MAIN OBJECTS OF THE BANK The main object and business of the Bank, as laid down in the Bank

Nationalization Act is as under: The main object of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 under which the undertaking of the Bank was taken over by the Central Government is as under: An Act to provide for the acquisition and transfer of the undertakings of certain Banking Companies, having regard to their size, resources, coverage and organization, in order to control the heights of the economy and to meet progressively, and serve better, the needs of the development of the economy, in conformity with national policy and objectives and for matters connected therewith or incidental thereto. The Main Object of the Bank enables it to undertake the activities for which the funds are being raised and the activities, which it has been carrying on till date. Business Sphere of the Bank The Bank shall carry on and transact the business of Banking as defined in Clause (b) of Section 5 of the Banking Regulation Act, 1949, and may engage in

27

one or more of the other forms of business specified in Sub-Section (1) of Section 6 of that Act. Clause (b) of Section 5 of the Banking Regulation Act, 1949 defines Banking as "the accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or otherwise." Other Business that the Bank may undertake (Section 3 (7)) Sections 3 (7) of Chapter II of the Banking Companies (Acquisition) Act 1970 provides for the Bank to act as Agent of Reserve Bank.
1.

The Bank shall, if so required by the Reserve Bank of India, act as agent of the Reserve Bank at all places in India where it has a branch:

a. Paying, receiving, collecting and remitting money, bullion and securities on behalf of the Government of India b. Undertaking and transacting any other business which the Reserve Bank may from time to time entrust to it .
2.

The terms and conditions on which any such agency business shall be carried on by the corresponding new Bank on behalf of the Reserve Bank shall be such as may be agreed upon. If no agreement can be reached on any matter referred to in Clause (2) above, or if a dispute arises between the corresponding new Bank and the Reserve Bank as to the interpretation of any agreement between them, the matter shall be referred to the Central Government and the decision of the Central Government, thereon, shall be final.

3.

28

4. The corresponding new Bank may transact any business or perform any function entrusted to it under Clause (1) by itself or through any agent approved by the Reserve Bank. CORPORATE STRATEGY The globalization of the economy and financial sector reforms have resulted in increased competition and thin margins. To achieve the corporate goal, the following strategies have been planned: 1. Proliferate the Banks business 2. Increase the banks' non-fund and non-interest income 3. Offer affable customer service 4. Open more specialized branches and expand personal banking, quick collection service, retail banking, forex banking, small scale industrial finance etc. 5. Use technology to boost credit off-take 6. Sharpen efficiency and efficacy 7. Reduction of non-performing assets MISSION & VISION OF THE BANK MISSION To ensure anywhere and anytime Banking for the customer with latest state- ofart technology and by developing effective customer centric relationship and to emerge as a world-class service provider through efficient utilization of human resources and Product innovation.
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VISION To put the Bank on higher growth path by building a strong customer-base through Talent Management, Induction of State of art Technology and through Structural Reorganization. COMPETITIVE STRENGTHS Many new banks, both private and foreign, have entered the industry and offer new and innovative products at competitive rates. In this scenario, Allahabad Bank believes that its competitive advantages are: a) Rich tradition of more than 142 years b) Large and loyal customer base c) Wide branch network d) Specialized branches to cope with modern demand pattern e) Diversified product portfolio f) Committed and experienced work force g) Technology Allahabad Bank CORPORATE FOCUS The corporate focus of the Bank is: a) To improve efficiency to face competition especially in metropolitan and urban centers b) To increase productivity c) To augment its market share of banking system deposits d) To develop its management information system e) To reduce NPAs
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f) To improve systems and control g) To upgrade products and services h) To provide adequate credit support to industry, trade and priority sector BUSINESS OF THE BANK & ITS PRODUCTS AND SERVICES Other than the offering traditional banking products such as corporate loans, the Bank has made its presence felt by introducing certain new products and value added services while continuing to popularize the existing products. Some of these new products are: (a) Retail Banking Boutiques: In the year 2000, Allahabad Bank came out with a unique strategy for marketing its retail loans by putting in place dedicated Retail Banking Boutiques at potential centers across the country to act as exclusive delivery channels of various Retail Finance Schemes. The Bank posted young & dynamic officers in these boutiques and delegated them with adequate authority to sanction loan proposals related to the various schemes on the spot. These officers were also exposed to specialized training not only to serve the customer better but also to sell the retail products, if need be, by adopting door to door campaign. Total number of Boutiques was 127 with an outstanding of Rs. 2561.18 crores as on June 30, 2007. During the quarter ended June 2007,the total disbursement under the various retail finance schemes was Rs. 211.77 crores. Brief description of the Banks retail schemes is as under

