BHANDARKARS ARTS AND SCIENCE COLLEGE, KUNDAPUR

CERTIFICATE
This is to certify th t !r" Pr #ee$ K%& r Shetty is st%'e$t of Fi$ ( )e r B" B" !" *++,-+. of this i$stit%tio$" This /ro0ect re/ort h s Tit(e' 1A PRO2ECT 5y REPORT i$ ON LTD", / rti ( PERFOR!ANCE E3ALUATION OF KARNATAKA BANK !ANGALORE4 5ee$ /re/ re' hi&

f%(fi((&e$t for the re6%ire&e$t of the B che(ors De7ree i$ B%si$ess ! $ 7e&e$t, to 5e s%5&itte' to ! $7 (ore U$i#ersity, %$'er the s%/er#isio$ !A!ATHA, Lect%rer, De/ rt&e$t B%si$ess ! $ 7e&e$t" $' 7%i' $ce of !s" of Co&&erce $'

Guide

Head of the Departm ent of Com m erce and Business Managem ent

Principal

Date: Place: Kundapura

BHANDARKARS ARTS AND SCIENCE COLLEGE, KUNDAPUR

DECLARATION
I Mr. PRAVEEN KUMAR ARTS SHET TY , SCIENCE st%'e$t of

BHANDARKARS

AND

COLLEGE,

KUNDAPUR, Final Year

B. B. M.

!!"#!$ 'o here5y

'ec( re th t this /ro0ect re/ort Tit(e' % A PRO2ECT REPORT

ON PERFOR!ANCE E3ALUATION OF KARNATAKA BANK LTD", !ANGALORE & is &y ori7i$ ( 8or9

$' th t it h s $ot $y De7ree

/re#io%s(y for&e' the 5 sis for the re8 r' of : Di/(o& or other si&i( r tit(e"

This /ro0ect is 5ee$ /re/ re' 5y &e i$ / rti ( f%(fi((&e$t for the re6%ire&e$t of the B che(ors De7ree i$ B%si$ess ! $ 7e&e$t, to 5e s%5&itte' to ! $7 (ore U$i#ersity, %$'er the s%/er#isio$ 7%i' $ce of M'. MAMATHA, Le()*rer, De+ar),en) $' -.

C-,,er(e an/ B*'ine'' Mana0e,en)"

D te; P( ce; K%$' /%r 1MR. PRAVEEN KUMAR SHETTY2

E3ECUTIVE SUMMARY
Name of the organization : Methodology : Data collection is a step in the preparation of project report. The information is collected in the following manner. Primary Sources : Data is collected b !fficers. Secondary Sources : The data is collected for report b "ario#s records maintained referring to and standing orders of the banks which help #s for preparing this reports. $ lot of data were also collected b magazines and news paper% ann#al reports of bank. Objecti es : To st#d To st#d To st#d To st#d To st#d the loans and ad"ances of the bank. the e"al#ation and performance of the bank. the all financial statement. the so#rce of finance of the bank. the histor of the bank. the interacting with the bank Managers and Karnataka Bank Ltd. Mangalore

ACKNO4LEDGEMENT
I & #ery &%ch 5eho('e$ to ! $7 (ore U$i#ersity for this s / rt of

8o$'erf%( o//ort%$ity to %$'ert 9e the Pro0ect St%'y

the f%(fi((&e$t of B che(ors De7ree i$ B%si$ess ! $ 7e&e$t" !y 7r tef%( th $9s re '%e to Prof" N r y $ R o" The

Pri$ci/ (, Bh $' r9 rs Arts $' Scie$ce Co((e7e for e<te$'i$7 the $ecess ry s%//ort i$ the /re/ r tio$ of this /ro0ect" A / rtic%( r 8or' of th $9s is '%e to Prof" Sh $th r &, H"O"D" of Co&&erce $' B%si$ess ! $ 7e&e$t $' other f c%(ty &e&5ers for their %sef%( ti/s $' e$co%r 7e&e$t" !y estee&e' 7%i'e, !s" ! & th , Lect%rer i$ B%si$ess ! $ 7e&e$t, 'eser#es (( //reci tio$ $' th $9s for / tie$t(y $' efficie$t(y 7%i'i$7 &e thro%7ho%t the /re/ r tio$ of this /ro0ect" I th $9 !r" 3"S"N" K r $th, De/%ty Ge$er ( ! $ 7er, K" ! $oh ,Chief ! $ 7er !r" Sh & Bh t, ! $ 7er $' !s" S%'h ,

Officr K r$ t 9 B $9 Lt'" for 7i#i$7 &e the o//ort%$ity to 'o &y s%&&er tr i$i$7 t their or7 $i= tio$"I & e<tre&e(y 7r tef%( to B $9 Lt'" !%&5 i, for his

!r" 3i0 y Sh $9er R i, AG!, K r$ t 9

8or's of 8is'o&, e$co%r 7e&e$t $' the i$terest he h ' to & 9e

the s%&&er tr i$i$7

$ i$teresti$7

$' e'%c ti#e o$e "A$' I

(so

th $9 (( the other e&/(oyees of K r$ t 9 B $9 Lt'" for /ro#i'i$7 &e 8ith # (% 5(e i$-ho%se s 8e(( s other i$for& tio$ re6%ire'

for the Pro0ect $' &ost of (( for their s%//ort $' coo/er tio$" L st 5%t $ot (e st I th $9 Bh ts Te(eco& Ce$tre, K%$' /%r for he(/i$7 &e i$ ty/i$7 $' /ri$ti$7"

S%5&itte' By

Mr. Pra5een K*,ar S6e))7

Re7" No" !8!!"!!$9

U$'er The G%i' $ce of !s" !A!ATHA, Lect%rer,

De/ rt&e$t of Co&&erce $' B%si$ess ! $ 7e&e$t

Pro0ect Re/ort s%5&itte' to ! $7 (ore U$i#ersity i$ / rti ( f%(fi((&e$t for the re6%ire&e$t of the B che(ors De7ree i$ B%si$ess ! $ 7e&e$t"

BHANDARKARS ARTS AND SCIENCE COLLEGE, KUNDAPUR

CONTENTS :.In/*')r7 [Link] :#"

.C-,+an7 [Link] $# ! ;.Pr-/*()' an/ :#9 Ser5i(e' [Link] 8.S(6e,e' E5-l5e/ <7 Karna)a=a Ban= 9;#99 L)/. >.S*<'i/iar7 Ser5i(e' -. 9"#" Karna)a=a Ban= [Link]?*re ";#$: ".C-n(l*'i-n $.Bi<li-0ra+67 $ #$; $8

INDUSTRY PROFILE
Mone lending in &ndia is an age old profession with a histor of abo#t '(( ears. &n the late )*th cent#r % Tipp# +#lthan% was accredited to ha"e concei"ed the idea of organising banking as a part of state machiner for

e,tending credit facilities to the need at an affordable rates. $t the end of late)*th cent#r % there were hardl an bank in &ndia in the modern sense of the term. $t the time of the $merican .i"il /ar% a "oid was created as the s#ppl of cotton to Lancashire stopped from the $merican0s. +ome banks were opened at that time which f#nctioned as entities to finance ind#str % incl#ding spec#lati"e trades in cotton. /ith large e,pos#re to spec#lati"e "ent#res% most of the banks opened in &ndia d#ring that period co#ld not s#r"i"e and failed. The depositors lost mone and lost interest in keeping deposits with banks. +#bse1#entl %

banking in &ndia remained the e,cl#si"e domain of 2#ropeans for ne,t se"eral decades #ntil the beginning of the '(th cent#r . The first bank which was established in &ndia was 3eneral Bank of &ndia which came into e,istence in )4*5 which was followed b the Bank of 6ind#stan. Both these banks are now def#nct. The oldest bank in e,istence in &ndia is the +tate Bank of &ndia being established as 7The Bank of Bengal7 in .alc#tta in 8#ne )*(5. $ co#ple of decades later% foreign banks like .redit L onnais started their .alc#tta operations in the )*9(s. $t that point of time% .alc#tta was the most acti"e trading port% mainl d#e to the trade of the British 2mpire% and d#e to which banking acti"it took roots there and prospered. The first f#ll &ndian owned bank was the $llahabad Bank% which was established in )*59. B the ):((s% the market e,panded with the establishment of banks s#ch as ;#njab National Bank% and Bank of &ndia% in ):(5% both of which were fo#nded #nder pri"ate ownership. The <eser"e Bank of &ndia formall took o"er the responsibilit of reg#lating the &ndian banking sector from ):=9. $fter &ndia>s independence in ):?4% the <eser"e Bank was nationalized and was gi"en broader powers. .

->-

HISTORY
The 2nglish word bank is deri"ed from the &talian word @BanacoA% the Latin word @Baac#sA and the Brench word @Ban1#eA which means a bench. The word is also deri"ed from the 3erman word @BankA% which means a joint stock compan f#nd Ci.e. heap mone D% rose from a large n#mber of members of the p#blic. Bank in one from or another was in e,istence e"en in ancient times. The writings of Man# Cthe maker of old 6ind# lawD and Ka#til a Cthe minister of .handrag#pta Ma#r aD and the teachings of .hrist contained references to banking acti"ities in Bab lonia m#ch before .hrist. 6owe"er modern banking is of recent origin. &t came into e,istence onl after the ind#strial re"ol#tion. $fter the ind#strial re"ol#tion% with the increase in the size of ind#strial and b#siness #nits% joint stock compan form of b#siness organization came into e,istence. This form of organization enco#raged people with small incomes to become shareholders of big ind#strial and b#siness enterprises .+till% there were certain section of the p#blic who were not prepared to in"est their mone on the shares of joint stock companies. B#t the were willing to part with their s#rpl#s mone % if the were ass#red of the repa ment of their mone with some interest thereon. +o% nat#rall there arose the need for the formation of financial instit#tion that co#ld collect the s#rpl#s f#nds of the people on terms acceptable to them and make them a"ailable to the need for prod#cti"e p#rpose.

Definition
-*-

$ Banking compan

in &ndia has been defined in the Banking

companies $ct% ):?: as @ /hich transacts the b#siness of Banking% which means accepting for the p#rpose of lending or in"estment% of deposits of mone from the p#blic repa able on demand or otherwise and with draw able b .he1#es% drafts% orders or otherwiseA.

Indian Banking Regulation Act

Sec !"#$ of the &ndian Banking <eg#lation $ct of ):?: defines the EBanking .ompan 0 as @$n compan which transacts the b#siness of BankingA.

Business of Banking
Banking is a b#siness and like an other b#siness the aim is the ma,imisation of profits thro#gh c#stomer ser"ice. The two main prod#cts are Deposits and Loans. !n Deposits it pa s interest whereas on Loans it charges interest and the rate on Deposits is alwa s lower than the rate of Loans. The difference between these two constit#tes the banks income. Banking is a b#siness b#t profiteering is absent here. &t is a #ni1#e b#siness of pooling together the sa"ings of the comm#nit scattered all o"er and from the "er same pool granting loans to the need in the societ . Th#s it acts as a link between the sa"ers and the need . This #ni1#e ser"ice is often called p#blic #tilit ser"ice. &n the common man0s parlance it is definitel a social ser"ice.

-?-

Banking is a b#siness b#t it differs from other b#siness in man respects. This b#siness r#ns p#rel on the confidence of the members of the general p#blic called the depositors who entr#st their sa"ings solel o#t of their confidence and tr#st that the will get back their mone with interest whene"er the need. +o long as there is confidence on the bank in this wa % the deposits will come to the bank. +imilarl in case of loan. /hile gi"ing% the bank reposes f#ll tr#st and confidence on the Borrower that he will repa the same with interest. There co#ld be sec#rit doc#ments #ndertaking to repa an time on demand b the bank and collateral sec#rities for an e"ent#alit . B#t the doc#ments and sec#rities are onl collateral and secondar and the main consideration is onl the confidence. Th#s in both the cases of deposits and ad"ances% confidence pa s a "ital role.

Post-Independence
The partition of &ndia in ):?4 had ad"ersel impacted the economies of ;#njab and /est Bengal% and banking acti"ities had remained paral zed for months. &ndia>s independence marked the end of a regime of the Laissez-faire for the &ndian banking. The 3o"ernment of &ndia initiated meas#res to pla an acti"e role in the economic life of the nation% and the &nd#strial ;olic <esol#tion adopted b the go"ernment in ):?* en"isaged a mi,ed econom . This res#lted into greater in"ol"ement of the state in different segments of the econom incl#ding banking and finance. The major steps to reg#late banking incl#ded. &n ):?*% the <eser"e Bank of &ndia was nationalized% and it became an instit#tion owned b the 3o"ernment of &ndia. &n ):?:% the Banking
-@-

<eg#lation $ct was enacted which empowered the <eser"e Bank of &ndia C<B&D 7to reg#late% control% and inspect the banks in &ndiaA. The Banking <eg#lation $ct also pro"ided that no new bank or branch of an e,isting bank ma be opened witho#t a license from the <B&% and no two banks co#ld ha"e common directors. 6owe"er% despite these pro"isions% control and reg#lations% banks in &ndia e,cept the +tate Bank of &ndia% contin#ed to be owned and operated b pri"ate persons. This changed with the nationalization of major banks in &ndia on ):th 8#l % ):5:.

