2.26 An analysis of the financial performance of SCBs is carried out using a set of financial ratios computed from the income and expenditure and the balance sheets statements of the banks.

2.27 A profitability analysis of the SCBs indicates that the profits of these banks have shown a decline during the year 1998-99. The operating profits of SCBs declined by 4.4 per cent from Rs.14,640.2 crore in 1997-98 to Rs.13,992.3 crore in 1998-99. Accordingly, the ratio of operating profits to total assets declined from 1.84 per cent in 1997-98 to 1.47 per cent in 1998-99 (Chart II.4). The decline in profitability of SCBs can be attributed, inter alia, to both the increase in interest expended and the operating losses incurred by nine of these banks. The ratio of net profit to total assets showed a somewhat lesser decline of 0.33 percentage points from 0.82 per cent in 1997-98 to 0.49 per cent in 1998-99, owing to decline in provisions and contingencies of these banks (Chart II.5). The ratio of provisions and contingencies to total assets marginally declined to 0.98 per cent during 1998-99 from 1.02 per cent in 1997-98.

Table II.5: Consolidated Balance Sheet of Public Sector Banks as on March 31, 1998 and 1999

(Amount in Rs. crore)

Item

Public Sector Bank Group

Nationalised Bank Group

State Bank Group

As on March 31,

As on March 31,

As on March 31,

As on March 31,

As on March 31,

As on March 31,

1998

1999

1998

1999

1998

1999

Amount

% to

Amount

% to

Amount

% to

Amount

% to

Amount

% to

Amount

% to

total

total

total

total

total

total

1

2

3

4

5

6

7

8

9

10

11

12

13

Liabilities

1.

Capital

16,070.59

2.47

14,405.63

1.87

15,034.79

3.61

13,369.83

2.76

1,035.80

0.44

1,035.80

0.36

2.

Reserves & Surplus

24,698.36

3.80

27,446.60

3.56

13,698.68

3.29

15,277.32

3.15

10,999.68

4.72

12,169.28

4.26

3.

Deposits

531,723.09

81.87

636,860.16

82.67

358,120.25

85.95

417,583.17

86.20

173,602.84

74.56

219,276.99

76.70

3.1

Demand Deposits

79,916.12

12.30

89,375.33

11.60

44,639.33

10.71

50,158.34

10.35

35,276.79

15.15

39,216.99

13.72

3.2

Savings Bank Deposits

123,301.47

18.98

145,133.62

18.84

84,537.35

20.29

99,214.83

20.48

38,764.12

16.65

45,918.79

16.06

3.3

Term Deposits

328,505.50

50.58

402,351.21

52.23

228,943.57

54.95

268,210.00

55.37

99,561.93

42.76

134,141.21

46.92

4.

Borrowings

14,015.50

2.16

18,367.41

2.38

5,068.66

1.22

8,150.32

1.68

8,946.84

3.84

10,217.09

3.57

5.

Other Liabilities and Provisions

62,996.40

9.70

73,241.09

9.51

24,738.48

5.94

30,036.47

6.20

38,257.92

16.43

43,204.62

15.11

Total Liabilities

6,49,503.94

100.00

7,70,320.89

100.00

4,16,660.86

100.00

4,84,417.11

100.00

2,32,843.08

100.00

2,85,903.78

100.00

Assets

1.

Cash and balances with RBI

59,846.13

9.21

68,522.04

8.90

40,340.09

9.68

45,142.81

9.32

19,506.04

8.38

23,379.23

8.18

2.

Balances with banks and

money at call and short notice

47,865.92

7.37

71,018.23

9.22

25,737.26

6.18

31,774.95

6.56

22,128.66

9.50

39,243.28

13.73

3.

Investments

227,093.08

34.96

276,802.19

35.93

154,389.68

37.05

181,629.92

37.49

72,703.40

31.22

95,172.27

33.29

3.1

In Govt. Securities (a+b)

155,765.79

23.98

190,982.95

24.79

103,120.91

24.75

120,634.70

24.90

52,644.88

22.61

70,348.25

24.61

a. In India

153,907.88

23.70

188,939.00

24.53

101,415.76

24.34

118,775.99

24.52

52,492.12

22.54

70,163.01

24.54

b. Outside India

1,857.91

0.29

2,043.95

0.27

1,705.15

0.41

1,858.71

0.38

152.76

0.07

185.24

0.06

3.2

In other approved

Securities

27,065.14

4.17

25,560.77

3.32

18,022.48

4.33

17,306.52

3.57

9,042.66

3.88

8,254.25

2.89

3.3

In non-approved Securities

44,262.15

6.81

60,258.47

7.82

33,246.29

7.98

43,688.70

9.02

11,015.86

4.73

16,569.77

5.80

4.

