EMPLOYEES PERCEPTION ON THE FINANCIAL POSITION OF SCHEDULED COMMERCIAL BANKS IN INDIA

EMPLOYEES PERCEPTION ON THE FINANCIAL POSITION OF SCHEDULED COMMERCIAL BANKS IN INDIA Dr.PRIYA.P 1 SUDHAGAR.S 2 1 Head, Department of Commerce, Sri Krishna Adithya College of Arts and Science, Coimbatore 2 II B.COM, Sri Krishna Adithya College of Arts and Science, Coimbatore ABSTRACT India s banking sector is sufficiently capitalized and well-regulated. The financial and economic conditions in the country are far superior to any other country in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well. Indian banking industry has recently witnessed the roll out of innovative banking models like payments and small finance banks. Although the banks in India have come a long way, they still have a lot of catching up to do to reach international standards. The gap in service delivery standards, innovations in products and services, corporate governance standards, creation of structured financial solutions, etc. is still quite wide. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Thus maintaining continued viability and profitability can be considered as the greatest challenge before banks during this decade. KEYWORDS: Banking, Public Sector Banks, Private Sector Banks, Employees, Working Funds 1. INTRODUCTION As the crop of the 70s bid good bye, the banks have moved on to a fast paced recruitment spree to welcome the gen next. The banks cannot afford to be complacent while recruiting new set of employees as their recruitment decisions today would determine the performance of their respective organizations over the coming decades. They must use more statistical tools to foresee their manpower needs over the medium to long term and prepare themselves by better planning. Sound MIS should form the basis of all manpower planning decisions including recruitment, placement, performance management, etc. The gap in knowledge and work experience between the outgoing and incoming groups is, however, significant and the impact of this transition could be potentially disruptive. This gap needs to be filled by mentoring and coaching the new incumbents by senior executives. The transfer of knowledge from mentor to mentee should be fast. Moreover, the mentor need not be physically present with the mentees; they can be together with the help of technology, sitting at two different places. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. trust and the confidence of the people on the institution remain the same. Therefore, in the changing economic environment of competitiveness, efficiency and productivity, profits are not a taboo for the banking industry. Thus maintaining continued viability and profitability can be considered as the greatest challenge before banks during this decade. Against such a backdrop, the need for a systematic appraisal of the financial position of commercial banks operating in India can hardly be overemphasized. The majority of the banks are still successful in keeping with the confidence of the stakeholders includes creditors. However, with the changing dynamics of banking business brings new kind of risk exposure in financial statement. In www.icmrr.org 72 icmrrjournal@gmail.com

this regard, a new research study is made to assess the financial position with reference to employee s perception. 2. SOURCES OF DATA AND METHODOLOGY It is based on the information that is secondary in nature. The data required for the study are gathered from financial statements of various issues, reports and publications of Reserve Bank of India. More relevant information required for the research works are collected from the publications of RBI, various economic surveys by the Government of India, books and Journals. The other useful information and statistics to the study are collected from the websites of the selected banks. The study is analytical and descriptive in nature. The entire bank groups are considered for analysis and interpretation. Hence, all Public sector and Private sector banks existed during the study period was considered for the present study. It excludes the foreign banks operating in India. Hence purposive sample technique is adopted for complete enumeration of each and every unit of the universe. A total of State Bank of India and its subsidiaries, nationalized banks and private sector banks functioning in India are selected for the study which is in operation during the study period. However, due importance is attached in constituting the sampling design based on average return on equity. Based on that the top most five banks and lower most five banks in Public sector and Private sector banks are grouped for the purpose of the study. The collected data are grouped as given under and they are examined by applying various ratios based on employee s perception. TOP MOST FIVE BANKS LOWER MOST FIVE BANKS Public sector Private sector Public sector Private sector State Bank of Travancore City Union Bank Punjab and Sind Bank ING Vysya Bank Andhra Bank Karur Vysya Bank Dena Bank Dhanalakshmi Bank Indian Overseas Bank Jammu & Kashmir Bank United Bank of India Lakshmi Vilas Bank State Bank of Mysore HDFC Bank Indian Bank Indusind Bank State Bank of Hyderabad Catholic Syrian Bank Central Bank of India ICICI Bank The following tools were applied to assess the financial position of Scheduled Commercial Banks in India like Ratio Analysis, Correlation, Factor analysis, Growth Analysis, Trend analysis and Path analysis. 3. OBJECTIVES OF THE STUDY The following are the objectives of the study: i. To frame a design on the financial appraisal in relation to performance evaluation of scheduled commercial banks in India. ii. To assess the financial position of scheduled commercial banks in relation to employees. iii. To identify the direct and indirect effect of the selected variables on the profitability with reference to employees perception iv. To assess the funds management position of scheduled commercial banks in India; and v. To offer suitable suggestions for the improvement of financial performance of scheduled commercial banks in India. www.icmrr.org 73 icmrrjournal@gmail.com

