Professional Documents
Culture Documents
MEANING OF FINANCE Finance is also the science and art of determining if the funds of an organization are being used properly. Through financial analysis, companies and businesses can take decisions and corrective actions towards the sources of income and the expenses and investments that need to be made in order to stay competitive. Finance is the life blood of business. It flows in mostly from scale of goods and services. It flows out for meeting various types of expenditure. The activating element in any business which may be on industrial or commercial undertaking is the finance. Business finance has been defined as those activities which have to do with the provision and management of funds for the satisfactory conduct of a business. Business finance is defined as that business activity which is concerned with the acquisition and conservation of capital funds in meeting the financial needs and overall objectives of business enterprises. So we can say business finance is mainly developed around three major objectives. Firstly, to obtain an adequate supply of capital for the needs of the business, Secondly, to conserve and increase the capital through better management, Thirdly, to make profit from the use of funds this is an overall objective of a business enterprise.
INDIAN FINANCIAL SYSTEM The financial system or the financial sector of any country consists of specialized and nonspecialized financial institutions of organized and unorganized financial markets of financial instruments and services, which facilitate transfer of funds procedures and practises adopted in the markets and financial interrelationship, are also part of the system. The structure of a financial system in any economy is as follows:
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Primary market: It is a market for new issue or new financial claims. Secondary market: It is a market for existing securities and those already issued and quoted in stock exchange.
b) Government Securities Market: It is also called gilt-edged securities market. It is a market where government securities are traded (long term securities)
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b) SECONDARY SECURITIES: These securities issued by some intermediaries ex; UTI and Mutual fund again these securities may be classified on the basis of duration as follows. Short Term Securities: Within one year ex; bills of exchange. Medium Term Security: Maturity period between 1-5 years ex; debentures. Long Term Securities: Maturity period more than 5 years ex; Gilts.
FINANCIAL SERVICES a) MERCHANT BANKING: A merchant banker is a financial intermediary who helps to transfer capital from those it to those who need it. b) LOAN SYNDICATION: Much number of banks joins together and forms a syndicate to provide loan as big sum to corporate. c) LEASING: A lease is an agreement under which a company acquires a right to make use of capital assets like machinery for agreed period in return for periodic payment of rentals. d) HIRE PURCHASE: It is an agreement relating to transaction in which goods are let on hire. e) FACTORING: It is an agreement under which a financial intermediary assumes the credit risk in the collection of book debt passes for its client. f) VENTURE CAPITAL: A venture capitalist finances a project based on the potentialities of new innovative projects for new entrepreneurs. g) MUTUAL FUND: A mutual fund refers to a fund raised by a financial services company by pooling the savings of the public.
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3. Agency services:
Another important function of a banker is the services offered by them as an agent. The commercial banks render a significant service by providing to its customers a simple means of medium of exchange called cheques. The cheque system is considered to be the most developed type of credit instrument. The banks perform miscellaneous functions such as undertaking the payment subscriptions, insurance premium, rent, etc. On the behalf of the customers they collect cheques, bills, salaries, pensions, dividends,
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4. General utility servicesA banker performs many general utility personal or miscellaneous services for his customers. The general utility services include the safe- keeping of valuables and documents, the issue of credit instrument for easy transfer of funds, collection of credit information regarding the customers, transaction in foreign exchange and provision of specialized advisory services to the customers.
