Human Resource Department Applicant Screening

Published Date: 02 Nov 2017

Certain jobs do not really need a thorough backdrop check, but any employment in a bank absolutely does. Human source section in banks must go the additional mile to depiction the against the law and monetary the past of job applicant, for the security of their customers and their business as a whole. Banks are highly doubtful to hire candidates with monetary deception on their proceedings, for instance, due to the sheer burden of temptation a place in a bank would place on an important person with that kind of the the past.

Bank Security

Human property separation must design and check work process to reduce opportunity for internal theft and conspiracy. HR policy separate cash receiving, storage, giving out and payout, and evidence all actions via video administration. In the event that a worker attempt to steal from a bank, the HR separation must grip the legal paperwork and executive development required by court events.

Pay Decisions

As with other industrial, HR expert in bank have a hand in making choice for pay raise and promotions. Bank workforces are sole in that they often contain two methods of paying personnel salary for back-office and other personnel, and charge for sales employees. location decision for salespeople selling loans and additional financial products be different from decisions to support executive staff. Banks' HR part must direct both rightly and on purpose to expand the human resources.

Executive Recruitment

The banking business is highly forceful, and banks constantly find the way a lawful minefield that can devastate business that pace out of row. Finding the right decision-making is vital in any industry, but particularly one in which competition is so violent and lawful completion so significant. Human capital expert in banks have to go the additional mile to employ the best executive talent in the bank pasture, allowing their organization to succeed and produce into the future. Human capital department in business must increase support of the board of director before bring an important person in to fill an managerial spot, as well.

Information Technology

1). Technology has opened up new market, new goods, new services and competent release channel for the bank industry. Online electronics bank, mobile bank and internet bank are just a small number of examples.

2). Information Technology has also provided bank business with the resources to contract with the challenge the novel financial classification sham. In order skill has been the base stone of recent monetary sector reform aimed at raising the pace and dependability of monetary procedure and of initiative to make stronger the banking division.

3). The IT rebellion has set the stage for unexpected add to in monetary group across the globe. The progress of skill and the growth of universal network have noticeably reduced the cost of global change move.

4). It is in order technology which enable banks in gathering such high view of customers who are more difficult and are also more techno-savvy compare to their complement of the yester years. They insist immediate, anytime and where banking amenities.

5). IT has been as long as solution to banks to take care of their clerical and rear office necessities. This have, though, now known way to large level do in fortified forces aimed at the client of the banks. IT also facilitates the foreword of new release channels--in the form of automatic Teller machines, Net Banking, Mobile bank and the like. Further, IT use has unspecified such far above the ground level that it is no longer likely for bank to deal with their IT implied on a separate basis with IT uprising, banks are more and more intersect their computer systems not only across bushes in a metropolis but too to extra location place with high-speed system infrastructure, and location up local area and broad

SWOT Analysis

Strengths

In the area of strength, a SWOT examination should list the area where the bank is following and excel in attainment its goals. This attainment should also be interior mechanism deep of the bank’s considerable and human capital. For case, a bank’s strength may be high client conservation, higher than regular assessment clarification equilibrium high-yield tie rates, an easy to use website, product line diversification, low employees income and low overhead. The "strength" portion of the bank industry’s SWOT study is a catalog of the interior prepared basics where the banking industry is following or excel. These rudiments need to refer to features the developed can administer and has a straight authority to vary. For example, the banking industry’s strength can include record-high annual returns, branch out asset collection offerings, decrease in business and trade fees, an add to in the figure of ATM machines

Weaknesses

The weakness in a bank’s SWOT examination should list the areas wherever the bank is falling short of achievement its goals or is non-competitive. This area of increase should also be center machine deep of the bank’s substantial and person resources. For example, a bank’s weakness may be low consumer approval, deprived website skin, low staff assurance, far above the ground loan rates, low make credit or a minimal product line. The "fault" ingredient of the bank industry’s SWOT examination is a list of the internal ready fundamentals the bank trade wants to get better upon. These basics need to refer to skin the industry can run and has a straight authority to change. For example, the bank industry's feeble point can comprise far above the globe loan rates, low bond credit ratings, an increased number of exceptional rubbish bond, an increase in loan-sharking activity and an better than before figure of high-risk.

