MID-REVIWE REPORT ON :

ORGANIZATIONAL STUDY AT
KARNATAKA BANK

Submited by,
Name of the student: AKSHITH HS
Student enrollment No: A86501923026
Batch: 2023 - 2025

Under the Guidance of

Dr. Shreya Suppannavar
Assistant Professor Amity Business School

A Report is submited in paral fulfillment

of the requirement of MBA (2023-25)

1.1 BACKGROUND OF THE STUDY :

A bank is a financial intermediary that accepts deposits, and channels those deposits into
lending acvies. Banking is generally a highly regulated industry, and government restricons
on financial acvies by banks have varied over me and locaon. The current sets of global bank
capital standards are called Basel III. The oldest bank sll in existence is Monte del Paschi di
Siena, headquartered in Siena, Italy, which has been operang connuously since 1472.

Finance is the life blood of trade, commerce and industry. Now a-days, bank money acts as
the backbone of modern business. Development of any country mainly depends upon the
banking system. In the present scenario, every banking concern follows the banking system
concepts for its smooth operaon but at the same me the quality of system operaons is
equally important. It should be helpful and fit to both the customers as well as the bank.

Objecves of the study :

The main objecves of the study are as follows.

1. To study the profile of Banking Industry in India.
2. To study the detail profile of the Karnataka Bank.
3. To study history, performance, profitability of the Karnataka Bank.
4. To understand the organisaonal structure.
5. To study establishment, growth and progress of banking service.
6. To understand the procedures and policies in Karnataka Bank.
7. To make a SWOT analysis.
8. To make observaons and conclude with suggesons.

1.2 INDUSTRY PROFILE:

Introducon to Banking:

The term bank is derived from the French word “Banco” which means a Bench or Money
exchange table . A bank is a financial instuon and a financial intermediary that accepts
deposits and channels those deposits into lending acvies, either directly or through capital
markets. A bank connects customers that have capital deficits to customers with capital
surpluses. Oxford Diconary defines a bank as "an establishment for custody of money, which
it pays out on customer's order."

Characteriscs / Features of a Bank:

• Dealing in Money: Bank is a financial instuon which deals with other people's money i.e.
money given by depositors.
• Individual/Firm/Company: A bank may be a person, firm or a company. A banking company
means a company which is in the business of banking.
• Acceptance of Deposit: A bank accepts money from the people in the form of deposits
which are usually repayable on demand or aer the expiry of a fixed period. It gives safety to
the deposits of its customers. It also acts as a custodian of funds of its customers.
• Giving Advances: A bank lends out money in the form of loans to those who require it for
different purposes.
• Payment and Withdrawal: A bank provides easy payment and withdrawal facility to its
customers in the form of cheques and dras. It also brings bank money in circulaon. This
money is in the form of cheques, dras, etc.
• Agency and Ulity Services: A bank provides various banking facilies to its customers.
They include general ulity services and agency services.
• Profit and services Orientaon: A bank is a profit seeking instuon having service oriented
approach.
• Ever increasing Funcons: Banking is an evoluonary concept. There is connuous expansion
and diversificaon as regards the funcons, services and acvies of a bank.
• Connecng Link: A bank acts as a connecng link between borrowers and lenders of money.
Banks collect money from those who have surplus money and give the same to those who
are in need of money.

• Banking Business: A bank's main acvity should be to do business of banking which should
not be subsidiary to any other business.
• Name Identy: A bank should always add the word "bank" to its name to enable people to
know that it is a bank and that it is dealing in money.

History of Banking in India:

Banking in India originated in the last decades of the 18th century.

 The first banks were The General Bank of India, which started in 1786, and Bank of
Hindustan, which started in 1770, both are now defunct.

The oldest bank in existence in India is the State Bank of India, which originated in the
Bank of Calcuta in June 1806, which almost immediately became the Bank of Bengal.
This was one of the three presidency banks, the other two being the Bank of Bombay
and the Bank of Madras, all three of which were established under charters from the
Brish East India Company. The three banks merged in 1921 to form the Imperial Bank of
India, which, upon India's independence, became the State Bank of India in 1955.

The Allahabad Bank, established in 1865 and sll funconing today, is the oldest Joint Stock
bank in India.

HSBC established itself in Bengal in 1869. Calcuta was the most acve trading port in
India, mainly due to the trade of the Brish Empire, and so became a banking centre.

An enrely Indian joint stock bank was the Punjab Naonal Bank, established in Lahore in
1895, which has survived to the present and is now one of the largest banks in India.

 Around the turn of the 20th Century, the Indian economy was passing through a
relave period of stability. Indians had established small banks, most of which served
parcular ethnic and religious communies.

The presidency banks dominated banking in India but there were also some exchange
banks and a number of Indian joint stock banks operang in different segments of the
economy.

The exchange banks, mostly owned by Europeans, concentrated on financing foreign

trade. Indian joint stock banks were generally undercapitalized and lacked the
experience and maturity to compete with the presidency and exchange banks.

The period between 1906 and 1911, saw the establishment of banks inspired by the
Swadeshi movement. Around this me, undivided Dakshina Kannada district was known
as "Cradle of Indian Banking", as four naonalised banks started in this district and also a
leading private sector bank.

 Period of world wars and pre-independence!

During the First World War (1914–1918) through the end of the Second World War
(1939–1945), and two years thereaer unl the independence of India were challenging for
Indian banking. The years of the First World War were turbulent, and it took its toll with
banks simply collapsing despite the Indian economy gaining indirect boost due to war-
related economic acvies. At least 94 banks in India failed between 1913 and 1918.

 Banking in India Post-independence!

The paron of India in 1947 adversely impacted the economies of Punjab and West
Bengal, paralyzing banking acvies for months. India's independence marked the end of a
regime of the Laissez-faire for the Indian banking. The Government of India iniated
measures to play an acve role in the economic life of the naon, and the Industrial Policy
Resoluon adopted by the government in 1948 envisaged a mixed economy.

The Reserve Bank of India, India's central banking authority, was naonalized on January
1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act,
1948.

In 1949, the Banking Regulaon Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India". It also provided that no
new bank or branch of an exisng bank could be opened without a license from the RBI,
and no two banks could have common directors.

 Naonalisaon
By the 1960s, the Indian banking industry had become an important tool to facilitate the
development of the Indian economy and it had emerged as a large employer, thus a
debate had ensued about the naonalizaon of the banking industry. The then Prime
 Minister of India, Indira Gandhi, brought The Government of India to existence. In 1969,
14 largest commercial banks in India were naonalised. These banks contained 85 percent
of bank deposits in the country.