Nationalisation
B the ):5(s% the &ndian banking ind#str had become an important tool to facilitate the de"elopment of the &ndian econom . $t the same time% it has emerged as a largest emplo er% and a debate has ens#ed abo#t the possibilit to nationalize the banking ind#str . &ndira 3andhi% the-then ;rime Minister of &ndia e,pressed the intention of the 3o"ernment of &ndia in the ann#al conference of the $ll &ndia .ongress Meeting in a paper entitled 7+tra tho#ghts on Bank Nationalisation.7 The paper was recei"ed with positi"e enth#siasm. Thereafter% her mo"e was swift and s#dden% and the 3o"ernment of &ndia iss#ed an ordinance and nationalised the )? largest commercial banks with effect from the midnight of 8#l ):% ):5:. 8a aprakash Nara an% a national leader of &ndia% described the step as a 7masterstroke of political sagacit .7 /ithin two weeks of the iss#e of the ordinance% the ;arliament passed the Banking .ompanies Bill% and it recei"ed the presidential appro"al on :th $#g#st% ):5:.

-A-

$ second dose of nationalisation of 5 more commercial banks followed in ):*(. The stated reason for the nationalisation was to gi"e the go"ernment more control of credit deli"er . /ith the second dose of nationalisation% the 3o"ernment of &ndia controlled aro#nd :)F of the banking b#siness of &ndia. $fter this% #ntil the )::(s% the nationalised banks grew at a pace of aro#nd ?F% closer to the a"erage growth rate of the &ndian econom .

Liberalisation
&n the earl )::(s the then Narasimha <ao go"ernment embarked on a polic of liberalisation and ga"e licences to a small n#mber of pri"ate banks% which came to be known as New 3eneration tech-sa"" banks% which incl#ded banks s#ch as GT& Bank% &.&.& Bank and 6DB. Bank. This mo"e% along with the rapid growth in the econom of &ndia% kick started the banking sector in &ndia% which has seen rapid growth with strong contrib#tion from all the three sectors of banks% namel % go"ernment banks% pri"ate banks and foreign banks.

Opportunities a Head
.#rrentl % o"erall% banking in &ndia is considered as fairl mat#re in terms of s#ppl % prod#ct range and reach-e"en tho#gh reach in r#ral &ndia still remains a challenge for the pri"ate sector and foreign banks. 2"en in terms of 1#alit of assets and capital ade1#ac % &ndian banks are considered to ha"e clean% strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The <eser"e Bank of &ndia is an a#tonomo#s bod % with minimal press#re
-B-

from the go"ernment. The stated polic of the bank on the &ndian <#pee is to manage "olatilit -witho#t an stated e,change rate-and this has mostl been tr#e. /ith the growth in the &ndian econom e,pected to be strong for 1#ite some time-especiall in its ser"ices sector% the demand for banking ser"ices-especiall retail banking% mortgages and in"estment ser"ices are e,pected to be strong. MH$% takeo"ers% asset sales and m#ch more action will happen on this front in &ndia. &n March '((5% the <eser"e Bank of &ndia allowed /arb#rg ;inc#s to increase its stake in Kotak Mahindra Bank to )(F. This is the first time an in"estor has been allowed to hold more than 9F in a pri"ate sector bank since the <B& anno#nced norms in '((9 that an stake e,ceeding 9F in the pri"ate sector banks wo#ld need to be "etted b them. $s on date% &ndia has ** sched#led commercial banks C+.BsD - '* p#blic sector banks% ': pri"ate banks and =) foreign banks. The ha"e a combined network of o"er 9=%((( branches and )4%((( $TMs. $ccording to a report b &.<$ Limited% a rating agenc % the p#blic sector banks hold o"er 49 percent of total assets of the banking ind#str % with the pri"ate and foreign banks holding )*.'F and 5.9F respecti"el .

COMPANY PROFILE
a) Back ground and inception of the co pan!"

-,-

Karnataka Bank Ltd% a leading E$0 .lass sched#led commercial Bank in &ndia% was incorporated on Beb )*th ):'? with a registered office at Mangalore. The Bank commenced its b#siness on '=rd Ma ):'? with an &nitial ;aid #p .apital of <s. ))%9*( contrib#ted b ))= shareholders. +ri.B.<.I asara a $char was the first president of the Bank. The Banks Memorand#m of $ssociation in its !bjecti"e .la#se states that the Bank apart from carr ing on the general f#nction of Banking b#siness% wo#ld @set apart and appropriate from the ann#al net profit towards the general% mental% moral Dra"idian Brahmin comm#nit % +#ch s#ms as ma and ph sical ad"ancement of other beneficial p#rpose of the members of the be deemed fitA.

The first three branches of the Bank were at Mangalore Dongerker % Madras 3eorge% and Gd#pi .ar +treet. +ri Kalmadi 3opal Krishna had the disting#ishion of becoming the first Branch Manager. $t the end of the Banks first ear of operations the Banks deposits stood at <s. (.5* Lakhs and ad"ances were <s. ).'' Lakhs. The Bank celebrated its +il"er 8#bilee in the ear ):?: in its +il"er 8#bilee ear of operation the Bank earned a net profit of <s. (.49 Lakhs with deposits of <s. 99.9: Lakhs and $d"ances of <s. =:.=: lakhs. +ri.K.+.N.$diga became the chairman of the Bank on '=rd No" ):9*. The Birst real recognition for the Mangalore based Bank came in the ear ):9: with the Bank being ele"ated from E.0 class to EB0 .lass. &n the stride of progress and e,pansion% the Bank got reinforced b the takeo"er of = banks namel +hringeri +harada Bank Ltd on )st $pril ):5(.%.hitrad#rga Bank Ltd on December =(th ):5?% and Bank of Karnataka Ltd on Dec ':th ):55.%. &n the ear ):5: the Bank opened its 49th branch where its deposits crossed <s. )( .rore mark to reach <s. )'.5= .rores% $d"ances were at <s. *.:( .rore and Net profits were <s. =.(9 Lakhs.
-.-

&n ear ):4) the Bank opened its first branch in the co#ntr 0s financial capital. The following ear the Bank was ele"ated to E$0 class b the <eser"e Bank of &ndia. &n its 3olden 8#bilee ear of its operation the Banks total deposits were <s. ==.)? .rores and $d"ances were <s. ''.(: .rore with )?5 branches and )'5 emplo ees. &n ):44 Karnataka Bank Ltd.% adopted the star s mbol as its #ni1#e "is#al identit s mbol. $ prod#ct of Late Dr. +hi"arama Karanth% it s mbolises stabilit % discipline% harmon and confidence. The +taff Training .ollege of the Bank was started at Mangalore Dongerker on +ept '4th ):44% &n ):44 the foreign e,change B#siness of the Bank was opened with a separate department was established &n Bangalore as central foreign e,change department which was later shifted to M#mbai C):4:D. The Bank achie"ed the target of <s. )(( crores mark in deposits with the aggregate deposits being <s. )(?.'? crores as on =))'-):4:. &n ):*( the Madras 3eorge Town Branch celebrated its golden j#bilee. &n the diamond j#bilee ear of the Bank% the deposits of the bank were <s. ')).=? .rores and $d"ances was <s. )''.'' crores respecti"el . &n ):*: the Banking ear was e,tended from )' months to )9 months to end on =)st March. The Banks M#mbai Bori"ili branch was declared as the first Model Branch of the Bank. &n )::?-:9 the first ser"ice branch was opened $t M#mbai. The first &nd#strial Binance Branch was also opened at Bangalore on '(th March )::9. The first $gric#lt#ral De"elopment Branch of the Bank was opened on ) st $pril )::9% The Bank made it into the stock markets on !ctober )::9 with a p#blic iss#e of <s. *) crores which was o"er s#bscribed b abo#t '.9 times despite depressed market condition% D#ring the ear '((=% the Bank has taken #p corporate agenc for marketing the "ario#s life policies of Met Life &ndia &ns#rance .ompan Ltd.J it has also taken #p corporate agenc of Bajaj $llianz 3eneral &ns#rance .o.

-C-

Ltd for marketing general ins#rance prod#cts. The banks all ro#nd e,cellence in the twin parameters of growth and stabilit has earned it rich la#rels in the form of @;)KA rating for certificate of deposits from .<&+&L. b) Nature of the Business #arried &n the words of Late +hri T.$.;ai @+ome people belie"e that Banking means mone lending and that a Banker is not b#t a glorified Mone lender. B#t Banking is not mone -lending as mone lender does not take the risk whereas the Banker does.A Bank is into pooling together the sa"ings of the comm#nit scattered all o"er and from the "er same pool granting loans to the need in the societ . Th#s it acts as a link between the sa"ers and the need . Th#s the two main prod#cts of the Bank are Deposits and Loans. c) $ision% &ission% and 'ualit! Polic! &ision Bank is a professional managed with good track record of c#stomer lo alt and consistent profitabilit . The bank has the resilience to face the new challenges s#ccessf#ll and achie"e the goals in "ision b its management. $dopting ethical management practices% Bank reiterates its commitment to f#lfill national and social priorities% present so#nd financial and abo"e of all else impro"e and inno"ate to meet the challenges posed b a c#stomer dri"en banking ind#str . Mission The Mission statement of an organisation generall represents its

long term goals and strategies. 2"er organisation m#st ha"e its own

->+-

mission% which describes present b#siness scope of the organisation. The mission statement of Karnataka Bank Ltd is as follows. @To be a technolog sa"" % c#stomer centric progressi"e bank with a national presence% dri"en b the highest standards of corporate go"ernance and g#ided b so#nd ethical "al#esA. 'uality Policy The L#alit polic of Karnataka Bank Ltd is of pro"iding L#ick and Better ser"ice and their b achie"ing .#stomer +atisfaction. Corporate Goal The Bank has en"isaged to achie"e a total b#siness t#rno"er of <s. '*% 9(( .rore% comprising of a deposit target of <s. )4% ((( crore and ad"ance target of <s. )% 9(( .rore for the ear ending March =)% '((*. The Bank is confident of achie"ing the same thro#gh better c#stomer ser"ices and operational efficienc . Besides% the Bank has plans to increase its total n#mber of b#siness #nits to 9*(% b increasing the total n#mber of branches to ?=( and own $TM network to )9( b March '((* d) Product()er*ice Profile Product for (inancial Salaried Persons Toda % personal finance is the fastest growing segment of banks credit deplo ment. $mong personal banking prod#cts% loans to salaried class% occ#pies a prominent place. /ith this backdrop this loan prod#ct has been modified from time to time The p#rpose for which this loan scheme can be #sed are ;#rchase ho#sehold articlesMcons#mer d#rables% .hildren0s 2d#cation% Marriage

->>-

and thread ceremon

of selfMdependents% Medical e,penses of

selfNdependents% !bse1#ies 2,penses% <epair to own ho#se and an other ;#rpose as to the satisfaction of sanctioning a#thorit The 1#ant#m of loan pro"ided shall be to a ma,im#m of )( times of the monthl gross salar or composite credit limit consisting of fi,ed loan and o"erdraft not e,ceeding )( times of the monthl gross salar o#t of which% the o"erdraft component shall not e,ceed 9 times of the gross salar . The loan has to be repaid with interest within 9 Oears.

)B* +P,+ GH+KBL $pna 3har scheme was introd#ced in No"ember '(()% d#l re"iewingM modif ing Bank0s erstwhile ho#sing finance scheme. The terms and conditions of the scheme ha"e been re"iewedM refined from time to time. The p#rpose for which loan can be pro"ided are for constr#ction of ho#seMp#rchase of read b#ilt ho#se or flatMp#rchase of site and b#ild ho#se thereon. <eno"ation MremodelingMrepairs to the e,isting ho#seMflat. The 1#ant#m of loan pro"ided shall be to a ma,im#m of 5( times of latest monthl take home CnetD salar in the case of salaried or 9 times of latest ann#al Net income pl#s depreciation pro"ided if an % as per ;HL aMc in the case of traders Mself emplo ed personsMprofessionals !r <s. 49.(( Lakhs. /hiche"er is less The 1#ant#m of loan pro"ided in the case of

reno"ationMremodelingMrepairs. of the e,isting ho#se Mflat ma,im#m <s. )(.(( lakh or #pto 5(F of the "al#e of the ho#se Mflat owned b the

->*-

applicant% whiche"er is lower s#bject to maintaining a margin of '9F on estimated repairs . $ ma,im#m period of )9 ears C incl#ding a repa ment holida at the option of beneficiar till the completion of constr#ction or )* months from the date of first disb#rsal of the loan whiche"er is earlier D for constr#ction Mp#rchase of ho#seM [Link] repairs M reno"ationsMremodelingMa,im#m period of 4 ears.

)B*.&+-/H+) *O+, /as form#lated d#ring Bebr#ar '(((% for financing traders

Mb#siness persons. The p#rpose for which KBL-Iarthak loan scheme was introd#ced was in order to pro"ide for the /orking .apital re1#irements of traders and b#siness persons The ma,im#m amo#nt that can pro"ided to indi"id#al traderMB#sinessman are <s. '9.(( Lakh per Borrower The repa ment conditions for KBL- Iarthak Loan are that in case of !"erdraft $cco#nts the amo#nt has to be paid within a period of !ne Oear $nd No 6olida period is gi"en. $nd the loan is <epa able either in monthl or 1#arterl instalments.

