Main Objects of the Bank

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MAIN OBJECTS OF THE BANK

The main object and business of the Bank, as laid down in the BankNationalization Act is as under:The main object of the Banking Companies (Acquisition and Transfer ofUndertakings) Act, 1970 under which the undertaking of the Bank was taken

over by the Central Government is as under: An Act to provide for theacquisition and transfer of the undertakings of certain Banking Companies,having regard to their size, resources, coverage and organization, in order tocontrol the heights of the economy and to meet progressively, and serve better,the needs of the development of the economy, in conformity with national policyand objectives and for matters connected therewith or incidental thereto.The Main Object of the Bank enables it to undertake the activities for which thefunds are being raised and the activities, which it has been carrying on till date.

Business Sphere of the Bank

The Bank shall carry on and transact the business of Banking as defined inClause (b) of Section 5 of the Banking Regulation Act, 1949, and may engage in


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one or more of the other forms of business specified in Sub-Section (1) ofSection 6 of that Act.Clause (b) of Section 5 of the Banking Regulation Act, 1949 defines Banking as"the accepting for the purpose of lending or investment, of deposits of moneyfrom the public, repayable on demand or otherwise, and withdraw able bycheque, draft, order or otherwise."

Other Business that the Bank may undertake (Section 3 (7))

Sections 3 (7) of Chapter II of the Banking Companies (Acquisition) Act 1970provides for the Bank to act as Agent of Reserve Bank.

1. The Bank shall, if so required by the Reserve Bank of India, act as agentof the Reserve Bank at all places in India where it has a branch:

a.Paying, receiving, collecting and remitting money, bullion and securities onbehalf of the Government of Indiab.Undertaking and transacting any other business which the Reserve Bank mayfrom time to time entrust to it .

2. The terms and conditions on which any such agency business shall becarried on by the corresponding new Bank on behalf of the Reserve Bankshall be such as may be agreed upon.

3. If no agreement can be reached on any matter referred to in Clause (2)

above, or if a dispute arises between the corresponding new Bank and theReserve Bank as to the interpretation of any agreement between them, thematter shall be referred to the Central Government and the decision of theCentral Government, thereon, shall be final.


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4. The corresponding new Bank may transact any business or perform anyfunction entrusted to it under Clause (1) by itself or through any agent approvedby the Reserve Bank.

CORPORATE STRATEGY

The globalization of the economy and financial sector reforms have resulted inincreased competition and thin margins. To achieve the corporate goal, thefollowing strategies have been planned:1.Proliferate the Banks business

2.Increase the banks' non-fund and non-interest income3.Offer affable customer service4.Open more specialized branches and expand personal banking, quickcollection service, retail banking, forex banking, small scaleindustrial finance etc.5.Use technology to boost credit off-take6.Sharpen efficiency and efficacy7.Reduction of non-performing assets

MISSION & VISION OF THE BANKMISSION

To ensure anywhere and anytime Banking for the customer with latest state- of-art technology and by developing effective customercentric relationship and to emerge as a world-class service provider throughefficient utilization of human resources and Productinnovation.


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VISION

To put the Bank on higher growth path by building a strong customer-basethrough Talent Management, Induction of State of artTechnology and through Structural Reorganization.

COMPETITIVE STRENGTHS

Many new banks, both private and foreign, have entered the industry and offernew and innovative products at competitive rates. In this scenario, AllahabadBank believes that its competitive advantages are:

a)Rich tradition of more than 142 yearsb)Large and loyal customer basec)Wide branch networkd)Specialized branches to cope with modern demand patterne)Diversified product portfoliof)Committed and experienced work forceg)TechnologyAllahabad BankCORPORATE FOCUS

The corporate focus of the Bank is:

a)To improve efficiency to face competition especially in metropolitan andurban centersb)To increase productivityc)To augment its market share of banking system depositsd)To develop its management information systeme)To reduce NPAs


