A

PROJECT REPORT ON
COMPARISION OF SERVICES IN CO-OPERATIVE BANKS

PROJECT BY
SHRADDHA V. RANE
TYBMS SEMESTER V

SATHAYE COLLEGE
VILE PARLE (E) MUMBAI 400 057

SUBMITTED TO
UNIVERSITY OF MUMBAI
2009 2010

A
PROJECT REPORT ON
COMPARISION OF SERVICES IN CO-OPERATIVE BANKS

PROJECT BY
SHRADDHA V. RANE
TYBMS SEMESTER V

SATHAYE COLLEGE
VILE PARLE (E) MUMBAI 400 057

SUBMITTED TO
UNIVERSITY OF MUMBAI
2009 2010

CERTIFICATE

I MR. YATIN NAIK, HEREBY CERTIFY THAT MS._SHRADDHA V.

RANE OF SATHAYE COLLEGE HAS COMPLETED THE PROJECT ON
COMPARISION OF SERVICES IN CO-OPERATIVE BANKS IN THE
YEAR 2009-2010.

THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE

BEST OF OUR KNOWLEDGE.

Project Guide
(Mr. Yatin Naik)

DECLARATION

I, MS. SHRADDHA V. RANE OF SATHAYE COLLEGE OF T.Y.B.M.S.

(SEM V) HEREBY DECLARE THAT I HAVE COMPLETED THE
PROJECT ON COMPARISION OF SERVICES IN CO-OPERATE BANKS
IN THE YEAR 2009-2010

THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE

BEST OF MY KNOWLDEGE.

Date :

____________________

(Shraddha V Rane)
Place :

ACKNOWLEDGEMENT
4

Any work that is to be done is never completed without the help of

many people from many different quarters of life. It has been the same for us
as well. Many different people have helped me over the last 2 months in
making this project a very successful venture. It would be unbecoming of me
not to thank them for all that they have done for me. It is for them that I m
writing these paragraphs.
My thanks first go to my project guide, Mr. Yatin Naik, without whose
thoughtful guidance and continuous prodding I would not have been able to
complete in time. I would also like to thank our co-coordinator Smt.Gouri
Deshpande for giving an opportunity to make it a successful project.
Last but not in the least, my thanks also go to my family and to my
friends, who would needle me, prod me, and help me to finish the work.
Without their enthusiastic support I would not have finished our work on
time.
Thank You All, Thank You For All Your Support.

INDEX

CONTENT

PAGE
NO.

INTROCUTION TO SERVICE SECTOR

FINANCIAL SERVICE: BANKS

BANK MARKETING

15

CUSTOMER SERVICE IN BANKS

21

CO-OPERATIVE BANK

27

SARASWAT BANK

42

MUMBAI BANK

57

ABHYUDAYA BANK

74

SURVEY & FINDINGS

80

CONCLUSION

83

BIBILIOGRAPHY

CHAPTER 1. INTRODUCTION TO SERVICE SECTOR

SERVICE
"A service is any activity or benefit that one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Its production, may or may not
be tied to a physical product says Prof. Philip Kotler
CHARACTERISTICS OF SERVICES:
Services possess several unique characteristics which not only create special marketing
challenges and opportunities, but they often result in marketing problems that are
substantially different from those made for the marketing of goods.
These characteristics are:
1. Intagibility
2. Inseparability
3. Heterogeneity
4. Perishability
5. Involvement of buyers.

I. Intangibility
Due to the intangible nature of services, it can't appeal to consumers' sense of sight,
hearing, smell, taste and touch. They are difficult to demonstrate at trade fairs, exhibit in
retail store, to illustrate in magazine advertisement, or to sample otherwise. This places a
burden on company's promotional programme. The buyer has to have faith in the service
provider the sales personnel and advertising department must emphasize on the benefits to
be derived from the service rather than the nature of service itself. Prof. Boone suggests
that as consumers are literally buying a promise, so it is important to tangibilize " service
like an architect's rendering of an office building that shows contented workers enjoying a
casual lunch in a beautiful courtyard.
Moreover Brand names for the services can be developed for increasing confidence. Use of
a celebrity by the service providers will help in confidence creation.
II. Inseparability
A service is inseparable from its source, i.e. is the seller. Moreover, some services must be
created and marketed simultaneously. Because of the simultaneous production and

marketing of most services, the marketer is usually concerned with the creation of time and
place utility. Like a doctor creates and dispenses all their services at the same time.
Inseparability often means that direct sale is the only feasible channel of distribution and
seller's services can be sold only in very limited markets. This limits the scale of operation
of a firm like mechanics and medical practitioners.
A tangible representation by some one other than the creator/seller is possible only in
certain services like travel agencies have travel agents; insurance companies have brokers,
etc.