EVOLUTION OF BANKING Banking is an ancient business with its history dated back to the 13 th century. When the first bill of exchange was used as money in the medieval trade. Banking in India has its origin as early as the Vedic period. During the days of east India Company, it was the turn of the agency house to carry out the banking business. The general bank of India was the first joint stock bank to be established in the year of 1886. The others that followed are the Bank of Hindustan and the Bengal Bank. In 1891 the first purely Indian Bank that is United Commercial Bank came into being. The setting up of Punjab National Bank in 1894 followed it. In 1920, three bank namely Bank of Bengal (1809), Bank of Bombay (1840), Bank of Madras (1843) was amalgamated and a new bank, Imperial Bank of India was established. The Reserve Bank of India, which is the Central bank, was created in 1935, with the passing Reserve Bank of India act in 1934. Later with the passing of State Bank of India in 1955 the undertaking of Imperial Bank of India was taken over by newly constituted State Bank of India. In the wake of Swadeshi Movement in 1905 no. of Bank with Indian Management were established in the country namely Punjab National Bank Ltd. The Bank of Baroda (1908), Bank of India (1906) Canara Bank Ltd. Indian Bank Ltd, Central Bank of India Ltd.
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The government said that nationalization is a major step in the process of public control over the principal institution. This would mobilize the peoples savings and direct it towards
productive purposes. After the nationalization the banks will be more focused on the serving farmers, promoting agricultural production and developing rural sectors. Public ownership of banking will utilize the credit facility towards speculative and other unproductive purposes.
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The Reserve Bank of India and Its Promotional Role: The RBI established the bill market scheme in 1952. The RBI has tried to help the establishment of financial corporation to provide credit to the agricultural sector of the economy. The RBI has promoted regional rural banks with the help of commercial banks to extend banking facilities to rural areas. The RBI has taken steps to enable the commercial banks to open branch in foreign countries. The RBI encourages and provides research in areas of banking.
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CREDIT APPRAISAL Credit appraisal is the process by which the lender assesses the credit worthiness of the borrower. It revolves around character, collateral capability and capacity. It takes into account various factors like income of the applicants, number of dependents, monthly expenditure, repayment capacity, employment history, number of years of service and other factors which affect credit rating of the borrower. Credit appraisal is a process to ascertain the risks associated with the extension of the credit facility. It is generally carried by the financial institutions which are involved in providing financial funding to its customers. Credit appraisal is a process to ascertain the risks associated with the extension of the credit facility. It is generally carried by the financial institutions which are involved in providing financial funding to its customers Credit risk is a risk related to non repayment of the credit obtained by the customer of the bank. Thus it is necessary to appraise the creditability of the customer in order to mitigate the credit risk. Proper evaluation of the customer is performed, which measures the financial condition and the ability of the customer to repay back the loan in future. Generally the credit facilities are extended against the security know as collateral. But even though the loans are backed by the collateral, banks are normally interested in the actual loan amount to be repaid along with the interest. Thus the customers cash flows are ascertained to ensure the timely payment of the principal and the interest. The product is designed to automate the entire lending process in a bank and provide credit portfolio managers with tools and reporting to assist them in decision making. Banks offers different types of credit facilities to the eligible borrowers. For this, there are several procedures, control and guidelines laid out. Credit appraisal, sanctions, monitoring and asset recovery management comprise the entire gamut of activities in the lending process of a bank.
Process of Credit appraisal: The credit appraisal is a holistic exercise which starts from the time a prospective borrower walks into the branch and culminates in credit delivery and monitoring with the objective of ensuring and maintaining the quality of lending and managing credit risk.
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The process of credit appraisal is multi-dimensional and includes: 1. 2. 3. 4. 5. Management appraisal Technical appraisal Commercial appraisal Financial appraisal Economic appraisal
Management appraisal has received lot of attention these days as it is one of the long term factors affecting the business of the concern. Technical appraisal emphasizes on the technical feasibility of the venture and also finds out the possible economic life period of the present technology. Commercial appraisal focuses on the commercial viability of the project. It tries to find matters regarding demand in market, the acceptance of product in market. It also focuses on the presence of other substitutes of the product in the market. Financial appraisal is done to find out whether the promoter is having the capacity to raise finance both own equity and debt? What are the sources of margin? Will the business generate sufficient funds to service the debt and other stakeholders? Is the capital structure optimal? Economic appraisal examines level of cost/benefit and IRR (internal rate of returns).