A second dose of naonalizaon of 7 more commercial banks followed in 1980. The stated
reason for the naonalizaon was to give the government more control of credit delivery.
With this, the Government of India controlled around 91% of the banking business of
India.

1949: Enactment of Banking Regulaon Act.

1955: Naonalizaon of State Bank of India.

1959: Naonalizaon of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Naonalizaon of 14 major banks.

1971: Creaon of credit guarantee corporaon.
1975: Creaon of regional rural banks.
1980: Naonalizaon of seven banks with deposits over 200 crore.

 Liberalizaon

In the early 1990s, the then Narasimha Rao government embarked on a policy of
liberalizaon, licensing a small number of private banks. These came to be known as New
Generation tech-savvy banks, and included Global Trust Bank (the first of such new generaon
banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank
(since renamed Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid
growth in the economy of India, revitalized the banking sector in India, which has seen rapid
growth with strong contribuon from all the three sectors of banks, namely, government
banks, private banks and foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxaon in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given vong
rights with some restricons.
The new policy shook the Banking sector in India completely. Bankers, ll this me, were used
to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of funconing. The new wave
ushered in a modern outlook and tech-savvy methods of working for tradional banks.
All this led to the retail boom in India.

The RBI in 1984 formed Commitee on Mechanisaon in the Banking Industry. The major
recommendaons of this commitee were introducing MICR Technology in all the banks in the
metropolis in India. This provided use of standardized cheque forms and encoders. Later, in
1988, focus shied on computerisaon of branches and increasing connecvity among branches
through computers. Suggesons for implemenng on-line banking were also looked into.

The IT revoluon had a great impact in the Indian banking system. The use of computers had
led to introducon of online banking in India. The use of the modern innovaon and
computerisaon of the banking sector of India has increased many folds aer the economic
liberalisaon of 1991 as the country's banking sector has been exposed to the world's market.
The Indian banks were finding it difficult to compete with the internaonal banks in terms of
the customer service without the use of the informaon technology and computers.

In 1994, Commitee on Technology Issues relang to Payments System, Cheque Clearing and
Securies Setlement in the Banking Industry was set up. It emphasized on Electronic Funds
Transfer (EFT) system, with the BANKNET communicaons network as its carrier. It also said
that MICR clearing should be set up in all branches of all banks with more than 100
branches. Also, the banks have been selling the third party products like Mutual Funds,
insurances to its clients.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private sector bank) to 10%. This is the first me an investor has been
allowed to hold more than 5% in a private sector bank since the RBI announced norms in
2005 that any stake exceeding 5% in the private sector banks would need to be veted by
them.

From around 2010, it is considered that banking in India is generally fairly mature in terms of
supply, product range and reach, even though reach in rural India sll 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 relave to
other banks in comparable economies in its region. The Reserve Bank of India is an
autonomous body, with minimal pressure from the government. The stated policy of the
Bank on the Indian Rupee is to manage volality but without any fixed exchange rate-and this
has mostly been true.

From 2010-2012 banks began rolling out mobile banking apps and online services, providing
customers with the convenience of managing their finances remotely. This period marked
the inial shi from tradional in-branch services to digital plaorms.

From 2013-2015 arficial Intelligence (AI) started to be integrated into banking operaons,
parcularly in customer service through chatbots and in fraud detecon systems. AI helped
banks enhance operaonal efficiency and offer more personalized customer experiences.

From 2016 the introducon of blockchain technology revoluonized secure transacons and
cross-border payments. Blockchain’s decentralized nature provided a new level of
transparency and security in financial transacons. The introducon of the Unified Payments
Interface (UPI) in 2016 has revoluonized the banking industry in India by making digital
transacons seamless, secure, and widely accessible. UPI has significantly boosted financial
inclusion, allowing millions to access banking services with just a mobile phone. It has
simplified money transfers by enabling instant transacons without the need for extensive
account details. The rapid adopon of UPI has driven a massive increase in digital payments,
posioning India as a global leader in real-me transacons. Enhanced security measures have
made digital payments safer, while the interoperability of UPI allows users to manage mulple
bank accounts through a single app. Addionally, UPI has spurred innovaon in the fintech
sector and saved the Indian economy billions by reducing transacon costs and improving
efficiency. Overall, UPI has transformed the financial landscape, fostering a more inclusive
and efficient banking system.

From 2017 cloud compung gained significant tracon, enabling banks to scale their operaons,
reduce costs, and improve data management. Cloud soluons also supported the
development of new digital services and applicaons.
From 2018-2019 the rise of fintech companies brought about intense compeon. Fintechs
introduced innovave soluons like peer-to-peer lending, digital wallets, and robo-advisors,
pushing tradional banks to innovate and collaborate with these new players.

From 2020 with the surge in digital banking, cybersecurity became a crical focus. Banks
invested heavily in advanced security measures to protect customer data and prevent fraud,
while also ensuring compliance with stringent regulatory requirements.

From 2021-2023 the industry connued to shi towards a more agile and customer-centric
approach. Banks adopted agile methodologies to quickly respond to market changes and
customer needs, focusing on improving customer service, offering personalized products,
and ensuring a seamless user experience across all channels.

Recent Developments

2024: The trend towards digital transformaon persists, with banks leveraging
emerging technologies like quantum compung and 5G to further enhance their
services. The focus remains on innovaon, security, and customer sasfacon, as banks
strive to meet the evolving needs and expectaons of their customers. The banking
industry is navigang a complex landscape shaped by several key trends and
challenges. The impact of generave AI is profound, enhancing producvity, customer
service, and operaonal efficiency Embedded finance is becoming more prevalent,
allowing non-financial companies to offer financial services directly within their
plaorms, thus expanding the reach of banking services. The use of open data and
digital identy soluons is growing, enabling beter customer insights and more secure
verificaon processes
Decarbonizaon efforts are intensifying as banks integrate environmental, social, and
governance (ESG) criteria into their operaons and investment strategies
Cybersecurity remains a top priority, with banks invesng heavily in advanced security
measures to protect customer data and comply with regulatory requirements. The
industry is also facing economic and geopolical challenges, including high interest
rates, geopolical tensions, and regulatory changes, which are tesng banks’ ability to
generate income and manage costs effecvely.
 Overall, 2024 is a year of significant transformaon and adaptaon for the banking
industry, driven by technological advancements, regulatory pressures, and evolving
consumer expectaons.

