Chapter IV

Analysis of Financial
Position of Canara Bank
 CHAPTER -IV

ANALYSIS OF FINANCIAL POSITION OF CANARA BANK

Balance sheet is one of the most significant financial statements.

It indicates the financial condition or the state of affairs of a business at a

particular moment of time. Balance sheet contains information about resources

and obligations of a business entity and its owner's interests in the business at a

particular point of time. Balance sheet communicates information about assets,

liabilities and owner's equity for a business firm as on a specific date.

Assets, representing economic resources, are the valuable possessions

owned by the firm. These possessions should be capable of being measured in

monetary terms. These assets may be classified as current assets and fixed assets.

The liabilities of a firm consist of owned capital as well as borrowed capital. These

liabilities represent obligations of the firm against the owners and outsiders. The

difference between assets and external liabilities is backed by the owners' funds.

4.1 CAPITAL AND RESERVES

Performance analysis has to be certainly commenced from own funds and

index numbers will provide the change in own funds in the bank. Ratio of capital

to reserves shows the retention of profits in the banks. The details are shown in

table 4.1 for analysis.

Capital to Reserves Ratio = Capital / Reserves

58
 TABLE - 4.1
CAPITAL AND RESERVES OF CANARA BANK
FROM 1996-2007

(Rs. in crores)

YEAR CAPITAL INDEX RESERVES INDEX RATIO

1996 484.82 100.00 1445.87 100.00 0.34

1997 484.82 100.00 1563.62 108.14 0.31

1998 577.72 119.16 1725.18 119.32 0.33

1999 577.87 119.19 1834.94 126.91 0.31

2000 577.87 119.19 2018.01 139.57 0.29

2001 577.87 119.19 2236.58 154.69 0.26

2002 577.87 119.19 2893.63 200.13 0.20

2003 410.00 84.57 3738.83 258.59 0.11

2004 410.00 84.57 4841.65 334.86 0.08

2005 410.00 84.57 5698.96 394.15 0.07

2006 410.00 84.57 7191.82 497.40 0.06

2007 410.00 84.57 9943.98 687.75 0.04

TOTAL 5908.84 1218.76 45133.07 3121.52 2.40

MEAN 492.40 101.56 3761.09 260.13 0.20

SD 80.09 16.52 2681.26 185.44 0.12

CV 16.27 16.27 71.29 71.29 59.48

TREND 2015 302.96 62.49 12861.91 889.56 -0.23

(Source: Annual Reports of Canara Bank)

59
 CHART -1
CAPITAL AND RESERVES

12000

10000

8000
Rs. in Crores

6000

4000

2000

-M-------m-----4.--E--..
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
—.— Capital --Ce— Reserve

59a
 Table 4.1 shows the details of capital and reserves in Canara Bank for a

period of 12 years. The share capital during 1997 was Rs.484.82 crores and it

declined to Rs.410 crores during 2007. It is to be noted that this is due to the

changes in the policy of the Government. The reserves during 1997 were

Rs.1445.87 crores and they increased to Rs.9943.98 crores in the year 2007. Index

number analysis shows that the increase in reserves is 687.75 per cent and this is

for a period of 12 years. The ratio of capital to reserves is calculated and it has

declined from 0.34 to 0.04. The mean capital is Rs.492.40 crores, standard

deviation is Rs.80.09 crores and the coefficient of variation is 16.27 per cent.

The mean reserve is Rs.3761.09 crores; standard deviation is Rs.2681.26 crores

and coefficient of variation is 71.29 per cent. Trend analysis shows that the

reserves in 2015 will be Rs.12,861.91 crores, other aspects being similar.

It is inferred that there is least change in the paid-up share capital and there

is higher increase in reserves in Canara Bank during the study period. Trend of the

ratio is negative since the change in share capital is least during the study period.

4.2 OWN FUNDS AND TOTAL LIABILITIES

Own funds are the sum of share capital and reserves in the banks. The own

funds are compared with total liabilities to find out the share of own funds to total

funds.

Own Funds to Total Liabilities Ratio = Own funds / Total Liabilities

60
 TABLE - 4.2
OWN FUNDS TO TOTAL LIABILITIES OF CANARA BANK
FROM 1996-2007
(Rs. in crores)

OWN TOTAL
YEAR INDEX INDEX RATIO
FUNDS LIABILITIES
1996 1930.69 100.00 31120.64 100.00 0.06
1997 2048.44 106.10 35657.41 114.58 0.06
1998 2302.90 119.28 43112.35 138.53 0.05
1999 2412.81 124.97 48119.64 154.62 0.05
2000 2595.88 134.45 54402.49 174.81 0.05
2001 2814.45 145.77 66439.05 213.49 0.04
2002 3471.50 179.81 72211.38 232.04 0.05
2003 4148.83 214.89 82054.93 263.67 0.05
2004 5251.65 272.01 99539.40 319.85 0.05
2005 6108.96 316.41 110305.17 354.44 0.06
2006 7601.82 393.74 133769.97 429.84 0.06
2007 10353.98 536.28 165960.82 533.28 0.06
TOTAL 51041.91 2643.71 942693.26 3029.16 0.64
MEAN 4253.49 220.31 78557.77 252.43 0.05
SD 2624.32 135.93 41770.19 134.22 0.01
CV 61.70 61.70 53.17 53.17 11.16
TREND 2015 13164.87 681.87 228777.52 735.13 0.06

(Source: Annual Reports of Canara Bank)

Table 4.2 shows the details of own funds and total liabilities in Canara Bank

for a period of 12 years. The own funds during 1996 were Rs. 1930.69 crores and they

61
increased to Rs. 10353.98 in the year 2007. The total liabilities during 1996 were

Rs. 31120.64 crores and they increased to Rs. 165960.82 crores in the year 2007.

Index analysis show that the increase in own funds was 536.28 percent for a period

of 12 years. Total liabilities also increased during the year 1996 to 2007. The ratio of

own funds and total liabilities is calculated and it declined from 1997 to 1998 and again

declined from 2001 to 2002. But in the year 2003 to 2007 it was increased from0.5 to

0.6 percent. The mean own funds is 4253.49 crores, standard deviation is Rs. 2642.32

crores and the co efficient of variation is 61.70 percent. The mean total liabilities are Rs

78557.77 crores; standard deviation is Rs. 41770.19 crores and co efficient of variation

is 53.17 percent. Trend analysis shows that the own funds in 2015 will be Rs. 13164.87

crores if other aspects are similar.

It is inferred that there is the least change in the total liabilities which is

relatively lesser than change in own funds in Canara Bank during the study period.

There may not be higher changes in the ratio of own funds to total liabilities in

future if the same trend continues.

4.3 OUTSIDE FUNDS TO TOTAL LIABILITIES

The ratio of outside funds to total liabilities is calculated and analyzed.

Outside funds are the borrowing and other deposits of the banks. The details are

shown in table for analysis.

