2. Macro Economic Factors
•
Bank rate is the which central bank (RBI) lends money to other banks or financial
institutions. Affects loan market.
Cash Reserve Ratio is a percentage amount of total deposits of a bank which it
maintains with central bank (RBI). Increase in this means lesser lending capability of
banks
•
•
•
Statutory Liquidity Ratio is ratio of total deposits maintained by bank at the closing
hour of each day. Increase in this means lesser lending capability of banks
Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the
banks against securities. When the repo rate increases borrowing from RBI becomes
more expensive. Hence banks find it difficult to lend and vice versa
Reverse Repo rate is the rate at which banks park their short-term excess liquidity
with the RBI. An increase in the reverse repo rate means that the RBI is ready to
borrow money from the banks at a higher rate of interest.
Major Banks
(by Sales)
1.
2.
3.
4.
5.
6.
7.
State Bank of India
8.
9.
10.
11.
12.
13.
14.
15.
Union Bank of India
ICICI Bank Limited
Punjab National Bank
Canara Bank
Bank of Baroda
Bank of India
Industrial Development Bank
of India
Central Bank of India
HDFC Bank Limited
Indian Overseas Bank
UCO Bank
Oriental Bank of Commerce
Syndicate Bank
Allahabad Bank
3. Impact of Budget on Banking Sector
Capital Infusion:
Shield against inflation:
• Budget 2013-14 proposed to provide a sum of Rs 14,000 crore
capital support to all public sector banks.
• Higher rate of inflation has eaten into domestic savings.
• Hence, FM introduced inflation indexed bonds or inflation
indexed national security.
Insurance Brokers
Agriculture credit
• Taking into account the wide network of bank branches and
the low penetration of insurance in the country,
• banks have been permitted to act as insurance brokers.
• Farmers who repay bank loans right in time normally pay a
subsidised rate of interest just at 4%.
• So far, all state-owned banks disburse such credit.
• Now private sector banks can also provide such loan s ,
Women Bank
A regulator for road construction - boon for
banks
• Budget proposes India's first Women's Bank as a public sector
bank
• It exclusively serves women and will be run predominantly by
women.
• An initial capital ofRs. 1,000 crore to be allotted for this
purpose.
• Constitution of a regulatory authority for the road sector to
address Bottlenecks in road projects .
• This is favourable for banks as lot of projects would now see fastpaced executions.
4. Financial Ratios
State
Punjab
Bank
National
of India Bank
ICICI Bank
Preference
on
parameter
Current Ratio
0.29
0.33
0.59
ICICI
Quick Ratio
14.07
10.12
49.67
ICICI
Earnings per Share
(Rs.)
206.20
134.31
72.17
SBI
Price-Earnings Ratio
10.05
5.34
14.48
ICICI
Debt-Equity Ratio
12.16
0.05
0.07
PNB
Return on Equity (%)
11.61
16.48
13.10
PNB
5. Net Interest
Income ( INR
Billion)
Net Sales (Cr)
Net Non
Performing
CASA
Assets (INR
Billion)
4.44
1.82 46.64
2.93
1.52 36.20
Gross Non
Other income PAT (INR Total Assets
Performing
(INR Billion) Billion) (INR Billion)
Assets (Cr)
SBI
PNB
1,19,657.10
41,893.33
433.00
134.00
144.00
42.00
117.00
49.00
13,355.00
4,582.00
ICICI
40,075.60
107.00
75.00
65.00
4,736.00
Net Sales (Cr)
3.62
0.73
CASA
Net Non Performing
Assets (Cr)
PAT (INR Billion)
43.50
46.64
119,657.1
0
43.50
117.00
1.82
36.20
1.52
65.00
49.00
41,893.33
•
SBI
PNB
ICICI
0.73
40,075.60
Net Sales of SBI is
highest, making it the
biggest bank of India
SBI
•
PNB
ICICI
PNB though the second
largest bank of India, lacks
in the profitability
compared to other
SBI
•
PNB
ICICI
PSU banks being more
susceptible to Non
Performing assets, a recent
trend seen across banking
sector, same is again
prominant
SBI
•
•
•
PNB
ICICI
Higher CASA is preferred
Can fix a lower base rate
SBI and ICICI on the better
side, typically 35 to 40%
for most banks in India