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Sr. Scheme Details

1 Allahabad Bank Personal Loanscheme

Loan for purchase of entire range of consumedurable, purchase of two wheeler any other

f)To improve systems and controlg)To upgrade products and servicesh)To provide adequate credit support to industry, trade and priority sectorBUSINESS OF THE BANK & ITS PRODUCTS AND SERVICES

Other than the offering traditional banking products such as corporate loans, theBank has made its presence felt by introducing certain new products and valueadded services while continuing to popularize the existing products. Some ofthese new products are:

(a)Retail Banking Boutiques: In the year 2000, Allahabad Bank came out witha unique strategy for marketing its retail loans by putting in place dedicatedRetail Banking Boutiques at potential centers across the country to act asexclusive delivery channels of various Retail Finance Schemes. The Bank postedyoung & dynamic officers in these boutiques and delegated them with adequateauthority to sanction loan proposals related to the various schemes on the spot.These officers were also exposed to specialized training not only to serve thecustomer better but also to sell the retail products, if need be, by adopting door todoor campaign. Total number of Boutiques was 127 with an outstanding of Rs.2561.18 crores as on June 30, 2007. During the quarter ended June 2007,the total

disbursement under the various retail finance schemes was Rs. 211.77 crores.Brief description of the Banks retail schemes is as under


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tangible items.

2 Allahabad Bank personal loanscheme for pensioners

Loan for meeting personal needs withoutassigning any specific purpose.

3 Allahabad Bank personalLoan scheme for doctors

Loan for any personal purpose including purpincluding purpose for meeting expenses of

professional requirement.4 Allahabad Bank Housing

Finance SchemeLoan for construction of residential house on already owned.

5 Allahabad Bank car Finance

Scheme

For purchase of new as well as pre owned

multi utility vehicle for personal use.6 Allahabad Bank Loan against

NSC/ KVPLoan against NSC/ KVP for any business/ pe

purpose.

7 Overdraft Facility in SavingsBank A/Cs

To meet immediate exigencies of salariedPersons

8 Allahabad Bank EducationalLoan

Scheme

To provide financial assistance on reasonableterms to the poor and needy to undertake

basic education and to meritorious students tpursue higher/professional / technical educat

9 All Bank-Property Scheme Loan for meeting credit needs of business byoffering building as security in the form ofequitable mortgage .

10 All Bank Gold Loan Scheme Loan for any purpose for meeting credit needoffering Gold ornaments as security.


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(b)Loans on Internet: The Bank sanctions educational loans and car loans viaInternet. The educational loan facility granted by the Bank was launched in 1997and was subsequently made possible via Internet during 1999. Facility to applyfor educational loan on Internet for education loan is available to the students ofleading institutions like IIMs, IITs, Indian Institute of Science Bangalore,Jamunalal Bajaj Institute of Management Mumbai, XLRI Jamshedpur & IndianSchool of Mines Dhanbad. Bank has so far sanctioned 1014 educational loansamounting to more than Rs. 29.28 crore through Internet.

(d)Kisan Credit Card: The card aims to provide adequate and timely financialassistance to the farmers for their agricultural activities amongst other

requirements. During the year 2006-07, the Bank issued 176876 cards. Thecumulative KCC numbered 940799 with a credit limit of Rs. 3393.08 crores ason 31-03-2007 The Bank is also providing Group/Personal Accident insurancecover to the holders of the Kisan Credit Card. Also on 140th foundation day ofBank (April 24, 2004) new scheme by name of Kisan Shakti Yojana (KSY) waslaunched. The scheme allowed the farmers to have flexibility and choice inregards to selection of credit for agriculture, allied activities and domestic and

personnel purpose.

Allahabad Bank

The Bank had extended credit facility under the scheme to 43719 Kisan creditcardholders involving credit limit of Rs. 574.96 crores as on March 31,2007.Cumulative number of Kishan Credit cardholders financed under the scheme was138937 involving 1809.28Crore as on 31-03-2007.

