“A STUDY ON FINANCIAL ANALYSIS OF SMALL

FINANCE BANK (WITH SPECIAL REFERENCE TO AU

BANK AND UJJIVAN BANK).”

A project report submitted in partial fulfillment of the

requirement for the degree of Post Graduate Diploma in
Banking and Financial Management
Under

NMIMS GLOBAL ACCESS SCHOOL FOR CONTINUING

EDUCATION

Prepared By
Name: Pratiksha Gaikwad
SAP ID: 77120211501
“A STUDY ON FINANCIAL ANALYSIS OF
SMALL FINANCE BANK (WITH SPECIAL
REFERENCE TO AU BANK AND UJJIVAN
BANK”
 ACKNOWLEDGEMENT

Apart from my efforts, the success of my project depends largely on the encouragement and
guideline of many others. I take this opportunity to express my gratitude to the people who have
been instrumental in the successful completion of this project.

I am gratefully indebted to our esteemed guide for his sincere guidance and priceless support
which would have been impossible for us to complete this project.

I express my gratitude to the staff members of NMIMS who directly or indirectly helped me. I
would also like to express my sincere gratitude to all my office colleagues in Firm.

Name: Pratiksha Gaikwad

SAP ID: 77120211501

 TABLE OF CONTENT

Summary 7

1. Introduction 8

2. Literature reviews 22

3. Research methodology 39

4. Data collections and Study 42

5. Recommendations, conclusion 63
and suggestions

References 68

Annexture 70
 ABSTRACT

During the economic downturn that followed the 2008 financial crisis, many businesses shifted
their attention from revenue growth to working capital management. Therefore, the purpose of
this thesis is to explore the connection between WCM and revenue development by surveying 36
Swedish enterprises operating in the information technology (IT), wholesale trade, and
manufacturing sectors. According to the findings, there is now a discrepancy between
expectations and outcomes with regards to WCM and its implications on revenue growth.
Researchers found that businesses surveyed saw no correlation between WCM and declining
profits.

However, actual performance in the analyzed sectors shows that gains in net working capital
(NWC) are not always justified by growth in revenue. According to the results, a centralized
level of the organization is also given primary responsibility for WCM and the execution of
WCM decisions. The research concluded that decentralizing WCM decision-making was
necessary for effective adoption, even while a centralized decision-making structure was
necessary for enterprises. Additionally, it is essential to routinely track how NWC growth is
influencing revenue expansion.
 CHAPTER: 1
INTRODUCTION
 INTRODUCTION

Rationale Of Study
A branch of corporate finance known as financial analysis looks at how well a business has done
financially in the past to make predictions about how well it will do in the future. The data
needed to make crucial decisions in a range of contexts is provided by financial analysis to
company leaders. Everyone in charge of a company must have the utmost proficiency in reading
and understanding financial records. Companies use the potential gain or loss of capital to set
goals and evaluate progress. A talent for analyzing and understanding financial data offered in
financial reports is essential for understanding and operating a business.

Analysis of financial patterns, budgeting, and planning for future company activities all fall
within the purview of the Finance Department. Included in this procedure is the implementation
of internal controls for the following activities: money counting, sales registration, expenditure
payment, stock valuation, and purchase authorization. Income statements, their balance sheets,
and financing statements are prepared by the finance team to demonstrate the efficacy of internal
controls.

The goal of conducting an audit in the field of business finance is to gather data that may help
the company's leadership make better decisions. Project valuation methods such as an internal
rate of return and net present value are part of an organization's internal evaluation toolbox.
Customers may pay for overtime on credit at several businesses. This means that the time it takes
to receive payment following a transaction may take longer than expected.

Days sales outstanding (DSO) is a useful metric for companies who have a lot of unpaid invoices
since it measures the length of time it takes to collect pay on a credit sale. One important factor
in a company's cash conversion cycle is its usual assortment period. Extrapolating past
performance metrics, such as net profits or profit margin, is a crucial part of financial
forecasting. Finding out-of-the-ordinary patterns is a breeze with this kind of authentic pattern
analysis.

Originating with small and medium-sized banks, this sector has a brief history.
As a result of the work of smaller finance groups, local and disadvantaged communities now
have access to larger financial services. A small bank with a settled-up capital of 100 crores or
more is the only one that can meet the conditions mentioned above. Company law (2013) and the
Banking Standards Act of 1934 (Section 22) regulate the process of issuing banking licenses.

They may also apply to the das a proposed commercial bank at any time they think it's
appropriate, according to the Banking Act of 1934, Section 42 (6) (a). The fact that small
financing banks really route deposits in India's semi-urban and rural areas is a good sign for the
country's economic future.

Some large commercial financial institutions may see their non-customers as an apolitical group.
People, businesses, trusts, and communities are the lifeblood of every bank's client base. The
Reserve Bank of India (RBI) has authorized small Indian banks to lend up to 25 million Indian
rupees (INR). Ingenuity is required to completely simplify the bank's processes. Ten small
finance banks were recently awarded a license, albeit a "basic level," by the Reserve Bank of
India (RBI), with an 18-month deadline to begin operations, reflecting the bank's commitment to
practical financial considerations.

Eight out of the ten components are little banks. There is now only one small finance bank
operating, and that is Equitas Small Finance Bank. According to RBI regulations from
November 2014, the primary objective of a small finance bank is to facilitate financial
incorporation via the provision of loans to micro, small, and medium-sized enterprises, as well as
smaller specialized units.

Low-income communities are required by law to get 75% of their total loans. While these
financial institutions may not have the same overhead as more conventional commercial banks,
they may provide comparable services. By linking affluent and spotless locations to conventional
banks, a host of banking services, including account opening, business acknowledgment, and
loaning, are made available. They help the Indian banking sector achieve its aim of opening
more branches.
As a country's level of living rises, there is a direct correlation with the expansion of branches in
the countryside. In certain places, it even leads to a decrease in poverty. When it comes to India's
pursuit of monetary parity, these banks will be crucial. A small bank is an authorised financial
institution that serves a specific geographic area by offering deposit and credit services.
Ranchers, micro and smaller enterprises, low-income individuals, areas with instability, and
itinerant workers are just a few of the many businesses that depend on small banks for settlement
services and financing.

To better serve its specialized clientele, India's banking system allowed small finance banks
(SFBs) to join in 2015. The expansion of the country's fundamental banking infrastructure is one
way these financial institutions want to achieve Financial Inclusion.

Microlending institutions are banks that help people in economically unstable areas, as well as
start-ups and small and medium-sized businesses, by providing them with small loans. A number
of industrialized nations already have small finance institutions, so the idea isn't new. Small
financing banks in India were authorized by the Reserve Bank of India (RBI) in 2015 for 10
persons.

As a component of a program for financial planning, the Reserve Bank of India (RBI)
established a new kind of bank in India in 2015. The Reserve Bank of India (RBI) granted
temporary licenses to eleven companies on September 17, 2015, so they may run small finance
banks in India. The first and biggest small finance bank in the nation was the Capital Finance
Bank. Their 47-location formal launch was on April 24, 2016.

Rules and restrictions:

Banks that provide smaller loans are subject to the regulations outlined in the Banking Act of
1949.
• The RBI Act of 1934
• The Act of 1999 on the Management of Foreign Exchange Risks
Credit Reporting Agency Reform Act of 2005; Payment and Settlement Capabilities
Improvement Act of 2007; Title I of the Deposit Insurance and Credit Guarantee Act of 1961
Requirements for Qualification
Small finance bank shareholders can be individuals or groups of citizens who have worked in
senior banking and finance roles for at least ten years. They can also be private sector companies
or societies owned and controlled by citizens, as long as they have a track record of staying in
business for at least five years.

To become small finance banks, existing privately owned NBFCs, MFIs, and LABs must be
locally managed and have been in operation for a minimum of five years. Joint partnerships
between advertising organizations cannot be formed as small financing banks.

Primary (Urban) Co-usable Banks (UCBs): Envious of Small Finance Banks, they may
consciously switch to become an Urban Co-usable Bank. Such microfinance organizations will
be required to have a minimum capitalization of Rs. 100 crore in order to begin operations. But
they expect their total assets to exceed 200 crores rupees not long after they begin for business.

Operations Covered by Small Banks

Micro and small businesses, as well as individuals living in economically depressed areas, will
be the primary borrowers and depositors at the microfinance organization. This institution will
primarily assist the unserved and underserved. Core monetary management procedures that do
not include risk pooling may also fall under this more general category, such as the selling of
mutual fund units, insurance goods, pension items, etc.

Naturally, when such items have met the standards set by the sectoral controller and the RBI.
The bank is now being represented by the ongoing standards that apply to all commercial banks,
and the need for Reserve Bank endorsement before to the bank's commencement of operations is
therefore moot.

In order to better assist its customers, the little bank is considering becoming an Authorized
Dealer in the international trade market.
Starting from the beginning of business, small financial institutions do not need to build at least
25% of their operational outlets in areas without credit provincial emphasis in order to get
general permission to create banking shops.

The sorts of operations that small financing banks may participate in will not be limited,
although applicants from underserved parts of the nation, such the Northeast, East, and Central
regions, will be given precedence when applying. When the time is perfect, these candidates may
easily expand into other districts.

Naturally, the needs of the area should be met by the small financing bank. Following an audit
and the end of the underlying adjustment period of five years, RBI may change the extent to
which small financing institutions are required to workout. Any additional administrative tasks,
both financial and otherwise, that the marketers may have should be clearly separated from the
bank's operations.

