COMMERCIAL BANKING SYSTEM

“AN ORGANISATIONAL STUDY ON VIJAYA BANK”

PROJECT REPORT
SUBMITTED BY:
ANEES PK
T4 MBA
ROLL. NO: 07
SUBMITTED TO:
DR. V.A SONNY
MBA DEPARTMENT
MES COLLEGE OF ENGINEERING

KUTTIPPURAM

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CONTENT
CONTENT PAGE NO

INTRODUCTION 4

COMPANY PROFILE 7

RESEARCH METHODOLOGY 8

DATA ANALYSIS 10

CONCLUSION 14

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INTRODUCTION

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INTRODUCTION
A bank is a financial institution and a financial intermediary that accepts deposits and channels
those deposits into lending activities, either directly by loaning or indirectly through capital
markets.

A bank may be defined as an institution that accepts deposits, makes loans, pays checks, and
provides financial services. A bank is a financial intermediary for the safeguarding, transferring,
exchanging, or lending of money. A primary role of banks is connecting those with funds, such
as investors and depositors, to those seeking funds, such as individuals or businesses needing
loans. A bank is the connection between customers that have capital deficits and customers with
capital surpluses.

Banks distribute the medium of exchange. Banking is a business. Banks sell their services to earn
money, and they must market and manage those services in a competitive field. Banks are
financial intermediaries that safeguard, transfer, exchange, and lend money and like other
businesses that must earn a profit to survive. Understanding this fundamental idea helps you to
understand how banking systems work, and helps you understand many modern trends in
banking and finance.

BANKING IS A UNIQUE BUSINESS

The services banks offer to customers have to do almost entirely with handling money or
finances for other people. Banks are critical to our economy. The primary function of banks is to
put their account holders' money to use by lending it out to others who are in need of the same.

Money is a medium of exchange, an agreed-upon system for measuring the value of goods and
services. Once, and still in some places today, precious stones, animal products, or other goods
of value might be used as a medium of exchange. This system was used for centuries, before the
invention of money. People used to exchange the goods or services for other goods or services in
return. This system is also known as “Barter System” and an age-old method that was adopted by
people to exchange their services and goods. Roman soldiers were sometimes paid in salt,
because it was critical to life and was a scarce commodity at those times.
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HOW BANKS ARE CREATED?

Banks and money are essential to maintaining economies and they impact the entire societies and
nations. Hence they are closely regulated and strict procedures and principles are advised to be
followed by the banks by various authorities and governments. In the United States, banks may
be chartered by federal or state governments and in India government decides the rules for
opening any banks or its branches.

From a business structure perspective, most of the Banks are corporations or cooperative
societies and may be owned by groups of individuals, corporations, or some combination of the
two. Around the world banks are supervised by governments to guarantee the safety and stability
of the money supply and of the country.

BENEFITS OF BANKING:

Safety: It’s risky to keep your money in cash as it could be lost, stolen, or destroyed. Financial
institutions keep your funds safe.

Convenience: With banks, there's no need to carry cash. If you need cash, you can easily access
your funds virtually anywhere.

Security: Banks follow stringent laws and regulations and at most banks, funds are insured.

Financial Future: As individual you'll have access to financial professionals to help you.
Knowledgeable advice of bankers is a valuable resource to help you build a better financial
future.

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COMPANY PROFILE

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COMPANY PROFILE

Vijaya Bank is a Government of India undertaking with 55.02% of the share

capital held by the Government of India and 44.98% held by the public, corporate,
financial institutions and employees. The Bank has a total business of Rs. 2.07
lakh Crores as on 31.12.2014.

The Bank is having a three tier organizational structure comprising of 1330

Branches as on 31.12.2012 and 48 extension counters, 24 Regional Offices (“RO”)
and a Head Office (“HO”) located at Bangalore.

The Bank’s Branch network is spread across the country and is completely
working on the Core Banking Solution using Finacle (Infosys Ltd.). The Bank is
the Lead Bank for Mandya, Dharwad and Haveri Districts in Karnataka. The
International Banking business is handled through 44 designated branches for
dealing in foreign exchange.

Mission of Vijaya Bank:

“The mission of the Bank is to emerge as a prime nationalized Bank backed by

modern technology, meeting customers’ aspirations with professional Banking
services and sustained growth contributing to national development.”