Opportunities

The possibility section in a bank’s SWOT study should list the area where the bank has room for increase or could take benefit of chance in the market. These areas ripe for growth should be external device reflective of the present business surroundings. For example, a bank’s chance may include an increasing economy, new high-yield investment products, banking deregulation, less competitor in the market or an add to in the normal savings rate. The "alternative" part of the banking industry’s SWOT study is a list of the external ecological rudiments the banking industry can potentially take benefit of in the near future or long-standing these outside ecological elements should not reflect the interior device of the business, but rather the factor or facial appearance outside the industry’s manage. For example, the bank industry’s occasion can include rising resources, bank deregulation, improved customer borrow, and add to in the number.

Threats

The threats part in a bank’s SWOT study should list the area anywhere the bank has the probable to refuse or be distress by other factors in the market. This factor should also be outside machine weighty of the present business location. For example, a bank’s pressure may comprise a declining financial system, greater than before capital gains taxes, more competitor in the market, high idleness or an add to in cover rates. The "pressure" part of the bank industry’s SWOT investigation is a list of the external environmental basics that can potentially injure the bank industry. These external ecological elements do not reflect the interior mechanism of the industry, but the factor or features exterior the industries manage. For example, the bank industry’s intimidation could include a declining monetary system, better than before banking system, better assets gains duty, new high-risk asset vehicle or senior health care costs. It’s significant to realize these examples are not black and white. For example, "new high-risk asset vehicle" are inherently a legal liability since they include increased risk.

5. Financial Analysis of Chosen Industry

E. RATIO ANALYSIS

Ratios can be classified under following five heads

A. Liquidity Ratios

B. Solvency Ratios

C. Profitability Ratios

E. Equity Related Ratios

A. LIQUIDITY RATIOS

(Concept of Liquidity Ratio :)

Following are the three Ratios under this head:

1. Current Ratio

2. Cash Ratio

1. Current Ratio

The current ratio is a financial ratio that procedures whether or not a firm has sufficient capital to pay its credit over the subsequently 12 months. It compare a firm's current assets to current liability its. The there ratio is an indication of a firm's market liquidity and ability to get together creditor's demands. Satisfactory current ratios vary from business to industry and are usually among 1.5 and 3 for healthy business. If a company's current ratio is in this range, then it usually indicates good short-term financial power.

Current Ratio= Current Assets / Current Liability

2010

2011

2012

Company name

CA CL

CA CL

CA CL

PMC

272.58 265.46

401.75 293.50

594.38 379.13

ARIHANT BANK

126.5 158.47

164.8 177.47

134.7 207.05

SARASWAT

303.0 163.19

283.5 181.98

903.8 215.73

TOTAL

702.08 587.12

849.3 652.95

1632.8 801.9

1.10

1.30

2.03

INTERPRETATION

We can see from the above chart that, PMC, ARIHANT and SARASWAT bank. Current assets are not more than double against current liabilities in last two years but in 2012 the ratio. This shows not very good condition of banks. The high current ratio more ability of company to meet current obligation and greater safety of funds for short term creditors. So it indicates, the current ratio is not in 2010-11satisfactory.but it satiactory in2012.

2 Cash Ratio:

The ratio of a company's figure cash and cash equal to its current liability. The cash ratio is most usually used as a calculate of company liquidity. It can so decide if, and how rapidly, the corporation can repay its short-term debt. A strong cash relation is useful to creditors when deciding how a great deal debt, if any, they would be ready to extend to the ask party. 