)B* 0D1OG M2/H-+ This scheme was introd#ced d#ring Bebr#ar and the p#rposes for which the loan can be a"ailed are for ). ;#rchase of Medical 21#ipmentM MachineriesM .omp#ters%

->?-

'. B#rnishing the !ffice% ;#rchase of B#rnit#re% Books etc. =. ;a ment of $d"ance rent for setting #p of an !ffice. The ma,im#m $mo#nt of loan facilit that can be a"ailed is as follows: Ma,im#m amo#nt #p to :(F of the cost of assets to be p#rchased in The case of p#rpose specified #nder ) Ma,im#m amo#nt #p to *(F of the cost in the case of p#rpose specified #nder ' and = Bor setting #p of an office Doctors % .hartered 2ngineering restricted to: <s. 49%((( P incase of <#ral branches <s. )%((%((( P incase of +emi-#rban branches <s. )%9(%((( P in the case of Grban branches <s. '%((%((( P in the case of Metropolitan branches .ons#ltants $cco#ntants%

the ma,im#m 1#ant#m of $d"ance is

)B* C+- (2,+,C3 /as form#lated d#ring No"ember )::* for the p#rpose of p#rchase of fo#r wheelers. The ma,im#m amo#nt of loan that can be pro"ided to indi"id#al #nder the scheme are as follows. ). Bor N2/ Iehicle: Ma,im#m amo#nt #pto to *9F of the in"oice "al#e e,cl#ding "ehicle ta, and ins#rance.

->@-

'. $nd for +econd hand Iehicle: The "ehicle sho#ld not be older

than = ears from the date of registration of the "ehicle. Ma,im#m amo#nt of loan is <s. 9.(( Lakh The loan has to be repa ed within 5( months in case of new "ehicle and =? months in the case of second hand "ehicle &2D1+,2DH2 3D0C+/2O,+* *O+, SCH3M3 /as introd#ced in the ear )::* on the occasion of platin#m 8#bilee Oear of the Bank .The scheme was designed to pro"ide financial s#pport to the deser"ing and meritorio#s st#dents for contin#ing their st#dies in &ndia and abroad. The amo#nt of loan facilit which are pro"ided for st#dents +t#d ing in &ndia is a Ma,im#m of <s. 4.9( Lakh and for st#dents st#d ing abroad it is a Ma,im#m <s. )9.(( Lakh <epa ment holida Mmoratori#m is co#rse period K) ear or 5 months after getting job in earlier. The interest to be debited on simple basis d#ring repa ment holida Mmoratori#m period. There after on compo#nding basis with monthl rests. The loan to be repaid in 9 to 4 ears after commencement of repa ment. )B* &+H+,+ M2/H-+ &n order to streamline deli"er of credit to the transport ind#str % a c#stomer friendl scheme tailored to meet the re1#irements of this sector was form#lated in +eptember '((=. The loan is pro"ided for the p#rpose of p#rchase of new as well as old C#p to 9 ears.D $#to rickshaw% 8eep% .ar% Ma,i cab% Tempo Tra"eller%

->A-

T$T$ +#mo etc... $nd also for p#rchase of new tractor% 8.B% .rane etc.% to be registeredMregistered as p#blic transport "ehicle for hire. The Ma,im#m amo#nt of loan that can be pro"ided #nder the scheme are mentioned below. (or a ,e4 &ehicle: ). Ma,im#m #pto *9F of the in"oice "al#e e,cl#ding "ehicle ta, and charges towards &ns#rance% ;ermit etc.

'. Bor Bod B#ilding charges #p to 49F of the 1#otation f#rnished b the "ehicle bod b#ilders. Bor an old "ehicle <egional office are permitted to sanction loan #nder the scheme for p#rchase of #p to 9 ears old "ehicle. Gp to = ears old "ehicle P =(F margin on latest "al#ation has to be maintained. Bor = to 9 ears old "ehicle% 9(F margin on the latest "al#ation has to maintain. The loan has to repaid within *? months in case of B#s and Tr#cks and for others it is 5( months )B* 3+S1 -2D3 +cheme was form#lated d#ring !ctober '(() for the p#rchase of two P wheelers. The loan scheme was introd#ced for the p#rpose of ac1#isition of new two wheeler of pop#lar brand and make Cs#ch as Bajaj% 6ero 6onda% TI+% Kinetic% 6onda etc.D Ma,im#m amo#nt of loan that can be a"ailed #nder this facilit is ). )9 times of net take home salar in the case of salaried persons% !r

->B-

'. 21#i"alent of ann#al gross income declared in the case of professionals M b#sinessmenM self-emplo ed persons% or =. Ma,im#m #p to )((F of the in"oice "al#e of the "ehicle e,cl#ding .omp. &ns#rance % <oad Ta, and e,tra fittings )% '% and = whiche"er is less. 6owe"er% the ma,im#m amo#nt of loan that can be considered as fi,ed at <s. 49%(((M- per borrower. The loan has to repaid within a Ma,im#m period of 5( months. )B*. )-2SH2) S+-+/H2 SCH3M3 The KBL- Krishik +arathi +cheme was introd#ced for p#rchase of Barm machineries like TractorM;ower Tiller% TrailerMother implements% 6ar"ester% +pra erM D#sterM!ther Barm Machineries and Barm "ehicles b $gric#lt#re. $ Ma,im#m amo#nt of loan is #pto :(F of the cost Ce,cl#ding Ta,% <egistration H &ns#ranceD of new farm Machiner MIehicle Ma, Limit <s. )(.(( Lakh. The loan amo#nt has to be repa ed within : ears. in case of

TractorMcombine in case of ;ower Tillers MThreshers its 4 ears in case of !ther &mplements MMachineriesM ' wheelers its 9 ears and in case of Barm Iehicles C? wheelersD its 4 ears . )B* 5)-2SH2) S2CH+,+ SCH3M3 The ;#rpose of the scheme is to pro"ide for all t pes of Minor &rrigation de"elopment works like ;#rchase of oil engineM2lectric ;#mp setsMDripM+prinklerM!ther &rrigation + stems incl#ding p#rchase of pipes M 3enerators. M <epair or replacement of irrigation s stemM3enerators. % open well% Bore well% T#be well.

->,-

$ Ma,im#m amo#nt of #pto *9F of the cost of new irrigation e1#ipments or 5(F of the Land "al#e which e"er is less. $nd Ma,. Limit being <s.9.((lakhs. The loan amo#nt has to be repaid between9-4 ears. )che e to #o*er the Loans for +eneral #redit card in Rural and )e i urban branches $s ad"ised b the <B& to sched#led commercial banks % for pro"iding hassle P free credit to the indi"id#als in r#ral and semi #rban areas% it is proposed to introd#ce a @3eneral .redit .ard schemeA in the r#ral and semi-#rban branches of &ndia. The +cheme is in the nat#re of an operati"e working capital acco#nt i.e.% in the nat#re of re"ol"ing credit% with no stip#lation as to end #se. The 3.. holder can draw cash from his !D acco#nt #p to the limit sanctioned. $ che1#e book ma also be iss#ed% if the borrower so insist Gnder the 3..% proper assessment of working capital re1#irement of an indi"id#al is to be made based on the income proof and cash flow statement s#bmitted along with his Mher application similar to that pre"ailing #nder normal credit assessment. Ma,im#m limit is restricted to <s. '9% ((( $n indi"id#al applicant being a resident of r#ralMsemi #rban area% with a definite so#rce of income and s#fficient means to meet the obligation on demand is eligible to co"er #nder the scheme. Gp to '9F of the ann#al income declared b the applicant and accepted b the sanctioning a#thorit for fi,ing #p eligible credit limit. .ash flow of the ho#sehold need be insisted at the time of sanction and re1#ired information ma be called for at the time of <e"iew M <enewal .Bor

->.-

women beneficiaries limit ma be considered #pto =9F of the ann#al income declared and accepted b the sanctioning a#thorit . The facilit sho#ld normall be "alid for '? months s#bject to an ann#al re"iew. The <e"iew ma cancellation of the facilit borrowal acco#nt. )2S+, S3&+ )3,D-+S ")S)s$ of 2OC &n order to reach diesel and other prod#cts in Kisan0s doorstep% it has been decided to set #p Kisan +e"a ;#mps in r#ral areas in line with low cost retail o#tlets. These will be known as @ )endrasA The following are the objecti"es for which the K+Ks was introd#ced Making diesel as well as the facilities M items re1#ired b the Kisan a"ailable to him #nder one roof at his door steps at least cost. ;ro"iding gainf#l emplo ment opport#nit to r#ral people. B#lfilling the corporate responsibilit towards r#ral de"elopment NON OIL ,A#ILI-I.): Bor a#gmenting the re"en#es of the Kisan +e"a Kendras as well as for the con"enience of agric#lt#ral c#stomers following non-oil facilities can be pro"ided. +ale of agro inp#ts of fertilizers% seeds% pesticides% etc. $gric#lt#ral e1#ipments% N#tan +to"e% 6#rricane lamp% etc.
->C-

res#lt in contin#ation of the facilit depending #pon the performance of the

Menhancement M red#ction in limit Cs#bject to limit of <s.'9%(((M-D or

)isan Se a

 &tems of dail needs like 3#r% Khandsari% Lal .hana% Blo#r% soap% etc. +ale of agro prod#cts like "egetables% etc. ;ro"ision of non agro facilities like banking% internet kiosk% comm#nication facilities% etc. +ale of stationar possibleD% etc. items like notebook% pencil% etc. as well as

newspaper Cif possibleD% re"en#e stamp C if possibleD% water mark Cif

-*+-

PRODUCTS
&otor )pirit /&) i"e" petrol) facilit!0
The K+K are primaril meant to be ha"ing 6igh +peed Diesel or 6+D facilit . 6owe"er% based on the potential of the site% the state 62$D C of the oil compan D ma take a decision to pro"ide M+ facilit also

Other Products of IO#

The Kisan +e"a Kendra will also sell l#bricating oils or an prod#cts as decided b &!. from time to time to the c#stomers. other

#ost In*est ent b! dealer

<s.5( lakhs the sales b#ilding% dri"ewa % fencing% other items s#ch as fire e,ting#isher etc.

.1pected )ales *olu es

D&2+2L: '9 T! 9( KL per month ;2T<!L: facilit potential e,ists C KL Q kilo Litres% ) KL Q )((( Litres D to be pro"ided onl when minim#m )( KL

-*>-

 S6+-O7G+- C-3D2/ C+-D SCH3M3 "SCC$ +.. was introd#ced in +eptember '((= conse1#ent #pon the anno#ncement made m +peech on )9 $#g '((= +.. scheme aims at pro"iding ade1#ate and timel credit i.e. working capital or block capital or both to small artisans% handloom wea"ers% +er"ice sector% Bishermen% self emplo ed persons% <ickshaw owners % other Micro 2ntreprene#rs % +63s% etc.% from the banking s stem in a fle,ible % hassle free and cost effecti"e manner. Borrowers in #rban areas can be co"ered #nder +.. scheme. +mall b#siness co"ered priorit sector is also eligible #nder +.. scheme. $n scheme M project that are income generating M emplo ment generating ma be co"ered #nder the scheme. The facilit ma also incl#de a reasonable component for cons#mption need. Barm sector acti"ities like fishers% dair etc.% can also be co"ered #nder the scheme. 3enerall s#ch of the self- emplo ment acti"ities which ha"e reg#lar t#rno"erM income stream on short inter"al basis can also be co"ered #nder +.. scheme. The credit facilit e,tended #nder the scheme is in the nat#re of a composite loan incl#ding term loanM cash credit or both: The Ma,im#m amo#nt of loan that can be pro"ided #nder the scheme is a loan Gp to <s. '9%(((M- per borrower as composite loan. This is indicati"e. Banks ma consider higher limits on the merits of the case. $ component for cons#mption credit co#ld be b#ilt in keeping in "iew the "al#e of the famil labo#r in the prod#cti"e acti"it . The total limit ;rime Minister in his &ndependence Da

-**-

wo#ld ha"e a relationship with projected net earning and repa ment capacit of the borrower. +.. is normall "alid for 9 ears s#bject to satisfactor operation of the acco#nt and renewed on a earl basis thro#gh simple re"iew process. Issue of #redit0 The beneficiaries #nder the scheme shall be iss#ed with a laminated credit card and pass book. This will +er"e as an identit card and facilitate recording of transaction on an ongoing basis. $s far as possible% cl#ster approach ma implementing the scheme. &n case smart card are iss#ed% fee towards iss#e of card Mprocessing ma not e,ceed <s. 9(M-per card Insurance0 Beneficiaries #nder the scheme wo#ld a#tomaticall be co"ered #nder the gro#p ins#rance scheme and the premi#m wo#ld be shared b the bank and the borrower e1#all . 2ach Bank ma negotiate the terms of ins#rance with a compan of its choices on a national or regional basis. B#rther as ad"ised b general &ns#rers Cp#blic sectorD $ssociation of &ndia C3&;+$D it wo#ld be ad"ised for the banks to take #p the matter of ;ersonal $ccident &ns#rance linked with +.. scheme indi"id#all with the ins#rance companies. +ince man bank ha"e tie-#ps for bancasss#rance agreement with general &ns#rance .ompanies the ma decide to incl#de +.. scheme also #nder their tie-#ps. be followed in

-*?-

[Link])I- PROD2#-)0
Karnataka Bank Ltd aims to help c#stomers b#ild on a strong fo#ndation b ma,imizing ret#rns on in"estments and increasing their assets. .#stomers. can make #se of their c#stomized prod#cts to take care of their specific banking needs.

+bhyudaya Cash Certificate

$ growth oriented scheme with ma,im#m ret#rns. Mone in"ested m#ltiplies after the specified period. The minim#m period of deposit is 5 months and the ma,im#m period is )'( months.

(i8ed deposits
$ deposit scheme for specified periods ranging from )9 da s to )( ears. with interest pa ments made monthl % 1#arterl % half- earl or earl as re1#ired b the depositor.

-eady Money deposits:

$ #ni1#e term deposit c#m o"erdraft acco#nt% whereb a minim#m deposit of <s. . )(%(((M- enables the c#stomers withdraw #p to 49F of the amo#nt b che1#e witho#t presentation of the deposit receipt.