Loans and Advances

259,646.96

39.98

297,350.28

38.60

162,221.57

38.93

188,925.16

39.00

97,425.39

41.84

108,425.12

37.92

4.1

Bills purchased &

discounted

24,007.24

3.70

24,961.76

3.24

14,026.54

3.37

15,032.26

3.10

9,980.70

4.29

9,929.50

3.47

4.2

Cash Credit,

Overdrafts, etc.

158,195.93

24.36

170,173.78

22.09

98,615.24

23.67

106,600.26

22.01

59,580.69

25.59

63,573.52

22.24

4.3

Term Loans

77,443.79

11.92

102,214.74

13.27

49,579.79

11.90

67,292.64

13.89

27,864.00

11.97

34,922.10

12.21

5.

Fixed Assets

8,251.14

1.27

9,402.84

1.22

6,439.24

1.55

6,813.59

1.41

1,811.90

0.78

2,589.25

0.91

6.

Other Assets

46,800.71

7.21

47,225.31

6.13

27,533.02

6.61

30,130.68

6.22

19,267.69

8.27

17,094.63

5.98

Total Assets

6,49,503.94

100.00

7,70,320.89

100.00

4,16,660.86

100.00

4,84,417.11

100.00

2,32,843.08

100.00

2,85,903.78

100.00

Table II.6: Consolidated Balance Sheet of Private Sector Banks as on March 31, 1998 and 1999

(Amount in Rs. crore)

Item

All Private Sector Bank Group

Old Private Sector Bank Group

New Private Sector Bank Group

As on March 31,

As on March 31,

As on March 31,

As on March 31,

As on March 31,

As on March 31,

1998

1999

1998

1999

1998

1999

Amount

% to

Amount

% to

Amount

% to

Amount

% to

Amount

% to

Amount

% to

total

total

total

total

total

total

1

2

3

4

5

6

7

8

9

10

11

12

13

Liabilities

1.

Capital

1,589.01

1.97

1,729.07

1.66

440.90

0.80

505.54

0.77

1,148.11

4.44

1,223.53

3.18

2.

Reserves & Surplus

3,599.50

4.45

4,221.49

4.06

2,746.86

5.00

3,058.22

4.67

852.64

3.30

1,163.27

3.02

3.

Deposits

69,515.78

86.02

86,832.03

83.53

47,778.11

86.92

56,018.70

85.63

21,737.67

84.11

30,813.33

79.97

3.1

Demand Deposits

7,926.60

9.81

11,040.83

10.62

4,996.34

9.09

6,221.59

9.51

2,930.26

11.34

4,819.24

12.51

3.2

Savings Bank Deposits

7,133.35

8.83

9,352.20

9.00

6,388.70

11.62

7,808.59

11.94

744.65

2.88

1,543.61

4.01

3.3

Term Deposits

54,455.83

67.39

66,439.00

63.91

36,393.07

66.21

41,988.52

64.18

18,062.76

69.89

24,450.48

63.46

4.

Borrowings

1,908.97

2.36

5,522.07

5.31

1,140.83

2.08

2,423.94

3.71

768.14

2.97

3,098.13

8.04

5.

Other Liabilities and Provisions

4,197.57

5.19

5,649.29

5.43

2,859.19

5.20

3,416.68

5.22

1,338.38

5.18

2,232.61

5.79

Total Liabilities

80,810.83

100.00

1,03,953.95

100.00

54,965.89

100.00

65,423.08

100.00

25,844.94

100.00

38,530.87

100.00

Assets

1.

Cash and balances with RBI

7,639.40

9.45

8,622.28

8.29

5,385.03

9.80

5,868.64

8.97

2,254.37

8.72

2,753.64

7.15

2.

