A Study on Mumbai Circle_Research Project Paper

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Undertaken at
Submitted by
Samson Fidelis Varel
&
Jayant Govinda Rao
PGDBM Batch: 2011-13
Under the guidance of
Mr. R. Srinivasa Raghavan Mr. Atul Srivastava
DGM, Circle Credit Financial Officer, Chief Manager, Credit Processing Cell,
State Bank of India, LHO, Mumbai. State Bank of India, LHO, Mumbai.

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Table of Contents
SR. NO. PARTICULARS PG. NO.
1.
Acknowledgement 4
2.
Executive Summary 5
3.
Marco Economic Overview 6
 The Happenings World Over
7
 The Indian Scenario
11
 The Western Appraisal
15
4.
Banking Sector Overview 16
 The Global Banking Scenario
16
 The India Banking Scenario
19
5.
Structure of State Bank of India 21
6.
PESTEL Analysis of Mumbai Circle Region 23
7.
Analysis On Credit Exposure Of Mumbai Circle 27
8.
Study on performance of Mumbai Circle Vis-À-Vis SBI India 43
9.
Performance review of Mumbai circle: Year–on-Year 67
10.
Appendices 76
11.
Bibliography 86

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ACKNOWLEDGEMENT
It gives us immense pleasure to thank the people who have guided us throughout our project. We are not
sure if we will ever be able to repay them for all their invaluable support, time and guidance. Our project
bears the imprint of many people and above all GOD ALMIGHTY.
We would like to acknowledge Mr. R. Srinivasa Raghavan, DGM, CCFO, SBI Mumbai LHO who found us
worthy enough to be a part of this immensely challenging and interesting project. We would also like to
acknowledge Mr. Atul Srivastava , Chief Manager, CPC, SBI Mumbai LHO for his timely support and
guidance. We could have never got a better mentor than him. And also the whole CPC team who were
there whenever we needed them. They have supported & guided us in every way possible during this
project. Without them this project would have remained a pipe dream.
We would also like to express our sincere gratitude towards Prof. P.L.Arya (Director, N.L.Dalmia Institute
of Management Studies & Research) for his support and guidance.

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Executive Summary
A Macroeconomic check is always important to know the causes of the functioning of a particular region
in the way it is functioning. Hence to study the behavior of Mumbai circle a macroeconomic overview of
the world, also an overview of India becomes very important. We have tried to analyze things from the
Macro Level percolating down to Micro Level.
The study is on the performance of SBI Mumbai circle hence the health of banking fraternity world over
and other parts of the Indian economy becomes imperative to check. Hence we have presented an
overview of the banking sector round the globe and also an overview on Indian banking performance.
Ideally a doctor before prescribing any medicine needs to know the patient’s health history. Similarly
before planning to start a business in any region one needs to be aware of the political, environmental,
legal dynamics of that region hence we have presented a PESTEL analysis of Mumbai circle region.
Since SBI, the then Imperial Bank of India is the oldest bank in the sub continent it imminently calls for a
performance comparison with the other set of banks to ascertain whether it still holds the majority of
the market share or not. We have analyzed the same but have limited the analysis to the region of
Mumbai circle.
In statistics the individual units are compared with the arithmetic mean of the whole bunch to arrive at
any deviations, if any. These deviations can connote various meaning depending upon the analysis. In
this report we have analyzed the performance of SBI Mumbai circle with SBI India as a benchmark for
measuring performance. SBI India being the arithmetic mean of the whole bunch and SBI Mumbai circle
being one such unit of the whole bunch and any deviation being over performance or underperformance
of SBI Mumbai circle as the case may be.

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Macro Economic Analysis
The Macrocosm takes into account the aspirations and expectations of microcosm and builds a structure
and the microcosm accordingly is obliged to follow the protocol to achieve the goals. In a similar way it is
the summation of individual economies(Microcosm) that makes the global economy(Macrocosm) and
the global economy also has an impact on the individual economy hence there cannot be a global
economy without individual economy and vice versa. Both are independent of and dependant on each
other.
Indian Economy is no more a secluded self sustaining economy. Post Liberalization process in 1991 India
has linked itself to the Global Economy. The ups in the Global Economy bring good news for India and
the downs hinder the India growth story. Although India’s growth can be claimed to be more domestic
demand driven but the events happening around the globe cannot be ignored. In short, in order to prop
up the Indian economy towards growth the macroeconomic study of the globe along with Indian
macroeconomic variables becomes imperative. Hence an abridged study of both has been presented in
this paper.
GDP growth rate of World & India:
The above graph shows the GDP growth of India vis-à-vis the World. It shows a direct correlation
between them. Hence India’s growth is tied to the growth of the world. India constitutes around 3 % of
the World’s GDP.
-4
-2
0
2
4
6
8
10
12
2002 2003 2004 2005 2006 2007 2008 2009 2010
World
India
Source: World Bank

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The Global Economy can be divided into Developed Economies and the Emerging Market Economies.
There are associations formed which segregate the developed from the developing and the developing
from the underdeveloped. Formations such as G-7, G-20, Euro Zone, BRICS etc. show the extent of the
contribution of the member countries to the Global economy for example the G-7 & G-20 countries
accounts for nearly 50% & 80% of the World GDP respectively. We have given an analysis of what
happened in the previous financial year 2011-12 and an analysis of the expectations of the people
around the globe for the year 2012-13.
The year can be said as the year of good for vanquishing terrorism and not as good for the world
economy. Some Economies were trying to boost growth and some were trying to save their country
from Sovereign Debt Default. The overall sentiment in the world was subdued. The year started with
Japan facing the fury of Tsunami. This caused a widespread fear of using nuclear reactors for fulfilling the
energy needs. Germany vowed to decrease its dependence on nuclear reactors and India taking on a
contrarian policy. Moving towards the West, the members of the Single currency Euro Zone were facing
the risk of Sovereign debt default with Greece being the most vulnerable. Even the developed countries
like the U.S.A and U.K couldn’t drive the economy towards growth in spite of measures like Quantitative
Easing taken by the respected Central Banks of the country. Germany the only Euro zone member on the
other hand was seen having a lowest unemployment rate, growth in exports, and greater IIP numbers all
thanks to the undervalued Euro. Association wise analysis is presented so as to facilitate the view of the
overall Global economy.
The G-7 members are The U.S.A, The U.K, Germany, Italy, France, Japan, and Canada.
GDP:
The total GDP of the G-7 amounts to $30.36 billion almost half of the world GDP of $ 82.64 billion. These
economies post sub-prime crises in 2008 have not fully recovered and are not performing at the pre
crises growth levels. The growth rate in this region was 4% in 2010 has been decreased to 3% in 2011
and the IMF forecasts a 2% growth rate in 2012.
Inflation:
Some amount of Inflation is healthy for an economy. It shows an increase in demand for goods and
services in the economy. But the quantum of inflation depends on the type of economy. It is normally
considered that the developed economies should have an inflation of around 2%- 3% and the developing
economies around 4%-5 %. The Y-O-Y Inflation in this region for 2011 was 2.61% and the forecasted
inflation for 2012 is 1.67%. Decrease in inflation estimates indicates decrease in demand for goods and
services in the economy which in turn means a decrease in GDP growth.

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Unemployment:
The Unemployment rate in 2011 was 7.6% and is not showing any signs of abating; a 7.6%
unemployment rate is estimated for 2012.The more the unemployment level the more is social unrest
and political uncertainty in an economy which is detrimental to an economy’s health.
The Euro area consists of 17 member countries sharing the common currency ‘Euro’.
GDP:
Germany is the only country in the Euro area performing well and having a GDP growth rate of around
3%. France and Italy the 2nd
and 3rd
biggest economies of the Euro zone did not perform well. The South
European economies like Greece have slipped into recession due to problems like sovereign debt default
crises and had received a bailout package of Euros twice in this year to avoid a default. These bailout
packages come with severe austerity commitments which hinder the growth of the economy.
Debt to GDP:
An analysis of the Debt to GDP ratio becomes very important for Euro Zone as majority of lenders to the
government are foreigners unlike Japan where the lenders are domestic lenders, in spite of the Debt to
GDP ratio being enormously high Japan doesn’t don’t face any problem financing its debt.
Debt to GDP Ratio
Countries 2009 2010 2011 2012(E)
France 79 82 86 89
Germany 74 83 82 79
Greece 127 143 161 153
Ireland 65 92 105 113
Italy 116 119 120 123
Portugal 83 93 107 112
Spain 54 61 68 79
Greece’s Government expenditure is getting out of hand. They are even dependent on a bailout package
to pay the monthly salaries of the Government employees. A whopping 161% of debt to GDP ratio
according to experts can be lowered only by sticking to austerity measures which the Greeks are not in
favor of.
Spain is a very peculiar case it doesn’t have a very high debt to GDP ratio still is facing problems because
of lower productivity and banking solvency problems which has aggravated in the past few months.
Ireland, Portugal and Greece have already knocked the doors of the European Financial Stability Facility
(EFSF) for a bailout package after the borrowing rates touched an unbearable level. And they have
implemented severe austerity measures asked in return for the bailout package by the EFSF.

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Unemployment Rates:
In times of distress of the Euro zone, Germany is thriving well. This can be seen from a number of
indicators like the GDP growth rate and the unemployment Rates etc.
The unemployment Rate in Germany is at 5.98% which was the lowest in 2011-12 and indicated that the
demand for German goods and services had increased. Spain, Greece has an unemployment rate of
around 22% showing a decrease in economic growth. A high unemployment rate in the economy is not
politically and economically called for.
The word coined by the chief economist of Goldman Sachs comprises of Brazil, Russia, India and China.
Lately South Africa was also added to the club. These countries are perceived to represent the future of
the world.
GDP:
The GDP of BRICS constitutes around 18% of world GDP. The growth rate of these economies is around
8%. The forecasts for 2012 show that there will be a decrease in growth and these economies will grow
at around 6%. The decrease in growth can be attributed to weak macroeconomic fundamentals of the
developed world. As economies like China thrive mainly on exports, if the consumption expenditure of
the developed world starts dwindling the growth in the emerging markets slows down.
Inflation:
Inflation for 2011 in this region is around 5.88% and the forecast for 2012 is around 5.75%.
Oil Imports/Exports:
Oil is the important driver of growth in the economy. Hence more oil requirement can be construed as
more growth in the economy. Except Russia all the other countries are net importers of oil. India for
example is completely dependent on oil imports which lead to CAD problem. The oil imports in this
region have grown at an average of 85% in 2011 with China’s oil need growing by 236% and India’s
around138% Y-O-Y.
Import/Export of goods and services:
The developed world has developed so much that it can’t afford to keep manufacturing units operating
at their place and hence is shifted to the developing economies as the Standard of living here is low
which leads to cheap labor and hence the same goods produced at a cheaper price. The main reason
behind the growth of emerging economies is this shift of units which has created jobs and a spurt in the
economy. A decline in the growth of exports indicates a possible slowdown in the economic growth.
Hence it becomes necessary to look at the growth figures of the exports.
The average growth rate in 2011 was around 7.22% taking a dip of around 700 basis points from the
previous year’s growth with mainly China taking a major hit. The Forecasts for 2012 is still down to 5.5%.