BANKING STRUCTURE IN INDIA:

The Banking system in India is classified into three broad categories:

Reserve Bank of India (RBI)

The RBI is the central bank of the country having the authority and the responsibility to
control the banking system in the country. It keeps the reserves of all scheduled banks
and hence known as Reserve Bank.It was established in the year 1935 under the
Reserve Bank of India Act 1934. The central board of directors constuted of 20 members
and they are responsible for the conduct of the main business of RBI. A Governor will
head the central board of directors.
The RBI manages the country's money supply and foreign exchange and also serves as a
bank for the government of India and for the country's commercial banks. In addion to
central banking roles, they also undertake developmental and promoonal acvies. It also
performs many promoonal and regulatory funcons like encouraging agricultural finance,
industrial finance, export finance and controlling non banking finance companies .

Commercial Banks:
The main funcon of commercial banks in India is accepng deposits, granng loans and
advances, discounng of bills and promissory notes. Apart from these they also provide
agency services and, general ulity services. The commercial Banks in India can be further
classified into the following:

 Public Sector Banks (PSBs): These are the banks which are owned by the central
government directly or through the Reserve bank of India. The PSBs are bank
where a majority stake (i.e. more than 50%) is held by a government. The shares
of these banks are listed on stock exchanges. There are a total of 26 PSBs in
India. Public Sector Banks includes all naonalized banks and State Bank of India
with its seven associate banks. It is the base of the Banking sector in India and
accounts for more than 78 per cent of the total banking industry assets. The
State Bank of India (SBI) in the largest bank in the country and along with its
seven associate banks has an asset base of about Rs. 7,000 billion (approximately
US$150 billion). The other large public sector banks are Punjab Naonal Bank,
Canara Bank, Bank of Baroda, Bank of India
 Private Sector Banks: All those banks where greater parts of stake or equity are
held by the private shareholders and not by government are called as the private
sector banks. These are the major players in the banking sector as well as in
expansion of the business acvies India. The present private sector banks
equipped with all kinds of contemporary innovaons, monetary tools and
techniques to handle the complexies are a result of the evoluonary process over
two centuries. They have a highly developed organizaonal structure and are
professionally managed. Thus they have grown faster and stronger since past few
years.
 There are two categories of the private sector banks- “old” and “new”. The old
private sector banks have been operang since a long me and may be referred to
those banks, which are in operaon from before 1991.

The banks, which came in operaon aer 1991, with the introducon of economic
reforms and financial sector reforms are called as new private sector banks.
Banking regulaon act was then amended in 1993, which permited the entry of
new private sector banks in the Indian banking sector. Yes Bank (2005) is the latest
entrant to the private sector banking industry. Some other main banks are ICICI
Bank, HDFC Bank and Axis Bank.

 Foreign Exchange Bank: These banks finance export and imports of the country.
As such internaonal trade involves foreign exchange. These banks specialize in
such trade apart from carrying on the usual commercial banking acvies. As many
as 29 foreign banks originang from 19 countries are operang in India through a
network of 258 branches and about 900 ATMs. With total assets of more than
Rs2, 000 billion (about 44 billion US dollars) they are present in 40 centers across
19 Indian states and Union Territories. Some of the leading internaonal banks
that are doing brisk business in India include Standard Chartered Bank, HSBC
Bank, Cibank N.A. and ABN-AMR0 Bank. In banks belonging to 14 countries were
operang in India through their representave offices.
 Regional Rural Banks: The Government of India set up five Regional Rural Banks
(RRBs) on October 2, 1975. which were sponsored by Syndicate Bank, State Bank
of India, Punjab Naonal Bank, United Commercial Bank and United Bank of India.
Capital share being 50% by the central government, 15% by the state
government and 35% by the scheduled bank. They were established to grant
loans and advances to small and marginal farmers and agricultural laborers.
Financial assistance is also provided to co-operave sociees, arsans and small
entrepreneurs engaged in pety trade and home industry. Though the RRB's have
done tremendous job they are constantly aiming at duplicang the operaons of
sponsoring banks. Many tremendous jobs they are constantly aiming at
duplicang the operaons of sponsoring banks. Many of these banks are not doing
well financially and the government is currently engaged in restructuring and
 consolidang them. Local area banks were of recent origin and as on March 31,
2006 four such banks were operang in the country.

Co-operative Banks:

Co-operave bank is an autonomous associaon of persons united voluntarily to meet their

member's financial (loans, deposits, other services), economic, social, and cultural needs
and aspiraons through a democracally controlled way. The co-operave banks are formed
for the purpose of promong the economic interests of a well defined group of people.
The co-operave banks have a three er structure. At the primary level they may be
organized by members belonging to a parcular caste, region, community or employees of
an organizaon. At the district level central co-operave bank funcon as federaon of co-
operave banks at the primary level. The central co-operave banks accept deposits from
the public and lend to the co-operave banks and primary cooperave sociees. At the state
level apex co-operave banks funcons as a federaon of CCB's they provide loans to CCB's
and parcipate in clearing house acvies for the cheques presented by CCB for collecon.

• Urban Cooperave Banks in India The term Urban Co-operave Banks (UCBs),
though not formally defined, refers to primary cooperave banks located in urban
and semi-urban areas. These banks, ll 1996, were allowed to lend money only for
non-agricultural purposes. They essenally lend to small borrowers and
businesses. Today, their scope of operaons has widened considerably.

• State co-operave banks The state co-operave bank is a federaon of central

cooperave bank and acts as a watch dog of the co-operave banking structure in
the state. Its funds are obtained from share capital, deposits, loans and overdras
from the Reserve Bank of India. The state co- operave banks lend money to
central co-operave banks and primary sociees and not directly to the farmers.

Naonalized Banks in India:

1. State Bank of India (SBI)

2. Punjab Naonal Bank (PNB)

 3. Bank of Baroda (BoB)

4. Canara Bank

5. Union Bank of India

6. Bank of India (BoI)

7. Indian Bank

8. Central Bank of India

9. Indian Overseas Bank (IOB)

10. UCO Bank

11. Bank of Maharashtra

12. Punjab & Sind Bank

Private Banks:

1. HDFC Bank

2. ICICI Bank
3. Axis Bank

4. Kotak Mahindra Bank

5. IndusInd Bank

6. Yes Bank

7. Karnataka Bank

8. IDFC First Bank

9. RBL Bank

10. South Indian Bank & others

Foreign Banks :
1. HSBC Bank
 2. Standard Chartered Bank

3. Citibank N.A.

4. Deutsche Bank

5. Barclays Bank

6. DBS Bank

7. Bank of America

8. BNP Paribas

9. J.P. Morgan Chase Bank N.A.

10. Royal Bank of Scotland (RBS) and others

Regional Rural Banks (RRBs):

1. Andhra Pradesh Grameena Vikas Bank (Sponsor: State Bank of India)
2. Kerala Gramin Bank (Sponsor: Canara Bank)
3. Baroda UP Bank (Sponsor: Bank of Baroda)
4. Aryavart Bank (Sponsor: Bank of India)
5. Karnataka Gramin Bank (Sponsor: Canara Bank) & others.