Outside Funds to Total Liabilities = Outside Funds / Total Liabilities

62
 TABLE - 4.3
OUTSIDE FUNDS TO TOTAL LIABILITIES OF CANARA BANK
FROM 1996-2007
(Rs. in crores)

OUTSIDE TOTAL
YEAR INDEX INDEX RATIO
FUNDS LIABILITIES

1996 27812.70 100.00 31120.64 100.00 0.89

1997 31904.24 114.71 35657.41 114.58 0.89
1998 38542.93 138.58 43112.35 138.53 0.89
1999 43341.00 155.83 48119.64 154.62 0.90
2000 49325.52 177.35 54402.49 174.81 0.91
2001 60535.78 217.66 66439.05 213.49 0.91
2002 65623.64 235.95 72211.38 232.04 0.91
2003 72188.64 259.55 82054.93 263.67 0.88
2004 87099.45 313.16 99539.40 319.85 0.88
2005 97022.57 348.84 110305.17 354.44 0.88
2006 117322.51 421.83 133769.97 429.84 0.88
2007 143955.80 517.59 165960.82 533.28 0.87
TOTAL 834674.79 3001.06 942693.26 3029.16 10.69
MEAN 69556.23 250.09 78557.77 252.43 0.89
SD 35930.97 129.19 41770.19 134.22 0.01
CV 51.66 51.66 53.17 53.17 1.64
TREND 2015 199277.33 716.50 228777.52 735.13 0.85

(Source: Annual Reports of Canara Bank)

63
 CHART -2
OUTSIDE FUNDS TO TOTAL LIABILITIES

350000

300000

250000

0 200000

150000
cc

100000

-
50000
=

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year

0— Outside Funds --A—Total Liabilities

63a
 Table 4.3 pinpoints the details of outside funds and total liabilities in

Canara Bank. The outside funds during 1996 were Rs. 27812.70 crores and they

increased to Rs.143955.80 crores during 2007. The total liabilities during 1996

were Rs. 31120.64 crores and they increased to Rs.165960.82 crores in the year

2007. Index number analysis shows that the increase in outside funds is 517.59

percent and this is for a period of 12 years. The ratio of outside funds are total

liabilities is calculated and it has declined from 0.89 to 0.87. The mean outside

funds are Rs.69556.23 crores. Standard deviation is Rs. 35903.97 crores and the

co efficient of variation is 51.66 percent.

Trend analysis shows that the outside funds in 2015 will be Rs.199277.33

crores, other aspects being similar. The ratio is highly fluctuating during the study

period.

It is inferred that there is least consistency in the total liabilities and there is

higher consistency in outside funds in Canara Bank during the study period. It is

also inferred that the ratio of outside funds to total liabilities may come down

significantly in the year 2015.

4.4 CASH TO TOTAL ASSETS

Cash balance in Canara Bank for a period of 12 years is compared with the

total assets. The ratio shows the portion of cash in the total assets.

Cash to Total Assets = Cash / Total Assets

64
 TABLE - 4.4
CASH TO TOTAL ASSETS OF CANARA BANK FROM 1996-2007
(Rs. in crores)

TOTAL
YEAR CASH INDEX INDEX RATIO
ASSETS

1996 5467.83 100.00 31120.64 100.00 0.18

1997 6923.87 126.63 35657.41 114.58 0.19

1998 7720.37 141.20 43112.35 138.53 0.18

1999 8179.59 149.59 48119.64 154.62 0.17

2000 7545.25 137.99 54402.49 174.81 0.14

2001 13171.23 240.89 66439.05 213.49 0.20

2002 12497.70 228.57 72211.38 232.04 0.17

2003 7697.16 140.77 82054.93 263.67 0.09

2004 12027.02 219.96 99539.39 319.85 0.12

2005 8668.73 158.54 110305.17 354.44 0.08

2006 11426.10 208.97 133769.97 429.84 0.09

2007 14705.22 268.94 165960.82 533.28 0.09

TOTAL 116030.07 2122.05 942693.25 3029.16 1.70

MEAN 9669.17 176.84 78557.77 252.43 0.14

SD 2936.89 53.71 41770.19 134.22 0.05

CV 30.37 30.37 53.17 53.17 32.35

TREND 2015 17589.29 321.69 228777.51 735.13 0.00

(Source: Annual Reports of Canara Bank)

65
 Table 4.4 provides the details of cash to total assets in Canara Bank for a

period of 12 years. The cash during 1996 was Rs.5467.83 crores and it increased to

Rs. 8179.59 crores during 1996 to 1999 and it declined from Rs.13171.23 crores to

7697.16 crores during 2001 to 2003. The total assets during 1996 were Rs. 31120.64

crores and they increased to Rs.165960.82 crores in the year 2007. Index number analysis

shows that the increase in total assets is 3029.15 percent for a period of 12 years.

The ratio of cash to total assets is calculated and is has declined from 0.18

to 0.09. The mean cash is Rs.9669.17 crores, standard deviation is Rs.2936.89

crores and the co efficient of variation is 30.37 percent. The mean total assets are

78557.77 crores, Standard deviation 41770.19 crores and co-efficient of variation

is 53.17. Trend analysis shows that the cash in 2015 will be Rs.17589.12 crores.

Cash to total assets ratio is almost zero due to the reason that there are very

high fluctuations in this ratio. It is inferred that there is least change in the cash

and there is higher increase in total assets in Canara Bank during the study period.

4.5 INVESTMENTS AND ADVANCES TO TOTAL ASSETS

Investments and advances are the major portion of assets in the bank

balance sheet. The ratio of investments and advances to total assets is calculated

and shown in table 4.5 for analysis.

Investments and Advances to Total Assets = Investment and advances /

Total Assets

66
 TABLE - 4.5
INVESTMENTS AND ADVANCES TO TOTAL ASSETS OF
CANARA BANK FROM 1996-2007
Rs. in crores
TOTAL
YEAR INV&ADV INDEX INDEX RATIO
ASSETS

1996 23802.48 100.00 31120.64 100.00 0.76

1997 26693.25 112.14 35657.41 114.58 0.75

1998 32855.67 138.03 43112.35 138.53 0.76

1999 36886.61 154.97 48119.64 154.62 0.77

2000 43569.52 183.05 54402.49 174.81 0.80

2001 49277.23 207.03 66439.05 213.49 0.74

2002 56346.81 236.73 72211.38 232.04 0.78

2003 70929.84 297.99 82054.93 263.67 0.86

2004 83431.60 350.52 99539.39 319.85 0.84

2005 98475.28 413.72 110305.17 354.44 0.89

2006 116399.88 489.02 133769.97 429.84 0.87

2007 143731.21 603.85 165960.82 533.28 0.87

TOTAL 782399.38 3287.05 942693.25 3029.16 9.70

MEAN 65199.95 273.92 78557.77 252.43 0.81

SD 38263.64 160.75 41770.19 134.22 0.05

CV 58.69 58.69 53.17 53.17 6.77

TREND 2015 202455.70 850.57 228777.51 735.13 0.98

(Source: Annual Reports of Canara Bank)

67
 CHART - 3
INVESTMENTS AND ADVANCES TO TOTAL ASSETS

180000 -

160000 -

140000 -

120000 -
Rs. in Crores

100000 -

80000 -

60000 -

40000 -

20000 -

o
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year

—E— Investment & Advance —ó—Total Assets

67a
 Analysis of table 4.5 shows the details of investment and advances to total

assets. The investment and advance during 1996 were Rs.23802.48 crores and they

increased to Rs.143731.24 crores during 2007. The total assets during 1996 were

Rs.31120.64 crores and they increased to Rs.165960.82 crores in the year 2007. Index

number analysis shows that the increase in investment and advances is 603.85 percent

and this is for a period of 12 years. The ratio of investment and advances to total assets

is calculated and is has increased from 0.76 and 0.87. The mean investment and

advance is Rs.65199.95 crores, standard deviation is Rs.38263.64 crores and the co-

efficient of variation is 58.69 per cent. The mean total assets are 78557.77 crores,

standard deviation is Rs.41770.19 crores and co-efficient of variation is 53.17 percent.

