A Peer Reviewed International Journal IJFRR INTERCONTINENTAL JOURNAL OF FINANCE RESEARCH REVIEW A STUDY ON THE FINANCIAL POSITION OF SCHEDULED COMMERCIAL BANKS IN INDIA (WITH REFERENCE TO CREDITOR S PERSPECTIVE) PRIYA.P DR.A.RAMACHANDRAN RESEARCH SCHOLAR, BHARATHIAR UNIVERSITY, COIMBATORE ABSTRACT DIRECTOR, DEPARTMENT OF MANAGEMENT STUDIES, SNR INSTITUTE OF MANAGEMENT, COIMBATORE Banking is a part of financial service sector. Indian Banking sector is evolving at a fast pace, with a tremendous opportunity to enter new markets and newer businesses by delivering high class customer service. Banking is getting redefined through new technologies. The four major trends altering the banking industry are consolidation, universalizing, development of new technologies and globalization of operations. The importance of banks in economic development of nations cannot be overemphasized. Enhancing efficiency and performance of the banking system is a key objective of economic reforms of many countries including India. Banking industry in India has also achieved a new height with the changing times. 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. KEYWORDS: Banking, Public Sector Banks, Private Sector Banks, Creditors, Working Funds. INTRODUCTION The biggest challenge for banking industry is to serve the mass market of India. Banking in India is generally fairly mature in terms of supply, product range and reach, even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. Before pre liberalization era, the picture of Indian Banking was completely different as the Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including
banking and finance. Banking industry in India has also achieved a new height with the changing times. 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 this regard, a new research study is made to assess the financial position with reference to Creditor s perspective.. 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 creditor s perspective. 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.
. 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 creditors. iii. To identify the direct and indirect effect of the selected variables on the profitability with reference to creditors perspective. 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. 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 00 0.. 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 (), 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 () 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. (), 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. (), 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 (), 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 (), 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 (), 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 (), studied the main determinants of costs, profits and profitability of the banking sector and also observed the intergroup differentials of SBI and its subsidiaries, the nationalized banks, foreign banks and private sector banks. Ramachandran (), 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 (00), 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 (00) 0, 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 (00), in Profitability, Efficiency and NonPerforming Assets A critical analysis with reference to the State Bank of India and its Associates examined the trends in profitability, efficiency and nonperforming 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 (00), Efficiency, Profitability and 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 noncontrollable by the bank itself. Vaidyanathan.V (00), 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 (00) 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 creditors.. 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 Creditors analysis a total of fifteen 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 fifteen 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.. Creditors Analysis of Commercial Banks Borrowings are the major nondeposit liability for banks. Credit Analysis is the process of analyzing financial statements issues in order to estimate the ability of the issuer to live up to its future contractual obligations such as long term contracts, prompt payment and growth of purchasing.
PRIVATE SECTORS TOP FIVE BANKS PUBLIC SECTORS. FINDINGS CREDITORS C Borrowings to Working Funds C Interoffice Adjustments to Other liabilities C Borrowings in India to Working Funds C 0 Interest Accrued to Other liabilities C Borrowings outside India to Working Interest on RBI/InterBank C Funds Borrowings to Interest Expended C RBI to Borrowings C Cost of Borrowings C Other banks to Borrowings C Liquid Assets to Total Borrowings C Other Institutions and agencies to Borrowings C Other Assets to Total Borrowings C Other Liabilities to Working Funds C Fixed Assets to Total Borrowings C. Ratios Bills Payable to Other liabilities 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. CR EDI TO RS RA TIO Name of the Bank State Bank of Travancore Andhra Bank Indian Overseas Bank State Bank of Mysore State Bank of Hyderabad City Union Bank Karur Vsysa Bank C Borrowings to Working Funds 00 0.. 0. 0. 0. 0.. 0.0 ME AN. S D. CV. CAG R 0.0.0 0......... 0.....0. 0...... 0. 0.... 0...0 C Bills Payable to Other liabilities 00...... 0. 0....... ME AN......0. SD....... CV..... 0.. CAG R..00.0 0..0..