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The overall sentiment is subdued and there is pessimism around the world. The Global growth is
projected to drop from about 4 percent in 2011 to about 3½ percent in 2012 mainly on account of the
damage done by deteriorating sovereign and banking sector developments in the Euro area. The re-
acceleration of activity during the course of 2012 is expected to return global growth to about 4percent
in 2013. The Crude Oil prices have touched a low of $90/barrel in June 2012 from a high of $124 / barrel
in March 2012 indicating a slower economic acceleration. Commodity prices are also down due to low
demand .The Euro Zone is projected to get into a mild recession in 2012 as a result of the sovereign debt
crisis and a general loss of confidence, the effects of bank deleveraging on the real economy, and the
impact of fiscal consolidation in response to market pressures.
The two major cause of worry for the Euro Zone are:
Fiscal consolidation by the individual economies which becomes imperative for them so as to reduce the
debt and
Banks Deleveraging in the Euro zone is a major cause of worry as the banks are wary of lending due to
deteriorating quality of the assets. The recent meet of G-8 countries re emphasized the need for Greece
to remain in the euro zone and the catastrophic effect the world would have if Greece exits the Euro
zone. Germany on its end is trying its best to give a fillip to the Euro zone. A 4% hike in the labor
compensation in Germany in order to make the other member countries goods more competitive was
one such move. The overall outlook remains bleak. Eurobonds is looked upon by the Euro zone as a great
sign of togetherness amongst the 17 member zone and would help the stressed economies to recover by
giving them an incentive by way of lower interest rates of borrowing but at the same time the developed
countries mainly Germany is against Eurobonds as that would mean the euro zone backing the
imprudent member’s sovereign liability. The pro-bailout party has won the re election held on 10th
June
2012 and the tensions of Greece getting abruptly out of the euro zone has been allayed.
The US presidential elections are on their way and the distressed Obama administration is trying hard to
revive the US economy. The Fed has extended the operation twist program, which helps in reducing the
long term borrowing rates, by a year.
As far as the BRICS countries are concerned the commodity driven economies of Brazil and Russia are
facing the brunt of low commodity prices which is hurting their performance. The export driven
economy of China is also showing signs of faltering growth with the HSBC Purchasing Managers Index
(PMI) showing a number of less than 50 around 47 for several quarters now, a number less than 50
indicates contraction. India is apparently stuck in a situation of stagflation where the inflation is very
high and the growth is coming down.

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India during this period showed a sign of sustenance from the wrath of melting global economy by giving
a 6.5% growth in GDP although below the initial expectations. This growth can be attributed to the
strong aggregate demand in the economy which constituted consumption expenditure as well as
Investment expenditure. But with the increase in aggregate demand and supply side constraints there
was inflation reigning in all over the economy. RBI in order to tame the inflation tried to cool off the
economy by increasing the policy rates almost 13 times which ultimately gave some positive results in
the month of January 2012. Concerns were raised over the quality of statistical data specially the IIP
numbers but the problem remains where it is as there is no alternative but to believe the MOSPI
numbers and live under the hope that the performance and integrity of these organizations will improve
in the due course of time.
The progress of Indian Economy can be attributed to various factors such as progress on the inflation
front, on the Policy front, on the Fiscal front, on the monetary policy front which needs be analyzed
individually. A comprehensive analysis is done on all the above mentioned factors which are as under.
Fiscal Policy Front:
The Union Government looks after the Central Fiscal Policy in the Economy. According to the estimates
there has been a wide gap between the budgeted expenditure and actual expenditure. This was mainly
on account of a substantial increase in the non planned expenditure and less than an estimated actual
revenue collection. The Fiscal year 2011-2012 saw a widening Central Fiscal Deficit of 5.7% against a
Budgeted Estimate of 4.3% apart from the State Fiscal Deficit. According to J.M .Keynes the more the
government spending the more is the growth in an economy, but this couldn’t be seen in the case of
Indian Economy. Simple Economics says that if a person consumes something he should give back
something productive to the society or else the consumption is gone waste. The reason for
nonperformance of the Indian economy among various can be attributed to the increase in subsidy
which goes in vain and doesn’t produce a desired effect of economic growth. Policy paralysis in the UPA-
II regime is another factor for derailing the economic growth.

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Monetary Policy & Inflation Front:
The Reserve Bank of India (RBI) looks after the money or rather credit supply in the economy. The
monetary economists are of the view that an increase in money supply in the economy leads to higher
inflation.
RBI uses various tools to regulate the money supply in the economy in order to keep Inflation at an
acceptable level, boost growth and have a stable exchange rate.
An analysis of RBI’s Measures to combat Inflation is as follows:
Inflation was getting higher and higher but still there were no signs of abating credit demand. Hence RBI
had to step in and lower the credit demand in the market by increasing the policy rates. It started using
repo rate, considered as liquidity easing/tightening tool, to tighten the credit demand but because of lag
effect the results couldn’t be seen immediately. It can be seen in the month of July 2011 that inflation
came down to 9.36% from a high of 9.74% in April 2011 but it was well above RBI’s comfort level. Hence
RBI decided to continue with the tighter monetary policy stance and finally succeeded in Dec 2011 when
the inflation tamed down to 7.74%.
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Percent
Period
Inflation
Repo Rate
CRR

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Trade and Capital flows in India:
India is having a trade deficit of 10.3% of GDP. A current account deficit of 4.3% of GDP is a high number.
If the twin deficits i.e. the CAD and fiscal deficit are not checked that could lead to Balance of Payment
and a sovereign debt problem. India now has reserves for 6 months of imports and although the
sovereign debt problem won’t be as bad as of Greece as Indian sovereign debts are financed
domestically with a very little foreign exposure but that could lead to crowding out of private
investments. The high deficit numbers send a negative signal to the world about India. With the Credit
Rating agency S&P and Fitch already turning India’s outlook from stable to negative, India has seen the
effects in the form of lower FII inflows and deteriorating Forex position.
The government seems to be poised to get things back on track in the F.Y 2012-13. As they say “Charity
begins at home”. The government keen on implementing austerity measures in order to reduce the fiscal
deficit has asked its departments to reduce its lavish expenditure and slash the non plan expenditure by
10%. In the current budget the finance minister has pegged the fiscal deficit for 2012-2013 at 5.1% of
GDP although a too ambitious number to achieve given the current scenario. The rupee is depreciating
and has created a new all time low of `57.38/$ breaching the psychological limit of `57/$.Although all
the Emerging economies currency is depreciating the Rupee has been the worst performing currency in
Asia, the second worst performing amongst BRICS countries after Brazil and Third worst performing
currency in the world against dollar.
In order to galvanize the investment sentiments for the foreign investors the finance minister has taken
many steps such as deferring the implementation of General Anti-Avoidance Rule (GAAR) by a year and
starting a new route of Investment for Foreign Retail Investors under Qualified Foreign Investors (QFI)
route. Many noted economists say that the economy has bottomed out and that the economy has no
place to go other than an up spurt but the thing is that the investors should see some incentives to
invest in Indian economy.
Saying all the things said above in the long term India is poised to be a great economic powerhouse. This
can be said reassuringly because of many factors such as the demographics, the increasing literacy rate,
and the highly untapped rural market which will bring a spurt in aggregate demand and turn the growth
cycle running. Unlike China which is an export oriented economy India should tap the domestic markets
first which in itself is huge. The only thing that India is majorly dependent on is the petroleum
requirement that needs to be tackled by lowering its dependence on crude oil and promoting &
developing the renewable sources of energy.

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Even the world is confident of India’s Strong growth this can be seen from the forecasts taken down
from Wikipedia. By 2040 India is seen surpassing US economy and taking the 2nd
position in terms of
GDP. This shows that although India may be facing problems in the short term but in the long run India is
bound to grow.
So it should be the earnest attempt of the present India to take India to the place where it has to be in
the future. And also see to it that it is not just the economic growth that has taken place but economic
development as well.

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Mumbai Circle comes under western region which comprises of the state of Maharashtra and Goa.
Maharashtra occupies the western and central part of the country and has a long coastline stretching
nearly 720 kilometers along the Arabian Sea. Maharashtra is the second largest state in India both in
terms of population and geographical area (3.08 lakh sq. km.). The State has a population of around 11
crore (Census 2011) which is 9.3 per cent of the total population of India. The State is urbanized with 45
per cent people residing in urban areas.
Mumbai, the capital of Maharashtra and the financial capital of India, houses the headquarters of most
of the major corporate & financial institutions. India's main stock exchanges& capital market and
commodity exchanges are located in Mumbai. The gross state domestic product (GSDP) at current prices
for 2010-11 is estimated at `10, 68,327 crore and contributes about 14.9 per cent of the GDP. The GSDP
has been growing at a rapid pace over the last few years. Presently industrial and services sector both
together contribute about 87 per cent of the State’s domestic product. The agriculture & allied activities
sector contributes 13 per cent to the State’s income.
Maharashtra is the most industrialized state. The State is pioneer in Small Scale Industries. The State
continues to attract industrial investments from both, domestic as well as foreign institutions. The
literacy rate of the State is 82.9 per cent as against 74 per cent at national level as per Census 2011.As
per India Human Development Report, 2011 Human Development Index of India is 0.467 and State ranks
5th
in the country with Human Development Index of 0.572.
Goa has a geographical area of 0.04 Lakh Square Km. with a population of 14.58 Lacs and 62.17% of
them being urban population. Goa comprises of only 0.12% of the total population of India.
The Literacy rate of Goa is 87.40% as per the census 2011. The gross state domestic product (GSDP) at
current prices for 2010-11 is estimated at `35934 Crores/- & 0.50% to the GDP.
It can be said that Mumbai circle has a good literacy ratio of above 80% of the total population. The
GSDP of Mumbai circle is around `1104261 Crores/- for 2010-11 which contributes around 15.5% to the
country’s GDP.
To cut the long things short Mumbai circle has great prospects of growth and the SBI Mumbai circle
should try to exploit the opportunity by lending their hands in this region’s growth story and also
increasing the shareholders value thus creating a win-win situation.

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Banking Sector Overview
The current global macro-economic situation is characterized by an unbalanced economic recovery
across advanced and emerging economies, moderation in economic prospects in 2011, high levels of
unemployment and inflationary pressures, and elevated levels of government debt.
Banks and prudential authorities still face tough challenges in securing financial stability. Banks need to
further strengthen capital and liquidity positions to regain markets’ confidence. The Global banks so far,
has seen a difficult period for the global banking system, with challenges arising from the global financial
system as well as the emerging fiscal and economic growth scenarios across countries.
It would be a mistake to think that central bankers can use their Balance sheets to solve every economic
and financial problem: they cannot induce deleveraging, they cannot correct sect oral imbalances, and
they cannot address solvency problems.
Central banks face the risk that, once the time comes to tighten monetary policy, the sheer size and scale
of their unconventional measures will prevent a timely exit from monetary stimulus, thereby
jeopardizing price stability. The result would be a decisive loss of central bank credibility and possibly
even independence.
The recent financial crisis has conveyed clear messages to market participants and to regulators
entrusted with safeguarding financial stability. One is that banks had mismanaged their liquidity
positions, both domestically and internationally, and failed to secure stable and diversified sources of
income and to contain costs.
Bank Credit Growth:
The countries of the BRICS nations have a positives growth in bank credit, showing economic
development in the advancing countries. On the other hand advanced countries have seen a little revival
in banks credit in the last few quarters ,there is an uncertainty about whether this credit revival would
continue or not, given the picture of economic revival looking bleak in the US and now, even in Germany.
Whereas economies from Europe, particularly countries with fiscal strains, namely Portugal, Spain and
Italy, showed a steep fall in the growth in bank credit with no signs of revival by 2011.
There are concerns about the revival in credit growth in many advanced economies to sectors that rely
heavily on bank financing and are crucial for revival in employment and growth, namely, small and
medium enterprises.