Norms
The Reserve Bank of India's (RBI) prudential regulations and suggestions for current
commercial banks will control the winding down of India's small financing banks. In exchange
for meeting the requirements of the statute, no evasion would be allowed.

In order to be listed on the Reserve Bankers's Preferred Source List (PSL) as need area loaning,
small financial companies must increase their Adjusted Internet Bank Credit (ANBC) in certain
regions by 75%. There should be no more than half of the credit portfolio made up of advances
and loans exceeding twenty-five million rupees.

The minimum amount that small money banks are required to have in paid-up voting equity
capital in order to operate is Rs. 200 crore. Not even UCBs that have transitioned into small
money banks are unaffected by this.

Because smaller financial institutions are more susceptible to market fluctuations, the Reserve
Bank of India (RBI) mandated that all banks maintain a capital adequacy ratio (CAR) of at least
15% of their RWA continuously.

Changes to the foreign direct investment (FDI) policy for private area institutions would show up
in the percentage of foreign ownership of SFBs. Currently, a private sector bank may only accept
FDI up to 74% of its paid-in capital.

A maximum of 10% of the paid-up capital may be owned by foreign financial investors (FIIs)
nor foreign portfolio investors (FPIs). A maximum of 24% of the paid-in capital may be held by
any one FII, FPI, or QFI. with the approval of the bank's board of directors and an additional,
unusual resolution by the general assembly, this might be raised to 49% of the entire settled-up
capital of the bank.

One possible way for smaller financial institutions in India to become universal banks is to apply
to the Reserve Bank of India (RBI). This may be done provided the banks fulfill the standard
minimum requirements for settled up capital and total assets. The projected consistent growth
from RBI and its effective function as a small financing bank for at least five years.

All the laws and regulations that pertain to universal banks, including the NOFHC structure, will
be applied to it when it evolves into one.

Here We Give You the Rundown on UJJIVAN Financial Institution and AU Small Finance
Bank.

A Local Bank in Australia

It was privately owned and established by Mr. Sanjay Agarwal that AU was born. Operating
under the aegis of the RBI (RBI), AU was a retail-engaged, customer-driven, purposefully
significant resource financing non-banking currency organization for over a decade. The identity
of the Small Branch Bank was made public on April 19, 2017. Since becoming a bank, AU has
expanded its customer base to nearly one million people and honed in on 27 products and
agreements across key industries, such as financing shops, safeguards, exchange the financial
sector, shared assets, operations banking, and resembles banking.
The first step for AU is to encourage employee engagement by aligning job responsibilities with
the company's mission to turn loyal customers into delighted ones. The overall goal of AU is to
be inclusive, to foster development for everyone, to be honest and direct, to take action, and to be
desperate. Customers in these locations would get assistance from AU SFB. Working-class
people, middle-class people, and small enterprises that don't have a lot of money to spare may all
benefit from AU. In India, AU is playing a major role in the economy.

With an annual market value of Rs. 17,000 Crores, AU SFB was 479th on Fortune India's list of
500 largest businesses. On the first day of trade, the bank's supply increased by 51%. Thanks to
its significant past as a vehicle account organization, almost all of AU SFB's credits had been
collected before the start of the first quarter of the 2018 calendar year. The low operating costs of
its branch locations have allowed AU Bank to grow.

This little finance bank employs more than 10,000 people in 11 states in central and northwest
India. They are spread out across 306 branches, 106 resource villages, 23 coworking spaces, and
291 automated teller machines. In compliance with the Companies Act 1956, AU Small Finance
Bank Limited (formerly L.N. Finco Gems Private Limited) was legally incorporated as a private
limited organization with the RoC on 10 January 1996. In 2000, the business was awarded
NBME accreditation by the Reserve Bank of India (RBI), under the proviso that it not accept
deposits from the general public.

As its new name suggests, Au The lenders (India) Company Limited is primarily concerned with
financial dealings. On May 24th, 2005, the RoC made a fresh statement about consolidation. The
company began working with HDFC Bank in 2005 as a reliable operational partner for financing
commercial vehicles. The group began working in Maharashtra in 2006. Both the India
Economic Performance Fund-1 and the India Economic Excellence Fund invested 20 crore in the
company in 2008.

The company established a branch in Gujarat in 2009. To comply with Section 45IA of the RBI
Act, the company re-enrolled with the RBI in 2010, and the RBI classified it as an NBFC-ND-
AFC. Throughout the year, the firm received investments totaling Rs 35 crore from the Global
Finance Corporation (IFC), Rs 6 crore from the IBE Fund, and Rs 14 crore from the IBE Fund-I.
The year-long recognition as a "Fundamentally Significant Non-Deposit Accepted Asset Finance
Group" was the cherry on top.

With the intention of serving clients in the home financing industry, AuHFL split out from its
parent company in 2011. The company received investments of Rs 150 crore and Rs 33.04 crore
in 2012 from Redwood and IFC, respectively. While the year progressed, CRISIL Ratings raised
the company's future bank branch ratings from BBB+/Stable to A/Stable. A wholly owned
division of the parent corporation, Au Insurance Coaching Services Private Limited, was formed
the same year to provide healthcare and brokerage services.

At a special extraordinary general meeting (EGM) held on January 10, 2013, the shareholders
decided to alter the company's name to Vau Financiers (India) Limited and become a public
restricted company. The RoC issued a new statement of joining after transforming into a public
restricted business on January 11, 2013. The Reserve Bank india India (RBI) granted the
company's request to become a Social Finance Bank (SFB) on October 7, 2015.

A+ was the credit rating that the company's long-distance banks branches were given in 2015 by
CARE Ratings. Long-term, CRISIL Ratings upgraded the company to an A+ in 2016. The firm
divested itself of its previous subsidiary AuHFL with RBI approval dated April 6, 2016. The
company announced the sale of all of its IML shares on May 18, 2016, in reaction to the RBI's
recommendation. On September 6, 2016, the company's 29.53% shareholding in M Power Micro
Finance Private Limited was allowed for sale by the Federal Reserve of India. Complete
ownership of the firm was transferred to AuIBSPL, a former business partner. The business was
granted final clearance to establish an SFB by the RBI in a letter issued December 20.

On April 13, 2017, the RoC issued a consolidation ultimatum, and the firm legally became the
Small Finance Bank of Australia Limited. In April of 2017, the company changed its legal status
to that of a small finance bank.The June 2017 AU Bank initial public offering (IPO) was 54
times oversubscribed. Aditya Birla Medical Services Logistics (ABHICL) insurance will be
handled by AU Small Finance Bank, which was announced on October 4, 2017. Supporting
micro, small, and medium-sized firms (MSMEs) receiving government subsidies, the Small
Finance Bank of Australia and the Small Businesses Development Bank of India (SIDBI) inked
an MOU on October 28, 2017.

The AU SIDBI Partnership Financing Program unites the two banks and makes joint financing
available to micro, little, and medium-sized enterprises (MSMEs) in the management and
manufacturing industries. They will adhere to a predetermined procedure for collecting data,
analyzing it, recording their findings, and addressing client feedback.
Working together, the Asian University Bank and SIDBI will assess the proposal.

This memorandum of understanding (MOU) between the two banks will set up a loan pool for
the 2018 fiscal year with a total of Rs 100 crore. A community discussion and review of FY
2018's successes will be conducted before selecting the corpus for next year. To encourage
medium-sized businesses to confidently grow their operations, the strategy aims to increase the
flow of finance to these businesses in the long run.The Reserve Bank of India (RBI) designated
AU Small Finance Bank as a Scheduled Commercial Bank in November 2017.

The Reserve Bank of India has approved the November 3, 2017, announcement by SBI Mutual
Fund to acquire a 10% stake in AU Small Finance Bank. On November 28th, 2017, the AU
Small Finance Union first announced the transfer of common assets. The bank and eleven other
companies, all of which are likely AMCs, have just released this product line. Public notice of
the partnership between Small Finance Bank of Australia and M/S. HAVE Sahaj E-Village
Limited to provide financial and bank services to clients was given on December 19, 2017.

A home advance product was introduced by Australian Small Finance Bank on January 12, 2018.
In March 2018, 71 new banking outlets were launched by AU Small Finance Bank in
underbanked communities.In an effort to better serve corporations, MNEs, and small and
medium-sized businesses, AU Small Finance Bank partnered with Aurionpro Solutions on
March 6th, 2018 to enhance the quality of its online banking offerings.
Small Finance Bank has been named the corporate expert for FGLI's life coverage company,
according to a statement from the bank. The partnership will boost the profile of both the bank
and FGLI, giving them more influence in the corporate sector. A total of 43.30 lakh totally paid
up value portions of the bank's common stock and 1.01 crore transformed warrants providing the
ability to buy in to an equivalent amount of value opens up on a particular basis were issued to
Camas Investments Pte Ltd, a 100% owned indirect division of Temasek Investments (Private)
Limited, by the Board of Boards of directors of Australian Small Finance Bank at a meeting held
on May 19, 2018. This amounted to Rs 1000 crore in membership capital. Before value shares
are designated, the whole sum due as consideration for their issue will become payable.

The convertible warrants will be activated when Camas Investors Pte. Ltd. pays 75% of the
membership cost payable towards them; the remaining 25% is due on the date of the fraction of
the converting warrants. The unique allotment states that a convertible warrant and value shares
both have an issue price of 692.77 rupees. All or part of the convert warrants given to Camas
Investments may be exercised within fifteen months following the date of issuance. May 30,
2018, was the day on which AU Small Finance Bank was granted the Certificate of Registration
under the Securities Board of the Republic of India Regulations 1994.