The scope of credit structure is incomplete without examination of credit proposal. Credit proposal has to be examined from the point of 6Cs viz 1. 2. 3. 4. 5. 6. Character Capacity Capital Condition Collateral Cash Flow
The credit policy of bank of India has undergone changes to cope up with the environmental changes, tap the available opportunities, achieve their commercial objective, fulfill social
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The credit policy is studied under- coverage, clientele marketing. The bank has over the years designed and adopted the best practices code. This in effect represents the banks philosophy towards effective corporate governance.
Meaning It is the process of appraising the credit worthiness of a loan applicant. Factors like age, income, number of Dependants, nature of employment, continuity of employment, repayment capacity, previous loans, credit cards etc are taken into account while appraising the credit worthiness of a person. Every bank or lending institutions have its own panel of officials for this purpose.
Definition The process of evaluating an applicants loan request or a corporations debt issue in order to determine the likelihood that the borrower will live upto his/her obligations.
Salient Features: 1. Data download/upload: Ensures prompt and accurate data entry in the business borrower application (profile and CMA) through floppy or web interface. 2. Pre-appraisal stage Eliminates costly errors and ensures complete and correct (input check procedures) of the uploaded borrower profile, and CMA data in required parameters sable format. 3. Verification
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Appraisal methodology Working capital computations: 1. CMA Based 2. Cash budgeting (especially for seasonal business lines) 3. Turnover methodology Term loans 4. Non banking financial companies 5. Infrastructure handling Appraisal Tools 1. Sensitivity analysis and projections for working capital and term loans 2. Comparison of previous CMAs, industry and peer group comparisons, linking to financial database of service providers such as CRISIL, CMIE and C -online. 3. Credit risk rating incorporation. 4. Term loans interest workouts, moratoriums, repayment schedules, sensitivity. 5. Computation of MPBF, facility wise maximum limits. 6. Proposal preparation. Post appraisal stage: 1. 2. 3. 4. Ensures the sanctions adequately covered by the policy guided terms and conditions. Accepted securities and documents linked to various facilities. Accepted terms and conditions linked to various facilities. Sanctions and follow-up methodologies, compliance of terms and conditions as charging of securities completed and sanctioning facilities as per set authority. 5. Auto generation of sanction letter with facility wise limits, terms and conditions. Monitoring Timely and standard review of credit extended 1. 2. 3. 4. 5. 6. Terms and conditions compliances; security documents compliance Securities charging compliance Review proposals Audit queries Stock statements QIS, MSOD
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Figure in congruencies through early warning signals to avoid non performing asset information. 1. Linkage of bank statements received from borrower, branches, etc. Recovery procedures 1. Recovery procedures and non performing asset management compromise proposal, BIFR, legal actions and write- offs. 2. Various statements- prompt and timely monitoring of activities to monitor document movement, appraisal, monitoring recoveries and soon.