Cash Ratio= (Cash + Marketable Security) / Current liability

2010

2011

2012

Company name

Cash Ms CL

Cash Ms CL

Cash Ms CL

PMC

178.74 5.74 265.46

216.42 6.00 293.50

229.86 7.85 379.13

ARIHANT BANK

6.82 24.92 158.47

7.55 23.66 177.47

9.78 17.09 207.05

SARASWAT

143.8 17.42 163.19

133.0 15.15 181.98

167.5 13.73 215.73

TOTAL

329.36 48.08 587.12

0.64

356.97 44.81 652.95

0.62

407.14 38.67 801.91

0.56

INTERPRETATION

The Cash ratio include Marketable security in numerator, it must be noted the quote Investments are taken as marketable security. The cash ratio is the utmost in 2010, as compare other years, it is good. This indicates for 1 Rs. of current liability, 0.56 Rs. are available by the way of cash and gainful security, from the total current assets.

B. SOLVENCY RATIOS

Following are the three Ratios under this head:

1. Debt - Equity ratio

2. Debt ratio

3. Interest coverage ratio

Debt - Equity Ratio

A calculate of a company's financial leverage considered by in the middle of its total liability by stockholders' equity. It indicates what amount of equity and debt the company is using to money its assets. A high debt/equity ratio usually means that a company has been violent in finance its increase with money owing. This can result in unstable earnings as a result of the extra interest spending. 

Debt - Equity Ratio= Debt / Equity or Net worth

2010

2011

2012

Company name

Debt Equity

Debt Equity

Debt Equity

PMC

1897.84 424.78

2079.88 493.84

2523.3 686.58

ARIHANT BANK

166.98 23.50

187.74 25.13

215.71 27.15

SARASWAT

1517.01 163.89

1678.58 174.92

2017.33 197.15

TOTAL

3581.83 612.17

3946.2 693.89

4756.34 910.88

5.85

5.69

5.22

INTERPRETATION

The above chart indicates that the all the bank. Has highest Debt Equity ratio in 2010 i.e. 5.85, which may not be good for the creditors. Because if we see last 3 years trend, debt is more than 1, which shows for every 2 Rs. of outside liabilities, company has 1 Rs. as owner’s Capital. It must be noted Net worth is worked out by deducting deferred / Misc. expenditure from the total of share capital & reserves

2. Debt Ratio:

A ratio that indicates what amount of debt a company has qualified to its assets. The calculate gives an idea to the control of the company along with the probable risks the company face in terms of its debt-load. A debt ratio of better than 1 indicate that company has more debt than assets; in the time in-between, a debt proportion of less than 1 point to that a company has more assets than debt. Used in mixture with other procedures of financial health, the debt ratio can help investors decide a company's level of risk.

Debt Ratio= Debt / (Debt + Equity).

2010

2011

2012

Company name

Debt De + Equity

Debt De +Equity

Debt De +Equity

PMC

1897.84 2322.65

2079.88 2573.72

2523.3 3209.88

ARIHANT BANK

166.98 190.48

187.74 212.87

215.71 242.86

SARASWAT

1517.01 1680.9

1678.58 1853.5

2017.33 2214.48

TOTAL

3581.83 4194.03

3946.2 4640.09

4756.34 5667.22

0.85

0.85

0.83

INTERPRETATION

The Ratio of three years concludes that the banks. has more than 50% of debt in total capital employed. So the company has to bear its fixed interest obligations. The ratio is highest in the year 2010, it is 0.85. This indicates out of total 1 Rs of capital employed the debt is 0.85. It is visible the ratio has not increasing trend from last 3 years. This can also be a good sign, as this interprets company gets debt on the basis of its sound creditworthiness

3. Interest Coverage Ratio:

A ratio used to conclude how without difficulty a company can pay interest on outstanding debt. The interest coverage ratio is deliberate by dividing a company's income before interest and dues (EBIT) of one episode by the company's attention expenses of the alike time. The inferior the ratio, the extra the company is loaded by debt expense. When a company's interest coverage ratio is 1.5 or inferior, its ability to meet interest expenses may be doubtful.

