STUDY ON APPROPRIATION OF PROFITS OF PUBLIC SECTOR BANKS WITH SPECIAL REFERENCE TO CANARA BANK
Abstract
Public sector banks play a pivotal role in the financial stability and economic development of a nation. The appropriation of profits in these banks is crucial for their sustainability, growth, and ability to support public welfare. This abstract examines the appropriation of profits in public sector banks, with a specific focus on canara bank, one of india's leading public sector banks.
Canara bank, like other public sector banks, generates profits through various financial services, including lending, investments, and fee-based services. These profits are subject to appropriation in different ways to ensure the bank's ongoing operations, compliance with regulatory requirements, shareholder value, and social obligations.
The key aspects of profit appropriation in canara bank are as follows:
Reserves and surplus:
A significant portion of profits is allocated to reserves and surplus, providing a buffer for contingencies and ensuring compliance with regulatory capital requirements. This allocation enhances the bank's financial strength and risk management capabilities.
Dividend distribution:
As a public sector bank, canara bank is obligated to distribute dividends to its shareholders, including the government of india. The distribution of dividends is a critical component of profit appropriation, reflecting the bank's commitment to returning value to its stakeholders.
Provisions for non-performing assets (npas):
Given the risk associated with lending activities, canara bank sets aside a portion of its profits for provisions against non-performing assets. This prudent approach ensures that the bank can absorb potential losses arising from defaulted loans, thereby maintaining financial stability.
Investments in infrastructure and technology:
To remain competitive and meet customer expectations, canara bank invests a portion of its profits in technology, infrastructure, and human capital. These investments contribute to operational efficiency and improved customer experiences.
Corporate social responsibility (csr):