Financial Institution Ujjivan

Among the country's small finance banks, the Ujjivan Small Financial Bank (USFB) Limited is
among the most prominent. Established by Samit Ghosh, respectively who remained in the same
roles at the parent company until 2017, when he transferred to a subsidiary of the bank. As a
mainstream bank, it is devoted to helping people who aren't getting service right now by giving
them money and other kinds of advanced attention. Our company has grown into a
comprehensive financial services provider, and we take great delight in catering to the unique
needs of each of our many customers.

The small finance bank Ujjivan has been successful in expanding its business and satisfying its
customers because of its dedication to innovation. Quick and simple access to finance is
something that customers are always seeking, and simplified electronic user interfaces that are
accessible in all locations and languages are making it possible. The bank's customer-associate
network has been able to branch out into other areas thanks to this as well.

We have always had trust in the 'Capable Bank,' which is making a respectable contribution to
society via programs that promote financial literacy and community development. The mission
of Ujjivan Financial Products and Services Limited (UFSL), an NBFC that has been in business
since 2005, is to serve the needs of the "monetarily dynamic poor" (those who do not have access
to sufficient services offered by traditional banks).

Ujjivan Small Finance Banking (USFB) was founded on January 31, 2017, by Ujjivan Financial
Service Limited (UFSL), and it began operating as a bank on February 1, 2017. Our company is
officially registered as a "planned bank" under the Reserve Bank of India Act, 1934, Second
Schedule. The financial services and bank sector overwhelmingly praised our 2019 IPO as the
best IPO in the previous four years, and we were able to achieve a substantial oversubscription.

More than 56.6 lakh customers would have used the bank's 575+ banking touch points spread
over 244 locations in 24 states plus union territories as of December 31, 2020. Thanks to our
computerized impression and easy alternative channels, including, but not limited to, internet
banking, mobile apps, tablet-based start, and cellphone banking, our clients may access all of the
bank's services at any time, day or night. The bank's manager and chief executive officer is
presently Nitin Chugh.

Purpose of the Research

The importance of the study stems from the fact that it delves into a substantial topic that assists
banks in making important decisions when it comes to granting different kinds of advances,
which is crucial because banks' financing and credit movements are seen as fundamental
activities that should be based on accurate data.

The purpose of this research is to get a feel for the state of small financing institutions in India by
analyzing their own financial data over the course of four years. Several ratios are used to assess
the bank's performance in this regard.
These financial institutions have an outstanding track record of offering modest loans to
borrowers from underserved sectors, such as micro, small, and medium-sized enterprises
(MSMEs). Some parts of their processes may need some tweaking, however, given the emphasis
on financial inclusion. To start, most SFB offices are located in states that have established
robust banking systems. Additionally, places that are city or semi-city centers. Second, compared
to other scheduled commercial banks, SFBs have a much greater average spread. The backbone
of Indonesian economy consists of micro, small, and medium-sized businesses (MSMEs).
Structure is essential for accounting processes, often known as accounting cycles.

Financial reports are a product of accounting's conceptual framework, methodologies, standards,

processes, and techniques for recording and reporting a company's financial status.

A clear focus and framework for financial inclusion initiatives were established in 2010 with the
adoption of plans that had been authorized by the Board. A sense of mission mode has been
infused into these endeavors as a result of the connection of the financial inclusion plan's goals
with those outlined in the 2014 Pradhan Mantri Jan-Dhan Yojana.

The central bank has offered new institutional alternatives for increasing financial inclusion with
attempts to launch new products and platforms. The Small Finance Banks (SFBs) are one
example of such an organization. In particular, SFBs are required to help promote financial
inclusion by (i) offering savings vehicles and (ii) lending money to small businesses, such as
micro and small industries, marginal farmers, and other entities in the unorganized sector, as well
as low-income communities and migrant workers.

Because of their exclusive concentration on people with modest financial requirements, these
institutions might be characterized as distinct financial services. Unlike Regional Rural Banks
(RRBs), which were established with the goal of integrating the underserved parts with
significant government ownership, these institutions have been formed in the private sector.
Even though the license rules were issued in 2014, 10 SFBs have already started operating. A
total of eight small finance banks began operations in 2017 and one in 2018, with Capital Small
Music Banks and Equitas Minor Finance Bank being the first to launch in 2016.
Except for one significant exception—the once-local Capital Small Finance Bank—the vast
majority of SFBs have their roots as microfinance organizations (MFIs). Most of these
organizations had an established clientele of middle-class and lower-class people since they were
microfinance institutions. Many microfinance institutions (MFIs) opted to become SFBs so they
could increase their reach and take advantage of the cheaper cost of financing and easier access
to donations that come with SFB status.

Urban and semi-urban centers, namely Tier 1 to Tier 3 centers with populations of 20,000 or
more, also have a disproportionate number of branches of small finance banks.

Tier 5-6 (rural) centers with populations below 10,000 made up just around 18% of the SFB
operations in March 2020. When compared to other SCBs, these financial institutions are more
focused on serving economically underserved sectors. Professional services, agriculture, and
(small-scale) commerce are the parts that make up this economy.

In addition, these banks have done a respectable job of reaching out to MSMEs especially when
it comes to loans for the industrial and service sectors. The loan inventory of SFBs is also
tailored to small-sized borrowers, in addition to servicing the under-served industries. In March
of 2020, a total of 83% of the loans they had might be borrowed up to '25 lakh.

A staggering 363,000,000,000 people live in poverty. In order to help the poor and
disadvantaged, small finance banks have developed sophisticated structures that allow them to
access banking services, deposits,

microinsurance, savings accounts, and mutual funds total

The SFB is a brand-new, experimental vehicle. Their performance is commendably strong, and
they have an approximately 17% market share in microfinance, as was revealed in the
Microfinance Pulse Report on October 21st. Note that the Reserve Bank of India has a very strict
and comprehensive licensing criteria for SFBs. This is likely due to the fact that LABs and RRBs
have failed in the past to accomplish the goal of financial inclusion. With a strict adherence to
regulatory compliance standards, SFBs are thrust into the open market, where Commercial
Banks face intense competition.

The Accounting Standards Board was established in 1977 and is responsible for overseeing the
adoption of the Indian Accounting Standard by Indian enterprises.

Various firms are able to modify their accounting standards to their advantage via the
development of various techniques. The purported accounting organizations should have
established standards that are known to quell any chaos. The creation of Accounting Standards
was facilitated by this notion. It is the responsibility of the College of Chartered Accountant of
India (ICAI) to provide the accounting standards for India.

Issue Description
The ratings agency ICRA predicted that small financing banks (SFBs) would have a little uptick
in the growth rate of their assets beneath management (AUM) in fiscal year 2021–2022, from
18% growth in FY21 to 20% growth in FY22.

The average yearly increase (CAGR) from FY16 to FY20 was over 30%, therefore this growth
rate is still below that. ICRA continues to take a cautious approach since the recent increase in
COVID-19 infections has the potential to derail a revival in growth. A decline in asset quality
measures was seen in the first half of fiscal year 2022 due to the second stage of the COVID-19
pandemic. However, the ratings agency expressed optimism that a partial recovery is anticipated
by the end of fiscal year 2022.

Since SFBs saw a drop in collections during the second stage of the pandemic, their gross non-
performing assets (GNPAs) increased from 5% on March 31, 2021 to 6.4% on September 30,
2021. The reorganized portfolio's performance may still be monitored, according to ICRA,
although the incremental increase in SFB collection efficiency is reassuring.

It is believed that the industry recorded an annualized growth rate of 7-8 percent in H1 FY2022,
although the AUM growth rate dropped due to the subsequent waves of the pandemic hurting
disbursements in Q1 FY2022. However, according to Sachin Sachdeva, a VP and sector head in
the financial sector at ICRA, "since disbursements begin picking up, we expect the pace for
expansion to improve in H2 FY2022, pushing known as full-year assets under management (A
growth to around 20%." Sachdeva added that this growth would not be significantly affected by
the recent increase in COVID-19 infections.

Ratings firm predicts SFB GNPAs will go down in FY22's second half, but that reported GNPA
as a proportion of total loans would be 70-80 basis points higher on March 31, 2022, than on
March 31, 2021.

Therefore, it is essential that we be familiar with the ratios used for accounting and advanced
accounting checks that small financing institutions use in order to complete this job. We may get
insight into the nature of the alterations via this.
 CHAPTER: 2
LITERATURE REVIEWS
 LITERATURE REVIEWS

Reviews from Interanion: (Technical University of Slovakia in Bratislava, 2016)

The management prowess of a company's upper echelons is the foundation of every successful
enterprise. Businesses now have more leeway to respond to changing conditions and seek
success in many ways. Leaders are trying to change their management approach to make sure the
business can stay in business even when circumstances are tough.

Financial analysis developed into its own specialization inside the company starting in 1900,
when it was used in field exams to assess the projects' financial health. An examination of 981
companies using seven financial measures demonstrated that the US could undertake financial
analysis in 1900.

According to a paraphrase (McLeay, 2011), international review of financial report information

still necessitates an awareness of the legal structure, security measures laws, and business
structures the fact that might impact firm supervisors in drawing up financial reports and lead to
developing and checking fascination for valid bookkeeping data.

Among the several uses of financial analysis, according to Junkus (1982): beta estimate,
forecasting of business disappointment, and consolidation research. This collection of five
articles gives a general outline of the value of financial and operational data for financial
planning and analysis, and then goes on to analyze particular uses of accounting data in financial
management.