PRIVATE SECTORS LOWER MOST FIVE BANKS PUBLIC SECTORS Jammu and Kashmir Bank HDFC Bank Catholic Syrian Bank Punjab and Sind Bank Dena Bank United Bank of India Indian Bank Central Bank of India ING Vysya Bank Dhanalakshmi Bank Lakshmi Vilas Bank Indusind Bank ICICI Bank.. 0. 0.. 0.. 0.. 0............ 0...... 0.0..0 0... 0..0 0.0. 0. 0...0.. 0..0....... TABLE NO. CREDITORS RATIOS Ratio of Borrowings to Working Funds explicates from the Table No. that among the Top most Public Sector Banks highest score was accounted by Andhra Bank at. for the year 000 and Indian Overseas Bank with. in the year 00. Among the Top most Private Sector Banks HDFC Bank registered the highest mean. among both phases. In the Lower most Public Sector Banks highest mean was recorded by Dena Bank at.0 for the year 000 and Central Bank of India with.. In the Lower most Private Sector Banks ICICI bank listed with highest mean. among both phases. Bills Payable to Other liabilities explicates among the Top most Public Sector Banks highest mean was accounted by State Bank of Hyderabad with. in the year 000 and Andhra Bank with. for the year 00. For Top most Private Sector Banks indicated that the highest is recorded for the Karur Vysya Bank with. for the year 000 and Jammu and Kashmir Bank with. for the year 00. 0. 0. 0.... 0............0... 0.. 0...0. 0..... 0.. 0.. 0...0... 0....... 0..........0. 0.... 0 0.. 0.. 0...... 0......... 0....0 0...0......... 0....0 0.
S.NO Among the Lower most Public Sector Banks highest mean was recorded by United Bank of India with. in the year 000 and Dena Bank with. for the year 00. In the Lower most Private Sector Banks highest mean was accounted by Lakshmi vilas Bank at. for the year 000 and ICICI Bank with 0. for the year 00. Interest Accrued to Other liabilities explains among the Top most Public Sector Banks State Bank of Mysore accounted with highest mean at. in both periods. For Top most Private Sector Banks indicated that the highest is recorded for the HDFC Bank with.0 for the year 000 and Catholic Syrian Bank with. in the year 00. Among the Lower most Public Sector Banks Dena Bank registered highest mean of.0 in both periods. In the Lower most Private Sector Banks highest mean is recorded by Indusind Bank at 0. for the year 000 and Lakshmi Vilas Bank with.0 for the year 00. Liquid Assets to Total Borrowings indicates that among the Top most Public Sector Banks for the year 000 was the highest in State Bank of Travancore at. and State Bank of Hyderabad with. for the year 00. For Top most Private Sector Banks indicated that the highest is recorded for the Catholic Syrian Bank with. City Union Bank with.. Among Lower most Public Sector Banks revealed that Central Bank of India registered a highest mean of. in the year 000 and Indian Bank with. for the year 00. In the Lower most Private Sector Banks highest mean is accounted by Dhanalakshmi Bank 0.0 among both phases.. Correlation TABLE NO. CORRELATION ANALYSIS BETWEEN SELECTED VARIABLES OF CREDITORS IN TOP MOST PUBLIC SECTOR BANKS WITH THE RATIO OF RETURN ON WORKING FUNDS TOP MOST PUBLIC SECTOR BANKS INDIAN STATE BANK OF STATE BANK STATE BANK OF ANDHRA BANK OVERSEAS TRAVANCORE OF MYSORE HYDERABAD BANK r pvalue r pvalue r pvalue r pvalue r pvalue C.0....0.0...0.0 C...0...0*..0.0. C.0...0....00*.. C..0...0....0. C.0.......0.. C.....0.0*...0. C..0*..0..00**.... C.0.0........ C.. NA NA.0...0 NA NA C 0.0.....00*....0* C...0...0*.0...0 C..0..0...0.0.0. C..0.0.....0.0. C..0.......0. C.......0...
