Description
it talks about Industry Trends of banking industry, PEST Analysis of banking Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Canara bank, it's Finance performance, SWOT analysis of Canara bank and Various Strategies employed.
Canara Bank – Company Ananlysis
Banking Industry A modern industrial society cannot be run by self financing of entrepreneurs. Some institutional assistance is necessary to mobilize the savings of the community and to make it available to the entrepreneurs. The people a large majority of whom save in small odd lots also want an institution which can ensure safety of their funds together with liquidity. Banks are the institutes which assure this and the funds can be drawn back in case of a need. From a broader social angle, banks act as a bridge between the users of capital and those who save but cannot use the funds themselves. The idle resources of the community are thus activated and brought to productive use. The banking system has capacity to add to the total supply of money by means of credit creation. It is because of their ability to manipulate credit that banks are used extensively as a tool of monetary policy. They, through channelling of funds into one or the other direction on a priority basis or extending it to one or the other on concessional terms and conditions, influence the flow of funds and thereby the nature of economic development. Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the population. Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth and the development of the country. Driven by the socialist ideologies and the welfare state concept, public sector banks have long been the supporters of agriculture and other priority sectors. They act as crucial channels of the government in its efforts to ensure equitable economic development.
Banking Industry in INDIA
Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980.
Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks in 1969, the public sector banks or the nationalized banks have acquired a place of prominence and has since then have achieved tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach .Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting all higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Cooperative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the high revenue niche retail segments. The Indian banking has finally worked up to the competitive dynamics of the new Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. Banks that employ IT solutions are perceived to be futuristic and proactive players capable of meeting the multifarious requirements of the large customer?s base. Private Banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium. The Indian banking has come from a long way from being a quiet business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending).
PEST ANALYSIS
POLITICAL ASPECT The policies of the Government and Reserve Bank of India influence the banking sector. At times, considering the political advantage of a particular party, the Government declares some measures to their benefits like waiver of short-term agricultural loans, to attract the farmer„s votes. By doing so, the entire banking system in the country gets affected. Various banks in the cooperative sector are open and are affected by the decisions of politicians. They exploit these banks for their benefits. The government also possesses the right to appoint the
key personnel in the bank like chairman etc. Various policies are framed by the RBI analyzing the present situation of the country like policies on cash reserve ratio, regulation of interest rates, licensing, statutory liquidity ratio, prime lending rates, bank rate, selective credit control measures, open market operations etc for better control over the banks
ECONOMIC ASPECT
Every year RBI declares its 6 monthly policy and accordingly the various measures and rates are implemented which has an impact on the banking sector. Also the Union budget affects the banking sector to boost the economy by giving certain concessions or facilities. If in the Budget savings are encouraged, then more deposits will be attracted towards the banks and in turn they can lend more money to the agricultural sector and industrial sector, therefore, booming the economy.
SOCIAL ASPECT Banks have changed the culture of human life in India and have made life much easier for the people. To adopt the social development in thebanking sector it was necessary for speedy economic progress, consistent with social justice, in democratic political system, which is free from domination of law, and in which opportunities are open to all. Accordingly, keeping in mind both the national and social objectives, bankers were given direction to help economically weaker section of the society and also provide need-based finance to all the sectors of the economy with flexible and liberal attitude. Now the banks provide various types of loans to farmers, working women, professionals, and traders. They also provide education loan to the students and housing loans, consumer loans, etc.