Financial study and public statements are crucial to modern organizations. Financial analysis and
transparency may provide light on how firms may keep their user-driven or payment processes
consistent.

When one uses the internet for analysis to decipher financial data, they are able to do more than
just share critical information internally and remotely; they can also influence actions or bits of
knowledge to greatly enhance the region where the company's flow occurs.
By combining hypothesis testing with data analysis, King Long Motor was able to gain a firm
grasp of the basic tenets of financial management. Armed with this knowledge, the company
conducted a targeted analysis to identify the factors driving King Long Engine's profitability, as
well as the motivation to boost profitability, and ultimately came up with recommendations to
boost profitability.

One of the most crucial indicators of the financial state of a business, liquidity shows whether it
can meet its short-term obligations without declaring bankruptcy (Billah, 2015). Liquidity risk,
caused by insufficient use of resources, is more difficult to manage than other forms of financial
risk.

In particular, One important metric in the banking industry is liquidity. This indicator is essential
for assessing the health of a country's banking and financial system as it shows how likely it is
that financial institutions are to repay their debts.

An essential idea in economics and finance is the rate of return on investment. Generally
speaking, the purpose of determining the rate of return for investments is to assess monetary
success, assess the allure of an endeavor, and arrive at judgments on the worth of enterprises.

Rather of using the economic rate of return (IRR), financial explanation clients use their
accounting rate of return (ARR) to analyze the profitability of firms and government operations,
assess capital speculation initiatives, and put a value on financial instances like offers. The
economic relevance of ARR measurements has been the subject of heated controversy for a long
time, because they depend on decentralized accounting rationales.

There are recognized standard liquidity ratios in the literature that may be applied to many types
of market microstructure data. In order to explore institutional trading systems, alleviate data
constraints in some sectors, and liberate intermediaries from data, several degrees of liquidity
have been devised. There are global cross-sectional examples, local cross-sectional examples,
and established time-arrangement designs in liquidity writing.
Opinions Across the Country: Building financial inclusion requires high levels of financial
awareness. Seminars on personal finance could be organized by the government with the help of
smaller lending organizations. The pristine economic sector is able to join the world of
traditional banking thanks to the small bank's function as a financial intermediary.

The collaboration is mutually beneficial for both institutions. It not only sets out new
opportunities to expand operations and improve reputation in specialized and underdeveloped
regions, but the administration is also ready to implement these plans effectively.

Important to the expansion of the economy is the function of the small credit bank. Since this
would increase the sector's prominence, the establishment of minor banking institutions
throughout provincial zones deserves further attention.

Basic financial services, including as loans, internet banking, and retail stores, are easily
accessible to residents in remote locations. It is impossible to exaggerate the importance of the
small financing bank in enhancing the financial climate for small- and medium-sized businesses
(MSME).

Providing banking and financial goods to underserved and neglected populations is the primary
objective of Small Finance Banks. New bank branches in rural regions should be opened as a top
priority.

Small financing banks have proliferated, allowing people in previously inaccessible places to
have access to essential banking services like loans, retail banking, and internet banking. Helping
communities that are neglected and unjustly impacted is an essential function of small financing
banks. There would be significant benefits to India's banking system and economy from the
establishment of the Small Finance Bank.

Financial analysis encompasses any and all investigations into, and expertise in, a business's
operations and financial situation. Using a variety of tools and perspectives, we look at the
relationship between the different claims.

Merchants, association-owned owners, skilled corporate executives, lessees, the state, and others
are examples of "friends of a forte unit," or consumers of such components.

Generally speaking, private sector banks performed better financially than public area banks
during the study period. Additionally, the study examines the function of liquidity, solvency, and
competency.

Benefiting a subset of Indian commercial banks via the use of board information assessments,
which include both fixed-effect and random-effect modes.

The overall soundness and efficiency of a country's financial system is reflected in the state of its
banking industry. Any bank's capacity to expand depends on its standard banking services, which
include deposits and loans. Repeated analyses may assess the efficacy of financial institutions
using metrics including growth, benefit, and nonperforming asset concentration.

A corporation is considered profitable if it is able to provide money for its shareholders. The
purpose of this research was to examine the profitability of several private sector banks in India
using indicators including revenue spread, margin of profit, return on long-term savings, return
on net worth, changed money margin, and return on resources.

One measure of the appropriateness or efficiency of a company's operations is its financial

success, which is a result of productivity and controls. A company's financial condition and
achievement may be better understood with the use of several profitability measures.

The company's strengths and flaws have been exposed by an analysis of its financial
performance. Profits have taken a hit due to recent cost hikes; the study shows that the business
has to fix this problem quickly to keep operations running smoothly going forward.
Method for analyzing financial accounts that distinguishes between task-related and financing-
related leverage. One set of criteria arises from the analysis for applying to account activities,
and another set emerges from the course of activities, both pertaining to acquisition.

The most fundamental banking services, such as deposit taking and loan disbursement, are
offered by small finance banks in India. These banks were founded with the intention of serving
communities who lack access to more conventional banking services. Included in this category
are tiny specialty shops, small companies, tiny ranches, and little

Influence of Microfinance Institutions on the Indian Economy

When compared to other countries, India's financial and economic situations are unparalleled.
Indian banks have shown to be resilient and adaptable in the face of global developments,
according to research on credit, market, and liquidity risk. It is believed that banks would have a
significant impact on the Indian economy.

Payment banks and small financing banks are two examples of the new, creative banking
concepts that have lately emerged in India's banking sector. The establishment of SFBs was
driven by a desire to help the country's small businesses, farmers, micro and small-scale
businesses, and unorganized sectors get access to credit and boost financial inclusion.

The cheap transaction costs offered by smaller financial institutions are a boon to their
customers. Commercial banks would find it exceedingly difficult to build branches in every
hamlet; hence, SFBs offer a low-cost platform for financial services to all citizens using mobile
phones. The deposit interest rate at SFBs is greater, while the lending interest rate is lower.
People with lesser incomes and small businesses will reap the benefits of this.

The actual draw for consumers will be the ease with which they can conduct financial
transactions. The elimination of illicit funds from the financial system is another way in which
SFBs help the state. The usage of electronic money will be encouraged. Financial education,
particularly for women, is being offered by these institutions to those living in rural areas. A
world without currencies will be preferred as a result of SFBs' ability to decrease reliance on
currency.

The Reserve Bank of India (RBI) believes that 90% of small firms lack access to banks.
Commercial banks often lend money for things like houses, cars, and schools, as well as big and
medium-sized businesses. However, securing working capital loans may be a significant
challenge for small businesses. Such matters may be resolved by smaller financial institutions. In
addition to bringing new ideas to the banking business, RBI wants them to be operators with
modern technology and low costs. However, commercial banks were impacted by SFBs as a
result of the money moving out of savings accounts, which in turn reduced the revenue from
normal fees such as cash transfers, check withdrawals, demand drafts, and ATM transactions.
Statutory liquidity ratios may be reduced if SFBs are required to invest 75% of its deposits in the
government sector.

New banks will rely on technology to reduce costs, improve service efficiency, and eliminate
fraud risks. The retail business of current banks will be impacted by SFBs, while the industrial
and corporate sectors would be unaffected. Smaller financial institutions will focus on serving
low-income rural residents. Consequently, SFBs and rural banks are competing.

The "Growing the Right Way" Small Finance Bank of Australia's Role
Mr. Sanjay Agarwal, who is also the managing director and chief executive officer of AU Small
Finance Bank, established AU as a limited liability business. Starting off as AU Financiers in
1996, the firm has spent over 20 years operating as a retail-focused, customer-centric,
systemically essential asset financing non-banking financial institution, all while adhering to RBI
requirements.

t changed its name to Small Finance Bank on April 19, 2017. In the two years after becoming a
bank, AU expanded its client base to approximately one million people. The bank now offers 27
products and services, with an emphasis on solutions in the following areas: digital banking,
insurance, deposit financing, transaction banking, mutual funds, and business banking.
In order to achieve its mission of transforming consumer happiness into customer joy, AU must
first empower its people via the creation of employment and livelihoods. Inclusion, universal
advancement, simplicity, action, and urgency are the key tenets of AU's mission.

These goals would serve as the foundation upon which AU SFB would provide its services to
clients. Micro and small businesses, as well as people with lower to medium incomes, who lack
access to traditional financing and financing options are AU's primary focus. The importance of
AU in the Indian economy is substantial. With yearly sales of 2,155.25 crores, AU SFB was
479th on the Fortune India 500 list. Market capitalization for AU SFB is Rs. 17,000 Crores, and
it is listed on both the NSE and the BSE. This bank's shares increased 51% on the first day it was
traded.

As of March 2018, almost all loans extended by AU SFB were secured, thanks to its background
as a car financing firm. Thus, AU Bank has increased its deposit base thanks to its very cheap
costs.
Dr. Jyoti Jagwani: Small Finance Banks' Contribution to India's Economy, with a Focus on......
257
With 396 branches, 84 asset centers, 49 industrial correspondents, 15 offices, and 485 ATMs
distributed over 11 states and one union territory as of December 31, 2018, AU SFB's
distribution network is extensive. In March 2019, we found that the number of customers
climbed from 2.8 lakh to 15.23 lakh. In March 2019, the client deposit also rose to 19,422 crore.
In March of 2019, the net worth jumped from 1,988 crore to 3,163 crore. March 2019 saw a rise
in interest revenue for AU Bank of 784 crore to 1,342 crore. AU Bank's earnings per share (EPS)
also rose in March 2019 from 11.2 to 13.2. So, it's safe to say that the Small Finance Bank of
Australia is making a big splash in the Indian banking industry and economy.

