CHAPTER-3 DATA COLLECTION & PRESENTATION

A. DATA COLLECTION 3.1. Marketing 3.1.1 Product planning process Product stands for both goods and service combination offered to the public to satisfy their needs. In the highly regulated banking industry all offered the same type of products. Actually the bank takes little time and no additional investment to develop a financial product or service. But the drawback is that no brand can be marketed with unique selling proposition for long because it can be copied immediately. Thus it is better to focus on some selected ideas relating to products, which have immediate operational utility as well as feasibility on banks. In the evolution of bank products, the products can be categorized into three groups. They are Core products, Formal products, and augmented product. Core products are those products, which define the business. For a bank, some of the core products are Savings Bank Account, Current Account, Term deposit, Recurring deposit, Cash credit, Term loan, overdraft and the like. This has two basic characteristics. Firstly, they define the business of a commercial bank that is whatever banking service was extended these core products are there. Second is that, core products do not have strong marketing content, that is, the product must be specifically designed in view of the needs of customers in well defined homogeneous market segment. Since core products, are used as basic tools of commercial banking and serve the full range of customer segments or at least a large number of them, their marketing content cannot be rated as very high. But these core products are indispensable to any business.

Furthermore, these products provide a basis for the development of more sophisticated and marketing oriented products.

Formal Product In the line product evolution, the next type of product is Formal product. Formal product is usually a combination of two or more core products and they have strong marketing content as they cater to some specific customer needs. During the last few years oceans of formal products have hit the market due to rising customer expectation and anxiety to attract the attention of customers. One of the basic features of services is intangibility. Tangibilising the intangible service product was a major challenge to the marketer. In other words, to help the customer in order to form a metal image of the intangible product is the main function to achieve competitiveness in service marketingz5. On the other hand, if banks are applying core products alone, this will create stress upon customers to finalize how to apply core products as according to the requirement of the customer. That means it will restrict the application of bank services which results in limited banking business. Contrary to this, formal product will give right product with specific names as according to the requirements of customers to boost the banking business.

Augmented Product This is a further modification of formal product. This is the age of value addition. Everybody is sold to the idea of value added product and services. Now it is common in the market that some ancillary benefits are attached. The main advantage of an augmented product stems from its strong marketing content. Because augmented product is made out of formal product which itself has a strong marketing content.

The concept of product packages is by considering customers' behaviour. Generally, a customer comes to the bank simply for a product but basically for solving the problems and to satisfy the needs. Customer needs are varied, complex and multidimensional needs. A bank should offer multidimensional product otherwise called product package. In the place of offering one or two or a large number of products to the customers, it is by understanding all bank related needs of a customer and then evolve a comprehensive product package which can take car of his entire spectrum of needs. Hence once the bank gives a tailor-made product it will definitely cultivate a psychological ownership on the custo~ner's mind. Another aspect required in a product policy is local touch that is, by considering local peculiarities; product must be local-oriented. Figure 6 shows the product package

3.1.2 .Pricing policies /strategies:

Price in the case of service, different terms are used for different services like fees for legal service, fare for transport service, commission agency services, premium for insurance service, interest for the use of money. Two characteristics, which have great impact on determining the prices of services are, perish ability and intangibility. In banking industry, price is the amount of money that will determine the exchange rate of bank product or services between the bank and customers. Price determination of the banking products or services is subject to regulation either by the Government or by the Reserve Bank of India. It is a unique feature of the bank price that the products are

mostly designed by the banker while the price is determined by the RBI and Government of India Due to this, there is uniformity in the price of bank product through out India. Hence the chance of competition on the basis of price is almost nil. As a part of the economic liberalization program of the Government, pricing in Indian banking is steadily being deregulated. Successive credit policy pronouncement of RBI during the last few years has already brought about substantial deregulation and, flexibility for banks in evolving their pricing strategy.

3.1.3 Channel planning and management

The most important element in distribution strategy relate to this issue of location of the banks to render their service. Distribution means delivery of the products or service at the right time and at the right place. The place where the banking products or service are delivered is an important element in bank marketing. Some of the major trends in this are The branch licensing policy of RBI is already a thing of the past. This was one of the first policy responses of the government to the Narasimharn Committee Report on Financial system 1991. Branch expansion on the basis of social banking consideration has achieved its objectives substantially. Compared to any nation in the world, India has the largest bank branch network. Practically it covers every nook and corner of the country.

