost of buildings in
the process of construction, and the miscellaneous funds held for
special purposes.
THE DIFFERENT LIABILITIES
Current Liabilities: On the equity side of the balance sheet, as on the
asset side, need to make a distinction between current and longterm items. Your current liabilities are obligations that you will
discharge within the normal operating cycle of your business. In
most circumstances your current liabilities will be paid within the
28

next year by using the assets you classified as current. The amount
you owe under current liabilities often arises as a result of acquiring
current assets such as inventory or services that will be used in
current operations. You show the amounts owed to trade creditors
that arise from the purchase of materials or merchandise as
accounts payable. If you are obligated under promissory notes that
support bank loans or other amounts owed, your liability is shown as
notes payable. Other current liabilities may include the estimated
amount payable for income taxes and the various amounts owed for
wages and salaries of employees, utility bills, payroll taxes, local
property taxes and other services.
Long-Term Liabilities: Your debts that are not due until more than a
year from the balance sheet date are generally classified as longterm liabilities. Notes, bonds and mortgages are often listed under
this heading. If a portion of your long-term debt is due within the
next

year, it

should

be removed

from

the long-term

debt

classification and shown under current liabilities.

Deferred Revenues: Your customers may make advance payments
for merchandise or services. The obligation to the customer will, as
a general rule, be settled by delivery of the products or services and
not by cash payment. Advance collections received from customers
are classified as deferred revenues, pending delivery of the products
or services.
Owner's Equity: Your owner's equity must be subdivided on your
balance sheet: One portion represents the amount invested directly
by you, plus any portion of retained earnings converted into paid-in
capital. The other portion represents your net earnings that are
retained. This rigid distinction is necessary because of the nature of
any corporation. Ordinarily, stockholders, or owners, are not
personally liable for the debts contracted by a company. A

29

stockholder may lose his investment, but creditors usually cannot

look to his personal assets for satisfaction of their claims. Under
normal circumstances, the stockholders may withdraw as cash
dividends an amount measured by the corporate earnings. The
distinction in this rule gives the creditors some assurance that a
certain portion of the assets equivalent to the owner's investment
cannot be arbitrarily withdrawn. Of course, this portion could be
depleted from your balance sheet because of operating losses. The
owner's equity in an unincorporated business is shown more simply.
The interest of each owner is given in total, usually with no
distinction being made between the portion invested and the
accumulated net earnings. The creditors are not concerned about
the amount invested. If necessary, creditors can attach the personal
assets of the owners.

BALANCE-SHEET STRUCTURE
Basis of balance-sheet: Assets = Liability + Equity
The following Balance sheet structure is just an example. It does not
show all possible kind of assets, equity and liabilities, but it shows
the most usual ones. It could be a consolidated balance sheet.
Monetary values are not shown and summary (total) rows are
missing as well.
Assets
Current Assets
Cash & cash equivalent
Inventories

30

Account receivable
Investment held for trading
Other current assets
Non-Current Assets Property, plant and equipment
Goodwill
Other intangible fixed assets
Investment in associates
Deferred tax assets
Miscellaneous Expenditure
Equity and Liabilities
Capital & Reserve
Share capital reserve
Revaluation reserve
Translation reserve
Retained earnings
Minority interest
Non-Current Liabilities Bank loan
Issued debt securities
Deferred tax liability

31

Current Liabilities Accounts payable

Current income tax liability
Short-term part of bank loans
Short-term provisions
EQUITY VALUATION:The real value to a purchaser of the business or
a shareholder may be different from the net assets shown by the
balance sheet. This is because factors that affect the value of a
business may not be recorded yet. For example, a purchaser will be
interested in the future earnings of the business, whether assets
such as property have been revalued recently, and whether there
are potential liabilities in the future such as lawsuits. The value of
the assets in the balance has also been based on the assumption
that the business is a going concern, otherwise the break-up value
of the assets may be far less than the value in the balance sheet.
PREPAIRING A BALANCE-SHEET
Title and Heading: In practice, the most widely used title is
Balance Sheet; however Statement of Financial Position is also
acceptable. Naturally, when the presentation includes more
than one time period the title "Balance Sheets" should be
used.
Heading: In addition to the statement title, the heading of
your balance sheet should include the legal name of your
company and the date or dates that your statement is
presented. For example, a comparative presentation might be
headed:

BALANCE SHEETS

32

 Format: There are two basic ways that balance sheets can be
arranged. In Account Form, your assets are listed on the lefthand side and totaled to equal the sum of liabilities and
stockholders' equity on the right-hand side. Another format is
Report Form, a running format in which your assets are listed
at the top of the page and followed by liabilities and
stockholders' equity. Sometimes total liabilities are deducted
from total assets to equal stockholders' equity.
Captions: Captions are headings within your statement that
designate

major

groups

of

accounts

to

be

totaled

or

subtotaled. Your balance sheet should include three primary

captions: Assets, Liabilities and Stockholders' Equity. In the
report form of presentation, the placement of your primary
captions would be as follows: 2006 ASSETS, LIABILITIES AND
STOCKHOLDERS EQUITY.
Order of Presentation of Captions: First, start with items held
primarily for conversion into cash and rank them in the order
of their expected conversion. Then, follow with items held
primarily for use in operations but that could be converted
into cash, and rank them in the order of liquidity. Finally, finish
with items whose costs you will defer to future periods or that
you cannot convert into cash.
STUDY OF CASH FLOW STATEMENT

Cash flow statement or statement of cash flows is a financial statement that shows a
company's incoming and outgoing money (sources and uses of cash) during a time
period (often monthly or quarterly). The statement shows how changes in balance
sheet and income accounts affected cash and cash equivalents, and breaks the analysis
down according to operating, investing, and financing activities. As an analytical tool

33

the statement of cash flows is useful in determining the short-term viability of a

company, particularly its ability to pay bills.
PURPOSE: The cash flow statement reflects a firms liquidity or solvency. The main
purpose to make cash flow statement are as follows:
1. provide information on a firm's liquidity and solvency and its ability to change
cash flows in future circumstances
2. provide additional information for evaluating changes in assets, liabilities and
equity
3. improve the comparability of different firms' operating performance by
eliminating the effects of different accounting methods
4. indicate the amount, timing and probability of future cash flows

ACTIVITIES INVOLVED IN CASH FLOW:

The cash flow statement is partitioned into cash flow resulting from operating
activities, cash flow resulting from investing activities, and cash flow resulting from
financing activities.
Operating activities: Operating activities include the production, sales and delivery of
the company's product as well as collecting payment from its customers. This could
include purchasing raw materials, building inventory, advertising.
Investing activities: Investing activities focus on the purchase of the long-term assets
a company needs in order to make and sell its products, and the selling of any longterm assets.

34

Financing activities: Financing activities include the inflow of cash from investors
such as banks and shareholders, as well as the outflow of cash to
shareholders as dividends as the company generates income. Other activities
which impact the long-term liabilities and equity of the company are also
listed in the financing activities section of the cash flow statement.
Analysis of cash flow statement is necessary for every organisation to depict its cash
inflow and outflow.
FINANCIAL STATEMENT ANALYSIS
Financial statement analysis is the process of examining relationships among financial
statement elements and making comparisons with relevant information. It is a
valuable tool used by investors and creditors, financial analysts, and others in their
decision-making processes related to stocks, bonds, and other financial instruments.
With a great understanding of the balance sheet & p&l account and how it is
constructed, we can look at some techniques to analyze the information contained
within the balance sheet & p&l account.
PURPOSE: The main purpose of analyzing the financial statement are the following:

To assess past performance and current financial position.

To make predictions about the future performance of a company.

TOOLS FOR ANALYSING

1. PERCENTAGE CALCULATION
There are two popular methods by which we can analyze the financial
statement by calculating percentage as taking a common base.
Horizontal Analysis
When an analyst compares financial information for two or more years for a
single company, the process is referred to as horizontal analysis, since the
analyst is reading across the page to compare any single line item, such as
sales revenues. In addition to comparing dollar amounts, the analyst computes
35