TECHNICAL ASPECT Technology plays a very important role in bank„s internal control mechanisms as well as services offered by them. It has in fact given new dimensions to the banks as well as services that they cater to and the banks are enthusiastically adopting new technological innovations for devising new products and services. The latest developments in terms of technology in computer and telecommunication have encouraged the bankers to change the concept of branch banking to anywhere banking. The use of ATM and Internet banking has allowed
anytime, anywhere banking facilities. Automatic voice recorders now answer simple queries, currency accounting machines makes the job easier and self-service counters are now encouraged. Credit card facility has encouraged an era of cashless society. Today MasterCard and Visa card are the two most popular cards used world over. The banks have now started issuing smartcards or debit cards to be used for making payments. These are also called as electronic purse. Some of the banks have also started home banking through telecommunication facilities and computer technology by using terminals installed at customers home and they can make the balance inquiry, get the statement of accounts, give instructions for fund transfers, etc. Through ECS we can receive the dividends and interest directly to our account avoiding the delay or chance of losing the post. Today banks are also using SMS and Internet as major tool of promotions and giving great utility to its customers. Company Analysis A Brief Profile of Canara Bank was founded in 1st July 1906 at Mangalore with the name Canara Hindu Permanent Fund formally registered with a capital of 2000 shares of 50/- each, with 4 employees.. The bank changed its name to Canara Bank Limited in 1910. The founder is Shri Ammembal Subba Rao Pai, a great visionary and philanthropist. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence. The eventful journey of the Bank has been characterized by several memorable milestones. The bank got nationalised on 19th July 1969 and the growth is phenomenal after the nationalisation in attaining the status of a national level player in terms of geographical reach and clientele segments and became Canara Bank. In 1976 Canara Bank inaugurated its 1000th branch Eighties was characterized by business diversification for the Bank. In June 2006, the Bank completed a century of operation in the Indian banking industry. Today, Canara Bank occupies a premier position in the comity of Indian banks. Headquarter and International Branches Canara banks headquarter is located at Banglore Karnataka India
Canara Bank established its International Division in 1976. In 1983, Canara Bank opened its first overseas office, a branch in London. Two years later, Canara Bank established a subsidiary in Hong Kong, Indo Hong Kong International Finance. In 2008-9, Canara Bank opened its third foreign operation, this one a branch in Shanghai. Today, Canara Bank international Divisions are Canara Bank, London Branch Canara Bank, Leicester Branch Canara Bank Hong Kong Branch Canara Bank Shanghai Branch Canara Bank Sharjah Representative Office, UAE Commercial Bank Of India LLC Al Razouki Internation Exchange Co Eastern Exchange Establishment Canara bank, Manama Top management includes Shri. S RAMAN Smt. ARCHANA S. BHARGAVA Shri. ASHOK KUMAR Dr. THOMAS MATHEW Smt. MEENA HEMCHANDRA Shri. G.V. SAMBASIVA Shri G.V.MANIMARAN Shri. KHALID LUQMAN BILGRAMI Shri. SUTANU SINHA Shri. P. V. MAIYA Chairman and Managing Director Executive Director Executive Director Director representing GOI Director representing RBI Workmen Employee director Officer Employee Director Part time non official Director Part time non official Director Director representating Shareholder
Shri. SUNIL GUPTA
Shareholder Director
Vision To emerge as a „Best Practices Bank? by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach. Mission To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking. Founding Principles 1. 2. 3. 4. To remove Superstition and ignorance. To spread education among all to sub-serve the first principle. To inculcate the habit of thrift and savings. To transform the financial institution not only as the financial heart of the community but the social heart as well. 5. To assist the needy. 6. To work with sense of service and dedication. 7. To develop a concern for fellow human being and sensitivity to the surroundings with a view to make changes/remove hardships and sufferings. Total revenue of the bank Net income Total assets Employees 257.92 billion (US$4.67 billion) (2011)[1] 40.34 billion (US$730.15 million) (2011) 3.2864 trillion (US$59.48 billion) (2011) 44,450 (2011)
(Ref :Website Canarabank.in) Canara Bank is mainly involve in following businesses ? Investment Banking
? ? ? ? ? ? ? ?
