Bank of Baroda is one among the foremost outstanding banks in Asian nation, having its total assets as Rs 1,43,146 Crores as on 31 st March 2007.The bank was based by prince Sayajiro Gaekwad three (also known as Shrimant Gopalrao Gaekwad) , then prince of Baroda on 20 th of July 1908 with a paid capital of RS ten lacs. From its introduction in an exceedingly little building of Baroda, the bank has return an extended thanks to accomplish its current position united of the foremost vital banks in Asian nation. On 19 th of July 1969, Bank of Baroda was nationalized by the govt of Asian nation with 13 alternative industrial banks.
The economic reforms in 1991 turned the Indian banking industry into an efficient tool to facilitate the development of the Indian economy. It has been more than 27 years since a committee headed by RBI governor M.Narasimham first made out a case for pruning the number of government or state owned banks. This committee which was appointed in 1991 by Manmohan Singh, who was then Finance Minister, had recommended a restructuring of Indian banks, with three or four banks including State Bank of India (SBI) that could be positioned as global banks, besides eight to ten banks with a national footprint or presence, rather than having over two dozen state owned banks. In 2018 the government has proposed the merger of VijayaBank and DenaBank with Bank of Baroda. The merger of these banks will be the first ever three-way consolidation of banks in India. This merger will make Bank of Baroda the second largest public sector bank and the third largest lender. The scheme of merger is expected to come into force April 1st, 2019. This paper highlights the rationale behind the merger of these banks, scheme of merger and challenges before Bank of Baroda for the merger.
DEA is the tool used to asses the relative efficiency of units, in this case the banks in either minimization of Input or maximization of Output this study is based on the maximization of output. While running the DEA model with three inputs and two outputs, with reference to Table 1 all the selected efficiency scores has attained more than 90 percentage for all the selected Decision Making Units (DMU) and the main thumb rule while running the model is “The sample size should be at least two or three times larger than the sum of Inputs and Outputs”, here with this above table the efficiency score has attained. The Table 1 shows that the performance efficiency of selected twelve banks over a period of time the efficiency was measured through Data Envelopment Analysis- Intermediation approach. Every year by keeping a benchmark bank as reference bank the efficiency has measured based on that the average and the rank has been given. The benchmark bank was selected according to the maximum score of weighted input and output. The overall efficiency shows that Corporation bank has ranked one with the average score of (0.99) followed by oriental bank of commerce (0.99) it has also scored the same but point of difference in the years average level point score and rank as number 2. The score of other public sector banks are Indian Overseas bank (0.98), Indian bank (0.98), Syndicate bank (0.96), Vijayabank (0.96), Andhra bank (0.96), United bank of India (0.96), Denabank (0.96), Bank of Maharashtra (0.96), UCO bank (0.94), Punjab and sind bank (0.93).
Interest on Loans and advances has been one of the important sources of earning in Indian banking industry. Secondly, in one way, public sector banks have promised to the government of India to provide financial support for the economic growth. For this reason public sector banks have been adopting a less strict credit policy to increase their earning. This less strict credit policy brings a lot of pain in the form of NPA or unconscious Assets. It is not only for banks but also for the economy and nation as a whole. In the other side Banks are arguing that, they are giving their level best to reduce these unconscious assets to the minimum possible extend. This study has given an effort to find out the result of the unconscious assets management effort of banks and which among the public sector banks ranks better as compare to other in the race. The study placed Central bank of India in first position in unconscious assets management. State Bank of Bikaner and Jaipur, DenaBank, Union Bank of India, State Bank of Travancore, Punjab and Sind Bank are also playing well. Other banks, which come under top ten ranking, are Indian Bank, State Bank of India, Bank of Maharashtra and Bank of Baroda. The study also found that there is a significance differences in the addition and reduction of unconscious assets in different public sector banks working in India.
The public sector banks taken for the study are The Karnataka Apex Bank Ltd , Bank of India, Karnataka, UCO Bank , Bank of Baroda, VijayaBank , Syndicate Bank, IDBI Bank Ltd , Andhra Bank, Union Bank of India, State Bank of Mysore, Indian Overseas Bank, United Bank Of India and Central Bank of India . The private sector banks taken for the study are The South Indian Bank Ltd, HDFC Bank , Karnataka Bank , Axis Bank and Bank of Rajasthan.