3.1.4 Promotional policies and their effect on sales:

The promotion is to inform and remind individuals and persuade them to accept, recommend or use of a product service or ideas. Promotion is a demand stimulating aid through communication. Any marketing promotion campaign has two objectives. 'They are to inform the prospective customer and then to persuade him. Due to the inherent intangible nature of senices, the customer of banking service relies more on subjective impression rather than concrete evidence. When a bank comes out with a new product, it makes its target customer segment aware of it only through marketing promotion. It may be in various forms like press advertisement, sales campaign, word of mouth, personal interaction directly mailing. Making the customer may be enough if the product is unique or in great demand. But this may not be so always. So the second fundamental objective of a promotion campaign is to persuade the customer to buy the product in preference to other similar products available in the market. Now this persuasion too could be in different ways like by working on an emotional plan by an objective of presentation of benefit of the product by identifying the product with some strong need of customers. Along with the above fundamental objective, it also has some subsidiary objectives like image building of an organization, promoting the growth of a newly started industry.

3.1.5 CRM Policies

There is an evolutionary approach to CRM that focuses heavily on customer equity assets management. This approach begins with business strategy development. Next, a data infrastructure is created that supports customer interactions. Then, a technology infrastructure is designed to produce CRM results. Finally, customer communication channel strategies are created, and strategy execution technology is used to create an ongoing dialog with the customers.

Customer-focused organizations can benefit most from CRM. These organizations develop business strategies that use CRM to identify the needs and the hurt points of existing customers. It is not that customer-focused organizations ignore potential customers, but they do understand the importance of keeping existing customers, especially during difficult economic times. For example, a customer-focused organization might use CRM to help create incentives that produce more business from existing customers, such as offering priority service, free delivery, and so on. Managing customer relationships promotes cheap growth by selling products and services to those customers who are most likely to buy, while wasting less time and resources trying to sell to those customers who are less likely to buy. Customers will pay more for a product or service if they have a long-standing relationship with a provider that they believe is responsive to their needs. Successful customer initiatives often include one or more of the following characteristics: they are affordable, they help companies generate Return on Investment (ROI) through higher profit margins, they produce greater wallet share, and they improve

operational and administrative efficiency. Investments in CRM process changes can be made incrementally. In some ways, the move toward an incremental or a modular rollout of customer initiatives is part of the natural maturation of CRM. For example, emergent pilot programs (programs designed to address problems or capture low-hanging ROI) require a piecemeal approach. Whether modular or not, to be effective, a customer initiative must have enterprise-wide impact. 3.2 HRM

People oriented Deployment, Promotion and selection policies

Bank has formulated and put in place well documented and comprehensive deployment, promotion and selection policies oriented towards identifying the best talent and providing opportunities for fast-track growth and development. Some of the prominent HR policies put in place are

HR Resourcing policy Promotion policy for officers Transfer policy for officers Promotion policies for clerical and subordinate cadre Overseas selection policy

Talent identification & grooming programs

Various programs are being run by the Bank for grooming of officers in specialized areas of Credit, Forex, Treasury / Dealing, Wealth Management, for grooming of Branch heads, etc.

HRNes (Human Resource Network for Employee Services)

"HRNes" covers the entire gamut of human resources management function in the Bank currently being performed and also includes many new sub-functions. It comprises of four broad modules encompassing different functions:

Oracle Core HR Module, covering all current HR processes in the Bank; Fluous Payroll Module, - centralized payroll, payments of various benefits, perks, welfare schemes, terminal benefits, etc.;

Employee Self-Service Module. Oracle Learning Management Module which includes training administration & e-learning; Various E-Learning modules are gradually being put on the system for employees to avail of and undergo these courses.

Grooming and etiquettes programmes

Grooming and etiquettes program are being conducted for front-line employees and also for employees selected for overseas posting in order to improve their service levels and qualitative interaction with customers and various stakeholders better.

SEED (Self efficiency and effectiveness development) program being run for frontline staff of the Bank in order to improve their service skills and servicing efficiency.