Soulabhya Deposit
$ fle,ible Etwin gain0 deposit scheme that allows withdrawal of deposits in #nits of <s. . )%(((M- each in case of need% witho#t affecting the interest pa able on the remaining #nits. Minim#m amo#nt of deposit is <s. 9%((( and in m#ltiples of <s . )%(((M- thereto.
-*@-

 Cumulati e deposit
$ monthl deposit scheme whereb a fi,ed amo#nt is to be contrib#ted monthl for a minim#m period of 5 months and a ma,im#m period of )( ears. This is an ideal scheme to sa"e a fi,ed amo#nt for f#t#re plans s#ch as ed#cation% b# ing a home etc.

2nsurance lin9ed sa ings Ban9 deposit

B maintaining a stip#lated minim#m balance in +B acco#nt%

c#stomers become entitled to free accident ins#rance co"erage of #p to <s. ' lakh and <s.)(%(((M- towards reimb#rsement of hospitalization e,penses arising o#t of accidents.

).(le8i Deposit
&t is a facilit for all e,isting acco#nt holders that ma,imize the ret#rns on s#rpl#s f#nds in the acco#nt. The stip#lated le"el at present is <s.)(%(((M-. /hene"er the balance in the +B aMc s#rpasses this amo#nt% the e,cess amo#nt gets transferred to a term deposit in m#ltiples of <s.9%(((M- for a specified period and earns interest applicable to a term deposit of that period.

-esident foreign currency "domestic$ account

This acco#nt can be opened as a c#rrent acco#nt onl . Boreign c#rrenc in G+D% 3B; and 2#ros ma be deposited. The acco#nt carries no interest with it and there is no minim#m amo#nt for opening the acco#nt. Boreign e,change ac1#ired in the form of c#rrenc notes% tra"elers che1#es% gifts% honorari#m recei"ed o#tside &ndia% gifts recei"ed from relati"es and earnings thro#gh the e,port of goods and ser"ices% can be credited to this acco#nt.

-*A-

 ,-2 Ser ices

There are a wide range of deposit schemes for Non-<esident &ndians. &t incl#des non resident r#pee acco#nt% foreign c#rrenc non resident CBankD scheme CB.N< RBSD and non resident Cordinar D acco#nt CN<!D with "er attracti"e and competiti"e rates. <esident foreign c#rrenc a"ailable. C<B.D CdepositD acco#nt for ret#rning &ndians is also

Area of Operation
The bank at present has ?)( branches% )(5 $TM o#tlets% 4 2,tension co#nters% * regional offices% ) &nternational Di"ision% ) Data .enter% ? +er"ice Branches% ' .#rrenc .hests% +pread o"er ): +tates and ' Gnion territories.

-*B-

O3nership Pattern
The share holding pattern in Karnataka Bank Ltd is as gi"en below in the form of table /able ,o: #%# Sho4ing the o4nership pattern in )arnata9a Ban9

/otal Shareholding +s a ; of total number of shares +s a ; of +<B

Categor y code

Category of shareholders%

,umber of shareholders%

/otal number of shares

,umber of shares held in demateriali:e d form

+hareholding of $ promoters and promoters 3ro#p ( ( ( (

Public shareholding

C)D

&nstit#tions

CaD

M#t#al

==)*??5

==)*??5

'.4?

-*,-

B#ndsMGT&

CbD

Binancial instit#tionsMBanks

9)*9*?

9)*9*?

(.?=

.entral CcD 3o"ernmentM+tate 3o"ernment ( ( ( (

CdD

Ient#re .apital B#nds

CeD

&ns#rance .ompanies

)=*5'=)

)=*5'=)

).)?

CfD

B&&s

=:

=5:5*?)4

=5:5*?)4

=(.?4

CgD

Boreign Ient#re .apital &n"estors

ChD

$n other

Sub./otal "B$"#$

=>

?@#A#=BC

?@#A#=BC

D?%BC

C'D

Non-&nstit#tions

CaD

Bodies .orporate

:*=

)9549)'(

)9549)'(

)'.:)

-*.-

&ndi"id#alsshareholders CbD holding nominal share capital of #pto <s. ) lakh 54''5 ?=:='?'4 '?95=?5= =5.')

ii. &ndi"id#alsshareholders holding nominal share capital in e,cess of <s. ) lakh 54= ):9??='= )5'59?'= )5.)(

Sub./otal "B$"@$

=CCC@

BA#!#CB>

!=>!@#A!

=!%@@

/otal Public shareholding =CA?@ "B$E"B$"#$F"B$"@ $ #@#D?D!? C

AC@?DCBD

#>>%>>

/O/+*"+$F"B$

=CA?@

#@#D?D!? C

AC@?DCBD

#>>%>>

-*C-

#o petitors Infor ation

+ll the ban9s in 2ndia are competitors for the Ban9% +ome of the major .ompetitors for the bank are.

#it! 2nion Bank Ltd"0

The oldest pri"ate sector bank% .it Gnion Bank Ltd% was established in ):(? as the K#mbakonam Bank Ltd. &t has taken o"er three local banks: .ommonwealth Bank Ltd in ):94J .it Borward Bank Ltd and Gnion Bank Ltd in ):59. Located in K#mbakonam% the temple cit and ha"ing small o#tfit of ))* branches% mostl in Tamil Nad#% it is less know o#tside the state. &n its long jo#rne % it "ent#red o#t of the state onl in ):*(% !pening a branch in Bangalore. .it Gnion Bank Ltd combines traditional banking with end#ring relationship.

-he 4arur $!s!a Bank Ltd"0

The Kar#r I s a Bank Ltd was established in the ear ):)5. The Bank witnessed the "icissit#des of the banking sector d#ring the two /orld wars. 2,panding slowl % it has grown strong in its hometown Kar#r. The bank0s o"erall performance has been aptl described b Dr. .. <angarajan% the then 3o"ernor of $ndhra ;radesh% while ina#g#rating the KIB towers in .hennai as% @The Kar#r I s a bank can be regarded as a fine e,ample of how a medi#m size bank can effecti"el pla its part in promoting regional de"elopment and in attending to the needs of small and medi#m enterpriseA.

-a ilnad &ercantile Bank Ltd0

Tamilnad Mercantile Bank Ltd is from T#ticorin. &ts original incarnation was as The Nandar Bank Ltd% promoted b a gro#p of b#sinessman in the

-?+-

port town of T#ticorin in ):'). &t became a sched#led bank in ):=9. The present name was adopted in ):5'. Tr#e to its name% it works as a Tamil Nad# bank. The Bank is making all efforts to remain as the totally moti ated ban9.

Nainital Bank Ltd0

Nainital Bank Ltd is a tin little bank from Gttaranchal. D#ring the British da s% most of the hill stations like +imla% M#ssorie% Darjeeling% and !ot were ha"ing banking facilities % pro"ided b either local banks or banks from o#tside. Nainitial where nat#re smiles in wilderness% saw the birth of a bank in ):''.!ne of its promoters was late 3obind Iallabh ;anth% confining to a single state. !n the e"e of &ndependence% it had a capital base of onl <s ).9( lakh and the n#mber of branches was 9.

-he Laksh i $ilas Bank Ltd0

The bank from Kar#r% which adds good fortune to your life- Lakshmi Iilas Bank Ltd-was established in ):'5 b a gro#p of 4 leaders of the local b#siness comm#nit % it was aiming at ser"ing the traders and the people from the middle class. D#ring the first two decades it co#ld open onl )( branches. .ontended in ser"ing the small towns for nearl 9( ears% it stepped o#t of the state onl in ):4?. Bor increasing the fee-based income the bank has entered into M!G with Dab#r .3G Life &ns#rance ;ri"ate Ltd for marketing the ins#rance prod#cts.

-he Dhanlaksh i Bank Ltd0

The Dhanlakshmi BankLtd% was established b a gro#p of eminent

law ers% in thriss#r in ):'4% with a initial paid #p capital of <s. ))%(((. 6andling a "ol#me of b#siness not more than <s ).=:lakh in the first ear%
-?>-

it co#ld earn a net profit of <s. )(): and the ne,t ear it declared a di"idend of )' percent. Tho#gh slow in e,panding% it took a bold step in taking o"er )' small banks in ):5?. The bank has caref#ll b#ilt #p relationshipG%(ore er with its shareholders and .#stomers.

-he )outh Indian Bank Ltd0

The +o#th &ndian Bank Ltd was born in Thriss#r in ):':% two ears after the birth of Dhanalakshmi Bank Ltd. &t has the record of taking o"er the largest n#mber of small banks-)9 banks between ):5) and ):59.$malgamating so man banks was intended a big task% considering the difference in the nat#re of the b#siness and the financial stat#re. B#t in the process the bank co#ld e,pand its b#siness. Tho#gh it does not ha"e its own $TMs% it has tied #p with .ent#rion Bank Ltd for sharing their $TM network all o"er the co#ntr

-he $!sa Bank Ltd0

The BangalorePbased% 4' ear old bank% began its banking operation in a small wa like all other banks . &t owes its formation to the effort made b their fo#nder directors% who were the b#sinessman. The first chairman was retired dep#t commissioner of the M sore state. The paid #p capital was onl <s.4)((( in ):=). Till ):5? it was spreading acti"ities into the neighboring districts like $nanthp#r% Bellar and M sore. $ branch was opened in Madras d#ring the ear and paid #p capital increased to <s. )(.=( lakh.&n ):4: % when the bank was celebrating its golden j#bilee% its capital base crossed the <s ) .rore mark and the deposits crossed the <s.)(( crore le"el.

2nfrastructural (acility
-?*-

$s regards to the infrast#ral facilities pro"ided in Karnataka Bank Offices The 6ead office of Karnataka Bank Ltd has a central air condition s stem which helps the emplo ees to escape from the heat of Mangalore .it . Canteen The Bank pro"ides canteen facilit to all its emplo ees and it is sit#ated inside the Bank premises. System The Bank is one of the few banks in the co#ntr which #ses Binical +oftware which in t#rn helps the bank to ser"e its c#stomers more efficientl . The Bank also pro"ides internet facilit to its emplo ees

6or9 (lo4 Model

The work flow model of Karnataka Bank Ltd is of two t pes and is shown belowJ ;rocess Map- Deposit: ;rocess Map $d"ances:

-??-

Process Map. Deposit: The below chart shows the work flow of depositing mone Chart # Chart Sho4ing the process map deposit in )arnata9a Ban9 *td
.#stomer

Deposit

$pplication <e"iew and doc#mentation

Decisio$ ! 9i$7

;rocessing

C sh Che6%e Dr ft

$cco#nts Department

/ork Done
-?@-

This is the work flow adopted b the bank at the time of recei"ing the deposits from their c#stomers. The first step in this process is c#stomer approaching the bank. /hen the c#stomers will ha"e s#rpl#s mone with them% the will be looking to in"est that mone in some place where the can get good ret#rns o#t of it. Bank is one s#ch place which accepts deposits from their c#stomers and pa s interest on them. +o the c#stomers will be looking for that bank which will pa them highest rate of interest on their deposits. !nce the c#stomer identifies the bank where he is going to deposit his amo#nt% he has to go thro#gh the introd#ction stage% were the c#stomer needs to be introd#ced to the bank. 6e ma be introd#ced to the bank b the c#stomer or an emplo ee of that bank. 6e is asked for pro"iding doc#ments like <ation card or an license for address% age H income proof. !nce the acco#nt is opened Ci.e. 2ither +.B aMc% fi,ed deposits% rec#rring deposits or c#rrent aMcD heMshe will pro"ide with facilities like .he1#e book% $TM or !.D if it0s a c#rrent aMc. !nce the c#stomer opens an acco#nt in the bank he can deposit an amo#nt an n#mber of times b#t in case of fi,ed deposit its one l#mp s#m amo#nt deposited till its mat#rit it is not withdrawn. /hen amo#nt is deposited it goes to the hands of cashier and then to cash s#per"isor and then to his acco#nt% b#t now d#e to .B+ the entr is gi"en within a min#te. The depositors are eligible to withdraw the amo#nt which is credited in their acco#nt and not more than that #nless it is c#rrent acco#nt. Depositors can withdraw as an when the need b#t in case of fi,ed deposits prior 4 da s notice to be gi"en% b#t toda 0s banker will not ask
-?A-

for an

notice j#st gi"e it in the spot with penalt . The process of

withdrawal is re"erse of depositing where from his acco#nt it goes to cash s#per"isor from him to cashier finall to the hands of c#stomer% again traditional work flow. Now all are comp#terized where in one person does all the acti"it . .#stomer can directl withdraw in $TMs or can directl iss#e .he1#es to the other part . Process Map +d ances: The "ario#s stages of granting loan to c#stomers is depicted below Chart ,o: @ Chart Sho4ing the process map ad ances of )arnata9a Ban9
.#stomers

.#stomer +pecific <e1#irement

Billing of $pplication

$pplication <e"iew

Decision

<eject

-?B-

Doc#mentation

Loan Disb#rsement

<epa ment of interest

This is the work flow model followed b the bank at the time of gi"ing ad"ances to their c#stomers. /hich in"ol"es the following series of steps% the are: $n part re1#iring f#nds thro#gh Bank first has to talk with the

respecti"e manager of a branch of his area. !ne thing the manager has to see that the amo#nt of loan he has to sanction is in his powerM limit or else he has to concern his higher a#thorit . &n this stage the process of negotiation regarding rate of interest between part and Banker takes place. The important d#t of a manager is to know his c#stomer there are man s stematical techni1#es and process to know the real identification of the c#stomers. This is done mainl to a"oid anti-la#ndering. The p#rpose of loan to be sanctioned sho#ld be clearl #nderstood either b e"al#ating bl#e print of his project or balance sheet or performance proof of his e,isting b#siness. This is mainl done to make s#re that repa ment of the amo#nt is ens#red and part won0t become Bankr#pt. &n case of personal loan e"al#ation of the person is done thro#gh other person who is known to the Banker.

