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INTRODUCTION OF BANKING

INTRODUCTION OF BANKING

DEFINITION OF BANK
Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits
of money from the public, repayable on demand or otherwise and withdraw by cheque, draft
or otherwise."
- Banking Companies (Regulation) Act,1949

ORIGIN OF THE WORD BANK:The origin of the word bank is shrouded in mystery. According to one view point the Italian
business house carrying on crude from of banking were called banchi bancheri" According to
another viewpoint banking is derived from German word "Branck" which mean heap or
mound. In England, the issue of paper money by the government was referred to as a raising
a bank.

ORIGIN OF BANKING :
Its origin in the simplest form can be traced to the origin of authentic history. After
recognizing the benefit of money as a medium of exchange, the importance of banking was
developed as it provides the safer place to store the money. This safe place ultimately evolved
in to financial institutions that accepts deposits and make loans i.e., modern commercial
banks.

Characteristics / Features of a Bank

1. Dealing in Money
Bank is a financial institution which deals with other people's money i.e. money
given by depositors.

2. Individual / Firm / Company


A bank may be a person, firm or a company. A banking company means a
company which is in the business of banking.

3. Acceptance of Deposit
A bank accepts money from the people in the form of deposits which are usually
repayable on demand or after the expiry of a fixed period. It gives safety to the
deposits of its customers. It also acts as a custodian of funds of its customers.

4. Giving Advances
A bank lends out money in the form of loans to those who require it for different
purposes.

5. Payment and Withdrawal


A bank provides easy payment and withdrawal facility to its customers in the
form of cheques and drafts, It also brings bank money in circulation. This money
is in the form of cheques, drafts, etc.

6. Agency and Utility Services


A bank provides various banking facilities to its customers. They include general
utility services and agency services.

7. Profit and Service Orientation


A bank is a profit seeking institution having service oriented approach.

Functions of Commercial Banks


The functions of commercial banks are of two types.
(A) Primary functions; and
(B) Secondary functions.
Let us discuss details about these functions.
(i) Primary functions
The primary functions of a commercial bank include:
a) Accepting deposits; and
b) Granting loans and advances

a) Accepting deposits
The most important activity of a commercial bank is to mobilise deposits from the public.
People
who have surplus income and savings find it convenient to deposit the amounts with banks.
Depending upon the nature of deposits, funds deposited with bank also earn interest.
b) Grant of loans and advances
The second important function of a commercial bank is to grant loans and advances. Such
loans
and advances are given to members of the public and to the business community at a higher
rate
of interest than allowed by banks on various deposit accounts.

ii) Secondary functions


In addition to the primary functions of accepting deposits and lending money, banks perform
a
number of other functions, which are called secondary functions. These are as followsa.
Issuing letters of credit, travellers cheque, etc.
b. Undertaking safe custody of valuables, important document and securities by providing
safe deposit vaults or lockers.
c. Providing customers with facilities of foreign exchange dealings.
d. Transferring money from one account to another; and from one branch to another
branch of the bank through cheque, pay order, demand draft.
e. Standing guarantee on behalf of its customers, for making payment for purchase of
goods, machinery, vehicles etc.
f. Collecting and supplying business information.
g. Providing reports on the credit worthiness of customers.
i. Providing consumer finance for individuals by way of loans on easy terms for purchase
of consumer durables like televisions, refrigerators, etc.
j. Educational loans to students at reasonable rate of interest for higher studies, especially for
professional courses.

BANK OF BARODA

INTRODUCTION
Bank of Baroda (BoB) (BSE: 532134) (Hindi: ) is the third largest bank in
India, after the State Bank of India and the Punjab National Bank and ahead of ICICI Bank.[3]
BoB is ranked 763 in Forbes Global 2000 list. BoB has total assets in excess of Rs. 3.58 lakh
crores, or Rs. 3,583 billion, a network of over 3,409 branches and offices, and about 1,657
ATMs. It plans to open 400 new branches in the coming year. It offers a wide range of
banking products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, credit cards and asset management. Its total business was Rs. 5,452
billion as of June 30.[4]

Bank of Baroda
BACKGROUND

Bank of Baroda provides banking and financial services to individual, business


and corporate customers in India and abroad. Its operations include wholesale
banking, which
contributed ~36% to FY10 revenues, retail banking (~26%) treasury operations
(~23%) and other banking operations (~15%). The company offers fixed,
current, and savings
deposit accounts to customers, while lending activity covers home loans, home
improvement loans, loan against future rent receivables, mortgage loans,
advance against
securities, education loans, auto loans, two wheeler loans, personal loans,
reverse mortgage loans, term finance, small scale industries and SME loans,
traders loans, working
capital, line of credit, export and import finance, bill finance, bridge loans,
advance against shares,

Company Profile
INDUSTRY PROFILE

Banking

The Indian banking system emerged relatively unscathed from the global
economic downturn of 200809.
While credit growth slowed down, banks were able to control the level
of nonperforming assets (NPAs), thanks partly to the Reserve Bank of Indian
allowing onetime restructuring of accounts.
NPAs as a proportion of gross advances increased
slightly from 2.3 per cent as on March 31, 2009 and 2.5 per cent as the end of
March 31, 2010.
The government has been supporting the growth of public sector banks by
infusing capital as per requirement.