Interest Coverage Ratio= (PBT EOT + Interest - Other Income) / Interest

Or

PBIT / Interest

2010

2011

2012

Company name

PBIT Interest

PBIT Interest

PBIT Interest

PMC

185.82 150.82

219.59 180.59

312.28 252.28

ARIHANT BANK

11.04 9.35

11.98 9.84

15 12.02

SARASWAT

107.56 95.8

119.18 98.92

154 130.58

TOTAL

304.42 255.97

350.75 283.35

418.28 394.88

1.18

1.23

1.05

INTERPRETATION

It is visible that the Ratio is variable in these three years. Banks. Has the least attention coverage ratio in 2012, due to the heavy interest of fixed period and working capital loans. However in 2010 and 2011, bank’s ability was greater to handle fixed charge liability. The 2010-12’s ratio implies that if the company’s PBIT were to decline to 1/5th level, PBIT available for servicing loan interest would still be equivalent to the claim of lenders. But in 2012 condition is not so good.

D. PROFITABILITY RATIOS

1. before Tax ROI:

Return on investment - or ROI - is the rate of revenues conventional for each money invest in an item or action. In a advertising sense, important the ROI of your advertising and marketing campaign helps you to recognize which technique are most effective in generate income for your business.

Before Tax ROI = (PBT EOT + Interest - Other Income) / Net Assets

Or

PBIT / Net Assets

2010

2011

2012

Company name

PBIT Net asset

PBIT Net asset

PBIT Net asset

PMC

185.82 70.12

219.59 108.25

312.28 215.25

ARIHANT BANK

11.04 (31.97)

11.98 (12.67)

15 (72.35)

SARASWAT

107.56 139.81

119.18 101.52

154 830.9

TOTAL

304.42 177.96

350.75 197.1

418.28 973.55

1.71

1.78

0.43

INTERPRETATION

For BANK. The highest Margin was 2.65 %, in 2010. On an average corporation generates 1% margin on Net sales. Company’s position is not nice in comparison to 2010 & 2012. But it decreases in 2011. The company is busy in banking, it is assets intensive trade and so margin is less.

E. EQUITY RELATED RATIOS

Following are the three ratios under this head:

1. EPS

2. DPS

3. Payout Ratio

1. EPS (Earning Per Share):

The segment of a company's profit owed to each outstanding share of normal stock. Earnings per share dish up as an indicator of a company's efficiency. When scheming, it is more precise to use a biased average number of shares outstanding over the coverage term, since the number of shares exceptional can change in excess of time. However, data sources from time to time simplify the calculation by using the figure of shares exceptional at the end of the time.

EPS = PAT / No. of Shares

2010

2011

2012

Company name

PAT No. of Shares

PAT No. of Shares

PAT No. of Shares

PMC

27.06 6.00

29.15 8.00

38.73 9.00

ARIHANT BANK

10.41 0.60

11.13 0.60

13.88 0.64

SARASWAT

107.75 20.57

119.7 20.57

154.01 23.38

TOTAL

145.22 27.17

159.98 29.17

206.62 33.02

EPS

5.34

5.48

6.25

INTERPRETATION

The Face value of shares was different from 2010, The Esp. is 5.34 and it found that it increases scenario in 2011 it 5.48 which profitable for company to generate high revenue on bank share while banks maintain increase scenario in 2012 also which 6.25 more gainful for banks

2. DPS (Dividend per Share):

The sum of confirmed dividend for every commonplace share issue. Dividend per share (DPS) is the total dividends paid out over a whole time (including interim dividends but not including special dividends) separated by the figure of outstanding usual share issued. payment per share are more often than not easily put up on quotation page as the dividend paid in the most new region which is then used to work out the dividend yield. 

DPS = Dividend / No. of Shares

2010

2011

2012

Company name

Dividend No. of Shares

Dividend No. of Shares

Dividend No. of Shares

PMC

454.01 6.00

531.02 8.00

838.35 9.00

ARIHANT BANK

0.39 0.60

0.44 0.60

0.52 0.64

SARASWAT

140.6 20.57

137.9 20.57

186.3 23.38

TOTAL

595 27.17

669.36 29.17

1025.17 33.02

21.9

22.9

31.0

INTERPRETATION

It must be noted, I have worked out no. of shares of these 3 years on face value of different Rs, though. So as to make comparison easily. DPS clearly shows increasing trend and from last 3 years it is constant which is nice for the shareholders. 1.5Rs. DPS indicates on the face value, company provides 21.9 % dividend and 22.9% & 31 % for 2011, 2012 respectively. It is good fixation on the part of company.