-?,-

The part in need of loan is capable of withdrawing the amo#nt not more then the amo#nt sanctioned to him. Doc#mentation deals with filling of forms that are in contract#al form and most of the doc#mentation process co#ld be seen in all the stage. &t also deals with s#bmission of sec#rit for their loan and its formalities. $fter the p#rpose of the loan is ser"ed% the part is obliged to repa the amo#nt incorporating ;L< and other Bank charges or according to the agreement (uture Gro4th prospectus /ith a econom of the co#ntr growing at nearl *F there high growth potential for the bank. The bank is planning to enable EMone .lick0 as a pa ment gatewa for shopping that co"ersast areas of b#siness like 6otel Booking% Ticket Booking% ;#rchase of goods etc. The Bank is also planning to introd#ce mobile Top-#p thro#gh $TMs and internet Banking. B#rther Bank is also planning to tie #p for online trading in shares.

Mc9ensyHsBHs (rame 6or9 McKinse H .ompanies 4+ framework pro"ides a #sef#l wa of st#d ing internal working of the organization. The model was de"eloped b Tom ;eter and <obert /aterman% cons#ltants of Mckens 0s and compan . The 40+ Model was fi<s. t p#blished b them in the article @+tr#ct#re is not organizationAC):*(D and in the books as onl @The $rt of 8apanese ManagementAC):*)D and @&n search of 2,cellenceA. .ons#lting Birm identified strateg e,hibited b the best managed companies. The McKinse

one of se"en elements

-?.-

+trateg % str#ct#re and s stems can be considered the 7hardware7 of s#ccess whilst st le% staff% skills and shared "al#es can be seen as the 7software7. .ompanies% in which these soft elements are present% are #s#all more s#ccessf#l at the implementation of strateg

-?C-

Chart ,o: D Chart sho4ing Mc9ensyHs BS Model

The f#nctioning of Karnataka Bank Ltd can be better #nderstood with the help of following 4s The 40+ are +tr#ct#re +kill +t le +trateg +taff +hared Ial#es

-@+-

#$ Structure &t prescribes the formal relationship that sho#ld e,ist among "ario#s positions and acti"ities. &t is the d#t of the top management to design the organisation str#ct#re of an organisation. &t is one of the critical tasks. The designing of the s#per str#ct#re in"ol"es iss#es like di"ision of organisation tasks and allocation of responsibilities between "ario#s departments. The hierarch of s#periors#bordinate relationship are defined b the organisation charts

which are formal doc#ments that indicate the chair of command and the titles that ha"e been assigned to the managers and other personnel0s. !rganization charts indicates the emplo ees position in the hierarch and their relationship within a formal organisation )tructure at Branch le*el The Karnataka Bank has totall ?)( branches an on =)st March '((4.2ach Branch is headed b a branch manger who has the responsibilit of o"erall administration of his or her branch% )tructure at Regional office Le*el The Karnataka Bank has eight regional offices spread across the co#ntr . 2ach regional office is headed b an assistant manager. The <egional offices are responsible for controlling the branches coming #nder them and also for implementation of decisions taken at the head office of the bank. Bor facilitating eas departmental head administration% the bank is di"ided into who are responsible for the o"erall

different departments with each department headed b its respecti"e administration of their department and also to carr o#t "ario#s

-@>-

acti"ities coming #nder their departments b taking the help of e,ec#ti"es% officers. and staff of their departments. The organisation str#ct#re of the Karnataka Bank has been shown in the chart below. The Board of Directors occ#p the top most position followed b the chairman who is ne,t in the hierarch . &n the ne,t le"el of organizational str#ct#re there are D3M 6#man relations and ind#strial relations% 3eneral Manager% planning and de"elopment% 3M .redit% 3M Treas#r % 3M% reco"er Legal and <MD% $nd D3M inspection and $#dit.

@$ S9ill +kills refer to the fact that emplo ees ha"e the skills needed to carr o#t the compan 0s strategies. +killf#l emplo ees are the assets of the organization. +kills of the emplo ees ma be impro"ed b gi"ing necessar training to them. The Bank belie"es that skillf#l emplo ees contrib#te to the +#ccess of the Bank. De"elopment of h#man reso#rce is an important factor for the de"elopment of an ind#str . Banking is not an e,ception to that. &t in"ol"es "ario#s aspects like contin#o#s training% rewards b wa of promotion% appreciations etc. The bank 6<D polic is g#ided b the .hinese ;ro"erb @&f o# are planning for one ear% grow rice. &f o# are planning for twent ears plant trees. &f # are planning for cent#ries % de"elop menA.D#ring the ear '((5-'((4%)?'? officers% 9)4 clerks and 5* s#b staff were gi"en training #nder "ario#s aspects to #pdateMimpro"e the knowledge. The officers of the bank are also dep#ted at Bankers Training .ollege% M#mbai% National &nstit#te of Bank Management% ;#ne% &nstit#te of De"elopment and

-@*-

<esearch

in

Banking

Technolog %

6 derabad.

/hene"er

+pecialized training was fond necessar . /able ,o%# /able sho4ing the number of employees 4ho under 4ent training during the year Banks own training .ollege !fficers .lerks +taff 4(: 9)4 +#b

$t bankers Training .ollege C<B&D H other Training colleges C !fficers D

$t /ork shops H +eminars.

5*

'5(

?99

D$ Style &t is one of the se"en le"ers which the top management can #se to bring abo#t change in the organization. $ccording to M. Kinse 0s Bramework% Becomes e"ident thro#gh the patterns of action taken b the members of the top management team o"er a period of time. The M. Kinse 0s Bramework considers @+t leA as more than the st le of top management. Karnataka Bank Ltd. follows a Top to down st le of management. &t also works in a participati"e st le. The decisions are taken b the top management concerning matters related to the organization. The decisions relating to department matters are taken b the departmental heads. The bank follows a democratic leadership st le which allows the emplo ees to take part in the decision making

-@?-

process. 2mplo ees are free to gi"e an ideas% s#ggestions etc% for the betterment of the organisation. This will be taken with acti"e cons#ltation with the emplo ees.

?$ Strategy +trateg means action a compan plans in response to or in

anticipation of challenges in the e,ternal en"ironment. The Karnataka Bank% in order to respond to the changes% has formed the following action plan with specific reference to prod#ct% pricing% and people

Action plans on product &ntrod#ction of &nternet Banking 2,pansion of Banks on $TM Network &ntrod#ction of Debit .ards <etailing in +ec#rities

Action plan on Pricing &ncreasing emphasis on fee based % .ommission based acti"ities% .ollection of #tilit bills and other fee based ser"ices like m#t#al f#nd distrib#tion which the bank to be more competiti"e.

-@@-

 The Bank plan to train emplo ees on marketing of prod#cts like schematic loans% ins#rance% mone transfer etc.% The Bank has decided to gi"e incenti"es to emplo ees for gro#p performance

The s#ccessf#l implementation of these strategies or action plans helps the bank to gain competiti"e ad"antage o"er the other banks.

!$ System + stem means formal and informal proced#res that go"ern e"er da acti"ities. The decision making s stems within the organisation can range from management instit#tions to str#ct#red comp#ter s stems and formal and informal proced#re that go"ern the e"er da acti"ities of the Bank. The + stem of the Karnataka Bank &ncl#des

.omp#ter + stem Training + stem .ontrol + stem

#o puter )!ste Karnataka Bank was the first bank to realize the importance of .entralised Banking + stem and was the Birst to deplo .ore Banking

-@A-

s stem EBinacle0. $ part from this the bank has comp#terised all acti"ities and branches so to pro"ide 1#ick ser"ice to its .#stomers. -raining )!ste &n a ser"ice ind#str like bank% 1#alit of the ser"ice offered to the

c#stomers is "er important. To pro"ide s#ch high 1#alit ser"ice to its c#stomers% the bank trains its emplo ees in "ario#s areas as well as in ad"anced technolog . The training is gi"en at the +taff Training .ollege of the bank and b some specialized o#tside agencies. #ontrol )!ste The Bank has well defined control s stem in all critical areas of operation i.e. corporate credit% fore,% treas#r % etc% which are doc#mented and re"iewed from time to time. The bank has also a f#ll-fledged internal a#dit and inspection mechanism thro#gh which all branches are p#t #nder reg#lar inspection encompassing the whole range of acti"ities i.e.% Bore,% .#stomer .omplaints% &ncome leakages etc. =$ Staff +taff means that the organization has hired able people trained them well and assigned them to the right jobs. +taffs are h#man reso#rces working in an organisation. The are responsible for carr ing o#t "ario#s acti"ities of the organisation effecti"el and efficientl . The Karnataka Bank has well trained% de"oted and skilled staffs who work "er hard for the s#ccess of the bank. The n#mber of people emplo ed b the bank stood at ??95 as on =)st March '((4. The B#siness per emplo ee has impro"ed from <s. ?.4* crores as on =)st March '((5 to <s. '? .rores as on =)st March '(([Link] Bank d#ring the '((5-'((4 recr#ited 4? new officers % ):* clerks% and =' s#b staff.

-@B-

/able ,o:@ /able sho4ing the total staff position as onD#.>D.@>>B Officer s $s at the end of the Oear )9:? Sub. Staff 4:? ='

Cler9s

/otal

'(5* ):*

??!= D>?

<ecr#ited d#ring the ear 4?

B$ Shared &alues +hared "al#es refer to the g#iding concepts% "al#es and aspirations that #nite an organisation in some common p#rpose. The g#ide emplo ees of an organisation towards "al#ed beha"ior. &mportant concerns and goals that are shared b most of the people in a gro#p% that tend to shape gro#p beha"ior% and that often persist o"ertime e"en with changes in gro#p membership. +hared "al#es originall called as s#per ordinate goalsJ it is the g#iding concepts and principles of the organisation - "al#es and aspirations% often #nwritten. The are also the things that infl#ence a gro#p to work together for a common goal. &t acts as a g#iding concept% f#ndamental ideas aro#nd which a b#siness b#ilt. +o it m#st be simple% #s#all stated at the abstract le"el% ha"e great meaning inside the organisation e"en tho#gh o#tsiders ma not see or #nderstand them.

-@,-

The Karnataka Bank goes for the following "al#es .#stomer +atisfaction L#ick and better +er"ice Lo al to the .#stomers 6onest in work S6O/ +nalysis &dentification of the threats and opport#nities in the en"ironment and the strengths and weakness of the firm is the cornerstone of b#siness polic form#lation. &t is these factors which determine the co#rse of action to ens#re the s#r"i"al of the firm. The en"ironment might present man opport#nities b#t a compan might not ha"e strength to e,ploit all the opport#nities. +imilarl % sometimes a firm will not ha"e the strength to meet the en"ironmental threats. &f a compan % th#s% finds that it will not ha"e the competence to s#r"i"e in a partic#lar line of b#siness% it will be pr#dent to gi"e it #p and concentrate on s#ch b#siness for which the firm is most competent. The economic liberalization in &ndia in )::) drasticall ha"e been concentrating on their core B#siness Strengths ). The factors that ha"e contrib#ted to the s#ccess of the Bank is its workforce beca#se the bank has highl ed#cated workforce% o#ng and energetic emplo ees within the age gro#p of '9-?9This helps the changed the b#siness en"ironment. Man .ompanies ha"e e,ited se"eral of their b#siness and

-@.-

8#nior emplo ees to learn from the e,perience of the emplo ees

senior

'. The Bank is professionall managed. The bank is one of the few banks in &ndia which gi"es importance to technolog in order to ser"e it c#stomers software0s. =. The Banks strengths lie in management capabilities% foc#sed strateg % speed decision making. better it is one of the few banks which #ses finacal

?. There has been e,pansion of branches and $TM ser"ices b the bank d#ring the last few ears. 9. The Banks pro"ides good infrastr#ct#ral facilit to its to its staff and help them to concentrate more on their job% 5. The Bank has introd#ced "ario#s schemes

6ea9nesses The weaknesses of the bank incl#des that the bank has majorit of the branches in the so#thern region. The second /eakness of the bank is that of its aging work force. Non-"erification of <eser"e Bank of &ndia defa#lters list while processing credit proposals Dela in follow #p on "ario#s acco#nts

Bank had often in"ol"ed in fre1#ent che1#e p#rchases of large amo#nts be ond the discretionar power .

-@C-

 /hile opening foreign letter of credit opinion report of the o"erseas part not obtained res#lting in de"ol"ementMlikel de"elopments. Dela in cr stallisation of e,port bills disco#nted. +anction terms and conditions were not complied with in man cases re"ealing inade1#ateMineffecti"e mechanism to monitor and follow-#p of s#ch cases. The stocks h pothecated to the Bank were not ade1#atel ins#redMnot ins#red in some cases There were instances of fre1#ent ret#rns of che1#es and the branches had not taken #p the matter with the borrowers concerned to maintain financial discipline.