3.3 Production and operations

Jammu and Kashmir bank has leveraged the power of the Internet in extending net based services to corporate customers. We offer you end to end e-commerce solutions for collections from dealers and payment to suppliers. These solutions can integrate with your website or our ENet facility can be customized to provide a platform for the transfer of data as regards to receipt and payments. The advantages accruing on account of our supply chain management solutions are:

Features & Benefits

Automation of supply chain payments resulting in operational efficiency Seamless transfer of funds Faster delivery of goods/services leading to significant decrease in working capital cycle Reduction in order processing costs ERP integration and compatibility Real-time information

3.4 Finance

PROFIT AND LOSS A/C Particulars I. INCOME : Interest Earned Other Income Total I II. EXPENDITURE: Interest expended 3,820.76 2,997.22 2,169.47 1,937.54 1,987.86 1,623.79 6,136.80 483.73 6,620.53 4,835.58 334.12 5,169.70 3,713.13 364.76 4,077.89 3,056.88 416.23 3,473.11 2,971.70 261.47 3,233.17 2,434.23 263.34 2,697.57 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Mar-10

Payments to/Provisions Employees for 652.26 521.41 523.61 366.36 278.77 225.77

Operating Expenses Administrative Expenses 140.42 114.89 97.50 90.83 83.21 76.47 &

Depreciation

49.73

43.95

37.93

36.93

32.51

32.16

Other

Expenses, & 430.88 291.22 315.08 249.92 218.72 163.40

Provisions

Contingencies

Provision for Tax

475.12

400.11

329.45

280.37

220.31

216.46

Fringe Benefit tax

0.00

0.00

0.00

0.00

1.95

1.70

Deferred Tax

-3.74

-2.35

-10.35

-1.22

0.00

-2.18

Total II

5,565.43

4,366.45

3,462.69

2,960.73

2,823.33

2,337.57

III. Profit & Loss

Reported Profit

Net 1,055.10

803.25

615.20

512.38

409.84

360.00

Extraordinary Items

0.00

0.00

0.00

0.00

0.00

0.00

Adjusted Profit

Net 1,055.10

803.25

615.20

512.38

409.84

360.00

Prior Adjustments

Year 0.00 0.00 0.00 0.00 0.00 0.00

Profit forward

brought 0.00

0.00

0.00

0.00

0.00

0.00

IV. Appropriations

Transfer

to 263.77 200.81 153.80 128.89 102.34 90.00

Statutory Reserve

Transfer to Other Reserves 507.75 413.68 314.42 258.71 211.60 182.09

Trans. Government /Proposed Dividend

to 283.58 188.76 146.98 124.78 95.90 87.91

Balance forward

carried to 0.00 0.00 0.00 0.00 0.00 0.00

Balance Sheet

Equity

Dividend

500.00

335.00

260.00

220.00

169.00

155.00

Earnings

Per 209.10 160.22 122.55 101.93 81.65 71.61

Share-Unit Curr

Earnings

Per 209.10 160.22 122.55 101.93 81.65 71.61

Share(Adj)-Unit Curr

Book Value-Unit 1,003.24 Curr

844.13

717.40

620.84

540.91

470.37

BALANCE SHEET Particulars SOURCES OF FUNDS : Capital Reserves Total Deposits Borrowings 48.49 4,816.20 48.49 4,044.69 48.49 3,430.19 48.49 2,961.97 48.49 2,574.37 48.49 2,232.34 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Mar-08

64,220.62 53,346.90 44,675.94 37,237.16 33,004.10 28,593.26 1,075.00 1,240.96 1,588.94 1,104.65 1,248.89 1,100.21 1,198.96 996.62 1,069.67 751.79 1,102.02

Other Liabilities 1,583.00 & Provisions TOTAL LIABILITIES APPLICATION OF : Cash Balances RBI Balances with & with 2,695.15 FUNDS

71,743.31 60,269.98 50,508.16 42,546.79 37,693.25 32,727.90

2,783.66

2,974.96

2,744.73

2,302.95

3,219.97

Banks & money at Call Investments Advances 2,709.18 1,670.21 573.84 1,869.51 2,971.81 1,217.27

25,741.06 21,624.32 19,695.77 13,956.25 10,736.33 8,757.67 39,200.41 33,077.42 26,193.64 23,057.22 20,930.41 18,882.61

Fixed Assets Other Assets Miscellaneous Expenditure not written off TOTAL ASSETS Contingent Liability Bills collection for

456.18 941.33

420.27 694.10

393.77 676.18

204.13 714.95

199.41 552.34

192.00 486.47

0.00

0.00

0.00

0.00

0.00

0.00

71,743.31 60,269.98 50,508.16 42,546.79 37,693.25 32,755.99

32,282.80 15,066.07 25,517.66 11,499.25 9,140.92

11,264.43

896.00

920.34

1,461.68

592.26

949.04

628.54

3.5 USE OF ITeS

Banking environment has become highly competitive today. To be able to survive and grow in the changing market environment banks are going for the latest technologies, which is being perceived as an enabling resource that can help in developing learner and more flexible structure that can respond quickly to the dynamics of a fast changing

market scenario. It is also viewed as an instrument of cost reduction and effective communication with people and institutions associated with the banking business.