**Correlation is significant at the 0.0 level (p<0.0) *Correlation is significant at the 0.0 level (p<0.0) C (Borrowings to Working Funds), C (Borrowings in India to Working Funds), C (Borrowings outside India to Working Funds), C (RBI to Borrowings), C (Other banks to Borrowings), C (Other Institutions and Agencies to Borrowings), C (Other Liabilities to Working Funds), C (Bills payable to Other liabilities), C (Interoffice Adjustments to Other liabilities) and C 0 (Interest Accrued to Other liabilities) C (Interest on RBI/InterBank Borrowings to Interest Expended), C (Cost of Borrowings), C (Liquid Assets to Total Borrowings), C (Other Assets to Total Borrowings) and C (Fixed Assets to Total Borrowings) Selective variables of Creditor s from the Table No. explain that State Bank of Travancore with five variables namely C, C, C, C and C has positive correlation with profitability of the bank. Secondly, Andhra Bank with five variables namely C, C, C, C and C has positive correlation with profitability of the bank. In case of Indian Overseas bank, it is clear that two variables namely C and C have positive correlation with profitability of the bank. State Bank of Mysore with five variables namely C, C, C, C and C has positive correlation with profitability of the bank. Further, State Bank of Hyderabad with eight variables namely C, C, C, C 0, C, C, C and C has positive correlation with profitability of the bank. Top most Private Sector Banks explain City Union Bank with seven variables namely C, C, C, C C, C 0 and C have positive correlation with profitability of the bank. Next, Karur Vysya Bank with seven variables namely C, C, C, C, C, C and C has positive correlation with profitability of the bank. In case of Jammu and Kashmir bank, it is clear that eleven variables namely C, C, C, C, C, C 0 C, C, C, C and C have positive correlation with profitability of the bank. HDFC Bank with seven variables namely C, C, C, C, C, C, C and C has positive correlation with profitability of the bank. Catholic Syrian Bank with five variables namely C, C, C, C and C has positive correlation with profitability of the bank. In case of Lower most Public Sector Banks, Punjab and Sind Bank with nine variables namely C, C, C, C, C, C, C 0, C and C have positive correlation with profitability of the bank. Dena Bank with four variables namely C, C, C and C has positive correlation with profitability of the bank. In case of United Bank of India, it is clear that seven variables namely C, C, C, C 0, C, C and C have positive correlation with profitability of the bank. Indian Bank with eight variables namely C, C, C, C, C, C 0, C and C has positive correlation with profitability of the bank. Finally, Central Bank of India with ten variables namely C, C, C, C, C C, C 0, C, C and C has positive correlation with profitability of the bank. Among the Lower most Private Sector Banks, ING Vysya Bank with five variables namely C, C, C, C and C 0 have positive correlation with profitability of the bank. Next, Dhanalakshmi Bank with seven variables namely C, C, C, C, C, C 0 and C has positive correlation with profitability of the bank. In case of Lakshmi Vilas bank, it is clear that nine variables namely C, C, C, C, C, C, C, C and C have positive correlation with profitability of the bank. Next, Indusind Bank with five variables namely C, C, C, C and C has positive correlation with profitability of the bank. Finally, ICICI Bank with seven variables namely C, C, C, C, C, C and C has positive correlation with profitability of the bank... Factor Analysis Top most Public Sector Banks for the period from 000 to 000 observed State Bank of Travancore with. per cent of total variation in C is accounted by Factor I. Secondly, Andhra Bank with. per cent of total variation in C is accounted by Factor I. Next, Indian Overseas Bank with. per cent of total variation in C is accounted by Factor I. Next, State Bank of Mysore with. per cent of total
variation in C is accounted by Factor I. Finally, State Bank of Hyderabad with. per cent of total variation in C is accounted by Factor I. Factors loadings of Top most Private Sector Banks for the period from 000 to 00 records City Union Bank with. per cent of total variation in C is accounted by Factor I. Secondly, Karur Vysya Bank with. per cent of total variation in C is accounted by Factor I. Next, Jammu and Kashmir Bank with. per cent of total variation in C is accounted by Factor I. Next, HDFC Bank with. per cent of total variation in C is accounted by Factor I. Finally, Catholic Syrian Bank with 0. per cent of total variation in C is accounted by Factor I. Factors loadings of Lower most Public Sector Banks for the period from 000 to 00 observed Punjab and Sind Bank with. per cent of total variation in C is accounted by Factor I. Secondly, Dena Bank with.0 per cent of total variation in C is accounted by Factor I. Next, United Bank of India with.0 per cent of total variation in C is accounted by Factor I. Next, Indian Bank with. per cent of total variation in C is accounted by Factor I. Finally, Central Bank of India with. per cent of total variation in C is accounted by Factor I. TABLE NO. FACTOR LOADING OF LOWER MOST PRIVATE SECTOR BANKS CREDITORS ING VYSYA BANK LAKSHMI VILAS BANK V F I F II F III FIV FV C V F I F II F III F IV FV C C...... C..0.0.0.. C..0.0... C....00.0. C 0.0..... C...00.0.. C..0.0.0.0. C....0.. C...... C...0...0 C...00..0.0 C 0..0.0..00.0 C.00..... C...0.0.0. C...0.0.. C.0...00.0.0 C.00...0.. C.0.0.0.0.. C....0.0. C.0.0..00.00. Y.00...00..0 C.0.0..0.0. C.0...0.. C.0...00.. C....00.0. C.0..0..0. C.0.00...0. Y.0.0..0.. C.0.00.0..0. C.....00.0 C..0.0..0. C...... EV*..0...00 EV*..... V*...0.. V*. 