Page 43 - Banking Finance October 2015

ARTICLE

motivated to introduce their own precautionary steps
like proper utilization of loan, feasible and financial and
operational prospective results of the borrowing
individuals.

D Management Performance:- It is observed that 8.82

% reduction in operating expenses in 2012-13 from the

peak level of 23.67 in 2010-11. Fig.No.3 indicated that

both business per employee and profit per employee

figures were in a gradual increase. This highlighted the

increasing nature of transactions which indicate the

efficiency in the managerial performance of SBI. evident that since independence, Indian banking sector has

D Earning Performance:- Table 3 shows a slight and undergone different phases of changes viz. nationalization,
steady increase of net profit margin only from 2010-11 reformation and the like. Nationalization of banks in 1969
to 2011-12. But it suddenly declined to 9.01 in 2012- and 1980 to sustain the economy is a great event in the
13 from 9.73 in 2011-12. Highest margin showed in banking history of India. Increase in deposits, loans and

2008-09 as 13.11 and lowest margin recorded in 2010- advances, and assets after nationalization shows that SBI

11 as 8.55. Net profit margin has been fluctuating due has been running smoothly to great extent.

to interest rates on deposits, lending rates, monetary With the implementation of the reforms of Narasimham
and fiscal policies and the like. Return on Employee committee, the operational and the financial performance
were also in declining trend. But in overall performance of SBI improved further to a great extent. Various
of SBI, it was not much affected. It is evident that the technological innovations have been introduced to serve the
net interest income registered the lowest rate of 2.16% customers in a better way. More autonomy should be given
in 2008-09 and the highest rate of 3.24 % in 2011-12. to SBI to take their own decisions from time to time so that
It may be said that, SBI has been functioning under the

firm regulations of the RBI. they would run on more profitable grounds.

D Liquidity Management:- Credit Deposit Ratio is an References:-
important parameter in the analysis of financial health
of banking industry. From Table.2, it is inferred that this l Said, Marie-Joe Bou & Saucier, Philippe 2003, 'Liquidity,
ratio has been increasing from the level of 73.11 in Solvency, and Efficiency? An Empirical Analysis of the
2008-09 to the level of 86.93 in 2012-13. The factors Japanese Banks' Distress', Journal of Oxford, vol. 5, no.
that influence the credit deposit Ratio are SLR and CRR. 3, pp. 354-58.
It may be said that deposits and advances are in an
increasing trend. The investment rate has been on l Prasuna, DG 2004, 'Performance Snapshot 2003-04',
decrease. ie; 37.19 percent in 2008-09 and 29.18 Chartered Financial Analyst, vol. 10, no. 11, pp. 6-13.
percent in 2012-13. So Return on Investment are also
decreased 6.01 per cent from 2008-09 to 2012-13. It l Gupta & Kaur 2008, 'A CAMEL Model Analysis of Private
may be observed that the profitability performance had Sector Banks in India', Journal of Gyan Management, vol.
reported to a decline. 2, no. 1, pp. 3-8.

CAMEL model evaluates five major angles of the financial l D Maheshwara & Prasad, KVN 2011, 'Evaluating
position of SBI. It indicates a safer position to SBI Performance of Regional Rural Banks: An Application of
irrespective of the slight variations in certain segments. CAMEL Model', Journal of Arts, Science & Commerce, vol.
2, no. 4, pp. 61-67.
Conclusion:
l Banking & Finance,Vol XX VII No.3,March,2014,Page
Economic development of any country is mainly influenced no19,54 &55
by the growth of the banking industry in that country. It is
l Banking & Finance, Vol XX VII No.09, September, 2014,
page No.53.

l RBI Reports on trend and progress of Banking India.

l www.sbionline.com

l www.statebankofindia.com

BANKING FINANCE | OCTOBER | 2015 | 43

Copyright@ The Insurance Times. 09883398055 / 09883380339