Trend analysis shows that the investment and advances in 2015 will be

Rs.202455.70 crores. It is inferred that the ratio of investments to total assets will

be 0.98 during 2015. This may be due to the fact that majority of total assets are

the investments and advances in the banks.

It is inferred that there is higher increase in the investment and advances and

there is lesser rate of increase in total assets in Canara Bank during the study period.

4.6 FIXED ASSETS AND OTHER ASSETS TO TOTAL ASSETS

Fixed assets and other assets are the part of total assets in the banks.

The fixed assets include buildings, furniture, land and vehicles. The ratio of fixed

assets to total assets is calculated and shown in table 4.6 for analysis.

Fixed Assets and Other Assets to Total Assets = Fixed Assets and Other Assets / Total Assets

68
 TABLE - 4.6
FIXED ASSETS AND OTHER ASSETS TO TOTAL ASSETS OF
CANARA BANK FROM 1996-2007
Rs. in crores
TOTAL
YEAR FA&OA INDEX INDEX RATIO
ASSETS

1996 1850.33 100.00 31120.64 100.00 0.06

1997 2040.29 110.27 35657.41 114.58 0.06

1998 2536.31 137.07 43112.35 138.53 0.06

1999 3053.45 165.02 48119.64 154.62 0.06

2000 3287.72 177.68 54402.49 174.81 0.06

2001 3990.58 215.67 66439.05 213.49 0.06

2002 3366.87 181.96 72211.38 232.04 0.05

2003 3427.94 185.26 82054.93 263.67 0.04

2004 4080.77 220.54 99539.39 319.85 0.04

2005 3161.16 170.84 110305.17 354.44 0.03

2006 5943.99 321.24 133769.97 429.84 0.04

2007 7524.39 406.65 165960.82 533.28 0.05

TOTAL 44263.80 2392.21 942693.25 3029.16 0.61

MEAN 3688.65 199.35 78557.77 252.43 0.05

SD 1609.14 86.96 41770.19 134.22 0.01

CV 43.62 43.62 53.17 53.17 21.27

TREND 2015 8732.53 471.94 228777.51 735.13 0.02

(Source: Annual Reports of Canara Bank)

69
 Table 4.6 highlights the details of fixed assets and other assets and total

assets in Canara Bank for a period of study. The fixed assets and other assets

during 1996 were Rs.1850.33 crores and they increased to Rs.7524.99 crores in

year 2007. But in the year 2005, there was slight change of Rs.3161.16 crores of

fixed assets and other assets. The total assets during 1997 were Rs. 356571.41

crores and they increased to Rs.165960.82 crores in the year 2007. Index number

analysis shows that the increase in fixed assets and other assets is 406.65 percent

and this is for the period of study. The ratio of fixed assets and other assets to

total assets is calculated and it has declined from 0.06 to 0.05. The mean fixed

assets and other assets is Rs.3688.85 crores, standard deviation are Rs.1609.14

crores and the co-efficient of variation is 43.62 percent.

Trend analysis shows that the fixed assets and other assets in 2015 will be

8732.53 crores if other aspects are equal. It is inferred that there is higher increase

to the total assets in Canara Bank during the study period.

4.7 OUTSIDE FUNDS TO INVESTMENT AND ADVANCES

Outside funds are the sum of debenture and current liabilities in the banks.

The outside funds are compared with investment and advances to find out the of

the outside funds to investment and advances.

Outside funds to investment = Outside funds / Investment and advances

70
 TABLE - 4.7
OUTSIDE FUNDS TO INVESTMENT AND ADVANCES OF
CANARA BANK FROM 1996-2007
Rs. in crores
OUTSIDE
YEAR INDEX INV&ADV INDEX RATIO
FUNDS

1996 27812.70 100.00 23802.48 100.00 1.17

1997 31904.24 114.71 26693.25 112.14 1.20

1998 38542.93 138.58 32855.67 138.03 1.17

1999 43341.00 155.83 36886.61 154.97 1.17

2000 49325.52 177.35 43569.52 183.05 1.13

2001 60535.78 217.66 49277.23 207.03 1.23

2002 65623.64 235.95 56346.81 236.73 1.16

2003 72188.64 259.55 70929.84 297.99 1.02

2004 87099.45 313.16 83431.60 350.52 1.04

2005 97022.57 348.84 98475.28 413.72 0.99

2006 117322.51 421.83 116399.88 489.02 1.01

2007 143955.80 517.59 143731.21 603.85 1.00

TOTAL 834674.79 3001.06 782399.38 3287.05 13.29

MEAN 69556.23 250.09 65199.95 273.92 1.11

SD 35930.97 129.19 38263.64 160.75 0.09

CV 51.66 51.66 58.69 58.69 8.03

TREND 2015 199277.33 716.50 202455.70 850.57 0.83

(Source: Annual Reports of Canara Bank)

71
 Table 4.7 quantifies the details of outside funds and investment and

advances in Canara Bank during the period of study. The outside funds during

1996 were Rs.27812.70 crores and they increased to Rs.143955.80 crores during

2007. The investment and advance during 2000 were Rs.43569.52 crores and they

increased to Rs.143731.21 crores in the year 2007. Index number analysis shows

that the increase in outside funds is 517.59 percent and this is for the period of 12

years. The ratio of outside funds and investment and advances is calculated and it

has declined from 1.17 to 1.00. The mean outside funds are Rs.69556.23 crores,

standard deviation is Rs. 35930.97 crores and co-efficient of variation is 51.66 per

cent. The mean of investment and advances is Rs.65199.95 crores, standard

deviation is Rs.35930.97 crores and the co-efficient of variation is 58.69 percent.

Trend analysis shows that the outside funds and investment and advances in 2015

will be Rs. 199277.33 crores and Rs.202455.70 crores respectively.

It is observed that the increase in investment and advances is not

proportionately backed by the increase in outside funds. It denotes that the bank

has strengthened its investments and advances financed by owned funds.

4.8 TOTAL DEPOSITS TO DEMAND DEPOSITS

Deposits may be savings deposits, fixed deposits, demand deposits and

other types of deposits. The ratio of total deposits to demand deposits is

calculated and shown in table 4.8 for analysis.

Total Deposits to demand deposits = Total deposit / Demand deposit

72
 TABLE - 4.8
TOTAL DEPOSITS TO DEMAND DEPOSITS OF CANARA BANK
FROM 1996-2007
(Rs. in crores)

DEMAND
YEAR [Link] INDEX INDEX RATIO
DEP

1996 26243.24 100.00 4774.99 100.00 5.50

1997 31445.01 119.82 5722.00 119.83 5.50

1998 38045.02 144.97 6282.56 131.57 6.06

1999 41958.61 159.88 5897.29 123.50 7.11

2000 48001.36 182.91 7104.42 148.78 6.76

2001 59069.53 225.08 7847.34 164.34 7.53

2002 64030.01 243.99 7148.23 149.70 8.96

2003 72094.82 274.72 7837.36 164.13 9.20

2004 86344.56 329.02 8654.16 181.24 9.98

2005 96913.40 369.29 8957.12 187.58 10.82

2006 116803.22 445.08 10261.86 214.91 11.38

2007 124381.43 473.96 12445.24 260.63 9.99

TOTAL 805330.21 3068.72 92932.56 1946.24 98.78

MEAN 67110.85 255.73 7744.38 162.19 8.23

SD 32878.86 125.29 2131.46 44.64 2.09

CV 48.99 48.99 27.52 27.52 25.34

TREND 2015 187902.49 716.00 15260.84 319.60 15.73

(Source: Annual Reports of Canara Bank)

73
 Table 4.8 reveals the total deposits and demand deposits ratio of Canara

Bank during the study period. It is observed from the table that the deposits

increased from Rs.26243.24 cores to Rs.124381.43 crores during the year 1996 to

2007, while the demand deposits increased from Rs.4774.99 crores to Rs.12445.24

crores during the same period. The growth index of total deposits reveales that the

total deposits increased to 473.96 percent during the study period whereas the

growth index of demand deposits was just 260.63 percent. It reveals that the

growth of the total deposits was much higher than that of demand deposits of the

Canara Bank during the study period was found to be Rs.67110.85 crores and that

demand deposits stood at Rs.7744.38 crores. The co-efficient of variation of total

deposits and demand deposits was 48.99 and 27.52 respectively. It devotes that the

growth of total deposits was rapid when compared with the demand deposits.

