State Bank of India

State Bank of India is an Indian multinational, Public Sector banking and financial
services company. It is a government-owned corporation with its headquarters
in Mumbai, Maharastra and also its corporate office in Mumbai, Maharashtra. As of
December 2013, it had assets of US$388 billion and 17,000 branches, including 190
foreign offices, making it the largest banking and financial services company in India
by assets.
State Bank of India is one of the Big Four banks of India, along with Bank of
Baroda, Punjab National Bank and ICICI Bank.
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" in British India, Bank of Calcutta and Bank of Bombay, to form the Imperial
Bank of India, which in turn became the State Bank of India. Government of
India owned the Imperial Bank of India in 1955, with Reserve Bank of India (India's
Central Bank) 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.
State Bank of India is a regional banking behemoth and has 20% market share in
deposits and loans among Indian commercial banks.
The roots of the State Bank of India lie in the first decade of the 19th century, when
the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June
1806. The Bank of Bengal was one of three Presidency banks, the other two being
the Bank of Bombay (incorporated on 15 April 1840) and the Bank of
Madras(incorporated on 1 July 1843). All three Presidency banks were incorporated
as joint stock companies and were the result of royal charters. These three banks
received the exclusive right to issue paper currency till 1861 when, with the Paper
Currency Act, the right was taken over by the Government of India. The Presidency

banks amalgamated on 27 January 1921, and the re-organised banking entity took
as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock
company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank
of India, which is India's central bank, acquired a controlling interest in the Imperial
Bank of India. On 1 July 1955, the imperial Bank of India became the State Bank of
India. In 2008, theGovernment of India acquired the Reserve Bank of India's stake in
SBI so as to remove any conflict of interest because the RBI is the country's banking
regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This
made SBI subsidiaries of eight that had belonged toprincely states prior to their
nationalization and operatonal take-over between September 1959 and October
1960, which made eight state banks associates of SBI. This acquisition was in tune
with the first Five Year Plan, which prioritised the development of rural India. The
government integrated these banks into the State Bank of India system to expand its
rural outreach. In 1963 SBI merged State Bank of Jaipur (est. 1943) and State Bank
of Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911),
which SBI acquired in 1969, together with its 28 branches. The next year SBI
acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years
later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in
1916 in Gwalior State, under the patronage of Maharaja Madho Rao Scindia. The
bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja.
The new bank's first manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired
the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its
affiliate, the State Bank of Travancore, already had an extensive network in Kerala.
There has been a proposal to merge all the associate banks into SBI to create a
"mega bank" and streamline the group's operations. [11]
The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from

seven to six. Then on 19 June 2009 the SBI board approved the absorption of State
Bank of Indore. SBI holds 98.3% in State Bank of Indore. (Individuals who held the
shares prior to its takeover by the government hold the balance of 1.7%.)
The acquisition of State Bank of Indore added 470 branches to SBI's existing
network of branches. Also, following the acquisition, SBI's total assets will inch very
close to the 10 trillion mark (10 billion long scale). The total assets of SBI and
the State Bank of Indore stood at 9,981,190 million as of March 2009. The process
of merging of State Bank of Indore was completed by April 2010, and the SBI Indore
branches started functioning as SBI branches on 26 August 2010.
On October 7, 2013, Arundhati Bhattacharya became the first woman to be
appointed Chairperson of the bank

SBI sets up call centres for NPA recovery

State Bank of India is using every possible way to step up recoveries from nonperforming assets.The countrys largest lender has opened two call centres at
Gurgaon and Chennai to deal with NPAs and Special Mention Accounts those in a
zone in between standard assets and NPAs. It has also set up account tracking
centres at 14 local head offices. As a step to improve tracking and recovery, the bank
has begun assigning SMAs and NPAs to individual staff members. This step will
ensure a sense of ownership in dealing with stress asset cases, a senior official
said.
Domestic brokerage Motilal Oswal Securities, in its review of bank performance in
the third quarter, said NPAs had been increasing. Gross NPAs rose marginally to Rs
23,438 crore by end-December 2010 from Rs 23,205 crore at end- September. In 12
months, gross NPAs have grown by Rs 4,577 crore.

The banking sectors bad loans swelled after September 2008, due to the adverse
effect of the global financial crisis on companies, small and medium enterprises and
households.
This brought heightened awareness in detecting stress cases early and taking
corrective steps in time. SBI has formulated a new code to identify accounts from the
seventh day of default.
Keeping an eye on improving banks ability to withstand adverse events, Reserve
Bank of India asked all lenders to make 70 per cent provision on overall NPAs. It first
gave time till September 2010 to do so. SBI sought, and got, an extra year to do so.
It has since sought time till March 2012 to meet the 70 per cent mark.
Its provision coverage ratio, including technical write-offs, improved to 64 per cent at
the end of December 2010 from 62.7 per cent in the earlier quarter. The incremental
provisioning required for 70 per cent is pegged at Rs 2,000 crore, to be amortised
over three quarters. NPA provisions were Rs 1,630 crore, which included additional
provisions made to improve coverage ratio.
The total of restructured loans were Rs 32,750 crore. Of the restructured portfolio,
assets worth Rs 4,420 crore have slipped into NPAs.