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Trends in access and usage of banking services:
Financial inclusion has become an important part of the banking policy in both advanced and emerging
economies in the recent years.
Moreover, it has attained centre stage particularly after the financial crisis. This is because there have
been concerns about the possibility of an increase in financial exclusion following the crisis, particularly
in the advanced economies. Recent data from the World Bank on the access and usage of banking
services suggest that these concerns have not been misplaced. There was a contraction in the access to
banking services in many of the advanced economies affected by the crisis, resulting from a closure of
bank branches. The decline in the usage of banking services was more striking in the advanced
economies.
The decline was more pronounced and widespread with regard to usage of credit services as compared
to deposit services. In the advanced economies countries like UK & Japan and in emerging economies
like Malaysia & China have deposits greater than the GDP of the country. Similarly credit is greater or
almost equal to GDP. Which should have translated into higher GDP growth but that did not happen.

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The Indian banking sector, which is the structure of the Indian financial sector, though weathered the
worst consequences of the global financial turmoil to a large extent, had to traverse through a
challenging macroeconomic environment during the post crisis period. The Indian banking sector
performed better in 2010-11 over the previous year despite the challenging operational environment.
The banking business of Scheduled Commercial Banks (SCBs) recorded higher growth in 2010-11 as
compared with their performance during the last few years. Credit grew at 22.9 per cent and deposits
grew at 18.3 per cent in 2010-11 over the previous year. Accordingly, the outstanding credit-deposit
ratio of SCBs increased to 76.5 per cent in 2010-11 as compared with 73.6 per cent in the previous year.
Deposits, which constitute 78 per cent of total liabilities of the banking sector registered higher growth
in 2010-11 in contrast to the trend observed in the recent years. This was mainly because of the
accelerated deposit mobilization of new private sector banks in 2010-11 over the previous year.

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In contrast, current account and savings account (CASA) deposits, which are least cost sources, recorded
deceleration in 2010-11. It is pertinent to note that despite the increased remuneration on savings
deposits based on a daily product basis with effect from April 1, 2010, the savings deposit mobilization
decelerated in 2010-11 across all the bank groups as compared with the previous year.
It is interesting to note that despite the widespread concerns with regard to slowdown in credit off-take
in the context of tight monetary policy, on a y-o-y basis, the loans and advances of the banking sector
recorded higher growth in 2010-11 as compared with the previous year. While the economic recovery
from the recent financial turmoil increased the demand for credit; from the supply side, higher growth in
deposits as well as growth in capital facilitated higher credit growth.

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Structure of State Bank of India
The State bank of India is divided into various groups which comprise of
 National Banking Group (NBG)
 Mid-Corporate Group (MCG)
 Corporate Account Group (CAG)
 Stressed Asset Management Group (SAMG)
National Banking Group (NBG) is divided into 14 circles which are listed below. The project report is
primarily related to the operation of the MUMBAI CIRCLE which comprises of Maharashtra and Goa.
There are 1178 branches in Maharashtra alone which is around 14% of the total Bank branches in
Maharashtra (i.e. Percentage of SBI branches to branches of all banks in Maharashtra) and 16 branches
in Goa. The local head office of the Mumbai Circle is at Bandra- Kurla Complex, Mumbai.
Circle Area of Operation
Ahmedabad Gujarat, Daman, Diu, Dadra & Nagar Haveli
Bangalore Karnataka
Bengal West Bengal, Sikkim, Andaman & Nicobar
Bhopal Madhya Pradesh, Chattisgarh
Bhubaneshwar Orissa
Chandigarh Chandigarh, Punjab, Himachal Pradesh, north Haryana, Jammu & Kashmir
Chennai Tamil Nadu, Pondicherry
Delhi Delhi, west U.P., Garhwal, south Haryana, Rajasthan
Hyderabad Andhra Pradesh
Kerala Kerala, Lakshadweep
Lucknow Uttar Pradesh, Kumaon
MUMBAI MAHARASHTRA, GOA
North-East Assam, Arunachal Pradesh, Meghalaya, Tripura, Nagaland, Mizoram, Manipur
Patna Bihar, Jharkhand

Mumbai circle is divided into three divisions. And further the divisions are divided into 7 Networks as shown in the chart.
Mumbai Circle
GM-1
Mumbai-I
No of Branches
Rural 1
Semi-Urban 0
Urban 3
Metro 135
TOTAL-------------139
Mumbai-II
No of Branches
Rural 36
Semi-Urban 27
Urban 36
Metro 74
TOTAL-------------173
GM-2
Pune
No of Branches
Rural 84
Semi-Urban 118
Urban 45
Metro 81
TOTAL-------------328
Panaji
No of Branches
Rural 64
Semi-Urban 49
Urban 0
Metro 0
TOTAL-------------113
GM-3
Nagpur
No of Branches
Rural 136
Semi-Urban 109
Urban 37
Metro 38
TOTAL------------ 320
Aurangabad
No of Branches
Rural 74
Semi-Urban 90
Urban 45
Metro 0
TOTAL-------------209
Network 7 covers 2 branches and
directly comes under GM-I.

PESTEL ANALYSIS:
There are many factors in the macro-environment that affects the decisions of an organization. Tax
changes, new laws, trade barriers, demographic change and government policies towards various
industries are the macro economic factors that an organization needs to look into. Hence it becomes
more than necessary to perform a PESTEL analysis of the region in which the organization operates. As
the report is mainly concentrated on Mumbai circle’s performance in its arena, an analysis of the region
under Mumbai circle i.e. the state of Maharashtra and Goa is presented.
Political Factors refer to government policy such as the degree of intervention in the economy, what
goods and services does the government want to provide, to what extent does it believe in subsidizing
firms, what are its priorities in terms of business support etc. In short, the Fiscal part of state is reflected
from political factors.
The State adopted its first industrial policy in the year 1993 which was revised in 1995 and 2001. Latest
industrial policy was introduced in 2006, which aimed at 10 per cent growth in the industry sector, 12
per cent growth in the service sector and generation of additional 20 lakh employment by 2010. State
has nearly achieved these growth targets. Industrial policy 2012 is in the offing. Political decisions can
have an impact on many vital areas for business such as the education, the workforce, the health of the
nation and the quality of the infrastructure of the economy such as the road and rail system.
Economic factors are key variables that have an impact on the activity in the banking services sector. The
level of consumer activity is governed by income levels and personal wealth. The per capita income of
Maharashtra at current prices is `87,686/- and of Goa is `1, 68,572/- where as the per capita income of
India is `53, 331/- as income levels grow, more discretionary income is available to spend which boosts
aggregate demand. Inflation rate for January, 2012 was 6.6 per cent as against 9.5 per cent for
Maharashtra January, 2011, a high WPI would lead to rise in the prices of raw materials. ‘Food’ inflation
for January, 2012 was (-) 0.5 per cent, as against 16.7 per cent for January, 2011. Year-on-year inflation
based on WPI declined from 9.7 per cent in April, 2011 to 6.6 per cent in January, 2012 .Inflation may ask
for higher wage demands from employees and raise costs.
Maharashtra states Gross State Domestic Product (GSDP), as per advance estimates, is expected to grow
at 8.5 per cent during 2011-12 as against 11.3 per cent during the previous year. The Industry sector is
expected to grow at 11.0 per cent. The Services sector is expected to grow by 10.1 per cent.
As far as Goa is concerned the GSDP growth for 2010-11 was 8.30%. The Industry sector grew at 6.80%.
The Services sector grew by 11.98%.

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The GSDP growth signals the bank so to as plan their lending pattern in different states and in various
Industries.
Sectoral Growth Rates at Constant Prices(2004-05)
2010-11 2011-12 2010-11 2011-12
Primary 15.6 -5.1 7 2.5
Secondary 10.8 9.1 7.2 3.9
Tertiary 11 10.1 9.4 9.4
GSDP/GDP 11.3 8.5 8.4 6.9
GSDP GDP
Source : Maharashtra Economic Survey 2011-12
Sector
Animal husbandry is an important agriculture related activity. The State’s share of livestock and poultry
population in India is 6.8 per cent and 10 per cent respectively and the State ranks sixth in India in
livestock and poultry population. Maharashtra is the most industrialized state. The State is pioneer in
Small Scale Industries.
The State continues to attract industrial investments from both, domestic as well as foreign institutions.
It has become a leading automobile production hub and a major IT growth centre. It boasts of the largest
number of special export promotion zones.
As can be seen from the growth numbers it has a huge potential in secondary and tertiary sectors and
the bank should look into various lending avenues in these sectors.
Consumer confidence in the economy and job security also has a major impact on the growth of the
economy, if lean times are foreseen; savings will be prioritized over spending. Consumers may also seek
easy access savings and be willing to tie up their money for longer periods with potentially more
attractive investments.
As per Population Census 2011, Maharashtra is the second largest State and Goa is fourth smallest in
India in terms of population. The total population of the Maharashtra State is 11.24 crore and of Goa is
14 lakh.
The Literacy rate in the State of Maharashtra is 82.9% (6th) and Goa is 87% (3rd). As per the ‘India
Human Development Report (IHDR) 2011’ Maharashtra ranks fifth and Goa ranks third in India.

25 | P a g e
New technologies create new products and new processes. It also leads to efficiency and increase in
Standard of Living. The Bio-Technology (BT) Policy was declared by the State Government in 2001. Public
BT parks are developed in the State at MIDC Jalna and MIDC Hinjewadi (Pune), while four private T parks
are being developed in the State with total estimated investment of about 300 crore. The Mumbai Metro
rail project is the first mass rapid transport system (MRTS) project being implemented under Public
Private Partnership (PPP) basis Technology can reduce costs, improve quality and lead to innovation.
These developments can benefit consumers as well as the organizations.
The environmental Factors are the factors which depend on the latitude and longitude where the region
is located. Hence it can be said that these are the factors which a state cannot change to its advantage
but it can always see to it that it promotes the activities that will prosper and will compliment the
environmental factors. And also sustain the current environmental level. Changes in temperature can
impact on many industries including farming, tourism and insurance. The growing desire to protect the
environment is having an impact on many industries such as the travel and transportation industries (for
example, more taxes being placed on air travel and the success of hybrid cars) and the general move
towards more environmentally friendly products and processes is affecting demand patterns and
creating business opportunities.
The Maharashtra State Government has signed MoU with ‘The Energy and Resources Institute’ (TERI) to
tackle the issue of climate change. This institute will prepare action plan for climate change within a
period of two years. The monsoon play a very important role in development of country and states like
Maharashtra which are highly dependent on agriculture and this will also help in food prices in control.
MTDC is the nodal agency for implementation of tourism policy in the State. The action plan in ‘Tourism
Policy 2006’ has been articulated by the State Government taking into consideration tourism potential
coupled with the employment potential, both direct and indirect, for the development of tourism sector.
The State Govt. has declared Small Hydro-electric Projects (SHPs) policy in order to boost the
development of small hydroelectric projects through privatization on 15th Sept., 2005. Under this policy,
the developers for 74 projects of 211.1 MW are finalized of which 11 projects of 52.9 MW are
commissioned up to Dec., 2011. Remaining 63 projects are at various stages of development.
Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and
demand (e.g. if the law affects the likelihood of customers buying the good or using the service).

