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# Why Accounting Education Volunteer

## Become Volunteer Teacher

This is the question which comes in the mind of shareholder who have investment money and want to invest or if you have invested the money in public sector bank and you have seen the decrease value in your invested money in Indian public sector banks.

Public sector banks are also companies like other type of companies but it is in service sector like other companies who are providing IT service, power supply service and telecommunication service. So, I already told, you have to measure its financial health. Whether you are short period investor or long period investor, you should understand except financial health, there are other many factors which affects the market value of shares of the public sector companies which you must know

Following are Main Factors which You have to Check Before Invest Your Money in Indian Public Sector Banks

1. CASA Ratio

Casa ratio means current and saving account ratio of bank. It means total amount of deposit of customers in current and saving account of a bank. Now, what is the need to know casa ratio of bank before investment in the share of bank. If bank has received large amount in the form of saving and current account, there is very less cost of this money. Current account has zero cost and saving account has just 3%. With this higher CASA ratio, bank will get more profit if same amount will given on debt. It means, higher net interest margin.

So, compare two or more indian public sector  banks and whose CASA ratio higher is better than whose casa ratio is less because same company is getting high net interest margin. So, company will grow, your share value will grow.

CASA Ratio = CASA Deposit / Total Deposit X 100

2. Net Interest Margin

Net interest margin is very important to know to expectations of good value of share in future in the market. It is difference between interest received by bank as lender of money from loan taker and interest paid on the deposit in the bank. More this margin means more ability of bank to earn money and good for shareholders who are real owner of bank. If you want to buy share you have to check this. It is next step after finding CASA ratio ratio. You can find and calculate only and increase the power of your knowledge for your success.

Formula

Interest Received on Given Loan - Interest Paid on Deposits / Total Given loan by Bank

3. NPA

Non performing assets means the loan which is given by bank and are default. Loan takers are not returning the money or it will soon default.

90 days or more, loan taker did not give interest or principle to bank. If this is becoming higher than previous, it is good sign, bank is going to loss. So, as investor, you have to see this fact. Never invest in such bank. If NPA is decreasing from past, this is good sign, bank is started positive action to secure its money. So, you can take decision to invest money in such banks.

4. Provision Coverage Ratio

Provision coverage ratio is the % of Keep funds separate for bad assets out of profit. Now, bad asset is also NPA. If bank had done this provision. That is good.

5. Asset Accretion Moderating

Is bank buying new assets at discount. It is good technique of increasing the profitability of bank. Different banks as different strategy, you can check it

6. Growth of Corporate Loan

Banks main business is to give loan and earn money. From previous period to this current period, you can compare the growth of its given loan. Growth of loan is good for public sector bank because it will give future income. So, it is also factor of future market value of share and will affect your decision to buy share of bank.

In End, it is simple rule of Financial Success, never keep all fruits in one bucket. Means, you can choose best public sector banks and also invest your money in other sectors like steel, cables, electricity, IT and health.

Related Books

Tips for Better Management of Money
Banking Exam Books
Banking eBook

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