Financial Performance Measurement of SBI Groups – An Empirical Study
Purash-Kanpur Haridas Nandi Mahavidyalaya, Howrah
Why you choose SBI? You have to clarify it in a paragraph.
The Imperial Bank was established in 1921 by amalgamation of three presidency banks – the Bank of Bengal, the Bank of Bombay and the Bank of Madras under a special legislation. These presidency banks were created as a charter to deal in bill of exchange payable in British India and were an integral part of Indian treasury. The Imperial Bank acted as a banker of the government until the establishment of Reserve Bank of India in 1935.
State Bank of India was formed on ...view middle of the document...
During the last decade, the Indian banking industry has recorded a compounded average growth rate (CAGR) of 18 percent as compared to the country’s average GDP growth of 7.2 percent during the same period. The overall development in banking industry has been supplemented with greater efficiency and productivity of the banking sector (K. C. Chakrabarty Committee, 2012).
As per the report published by McKinsey & Company on Indian Banking 2010, Indian banking index has grown at a compounded annual rate of over 51 per cent since April 2001 as compared to a 27 per cent growth in the market index for the same period.
However, as per a report of Reuters published in December, 2012 the private sector banks such as HDFC Bank (HDBK.NS) and YES Bank (YESB.NS) trade at 3.2-5.3 times book value as compared with State Bank of India at 1.4 times.
The public sector banks facing a stiff competition from the new private sector banks. Seven new private sector banks have already entered in financial system since reforms were undertaken with an existing 14 old private sector banks. In addition, a total of 27 new foreign banks opened branches in India following the reforms of 1991 with an existing 18 foreign banks which were already operating in India. They have come with innovative product, superior service and greater efficiency to tap new and existing market (Bharati V. Pathak, 2011).
The Parliament has already passed Banking Laws (Amendment) Bill, 2012. The amendment will facilitate the big corporate houses to establish large-sized banks.
* What is the need for the study? You have to write clearly.
* Please write definition of the research problem (Financial Performance Measurement) in terms of banking sector as well as SBI.
* What is the significance of the study?
* What is the financial performance of SBI during the last twelve years? You have to write clearly in a paragraph.
* What is the aim of the study? You have to write clearly in a paragraph.
As competition gains further momentum, there would be a need to focus on the organizational efficiency and effectiveness of the public sector banks to sustain in a globalised scenario. The effective studies for proper identification of the weak areas of operation and functioning as well as the identification of risky activities are necessary for taking adequate remedial measures which can only protect and defend them against potential distress.
Review of Literatures:
Until the early 1990s, the focus of RBI’s regulation of commercial banks in India was mainly on solvency issues. However the RBI has been taking steps to realign its supervisory and regulatory standards with the international best practices in a phased manner taking into consideration the economic conditions of the country since 1988 Basel-I Accord. In this context, few expert groups have conducted reviews of the supervisory processes viz. systems and procedures relating to the statutory inspections, during...