0.. 0.. CV*..... CV*....0. C (Borrowings to Working Funds), C (Borrowings in India to Working Funds), C (Borrowings outside India to Working Funds), C (RBI to Borrowings), C (Other Banks to Borrowings), C (Other Institutions and agencies to Borrowings), C (Other Liabilities to Working Funds), C (Bills Payable to Other liabilities), C (InterOffice Adjustments to Other liabilities) and C 0 (Interest Accrued to Other liabilities) C (Interest on RBI/InterBank Borrowings to Interest Expended), C (Cost of borrowings), C (Liquid Assets to Total Borrowings), C (Other Assets to Total Borrowings) and C (Fixed Assets to Total Borrowings) * (In Percentage); EV Eigen Value; V Variance; CV Cumulative Eigen Value
Factors loadings of Lower most Private Sector Banks for the period from 000 to 00 records ING Vysya Bank with. per cent of total variation in C is accounted by Factor I. Next, Dhanalakshmi Bank with.0 per cent of total variation in C is accounted by Factor I. Subsequently, Lakshmi Vilas Bank with.0 per cent of total variation in C is accounted by Factor I. Next, Indusind Bank with.0 per cent of total variation in C is accounted by Factor I. Finally, ICICI Bank with.0 per cent of total variation in C is accounted by Factor I.. Growth Analysis The CAGR shows that Borrowings were highest in Indian Overseas Bank with 0. and lowest in Karur Vysya Bank at 0.0. Further, CAGR of Other liabilities was the highest in HDFC Bank and lowest in Dena Bank. The CAGR shows that Interest accrued was the highest in ING Vysya Bank at 0. and lowest in the Dena Bank with 0. respectively. The CAGR shows that Liquid Assets was the highest in HDFC Bank at 0. and lowest in the Catholic Syrian Bank at 0.0 respectively. Further, CAGR of Other Assets the highest in Catholic Syrian Bank at 0. and lowest in the Indian Bank at 0. respectively.. Trend Analysis Among Top most Public Sector Banks, it is clear that the trend movement of Borrowings for the year 0 is highest in the Indian Overseas Bank by Cr.0. Secondly, among Top most Private Sector Banks, for the year 0 is highest in the HDFC Bank by Cr.0. Further, among Top most Public Sector Banks, for the year 0 is highest in the Central Bank of India by Cr.0. Finally, in case of Top most Private Sector Banks, for the year 0 is highest in the ICICI Bank by Cr.. Among Top most Public Sector Banks, it is clear that the trend movement of Interest Accrued for the year 0 is highest in the Andhra Bank by Cr.. Secondly, among Top most Private Sector Banks, for the year 0 is highest in the HDFC Bank by Cr.. Further, among Top most Public Sector Banks, for the year 0 is highest in the Central Bank of India by Cr.. Finally, in case of Top most Private Sector Banks, for the year 0 is highest in the ICICI Bank by Cr.. Among Top most Public Sector Banks, it is clear that the trend movement of Liquid assets for the year 0 is highest in the Indian Overseas Bank by Cr.00.Secondly, among Top most Private Sector Banks, for the year 0 is highest in the HDFC Bank by Cr.0.Further, among Top most Public Sector Banks, for the year 0 is highest in the Central Bank of India by Cr.. Finally, in case of Top most Private Sector Banks, for the year 0 is highest in the ICICI Bank by Cr.0. 0
CHART NO.. Path Analysis It is observed that between Top most and Lower most Public and Private Sector Banks for the period of 000 to 00. Among the Top most Public Sector Banks, State Bank of Travancore explicates that the variables C and C 0 contribute towards profitability but C and C reduces the profitability. Secondly, Andhra Bank states that the variables C and C contribute towards profitability but C and C reduces the profitability. Next, Indian Overseas Bank indicates the variable C reduces the profitability. Further, State Bank of Mysore shows that the variables C, C and C 0 contribute towards profitability but C reduces the profitability. Finally, State Bank of Hyderabad shows that the variables C and C contribute towards profitability. Among the Top most Private Sector Banks, City Union Bank explicates that the variable C contribute towards profitability but C and C reduces the profitability. Secondly, Karur Vysya Bank states that the variables C, C and C reduce the profitability. Next, Jammu and Kashmir Bank indicates the variables C and C contribute towards profitability but C reduces the profitability. Further, HDFC Bank reveals that the variable C contribute towards profitability but C and C reduces the profitability. Finally, Catholic Syrian Bank shows that the variables C, C and C contribute towards profitability but C and C reduces the profitability. Among the Lower most Public Sector Banks, Punjab and Sind Bank explicates that the variables C, C, C 0 and C reduces the profitability. Secondly, Dena Bank states that the variable C contribute towards profitability C, C, C and C reduces the profitability. Next, United Bank of India