26 | P a g e
It is important not to just list PESTEL factors but also understand the impact of these factors because
listing by itself doesn’t suffice the need. Bank must decide on the relative importance of various factors
and one way of doing this is to rank or score the likelihood of a change occurring and also rate the
impact if any. The higher the likelihood of a change, the greater the impact of any change, the more
significant this factor will be to the growth of Industries and this growth will decide the bank portfolio of
assets.
It is also important to consider the level at which it is applied. As from the PESTEL analysis we can
conclude that Maharashtra state is a sound place for industries to grow due to the favorable economic
and other factors which are stated above. Maharashtra is a fiscally prudent state, so it can increase its
size of budget to spur growth in the region if the need arise, and unlike West Bengal, Punjab & Kerala,
has the leeway for hassle free borrowing from the Union Government. As the state of Goa is more
tourism oriented the scope of tourism sector is more in the region than other sectors. Our analysis
shows that Goa forms a minuscule part in the total exposure of advances by banks in the Mumbai circle.
Hence it was not considered materially important to do an elaborate PESTEL analysis of Goa.

27 | P a g e
ANALYSIS ON CREDIT EXPOSURE OF
MUMBAI CIRCLE.
A holistic picture of the total Credit Exposure in various sectors in Mumbai circle is presented in this
section .The information is analyzed by clubbing various groups of banks. The reason behind this analysis
is to get a fair picture on where the SBI Mumbai Circle stands in terms of exposure in various industries
and its market share in this region.
The primary source of data is taken from the Reserve Bank of India’s (RBI) database. The database
available was for the year ended 31st
March 2011.
The analysis consists of the following Bank groups:
 State Bank of India(SBI)
 SBI Associates
 Nationalized Banks
 Regional Rural Banks
 Private Sector Banks &
 Foreign Banks
The list of Banks included in the Bank Groups is given below in Annexure I to IV.
The total exposure of Mumbai circle is divided into Eight Industry groups as follows:
 Agriculture
 Industry
 Finance
 Transport Operators
 Professional and Other Services
 Trade
 Personal Loans
 All Others

28 | P a g e
Bank Group wise breakup of Total Exposure
All the banks in the Mumbai Circle which includes Maharashtra and Goa has a total exposure of
`1099508 Crores/- and SBI has an exposure of `141403 Crores/- as on 31st
March 2011. Nationalized
banks have an exposure of 52% being the highest but it should be noted that it includes 19 banks. On an
average each nationalized bank has an exposure of around 2.7 %, which is far more less than SBI’s
standalone exposure of 13%. This shows SBI’s supremacy in terms of market share in Mumbai circle.
When we include SBI’s associates with SBI it sums up to the market share of 17% .Other public sector
bank which is IDBI Bank Ltd also has a considerable amount of 5% of exposure in the total credit lent to
Mumbai circle.
FOREIGN BANKS
7%
NATIONALISED
BANKS
52%
OTHER PUBLIC
SECTOR BANKS
5%
PRIVATE
SECTOR BANKS
19%
REGIONAL
RURAL BANKS
0%
SBI
13%
SBI Associate
4%
Total Exposure
Source: RBI Data Base

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Industry wise exposure of SBI:
A General observation is that, SBI amongst all the banks has the highest exposure in the all sectors. A
point worthy of mentioning is that in spite of having highest exposure and hence susceptible to NPAs it
gave glowing results in the F.Y 2011-12 as compared to F.Y 2010-11. SBI has the highest exposure of 68%
in Industry followed by personal loan with 11% and all others in a range of 3%-5%.The GSDP of
Maharashtra for 2010-11 `1068327 Crores /- out of which Industry sector has a share of `323311 Crores
/- and Services sector has a share of `608475 Crores /-. SBI lends 68% of its money towards industries
which contributes towards 30% of GSDP.
AGRICULTURE
3%
PROFESSIONAL
AND OTHER
SERVICES
4%
FINANCE
4%
INDUSTRY
68%
PERSONAL
LOANS
11%
ALL OTHERS
0%
TRADE
5%
TRANSPORT
OPERATORS
5%
SBI Outstanding

30 | P a g e
India was considered to be an agrarian economy until last two decades. These days Indian GDP growth is
led more by Services sector than by Agriculture and Industry. Nevertheless India’s majority of population
is dependent on Agricultural income. As they say “Actual India lies in the rural more than in the urban”.
Hence it becomes imperative for the Government and also the banks to see to it that adequate credit is
supplied to this sector so that this sector thrives and flourishes. After all, the basic essential commodity
for a man to survive is food.
This sector comes under priority sector lending as the RBI calls; every bank has to have a minimum
exposure in this sector as prescribed by the central bank. Hence we can see that every group of bank has
some exposure in Agriculture although the foreign banks have the lowest amongst the group.
The advances to the agricultural sector can be divided into two:
 Direct Lending and
 Indirect Lending
Direct Lending includes lending directly to the farmers, horticulturists, poultries etc. Indirect Lending
includes lending to fertilizer industries, seed processing industries etc.
The Maharashtra Economic Survey 2011-12 has estimated the Agricultural activities at `1176799
Crores/-.
Year
Exposure
(` in Crores) Growth
Exposure
2005 7680 4737
2006 11529 50% 9311 97%
2007 14792 28% 9839 6%
2008 18950 28% 7720 -22%
2009 18617 -2% 8410 9%
2010 26440 42% 9099 8%
CAGR 28% 14%
Direct Finance Indirect Finance
Table on Exposure in Direct & Indirect Finance

31 | P a g e
Exposure bank group wise:
The above chart states that SBI alone has an exposure of 12% and an exposure of 16% along with its
associates. The nationalized banks have a major chunk of 49% in agriculture sector followed by private
sector banks. The Regional Rural Banks have the biggest exposure, amongst all the Industry groups, in
agriculture showing that they are more skewed towards lending for agriculture which is the main
objective of these Regional Rural Banks.
FOREIGN BANKS
2%
NATIONALISED
BANKS
49%
OTHER PUBLIC
SECTOR BANKS
6%
PRIVATE SECTOR
BANKS
23%
REGIONAL RURAL
BANKS
4%
SBI
12%
SBI Associate
4%
AGRICULTURE

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As far as Mumbai Circle is concerned especially the state of Maharashtra, Secondary Sector is the major
contributor to Gross State Domestic Product(GSDP) and had the highest growth of 10.8% in 2010-11
amongst the three sectors and a growth of 9.1% in 2011-12. This sector is important for contribution
towards GSDP and to the profitability of the bank as well. Hence in the light of Demand for credit,
growth prospects in the industry & NPAs in this sector, credit should be lent accordingly.
Industry is a broad group which consists of:
 Construction,
 Electricity, Gas & Water,
 Manufacturing & Processing &
 Mining & Quarrying.
Construction:
The construction industry plays a very important role in the development of a country. The development
of the country depends on the infrastructural development in the country. Hence an increase in the
activities of construction which can be seen indirectly through lending pattern of the banks is a good sign
of economic development. The Maharashtra Economic Survey 2011-12 pegs 2010-11 construction
industry’s addition at `85708 Crores /-.
As is seen there is a growth rate of 48% CAGR in bank lending. This shows a healthy growth in the
infrastructure segment.
Year
Exposure
2004-05 13503.1073 0%
2005-06 22363.0797 66%
2006-07 31715.682 42%
2007-08 56297.0465 78%
2008-09 71221.2923 27%
2009-10 95872.5514 35%
CAGR 48%
Source : RBI Database
Manufacturing & Processing:
Index for Industrial Production (IIP) numbers are widely followed by the market in order to see whether
the economy is heading towards boom or burst.

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The manufacturing sector numbers have the highest percent of weight-age of 75.52% in the Index. The
April 2012 IIP numbers were very dismal having a growth rate of 0.1% only, with the manufacturing
sector also having a growth of 0.1%. There is a need to boost the manufacturing sector but this can only
happen with the removal of supply side bottlenecks by the government.
Year
Exposure
(`. In Crs) Growth
2004-05 102597
2005-06 139032 36%
2006-07 181363 30%
2007-08 199855 10%
2008-09 247576 24%
2009-10 282234 14%
CAGR 22%
The Credit in the manufacturing sector is growing at a CAGR of 22%. Pan India credit growth rate is also
22%. As can be seen from the above data there is a decrease in credit growth in the year 2009-10.
Mining & Quarrying:
There are many minerals that are mined in the state of Maharashtra like Coal, Iron ore, Limestone,
Chromites etc. Coal is majorly considered as the main raw material for Iron & steel industry, Electricity
generation etc .The minerals & ores also form an important part. Hence care should be taken that mining
and quarrying industry is not bereft of credit.
Year
Exposure
2004-05 5826
2005-06 2601 -55%
2006-07 5455 110%
2007-08 8547 57%
2008-09 7904 -8%
2009-10 13729 74%
CAGR 19%
Maharashtra economic survey 2011-12 has estimated the mining industry to grow to `3660 Crores/-.
This industry has a CAGR of 19% in Mumbai circle.

34 | P a g e
Exposure Bank group wise:
The following Pie Chart shows a distribution of an amount outstanding of `469331 Crores /- as on 31st
March 2011.
An Exposure of 51% is taken by Nationalized Bank being the highest but it needs to be noted that it
includes 19 banks. Even the Arithmetic mean of nationalized bank comes to around 2.5% which is far
more less than SBI’s standalone exposure of 19% and a consolidated exposure, with SBI associates as
well, of around 25% of the total amount lent in the Industry sector. SBI alone has an exposure of around
`90159 Crores/- and `119907Crores/- including its associates. Other players account for 24% of the
advances given to this sector.
FOREIGN
BANKS
7%
NATIONALISED
BANKS
51%
OTHER PUBLIC
SECTOR BANKS
5%
PRIVATE
SECTOR
BANKS
12%
REGIONAL
RURAL BANKS
0%
SBI
19%
SBI Associate
6%
INDUSTRY

35 | P a g e
With the increase in Professionals the need for setting up an independent office for practice has also
increased. These professionals include Chartered Accountants, Lawyers, Pathologists, Doctors, etc. Banks
help these professionals with providing credit for setting up of office, purchase of Machinery and
equipments etc. This segment has an outstanding of `110251 Crores/- as on 31st
March 2011.Credit for
this sector grew at a CAGR of 41% in the past 5 years.
SBI has an exposure of 5% and 6% with its associates in Mumbai circle. This sector is dominated by the
nationalized banks having a total exposure of 59% followed by private sector by 20%. Even the foreign
banks seem to have interest in lending to this sector which is clearly seen in their exposure of 10% in this
region.
FOREIGN BANKS
10%
NATIONALISED
BANKS
59%
OTHER PUBLIC
SECTOR BANKS
5%
PRIVATE SECTOR
BANKS
20% REGIONAL RURAL
BANKS
0%
SBI
5%
SBI Associate
1%
PROFESSIONAL AND OTHER SERVICES

