1. TITLE OF THE STUDY
PRESENTED
BY:
Avinash

2. INDUSTRY PROFILE
Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should be
able to meet new challenges posed by the technology and any other external and
internal factors. For the past three decades India's banking system has several
outstanding achievements to its credit. In fact, Indian banking system has reached even
to the remote corners of the country. This is one of the main reasons of India's growth
process. The government's regular policy for Indian bank since 1969 has paid rich
dividends with the nationalization of 14 major private banks of India. Not long ago, an
account holder had to wait for hours at the bank counters for getting a draft or for
withdrawing his own money.
STAGES OF BANKING IN INDIA
The first bank in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct
phases. They are as mentioned below:
•Early phase from 1786 to 1969 of Indian Banks
•Nationalizations of Indian Banks and up to 1991 prior to Indian banking sector
Reforms.
•New phase of Indian Banking System with the advent of Indian financial & Banking
Sector Reforms after 1991.

3. COMPANY PROFILE
In 1913, at the instance of Sir M. Visvesvaraya, the Engineer Statesman, a state aided
Bank, under the patronage of His Highness the Maharaja of Mysore, Sri Krishnaraja Wodeyar
IV, was established. This was "MYSORE BANK LTD". During 1953, "Mysore Bank" was
appointed as an agent of Reserve Bank of India to undertake Government business and
treasury operations, and in March 1960, it became a subsidiary of the State Bank of India
under the State Bank of India (subsidiary Banks) Act 1959. Now our bank is an Associate
Bank under State Bank Group. The Bank has grown progressively, right from its inception
and has declared uninterrupted profits from the beginning. "MYSORE BANK", as it is
popularly known, is constantly committed to serve it's customers. Our dedicated service to
clientele has brought recognition laurels to "MYSORE BANK". In this competative world
of Banking and Technology we reiterate and resolve to rededicate ourselves for the service of
the Nation through improved service to our customers.
“To give real service, you must add something which cannot be bought or measured with
money” - Sir M. Visvesvarayya
The bank has stood up to the challenges of financial sector reforms in this decade.The Bank
has a widespread network of 707 branches(as on 31.03.2011) and 22 extension counters
spread all over India which includes 6 Small and Medium Enterprises Branches, 4 Industrial
Finance branches, 3 Corporate Accounts Branches, 6 specialised Personal Banking
Branches, 10 Agricultural Development Branches, 3 Government Business branches, 1 Asset
Recovery Branch and 8 Service Branches, offering wide range of services to the customers.

4. INTRODUCTION
Any amount borrowed or lent is called loan. If money is borrowed it is debt of
business and if loan is given, it is receivable for the business. Loan is a method of
lending under which bank gives credit to a borrower for a fixed period and for a
specific purpose. Loan are promises for future payment, they have to be repaid in
periods beyond a year and are, therefore long term liabilities. In other wards "when a
banker makes an advances in a lump sum which cannot be paid wholly or partly and
which the customer has permission to withdraw subsequently, it is called a loan.
"Profit is the pivot on which the entire business activity rates. Banking is essentially a
business dealing with money and credit. Like every other business activity. Bank
share profit oriented. A bank invests its funds in many ways to earn income. The bulk
of its income is derived from loans and advances. Banks make loans and advances to
traders, businessman and industrialist against the security of some assets or on the
basis of the personal security of the borrower. In either case, the banks run the risk of
default in repayment. Therefore, banks have to follow a cautions policy and sound
lending principles in the matter of lending. Banks in India have to consider the
national interest along with their own interest while determining the lending
policy.Many a time a borrower needs funds for fixed assets or non-respective type of
activitiesand thus seeks money from the bank that is withdrawn in one lump sum.
The loan amount isnormally repaid in installments. Loan may be short-
term, medium-term or long-term.