III. Heterogeneity
It is often impossible to standardize output among sellers of the same service or even to
assure consistency in the services provided by one seller. There is bound to be some
variability between the two "units" of output by the same seller. For example, however
hard an airline may try but it just does not give the same quality of services on each trip.
The repair job of a mechanic will also not be of same quality. This variability of
performance depends to a large extent on the infallible nature of human beings.
Moreover it is difficult to predict in advance the quality of service being bought. A person
buys ticket for a cricket match without knowing whether it will be boring or exciting.
To ensure consistency in quality two steps can be taken. Firstly, investing in good
personnel selection and training and secondly monitoring customer satisfaction through
suggestion and complaint systems, customer surveys and comparison shopping so that poor
services can be detected and corrected.

IV. Perishability

Services are highly perishable and the market for most of them fluctuates -usually by
seasons and often by day or by week. Unused electric power, idle personnel, vacant seats
in stadiums, buses, trains, and airplanes represent business lost forever.
However there are some exceptions. In Banking, health and life insurance the service is
purchased then Banking companies hold it until needed by the buyer or the beneficiary.
This constitutes a type of storage.
Product planning, pricing, & promotional challenges are faced by service Company
executives due to its perishability and fluctuating demand. Channels must be found for
peak and slack periods. As regards slack periods, off-season advantages can be
highlighted. This will level the demand, a little certainly

V. Involvement of Buyers
In service transactions, a silent relationship exists between the buyer and seller, as
distinguished from a customer relationship. The buyer in the marketing and production of
services plays a major role. Like hair stylist's customers will describe the desired style and
also make suggestions at several stages during the styling.
Often the buyer places himself 'in the hands' of the seller and abides by the suggestions or
advice provided by him. Prof. Warren J. Wittreich considers that "since many service
organizations are client serving organization many (but not all) seem to approach the
marketing function in a more professional manner (financial, legal, educational)".
For example different firms require unique blends of insurance coverage and the final
policy may be developed after several meetings between the purchaser and the insurance
agent.
The interaction of buyer and seller constantly by both the production and distribution
stages is a common feature of services.

BUYER BEHAVIOR FOR SERVICES

9

Buyer behavior 'consists of the acts of individuals in obtaining and using goods and
services, including the decision processes that precede and determine these acts, many
similarities exists between the buyer behavior for goods and for services, but there are
some important differences. These may be grouped as under:
1. Attitude
2. Needs and motives.
3. Purchase Behavior
.
The personal element of the services makes the service marketers perceived as more
cooperative than good marketers. This personal element gives an edge to service marketers
and provide them with a unique marketing opportunity.
Sales representatives of services play an important role during the personal contact
between sales people and customers.

Prof. William R. George in The Retailing of services - A challenging future" describes it

thus: " With service retailing there is a change in the sequence of events that occur-the sale
must be made before production and consumption take place. Thus the truism that all
customer contact employees are engaged in personal selling is much more real for the
service firms that for the goods firms. With goods, the physical object can carry some of
the selling burden. With services, contact personnel are the service. Customers, in effect,
perceive them to the the product". They become the physical representation of the
offering. The services firm employees are both the factory workers and sales person
because of the simultaneous production and consumption of most services."

I. Attitudes

10

The intangible element of services makes attitude very important in its marketing. It is
likely that the characteristics of intangibility cause buyers to rely on subjective impressions
of a service and its seller when purchasing a service Two important distinctions between
goods and service are firstly services are perceived as being more personal than goods and
secondly consumer are sometimes less satisfied with purchase of service. Dissatisfaction
with the personal elements of a service such as the seller or his agent can create a negative
attitude towards the entire service.
II. Needs and Motives
Essentially the same types of need are satisfied whether a person buys material for hojne
repair or hires a service organization to perform the task. Although service needs have
increased in importance, these needs can usually be satisfied by new or modified goods as
well as by service a need that often stands out is the consumer desire for personal attention.
By appealing to this need, stylist, the banker or the insurance agent provided a form of
satisfaction that the seller of a good cannot easily match. The desire for personal attention
is often the dominant need satisfied by a service.
III. Purchase Behavior
Goods selection decisions are normally concerned more with the question of whether to
purchase while service selection decisions emphasize proper timing and selection of a
source.
This situation suggests several distinctions between purchase behaviour for goods and
services. The degree of pre-purchase planning may differ, influence on the buyer may
vary; and the buyer may be more personally involved in the service purchase.
Consumers are influenced more by other friends, neighbors and sale people when buying
services than when buying goods. Because services are intangible, it is difficult for the
buyer to judge quality and value. Buyers are usually unable to inspect or sample a service
prior to its purchase, so they may depend on the experience and observations of others.