Encountered by Community Banks

We all know that small lending institutions are doing a great deal to help more people get access
to formal financial services. Among these banks' numerous benefits is their ability to better
comprehend the requirements of underbanked regions and to encourage lending to small
borrowers. Operating costs for SFBs are minimal. In spite of these advantages, small finance
institutions still have a ways to go before they can meet the needs of a diverse clientele and
adequately educate its current employees.

Small Finance Banks face more risks due to their local nature of business; thus, only seasoned
participants in the area have been licensed. It has been noted that banks that were supported by
financial institutions have historically done well. These prosperous financial institutions were
prepared to manage a bank in every way: they had sufficient knowledge and expertise in the
financial services industry, sufficient capital, and a solid business strategy.

Banks are required to continuously maintain a ratio of capital sufficiency of at least 15%. Both
the new Universal Bank licenses and scheduled commercial banks are subject to lower Capital
Adequacy Ratio requirements (9 and 13 percent, respectively). This proves beyond a reasonable
doubt that, because of its more regional focus, a Small Credit Bank is seen as more risky than the
Universal Bank. Along with insufficient financing, SFBs are also dealing with a lack of public
knowledge.

SFBs tend to cluster in certain areas. So, unlike other banks, they are subject to systemic risk,
which includes things like weather, agricultural prices, and the performance of the surrounding
economy. This may cause issues with the administration.
The depositors of these banks are subject to a higher rate. It might lead to an increase in
nonperforming assets and a desire to make riskier loans.

One of the first things that SFBs banks will have to do is change their promoter's investment and
foreign ownership so it complies with RBI regulations. Institutions will need to decrease their
foreign shareholdings to 49% because many of them have 90 percent or more. Providing a wide
range of financial services is the next step.

Creating a reliable system for inexpensive goods would be an expensive ordeal. The supply of
banking services will be more expensive due to the huge capital requirements of building
automated teller machines (ATMs), automated banking machines (ABMs), or an automated
branch network. Training current employees to adapt to this new way of providing services and
bringing in fresh, diverse talent from banks are both necessary steps in the institutional change.
The Changing Face of Banking
Some of the previous banking-based efforts include priority sector lending, which uses different
government-floated financing programs to provide funds to underprivileged parts of society; new
banking-based techniques include However, commercial banks are wary about serving micro-
segments because to high transaction costs, default risk stemming from moral hazard, and
widespread financial illiteracy among low-income groups.

The Indian government has long supported cooperative banks as a means to alleviate poverty.
This is due to the cooperatives' democratic structure, training for all stakeholders, emphasis on
mutual aid and self-sufficiency, and the fact that their constitution is authored solely by
members, all of whom are low-income earners.

The government did not perceive those organizations as a separate movement to be owned by the
members; instead, they saw them as an extension of their administrative department. The
wealthy and politicians also played a role in the failure of the movement, seizing power and
influence through elections.

The restricted membership and exclusive focus of primary cooperatives can work against them.
If scheduled commercial lenders and Cooperatives are unable to resolve the problems faced by
the poor and vulnerable, the Reserve Bank of India (RBI) may turn to Grameena Bank, formerly
known as Regional Rural Banks.

In 1976, Regional Rural Banks (RRBs) were established with a capital structure that included
50:15:35 from the Central Government, state governments, and sponsor banks. This was in
response to the Narasimham Committee's (1975) recommendation that RRBs serve the unbanked
and disadvantaged parts of society. They were able to reach more people and help those without
bank accounts, but they were unable to turn a profit and eventually became unsustainable due to
poor ownership and accountability.

Therefore, many RBI committees have investigated potential reorganization and liquidation, and
the Sardesai Committee (2005) concluded that loss-making RRBs should be merged. A number
of RRBs have been recapitalized after seeing their net worth and deposits deteriorate So, while
196 RRBs were born out of sponsor bank mergers and amalgamations, 56 of them are now active
(Sulagna Das 2014). Concurrent with the recapitalization of RRBs, Grameena Banks are
established.

Community Banks:In 1996, the same year that RRBs were recapitalized, Local Area Banks
(LABs) were also established. During his budget statement on July 22, 1996, the finance minister
announced that the Reserve Bank of India has consented to the establishment of new privatized
local area banks that would have authority over two or three adjacent districts. Because of this,
local institutions in rural regions would be able to pool their funds and put them to use investing
in their communities.

In August 1996, at the announcement of the Finance Minister, the Reserve Bank of India (RBI)
issued a set of instructions for the establishment of Local Area Banks in the private sector In
order to "expect to bridge the gaps in credit availability while strengthening the institutional
credit framework, in rural and semi-urban areas," and to "providing institutional structures for
promoting landlocked savings as well as to earn the provision of credit for viable business
enterprises in local areas," local area banks were established by the government.

The minimum capital needed for LABs was 5 core, with a 40% contribution from promoters and
a progressive reduction in their concentration. The RBI enforced strict "arm's length" rules for
promoter businesses while dealing with LABs and utilized additional "fit-and-proper" standards
for board members. Strict regulations and the same level of scrutiny as scheduled commercial
banks on sufficient capital and prudential standards have been imposed on LAB licensing.

They have the green light to do business in three adjacent areas. Simultaneously, Scheduled
Commercial Banks are obligated to open a minimum of 25% of their branches in Tier V and Tier
VI areas; however, LABs are exempt from this requirement. Of the 227 applications for LABs
that were received, only 10 have been authorized by RBI. Out of the remaining 6, one was closed
due to irregularities, and the other was merged in Bank of Baroda. Of the withdrew applications,
four were left unapproved. According to Sriram (2014). Capital Local Area Bank, the LAB that
was doing the work, was given the green light to apply for a Small Finance Bank loan and is now
ready to convert. That leaves only three regional banks.

Companies that provide microfinance:

Modern microfinance has expanded throughout India, with proponents pointing to the success
story of the practice in its home country of Bangladesh. Many different types of non-
governmental organizations (NGOs), both for-profit and non-profit, embraced this concept and
brought it to India.

They did an excellent job. In response to the microfinance industry's current state of affairs—
which includes issues like overfunding, coercive recovery procedures, and embargoes imposed
by certain states like Andhra Pradesh—and the positive feedback it has received from low-
income beneficiaries, SIDBI developed a model known as the SHG-Bank Linkage model, which
has been, and continues to be, an enormous success, following instructions from the Reserve
Bank of India (RBI).

Microfinance institutions, on the other hand, have expanded rapidly, mostly adopted the Joint
Liability Group Model, and established themselves firmly among the urban and rural poor. The
MFIs were able to turn a profit and go on with remarkable ease, in contrast to the RRBs.
However, they are limited to microcredit only, which is a weakness. All things considered,
microfinance encompasses a wide range of financial services, including banking, insurance, and
microcredit.

No. 2349-6622 of the ISSN 128 Research on the Long-Term Health of India's Community-Based
Financing Institutions

Microfinance Institutions
The nation's need for banking services, such as savings, microcredit, insurance, pension, mutual
funds, transfers, etc., must be met in order to accomplish this goal. A committee headed by Dr.
Raghuram Rajan was established by the Niti Ayog (previously the Planning Commission) to
reform the financial sector. In their 2009 report, "A Hundred Small Steps," the committee
suggested the establishment of small finance banks to "further inclusion" by providing more
comprehensive financial support for marginalized farmers, low-income households, migrant
workers, small businesses, and other unorganized entities.

On August 14, 2014, SIDBI published draft recommendations for the licencing of small finance
banks (RBI Press Release, 2014) The Reserve Bank of India (RBI) has issued regulations for the
private sector's small finance banks. The Reserve Bank of India (RBI) has so far issued 10 tiny
financial institution licenses in concept.

Of the 10, eight are well-established microfinance institutions

Pandemic COVID-19 and its effects
Borrowers using microfinance institutions (MFIs) often have less-than-ideal credit histories
compared to other borrowers; due to the prolonged statewide lockdown imposed to prevent the
spread of COVID-19, this had a negative impact on their capacity to generate revenue and their
savings.

As of August 2020, a 50%-60% ban was in place for the microloans. Additionally, in the months
immediately after COVID-19, typical activities of MFIs, such as loan origination and collections,
were hindered by the countrywide lockdown and subsequent state-imposed lockdowns. Because
of the high level of human connection inherent in their field-intensive operations—which include
things like house visits and actual cash collection—this had a negative effect on MFIs.

By March of Fiscal 2020, several MFIs had strengthened their liquidity, meaning that the bulk of
the collection had already taken place before the announcement of the lockdown. Actually, the
collecting efficiency remained relatively same at 98-99%. Last week of March is usually a busy
time for businesses, and the MFIs took advantage of that by drawing down bank loans to use for
on-lending.

Unfortunately, the shutdown prevented the anticipated payouts from taking place. In the third
and fourth quarters of Fiscal 2021, disbursements returned to their pre-COVID-19 levels, with
rural and semi-urban areas taking the lead. This was due to the comparatively lesser effect of
COVID-19.

At the start of Fiscal 2022, the microfinance sector once again saw the effects of the second wave
of the COVID-19 epidemic, which slowed growth. Due to the fact that commercial activities
pertaining to critical services were permitted to be operational and there was no strict total
national lock down, the industry was able to recover quicker than during the first wave. The
functioning of MFI branches was also authorized by the RBI. Additionally, lenders were better
equipped to manage the second wave of COVID-19 by heavily using technology and third-party
tie-ups to ease disbursements and collections, building upon their expertise from the previous
wave.