percentage changes from year to year for all financial statement balances, such
as cash and inventory. Alternatively, in comparing financial statements for a
number of years, the analyst may prefer to use a variation of horizontal
analysis called trend analysis. Trend analysis involves calculating each year's
financial statement balances as percentages of the first year, also known as the
base year. When expressed as percentages, the base year figures are always
100 percent, and percentage changes from the base year can be determined.
If we want to calculate % change in sales then we apply the following
formula:
Percentage=change in sales /Base Year Sales*100
Vertical Analysis
When using vertical analysis, the analyst calculates each item on a single
financial statement as a percentage of a total. The term vertical analysis
applies because each year's figures are listed vertically on a financial
statement. The total used by the analyst on the income statement is net sales
revenue, while on the balance sheet it is total assets. This approach to financial
statement analysis, also known as component percentages, produces commonsize financial statements. Common-size balance sheets and income statements
can be more easily compared, whether across the years for a single company
or across different companies.
If we want to calculate % change of current assets then we apply the following
formula:
Percentage: current assets/total assets*100
2. RATIO ANALYSIS
Financial ratio analysis uses formulas to gain insight into the company and its
operations. For the balance sheet, using financial ratios (like the debt-to-equity
ratio) can show you a better idea of the companys financial condition along
with its operational efficiency. It is important to note that some ratios will need
information from more than one financial statement, such as from the balance
sheet and the income statement. Ratio analysis facilitates inter-firm and intrafirm comparison.

36

Ratios are often classified using the following terms:

LIQUIDITY RATIO
Liquidity ratios are measures of the short-term ability of the company to pay its
debts when they come due and to meet unexpected needs for cash.

Current Ratio: The current ratio is a rough indication of a firm ability to service its
current obligations. Generally, the higher the current ratio, the greater the cushion
between current obligations and a firm ability to pay them. The stronger ratio
reflects a numerical superiority of current assets over current liabilities Current
ratio is calculated as follows:
Current ratio= Current Assets/Current Liabilities

Quick Ratio: It is also known as the acid test ratio, this is a refinement of the
current ratio and is a more conservative measure of liquidity. The quick ratio
expresses the degree to which a companys current liabilities are recovered by the
most liquid current assets. quick ratio is calculated as follows:
Quick ratio= (cash + marketable securities + Receivables)/current liabilities

SOLVENCY RATIO
Solvency ratios indicate the ability of the company to meet its long-term
obligations on a continuing basis and thus to survive over a long period of time.

Debt/Worth Ratio: This ratio expresses the relationship between capital

contributed by creditors and that contributed by owners. It expresses the degree of
protection provided by the owners for the creditors. The higher the ratio, the
greater the risk being assumed by creditors. The lower the ratio, the greater the
long-term financial safety. A firm with a low debt/worth ratio usually has a greater
flexibility to borrow in the future. A more highly leveraged company has a more
limited debt capacity.
Debt/worth ratio=Total Liabilities / Tangible Net Worth
37

 PROFITABILITY RATIO
Profitability ratios are gauges of the company's operating success for a given
period of time.

Return On Assets: Return on assets is a measure of how effectively the firms

assets are being used to generate profit. It is calculated as follows:
Return On Assets= Net Income/Total Assets

Return On Equity: Return on equity is the bottom line measure for the
shareholders, measuring for the profits earned for each rupee invested in business.
It is calculated as follows:
Return on Equity= Net income/shareholders equity

Fixed/Worth Ratio: This ratio measures the extent to which owners equity
(capital) has been invested in plant and equipment (fixed assets). A lower ratio
indicates a proportionately smaller investment in fixed assets in relation to net
worth and a better cushion for creditors in case of liquidation. Similarly, a higher
ratio would indicate the opposite situation. The presence of substantial leased
fixed assets (not shown on the balance-sheet ) may deceptively lower this ratio.
Fixed Worth Ratio=Net Fixed Assets/ Tangible Net Worth

38

CHAPTER-3
RESEARCH METHODOLOGY

39

The procedure adopted for conducting the research requires a lot of attention as it has
direct bearing on accuracy, reliability and adequacy of results obtained. It is due to
this reason that research methodology, which we used at the time of conducting the
research, needs to be elaborated upon. It may be understood as a science of studying
how research is done scientifically. So, the research methodology not only talks about
the research methods but also considers the logic behind the method used in the
context of the research study. Research Methodology is a way to systematically study
and solve the research problems. If a researcher wants to claim his study as a good
study, he must clearly state the methodology adapted in conducting the research the
research so that it way be judged by the reader whether the methodology of work
done is sound or not.