PERIOD OF THE STUDY The present study attempts to evaluate the financial position of scheduled commercial banks in India over a ten years period covering 2007-2016. 4. LITERATURE REVIEW The review of the existing literature shows that research work has been carried out in India. The study is an important aspect in any research, through which one can understand past trends in research output in any particular discipline. Similarly research work has also been carried out on the profitability of banks and the determinants of profitability. The following passages summarise the existing readily available literature in those areas. The Banking Commission (1972), reviewed operating methods and procedures of the banks and made recommendations for improving and modernizing them. Special attention was on customer service, credit procedures and internal control systems. It suggested the use of certain ratios for measurement of operational efficiency of branches. Klein (1977) studied the impact of long range planning on profit and growth of commercial banks. The study indicates that bank size is an important variable affecting growth trends in commercial banks. Mathur, O.P. (1977), studied about the public sector banks in Indian economy by conducting a case study of the State Bank of India. The bank has also played a leading role in developing the backward regions of the country. Ganesh, K. (1979), in the paper on the system of profit monitoring in banks emphasized that the effectiveness of monitoring system would depend upon profit plan, identification of profit centres, setting of standards for comparison and a proper management information system. Nayan and Kamal (1982), suggested a model for evaluation of performance of commercial banks. The study led to the conclusions that the present system of ranking the banks on the basis of aggregate deposits fails to reflect their overall achievements, Joshi (1986), had analyzed the trend of gross and net profits of all scheduled commercial banks. The views for the declining demand from the corporate sector for bank funds had serious implications for bank profitability. Dr. Tapas Kumar Chakrabarthy (1986), in the paper on Profitability of Banks An empirical attempt for identification of variable of Income and Expenditure of scheduled commercial banks for profit planning, made a modest attempt to assess empirically the relative performance of each bank in the content of three variables viz., profit, earnings and expenses. Garg (1989), studied the main determinants of costs, profits and profitability of the banking sector and also observed the inter-group differentials of SBI and its subsidiaries, the nationalized banks, foreign banks and private sector banks. Ramachandran (1992), observed that profitability of banks is on the decline. In the paper, the author traced out in brief the causes for declining in profitability and suggests possible measures for arresting this trend. Ganesan (2001), examined the determinants of profitability of public sector banks in India by an empirical estimation of profit function model. It showed that interest cost, interest income, other income, deposit per branch, ratio of credit to total assets, share of priority sector in total advances and loss of interest income were the significant determinants of profits and profitability of Indian public sector banks. Ramachandran, A (2002), in Profits, Profitability and Growth of Commercial Banks, have analyzed some aspects of factors influencing total earning, total expenditure and profitability of Indian schedule commercial banks. The multivariate analyses of the profitability undertaken disclose the relationship among the earning factor and expenses factor on the profitability of banks which enriches the scope of the study. Naganathi, T (2007), in Profitability, Efficiency and Non-Performing Assets A critical analysis with reference to the State Bank of India and its Associates examined the trends in profitability, efficiency and non-performing assets of SBI & its associate banks considering interest, working funds, interest expense, gross profits, net profits, spread, etc., that the profitability is on an increasing trend. Kanjana, E.N Efficiency, Profitability and www.icmrr.org 74 icmrrjournal@gmail.com

Growth of Scheduled Commercial Banks in India tested whether the establishment expense being a major expense, out of total expense which is met by scheduled commercial banks is more due to excessive number of employees. In its empirical study, it was disclosed that the earning factor and expense factor which are controllable and non-controllable by the bank itself. Vaidyanathan.V, in An Empirical Evaluation of the Financial Performance of Scheduled Commercial Banks in India examined to assess the extent of variation in profits and profitability and present the progress of scheduled commercial banks in India. Ashok Kumar.M in his study examines how the financial performance of SBI group, Nationalized banks group, private banks group and foreign banks group has been affected by the financial deregulation of the economy. The main objective of the study is to assess the financial position of scheduled commercial banks in relation to employee s perception. 5. ANALYSIS AND INTERPRETATION The researcher has adopted the various techniques to find the various ratios which are the base for further observation and analysis. To validate the findings and strengthen the arguments the researcher has adopted statistical tools like Ratio Analysis, Correlation, Factor analysis, Growth Analysis, Trend analysis and Path analysis. The observed data are grouped under two categories of Top most banks, Lower most banks. Under the Employees analysis a total of nine variables are identified and adopted under the multivariate technique among that one is considered as independent variable. Ratios are calculated and grouped under Top and lower most Public and Private sector banks classification and presented for the study period. There are nine ratios at the bank level. The determined ratios are further used as a base for applying the various statistical tools and techniques. In the process of understanding the efficiency and profitability of the Commercial banks, the researcher has also attempted to test the various hypotheses framed in the study. Employees Analysis of commercial banks Employees banking proposition understands employers' requirements to provide and implement structured domestic and regional staff benefits. Financial statement ratios includes such as salaries & wages, Profit per employee etc. Employee s ratio is an important aspect to measure the financial position of the bank. E 1 Wage Bill to Total Income E 6 Operating Expenses to Total Income E 2 Wage Bill to Total Expenses E 7 Non-Interest Income to Working Funds E 3 Wage Bill to Intermediation costs E 8 Non-Operating Expenses to Working Funds E 4 Business per Employee E 9 Intermediation Cost to Working funds E 5 Profit per Employee 6. FINDINGS 6.1 Ratios The ratios are determined and presented in percentage to understand the factors determining the financial position of Scheduled Commercial Banks coming under the study period. www.icmrr.org 75 icmrrjournal@gmail.com