Microfinance changes prioritized by the government in response to the COVID-19 pandemic

Lifting the financial strain of debt repayment via a moratorium period: At first, the Reserve Bank
of India (RBI) gave financial institutions the green light to put off paying interest on outstanding
working capital facilities and term loans for three months from March 1, 2020.

An additional three months were added to the embargo, bringing it to August 31, 2020.
Nevertheless, in order to take advantage of this benefit, the banks were told to set aside 10%
more money, which could be offset against the money needed for real slippages later on.
Borrowers will feel better and more secure as a result of these actions, which should increase
economic confidence.

Financing assistance from RBI: To help NBFC-MFIs, RRBs, and cooperative banks, the Reserve
Bank of India (RBI) announced in April 2020 that NABARD will get ₹250 billion in refinancing
assistance.

Scheme for subsidizing loan interest: Loans made possible by the Mudra-Shishu program are
eligible for a 2% interest subsidy from the government. Loans up to ₹50,000 are mostly provided
by NBFC-MFIs that target low-income populations.

and 3FY23 (in billions of rupees)

The Reserve Bank of India (RBI) said on May 5, 2021, that Priority Sector Lending would apply
to new loans made by small finance companies to Non-Bank Financial Companies (NBFCs) with
assets below ₹ 500 Crore, which will thereafter be re-lent to individual borrowers. Credit will be
more readily available to smaller MFIs, who have been confronted with greater difficulties in
obtaining finance, if the priority-sector lending criteria is extended to NBFC-MFIs with asset
sizes up to ₹ 500 crores. Up to March 31, 2022, the facility will be accessible to SFBs.

To mitigate the effects of the second wave of the epidemic, the Reserve Bank of India (RBI)
established a special long-term repo activity (SLTRO) program for the State Financial Bank
(SFB) with a funding of ₹100 billion. Starting on May 17, 2021, and continuing every month
until the whole money is used up, an initial auction will be held. Small businesses and other
unorganized sectors should be lent the money that this initiative borrows.

For the first 2.5 million clients, the minister of finance announced on June 28, 2021, a credit
guarantee plan via microfinance institutions (MFIs) with a maximum duration of three years.
New or existing NBFC-MFIs would get 75% of the guarantee for ticket sizes up to ₹ 1.25 lakh
from scheduled commercial banks. As a result, this should alleviate the second wave of the
pandemic's devastating impact on people's and companies' ability to pay their bills.

Increasing market share to fuel industrial expansion

Household debt penetration on MFI loans in India has grown, but it's still relatively low
compared to other developed countries. This means that MFIs have a large untapped market to
compete in. Despite the difficulties brought on by COVID-19, the domestic microfinance
business has shown resilient in the past and is predicted to gain steam in the coming two fiscals
as a result of faster economic development and more readily available cash.

Estimates for the MFI loan portfolio by CRISIL MI&A range from 18% to 20% CAGR from
Fiscals 2023–2025. Consistent growth in MFI clientele and deeper penetration into rural regions
would fuel development. Due to their ongoing efforts to diversify their portfolios into various
asset classes, including as home loans, MSME loans, and car loans, SFBs had double-digit
growth of 13% during Fiscal 2018-23.

Assam, Bihar, Odisha, India and West Bengal have all seen a dramatic increase in the number of
microfinance institutions (MFIs) in operation. These states have also seen a comparable increase
in AUM, since the aggregate amount of branches has more than tripled since Fiscal 2017.
Financial inclusion institutions (MFIs) are able to make better lending choices because to the
abundance of borrower credit-related data made available by credit information providers.

Market in rural areas to propel NBFC-MFI operations

The rural market is anticipated to continue having a bigger part of MFIs' activity, according to
CRISIL MI&A, and this area is predicted to have booming demand. The rural sector presents a
significant potential for savings & loan products since, although comprising 2/3 of the
population, contributing 47% of GDP, and meeting 2/3 of the demand for two-wheelers, their
proportion of the total credit outstanding is relatively low at 10%.

The government also planned to spend an estimated ₹70 billion to provide free high-speed Wi-Fi
in more than 2,500 cities and towns as part of the Digital India initiative. The government's goal
is to install 50,000 to 60,000 Wi-Fi hotspots nationwide as part of the strategy. Upon completion,
these initiatives will reportedly aid in the acceleration of digital service expansion to rural
populations, particularly the lowest socioeconomic strata, according to CRISIL MI&A.

Microfinance institutions (MFIs) concentrate more on rural regions than banks do. Even in the
future, MFIs anticipate that rural clients would make up a disproportionately large portion of
their customers, anything from 55 to 60%. According to CRISIL MI&A, the best way to cross-
sell more items to rural clients is to build a strong connection with them and interact with them
often. This will result in stronger and more loyal customer relationships.

Rural regions have a greater demand for loans, according to CRISIL MI&A. This is likely due to
the government's push for financial inclusion and the fact that banks are building branches in
formerly unbanked areas. Due to reduced competition, lower loan penetration, and less mobility
in rural regions, the rural percentage of the NBFC-MFI portfolio climbed to 77% as of December
31, 2022, from 66% in Fiscal 2018.

It reaped the benefits of reduced delinquency rates and improved credit behaviors generally.
There is a lot of room for growth in rural areas' credit penetration rates, and microfinance
institutions are well-positioned to fill this need—which is now being satisfied by informal
sources like local moneylenders—thanks to their relatively deeper accessibility, existing client
relationships, and staff base.
 CHAPTER: 3
RESEARCH METHODOLOGY
 RESEARCH METHODOLOGY

Research Methods
The major objective is to study India's small finance banks to find out what they do for a living
and the challenges they face. The research strategy used in this study was descriptive.
To get this data, we combed through scholarly journals, publications, and SFB websites.
Under the null hypothesis (H0), this research will not find any evidence that small finance banks
have any effect on the Indian economy. The Indian economy has benefited from small finance
banks (H1 > 0).

Aims of Research
The study's main objective is to look at the Au and Ujjivan banks' profitability. The research
strategy is based on a combination of quantitative and descriptive methods. For this purpose, a
wide range of online resources, including articles and journals, provide the bulk of the secondary
data. The author has gathered data for four years, from 2016–2017 all the way through 2019–
2020, in order to study the financial analysis of banks.
To look into and evaluate how well the smaller banks in AU and Ujjivan have done monetarily.

To analyze the financial performance of the AU & Ujjivan Tiny Finance Bank, compare it to
others, and draw conclusions.

The first hypothesis is that Ujjivan Bank and Au institution have same financial analyses. You
can't tell the two apart.

Research Area
Using data from the last two years, the research project titled "Financial evaluations of small
banks of finance with respect to AU und UJJIVAN small finance bank" will compare and
contrast the two banks' financial performance. The study's foundation is a review of profitability
and liquidity.You can see this in action by analyzing the past trends in the company's assets and
debts with the use of current and quick ratios. Even for those without experience in the field,
financial analysis makes it very clear where the association is in terms of its ability to pay off
short-term obligations and liabilities. One way to do this is by looking at how the association's
assets and liabilities have changed over time.

Decisions for venture capital, lines of credit, and other types of funding are based on analyses of
the financial statements, which also help to evaluate the organization's current and future
performance.

One caveat of the study is that it doesn't account for changes to the general price level.

Secondary data is used as a basis for the whole inquiry.

The data shown here is sourced from the company's balance statement and a number of scholarly
journals; nevertheless, the accuracy of the data presented may vary from one magazine or article
to another.

No two companies use the same methodology when analyzing their financial performance. For
the sake of this inquiry, let's assume that both companies use the same program to assess the
efficacy of their financial processes.

The many possible approaches to calculating accounting ratios also affect their usefulness. No
matter how few changes there are in the external variables, the various ideas used to calculate the
percentage's numerator and denominator will not lead to trustworthy conclusions.
 CHAPTER: 4
DATA COLLECTION AND ANALYSIS
 DATA COLLECTION AND ANALYSIS

This study was based on data collected over four years by the Au + Ujjivan Small Finance
Banks. To further highlight the facts, several ratios have been presented under liquidity, debt,
profitability, and market value.

Current Yield
If you want to know how well a business can handle its short-term debts, particularly those with
due dates within the next twelve months, go no further than the current ratio, a liquidity ratio. To
auditors and prospective investors, it details how a business may pay down its debt and
additional payables using money that isn't already in the bank.

Current Assets = Formula

Current Responsibilities

YEAR AU BANK UJJIVAN BANK

2017 0.00 0.75
2018 0.00 1.05
2019 0.39 0.75
2020 0.37 0.66
TABLE- 1.1
 CURRENT RATIO

100%
90%
80%
70%
60% UJJIVAN
50% AU
40%
30%
20%
10%
0%
2017 2018 2019 2020

FIG- 1.1

Interpretation:
The term "current ratio" describes the relationship between short-term assets and short-term
liabilities. Ujjivan Bank had an average of 0.78 while AU Bank had 0.19. Compared to AU
Bank's 0.22 standard deviation, Ujjivan Bank's was 0.19. The variance coefficient for Ujjivan
Bank was just 0.23, in contrast to 1.15 for AU Bank.

Gaining a bigger current ratio is better than losing ground.

The sweet spot is often considered to be between 1.2 and 2. The percentage change in the Au and
Ujjivan banks from 2017 to 2020 is shown in Table 1.1. In contrast to Au Bank, which
consistently misses the goal ratio, Ujjivan Bank achieves success in 2018 but then declines the
following two years.