11

Indian Service Sector

In alignment with the global trends, Indian service sector has witnessed a major boom and
is one of the major contributors to both employment and national income in recent times.
The activities under the purview of the service sector are quite diverse. Trading,
transportation and communication, financial, real estate and business services, community,
social and personal services come within the gambit of the service industry.
Services or the "tertiary sector" of the economy covers a wide gamut of activities like
trading, banking & finance, infotainment, real estate, transportation, security, management
& technical consultancy among several others. The various sectors that combine together
to constitute service industry in India are:

Trade

Hotels and Restaurants

Railways

Other Transport & Storage

Communication (Post, Telecom)

Banking

Insurance

Dwellings, Real Estate

Business Services

Public Administration; Defence

Personal Services

Community Services

Other Services
12

There was marked acceleration in services sector growth in the eighties and nineties,
especially in the nineties. While the share of services in India's GDP increased by 21 per
cent points in the 50 years between 1950 and 2000, nearly 40 per cent of that increase was
concentrated in the nineties. While almost all service sectors participated in this boom,
growth was fastest in communications, banking, hotels and restaurants, community
services, trade and business services. One of the reasons for the sudden growth in the
services sector in India in the nineties was the liberalisation in the regulatory framework
that gave rise to innovation and higher exports from the services sector.
The boom in the services sector has been relatively "jobless". The rise in services share in
GDP has not accompanied by proportionate increase in the sector's share of national
employment. Some economists have also cautioned that service sector growth must be
supported by proportionate growth of the industrial sector, otherwise the service sector
grown will not be sustainable. In the current economic scenario it looks that the boom in
the services sector is here to stay as India is fast emerging as global services hub.
Service sector is the lifeline for the social economic growth of a country. It is today the
largest and fastest growing sector globally contributing more to the global output and
employing

more

people

than

any

other

sector.

The real reason for the growth of the service sector is due to the increase in urbanization,
privatization and more demand for intermediate and final consumer services. Availability
of

quality

services

is

vital

for

the

well

being

of

the

economy.

In advanced economies the growth in the primary and secondary sectors are directly
dependent on the growth of services like banking, insurance, trade, commerce,
entertainment

etc.

13

FINANCIAL SERVICES BANKS

FINANCIAL SERVICES: In general, all types of activities which are of a financial

nature could be brought under the term financial services. In a broad sense the term
financial service means mobilizing and allocating savings. Thus it includes all activities
involved in the transformation of savings into investment. The term can also be called
financial intermediation .i.e. a process by which funds are mobilised from a large number
of savers and making them available to all those who are in need of it.

FINANCIAL SERVICES AVAILABLE TO THE CORPORATE SECTOR

Some of the financial services available to the corporate sector are:

Corporate loans

Services of merchant bankers

Leasing

Factoring and forfeiting

Venture capital

14

Introduction to Banks
The robust macroeconomic environment continued to underpin the financial performance
of Indian banks during 2004-05, with major bank groups successfully weathering the
impact of an upturn in interest cycle. The demand for credit was broad-based during 200405 with agriculture and industry joining the housing and retail sectors to drive up the
demand for credit. A sharp increase in net interest income mitigated to a large extent the
impact of a sharp decline in non-interest income mainly on account of decline in trading
profits. Banks continued to earn sizeable profits albeit somewhat lower than last year.
Asset quality of scheduled commercial banks improved further during 2004-05. Capital
base of banks kept pace with the sharp increase in risk-weighted assets.

ORIGIN AND EVOLUTION OF INDIAN BANKING

Opinions differ as to the origin of the work "Banking". The word "Bank" is said to be of
Germanic origin, cognate with the French word "Banque" and the Italian word "Banca",
both meaning "bench". It is surmised that the word would have drawn its meaning from the
practice of the Jewish money-changers of Lombardy, a district in North Italy, who in the
middle ages used to do their business sitting on a bench in the market place. Again, the
etymological origin of the word gains further relevance from the derivation of the word
"Bankrupt" from the French word "Banque route" and the Italian word "Banca-rotta"
meaning "Broken bench" due probably to the then prevalent practice of breaking the bench
of the money-changer, when he failed.
Banking is different from money-lending but two terms have in practice been taken to
convey the same meaning. Banking has two important functions to perform, one of
accepting deposits and other of lending monies and/or investment of funds. It follows from
the above that the rates of interest allowed on deposits and charged on advances must be
known and reasonable. The money-lender advances money out of his own private wealth,
hardly accepts deposits and usually charges high rates of interest. More often, the rates of
interest relate to the needs of the borrower. Money-lending was practised in all countries
including India, much earlier than the recent type of Banking came on scene.
15

DEFINATION AS PER BANKING REGULATION ACT 1949

A Bank borrow by accepting deposits of money from the public, the deposits are to be
repaid on demand or after fixed period. They can be withdrawn by the depositors by means
of cheque, draft, order or any other way. A Bank accepts deposits (i.e. borrows) for the
purposes of lending mainly to traders, industrialists and manufacturers and the like as also,
for the purposes of investing in government securities to fulfil statutory obligations. Thus,
Banking Regulations Act, 1949 defines Banking as accepting for the purposes of lending
or investment of deposits of money from the public repayable on demand or otherwise and
withdrawable by cheque, draft, and order or otherwise.
By and large, this definition can be satisfactory. As per the provision of the Banking
Regulation Act, every company willing to do banking business must obtain license from
the Reserve Bank for carrying on banking business in India. Besides, all companies
carrying on banking business must use the word bank, banker or banking as per of their
names. It may be noted that money-lenders are not bankers.