Opportunities The 3rowth potentials or the opport#nities are "er h#ge as the bank had mainl concentrated on the so#thern region of the co#ntr in its earlier ears it has the opport#nit to e,pand its b#siness to other parts of the co#ntr wherein it can increase its c#stomer base. The bank b "irt#e of becoming a member of $TM networks like EI&+$% ENB+0% [Link] Tree0% besides contin#ing the bilateral arrangement with corporation Bank% has enabled access to nearl ) million $TMs and '9 Million ;!+ across the globe for its card holders. Bank is also facilitating inward remittance facilit thro#gh /estern Gnion Mone Transfer which has enabled "ast section of the pop#lation to recei"e hassle free remittance from abroad. The bank is planning to enable EMone .lick0 as a pa ment gatewa for

-A+-

shopping that co"ers "ast areas of b#siness like 6otel Booking% Ticket Booking% ;#rchase of goods etc. The Bank is also planning to introd#ce mobile Top-#p thro#gh $TMs and &nternet Banking% besides la#nching "al#e additions like +M+ alerts to Non-Mone .lick .#stomers% Gtilit bill pa ment and $ir ticket booking thro#gh $TMs. B#rther Bank is also planning to tie #p for online trading in shares. The Bank is planning to increase the n#mber of its $TMs to )9( b =).(=.'((*. /hreats $s the bank majorit b#siness comes from the so#th an effect to the econom here wo#ld ha"e an ad"erse effect on the performance of the bank. The Bank is relati"el smaller when compared to other banks like +B& and &.&.& Bank and some others. +ince it0s a smaller bank when compared to hea" weights like +B& and corporation Bank the bank is alwa s #nder treat of being taken o"er b other banks.

S0MM+-1 O( *+/3S/ +,,0+* -3PO-/

Karnataka Bank Ltd% is a leading E$0 .lass sched#led commercial Bank in &ndia has earned a net profit of <s. )44.(= crores as against <s. )45.(= crores in the pre"io#s ear an increase of (.9F increase in comparison with the pre"io#s its ad"ances rose b ear. Bor the ear '((5-(4 the total deposit of ear. The other ke Karnataka Bank registered a growth of 5F o"er the pre"io#s ear. /hile ''.5(F o"er the pre"io#s financial data0s are mentioned below /able ,o: D

-A>-

/able Sho4ing the performance highlights of the Ban9 for the year @>>=.@>>B C<s. &n .roreD +s on Ifor the year ended D#%>D%@>>B )?(=4.?? :99'.5* 9(?*.)5 )?=(.9' =95.9* )44.(= +s on Ifor the year ended D#%>D%@>>= )='?=.)5 44:).94 99?*.9* ))*?.*? ='*.': )45.(=

Particulars% Deposits $d"ances &n"estments Total &ncome !perating ;rofit Net ;rofit

The total b#siness t#rno"er of the bank to#ched <s. '=9:(.)' crores% an increase of )'.)9F o"er the preceding. The total assets of the bank increased from <s. )?:9=.'4 crores to <s. )5'''.9' crore recording a growth of *.?:F The Net interest income rose from <s =59.:4 crore to <s.?):.*5 crore thereb registering a growth of )?.4=F d#e to growth in ad"ances. The operating profit increased from <s. ='*.': crores to <s. =95.9* crore showing a growth of *.5'F

-A*-

 Total Deposits of the bank grew from <s. )='?=.)5 crores as on =).(=.'((5 to <s. )?(=4.?? crore as on =).(=.'((4% registering a growth of 5F The total ad"ances grew from <s. 44:).94 crores as on =).(=.'((5 to <s. :99'.5* crores as on =).(=.'((4an increase of ''.5(F $gric#lt#ral ad"ances increased from <s. 4=4.== .rores to 4:).=: .rore. The priorit sector ad"ances increased from '44'.'( .rores to <s. =(9*.:( .rores.
The total in"estment of the bank as on =)st March '((4 stood at <s.

9(?*.)5 .rores as against <s. 99?*.9* .rores as on =)st March '((5 showing a red#ction of :.('F. The banking posted an operating profit of <+. =95.9* .rore for the ear as against ='*.': .rore for the Biscal '((5.

+ppropriations The net profit of <s. )44.(= .rore which along with a s#m of <s. (.(5 .rore bro#ght forward from the pre"io#s ear aggregated <s. )44.(: .rore is appropriated as #nder. The corresponding fig#re for the pre"io#s ear was <s. ':5.(? .rores.

/able ,o: ? /able Sho4ing +ppropriation of profits of the ban9 for the year @>>=. @>>B
-A?-

+ppropriation Transfer to +tat#tor <eser"es Transfer to .apital <eser"es Transfer to <e"en#es and

-s% % in crore )(4.(( ).=* ):.((

3eneral <eser"es Transfer to ;roposed Di"idend ?:.5:

Balance .arried to Balance (.(' sheet /otal #BB%>A

Di idend: The bank declared a di"idend of =9F for the ear which totaled <s. ?'.?4 .rores% which is )5.4?F higher than the amo#nt distrib#ted for the ear end =).(=.'((5. The Di"idend ;a o#t ratio stood for the ear stands at higher at '=.::F as compared to '(.54F d#ring the ear '((9-(5 3arning per share I Boo9 &alue The 2arning per share and the book "al#e of the share stood at <s. )?.5( and <s. )('.(* <especti"el as on =)st March '((4. ,et O4ned (unds and capital +deJuacy -atio

-A@-

The net owned f#nds of the bank increased from <s. )))).)= .rore to <s. )'=*.5= .rore registering a growth of )).?4F. The capital ade1#ac ratio decreased from )).4*F as on =)st March '((5 to )).(=F as on =)st March '((4 after taking into acco#nt the market risk on in"estment as per <B& g#idelines. The bank has been consistentl maintaining .apital $de1#ac <atio well abo"e the norm of :F stip#lated b the <B&. (ore8 Business D#ring the ear% Bank achie"ed foreign e,change b#siness t#rno"er of <s. 5)().)5 .rore as against <s. ?5=*.9: .rore for the pre"io#s ear% registering a growth of =).9=F. The ad"ances to e,port sector increased from *:?.*) .rore to <s. )(:9.=) .rore +d ances to Priority Sector The ad"ances of the bank to priorit sectors are shown below in the form of a table

/able ,o:! /able Sho4ing *ending of the Ban9 to Priority Sector C<s. in lakhD ,umber of accounts at the end of the year 9''): Balance outstanding at the end of the year 9:':9.9: ))9:'(.:)

/ypes of +d ances

aD $gric#lt#re

bD +mall +cale &nd#stries 59?: of which 2,port .redit to ++& #nits

-AA-

cD

+etting #p of &nd#strial 2state

the ? 9=:*

9:=9.:: =*:5.*) '455.'4 )=?(?.4* =4)9.9= )?)?*.*4 4:9?'.?= 4*).59 ?9'.?5 5('*.'* D>!CCA%!B 4)5(=.=5

dD +mall B#siness Binance

eD ;rofessional H +elf ??': 2mplo ed fD Transport !peration gD 2d#cation hD <etail Trade iD 6o#sing Loans jD .ons#mption loans kD +elf 6elp 3ro#p lD Bood ;rocessing /otal 2,port Binance e,cl#ding e,port credit to small scale ind#strial #nits 9?95 '=4* )=499 ))*4( )5'4 )()* 5= #>?B== :)9

-atio +nalysis <atio $nal sis is a widel #sed tool of financial anal sis. &t can be #sed to compare the risk and ret#rn relationship of a firm. &t is defined as the s stematic #se of ratios to interpret the financial statements so that the strengths and weakness of a firm as well as its historical performance and its c#rrent financial conditions can be determined. The term ratio refers to the n#merical or 1#antitati"e relationship between two items or "ariables. The rationale of ratio anal sis lies in the fact that it makes related information comparable.

-AB-

Significant Performance 2ndicators: /otal +d ances to /otal Deposit -atio: This ratio is generall e,pressed as a ratio between Total $d"ances and Total Deposits. The ratio is #sed to determine how m#ch of the total deposits collected from the c#stomers are lent as loan to p#blic. &t can be e,pressed as follows:

/otal +d ances /otal Deposits

-A,-

/able ,o: ! /able sho4ing /otal +d ances to /otal Deposits ratio C(((0s omittedD Particulars% /otal +d ances "-s%$ /otal Deposits "-s%$ Mar >B :99'%54%:: )?(=4%?=%9 ? /otal +d ances to /otal (.5*(9 Deposits ratio &t can be seen in the abo"e table that there has been a stead increase in total ad"ances in proportion to total deposits from <s. (.9* to <s. (.5*. &t can also be inferred that there has also been a stead increase in the amo#nt of deposits collected b the bank o"er the period of three ears. . #$ /otal 2n estments to /otal Deposits -atio: This ratio is generall e,pressed as a ratio between Total the Bank for its (.9**= (.9*(' Mar >= 44:)%95%4* Mar >! 5'*4%??%(5

)='?=%)5%(? )(*=4%(9%*)

&n"estment and Total Deposits. This ratio is to #sed to know what proportion of the total deposits are #sed b other companies. &t can be e,pressed as follows: /otal 2n estments in"estments p#rpose s#ch as 3o"ernment +ec#rities or +hares of

-A.-

/otal Deposits /able ,o: = /able Sho4ing the /otal 2n estments to /otal Deposits -atio C(((0s omittedD Particulars% /otal 2n estments "-s%$ /otal Deposits "-s%$ Mar >B 9(?*%)5%?? )?(=4%?=%9 ? /otal 2n estments to /otal Deposits ratio The total in"estments in proportion to total deposits ha"e shown a slight decline o"er the ears from (.?'(= in March '((9 to (.=9:5 in March '((4. @$ ,et ,[Link] +ssets to ,et +d ances This <atio indicates the $d"ances or Loans that were lent b the Bank and which ha"e t#rned o#t to be Non-;erforming $d"ances. &t can be e,pressed as follows: ,et ,[Link] +ssets E Opening Balance F +dditions during the year 5 -eductions during the year% ,et ,P+ (.=9:5 Mar >= 99?*%9*%(4 )='?=%)5%( ? (.?)*: (.?'(= Mar >! ?999%4)%54 )(*=4%(9%*)

-AC-

,et +d ances /able ,o: B /able Sho4ing the ,et ,[Link] +ssets to ,et +d ances -atio Particulars% ,et ,P+ "-s in la9h$ Mar >B ))5('.9( Mar >= :)9).): 44:).94 Mar >! )?=':.9? 5'*4.??

,et +d ances "-s% in :99'54.:: crores$ ,et ,P+ to ,et +d ances ).')?9

).)4??

'.'4:(

N;$s are those ad"ances where the interest and ad"ances ha"e been o"erd#e for more than :( da s. The abo"e table shown that there has been a steep decrease in Non performing assets of Bank from '.'4:( in March '((9 to ).')?9 in March '((4 this shows that there has been an increase in the efficienc of the Bank to collect its ad"ances. D$ -eturn on /otal +ssets <et#rn on total assets is the ratio of net profit to total reso#rces. This ratio meas#res the prod#cti"it of the total assets of a concern. &t indicates the profitabilit of a b#siness. ,et Profit K#>> /otal +ssets

-B+-

/able ,o: C /able Sho4ing the -eturn on /otal +ssets -atio C((( !mittedD Particulars% ,et Profit after /a8 "-s%$ /otal +ssets "-s%$ Mar >B )44(=?? Mar >= )45(==: Mar >! )?4)?5? )'9'54)*) ).)4?5

)5'''9)5' )?:9='4': ).)44'

,et Profit after /a8 to ).(:)' /otal +ssets

The data re"eals that there has been a decrease on the ret#rn on total assets from ).)4?5 in '((9 to ).(:)'. ?$ 3arnings Per Share -atio: This is a ratio between net profit a"ailable for e1#it shareholders that is net profit after ta,es and preference di"idends% and the n#mber of e1#it shares. The more the 2;+ the better is the performance and f#t#re prospect#s of the compan . This ratio throws light on the performance of the compan and helps in deciding whether the e1#it share capital is being #tilized effecti"el or not. ,et Profit a ailable for 3Juity Shareholders ,umber of 3Juity Shares

-B>-

/able ,o: A /able Sho4ing the 3arnings per Share -atio C(((s omittedD Particulars% ,et Profit a ailable for eJuity Shareholders% "-s $ ,umber of 3Juity Shares )')'5'.? ) 3PS "-s% $ )?.5( )?.9)* =?.(9 )')'9=.55 ?='(5.4?= Mar >B )44(:=) Mar >= )45(?=? Mar >! )?4)?**

The abo"e data shows that there has been a decline in 2;+ of the bank from <s. =?.9( in '((9 to <s. )?.5( in '((4. The decrease in the 2;+ is d#e to the increase in share capital of the Bank.

*3+-,2,G 3LP3-23,C3 The in-plant training was for fo#r weeks. & had done m in plant in Karnataka Bank Ltd% Mangalore. $s there was limitation of time% the st#d Bank. &n-plant training is reall #sef#l to know how class room st#d is applied in the organisation. &t is tr#e incase of Karnataka Bank Ltd. 2"er is done abo#t the general information regarding the Karnataka

-B*-

organisation before carr ing o#t an

task has to perform managerial

f#nctions s#ch as planning% organising% controlling and directing. Besides #s#al f#nctions s#ch as wage and salar administration.