Balances with banks and money

at call and short notice

5,955.81

7.37

8,690.65

8.36

4,093.92

7.45

5,345.03

8.17

1,861.89

7.20

3,345.62

8.68

3.

Investments

26,492.54

32.78

36,493.76

35.11

17,766.17

32.32

22,138.50

33.84

8,726.37

33.76

14,355.26

37.26

3.1

In Govt. Securities (a+b)

17,249.31

21.35

22,293.56

21.45

11,709.55

21.30

14,198.78

21.70

5,539.76

21.43

8,094.78

21.01

a. In India

17,120.53

21.19

22,189.17

21.35

11,580.77

21.07

14,094.39

21.54

5,539.76

21.43

8,094.78

21.01

b. Outside India

128.78

0.16

104.39

0.10

128.78

0.23

104.39

0.16

-

-

-

-

3.2

In other approved Securities

1,383.58

1.71

1,539.41

1.48

1,317.76

2.40

1,348.51

2.06

65.82

0.25

190.90

0.50

3.3

In non-approved Securities

7,859.65

9.73

12,660.79

12.18

4,738.86

8.62

6,591.21

10.07

3,120.79

12.08

6,069.58

15.75

4.

Loans and Advances

35,206.15

43.57

42,791.52

41.16

24,143.61

43.92

27,751.25

42.42

11,062.54

42.80

15,040.27

39.03

4.1

Bills purchased &

discounted

7,415.88

9.18

8,869.61

8.53

4,034.04

7.34

4,300.39

6.57

3,381.84

13.09

4,569.22

11.86

4.2

Cash Credit,

Overdrafts, etc.

18,864.63

23.34

21,796.93

20.97

13,331.47

24.25

14,975.72

22.89

5,533.16

21.41

6,821.21

17.70

4.3

Term Loans

8,925.64

11.05

12,124.98

11.66

6,778.10

12.33

8,475.14

12.95

2,147.54

8.31

3,649.84

9.47

5.

Fixed Assets

2,417.23

2.99

2,801.99

2.70

1,324.22

2.41

1,346.30

2.06

1,093.01

4.23

1,455.69

3.78

6.

Other Assets

3,099.70

3.84

4,553.75

4.38

2,252.94

4.10

2,973.36

4.54

846.76

3.28

1,580.39

4.10

Total Assets

80,810.83

100.00

1,03,953.95

100.00

54,965.89

100.00

65,423.08

100.00

25,844.94

100.00

38,530.87

100.00

Table II.7: Consolidated Balance Sheet of Foreign Banks in India as on March 31, 1998 and 1999

(Amount in Rs. crore)

Item

Foreign Bank Group

As on March 1998

As on March 1999

Amount

% to total

Amount

% to total

1

2

3

4

5

Liabilities

1.

Capital

1,779.75

2.73

2,072.01

2.70

2.

Reserves & Surplus

5,705.87

8.77

5,125.37

6.69

3.

Deposits

42,829.30

65.79

47,453.36

61.93

3.1 Demand Deposits

7,499.43

11.52

9,156.35

11.95

3.2 Savings Bank Deposits

3,040.93

4.67

3,878.46

5.06

3.3 Term Deposits

32,288.94

49.60

34,418.55

44.92

4.

Borrowings

9,856.03

15.14

16,359.00

21.35

5.

Other Liabilities and Provisions

4,926.76

7.57

5,613.39

7.33

Total Liabilities

65,097.71

100.00

76,623.13

100.00

Assets

1.

Cash and balances with RBI

4,104.96

6.31

4,240.34

5.53

2.

Balances with banks and money at

call and short notice

6,489.44

9.97

9,207.67

12.02

3.

Investments

18,381.05

28.24

26,337.46

34.37

3.1 In Govt. Securities (a+b)

13,700.68

21.05

16,878.30

22.03

a. In India

13,700.68

21.05

16,878.30

22.03

b. Outside India

-

-

-

-

3.2 In other approved Securities

310.87

0.48

304.80

0.40

3.3 In non-approved Securities

4,369.50

6.71

9,154.36

11.95

4.

Loans and Advances

29,313.43

45.03

29,506.75

38.51

4.1 Bills purchased & discounted

2,862.49

4.40

3,234.49

4.22

4.2 Cash Credit, Overdrafts, etc.

10,948.17

16.82

11,706.85

15.28

4.3 Term Loans

15,502.77

23.81

14,565.41

19.01

5.