BASIC CONCEPT OF BANKING:

Banking is different from money lending, but the two terms, usually carry the same
significance to the general public. The money lender, advances money out of his own
private wealth, hardly accepts deposits from general public and usually charges high rate of
interest. More often, the rates of interest relate to the needs of the borrower and at times the
rates may be exorbitant. On the other hand the banking is defined in section 5(b) of the
Banking Regulation Act, 1949, as the acceptance of deposits of money from the public for
the purpose of lending or investment. Such deposits of money from the public are used for
the purpose of lending or investment. Such deposits may be repayable on demand or
otherwise and with drawable by cheque, draft order or otherwise. Thus a bank must
perform two basic and essential functions:
(i) Acceptance of deposits and
(ii) Lending or investment of such deposits.
16

The deposits may be repayable on demand or for a period of time as agreed by the banker
and the Customer. In terms of the definition, the banker can accept deposits of money and
Not Anything Further accepting deposits form frolic unapplied that a banker accepts
deposits form anyone who offers money for such purpose Accepting of deposits for
lending and investments have been the original functions of banking but gradually there
functions were extended and others were added from time to time and presently banks
perform a number of economic activities which may affect all walks of economic life.

SIGNIFICANCE OF BANKS:

The importance of a bank to modern economy, so as to enable them to develop, can be

stated as follow:
(i) The banks collect the savings of those people who can save and allocate them to those
who need it. These savings would have remained idle due to ignorance of the people and
due to the fact that they were in scattered and oddly small quantities. But banks collect
them and divide them in the portions as required by the different investors.
(ii) Banks preserve the financial resources of the country and it is expected of them that
they allocate them appropriately in the suitable and desirable manner.
(iii) They make available the means for sending funds from one place to another and do
this in cheap, safe and convenient manner.
(iv) Banks arrange for payments by changes, order or bearer, crossed and uncrossed, which
is the easiest and most convenient, Besides they also care for making such payments as
safe as possible.
(v) Banks also help their customers, in the task of preserving their precious possessions
intact and safe.
(vi)To advance money, the basis of modern industry and economy and essential for
financing the developmental process, is governed by banks

17

(vii) It makes the monetary system elastic. Such elasticity is greatly desired in the present
economy, where the phase of economy goes on changing and with such changes, demand
for money is required. It is quite proper and convenient for the government and R.B.I. to
change its currency and credit policy frequently, This is done by RBI, by changing the
supply of money with the changing the supply of money with the changing needs of the
public.

TYPES OF BANKS
Today is the age of specialization and we can find specialization in all fields including
banking. The banks have specialized in a particular line of finance. Various types of banks
have developed to suit the economic development and requirements of the country.

The principal banking institutions of a country may be classified into the following types:
1. Central banks: central bank is the bank of a country- a nation. Its main function is to
issue currency known as bank notes. This bank acts as the leader of the banking system
and money market of the country by regulating money and credit. These banks are the
bankers to the government, they are bankers banks and the ultimate custodian of a nations
foreign exchange reserves. There is now hardly any country that does not have a central
bank of its own. It acts, as a great engine of growth of a state the central bank of India is
reserve bank of India.
2. Commercial banks: a bank, which undertakes all kinds of ordinary banking business, is
called a commercial bank. It is so called because it provides money and credit for
commercial and trade activities. They receive short and medium term deposits from the
public and grant short-term loans and advances. They supply working capital to industries
and enable them to carry on production and manufacturing activities. They grant loans and
advances on the stocks of agricultural commodities, industrial goods, etc. they discount
internal and foreign bills. They also perform agency services such as collection of
Cheques, dividends, interest on investments, issue of drafts, letters of credit, travelers
Cheques etc.

18

3. Industrial banks or financial institutions: an industrial bank is one which specializes

by providing loans and fixed capital to industrial concerns by subscribing to share and
debentures issued by public companies. They play an important role in the establishment
and growth of industries. Investment banks supply the block capital required for the
acquisitions of fixed assets. They provide long-term loans and credits for periods varying
between 5 and 15 years for industries to acquire fixed assets.

4. Exchange banks: these types of banks are primarily engaged in the transactions
involving foreign exchange. They deal in foreign bills of exchange import and export of
bullion and otherwise participate in the financing of foreign trade. They do a number of
incidental services such as opening of letters of credit, issue of foreign currency drafts and
travellers Cheques and supply of information about foreign customers. They provide
credit and loans in foreign currency and also accept deposits in foreign currency.

