Final Banking[1]


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Final Banking[1]

  1. 1. Presented by – Kunal Kurani PG-06-85 Mythili Venugopal PG-06-88 Ambarish Waghmare PG-06-120 Banking
  2. 2. A Bank is Financial Institution Licensed to deal with money & substitutes Accepts deposits & lends money Provides services for profit Supervised by the Central Bank
  3. 3. Key Terms <ul><li>Net Interest Income </li></ul><ul><ul><li>The difference between the revenues on the assets and the cost of servicing the liabilities. </li></ul></ul><ul><li>Net Interest Margin </li></ul><ul><ul><li>The difference between interest income and interest expenses, divided by average earning assets. </li></ul></ul><ul><li>Non Performing Assets </li></ul><ul><ul><li>Loans on which repayments or interest payments are not being made on time. </li></ul></ul>
  4. 4. Key Terms Contd… <ul><li>Cash Reserve Ratio </li></ul><ul><ul><li>CRR requirement is a bank regulation that sets the minimum reserves each bank must hold with RBI </li></ul></ul><ul><li>Statutory Liquidity Ratio </li></ul><ul><ul><li>It is the amount which a bank has to maintain in the form of cash, gold or approved securities. The quantum is specified as some percentage of the total demand and time liabilities of a bank. </li></ul></ul><ul><li>Capital Adequacy Ratio </li></ul><ul><ul><li>Ratio which determines the capacity of the bank in terms of meeting the time liabilities and other risk such as credit risk, operational risk, etc. </li></ul></ul>
  5. 5. Parameters for evaluation Growth Valuation Size Safety Efficiency Profitability BANKS
  6. 6. Parameters <ul><li>Profitability </li></ul><ul><ul><li>Net Interest Margin </li></ul></ul><ul><ul><li>Net Profit </li></ul></ul><ul><li>Efficiency </li></ul><ul><ul><li>Return on Average Assets </li></ul></ul><ul><ul><li>Profit Per Employee </li></ul></ul><ul><li>Safety </li></ul><ul><ul><li>Net NPA to net Advances </li></ul></ul><ul><ul><li>Capital Adequacy Ratio </li></ul></ul>
  7. 7. Parameters <ul><li>Size </li></ul><ul><ul><li>Assets </li></ul></ul><ul><ul><li>Income </li></ul></ul><ul><li>Valuation </li></ul><ul><ul><li>PE Multiple </li></ul></ul><ul><ul><li>Price to Book Value </li></ul></ul><ul><li>Growth </li></ul><ul><ul><li>Net Interest Income </li></ul></ul><ul><ul><li>Net Profit </li></ul></ul>
  8. 8. 254584.00 470868.00 Net Interest Income 29.20 times 24.90 times PE Multiple 12.8 % 13.37 % Capital Adequacy Ratio 1.71 % 0.71 % NPA 72.61 % 322.15 % Net Interest Margin 8.50% 9.50% Rate of Interest HDFC Bank ICICI Bank  
  9. 9. D F I Commercial Banks N B F C
  10. 10. Universal Banking
  11. 11. Universal Banking <ul><li>A one stop financial supermarket </li></ul><ul><li>An institution that includes investment banking, insurance, etc. apart from traditional banking services. </li></ul>
  12. 12. Universal Banking Traditional Services Investment Banking Commercial Banking Financial Products
  13. 13. Why Universal banking…..??? <ul><li>Maximisation of profits </li></ul><ul><li>Sustain the growing competition from global players </li></ul><ul><li>Retaining customers </li></ul>
  14. 14. Merits <ul><li>Economies of scale & scope </li></ul><ul><li>Lower risk of substitution </li></ul><ul><li>Industrial development </li></ul><ul><li>Globalisation </li></ul>
  15. 15. Limitations <ul><li>Complex supervision </li></ul><ul><li>Holding large block of stocks – influence national interest </li></ul>
  16. 16. ICICI ICICI Bank Subsidiary Long Term financing as per sectoral needs Short Term financing fulfilling Working Capital needs Narasimham Committee II ICICI ICICI Bank
  17. 17. ICICI BANK Personal Banking NRI Banking Corporate Banking Cards / Loans Insurance Demat Services Investments Money Transfer Investments Property Solutions Cash Management Trade Services Corporate Net banking
  18. 18. Happy Holi...