Ranjith j gowda's STUDY ON FINANCIAL PERFORMANCE(Ratio) OF VIJAYA BANK * Ranjith j gowda (Madaburu,N.R Pura)

Financial Performance Of Vijaya Bank
A Study on Financial Performance of Vijaya
Bank in Kadur
Project Report
Submitted to Kuvempu University in partial fulfillment of the
requirements for the Degree of
Master of Commerce
Submitted By
RANJITH KUMAR B.J
M.Com. Semester – IV
Department of Post Graduate Studies in Commerce
P.G Centre Kuvempu university Kadur, Chikmagalur District, Karnataka
Register Number: MC128619
Under the Guidance of
Venkatesha B.M
Faculty Member
Department of Post Graduate Studies in Commerce
Kuvempu University P G Centre Kadur, Chikmagalur District, Karnataka
2013-2014
Kuvempu University P.G Centre Kadur Page 1

From:
Ranjith Kumar B.J
M.com, Semester-IV,
Department of Post-Graduate Studies in Commerce,
Kuvempu university P.G Centre Kadur, Chikmagalur District, Karnataka
Declaration
I hereby declare that,
1. The work contained in this report is original and has been done by me
under the guidance of my supervisor, Venkatesha B.M. The work has
not been submitted to any other university for any degree or diploma.
2. I have followed the guidelines provided by the Department in
preparing the report.
3. I have conformed to the norms and guidelines given in the Ethical
Code of Conduct of the Department.
4. Whenever I have used materials (date, theoretical analysis, figures,
and text) from other sources, I have given due credit to them by citing
them in the text of the report and giving their details in the reference.
Signature of the Student
(RANJITH KUMAR B.J)
Date:

KUVEMPU UNIVERSITY
Department Of Post Graduate Studies In Commerce
Kuvempu University P.G Centre Kadur, Chikmagalur District, Karnataka
Certificate
This is to certify that Mr. Ranjith Kumar B.J is a bonafide student of
this Department and This Project Report on “A STUDY ON
FINANCIAL PERFORMANCE OF VIJAYA BANK KADAR” has
been prepared by his in partial fulfillment of the requirement for the
Degree of Master of Commerce under my guidance.
Signature of Guide
(VENKATESHA B.M)
Date:

KUVEMPU UNIVERSITY
Department Of Post Graduate Studies In Commerce
Kuvempu University P.G Centre Kadur, Chikmagalur District, Karnataka
Certificate
This is to certify that Mr. Ranjith Kumar B.J is a bonafide student
of this Department and This Project Report on “A STUDY ON
FINANCIAL PERFORMANCE OF VIJAYA BANK KADAR” has been
prepared by his in partial fulfillment of the requirement for the Degree of
Master of Commerce under the guidance of Venkatesha B.M
Signature of coordinator
(Dr. SHOBHARANI H)
Date:

ACKNOWLEDGEMENT
Motivation causing people to act in certain direction is very necessary
for the success of any task. “Behind every successful student there is a
teacher”. I feel happy and proud to mention those who motivated me and
contributed directly or indirectly in making this project successfully.
I take this opportunity to express my sincere thanks to Dr. Shobharani H
Assistant Professor, Department of P.G Studies & Research in Commerce,
Kuvempu University P.G Centre Kadur.
My sincere thanks to Mr. Venkatesha B.M., Faculty Member, Department of
P.G.Studies& Research in Commerce, Kuvempu University P.G Centre Kadur,
my project guide for his valuable guidance, constant advice and encouraging
words at each step throughout the project study.
I would like to offer my sincere thanks to Ishwar Shetty, Branch
Manager of Vijaya Bank, B.H Road Branch, Kadur, with timely co-operation
my endeavor would not have been success.
I would like to offer my sincere thanks to Kusuma K.S, faculty member
Department of Commerce.
I am pleased to place my profound etiquette to my beloved father Jagadeesh
B.R, mother Vedavathi H.E and to my Brotherfor their encouragement
affection and love throughout my career.I thank all my friends and others
including library service who directly or indirectly helped me in completion of
this work.
Date:
Place:Kadur RANJITH KUMAR B.J

VIJAYA BANK
Kadur Branch
Annapoorna Castle, N.H.206, Check Post, Kadur
Chikmagalur Dist, Karnataka
Pin 577548
Certificate
This is to certify that Mr. RANJITH KUMAR B.J is a student of
Department Of Post Graduate Studies in Commerce Kuvempu University
P.G Centre Kadur, Chikmagalur (D), has carried out a project entitled “A
STUDY OF FINANCIAL PERFORMANCE OF VIJAYA BANK
KADAR” has been prepared by him in partial fulfillment of the
requirement for the Degree of Master of Commerce.
We wish all the best for his future.
Signature of the Manager
(ISHWAR SHETTY)
Date:
Place: Kadur

CONTENTS
Sl. No Chapters Page no
1 Introduction and Research Design
2 Profile of Study Area
3 Conceptual frame Work
4 Data Analysis and Interpretation
5 Finding, Suggestion and Conclusion
Annexure:
Bibliography

LIST OF TABLE
Sl. No Table no List of the table Page no
1 4.1 Current Ratio
2 4.2 Cash Position ratio
3 4.3 Solvency ratio
4 4.4 Fixed Assets ratio
5 4.5 Return On Total Resources
6 4.6 Net Profit ratio
7 4.7 Interest On Loan
8 4.8 Payout Ratio
9 4.9 Deposits Of The Bank
10 4.10 Advance Of The Bank
LIST OF THE GRAPH
SL.NO Graph
no
List of the chart Page no
1 4.1 Current Ratio
2 4.2 Cash Position ratio
3 4.3 Solvency ratio
4 4.4 Fixed Assets ratio
5 4.5 Return On Total Resources
6 4.6 Net Profit ratio
7 4.7 Interest On Loan
8 4.8 Payout Ratio
9 4.9 Deposits Of The Bank
10 4.10 Advance Of The Bank

LIST OF FIGURE
Sl. No Table Page No
1 Organization structure
2 Branch structure

CHAPTER -1
INTRODUCTION AND RESEARCH DESIGN
1.1 INTRODUCTION
1.2 LITERACY REVIEW
1.3 STATEMENT OF PROBLEM
1.4 OBJECTIVE OF STUDY
1.5 SCOPE OF THE STUDY
1.6 METHODOLOGY
1.7 LIMITATION
1.8 CHAPTER SCHEME

1.1 Introduction
Financial performance analysis is the process of identifying the financial
strengths and weaknesses of the firm by properly establishing the relationship between
the items of balance sheet and profit and loss account. It also helps in short-term and
long term forecasting and growth can be identified with the help of financial
performance analysis. The dictionary meaning of ‘analysis’ is to resolve or separate a
thing in to its element or components parts for tracing their relation to the things as
whole and to each other. The analysis of financial statement is a process of evaluating
the relationship between the component parts of financial statement to obtain a better
understanding of the firm’s position and performance. This analysis can be undertaken
by management of the firm or by parties outside the namely, owners, creditors,
Investors.
Financial analysis can be defined as a study of relationship between many
factors as disclosed by the statement and the study of these factors. The objective of
financial analysis is the pinpointing of strength and weakness of a business undertaking
by regrouping and analyzing of figures obtained from financial statement and balance
sheet by the tools and techniques of management accounting. Financial analysis is as
the final step of accounting that result in the presentation of final and the exact data that
helps the business managers, creditors and investors.
Based on this reasoning, this project is an attempt to analyze the financial
performance of VIJAYA BANK. In the financial analysis a ratio is used as an index for
evaluating the financial position and performance of the firm. The absolute accounting
figures reported in the financial statement do not provide a meaningful understanding
of the performance and the financial position of a firm. But the accounting figures
convey the meaning when it is related to some other relation information for example
Rs.5crores net profit may look impressive, but the firms performance can be said good
or bad only when net profit figures is related to the firm’s investment.
Accounting ratios are relationships expressed in the mathematical terms
between figures that are connected with each other in the some manner. The
information contained in the balance sheet, profit and loss account or the income
statements are used by the management, creditors investors and others to form

judgment about the operating performance and the financial strengths and weaknesses
of the firm if we properly analysis the information reported in the statement.
1.2 Literacy review:
Avkiran, 1995.Simply stated much of the current bank performance literature describes
the objective of financial organizations as that of earning acceptable returns and
minimizing the risks taken to earn this return.
Chien and Danw (2004) showed in their study that most previous studies concerning
company performance evaluation focus merely on operational efficiency and
operational effectiveness, which might directly influence the survival of a company. By
using an innovative two-stage data envelopment analysis model in their study, the
empirical result of this study is that a company with better efficiency does not always
means that it has better effectiveness.
Elizabeth and Ellot (2004) indicated that all financial performance measure as interest
margin, return on assets, and capital adequacy are positively correlated with customer
service quality. Scores Mazher (2003) discussed the development and performance o f
domestic and foreign banks in Arab gulf countries, and showed that local and foreign
banks in these countries. Literature on community bank performance, especially related
to efficiency and bank strategy continues to expand. The following discussion
summarizes some research in this area over the past decade.
Wall (1985) examined small and medium sized banks from the early1970’s until
deregulation occurred in the early 1980’s. He found that profitable banks had lower
interest and non interest expense than less profitable banks. In addition, the more
profitable banks had lower cost of funds, greater use of transactions deposits, more
marketable securities and higher capital levels.
Zimme rman (1996) examined community bank performance in California during the
early 1990’s, a period of slow recovery for these institutions. Excessive reliance on real
estate lending caused deterioration in asset quality which reduced overall profitability.
Lack of geographic diversification further compounded community bank performance.