LOWER MOST FIVE BANKS PRIVATE SECTORS PUBLIC SECTORS PRIVATE SECTORS TOP FIVE BANKS PUBLIC SECTORS EMPLOYEES RATIO EMPLOYEES RATIO Name of the Bank E 1 Wage Bill to Total Income E 2 Wage Bill to Total Expenses E 3 Wage Bill to Intermediation Costs 2007 2016 MEAN SD CV CAGR 2007 2016 MEAN SD CV CAGR 2007 2016 MEAN SD CV CAGR State Bank of Travancore 14.55 12.05 12.99 1.82 3.52-2.073 17.98 15.11 17.22 3.15 9.70-1.914 73.5 63.60 65.75 4.96 11.38-1.595 Andhra Bank 13.36 12.02 13.40 2.46 4.91-1.168 16.34 16.30 18.06 4.13 11.61-0.027 68.69 64.77 61.44 4.72 11.51-0.651 Indian Overseas Bank 17.82 13.07 15.31 2.73 4.20-3.386 21.38 16.64 20.17 4.21 12.42-2.747 74.58 67.68 70.30 4.12 8.32-1.073 State Bank of Mysore 20.05 12.09 15.60 4.21 7.13-5.466 24.91 16.32 20.72 6.28 17.68-4.590 76.99 59.77 63.62 8.74 16.92-2.774 State Bank of Hyderabad 12.40 11.76 11.70 2.44 5.37-0.587 16.82 15.95 15.89 3.69 12.27-0.588 68.26 68.68 63.31 3.99 14.36 0.068 City Union Bank 8.89 7.39 8.21 1.18 1.19-2.032 11.86 10.01 11.30 1.75 3.14-1.867 61.6 46.96 50.90 5.76 17.59-2.970 Karur Vsysa Bank 9.05 9.25 9.30 1.33 1.71 0.243 12.49 12.20 12.76 2.17 4.40-0.261 49.38 53.30 48.95 4.05 9.57 0.852 Jammu and Kashmir Bank 8.95 12.84 10.00 1.36 3.10 4.092 12.54 17.88 13.77 1.91 2.73 4.020 61.57 68.99 59.78 4.21 2.97 1.272 HDFC Bank 5.36 11.69 8.86 2.37 3.36 9.051 7.32 17.15 12.94 3.44 1.29 9.922 26.14 39.65 31.79 6.41-18.11 4.738 Catholic Syrian Bank 15.40 25.37 19.59 3.91 13.77 5.703 19.43 26.43 22.83 3.60 11.67 3.478 75.25 73.43 69.63 5.17 24.03-0.272 Punjab and Sind Bank 18.80 14.08 20.20 6.73 17.19-3.161 21.11 17.35 24.49 7.48 31.23-2.156 73.66 76.81 75.77 2.63 3.93 0.466 Dena Bank 15.65 12.36 14.28 2.27 7.43-2.588 18.69 15.84 18.81 3.85 18.07-1.822 70.06 64.11 64.61 4.69 14.26-0.981 United Bank of India 26.86 11.67 17.76 4.83 13.68-8.846 29.76 14.88 22.00 5.99 26.48-7.413 86 62.67 72.44 7.67 18.06-3.455 Indian Bank 20.14 12.64 17.46 4.04 10.89-5.044 22.62 18.38 23.32 4.27 15.08-2.280 77.57 69.18 72.36 4.51 7.86-1.264 Central Bank of India 21.28 17.98 17.60 4.15 15.47-1.855 24.57 21.33 21.62 5.78 30.02-1.559 78.17 74.12 73.33 3.70 12.34-0.589 ING Vysya Bank 11.60 18.08 14.73 1.84 1.60 5.055 13.97 22.32 17.56 2.20 3.13 5.344 53.91 59.03 50.33 4.40 18.88 1.013 Dhanalakshmi Bank 14.18 19.13 16.12 2.44 1.63 3.383 17.97 20.44 18.84 2.07 0.58 1.441 67.18 58.49 57.34 6.43-6.05-1.527 Lakshmi Vilas Bank 11.19 9.67 11.75 2.12-0.61-1.611 14.28 12.53 14.33 2.36-1.42-1.442 56.82 50.97 54.15 3.24-13.94-1.200 Indusind Bank 2.27 8.89 5.49 2.28 1.90 16.379 3.16 11.88 6.95 2.81 4.06 15.852 21.42 37.94 28.80 6.50 33.51 6.558 ICICI Bank 5.40 8.64 5.51 1.35 1.64 5.361 6.75 11.95 7.20 2.03 3.70 6.552 23.64 42.57 26.45 6.73 40.78 6.754 www.icmrr.org 76 icmrrjournal@gmail.com