& learnt abo#t what is N;$0s in banks% Non ;erforming $d"ances means an asset or acco#nt of borrower% which has been classified b a bank or financial instit#tion as s#b-standard% do#btf#l or loss asset% in accordance with the directions or g#idelines relating to asset classification iss#ed b <B&. .onditions to treat an acco#nt as N;$. i. &nterest and Mor installment of principal remain o"erd#e for a period of more than :( da s in respect of a Loan% ii. The acco#nt remains >o#t of order> for a period of more than :( da s% in respect of an o"erdraftM cash .reditC!DM..D% iii. The bill remains o"erd#e for a period of more than :( da s in the case of bills p#rchased and disco#nted% i". &nterest andM or installment of principal remains o"erd#e for two har"est seasons b#t for a period not e,ceeding two half ears. in the case of an ad"ance granted for agric#lt#ral p#rpose% and ". $n amo#nt to be recei"ed remains o"erd#e for a period of more than :( da s in respect of other acco#nts. +econdl & had learnt abo#t what is an o"erd#e acco#nt it means @$n acco#nt sho#ld be treated as >o#t of order> if the o#tstanding balance remains contin#o#sl in e,cess of the sanctioned limitM drawing power. &n case where the o#tstanding balance in the principal operating acco#nt is less than the sanctioned limitM drawing power% b#t there are

-B?-

no credits contin#o#sl for si, months as on the date of balance sheet or credits are not eno#gh to co"er the interest debited d#ring the same period% these acco#nt sho#ld be treated as >o#t of order> The reco"er department of the bank works for the reco"er of credit granted to c#stomers. <eco"er department will do the job of getting back the loan granted to the c#stomers. if the fail to repa the loan amo#nt. $s regards to the legal department it is concerned with pro"iding legal ad"ices to "ario#s departments if there is an f#nctioning of department. #% Circulars pertaining to the products and ser ices of )arnata9a Ban9% @% )arnata9a Ban9Hs +nnual -eport @>>?.@>>B% D% Maga:ines and Brochures of )arnata9a Ban9% ?% Sou enir of the Ban9% !% 444%9arnata9aban9%com =% 444%rbi%org conflict in the

-B@-

SCHEMES EVOLVED BY KARNATAKA BANK LTD.

/H3 PH2*OSOPH1 7To open a shop is eas b#t to keep it open is an art7 - were the golden words of noted philosopher .onf#ci#s. /hen we look back to the histor of coffee finance in o#r bank% we feel pro#d beca#se there is a perfect combination of the art and science.

/H3 C0P /H+/ CH33-S Bor cent#ries% coffee has been cheering and stim#lating the task b#ds of millions of people worldwide. Bascinated b the fragrance of the steaming c#p% Dr. +. <adhakrishnan eminent scholar and statesman.

/H3 O-2G2, The origins of coffee c#lti"ation in &ndia goes back to aro#nd )5(( $.D. when a M#slim +aint from &ndia Baba B#dan sm#ggled se"en coffee seeds o#t of Oemen on his wa back from a pilgrimage% near .hikmagal#r. $ pict#res1#e town in Karnataka and this mo#ntain now pop#larl known as 7Baba B#dan 3iri7 and origin of coffee in &ndia.

-BA-

/H3 &2S2O, Born in the ear ):'? at Mangalore the Karnataka Bank Ltd. was known for its commitment to the common man. The Bank choose to find a new path in the agric#lt#ral sector b financing this "er need b#t totall neglected area d#ring the pre independence itself. Bor Karnataka bank% this transition period was not onl critical b#t also historic it is all now that the same <B& has made agric#lt#ral finance a priorit sector and earmarked a minim#m of )*F of credit to agric#lt#ral sector. 6ats off to the great "ision of late +ri K.+.N. $diga and other fo#nder directors who were instr#mental in showing a new path not onl to the Bank b#t also to the nationT

/H3 ,3/6O-) 2nco#raged b its earl s#ccess in agric#lt#ral finance% the Bank started its first branch in the coffee belt in the ear ):94 at Koppa followed b Balehonn#r and +#nti Koppa in ):9* and then spread its tentacles to 6assan in ):5( and the coffee town of .hikmagalore in ):55. Iiz 6assan and .hikmagalore. There after% there was no going back% as the Bank opened more and more branches in the #nbanked coffee areas of .hikmagalore% 6assan and Kodag# districts. Toda aro#nd ?* branches of the bank are e,cl#si"el . .offee c#ring trading e,port etc. !#t of )4(54' latch of coffee c#lti"ated area in these = d=istricts% Bank has financed fo=r =mor=e than= =9=4*'' ha. The total o#tstanding ;lantation credit of the Bank has reached a new height of <s.'': crores.

-BB-

/H3 ,36 3-+ The more scientific and technological orientation towards agric#lt#ral finance more especiall towards plantation finance began d#ring the ear ):*? when bank started recr#iting more technicall 1#alified agric#lt#ral field officers C$;!sD. The ser"ice of these specialized officers has been #tilized. 7Gnder 6ead 1#arter based cl#ster branches approach7 almost all the branches of the Bank are ha"ing agric#lt#ral ad"ances% it was at this period that Bank #pgraded its technical e,pertise in coffee finance and took earl ad"antages in #tilization of the refinance facilities of N$B$<D. The effecti"e mobilit of the $B!s in the field of agric#lt#ral credit the Bank has also started posting some of them as branch manages for some of the agric#lt#ral dominated branches.

/H3 +%D%B% $ll these stren#o#s efforts ha"e c#lminated in designing the .hikmagalore branch as the first 7C$DBD of bank in )::9. B#rther in order to pro"ide modern banking facilities to the coffee e,ports is ga"e more fillips to the coffee e,ports. The bank also designed the said branch for crore b#siness d#ring ):44. The bank has created banking s stem i.e. 7$gric#lt#re7 and 7Boreign 2,change B#siness7 apart from the traditional banking facilities.

-B,-

SUBSIDIARY SERVICE OF KARNATAKA BANK

Demand Draft Mail Transfer Telegraphic Transfer ;a !rder +afe Locker Bacilit +afe .#stod +er"ices M#lti Branch Banking

-B.-

SUBSIDIARY SERVICES OF KARNATAKA BANK

The Karnataka Bank Ltd. has rendered lots of s#bsidiar ser"ices to its .#stomer with reasonable ser"ice charges. +ince its inception the Bank has attached high priorit to c#stomer ser"ice. The main motto of the Bank is 7+er"ice with a +mile7. This motto added f#ll benefits to its slogan of 73rowth with +tabilit 7. <emittance of f#nds is major s#bsidiar ser"ice rendered b the Bank. &t has twin benefits of attracting new clients towards it and increasing its commission% income. The important +#bsidiar ser"ices rendered b the >Karnataka Bank Ltd.> are as follows:

D3M+,D D-+(/S "DPS$ Demand drafts are negotiable instr#ments drawn b one branch #pon another branch of the same Bank. &t is an #nconditional order to pa on demand% a specified person or to his order. Demand draft books s#pplied b 6.!. shall alwa s be held in joint

c#stod % d#l entered in the stock register. &t shall bear the name% D;D code and <B& code of iss#ing branch at the top. &f these partic#lars do not appear on the draft pads s#pplied b 6.!. these partic#lars shall be stamped on the draft lea"es on the da of receipt of stock.

-BC-

/3*3G-+PH2C /-+,S(3&n Telegraphic Transfer f#nds% are transferred from one branch to another branch b coded telegraphic massage for pa ment to the beneficiar of the TT b the drawee branch. Telegraphic transfers can be made between branches% which ha"e prior arrangements in this regard. Branches can ha"e reciprocal arrangements for both o#tward and inward transfer or for either inward or o#tward transfer onl . The message sho#ld also contain the telegram serial n#mber pertaining to the recei"ing branch. The coded message sho#ld be transmitted thro#gh tele,. The iss#ing branch sho#ld compare the confirmator recei"ed from the pa ing branch with the entr made in the Telegram &nward <egister and make a not of receipt of the confirmator against the entr in the register. &f an discrepanc is noticed% it sho#ld be immediatel followed #p with the other branch for necessar correction.

P+1 O-D3-S I P+1 S*2PS $ pa order or a pa slip is an order b a branch of a Bank drawn #pon it self to appl a certain s#m of mone to or to the order of the pa ee named therein. $ltho#gh% the pa order is almost in the form of che1#e since it is drawn on the branch it self% it is not co"ered b sections *9$ and )=) of the Negotiable &nstr#ments $ct. The Bank will not therefore get protection in pa ing a pa order with a forged endorsement. +imilarl % the collecting Bank will also not get protection% as pa order is not co"ered b section )=) of the Negotiable &nstr#ments $ct.

-,+-

;a ment d#e from the branch to the local parties M Banks% are also made b iss#ing pa order. The commission is to be collected as applicable to local drafts. /here a pa order is iss#ed to third part at the re1#est of c#stomer% the credit slip meant for DDs M MTs ma be #sed. /hile appl ing a pa order presented thro#gh clearing or across the co#nter for pa ment or for credit of an acco#nt% it sho#ld be scr#tinized in all respects as in the case of che1#es M drafts.

S+(3 D3POS2/ *OC)3-S ;ro"ide different sizes for rental p#rposes. ;reca#tion while gi"ing a locker on rental basis are as follows. ). The locker hirer sho#ld ha"e an introd#ced sa"ings or c#rrent acco#nt with the bank. '. The branch asks the hirer to fill in and sign a specimen signat#re card% with his f#ll name% address% specimen signat#re and a password or a code word. =. The banker specifies the timings of the operations of lockers. ?. Lockers cannot be rented o#t to a minor% as a minor has no contract#al capacit to hire a locker.

S+(3 C0S/OD1 S3-&2C3 Traditionall bankers recei"e "al#ables s#ch as negotiable sec#rities

jeweller and doc#ments of title to propert for safe c#stod . &n fact the origin of Banking in &ndia is said to lie in the fact that people going on pilgrimage for long periods #sed a keep their "illage or town. Being e1#ipped with safes and storage rooms for the p#rpose of their b#siness
-,>-

modern bank is nat#rall a safe and con"enient place to keep "al#able in safe c#stod .

M0*/2 B-+,CH B+,)2,G M#lti Branch Banking is a special facilit offered b Karnataka Bank that gi"es the power to operate +B or .#rrent $cco#nt of acco#nt holder thro#gh se"eral branches in the cities of Bangalore% Mangalore% .hennai and M#mbai. $n c#stomer who is eligible to open a +B acco#nt or a .#rrent $cco#nt can open the pri"ileged acco#nt and a"ail M#lti Branch Banking facilit . The minim#m a"erage balance to be maintained is <s.9(((M- for +B acco#nt and <s.)((((M- for .#rrent $cco#nt. The M#lti Branch Banking ac1#ires power of geographical fle,ibilit in Banking.

M3-CH+,/ B+,)2,G The <B& has allowed &ndian Banks to #ndertake man ancillar ser"ices. &n addition to their main b#siness of banking Merchant banking is among one of the most important b#sinesses now being #ndertaken b Banks.

Money plant +/Ms $n acco#nt holder% can #se $TM card to withdraw cash% make balance en1#iries and re1#est statements% che1#e books thro#gh $TMs. Mone ;lant $TMs gi"e 7ro#nd the clock7 access to acco#nt thro#gh $TM co#nters across the co#ntr % as well as those $TMs #nder arrangement with .orporation Bank.

-,*-

0/2*2/1 B2** P+1M3,/ M+D3 3+S1 $t Karnataka Bank one can now make telephone bill pa ments thro#gh the bank itself. Now c#stomers need no longer wait long ho#rs in a 1#e#e to pa phone bills.

63S/3-, 0,2O, MO,31 /-+,S(3$ strategic arrangement with /estern Gnion Binancial +er"ices &nc. of G+$ facilitates 1#ick% reliable and con"enient transfer of f#nds an where in the world.

SP33D1 MO,31 /-+,S(3- 6O-*D62D3 The Bank is also a member of the +ociet for /orldwide &nter Bank Binancial Tele .omm#nication C+/&BTD for e,peditio#s two wa transfer of f#nds and has a wide network of correspondent Banks in ?= co#ntries aro#nd the globe.

/H3 )-2SH2 C+-D Karnataka Bank introd#ced $gric#lt#ral credit card known as >K<&+6& .$<D> for its former clientele in the ear ):*: it self. &t is also now histor that the <B& has made K&+$N .<2D&T .$<D+ mandator for all banks since )::*. &t has also e,tended this facilit to the plantation sector d#ring the platin#m j#bilee ear.

/H3 CO((33 CO,(3-3,C3

-,?-

The dominance of the bank in plantation sector finance bro#ght to the limelight 7/hen .offee .onference7 was organised on '5-(?-)::*. &t was again in historic occasion as more than 9(( ;lanter delegates from all the three major coffee growing districts% "iz .hikmagalor% 6assan and Kodag# ha"e participated along from N$B$<D% .offee Board% 3rowers $ssociation% Ta, .ons#ltants% .arriers 2,ports% Bankers etc.

-,@-

ANNE3URE
Balance sheet of the last three years Capital and *iabilities
March H>! March H>= March M>B

/otal Share Capital

)').'9

)').'4

)').=9

3Juity Share Capital Preference Share Capital -eser es -e aluation -eser es ,et 6orth Deposits Borro4ings /otal Debt

)').'9 (.(( *95.4: (.(( :4*.(?

)').'4 (.(( :*:.*5 (.(( )%))).)=

)').=9 (.(( )%))4.'4 (.(( )%'=*.5'

)(%*=4.(5 )=%'?=.)5 )?%(=4.?? '?=.55 ))%(*(.4' )*'.5: ?'(.4?

)=%?'9.*9 )?%?9*.)* ?'?.): 9=?.(9

Other *iabilities < Pro isions ?*=.5* /otal *iabilities

)'%9?'.?? )?%:5).)4 )5%'=(.*9

+ssets
-,A-

Cash < Balances 4ith -B2 Balance 4ith Ban9sN Money at Call +d ances 2n estments Gross Bloc9 +ccumulated Depreciation ,et Bloc9 Capital 6or9 2n Progress Other +ssets /otal +ssets

5*4.5*

9=9.=:

*'5.*'

5*?.*(

54:.''