Myers and Spong (2003) examined community bank growth in the 10th Federal
Reserve District (Kansas City) with an emphasis on economic conditions in slower
growing markets.
These slower growing markets presented problems in loan quality as well as staffing
including senior management and directors. Community banks in low growth markets
experienced higher overhead costs relative to income than banks in higher growth
markets.
1.3 Statement of problem:
The study of financial performance contains revenue, tax, expenses, etc, on one
side and the other side shows the liabilities and assets position in the year. Ratio
analysis is a very useful analytical technique to raise pertinent questions on a number of
managerial issues. It provides bases or clues to investigate such issues in detail. While
assessing the financial health of a company, ratio analysis answers to questions relating
to the bank’s profitability, asset utilization, and liquidity and financial capabilities of
the bank’s.
1.4 Objective of study
 To evaluate the financial performance of vijaya bank with the help of ratio
analysis.
 To suggest measures, on the basis of the study results, to improve further the
financial performance of the banks under study.
1.5 Scope of the study
For the purpose of study I have selected theVijaya bank branch located at B.H.
Road in Kadur is related for study of financial performance and maintaining structure
and how to reduce loss. This Project report aimed at give clear picture of financial
performance and ratio analysis of Vijaya Bank.
1.6 Methodology

`The Data is collected for the preparation of the Project Report includes
primary and secondary data.
Primary data: The primary data is collected through on Interview with the manager of
the Bank and the Bank staff to collect information about service rendered by the bank
to study the various aspects of annual Report.
Secondary data: The secondary data is collected through Newspaper, Magazines,
Books and Banks website, etc.
1.7 LIMITATION OF PROJECT REPORT:
 The study is limited to only three financial years.
 The study is limited to only VIJAYA BANK. Kadur Branch
CHAPTER SCHEME:
Chapter - 1 Introduction to the study
This chapter gives us a general introduction to the study undertaken. It talks
about the problem for which the project has been taken; the introduction of the study;
need, objective and the limitation of the study conducted.
Chapter - 2 Profile of the Study Area
This chapter views the present status of the organization that is VIJAYA
BANK. It also covers the functional departments, its organizations structure, its
objectives and its future prospects.
Chapter – 3 Conceptual frameworks
This chapter views the meaning of ‘Financial performance’ and Different
Technics to measure the financial performances.
Chapter - 4 Data analysis and interpretation
In this chapter all calculations pertaining to the study are calculated and
interpreted. Calculations refer to the ratios calculated in the study. The trends of the

ratios are also projected and interpreted. As it is said that one picture is worth 1000
words, graphs have also been provided foe better understanding.
Chapter - 5 Findings, Suggestions and Conclusions
This is the final chapter of the study with the conclusions of the overall study
along with the suggestions pertaining to the areas of improvement.

CHAPTER-2
PROFILE OF THE STUDY AREA
2.1 HISTORY OF VIJAYA BANK
2.2 COMPANY PROFILE
2.3 BRANCH PFOFILE

2.1 History
Vijaya Bank was founded in 1931 by A B Shetty in Mangalore, Karnataka. It
became a scheduled bank in 1958. Nine banks merged with it between 1963 and 1968.
The bank was nationalized in 1980. In 1996, Vijaya bank opened Vijaya bank Housing
Finance Ltd (VHFL), a housing finance subsidiary. The bank made its maiden IPO in
2000 and a second public issue in 2003. In FY04, it bought National Housing Bank’s
stake in VHFL, making VHFL its wholly owned subsidiary.
October 1931 in Mangalore, Karnataka the objective of the founders was
essentially to promote Banking habit. Thrift & entrepreneurship among the farming
community of Dakshina Kannada district in Karnataka state. The bank become a
scheduled bank in1958, Vijaya Bank steadily grew into a large all India bank with a
smaller banks merging with it during the 1963-68. The credit for this merger as well as
growth goes to late Shri M.Sunder Ram Shetty, who was then the chief Executive of
the bank. The bank was nationalized on 15th April 1980 today, the bank has built a
network of 842 branches that span all 28 states & 4 union territories in the country.
It was founded by late Shri A.B.Shetty and other enterprising farmers with an
intention to promote banking habits among farming community in the Dakshina
Kannada district in Karnataka State.
Vijaya Bank became a scheduled bank in 1958. During the year 1963-68 is
grew into all India bank by merger of nine smaller banks into Vijaya Bank. It got
nationalized in year 1980.Currently, it has a network of 1277 branches, 49 extension
counters and 551 ATMs pread across all 28 states and 4 union territories in the country.
Decade Of Entrenchment
In early corporate history of the bank, i.e. 1931 to 1960 were not eventful.
Those were the difficult years for the banks. The external environment was not
conducive for growth the national movement second world war, economic recession
post independent charges in the boning regulatory framework posed tremendous
pressure on the coping capabilities of the banks. It is not surprising that the county

recorded highest number of banks failures during this period. Vijaya bank ltd. Reacted
cautiously to the market realities. If followed the path of precedence and conservation.
It mainly concentrated on giving gold loans and pledge loans on agricultural
commodities. During this period of insulation. The bank added 20 branches less than
one branch per year. A branch was however opened in Bombay thus expanding the
banks.
Operations beyond Dakshina Kannada district the year 1958 was the bench
mark year for the bank, in the year Vijaya Bank ltd was categorized as scheduled
commercial bank by the Reserve Bank of India.
Decade Of Mergers (1960-69)
In the early sixties, Reserve Bank of India took a policy decision to merge
smaller banks with comparatively large smaller banks with comparatively larger ones
to reduce the number of banks to an administratively manageable level. Vijaya bank
saw an opening. It comes out with a proposal of collaborative merger of smaller banks
for synergy strength and collective prosperity. Some banks found the proposal
acceptable totally nine banks got merged with Vijay bank ltd. On various dates
between 1963 and 1967. The credit for successful execution of the merger plan should
go to Sri. M. Sunder Ram Shetty. Who was then (1962 -69) then on executable
chairman of the bank. Thanks to the manager, 42 branches were added to the bench
network and the bank emerged as a strong and confident entity.
Decade Of Growth 1970- 80
1969 was an eventful year for the banking industry. The year saw
nationalization of 14 major banks. The remaining smaller banks were brought under
social control. In Vijay bank ltd. Also things started happening Shri. M. Sunder Ram
Shetty took over as the whole time chairman and chief executive of the bank. The key
strategic areas were identified for growth capital and reserve deposit advances ranch
expansion and human one bank among the non-nationwide banks. The RBI had just
liberalized the branch licensing policy as a provider to its action plan, Mangalore to
Bangalore. Thanks to the extra ordinary enthusiasm, dedication and capacity for hard
work shown by the employees the bank could out perform its peers in the industry and

record outstanding growth which has few parallels in the history of Indian banking
industry.
During the period from 1969 to 1976 the bank’s deposits set up from Rs. 13.21
crore to 221.02 crore recording on average annual growth rate of 42% the bank added
377 new branches. The shareholders return in the form of dividend doubled from 6%
to 12% the bank expanded 60th functionally and geographically. The bank introduced a
number of innovative deposit and loan schemes focusing on various customer
segments.
The banks publicity and public relations was at its best. The bank identified
international banking as a ‘Sunrise’. Sector as early as in 1970 the full- fledged
international banking division was opened in the year 1971. As a part of product
diversification strategy. The bank was also very active in social lending particularly in
the area of agricultural finance. The bank had on enlightened human resources
management policy. A great deal of emphasis was laid on training .the bank opened its
first training college in Bangalore in 1971, the bank has 1160 employees in 1969 and
the number went up to 9080 in 1979 urges young and inexperienced. They were a
highly inspired and motivated lot. The average age of the employees at one point of
time during the period was just 27% by the late seventies the bank had made substantial
headway as indicated below.
NationaizationAnd New Chaleenges
The bank was nationalized on 15/04/1980 following nationalization banks
objectives and priorities changed. Change from entrepreneurial banking to compliance
banking called for radical changes in the organizational structural policies and
programs as well as in the mindset of its employees. In the early part of 1980’s the
bank was pro-occupied in effecting such structural changes for effective
implementation of various government schemes. A new rural development and priority
sector division was created during this period to further intensity. The banks efforts for
lending to priority sector and weaker sections of the society the bank introduced quite a
number of innovative schemes such as vijaya Krishna cards vijaya vicharvihar etc… to
meet the specific needs of forming community.. The bank also sponsored its first
regional rural bank viz. Vishveshwaraiah grameena bank for Mandya district. The
bank has highly centralized administrative set up before nationalization. After