Consumer Banking Commercial Banking Retail Banking Private Banking Asset Management Pensions Mortgages Credit Cards
Financial Performance as per October 2011 report Global Business Crosses 5.30 lakh crore Net Profit for Q2 at 852crore Operating Profit stood at 1605 crore 19.24
Earnings Per Share (EPS) for the quarter was at
Steady Growth in Business - Global business crosses 5.30 lakh crore, an increase of 25% y.o.y. Global Deposits reached 312577 crore, up by 25%. Domestic deposits grew by 26% compared to SCBs? growth at 19%. Advances (net) reached 217938 crore, up by 24%. Domestic advances grew higher by 27% compared to SCBs? growth at 21.4%. Return on Assets at1.01%. Capital Adequacy Ratio at 12.78%. Tier I Capital Ratio at 9.15%. Cash Recovery at over 800 crore. 160 Branches and 114 ATMs added during the Second Quarter. System Driven NPA implemented for all loan accounts, irrespective size or category. (Ref:http://www.canarabank.com/English/scripts/PressReleases.aspx)
Recent activities of Canara Bank Canara Bank had a major IT initiative to network all branches and move them to a single software platform. Canara Bank chose Flexcube from Oracle Financial Services Software as the application. The Bank entered into an agreement with IBM for rolling out flexcube to over 1000 branches as part of Phase I. This phase has just been concluded, with Karaikudi Branch in Tamil Nadu being the 1000th branch to go live. Over 22 million customers are benefiting from this initiative. In March 2009 IT Examiner published reports[6] of major problems with the flexcube implementation. Now, all the branches of Canara Bank are live on core banking application Flexcube. The bank has been actively involved in rural sector banking with inclusive growth and financial inclusion. It takes initiatives in rural area like rural service volunteer scheme and various non-credit support. Some of the programs include providing potable water to remote villages under Jalayoga Scheme, health care through Rural Health Clinic Scheme to backup our credit initiatives, all aimed at a holistic development of rural society. The bank has also launched a growth scheme called “Canara Grameena Vikasa Vahini” under which 25 vehicles across the country have been deployed to take the bank to the interior areas. Besides being a financial literacy tool, the scheme also facilitates expanding credit delivery capability. Benefits of Technology in Rural Areas To extend the benefits of technology driven banking practices such as ATMs to the rural areas, the bank has launched many technology aided financial inclusion initiatives. The bank has piloted a project involving biometric handheld devise operated through smart cards by engaging the services of business correspondents, in two villages of Bangalore rural district. The bank is providing savings banks operation in these two villages through smart card. The transactions can be done at the leisure time, since the business correspondent is a local person, available in the village throughout. The smart cards issued can also be used in biometric ATM machines for withdrawals. Encouraged by the success of the pilot project, the bank has also taken up similar projects all over the country by identifying one/two villages in 50 rural/semi urban branches. The bank has launched similar smart card project for payment of Social Security Pension and NREGP wages by engaging Business Correspondents in three districts of Andhra Pradesh: East Godavari, Warangal and Chittoor. (http://www.agricultureinformation.com/mag/2009/12/canara-bank-2/) Canara Bank sponsors three regional rural banks (RRB). 1. Shreyas Gramin Bank - Canara Bank is a sponsor of this bank, which came about with the amalgamation on 1 June 2006 after amalgamation of three RRBs, Aligarh Gramin Bank, Etah Gramin Bank & Jamuna Gramin Bank.
2. South Malabar Gramin Bank - is the largest RRB in India. Its headquarters are at Malappuram and it operates in eight districts in Kerala. It was established in 1976 as a Scheduled Commercial Bank. 3. Pragathi Gramin Bank has its headquarters at Bellary, Karnataka, and has 365 branches spread over seven districts. Canara bank is a state level lead bank in Kerala. SWOT ANALYSIS STRENGTHS ? ? ? ? ? ? ? ? Leadership in Karnataka state Diversified loan book Comfortable capital and reserve levels Articulation of good banking Canara bank has employed over 44,000 people Canara bank made a partnership with UNEP to initiate a successful solar loan programme New technological improvements eg. To network all the branches and move them under single software platform Good will in rural part of India
WEAKNESSES ? ? ? ? ? ? ? Declining asset quality to impact margins Low international exposure Customer Service is lesser compare to other Banks Low customer satisfaction Low Brand Value due to poor branding strategies Not a 1st choice bank in Urban area Slow response of employees
OPPORTUNITIES ? ? Foray into high growth areas likely to broaden fee income sources Government support to boost capital strength Government initiatives likely to spur demand in financial transactionsRural and social banking as these are the focus area for the Bank
? ?
Agricultural based consultancy Finance Schemes for small businesses and Education Programs supporting agriculture
? ? ? ? ?
THREATS Weak monsoon likely to impact rural credit off-take Declining exports likely to subdue trade financing demand in India Intensifying competition likely to check growth opportunities Economic Crises Changing government and RBI policies
MAJOR COMPETITORS Allahabad Bank, Andra Bank, Bank Of Baroda, India Bank, Bank of Maharashtra
References:http://economictimes.indiatimes.com/canara-bank/quotecompare/companyid-9218.cmshttp://www.canarabank.com/English/Scripts/pblinternatbranches.aspxhttp://en.wikipedia.org/wiki/Canara_Bankhttp://business.mapsofindia.com/banks-in-india/
doc_487546776.docx
it talks about Industry Trends of banking industry, PEST Analysis of banking Industry, Competitor Analysis, SWOT analysis, Company Description, General Information about Canara bank, it's Finance performance, SWOT analysis of Canara bank and Various Strategies employed.
