Summary of findings, Suggestions and Condusion

Transcription

1 Chapter- V Summary of findings, Suggestions and Condusion

2 CHAPTER - V SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION Commercial banks are considered as an important segment of the tertiary sector of our economy. They act as the back-bone of our economic growth and prosperity. The commercial banks play an all-persuasive role of a catalyst in development. The mobilisation and investment of resources along with the operational efficiency and discipline of different segments of the economy determine to a large extent, the pace of economic development of a country. Hence the present study is meant for the appraisal of performance of commercial banks with special reference to Karur Vysya Bank. The present study covers a period of five financial years from to The major findings of the study are as follows. 104

3 FINDINGS The Karur Vysya Bank has been in existence for the past 85 years. It has been rendering many services to its customers with value added and highly improved technology. The growth of a bank can be measured in terms of its branches. The Karur Vysya Bank has been taking aggressive steps for branch expansion. However more of the branches are in urban and semi urban areas. The mobilization of deposits by Karur Vysya Bank has been impressive. It has put its efforts to mobilize low cost deposits. It ended in the yielding of good results. The Karur Vysya Bank has been securing a position in the top five as ranked by the leading professional and financial journals and dailies. During the year , the Karur Vysya Bank became the highest profit making private sector bank with its record net profit. 105

4 > The Karur Vysya Bank has entered into tie-up with leading insurance companies, mutual fund and Software Company in connection with its expansion projects. > The mobilization of deposits by Karur Vysya Bank was rapid and good during the study period. The thrust for the mobilization of low cost deposits yielded results with the savings bank and demand deposits. > The advances made by the Karur Vysya Bank have achieved a remarkable growth during the study period. The bank has classified the advances as per prudential norms prescribed by the Reserve Bank of India. > The Karur Vysya Bank yield an income of Rs.648 crores in the year Soft interest rate regime and exercise of call options by issues in respect of non-slr bonds resulted in declining of average yield to investments. > Karur Vysya Bank has increased its owned funds to a greater extent by appropriating the profits through issue of bonus shares and right shares to the existing shareholders. 106

5 Through the operations, the Karur Vysya Bank has posted impressive operating profits during the study period. The Karur Vysya Bank follows the policy to maximize the wealth of the shareholders by rewarding them with fair returns on their investments, while retaining the balance of earnings for future growth of the bank and to strengthen the capital adequacy. Karur Vysya Bank is one of the very few banks in the banking sector, which has been declaring handsome dividends to its shareholders. The bank was ranked No.1 bank in the country, in terms of percentage of dividend declared in the year among the listed companies. The Karur Vysya Bank has improved its Capital Adequacy Ratio consistently over the minimum regulatory level of 9 percent. The Karur Vysya Bank has been taking steps to reduce the leased fixed assets. It reduced the leased fixed assets to 0.24 during the year On the other hand, Premises and other assets owned by the Bank has been increased. 107

6 > While comparing the interest income and other income, the former has showed a greater growth than the later. > In the case of expenditure of Karur Vysya Bank, both interest expenses and operating expenses had been growing in an equal proportion over the years during the study period. > With the increase in the volume of business and no corresponding increase in the number of employees, Business Per Employee has increased from Rs.2.88 crores to Rs.3.30 crores. > The net profit per employee has showed a remarkable growth during the study period. Since the owned funds have been increasing year after year, the net profit to owned funds did not correspond with the increase in the net profit. > Interest income to average working funds had a greater increase in the study period over the increase in the non-interest income to average working funds. 108

7 With the increase in the number of branches, the expenditure per branch has been increasing during the study period. The Karur Vysya Bank's endeavors towards the reduction of nonperforming assets were very good. During the study period, the steps taken by the Karur Vysya Bank gave favorable results to reduce the NPA' 109

8 SUGGESTIONS )> Based on the above findings, suitable suggestions are made hereunder for improving the operational efficiency of the Karur Vysya Bank. Risk is interest in any business, particularly in banking business. Hence there is a strong need for risk management policies. Since banks have to face number of risks such as Credit risk, Market risk and Operational risk etc., A Risk Management Department is to be established. Adequate training is to be imparted to the Executors and officers to obtain their skill in the management of risks. )=. In the quest for new business opportunities and to widen the clientele base and reach out to new markets, the bank ahs to expand further, the network of branches at important centers where business potential is high. 110

9 The banking industry is undergoing sea change from the earlier 'brick and mortar' banking to high tech e-banking'. The bank has to be alive to sweep changes that are taking place in the technological front. The bank has to computerize more number of its branches on even 100 percent computerization may be made within a year on two if possible. The bank has to reduce further the Non-performing assets in order to strengthen its financial position. 111

10 CONCLUSION This study has been purely empirical and it has attempted to cover three important aspects related to banking development with special reference to Karur Vysya Bank. But the experience shows that each aspect deserves a separate study when such elated variables as customer services, working results are taken into consideration. It seems reasonable that a comprehensive study of the baking system as a socio-economic institution and its development will be possible only when all the direct pressured and initiatives generating from the management of finances. 112