Fixed Assets

2,092.41

3.21

2,295.62

3.00

6.

Other Assets

4,716.42

7.25

5,035.29

6.57

Total Assets

65,097.71

100.00

76,623.13

100.00

Box II.2: Credit-Deposit Ratio of Scheduled Commercial Banks

In recent times, there has been a considerable amount of discussion on the usefulness of credit-deposit ratio (C-D ratio) as a measure of allocation of funds by banks. Credit extended by commercial banks could be in terms of any or combinations of the following: cash credit, overdrafts, demand loans, purchase or discounting of commercial bills and instalment or hire purchase credit. Deposits, on the other hand, consist mainly of demand deposits and term deposits. The C-D ratio provide an indication of the extent of credit deployment for every unit of resource raised.

Total credit extended by scheduled commercial banks showed an increase of around 12 times between 1969 and 1984. The credit-deposit ratio, however, fell by around 7 percentage points to 70.7 per cent by 1984 from 77.4 per cent in 1969. This is reflective of the deployment of resources in increasing measure to meet the statutory liquidity ratio and the cash reserve requirements (Chakravarty Committee, 1985). Subsequently, it declined to 60.7 per cent by 1990 and then to 55.6 per cent by 1995.

Recent trends in the C-D ratio of SCBs indicate that the ratio has declined from 50.3 per cent, as on March 1998 to 47.9 per cent in March 1999. In terms of bank-group, over the period from March 1998 to March 1999, while the ratio has remained at 45.3 per cent for nationalised banks, it has witnessed a significant decline for the State Bank Group (from 56.1 per cent to 49.5 per cent). Other bank groups have also posted moderate to noticeable decline in the C-D ratio over the same period.

Several indicators of credit deployment have been used in the literature. Of this, the oft-quoted ratio has traditionally been the credit-deposit ratio. It, however, needs to be recognized that the C-D ratio does not serve as a reliable indicator of the trends in mobilisation of deposits and deployment of credit. First, while the amounts of both deposit accretion and credit expansion could be very small, the ratio could be high, giving a misleading picture of the C-D ratio. Secondly, with the introduction of new capital adequacy norms, it is not credit deployment per se, but the quality of credit that has become of prime concern to banks. Excessive demand for credit might often lead to adverse selection, resulting in banks resorting to what is popularly referred to as 'credit rationing'. The need to ration credit to doubtful borrowers has been triggered by the necessity on the part of the banks to reduce their quantum of non-performing assets. Finally, to the extent that the C-D ratio does not take into account banks' investment in approved securities other than that in governments, and other marketable instruments, it fails to provide a complete picture of the resource deployment by banks.

The introduction of prudential norms has induced a search for newer ratios that can adequately capture the deployment of resources. Of this, the most used has been the credit and investment in Government securities to deposit ratio, which internalizes the SLR requirements. But as financial markets have widened, and as financial reforms have been undertaken to improve the exposure of banks to marketable debt securities and equities, it has become increasingly clear that it is necessary to view credit and investments in marketable instruments, not all of which are officially approved, as the flow of banks funds to private sector. Such flows in relation to deposits provide insights about the extent of bank financing out of every unit of resource mobilised.

2.28 The intermediation cost of SCBs measured in terms of the ratio of operating expenses to total assets showed only a negligible increase from 2.63 per cent in 1997-98 to 2.65 per cent in 1998-99. The increasing competition in the banking industry has led to a decline in the 'spread' of SCBs, i.e. net interest income. The spread of SCBs declined from 2.95 per cent in 1997-98 to 2.78 per cent in 1998-99 (Table II.8).

2.29 As a result of the increase in competition among the bank groups and the diversification of activities of banks, the net profit structure of various bank groups has been undergoing changes. An analysis of the net profits structure of SCB groups shows that the share of State Bank of India and its seven Associated Banks (henceforth SBI Group) in the total net profits of SCBs, which was 19.3 per cent in 1991-92, increased to 37.8 per cent in 1997-98 and moved down to 31.5 per cent in 1998-99 (Chart II.6). The share of nationalised banks in the total net profits of SCBs declined from 43.9 per cent in 1991-92 to 39.5 per cent in 1997-98 and further to 38.5 per cent in 1998-99. As regards foreign banks, their net profits as a proportion to total net profits of SCBs declined from 30.4 per cent in 1991-92 to 9.7 per cent in 1997-98; and then improved substantially to 14.9 per cent in 1998-99. The private sector banks, both old and new, have shown substantial improvements in their shares of net profits. The share of private sector banks in the total net profits of SCBs has shown a more than two-fold increase from 6.4 per cent in 1991-92 to 15.2 per cent in 1998-99 (Chart II.6).