Canara Bank – Company Ananlysis
Banking Industry A modern industrial society cannot be run by self financing of entrepreneurs. Some institutional assistance is necessary to mobilize the savings of the community and to make it available to the entrepreneurs. The people a large majority of whom save in small odd lots also want an institution which can ensure safety of their funds together with liquidity. Banks are the institutes which assure this and the funds can be drawn back in case of a need. From a broader social angle, banks act as a bridge between the users of capital and those who save but cannot use the funds themselves. The idle resources of the community are thus activated and brought to productive use. The banking system has capacity to add to the total supply of money by means of credit creation. It is because of their ability to manipulate credit that banks are used extensively as a tool of monetary policy. They, through channelling of funds into one or the other direction on a priority basis or extending it to one or the other on concessional terms and conditions, influence the flow of funds and thereby the nature of economic development. Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the population. Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth and the development of the country. Driven by the socialist ideologies and the welfare state concept, public sector banks have long been the supporters of agriculture and other priority sectors. They act as crucial channels of the government in its efforts to ensure equitable economic development.
Banking Industry in INDIA
Banking in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980.
Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks in 1969, the public sector banks or the nationalized banks have acquired a place of prominence and has since then have achieved tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach .Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting all higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Cooperative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the high revenue niche retail segments. The Indian banking has finally worked up to the competitive dynamics of the new Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. Banks that employ IT solutions are perceived to be futuristic and proactive players capable of meeting the multifarious requirements of the large customer?s base. Private Banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium. The Indian banking has come from a long way from being a quiet business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending).
PEST ANALYSIS
POLITICAL ASPECT The policies of the Government and Reserve Bank of India influence the banking sector. At times, considering the political advantage of a particular party, the Government declares some measures to their benefits like waiver of short-term agricultural loans, to attract the farmer„s votes. By doing so, the entire banking system in the country gets affected. Various banks in the cooperative sector are open and are affected by the decisions of politicians. They exploit these banks for their benefits. The government also possesses the right to appoint the
key personnel in the bank like chairman etc. Various policies are framed by the RBI analyzing the present situation of the country like policies on cash reserve ratio, regulation of interest rates, licensing, statutory liquidity ratio, prime lending rates, bank rate, selective credit control measures, open market operations etc for better control over the banks
ECONOMIC ASPECT
Every year RBI declares its 6 monthly policy and accordingly the various measures and rates are implemented which has an impact on the banking sector. Also the Union budget affects the banking sector to boost the economy by giving certain concessions or facilities. If in the Budget savings are encouraged, then more deposits will be attracted towards the banks and in turn they can lend more money to the agricultural sector and industrial sector, therefore, booming the economy.
SOCIAL ASPECT Banks have changed the culture of human life in India and have made life much easier for the people. To adopt the social development in thebanking sector it was necessary for speedy economic progress, consistent with social justice, in democratic political system, which is free from domination of law, and in which opportunities are open to all. Accordingly, keeping in mind both the national and social objectives, bankers were given direction to help economically weaker section of the society and also provide need-based finance to all the sectors of the economy with flexible and liberal attitude. Now the banks provide various types of loans to farmers, working women, professionals, and traders. They also provide education loan to the students and housing loans, consumer loans, etc.