Total debt for the fiscal year ending March 31, 2018, was lower at Ujjivan Bank compared to Au
Bank. As shown in Figure 1.1, the two banks' current ratios are visually displayed.

Unwavering Commitment to Fairness

The debt-equity ratio is a useful metric for analyzing the financial health of a business by
comparing the contributions of its creditors to those of its shareholders. The debt-equity ratio
measures the extent to which a company's total equity capital is divided by its total long-term
debt.

The formula:

Full Scope of Duty Total Value to Stockholders

YEAR AU UJJIVAN
2017 0.00 4.51
2018 0.00 5.27
2019 0.06 7.13
2020 0.04 4.97

TABLE 1.2

TOTAL DEBT TO EQUITY RATIO

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2017 2018 2019 2020

AU UJJIVAN

FIG 1.2

Interpretation:
Because it reduces risk, a total debt to equity ratio below 1 is ideal for a company. While the rate
at Ujjivan Bank was 0.025, it was 5.47 elsewhere. The standard deviation at Au Bank was just
0.03, in stark contrast to the 1.15 for Ujjivan Bank. Ujjivan Bank has a variance coefficient of
just 0.21 while Au Bank's was 1.2.

Table 1.2 demonstrates that compared to Ujjivan Bank, Au has a better ideal ratio because to its
reduced dependence on external liabilities. This ratio is highest in 2019 in relation to the
preceding three years.

Therefore, AU Bank's debt collection risk is reduced. Figure 1.2 is a graphical representation of
the total debt to the equity ratios of the two banks.

Garbage Disposal Brim

The term "net profit margin" describes the proportion of sales that remain as profit. It is a way to
see how much money is flowing in from net profits for a company or division.

The percentage form of net profit percentage is more common, although the decimal form is
equally acceptable. The net profit margin is the percentage of revenue that a business retains as
profit.

Formula:
Gross Profit / Total Sales

YEAR AU UJJIVAN
2017 64.21 0.01
2018 16.52 0.46
2019 12.94 10.87
2020 15.74 12.94

TABLE 1.3
 NET PROFIT MARGIN
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2017 2018 2019 2020

AU UJJIVAN

FIG -1.3

Interpretation:
A high net profit margin is indicative of a successful business. It is possible for a company to
charge greater prices than its rivals and yet make a profit if it controls its expenditures well
enough.

In comparison to Ujjivan banks, Au banks had a net profit margin of 27.35% on average. Ujjivan
Bank's standard deviation was 6.79 while Au Bank's was 24.61. Ujjivan Bank had a variance of
111.18 and Au Bank of 89.94.

Table 1.2 shows that the two banks' net profit margins are different. We can see that Au
maintains a consistent ratio of about 20% in its first year and continues to do so for the next three
years. Although Ujjivan Bank's stake is down in 2017 and 2018, it is almost the same in 2019.

On the other hand, Ujjivan Bank could have trouble establishing a solid budget structure in the
first two years due to weak pricing methods, but in the subsequent two years, they would have
more than compensated with efficient management and reduced expenses. Figure 1 displays the
bank's financial data along with their net profit margin percentage.2
Running Margin of Profit
After subtracting all direct and indirect costs, such labor and raw materials, from a company's
sales, the remaining amount is its operating profit. This profit does not take into account any
premium or assessment. We divide the operating profit by the net sales of the business to get this
ratio. A greater ratio is better since it shows that the firm is doing a good job of achieving its
goals and turning its transactions into earnings.

Profit = Total Revenue / 100

YEAR AU UJJIVAN
2017 0.93 -6.28
2018 -5.43 -7.12
2019 -2.71 -0.36
2020 -0.73 1.02
TABLE 1.4
 OPERATING PROFIT MARGIN
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
2017 2018 2019 2020

AU UJJIVAN

FIG -1.4

Interpretation:
The operating profit margin ratio for Ujjivan Bank was 3.18%, whilst for Au Bank it was -1.98%
on average.The standard deviation for Au bank was 2.73 and for Ujjivan bank it was 4.11. Au
and Ujjivan had variance coefficients of -1.37 and -1.29, correspondingly.

A declining operating margin is an indication of increasing costs relative to profits. This proves
that the bank is unable to generate a healthy profit due to its large spending. While Ujjivan
Bank's operational margin profit fell irregularly throughout the previous three years, Au Bank's
margin profit was greater in 2017 (table 1.4). The margin at Ujjivan Bank, however, increased all
the way up to 2020.

So, Au Bank had a very successful 2017, but they were unable to sustain that level of success in
the subsequent three years. Expenses were unchanged and earnings increased for Ujjivan Bank
on March 31, 2020. From 2017 through 2020, the operating profit predictions of Au and Ujjivan
Bank are shown in Graph
Asset Return
Return on total assets (ROA) is a measure of a company's profitability. Return on assets (ROA)
is a metric that auditors, investors, and company executives may use to assess how well a
business is converting its assets into profit. A higher Return on Assets (ROA) rate indicates that
your business is doing better.

Formula:
Total Assets Net Income

YEAR AU UJJIVAN
2017 8.40 0.00
2018 1.55 0.07
2019 1.17 1.44
2020 1.60 1.90

TABLE 1.5
 RETURN ON ASSETS
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2017 2018 2019 2020

AU UJJIVAN

FIG -1.5

Interpretation:
Ujjivan Bank's ROA was a pitiful 0.85%, in stark contrast to Au Bank's average ROA of 3.18%.
Au Bank had a standard deviation of 3.48, which was much higher than Ujjivan Bank's 0.96. The
coefficient of change for au bank and Ujjivan bank is equivalent to 1.09.

Excellent is anything beyond 20% while decent is anything above 5%. Table 1.5 shows that in
2017, the ROA% of Au bank grew at the quickest rate. The ratios in the three years that followed
2017 were similarly much lower. That the ratio fell and then rose is somewhat strange. During its
first two years of operation, Ujjivan Bank maintained a constant return on assets. The two year
before that saw much more expansion.

Since Au Bank's ROA was greater in 2017, it may be inferred that the bank used its assets more
efficiently than Ujjivan Bank did in the first two years and before to that. Figure 1.5 shows the
ratios of different banks over a lengthy period of time.
Return on Equity Ratio
Divide Net Income by Founder Equity to get Return on Equity (ROE), a measure of a company's
profitability. Return on equity (ROE) measures the profitability of an organization's operations
after subtracting all debt from its total assets. Return on equity (ROE) is a measure of a
company's profitability that compares the amount of money it makes from shareholders to the
money it takes in.

Formula for Shareholder Equity and Average Net Income

YEAR AU UJJIVAN
2017 41.35 0.00
2018 12.80 0.47
2019 12.07 12.30
2020 15.41 11.71

TABLE 1.6
 RETURN ON EQUITY
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2017 2018 2019 2020

AU UJJIVAN

FIG-1.6

Interpretation:
Ujjivan Bank's average return on equity was6.12, but Au Bank's was 20.4. Ujjivan Bank's
standard deviation is 6.80 and Au Bank's standard deviation is 14.03. This is in relation to the
variations in their equity rates. In comparison to Ujjivan's 1.11 coefficient of variation, gold's
was 0.68. It is considered ideal to have a return on equity of fifteen to twenty percent.

Compared to Ujjivan Bank, Au Bank had the highest ratio in 2017, as shown in Table 1.6. From
2018 to 2019, the Ujjivan bank percentage increased somewhat, while the Au share fell. In 2020,
the share price of Au Bank rose by about 15%, while the share price of Ujjivan Bank declined.

This explains why, between 2017 and 2020, Au Bank's return on equity was higher than Ujjivan
Bank's average ROE, indicating that the latter produced less money and so required more capital.
The ROE of the two financial institutions is shown in Figure 1.6.

Profit Net Interest

One way to calculate a bank's net interest margin (NIM) is to look at the interest it pays out on
loans and advances compared to the interest it receives on savings and certificates of deposit.

Net Income - Invested Equity on Average = RESULT

IF (IR > IE) then (IR > IE) WHERE (IR > IE)

YEAR AU UJJIVAN
2017 8.01 1.22
2018 4.99 9.08
2019 4.11 8.05
2020 4.52 8.87
TABLE 1.7
 NET INTEREST MARGIN
16

14

12

10

2017 2018 2019 2020

AU UJJIVAN

FIG 1.7

Interpretation:
On average, Ujjivan Bank's net interest margin was 6.80 percent, whereas Au Bank's was 5.40
percent.In contrast to Ujjivan Bank's 3.74 standard deviation, Au Bank's is 1.77. The variance
coefficient for Ujjivan Bank was0.55, whereas it was 0.32 for Au Bank.

A negative margin on net interest indicates inefficient investment, whereas an increasing margin
shows efficient profitability. You may see the comparisons over time in table 1.7. In 2017, Au
Bank had the highest ratio at 8.01, while in 2018, Ujjivan had the highest at 9.08.

Subsequently, the Au bank shifted their forecast from 2018 to 2020. In contrast, Ujjivan's ratio
was low in 2017, 19, and 20.

This bodes well for the financial health and future profitability of both financial institutions.
Figure 1.7 shows the net interest rate differentials of Au Bank with Ujjivan Bank visually. ROI
To get a company's earnings per share (EPS), divide its net income by the total number of
common stock shares outstanding. The resultant number is a good proxy for the profitability of a
business. Accounting for unusual occurrences and the risk of a drop in share value is standard
practice for companies when reporting profits per share.