36 | P a g e
The celebrated Charles Dow, inventor of the famous ‘DOW THEORY’ used to track the Industries’ Stock
Index with that of Railways’ Stock Index. He always said that even if the Industries might be performing
well but if the transport system is not performing up to the mark then the industries good performance
is of no use to the economy. This implicitly meant that an economy’s transport system should be good
enough to transport the goods to the market place well on time.
The exposure in this industry is `55647 Crores /- in Mumbai circle. SBI has a small exposure of 10% and
13% with its associates in this sector. The nationalized Bank group has again the highest share of 59%
and second to it are private banks.
Lending to NBFC’s is majorly covered under this sector. The NBFCs are a tether between the banks and
the borrowers whom the banks are not allowed to lend. They play an important role in boosting growth
by providing credit to people of limited creditworthiness. But care must be taken to see to it that the
credit supplied to these NBFCs are backed by adequate collateral and banks before lending must see to it
that a sound model is being used by the NBFCs. After all it is the depositor’s money that is at stake.
FOREIGN
BANKS
1%
NATIONALISED
BANKS
59%
OTHER PUBLIC
SECTOR BANKS
11%
PRIVATE
SECTOR BANKS
16%
REGIONAL
RURAL BANKS
0%
SBI
10%
SBI Associate
3%
TRANSPORT OPERATORS

37 | P a g e
This sector also shows the same pattern like that of professional services lending. It is having a CAGR of
27% and the total amount lent in Mumbai circle as on 31st
, March 2011 is `188179 Crores /- which is
around 17% of total Mumbai’s exposure. Where in SBI has a share of 6% and on a consolidated basis 8%.
FOREIGN
BANKS
5%
NATIONALISED
BANKS
62%
OTHER PUBLIC
SECTOR BANKS
5%
PRIVATE
SECTOR
BANKS
20%
REGIONAL
RURAL BANKS
0%
SBI
6%
SBI Associate
2%
FINANCE

38 | P a g e
Trade by meaning is the action of buying and selling goods and services. Traders are an important link in
making goods available to the final consumer .A trader mainly requires loan for buying goods for resale,
which means their main requirement is credit for working capital.
The Trade sector can be divided into two:
 Retail trade
 Wholesale Trade
Growth in Retail trade is 22% on CAGR basis and in wholesale it is12% in the Mumbai circle. The year
2008 saw a sharp fall in retail trade and wholesale trade to some extent.
Year
Exposure
( ` in Crores) Growth
Exposure
( ` in Crores) Growth
2005 10468 27480
2006 13076 25% 28273 3%
2007 22300 71% 31747 12%
2008 16039 -28% 34050 7%
2009 30514 90% 42287 24%
2010 28605 -6% 47770 13%
CAGR 22% CAGR 12%
Source: RBI Database
Retail Trade Wholesale Trade
Credit exposure growth trends:
FOREIGN BANKS
8%
NATIONALISED
BANKS
61%
OTHER PUBLIC
SECTOR BANKS
3%
PRIVATE SECTOR
BANKS
18%REGIONAL
RURAL BANKS
0%
SBI
7%
SBI Associate
3%
TRADE

39 | P a g e
The greater portion on the exposure is with the nationalized banks which amount to 61% or `48972
Crores /-. And SBI has a share of 7% and on consolidated basis with associate 10%. But when average
exposure per nationalized bank is compared with SBI’s performance, SBI has performed better. The
private’s sector banks have a share of 18% which is second highest and followed by Foreign Banks.

40 | P a g e
Personal loans satisfy consumption demand in the economy. Growth in consumption demand leads to
growth in the economy. These loans normally carry a higher rate of interest. Hence banks can exploit the
dual opportunity of earning a higher rate of return and creating consumption demand which in turn
leads to expansion of capacities and credit for expansion asked for from the banks.
The personal loans are divided into three categories
 Loan for Housing,
 Loan for consumer durable goods and
 The residual category.
The growth of credit in the housing loan is the highest amongst the three at a CAGR of 20% and an
exposure of `73297 Crores /-.
Year
Exposure
(` In Crs) Growth
Exposure
(` In Crs) Growth
Exposure
(` In Crs) Growth
2005 25187 914 20590
2006 37545 49% 1083 18% 72802 254%
2007 49502 32% 1601 48% 34696 -52%
2008 47247 -5% 1047 -35% 36922 6%
2009 51181 8% 537 -49% 52480 42%
2010 62801 23% 388 -28% 35646 -32%
CAGR 20% -16% 12%
Loan for housing Loan for consumer goods Rest of the Loan
Credit Exposure Growth Trends:
Demand for consumer durable loans has seen a steep decline from 2007-08 and shows a CAGR of -16%
for the past 5 years. The residual category which consists of educational loans, personal loans, etc. has
grown at a CAGR of 12% in this region.

41 | P a g e
The Personal loan segment is 11% of the total exposure of all banks in the Mumbai Circle, which is third
to Industry and Finance that has an exposure of 43% and 17% respectively.
Private Banks are the forerunners in this sector with a pie of 32%. Nationalized banks being the second
having a 30% exposure.SBI has an exposure of 16% and SBI & associates have contributed up to 21% of
the total credit in this sector. The private sector has it highest exposure to Personal Loan segment
leaving behind the all other segments.
FOREIGN BANKS
10%
NATIONALISED
BANKS
30%OTHER PUBLIC
SECTOR BANKS
7%
PRIVATE SECTOR
BANKS
32%
REGIONAL
RURAL BANKS
0%
SBI
16%
SBI Associate
5%
PERSONAL LOANS

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This is the residual group for all other loans not included in the above groups, which include loans given
to sports, recreational and cultural activities, other social work, education public administration etc, out
of the total exposure of Mumbai Circle the All Others group has an exposure of 3% only of Total
exposure of `32951 Crores/- .
The nationalized banks have the highest exposure of 46% and second to them are private sector banks of
38% followed by Foreign banks .SBI has only a share of 1% in this group. This shows that in these areas
the credit provided by the non-public sectors banks has a greater pie.
FOREIGN BANKS
14%
NATIONALISED
BANKS
46%
OTHER PUBLIC
SECTOR BANKS
0%
PRIVATE SECTOR
BANKS
38%
REGIONAL RURAL
BANKS
1%
SBI
1%
SBI Associate
0%
ALL OTHERS

43 | P a g e
Study on performance of Mumbai
Circle Vis-À-Vis SBI India.
Mumbai is considered to be the financial hub of India. Mumbai circle, which comprises of the developed
Maharashtra and the tourist centric Goa, is a key contributor to the Indian Economic Growth. On the
other hand Banks are considered to be the growth drivers of an economy; it is their function of lending
credit to the industries that helps them grow. As contribution of the Mumbai circle to the economic
development is vital, a study on the bank's performance in Mumbai circle becomes imperative for all the
banks. Since SBI is a part of banking fraternity it calls for an analysis on the part of SBI also. Hence a study
on SBI Mumbai circle’s performance is necessary from the Mumbai Local Head Office’s (LHO) view point
as well as from the SBI India’s view point.
SBI’s Value statement states,” we’ll do everything we can to contribute to the community we work in”.
So the SBI Mumbai Circle must try to contribute to this region’s growth story and also try to satisfy the
stakeholders of the bank by an outstanding performance.
The SBI lends to various Industries but we are mainly concentrating on the industries where SBI Mumbai
circle has its exposure. To make the study easier for cognition, comparison, comprehension & make an
easier conclusion out of it we have clubbed the industries under same nomenclature into one head and
thereby having 11 major heads of Industries. An analysis of the sub industries has been made when
every major head is presented separately.
Our Comparison is mainly based on the Industries classified in the Centre for Monitoring Indian
Economy’s (CMIE) Industry Analysis Report (IAS) Report. One needs to note that the comparison is done
on 37% of the total of SBI Mumbai Circle’s credit exposure which is concentrated on Big Industries. The
remaining 64% of the exposure of Mumbai Circle is in Medium and Small Enterprise (MSME), considering
the extend of exposure in each industry which was very less baring a few it was considered unviable to
do a performance appraisal of the same
Normally a Bank has both fund based and Non fund based exposure .The exposure details that are
shown below for both SBI India and Mumbai Circle only include the Fund Based Exposure. And also the
exposure of SBI India includes the exposure above 1cr only.
The list of industries the State Bank of India has an exposure in is given in Annexure V.

44 | P a g e
Percentage Outstanding of Industries to the Total Outstanding of Mumbai circle & SBI India.
The graph above shows the outstanding that SBI has in each industry as a percent of SBI’s total
outstanding in Mumbai circle and in India.
We are comparing the performance of SBI Mumbai circle with SBI India by considering SBI India as a
bench mark .So as to see whether SBI Mumbai circle has over performed underperformed or is on par
with SBI India.
The total exposure amount of the above industries comes to around `8500 Crores/- in Mumbai Circle
and `205138 Crores/- for SBI India as on 31st
March 2011. Mumbai Circle Constitutes around 4% of the
total outstanding of SBI India.SBI India Includes 14 Circles, MCG, CAG, SAMG .The bigger loans are
processed in MCG and CAG offices does not come under the purview of Mumbai Circle even if the office
is situated in Mumbai Circle Region. Hence considering all the factors a 4% exposure is a sizable amount.
As can be seen from the above graph the Mumbai Circle has the highest exposure in construction and
related activities amongst the listed industries it is around `2405 Crores/- and is around 18% of the total
exposure of SBI India in construction industry. The Metal & Coal Industry also has a good 10% of the total
exposure of Mumbai Circle. The Other 8 Industries have an exposure ranging from 1%- 4%.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Mumbai Circle SBI India
Note: SBI India includes Advances of Rs.1 Cr and above.

45 | P a g e
Percent of Non Performing Asset (NPA) to the total exposure in the Mumbai Circle /SBI India:
The actual growth in any industry is gauged by the NPAs in that particular industry that the bank holds. In
a boom particularly there will be negligible NPAs and in recession the NPAs increase by leaps and
bounds. Apart from the Economic cycle we can also see industry downturns due to reasons peculiar to
those Industries. Hence it is very important to see the economic as well as industry cycle before lending
to the industry and NPA is one such indicator that helps us in the endeavor.
It is very pleasing to note that on a comparative basis Mumbai circle has a very low percent of NPA to its
total exposure when compared to SBI India. The highest NPA that can be seen is in Chemical Industry
which is around 2% of total exposure of the industry which co-incidentally happens to be the highest in
absolute terms as well which sums up to `9.32 Crores/-. SBI India has its highest NPA in IT Industry.
We have rated the exposure in every industry as per our analysis with a rating which is as follows
Rating Comparative Performance with SBI as a Whole(SBI India)
A+ +
Mumbai Circle outperforming
A+
Mumbai Circle ahead to a greater extent
A Both of them are on par with Mumbai Circle trifling ahead
B Both of them are on par with SBI India trifling ahead
B+
Mumbai Circle not performing well when compared to SBI India
B+ +
Mumbai Circle performing poorly when compared to SBI India
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Mumbai Circle SBI India

46 | P a g e
The Food Product segment has 3 sub-divisions:
 Edible Oil,
 Sugar,
 Food Processing
Sugar Industry is manufacturing of sugar from sugar cane. Edible Oil industry is crushing and
extracting oil from various oil seeds. Food Processing contains packaging , preserving, and selling
food products like ready to eat etc..
Percentage of industry’s exposure to the total exposure:
Edible Oil : In India around 60% of the oil consumption is met through imports. The total exposure in this
industry is `247 Crores/- by Mumbai circle and `3176 Crores/- by SBI India which amounts to 1.08% and
0.41% of the total Outsatnding Respectively.
Sugar: Sugar production constitutes around 1% of total GDP and around `3000 Crores/- to the
government exchequer by the way of excise duty. Sugar is a very sensitive industry , the government
prevents the manufacturers from exporting the sugar they produce and mandating them to sell their
produce in the domestic market at a lower price. This has affected their bottom line severely.
Maharashtra is the highest producer of sugar . One noteworthy point is that the players in this industry
are affluent so they seldom require funding from the bank .
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
EDIBLE OIL SUGAR FOOD
PROCESSING
Mumbai Circle
SBI India

