CAPITAL STRUCRURE ANALYSIS OF BANKING COMPANY WITH SPECIAL REFRENCE TO STATE BANK OF INDIA

The purpose of this research was to understand the capital adequacy of State bank of India. The capital structure is the mix of equity and debt fund. Capital structure can influence not only the return of a company earning for its stakeholders, but also helps in determining the financial position of the company whether or not a firm survives will survives in recession or depression. There are two most popular source of fund which a company can get finance owned capital (equity) and borrowings (Debt). An optimal debt equity mix gives a healthy result of the financial wealth for the company. This was the main threshold of the capital structure forecasting and planning. Because of this many industries recognized and reorganized their capital structure. The main aim of present study is to analyze the capital structure of the banking industry with special reference to State Bank of India. During the Liberalization, privatization and globalization various banking reforms in India have been taken. After the implementation of Narshimhan committee reports and Basell II norms banks have kept their capital according to the capital adequacy. The research study is descriptive and analytical research which is conducted on the basis of secondary data. The present study is based on the analysis of five years annual reports of State Bank of India from 2005-06 to 2009-10. The study revealed that the company has the policy using trading on equity. So State Bank of India has more dependence on debt funds. Adopting this policy may be the reason behind its great success in the present situation.