nationalization banking operations were gradually decentralized. The bank shifted its
zonal offices the respective territories. To give greater theorist on computeralization
and diversification, new departments viz, computer policy and planning depreciation
credit card division and merchant banking divisions were set up at Head office.
The Challenging Mineties
In early 90’s [N ineties] banks were faced with turbulent changes in the
financial sector. Liberalizationof economy. Deregulation, computerization etc opened
up new opportunities for banks for diversification and growth. Introduction of
prudential norms in income recognition provision and capital adequacy transparency in
financial reporting etc…l have rendered banks more accountable for performance. The
bank faced these challenges posed by the deregulations in its stride. It opened as
money as 1133 new branches of these 36 were specialized, specialized industrial
finance and 551cbranches were opened to give focused attention to meet the needs of
different classes of customers. Generate emphasis was also given on modernization of
banking operations. The bank which had to book losses in 1992-1993 and 1995-96 on
account of stringent income recognition provisioning norms, turned the corner
immediately In 1996-97 and has now started improving its performance on the
profitability front the bank also successfully mobilized equity amounting to Rs. 100
Crore through in 2000. As a result the shareholding of the government of India has
come down from 100% to 72.16%.
Looking Ahead
Today vijaya bank is a vibrant institution it has spread its branch network in all
the 288 states and 4 union territories of the country. It has on its rolls about 12000
employees an overplaying majority of whom have already put in about 20 to 25 years
of service in various capacities. They are quite an experienced, reliable and competent
lot to provide efficient service and to take the bank to greater heights.
Development Of The Modern Banking
For the history of modern banking in India a preface to the English agency is
the days of east India Company would be necessary. The bank of Hindustan was the
first Joint stock bank to be established under European management. But soon if first
half of the 9th century. The east India Company established 3 banks.

But of Bengali in 1809 with a capital lake under government after the 3 decade
there were another two banks were established namely the banks of Bombay in 1840,
the bank of Madras in 1843. These banks know as the presidency banks. These 3
banks were amalgamated in 27th January 1921 to form the empirical bank of India .
The aid commercial bank was perhaps the first purely joint stock bank to be established
in 1889. Later the Punjab national bank (1989) and the people’s banks (1901) were
established.
The swadeshi movement of 1905 gave a great stimulus to the development of
Indian banks. The banks of India were started in 1906. The A Indian bank in 1907.The
bank of Baroda in 1908 and the central bank of India in 1911.However the banking
crises of 1943 unit hard money of the bank.The state bank of India was established and
the following banks were maee4 subsidiaries of stat bank of India.
In 1922 the bank king industry witnessed many bank failure. It is only in
recent year’s such bank failure have been prevented 2 stability restored/. In 1935 we
established the reserve bank of India which is acting as the Central bank of our county.
Amongst various banking instructions in the county in the organized sectors.
The commercial banks are the oldest institutions having a wide network of branches.
In fact one of the commercial bank in our county state bank of India (SBI) has got more
than 12,000 branches all over India which is highest by any banking institution in the
world there by trying all over the county. However commercial banks have the lion’s
shares in the total banking operation I the county.
IN 1955 THE Imperial bank of India has been taken over by the newly
constituted the state bank of India. Pursuant to the provisions of the state bank of Act
of 1956 eight state owned banks were nationalized with effect from July 19, 1969 again
a 23/04/1980 six more banks were also nationalized. Thus bringing to a total of 92% of
the banking system I India under the public sector.Regional rural banks are the new
banking institution which have e been added to the Indian banking scheme since
october1975 under the regional rural banks Act 1976.
With a shift in the government policies towards state ownership banks with the
shareholding s of public has b been converted drawn corporate bodies into national
institution under 2 phase that is once in 1969 and then again in 1981. Today as many

as 28 lakhs constitute the strong public sector commercial banks today contributes
business in the country.
Banking Regualtion Act 1949
Sec 5 (1) (b) of the act defines the term “banking” as „accepting for the
purpose of lending or investment of deposits of money from the public, repayable on
demand or otherwise and withdraw able by cheque, draft, order or otherwise‟. The
Indian banking regulation Act of 1949 has the essential characteristics they are as
follows:
1. Acceptance of deposits from the public on current, fixed and savings bank accounts.
2. Allowing of withdrawals of their deposits by cheques, drafts, orders or otherwise.
3. Utilization of deposits in hand for the purpose of lending or investment in securities.
4. Performance of banking business as the main business.
2.2 Company Profile
Vijaya Bank came into existence in 15th April of the year 1980, as a
consequence of the Government of India taking over the undertaking of Vijaya Bank
Ltd. The Bank is engaged in transacts all types of banking business including foreign
exchange. The bank has a strong presence in the fast-growing southern states. Its
business activities are diversified and encompass merchant banking, credit cards,
ATMs, housing finance, fast collection services etc.
The Bank had sponsored its first Regional Rural Bank in the year 1985 under
the name and style VisweswarayaGrameena Bank in March. This Regional Rura l Bank
caters the needs of the target group belonging to Mandya district of Karnataka State.
VB introduced the novel scheme under the name of VijayaVicharVihar' in the year
1989. During the year 1992, the bank had introduced automatic renewal facility up to
four times in respect of short-term deposits accepted for periods from forty-six days to
one year for the convenience of the customers. VB had entered into the Memorandum
of Understanding (MoU) with the Reserve Bank of India in the year of 1994 to fulfil l
definite performance commitments. Also in the same year of 1994, the bank introduced
the new schemes viz. Vijaya Gift Bond Scheme and Vijaya Service Card for enlarging

its services to its business clientele.The Bank opened its third exclusive NRI branch at
Mapuca (Goa) and established special NRI Cells at the branches in Tiruvalla,
Kottayam, Trivandrum and Kozhencherry (all in the Kerala State).
During the year 1995, VB had opened 33 new branches and also the bank
opened five Hi- tech Agricultural Finance branches at Bangalore, Coimbatore, Delhi,
Hyderabad and Lucknow. In the identical year of 1995, the bank entered into an
agreement with M/s. Oriental Exchange Co., WLL Manama, Bahrain providing for the
Bank's participation in the said exchange company's day-to-day management. Vijaya
Bank launched a fully operational Custodial Services Division at Mumbai. In the year
1996, VB had opened its first subsidiary, Vijaya bank Housing Finance Limited to add
impetus to housing finance. Vijaya Bank introduced three new loan schemes, namely,
'VijayaNivruthi', 'VijayaKrishiVikas' and 'VijayaMangala' to cater to the credit needs of
pensioners, farmers and workingwomen respectively. The Bank had also entered into
tie-up arrangements with ICICI, Banking Corporation Limited and Oman International
Bank Ltd. VB had introduced innovative banking service called Any Branch Banking'
in the same year of 1996. During the year 1997, Vijaya Bank had launched a special
agriculture credit plan targeted specifically at agriculture and other, rural advances. The
Bank also launched the special loan recovery motivation scheme', which helped reduce
the level of NPAs from 11.6 per cent to 9.6 per cent. The Bank had entered into
domestic correspondent Banking arrangements with various private sector banks and
foreign banks during the year 1998.
After a year, in 1999, Vijaya Bank had entered into Rs 200-crore take-out
financing agreement with the Housing and Urban Development Corporation (HUDCO)
for funding infrastructure projects. In the year 2000, VB had introduced a new scheme
named V-Star savings bank Account Scheme. Vijaya Bank taped the capital market
with an initial public offering in the year 2000. The Bank had signed a pact with LIC in
the year of 2003 to offer Life insurance cover to all its existing as well as its new
deposit-holders. VB had unveiled a new electronic fund remittance facility called V-REMIT,
under which the bank customers can electronically remit funds to the account
holders in any bank. The MoU was signed with M/s National Insurance Company
Limited in the year 2003 for marketing banc assurance products. Bank has decided to
amalgamate its own subsidiary VIJAYA BANK Housing Finance Ltd. (VHFL) with
the Vijaya Bank. Vijaya Bank had opened a Kiosk that is exclusively for reta il lending

at its Ashoknagar Branch in Mangalore and signed the MoU with Punjab National
Bank and Principal Financial Group of USA for a joint venture participation in Asset
Management Company.
In the year 2004, the bank made tie-up with NIC to offer free insurance policy.
Punjab National Bank (PNB) and VB had entered into a four-way partnership with
Principal Financial of the US and Berger Paints to set up an insurance broking
company. Vijaya bank Housing Finance Ltd became a wholly owned subsidiary of the
bank in the identical year of 2004. The Bank signed a pact with Nabard to co- finance
agriculture, agro processing, hi-tech agriculture and rural development projects. Vijaya
Bank launched the bank's second city specific credit card - the 'Hyderabad Card'.
During the year 2005, the bank made tie-up with TAFE. In the year 2006-07, the bank
implemented the Crore Banking Solution (CBS) in additional 152 branches. VB
opened 43 new branches, upgraded 10 extension counters into full- fledged branches,
converted 2 regional foreign exchanges into full- fledged overseas branches and also
converted one capital market services branch into a general banking branch in the yea r
2006-07.
The bank had helped 11061 Self Help Groups in the same year by the way of
loan disbursement. In June of the year 2007, VB had inked a memorandum of
understanding (MoU) with credit rating agency ICRA, under which ICRA will assign
ratings to small scale industries (SSIs) and small and medium enterprises (SMEs) that
are borrowers of the bank. As of April 2008, signed a memorandum of understanding
with Fitch Ratings India to provide bank loan ratings to its corporate clients at a
normal fee. Vijaya Bank plans to focus on farm and retail lending to push up business.
Activities of Banks
a. Primary Functions.
b.Subsidiary Functions.
Primary Functions:

i. Acceptance of deposits: It is very important for banks as it forms the basis of all
other activities of banks. It accepts various types of deposits. They are current
deposit, saving deposit, fixed deposit and recurring deposits.
ii. Lending of Funds: It is also the most important function of Commercial Banks as
it fetches the major portions of the income of the banks.
Banks lend money by the way of loans, overdrafts, cash credit and discounting of
bills.
Subsidiary Functions:
i. Agency Functions: The services rendered by banks as agent of their customers
are called agency services. They are:
ii. Banks collect cheque, bank draft, bills, interest, dividends etc on behalf of the
customer.
iii. Banks sells and purchases securities on behalf of the customers.
iv. Banks arranges for remittance of funds from one place to another place.
v. Banks acts as trustees, executors, representatives of their customers.
vi. General Utility Services: Services rendered by banks to their customers as well
as the general public are called as general utility services.
vii. Banks accept precious articles, documents etc for safe custody.
viii. Banks helps exporters and importers in foreign trade.
ix. Banks issue travellers cheque, letter of credit, circular notes etc.
x. Banks acts as a reference and supply information about the financial standing
of the customers to others.
Functions and importance’s of banks
The importance of banks in the modern economy cannot be denied. Banks play a
significant role in the economic development. Banks perform a number of functions.
They are:
1. Banks mobilize the small scattered and ideal savings of the people, and make them
available for productive purpose. In the sort, they aid the process of capital
formation.

2. By accepting the savings of the people, banks provide safety and security to the
surplus money of the depositors.
3. Banks provide a convenient and economical method of payment. The cheque
system introduced by banks is convenient form making payments. Again the use of
cheque economies the time and trouble involved in settlement of business
obligations.
4. Banks provide a convenient and economical means of transfer of funds from one
place to another. Banks drafts are commonly used for remittances of funds from
one place to another.
5. Banks helps the movement of capital from regions where it is no very useful to
regions where it can be more usefully employed, by moving funds, banks increases
the utility of funds. Again by moving funds from one place to another, banks
contribute to the economic development of backward regions.
6. Banks influence the rates of interest in the money markets. Through the supply of
money (i.e. bank money or bank deposits) banks expert a powerful influence on
the interest rates in the money market.
7. Banks help trade and commerce industry and agriculture by meeting their financial
requirements. But for the financial assistance provided by the banks, the pace of
growth of trade and commerce industry and agriculture would have been very
slow.
8. Banks direct the flow of funds into production channels. While lending money,
they discriminate in favor of essential activities and against non essential activities.
Thus they encourage the development of right types of activities which the society
desires.
9. Banks always make it a point to help the industries, the prudent, the punctual and
the honest and discourage the dishonest, the spendthrift, the gambler the lair and
the knave (i.e. the rouge). Thus banks act as public conservators of commercial
virtues.
10. Banks serves as the best financial intermediaries between the saver (i.e. the
depositors or lenders) and the investor (i.e. the borrowers or the entrepreneurs).

Service Profile
The bank has many financial services and different schemes. Important among them
are as follows:
1. Domestic products saving bank deposits for individuals & non-trading
organizations / institutions.
2. Current Account, For business operations – trades, businessmen, corporate bodies.
3. Fixed Deposits Secured way to high returns – individuals and institutions.
4. Kamadhenu Deposits Re-investment money multiplier plan.
5. Auto – Renewal Higher return in a shorter plan.
6. Flexi Deposits A combination of savings & fixed deposits – high return & instant
liquidity.
7. Ashraya Deposits Respecting Indian values for senior citizens.
8. Recurring deposits scheme Inculcating saving, a rewarding & recurring habit.
9. Floating Rate Deposits Scheme (Frds) Insures against interest rate fluctuations.
10. Loan Products
11. Housing Loan Scheme Purchase of a ready built house / flat construction of house,
purchase of a site and construction of house thereon, for undertaking repairs,
renovations, up gradation, and creation of additional amenities and for taking over
of the HL liability from other recognized housing finance companies and banks.
12. Home Improvement Loans Furnishing the house / flat along with bank’s home
loans / independently.
13. Vijmobile Facilities purchase of new / used cards / jeeps of all make. The scheme
also covers finance for purchase of brand new two wheelers.
14. Vijcarry Provided credit worthy individuals, professional and salaried class for
buying consumer durables and household articles.
15. Vijcash Offer assistance for meeting unforeseen contingencies.
16. Finance is granted against approved shares, bonds and debentures held by the
clients.
17. Vijbudget Fulfills the financial needs of confirmed employees of reputed PSU’s,
joint stock companies, central / state / semi – government employees and lecturers
/ professors / assistant professors of colleges / universities and research institutes.

18. Vijrent Provides loans to property owners whenever the property is leased / rented
out to PSU’s central / state / semi – government undertakings. Reputed corporate
banks. Financial institutions, Insurance companies and MNCs.
19. Canmortgage Designed to meet the financial requirements against security of
equitable mortgagee of property (land & building) to professional, businessman,
salaried persons and individuals.
20. Vidyasagar Educational Loan Scheme Renders financial assistance for needy and
meritous students for pursuing all type of studies (professionals / general) in India
and Abroad.
21. Loan scheme to traders / business enterprises With hassle – free and minimum
terms and conditions, the scheme cater to the needs of t raders and other business
enterprises for smooth flow of business activities.
22. Mahila Exclusive loan scheme for women clientele.
23. Agri – Loan Scheme various loan schemes for agri-clinic, minor, irrigation, farm
development / machinery, plantation crops fishers and for agro-exports.
24. Ssi Loan Scheme A host of schemed available for technology up gradation fund in
textile and jute industries, credit linked capital subsidy standby credit for capital
expenditure and margin money scheme of KVIC.
Other Priority Scheme- These include loan for retail traders, small business,
professional / self employed, medical practitioners and loan for solar water heating /
home lighting system.
Credit Card Operations
 The first Indian card issuers to bay ISO 9002 certification, VIJCARD today as a
distinct recognition in the domestic as well as international market.
 All investors of VIJCARD namely, VIJCARD visa, classic, visa-corporate,
master card and visa – international gold are issued through all VIJAYA BANK
branches & 24 VIJCARD service centers located at major cities across the
country.
 Four Indian Banks are in affiliation with the bank for issue of VIJCARD
VISACARD.
 Launched DEBIT CARD on November 4, 2003, a value added and tech based
product for its niche clients.

Who can open an account:
Savings Bank Account can be opened by
1. An individual in his own name
2. More than one individual in their joint names payable to all of them jointly or any
one or more or survivor/s.
3. Guardian on behalf of a minor furnishing a declaration as to the date of birth of the
minor.
4. A minor over the age of 12 years in his own name provided the minor produces the
satisfactory proof of his / her date of birth such as ‘Date of birth certificate; issued
by corporation / hospital, school certificate etc. [However the maximum balance in
such account shall be restricted to Rs. 10,000/-].
5. Secretaries / treasurers / managers or duly constituted / authorized officers of the
clubs, association (registered or unregistered), school, religious or charitable
institutions and such other body of like nature in their names, by giving clear
operational instructions and furnishing the constitution / rules & bylaws governing
such institutions and other necessary information.
Pass books / sheets
1. Computerized account statements are also issued in lieu of pass book, if the
customer so desires. Such statements will be sent in soft copy to the available e-mail
ID of the customer, if he/she so desires
2. Any unreasonable delay in getting back the pass book / statement of account
periodically should be brought to the notice of the Branch Head
3. No entries should be made in the pass book / account statement by the deposit /
account holder
4. Any manual entry made in the passbook / statement of account, by the bank staff,
should be insisted for authentication by the Officer / Branch Manager
5. The pass book should be tendered in the branch while depositing and / or
withdrawing money or at least once a fortnight for getting the entries written up

