www.pbr.co.in 91 Profitability of State Bank of India: An Analysis Dr. Kingshuk Adhikari Assistant Professor Department of Commerce Assam University, (A Central University) Silchar, India Nitashree Barman Research Scholar Department of Commerce Assam University, (A Central University) Silchar, India Pinkumoni Kashyap Research Scholar Department of Commerce Assam University, (A Central University) Silchar, India Abstract The paper attempts to analyse the profitability of State bank of India for the period of seven years. Apart from studying the trend of different components of both income and expenditure, performance of the bank has been analysed with the parameters like OPTWF, ROA, ROE, ROI and EPS. There is a significant difference not only between the components of income but also across the components of expenditure. The paper concludes that the profitability performance of the SBI is not consistent during the study period. The bank should focus more on diversification of income and should also curtail operating expenses in order to improve profitability performance. Keywords: Income, Expenditure, Operating Expenses, Profit, Interest Pacific Business Review International Volume 6, Issue 12, June 2014 Introduction Background of the Study Financial system has a great role to play in economic development of a country. A well-functioning financial sector facilitates efficient intermediation of financial resources, which creates money in the economy. In a country like India, public sector banks have an edge over private sector banks in terms of size, geographical reach and access to low cost deposits. Large size of business enables them to cater to the larger credit needs of corporate as well as other sections of the society. Geographical reach through a large number of branches increases their access to low cost deposits and lowers the portfolio risk through diversification. The access to low cost deposits enables them to the corporate at competitive rates (Pathak, 2005:479). At present, there are 26 public sector banks in India out of which 19 nationalised banks, one IDBI bank and other six banks are SBI and its Associates. SBI is the biggest commercial bank in India. Compared to other Indian commercial banks it has wide business networks and been able to access to a wide coverage of areas. Thus, the assessment of profitability performance of such a big bank has its own importance having implication towards its own financial health as well as economic condition of the economy. Besides, if the profitability performance shows increasing trend, it signals that the concern is moving towards the development stage along with right strategy