TECHNICAL ASPECT Technology plays a very important role in bank„s internal control mechanisms as well as services offered by them. It has in fact given new dimensions to the banks as well as services that they cater to and the banks are enthusiastically adopting new technological innovations for devising new products and services. The latest developments in terms of technology in computer and telecommunication have encouraged the bankers to change the concept of branch banking to anywhere banking. The use of ATM and Internet banking has allowed
anytime, anywhere banking facilities. Automatic voice recorders now answer simple queries, currency accounting machines makes the job easier and self-service counters are now encouraged. Credit card facility has encouraged an era of cashless society. Today MasterCard and Visa card are the two most popular cards used world over. The banks have now started issuing smartcards or debit cards to be used for making payments. These are also called as electronic purse. Some of the banks have also started home banking through telecommunication facilities and computer technology by using terminals installed at customers home and they can make the balance inquiry, get the statement of accounts, give instructions for fund transfers, etc. Through ECS we can receive the dividends and interest directly to our account avoiding the delay or chance of losing the post. Today banks are also using SMS and Internet as major tool of promotions and giving great utility to its customers. Company Analysis A Brief Profile of Canara Bank was founded in 1st July 1906 at Mangalore with the name Canara Hindu Permanent Fund formally registered with a capital of 2000 shares of 50/- each, with 4 employees.. The bank changed its name to Canara Bank Limited in 1910. The founder is Shri Ammembal Subba Rao Pai, a great visionary and philanthropist. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence. The eventful journey of the Bank has been characterized by several memorable milestones. The bank got nationalised on 19th July 1969 and the growth is phenomenal after the nationalisation in attaining the status of a national level player in terms of geographical reach and clientele segments and became Canara Bank. In 1976 Canara Bank inaugurated its 1000th branch Eighties was characterized by business diversification for the Bank. In June 2006, the Bank completed a century of operation in the Indian banking industry. Today, Canara Bank occupies a premier position in the comity of Indian banks. Headquarter and International Branches Canara banks headquarter is located at Banglore Karnataka India
Canara Bank established its International Division in 1976. In 1983, Canara Bank opened its first overseas office, a branch in London. Two years later, Canara Bank established a subsidiary in Hong Kong, Indo Hong Kong International Finance. In 2008-9, Canara Bank opened its third foreign operation, this one a branch in Shanghai. Today, Canara Bank international Divisions are Canara Bank, London Branch Canara Bank, Leicester Branch Canara Bank Hong Kong Branch Canara Bank Shanghai Branch Canara Bank Sharjah Representative Office, UAE Commercial Bank Of India LLC Al Razouki Internation Exchange Co Eastern Exchange Establishment Canara bank, Manama Top management includes Shri. S RAMAN Smt. ARCHANA S. BHARGAVA Shri. ASHOK KUMAR Dr. THOMAS MATHEW Smt. MEENA HEMCHANDRA Shri. G.V. SAMBASIVA Shri G.V.MANIMARAN Shri. KHALID LUQMAN BILGRAMI Shri. SUTANU SINHA Shri. P. V. MAIYA Chairman and Managing Director Executive Director Executive Director Director representing GOI Director representing RBI Workmen Employee director Officer Employee Director Part time non official Director Part time non official Director Director representating Shareholder
Shri. SUNIL GUPTA
Shareholder Director
Vision To emerge as a „Best Practices Bank? by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach. Mission To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking. Founding Principles 1. 2. 3. 4. To remove Superstition and ignorance. To spread education among all to sub-serve the first principle. To inculcate the habit of thrift and savings. To transform the financial institution not only as the financial heart of the community but the social heart as well. 5. To assist the needy. 6. To work with sense of service and dedication. 7. To develop a concern for fellow human being and sensitivity to the surroundings with a view to make changes/remove hardships and sufferings. Total revenue of the bank Net income Total assets Employees 257.92 billion (US$4.67 billion) (2011)[1] 40.34 billion (US$730.15 million) (2011) 3.2864 trillion (US$59.48 billion) (2011) 44,450 (2011)
(Ref :Website Canarabank.in) Canara Bank is mainly involve in following businesses ? Investment Banking
? ? ? ? ? ? ? ?