The government is expected to continue to maintain its strong support for the
banking system, while simultaneously imposing stringent
prudential norms to ensure its orderly growth.
Realising this, several banks increased their deposit rates by a further 25 75 bps
in the first week of October 2010.

Total Share Capital


Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Revaluation Reserves
Net Worth
Deposits
Borrowings
Total Debt
Other Liabilities & Provisions
Total Liabilities

2007
365.53
365.53
0
0
8284.41
0
8649.94
124915.98
1142.56
126058.54
8437.70
143146.18
2007

2008
365.53
365.53
0
0
10,678.40
0
11,043.93
152,034.13
3,927.05
155,961.18
12,594.41
179,599.52
2008

2009
365.53
365.53
0
0
12,470.01
0
12,835.54
192,396.95
5,636.09
198,033.04
16,538.15
227,406.73
2009

2010
365.53
365.53
0
0
14,740.86
0
15,106.39
241,044.26
13,350.09
254,394.35
8,815.97
278,316.71
2010

2011
392.81
392.81
0
0
20,600.30
0
20,993.11
305,439.48
22,307.85
327,747.33
9,656.73
358,397.17
2011

6413.52

9,369.72

10,596.34

13,539.97

19,868.18

11866.85
83620.87
34943.63
2244.62

12,929.56
106,701.320
43,870.07
3,787.14

13490.77
143985.90
52445.88
3954.13

21,927.09
175,035.29
61,182.38
4,266.60

30,065.89
228,676.36
71,260.63
4,548.16

1155.81
1088.81
0
5212.5

1,360.14
2427.00
0
4301.83

1644.41
2309.72
0
4578.12

1,981.84
2,284.76
0
4,347.22

2,248.44
2,299.72
0
6,226.40

143146.18

179599.5

227406.73

278,316.71

358,397.180

54999.86
12976.53
237.46
28.18

75364.33
15105.51
303.18
39.41

64745.82
22584.64
352.37
61.14

77,997.01
27,949.60
414.71
83.96

112,272.64
33,735.67
536.16
108.33

Assets
Cash & Balances with RBI
Balance with Banks, Money at
Call
Advances
Investments
Gross Block
Accumulated Depreciation
Net Block
Capital Work In Progress
Other Assets
Total Assets
Contingent Liabilities
Bills for collection
Book Value (Rs)
EPS

BALANCE SHEET OF BANK OF BARODA

PROFIT & LOSS OF BANK OF


BARODA
2007

IN RS.
CR.
2008
2009

2010

2011

Income:
9,212.64 11,813.5 15,091.6
Interest earned
Other income
1,381.79
Total income
10,594.4
Expenditure:
Interest expended
5,426.56
Operating expenses
2,771.45
Other provision and contingencies
1,369.95
Total expenses
9,568.0
Net profit

2,051.0
4
13,864.
5
7,901.6
7
3,370.2
7
1,157.0
5
12,429.
0

Extraordinary items
Profit B/F

1,026.46
0
0

Total

1,026.46

1,435.5
2
0
0
1,435.5
2

0
252.46
0
28.18
60
237.46

Preference dividend
Equity dividend
Corporate dividend tax
Per share data:
EPS
Equity dividend (%)
Book value
Appropriations
Transfer to statutory reserve

271.5

17,849.2

16,698. 21,885.9
3
2,806.3
6
2,809.19
19,504.
7
24,695.1

9,968.17

10,758.
9

2,757.66

3,844.66 4,711.23 5,669.88


1,809.20
15,622.0

Proposed dividend/ transfer to govt.


Balance C/F to balance sheet
Total

1,026.46
PROFIT AND LOSS OF BANK OF BARODA

976.28
16,446.
4

1,699.88
20,453.4

2,227.20

3,058.3
3
0
0
3,058.3
3

0
340.94
0

0
383.56
0

0
639.26
0

0
753.35
0

39.41
80
303.18

61.14
90
352.37

83.96
150
414.71

108.33
165
536.16

2,227.20
0
0

4,241.68
0
0
4,241.68

707.41
383.56
0

1,162.0
7 1,387.87
1,257.0
0 2,100.46
639.26
753.35
0
0

1,435.5
2 2,227.20

3,058.3
3 4,241.68

444.23 1,136.23

Transfer to other reserve


502.5
252.46
0

13,083.7

650.35
340.94
0

Current Ratio
0.05
0.04

0.04

0.04

0.03

0.03
0.03

Current Ratio
0.02

0.02

0.02

0.02

0.02
0.01
0.01
0

Earnings Per Share


120

108.33

100

83.96
Earnings Per Share

80
61.14

60
40
20
0

39.41
28.18

CONCLUSIONS:
1. Bank Of Baroda has overall better efficiency and has performed better in the banking
institution.
2. EPS And DPS Of Bank Of Baroda is increasing due to increase in the use of debt.

REFERENCES:

http://en.wikipedia.org/wiki/Bank_of_Baroda
http://www.moneycontrol.com/financials/bankofbaroda/balance-sheet/BOB
http://www.moneycontrol.com/financials/bankofbaroda/profit&loss/BOB
www.google.com
www.capitaline.com
www.investopedia.com