3. Payout Ratio:

The amount of earnings paid out in dividend to shareholders. Investor can use the payout ratio to decide what companies are doing with their pay. The payout ratio also indicates how well pay ropes the dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are easier to pay out than larger dividends.

Payout Ratio = Dividend / PAT

2010

2011

2012

Company name

Dividend PAT

Dividend PAT

Dividend PAT

PMC

454.01 27.06

531.02 29.15

838.35 38.73

ARIHANT BANK

0.39 10.41

0.44 11.13

0.52 13.88

SARASWAT

140.6 107.75

137.9 119.7

186.3 154.01

TOTAL

595 145.22

669.36 159.98

1025.17 206.62

4.09

4.18

4.96

INTERPRETATION

It is visible from the Graph that Ratio shows rising trend till 2012, and then it starts increasing, which is very nice. The amount of intended dividend is also increasing, and it is constant from last 2 years. Although the % of payout increases in 2011, the amount of dividend remains the same, but the PAT is decreased. This indicates that bank. is very loyal to their shareholders, as it had increased % of payout from the decrease PAT amount in 2011, Company had shown immense growth in payout in 2012 against preceding years too. All these efforts of company surely convince shareholders.

WORKING CAPITAL ANALYSIS

1. Current Ratio:

The current ratio is a monetary ratio that measures whether or not a firm has sufficient capital to pay its amount overdue in excess of the next 12 months. It compare a firm's current assets to current liability its. The current ratio is an indication of a firm market liquidity and ability to meet creditor's burden. Suitable current ratios vary from industry to industry and are generally connecting 1.5 and 3 for well-built businesses. If a company's present ratio is in this range, then it more often than not indicates good short-term monetary strength.

Current Ratio= Current Assets / Current Liability

2010

2011

2012

Company name

CA CL

CA CL

CA CL

PMC

272.58 265.46

401.75 293.50

594.38 379.13

ARIHANT BANK

126.5 158.47

164.8 177.47

134.7 207.05

SARASWAT

303.0 163.19

283.5 181.98

903.8 215.73

TOTAL

702.08 587.12

849.3 652.95

1632.8 801.9

C R

1.10

1.30

2.03

INTERPRETATION

We can see from the above chart that, bank. Current assets are not more than two times against current liability in last two years. This shows not very good condition of company. The high current ratio more ability of company to meet current obligation and greater safety of funds for short term creditors. So it indicates, the current ratio is not acceptable

2. Working capital

A measure of both a company's capability and its short-term monetary health. This ratio indicates whether a company has sufficient short expression assets to cover up its short term debt. Anything below 1 indicates negative W/C (working capital). While no matter which over 2 earnings that the company is not investing excess assets. Most believe that a ratio between 1.2 and 2.0 is sufficient. Also known as "net operational capital", or the "operational capital ratio". 

Working capital = Current assets - current liabilities

2010

2011

2012

Company name

CA CL

CA CL

CA CL

PMC

272.58 265.46

401.75 293.50

594.38 379.13

ARIHANT BANK

126.5 158.47

164.8 177.47

134.7 207.05

SARASWAT

303.0 163.19

283.5 181.98

903.8 215.73

TOTAL

702.08 587.12

849.3 652.95

1632.8 801.9

W.C

114.96

194.4

830.9

Interpretation

A calculate of both a company's competency and its short term financial health. The working capital useful to meet the day to day requirement of expense and cash requirement in 2010 the working capital was 114.96 crore and after that in 2011 it was big increase in 194.4 which shows the bank increase their working capital while in it was 830. Which continues increment in working capital?

Applying Porter's 5 Forces Model to Banking Industry

Porter's 5 Forces Model is a actuality check to see if a business is good-looking enough to enter. The 5 forces are: 1) Threats from new or possible competitors. 2) The power of competition among existing firms. 3) The power of the supplier. 4) The power of the consumers. 5) The easiness of varying to substitute products. If all of folk’s forces are far above the ground then the manufacturing is less positive to enter. Before entering an industry, one firm should make sure whether those forces are low, so it’s positive for the firm to enter.