indicates the variables C, C and C contribute towards profitability C reduce the profitability. Further, Indian Bank shows that the variables C and C contribute towards profitability but C and C reduces the profitability. Finally, Central Bank of India shows that the variables C and C contribute towards profitability but C and C reduces the profitability. In Lower most Private Sector Banks, ING Vysya Bank explicates that the variables C and C contribute towards profitability but C reduces the profitability. Secondly, Dhanalakshmi Bank states that the variables C and C contribute towards profitability but C and C reduces the profitability. Next, Lakshmi Vilas Bank indicates the variables C and C contribute towards profitability but C reduces the profitability. Further, Indusind Bank reveals that the variables C, C and C contribute towards profitability but C reduces the profitability. Finally, ICICI Bank shows that the Variables C, C and C reduce the profitability.. SUGGESTIONS In the present field of Interest of the researcher with the set of objectives to study 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 should gradually relax and barriers to entry in the banking sectors must be 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. It is suggested to search for alternative policies, systems and procedures, saving and loan products, other complementary services and new delivery mechanisms that would fulfil the requirements of the poor. The following suggestions are made with a view to better the performance of scheduled commercial banks in India with special reference to creditor s perspective. It is noted Indian Bank and Lakshmi vilas Bank of selective bank in our study states Borrowings outside India to Working Funds ratio is not satisfactory. It indicates the financial position of the bank and its ability to meet all its financial requirements. It shows the percentage of assets that are financed with loans and other financial obligations Borrowed outside India. Decrease in the ratio would denote that faring well, and is less dependent on debts for their business needs. Secondly, it is observed State Bank of Travancore, Karur Vysya Bank, Punjab and Sind Bank and Dena Bank shows negative position in Borrowings with RBI. This ratio proportionate RBI to Borrowings. Further, other liabilities to Working Funds are not satisfactory in case
of City Union Bank, United Bank of India and Indian Bank. The other liabilities comprises of bills payable, interoffice adjustment, interest accrued and other including provisions. On basis of above findings, Banks are suggested to have control over the borrowings with RBI and Other liabilities. It is observed Cost of Borrowings of Jammu and Kashmir and Central Bank of India are inferior among selective banks. Interests paid on borrowings are high for these banks. It is recommended from the above statement, banks should concentrate to reduce borrowings. Further, Fixed assets to Total Borrowings are poor in the selective banks during the study period. The fixed assets consist of premises, fixed assets under construction and other fixed assets. It is recommended overall banks should concentrate in borrowings. So that it helps banks to reduce interest paid on borrowings. Hence the above suggestion helps the scheduled commercial banks in India to make a sound financial position in creditor s perspective.. CONCLUSIONS Banking industry in India has also achieved a new height with the changing times. The use of technology has brought a revolution in the working style of the banks. Nevertheless, the fundamental aspects of banking i.e. the trust and the confidence of the people on the institution remain the same. The majority of the banks are still successful in keeping with the confidence of the creditors as well as other stakeholders. However, the changing dynamics of banking business brings new kind of risk exposure in financial statement. The present study empirically examines the various issues of commercial banks by understanding their profitability, efficiency during the study period. It also probes the Creditors perspective on the financial statements. REFERENCES. Government of India, Report of the Banking Commission New Delhi,.. Klein, Hans Emil, Impact of LongRange Planning on Profit and Growth in Selected Segments of Commercial Banks, Ph.D. Thesis, University of Kentucky,. Mathur, O.P., Public Sector Bank in India A Case study of State Bank, Sterling Publishers Pvt. Ltd., New Delhi,. Ganesh, K., Monitoring Profitability in Banks, the Commerce, July, pp... Nayan, Kamal, Performance Evaluation of Commercial Banks: Development of An Evaluation Model, Ph.D. Thesis, Himachal Pradesh University, Shimla,
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