6. The depositor should check up the entries in the pass book / account statement and
report immediately to the Branch Manager, if any discrepancies are observed
/found
7. If no representation is received within 3 days from the date of updating the
passbook, the Bank will presume that the entries are correct and will bind on the
customer
8. If the pass book is lost, duplicate pass book will be issued against written request
and with applicable charges.
Transactions
1. In the counter, credits to the account shall ordinarily be through a ‘ Pay- in-slip’
supplied by the Bank unless otherwise permitted by the Bank and such credits will
be acknowledged by the authorized official of the Bank
2. Depositor can remit to the accounts from other branches through the ‘ Alternate
Delivery Channel’ like NEFT / RTGS / ECS / Net banking / Mobile Banking etc.,
duly complying with the conditions stipulated therein
3. Deposit to the account shall be in multiple of Re.1/- subject to minimum of Re.1/-
per occasion
4. Withdrawals shall be ordinarily made only by way of cheques supplied by the
Bank. However the Bank, at its discretion, may allow payments by way of
withdrawal slips, ECS, electronic media, mandates, cheque images where cheque
truncation is provided, etc.
5. For withdrawals by using withdrawal slips, the account holder should be present in
the counter along with the latest pass book. Withdrawal slips are not meant for
issuing to third parties and should be used on the same day of issue
6. If a customer having cheque books, needs to do cash / non-cash transaction
without using the cheque book, such requests may be considered by the Bank on
merit only in the parent / base branch
7. Cheques / bills, pay orders, demand drafts, pension bills, dividend warrants, refund
orders, etc., may be collected through account on behalf of the depositor on
payment of collection charges stipulated by the bank from time to time. The
proceeds of the instruments accepted for collection will be credited to the account
on realisation and even if credited before realisation, withdrawals are permitted
only after realisation of the instruments. The bank, therefore, has the right to debit

the customer's account, in the event advance credit has been given in respect of
instrument accepted for collection and such instrument is returned unpaid. The
bank will not be responsible for any loss that may occur by delay or otherwise in
transmission or collection
8. All the cheques, drafts and other valuable instruments sent by a customer by post
must be transmitted only by means of registered post, failing which the bank will
be absolved of all liability arising from any fraud in respect of such instruments
lost or stolen in transmission
9. Should the bank receive notice form the drawer of the loss of the cheque or to stop
payment of a cheque, such notice will be registered, but the bank will not be
responsible should the cheque be paid on presentation by oversight of such notice
or otherwise. If such a Notice is given by telegram, it should at once be confirmed
by a letter. Service charges as stipulated from time to time will be collected for
recording stop payment of cheques
10. The Bank is not bound to give notice of dishonour of cheque, etc., until
dishonoured instrument is received by the Bank
11. While returning a cheque, the bank need not mention the name and address of the
drawer of the cheque even if a request is made by the payee. It may be disclosed
only under the following circumstances :
o Disclosure is necessitated as per the Court's order
o Disclosure is to be made to an agency of the State duly empowered under the
Statue
o Drawer of the cheque has consented for such disclosure
1. No account will be allowed to be overdrawn except by special arrangement with
the bank. Interest on the amount overdrawn will be calculated at the rate prescribed
by the bank from time to time on the daily balance and the same will be charged to
the account on the last day of the quarter in which the account was overdrawn or
even earlier if the bank thinks it desirable
2. When the depositor wishes to transfer his account from one branch of the bank to
another branch, upon his written request, and surrender of cheque leaves, the
transfer will be made free of charge, but the depositor will be required to pay
service charges as stipulated form time to time for a new pass book which will be
supplied to him

3. The account will be closed on a written request of the depositor(s) and the balance
to the credit, if any, will be paid to the depositor on surrendering the unused
cheque leaves and the pass book. The passbook will be returned to the depositor
after closing the account.
Cheque book facility
1. The account holders can opt for cheque book facility by maintaining the prescribed
minimum balance. All such account holders are provided with 2 cheque books per
annum free of charges
2. Other account holders without cheque book facility can withdraw cash from their
accounts using the ‘Withdrawal Slips’
Restrictions on withdrawals
1. Maximum withdrawals other than through ATM are restricted. If such withdrawal
exceeds the limit, service charge will be levied as decided by the Bank from time
to time. The present charges are as under:
Minor Accounts
1. Accounts, opened in the name of the minor by guardian, will automatically cease
for operation by the guardian on the date of the minor attaining the majority. The
guardian shall attest the signature of the ‘then minor’, duly complying with the
KYC norms, for further operations by the ‘then minor’ therein.
Interest payment / levy of charges
1. Interest on Savings Bank Account is paid at the prescribed rate on daily products.
Such interest is calculated for the periods February to July and August to January
and credited on the 1st day of succeeding month. Interest so calculated will be
rounded off nearest to a rupee. If interest comes to less than a rupee no interest will
be paid for that half year
2. Cash deposited into the account, over and above the prescribed limit, shall attract
service charges as fixed by the Bank from time to time

3. If the account is closed incidental charges will be recovered (except where
premature closure of an account is due to the death of the account holder, transfer
to another branch, transfer for term deposits or for opening another joint account)
Bank’s rights
1. The Bank has a paramount lien on the deposit amount and reserves to itself the
right to appropriate the deposit amount towards any financial obligation of the
depositor to the bank in any capacity
2. The bank reserves the right to refuse payment of cheques / withdrawal slips, which
bears unauthenticated alterations and / or written with pencil.
3. The Bank reserves its right to reverse / correct the mistakes located at any time
4. If the cheques issued by the account holder are returned for want of sufficient
funds or the account has any other irregularity, the Bank reserves its right to warn,
stop issuing further cheque books and close the account.
Mission
To emerge as a Prime National Bank backed by modern technology, meeting
customers’ aspirations with professional banking services and sound growth
contributing to national growth.
2.3 Branch Profile
The Kadur branch of Vijaya Bank is located at Annapoorna Castle, N.H.206,
Check Post, Kadur. The branch code is 1467 .Vijaya Bank Kadur branch address,
contact and other codes below.
Bank: Vijaya Bank.
State: Karnataka.
District: Chikmagalur.
Branch: Kadur
Establish on: 28-10-2010
Branch manager: ISHWAR SHETTY
IFSC Code: VIJB0001467 (5th character is zero)
Branch Code: 001467 (Last 6 Characters of the IFSC Code)
City: Kadur

Address: Annapoorna Castle, N.h.206, Check Post, Kadur
Contact: 9180 25584066
KADUR1467@VIJAYABANK.CO.IN

Figure. 1
Organization structure
[Source: Secondary data]
Managing director
Chief Genaral manager
General manager
(operation)
General manager (planing
and development)
General manager
(commercial and
istitution)
General manager
(treasury)
General manager
(technology)
General manager
(vigiliance and inspection)

Figure. 2
Branch structure

[Source: Secondary data]
Branch manager
Deputy manager
Assistence manager
(Advance)
Head cashier
Singel window
Operater
Computer operater
Probationary
officer
Attenders

CHAPTER-3
CONCEPTUAL FRAMEWORK

Banking
The word bank is derived from the Italian word “Banco” The Latin word
Bancus and the French word banque which means a bench. In olden days the European
bankers transacted their banking activities viz, money changing and money lending by
displaying coins of different countries and of different denomination on the benches
installed in the market place. As such the word Bank should be associated with these
words. But, according to others the word bank is derived from the German word bank
which means the common fund raised from a large number of the members of the
public for the purpose of financing the needy and for giving the loans.
Banking is one form or another was insistent and even in accent times. The
writings (The minister of Chandragupta maurya) contained reference to banking
however banking as a kind of business i.e. modern banking is of recent origin. It come
into existence only offer the industrial revaluation.After the Industrial revaluation with
the increase in the size ofindustrial and business units. Anoint stock from of business
organigsation came in to existence only after the industrial regulation. The first Joint
Stock company bank was established under the European management by the names of
bank of Hindustan of Calcutta and it was failed then there presidency bankers called
bank of bagal in 1806 Bank of madras in 1843 were established with the partic ipation
of Government and since the right of note issue. The first purely Indian joint stock bank
was” Oudh commercial Bank” which came into existence in 1889.Then the ‘Punjab
National Bank’ in 1894. The people’s bank in 1901 was established. The swadesh i
movement of 1905 gave great stimulus to the starting of Indian Banking.
Joint stock company form of business organization came into existence this
form of organization encouraged people with small means to become shareholders of
big industrial to business enterprise still there were certain sections of the public who
were not prepared to invest their surplus money’s if they were assumed of the
repayment of their money with a little interest there on so, naturally there were the need
for the formation of financial institutions that could collect the surplus funds of the
people on terms acceptable to them and make them ( i.e. The funds) available to the
needs for productive purposes accordingly a long number of financial institutions called