Sr. 1
31

Scheme Allahabad Bank Personal Loan scheme

Details Loan for purchase of entire range of consumer durable, purchase of two wheeler any other

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tangible items. 2 3 4 5 6 Allahabad Bank personal loan scheme for pensioners Allahabad Bank personal Loan scheme for doctors Allahabad Bank Housing Finance Scheme Allahabad Bank car Finance Scheme Allahabad Bank Loan against NSC/ KVP Overdraft Facility in Savings Bank A/Cs Allahabad Bank Educational Loan Scheme All Bank-Property Scheme All Bank Gold Loan Scheme Loan for meeting personal needs without assigning any specific purpose. Loan for any personal purpose including purpose including purpose for meeting expenses of professional requirement. Loan for construction of residential house on land already owned. For purchase of new as well as pre owned multi utility vehicle for personal use. Loan against NSC/ KVP for any business/ personal purpose. To meet immediate exigencies of salaried Persons To provide financial assistance on reasonable terms to the poor and needy to undertake basic education and to meritorious students to pursue higher/professional / technical education. Loan for meeting credit needs of business by offering building as security in the form of equitable mortgage . Loan for any purpose for meeting credit needs by offering Gold ornaments as security.

7 8

9 10

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(b) Loans on Internet: The Bank sanctions educational loans and car loans via Internet. The educational loan facility granted by the Bank was launched in 1997 and was subsequently made possible via Internet during 1999. Facility to apply for educational loan on Internet for education loan is available to the students of leading institutions like IIMs, IITs, Indian Institute of Science Bangalore, Jamunalal Bajaj Institute of Management Mumbai, XLRI Jamshedpur & Indian School of Mines Dhanbad. Bank has so far sanctioned 1014 educational loans amounting to more than Rs. 29.28 crore through Internet. (d) Kisan Credit Card: The card aims to provide adequate and timely financial assistance to the farmers for their agricultural activities amongst other requirements. During the year 2006-07, the Bank issued 176876 cards. The cumulative KCC numbered 940799 with a credit limit of Rs. 3393.08 crores as on 31-03-2007 The Bank is also providing Group/Personal Accident insurance cover to the holders of the Kisan Credit Card. Also on 140th foundation day of Bank (April 24, 2004) new scheme by name of Kisan Shakti Yojana (KSY) was launched. The scheme allowed the farmers to have flexibility and choice in regards to selection of credit for agriculture, allied activities and domestic and personnel purpose. Allahabad Bank The Bank had extended credit facility under the scheme to 43719 Kisan credit cardholders involving credit limit of Rs. 574.96 crores as on March 31,2007. Cumulative number of Kishan Credit cardholders financed under the scheme was 138937 involving 1809.28 Crore as on 31-03-2007. (e) Depository Services: The Bank has had the distinction of being the first nationalized Bank in the eastern region to be a depository participant of NSDL at
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Kolkata to offer Demat and other related services to its customers in 1998. . The Bank had further spread its DP services to its customers by opening DP at Luck now, Kanpur and Varanasi under agreement with CDSL. The bank also opened its first Branch DP at Mumbai with main DP at Kolkata Main Branch. The Bank earned an income of Rs. 80.37 lacks from 23913 accounts in financial year 2006-07 and Rs. 60.08 lacks from 19720 accounts during quarter ending June 2007. The Bank is going to start a Branch DP at New Delhi very soon, which will be connected through Back Office software at Kolkata Main DP. (f) Flexi- Fix Deposit Scheme: This scheme was launched to provide liquidity of a savings bank account and higher yield of a fixed deposit. (g) Banc-assurance: The Bank has entered into tie up arrangement with Life Insurance Corporation of India for Life Insurance and with National Insurance Company Limited and ECGC for Non-life Insurance and Export Credit Insurance for selling of their products through its branches. The Bank is also providing life insurance cover to the extent of Rs. 1.00 lacks to its depositors in association with LICI on payment of a very nominal premium. The Bank also has tie up arrangements with LICI for coverage of housing loans and Educational loans being provided by our branches. The Bank is providing free group personal accidental coverage of Rs. 1.00 lacks to SB Account holders maintaining an average monthly balance of Rs. 5000/- as well as to all its ATM cardholders. The bank has earned an income of Rs. 767 lacks from Ban assurance during FY a 2006-07 and Rs. 100 lacks in the first quarter of current FY i.e. June 2007. The Bank has entered into tie up arrangement with UTI-AMC, Principal-PNB AMC, Kotak- Mahindra AMC and Reliance Capital Asset Management Ltd. for selling of their Mutual Fund Products through our branches. This has generated
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an income of Rs. 62.09 lacks during FY 2006-07 and Rs. 38.19 lacks during first quarter of current FY. (h) Other Services: The Bank has also been providing Cash Management services through its QCS Branches/Centers at Kolkata, New Delhi, Mumbai, Luck now and Chennai. Under CMS activities, the Bank is providing Local Cheque collection service, Collect and pay service, assured credit up to day 7 to various private and other Banks as well as to corporate clients. The bank has earned an income of Rs. 355.19 lacks during FY 2006-07 and Rs. 94.12 lacks in the first quarter of current FY.For expansion of CMS business, the Bank is in the process of opening of Local Cheque Collection Hubs at 18 strategic locations, which will be linked with existing QCS Branches/Centres. BRANCH NETWORK OF THE BANK The Bank has 44 zonal offices, controlling 2107 branches and 105 extension counters as on June 30, 2007, including 52 specialized branches. The population group wise break up of branches of the Bank in India is as under: Population Group Number of Branches % Share to Total Rural Semi-Urban Urban Metropolitan Total 979 389 441 298 2107 46.46 18.45 20.93 14.15 100.00