5. Co-operative banks: they are organized on co-operative principles of mutual help and
assistance. They grant short-term loans to the agriculturists for purchasing of seeds,
harvesting and for other cultivation expenses. They accept money on deposit from and
make loans to their members at a low rate of interest.

6. Land-mortgage banks (presently known as agricultural and rural development banks):

they are agricultural development banks. The land- mortgage banks supply long-term loans
for a period up to 15 yeas for development of land and to increase agricultural yield. They
create negotiable bonds out of real estate such as land, building etc.

7. Savings banks: these are institutions that collect the periodical savings of the general
public. Their main object is to promote thrift and saving habits between the middle class
and lower income sections of the society. They have certain restrictions on the number of
with drawings in a year to discourage spending. In India, we have postal savings accounts.
These separate savings banks as such are very rare.
19

8. Supranational banks: special banks have been created to deal with certain international
finance matters. Asian development bank is a supranational bank, which provides finances
for the economic development of poor Asian countries. They generally provide finance at a
concessional interest rates and for long-term needs.

9. International banks: international banks are those, which are operating, in different
countries. While, the registered office/ head office is in one county, they operate through
their branches in other countries. They specialize in banking business pertaining to foreign
trade like opening of letters of credit, providing shot-term finances in foreign currency,
issue of performance guarantee, arranging foreign currency credits, etc.

20

CHAPTER 3. BANK MARKETING

7 PS OF MARKETING FOR BANKING SERVICES:

1. PRODUCT:
The changing psychology, the increasing expectation, the rising income, the changing
lifestyles, the increasing domination of foreign bans and the changing needs and
requirements of the customers at large make it essential that they innovate their service mix
and make them of worked class
To be more specific, the peripheral services need an intensive care since the core services
are found by and large the same.

Innovating the peripheral services thus becomes

important

2. PROMOTION:
Promotion mix includes advertising, publicity, sales promotion, word of mouth
promotion, personal selling and telemarketing. Banking organizations use these
components of the promotion mix with motto of informing, sensing and persuading the
customers. It helps banks at micro and macro levels. The business of a bank determines the
scale of the advertisement budget. In addition, the intensity of competition also plays a
decisive role since in the majority of cases. For promoting the banking business, the print
media is found to be economic as well as effective. Some banks have also been able to use
the television media effectively. .In the banking services the effectiveness of public
Relations is found in high magnitude.
Telemarketing is also found to be instrumental in advertising the banking services and the
banking organizations can use this tool of the promotion mix both for advertising and
selling. Much communication about the banking services actually takes place by word- ofmouth information, which is also known as word- of- mouth promotion. The oral publicity
plays an important role in eliminating the negative comments and improving the services.
21

This also helps the banker to know the feedback, which may simplify the task of improving
the quality of services. The above facts make it clear that such kind of promotion is
influenced by a number of factors. The most dominating factor is the quality of services
offered. The bank professionals, the frontline staff and the senior executives should realize
that degeneration in quality would make this tool effective.

3. PRICE:
In the formulation of marketing mix, the pricing decisions occupy a place of outstanding
significance. The pricing decisions include the decisions related to interest and fee or
commission charged by banks. Pricing decisions are found instrumental in motivating or
influencing the target market. The RBI regulates the rate of interest and the Indian Banks
Association controls other charges. In our country, the price mix is more important because
the banking organizations are also supposed to sub serve the interests of the weaker
sections and the backward regions. Also in making the pricing decisions, the Government
Of India is instrumental or we can say it commands everything as a shadow policy maker.
This also complicates the price mix for banking sector.

4. PEOPLE:
Sophisticated technologies no doubt, inject life and strength to a banks efficiency but the
moment there is a lack of productive human resources even the new generation of
information technologies would hardly produce the desired results. The development of
human resources makes the ways for the formation of human capital. Human resources
can be developed through education, training and by psychological tests. Even incentives
can inject efficiency and can motivate people for productive and qualitative work. The
reputation of the bank will be enhanced if the employees with whom the customers interact
confirm and build trust in the bank.

22

5. PROCES:
All the major activities of banks follow RBI guidelines. There has to be adherence to
certain rules and principles in the banking operations. In fact not only all the branches of a
single-bank, but all the banks have some standardization in them. This is because of the
rules they are subject to.

Besides this, each of the banks has its standard forms,

documentations, etc. There are specialty counters at each branch to deal with customers of
a particular scheme. A number of steps are usually specified and a specific pattern is
followed to minimize time taken. In banks various functions are segregated. Separate
counters exist with clear indication. This makes procedures not only simple but consume
less time. Besides instruction boards in national boards in national and regional language
help the customers further.

6. PHYSICAL EVIDENCE
The physical evidences include the logo, the layout of the branch, the passbooks, cheque
books, the furniture, the reports, punch lines, other tangibles, employees dress code etc.
The companys financial reports are issued to the customers to emphasis or credibility.