Ratio analysis explains that among the Top most Public Sector Banks E 1 records State Bank of Mysore with highest ratio 20.05 in the year 2006-07 and Indian Overseas Bank with 13.07 in the year 2015-16. Top most Private Sector Banks indicated that the highest is recorded for the Catholic Syrian Bank at 15.4 and 25.37 in both periods. Besides, Lower most Public Sector Banks revealed that highest ratio was accounted by United Bank of India with 26.86 in the year 2006-07 and Central Bank of India with 17.98 in the year 2015-16. In Lower most Private Sector Banks, highest was accounted by Dhanalakshmi Bank among both periods. The above table shows that among the Top most Public Sector Banks E 2 indicates highest ratio was accounted by State Bank of Mysore at 24.91 for the year 2006-07 and Indian Overseas Bank with 16.64 in the year 2015-2016. Among both periods, Top most Private Sector Banks highest ratio is recorded for Catholic Syrian Bank at 19.43 and 26.43. Among the Lower most Public Sector Banks highest ratio was recorded by United Bank of India with 29.76 for the year 2006-07 and Central Bank of India with 21.33 in the year 2015-2016. In the Lower most Private Sector Banks the highest ratio was recorded by Dhanalakshmi Bank at 17.97 year 2006-07 and ING Vysya Bank with 22.32 in the year 2015-2016. The above table depicts that among the Top most Public Sector Banks E 3 indicates highest ratio accounted by State Bank of Mysore at 76.99 in the year 2006-07 and State Bank of Hyderabad accounted with 68.68 for the year 2015-2016. Among Top most Private Sector Banks highest ratio is accounted by Catholic Syrian Bank among both periods. In case of Lower most Public Sector Banks revealed that highest ratio accounted by United Bank of India with 86.00 in the year 2006-07 and Punjab and Sind Bank with ratio 76.81 in the year 2015-2016. In the Lower most Private Sector Banks highest ratio is recorded by Dhanalakshmi Bank at 67.18 in the year 2006-07 and ING Vysya bank with 59.03 for the year 2015-2016. Next table shows that among the Top most Public Sector Banks E 4 indicates highest ratio was accounted by Andhra Bank at 195.96 and 1165.00 among both periods. For Top most Private Sector Banks indicated that the highest ratio is recorded by HDFC Bank in the year 2006-07 with 778.00 and Karur Vysya Bank with 935.00 in the year 2015-2016. Among the Lower most Public Sector Banks highest ratio accounted by Dena Bank with 221.00 for 2006-07; Punjab and Sind Bank with 1190.00 in 2015-2016. Among both periods, Lower most Private Sector Banks implies highest ratio accounted by Indusind Bank. The below table implies among the Top most Public Sector Banks E 5 for the year 2006-07 was the highest in State Bank of Hyderabad, at 1.68 and Andhra Bank with 9.0 in the year 2015-2016. Among Top most Private Sector Banks highest ratio is recorded for the HDFC Bank with 9.75 in 2006-07; Karur Vysya Bank with 9.09 in 2015-2016. In case of Lower most Public Sector Banks highest ratio is recorded by United Bank of India with 0.66 in 2006-07 ; Indian Bank with 8.88 in 2015-2016. In the Lower most Private Sector Banks, highest ratio indicates Indusind Bank at 6.88 in 2006-07 and ICICI Bank with 10.0 in 2015-2016. The following table explains E 6 indicates among the Top most Public Sector Banks highest ratio was accounted by State Bank of Mysore at 26.05 for the year 2006-07 and 20.23 for the year 2015-2016. Among the Top most Private Sector Banks indicated that highest ratio is recorded for HDFC Bank with 20.53 in 2006-07; Catholic Syrian Bank with 34.55 in 2015-2016. Among the Lower most Public Sector Banks revealed that United Bank of India listed highest ratio of 31.23 for 2006-07; Central Bank of India with 24.26 in 2015-2016. In the Lower most Private Sector Banks the www.icmrr.org 77 icmrrjournal@gmail.com

highest ratio indexed by ICICI Bank with 22.83 in 2006-07 and that Dhanalakshmi Bank with 32.71 for the year 2015-2016. Correlation Analysis between selected variables of Employees with the Ratio of return on working funds Table demonstrates the correlation coefficient matrices of the selected variables with the dependent variable, i.e., return on working funds of Top most Public Sector Banks and Private Sector Banks for the period of 2006-2007 to 2015-2016. In case of Top most Public Sector Banks, State Bank of Travancore with two variables namely E 4 and E 5 have positive correlation with profitability and the coefficient are.638 and.693 respectively. Andhra Bank implies seven variables namely E 1, E 2, E 3, E 6, E 7, E 8 and E 9 have positive correlation with return on working funds. In case of Indian Overseas bank, it is clear that six variables namely E 1, E 2, E 5, E 6, E 7 and E 9 have positive correlation with profitability. State bank of Mysore indicates six variables namely E 1, E 2, E 3, E 6, E 7 and E 9 have positive correlation with profitability and State Bank of Hyderabad with six variables namely E 1, E 2, E 3, E 7, E 8 and E 9 have positive correlation with return on working funds and the coefficient are.189,.349,.704,.630,.311 and.264 respectively. Following table indicates that among Top most Private Sector Banks, City Union Bank with four variables namely E 3, E 4, E 5 and E 7 have positive correlation with profitability and the coefficient are.008,.033,.272 and.226 respectively. It is obvious from the below table that Karur Vysya Bank, six variables namely E 1, E 2, E 3, E 7, E 8 and E 9 have positive correlation with profitability. In case of Jammu and Kashmir bank, it is clear that five variables namely E 3, E 5, E 7, E 8 and E 9 have positive correlation with profitability. It is evident from the following table HDFC Bank six variables namely E 1, E 2, E 3, E 5, E 6 and E 7 have positive correlation with profitability. Finally, Catholic Syrian Bank with four variables namely E 3, E 5, E 7 and E 8 has positive correlation with profitability. www.icmrr.org 78 icmrrjournal@gmail.com