The growth index analysis showed that the total deposits have grown by

473.96 percent during the study period while the demand deposits could registered

260.63 per cent growth only. An attempt has been made to compare the total

deposits and demand deposits by computing ratio of the attributes. It is found that

the ratio of the deposits to demand deposits increased from 5.50 times to 9.99

times during the study period. The ratio was at its maximum of 11.38 times

during the year 2005-06. The average ratio was ascertained as 8.23 times with a

standard deviation of 2.09. The co-efficient of variation of ratio of total deposits

to demand deposits was computed to be 25.34 percent. It denotes that the ratio

74
was consistent during the study period. It is also predicted from the trend

analysis that the total deposits and demand deposits during the year would be

Rs.187902.49 crores and Rs.15260.84 crores respectively.

4.9 DEMAND DEPOSITS TO SAVINGS DEPOSIT

The ratio of demand deposits to savings deposit in the study bank was

examined for a period of 12 years and the data are shown in table 4.9 for analysis.

Demand deposits to savings deposits = Demand deposits / Savings deposits.

75
 TABLE - 4.9
DEMAND DEPOSITS TO SAVINGS DEPOSITS OF CANARA BANK
FROM 1996-2007
(Rs. in crores)

YEAR DEMAND DEP INDEX SAVINGS DEP INDEX RATIO

1996 4774.99 100.00 5789.91 100.00 0.82

1997 5722.00 119.83 6704.59 115.80 0.85

1998 6282.56 131.57 8076.61 139.49 0.78

1999 5897.29 123.50 9542.93 164.82 0.62

2000 7104.42 148.78 11129.34 192.22 0.64

2001 7847.34 164.34 12785.87 220.83 0.61

2002 7148.23 149.70 14511.46 250.63 0.49

2003 7837.36 164.13 17259.83 298.10 0.45

2004 8654.16 181.24 20511.83 354.27 0.42

2005 8957.12 187.58 23866.74 412.21 0.38

2006 10261.86 214.91 28627.13 494.43 0.36

2007 12445.24 260.63 32435.30 560.20 0.38

TOTAL 92932.56 1946.24 191241.54 3303.01 6.81

MEAN 7744.38 162.19 15936.79 275.25 0.57

SD 2131.46 44.64 8763.24 151.35 0.18

CV 27.52 27.52 54.99 54.99 31.69

TREND 2015 15260.84 319.60 47840.91 826.28 -0.08

(Source: Annual Reports of Canara Bank)

76
 Table 4.9 explores the details of demand deposits and saving deposits in

Canara Bank for a period of 12 years. The demand deposits during 1996 were

Rs.4774.99 crores and they increased to Rs.12445.24 crores during 2007. The

saving deposits during 1996 were Rs.5789.91 crores and they increased to

Rs.32435.30 crores in the year 2007. Index number analysis reveals the increase

in saving deposits of 560.20 percent during the study period. The ratio of demand

deposits and saving deposits is calculated and it has declined from 0.82 to 0.38.

The mean demand deposits were Rs.7744.38 crores, standard deviation is

Rs.2131.46 crores and co-efficient of variation is 27.52 percent. The mean saving

deposits are Rs.15936.79 crores, standard deviation is Rs.151.35 crores and co-

efficient of variation is 54.99 percent.

Trend analysis shows that the saving deposits in 2015 will be Rs.47840.91

crores. It is also found that the ratio may be negative during 2015. This may be

due to the higher increase in savings deposit than that of demand deposits.

It is inferred that there is less change in the demand deposits and there is

higher increase in demand deposit.

4.10 TERM DEPOSITS TO BORROWINGS

Term deposits are deposits that are held by the bank for a fixed period. The

ratio of term deposits to borrowings is studied and shown in table 4.10 for analysis.

Term deposits to borrowings = Term deposits / Borrowings.

77
 TABLE - 4.10
TERM DEPOSIT TO BORROWINGS OF CANARA BANK FROM 1996-2007
(Rs. in crores)

YEAR TERM DEP INDEX BORROWINGS INDEX RATIO

1996 15678.34 100.00 1569.47 100.00 9.99

1997 19018.42 121.30 459.23 29.26 41.41

1998 23685.85 151.07 497.91 31.72 47.57

1999 26518.40 169.14 1382.39 88.08 19.18

2000 29767.61 189.86 1324.16 84.37 22.48

2001 38436.32 245.16 1466.25 93.42 26.21

2002 42370.32 270.25 1593.63 101.54 26.59

2003 46997.63 299.76 93.82 5.98 500.93

2004 57178.57 364.70 754.89 48.10 75.74

2005 64089.54 408.78 114.16 7.27 561.40

2006 77914.23 496.95 545.83 30.65 30.59

2007 79500.89 507.07 1574.35 100.31 50.50

TOTAL 521156.11 3324.05 10856.08 691.71 4399.61

MEAN 43429.68 277.00 904.67 57.64 366.63

SD 22101.98 140.97 641.43 40.87 856.71

CV 50.89 50.89 70.90 70.90 233.67

TREND 2015 124800.74 796.01 279.97 17.84 1902.92

(Source: Annual Reports of Canara Bank)

78
 Table 4.10 shows details of term deposits to borrowings in Canara Bank

during the study period. It is observed from the table that the deposits increased

from Rs. 15678.34 crores during the year 1996 to Rs. 79500.89 crores during the

year 2007. Borrowings increased from Rs. 5789.91 crores to Rs. 32435.30 crores

during the same period. Index number analysis shows that the term deposits

increased to 507.07 percent during the study period whereas the growth index of

borrowings was just 100.31 percent. The ratio of term deposits to borrowings is

calculated and it has increased 9.99 to 50.50. The mean term deposits are

Rs. 43429.68 crores, standard deviation Rs 22101.98 crores and the co-efficient of

variation is 50.89 percent. The mean borrowings are Rs. 904.67 crores, standard

deviation is Rs. 641.43 crores and co-efficient of variation is 70.90 percent. Trend

analysis shows that the borrowing in 2015 will be Rs. 279.97 crores if other aspect

remain similar.

It is observed that there was a constant increase in the term deposits,

however, the borrowings witnessed wide fluctuations during the period of study. As a

result the ratio of term deposit to borrowings has also undergone a fluctuating trend. It

reveals that the bank could reduce the borrowings by mobilizing more term deposits.

4.11 TOTAL DEPOSITS TO RESERVES:

Total deposits are the sum total of all deposits in the bank. It is compared with

the reserves for the purpose of understanding the ratio of reserve to total deposits.