The Research Methodology here includes: Objective of study

Meaning of Research.
Research Problem.
Research Design.
Data Collection method.
Analysis and interpretation of Data
Limitation of study

3.1 OBJECTIVE OF THE STUDY

Objectives are the ends that states specifically how goal be achieved. Every study
must have an objective for which all the efforts have been done. Without objective no
research can be conducted and no result can be obtained. On the basis of objective all
the research process is followed. Objectives are the main aspect of every study. The
objective of the study gives direction to go through the research problem. It guides the
researcher and keeps him on track. I have two objectives regarding my research
project.

40

These are shown below:1. Primary objective

2. Secondary objective

1. Primary objective:1) To analyze the financial statements of the corporation to assess its true financial
position by the use of ratios.

2. Secondary objective:1) To find out the shortcomings in Axis Bank.

2) To see whether Axis Bank is going well or not in different areas.

3.2 IMPORTANCE OF THE STUDY

By FINANCIAL PERFORMANCE ANALYSIS OF Axis Bank we would

be able to get a fair picture of the financial position of Axis Bank.

By showing the financial performance to various lenders and creditors it is

possible to get credit in easy terms if good financial condition is maintained in
the company with assets outweighing the liabilities.

Protecting the property of the business.

Compliances with legal requirement.

Meaning of Research:
Research is defined as a scientific and systematic search for pertinent information on
a specific topic. Research is an art of scientific investigation. Research is a
systematized effort to gain now knowledge. It is a careful investigation or inquiry
especially through search for new facts in any branch of knowledge. Research is an
academic activity and this term should be used in a technical sense. Research
comprises defining and redefining problems, formulating hypothesis or suggested
41

solutions. Making deductions and reaching conclusions to determine whether they if

the formulating hypothesis.
3.3 Research Problem
The first step while conducting research is careful definition of Research Problem.
To ERR IS THE HUMAN is a proverb which indicates that no one is perfect in this
world. Every researcher has to face many problems which conducting any research
thats why problem statement is defined to know which type of problems a researcher
has to face while conducting any study. It is said that, Problem well defined is
problem half solved.
Basically, a problem statement refers to some difficulty, which researcher experiences
in the context of either a theoretical or practical situation and wants to obtain the
solution for the same.
The problem statement here is:TO MAKE A FINANCIAL ANALYSIS OF FINANCIAL STATEMENTS OF
AXIS BANK

3.4 Research Design

A research designs is the arrangement of conditions for collection and analysis data in
a manner that aims to combine relevance to the research purpose with economy in
procedure. Research Design is the conceptual structure with in which research in
conducted. It constitutes the blueprint for the collection measurement and analysis of
data. Research Design includes and outline of what the researcher will do form
writing the hypothesis and it operational implication to the final analysis of data. A
research design is a framework for the study and is used as guide in collection and
analyzing the data. It is a strategy specifying which approach will be used for
gathering and analyzing the data. It also include the time and cost budget since most
studies are done under these two cost budget since most studies are done under theses
tow constraints. The design is such studies must be rigid and not flexible and most
focus attention on the following:-

42

 What is the study about?

Why is the study being made?
Where will the study be carried out?
What type of data is required?
Where can be required data be found?
What period of time will the study include?
What will be sample design?
What techniques of data collection will be used?
How will the data be analyzed?
In what style will the report be prepared?

3.5 Data Collection Method

The process of data collection begins after a research problem has been defined and
research design ahs been chalked out. There are two types of data.

PRIMARY DATA It is first hand data, which is collected by researcher itself. Primary data is collected
by various approaches so as to get a precise, accurate, realistic and relevant data. The
main tool in gathering primary data was investigation and observation. It was
achieved by a direct approach and observation from the officials of the company.

SECONDARY DATA - it is the data which is already collected by someone else.

Researcher has to analyze the data and interprets the results. It has always been
important for the completion of any report. It provides reliable, suitable, adequate and
specific knowledge.

43

44

3.6 TYPE OF DATA USED IN THE STUDY

The required data for the study are basically secondary in nature and the data are
collected from

The audited reports of the company.

INTERNET which includes required financial data collected form Axis

Banks official website i.e www.icici.com and some other websites on the
internet for the purpose of getting all the required financial data of the bank
and to get detailed knowledge about Axis Bank for the convenience of study.

Brouchers of Axis Bank.