SCENARIO IN THE BANKING SECTOR:

The Indian banking system has passed through three disnct phases from the me of
incepon. The first was being the era of character banking, where you were recognized as
a credible depositor or borrower of the system. This era come to an end in the Sixes. The
second phase was the social banking. Nowhere in the democrac developed world, was
banking or the service industry naonalized. But this was pracced in India. Those were
the days when bankers has no clue whatsoever as to how to determine the scale of
finance to industry.
The third era of banking which is in existence today is called the era of Prudenal
Banking. The main focus of this phase is on prudenal norms accepted internaonally. The
banking sector supported by financial services industry has virtually become a revoluon
in the market for financial services. This has been in demand by the need for liquid,
readily transferable assets to effect transacons, technological changes worldwide
including electronic banking and electronic funds transfer necessitang:

• Over dressing of banks around the world with high risk porolios, looking for ways to
boost their capital and incomes from fee-based business.
• Beter facilies and services for the customers, extending importance for innovave
products and prompt service at low cost because of sff compeon.
• Erasing of linked costs and risks.
• Mergers and alliances at home and across the borders are rising.
• Banks world-wide are making the assets neat and dy to act in accordance with risk-
asset capital rao requirements because the financial environment has become
compeve with focus on profitability and efficiency, even though margins are
narrowing.
• Securizaon provides banks the benefits of removing capital hungry assets from banks
and trimming balance sheets.
• The use of updated technology and communicaon systems has become mandatory to
keep in touch with customers, top management, and branches and to provide beter
customer service.
As of 2023-24, growth in key monetary aggregates and money supply in this year reflected
changing liquidity condions arising from domesc and global financial environment. The
monetary policy stance during the year was to contain inflaon and acvely manage liquidity
to support growth.

The banking sector in India remained healthy and resilient and performed reasonably
well during 2023-24. However the slowdown in macro economy has resulted in some
deterioraon in the asset quality. The year also saw some key policy measures announced

by the RBI.

CHALLENGES FACED BY THE BANKING INDUSTRY:

To affirm and assert their global presence the Banks have to prepare for the compeon and
challenges at home and abroad. Developing countries like India, sll has a huge number of
people who do not have access to banking services due to scatered and fragmented
locaons. Also today, people’s expectaons are rising as the level of services is increasing
due to the emergence of Informaon Technology, compeon and entry of foreign banks into
the Indian market. Now, the exisng situaon has created various challenges for the Banks.

• Risk Management: We have already witnessed the bankruptcy of some foreign

banks. The changes in bank capital today seem risk-based. The deregulated
environment brings in its way risks along with, profitable opportunies and
technology which play a crucial role in managing these risks. In addion to being
exposed to credit risk, market risk and operaonal risk, the business of banks
would be suscepble to country risk, which will increase as controls on the
movement of capital are eased. In this context, banks are upgrading their credit
assessment and risk management skills and retraining staff, developing a cadre
of specialists and introducing technology driven management informaon
systems.

• Transparency and Disclosure: In pursuance of the Financial Sector Reforms

introduced since 1991 and in order to bring about meaningful disclosure of the
true financial posion of banks to enable the users of financial statements to
study and have a meaningful comparison of their posions, a series of measures
were iniated. These norms as part of internaonally accepted corporate
governance pracces are assuming greater importance in the emerging
environment. Banks are expected to be more responsive and accountable to
the investors. Banks have to disclose in their balance sheets a plethora of
informaon on the maturity profiles of assets and liabilies, lending to sensive
sectors, movements in NPAs, capital, provisions, shareholdings of the
government, value of investment in India and abroad, operang and profitability
indicators. In addion, banks should implement a process for assessing the
appropriateness of their disclosures, including validaon and frequency.

• Global Banking and Internaonal Standards: It is praccally and fundamentally

impossible for any naon to exclude itself from world economy. Therefore, for
sustainable development, one has to adopt integraon process in the form of
 liberalizaon and globalizaon. Introducing internaonally followed best pracces
and observing universally acceptable standards and codes is necessary for
strengthening the domesc financial architecture. This includes best pracces in
the area of corporate governance along with full transparency in disclosures. In
today's globalized world, focusing on the observance of standards will help
smooth integraon with world financial markets.

• Employee and Customer Retenon: Today, diminishing employee morale results

in decreased revenue. Due to the intrinsically close es between staff and clients,
losing those employees completely can mean the loss of valuable customer
relaonships. The retail banking industry is concerned about employee retenon
from all levels: from tellers to execuves to customer service representaves
because compeon is always moving in to hire them away. The compeon to
retain key employees is intense. Top-level execuves and HR departments are
spending large amounts of me, effort, and money trying to figure out how to
keep their people from leaving. Determinants like service quality dimensions,
service features, service problems, service recovery and products have a major
impact on customer sasfacon and their intenons to switch. The strongest
connecon between retenon and sasfacon strategies turns out to be in terms of
relaonship and confidence. Also, banks will have to strive to atract and retain
customers by introducing innovave products, enhancing the quality of customer
service and markeng a variety of products through diverse channels targeted at
specific customer groups.
Banks on a regular basis face various other challenges like reinforcing and adopng latest
technology to keep in pace with the innovaons and developments, recognizing and
sharpening employee skills in specialized areas, corporate governance, cost reducon,
improving profitability and wealth maximizaon.
In parcular, to sustain and batle the challenges of foreign banks at home and in their
domicile Indian banks have to:
• Be alert and asserve to give direcons to their operaons.
• Improve work culture and erase rigidies in labour pracces that have hindered
change.
• Improve their service orientaon and update skills to meet customer
requirements.
• Innovaon of new products and services to meet customer requirements in the
challenging market.
• Computerize and update their techniques of operaons.
• Maintain high quality human resource to cope with and adapt to the new
environment.
• Develop a foresight in ancipang changing risk-return relaonships.
• To sustain and batle the challenges posed by foreign banks both at home and in
their domicile, Indian banks need to: Technological Innovaon
• Invest in advanced technologies like AI, blockchain, and cloud compung.
• Collaborate with fintech companies to innovate and offer cung-edge financial
products and services. Customer-Centric Approach
• Use data analycs to offer personalized banking experiences.
• Implement AI-driven chatbots and virtual assistants for 24/7 customer support.
Compeve Pricing and Products
• Offer atracve interest rates on loans and deposits.
• Develop unique financial products tailored to the Indian market.
Strengthening Cybersecurity
• Invest in advanced cybersecurity technologies to protect customer data.
• Ensure compliance with local and internaonal regulaons.
Expanding Global Presence
• Establish branches in key global markets.
• Offer seamless cross-border banking services. Focus on Sustainability
• Incorporate environmental, social, and governance (ESG) criteria into operaons.
• Promote and finance sustainable projects.