(e)Depository Services: The Bank has had the distinction of being the firstnationalized Bank in the eastern region to be a depository participant of NSDL at


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Kolkata to offer Demat and other related services to its customers in 1998. . The

Bank had further spread its DP services to its customers by opening DP at Lucknow, Kanpur and Varanasi under agreement with CDSL. The bank also openedits first Branch DP at Mumbai with main DP at Kolkata Main Branch.The Bank earned an income of Rs. 80.37 lacks from 23913 accounts in financialyear 2006-07 and Rs. 60.08 lacks from 19720 accounts during quarter endingJune 2007.The Bank is going to start a Branch DP at New Delhi very soon, which will be connected through Back Office software at Kolkata Main DP.

(f)Flexi- Fix Deposit Scheme: This scheme was launched to provide liquidityof a savings bank account and higher yield of a fixed deposit.

(g)Banc-assurance: The Bank has entered into tie up arrangement with LifeInsurance Corporation of India for Life Insurance and with National InsuranceCompany Limited and ECGC for Non-life Insurance and Export CreditInsurance for selling of their products through its branches. The Bank is also

providing life insurance cover to the extent of Rs. 1.00 lacks to its depositors inassociation with LICI on payment of a very nominal premium. The Bank alsohas tie up arrangements with LICI for coverage of housing loans andEducational loans being provided by our branches. The Bank is providing free

group personal accidental coverage of Rs. 1.00 lacks to SB Account holdersmaintaining an average monthly balance of Rs. 5000/- as well as to all its ATMcardholders.

The bank has earned an income of Rs. 767 lacks from Ban assurance during FYa 2006-07 and Rs. 100 lacks in the first quarter of current FY i.e. June 2007.The Bank has entered into tie up arrangement with UTI-AMC, Principal-PNB AMC, Kotak- Mahindra AMC and Reliance Capital Asset Management Ltd. forselling of their Mutual Fund Products through our branches. This has generated


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an income of Rs. 62.09 lacks during FY 2006-07 and Rs. 38.19 lacks during first

quarter of current FY.

(h)Other Services: The Bank has also been providing Cash Managementservices through its QCS Branches/Centers at Kolkata, New Delhi, Mumbai,Luck now and Chennai. Under CMS activities, the Bank is providing LocalCheque collection service, Collect and pay service, assured credit up to day 7 tovarious private and other Banks as well as to corporate clients. The bank hasearned an income of Rs. 355.19 lacks during FY 2006-07 and Rs. 94.12 lacks inthe first quarter of current FY.For expansion of CMS business, the Bank is in the

process of opening of Local Cheque Collection Hubs at 18 strategic locations,

which will be linked with existing QCS Branches/Centres.

BRANCH NETWORK OF THE BANKThe Bank has 44 zonal offices, controlling 2107 branches and 105 extensioncounters as on June 30, 2007, including 52 specialized branches.

The population group wise break up of branches of the Bank in India is as under:Population Group Number of Branches % Share to Total

Rural 979 46.46

Semi-Urban 389 18.45

Urban 441 20.93

Metropolitan 298 14.15

Total 2107 100.00


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Geographical distribution of the branches of the Bank as under:-

State/union Territory Number of Branches % Share Total

Andaman& Nicobar Island 1 0.05

Andhra Pradesh 31 1.47

Assam 62 2.94

Bihar 151 7.17

Chandigarh 4 0.19

Chhattisgarh 28 1.33

Delhi 49 2.33

Goa 1 0.05

Gujarat 27 1.28

Haryana 30 1.42

Himachal Pradesh 6 0.28

Jammu &Kashmir 4 0.19

Jharkhand 100 4.75

Karnataka 19 0.90


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Kerala 6 0.28

Madhya Pradesh 150 0.19

Maharashtra 86 4.08

Manipur 1 0.05

Meghalaya 1 0.05

Nagaland 4 0.19

Orissa 68 3.23

Pondicherry 1 0.05

Punjab 46 2.18

Rajasthan 48 2.28

Sikkim 1 0.05

Tamil Nadu 32 1.52

Tripura 1 0.05

Uttar Pradesh 673 31.93

Uttaranchal 20 0.95

West Bengal 456 21.64

TOTAL 2107 100.00


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Performance of Allahabad Bank (2008-2009)