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Geographical distribution of the branches of the Bank as under:State/union Territory Andaman& Nicobar Island Andhra Pradesh Assam Bihar Chandigarh Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh Number of Branches 1 31 62 151 4 28 49 1 27 30 6 % Share Total 0.05 1.47 2.94 7.17 0.19 1.33 2.33 0.05 1.28 1.42 0.28

Jammu &Kashmir Jharkhand Karnataka

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4 100 19

0.19 4.75 0.90

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Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Nagaland Orissa Pondicherry Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal TOTAL

6 150 86 1 1 4 68 1 46 48 1 32 1 673 20 456 2107

0.28 0.19 4.08 0.05 0.05 0.19 3.23 0.05 2.18 2.28 0.05 1.52 0.05 31.93 0.95 21.64 100.00

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Performance of Allahabad Bank (2008-2009) Business

(1)

(2) (3) (4)

(5)

(6)
(7)

(8)

The business of Allahabad Bank stood as RS 144415 crore as on 31.03.2009 as against RS 1,21,929 crore as on 31.3.2009 as against Rs. 1,21,929 crore corresponding previous year registering a growth 18.44% year- on year. Deposit of the Bank went up to Rs 84972 crore as on 31.03.2009 from Rs 71616 crore as on 31.3.2008.year on year basis, Total Deposits grew by 18.65%. Deposits under Differential Rate and certificate of deposits have been reduced to Rs 16635 crore from Rs 19976 crore as on 31.03.2008. Gross credit to total Deposit ratio stood as 69.96% as March 2009 as against 70.25% as on 31.03.2008. Priority sector advances increased from Rs 18774 crore as on 31.032008 to Rs 20435 crore as on 31.03.2009 Agriculture credit was Rs 9,568 crore as on 31.03.2009 Business per employee rose from Rs 6.04 crore as on 31.03.2008 to Rs 7.06 crore as on 31.03,2009. Business per Branch improved from Rs 56.61 crore as on 31.03.2008 to Rs 63.90 crore during the period.

Asset Quality Of Allahabad Bank (1)

(2) (3) 38

Gross NPA declined to Rs 1.81% from 2.00% at March 08. Gross NPA stood at RS 1078.25 crore. Net NPA at Rs at .072% amounting Rs 422.11 crore.

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(4)

(5)
(6) (7)

Book value per share was Rs 131.00. Return on Asset was 0.90%. Earnings per share (EPS) was Rs 17.21 Capital Adequacy Ratio was Rs 13.11% as at March 09 against the stipulated norm of 9% speculated norms of RBI. Technological Development

(1)

(2) (3)

Total CBS Branch 922 as 31.03.2009. More than 38000 ATMs across the country E-Payment for Direct and Indirect Taxes made available to customers all CBS branches. Human Resources of Allahabad Bank
(1) (2)

Total manpower as the strength of the Bank was 20,457 as 31.03.2009. 11828 personnel were imparted training during the year.