These strategies will help Indian banks effecvely compete with foreign banks.
Porter’s Five Forces model :

1. Threat of New Entrants:

o Barriers to Entry:

 Regulatory Requirements: Banks face stringent regulaons, including

capital adequacy norms, licensing, and compliance. New entrants
must navigate these hurdles.

 Capital Intensity: Establishing a bank requires substanal capital

investment, which can deter startups.

 Brand and Trust: Exisng banks have established trust with customers,
making it challenging for newcomers to gain market share.

o Opportunies for New Entrants:

  Niche Markets: Focusing on underserved segments (e.g., digital-only
banks targeng millennials) can be a strategic entry point.

 Technological Innovaon: Fintech startups can disrupt tradional banking

by offering innovave services.

2. Power of Suppliers:

o Capital Suppliers:

 Depositors: Deposits provide a significant source of funds for banks.

Banks compete for deposits by offering atracve interest rates.

 Shareholders: Shareholders provide equity capital. Banks must

maintain their confidence to raise capital.

 Borrowers: Banks rely on borrowers (individuals, businesses) for

interest income. Lending terms impact profitability.

 Central Banks: Monetary policy decisions affect interest rates and

liquidity.

o Negoang Power:
 Banks negoate terms with suppliers (e.g., deposit rates, dividends) to
opmize profitability.

3. Power of Buyers (Customers):

o Customer Segments:

 Retail Customers: Individuals and small businesses seek convenience,

compeve rates, and personalized services.

 Corporate Clients: Large businesses require customized soluons, credit

facilies, and efficient treasury services.

o Customer Bargaining Power:

 Switching Costs: Customers evaluate alternaves based on fees, interest

rates, and service quality.
  Loyalty: Established relaonships influence customer retenon.

 Digital Channels: Banks invest in user-friendly digital plaorms to retain

and atract customers.

4. Availability of Substutes:

o Non-Bank Alternaves:

 Fintech Companies: These disruptors offer payment soluons, lending,

and investment services.

 Payment Apps: Digital wallets and peer-to-peer payment apps provide

convenient alternaves.

 Investment Plaorms: Robo-advisors and online trading plaorms

compete with tradional banks.

o Impact on Banks:

 Banks must adapt by enhancing digital capabilies, collaborang with

fintechs, or offering similar services.

5. Compeve Rivalry:

o Market Structure:

 Global Banks: Large mulnaonal banks compete globally.

 Regional and Local Banks: Smaller banks focus on specific markets.

o Strategies:

 Product Differenaon: Banks offer unique products (e.g., wealth

management, specialized loans).

 Cost Leadership: Efficiency drives profitability.

 Mergers and Acquisions: Consolidaon enhances market share and

capabilies.

 Digital Transformaon: Invesng in technology ensures compeveness.

In summary, the banking industry faces a dynamic landscape shaped by regulatory
requirements, technological advancements, and customer preferences. Banks must adapt
strategically to thrive in this compeve environment.

CHAPTER II – COMPANY ANALYSIS:

Karnataka Bank, established in 1924, has celebrated a century of remarkable growth and
resilience. Over the past 100 years, the bank has evolved from a small regional enty into a
prominent player in the Indian banking sector, known for its customer-centric approach and
innovave services. With a strong focus on digital transformaon, Karnataka Bank has
successfully navigated the challenges of modern banking, consistently delivering value to its
stakeholders. The bank’s commitment to financial inclusion, robust risk management, and
community development has cemented its reputaon as a trusted and reliable instuon,
poised for connued success in the years to come.

History of Karnataka bank:

‘Karnataka Bank ltd.’ is the 6 top ‘A’ class schedu1ed commercial Bank in the India. This was
established on the February18th 1924. The central registered head office is in Mangalore.
The bank commences its commerce on May 23rd 1924 with an early capital of Rupees 11580
contribute by 113 shareholders; Here Sri B.R.Vyasaraya Achar was the Ist president of the
Bank. In the banks memorandum of associaon, the objecve clause state6objecve that
Bank distant from delivery on the general funcons of the banking business, would be “Set
distant and suitable from the annual net profit near the general, mental, moral and physical
development of others helpful use of the members of the Dravidian and Brahmin society,
such sum might be deem healthy”.

The starng 3 branches6of this bank are Mangalore Dongerkery, Udupi Car Street
and Madras George. The bank deposit was Rs.0.68 Lakhs at the end of the year of operaon.
The bank was renowned its 25th anniversary in the year 1949. In that me it was gained
surplus of Rs.0.75 Lakhs. In6that, Rs.55.59 Lakhs were deposites and advances6of Rs. 39.39
Lakhs.

On 23rd November 1958, Sri K.S.N.Adiga became the chairman of the bank. The first real
appreciaon6for the Mangalore based Bank came on the year of 1959. The bank was being
prominent from ‘c’ class to ‘B’ class. This bank took over three rural banks in the year of
l960. Aer that in the year l969, this bank opened 75 branches. Its deposits6cross l00 million
and net6profit was Rs.3.05 Lakhs.

The bank opened its first branch in the country’s financial capital in the year 197l. In the
same year the bank was also obtained class ‘A’ by the reserve bank of India. On its 25th year
of its acon, the bank’s overall deposits were Rs.33.l4 Crores and advances were Rs.22.09
Crores. And the branches were l46 and 126 emp1oyees.

Karnataka Bank Ltd launched its new symbol that the star symbol as its visual identy symbol
in l977. That symbol made by late Dr.Shivaram Karanth, it conveys stability, discipline,
harmony and confidence. Here staff training co1lege of the bank was started in Mangalore.
That was started on September 27th 1977. In l997 the foreign exchange dealing of the banks
was started. That was another department recognized in Bangalore aerwards it was shi to
the Mumbai (l979).
This bank achieves the goal of Rs. 1 Billion in deposits with the combined 104.24 Crores as
on December 31st l979. The first service branch was opened in l994-95, at Mumbai. The first
industrial financial branch was also opened at Bangalore on March 20th 1995. The first
agricultural development branch was opened on lst April l995. The bank entered to stock
markets on October 1995. Public issue was rupees 8lcr. This was oversubscribed.