Public Sector Banks

2.30 The banking sector in India has been characterised by the predominance of public sector banks (PSBs) with more than 80 per cent share in the total assets of SCBs. An analysis of the combined performance of 27 PSBs shows that the operating profits of these banks increased by 2.96 per cent from Rs.10,273.7 crore in 1997-98 to Rs.10,577.5 crore in 1998-99. The ratio of operating profit to total assets, however, showed a decline from 1.58 per cent in 1997-98 to 1.37 per cent in 1998-99. Similarly, the ratio of net profits to total assets of PSBs also, declined from 0.77 per cent in 1997-98 to 0.42 per cent in 1998-99. The net profits of some of the large-sized PSBs like the State Bank of India, the Bank of India, and the Punjab National Bank came under pressure during the year and this has affected the overall net profits of PSBs (Table II.9). The net profit ratio of these PSBs was below the SCBs average of 0.49 per cent. A disaggregated analysis of PSBs, indicates that the net profits ratio of 14 PSBs was above the average net profit ratio of SCBs. The ratio of intermediation cost to total assets of PSBs (i.e. operating expenses) at 2.65 per cent during 1998-99 almost remained unchanged as compared with last year (2.66 per cent). The 'spread' of public sector banks has shown a marginal decline from 2.91 per cent in 1997-98 to 2.81 per cent in 1998-99 (Table II.9).

2.31 To enable the public sector banks to perform in a more competitive manner, the Government of India has adopted the policy of providing autonomous status to these banks subject to certain benchmarks. The criteria for grading a bank and considering it eligible for autonomous status were set out in the Union Budget presented in March 1998². Based on these criteria, the eligibility for autonomous status is indicated in column (8) of Table II.10. So far, as at end-March 31, 1999 as many as 17 (out of 27) PSBs have become eligible for autonomous status of various banks. Appendix Tables II.4 (A), II.4 (B), II.4 (C), II.4 (D), II.4 (E), II.4 (F), II.4 (G), II.4 (H), II.4 (I) present bank-wise data in respect of certain financial parameters for public sector banks.

Table II.8: Financial Performance of Scheduled Commercial Banks for the years 1997-98 and 1998-99

(Rs. crore)

Item

1997-98

1998-99

Variation of

Column (3) over (2)

Absolute

Percentage

1

2

3

4

5

A.

Income (i+ii)

85,856.98

1,00,077.61

14,220.63

16.56

(100.00)

(100.00)

i)

Interest Income

73,750.62

87,370.07

13,619.45

18.47

(85.90)

(87.30)

ii)

Other Income

12,106.36

12,707.54

601.18

4.97

(14.10)

(12.70)

B.

Expenditure (i+ii+iii)

79,355.14

95,418.11

16,062.97

20.24

(100.00)

(100.00)

i)

Interest Expended

50,299.42

60,904.99

10,605.57

21.08

(63.39)

(63.83)

ii)

Provisions and Contingencies

8,138.31

9,332.81

1,194.50

14.68

(10.26)

(9.78)

iii)

Operating Expenses

20,917.41

25,180.31

4,262.90

20.38

(26.36)

(26.39)

of which : Wage Bill

14,091.65

16,649.19

2,557.54

18.15

(17.76)

(17.45)

C.

Profit

i)

Operating Profit

14,640.15

13,992.31

-647.84

-4.43

ii)

Net Profit

6,501.84

4,659.50

-1,842.34

-28.34

D.

Total Assets

7,95,412.48

9,50,897.97

1,55,485.49

19.55

E.