CORRELATION ANALYSIS BETWEEN SELECTED VARIABLES OF EMPLOYEES IN TOP MOST BANKS WITH THE RATIO OF RETURN ON WORKING FUNDS TOP MOST PUBLIC SECTOR BANKS TOP MOST PRIVATE SECTOR BANKS S.NO. STATE BANK OF TRAVANCORE ANDHRA BANK INDIAN OVERSEAS BANK STATE BANK OF MYSORE STATE BANK OF HYDERABAD CITY UNION BANK KARUR VYSYA BANK JAMMU AND KASHMIR BANK HDFC BANK CATHOLIC SYRIAN BANK r p-value r p-value r p-value r p- value r p-value R p-value r p-value r p-value r p-value r p-value E 1 -.717.010**.602.033*.037.460.336.171.189.301 -.333.174.280.216 -.399.127.331.175 -.619.028* E 2 -.548.050*.741.007**.324.181.482.079.349.161 -.096.396.355.157 -.044.452.348.163 -.266.229 E 3 -.508.067.387.134 -.145.344.030.467.704.011*.008.491.529.058.331.175.402.125.455.093 E 4.638.024* -.454.094 -.408.121 -.229.262 -.269.226.033.464 -.623.027* -.464.089 -.011.488 -.693.013* E 5.693.013* -.164.325.301.199 -.006.493 -.044.452.272.224 -.267.228.451.095.098.393.917.000** E 6 -.642.023*.472.084.107.384.464.088 -.028.470 -.299.201 -.026.471 -.687.014*.042.454 -.810.002** E 7 -.085.407.875.000**.205.285.337.171.630.025*.226.265.378.140.949.000**.076.418.923.000** E 8 -.165.324.036.461 -.444.099 -.536.055.311.191 -.010.490.352.160.652.021* -.059.436.794.003** E 9 -.632.025*.803.003**.031.466.283.214.264.231 -.466.087.462.090.730.008** -.086.407 -.175.315 **Correlation is significant at the 0.01 level (p<0.01) *Correlation is significant at the 0.05 level (p<0.05) E 1 (Wage Bill to Total Income), E 2 (Wage Bill to Total Expenses), E 3 (Wage Bill to Intermediation Costs), E 4 (Business per Employee), E 5 (Profit per Employee), E 6 (Operating Expenses to Total Income), E 7 (Non-Interest Income to Working Funds), E 8 (Non-Operating Expenses to Working Funds) and E 9 (Intermediation cost to Working Funds) www.icmrr.org 79 icmrrjournal@gmail.com

Table demonstrates the correlation coefficient matrices of the selected variables with the dependent variable, i.e., return on working funds of Lower most Public Sector Banks and Private Sector Banks for the period of 2006-2007 to 2015-2016. It is evident from the below table, Lower most Public Sector Banks states Punjab and Sind Bank with two variables namely E 4 and E 5 have positive correlation with profitability and the coefficient are.558 and.787 respectively. Secondly, Dena Bank with two variables namely E 4 and E 5 have positive correlation with profitability and the coefficient are.557 and.780 respectively. In case of United Bank of India, it is clear that eight variables namely E 1, E 2, E 3, E 5, E 6, E 7, E 8 and E 9 have positive correlation with profitability. It is evident from the below table Indian Bank two variables namely E 4 and E 5 have positive correlation with profitability. Finally, Central Bank of India, eight variables namely E 1, E 2, E 3, E 4, E 5, E 6, E 7 and E 9 have positive correlation with profitability and the coefficient are.045,.174,.130,.019,.339,.032,.495 and.107 respectively. Following table states among lower most Private Sector Banks, ING Vysya Bank with six variables namely E 2, E 3, E 4, E 5, E 7 and E 8 have positive correlation with profitability and the coefficient are.130,.742,.213,.838,.609 and.340 respectively. Dhanalakshmi Bank with five variables namely E 3, E 4, E 5, E 7 and E 8 has positive correlation with profitability. In case of Lakshmi Vilas bank, it is clear that six variables namely E 2, E 3, E 5, E 7, E 8 and E 9 have positive correlation with profitability. It is evident from the below table Indusind Bank four variables namely E 2, E 5, E 7 and E 9 have positive correlation with profitability and. The following table depicts ICICI Bank, eight variables namely E 1, E 2, E 3, E 4, E 5, E 7, E 8 and E 9 have positive correlation with profitability. www.icmrr.org 80 icmrrjournal@gmail.com

CORRELATION ANALYSIS BETWEEN SELECTED VARIABLES OF EMPLOYEES IN LOWER MOST BANKS WITH THE RATIO OF RETURN ON WORKING FUNDS LOWER MOST PUBLIC SECTOR BANKS LOWER MOST PRIVATE SECTOR BANKS S.NO PUNJAB AND SIND BANK DENA BANK UNITED BANK OF INDIA INDIAN BANK r p-value r p-value r p-value r p-value r CENTRAL BANK OF INDIA p- value ING VYSYA BANK DHANALAKSHMI BANK LAKSHMI VILAS BANK INDUSIND BANK ICICI BANK r p-value r p-value r p-value r p-value r p-value E 1 -.741.007** -.759.005**.315.188 -.590.036*.045.451 -.224.267 -.873.000** -.131.359 -.001.499.112.379 E 2 -.687.014* -.608.031*.491.075 -.309.192.174.315.130.361 -.547.051.128.362.212.279.167.322 E 3 -.663.018* -.520.062.446.098 -.570.043*.130.360.742.007**.079.414.700.012** -.039.458.223.268 E 4.558.047*.557.047* -.626.026*.746.007**.019.479.213.277.148.341 -.352.159 -.140.350.597.034* E 5.787.003**.780.004**.061.433.828.002**.339.169.838.001**.887.000**.582.039*.933.000**.908.000** E 6 -.716.010** -.723.009**.287.211 -.534.056.032.465 -.667.017* -.670.017* -.364.150 -.007.492 -.202.288 E 7 -.739.007** -.116.375.769.005** -.507.068.495.073.609.031*.477.082.866.001**.565.044*.768.005** E 8 -.569.043* -.401.125.340.168 -.371.146 -.057.438.340.168.215.276.533.056 -.486.077.629.026* E 9 -.798.003** -.657.019*.431.107 -.529.058.107.384 -.259.235 -.324.181.456.093.162.327.686.014* **Correlation is significant at the 0.01 level (p<0.01) *Correlation is significant at the 0.05 level (p<0.05) www.icmrr.org 81 icmrrjournal@gmail.com