47 | P a g e
The total exposure is `84.27 Crores/- and `9635 Crores/- in Mumbai Circle and SBI India respectively as
on 31st
March 2011.
Food Processing: It comes under priority sector. It contributes over 20% of Indias GDP. The amount of
Exposure is `62 Crores/- in Mumbai Circle and `12800 Crores/- in SBI India. Mumbai circle has a
miniscule exposure of around 0.27% whereas SBI India has 1.66% of the total Exposure. The Central
government has allowed 100% FDI investment in the Food Processing industry via automatic approval.
Percent of Non Performing Asset to the total exposure in the Industry.
The NPA’s of Mumbai circle is very low in all the three sectors when compared with the benchmark SBI
India. SBI India has quite a lot of exposure in food processing industry. It has an NPA of 5.57% of total
exposure in that industry and Mumbai circle has only 0.90% of the total exposure in that industry. The
other sectors have not much NPA worth mentioning.
Industry Rating Remarks
EDIBLE OIL A+ +
The Exposure of Mumbai Circle is More as compared to SBI India and also the
level of NPA is negligible
SUGAR A
The NPA level of SBI India is 10 times more than Mumbai Circle where as the
exposure is only 4 times that of Mumbai Circle
FOOD
PROCESSING
B
The proportionate NPA of SBI India are a notch less than Mumbai circle in
proportion to exposure.
0.02% 0.03%
0.90%
2.49%
0.30%
5.57%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
EDIBLE OIL SUGAR FOOD
PROCESSING
Mumbai Circle
SBI India

48 | P a g e
The Textile and Leather Industry is made up of Leather Industry and the Textile Industry.
The Textile industry which was mainly concentrated in Mumbai region has been shifted to the Gujarat
belt leaving a small number in this region. Notwithstanding that we can see a considerable amount of
money lent to this industry.
The exposure of Mumbai circle in the textile industry is `1041 Crores/- vis-à-vis `33249 Crores/- of SBI
India. This comes to around 4.53% & 4.32% respectively of the total outstanding. Off late the textile
industry has been facing problems for servicing their debts and had knocked the doors of the banks for
debt restructuring. Caution needs to be taken henceforth before lending.
The leather industry is hardly being lent both in Mumbai Circle and SBI India the reason can be attributed
to the unorganized structure of the market. The exposure is around `22 Crores/- in Mumbai Circle and
`1946 Crores/- in SBI India.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
LEATHER TEXTILE
Mumbai Circle
SBI India
0.9%
0.6%0.7%
3.7%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
LEATHER TEXTILE
Mumbai Circle
SBI India

49 | P a g e
The percent of NPA to exposure is higher for SBI India in textile and lower in Leather as compared to
Mumbai Circle. But the total NPA level is higher for SBI India showing the performance of Mumbai Circle
better than SBI India.
LEATHER
B
The Exposure of Mumbai circle is less but its NPA levels
are high as compared to SBI India
TEXTILE
A+ + The level of NPA's of Mumbai Circle is negligible and
the Exposure is more as compared to SBI India

50 | P a g e
The Chemicals Industry comprise of Paper and Pharmaceuticals industry.
Paper:
The Centre of production is mainly located in the western region and northern region which also
accounts nearly two-thirds of the total consumption followed by the southern region .Hence there is a
great scope for Mumbai circle in this region to lend and it can been clearly seen from the graph that
around 1% of the total exposure is in paper industry as compared to 0.38% of total exposure of SBI India.
The credit lent in absolute terms is around `245 Crores/- in Mumbai Circle and `2805 Crores/- in SBI
India as on 31st
March 2011.
Pharmaceutical:
There are some Big players present in this Industry viz Dr. Reddys, Ranbaxy, Novartis, Sun Pharma, etc.,
nevertheless the Pharmaceutical Industry is highly fragmented with Abbott enjoying the highest market
share of 6.1%. Also there is perfect competition as they call it in economics with many local players
competing for every pie of market share. The Mumbai circle has lent a share of 0.9% which comes to
`207 Crores/- as compared to 1.08% summing to `. 8350 Crores/- of SBI India’s `770257 Crores/-
exposure.
1.06%
0.90%
0.38%
1.08%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
PAPER PHARMA
Mumbai Circle
SBI India

51 | P a g e
The NPA figures for SBI India in paper industry is very high at `439 Crores/- compared to Mumbai circle’s
`6 Crores/- The Pharma Industry has more or less the percent of NPAs for both Mumbai circle and SBI
India but when compared in absolute terms SBI India has an NPA of `145 Crores/- and Mumbai Circle
`2.88 Crores/-.
PAPER
A+ + The Exposure of Mumbai Circle is 3 times of SBI India
and also the level of NPA's is less
PHARMACEUTICALS
A
The Exposure of Mumbai Circle is less than of SBI India
but the level of NPA's is less on comparative basis
2.6%
1.4%
15.0%
1.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
PAPER PHARMA
Mumbai Circle
SBI India

52 | P a g e
The petrochemicals Industry is slowly and steadily increasing its footprints in India. With RIL’s Largest
refinery in Jamnagar and foreign players like Cairn entering India for exploration and refining has showed
a great prospect for this industry in India.
Albeit great prospects for this industry not much lending can be seen in Mumbai circle and at SBI India
level. A sum of `70 Crores/- and `966 Crores/- respectively is outstanding as on 31st
March 2011.
The NPA of SBI India is considerably high with 2.17% of the total exposure in this industry being NPA
whereas the NPA of SBI Mumbai circle is as low as 0.03% which is very good indeed.
PETROCHEMICALS
A+ The NPA of SBI India is very high on a comparative basis and exposure is also
not that high in comparison to Mumbai Circle
0.00%
0.10%
0.20%
0.30%
0.40%
PETROCHEM
Mumbai
Circle
SBI India
0.03%
2.17%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
PETROCHEM
Mumbai Circle
SBI India

53 | P a g e
The Construction and allied industry consists of cement, ceramic, glass and construction industry.
The constructions Industry consists of Real Estate, Industrial construction, Infrastructure etc. Cement,
ceramic and glass are correlated to the construction Industry.
Construction:
The size of construction industry is nearly 10% of India’s GDP. Infrastructure development is essential for
the development of the economy. It is a Capital and Working Capital intensive industry. The operating
profit margin of this industry is around 20%. The construction industry is considered to have a DOMINO
effect on steel, cement, ceramic etc. thereby giving a fillip to the Indian Economy. For the past two
decades the government is keen on promoting Infrastructure development by initiating various policies
conducive to the same for e.g. Government has extended tax benefits for investing in NHAI bonds. The
main reason for such initiatives is that Infrastructure projects normally have a long gestation period
which makes it less lucrative as an Investment destination.
The construction portfolio of Mumbai circle consists majorly of Infrastructure advances which comes to
around `2150 Crores/ making it 9% of the total exposure while SBI India has a considerably less percent
of exposure to the total exposure which is 0.78%, summing it to `6024 Crores/-.
Cement:
Cement is a low value and high volume commodity. The cement industry’s growth depends on four
major sectors: Housing, Infrastructure, Commercial construction and Industrial segments. They are the
major demand drivers for cement. The Western region has the high intensity of consumption in India.
This makes a case for the industries to have their facilities in western region from a cost benefit point of
view.
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
Mumbai Circle
SBI India

54 | P a g e
The National Banking Group (NBG) which comprise of the 14 circles has 18% of the total exposure in this
Industry. In June 2012 cement major players were fined a penalty of 50% of their FY-10 profits by the
Competition Commission of India (CCI) for cartelization.
The Mumbai circle has an exposure of `32 Crores/- which accounts to 0.14% of the total exposure and
SBI India has an exposure of `4163 Crores/- which is 0.54% of the total exposure.
Ceramics:
The Mumbai circle has an exposure of 0.17% which amounts to `38 Crores/- and SBI India has an
exposure of `1913 Crores/- making it 0.25% of total outstanding.
Glass:
Glass is considered to be Eco friendly unlike plastic and other materials which are ecologically toxic.
There are two types of glass: Float glass and Flat glass. The one unique feature of this industry is that all
the raw materials are available indigenously. The major players in this industry are Asahi India among the
domestic players and Saint Gobain among the International players. The Mumbai circle has an exposure
of `184 Crores/- which is 0.8% of the total outstanding of SBI India has `1150 Crores/- of exposure
tuning to around 0.15% of the total outstanding.
Cement: The Cement Industry has a very negligible NPA as far as the Mumbai circle is concerned and the
SBI India has an amount of `10 Crores/- which is 0.29% of the total outstanding as on 31st
march 2011.
Ceramic: Ceramic also has a very less amount of NPA as far as Mumbai Circle is concerned but SBI India’s
NPA is quite substantial to 2.30% of the total outstanding which comes to `44 Crores/-.
0.05% 0.04%
0.39%
0.01%
2.69%
0.29%
2.30%
0.95%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
Mumbai Circle
SBI India

55 | P a g e
Construction: The Mumbai circle has outperformed SBI India both in terms of percent of total lending
and percent of NPAs to the total outstanding. The NPA of SBI India is 2.69% which comes to `162
Crores/- and Mumbai circle’s NPA is `1 crore only.
Glass: The NPA in the glass industry is quiet less in absolute terms as well as relatively. The SBI India’s
NPA amounts to `11 Crores/- and Mumbai circle `2 Lakhs/- only.
CEMENT
A
The Exposure of Mumbai Circle is less than of SBI India but the level of NPA's
is less on comparative basis
CERAMIC
A+ + The exposure both Mumbai circle and SBI India is almost same but the level of
NPA's of Mumbai Circle is very less.
CONSTRUCTION A+ +
Both the Exposure and the level of NPA's of Mumbai Circle are better.
GLASS A+
the level of NPA's of SBI India is high even though the level of exposure is less

56 | P a g e
The Metal and Coal Industry comprises of Aluminium, Iron & Steel and Coal Industry. The coal is the main
raw material for almost everything. Hence proper supply of coal in the economy is very important.
Aluminium and Iron & Steel are very important for Industrial growth.
Coal:
The Public sector unit Coal India Limited (CIL) supplies 80% of the coal requirements in the country. The
percentage exposure of coal is very less as a percentage of total exposure of the industry. Both Mumbai
and SBI India have a similar percentage exposure.
Iron& Steel:
Iron and steel industries are known as the heavy industries, and are vital for the growth of the country
and its economy. Giving credit to this sector indirectly means giving credit to growth. The exposure of
Mumbai Circle is higher to SBI India which is almost 10% whereas of SBI India is 5%.
Aluminium:
India is net importer of Aluminium and net exporter of bauxite, because of the high cost of converting
bauxite into aluminium. The exposure of SBI India is around 1% and of Mumbai Circle is about 0.5%
which shows a very low exposure taken by both.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
ALUMINIUM IRON & STEEL COAL
Mumbai Circle
SBI India