plumbed by different measures like deposits, advances, working assets, incomes, expenditures, profits, no of assets, number of accounts and branches etc. The role of employees is also of great signification as each & every expression of a bank is directly affiliated to the attitude, motivation & work civilisation of the employees. so the parameters which are used to count the efficiency, should also incorporate the performance of their employees. In the current study the employee performance reasoning of selected co.opt bank has been performed on the basis of 2 ratios. a). working funds / employee b). operating profit / employee ratio. In this research article researcher study the employee work productivity of BCC & AJMB bank. Keywords: Employee Productivity
Target firms are typically smaller and more like opaque (difficult to understand) firms than acquiring firms. Banks that advise target firms can reuse information obtained in the course of a prior banking relationship by certifying the value of the merger (e.g., whether the price the acquirer offers to pay for the target is appropriate). The target bank’s private information about the target firms particularly valuable because of information asymmetries that make it difficult to certify the value of the target, and because it is the target firm that must be priced in a merger. However, this certification effect is likely to be reduced if the target bank advises the acquirer, since the target’s bank may be reluctant to reveal bad information about the target to the acquirer for fear that if the deal is not completed; the target will penalize the bank with the loss of its banking business. Acquirer’s abnormal returns are either negative or statistically insignificant both when the target’s bank and the acquirer’s bank advise the acquirer, and that the use of commercial bank advisors with prior banking relationships has no significant impact on acquirer abnormal returns.
Research conducted by (Tran, Lin, & Nguyen, 2016) This study examines the reciprocal relationship between liquidity creation, regulatory capital, and profitability of US bank banks. The findings of the study indicate that regulatory capital and the creation of liquidity positively influence each other after controlling the bank's profitability. However, this relationship was largely driven by small banks and especially during the non-crisis period. This is also sensitive to the capital level of bank regulations and how they are measured. In addition, we find that banks that create more liquidity and show higher liquidity risk have lower profitability. Finally, the relationship between regulatory capital and bank performance is not linear and depends on the level of capitalization. Regulatory capital is negatively related to bank profitability for banks with high capital but is positively related to profitability for banks with lower capital. Therefore, changes in regulatory capital have a different impact on bank performance.
The banking scenario in India in the post liberalization and deregulated environment has witnessed sweeping changes. The tremendous advances in technology and the aggressive infusion of information technology had brought in a paradigm shift in banking operations. Today, banking is more customer-centric. Banks are increasingly focusing on the premise that customers choose their service provider who differentiates himself from the others of the class with his quick and efficient service. For customers, it is the realization of their ‘Anywhere, Anytime, Anyway’ banking dream. This has prompted the banks to embrace technology to meet the increasing customer satisfaction. The curtsey, accuracy and speed are like a crown factors for a bank. Based on the responses of 100 customers of Bank of Baroda operating in the Faridabad district of Haryana has been taken into consideration. The survey was conducted in Faridabad district.
The fundamental yardstick in the ROE decomposition model is the Return on Equity. ROE for public sector banks stands at around 16.89% – considering that the coupons offered on fixed rate securities were decreasing at the time, this may be considered as acceptable. Yet, one should also scrutinize this rate of return in view of the profits earned elsewhere, and investors might be justified in expecting higher rates of return. The ROE ratio for private sector banks is negative and may be wholly attributed to Axis bank’s negative NI. When accounting for the latter fact by eliminating Axis bank from the private sector banks group, the tendency for private banks to operate on a lower ROE still prevails. Such comments also apply to the ROA where the negative figure for private sector banks may be attributed to Axis bank, and there is a tendency for the private banks to realize a lower ROA.
Since the one way analysis of variance was found insignificant in relation to Occupational Stress, the least significant difference (LSD) test was not applied in order to find out the differences of the paired means among Personnel’s from Private Bank (Bank of Baroda), Personnel’s from Semi Government/Co- Operative Bank (Punjab National Bank) & Personnel’s from Public Bank (State Bank of India) from Varanasi District.
t is generally held opinion that flowing water is free from contamination; and stagnant water is the fulcrum of contamination. This can be encapsulated in relation to corporate sector as growth is the essence of corporate life; and stagnation is death of corporate life. Hence, growth strategies are imperative to keep the wheels of organization on a growth track on continuous basis. The banking sector in India is not an exception to it as banks are operating not under static and stabilized conditions but under ever changing condition since the implementation of LPG policy in 1991. Under these conditions, no entity even dreams to give pause for its growth and welcome potential disastrous conditions. This growth can be realized either through organic growth route or through in- organic growth route or mixture of both. Organic growth refers to internal growth those results in enhanced customer base, higher sales, increased revenue, without resulting in change of corporate entity. Inorganic growth refers to the external growth producing leap frog effect as it enables to skip few steps on the growth ladder associated with internal growth process. At present, every banking entity desires to pool up the resources, by joining hands with other banking entity, with the purpose of realizing enhanced competitive advantage. One cannot fail to notice occurrences of such events in Indian banking sector. In this backdrop present paper intents to touch and disclose an overview of Mergers and Amalgamations in banking sector; reasons for Mergers and Amalgamations; regulatory framework governing Merger and Amalgamation in banking sector. In addition to, it, present paper intends to evaluate the impact of Mergers on surviving banks in terms of Profitability, Efficiency and Solvency.