Dimensions of credit appraisal: A lot of attention has to be paid to this area. This is one of the long term factors affecting the business of the concern. Does the management have enough experience in line? What is its track record? What are the antecedents? Introduced to us by whom? These are some of the questions that need to be answered before we can take up any kind of exposure. Technical appraisal: What is the status of technology used? Has a prototype been developed of the product? What could be the possible economic life period of the present technology? Is the venture technology feasible? Technical appraisal of the projects need to be carried out by all India financial institutions, PSU banks/other leading banks having expertise in the area and the same may be accepted for an appraisal purpose, after subjected to vetting by TAC/TAD. Exemption from fresh techno-economic appraisal shall be available in the following categories: 1. Where appraisal has been carried out by all India financial institutions, PSU banks/other leading banks having expertise in the area and the same may be accepted for an appraisal purpose, after subjected to vetting by TAC/TAD. 2. Where appraisal carried out by leader of WC consortium and the branch/sanctioning authority observing no serious differences with such appraisal. 3. In case of AAA/AA rated accounts with the other banks, where our purposes to join the
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Financial appraisal: Does the promoter is having the capacity to raise finance both own equity and debt? What are the sources of margin? Will the business generate sufficient funds to service the debt and other stakeholders? Is the capital structure optimal? Through scrutiny of the financial aspects of the request needs to be carried out. Apart from ascertaining the need based character of the limits requested for, the financial health of the proponents, ability to absorb unanticipated financial costs need to be looked into. Ascertaining the need based character of the limits would include scrutiny of the cost of the project, means of financing, financial projections etc. need to be within acceptable parameters for those industries/activities. Where higher limits are considered, detailed of the financial health would be made and the following ratios computed: 1. Current ratio 2. Total outstanding liabilities/equity ratio
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All the above ratios would be complied for the past two/three years including the latest audited balance sheet. As the ratios would vary from industry to industry, services, trade etc. It is proposed not to stipulate any particular bench mark for the above ratios. Besides the above factors, bank need to reckon the existence, if any, of negative factors that may adversely affect the continued well being of a customer. Economic appraisal: What is the break even level? Will the business post positive net present value through its economic life? What is the level of cost/benefit? What is the internal rate of returns? Will the cost of funding and operations be well below the IRR? As a prudent banker the following areas need to be particularly looked into: Character Antecedents- introduced by whom- is it a take over account? In which case, what does the status report say? - Background educational professional socio-economic, politicalinitiative and drive.
Capacity Experience in the activity track record planning, budgeting and review handlingproduction capacity- capacity utilization professional capacity to handle men, materials, money and minutes capacities to handle contingencies and crises. Capital Extent of stake in business. Ability to raise finance both owned equity and debt Ability to inspire and sustain investor confidence Ability to absorb losses expected and unexpected Structuring and budgeting capital.
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Stages of credit appraisal: 1. Interview with the proponent and attestation of application on bank's prescribed format. 2. Adherence of KYC norms stipulated by reserve bank of India. 3. Attestation and verification of documents/financial statements according to type of facilities required as per bank's norms. 4. Inspection:
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Before extending any loan or credit to you, lenders check things like how much money you earn, how long you have been using credit and whether you have made payments on time.
Credit Scoring System: Credit scoring is the statistical system used by lenders to determine applicants credit worthiness. Information about borrower and his credit experiences is collected from your loan application and his credit report. Using a statistical program, lenders compare this information to the credit performance of consumers with similar profiles. How long borrower been using credit and whether he has made payments on time. A credit scoring system awards points for each factor that helps predict who is most likely to repay the debt. A total number of points a credit score helps predict how credit worthy the borrower are, that is, how likely it is that you will repay a loan and make the payments when due. The points are distributed in various aspects of borrower profile such as: 1. Personal information: age, educational qualifications, number of dependents/children, spouses income. 2. Employment information: organization, designation, length of service, etc. 3. Income information: net income, instalment of other loans, other liabilities 4. Net worth information: owning a house, vehicle, credit cards, telephone, etc. 5. Previous relations with the lender: banking account, credit card, any other loan, etc from the same lender. Borrower level of education can give an indication to the lender whether it is a good risk to extended credit to him. Higher the education better is the credit score. A person with professional qualifications is given more points than a simple graduate.