5. STATEMENT OF THE PROBLEM:
The Title of the project is “A study on Loans and advances & Its Impact on State
Bank of Mysore. There is a wide fluctuation between different sectors. While
issuing loans to different sector, should analyze the external factor which is
affecting to the particular sector. Bank should think about increase the Net Income
and reduce the NPA level of the Bank, while issuing loans. Major portion of the
Income is derived from the loans and advances of the Bank.
In this context, study is related to the contribution to Total income from the
different sector by analyzing the co-relation between loans and advances issued to
different sector and the Total income of the Bank. This analytical study of loans
and advances to different sector which helps know the risk and return from various
sector.
OBJECTIVES OF THE STUDY
The main aim of the present study is to accomplish the following objectives:
•To Analysis the sources of income by considering Loans and Advances.
•To study the relationship between loans and advances to its total current assets.
•To study the Procedure of issuing loans and advances of the bank.
•To study the Impact of loans and advances on Net profit

6. SCOPE OF THE STUDY
•The information used from the annual report of Sate Bank of Mysore of the year 2010-
11, 2009-10, 2008-09 and 2007-08 for preparing the this project report.
•For the purpose of comparison, I used the statistical tools like standard Deviation and Co-
efficient of correlation.
METHODOLOGY
Research design
This study is based on Descriptive research design.
Data collection method
Secondary data
The data published or unpublished which have already been collected and processed by
some agency or person and take over from there and used by any other agency for their
statistical work.
This report is prepared through secondary sources such as text books, journals, and annual
reports of the Apex Bank.
Tools used to analysis the data:
Trend ratio

7. ANALYSIS AND INTERPRETATION
LOANS AND ADVANCES TO INTEREST EARNED
Amount in crores
Particular 2010-11 2009-10 2008-09 2008-09 2006-07
Interest Earned 4,079.08 3,558.92 3,247.28 2,494.40 1,776.49
Loans and Advance 34,029.81 29,535.86 25,616.05 21,027.14 16,465.54
Sources annual report 2006 to 2011
Loans &advance to interest
The graph shows the comparison between loans
earned
& advances to the interest earned by the bank in
past five years (2007 to 2011). Here it shows 35,000.00
that there is an increasing in loans & advances 30,000.00
Amount in crores
over the years, in the current year it issued Rs. 25,000.00
34,029Cr from 29535.86Cr. So the bank has 20,000.00
15,000.00
given loans & advance to help its customer to
10,000.00
meet their obligation and also there is an
5,000.00
increase in interest earned from loans given to
0.00
the customer by making proper collection 2010- 2009 2008 2008 2006
11 -10 -09 -09 -07
efforts. In the current year (2010-11) the Interest Earned 4,079.0 3,558.9 3,247.2 2,494.4 1,776.4
interest earned amount is increased by 15% Loans and Advance 34,029. 29,535. 25,616. 21,027. 16,465.
compare last year(2009-10).

8. LOANS AND ADVANCES TO TOTAL CURRENT ASSETS :
Amount in crores
Particular 2010-11 2009-10 2008-09 2007-08 2006-07
Total Current Assets 49,897.23 44,009.74 39,136.72 32,336.00 25,893.68
Loans and Advance 34,029.81 29,535.86 25,616.05 21,027.14 16,465.54
Source : annual report 2007-2011
Loans& advances to Total
current assets
From the graph it shows the comparison
60,000.00
between total current assets and Loans &
Advances from 2007 to 2011. Here it shows 50,000.00
Amount in crores
that due to increase in loans & advances given 40,000.00
to the customer over the years simultaneously 30,000.00
total current assets also been increased. In the
20,000.00
present year total current asset has been
increased by 14% compare to the last year. 10,000.00
The loan has increased due to moderate 0.00
2010- 2009- 2008- 2007- 2006-
interest rates compare to other banks. 11 10 09 08 07
Total Current Assets 49,897.2 44,009.7 39,136.7 32,336.0 25,893.6
Loans and Advance 34,029.8 29,535.8 25,616.0 21,027.1 16,465.5

9. LOANS AND ADVANCES TO TOTAL ASSETS :
Amount in crores
2010-11 2009-10 2008-09 2007-08 2006-07
Particular
Total Assets 52,127.07 45,454.12 40,510.90 33,069.70 26,842.65
Loans and Advance 34,029.81 29,535.86 25,616.05 21,027.14 16,465.54
Source: annual report 2007-2011
Loans&advances to Total asset
From the above tables it shows the
60,000.00
relationship between total asset & loans &
50,000.00
advances from 2007 to 2011. Here in the
Amount in crores
40,000.00
bank total assets have been increased over
30,000.00
the years due to increase in loans &
advances given to the customer at the 20,000.00
moderate interest rates. In the current year 10,000.00
the total assets has increased by 15% and 0.00
2010- 2009- 2008- 2007- 2006-
also the bank has been invested some of 11 10 09 08 07
Total Assets 52,127.0 45,454.1 40,510.9 33,069.7 26,842.6
their funds to the fixed asset.
Loans and Advance 34,029.8 29,535.8 25,616.0 21,027.1 16,465.5

