Investment Portfolio Management of the State Bank of India

Aggarwal, Meghna

• Publisher: Scholars World
• Year: 2021
• eBook ISBN: 9789351302315
• Topic: Negocios y empresa
• Subtopic: Negocios en general

This book examines the investment portfolio composition of the State Bank of India and its impact on the Indian Economy. Commercial Banking system, especially SBI group, occupies a unique position in the Indian financial system.The practice of banking in our society is not something that can be refined to a set of given rules and formulas applicable to a static economy but an art to be pursued in a dynamic economy with a public, yet profitable, service as the end result. Investment portfolio of the State Bank of India shares one objective- to provide the largest pool of assets from which the owner can finance expenditure now or at some future date by involving investment of a client's funds in stock and securities and buying and selling securities with an objective to achieve higher return for the client.To do so, an investment policy is required to be formulated that takes into account-liquidity requirements, capital adequacy, the income factor, and the status of the money and bond markets. However, the current global context has implications for the banking system both in terms of the financial outlook for its borrowing entities as well as the flow of funds. This highlights the fact that the overall environment today is much more challenging and much more difficult than the yesteryears. This makes it even more important to accelerate the pace of reforms in the banking sector, and to introduce best practices in terms of lending policy, investment management and risk containment. The book will serve as useful reference to researchers, teachers and will also act as a ready reference for policy planners.

Table of contents

• Preface
• List of Tables
• List of Chart, Exhibits and Figures
• 1.  Introductory Treatise
• •   Objective of the Study
• 2.  Considerations Regarding Liquidity
• 2.1  Scope of Liquidity
• 2.2  Determination of Protective Liquidity Requirement
• 2.2.1  Estimation of Demand and Time Deposit Liquidity
• 2.2.1.1  Estimation of Demand Deposit Liquidity
• 2.2.1.2  Estimation of Time Deposit Liquidity
• 2.3  Judgement and Statistical Approach Combined
• 2.3.1  Determination of Loan Liquidity Requirements
• 2.4.  Determination of Aggregate Liquidity Requirements.
• 2.5.  Interpretation of Liquidity Requirements in Terms of investment Policy
• 2.5.1.  The Secondary Reserve
• 2.5.2.  The Usage of Borrowed Funds
• 2.5.3.  The investment Reserve
• 2.5.4.  Comparison of Liquidity and Flexibility
• 2.5.5.  Flexibility as an Alternative to Liquidity
• 3.  Considerations Regarding Capital
• 3.1.  Need for Capital
• 3.2.  Risk Ratio and Its Use
• 3.3.  Clear and Precise Expression of Capital Adequacy
• 3.4.  Determining Capital at Disposal for investments
• 3.5.  Assigning Capital Beyot The investment Portfolio
• 3.5.1  Assets Without Risk
• 3.5.2.  Assets With Least Risk
• 3.5.3.  assets with mediocre risk
• 3.5.4.  Other Asset Categories
• 3.6  Assigning Capital of the investment Portfolio
• 3.6.1  Estimating Credit Risks in Securities
• 3.6.2  Assigning Capital to investment Credit Risks
• 3.6.3  Estimating Market Risktin the investment Portfolio
• 3.6.4  Diversification
• 3.6.5  Other Factors Amounting to investment Risk
• 4.  Considerations Regarding Income
• 4.1.  income as an Evaluation of Risk
• 4.1.1  Income Differentiation Between Credits
• 4.1.2  Bond Returns and the Yield Curve
• 4.1.2.1  The Upward Projecting Yield Curve
• 4.1.2.2.  The Unvarying Yield Curve
• 4.1.2.3.  The Downward Sloping Yield Curve
• 4.1.2.4  The insinuation of the Yield Curve
• 4.1.3  The Consequences of Maturity on Price Net Return Net Yield
• 4.2  Considerations Regarding Taxation
• 4.2.1  Evaluating The Relative Importance of Tax System of the individual Bank
• 4.2.2  Taxable income of the individual Bank; Tax-Exempt income of The individual Bank-A Comparison
• 4.2.3  Capital Gains Tax
• 4.2.4  The Significance of income in the Portfolio
• 5.  Significant Considerations Regarding Market: The Significance of Monetary and Fiscal Policy
• 5.1  Fundamental Duty of Monetary Authorities
• 5.2.  Monetary Policy in Effect
• 5.3  Monetary Policy in force: A Concise inspection
• 5.4  The Subdivision of a Modifiable Monetary Policy
• 5.5  Other Considerations Regarding Market forces
• 5.5.1.  Treasury Operations
• 5.5.2.  investor Awareness or Attitude
• 6.  Maximizing income Consistent with Liquidity and Capital Considerations
• 6.1  investment Media Accounted for
• •   Riskless investments
• •   Risk investments
• 6.1.1  Riskless investments
• 6.1.2  Quasi-Risk Investments
• 6.1.3  Risk investments
• 6.2  The Secondary Reserve
• 6.2.1  Short-Term Treasury Agreements
• 6.2.2  Other Assets
• 6.2.3  Other investments Near Maturity
• 6.3  The investment Reserve
• 6.3.1  investment Reserve Assets
• 6.3.2  investments Relegated to the investment Reserve Account
• 6.3.3  Diversification
• 6.3.4  Determination of Maximum Maturities
• 6.4  A Flexible investment Policy
• 6.4.1  Portfolio Policy During Periods of Ease and Transition towards Restraint
• 6.4.2  Portfolio Policy During Periods of Restraint and Transition toward Ease
• 7.  A Study of the Investment Portfolio Composition of the State Bank of india
• 7.1  Portfolio Composition
• 7.1.1  Basic Principles
• 7.1.2  An Overview
• 7.1.3  Portfolio Types and their Needs
• 7.1.4  Some Aspects of Investment Portfolio Management
• 7.1.5  investment Portfolio Composition of the State Bank of india
• 7.2  Study Using Least Square Technique
• 7.2.1  Markowitz Portfolio Selection Model
• 7.2.2  Sharpe: The Single Index Model
• 7.2.3  The Capital Asset Pricing Model
• 7.2.4  Factor Models and Arbitrage Pricing Theory
• 7.3  Error Correction Model
• 7.3.1  Empirical Analysis
• 7.4  Impact on The Gross National Product (GNP)
• 7.4.1  Results and interpretations of the interview
• 7.4.2  Empirical Results and interpretation
• 8.  Conclusion and Suggestions
• 8.1  Development and Execution of Policy
• 8.2  Responsibility for investment Policy
• Glossary
• Bibliography
• Annexure-I
• Annexure II
• Annexure III