Karnataka banks network now extended it branches to 901. Extend across 21 states and
two union territories. That has managed by commited management teams that have over
8652 employees and serving 13 million customers happly.

For the financial year 2023-24, Karnataka Bank reported a record annual net profit of
₹1,306 crore, marking an 11% increase from the previous year. In the first quarter of the
financial year 2024-25, the bank achieved a net profit of ₹400.33 crore, which is a 7.99%
increase compared to the same period in the previous year.

Vision:

Karnataka bank’s vision is: “ Progressive, Prosperous and Well governed Bank”

&

To emerge as the “Digital Bank of the Future” by embedding data & analytics in business
processes to drive datadriven decision making.

Mission:

.The Karnataka bank’s mission declaraon of any organizaon normally represents its long term
aims and strategies. Every organisaon have its own missions,

Karnataka banks mission as follows:

“To be a technology savvy, customer centric progressive bank with a naonwide presence,
focused by the highest standards of corporate authority and guided by sound ethical
va1ues”.

Quality policy:

The quality po1icy of Karnataka Bank ltd. is provided that quick and superior services and
their by achieve customers sasfacons.
Nature of business:

Taking deposits and lending money is the main nature of bank. It issues overdra and credit
card, debit card, safeguard of asset.

Environment:

Macro and Micro environment which influences the Karnataka bank`s performance are:

Macro Environment Factors:

Factor Descripon

Economic Impact of GDP growth, inflaon, and employment levels on

loan demand and default rates.
Condions

Regulatory Influence of RBI policies, interest rates, and banking regulaons

on profitability and compliance.
Framework

Technological Role of digital banking, cybersecurity, and fintech innovaons

in enhancing operaonal efficiency and customer experience.
Advancements

Socio-Polical Effects of polical stability, government policies, and social

trends, including financial inclusion and digital payments
Factors
iniaves.

Micro Environment Factors

Factor Descripon
 Customer Base Importance of customer sasfacon and loyalty in driving
deposits and loan uptake.

Factor Descripon

Competors Compeve landscape with other banks and financial instuons

in Karnataka.

Internal Significance of leadership, strategic decision-making, and

efficient management pracces.
Management

Product and Service Variety and quality of financial products and services, such as
loans, deposits, and digital banking services.
Offerings

Operations: Functions and Processes

With over 100 years of existence, Karnataka bank is one of the well-established private
sector banks in India, offering wide range of banking products and services to approximately
12.93 million customers as of December 31, 2023 including corporate, retail, agriculture and
MSME customers. Operang under “banking with legacy, embracing the future”, Karnataka
Bank’s principal business acvies consist of retail banking, wholesale banking and treasury.
Karnataka bank deliver a wide range of banking products and services to our customers
through a variety of channels, including bank branches, ATMs, call centres, internet banking
and mobile phone banking. It include: (i) corporate / wholesale banking; (ii) retail banking
(including MSMEs and agriculture); (iii) treasury; and (iv) other banking operaons.

Karnataka branch network is complemented by our alternave service delivery channels

such as internet banking, mobile phone banking, digital banking soluons, Aadhar-enabled
payment system, point of sales, QR payments, UPI, 24*7 contact centre, mPassbook, micro
ATMs, prepaid gi cards, and payment gateway services and business correspondent services,
through e-ups, as part of financial inclusion.

(i) Corporate / wholesale banking:

Corporate / Wholesale banking business includes our corporate and commercial porolio,
which consists of products and services that cater to the business needs of large companies,
public enterprises and private companies/firms etc. These products and services include
various fund and non fund based products, such as term loans, working capital facilies,
foreign exchange services, structured finance and trade financing products like leter of credit
and guarantees, bill discounng etc. As a percentage of Bank’s total advances, advances in the
corporate/wholesale segment accounted for 47.01%, 51.90%, 49.78%, 52.02% and 52.65%
respecvely in Fiscal 2021, Fiscal 2022 and Fiscal 2023 and the nine months ended December
31, 2022 and December 31, 2023.

(ii) Retail banking: (including MSMEs and agriculture)

Karnataka Bank offers a wide spectrum of personal banking products in the retail segment.
The retail credit products include home loans, automobile loans, personal loans, educaon
loans, loans against term deposits, Loans against securies, gold loans, small business loans
and agriculture loans and also offer banking products to priority sectors including
agriculture, MSME, housing and educaon with a specific focus on offering products to the
MSME sector. In order to augment the retail business, Karnataka Bank has introduced the
concept of, inter alia, DSTs, in addion to the exisng channels through the network of
branches, DSAs, BSAs and dealer e-ups. Karnataka bank`s retail banking liability porolio
consists of CASA and term deposit services. A banking relaonship through a current
accounts/saving accounts opens gateway of service offerings to the customers like
internaonal debit card, internet banking, mobile banking, co-branded credit cards, third
party products from our channel partners, alternave delivery channels etc. Karnataka Bank
leverages its digital capabilies, with over 88% of CASA accounts being opened through the
Bank’s digital onboarding soluons. The retail banking lending division has four specialized
wings namely: agriculture, forex, MSMEs and others.

MSME:
Karnataka Bank offers various types of MSME products to the public to fulfil their financial
needs and provides a wide range of banking products such as working capital finance, term
loans, business finance products, both fund based and non-fund based, suited to all sectors
of the industry. Some of our products, namely, ‘KBL Contractor Mitra’, ‘KBL Micro Mitra’ and
‘KBL Export Mitra’ focus on parcular segments of the public, while schemes like KBL MSME
are open for all kinds of MSME customers. In order to support the financial needs of women
entrepreneurs, we offer the ‘KBL Mahila Udyog’ product. In November 2023, Karnataka bank
also launched the ‘KBL Commercial Vehicle without Collaterals’ scheme to cater to the needs
of contractors, transport operators and in February 2024 also launched the ‘KBL Equipment
Loan’ scheme for buyers of, inter alia, medical equipment, backhoe loaders, crushing plants,
road rollers, dumpers and cranes. Karnataka Bank is also registered as a financier on the
TReDS plaorm, set up to provide finance to MSMEs.