Banking trade is in the middle of the most powerful developed. Which happen to be the industry I am working in? Let’s break it down and see how Porter's 5 Forces Model be relevant in this industry.

Force 1: Threats from new-fangled or potential competitors--- Low---This might be the only power that will achieve a low. Chance a bank requires a lot of funds. Every associate of the plank of directors wants to be tartan and verified by the fed, this more often than not takes a long flash. The filing also takes a extended time for the fed to grant.

Force 2: The intensity of rivalry among obtainable firms---High--- As you can observe, bank are branch all over. The banks are offering incentive for opening accounts. You might hear of "Free examination for Life", "No ATM fee always", "at no cost $75 for opportunity a new explanation". a number of of the bankers are required to open sure amount of financial records every month. This makes the rivalry very fierce.

Force 3: The power of the supplier High--- There is only one trader, the fed. All banks in the United States have a relation with the Fed. This is bank account number is their direction-finding numeral. This income that Fed has total control over the industry. A small transform in concentration by the feed resolve have tremendous effect on the whole industry. Other key influence is fed money speed, required keep back ratio, etc.

Force 4: The power of the consumers High---If the customer doesn't like no matter which, and I mean anything of their banks. He can open account in an additional bank, which it won't get him more than 30 minutes. This is why client service is attractive so significant in this trade. The bank I work at offers tons of stuff for the customers, as well as: free pens, free coin plus machinery, lollipops, dog biscuit, even a greeter at the entrance, etc.

Force 5: The easiness of changing to substitute products average Customers can forever put currency anywhere to make a little benefit, there are all type of bond, common funds, stock etc. However, the power of check clearing of the banks is undeniable. All the paychecks, expenditure goes through some banks to obvious. Image if there are no bank to obvious check, then the whole financial system will goes in halt. There is other monetary institution other than banks, such as thrifts, credit merger, etc; Porter's 5 Forces Model states that bank industry is adverse to enter as the majority of the forces scored high.

Problems Identification,

Failed Banks

Dozens of banks unsuccessful in 2008 and 2009, many of whom were serious into profitable real estate loans, building loans and land loans. Gainful real estate loan finance the strip malls and shopping that saw past its best figures of consumers as the financial system decline. Holder was not able to make the operating cost and may have surplus the property, send-off the bank on the fastening. This led to less than capitalization at many bank, which cause them to be in use over by the FDIC.

Sub Prime Lending

Many banks busy in sub-prime credit lending. These loans were completed to clients who did not qualify for average mortgage loan since of feeble recognition, inadequate profits or an unbalanced line of work circumstance. A sub-prime consumer is a great deal riskier since of this factor. several loan complete to this clientele were compliant rate mortgages, which are tied to sure index, plus a margin, that add to occasionally and raise the advance sum. Some consumers saw their expenditure add to by hundreds of dollars, creation them high-priced. Foreclosures reach proof level when household could not make this spending.

Foreclosures

The add to in foreclosures cause the worth of home to refuse considerably. Many homeowners were left due more than their homes were worth. Face with foreclosure, they also were not capable to sell the home without leaving from side to side a small sale, which potentially could disappear them remaining a require balance. The enhance in foreclosures also caused a decrease in command for adjustment.

Bad Loans

Some bank made a lot of bad loan. Many clients should not have been time-honored for loans in the first leave. Other banks invest in dangerous mortgage-backed securities. Then, when the melancholy hit, a lot of populace misplaced their job and be incapable to create loan payments. Criminal act rates for finance loans soar, as did losses and awful debts.

Reserve Requirements

A lot of banks didn't have sufficient assets. This is the section of clientele deposits that banks are necessary to stay on hand over, in the hard cash vault or on put with the central Reserve. This treasury helps offset dead and support with daily bank dealings. At what time banks don't include sufficient treasury, they could not loan currency waiting the treasury is replenished. Bank can have a loan of from other banks at the feed Funds rate, which is 0.25 percent. These types of loans are usually during the night borrowing.