ALLAHABAD BANK UNAUDITED FINANCIAL RESULTS For Nine Months ended 31st December 2008

(RS IN LAKH)

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PARTICULARS

Quarter Ended (Reviewed)

Quarter Ended (Reviewed)

Nine Months Nine Months Ended Ended (Reviewed) 31.12.2008 31.12.2007 (Reviewed)

Year end (Audited ) 31.03.20

31.12.2008

31.12.2007

1 A

Interest Ended (a)+(b)+(c)+(d) Interest/discoun t on advances/ bill Income on investments

189804.45 145118.85

155623.33 112953.62

544962.25 404916.66

455985.72 322785.35

617121.5

446983.0

B C

44230.27

42064.72 513.05

138298.60 715.82

129466.11 3615.47

166946.9 4062.67

117.28 Interest on balances with RBI and other inter bank funds Others Other Income Total Income(1)+(2) Interest Expended Operating 40 338.04 40840.47 129390.46 129390.46 34648.49

D 2 3 4 5

91.94 40017.73 195641.06 113821.39 29707.49

1031.11 68365.53 613327.78 388346.14 96281.23

128.78 59616.09 515580.81 322142.05 82483.94

128.93

713597.3

713597.3

449887.9

115758.3

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Chapter 3 :-Research operation Significance of the study The main aim of any person is utilization money in the best manner since the India is country were more than half of the population has problem of running the family in the most efficient manner. However Indian people faced large number of problem till the development of the full-fledged banking sector. The Indian banking sector came into the developing nature mostly after the 1991 government policy. The banking sector has really helped the Indian people to utilize the single money in the best manner as they want. People now have started investing their money in the banks and banks also provide good returns on the deposited amount. The people now have at the most understood that banks provide them good security to their deposits and so excess amount are invested in the banks. Thus, banks have helped the people you achieve their socio economic objectives. The banks not only accept the deposits of the people but also provide them credit Facility for their development. Indian banking sector has the nation in developing the business and service sectors. But recently the banks are facing the problem of credit risk.It is found that many general people and business people borrow from the banks but due to some genuine or other reasons are not able to repay back the amount drawn to the banks. The amount which is not given back to the banks is known as non- performing assets which hamper the
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business of the banks. Due to NPAs the income of the bank is reduced and the banks have to make large number of the provisions that would curtail the profit of the bank and debtor that the financial performance of the banks not shows good results. The main aim behind making this report is to know how public sector Banks are operating their business and how NPAs play its role to the operations of the public sector Banks. The report NPAs are classified according to the sector, industry, and state wise. The present study also focuses on the existing system in India to solve the problem of NPAs and comparative analysis to understand which bank is playing what role with concerned to NPAs.Thus, the study would help the decision makers to understand the financial performance and growth of public sectors banks are compared to the NPAs. Objective of the study Primary objective: The primary objective of the making report is: To know why NPAs are great challenge to the public sector banks. Secondary objectives: The secondary objectives of preparing this report are:

To understand what is Non performing Assets and what are the underlying reasons for the emergence of the NPAs. To understand the impacts of NPAs on the operations of the public sector Banks.

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To know what steps are being taken by the Indian banking sector to reduce the NPAs? To evaluate the comparative ratios of the public sector banks with concerned to the NPAs.

Research methodology The research methodology means the way in which we would complete our prospected task. Before undertaking any task. Before undertaking any task it becomes very essential for anyone to determine the problem of study. I have adopted the following procedure in completing my report study. (1) (2) (3) (4) (5) (6) Formulating the problem Research design Determine the data sources Analyzing the data Interpretation Preparing research report (1)Formulating the problem I am interested in the banking sector and I want to my future in banking sector so decided to make my research study on banking sector. I analyzed first the factors that are important for the banking sector and I came to know that providing credit facility to the borrower is one of the important factors as far as the banking sector is concerned. On the basis of the analyzed factor, I felt that the important issue right now as far as the credit
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facilities are provided by the bank is non performing assets. I started knowing about the basics of the NPAs and decide to the study on the NPAs. So, I chose the topic NON performing Assets the great challenge before the public sector banks. (2)Research Design The research design tells about the mode with which the entire project is prepared. My research design for the study is basically analytical. Because I have utilized the large number of data of the public sector banks. (3)Determining the data source The data source can be primary or secondary. The primary data are those data which are used for the first time in the study. However such data take place much time and are also expensive. Whereas the secondary data are those data which are already available in the market. These data are easy to search and are not expensive too for my study I have utilized totally the secondary data.
(4)