Their mission statement stresses on the importance to adopt modern technology in

the field of banking and thus ensuring efficient and effective services to their
customers, such that all their banking needs can be satisfied.

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RESEARCH METHODOLOGY

Methodology is a plan of action for a research report to explain in details how data is collected,
analysis and presented so that they will provide meaning full information.

OBJECTIVES OF THE STUDY

 To study about the organizational structure of VIJAYA bank.

SOURCE OF DATA COLLECTION

 SECONDARY DATA
It is the data which is already collected by someone else. Researcher has to analyze the
data and interprets the results. It has always been important for the completion of any
report. It provides reliable, suitable, adequate and specific knowledge.

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DATA ANALYSIS

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DATA ANALYSIS

Income Statement of Vijaya Bank for the year ended 31st March, 2014:

Source: Vijaya Bank: Audited Financial Results for the Quarter and Year ended 31st
March 2014

SI. Particulars 31st March 2014 31st March 2013

No
(Rs. in Lakhs) (Rs. in Lakhs)

1. Interest Earned 1070655 905188

2. Other Income 70987 60700

3. Total Income (1+2) 1141642 965888

4. Interest Expended 862314 717388

5. Operating Expenses 168955 136297

6. Total Expenditure (4+5) [Excluding 1031269 853685

provisions and contingencies]

7. Operating Profit (3-6) [Profit before 110373 112203

Provisions and Contingency]

8. Provisions (other than tax) and 65578 54548

Contingencies

9. Exceptional Items 0 0

10. Profit from ordinary activities before 44795 57655

tax (7-8-9)

11. Tax Expenses 3204 (906)

12. Net Profit from ordinary activities 41591 58561

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 after tax (10-11)

13. Extraordinary Items (Net of Tax 0 0

Expenses)

14. Net Profit or Loss for the Period (12- 41591 58561
13)

Interpretation: The net profit of the Bank has reduced by Rs. 16970,00,000 in the financial year
2013-14 when compared to the previous year. However, it should be noted that total income has
increase over the year and total expenses has also increases considerably, reducing the operating
profits for the year.

Summarized Balance Sheet as on 31st March 2014:

Source: Vijaya Bank: Audited Financial Results for the Quarter and Year ended 31st March 2014

Particulars 31st March 2014 31st March 2013

(Rs. in Lakhs) (Rs. in Lakhs)

Capital and Liabilities

Capital 85912 169554

Reserves and Surplus 502880 386311

Deposits 12429616 9701724

Borrowings 474480 639182

Other Liabilities and 221784 201404

Provisions

Total 13714672 11098175

Assets

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 Cash and Balances with 554020 391770
Reserve Bank of India

Balances with Banks and 391745 272705

Money at Call & Short
Notice

Investments 4258538 3128496

Advances 8150403 6976576

Fixed Assets 52895 47674

Other Assets 307071 280954

Total 13714672 11098175

Interpretation: The overall position of Vijaya Bank has improved over the year. There is an
increase in both the total assets as well as the liabilities of the Bank. The total Deposits have
increased by Rs. 272789200,000 over the year. Also, the advances made are also increased, thus
showing a positive increase in the business operations.

Performance Appraisal System:

Vijaya Bank has its own system of performance appraisal mechanism in place. The Bank has a
personnel database called as the HLMS database. This database contains the data of each and
every employee of the bank.

The employees of the Bank enter in details about their each and every activity into the database.
At the end of the year each of them appraise their own performance during the period. They
mention all the work performed by them.

This information entered into the HLMS by the employee is examined by the immediate
reporting authority of the employee. The reporting authority then awards marks to the
employee’s performance.

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CONCLUSION

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CONCLUSION
Banking systems have been with us for as long as people have been using money. ... To make
money, banks use deposits and whole sale deposits, share equity and fees and interest from debt,
loans and consumer lending, such as credit cards and bank fees.

Banking will help all of us to achieve more. It gives opportunities for some to invest and some to
borrow to make better future for others. In the end we all benefitted by it. Banking is build on
trust, so that brings responsibility along with joy of doing good.

A bank account is not only about saving money, it's also about managing money. Opening an
account is a smart move - it means that you can access a service that helps you control your
money, and which may help you borrow at some time in the future, if you need to do so.

But do remember that you are the customer - that means you have rights and if you're not happy,
you can complain, and you can move your account somewhere else.

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