Financial Ratios (per cent) $

i)

Operating Profit

1.84

1.47

-0.37

-

ii)

Net Profit

0.82

0.49

-0.33

-

iii)

Income

10.79

10.52

-0.27

-

iv)

Interest Income

9.27

9.19

-0.08

-

v)

Other Income

1.52

1.34

-0.18

-

vi)

Expenditure

9.98

10.03

0.05

-

vii)

Interest Expended

6.32

6.40

0.08

-

viii)

Operating Expenses

2.63

2.65

0.02

-

ix)

Wage Bill

1.77

1.75

-0.02

-

x)

Provisions and Contingencies

1.02

0.98

-0.04

-

xi)

Spread (Net Interest Income)

2.95

2.78

-0.17

-

Notes :

1.

$ Ratios to Total Assets.

2.

Figures in brackets are percentage shares to the respective total.

Table II.9: Financial Performance of Public Sector Banks for the years 1997-98 and 1998-99

(Rs. crore)

Item

1997-98

1998-99

Variation of

Column (3) over (2)

Absolute

Percentage

1

2

3

4

5

A.

Income (i+ii)

67,706.58

78,867.07

11,160.49

16.48

(100.00)

(100.00)

i)

Interest Income

59,076.17

69,474.31

10,398.14

17.60

(87.25)

(88.09)

ii)

Other Income

8,630.41

9,392.76

762.35

8.83

(12.75)

(11.91)

B.

Expenditure (i+ii+iii)

62,676.91

75,608.98

12,932.07

20.63

(100.00)

(100.00)

i)

Interest Expended

40,173.57

47,839.75

7,666.18

19.08

(64.10)

(63.27)

ii)

Provisions and Contingencies

5,244.05

7,319.41

2,075.36

39.58

(8.37)

(9.68)

iii)

Operating Expenses

17,259.29

20,449.82

3,190.53

18.49

(27.54)

(27.05)

of which : Wage Bill

12,623.44

14,839.66

2,216.22

17.56

(20.14)

(19.63)

C.

Profit

i)

Operating Profit

10,273.72

10,577.50

303.78

2.96

ii)

Net Profit

5,029.67

3,258.09

-1,771.58

-35.22

D.

Total Assets

6,49,503.94

7,70,320.89

1,20,816.95

18.60

E.

Financial Ratios (per cent) $

i)

Operating Profit

1.58

1.37

-0.21

-

ii)

Net Profit

0.77

0.42

-0.35

-

iii)

Income

10.42

10.24

-0.18

-

iv)

Interest Income

9.10

9.02

-0.08

-

v)

Other Income

1.33

1.22

-0.11

-

vi)

Expenditure

9.65

9.82

0.17

-

vii)

Interest Expended

6.19

6.21

0.02

-

viii)

Operating Expenses

2.66

2.65

-0.01

-

ix)

Wage Bill

1.94

1.93

-0.01

-

x)

Provisions and Contingencies

0.81

0.95

0.14

-

xi)

Spread (Net Interest Income)

2.91

2.81

-0.10

-

Notes :

1.

$ Ratios to Total Assets.

2.

Figures in brackets are percentage shares to the respective total.

Nationalised Banks

2.32 The nationalised banks (19) form a predominant part of PSBs. During 1998-99, the assets of the nationalised banks constituted the largest share of 62.9 per cent in the total assets of the PSBs and 50.9 per cent of the total assets of the entire SCBs. An analysis of the financial performance of nationalised banks indicates that the operating profits of these banks increased by 7.0 per cent from Rs.5,541.4 crore in 1997-98 to Rs.5,929.4 crore in 1998-99. The ratio of operating profits to total assets declined marginally by 0.11 percentage point from 1.33 per cent in 1997-98 to 1.22 per cent in 1998-99. The decline in net profits can be attributed to the decline in the net profits of some of the large-sized banks as discussed earlier. The net profit ratio of nationalised banks has declined from 0.62 per cent in 1997-98 to 0.37 per cent in 1998-99 (Table II.11). The intermediation cost of nationalised banks showed a marginal decrease from 2.65 per cent in 1997-98 to 2.63 per cent in 1998-99. The 'spread' of nationalised banks was at 2.79 per cent during 1998-99 as against 2.78 per cent during 1997-98.