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Scoring models generally evaluate the following types of information in credit report: What is borrower outstanding debt? Many scoring models evaluated the total amount of debt that borrower has compared to his credit limits. If the amount that borrower owe is close to his credit limit that is likely to have a negative effect on his score. Have borrower paid his dues on time? Payment history typically is a significant factor. It is likely that borrower score will be affected negatively if he has paid his dues late. How long is borrower credit history? Generally, lenders prefer a seasoned credit history i.e, a credit track record of more than a year. An insufficient credit history may have an effect on borrower score, but that can be offset by other factors, such as timely payments, low balance and previous relationship with the lender. How many and what types of credit accounts do the borrower have? Although it is generally good to have established credit accounts, too many loans and credit card accounts may have a negative effect on borrower score. Scoring models may be based on more than just information in borrower application from and bank statements. For example, lenders may call borrower for one-to-one discussion; investigate his credit reputation by contacting their employer, friends or neighbours. Lenders also look at borrower spending behaviour. The model considers all these information for evaluation. Reliable of the credit scoring: Credit scoring system enable lenders to evaluate a number of applicants consistently and impartially on many different characteristics. There are pros and cons to the credit scoring
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Credit verification agencies: 1. Role of credit verification agencies: Credit verification agencies provide the professional service of verifying, validating and certifying vital details of credit information on individuals applying to banks for loans. Use of credit verification agencies is gaining increasing as a risk mitigating strategy in the retail loan segment within the banking industry. The agencies usually verify the following minimum details in respect of each loan application: Identity of the applicants. Address of the applicants. Veracity of employment/profession of the applicants. Cross verification of the income details declared by the applicant Confirmation of telephone numbers
However such verifications by agencies is generally available only in respect of retail loans.
2. Benefits of entrusting credit verification to specialist agencies are: The major benefits of entrusting credit verification to specialist agencies are: Since credit verification agencies operate locally and have a specialization in their domain, the verification conducted by them is generally reliable prompting many banks in the industry to use the services of specialist credit verification agencies.
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This would also be appropriate for the reason that the above 6 cities account for a bill of the banks exposure in value terms.
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modifications/deviations to all or any of the above described guidelines on enlisting of credit verification agencies including the maximum fee payable for verification, benchmarks for verification and amendments to the format of the indemnity.
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Method of data collection: There are various methods of data collection as concerned to the project; direct interview method has been followed in this study. Limitations of the study: The study is limited to Rythara seva Sahakara bank in Singnayakanahally branch, Bangalore only. Due to inadequate time and cost it was not possible for me to make an exhaustive study. It is limited to the facts and figures of the annual report provided for the periods 2009,2010 and 2011. Interpretation of the study is based on the assumption that the respondents have given correct information. This study does not provide any information other than credit appraisal.
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1. INTRODUCTION: The first chapter gives the detailed introduction on the credit appraisal . 2. RESEARCH OF THE STUDY: The second chapter states the objectives, scope, source of data and research methodology. 3. COMPANY PROFILE OF THE ORGANIZATION: The third chapter gives the profile of the organization where the project is conducted. It also explains about the future plans of the company. 4. ANALYSIS AND INTERPRETATION: The chapter gives detail regarding the analysis and interpretation of data after collection. It comprises of brief notes regarding analysis and various methods through which they may be carried out. It also consists of the data in form of tables, graphs and pie-charts and its interpretation. 5. SUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONS: This chapter comprises of the findings and conclusion drawn from the analysed & interpreted data and even suggestions with respect to findings. 6. ANNEXURE: 7. BIBLIOGRAPHY:
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agriculture. Especially all the small and marginal farmers were provided with short term and medium term loans. The advanced technology was made available by digging Bore wells and open wells for irrigation which helped conversion of dry land in to cultivatable land.
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Mission Statement To improve the economic development of the members of the society and also giving attention for lending loans to farmer also. Release them from the clutches of moneylenders through ,making available loans at a reasonable rate of interest with simple terms and conditions. Information Technology in Rythara Seva Sahakara Bank Information technology is very important. Today, every banking sector is the modern method of technology of different department, so this bank also use and implements new techniques in the field of finance and all over the management in the organization. Rythara seva Sahakara bank was implementing recording all documentations in computerized and also monitoring the legal cases with the help of computers. Finance Government of Karnataka extended financial support for establishing the farmer co-operative societies/banks in the rural areas. It provided the maximum loan facilities to the individual farmers, small business man and others to take the benefit from these banks.
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Important acts of Rythara Seva Sahakara Bank Karnataka co-operative societies Act-1959 Karnataka co-operative societies Rules-1960 Department of parliamentary affairs and legislation-2000 Bye-law of co-operative societies.