The valuable cooperation extended by staff members and the branch manager
of Axis Bank, New Delhi contributed a lot to fulfill the requirements in the
collection of data in order to complete the project.

3.7 ANALYTICAL TOOLS APPLIED:

The study employs the following analytical tools:
1. Comparative statement.
2. Trend Percentage.
3. Ratio Analysis.
4. Cash Flow Statement.

45

3.8 LIMITATIONS OF STUDY

Difficulty in data collection.

Limited knowledge about the bank in the initial stages.

Branch manager was reluctant for giving financial data of the bank.

The analysis and interpretation are based on secondary data contained in the
published annual reports of Axis Bank for the study period.

Due to the limited time available at the disposable, the study has been confined for
a period of 3 years.

Ratio itself will not completely show the companys good or bad financial
position.

Inter firm comparison was not possible due to the non availability of competitors
data.

The study of financial performance can be only a means to know about the
financial condition of the company and cannot show a through picture of the
activities of the company

46

CHAPTER-4
ANALYSIS & INTERPRETATION

47

DATA ANALYSIS

1. Capital Adequacy Ratio from March 2012 March 2014.

Capital Adequacy Ratio

14.00%
13.50%
Percentage

13.00%
12.50%
12.00%

13.73%

13.69%

2013

2014

Capital Adequacy Ratio

11.50%
11.00%
10.50%

11.57%

10.00%
2012

Year

Interpretation:
In above analysis, it has been found that capital adequacy ratio is increasing year by
year in 2012 it was 11.57%, in 2013 it increased to 13.73% & in 2014 it slightly
decreased to 13.69%.

48

2. Net Profit Margin

Net Profit Margin

13.50%
13.00%

Percentage

12.50%
13.31%

12.00%
11.50%

12.01%

Net Profit Margin

12.22%

11.00%
2012

2013

2014

Year

Interpretation:
In above analysis, it has been found that net profit margin is increasing year by year in
2012 it was 12.01%, in 2013 it increased to 12.22% & in 2014 it increased to
13.31%.it show that Axis bank profit margin is increasing yr by yr which shows that
Axis bank have high margin of safety. Its means sales are increasing.

49

3. Operating Expense

Operating Expense
27.00%
26.00%

Percentage

25.00%
24.00%
23.00%
22.00%

Operating Expense

26.20%
24.95%
23.26%

21.00%
2012

2013

2014

Years

Interpretation:
In above analysis, its clear that operating expense is increasing year by year in 2012
it was 23.26%, in 2013 it increased to 26.20% & in 2014 it slightly decreased to
24.95%. In 2013 operating expense increased to 26.20% which shows that in this year
investors get less profit but in 2014 operating expenses decreased.

50

4. Return On Net Worth:

Return on Net Worth

25.00%
20.00%

19.37%

Percentage

15.00%

17.77%
12.21%

Return on Net Worth

10.00%
5.00%
0.00%
2012

2013

2014

Year

Interpretation:
In above analysis, it has been found that return on net worth is changing year by year
in 2012 it was 19.37%, in 2013 it decreased to 12.71% & in 2014 it increased to
17.77%. Return on net worth measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have invested. In
above analysis its is clearly shown that in 2012 axis bank generate good amount of
profit through its share holders investment but in 2013 it decreased ,and 2014 it
increased to 17.77% .

51

5. Net Interest Income

Net Interest Income

6.00%

Percentage

5.00%
4.00%
3.00%
2.00%

Net Interest Income

4.01%

4.74%

4.98%

2013

2014

1.00%
0.00%
2012

Year

Interpretation:
In above analysis, it has been found that net interest income is increasing year by year
in 2012 it was 4.01%, in 2013 it increased to 4.74% & in 2014 it increased to 4.98%.
Which show that Axis bank income after paying interest on deposits is increasing year
by year which shows that bank have good margin b/w interest received and interest
paid.

52

6. Non Interest Income

Non Interest Income

0.07%
0.06%

Percentage

0.05%
0.04%
0.03%
0.02%

0.06%

Non Interest Income

0.03%

0.01%

0.02%

0.00%
2012

2013

2014

Year

Interpretation:
In above analysis, it has been found that non interest income is changing year by year
in 2012 it was 0.03%, in 2013 it decreased to 0.02% & in 2014 it increased to 0.06%.