Analyzing the data The primary data would not be useful until and unless they are well edited and tabulated. When the person receives the primary data many unuseful data would also be there. So, I analyzed the data and edited them and turned them in the unuseful data would also be there. So, I analyzed the data and edited them and turned

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them in the useful tabulations. So, that can become useful in my report study. (5)Interpretation of the data With use of analyzed data I managed to prepare my project report. But the analyzing of data would not help the study to reach towards its objectives. The interpretation of the data is required so that the others can understand the crux of the study in more simple way without any problem so I have added the chapter of analysis That would explain others to understand my study in simple way. (6)Project writing This is the last step in preparing the project report. The objective of the report writing was to report the findings of the study to the concerned authorities. Tools and Techniques As no study could be successfully completed without proper tools and techniques, same with my project. For the better presentation and right explanation I used tools of statistics and computer very frequently. And I am very thankful to all those tools for helping me a lot. Basic tools which I used for project from statistics are Bar Charts Pie charts
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Tables Bar charts and pie charts are really useful tools for every research to show the result in a well clear, ease and simple way. Because I used bar charts and pie charts in project for showing data in a systematic way, so it need not necessary for any observer to read all the theoretical detail, simple on seeing the charts anybody could know that what is being said. Applied Principles and concepts While I started to do the project the main thing which was the matter of concern was that around what principles I have to revolve my project. Because without having any hypothesis and objective we cannot determine that what output or result we are expecting from the project. And second thing is that having only tools and techniques for the purpose of project is not relevant until unless we have the principals for which we have to use those tools and techniques. Mathematical Averages Standard Deviation Correlation

Sources of primary and Secondary data:

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For the purpose of project data is very much required which works as a food for process which will ultimately give output in the form of information. So before mentioning the source of data for the project I would like to mention the source of data for the project I would like to mention that what type of data I have collected for the purpose of project and what is exactly. 1. Primary Data: Primary data is basically the live data which I collected on field while doing cold calls with the customers and I shown them list of question for which I had required their responses. In some cases I got no response from their side and then on the basis of my previous experiences I filled those fields. Source: Main source of primary data for the project was Questionnaires which I got filled by the customers or sometimes filled myself on the basis of discussion with the customers. Secondary Data:

2.

Secondary data for the base of the project I collected from intranet of the Bank and from internet, RBI Bulletin, Journal by ICFAI University. Limitation of the study The limitations that left in my side are:
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It was critical for me to gather the financial data of the every bank of the public sector Banks so the better evaluations of the performance of the banks are not possible. Since my study is based on the secondary data, the practical operations as related to the NPAs are adopted by the banks are not learned.

Since the Indian banking sector is so wide so it was not possible for me to cover all the banks of the Indian banking sector. NON-PERFORMING ASSETS The world is going faster in terms of services and physical products. However it has been researched that physical products are available because of service industries. In the nation economy also service industry plays vital role in the boosting up of the economy. The nations like US, UK, and Japan have service industries more than 55%.The banking sector is one of appreciated service industry. The banking sector plays large role in channelizing money from one end to other end. It helps almost every person in utilizing the money at their best. The banking sector accepts the deposits of the people and provides fruitful return to people on the invested money. But for providing the better returns plus principle amounts to the clients; it becomes important for the bank to earn the main source of income for banks are the interest that they earn on the loans that have been disbursed general person, businessman, or any industry for development. Thus, we may find the input-output system in the banking sector. Banks first, accepts the deposits from the people and secondly they lend this money
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to people who are in the need of it. By the way of channelizing money from one end to another end, Banks earn their profits. However, Indian banking sector has recently faced the serious problem of Non performing Assets. This problem has been emerged largely in Indian banking sector since three decade. Due to this problem many public sector Banks have been adversely affected to their performance and operations. In simple words Non Performing Assets problem is one where banks are not able to recollect their landed money from the clients or clients have been in such a condition that they are not in the position to provide the borrowed money to the banks. The problem of NPAs is danger to the banks because it destroys the healthy financial conditions of the them. The trust of the people would not be any more if the banks have the higher NPAs. So, the problem of NPAs must be tackled out in such a way that would not destroy the operational, financial conditions and would not affect the image of the banks, recently,RBI has taken number steps to reduce NPAS of the Indian banks. And it is also found that the many banks have shown positive figures in reducing NPAs as compared to the past years.

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