==?.5:

5%'*4.?? ?%999.4' ):5.') ::.55 :5.99 (.(( '=(.'9

4%4:).94 9%9?*.9* '):.9' ))9.') )(?.=) (.(( =('.)(

:%99'.5* 9%(?*.)5 '=9.9( )'*.5* )(5.*' (.(( =5).5*

)'%9?'.?? )?%:5).)4 )5%'=(.*9

*iabilities
Contingent *iabilities '%(?(.(* '%?)'.4( =%?'4.:(

Bills for collection

=5=.=5

?5=.(:

54'.**

Boo9 &alue "-s$

*(.55

:).5'

)('.(4

Profit and loss account for the year ended D#st marchN @>>B

-,B-

/able no%A CoooHs omitted$ (or the year ended D#%>D%@>>! -s% 2% 2,COM3 &nterest earned !ther income /otal 22% 3LP3,D2/0-3 &nterest e,pended !perating e,penses ;ro"isions contingencies /otal 222% P-O(2/ Net profit for the ear Transferred &n"estment Bl#ct#ation <eser"e ;rofit bro#ght forward '? /otal 2&% +PP-OP-2+/2O,S Transfer to +tat#tor <eser"e Transfer to .apital ( )%'9%?5 )%=*%') :(%((%(( )(5%((%(( )(4%((%(( #?BN#?NCC :9 @A=N>?ND? 9%*4 #BBN>AND# )?4%)?%** )45%(=%=: )'(%((%(( )44%(=%?? ( from ( A#DNADN!! #>>CNC>N?A #@!DN?CNCB 9'=%(?%=9 ):4%==%() and ):=%95%): 59'%(5%5= '(?%?*%)) )9'%'9%49 *=5%=:%(9 '=4%9?%9' )4:%99%=( *=:%:=%== '')%)?%*5 #>=#N>CN#A )()*%(=%4= )55%*(%)9 ##C?NCDNCC )'95%'9%(? )4?%'4%'4 #?D>N!@ND# (or the year ended D#%>D%@>>= -s% (or the year ended D#%>D%@>>B -s%

-,,-

<eser"e Transfer to <e"en#e '*%'9%(( <eser"e Transfer B#nds Transfer to ;roposed '?%'?%*) di"idend Transfer to Ta, on =%??%)' proposed di"idend Balance carried o"er :9 to Balance +heet /otal N#mber ear a"erageD 2arning per share C<s per share of <s. )(Meach -see note No: 9 of sched#le )4D Basic H Dil#ted Notes on acco#nt $cco#nting ;olicies =?.(5 )?.9' )?%5( of o#tstanding d#ring the C/eighted #?BN#?NCC shares ?='(%54%?= @A=N>?ND? )'%)'%9=%55= #BBN>AND# )'%)'%5'%?)4 9%*4 '%': 9%)(%'( 4%')%4* =5%=4%*) ?'%?4%(= to !ther )%'(%(( )%9(%(( ( )?9%49%(( ):%((%((

-,.-

/H3 )+-,+/+)+ B+,) *2M2/3D: -3GD < H3+D O((2C3: M+,G+*O-3 .!B!>>@ 0,+0D2/3D '0+-/3-*1 (2,+,C2+* -3S0*/S (O- /H3 /H-33 MO,/HS 3,D3D D#%#@%@>>B -s in *a9hs
GN$GD&T2D 'uarter ended D#%#@%@>> B # &nterest 2arned CaKbKcKdD ?>!?= D#%#@%@>> = ='):: ,ine months ended D#%#@%@>> B ##!>## D#%#@%@>> = :(=(9 $GD&T2D 1ear 3nded D#%>D%@>>B )'95'9

aD

&nterestMDisco#n t on ad"ancesMbills &ncome on &n"estments &nterest on balances with <eser"e Bank of &ndia and other inter bank f#nds !thers !ther &ncome T!T$L &N.!M2 C)K'D &nterest e,pended !perating e,penses CiKiiD 2mplo ees .ost !ther operating e,penses T!T$L 2U;2ND&TG<2 CC?K9D e,cl#ding pro"isions H .ontingenciesD

@CC=@

')''5

C#AD>

9494?

*)=9'

bD cD

##DCD @=C

)(=(* '?(

D@@#> BCC

=(4)4 )95?

?)'4( '9)5

dD ' D

DD BDA# ?BADB

?'9 =:4) =5)4(

CD #B@=# #D@@B@

?9( )==': )(=5=?

?*4 )4?'4 )?=(9'

? 9

@CA== =C@D

')5:9 99'*

BAAD> @>BD=

5)'(9 )4'94

*=5=: '=499

iD iiD

DC#B D>>=

=('? '9(?

##C!D CCCD

:4== 49'?

)':(: )(*?5

D!BCA

'4''=

#>>===

4*?5'

)(4=:?

-,C-

!perating ;rofit before pro"isions H contingencies C=-5D ;ro"isions Cother than ta,D and .ontingencies 2,ceptional &tems ;rofit CKDMLoss C-D from !rdinar $cti"ities before ta, C4-*-:D Ta, 2,pense Net ;rofit CKDMLoss C-D from !rdinar acti"ities after Ta, C)(-))D 2,traordinar &tems Cnet of ta, e,penseD Net ;rofit CKDMLoss C-D for the period C)'-)=D ;aid #p e1#it share capital CBace Ial#e <s )(M-D <eser"es e,cl#ding re"al#ation reser"es Cas per balance sheet of pre"io#s acco#nting earD $nal tical <atios ;ercentage of shares held b 3o"ernment of &ndia .apital $de1#ac <atio CFD

#@#?C

*:?4

D#=>=

'9)4'

=959*

#>!>

5):

@=!>

'=((

*=4*

: )(

> ##>AC

( *='*

> @CA!=

( ''*4'

( '4'*(

## #@

?#A! =A>D

':?( 9=**

#>C=> #C>A=

4*?9 )9('4

:944 )44(=

#D

>

>

)?

=A>D

9=**

#C>A=

)9('4

)44(=

)9

#@#D!

)')'4

#@#D!

)')'4

)')=9

)5

)))4'4

#B iD

,il

Nil

,il

Nil

Nil

iiD

#D%##

)).*=

#D%##

)).*=

)).(=

-.+-

i iiD

3arning per share "3PS$ "-s$ aD Basic 2;+ bD Dil#ted 2;+ before 2,traordinar items Cnet of Ta, e,penseD bD D Basic 2;+ Dil#ted 2;+ after 2,traordinar items Cnet of Ta, e,penseD V Not $nn#alised N;$ <atios as on date aD 3ross N;$ Net N;$ bD F of 3ross N;$ F of Net N;$ cD <et#rn on $ssetsV Not $nn#alised ;#blic +hareholding -No of +hares -;ercentage of +hare holding

!%=AK !%=CK

?.??V ?.??V

#?%A#K #?%CCK

)'.=:V )'.=:V

)?.5( )?.5(

!%=AK !%=CK

?.??V ?.??V

#?%A#K #?%CCK

)'.=:V )'.=:V

)?.5( )?.5(

i"D

DBA@> #@C@! D%!= #%@D >%DCK

=*:?= ))**= ?.=' ).=5 (.=9V

DBA@> #@C@! D%!= #%@D #%>!K

=*:?= ))**= ?.=' ).=5 (.::V

=*4=? ))5(? =.:9 ).'' ).)9

)*

#@#D?D!? C #>>;

)')'5(=? * )((F

#@#D?D!? C #>>;

)')'5(=? * )((F

)')=?=9?* )((F

-.>-

,otes: ). ).The Board of Directors ha"e taken the abo"e financial res#lts for the 1#arter ended =)st December '((4 on record at their meeting held on =(th 8an#ar '((*. '. The abo"e res#lts ha"e been arri"ed at after considering #s#al and necessar pro"isions as per <B& g#idelines. =. ;ro"ision for 2mplo ees Benefits for the 1#arter has been made on an estimated basis pending act#arial "al#ation of the liabilit . $dditional pro"ision Cif an D re1#ired to compl with $+ )9 C<e"isedD of The &nstit#te of .hartered $cco#ntants of &ndia has not been 1#antified. ?. The Bank has identified two-b#siness segments "iz Treas#r and !ther

Banking !perations and the 3eographic +egments consist of the Domestic +egment% as the Bank does not ha"e an foreign branch. The segment res#lts are anne,ed. 9. D#ring the nine months ended December =)% '((4% the 2+!; .ommittee of the Board of Directors has granted in aggregate ::('(( stock options% grant date being ').(*.'((4 and (9.)(.'((4% to the emplo ees of the Bank #nder The Karnataka Bank 2mplo ees +tock !ptions +cheme '((5 C2+!+ '((5D at an e,ercise price of <s 9( per share. These stock options wo#ld "est within a period not e,ceeding three ears in a graded manner i.e.?(F% =(F and =(F. $ccordingl the Bank has transferred a s#m of <s '4*.?9 lakh being the proportionate compensation e,penses for the option of ?(F. 5. +tat#s of the shareholders complaints is as #nder: .omplaints pending at the beginning of the 1#arter Nil .omplaints recei"ed d#ring the 1#arter : .omplaints redressed d#ring the 1#arter : .omplaints pending at the end of the 1#arter Nil

-.*-

Segment4ise -esults P+-/ + . Business Segment (or the three months period ended D#%#@%@>>B Particulars /hree Months ended D#%#@%@>>B B!!@ ?>DC! ?BADB 0,+0D2/3D /hree Months ,ine Months ended ended D#%#@%@>>= D#%#@%@>>B -s in *a9hs +0D2/3D ,ine Months 1ear ended ended D#%D%@>>B D#%#@%@>>=

a$Segment -e enue iD Treas#r !perations iiD !ther Banking !perations /otal b$Segment -esults iD Treas#r !perations iiD !ther Banking !perations /otal Gnallocated e,penses ;rofit before Ta, &ncome ta, 2,traordinar ;rofitMLoss Net ;rofit !#= ##@== ##BC@ =C? ##>AC ?#A! > =A>D -)?5: )(?5' *::= 559 *='* ':?( ( 9=** Other 2nformation Segment +ssets iD Treas#r !perations iiD !ther Banking !perations iiiD Gnallocated $ssets /otal +ssets Segment *iabilities iD Treas#r !perations iiD !ther Banking !perations iiiD Gnallocated Liabilities /otal *iabilities #C?@AB? )95*(4= #C?@AB? )95*(4= )5'''9' #C#@=# #=?=?!A #!@!? ):::9: )=?'49' '9=5' #C#@=# #=?=?!A #!@!? ):::9: )=?'49' '9=5' )?:):? )?=*9(* =?99( #C?@AB? )95*(4= #C?@AB? )95*(4= )5'''9' #CC@D@ #=DCD=C #=DB? '(5:=( )=?:9?' ))5() #CC@D@ #=DCD=C #=DB? '(5:=( )=?:9?' ))5() )95)59 )??*95= )49'? .@D@= DDD!C D#>D@ @>B= @CA!= #>C=> > #C>A= -)9'= '5=?5 '?*'= ):9) ''*4' 4*?9 ( )9('4 -?='' =?':? '::4' '5:' '4'*( :944 ( )44(= 9(=? =))=5 =5)4( #B=@@ ##?=!> #D@@B@ )5:?5 *55** )(=5=? ):*54 )'=)*9 )?=(9'

-.?-

CONCLUSION
Karnataka Ltd. a premier pri"ate sector Bank in &ndia% incorporated in the ear ):'? with a modest capital of <s.))%9*( has grown b leaps and bo#nds in ke areas of banking thanks to its +hareholders% .#stomers and well wishers. Karnataka Bank Ltd. has registered a net profit of <s. )*(.:5 crore for the : months period ended =)st December (4 as against <s. )9(.'4 crore for the corresponding period last ear% showing an increase of '(.?'F. The profit for the third 1#arter showed an increase of '*.)'F o"er corresponding 1#arter of the pre"io#s ear from <s.9=.** crore to <s.5:.(= crore. !n a ear-on- ear basis% the total b#siness growth was at )4.5'F with deposit growth of )5.45F and ad"ances growth of )*.:5F. $s at =)st December '((4% the deposits stood at <s.)9:(= crore and ad"ances at <s.)(?)? crore as against <s. )=5'( crore and <s.*49? crore as at =)st December '((5. The aggregate in"estments stood at <s. 94?* crore as at =)st December '((4. The .D ratio stood at 59.?*F. The net interest income for the nine months period has increased from <s.':) crore to <s. =9) crore. The .apital $de1#ac ratio stood at )=.))F. The net N;$ stood at ).'=F as at =)st December '((4 compared to ).=5F of the corresponding period of the pre"io#s ear. <et#rn on assets stands at ).?)F. $s on date% all the ?)5 branches are networked #nder core banking sol#tion co"ering )((F b#siness.

-.@-

The Banking ind#str has been #ndergoing rapid changes reflecting a n#mber of #nderl ing de"elopments. $s earl as in March '(((% when all traditional banks were b#s disc#ssing their &T strategies% we did e,actl what an foreword looking bank sho#ld ha"e done we decided to go for core banking e-platform for gaining b#siness agilit and a competiti"e ad"antage in the market place. Toda % Karnataka Bank has o"er ?): branches sit#ated in important locations spread o"er ): states and ' #nion territories of the co#ntr connected to the Data .entre in Bangalore. The state-of-the-art 7Binance7% centralized core banking sol#tion% pro"ided b &nfo s% Bangalore% was chosen b #s to set #p a core banking e-platform to replace o#r legac s stem. Toda all o#r comp#terized branches are offering an where banking

facilit to their c#stomers and all transactions are done thro#gh the data center on online real time basis.

-.A-

BIBILIOGRAPHY
B.+. <aman M.L. +eth I.B. 6ansa Banking Theor Mone banking and &nternational Trade Banking Theor

*=rd $nn#al <eport of Karnataka Bank Ltd.

-.B-