The Software Packages for Banking Applications in India had their beginnings in the middle of 80s, when the Banks started computerizing the branches in a limited manner. The early 90s saw the plummeting hardware prices and advent of cheap and inexpensive but high powered PCs and Services and banks went in for what was called Total Branch Automation (TBA) packages. The middle and late 90s witnessed the tornado of financial reforms, deregulation globalization etc. coupled with rapid revolution in communication technologies and evolution of novel concept of convergence of communication technologies, like internet, mobile/cell phones etc. Technology has continuously played on important role in the working of banking institutions and the services provided by them. Safekeeping of public money, transfer of money, issuing drafts, exploring investment opportunities and lending drafts, exploring investment being provided.

Information Technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. Internet has significantly influenced delivery channels of the banks. Internet has emerged as an important medium for delivery of banking products and services.

The customers can view the accounts; get account statements, transfer funds and purchase drafts by just punching on few keys. The smart cards i.e., cards with micro processor chip have added new dimension to the scenario. An introduction of Cyber Cash the exchange of cash takes place entirely through Cyber-books. Collection of

Electricity bills and telephone bills has become easy. The upgradeability and flexibility of internet technology after unprecedented opportunities for the banks to reach out to its customers. No doubt banking services have undergone drastic changes and so also the expectation of customers from the banks has increased greater.

IT is increasingly moving from a back office function to a prime assistant in increasing the value of a bank over time. IT does so by maximizing banks of pro-active measures such as strengthening and standardizing banks infrastructure in respect of security, communication and networking, achieving inter branch connectivity, moving towards Real Time gross settlement (RTGS) environment the forecasting of liquidity by building real time databases, use of Magnetic Ink Character Recognition and Imaging technology for cheque clearing to name a few. Indian banks are going for the retail banking in a big way

The key driver to charge has largely been the increasing sophistication in technology and the growing popularity of the Internet. The shift from traditional banking to e-banking is changing customers expectations.

E-Banking:

E-banking made its debut in UK and USA 1920s. It becomes prominently popular during 1960, through electronic funds transfer and credit cards. The concept of web-based baking came into existence in Europe and USA in the beginning of 1980.

In India e-banking is of recent origin. The traditional model for growth has been through branch banking. Only in the early 1990s has there been a start in the non-branch banking

services. The new private sector banks and the foreign banks are handicapped by the lack of a strong branch network in comparison with the public sector banks. In the absence of such networks, the market place has been the emergence of a lot of innovative services by these players through direct distribution strategies of non-branch delivery. All these banks are using home banking as a key pull factor to remove customers away from the well entered public sector banks.

Many banks have modernized their services with the facilities of computer and electronic equipments. The electronics revolution has made it possible to provide ease and flexibility in banking operations to the benefit of the customer. The e-banking has made the customer say good-bye to huge account registers and large paper bank accounts. The e-banks, which may call as easy bank offers the following services to its customers:

Credit Cards/Debit Cards ATM E-Cheques EFT (Electronic Funds Transfer) DeMAT Accounts Mobile Banking Telephone Banking Internet Banking EDI (Electronic Data Interchange)

Benefits of E-banking:

To the Customer:

Anywhere Banking no matter wherever the customer is in the world. Balance enquiry, request for services, issuing instructions etc., from anywhere in the world is possible.

Anytime Banking Managing funds in real time and most importantly, 24 hours a day, 7days a week.

Convenience acts as a tremendous psychological benefit all the time. Brings down Cost of Banking to the customer over a period a period of time. Cash withdrawal from any branch / ATM On-line purchase of goods and services including online payment for the same.

To the Bank:

Innovative, scheme, addresses competition and present the bank as technology driven in the banking sector market

Reduces customer visits to the branch and thereby human intervention Inter-branch reconciliation is immediate thereby reducing chances of fraud and misappropriation

On-line banking is an effective medium of promotion of various schemes of the bank, a marketing tool indeed.

Integrated customer data paves way for individualised and customised services.

Impact of IT on the Service Quality:

The most visible impact of technology is reflected in the way the banks respond strategically for making its effective use for efficient service delivery. This impact on service quality can be summed up as below:

With automation, service no longer remains a marketing edge with the large banks only. Small and relatively new banks with limited network of branches become better placed to compete with the established banks, by integrating IT in their operations.