57 | P a g e
Percent of Non Performing Asset to the total exposure in the Industry.:
Aluminium:
The amount of NPA’s of both is proportional to the amount of exposure they have in aluminium industry.
This signifies that both SBI India and Mumbai Circle are almost on par in the industry.
Iron & Steel:
The percentage of NPA’s for SBI India is very high as compared to Mumbai Circle and also when
compared to the percentage exposure it has in the industry. This shows that the performance of Mumbai
Circle is better than SBI India.
Coal:
The NPA level of Mumbai circle is very low as compared to SBI India. Mumbai Circle has just 0.7% NPA’s
of total exposure of Mumbai circle and SBI India has 10% NPA’s. This give a clear idea about that the
advances given in Mumbai Circle are better compared to the SBI India.
ALUMINIUM
B
As compared to the proportionate level of exposure the NPA
level of SBI India is less than Mumbai Circle.
IRON & STEEL A+ +
The NPA level of Mumbai circle is very low.
COAL
A+ + The NPA level of SBI India is very high to the proportion of
exposure.
0.3% 0.1%
0.7%0.9%
3.7%
10.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
ALUMINIUM IRON & STEEL COAL
Mumbai Circle
SBI India

58 | P a g e
The consumer durables & Jewellery Industry comprise Diamond, Gems & Jewellery and Electronics
Industry.
The trend in these industries represents the spending power of the populace.
Diamond:
Indians are culturally and traditionally attached to gold than diamonds but this trend is slowly changing
with the young working generations opting for diamond. This industry is seeing a rise in the recent times.
But India is the largest industry for diamond cutting and processing and is mainly concentrated in
Gujarat. Hence mumbai circle is not having much of exposure in this segment.It only has an exposure of
`26 Crores/- i.e 0.12% of the total exposure. while SBI India has an exposure of `3723 Crores/-
Gems & Jewellery:
India is the highest consumer of Gold in the world and highest importer as well. It is the sentiments that
drives demand for gold in India. This industry requires more of working capital support.The exposure in
Mumbai circle for gems & jewellery is quite a good percent which comes to around 2.4% of the total
outstanding and SBI India it is around 0.63%.
Electronics:
The Electronics Industry includes consumer durables like Television, Washing Machine , Refrigerator, Air
Conditioners etc.The exposure to the manufacturers of the products in Mumbai circle and SBI India is
less than 1%.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
Mumbai Circle
SBI India

59 | P a g e
Gems & Jewellery: The NPA of SBI India which is 3.03% is very high as compared to Mumbai circle’s
0.11%.
Electronics: The Mumbai circle is a bad performer of the Electronics segment when compared to SBI
India. It comparatively has a lesser exposure in terms of percentage outstanding but still has a higher
percent of NPAs.
DIAMOND
B
The exposure of SBI India is high compared to Mumbai Circle,
the NPAs being nil for both.
ELECTRONIC
B+ + The exposure of Mumbai circle is less but the NPA levels are
very high.
GEMS & JEWELLERY
A+ + The exposure of Mumbai Circle is 3 times of SBI India in
percent terms but the NPA levels are very low.
0.0%
12.2%
0.1%0.0%
2.0%
3.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
DIAMOND ELECTRONIC GEMS & JEWELLERY
Mumbai Circle
SBI India

60 | P a g e
The Automobile Industry comprises of Automobile and Tyre industry.
The performance of Automobile Industry is linked to the prices of petroleum products and has an inverse
relationship with the price of petroleum products. With the recent deregulation of petrol prices and an
increase in the prices of petrol there has been an untoward demand for diesel vehicles. The National
Banking Group has only 1% of the total amount lent to the industry. Majority of the exposure is in CAG
which is around 69%.The tyre industry is directly linked to the automobile industry. It has been noted
that the current organizations are working on a 100% capacity level. Hence to increase their capacity
they will have to go for expansion, an opportunity which the bank should try to exploit considering the
other factors as well.
Automobile:
SBI India has a 1% of the total exposure in the automobile industry whereas the Mumbai circle has only
0.12% of the total exposure. As the automobile industry is a High Capital Intensive industry Mumbai
circle which comes under NBG has got a little to deal with it.
Tyre:
The amount of exposure in tyre industry is very less both in Mumbai circle and in SBI India. It is only
0.06% of the total exposure for both of them. Hence there is a great scope of increasing exposure in the
tyre sector which would help the Bank in diversifying their portfolio.
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
AUTOMOBILE TYRE
Mumbai Circle
SBI India

61 | P a g e
The NPA’s in this industry is high as far as SBI India is concerned but Mumbai circle has a negligible
amount of NPA under its exposure. Automobile industry has 1.92% of NPA in SBI India and 1.23% in Tyre
industry.
AUTOMOBILE
A
Percentage of NPA level of Mumbai Circle is a bit better
than SBI India.
TYRE
A+ Percent of Exposure is same but the NPA level of
Mumbai circle is better than SBI India.
0.04% 0.00%
1.92%
1.23%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
AUTOMOBILE TYRE
Mumbai Circle
SBI India

62 | P a g e
The services sector has seen the highest growth in the past decade. It has taken the baton from the
primary and secondary sector to take the economy to its new highs. Education is considered to be a
prerequisite for any economy to have a sustainable growth hence should be given importance but at the
same time Institutes which are sham should be watched out for.
Hospital tourism is being seen as a lucrative industry as there is a great demand abroad for Indian
medical treatment because of its affordability.
Hotel Industry is cyclical in nature with the boom in the economy it gets a boost and with a recession it is
affected.
Education: Indian Education Industry is considered to be the third largest in the world. It is poised to
grow even more with an increase in the population in the age bracket of 20-25 years. Public spending at
around 3.5% of the country’s GDP. A point that needs to be noted is that the NBG has an exposure of
74% in this sector out of which Mumbai circle has around 8% of exposure. The overall exposure of
Mumbai circle is 1.11% of the total and SBI India has 0.44% exposure.
Hospital: The Mumbai circle has an exposure of 0.65% which sums up to `150 Crores/- and SBI India has
an exposure of `2000 Crores/-. This makes it 0.27% of the total outstanding.
Hotel: The Hotel industry in Mumbai circle has a net credit of `326 Crores/- and SBI India has `5600
Crores/- as on 31st
March 2011 which comes to a 1.40% of the Mumbai circle’s total exposure and 0.70%
of SBI India’s total exposure.
0.00%
0.50%
1.00%
1.50%
EDUCATION HOSPITAL HOTEL
Mumbai Circle
SBI India

63 | P a g e
SBI India has a considerable amount of NPA in all the sectors mentioned above. Highest being 5.01% in
the Education sector and the Mumbai circle has a very negligible amount of NPA.SBI India has NPA of
4.54% in the hospital sector of the total exposure in Hospital industry and the Mumbai circle has 0.82%
only.
The Hotel Industry is also having an NPA of 2.40% in SBI India and this is one sector where the Mumbai
circle is having an NPA exceeding 1% in this industry.
EDUCATION
A+ + The NPA level of Mumbai circle is considerably low in
comparison to SBI India.
HOSPITAL A+
NPA of Mumbai Circle is less and its exposure is high.
HOTEL A SBI India's exposure is low and NPA level is high.
0.2%
0.8%
1.6%
5.0%
4.5%
2.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
EDUCATION HOSPITAL HOTEL
Mumbai Circle
SBI India

64 | P a g e
Information Technology is the Industry which has provided a great fillip to the Indian Economy. It is this
sector which provides huge employment to people in India. This sector saw a boom from the 90’s and
sustained till the 2008 sub-prime crises. The IT companies are generally cash rich companies. For E.g.
Infosys is a debt free company. Hence their dependence on banks is comparatively less.
The Mumbai circle exposure in IT industry which is just less than 1% is higher than the SBI India exposure
of around0.47% on a comparative basis. The absolute figure is `207 Crores/- and `3592 Crores/- of SBI
India.
In terms of the asset held Mumbai circle has a fair amount of good asset than SBI India. The NPA of
Mumbai Circle is 0.1% of the exposure and SBI India holds 12.6% of the exposure as NPA.
INFORMATION
TECHNOLOGY
A+ + Exposure of Mumbai circle is high but the NPA is considerably very low
when compared to SBI India
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
INFORMATION TECHNOLOGY
Mumbai Circle
SBI India
0.1%
12.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
INFORMATION
TECHNOLOGY
Mumbai Circle
SBI India

65 | P a g e
In order for an economy to grow the Power Industry plays a very important role. The vision of Indian
Government to supply electricity to every household makes this industry very lucrative to invest in. But
this Industry is very much in a regulated environment. The Power Generating Company and Distribution
Cos are not able to pass on the raising costs to the consumer which is hampering their bottom line.
Power cable:
There is hardly any exposure by the bank in power cable manufacturing Industry both at Mumbai circle
and SBI India level. An amount of `64 Crores/- and `1371 Crores/- respectively.
Power:
Various private sector players have entered into Distribution business like Reliance ADAG group, TATA
Group etc. The exposure of Mumbai circle is 0.67% of Total exposure and 4.42% of SBI India.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
POWER CABL POWER
Power
Mumbai Circle
SBI India

66 | P a g e
The NPA level in Power cable is high for SBI India even when exposure to the same is not very much. The
NPA levels are not very much in power sector for both Mumbai Circle and for SBI India too. It is a mere
0.03% and 0.10% for SBI India and Mumbai Circle respectively.
POWER CABLE
A+ Exposure is same for both but NPA levels of Mumbai circle is
low when compared to SBI India.
POWER
B NPA level is almost same for both of them but the exposure of
Mumbai circle is less than SBI India.
0.18%
0.03%
1.09%
0.10%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
POWER CABL POWER
Mumbai Circle
SBI India

67 | P a g e
Performance review of Mumbai
circle: Year–on-Year.
We have analyzed the year on year(Y-O-Y) changes in the Mumbai circle only in the major industries
namely:
 IRON & STEEL
 CONSTRUCTION
 CERAMIC
 PAPER
 PHARMACEUTICALS
 PETROCHEMICALS
 DIAMOND
 TEXTILE
 ELECTRONICS
The analysis done here mainly focuses on the Y-O-Y increase/decrease in exposure and NPA’s from 2010-
11 to 2011-12 and also the movement in the internal ratings which is given by the bank to each account.
The word ‘movement’ above indicates the change of ratings or the additions/ deletions of the individual
accounts from one cluster to the other.
There are in all 17 ratings starting from SB 1 to SB 16 and one UNRATED column. The SB 1 rating to an
account indicates safest & soundest account and the extent of safeness and soundness decreasing as the
rating increases up to SB 16. UNRATED group includes accounts not rated, accounts with wrong code,
ratings not applicable. For the purpose of simplification and to have a holistic view we have clustered the
accounts as per the Bank’s CRMD report.