Consumer Banking Commercial Banking Retail Banking Private Banking Asset Management Pensions Mortgages Credit Cards
Financial Performance as per October 2011 report Global Business Crosses 5.30 lakh crore Net Profit for Q2 at 852crore Operating Profit stood at 1605 crore 19.24
Earnings Per Share (EPS) for the quarter was at
Steady Growth in Business - Global business crosses 5.30 lakh crore, an increase of 25% y.o.y. Global Deposits reached 312577 crore, up by 25%. Domestic deposits grew by 26% compared to SCBs? growth at 19%. Advances (net) reached 217938 crore, up by 24%. Domestic advances grew higher by 27% compared to SCBs? growth at 21.4%. Return on Assets at1.01%. Capital Adequacy Ratio at 12.78%. Tier I Capital Ratio at 9.15%. Cash Recovery at over 800 crore. 160 Branches and 114 ATMs added during the Second Quarter. System Driven NPA implemented for all loan accounts, irrespective size or category. (Ref:http://www.canarabank.com/English/scripts/PressReleases.aspx)
Recent activities of Canara Bank Canara Bank had a major IT initiative to network all branches and move them to a single software platform. Canara Bank chose Flexcube from Oracle Financial Services Software as the application. The Bank entered into an agreement with IBM for rolling out flexcube to over 1000 branches as part of Phase I. This phase has just been concluded, with Karaikudi Branch in Tamil Nadu being the 1000th branch to go live. Over 22 million customers are benefiting from this initiative. In March 2009 IT Examiner published reports[6] of major problems with the flexcube implementation. Now, all the branches of Canara Bank are live on core banking application Flexcube. The bank has been actively involved in rural sector banking with inclusive growth and financial inclusion. It takes initiatives in rural area like rural service volunteer scheme and various non-credit support. Some of the programs include providing potable water to remote villages under Jalayoga Scheme, health care through Rural Health Clinic Scheme to backup our credit initiatives, all aimed at a holistic development of rural society. The bank has also launched a growth scheme called “Canara Grameena Vikasa Vahini” under which 25 vehicles across the country have been deployed to take the bank to the interior areas. Besides being a financial literacy tool, the scheme also facilitates expanding credit delivery capability. Benefits of Technology in Rural Areas To extend the benefits of technology driven banking practices such as ATMs to the rural areas, the bank has launched many technology aided financial inclusion initiatives. The bank has piloted a project involving biometric handheld devise operated through smart cards by engaging the services of business correspondents, in two villages of Bangalore rural district. The bank is providing savings banks operation in these two villages through smart card. The transactions can be done at the leisure time, since the business correspondent is a local person, available in the village throughout. The smart cards issued can also be used in biometric ATM machines for withdrawals. Encouraged by the success of the pilot project, the bank has also taken up similar projects all over the country by identifying one/two villages in 50 rural/semi urban branches. The bank has launched similar smart card project for payment of Social Security Pension and NREGP wages by engaging Business Correspondents in three districts of Andhra Pradesh: East Godavari, Warangal and Chittoor. (http://www.agricultureinformation.com/mag/2009/12/canara-bank-2/) Canara Bank sponsors three regional rural banks (RRB). 1. Shreyas Gramin Bank - Canara Bank is a sponsor of this bank, which came about with the amalgamation on 1 June 2006 after amalgamation of three RRBs, Aligarh Gramin Bank, Etah Gramin Bank & Jamuna Gramin Bank.
2. South Malabar Gramin Bank - is the largest RRB in India. Its headquarters are at Malappuram and it operates in eight districts in Kerala. It was established in 1976 as a Scheduled Commercial Bank. 3. Pragathi Gramin Bank has its headquarters at Bellary, Karnataka, and has 365 branches spread over seven districts. Canara bank is a state level lead bank in Kerala. SWOT ANALYSIS STRENGTHS ? ? ? ? ? ? ? ? Leadership in Karnataka state Diversified loan book Comfortable capital and reserve levels Articulation of good banking Canara bank has employed over 44,000 people Canara bank made a partnership with UNEP to initiate a successful solar loan programme New technological improvements eg. To network all the branches and move them under single software platform Good will in rural part of India
WEAKNESSES ? ? ? ? ? ? ? Declining asset quality to impact margins Low international exposure Customer Service is lesser compare to other Banks Low customer satisfaction Low Brand Value due to poor branding strategies Not a 1st choice bank in Urban area Slow response of employees
OPPORTUNITIES ? ? Foray into high growth areas likely to broaden fee income sources Government support to boost capital strength Government initiatives likely to spur demand in financial transactionsRural and social banking as these are the focus area for the Bank
? ?
Agricultural based consultancy Finance Schemes for small businesses and Education Programs supporting agriculture
? ? ? ? ?
THREATS Weak monsoon likely to impact rural credit off-take Declining exports likely to subdue trade financing demand in India Intensifying competition likely to check growth opportunities Economic Crises Changing government and RBI policies
MAJOR COMPETITORS Allahabad Bank, Andra Bank, Bank Of Baroda, India Bank, Bank of Maharashtra
References:http://economictimes.indiatimes.com/canara-bank/quotecompare/companyid-9218.cmshttp://www.canarabank.com/English/Scripts/pblinternatbranches.aspxhttp://en.wikipedia.org/wiki/Canara_Bankhttp://business.mapsofindia.com/banks-in-india/
doc_487546776.docx