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Planning
Organising
Staffing
Directing
Controlling
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Organizational Structure of Rythara Seva Sahakara Bank Share holder Directors Manager Staff
Shareholders The person who holds the share of company is called a shareholder/member of the company. The capital of the company is usually divided into certain individual units of a fixed amount. These units are called share. Share means a definite portion of the capital of a company. A share is the interest of a shareholder in the company measured by a sum of money. Societies provided by three types of shareholders namely: a. Class Shareholder (Former). b. Class Shareholder (Government) c. Class Shareholder (Individual) Directors There are ten board of directors from the different departments. Directors of the Rythara Seva Sahakara Bank VANISHREE N.MURTHY K.NAGEGOWDA
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Future Prospects/Growth All branches should become computerized branch with ATM facility Undertaking commercial activities. Increasing sales. Become a RBI clearing house member
AUDIT,ENQUIRY & INSPECTION Audit Under rule 51, Rythara Seva Sahakara bank should keep accounts of books and registers as prescribed by the registrar from time to time. In case fails to maintain and write the accounts up to date as prescribed by the registrar. He is given powers under rule 52 to direct the society to gets to these accounts. Auditor should audit the final accounts and other statements and they may direct returns as with in two months from the close of the co-operative year. Enquiry Whenever irregularities and mismanagement etc, occur in the co-operative societies. The act provide for enquiry by the registrar under section 64.
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Analysis: The above table shows that there are changes in the equity share capital of the bank. It is 44.38% in 2009-10, 46.84% in 2010-11 and 8.78% in 2011-12.
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46.84%
Interpretation: The above graph represents the changes in equity share capital from one year to another year. In 201011 it has increased to some extent but it has been suddenly decreased to a large extent in 2011-12.
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Analysis: The above table shows the net profit for three financial years which is increasing from one financial year to another financial year. The net profit was 124.24 lakhs in 2009-2010, 183.77 lakhs in 2010-2011 and 232.56 lakhs in 2011-2012.
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22.98%
34.00%
Interpretation: From the above graph we can interpret that net profit is increasing year by year i.e. from 22.98% in 2009-2010 to 43.02% in 2011-2012.
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Analysis From the above table we can analyse that the value of current assets increased in the year 2010-2011 and it has decreased in the financial year 2011-2012.
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35.00
33.00
32.00
29.00
28.00
Interpretation: The above graph represents the change in the value of current assets. The value of current assets increased from 30.35% to 35.14% in the financial year 2009-2010 and it has been diminished to 34.51% in the financial year 2010-2011.
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Analysis: From the above table it can be analysed that there are fluctuations in the value of current liabilities. The value of current liability was Rs.10.31 Lakhs in 2009-2010 and it was Rs.32.81 Lakhs in 2011-2012.
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2011-12
67.87%
2010-11
10.80%
2009-10
21.33%
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
Interpretation: From the above graph we can interpret that the value of current liabilities has decreased from 21.33% in 2009-2010 to 10.80% in 2010-2011 and again the value of current liabilities increased to 67.87% in the financial year of 2011-2012.
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Year
Amount( in lakhs)
Percentage (%)
2009 - 2010
105.92
34.70
2010 - 2011
83.38
27.32
2011 - 2012
115.92
37.98
Total
305.22
100
ANALYSIS: From the above table it is analysed that the amount outstanding with respect to personal loan is 105.92 lakhs with 34.70% in 2009-2010. The amount outstanding with respect to personal loan is 83.38 lakhs with 27.32% and the amount outstanding with respect to personal loan is 115.92 lakhs with 37.98% in 2011 - 2012.
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40
35
30
25
20 34.7 % 15 27.32%
37.98 %
10
INTERPRETATION: From the above graph it can be interpreted that there is a decline in the amount outstanding with respect to personal loan in the year 2010 2011 and again there is substantial growth in the year 2011-2012 in the matter of personal loans.