The technology has commoditizing some of the financial services. Therefore the banks cannot take a lifetime relationship with the customers as granted and they have to work continuously to foster this relationship and retain customer loyalty.

The technology on one hand serves as a powerful tool for customer servicing, on the other hand, it itself results in depersonalizing of the banking services. This has

an adverse effect on relationship banking. A decade of computerization can probably never substitute a simple or a warm handshake.

In order to reduce service delivery cost, banks need to automate routine customer inquiries through self-service channels. To do this they need to invest in call centers, kiosks, ATMs and Internet Banking today require IT infrastructure integrated with their business strategy to be customer centric.

Impact of IT on Banking System:

The banking system is slowly shifting from the Traditional Banking towards relationship banking. Traditionally the relationship between the bank and its customers has been on a one-to-one level via the branch network. This was put into operation with clearing and decision making responsibilities concentrated at the individual branch level. The head office had responsibility for the overall clearing network, the size of the branch network and the training of staff in the branch network. The bank monitored the organisations performance and set the decision making parameters, but the information available to both branch staff and their customers was limited to one geographical location.

Traditional Banking Sector

The modern bank cannot rely on its branch network alone. Customers are now demanding new, more convenient, delivery systems, and services such as Internet banking have a dual role to the customer. They provide traditional banking services, but additionally offer much greater access to information on their account status and on the banks many other services. To do this banks have to create account information layers, which can be accessed both by the bank staff as well as by th customers themselves.

The use of interactive electronic links via the Internet could go a ling way in providing the customers with greater level of information about both their own financial situation and about the services offered by the bank.

The New Relationship Oriented Bank

Impact of IT on Privacy and Confidentiality of Data:

Data being stored in the computers is now being displayed when required on through internet banking mobile banking, ATMs etc. all this has given rise to the issues of privacy and confidentially of data are:

The data processing capabilities of the computer, particularly the rapid throughput, integration, and retrieval capabilities, give rise to doubts in the minds of individuals as to whether the privacy of the individuals is being eroded.

So long as the individual data items are available only to those directly concerned, everything seems to be in proper place, but the incidence of data being cross referenced to create detailed individual dossiers gives rise to privacy problems.

Customers feel threatened about the inadequacy of privacy being maintained by the banks with regard to their transactions and link at computerized systems with suspicion.

Aside from any constitutional aspect, many nations deem privacy to be a subject of human right and consider it to be the responsibility of those who concerned with computer data processing for ensuring that the computer use does not revolve to the stage where different data about people can be collected, integrated and retrieved quickly. Another important responsibility is to ensure the data is used only for the purpose intended.

CHAPTER-4 FUNCTIONAL ANALYSIS OF JAMMU AND KASHMIR BANK

1. ANALYSIS OF WORKING CAPITAL The analysis of working capital can be conducted through a number of devices, such as: 1. Ratio analysis. 2. Fund flow analysis.

3. Budgeting.

4.1.1. RATIO ANALYSIS

A ratio is a simple arithmetical expression one number to another. The technique of ratio analysis can be employed for measuring short-term liquidity or working capital position of a firm. The following ratios can be calculated for these purposes: 1. Current ratio. 2. Quick ratio 3. Gross Profit Ratio 4. Fixed Assets turnover ratio 5. Receivables turnover. 6. Payable turnover ratio. 7. Working capital turnover ratio. 8. Net Profit Ratio 9. Ratio of current liabilities to tangible net worth. 10. Total assets turnover ratio.

4.1.2. FUND FLOW ANALYSIS

Fund flow analysis is a technical device designated to the study the source from which additional funds were derived and the use to which these sources were put. The funds flow analysis consists of a. Preparing schedule of changes of working capital b.

Statement of sources and application of funds. It is an effective management tool to study the changes in financial position (working capital) business enterprise between beginning and ending of the financial dates.

4.1.3. WORKING CAPITAL BUDGETING

A budget is a financial and / or quantitative expression of business plans and polices to be pursued in the future period time. Working capital budget as a part of the total budge ting process of a business is prepared estimating future long term and short term working capital needs and sources to finance them, and then comparing the budgeted figures with actual performance for calculating the variances, if any, so that corrective actions may be taken in future. He objective working capital budget is to ensure availability of funds as and needed, and to ensure effective utilization of these resources. The successful implementation of working capital budget involves the preparing of separate budget for each element of working capital, such as, cash, inventories and receivables etc.

Calculation of Ratios 1. Current Ratio: - Current ratio is calculated by current assets upon current liabilities. It measures short term paying ability of the firm.