Joint stock banks were set up after the industrial revolution. As such joint stock banks
or modern banks are of recent development.
Bank plays a very useful and dynamic role in the economic life of a modern
society these render very valuable services to the community to the trade and industry
they help the wheels of tr5ade commerce and industry always revolving. Banks in
modern day’s acts as the Chief agent in mobilizing the dormant funds of community to
diverts them into productive channels they contribute to the general welfare and
prosperity of the nation. Banks today are the back bone of modern industry. They are
an essential part of the community. So, naturally there was the need for the formation
of financial institutions that could collect the surplus funds of the people on terms
acceptable to them and make them (i.e. the funds) available to the needs for productive
purpose. Accordingly a long number of financial institutions called joint stock banks
were set up after the industrial revaluation even though banking as an independent
business oriented during the 14Th centrally in England. The seeds of banking business
were shown as early as 2000 back,
According to Geofferycrowther the present day banker has their ancestry viz,
merchant money lender and gold smith. Banking in India flourished a ancient vide
times. It originated in our country as early as 500 B.C money was accepted on deposits
and given in the form of advances. However banking in those days consisted mainly on
money lending county.
During the mogul period of Indigenous bankers played a very important role in
lending money and financing of foreign trade and commerce for the purpose of lending
the towns and principal towns. In small towns a ‘ sheath ‘ also known ‘shah’ and chili
on performed banking functions In principal towns “ Magarsheth” as “ Town bankers”
was doing money lending business besides money lending they were transferring funds
from place to place and doing collection business mainly through Hindus.
They accepted deposits and employees them in their business the rate of
interest charged by them was very high as the advance were unsecured and risks and
were repaid over a long period of time that is not cause now. The money lender Act
paused by different state has imposed large number of restrictions on their business
with the growth of banking habits. The changes in the public opinion and fast
expansions of banking is rural and semi urban areas especially after nationalization of

major Indian commercial banks the money lenders close bound to close their
importance.
Financial Performance
The word ‘Performance’ means ‘the performing of an activity, keeping, in
view the achievement made by it’. In other words,
‘Performance’ means ‘the role Played by an arrangement keeping in view the
achievement made by it’. In the context of the banks, it takes into account the way of
their progress.
The opinion of Robert Albans 1 about performance is “The word ‘performance’ is used
to mean the efforts extended to achieve the targets efficiently and effectively. The
achievement of targets involves the integrated use of human, financial and natural
resources.”
According to Erich L. Kohlar, “The performance is a general term applied to a part or
to all the conducts of activities of an organization over a period of time; often with
reference to past or projected costs efficiency, management responsibility or
accountability or the like.”
On the basis of the above definitions, it can be said that the word ‘Performance’ not
only refers to the presentation of something but it also exhibits the quality and results
achieved by the management of an enterprise. It takes into account the accomplishment
of objectives and goals set for an enterprise. Keeping in view the comparison of the
present success with the past. However in the context of the present study, it covers
financial, cost, personnel and social aspects. Thus we can say that the overall
conclusion of the activities of an enterprise is called ‘Performance’.
Techniques OfFinancial Peroformance Analysis
A financial analyst analyzes the financial statements by selecting the appropriate
techniques according to the purpose of analysis. Financial statements may be analyzed
by means of any of the following techniques.
1. Comparative Statements
2. Common-size Statements

3. Trend Analysis
4. Cash Flow Statements
5. Fund Flow Statements
6. Cost-Volume-Profit Analysis
7. Ratio Analysis
1. Comparative statements:
Comparative statements are financial statements that cover a different time
frame, but are formatted in a manner that makes comparing line items from one period
to those of a different period an easy process. This quality means that the comparative
statement is a financial statement that lends itself well to the process of comparative
analysis. Many companies make use of standardized formats in accounting functions
that make the generation of this type of statement quick and easy. The benefits of a
comparative statement are varied for a corporation. Because of the uniform format of
the statement, it is a simple process to compare the gross sales of a given product or all
products of the company with the gross sales generated in a previous month, quarter,
or year. Comparing generated revenue from one period to a different period can add
another dimension to analyzing the effectiveness of the sales effort, as the process
makes it possible to identify trends such as a drop in revenue in spite of an increase in
units sold.
Along with being an excellent way to broaden the understanding of the success
of the sales effort, a comparative statement can also help address changes in
production costs. By comparing line items that catalog the expense for raw materials
in one quarter with another quarter where the number of units produced is similar can
make it possible to spot trends in expense increases, and thus help isolate the origin of
those increases. This type of data can prove helpful to allowing the company to find
raw materials from another source before the increased price for materials cuts into the
overall profitability of the company.
A comparative statement can be helpful for just about any organization that has
to deal with finances in some manner. Even non-profit organizations can use this
method to ascertain trends in annual fund raising efforts. By making use of the
comparative statement for the most recent effort and comparing the figures with those

of the previous year’s event, it is possible to determine where expenses increased or
decreased, and provide some insight in how to plan the following year’s event.
2. Common size:
Common-size financial statements usually involve the balance sheet and the
income statement. These two financial statements become "common-size" when their
dollar amounts are expressed in percentages.
For example, a common-size balance sheet will report all of the balance sheet amounts
as a percentage of the "Total Assets" amount. If Cash was $80,000 and Total Assets
were $1,000,000 then Cash will appear as 8% and Total Assets will appear as 100%. If
the Current Assets were $350,000 they will appear as 35%. If Current Liabilities were
$180,000 then on the common-size statement they will appear as 18%. By having all
of the balance sheet amounts as a percentage of Total Assets, you can compare your
company's current asset percentage (and all other line items) to your industry's
percentage or to any other company's percentages. It doesn't matter if the other
company is larger or smaller than your company, because all amounts are in
percentages of Total Assets. A common-size income statement will show all of the
income statement amounts as a percentage of net sales. If net sales are $10,000,000
and the cost of goods sold is $7,800,000, the common-size income statement will
report net sales as 100% and the cost of goods sold as 78%. If SG&A expenses are
$1,300,000 they will appear as 13%. Having the income statement in percentages of
net sales allows you to compare your company's SG&A expenses and its gross profit
to your industry percentages and to other companies regardless of size.
3. Trend analysis
A trend analysis is a method of analysis that allows traders to predict what will happen
with a stock in the future. Trend analysis is based on historical data about the stock's
performance given the overall trends of the market and particular indicators within the
market.
Trend analysis takes into account historical data points for a stock and, controlling for
other factors like the general changes in the sector, market conditions, competition for
similar stocks, it allows traders to forecast short, intermediate, and long term
possibilities for the stock

4. Cash flow statements
A summary of the actual or anticipated incomings and outgoings of cash in a firm
over an accounting period (month, quarter, year).
Itanswers the questions:
 Where the money came (will come) from?
 Where it went (will go)?
Cash flow statements assess the amount, timing, and predictability of cash-inflows and
cash-outflows, and are used as the basis for budgeting and business-planning.
The accountingdata is presented usually in three main sections:
1. Operating-activities (sales of goods or services),
2. Investing-activities (sale or purchase of an asset, for example), and
3. Financing-activities (borrowings, or sale of common stock, for example).
Together, these sections show the overall (net) change in the firm's cash-flow for the
period the statement is prepared.
4. Lenders and potential investors closely examine the cash flow resulting from the
operating activities. This section represents after-tax net incomeplusdepreciation and
amortization and, therefore, the ability of the firm to service its debt and paydividends.
With balance sheet and income statement (profit and loss account), cash flow statement
constitutes the critical set of financial informationrequiredto manage a business. Also
called statement of cash flows
5. Fund flow statement
Funds Flow Statement is a statement prepared to analyze the reasons for changes in
the Financial Position of a Company between 2 Balance Sheets. It shows the inflow
and outflow of funds i.e. Sources and Applications of funds for a particular period. In
other words, a Funds Flow Statement is prepared to explain the changes in the
Working Capital Position of a Company. There are 2 types of Inflows of Funds:-
1. Long Term Funds raised by Issue of Shares, Debentures or Sale of Fixed
Assets

2. Funds generated from Operations
If the Long Term Fund requirements of a company are met just out of the Long
Term Sources of Funds, then the whole fund generated from operations will be
represented by increase in Working Capital. However, if the Funds generated from
Operations are not sufficient to bridge a gap of Long Term Fund Requirements, then
there will be a decline in Working Capital.
6. Ratio Analysis
A ratio is defined as ‘the indicated quotient of two mathematical expressions’
and as ‘the relationship between two quantitative terms between figures which have a
cause and effect relationship or which are connected with each other in some manner
or the other. A noticeable point is that a ratio reflecting a quantitative relationship
helps to perform a qualitative judgment. Such is the nature of all financial ratios.
Ratio analysis is a widely used technique in financial analysis. It is defined as
systematic use of ratio to interpret the financial statements so that the strengths and
weaknesses of the organization, its historical performance and current financial
condition, can be determined.
Classification of Ratios
The use of ratio analysis is not confined to the financial manager only. There
are different parties interested in the ratio analysis for knowing the financial position
of the firm for different purpose. In view of the various users of ratios, there are many
types of ratios, which can be calculated for the given information in the financial
statements.
Following is the classification of ratios:
1. Liquidity Ratio
2. Leverage Ratio
3. Profitability Ratio
4. Activity Ratio

Liquidity Ratios
Liquidity refers to the ability of the concern to meet its current obligations as
and when they, become due. These ratios are calculated to comment upon the short
term paying capacity of the concern or the firm’s ability to meet its current
obligations. Much insight could be obtained into the present cash solvency of the firm
and its ability to remain solvent in the event of emergent: i.e. the firm should ensure
that it does not suffer from any lack of liquidity and also that it is necessary to strike a
proper balance between high liquidity and lack of liquidity.
Leverage Ratios
The short-term creditors like the bankers and the suppliers of raw materials are
more concerned with the firm’s current debt paying ability. On the other hand, long
terms creditors like debenture holders, financial institutions, etc, are more concerned
with the firm’s long-term financial position. To judge the long-term financial position
of the firm, financial leverage or capital structure ratio is used. The shareholders,
debenture holders and other long-termed creditors like financial institutions are more
interested in the long term financial position or long term solvency o f the firm.
Leverage or solvency ratios are used for such an analysis. These ratios are also used to
analyze the capital structure of a company. That is only these are also called capital-structure
ratios. The term solvency generally refers to the firm ability to pay the
interest regularly and repay the principal amount of debt on due date.
There are two aspects of long-term solvency of a firm. They are:
1. Ability to repay the principal amount of loan on the due date.
2. Regular payment of interest.
Accordingly, there are two types of leverage ratios. The first type of leverage
ratio is based on the relationship between owned-capital and borrowed capital. These
ratios are calculated from the balance items. The second type of leverage ratio is
coverage ratios. These are computed from the profit and loss account.
Profitability ratio
Profit reflects the final result of the business operations. There is two types of
profitability ratios namely margin ratio and ratio on returns rates. Profit margin ratios
show the relation between sales and profits.