7. PLACE:
Banks need to take into consideration the place factor as it decides the volume of business
for them. Branches must be located at many places so that people can have easy access and
do not need to waste time travelling. Convenient location helps the bank to obtain the
business from the neighbouring areas.

23

MARKET SEGMENTATION FOR BANKING INDUSTRY:

The market segmentation for the banking industry can be done on the basis of the
purchasing power of potential customers i.e amount and term of deposits. The customers
can also be divided on the basis of whether they come from urban or rural areas. Philip
Kotlers segmentation criteria can also be used to segment the market
It can also be done sector wise

Agricultural sector (based on acres of land owned),

Household sector(based on income level),

Institutional sector (religious, educational, charitable etc),

Trade and commerce( wholesalers and retailers),

Industrial sector( based on size and turnover)

BANK MARKETING AT OPERATIONAL LEVEL (BRANCH LEVEL)

Marketing efforts at Branch level will aim: 1. To create a customer.
2. To convert a customer into a client and
3. To continuously satisfy the needs of customers.
1. Creation of Customer
Every branch must identify its area of operation and this is termed as command area. All
efforts of the branch should be concentrated to create customers, preferably from this
command area. For this purpose a survey of the area must be conducted to collect vital data
about the target population living in the command area. The data must be regrouped into
subgroups possessing identical traits pertaining to profession, income and cultural
togetherness. For example in a typical command area we may identify 30 practising
doctors, 100 shopkeepers, 500 businessmen, 2000 industrial workers, 1000 labourers, 1000
agriculturists and 1000 others. When we further analyse we may learn that out of 30
24

medical practitioners 10 pay income tax of more than Rs. 10.000 per year, 15 pay nominal
income tax and others do not pay any income tax. Similarly out of 500 pensioners we may
know that 100 people draw more than Rs. 500 per month as pension. Another 200 draw
between Rs. 400 & 800 & 100 draw between Rs. 100 and Rs. 400 where as the balance get
below Rs. 100 per month as pension.
By having this information, the branch manager must try to attract the various potential
customers by highlighting those schemes that are likely to attract the target group. To
begin with it is immaterial as to what business comes to the branch so long as it succeeds
in creating a banker-customer relationship i.e. that target person opens a bank account. The
first objective is thus achieved.
2. To Convert a Customer into a Client
Once a banker-customer relationship is achieved, the banker must try to evaluate the
customer as to how important that customer can be to the bank depending on his
potentialities. This is extremely important because every branch manager has limitations of
time, energy and money, which he has to spend judiciously to optimize the utility with a
view to converting a customer into a client.
As per banker-customer relationship, a customer is one who maintains an account with a
bank. That means by simply opening an account may be with only Rs. 10 , this relationship
is established. But the banker would not stop at this. In fact a banker would try to convert
every customer into a client. A client is one who seeks professional advice from an
established practitioner like advocate, doctors, tailors etc and a client would depend on him
for all expert guidance. A client is normally a person who wholly depends on a particular
professional for protecting his interests in all spheres and he would even consult him for
things not directly connected with the profession practised by the professional and the
guidance, received is taken seriously and in total confidence. To reciprocate the client
would part with even the confidential information and he would lay down the entire truth
even though the truth may even be against the interest of the client himself. Yet a
professional is expected to protect his client as far as possible. Thus a professional client
relationship is one of utmost faith and understanding. By converting the customers into
clients a branch manager is creating emissaries of goodwill and they would become vital
growth links for future expansion. Yet when such a linkage is established, the principle of
25

total faith and protection of his interests must always be maintained. At field level a branch
manager has limitations in terms of (a) Time (b) Money and (c) Energy. Hence he is not
able to provide same type of treatment to all his customers.
3. Satisfying the needs of the Customers
A customer today is very demanding and it is virtually impossible to fully satisfy all his
needs. A bank must make a policy to satisfy the customer needs i.e. satisfaction upto a
level so as to ensure that the expectations of a customer do not become to high to satisfy
Satisfying means achievements of satisfaction at a per-determined avowed level. In a
service industry it is not always easy to set out satisfying levels yet an attempt be made on
following lines,
(a)

Identify the customer -sensitive areas of branch e.g. Drafts issue Section, Drafts

payable section, saving ledger section, Fixed deposit section, Pension payment counter,
cash Receipt Counter etc.
(b)

All such sections be rated as most important, important priority and ordinary

depending on the type of clientage and volume of business and also as to how significant is
the role played by the section in improving its image in the area.