E 1 (Wage Bill to Total Income), E 2 (Wage Bill to Total Expenses), E 3 (Wage Bill to Intermediation Costs), E 4 (Business per Employee) and E 5 (Profit per Employee) E 6 (Operating Expenses to Total Income), E 7 (Non-Interest Income to Working Funds), E 8 (Non-Operating Expenses to Working Funds) E 9 (Intermediation cost to Working Funds) Factor loading of Top Most Public Sector Banks of Employees measurement scale items on extracted factors Table shows the factors loadings of Top most Public Sector Banks for the period from 2006-07 to 2015-2016. State Bank of Travancore explains 94.48 per cent of total variation in E 6 is accounted by Factor I. Similarly E 1, E 2, E 9 and Y variables are explained by Factor I. But both the derived factors taken together explain 60.0 per cent variations in the dependent variable. This shows that no individual factor can be solely responsible for the variations and it is the combinations of different factors which are associated with return on working funds. Secondly, Andhra Bank implies 92.16 per cent of total variation in E 6 is accounted by Factor I. Similarly E 2, E 1, E 8 and E 9 variables are explained by Factor I. This shows that no individual factor can be solely responsible for the variations and it is the combinations of different factors. Next, Indian Bank shows 98.41 per cent of total variation in E 1 is accounted by Factor I. Similarly E 6, E 2, E 9, E 3, E 5 and E 4 variables are explained by Factor I. State Bank of Mysore signifies 96.43 per cent of total variation in E 9 accounted by Factor I. Similarly E 1, E 7, E 4, E 2, E 5, E 3 and E 6 variables are explained by Factor I. This shows that no individual factor can be solely responsible for the variations and it is the combinations of different factors. Finally, State Bank of Hyderabad explicates 93.70 per cent of total variation in E 6 is accounted by Factor I. Similarly E 1, E 2, E 9 and E 8 variables are explained by Factor I. But all the three derived factors altogether explain 83.1 per cent variations in the dependent variable. This shows that no individual factor can be solely responsible for the variations and it is the combination of different factors which are associated with return on working funds. www.icmrr.org 82 icmrrjournal@gmail.com

FACTOR LOADING OF TOP MOST PUBLIC SECTOR BANKS EMPLOYEES STATE BANK OF TRAVANCORE ANDHRA BANK INDIAN OVERSEAS BANK STATE BANK OF MYSORE STATE BANK OF HYDERABAD V F I F II C 2 V F I F II F III C 2 V F I F II F III C 2 V F I F II C 2 V F I FII F III C 2 E 6.972 -.155.970 E 6.960 -.048.253.988 E 1.992.107.028.996 E 9.982.128.980 E 6.968.224 -.101.998 E 1.930.317.965 E 2.889.406.159.981 E 6.986 -.043.094.982 E 1.971.170.972 E 1.952.226.178.989 E 2.893.281.877 E 1.885.286.266.936 E 2.918.032.331.954 E 7.968 -.046.939 E 2.894.305.313.991 E 9.754.614.946 E 8 -.697.550.449.990 E 9.896.403.038.966 E 4 -.967 -.017.936 E 9.782.553.227.970 Y -.748 -.201.600 E 9.646.537.535.991 E 3.894.363 -.144.951 E 2.945.270.965 E 8 -.660.528.429.898 E 8 -.212.923.896 E 3 -.012.836.051.702 E 5 -.868 -.366.299.976 E 5 -.927.169.888 E 4 -.316 -.918 -.112.955 E 7.222.811.707 E 7.256.786.424.864 E 4 -.722 -.458 -.409.898 E 3.854 -.389.880 E 5 -.388 -.902.093.973 E 3.469.794.850 Y.538.726.085.823 E 8.025.910 -.398.988 E 6.785.541.909 E 7.073.756.516.843 E 4 -.621 -.741.935 E 5 -.117 -.053 -.990.997 E 7.342.847.278.912 E 8.292 -.927.945 E 3.156.050.915.864 E 5 -.627 -.640.803 E 4 -.294 -.293 -.907.994 Y.015 -.062.993.990 Y.256.789.688 Y.039.128.902.831 EV* 6.569 1.979 EV* 5.689 2.292 1.285 EV* 6.525 1.850 1.238 EV* 7.059 2.045 EV* 5.395 2.495 1.423 V * 65.69 19.79 V* 56.89 22.92 12.85 V * 65.25 18.49 12.38 V* 70.56 20.45 V* 53.95 24.96 14.23 CV* 65.69 85.479 CV* 56.89 79.809 92.66 CV* 65.25 83.75 96.12 CV* 70.56 91.01 CV* 53.95 78.90 93.13 E 1 (Wage Bill to Total Income), E 2 (Wage Bill to Total Expenses), E 3 (Wage Bill to Intermediation Costs), E 4 (Business per Employee), E 5 (Profit per Employee), E 6 (Operating Expenses to Total Income), E 7 (Non-Interest Income to Working Funds), E 8 (Non-Operating Expenses to Working Funds) and E 9 (Intermediation cost to Working Funds) *- (In Percentage) www.icmrr.org 83 icmrrjournal@gmail.com

