relation with economics concepts

1. Presentation On Economics Of Principles At Submitted To:- Prof. Sonu Gupta. Presented By:- 1)DilipChandnani (09) 2)BhautikaBapodara (10) 3)SeemaBaloch (12) 4)JyotiBhagwani (23) 5)ShwetaKhamar (34)

2. Introduction To Banking Sector

4. The State Bank of India was earlier known as the Imperial bank of India and is also one of the oldest bank in the generation. December 18, 2010 3 State Bank Of India

10. With policies on liberalization being generously taken up, these private banks were established.

11. E.g.:- Axis Bank, Bank of Rajasthan, Catholic Syrian Bank, Federal Bank, HDFC Bank, ICICI Bank, ING Vysya Bank, Kotak Mahindra Bank and SBI Commercial and International Bank .

12. The Foreign Banks in India like HSBC, Citibank, and Standard Chartered bank etc. can also be clubbed here. December 18, 2010 8 State Bank Of India

17. To maintain continuous pursuit for cost effectiveness, enhanced productivity for ensuring financial health of the organization, to take care of stakeholders aspirations continuously.

18. To be a technology driven, transparent organization, ensuring dignity and respect for its team members.

20. All branches and administrative offices throughout the country sponsor and participate in large number of welfare activities and social causes.

22. It presently has 82 foreign offices in 32 countries across the world.

28. Demand and Supply theories

30. Many things determine the quantity demanded but when we analyse how markets work, one determinant plays a central role-the price of the good.

32. Sometimes other factors such as income and substitute products also affect the demand. They are called the “Income effect” and “Substitute effect”.

33. If the demand increases due to the increase in the income of the consumer then it is Income effect.

36. There are many determinants for quantity supplied, but once again, price plays a special role in analysis.

40. For example, if the bank has Rs. 5 crore to lend as loans and the bank wants to give it at the rate of 8% interest .

41. The bank finds exactly that much customers who want to pay the same interest rate then it will be the equilibrium price and equilibrium point for quantity demanded and supplied.

45. Demand to a good is said to be Elastic if the quantity demanded responds substantially to the changes in the price.

47. Necessities versus Luxuries

48. Definition of the Market

50. When demand is elastic, price and total revenue move in opposite direction.

52. Most goods are normal goods. Higher income raises the quantity demanded because income and quantity demanded move in the same direction.

54. So when income increases the demand for a normal good also increases.

56. Supply of a good is said to be elastic if the quantity supplied responds substantially to changes in price.

58. But in exception cases like if RBI decreases the repo rate then the quantity supplied will increase substantially.

60. It can charge the interest more than what it wants to willing to charge. Then it is producer’s surplus.

63. The slope of budget constraint measures the rate at which consumer can trade one good for the other.

64. As shown in diagram point C gives optimum satisfaction. Any point on budget constraint gives the customer same level of satisfaction while point D gives less satisfaction.

66. The State bank of India has developed its business very well at economies of scale and it is going further in functions like mutual funds, insurance, stock market accounts and investments so it has developed the economies of scope as well.