Total Deposits to Reserves = Total deposits / Reserves

79
 TABLE - 4.11
TOTAL DEPOSITS TO RESERVES OF CANARA BANK
FROM 1996-2007
(Rs. in crores)

YEAR TOT. DEP INDEX RESERVES INDEX RATIO

1996 26243.24 100.00 1445.87 100.00 18.15

1997 31445.01 119.82 1563.62 108.14 20.11

1998 38045.02 144.97 1725.18 119.32 22.05

1999 41958.61 159.88 1834.94 126.91 22.87

2000 48001.36 182.91 2018.01 139.57 23.79

2001 59069.53 225.08 2236.58 154.69 26.41

2002 64030.01 243.99 2893.63 200.13 22.13

2003 72094.82 274.72 3738.83 258.59 19.28

2004 86344.56 329.02 4841.65 334.86 17.83

2005 96913.40 369.29 5698.95 394.15 17.01

2006 116803.22 445.08 6722.23 464.93 17.38

2007 124381.43 473.96 9943.98 687.75 12.51

TOTAL 805330.21 3068.72 44663.47 3089.04 239.51

MEAN 67110.85 255.73 3721.96 257.42 19.96

SD 32878.86 125.29 2629.56 181.87 3.73

CV 48.99 48.99 70.65 70.65 18.69

TREND 2015 187902.49 716.00 12623.28 873.06 12.17

(Source: Annual Reports of Canara Bank)

80
 Table 4.11 shows the details of total deposits and reserve in Canara Bank

for a period of study. The total deposits during 1996 were Rs. 26243.24 crores and

they increased to Rs. 124381.43 crores during 2007. The reserves during 1996

were Rs. 1445.87 crores and they increased to Rs. 9943.98 crores in the year 2007.

Index number analysis shows that the increase in reserve is 687.75 percent during

the study period. The ratio of total deposits to reserve is calculated and it has

declined from 18.15 to 12.51. The mean total deposits are Rs.67110.85 crores,

standard deviation is Rs. 32878.86 crores and the co-efficient of variation is 48.99

percent. The mean reserves are Rs. 3721.96 crores, standard deviation is Rs

2629.56 crores and co-efficient of variation is 70.65 percent. Trend analysis shows

that the reserves in 2015 will be Rs.12623.28 crores.

From the analysis, it could be realized that the total deposits were more

consistent than the reserves. It denotes that the bank has set aside more reserves

from year to year. The trend analysis projects that the ratio of total deposits to

reserves could be reduced to 12.17 times in the year 2015.

4.12 CASH CREDIT TO TERM LOAN

Cash credit is a type of lending extended by the banker to customers. Term

loan is a loan given by banks to customers for a specific period. These two types

of lending are compared in the table below.

Cash Credit to Term Loan Ratio = Cash Credit / Term loan

81
 TABLE - 4.12
CASH CREDIT TO TERM LOAN OF CANARA BANK FROM 1996-2007

(Rs. in crores)

CASH TERM
YEAR INDEX INDEX RATIO
CREDIT LOAN

1996 8053.33 100.00 3345.75 100.00 2.41

1997 8732.29 108.43 3740.01 111.78 2.33
1998 10901.23 135.36 4443.15 132.80 2.45
1999 11414.66 141.74 5776.88 172.66 1.98
2000 12949.05 160.79 7885.31 235.68 1.64
2001 16686.16 207.20 8730.04 260.93 1.91

2002 19849.43 246.47 10289.99 307.55 1.93

2003 23546.44 292.38 13431.25 401.44 1.75
2004 24306.46 301.82 19243.38 575.16 1.26
2005 27795.84 345.15 27971.12 836.02 0.99
2006 38515.19 478.25 35984.47 1075.53 1.07
2007 47029.89 583.98 45760.65 1367.73 1.03

TOTAL 249779.97 3101.58 186602.00 5577.29 20.76

MEAN 20815.00 258.46 15550.17 464.77 1.73
SD 12226.11 151.81 13957.36 417.17 0.54
CV 58.74 58.74 89.76 89.76 31.06
TREND
63980.30 794.46 63082.92 1885.46 -0.16
2015

(Source: Annual Reports of Canara Bank)

82
 Table 4.12 shows the details of cash credit and term loan in Canara Bank

for a period of 12 years. The cash credit during 1996 stood at Rs.8053.33 crores

and it increased to Rs. 47029.89 crores during 2007. The term loans during 1996

were Rs. 3345.75 crores and they increased to Rs. 45760.65 crores in during 2007.

Index number analysis shows that the increase in term loan is 1367.73 percent and

this is during the period of study period. The ratio of cash credit to term loan

calculated and it has declined from 2.41 to 1.03. The mean cash credit is

Rs. 20815.00 crores, standard deviation is Rs. 12226.11 crores and the co-efficient

of variation is 58.74 percent. The mean term loan is 15550.36 crores, standard

deviation is Rs. 13957.36 crores and co-efficient of variation is 89.76 percent.

Trend analysis shows that the term loan in 2015 will be Rs.63082.92 crores. It is

inferred that there is increase in the cash credit and there is higher increase in term

loans in Canara Bank during the study period.

4.13 TOTAL ADVANCES TO SECURED ADVANCES

Total advances are the sum of all types of loans and advances provided by

the bank. Secured advance are the advances given on the basis of security.

The ratio secured loan to total advance is calculated and shown in table 4.14.

Total Advances to Secured Advances Ratio = Total Advances / Secured Advances

83
 TABLE - 4.13

TOTAL ADVANCES TO SECURED ADVANCES OF CANARA BANK

FROM 1996-2007

(Rs. in crores)

TOTAL
YEAR INDEX SECURED INDEX RATIO
ADV
1996 13095.84 100.00 12374.46 100.00 1.06
1997 14412.83 110.06 13419.61 108.45 1.07
1998 16824.68 128.47 15337.96 123.95 1.10
1999 19530.11 149.13 17425.88 140.82 1.12
2000 23546.73 179.80 20420.21 165.02 1.15
2001 27831.77 212.52 23344.43 188.65 1.19
2002 33126.71 252.96 28137.80 227.39 1.18
2003 40471.60 309.04 34756.42 280.87 1.16
2004 47638.62 363.77 41019.84 331.49 1.16
2005 60421.14 461.38 49091.28 396.71 1.23
2006 79245.69 605.12 58792.58 475.11 1.35
2007 98505.69 752.19 77330.59 624.92 1.27
TOTAL 474651.41 3624.44 391451.06 3163.38 14.05
MEAN 39554.28 302.04 32620.92 263.61 1.17
SD 27364.57 208.96 20435.03 165.14 0.08
CV 69.18 69.18 62.64 62.64 7.12
TREND
135130.10 1031.86 104601.37 845.30 1.14
2015

(Source: Annual Reports of Canara Bank)

84
 Table 4.13 shows the details of total advances and secured advances is

Canara Bank for a period 12 years. The total advances during 1998 were

Rs. 16824.68 crores and they increased to Rs. 98505.69 crores during 2007. The

secured advances during 1996 is Rs. 12374.46 crores and it has increased in

secured loan is Rs. 77330.59 crores in the year 2007. Index number analysis shows

that the increase in secured advances is Rs.624.92 percent during the study period.

The ratio of total advances to secured loan is calculated and it has increased from

1.06 to 1.27. The mean total advances are Rs. 39554.28 crores, standard deviation

is Rs.27364.57 crores and the co-efficient of variation is 69.18 percent. The mean

secured advances are Rs. 32620.92 crores, standard deviation is Rs. 20435.03

crores and co-efficient of variation is 62.64 percent.