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ANALYSIS: From the above table it is analysed that the outstanding amount of loan was 82.76 lakhs with 28% in 2009-2010, In the year 2010 2011 the amount was 98.87 lakhs with 34 % and in the year 2011 2012 it was 113.36 lakhs with 38%.
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34%
INTERPRETATION: From the above pie- chart it can be inferred that there is continuous growth every year in the housing finance segment. There is a noticeable growth in the home loan segment which is very profitable to the bank for their further financial improvement.
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Year
Percentage (%)
1.06 1.10
6.91 7.17
2011 - 2012
13.18
85.92
Total
15.34
100
ANALYSIS: From the above table it is analysed that the amount outstanding with respect to educational loan is 1.06 lakhs with 6.91% in the financial year 2009-2010. The amount outstanding with respect to educational loan is 1.10 lakhs with 7.17% in 2010-2011. And it was 13.18 lakhs with 85.92% in 2011-2012.
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6.91% 7.17%
85.92%
INTERPRETATION: From the above pie-chart it is seen that there is a substantial growth of education loan in the year 2010 2011 and there is a tremendous growth in the year 2011 2012 as compared to previous years. There is a noticeable growth in the education loan segment of Rythara seva Sahakara bank which plays a very important role in the development of bank.
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Analysis: From the above table we can analyse that the value of the advances provided to SC/ST priority sector remains same in the last three financial years.
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33.33%
33.33%
33.33%
Interpretation: The above graph represents the change in the value of advances given to SC/ST priority sector. Hence the value of advances to SC/ST priority sector was stable for last three years i.e. 33.33%.
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Analysis: From the above table we can ascertain that the value of the domestic credit was Rs.10.31 Lakhs in 20092010, Rs.8.22 lakhs in 2010-2011 and Rs.2.99 lakhs in 2011-2012.
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50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
47.91%
38.20%
13.89%
Series1
Interpretation: From the above graph we can interpret the change in the value of domestic credit of Rythara seva Sahakara bank. Hence there is a diminishing strategy in the value of domestic credit i.e. from 47.91% in 2009-2010 to 13.89% in the financial year 2011-2012.
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Analysis: The above table shows the change in the value of domestic deposit. The value of domestic deposit was Rs.3996.63 lakhs in 2009-2010, Rs.5593.95 Lakhs in 2010-2011 and 21407.66 lakhs in 2011-2012.
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70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 2009-10 2010-11 12.89% 18.05%
69.06%
2011-12
Interpretation: From the above graph we can conclude the change in the value of domestic deposits. The value of domestic deposits has increased from 12.89% in 2009-2010 to 18.05% in 2010-2011 and again it has increased to 69.06% in 2011-2012.
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Analysis: From the above table we can analyse the value of change in the net NPV. It was Rs.30.64 Lakhs in 20092010, Rs.48.02 Lakhs in 2010-2011 and Rs.54.56 Lakhs in 2011-2012.
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45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 2009-10 2010-11 23.00%
40.95% 36.05%
2011-12
Interpretation: The above graph represents the change in the value of net NPA. The net NPA increased from 23% in 2009-2010 to 36.05% in 2010-2011 and again it has increased to 40.95% in 2011-2012.
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Analysis: From the above table it can be analysed that the value of Bank deposits was Rs.1523.11 lakhs in 20092010, Rs.2477.59 lakhs in 2010-2011 and Rs.2831.94 lakhs in 2011-2012.
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2011-12
41.45%
2010-11
36.26%
2009-10
22.29%
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
Interpretation: From the above graph we can interpret the change in the value of bank deposits from 2009-2012. The value of bank deposits was 22.29% in 2009-10 and it was 41.45% in 2011-2012.
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Analysis From the above table we can analyse that the value of current deposits was Rs.3996.63 lakhs in 2009.10, Rs.5593.95 lakhs in 2010-2011 and it was 293.13 lakhs in 2011-2012.
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2.97%
Interpretation: The above graph represents percentage of change in current deposits. The current deposits increased from 40.44% in 2009-2010 and it was 2.97% in 2011-2012. Hence, the current deposits has decreased to a great extent.