Year

2009

2010

2011

Current Assets

37371.65

42343.9

50116.52

Current Liabilities

36623.6

41347.8

49259.3

Current Ratio

1.02

1.02

1.01

Significance: - An ideal current ratio is 2:1. This ratio is used for short term paying ability of the firm. Approximate of 1 of current ratio the creditors will be able to get their payment in full.

2. Quick Ratio: - This ratio is also known as liquid ratio. It measures short term paying ability by measuring short term liquidity.

Year

2009

2010

2011

Liquid assets

37371.65

42343.9

50116.52

Current liabilities

36623.6

41347.8

49259.3

Liquid Ratio

1.024

1.02

1.01

Significance: - This ratio is able to payment for its creditors. This ideal figure is 1.

3. Gross profit ratio: - Gross profit ratio indicates the efficiency of the production or operation of trading. It expresses relation between gross profit and net sales.

G.P. Ratio= Gross profit/net sales* 100

Year

2009

2010

2011

Gross profit

774.45

958.21

1149.49

Net Sales

53934.51

60294.39

70869.57

G.P.R.

14.3%

15.8%

16.2%

Significance:- This ratio indicates the degree to which the selling price of goods per unit may decline without resulting in losses from operations to the firm. If there is continuous increment in gross profit ratio then it means the selling price of goods is increasing day by day.

4. Net Profit Ratio: - Net profit ratio indicates efficiency of P&L A/C of the firm. It intends relation between net profit and net sales. Net Profit Ratio= N.P. /Net sales*100

Year

2009

2010

2011

Net Profit

409.84

512.38

615.2

Net sales

53934.51

60294.39

70869.57

N.P.R

7.5%

8.4%

8.6%

Significance: - Net profit ratio indicates net margin on sales. This margin is continuously increasing year to year.

5. Fixed assets Turnover Ratio: - It indicates the investment in fixed assets has been judicious or not. It calculated by the following formula; FATOR = Net sales /Net fixed assets Net fixed assets = Fixed assets depreciation

Year

2009

2010

2011

Net sales

53934.51

60294.39

70869.57

Net fixed assets

1,994,1.43

3,937,7.02

1,920,0.15

FATOR

2.7 Times

1.53 Times

3.69 Times

Significance: - It indicates the extent to which the investment in fixed assets contributes towards sales. It compared with the previous period, it indicates whether the investment in fixed assets has been judicious or not.

6. Working capital Turnover Ratio: - Working capital ratio is talking about utilization of working capital for the firm. Working capital turnover ratios express the relation between net sales and working capital. It is calculate by the following formula; WCTOR = Net Sales/Working capital

Year

2009

2010

2011

Net Sales

53934.51

60294.39

70869.57

Working capital

37371.65

42343.9

50116.52

WCTOR

1.44 Times

1.42 Times

1.41 Times

7. Total assets turnover ratio: - Total assets turnover ratio intends to the total assets to total turnover. It indicates to efficiency of total assets and total turnover. This ratio is very important for estimate the position of the firm. This ratio is calculated by the following formula;

TATOR = Total assets/total turnover Year 2009 2010 2011

Total assets

376,932,318

327,559,871

425,467,948

Turnover

53934.51

60294.39

70869.57

TATOR

69%

54%

60%

Significance;- The Banks aggregate business crossed yet another psychological mark and stood at ` 70,869.57 Crore at the end of the financial year 2010-11. The Banks total business increased by ` 10,575.18 Crore from the previous years figure of ` 60,294.39 Crore, registering a growth of 17.54% The above parameters are used for critical analysis of financial position. With the evaluation of each component, the financial position from different angles is tried to be presented in well and systematic manner. By critical analysis with the help of different tools, it becomes clear how the financial manager handles the finance matters in profitable manner in the critical challenging atmosphere, there commendation are made which would suggest the organization in formulation of a healthy and strong position financially with proper management system. I sincerely hope, through the evaluation of various percentage, ratios and comparative analysis, the organization would be able to conquer its in efficiencies and makes the desired changes.

2. ANALYSIS OF FINANCIAL STATEMENTS:

Financial statement is a collection of data organized according to logical and consistent accounting procedure to convey an under-standing of some financial aspects of a business firm. It may show position at a moment in time, as in the case of balance sheet or may reveal a series of activities over a given period of time, as in the case of an income statement. Thus, the term financial statements generally refers to the two statements (1) The position statement or Balance sheet. (2) The income statement or the profit and loss Account.