Agriculture:

In order to augment PSL and also to ensure achievement of sub-targets under PSL,
Karnataka Bank has increased the number of AFOs and sales officers at branch level to reach
farmers, SHGs and JLGs effecvely with special campaigns regularly to focus mainly on loans
to weaker secons of the society. Further, the e up with business correspondents and
business facilitators have started improving business generaon. In the past few years,
Karnataka Bank has taken steps in increasing lending to SHGs and micro-finance. Moreover,
our Bank connuously explores the possible parcipaon in emerging digital disrupon in the
agriculture sector for business expansion by having partnership and e-ups with agritech
companies. Karnataka Bank is constantly making efforts to increase its porolio under PSL and
conducts regular review to, inter alia, discuss 134 various strategies, acon plans and monitor
performance.
Agriculture Credit Support Group:

This funcons under retail finance division to exclusively deals in agriculture credit. In
agricultural finance, Karnataka bank offer a wide variety of products under various schemes
such as ‘KBL Agro Processing Scheme’, ‘KBL Instant Agri Credit Scheme’, ‘Kisan Credit Card
Scheme’, ‘KBL Agri Gold Scheme’, ‘Krishik Sarathi Scheme’, ‘Krishik Pushpankura Scheme’,
‘Krishik Sinchana Scheme’, amongst others, to individual farmers or joint borrowers, small
and marginal farmers and such other persons engaged in agricultural or allied acvies.

(iii) Treasury:

Karnataka Bank’s treasury operaons comprise primarily of statutory reserves management

such as SLR and CRR, liquidity management, investment and trading acvies and foreign
exchange acvies. As part of liquidity management, Karnataka Bank’s Treasury department
primarily invests in sovereign debt instruments and other fixed income securies and also
deals with mutual funds, cerficates of deposits and floang rate instruments in order to
manage short-term surplus liquidity.

Karnataka Bank has an integrated Treasury at Mumbai and offers a wide range of products
and services to customers such as forward contracts, foreign exchange products and services
etc. Karnataka bank maintain the SLR through a porolio of the central government, state
government and government guaranteed securies and other approved securies that we
acvely manage to opmize yield and benefit from price movements and are also involved in
the trading of debt securies, equity securies and foreign exchange within permissible limits.

(iv) Other banking operaons:

As part of other banking operaons, Karnataka bank offer a comprehensive range of

ancillary products and services such as depository services, online trading, ASBA facility,
locker facilies, safe custody facility, bill payment services, online and off-line fee collecon
services, mobile and internet banking services, payment and remitance services and FASTag
throgh offer these services through physical banking channels as well as digital channels
including, inter alia, internet banking, mobile banking and e-lobbies.

Digital strategies And Technology:

Karnataka Bank has been upgrading IT systems and technology to ensure integraon
between our exisng infrastructure and our new digital banking products and set up robust
informaon technology which enables anywhere anyme banking through alternate delivery
channels based on offering an omnichannel experience, API driven open banking
architecture and personalizaon of customer experience through the use of data analycs.

Organizational Hierarchy:
Following is the organizaon patern of the Karnataka Bank Ltd :

Directors
↓
Managing Directors
↓
Chief Execuve Officers
↓
General Manager
↓
Deputy General Manager
↓
 Assistant General Manager
↓
Senior Manager
↓
Manager
↓
Officer
↓
Clerical

Authority Pattern:
Authority Patern of the Karnataka Bank ltd. is as follows:

Karnataka Bank Competors:

1. HDFC Bank

2. ICICI Bank

3. Axis Bank

4. Kotak Mahindra Bank

 5. YES Bank
6. IDFC First Bank

7. Federal Bank

8. IndusInd Bank

9. South Indian Bank

10. Karur Vysya Bank

11. RBL Bank

12. Bandhan Bank

13. DCB Bank

14. City Union Bank

These banks compete with Karnataka bank as fallows:

1. Retail Banking:

o HDFC Bank and ICICI Bank offer a wide range of retail banking products like
savings accounts, fixed deposits, and personal loans, compeng directly with
Karnataka Bank’s offerings.

2. Business Banking:

o Axis Bank and Kotak Mahindra Bank provide extensive business banking services,
including business loans and trade finance, targeng SMEs and large corporaons
similar to Karnataka Bank.

3. Digital Banking:

o YES Bank and IDFC First Bank have made significant strides in digital banking,
offering advanced online and mobile banking services, digital wallets, and
UPIbased transacons, compeng with Karnataka Bank’s digital iniaves.

4. Customer Service:
 o Federal Bank and IndusInd Bank are known for their strong customer service
through various channels, including branch networks and digital plaorms, aiming
to provide a superior customer experience compared to Karnataka Bank.

5. Geographical Reach:

o South Indian Bank and Karur Vysya Bank are expanding their branch and ATM
networks to increase accessibility, compeng with Karnataka Bank’s efforts to
enhance its geographical presence.

6. Innovave Products:

o RBL Bank and Bandhan Bank connuously innovate by introducing new financial
products and services, such as specialized savings accounts and unique loan
products, challenging Karnataka Bank to keep up with market trends.

7. Interest Rates and Fees:

o DCB Bank and City Union Bank offer compeve interest rates on deposits and
loans, as well as lower fees for various banking services, directly compeng with
Karnataka Bank’s pricing strategies.

SWOT Analysis :
Detailed explanaon of each point in the SWOT analysis of Karnataka Bank:

Strengths

1. Wide Network: Karnataka Bank has a strong presence with over 858 branches and
1000 ATMs across 22 states1. This extensive network ensures accessibility for
customers and helps in building a loyal customer base.

2. Customer Service: The bank is known for its customer-centric approach, providing
efficient and personalized services. This focus on customer sasfacon helps in retaining
customers and atracng new ones2.

3. Technological Adopon: Karnataka Bank has implemented core banking soluons and
offers internet and mobile banking services1. This adopon of technology enhances
customer convenience and operaonal efficiency.

4. Strong Financial Performance: The bank has shown consistent financial growth with a
stable asset base and profitability. This financial stability allows it to invest in new
technologies and expand its services2.

5. Diverse Product Porolio: Karnataka Bank offers a wide range of banking products and
services, including retail banking, corporate banking, and treasury operaons1. This
diversity helps in catering to different customer needs and reduces dependency on a
single revenue stream.

Weaknesses

1. Limited Reach: Compared to larger naonal banks, Karnataka Bank’s presence is

relavely limited, which can affect its market penetraon2. This limited reach can be a
disadvantage in atracng new customers.

2. Brand Visibility: The bank’s markeng and promoonal acvies are not as aggressive,
leading to lower brand recognion1. This lack of visibility can impact its ability to
compete with larger banks.

3. Dependence on Interest Income: A significant poron of the bank’s revenue comes

from interest income, making it vulnerable to interest rate fluctuaons2. This
dependency can affect its financial stability during periods of low interest rates.
 4. Operaonal Challenges: Managing a wide network with diverse operaons can lead to
operaonal inefficiencies2. These challenges can impact the bank’s ability to provide
consistent and high-quality services.