The ultimate aim of any business enterprise is to earn maximum profit. Lord
keens remarked, “Profit is the engine that drives the business enterprise”, a firm
should earn profit to survive and grow for a long period of time. To the management
profit is a measurement of efficiency and control. To the owners it is to measure the
worth of their investment. To the creditors it is the margin of safety. The management
of the company should know how efficiently they carry out business operation. In
other words, the management of the company is very much interested in the
profitability of the company. Beside management, creditors and owners are also
interested in the profitability of the co-creditors, as they want to get interest and
repayment of principal amount regularly. Owners want to get a reasonable return on
their investment.
The profitability ratio measures the ability of the firm to earn and on sales,
total assets and invested capital. Profitability ratios are generally calculated either in
relation to sales or in relation to investment. The profitability ratios in relation to sales
are gross profit ratio. Net profit ratio, operating ratio, expenses ratio, and etc. the
profitability ratios in relation to investment are return on assets, return on investment,
return on equity capital.
The important profit margin ratios are gross profit margin and net profit margin
.the rate of return ratio reflects the relationship between rate and profit and investment.
The important rate of return ratio is return on equity and return on investment, etc.
Activity ratio
Funds of the owners and creditors are invested in various assets to generate
sales and profits. The better the management of assets, the larger the amount of sales.
Activity ratios are employed to evaluate the efficiency with which the firm’s managers
utilize their assets. These ratios are also called turnover ratio because they indicate the
speed with the assets are being converted or turn over into sales.

CHAPTER-4
DATA ANALYSIS AND INTREPRETATION

4.1 Data Analysis And Interpretation
In this chapter all calculations pertaining to the study are calculated and
interpreted. Calculations refer to the ratios calculated in the study. The trends of the
ratios are also projected and interpreted. As it is said that one picture is worth 1000
words, graphs have also been provided for better understanding.
Types of Ratios
1. Short-term solvency ratio
2. Long-term solvency ratio
3. Profitability ratio
1. SHORT-TERM SOLVENCY RATIO
The various ratios are:
a) Current Ratio
b) Cash Position Ratio
a) Current Ratio
It may be defined as the relationship between the current assets and current
liabilities. The ratio is a measure of general Liquidity of the firm for a short period of
time. A ratio of 2:1 is considered satisfactory as a rule of thumb
Current Assets (CA)
Current Ratio = ------------------------------
Current Liabilities (CL)

Table.1 CURRENT RATIO
YEAR CURRENT
ASSETS (Rupees in
Lacs)
CURRENT LIABILITIES
(Rupees in Lacs)
RATIO
2011-2012 7,914,81 6,361,54 1.24
2012-2013 9,905,41 9,336,85 1.06
2013-2014 13,863,24 13,125,72 1.05
The Current ratio form the above calculation is worth 1.24 in 2011. In the year
2012 it has decreased to 1.06. In 2013, it further decreases to 1.05. The bank needs to
maintain more current assets in order to meet its short-term obligations. We can
conclude that the ratio is favorable as the current asset is slightly more than the current
liabilitie.
GRAPH 4.1 CURRENT RATIO
1.24
CURRENT RATIO
1.06
1.05
1.3
1.25
1.2
1.15
1.1
1.05
1
0.95
2011-12 2012-13 2013-14
YEARS
CURRENT RATIO

(b) Cash Position Ratio
It may be defined as the relationship between the available cash both at bank
and in hand and current liabilities.
A ratio of 1: 1 is considered to be a good ratio but a rate of 0.75: 1 is also good. Such
a ratio would imply that the firm has enough cash on hand to meet all the current
liabilities
Formulae
Cash
Cash Position Ratio = ------------------------
Current Liabilities
TABLE 4.2 CASH POSITION RATIO
YEAR CASH IN THE
BANK
CURRENT
LIABILITIES
RATIO
2011-2012 2,622,41 6,361,54 0.41
2012-2013 3,458,19 9,336,85 0.37
2013-2014 3,169,22 13,125,72 0.24
The bank’s cash balances to current liabilities recorded are 0.41, 0.37 and 0.24
in the year 2011-2012, 2012-13 and 2013-14 respectively. In the year 2011-12, the
highest ratio was recorded.

GRAPH 4.2 CASH POSITION RATIO
0.41
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
CASH POSITION
2011-12 2012-13 2013-14
YEARS
2. Long Terms Solvency Ratios
0.37
0.24
CASH POSITION
Long-term solvency ratio conveys a firm’s ability to meet the interest cost and
repayment schedule of its Long-term obligations.
These ratios are helpful to management in proper administration of capital. It
also helps the creditors to know the capacity of a business concern to pay debt in future.
The various ratios are:
a) Solvency Ratio
b) Fixed asset to net worth Ratio
(a) Solvency Ratio
It can be defined as the relationship between total liabilities and total assets.

Formulae
Total Liabilities
Solvency Ratio = _______________ X 100
Total Assets
Generally lower the solvency ratio, more satisfactory or stable is the long-term
solvency position of a firm.
TABLE 4.3 SALVENCY RATIO
YEAR TOTAL
LIABILITIES (Rs.
in Lacs)
TOTAL ASSETS (Rs.
in Lacs)
RATIO IN
PERCENTAGE
2011-2012 14,704,27 15,617,33 0.94
2012-2013 21,845,1 23,787,38 0.92
2013-2014 28,175,25 30,424,08 0.93
The above ratios show 0.94% in the year 2011. It was 0.92% in 2012 and in the
year 2013 it increases to 0.93%. We have notice from the ratios calculated above that
they have remain almost the same in the four consecutive years.

GRAPH 4 .3 SOLVENCY RATIO
0.92
SOLVENCY RATIO
0.91 0.915 0.92 0.925 0.93 0.935 0.94 0.945
2013-14
2012-13
2011-12
Y
E
A
R
S
(b) Fixed Asset to Net worth Ratio
0.94
0.93
SOLVENCY RATIO
This ratio establishes the relationship between fixed asset and shareholders
fund. This ratio indicates the extent to which shareholder’s funds are sunk in the fixed
asset. Generally, the purchase of fixed assets should be financed by the shareholders
equity, which includes reserve, surpluses and retained earnings.
Formulae
Fixed Asset (After Dep)
Fixed Assets Ratio = _______________________ X 100
Net Worth

TABLE 4.4 FIXED ASSETS RATIO
YEAR FIXED
ASSETS (Rs.
in Lakhs)
NET WORTH
(Rs. in Lakhs)
RATIO IN
PERCENTAGE
2011-2012 289,74 913,09 31.17
2012-2013 371,10 1,942,28 19.12
2013-2014 52,86 2,248,83 23.5
The fixed assets to net worth ratios are 31.17%, 19.12% and 23.5%. In the year
2011, 2012, 2013 respectively. This ratio is in a good position as the net worth is more
than the fixed assets in all the three years. The shareholder’s funds are sufficient to
finance the fixed assets.
GRAPH 4.4 FIXED ASSETS RATIO
40.0%
30.0%
20.0%
10.0%
0.0%
2011-12
31.17%
1. Profitability Ratio
FIXED ASSETS RATIO
19.12%
2012-13
23.50%
2013-2014
YEARS
FIXED ASSETS RATIO

Profits are measures of overall efficiency of a business. Higher the profit the
more efficient is the business.
In other words they are the ratios, which reveal the total effect of business
transaction and indicate how far the organization has been successful I its operation.
These ratios are
1. Return on Total Resource
2. Net Profit Ratio
1. Return on Total Resource
Return on total resource or total assets ratio is the ratio of net profit to total
resources or total assets. The ratio indicates the return on fixed assets and current
assets. Return here means net profit after taxes and total resources mean all realizable
assets including intangible assets, if they are realizable. This ratio measures the
productivity of the total resources of a concern.
Formulae Net Profit
Return on Total Resource = ______________ X 100
Total Asset
TABLE 4.5 RETURNS ON TOTAL RESOURCES
YEAR NET PROFIT
(Rs. in Lacs)
TOTAL ASSETS (Rs.
in Lacs)
RATIO IN
PERCENTAGE
2011-2012 210,12 15,617,33 1.35
2012-2013 297,04 23,787,38 1.25
2013-2014 387,60 30,424,08 1.27