Mahesh R. & Daddikar Prasad (2012) focused on the performance of Indian Airline Companies after the consolidation of Airline sector in year 2007-08. The main objective of this paper is to analyze whether the Indian Airline Companies have achieved financial performance efficiency during the post merger & acquisition period specifically in the areas of profitability, leverage, liquidity, and capital market standards. The finding of this study shows that there is no improvement in surviving Company’s return on equity, net profit margin, interest coverage, earning per share and dividend per share post-merger & acquisition.
The degree to which different portfolios are affected by these systematic risks as compared to the effect on the market as a whole, is different and is measured by Beta. To put it differently, the systematic risks of various securities differ due to their relationships with the market. The Beta factor describes the movement in a stock's or a portfolio's return in relation to that of the market returns. For all practical purposes, the market returns are measured by the returns on the index (Bank Nifty), since the index is a good reflector of the market.
The study of financial performance and trend helps to understand the progress of the banks. The study identified that there is a significant difference in performance between Andhra Bank and State Bank of India. The productivity of both public sector banks presented the same trend but in return on equity and profit per employee decreased year to year. The proportion of performing assets is also decreasing year by year. The study identified that there is a significant difference in performance of ICICI Bank and HDFC Bank. In case of ICICI bank the proportion of performing assets presented a decreasing trend. The HDFC bank performance is optimum and identified a growth in profit per employee, consistency in proportion of performing assets and symmetry in return on equity. In a comparison of four banks the financial performance of HDFC bank stood at top and the performance of Andhra Bank stood at a low level.
We are grateful to Chief Editor Nezameddin Faghih and the reviewers for their insight comments and suggestions throughout the review process. Finally, we wish to thank our parents for encouraging us throughout the study. Corresponding Author: The completion of this study would have been not possible if not dependent on the steadfast support and the encouragement of my wife (Samiya Jan) for her motivational speeches. There are no other contributors.
• To protect the interest and safety of funds of depositors of GTB, RBI imposed three months moratorium on it from 24/07/2004 to 23/10/2004. During the period of moratorium the bank is not allowed to carry on any of its operations- taking deposits or rendering loan till a solution to reconstruct the bank is obtained by RBI. This was the move taken in consultation with the Finance Ministry and after the bank failed to come up with a viable proposal for raising additional capital. Infact, the Finance Ministry declared that the RBI’s move was only a temporary one aimed mainly to protect the interests of depositors and to utilize the period of moratorium to work out a long-term solution.
Specifically, the policies were business improvement orders calling for bold restructuring efforts such as the resignation of the top management, a review of compensation structures and a reduction in employee headcount when after-tax profits declined to below 30% (known as the ‘30% rule’). If banks were unable to improve profitability after receiving another business improvement order, then conversion rights were exercised to convert preferred shares into common shares. Several examples exist, such as the case of Kumamoto Family Bank, which received a business improvement order in July 2004 to change its president. In addition, the Financial Services Agency issued a business improvement order to UFJ Holdings and UFJ Bank on 18 June 2004 because the banks concealed documents concerning their borrowers.
Interpretation: CRAR is the ratio of capital funds to risk weighted assets. Reserve Bank of India prescribes bank to maintain a CRAR of 9% about credit risk, market risk and operational risk on an ongoing basis as against 8% prescribed in BASEL. From the above table it is clear that Axis bank has the most favorable Capital Adequacy Ratio for the year 2014 and 2018. Higher the ration, higher is the risk taking capacity of bank due to unexpected loss in banking portfolio. With respect to RBI norms of 9%, every bank analyzed is in favorable position. The table predicts that private banks more bearing capacity for credit and market risk as compared to Government owned Banks
In the recent times, we have seen some M&A as voluntary efforts of banks. Merger of Times Bank with HDFC Bank was the first of such consolidations after financial sector reforms ushered in 1991. Merger of Bank of Madura with ICICI Bank, reverse merger of ICICI with ICICI bank, coming together of Centurion Bank and Bank of Punjab to form Centurion Bank of Punjab and the recent decision of Lord Krishna Bank to merge with Federal Bank are voluntary efforts by banks to consolidate and grow.