State Bank of India and Associates

2.33 The State Bank of India and its 7 Associated banks constitute the second largest segment of the PSBs. During the year 1998-99, the total assets of the State Bank of India and its 7 Associated Banks accounted for 37.1 per cent of the assets of the PSBs. As a proportion to the total assets of the entire SCB sector, the total assets of the SBI group constituted 30.1 per cent in 1998-99. As regards the flow of assets, the total assets of SBI group have shown an increase of 22.8 per cent from Rs.2,32,843.1 crore as on March 31, 1998 to Rs.2,85,903.8 crore as on March 31, 1999.

2.34 An analysis of the financial performance of the SBI group indicates that the operating profits of SBI group recorded a decline of 1.78 per cent from Rs.4,732.3 crore in 1997-98 to Rs.4,648.1 crore in 1998-99. The ratio of operating profit to total assets also declined by 0.40 percentage points from 2.03 per cent in 1997-98 to 1.63 per cent in 1998-99. (Table II.12). The ratio of provisions and contingencies to total assets increased by 0.13 percentage point from 0.98 per cent in 1997-98 to 1.11 per cent in 1998-99. As a result, the ratio of net profits to total assets showed a decline of 0.55 percentage point from 1.06 per cent in 1997-98 to 0.51 per cent in 1998-99. The ratio of 'intermediation cost' to total assets was 2.70 per cent during 1998-99 as against 2.68 per cent during 1997-98. The 'spread' of SBI group during the year 1998-99 showed a substantial decline from 3.14 per cent in 1997-98 to 2.85 per cent in 1998-99.

Indian Private Sector Banks

2.35 With a view to infusing more competition in the banking sector, the policy of providing autonomous status to the public sector banks, as discussed earlier, has been further supplemented by the policy of encouraging the setting up of more private sector banks. So far, in addition to the 25 old private sector banks, as many as 9 new private sector banks have been established.

Table II.10: Public Sector Banks - List of Banks Eligible for Autonomous Status as on March 31, 1999

(Amount in Rs. crore)

Name of the Bank

Net Profit as on

CRAR

% of net

Net

Banks

NPAs to net

owned

  Eligible for

March 31,

March 31,

March 31

advances

funds

Autonomy

1997

1998

1999

as on 31.3.1999

1

2

3

4

5

6

7

8

State Bank of India

1,349.25

1,861.20

1,027.80

12.51

7.18

10,402.30

xxx

State Bank of Bikaner & Jaipur

40.48

90.48

91.88

12.26

10.45

419.35

State Bank of Hyderabad

52.45

97.12

111.53

10.65

8.78

496.09

xxx

State Bank of Indore

17.06

27.71

31.04

12.35

10.10

193.93

State Bank of Mysore

40.24

50.54

33.58

10.23

10.55

242.49

State Bank of Patiala

59.03

143.01

101.20

12.47

8.23

657.70

xxx

State Bank of Saurashtra

108.29

126.41

25.36

14.35

7.70

412.12

xxx

State Bank of Travancore

40.25

63.30

43.27

10.27

10.80

381.10

Allahabad Bank

64.30

129.21

135.00

10.38

12.54

849.07

Andhra Bank

35.70

75.25

90.04

11.02

4.26

491.57

xxx

Bank of Baroda

276.53

461.35

421.44

13.30

7.70

2,898.44

xxx

Bank of India

360.02

364.51

201.14

10.55

7.28

2,406.66

xxx

Bank of Maharashtra

47.19

56.29

51.89

9.76

8.72

478.25

xxx

Canara Bank

147.40

203.02

225.06

10.96

7.09

2,412.81

xxx

Central Bank of India

150.83

174.89

146.25

11.88

9.79

1,722.92

Corporation Bank

125.13

166.87

192.03

13.20

1.98

974.60

xxx

Dena Bank

72.91

105.04

110.09

11.14

7.67

696.69

xxx

Indian Bank

-389.09

-301.50

-778.50

Neg.

21.67

-283.25

Indian Overseas Bank

104.51

113.06

55.34

10.15

7.30

718.63

xxx

Oriental Bank of Commerce

180.25

210.00

230.12

14.10

4.50

1,231.48

xxx

Punjab & Sind Bank

20.00

65.09

60.45

10.94

10.48

373.80

Punjab National Bank

237.71

477.35

372.12

10.79

8.96

1929.75

xxx

Syndicate Bank

66.96

82.66

142.58

9.57