Analysis on Capital Structure, Dividend Policy & Working Capital Requirements of

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SELDOM CORPORATE India recognizes a PSU (Public Sector Unit) and considers its executives worthy of an award for efficiency and business performance. In the corporate arena, ICICI, HDFC, HSBC etc. are the banks which are always considered for one award or the other. Some PSU banks have won awards in the past but those awards were for achieving computerization and other such ‘achievements’. Seldom has a a PSU bank been seen by corporate India as a potential avenue and as one capable of scaling new heights in the banking industry with the presence of more competitive private banks. But now SBI has started to dance, to jump and to take big strides for achieving the business goal, which hitherto have been the characteristics of the small and…show more content…
Therefore, a good dividend policy under which the company declares a regular growth based dividend, the company is bound to be benefited by that which is communicated to the potential investors that is visible by the rocketing prices of the stock price of SBI. Apart from this, management at SBI is working up to the mark as it is functioning under a proper planning regarding how much to pay out as dividend and how much retain for future investments. To meet its financial requirements, SBI plans really well. State Bank utilizes it cash adequately to meet its funding requirements. Being in banking sector, where the depositors can demand their money back at any time, the bank needs to maintain the flexibility in its cash reserves and so has to declare the dividends sensibly and thus a sufficient cash balance has been maintained by the bank which is shown below: ________________________________________________________________ 2006-07 2005-06 2004-05 2003-04 (in Rs. Crores) Cash and equivalent begin of year 44,560.00 39,322.10 43,566.62 45,181.02

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