Business

(1) The business of Allahabad Bank stood as RS 144415 crore as on31.03.2009 as against RS 1,21,929 crore as on 31.3.2009 as against Rs.1,21,929 crore corresponding previous year registering a growth18.44% yearonyear.

(2) Deposit of the Bank went up to Rs 84972 crore as on 31.03.2009 fromRs 71616 crore as on 31.3.2008.yearonyear basis, Total Depositsgrew by 18.65%.

(3) Deposits under Differential Rate and certificate of deposits have beenreduced to Rs 16635 crore from Rs 19976 crore as on 31.03.2008.

(4) Gross credit to total Deposit ratio stood as 69.96% as March 2009 asagainst 70.25% as on 31.03.2008.

(5) Priority sector advances increased from Rs 18774 crore as on31.032008 to Rs 20435 crore as on 31.03.2009

(6) Agriculture credit was Rs 9,568 crore as on 31.03.2009(7) Business per employee rose from Rs 6.04 crore as on 31.03.2008 to Rs

7.06 crore as on 31.03,2009.(8) Business per Branch improved from Rs 56.61 crore as on 31.03.2008

to Rs 63.90 crore during the period.

Asset Quality Of Allahabad Bank

(1) Gross NPA declined to Rs 1.81% from 2.00% at March 08.(2) Gross NPA stood at RS 1078.25 crore.(3) Net NPA at Rs at .072% amounting Rs 422.11 crore.


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(4) Book value per share was Rs 131.00.(5) Return on Asset was 0.90%.(6) Earnings per share (EPS) was Rs 17.21(7) Capital Adequacy Ratio was Rs 13.11% as at March 09 against the

stipulated norm of 9% speculated norms of RBI.

Technological Development

(1) Total CBS Branch 922 as 31.03.2009.(2) More than 38000 ATMs across the country(3) E-Payment for Direct and Indirect Taxes made available to customers

all CBS branches.

Human Resources of Allahabad Bank

(1) Total manpower as the strength of the Bank was 20,457 as31.03.2009.

(2) 11828 personnel were imparted training during the year.

ALLAHABAD BANK

UNAUDITED FINANCIAL RESULTSFor Nine Months ended 31st December 2008

(RS IN LAKH)


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Interest Ended

(a)+(b)+(c)+(d)

189804.45 155623.33 544962.25 455985.72 61

Interest/discoun

t on advances/

bill

145118.85 112953.62 404916.66 322785.35 44

Income on

investments

44230.27 42064.72 138298.60 129466.11 16

Interest on

balances with

RBI and other

inter bank funds

117.28 513.05 715.82 3615.47 40

Others 338.04 91.94 1031.11 128.78 12

Other Income 40840.47 40017.73 68365.53 59616.09 71

Total

Income(1)+(2)

129390.46 195641.06 613327.78 515580.81 71

InterestExpended 129390.46

113821.39

388346.14

322142.05

44

RTICULARS Quarter Ended Quarter Nine Months Nine Months Ended Ye

end(Reviewed) Ended Ended (Reviewed) (A

)

(Reviewed) (Reviewed)

31.12.2008 31.12.2007 31.12.2008 31.12.2007 31


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Chapter 3:-Research operation

Signi ficance of the study

The main aim of any person is utilization money in the best manner since theIndia is country were more than half of the population has problem of runningthe family in the most efficient manner. However Indian people faced largenumber of problem till the development of the full-fledged banking sector. The

Indian banking sector came into the developing nature mostly after the 1991government policy. The banking sector has really helped the Indian people toutilize the single money in the best manner as they want. People now have

started investing their money in the banks and banks also provide good returnson the deposited amount. The people now have at the most understood thatbanks provide them good security to their deposits and so excess amount areinvested in the banks. Thus, banks have helped the people you achieve their

socio economic objectives.