Factor loading of Top Most Private Sector Banks of Employees measurement scale items on extracted factors Table shows the factors loadings of Top most Private Sector Banks for the period from 2006-2007 to 2015-2016. City Union Bank explains 94.67 per cent of total variation in E 2 accounted by Factor I. Similarly E 1, E 9 and E 6 variables are explained by Factor I. But all the three derived factors taken together explain 98.7 per cent variations in the return on working funds. This shows that no individual factor can be solely responsible for the variations in and it is the combinations of different factors which are associated with dependent variable. Secondly, Karur Vysya Bank indicates 96.24 per cent of total variation in E 1 accounted by Factor I. Similarly E 2, E 6, E 9 and E 8 variables are explained by Factor I. But all the three derived factors taken together explain 84.5 per cent variations in the dependent variable. This shows that no individual factor can be solely responsible for the variations and it is the combinations of different factors which are associated with dependent variable. Next, Jammu and Kashmir shows 87.42 per cent of total variation in E 9 accounted by Factor I. Similarly E 7, Y and E 8 variables are explained by Factor I. HDFC Bank signify 97.22 per cent of total variation in E 6 is accounted by Factor I. Similarly E 2, E 1, E 5 and E 9 variables are explained by Factor I. Finally, Catholic Syrian Bank explicates 93.32 per cent of total variation in E 7 is accounted by Factor I. Similarly Y, E 8, E 6 E 5 and E 4 variables are explained by Factor I. Both derived factors taken together explain 92.4 per cent variations in the dependent variable. This shows that no individual factor can be solely responsible for the variations and it is the combinations of different factors which are associated with return on working funds. www.icmrr.org 84 icmrrjournal@gmail.com

FACTOR LOADING OF TOP MOST PRIVATE SECTOR BANKS EMPLOYEES CITY UNION BANK KARUR VYSYA BANK JAMMU AND KASHMIR BANK HDFC BANK CATHOLIC SYRIAN BANK V F I F II F III C 2 V F I F II F III C 2 V F I F II F III C 2 V F I F II F III C 2 V F I F II C 2 E 2.973.100.079.963 E 1.981.085.082.976 E 9.935.265.160.971 E 6.986 -.100 -.039.983 E 7.966 -.086.941 E 1.959.047 -.170.951 E 2.958.182.144.971 E 7.935 -.286.038.958 E 2.887.329.314.994 Y.956 -.099.924 E 9.872 -.136 -.354.904 E 6.923.108 -.356.990 Y.873 -.297.209.895 E 1.823.466.309.991 E 8.893 -.278.874 E 6.803 -.572 -.159.998 E 9.843.439.002.903 E 8.711 -.543.045.802 E 5 -.733 -.659.127.988 E 6 -.812.569.983 E 7 -.256.944.172.986 E 8 -.727.497.378.918 E 1 -.188.917.335.989 E 9.718.672 -.116.981 E 5.786 -.138.636 E 3.119.943.024.903 E 5 -.320 -.898.128.925 E 2.101.889.425.981 E 8 -.138.984 -.016.987 E 4 -.776.039.604 E 8 -.437.872 -.114.964 E 7 -.174.868.227.835 E 6 -.456.872 -.164.996 E 7.376.833.082.842 E 2 -.199.936.915 E 4 -.592 -.737 -.060.897 E 4 -.403 -.864 -.215.955 E 5.209 -.002.942.931 E 4 -.579 -.796.007.968 E 9 -.112.933.883 E 5 -.577 -.729.187.899 E 3 -.226 -.043.912.884 E 3.386.332.813.919 E 3.613.652.411.969 E 1 -.559.827.996 Y -.169.014.979.987 Y.244.381.800.845 E 4 -.569.316.743.975 Y.066 -.038.989.984 E 3.620.716.897 EV* 4.461 3.945 1.045 EV* 4.852 3.041 1.310 EV* 4.720 3.466 1.230 EV* 6.840 1.653 1.194 EV* 5.964 2.690 V* 44.61 39.46 10.45 V* 48.52 30.41 13.09 V* 47.20 34.66 12.29 V* 68.39 16.53 11.94 V* 59.64 26.90 CV * 44.61 84.07 94.51 CV* 48.52 78.94 92.03 CV* 47.20 81.86 94.16 CV* 68.39 84.93 96.87 CV* 59.64 86.54 E 1 (Wage Bill to Total Income), E 2 (Wage Bill to Total Expenses), E 3 (Wage Bill to Intermediation costs), E 4 (Business per Employee), E 5 (Profit per Employee) E 6 (Operating Expenses to Total Income), E 7 (Non-Interest Income to Working Funds), E 8 (Non-Operating Expenses to Working Funds) and E 9 (Intermediation cost to Working Funds) *- (In Percentage) www.icmrr.org 85 icmrrjournal@gmail.com