OBJECTIVES OF FINANCIAL STATEMENTS: According to accounting Principal Board of America (APB) states. The following objectives of financial statements: 1. To provide reliable financial information about economic resources and obligation of a business firm. 2. To provide other needed information about charges in such economic resources and obligation. 3. To provide reliable information about change in net resources (recourses less obligations) missing out of business activities. 4. To provide financial information those assets in estimating the learning potential of the business.

LIMITATIONS OF FINANCIAL STATEMENTS: Though financial statements are relevant and useful for a concern, still they do not present a final picture a final picture of a concern. The utility of these statements is dependent upon a number of factors. The analysis and interpretation of these statements

must be done carefully otherwise misleading conclusion may be drawn. Financial statements suffer from the following limitations: 1. Financial statements do not given a final picture of the concern. The data given in these statements is only approximate. The actual value can only be determined when the business is sold or liquidated.

2. Financial statements have been prepared for different accounting periods, generally one year, during the life of a concern. The costs and incomes are apportioned to different periods with a view to determine profits etc. The allocation of expenses and income depends upon the personal judgment of the accountant. The existence of contingent assets and liabilities also make the statements imprecise. So the financial statements are at the most interim reports rather than the final picture of the firm. 3. The financial statements are expressed in monetary value, so they appear to give final and accurate position. The value of fixed assets in the balance sheet neither represent the value for which fixed assets can be sold nor the amount which will be required to replace these assets. The balance sheet is prepared on the presumption of a going concern. The concern is expected to continue in future. So, the fixed assets are shown at cost less accumulated depreciation. Moreover, there are certain assets in the balance sheet which will realize nothing at the time of liquidation but they are shown in the balance sheets. 4. The financial statements are prepared on the basis of historical costs or original costs. The value of assets decreases with the passage of time current price changes are not taken into account. The statements are not prepared with the keeping in view the economic conditions. The balance sheet loses the significance of being an index of current economic realities.

Similarly, the profitability shown by the income statements may be representing the earning capacity of the concern. 5. There are certain factors which have a bearing on the financial position and operating result of the business but they do not become a part of these statements because they cannot be measured in monetary terms. The basic limitation of the traditional financial statements comprising the balance sheet, profit & loss A/c is that they do not give all the information regarding the financial operation of the firm. Nevertheless, they provide some extremely useful information to the extent the balance sheet mirrors the financial position on a particular data in lines of the structure of the basis of assets, liabilities etc. and the profit & loss A/c shows the result of operation during a certain period in terms revenue obtained and cost incurred during the year.

FINANCIAL STATEMENT ANALYSIS : -

It is the process of identifying the financial strength and weakness of a firm from the available accounting data and financial statements. The analysis is done

CALCULATIONS OF RATIOS. Ratios are relationship expressed in mathematical terms between figures, which are connected with each other in some manner.

CHAPTER-5 SUMMARY AND CONCLUSIONS

A. FINDINGS

Ratio analysis can be used by financial executives to check upon the efficiency with which working capital is being used in the enterprise. The following are the important ratios to measure the efficiency of working capital. The following, easily calculated, ratios are important measures of working capital utilization.

Ratio

Formulae

Result

Interpretation

Average

Stock

* = x days

On

average,

you

365/ Cost of Goods Sold

turn over the value of your entire stock every x days. You may need to break this down into

product groups for effective management. Obsolete stock, slow moving lines will extend overall stock stock

turnover Faster

days. production,

fewer product lines, just in time ordering will reduce average days.

Receivables (in days)

Ratio Debtors * 365/ Sales = x days

It

takes

you

on

average x days to collect monies due to you. If youre official credit terms are 45 day and it takes you 65 days... why? One or more large or slow debts can drag out the average Effective management days. debtor will

minimize the days.

Payables Ratio (in Creditors

365/ = x days

On average, you pay

days)

Cost of Sales (or Purchases)

your suppliers every x days. If you better

negotiate

credit terms this will increase. If you pay earlier, say, to get a discount this will decline. If you

simply defer paying your suppliers

(without agreement) this will also

increase - but your reputation, the

quality of service and any flexibility provided by your suppliers suffer. Current Ratio Total Assets/ Current = x times Total Current Assets are assets that you can readily turn in to cash or will do so may

Current Liabilities

within 12 months in the course of

business. Liabilities

Current are

amount you are due to pay within the coming 12 months. For times example, means 1.5 that

you should be able to lay your hands on $1.50 for every

$1.00 you owe. Less than 1 time e.g. 0.75 means that you

could have liquidity problems and be

under pressure to generate cash to sufficient meet

oncoming demands.