Trend analysis shows that the secured advances in 2015 will be

Rs. 104601.37 crores. It is inferred that there is higher increase in the total

advances and there is increase in secured advances in Canara Bank during the

study period.

4.14 TOTAL ADVANCES TO UNSECURED ADVANCES

Banks have to provide advances based on security and some times the

banks may have to give loans without any security. The ratio of total advances to

unsecured advances is calculated and shown in table 4.14 for analysis.

Total Advances to Unsecured Advances Ratio = Total Advances / Unsecured Advances

85
 TABLE - 4.14
TOTAL ADVANCES TO UNSECURED ADVANCES OF CANARA BANK
FROM 1996-2007
Rs. in crores
TOTAL UNSECURE
YEAR INDEX INDEX RATIO
ADVANCE ADVANCES

1996 13095.84 100.00 721.37 100.00 18.15

1997 14412.83 110.06 993.22 137.68 14.51

1998 16824.68 128.47 1486.73 206.10 11.32

1999 19530.11 149.13 2104.23 291.70 9.28

2000 23546.73 179.80 3126.51 433.41 7.53

2001 27831.77 212.52 4487.34 622.05 6.20

2002 33126.71 252.96 4988.91 691.58 6.64

2003 40471.60 309.04 5715.18 792.26 7.08

2004 47638.62 363.77 6618.80 917.53 7.20

2005 60421.14 461.38 11330.12 1570.63 5.33

2006 79245.69 605.12 20453.11 2835.30 3.87

2007 98505.69 752.19 21175.10 2935.38 4.65

TOTAL 474651.41 3624.44 83200.62 11533.62 101.77

MEAN 39554.28 302.04 6933.39 961.13 8.48

SD 27364.57 208.96 7120.02 987.01 4.24

CV 69.18 69.18 102.69 102.69 49.96

TREND
135130.10 1031.86 30528.84 4232.04 -5.56
2015

(Source: Annual Reports of Canara Bank)

86
 Table 4.14 gives the details of total advances and unsecured advances in Canara

Bank during the period of study. The total advances during 1996 were Rs. 13095.84

crores and they increased to Rs. 98505.69 crores during 2007. The unsecured advances

1998 were Rs. 1486.73 crores and they increased to Rs. 21175.10 crores in the year

2007. Index number analysis shows that the increase in unsecured advances is 2935.38

percent for the study period. The ratio of total advances to unsecured advances is

calculated and it has declined from 18.15 to 4.65. The mean unsecured advances are Rs.

6933.39 crores, standard deviation is Rs. 7120.02 crores and co-efficient of variation is

to 102.69 percent. Trend analysis shows that the unsecured advances in 2015 will be

Rs. 4232.04 crores, and the exits of -5.56 in unsecured advances.

The analysis of ratio of total advances to unsecured advances reveals that

the bank has lent more unsecured advances during the second half of the study

period. It is also predicted that it may go up further after the end of the study

period. It discloses that the bank has liberalized the policies in relation to

obtaining securities for advances.

4.15 TOTAL ADVANCES TO PRIORITY SECTOR ADVANCES

A few common priority sector benfineries normally identified by the

Government include SSI, Agriculture and weaker sections. The ratio of total advances

and priority sector advances is calculated and shown in table 4.15 for analysis.

Total Advances to Priority Sector Advances Ratio = Total Advances /

Priority Sector Advances

87
 TABLE - 4.15

TOTAL ADVANCES TO PRIORITY SECTOR ADVANCES OF

CANARA BANK FROM 1996-2007
(Rs. in crores)

PRIORITY
YEAR TOT-ADV INDEX INDEX RATIO
SEC ADV

1996 13095.84 100.00 4753.27 100.00 2.76

1997 14412.83 110.06 5266.88 110.81 2.74

1998 16824.68 128.47 6005.89 126.35 2.80

1999 19530.11 149.13 6270.67 131.92 3.11

2000 23546.73 179.80 6807.23 143.21 3.46

2001 27831.77 212.52 8069.37 169.76 3.45

2002 33126.71 252.96 9287.60 195.39 3.57

2003 40471.60 309.04 12170.17 256.04 3.33

2004 47638.62 363.77 16151.67 339.80 2.95

2005 60421.40 461.38 20388.66 428.94 2.96

2006 79425.70 606.50 29926.86 629.61 2.65

2007 98505.68 752.19 36680.33 771.69 2.69

TOTAL 474831.67 3625.82 161778.58 3403.52 36.46

MEAN 39569.31 302.15 13481.55 283.63 3.04

SD 27388.36 209.14 10480.12 220.48 0.33

CV 69.22 69.22 77.74 77.74 10.99

TREND
135221.68 1032.55 48436.59 1019.02 2.97
2015

(Source: Annual Reports of Canara Bank)

88
 Table 4.15 exhibits the details of total advances and priority sector

advances in Canara Bank during the study period. The total advances during 1996

were RS. 13095.84 crores and they increased to Rs. 98505.68 crores during 2007.

The priority sector advances 1996 were Rs.4753.27 crores and they increased to

Rs. 36680.33 crores during 2007. Index number analysis shows that the increase in

priority sector advances is 771.69 percent during the study period. The ratio of

total advances to priority sector advances is calculated and it has declined from

2.76 to 2.69. The mean priority sector advances are Rs. 283.63 crores, standard

deviation is Rs. 220.48 crores and co-efficient of variation is to 77.74 percent. Trend

analysis shows that the priority sector advances in 2015 will be Rs. 1019.02 crores.

It is observed that there was no huge variation in the ratio of total advances

to priority sector advances. The bank has maintained the ratio around 3 times

during the entire study period.

4.16 PUBLIC SECTOR ADVANCES TO BANK ADVANCES

Advances to central and State Governments and other undertakings

including Government companies and corporations which are, according to the

status, to be treated as public sector companies are to be included in the category

'public sector'. The ratio of total public sector advances to bank advances is

calculated and shown in table 4.16 for anlaysis.

Public Secured Advances to Bank Advances Ratio = Public Secured Advances /

Bank Advances

89
 TABLE - 4.16
PUBLIC SECTOR ADVANCES TO BANK ADVANCES OF
CANARA BANK FROM 1996-2007
(Rs. in crores)

PUB-SEC
YEAR INDEX BANK ADV INDEX RATIO
ADV

1996 1407.11 100.00 84.41 100.00 16.67

1997 1344.17 95.53 24.65 29.20 54.53

1998 1721.37 122.33 123.37 146.15 13.95

1999 2910.54 206.85 95.65 113.32 30.43

2000 _ 4701.95 334.16 94.64 112.12 49.68

2001 6204.84 440.96 97.53 115.54 63.62

2002 7374.76 524.11 138.21 163.73 53.36

2003 7591.87 539.54 449.81 532.87 16.88

2004 7774.05 552.48 510.85 605.18 15.22

2005 9011.49 640.43 110.33 130.70 81.68

2006 10083.58 716.62 25.00 29.62 403.34

2007 12184.73 865.94 4.33 5.13 2814.03

TOTAL 72310.48 5138.93 1758.79 2083.55 3613.38

MEAN 6025.87 428.24 146.57 173.63 301.12

SD 3616.99 257.05 161.81 191.69 798.54

CV 60.02 60.02 110.40 110.40 265.19

TREND
19355.78 1375.57 251.03 297.38 1915.43
2015

(Source: Annual Reports of Canara Bank)

90
 Table 4.16 highlights the details of public sector advances and bank advances in

Canara Bank during the study period. The public secured advances during 1996 Rs.