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Analysis: From the above table we can analyse that the value of Fixed deposits was Rs.1582.22 lakhs in 20092010, Rs.1988.16 lakhs in 2010-2011 and Rs,2866.07 lakhs in 2011-2012.
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2011-12
44.53%
2010-11
30.89%
2009-10
24.48%
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
Interpretation: The above graph represents the change in the value of fixed deposits. The value of fixed deposits was increased from 24.48% in 2009-2010 to 30,89% in 2020-2011 and again it has increased to 44.53% in 2011-2012.
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Table 15 Table showing source of awareness about Rythara seva Sahakara bank
Source
No. of respondent
Percentage (%)
RSSB employees
12.5
Friends
22
55
Television
7.5
Newspaper
10
25
Total
40
100
ANALYSIS: From the above table it can be analysed that the source of awareness for 5 respondents is through RSSB employees, the source of awareness for 22 respondents is through friends, the source of awareness for 3 respondents is through television & the source of awareness for 10 respondents is through news paper.
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60
55%
50
40
30
25%
20 12.5% 10 7.5%
INTERPRETATION: It can be inferred that majority of the respondent came to know about the bank through friends, followed by news paper and finally the least came to know through television.
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Findings: 1. The equity share capital of the bank is quite satisfactory it maintained a stable rate of percentage. 2. The net profit of the bank is increasing year by year is good indication for the bank that it is in a healthy position. 3. When compare the percentage of the current assets over the current liabilities it is satisfactory i.e., the value of current assets is higher than the current liabilities in all three years. 4. The housing loan and education loan is also increasing year by year this will help to the common people and students. 5. Advances lend under priority sector to various sections of people is stable in all three years. 6. Domestic credit is decreased year by year in turn domestic deposits increased year by year, it is also good for the bank that they can get the sources for their operations. 7. The net NPA of the bank is increasing year by year. 8. Bank deposits increased tremendously and current deposits were maintained stable. 9. The Fixed deposit is in its way of increasing year by year. 10. Overall by observing the growing scenario, in every aspect it is good for the bank for its long run survival.
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SUGGESTIONS: 1. First thing is the equity share capital stale in all three years. If the bank attracts or obtains more equity capital it is good for its efficient operation. 2. The bank should attract more customers related to current deposits by offering more benefits to them. 3. The NPA rate increasing year by year. The bank should reduce NPA gradually. 4. More importance is bank should take more intention relating to the careful appraisal of the proposed applicant. 5. The bank has to give more additional facilities to retain its present customers. 6. The bank operation in the village side should also have improved because they are not aware about the banking activities. 7. The bank should try satisfying the customers as they desire. 8. Through this the bank can improve and become younger than ever.
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1. A detailed study about the promoters is carried out in order to ensure promoters are experienced in line of business and are capable to implement and run the project. 2. A detailed study about technical aspects is done to determine the technical soundness of the project. 3. A detailed study relating to financial viability of the project is done; thereby ensuring that project will generate sufficient surplus to repay the loan replacement and interest. 4. It determines the risk associated with the project this is done by performing a sensitivity analysis and credit rating. With sensitivity analysis the projects capacity to service debts under worsened conditions is determined. Credit ratings provides ratings for various parameters like management ,financial , market and so , thereby determine the credit worthiness of the borrower . 5. It is on the basis of credit risk level; collateral securities to be given by the borrower are determined. This shows bank of India has sound system for credit appraisal.
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BIBLIOGRAPHY
References: Websites:
A Hand Book of Banking by N. S. Toor Ramman Finance management. Finance management and policies by James C. Van Horne. Management accounting principle and practises by R. K. Sharma. Accounting for managers S. P Jain and K.L. Narang. Research methodology by C.R. Kothori. Business Research Methods by Appannaiah Reddy and Ramnath
www.google.com www.rbi.org.in
www.wikipedia.com
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