53

7.

Net Profit

Net Profit
1.60%
1.40%
1.20%
Percentage

1.00%
0.80%
0.60%

1.07%

1.17%

2012

2013

1.41%

Net Profit

0.40%
0.20%
0.00%
2014

Year

Interpretation:
In above analysis, it has been found that non interest income is increased year by year
in 2012 it was 1.07%, in 2013 it increased to 1.17% & in 2014 it increased to 1.41%.
In above analysis it is clearly shown this net profit of Axis bank is increasing year by
year which show that Axis bank sales increasing & and it also manage its expenses
very efficiently

54

8.

Earning Per Share

Earning Per Share

60.00%

Percentage

50.00%
40.00%
30.00%

50.57%

Earning Per Share

20.00%
10.00%

23.40%

29.94%

0.00%
2012

2013

2014

Year

Interpretation:
In above analysis, it has been found that non interest income is increased year by
year in 2012 it was 23.40%, in 2013 it increased to 29.94% & in 2014 it increased
to 50.57%.It shows that share value oh share is increasing and share holder
earning more year by year.

55

9. Equity Dividend

Interpretation:
In above analysis, it has been found that non interest income is increased year by year
in 2012 it was 45%, in 2013 it increased to 60% & in 2014 it increased to 100%. Is
show investors get high amount of divided on there investment which is increasing
year by year.

56

CHAPTER- 5
FINDINGS &
SUGGESTIONS

57

FINDINGS

When I compare saving a/c of axis bank with other banks I found that axis bank
provide more varieties of saving a/c to its customer than its competitor banks.

But services charges of axis bank are quite higher than its competitors.

By analyzing the DD and PO rates, charges under axis bank are higher than to its
competitors banks.

Average quarterly balance maintenance charges are also high in axis bank.

When I compare current a/c of axis bank with its competitors banks I found that
AQB is broadly categorized for rural and urban areas under AXIS bank, but no
such rural and urban classification is made by its competitors banks for its current
account customers.

Different DD and PO rates are applied by the banks according to the kinds of
account facilities they are providing to their ultimate customers.

Average quarterly balance is less and broadly categorized current a/c is offer by
axis bank to its customers. As compare to its competitors.

DD & PO charges are different for different current a/c holders in axis bank.

After doing ratio analysis I found that Axis bank profit margin is increasing yr by
yr which shows that Axis bank have high margin of safety. Its means sales are
increasing .which is good for future growth.

In 2012 operating expense of Axis bank is low in comparison of yr 2013 which

shows that in 2013 Axis bank does not manage its operating expenses efficiently.
but in 2014 bank have less operating expenses as compare to 2013.

I also found that in axis bank have good return on net worth in 2012 which
shows that axis bank generate good amount of profit through its share holders
investment ,but in 2013 it decreased ,and 2014 it increased to 17.77% .

Axis bank also generate good amount of through is net interest income in 2012 ,
but in 2013 it was slightly decreased . And 2014 it increased further.

Axis bank net profit is also increasing year by year which is good sing for future
growth and this growth also help them in attracting new investors & customers.

EPS is also increasing every years which shows that Axis bank market share value
is increasing & market share is also increased in past few years.
58

SUGGESTION

AXIS bank should need to lower the charges rate if the balance falls below
average quarterly balance.

AXIS bank should work on their field networking and services to enhance more
credibility.

A wide publicity to be given about the organization and its products through
various means of communications to keep growth moments.

AXIS bank should target customers that are ranging between 25-30 age group
because it was found that they are more interested in taking Business loan & to
apply for new account.

If AXIS bank wants to compete their rivals like ICICI & HDFC they should
minimize, the AQB so, that they can increase customer database.

New and different product should be launched to attract more customers.

Customer service should be improved.

To eliminate the dissatisfaction proper workshop and awareness programs like

campaigning are helpful and held on the client origination.