AXIS Bank
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, AXIS.

Life Insurance Corporation of India (LIC)

General Insurance Corporation Ltd.

Other four PSU companies, i.e.

National Insurance Company Ltd.,

 The New India Assurance Company,

The Oriental Insurance Corporation and United Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 280.51 Crores with the public holding
(other

than

promoters)

at

72.46

%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at
Mumbai. Presently the Bank has a very wide network of more than 469 branch offices and
Extension Counters. The Bank has a network of over 2016 ATMs providing 24hrs 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.
About Axis Bank
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.
Life Insurance Corporation of India (LIC)
General Insurance Corporation Ltd.
Other four PSU companies, i.e.
National Insurance Company Ltd.,
The New India Assurance Company,
The Oriental Insurance Corporation and United Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 358.97 crores with the public holding (other
than promoters) at 57.59%.Presently; the Bank has a very wide network of more than 729
branch offices and Extension Counters. The Bank has a network of over 3171 ATMs
providing 24 hrs day banking. 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.
The latest offerings of the bank along with Dollar variant is the Euro and Pound Sterling
variants of the International Travel Currency Card. The Travel Currency Card is a signature
based pre-paid travel card which enables travelers global access to their money in local
currency of the visiting country in a safe and convenient way.

NPA analysis of Axis bank

Axis Bank has reported a better than expected net profit of Rs.5.81 bn in
Q4FY09, a growth of 60.9% on a YoY basis and 16.1% on a QoQ basis. For the
FY09, the net profit stands at Rs.18.15 bn, a growth of 69.5% on YoY. Axis Bank
has restructured loans worth Rs.6.6 bn during the quarter, taking the total
restructured loans to Rs.16.25bn in FY09, representing 1.74% of the gross
customer assets.

Facts and figure of the year 2007- 09:

2008-09

2007-08

Growth (%)

Net profit

581.45

361.40

61

Net interest

1032.60

828.43

25

Other income

845.51

556.47

52

EPS(rs)

16.10

9.89

CAR (%)

13.69

13.73

Net NPA

0.35

0.36

income

Gross NPA has shown an upward movement:

The Gross NPA of the bank has increased by 24 bps during FY09 and 6 bps during
the Q4FY09. In absolute terms, the Gross NPA has increased by Rs.1.7bn during
the quarter. The bank has written back approx Rs.60mn, which limited the net
increase in its gross NPA to Rs.1.10bn.

Operating Expenses remains under control:

Operational expenses of the bank remained under control during FY09. The
employee cost of the bank increased by 48.8% on a YoY basis. The bank had
added
approx 5945 employees in FY09, which is reflected in the increased employee
cost.
The cost to income ratio of the bank stands at 43.1% compared to 49.2% in
FY08.

Comparison between AXIS, AND SBI

PARTICULARS

AXIS 2008-09

SBI 2008-09

CAR(Capital

13.69 %

14.25%

0.35%

1.76%

adequacy ratio)
NET NPA

Inference
As compared to other banks the net NPA of Axis Bank is less. This shows the
recovery and follow up system of the bank. Further the quality of the appraisal
and decision making is evide comparative study of sbi and axis

comparative study of sbi and axis

NPA Ratios : sbi

i) Gross NPA
ii) Net NPA

Mar 15
56,725.34
27,590.58

Mar14
61,605.35
31,096.07

Mar13
51,189.39
21,956.48

Mar12
39,676.46
15,818.85

70,000.00
60,000.00
50,000.00
40,000.00
Gross NPA

30,000.00

Net NPA
20,000.00
10,000.00
0.00
Mar'15

NPA Ratio SBI

i) % of Gross NPA
ii) % of Net NPA
Return on Assets %

Mar'14

Mar'13

Mar15
4.25
2.12
0.76

Mar'12

Mar14
4.95
2.57
0.65

Mar13
4.75
2.10
0.91

Mar12
4.44
1.82
0.88

5
4.5
4
3.5
3
2.5

% of Gross NPA

% of Net NPA
Return on Assets %

1.5
1
0.5
0
Mar'15

Axis bank
NPA Ratios :
i) Gross NPA
ii) Net NPA

Mar'14

Mar'13

Mar15

4,110.19
1,316.7
1

Mar'12

Mar14

Mar13

Mar12

3,146.41

2,393.42

1,806.30

1,024.62

704.13

472.64

4,500.00
4,000.00
3,500.00
3,000.00
2,500.00

Gross NPA

2,000.00

Net NPA

1,500.00
1,000.00
500.00
0.00
Mar'15

Mar'14

Axis bank

Mar'13

Mar15

i) % of Gross NPA
ii) % of Net NPA
Return on Assets %

Mar'12

Mar14

1.34
0.44
1.83

1.22
0.40
1.78

Mar13
1.06
0.32
1.70

Mar12
0.94
0.25
1.68

2
1.8
1.6
1.4
1.2
% of Gross NPA

% of Net NPA

0.8

Return on Assets %

0.6
0.4
0.2
0
Mar'15

Mar'14

Mar'13

Mar'12