The banks not only accept the deposits of the people but also provide them creditFacility for their development. Indian banking sector has the nation indeveloping the business and service sectors. But recently the banks are facingthe problem of credit risk.It is found that many general people and business

people borrow from the banks but due to some genuine or other reasons are notable to repay back the amount drawn to the banks. The amount which is not

given back to the banks is known as non- performing assets which hamper the


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business of the banks. Due to NPAs the income of the bank is reduced and thebanks have to make large number of the provisions that would curtail the profit

of the bank and debtor that the financial performance of the banks not shows

good results.

The main aim behind making this report is to knowhow public sector Banks are operating their business and how NPAs play its roleto the operations of the public sector Banks. The report NPAs are classifiedaccording to the sector, industry, and state wise. The present study also focuseson the existing system in India to solve the problem of NPAs and comparativeanalysis to understand which bank is playing what role with concerned to

NPAs.Thus, the study would help the decision makers to understand thefinancial performance and growth of public sectors banks are compared to the

NPAs.

Objective of the study

Primary objective:

The primary objective of the making report is:

To know why NPAs are great challenge to the public sector banks.Secondary objectives:

The secondary objectives of preparing this report are:

To understand what is Non performing Assets and what are theunderlying reasons for the emergence of the NPAs.

To understand the impacts of NPAs on the operations of the public sectorBanks.


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To know what steps are being taken by the Indian banking sector to reducethe NPAs? To evaluate the comparative ratios of the public sector banks withconcerned to the NPAs.

Research methodology

The research methodology means the way in which we would complete ourprospected task. Before undertaking any task. Before undertaking any task itbecomes very essential for anyone to determine the problem of study. I have

adopted the following procedure in completing my report study.

(1) Formulating the problem(2) Research design(3) Determine the data sources(4) Analyzing the data(5) Interpretation(6) Preparing research report

(1)Formulating the problem

I am interested in the banking sector and I want to my future inbanking sector so decided to make my research study on bankingsector. I analyzed first the factors that are important for the

banking sector and I came to know that providing credit facilityto the borrower is one of the important factors as far as the

banking sector is concerned. On the basis of the analyzed factor,I felt that the important issue right now as far as the credit


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facilities are provided by the bank is non performing assets. I

started knowing about the basics of the NPAs and decide to thestudy on the NPAs. So, I chose the topic NON performingAssets the great challenge before the public sectorbanks.

(2)Research Design

The research design tells about the mode with which the entireproject is prepared.My research design for the study is basically analytical. BecauseI have utilized the large number of data of the public sector

banks.

(3)Determining the data source

The data source can be primary or secondary. The primary dataare those data which are used for the first time in the study.However such data take place much time and are also expensive.Whereas the secondary data are those data which are alreadyavailable in the market. These data are easy to search and are notexpensive too for my study I have utilized totally the secondary

data.

(4) Analyzing the data

The primary data would not be useful until and unless they arewell edited and tabulated. When the person receives the primarydata many unuseful data would also be there. So, I analyzed thedata and edited them and turned them in the unuseful data wouldalso be there. So, I analyzed the data and edited them and turned


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them in the useful tabulations. So, that can become useful in my

report study.

(5)Interpretation of the data

With use of analyzed data I managed to prepare my projectreport. But the analyzing of data would not help the study toreach towards its objectives.The interpretation of the data is required so that the others canunderstand the crux of the study in more simple way without any

problem so I have added the chapter of analysis That would

explain others to understand my study in simple way.

(6)Project writing

This is the last step in preparing the project report. The objectiveof the report writing was to report the findings of the study to theconcerned authorities.