Quick Ratio

(Total

Current = x times

Similar

to

the

Assets - Inventory)/ Total Liabilities Current

Current Ratio but takes account of the fact that it may take time to convert

inventory into cash.

Working Ratio

Capital (Inventory Receivables Payables)/ Sales

+ As % Sales -

A high percentage means that working capital needs are

high relative to your sales.

Other working capital measures include the following: Bad debts expressed as a percentage of sales. Cost of bank loans, lines of credit, invoice discounting etc. Debtor concentration - degree of dependency on a limited number of customers. Once ratios have been established for our business, it is important to track them over time and to compare them with ratios for other comparable businesses or industry sectors.

B. Lessons learnt Cash flows in a cycle into, around and out of a business. It is the business's life blood and every manager's primary task is to help keep it flowing and to use the cash flow to generate profits. If a business is operating profitably, then it should, in theory, generate

cash surpluses. If it doesn't generate surpluses, the business will eventually run out of cash and expire. The faster a business expands, the more cash it will need for working capital and investment. The cheapest and best sources of cash exist as working capital right within business. Good management of working capital will generate cash will help improve profits and reduce risks. Bear in mind that the cost of providing credit to customers and holding stocks can represent a substantial proportion of a firm's total profits. There are two elements in the business cycle that absorb cash - Inventory (stocks and work-in-progress) and Receivables (debtors owing you money). The main sources of cash are Payables (your creditors) and Equity and Loans.

Each component of working capital (namely inventory, receivables and payables) has two dimensions ........TIME ......... and MONEY. When it comes to managing working capital - TIME IS MONEY. If you can get money to move faster around the cycle (e.g. collect monies due from debtors more quickly) or reduce the amount of money tied up (e.g. reduce inventory levels relative to sales), the business will generate more cash or it will

need to borrow less money to fund working capital. As a consequence, you could reduce the cost of bank interest or you'll have additional free money available to support additional sales growth or investment. Similarly, if you can negotiate improved terms with suppliers e.g. get longer credit or an increased credit limit, you effectively create free finance to help fund future sales.

C. SUGGESTIONS After a lot of research of working capital, I am able to say that there should be more liquid surplus for smooth running of any business. But under the corporate banking this is more prominent requirement. Because in banking, working capital is more exchangeable as compare other organization When we provide term loan to our customer as per RBI guidelines. Loan can be short term or long term. Profitability of the bank is also affect by working capital. Generally, all things are affected by working capital under in a house. The J&K Bank is the only private sector bank in the country assigned with the responsibility of convening State Level Bankers Committee meetings. The bank continued to discharge its lead bank responsibility in 12 out of 22 districts of J&K State satisfactory.

CONCLUSION Any change in the working capital will have an effect on a business's cash flows. A positive change in working capital indicates that the business has paid out cash, for example in purchasing or converting inventory, paying creditors etc. Hence, an increase in working capital will have a negative effect on the business's cash holding. However, a

negative change in working capital indicates lower funds to pay off short term liabilities (current liabilities), which may have bad repercussions to the future of the company. If you would like to get a better understanding of financial statements or budgeting contact nkavithamba@yahoo.co.in. Therefore we can say that working capital plays a very important role in Corporate Banking. o Without working capital any business cannot run. The bank aggregate business crossed yet another psychological mark and stood Rs70869.57 crores at the end of financial year 2010-2011. o The bank total business increased by Rs 10575.18 crores from the previous figure of 60294.39 Crores, registering a growth of 17.54%. o The bank continued its prudent approach in expanding quality credit assets in line with its policy on credit risk management. Its net advance increased by Rs 3136.41 Crores. o The Banks performance in the recovery of NPAs during the year continued to be good. o Investment portfolio increased by Rs 5,739.52 Crores from 13956.25 and 19695.77 as on 2011. o The Bank has earned an income of Rs 26.14 crores from the Insurance business. In life insurance mobilized a business of Rs 103.02 crores and in non-life segment Rs 59.36 crores was mobilized during the year. o The gross profit for the financial year 2010-11 stood at Rs 1149.49 crores. o The highest ever net profit of Rs 615.2 crores.

REFERENCES AND BIBLIOGRAPHY

During the completion of this project work I have taken references from various sources which include:

zines such as Business Economics, Newspaper such as Greater Kashmir, Bank Dairy, Bank Catalogue, Bank magazine etc.

www.jkbank.net www.jkbank.com www.rbi.org.in Bank