1407.11 crores and they increased to Rs. 12184.73 crores during 2007. The Bank

advances in 1998 were Rs. 123.37 crores and they declined to Rs. 4.33 crores in the

year 2007. Index number analysis shows that the decrease in bank advances is

5.13 percent and this is for a period of 10 years. The ratio of public sector advances to

bank advances is calculated and it has increased from 16.67 to 2814.03. The mean

public sector advances are Rs. 6025.87 crores, standard deviation is Rs. 3616.99 crores

and co-efficient of variation is 60.02 per cent. The mean bank advances are Rs. 146.57

crores, standard deviation is Rs. 161.81 crores and co-efficient of variation is 110.40

percent. Trend analysis shows that the public sector advances in 2015 will be

Rs. 19355.78 crores and bank advances in 2015 will be Rs. 251.03 crores.

From the analysis, it is understood that public sector advances witnessed a

constant increase throughout the period of study except in the year 1997 when

there was a slight decrease. On the other hand, the bank advances were subject to

wide variations during the period of study.

4.17 TOTAL ADVANCES TO PUBLIC SECTOR ADVANCES:

Total advances are the sum of all types of loans and public secured

advances provided by the bank. The ratio of public secured advances to total

advances is calculated and shown in table 4.17 for analysis.

Total Advances to Public Secured Advances Ratio = Total Advances /

Public Secured Advances

91
 TABLE - 4.17
TOTAL ADVANCES TO PUBLIC SEC ADVANCES OF
CANARA BANK FROM 1996-2007
(Rs. in crores)

PUB-SEC
YEAR TOT-ADV INDEX INDEX RATIO
ADV

1996 13095.84 100.00 1407.11 100.00 9.31

1997 14412.83 110.06 1344.17 95.53 10.72

1998 16824.68 128.47 1721.37 122.33 9.77

1999 19530.11 149.13 2910.54 206.85 6.71

2000 23546.73 179.80 4701.95 334.16 5.01

2001 27831.77 212.52 6204.84 440.96 4.49

2002 33126.71 252.96 7374.76 524.11 4.49

2003 40471.60 309.04 7591.87 539.54 5.33

2004 47638.62 363.77 7774.05 552.48 6.13

2005 60421.40 461.38 9011.49 640.43 6.70

2006 79425.70 606.50 10083.58 716.62 7.88

2007 98505.68 752.19 12184.73 865.94 8.08

TOTAL 474831.67 3625.82 72310.48 5138.93 84.62

MEAN 39569.31 302.15 6025.87 428.24 7.05

SD 27388.36 209.14 3616.99 257.05 2.11

CV 69.22 69.22 60.02 60.02 29.95

TREND
135221.68 1032.55 19355.78 1375.57 4.10
2015

(Source: Annual Reports of Canara Bank)

92
 Table 4.17 shows the details of total advances and public sector advances in

Canara Bank during the study period. The total advances during 1996 were

Rs. 13095.84 crores and they increased to Rs. 98505.68 crores during 2007.

The public sector advances 1996 were Rs.1407.11 crores and they increased to

Rs. 12184.73 crores in the year 2007. Index number analysis shows that the

increase in public sector advances are 865.94 percent, and this is for a period of

12 years. The ratio of total advances to public sector advances are calculated and it

has declined from 9.31 to 8.08. The mean total advances is Rs.39569.31 crores,

standard deviation is Rs.27388.36 crores and co-efficient of variation is to 69.22

percent. The mean public sector advances are Rs. 6025.87 crores, standard

deviation is Rs. 3616.99 crores and co-efficient of variation is 60.02 per cent.

Trend analysis shows that the public sector advances in 2015 will be

Rs. 19355.78 crores and Total advances in 2015 will be Rs. 135221.68 crores.

It is evident from the analysis that the ratio of total advances to public

sector advances showed a fluctuating trend during the period of study.

4.18 TOTAL ADVANCES TO BANK ADVANCES:

Total advances are the sum of all types of loans and bank advances

provided by the bank. The ratio of total advances to bank advances is calculated

and shown in table 4.18 for analysis.

Total Advances to Bank Advances Ratio = Total Advances /

Bank Advances

93
 TABLE - 4.18
TOTAL ADVANCES TO BANK ADVANCES OF
CANARA BANK FROM 1996-2007
(Rs. in crores)

YEAR TOT-ADV INDEX BANK ADV INDEX RATIO

1996 13095.84 100.00 84.41 100.00 155.14

1997 14412.83 110.06 24.65 29.20 584.70

1998 16824.68 128.47 123.37 146.15 136.37

1999 19530.11 149.13 95.65 113.32 204.18

2000 23546.73 179.80 94.64 112.12 248.80

2001 27831.77 212.52 97.53 115.54 285.37

2002 33126.71 252.96 138.21 163.73 239.68

2003 40471.60 309.04 449.81 532.87 89.97

2004 47638.62 363.77 510.85 605.18 93.25

2005 60421.40 461.38 110.33 130.70 547.64

2006 79425.70 606.50 25.00 29.62 3177.03

2007 98505.68 752.19 4.33 5.13 22749.58

TOTAL 474831.67 3625.82 1758.79 2083.55 28511.72

MEAN 39569.31 302.15 146.57 173.63 2375.98

SD 27388.36 209.14 161.81 191.69 6472.58

CV 69.22 69.22 110.40 110.40 272.42

TREND
135221.68 1032.55 251.03 297.38 15294.06
2015

(Source: Annual Reports of Canara Bank)

94
 Table 4.18 gives the details of total advances and bank advances in Canara

bank during the period of study. The total advances during 1996 were Rs.

13095.84 crores and they increased to Rs. 98505.68 crores in 2007. The bank

advances in 1996 were Rs.84.41 crores and they decreased to Rs. 4.33 crores in

the year 2007. Index number analysis shows that the decrease in bank advances is

5.13 per cent, and this is for a period of 12 years. The ratio of total advances to

bank advances is calculated and it has increased from 155.14 to 22749.58. The

mean bank advances are Rs.146.57 crores, standard deviation is Rs.161.81 crores

and co-efficient of variation is 110.40 percent. Trend analysis shows that the bank

advances in 2015 will be Rs. 251.03 crores.

From the analysis of ratio of total advances to bank advances it is realized

that there was a wide variation during the period of study. The unstable growth of

bank advances led to greater variation in the ratio of total advances to bank

advances.

4.19 TOTAL ADVANCES TO OTHER ADVANCES

Total advances are the sum of all types of loans and other advances

provided by the bank. The ratio of total advances to other advances is calculated

and shown in table 4.19 for analysis.