Profitability as a Whole The Remaining Money

YEAR AU UJJIVAN
2017 30.18 17.7
5
2018 10.26 0.08
2019 13.26 1.78
2020 22.78 0.73

Table 1.8
 EARNING PER SHARE
60

50

40

30

20

10

2017 2018 2019 2020

AU UJJIVAN

Fig 1.8

Interpretation:
With the rise in earnings per share, there is more evidence to suggest the bank will turn a profit.
Earnings per share for Au bank were 19.09 and for Ujjivan banks they were 5.08. The standard
deviation at Au bank was 9.12, whereas at Ujjivan bank it was 8.47. Ujjivan Bank had a
variation of 1.66 while Au Bank had a variance of 0.47.

Table 1.8 shows that compared to Ujjivan, Au bank had a much better EPS ratio. Earnings every
share (EPS) increasing for Au bank was greatest in 2017 compared to the prior three years. In the
same year, Ujjivan Bank's profits per share ratio reached an all-time high, breaking all prior
records.

Because of this, the chances of Au bank making a profit and rewarding its shareholders with
dividends are higher than those of Ujjivan bank. Figure 1.8 shows the four-year earnings from
share (EPS) for the two banks graphically.
Defaulting Assets as a Percentage
Financial commitments that have not been repaid in accordance with the agreement are known as
nonperforming assets (NPAs). Borrowers run the danger of falling into financial difficulties
when they are late with or miss payments on advances, whether they be principle or interest.
Lenders declare a default when they believe borrowers have failed to repay loans as agreed upon
in advance.

Final Remaining Profit After Deducting All Costs

YEAR AU UJJIVAN
2017 1.2 0.0
2018 1.3 0.7
2019 1.3 0.3
2020 0.81 0.2
Table 1.9
 NON PERFORMING ASSET RATIO
2.5

1.5

0.5

2017 2018 2019 2020

AU UJJIVAN

Fig 1.9

Interpretation:
The bank benefits from a decrease in the proportion of loans that are not performing. Ujjivan
Bank's average nonperforming assets were just 0.4% of total assets, whereas Au Bank's were
1.15%. While Au Bank's mean variance was just 0.23, Ujjivan Bank's was 0.26. In contrast to
Ujjivan Bank's 0.66 coefficient of variation, Au Bank's was just 0.20.

According to Table 1.9, Ujjivan Bank has lesser Non-Performing Assets compared to Au Bank.
Therefore, Ujjivan Au the Bank has obligations that may force it to close its doors if the principal
were ever increased, or at the very least, prevent it from earning any interest income. Graphed in
figure 1.9 are the four-year totals of nonperforming assets for the two financial institutions.
Estate Agent's Estimate
An indicator of a company's capital sufficiency is the ratio of owners' equity to total equity. To
keep track of it, just deduct the investors' worth from the total assets.

Sum of All Assets Held by Property Owners' Funds = Formula

YEAR AU UJJIVAN
2017 100.00 77.98
2018 22.22 26.69
2019 13.16 17.60
2020 14.18 21.26
Table 1.10
 PROPRIETOR'S RATIO
200
180
160
140
120
100
80
60
40
20

2017 2018 2019 2020

AU UJJIVAN

Fig – 1.10

Interpretation:
Reducing the percentage of nonperforming loans is good for the bank. On average,
nonperforming assets accounted for 1.15 percent of Au Bank's total assets, but just 0.4 percent of
Ujjivan Bank's. Ujjivan Bank had a mean variance of 0.26, whilst Au Bank's was a mere 0.23.
Au Bank has a coefficient of variation of just 0.20, in comparison to Ujjivan Bank's 0.66.

Table 1.9 shows that compared to Au Bank, Ujjivan Bank has lower Non-Performing Assets. So,
if the principle were ever raised, Ujjivan Au the Bank may be forced to shut down or, at the very
least, not be able to generate interest. Figure 1.9 shows the two banks' total nonperforming assets
over the last four years.
Appraisal by Real Estate Agent
The debt-to-equity ratio is a measure of a company's ability to meet its financial obligations.
Simply subtract the value of the investors from the total value of the assets to keep track of it.

Calculation of the Total Assets Held by Funds Belonging to Property Owners =

Interpretation
In this investigation, ten ratios were extracted from bank statements. According to table 2, the
expected value is less than.05. The ratios showing no statistically significant difference include
the proprietor's ratio, which is also net interest margin, operational profit margin, net profit
margin, return on assets, return on equity, and profits per share. Consequently, the null
hypothesis is accepted.

All three of these ratios—current, total debt to equity, and non-performing assets—have
probability values below 0.01. This leads us to conclude that there is a significant difference
rather than accepting the null hypothesis.
 CHAPTER: 5
CONCLUSION, RECOMMENDATION
AND SUGGESTIONS
 MAJOR FINDINGS
 Based on an examination of the ratios at Au institution and Ujjivan bank, this study was
conducted. In order to compare the two firms' financial achievements, many ratios were
used. The inquiry yielded the following findings.

 For the last four years, the current ratios of Au Bank and Ujjivan Banco have been
around average. This makes even the most basic loan payments difficult for them to do at
the moment.

 Ujjivan Bank is becoming more reliant on funding from external sources in order to
function. The bank has an undesirable leverage ratio.

 Both banks are well-positioned for long-term solvency since they prioritize owner
financing above debt. Over the course of the next four decades, the banks will have
sufficient resources to maintain a steady liquidity ratio.

 It's clear that Au bank is doing far better financially than Ujjivan. Cutting costs and
increasing credit are two of the bank's successful strategies.

 Shares of stock in both banks are about equal in market value. Their capacity to provide
dividends to shareholders fluctuates from one year to the next, but they have consistently
maintained a consistent level of distributions.

 Au Bank does a good job of managing its non-performing assets. Regarding

nonperforming assets, they are subject to minimal external requirements.
 CONCLUSION
Potentially profitable unbanked regions and the provinces have a lot of unrealized potential. It is
thought that investigating alternative financial pillars is necessary to take advantage of this
unfulfilled need for financial services. Nevertheless, given the diverse range of marketplaces and
customer groups in India, it could be necessary to modify the idea to cater to the unique
requirements of the local market.

In terms of the relative strengths of the various institutions, the objectives of long-term
sustainability and financial absorption must be congruent. A comprehensive strategy is required
to tackle financial prohibition, and that strategy must include banks informing the public about
the products they offer, educating their clients, and providing guidance on topics such as
reasonable credit, investment funds, obligation counseling, and cash management.

Banks should establish clear protocols to broaden their service offerings if they want to
encourage financial consideration. In spite of progress, the Reserve Bank of India and the Indian
government should do more to level the playing field so that low-income and marginalized
individuals may afford the banking services and credit they need.

One initiative to increase access to formal banking services in India is the proliferation of small
finance banks. Due to the large population of financially illegitimate individuals in India who are
free to roam around, these banks are thriving and have tremendous potential throughout the
nation.

Rural and semi-urban areas of India are home to the vast majority of India's regional finance
institutions, which serve a diverse clientele that includes many people living on modest incomes.
Retail banks and the time spent offering different types of financial assistance to clients may
stand to gain from innovative ideas that lenders of all sizes may use.
 RECOMMENDATIONS
 It's possible that both organizations' short-term cash requirements are closely monitored.
Because of this, they would never have any trouble paying their expenses.

 A prospective investor should carefully review a bank's financial records before

depositing funds.

 Two of the nation's top minor financing banks are Au Bank und Ujjivan Bank.

 Reducing marginal expenditures might increase profit per pound for smaller financial
organizations. Increasing the number of shares issued by a corporation could lead to a
decline in their value.

 Smaller banks may be able to boost their profit margins via strategic price planning.
Taking a low-priced technique could lead to inefficient management as it reduces their
net profit.

 An investor may make a well-informed choice by comparing Au plus Ujjivan Bank to

other minor financing banks.
 SUGGESTIONS
When dealing with bigger banks, many SFBs take on the role of business correspondent. Almost
all of the services that a bank typically provides may be handled by small financial institutions
(SFBs). Promoting one's little financial institution is not a top concern. When it comes to
developing long-term problems, modest financial institutions in semi-urban and rural areas are
crucial. The majority of consumers were shown to have a vague understanding of the financial
inclusion and small financing institutions. Nearly half of the world's population does not have a
bank account. Using innovative strategies and state-of-the-art technology, small financing banks
aim to provide affordable banking services.

The process of payment and settlement mechanism is open to both sponsor banks and SFBs.
Because they have little overhead, these banks may easily make a profit.

Small financial institutions need to establish distinct identities to attract and retain consumers if
they want to stay in the game. Plus, it will reduce the likelihood of political interference. In times
of economic instability, the varied range of goods offered by small and medium-sized companies
(SFBs) helps the poor to stabilize their finances. Successful change management techniques are
essential for small financing institutions. Traditional methods of meeting technological
requirements will have to be used by small and medium-sized enterprises.
 BIBLIOGRAPHY
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 ANNEXTURE

BALANCE SHEET OF AU BANK WITH REFERENCE OF

FOUR YEARSDATA.

BALANCE SHEET OF AU MAR 20 MAR 19 MAR 18 MAR 17

SMALL FINANCE BANK (in
Rs. Cr.)

12 12 12 mths 12 mths
months months

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 304.12 292.36 285.70 284.25

TOTAL SHARE CAPITAL 304.12 292.36 285.70 284.25

Revaluation Reserve 0.00 0.00 0.00 0.00

Reserves and Surplus 4,020.56 2,652.59 1,977.98 1,697.19