68 | P a g e
The exposure of Mumbai circle has increased from Rs. 23012 Crores/- in 2010-11 to Rs. 31427 Crores/-in
2011-12 ,an increase of 36.5% Y-O-Y and Rs. 8415 Crores/- in absolute terms.
The NPA levels have increased to two and a half times that of 2010-11. The NPA’s have increased by
Rs.451 Crores/- but an interesting thing to note is that the number of account haven’t increased to that
extent.
Industry wise Exposure:
Year 2010-11 2011-12
INDUSTRY
Exposure
(` in Crores)
Percent of
Total Exposure
Exposure
(` in Crores)
Percent of
Total Exposure Growth
IRON & STEEL 2220.64 9.6% 2474.62 7.9% 11%
CONSTRUCTION 2150.48 9.3% 1636.22 5.2% -24%
CERAMIC 38.50 0.2% 40.65 0.1% 6%
PAPER 245.07 1.1% 281.67 0.9% 15%
PHARMACEUTICALS 207.97 0.9% 217.45 0.7% 5%
PETROCHEMICALS 70.80 0.3% 312.97 1.0% 342%
DIAMOND 26.88 0.1% 17.77 0.1% -34%
TEXTILE 1041.53 4.5% 1386.28 4.4% 33%
ELECTRONICS 31.25 0.1% 20.11 0.1% -36%
Industry wise Non-Performing Assets (NPAs):
Year 2010-11 2011-12
INDUSTRY
NPA
(` in Crores)
Percent of
Exposure
NPA
(` in Crores)
Percent of
Exposure
Percent
Increase in NPA
IRON & STEEL 1.17 0.1% 30.47 1% 2495%
CONSTRUCTION 1.16 0.1% 28.92 2% 2401%
CERAMIC 0.15 0.4% 12.94 32% 8501%
PAPER 6.43 2.6% 25.48 9% 296%
PHARMACEUTICALS 2.88 1.4% 25.86 12% 797%
PETROCHEMICALS 0.02 0.0% 8.11 3% 44765%
DIAMOND 0.00 0.0% 5.27 30%
TEXTILE 6.22 0.6% 17.92 1% 188%
ELECTRONICS 3.82 12.2% 4.26 21% 12%
From the above tables we can analyze that the growth in exposure of bank in construction industry is
negative (i.e. -23%). The exposure has decreased from Rs.2150 Crores/-in 2010-11 to Rs.1636 Crores /-in
2011-12, a decline of Rs.514 Crores/-. The industry’s exposure to the total exposure (which includes all
the accounts in which Mumbai circle has exposure) of Mumbai Circle has reduced to 5.21% from 9.34%
in 2011- 12.It needs to be noted that not only the exposure has reduced by 23% but also the NPA levels

69 | P a g e
have increased to a huge extent from Rs.1.16 Crores/- in 2010-11 to Rs.28.92 Crores in 2011-12. This is
almost a 24 times increase in NPA levels from 2010-11.
The related industries like Iron & Steel, Ceramic, and Cement etc also show a similar trend. The Iron &
Steel industry showed a slow growth in exposure of about 11% from Rs.2220 Crores/- to Rs.2474
Crores/-. Even though the industry has shown some growth on a Y-O-Y basis the exposure as a
percentage of total exposure is reduced to 7.87% from 9.65%.The NPA levels has mounted from Rs.1.17
Crores/-in 2010-11 to Rs.30.47 Crores/- in 2011-12. Similarly the Ceramic industry grew by 6% but its
NPA’s grew from Rs.0.15 Crores/- to Rs.12.94 Crores/-.
The chemical industry which includes Paper and Pharmaceuticals industry has increased outstanding
and increased NPA levels. The Bank’s exposure in Paper industry grew at around 15% to Rs.282 Crores/-
and Pharmaceuticals industry at 5% to Rs.217 Crores/-. Pharmaceuticals industries had an NPA level of
Rs.2.88 Crores/- and Rs. 6.43 Crores/- in Paper industry in 2010-11 but both Paper and Pharmaceuticals
industry had NPA’s had grown to Rs.25 Crores/- in 2011-12.
The exposure of petrochemicals has more than quadrupled in one year from Rs. 70 Crores/- in 2010-11
to Rs.313 Crores/- in 2011-12. Also the petrochemicals exposure as a percentage of the total exposure of
Mumbai circle has increased from 0.3% to 1% in 2011-12. The NPA levels have increased drastically to
Rs.8.11 Crores/- in 2011-12 from a mere Rs. 2 Lakhs/- in 2010-11
The percent increase in Bank’s Exposure in Textile industry is the second highest amongst the industries
charted above, with a growth rate of 33% from 2010-11 to 2011-12. The exposure in textile industry
grew from Rs.1041 Crores/- to Rs.1368 Crores/-, and increase of Rs.345 Crores/- but its NPA levels
increased by twice the amount in 2010-11 from Rs.6.22 Crores/- to Rs. 17.92 Crores/- 2011-12.
The diamond industry has seen a downward trend in exposure but increase in NPA levels of the industry.
The exposure has decreased from Rs.26.88 Crores in 2010-11 to Rs.17.77 Crores/- in 2011-12 with a
decrease of 34% .The NPA levels have increased from nil in 2010-11 to Rs.5.27 Crores/-.
The electronic industry decreased its exposure in monetary terms but electronics industry’s exposure as
the percent of total Mumbai circle has remained unchanged. The NPA levels have also seen a small
increase of 12% with increase in the NPA percent of the exposure of that industry.

70 | P a g e
An analysis of changes in internal ratings, which is given by the bank to each and every account, has been
presented. The analysis consists of tracking the movement of the ratings from one cluster to the other,
along with the Y-O-Y increase or decrease in the number of accounts and amount outstanding of every
industry.
2010-11 2011-12
INDUSTRY
SBI Ratings
No of
Accounts
Exposure
(` in Crores)
No of
Accounts
Exposure
(` in Crores)
Growth in
Exposure
CERAMIC
SB 1 TO 2 1 0.05 0 0.00 -100%
SB 3 to 5 7 4.79 4 3.24 -32%
SB 6 TO 7 4 5.57 4 1.20 -79%
SB 8 TO 10 2 9.36 3 12.85 37%
SB 11 TO 15 0 0.00 0 0.00 0.00
UNRATED 98 18.73 100 23.36 25%
TOTAL 112 38.50 111 40.65 6%
CONSTRUCTION
SB 1 TO 2 43 45.91 13 490.24 968%
SB 3 to 5 86 1434.27 92 277.29 -81%
SB 6 TO 7 53 269.71 66 228.15 -15%
SB 8 TO 10 33 114.67 52 374.13 226%
SB 11 TO 15 0 0.00 0 0.00 0.00
UNRATED 209 285.92 110 266.41 -7%
TOTAL 424 2150.48 333 1636.22 -24%
IRON & STEEL
SB 1 TO 2 52 222.47 33 44.07 -80%
SB 3 to 5 119 789.93 105 498.28 -37%
SB 6 TO 7 85 247.68 91 383.90 55%
SB 8 TO 10 64 168.12 71 459.22 173%
SB 11 TO 15 1 4.93 0 0.00 -100%
SB 16 (NPA's) 1 0.05 0 0.00 -100%
UNRATED 479 787.45 345 1089.15 38%
TOTAL 801 2220.64 645 2474.62 11%
The total exposure in ceramic industry in the Mumbai circle has increased by 6%. We can see a
movement in the ratings, the exposure in the first three groups of ratings (SB1 to SB7) has decreased
drastically and the exposure in last three has increased.
The construction industry has seen an overall decrease in exposure. The exposure in the group of SB 1 to
2 has increased by almost 9 times and SB 8 to 10 it has increased around 2 times mainly and in other all
group it has decreased. This increase in the accounts rating should be looked at with the NPA’s increase
in the financial year.

71 | P a g e
The Iron & Steel industry on the whole has seen small increase in the exposure but the exposure in the
top rating group of SB 1 to 2 and 3 to 5 have come down radically in the Mumbai circle. But its exposure
has increased in the mid group of SB 6 to 7 and 8 to 10.
2010-11 2011-12
INDUSTRY
SBI Ratings
No of
Accounts
NPA
(` in Crores)
No of
Accounts
NPA
(` in Crores)
CERAMIC
SB 1 TO 2 0 0.00 0 0.00
SB 3 to 5 0 0.00 0 0.00
SB 6 TO 7 0 0.00 0 0.00
SB 8 TO 10 0 0.00 2 12.61
SB 11 TO 15 0 0.00 0 0.00
UNRATED 14 0.15 17 0.32
TOTAL 14 0.15 19 12.94
CONSTRUCTION
SB 1 TO 2 0 0.00 0 0.00
SB 3 to 5 0 0.00 2 6.17
SB 6 TO 7 0 0.00 1 18.38
SB 8 TO 10 0 0.00 1 3.37
SB 11 TO 15 0 0.00 0 0.00
UNRATED 18 1.16 8 0.99
TOTAL 18 1.16 12 28.92
IRON & STEEL
SB 1 TO 2 0 0.00 2 1.24
SB 3 to 5 2 0.40 7 11.80
SB 6 TO 7 1 0.22 3 0.75
SB 8 TO 10 0 0.00 1 7.87
SB 11 TO 15 0 0.00 0 0.00
SB 16 (NPA's) 1 0.05 0 0.00
UNRATED 28 0.51 26 8.82
TOTAL 32 1.17 39 30.47
The NPA level has increased in the ceramic industry and mainly in the SB 8 to 10 rating the group which
saw the highest increase in the exposure. This group almost accounts for 97% of the total NPA’s of the
industry.
In the construction industry the NPA levels have increased in SB 3 to 5, 6 to 7 and 8 to 10 groups. With
the major chunk in SB 6 to 7 groups accounting to 64% of the total NPA’s in construction industry.
In the Iron & Steel industry the NPA’s can be seen in the SB 3 to 5 cluster. Mainly even thought the
group saw 37% decrease in the exposure. The other NPA’s in the industry are in the SB 8 to 10 and
UNRATED and small amount also in SB 1 to 2 cluster.

72 | P a g e
2010-11 2011-12
INDUSTRY
SBI Ratings
No of
Accounts
Exposure
(` in Crores)
No of
Accounts
Exposure
(` in Crores)
Growth
in
Exposure
PAPER
SB 1 TO 2 21 36.99 11 16.30 -56%
SB 3 to 5 49 39.39 39 27.95 -29%
SB 6 TO 7 61 93.77 54 100.32 7%
SB 8 TO 10 47 46.56 51 108.96 134%
SB 11 TO 15 1 2.83 1 2.71 -4%
SB 16 (NPA's) 1 0.48 0 0.00 -100%
UNRATED 269 25.05 252 25.43 1%
TOTAL 449 245.07 408 281.67 15%
PETROCHEMICALS
SB 1 TO 2 15 3.97 7 1.20 -70%
SB 3 to 5 16 5.17 14 13.60 163%
SB 6 TO 7 17 15.54 24 43.92 183%
SB 8 TO 10 12 23.62 7 38.72 64%
SB 11 TO 15 55 22.49 0.00 0.00 -100%
UNRATED 0.00 0.00 38 215.53 -
TOTAL 115 70.80 90 312.97 342%
PHARMACEUTICALS
SB 1 TO 2 14 14.74 5 5.77 -61%
SB 3 to 5 29 16.99 35 55.84 229%
SB 6 TO 7 29 86.70 40 97.76 13%
SB 8 TO 10 37 69.27 26 30.62 -56%
SB 11 TO 15 2 6.79 0 0.00 -100%
UNRATED 72 13.48 63 27.44 104%
TOTAL 183 207.97 169 217.45 5%
There is not much increase in the exposure of paper Industry but a decrease in the exposure in the top
rating group and an increase in the SB 8 to 10 cluster can be seen, which increased to more than the
double. SB 8 to 10 cluster contributes to about 40% of the exposure of the industry.
The overall exposure of Petrochemicals industry more than quadrupled from 2010-11 to 2011-12. The
exposure grew in SB 3 to 5 and 6 to 7 cluster. But the major increase was in the UNRATED group which
contributes about 70% of the total petrochemicals industry exposure.
The Pharmaceuticals industry didn’t see much of increase in the exposure, but the exposure in the SB 3
to 5 and UNRATED cluster saw a huge increase where as the other clusters had mainly a downfall in
exposure.

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