26

CHAPTER4. CUSTOMER SERVICE IN BANKS

Bank is a service institution. A satisfied customer is a source of publicity for the bank.
Each employee in the Branch is representing the Bank and Bank's image is being passed on
to the customer through the service he renders. Bank manager for development of business
has to dwell on the capability, competence and attitudes of his team who has to provide in
house service to the customer. Complaints about the deteriorating quality of customer
service in the public sector banks have been more actively voiced in the recent past, and,
such complaints are on the increase. The Union government is seized of this matter and, in
fact the Finance Minister convened a meeting of the Chief Executives of public sector
banks sometime back to apprise them of these increasing complaints and to convey the
concern of the government in this matter so that they, in turn would work out ways and
means of improving the standards of customer service obtaining in their banks.

ENUMERATION OF CUSTOMER SERVICE

Customer service receives banks best attention and it has been emphasized from time to
time the need for optimizing the standard of customer services thereby facilitating
maximum operational efficiency. The year 1986 was declared as 'Customer service year'
by the finance ministry. Banks in order to keep up their efforts in serving the customer to
his full satisfaction has evolved some important guidelines, as enumerated below: I. Customer Service Committee
A customer service committee must be set up at all the branches with a staff strength of 25
and above. The following should comprise the committee.
(i)

Chief manager/manager/officer incharge: Chairman (1)

(ii) Sub Manager /Asst. Manager/Accountant Member (l)

(iii) Officer staff

: Member (1)

(iv) Clerical cadre

: Member (1)

27

The objectives of this committee are:

a)

Assessment of the quality of customer service rendered at Branches.

b) Consideration of matters relating to bringing about improvement in customer service at

branch level directly.
c)

Expeditious handling of customers.

II. Inquiry Counter

With a view to ensure quick and proper reply to the customers queries, all branches must
have an inquiry counter at the entrance which should be attended to by a knowledgeable
employees who is well versed with branch routine. Where work warrants, an employee
should be put exclusively for this purpose.
III. May I help you Counter
'May I help you' counters are to be set up at all the bank branches with a staff strength of
25 and more. IV. Complaint-cum Suggestion Box
Complaint cum suggestion box is installed at Regional offices in addition to installation of
such box at each branch.
V. Indicator Board
Indicator board should be displayed at all counters in English as well as in Regional
languages indicating the actual work being transacted at each counter.
VI. Notice Board
Business hours and office hours of each office should be displayed outside the office
premises near the main entrance. Every office should prominently display a notice board
requesting customers to meet the manager in case their difficulties/grievances are not
redressed.
VII. Sitting Arrangement
Sitting plan of the offices should be functional and designed to facilitate smooth and
speedy flow of work.
VIII. Basic Amenities
Arrangement should be made for provision of basic amenities to the customers specially
where customers transaction are delayed, their waiting time should be made more
comfortable.

28

IX. Name Plates

All employees should be supplied with name plates which should be placed at their
counters/tables subordinate staff should display their name badges on their uniform.
X. Direct Interaction with Customers
Several measures have been initiated towards evolving direct interaction with customers at
various levels so as to ensure quick redressal of their grievances.
a) Personal hearing system has been introduced.
b) Officers incharge have been advised to meet cross section of customers regularly.
c)

Zonal managers have been advised to hold customer. Relations programme at least

once in six months so as to provide a platform to the customers for letting out the
grievances as also to invite their suggestions.
d) A complaint cell has been set up for prompt redressal of customer grievances; efforts
are made to dispose off the complaints at there earliest.
XI. Customer Service Cards
As an innovative step customer service cards are made available to the branches for use by
the customers. The card has been designed so as to reflect customer satisfaction as well as
grievances against the service rendered by the branch.
XIII. Prompt Collection of Outstation Cheques
The entire collection business is to be routed through IBA courier services.
XIV. Payment of Travelers Cheques
The branches without causing any inconvenience to the customers should promptly pay
Traveller cheques of issuing bank and of those banks with which the issuing bank is having
agency arrangements.
Traveller cheques if otherwise in order should be honored even if the name of the payer
has not written on the Traveller cheques. The presenter may however, be asked to write the
name of the payee holder in the blank space on the Traveller cheques presented for
payment.

29

DESIGNING THE CUSTOMER SERVICE PACKAGE

To compete efficiently in the market requires the ability to, develop some differential
advantage over competing companies and their product or service offerings. Sometimes,
this differential advantage may be in terms of distinctive product attributes or related
benefits as perceived by the customer. On other occasions it may be price, or alternatively,
the product may be promoted in such a way that it requires a distinctive image in the eyes
of the market. In just the same way, customer service can be used to develop a differential
advantage &, indeed, there can be a major benefit to the company in using customer
service in this way. For example, in competitive markets where real product differentiation
may be difficult to establish & where to compete on price would only lead to profit
erosion, it makes sense to switch the marketing emphasis to customer service.
Earlier it was stressed that it is important to establish those components of the total
customer service mix, which have the greatest impact on the buyer's perception of us as a
supplier. This thinking needs to be carried right through into the design of the customer
service offering. This offering can best be described as the customer service 'package', for
it will more likely contain more than one component. The design of the package will need
to take account of the differing needs of different market segments so that the resources
allocated to customer service can be used in the most cost-effective way. Too often,
companies adopt a uniform, blanket approach to service, which does not distinguish
between the real requirements of different customer types, This can lead to customers
being offered too little service or too much. One approach to the development of such a
package contains the following steps:
Determining competitive customer service practices and polices within each product and
market channel.
Identifying measuring key elements which led to becoming a preferred or 'Most Favoured
Supplier';
Measuring the impact of each aspect of service on market share and profitability;
Assessing the performance of the company on each of those service components and
redesigning the corporate service package to emphasis effective service expenditure and
de-emphasis ineffective ones. Sensitivity to different service elements varies considerably
by market channel, geographic area and product category More importantly, two distinct
effects of different service levels can be isolated: first, a short-term effect on sales; and
30