10. LOANS AND ADVANCES TO TOTAL LIABILITIES :
Amount in crores
2010-11 2009-10 2008-09 2007-08 2006-07
Particular
Total Liabilities 52,127.07 45,454.12 40,510.90 33,069.70 26,842.65
Loans and Advance 34,029.81 29,535.86 25,616.05 21,027.14 16,465.54
Source : annual report 2007-2011
From the above table shows that comparison Loans & advances with Total
of total liabilities with Loans & advances liabilities
from 2007 to 2011. Here the total liabilities 60,000.00
Amount in crores
of the company have increased due to raise 50,000.00
40,000.00
in share capital, reserves, deposits, &
30,000.00
borrowed funds and hence the loans &
20,000.00
advances issued to the customers has also
10,000.00
increased over the years. In the current year
0.00
the total liabilities of the company has 2010- 2009- 2008- 2007- 2006-
11 10 09 08 07
increased by 15% compare to the last year Total Liabilities 52,127.0 45,454.1 40,510.9 33,069.7 26,842.6
Loans and Advance 34,029.8 29,535.8 25,616.0 21,027.1 16,465.5

11. FINDINGS:
¥There is an increasing in loans & advances over the years, in the current year it issued
Rs. 34,029Cr from 29535.86Cr. So the bank has given loans & advance to help its
customer to meet their obligation and also there is an increase in interest earned from
loans given to the customer by making proper collection efforts.
¥In the current year (2010-11) the bank shows that interest earned amount from the
customers is increased by 15% compare last year (2009-10).
¥ Increase in turnover of the business in the bank because the bank provides new
schemes or services to the customer. Hence in the current year the turnover of the
business has raised by13% (3984.64 to 4534.26) compare to last year.
¥In the current year amount invested by the bank on fixed asset has decreased by 2%
compare to last year.
¥Increase in loans & advances given to the customer over the years simultaneously total
current assets also been increased. In the present year total current asset has been
increased by 14% compare to the last year. The loan has increased due to moderate
interest rates compare to other banks.
¥The total assets have been increased over the years due to increase in loans & advances
given to the customer at the moderate interest rates. In the current year the total assets
has increased by 15% and also the bank has been invested some of their funds to the
fixed asset.

12. SUGGESTIONS:
The Auto loan product of the bank should be more highlighted with promotional
activities as there are many competitors for Auto loan in the market.
Bank should make provision for free accident insurance cover for the auto loan
product to attract the customers for loan.
Since most of the customers of Auto Loan go for purchasing of new vehicles during
Festivals, are attracted towards the special offers in loan schemes, special offers should
be announced during Special occasion Like New Year, Festivals etc as such offers
attract customers.
The bank should adopt the new technology that makes the customer easy transfer of
fund through electronically and SMS facilities to mobiles for every transaction that the
customers transfers money.

13. CONCLUSION
Overall banking in India is considered as fairly mature in terms of supply, product range
and reach even – though reach in rural India still remains a challenge for the public
sector, private sector and foreign banks. Even in terms of quality of assets and capital
adequacy, Indian banks are considered to have clean, strong and transparent balance
sheets as compared to other banks in comparable economies in its region
With the growth in Indian Economy expected to be quite some time especially in its
services sector, the demand for banking services especially retail banking, mortgages and
Investment services are expected to be strong.
SBM Bank has been a competent player in the market with quality service and attractive
Interest rate, its service is not only limited to Metropolitan cities but its striving hard to
reach and cater the needs of the urban and rural customers and has been a good performer
in the Retail loan Industry.
As the Banking sector is booming, all the banks are facing stiff competition among
themselves; to face the competition and survive in the market SBM should adopt
Innovative Techniques to face the competition. The main concern of SBM Bank should
be quality service and customer satisfaction, to gain a major share in the market bank
should go for aggressive promotional activities and attract customers by charging
competitive interest rate.

14. THANK YOU