The return on assets in the year 2011 was 1.35%, in the year 2012 it decreases
to 1.25% and in the year 2013 it was 1.27%. As the bank purchased more assets during
the year. There is a slight decrease in the returns.
GRAPH 4.5 RETURNS ON TOTAL RESOURCE
1.36
1.34
1.32
1.3
1.28
1.26
1.24
1.22
1.2
1.35
RETURN ON TOTAL RESOURCE
1.25
1.27
2011-12 2012-13 2013-14
2. Net Profit ratio
YEARS
TABLE 4.6 INCREASE IN NET PROFIT
RETURN ON TOTAL
RESOURCE
YEAR NET PROFIT
(Rs. in Lacs)
2011-2012 210,12

2012-2013 294,04
2013-2014 387,60
In the above table it shows the figure of net profit. There has been a
continuous increase in the net profit of the four consecutive years. This shows that the
profitability of the bank is in a very sound position we can conclude that the bank have
sufficient earnings to meet its expenses and to pay dividend to its shareholders.
GRAPH 4.6 SHOWING NET PROFIT
450
400
350
300
250
200
150
100
50
0
NET PROFIT
2011-12 2012-13 2013-14
Interest on loan
210.12
294.04
387.6
YEARS
This establishes the relationship between interest received and Total Loan.
Formulae
Interest Received
NET PROFIT

Interest on loan = ____________________ X 100
Total Loan
TABLE 4.7 INTERESTS ON LOAN
YEAR INTEREST
RECEIVED
(Rs. in Lacs)
LOANS
(Rs. in Lacs)
RATIOS IN
PERCENTAGE
2011-2012 1,259,46 4,636,66 27.16
2012-2013 1,702,99 6,813,72 24.99
2013-2014 2,022,97 11,754,86 17.21
The interest on loan has been recorded as 27.16% in the year 2011. it has
decreased to 24.99% in the year 2012. In the year 2013 it has decrease to 17.21%.
GRAPH 4.7 INTEREST ON LOAN

17.21%
Interest Payout Ratio:
INTEREST ON LOAN
21.16%
24.99%
2011-12
2012-13
2013-14
It establishes the relationship between interest paid and earnings before tax and
interest.
Formulae
Interest Paid
Interest payout ratio = ______________ X 100
EBIT
(EBIT= Profit for the year + Interest paid + Tax)
TABLE 4.8 INTEREST PAYOUT RATIO
YEAR INTEREST PAID
(Rs. in Lacs)
EBIT
(Rs. in Lacs)
RATIOS IN
PERCENTAGE

2003-2004 753,75 1,072,81 70.3
2004-2005 1,073,74 1,486,12 72.3
2005-2006 1,191,96 1,967,16 60.6
The interest payout ratio in the year 2011 was 70.3%. In the year 2012 it has
increases to 72.3% and in the year 2013 it was recorded as 60.6%.
GRAPH 4.8 INTEREST PAY OUT RATIO
PAY OUT RATIO
70.3
72.3
60.6
2011-12
2012-13
2013-14

Deposits
TABLE 4.9 DEPOSIT OF VIJAYA BANK
YEAR DEPOSITS
(Rs. in Lacs)
2011-2012 11,658,11
2012-2013 17,653,81
2013-2014 22,376,07
Deposit constitutes the main source of fund for commercial banks. Deposit for
the year 2013-2014 was also strong. Total deposits increased by 79% from Rs17, 653,
81 lacks to Rs22, 376, 07 lacks. In the year 2012-2013 total deposit has increased by
66% from Rs11, 653, 11 lacks to Rs17, 653, 81 lacks.
GRAPH 4.9 DEPOSIT OF THE BANK
1165811
DEPOSITE
1765381
2237607
2500000
2000000
1500000
1000000
500000
0
2011-12 2012-13 2013-14
YEARS
DEPOSITE

Advances of The Bank
TABLE 4.10 ADVANCES OF THE BANK
YEAR ADVANCES
(Rs. in Lacs)
2011-2012 4,637
2012-2013 6,814
2013-2014 11,755
Advances represent the amount led by the bank to its customers. They
constitute the most important item on the asset side of the balance sheet of a bank.
Advances may be in the form of loans, overdrafts, and cash credit. The following
figures show the advances of the bank. In the year 2013-2014 Advances grew by 58%
from Rs6, 814 Crores to Rs11, 755 Crores. The advances have been increased over the
years and this shows that the bank is in a sound position.
GRAPH 4.10 ADVANCES LEVEL

4,637
ADVANCES
6,814
11,755
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2011-2012 2012-2013 2013-2014
YEARS
ADVANCES

CHAPTER-5
FINDINGS, SUGGESTIONS AND CONCLUSION

5.1FINDINGS:
 Current Ratio is good in the year 2011-12 (1.24%) when compared to in year
2012-13(1.06%) and 2013-14 (1.05%)
 Cash portion ratio is in Healthy level. In the year 2011-12 the highest current
ratio recorded
 Solvency ratio is in the favorable position. In 3 financial years the solvency
ratio all most is same and slight changes.
 The net fixed assets to net worth ratio are in good position, because the net
worth is more than the fixed assets. The net worth ratio decreases; it is
favorable symbol to the bank.
 The Return on Total Resource ratio is in slight decrease. In the years 2011 to
2013 ratios 1.35%, 1.25% and 1.27%. It shows the bank purchased more assets
during the years.
 Interest on loan has been decreases from 27.16% to 17.21% in the period 2011-
12 to 2013-14; it is not a good progress.
 Interest payout ratio is decreases every year like 70.3% to 60.65%, it shows
better progress of the bank.
 Net profit increased year by year, it shows the bank in a good financial
stability. In the year 2011-12 net profit 210.12 lakhs, it increased to 387.61
lakhs.
 Deposits from the customer’s accounts in the bank are increased year by year.
In the year 2011-12 it is 11.658.07 lakhs.
 Advances of the bank. In the year 2013-2014 Advances grew by 58% from
Rs6, 814 Crores to Rs11, 755Crores. The advances have been increased over
the years and this shows that the bank is in a sound position.

5.2 SUGGESTIONS
 The Current Ratio of the bank is found to be favorable, but the bank has to
maintain more current assets in order to meet its short-term obligations.
 Cash portion is slight decreased, so bank has to take corrective actions over it.
 Solvency ratio of the bank over the years are slightly decreases, it is good for
the bank, but bank has to give more importance to reduce the total liabilities,
 Banks fixed assets are in the well position, so bank has to maintain the fixed
assets as same.
 Return on resources i.e.return on fixed assets and current assets are slightly
decreased movement, so bank has to use the resources effectively than early
 If the bank has to attract more customers and deal with more transaction, the
bank can provide advances and loans to the general public for the following
purposes:
 Loan to small scale industries and cottage industries.
 Loan to self-employed person or young entrepreneurs.
 Increase short-term deposits and long-term deposits by providing higher rate of
interest.

6.3 CONCLUSION
The study entitle “A Study of Financial Performance of VIJAY Bank
Limited” has been undertaken with the objective to analyze and interpret the bank’s
financial performance. The analysis of the bank was undertaken with the help of ratios,
which are important tools of financial analysis. In general, the bank has achieved
progress over the 3 financial years. The bank has a healthy financial performance. The
bank has been able to achieve heavy growth across multiple parameters, including
customer’s acquisition and revenues. It has been found that the current assets are more
than the current liabilities and we can conclude that that the bank will be able to meet
all its immediate all its financial commitments, Therefore, the short-term solvency
position of VIJAYA Bank Limited remains healthy.
After having solved the ratios and analyzing the financial data, we can conclude that
the bank has gradually excelled over the years. Thus, ratio analysis has been a very
useful technique, which has highlighted the performance of VIJAYA Bank Limited in
key-areas and also has helped in the allocations of certain strategies to be followed by
VIJAYA Bank Limited, which is indispensable to its future growth.

ANNEXURE
 Bibliography

BIBLIOGRAPHY
Books
 Gorden and Natarajan – “Banking Theory, Law and Practice, ” Himalaya
Publishing house, 21st Revised Edition.
 B.s Raman – “Theory of Banking, ” United Publishers Opera Plaza, 2007
 Jyotsna sethi - Nishwan bahtia – “Element of banking and insurance,” Eastern
economic, 2010.
Articles
 Pak. j Commer & soci “analyzing Financial Performance of Commercial banks
in India”, Hill Publishing Pvt Ltd, Volume-4, 2010
 K.Subramanyam, Dr.M. Venkateshwar, “Financial Performance of scheduled
commercial Banks in India”, Indian journal Of research-PARIPEX
 Volume-1, issue 12/Dec/2012, page 70-90
Websites
www.vijayabank.com
www.wikipedia.com
www.ask.comw
www.economictimes.com

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