Total Advances to Other Advances Ratio = Total Advances / Other Advances

95
 TABLE NO.4.19
TOTAL ADVANCES TO OTHER ADVANCES OF
CANARA BANK FROM 1996-2007
(Rs. in crores)

YEAR TOT-ADV INDEX [Link] INDEX RATIO

1996 13095.84 100.00 6592.65 100.00 1.99

1997 14412.83 110.06 7586.30 115.07 1.90

1998 16824.68 128.47 8654.62 131.28 1.94

1999 19530.11 149.13 9794.54 148.57 1.99

2000 23546.73 179.80 11510.96 174.60 2.05

2001 27831.77 212.52 12997.30 197.15 2.14

2002 33126.71 252.96 15610.35 236.78 2.12

2003 40471.60 309.04 19693.86 298.72 2.06

2004 47638.62 363.77 22690.21 344.17 2.10

2005 60421.40 461.38 30320.38 459.91 1.99

2006 79425.70 606.50 38817.07 588.79 2.05

2007 98505.68 752.19 48541.08 736.29 2.03

TOTAL 474831.67 3625.82 232809.31 3531.35 24.36

MEAN 39569.31 302.15 19400.78 294.28 2.03

SD 27388.36 209.14 13434.37 203.78 0.07

CV 69.22 69.22 69.25 69.25 3.51

TREND
135221.68 1032.55 65933.77 1000.11 2.16
2015

(Source: Annual Reports of Canara Bank)

96
 Table 4.19 highlights the details of total advances and other advances in

Canara Bank for the period of study. The total advances in 1996 were

Rs. 13095.84 crores and they increased to Rs. 98505.68 crores during 2007. The

other advances 1996 were Rs. 6592.65 crores and they increased to Rs. 48541.08

crores in the year 2007. Index number analysis shows that the increase in other

advances is 736.29 per cent, and this is for a period of 12 years. The ratio of total

advances to other advances are calculated and it has increased from 1.99 to 2.03.

The mean other advances is Rs.19400.78 crores, standard deviation is Rs.13434.37

crores and co-efficient of variation is to 69.25 percent. Trend analysis shows that

the other advances in 2015 will be Rs.65933.77 crores.

A comparison of co-efficient of variation of total advances and other

advances showed that there was not much difference in the growth of these

advances. The ratio of total advances to other advances has been maintained at

around 2 times during the study period.

4.20 INVESTMENTS AND SOURCES OF FUNDS

The relationship between investment and sources of funds has been

analysed with multiple regression technique as detailed in table 4.20 for analysis.

97
 TABLE - 4.20
INVESTMENTS AND SOURCES OF FUNDS OF CANARA BANK FROM
1996-2007
(Rs. in crores)

RES & BORROW OTHER INVEST-

YEAR CAPITAL DEPOSITS
SUR -INGS LIABILITIES MENTS

1996 484.82 1445.87 26243.24 1569.47 1377.25 10706.64

1997 484.82 1563.62 31445.01 459.23 1704.73 12280.42

1998 577.72 1725.18 38045.02 497.91 2266.52 16030.99

1999 577.87 1834.94 41958.61 1382.39 2365.83 17356.50

2000 577.87 2018.01 48001.36 1324.16 2481.09 20022.80

2001 577.87 2236.58 59069.53 1466.25 3088.82 21445.46

2002 577.87 2893.63 64030.01 1593.63 3116.24 23220.10

2003 410.00 3738.83 72094.82 93.82 5717.46 30458.24

2004 410.00 4841.65 86344.56 754.89 7188.30 35792.98

2005 410.00 5698.96 96908.41 114.16 7173.64 38053.88

2006 410.00 7191.82 116776.68 545.83 8845.64 36974.18

2007 410.00 9943.98 142381.45 1574.35 11651.04 45225.53

LINEST 3.250 -0.396 0.336 -4.529 -4.524 6801.139

1.914 1.554 0.144 1.792 19.586 9351.725

0.980 2175.503 #N/A #N/A #N/A #N/A

58.380 6.000 #N/A #N/A #N/A #N/A

(Source: Annual Reports of Canara Bank)

Note : #N/A - Not Applicable

98
 Data relating to investments and variables such as capital, reserves and

surpluses, borrowings and other liabilities are compared. The dependence of

investment and the impact of other variables are studied using multi regressions

analysis. The formula is

Y = aX1 + bX2 + cX3 + dX4 + eX5 + k. The computed formula is

Y = -0.4524 X1 — 4.529 X2 + 0.336 X3 - 0.396 X4 + 3.250 X5 + 6801.139
Where
Y = Investments;
X1 = Capital;
X2 = Reserves and surplus;
X3 = Deposits;
X4 = Borrowings; and
X5 = Other liabilities.

The relationship between investments and selected variables — capital, reserves

and surplus, deposits, borrowings and other liabilities has been examined by using

multiple linear regression. It reveals that the investments have been positively

influenced by deposits, borrowings and other liabilities while the capital and reserves

and surplus have an inverse influence on investments. A higher direct proportion of

change in investments of the banks is influenced by other liabilities whereas the

reserves and surplus influenced higher inverse proportionate change in investments.

4.21 ADVANCES AND SOURCES OF FUNDS

The relationship between advances and sources of fund has been analyzed

with multiple regression technique as detailed in table 4.21 for analysis.

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 TABLE - 4.21
ADVANCES AND SOURCES OF FUNDSOF
CANARA BANK FROM 1996-2007
(Rs. in crores)

Other
YEAR Capital Res & Sur Deposits Borrowings Advances
liabilities

1996 484.82 1445.87 26243.24 1569.47 1377.25 13095.84

1997 484.82 1563.62 31445.01 459.23 1704.73 14412.83

1998 577.72 1725.18 38045.02 497.91 2266.52 16824.68

1999 577.87 1834.94 41958.61 1382.39 2365.83 19530.11

2000 577.87 2018.01 48001.36 1324.16 2481.09 23546.73

2001 577.87 2236.58 59069.53 1466.25 3088.82 27831.77

2002 577.87 2893.63 64030.01 1593.63 3116.24 33126.71

2003 410.00 3738.83 72094.82 93.82 5717.46 40471.60

2004 410.00 4841.65 86344.56 754.89 7188.30 47638.62

2005 410.00 5698.96 96908.41 114.16 7173.64 60421.40

2006 410.00 7191.82 116776.68 545.83 8845.64 79425.70

2007 410.00 9943.98 142381.45 1574.35 11651.04 98505.68

LINEST -3.496 -0.978 0.503 7.485 -12.150 399.249

1.623 1.318 0.122 1.519 16.610 7930.692

0.998 1844.927 #N/A #N/A #N/A #N/A

483.638 6.000 #N/A #N/A #N/A #N/A

(Source: Annual Reports of Canara Bank)

Note : #N/A - Not Applicable

100
 Data relating to advances and variables such as capital, reserves and

surpluses, borrowings and other liabilities are compared. The dependence of

advances and the impact of other variables are studied using multi variable

analysis. The formula is

Y = aX1 + bX2 + cX3 + dX4 + eX5 + k. The computed formula is

Y = -12.150 X1 +7.485 X2 + 0.503 X3 — 0.978 X4 -3.496 X5 +399.429

Where

Y = Advance;
X1 = Capital;
X2 = Reserves and surplus;
X3 ---- Deposits;
X4 = Borrowings; and
X5 — Other liabilities.

In this chapter a detailed analysis of various aspects of bank sheet of the

study bank is done. Ratios are calculated. Mean, standard deviation, coefficient

of variation, and trend are calculated. The relationship between different variables

is found out using statistical tools.

Advances are made by a bank out of the funds generated through owned

capital as well as borrowed capital. Thus a change in the owned capital or

borrowed capital may have its impact on the advances. In order to understand the

relationship between advances and other independent variables, a linear regression

analysis has been carried out and the results are furnished in Table 4.21.

101
 Table 4.21 depicts that the inter-relationship between advances and

independent variables — capital, reserves and surplus, deposits, borrowings and

other liabilities is significant. It is understood that the capital, borrowings and

other liabilities influenced the advances positively. However,the influence caused

by reserves and surplus and deposits was found to be inverse. A greater

proportionate change in positive terms has been influenced by the reserves and

surplus while the lower was by deposits. The inverse proportionate influence

caused by the capital has been found to be maximum while the borrowings had

least impact.

102