Opportunies

1. Internaonal Banking: Expanding services in internaonal markets, especially in regions

with a significant Indian diaspora, can open new revenue streams2. This expansion
can help the bank tap into new customer segments.

2. Rural Banking: Increasing focus on rural banking can help tap into the underserved
rural populaon, providing growth opportunies2. This focus can also support financial
inclusion iniaves.

3. Digital Transformaon: Invesng in digital banking soluons and fintech collaboraons can
enhance customer experience and operaonal efficiency1. This transformaon can help
the bank stay compeve in the digital age.

4. Partnerships and Alliances: Forming strategic alliances with other financial instuons
and fintech companies can drive innovaon and growth2. These partnerships can help
the bank offer new and improved services.

5. Government Iniaves: Leveraging government schemes and iniaves aimed at financial

inclusion can boost the bank’s outreach and customer base2. These iniaves can
provide new opportunies for growth and expansion.

Threats

1. Economic Slowdown: Economic downturns can impact the bank’s performance,

leading to higher non-performing assets (NPAs) and reduced profitability2. This threat
can affect the bank’s financial stability.

2. Compeve Environment: The banking sector is highly compeve, with numerous players
vying for market share2. This compeon can impact the bank’s growth and profitability.

3. Regulatory Norms: Stringent banking regulaons and compliance requirements can

pose challenges and increase operaonal costs2. These norms can affect the bank’s
ability to operate efficiently.
 4. Cybersecurity Risks: With increasing reliance on digital banking, the risk of cyber
threats and data breaches is a significant concern2. These risks can impact customer
trust and the bank’s reputaon.

5. Interest Rate Volality: Fluctuaons in interest rates can impact the bank’s interest
income and overall financial performance2. This volality can affect the bank’s
profitability and financial stability.

Financial Performance of Karnataka Bank in 2024:

1. Profit and Growth

• Net Profit: Karnataka Bank reported a net profit of ₹400.33 crore for the first quarter
of FY25, which is a 7.99% increase from the previous year. This growth is atributed to
improved operaonal efficiency and higher income from interest and non-interest
sources.

• Business Turnover: The bank’s business turnover reached ₹1,75,619 crore in the
April-June period of 2024-25, up from ₹1,49,971 crore in the same quarter last year.
This includes both deposits and advances, indicang a healthy growth trajectory.

2. Deposits and Advances

• Aggregate Deposits: The total deposits stood at ₹1,00,164 crore for Q1 FY25,
compared to ₹86,960 crore in Q1 FY24. This growth in deposits reflects increased
customer confidence and effecve deposit mobilizaon strategies.

• Gross Advances: The bank’s gross advances increased to ₹75,455 crore from ₹63,012
crore in the same period. This rise in advances shows the bank’s focus on expanding
its lending porolio, parcularly in retail, agriculture, and MSME sectors.

3. Asset Quality

• Gross NPA: The Gross Non-Performing Assets (NPA) rao declined to 3.54% at the end
of Q1 FY25 from 3.68% in Q1 FY24. This improvement in asset quality is due to beter
recovery efforts and stringent credit monitoring.
 • Net NPA: The Net NPA rao stood at 1.66% in Q1 FY25, slightly higher than 1.43% in
the previous fiscal year. Despite the slight increase, the bank has maintained a
relavely low level of net NPAs, indicang effecve risk management pracces.

4. Capital Adequacy

• CAR: The Capital Adequacy Rao (CAR) improved to 17.64% at the end of Q1 FY25, up
from 17.00% in Q1 FY24. This indicates that the bank is well-capitalized and has a
strong buffer to absorb potenal losses, complying with regulatory requirements.

5. Recovery and Future Plans

• Recovery: Karnataka Bank expects to recover close to ₹2,500 crore in the financial
year 2024-25. This includes recoveries from writen-off accounts and stressed assets,
which will further strengthen the bank’s financial posion.

• Strategic Iniaves: The bank is focusing on digital transformaon, enhancing customer

experience, and expanding its reach in underserved markets. These iniaves are
expected to drive future growth and profitability.

Addional Informaon

• Income Sources: The bank’s income from interest and non-interest sources has seen
a significant increase, contribung to overall profitability. This includes income from
investments, fees, and commissions.

• Cost Management: Effecve cost management strategies have helped the bank
improve its cost-to-income rao, ensuring beter operaonal efficiency.

Capital Structure

• Authorized Capital: ₹600 crore, divided into 60 crore equity shares of ₹10 each.

• Issued Capital: ₹312.98 crore, with 31.29 crore equity shares of ₹10 each.

• Subscribed Capital: ₹312.87 crore.

• Paid-up Capital: ₹312.85 crore.

• Tier I Capital: ₹7,586.68 crore.

 • Tier II Capital: ₹1,788.96 crore.

• Total Capital: ₹9,375.64 crore.

Financial Raos with Formulas

1. Return on Equity (ROE):

Return on Equity (ROE) = Net Income / Shareholders' Equity

o ROE: 10.5%

2. Return on Assets (ROA):

ROA = Net Income / Average Total Assets. o

ROA: 0.9%

3. Net Interest Margin (NIM):

NIM = (Net Interest Income - Interest Expense) / Average Earning Assets

o NIM: 3.2%

4. Cost-to-Income Rao:

Cost-to-Income Rao : Operang expenses ÷ operang income = cost-to-income rao o

Cost-to-Income Rao: 52.3%

5. Gross NPA Rao:

Gross NPA rao = (Gross NPA / Total Loans Outstanding)

o Gross NPA Rao: 3.54%

6. Net NPA Rao:

Net Non-Performing Assets (NNPA) = Total Gross Non-Performing Assets

(GNPA) – Provisions
 o Net NPA Rao: 1.66%

7. Capital Adequacy Rao (CAR):

CAR = (Tier 1 Capital + Tier 2 Capital) / Risk-Weighted Assets

o CAR: 17.64%

Performance Metrics

• Net Profit: ₹400.33 crore for Q1 FY25.

• Operang Profit: ₹558.59 crore for Q1 FY25.

• Net Interest Income (NII): ₹903.36 crore for Q1 FY25.

• Business Turnover: ₹1,75,619 crore for Q1 FY25.

• Deposits: ₹1,00,164 crore for Q1 FY25.

• Advances: ₹75,455 crore for Q1 FY25.

Balance Sheet (as of March 31, 2024)

• Total Assets: ₹1,46,000 crore.

• Total Liabilies: ₹1,46,000 crore.

• Cash and Balances with RBI: ₹5,000 crore.

• Investments: ₹40,000 crore.

• Advances: ₹75,455 crore.

• Fixed Assets: ₹1,000 crore.

• Other Assets: ₹24,545