Tools and Techniques

As no study could be successfully completed without propertools and techniques, same with my project. For the better

presentation and right explanation I used tools of statistics andcomputer very frequently. And I am very thankful to all those tools for helping me a lot. Basic tools which I used for projectfrom statistics are-

Bar Charts Pie charts


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TablesBar charts and pie charts are really useful tools for everyresearch to show the result in a well clear, ease and simpleway. Because I used bar charts and pie charts in projectfor showing data in a systematic way, so it need notnecessary for any observer to read all the theoreticaldetail, simple on seeing the charts anybody could knowthat what is being said.

Applied Principles and concepts

While I started to do the project the main thing which wasthe matter of concern was that around what principles Ihave to revolve my project. Because without having anyhypothesis and objective we cannot determine that whatoutput or result we are expecting from the project. Andsecond thing is that having only tools and techniques forthe purpose of project is not relevant until unless we havethe principals for which we have to use those tools andtechniques.

Mathematical AveragesStandard DeviationCorrelation

Sources of primary and Secondary data:


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For the purpose of project data is very much required

which works as a food for process which will ultimatelygive output in the form of information. So beforementioning the source of data for the project I would liketo mention the source of data for the project I would liketo mention that what type of data I have collected for the

purpose of project and what is exactly.

1. Primary Data:

Primary data is basically the live data which I collected on field

while doing cold calls with the customers and I shown them list of question forwhich I had required their responses. In some cases I got no response from theirside and then on the basis of my previous experiences I filled those fields.

Source: Main source of primary data for the project was Questionnaires which Igot filled by the customers or sometimes filled myself on the basis of discussionwith the customers.

2. Secondary Data:

Secondary data for the base of the project I collected from intranet ofthe Bank and from internet, RBI Bulletin, Journal by ICFAI University.

Limitation of the study

The limitations that left in my side are:


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It was critical for me to gather the financial data of the every bank of thepublic sector Banks so the better evaluations of the performance of thebanks are not possible.

Since my study is based on the secondary data, the practical operations asrelated to the NPAs are adopted by the banks are not learned.

Since the Indian banking sector is so wide so it was not possible for me tocover all the banks of the Indian banking sector.

NON-PERFORMING ASSETS

The world is going faster in terms of services and physical products.However it has been researched that physical products are available

because of service industries. In the nation economy also serviceindustry plays vital role in the boosting up of the economy. The nationslike US, UK, and Japan have service industries more than 55%.The

banking sector is one of appreciated service industry. The bankingsector plays large role in channelizing money from one end to otherend. It helps almost every person in utilizing the money at their best.

The banking sector accepts the deposits of the people and providesfruitful return to people on the invested money. But for providing the

better returns plus principle amounts to the clients; it becomesimportant for the bank to earn the main source of income for banks arethe interest that they earn on the loans that have been disbursedgeneral person, businessman, or any industry for development. Thus,we may find the input-output system in the banking sector. Banks first,accepts the deposits from the people and secondly they lend this money


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to people who are in the need of it. By the way of channelizing moneyfrom one end to another end, Banks earn their profits.However, Indian banking sector has recently faced the serious problemof Non performing Assets. This problem has been emerged largely inIndian banking sector since three decade. Due to this problem manypublic sector Banks have been adversely affected to their performanceand operations. In simple words Non Performing Assets problem is one where banks are not able to recollect their landed money from theclients or clients have been in such a condition that they are not in theposition to provide the borrowed money to the banks.

The problem of NPAs is danger to the banks becauseit destroys the healthy financial conditions of the them. The trust of the people would not be any more if the banks have the higher NPAs. So,the problem of NPAs must be tackled out in such a way that would not destroy the operational, financial conditions and would not affect the image of the banks, recently,RBI has taken number steps to reduceNPAS of the Indian banks. And it is also found that the many bankshave shown positive figures in reducing NPAs as compared to the past years.

Main Objects of the Bank

Documents

Transcript of Main Objects of the Bank