59

CHAPTER-6
CONCLUSION

60

CONCLUSION
My experience with Axis Bank Ltd. is outstanding. While working in Axis Bank I
found that this bank has developed manifold in short period of time due to facilities
and services provided to their customer and this growth rate can be keep it up if they
start to go in semi-urban areas. In last couple of years they have opened new many
branches and they should open many more. The working staffs are very co-operative
in nature and due to that the bank will also get good benefit. Axis Bank has provided
their customer Net-banking facilities and due to that transactions are done fast.
Charges at Axis Bank are when I compare it with Yes bank and ICICI bank. Charges
are high because Axis bank provides more variety of account to its customer. And
when I compare Axis bank to HDFC bank charges of axis bank is less than HDFC
bank.
Axis bank also provides ATM services 24 hours, also give free balance enquiry
To its account holder , it also provide addition services to its account holders like bill
payment , tax payment, mobile all this addition services are free of cost . But Axis
bank competitor charge for this services.
Axis bank also provide i-connect facility to its a/c which is unique service introduced
by axis bank which is plus point of axis bank against its competitors. ICICI is closest
competitor of axis bank because there is slightly difference between charges and it
also provides almost similar types of facilities.
Axis bank categorized its account according to regional wise like metro city, urban,
rural, semi-urban and charged according to persons income, average quarterly balance
maintenance is also different for different account holder. Fee for non maintenance of
quarterly average balance is charged by axis bank according to a/c holders category.
But ICICI, HDFC charges quit similar fee for non-maintenance of AQB from there a/c
holders.
Past record of axis bank shows that net profit, net interest of Axis bank, is increasing
year by year this is only because they offer more varieties of account to there
customer according to there needs, business profile. And Yes bank, & other
competitors of Axis bank does not provide varieties of account to there customer.
61

They only provide two, three types of a/c. Market share of axis bank is also increasing
year by year which is show in earning per share ratio as compare to its competitors
In addition, Axis bank offers corporate restructuring advisory services, mergers and
acquisitions advisory services, acquisition funding arranging services, infrastructure
and project advisory services, techno-economic feasibility reports, and business plan
preparation and bid process management, as well as acts as debenture trustees and
trustees for securitization issues.

62

BIBLOGRAPHY

63

BIBLIOGRAPHY

WEBSITE

www.axisbank.com

www.finance.india.mart.com

BOOKS REFFERED:
Accountancy. R.K. Mittal, A.K.Jain.
Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma.
Essentials of Corporate Finance 2nd edition, Irwin /McGraw-Hill.Ross, S.A.,
R.W. Westerfield and B.D. Jordan.
Basic Financial Management, 8th edition, Prentice -Hall,Inc. Scott, D.F., J.D
Martin, J.W. Petty and A.Keown.

64

ANNEXURE

65

ANNEXURE - 1
INCOME STATEMENT
Currency
in
Millions
of Indian
Rupees

As of:

Mar 31
Mar 31
Mar 31
Mar 31
2011
2012
2013
2014
Reclassified Reclassified Reclassified

Revenues

10,099.1

17,959.2

29,159.3 39,642.1

Other Revenues

-2,676.1

-5,796.4

-19,093.9 -27,301.0

TOTAL REVENUES

22,107.7

38,015.2

46,867.3 62,405.3

1,289.8

1,907.6

20,817.9

36,107.6

44,620.3 59,361.6

Selling General & Admin

Expenses, Total

8,627.9

14,869.5

20,357.5 25,704.1

Other Operating Expenses

2,275.9

4,890.0

10,903.8

19,759.5

26,491.0 34,580.1

OPERATING INCOME

9,914.1

16,348.1

18,129.3 24,781.4

EBT, EXCLUDING
UNUSUAL ITEMS

9,914.1

16,348.1

18,129.3 24,781.4

EBT, INCLUDING
UNUSUAL ITEMS

9,914.1

16,348.1

18,129.3 24,781.4

Income Tax Expense

3,371.6

5,756.7

Earnings from Continuing

Operations

6,542.5

10,591.4

18,129.3 24,781.4

NET INCOME

6,542.5

10,591.4

18,129.3 24,781.4

NET INCOME TO

6,542.5

10,591.4

18,129.3 24,781.4

Cost of Goods Sold

GROSS PROFIT

OTHER OPERATING
EXPENSES, TOTAL

66

2,247.0

6,133.5

--

3,043.8

8,876.0

--

4-Year
Trend

COMMON INCLUDING
EXTRA ITEMS
NET INCOME TO
COMMON EXCLUDING
EXTRA ITEMS

6,542.5

10,591.4

67

18,129.3 24,781.4

ANNEXURE 2
CASH FLOW STATEMENT

Currency in
Millions of
Indian Rupees

As of:

Mar 31
Mar 31
Mar 31
2011
2012
2013
Reclassified Reclassified Reclassified

Mar 31
2014

NET INCOME

6,542.5

10,591.4

18,129.3

24,781.4

Depreciation &
Amortization

1,120.1

1,593.0

1,902.2

2,378.7

DEPRECIATION &
AMORTIZATION,
TOTAL

1,120.1

1,593.0

1,902.2

2,378.7

29.1

151.8

82.0

44.9

1,657.2

1,043.1

2,005.7

607.4

17.7

213.2

661.5

564.7

-763.8

-371.5

-2,093.4

-1,672.0

1,986.3

4,760.4

8,370.7

13,561.3

Change in Other Working

-144,427.8
Capital

-244,927.6

-223,081.7 -279,669.7

CASH FROM
OPERATIONS

-133,811.7

-226,944.3

-194,026.2 -239,403.4

-2,273.9

-4,417.4

-3,883.3

-4,149.3

34.9

126.4

399.9

189.7

(Gain) Loss from Sale of

Asset
(Gain) Loss on Sale of
Investment
Asset Write down &
Restructuring Costs
Other Operating
Activities
Provision for Credit
Losses

Capital Expenditure
Sale of Property, Plant,
and Equipment

68

4-Year
Trend

Investments in
Marketable & Equity
Securities

-34,264.6

-44,515.7

-91,764.6 -46,793.1

CASH FROM
INVESTING

-36,503.7

-48,806.8

-95,247.9 -50,752.7

Long-Term Debt Issued

17,128.1

--

19,050.6

18,214.3

TOTAL DEBT ISSUED

17,128.1

--

19,050.6

18,214.3

Long Term Debt Repaid

--

-720.8

--

--

TOTAL DEBT REPAID

--

-720.8

--

--

359.4

45,466.8

388.6

39,031.7

Common Dividends Paid

-1,117.4

-1,488.1

-2,516.0

-4,205.5

TOTAL DIVIDEND
PAID

-1,117.4

-1,488.1

-2,516.0

-4,205.5

Other Financing
Activities

186,714.9

288,343.2

297,383.1 239,210.0

CASH FROM
FINANCING

203,085.0

331,601.2

314,306.3 292,250.5

-5.0

22.1

106.6

-204.1

32,764.6

55,872.1

25,138.8

1,890.2

Issuance of Common
Stock

Foreign Exchange Rate

Adjustments
NET CHANGE IN CASH

69

ANNEXURE - 3
BALANCE SHEET
Mar '08

Mar '09

Mar '10

12 mths

12 mths

12 mths

Capital and Liabilities:

Total Share Capital

357.71

359.01

405.17

Equity Share Capital

357.71

359.01

405.17

Share Application Money

2.19

1.21

0.17

Preference Share Capital

0.00

0.00

0.00

8,410.79

9,854.58

15,639.27

0.00

0.00

0.00

8,770.69

10,214.80

16,044.61

87,626.22

117,374.11

141,300.22

Borrowings

5,624.04

10,185.48

17,169.55

Total Debt

93,250.26

127,559.59

158,469.77

7,556.90

9,947.67

6,133.46

109,577.85

147,722.06

180,647.84

Mar '08

Mar '09

Mar '10

12 mths

12 mths

12 mths

Cash & Balances with RBI

7,305.66

9,419.21

9,473.88

Balance with Banks, Money at

Call

5,198.58

5,597.69

5,732.56

Advances

59,661.14

81,556.77

104,343.12

Investments

33,705.10

46,330.35

55,974.82

Gross Block

1,384.70

1,741.86

2,107.98

Accumulated Depreciation

590.33

726.45

942.79

Net Block

794.37

1,015.41

1,165.19

Reserves
Revaluation Reserves
Net Worth
Deposits

Other Liabilities & Provisions

Total Liabilities

Assets

Capital Work In Progress

128.48

57.48

57.24

Other Assets

2,784.51

3,745.15

3,901.06

Total Assets

109,577.84

147,722.06

180,647.87

Contingent Liabilities

78,028.44

104,428.39

296,125.58

Bills for collection

16,569.95

29,906.04

35,756.32

245.13

284.50

395.99

Book Value (Rs)