SUGGESTIONS In the present field of Interest of the researcher with the set of objectives to study the employee s perception on the financial position of scheduled commercial banks in India. The following suggestions are made with the help of the findings and observations that shall help scheduled commercial banks to have an insight into their financial statement and also to make suitable reforms. In the banking sectors, the particular focus has been on imparting operational flexibility and functional autonomy with a view to enhancing efficiency, productivity and profitability, imparting strength to the system and ensuring financial soundness. The restrictions on activities undertaken by the existing institutions were gradually relaxed and barriers to entry in the banking sectors were removed. Since independence, the Government of India and the RBI have made concerted efforts to provide the poor with access to credit. Despite the phenomenal increase in the physical outreach of formal credit institutions in the past several decades, the poor continue to depend on informal sources of credit. Institutions have also faced difficulties in dealing effectively with a large number of small borrowers, whose credit needs are small and frequent and their ability to offer collaterals is limited. Besides, cumbersome procedures and risk perceptions of the banks left a gap in serving the credit needs of the rural poor. This led to a search for alternative policies, systems and procedures, saving and loan products, other complementary services and new delivery mechanisms that would fulfill the requirements of the poor. The following suggestions are made with a view to better the performance of scheduled commercial banks in India. It is noted that a sizeable income is spend to meet the operating expenses especially the wages. It is always a matter of concern that the employees efficiency is low in Top most public sectors. It is suggested to reduce the transaction costs as well as the burden ratio to increase the efficiency. The scheduled commercial banks in India should be prepared to accept the formidable task of keeping pace with the challenges in order to bring in operational efficiency. It is being noticed with great distress that the Operating Expenses to Total Income is always on the higher side and it is increasing over the period of years. Further, it is observed Intermediation Cost to Working Funds of Indian Overseas Bank, City Union Bank, HDFC Bank and Dhanalakshmi Bank on the inferior among selective banks. The banks should adopt a better strategy to curtail the operating expenses in order to enhance the profit margin. It is noted that the scheduled commercial banks witnessed Top and Top most Public sectors will need to wring more efficiency out of their operations to catch up with the banking industries average in terms of Profit per Employee and Business per Employee. It is emphasized that more effective and enlightened corporate governance of banks can be a vital avenue for improving banking productivity. It is observed that employee productivity in terms of both business per employee and profit per employee in all scheduled commercial banks, including public sectors and private sectors to increase productivity. It is renowned that Non- Interest Income to Working Funds of State Bank of Travancore and Karur Vysya Bank from the selective banks is on Top side. To increase revenue banks should offer other services to their customers and from these other services banks earn "non-interest income"(fees, commission, charges, exchange fees etc.). Banks offer various services to their customers at cheaper cost and as early as possible. In banking business public sectors and private sectors earn huge income from these sources. www.icmrr.org 86 icmrrjournal@gmail.com

8. CONCLUSIONS We all know that banking in the future is going to be quite different from what we have seen and experienced in the past. Hence, we must be willing to shed the methods, structures, policies and technologies that succeeded in the past while retaining the useful elements. Most importantly, our employees must get away from yesterday s mindsets and you as the HR chiefs; have a very critical role in ensuring this transition. Technology is also compelling us to reinvent ourselves, our methods and our way of doing business. As Peter Drucker, the American Management Consultant has said we re in one of those great historical periods that occur every 200 to 300 years when people don't understand the world anymore, when the past is not sufficient to explain the future. The majority of the banks are still successful in keeping with the confidence of the employees as well as other stakeholders. However, the changing dynamics of banking business brings new kind of risk exposure in financial statement. The above study empirically examines the various issues of commercial banks by understanding their profitability, efficiency during the study period. The current decade is already proving to be a challenging one for the HR professionals in banks, particularly for those in the public sector banks. This is because of the significant number of employees retiring during this decade. This not only poses unique challenges but also presents opportunities for HR managers across the industry. At stake is a chance to transform HR practices and create a workforce that can provide individual banks with a strategic edge in an environment that is likely to become increasingly competitive in the days ahead. The retirement decade provides an opportunity, especially for the PSBs, to transform their work force by hiring the right talent, rightsizing and right-skilling them and thereby bringing about a cultural transformation in the functioning of these banks. Since, it probes the employee s perception on the financial statements. REFERENCES 1. Government of India, Report of the Banking Commission New Delhi, 1972. 2. Klein, Hans Emil, Impact of Long-Range Planning on Profit and Growth in Selected Segments of Commercial Banks, Ph.D. Thesis, University of Kentucky, 1977. Mathur, O.P., Public Sector Bank in India A Case study of State Bank, Sterling Publishers Pvt. Ltd., New Delhi, 1977 3. Ganesh, K., Monitoring Profitability in Banks, the Commerce, July 1979, pp. 25-27. 4. Nayan, Kamal, Performance Evaluation of Commercial Banks: Development of An Evaluation Model, Ph.D. Thesis, Himachal Pradesh University, Shimla, 1982 5. Joshi, P.N., IProfitability and Profit Planning in Banks, The Journal of Indian Institute of Bankers, Vol.57, No.2, April-June, 1986. 6. Chakrabarty, Tapas Kumar, Profitability of Banks: An Empirical Attempt for Identification of Variable of Income and Expenditures of Scheduled Commercial Banks for Profit Planning, Bank Economists Meet, (collection of papers), Punjab National Bank, New Delhi, 1986, pp.3.18-3.19. 7. Garg, S., Indian Banking: Cost and Profitability, Anmol Publications, New Delhi, 1989 8. Ramachandran, N., Profit Planning as a Management Tool for Profit Maximization, The Banker, Jan. 1992. 9. Ganesan (2001), Determinants of Profits and Profitability of Public Sector Banks In India: A Profit function Approach, Journal of Financial Management and Analysis, Vol.14 (1) pp.27-37, 2001. www.icmrr.org 87 icmrrjournal@gmail.com

10. Ramachandran.A (2002), Profits, Profitability and growth of Commercial Banks. 11. Naganathi.T (2007), Profitability, Efficiency and NPA s A Critical analysis with reference to SBI and its Associates. 12..Kanjana.E.N (2007), Efficiency, Profitability and Growth of Scheduled Commercial Banks in India. 13. Vaidyanathan. V (2008), An Empirical Evaluation of the Financial Performance of Scheduled Commercial Banks in India. Ph.D Thesis, Vinayaga Missions University, Salem. 14. Ashok Kumar.M (2009), Financial Performance Of Scheduled Commercial Banks in India CRAMEL Analysis. Ph.D Thesis, Bharathiar University, Coimbatore. www.icmrr.org 88 icmrrjournal@gmail.com