Though Indian banks have not acquired international stature, the trend towards improvement is quite discernable.There
is perhaps a floating notion in academic and banking
circles abroad that banking in India is in need of some
fixing up as it is overregulated and overprotected.
However, if we look at the performance of some of our
banks we can see that they are gaining in strength and
do not need any kind of fixing.
Let
us try and look at the performance of Federal Bank Ltd.
(FB), Bank of Rajasthan Ltd. (BoR), and South Indian
Bank Ltd. (SIB). The Banks have been chosen by a simple
judgmental process. However, all of them come under
the category of old generation private sector banks.
Five
performance ratios, viz. PAT/NW, Capital Adequacy, G.Sec./Total
Investments, Other Income/Total Income, and Net NPA/Net
Advances are selected for this purpose. It is found
that the capital adequacy of all three banks has been
comfortable and is well above mandated RBI norms. However,
in the case of SIB there has been a decline in 2005.
PAT/NW has also been steady though in case of SIB it
came down from 23.86 in 2004 to 2.06 in 2005 and for
both the other banks too the figure has taken a knock
in 2005. G. Sec to total investments is high in all
three cases and in case of SIB it is as high as 91.87%
in 2005. Other income to total income hovers around
the 50-60% mark generally. Net NPA is low and is quite
healthy in all cases. BoR also seems to be earning more
from its non-core lending activities than the other
way round. |