second, a long-term effect on achieving a more favored position with the buyer.
Recommendations for the redesigned service package include:
I. In designing the distribution system considers the added buyer influence & the impact on
sales of a 'market presence', that is, proximity of stock to key markets;
II Provide quantity price brackets, encouraging the buyer to 'stretch' for a lower price
through purchasing greater quantities- especially at the lowest quantity levels;
III. Offer promotion incentives, especially to lower volume customer;
IV. Support promotions with superior distribution service;
V. Provide incentives to reduce' customer responsible' emergency shipment needs;
VI. Concentrate on improved on-time delivery consistency;
And
VII. Recognize the influence of sales & service personnel on sales levels achieved.
The precise composition of the customer service package for any market segment will
depend on the result of the analysis. It will also be determined by budgetary & cost
constraints. If alternative packages can be identified which seem to be equally acceptable
to the buyer, it makes sense to choose the least cost alternative. Once a cost-effective
package has been identified in this way, it should become a major part of the company's
marketing mix-'using service to sell' is the message here. If the market segments we serve
are sensitive to service, then the service package must be actively promoted. One way in
which this can be achieved with great effect is by stressing the impact on the customer's
costs of the improved service package. All too often, the customer will not appreciate the
impact that improved service offered by the supplier can have on his, the customer's
bottom line.

SAFE DEPOSIT VAULTS

Operation in safe deposit vaults should be allowed to all customers during the scheduled
hours.
For the purpose of allotment of lockers, ail branches should maintain a waiting list of
customers desirous of having safe deposit vault facility with the bank. Lockers available
with the bank should be allowed as far as possible on the basis of such waiting lists.

31

It should be ensured that in case of power failure, suitable alternative arrangement, like
emergency light, high power battery is made and it is always readily available so that the
customers avoid inconvenience in the operation of locker. If for any reason such
arrangement is not available and the customer agrees to operate the locker with the help of
candlelight, it should be permitted.

HOUSE KEEPING IN A BANK

In house service to the customers depends upon the quality of hose keeping in the branch.
House keeping coupled with the sense of belongingness of the organisation is thus a key to
effective customer service.
House keeping in a branch briefly comprises of:
I. Proper maintenance of current and old record, stationary etc.
II. Tallying of balance.
III.Aiding by banks systems and procedures including various safeguards.
IV. Up keep of S.F.F. and bank premises.
V. Manage workable employment situation for the members of staff.
VI. Timely submission of statements and returns.
VII. Attending correspondence promptly.
VIII. Ensuring service to the customers to their satisfaction.
IX. Maintaining public relations to achieve the above objectives.
X. Proper maintenance and updating of bank circular books of instruction manuals and
publicity material so that these can be accessible in case of need.
XI. Timely disposal of loan applications on merits.
XII. Fool proof documentation and disbursement as per the bank formats and guidelines.
XIII. Completion of formalities and follow up to obtain refinance from I.D.B.I.,
NABARD, R.B.I, etc.
XIV. Ensuring end use, regular follow up, verification of securities, recovery, obtaining
B.C. letters, etc.
XV. Observing the instructions relating to reporting for payment of guarantee fee,
maintenance of record, lodging of claims and post-claim procedure of DICGC

32

CHAPTER5. CO OPERATIVE BANK

INTRODUCTION
Co-operative banks are an important constituent of the Indian financial system, judging by
the role assigned to them, the expectations they are supposed to fulfills, their number, and
the number of offices they operate. The co-operative movement originated in the West, but
the importance that such banks have assumed in India is rarely paralleled anywhere else in
the world. Their role in rural financing continues to be important even today, and their
business in the urban areas also has increased in recent years mainly due to the sharp
increase in the number of primary co-operative banks.
The Co-operative banks have a history of almost 100 years. The Co-operative banks are an
important constituent of the Indian Financial System, judging by the role assigned to them,
the expectations they are supposed to fulfil, their number, and the number of offices they
operate. The co-operative movement originated in the West, but the importance that such
banks have assumed in India is rarely paralleled anywhere else in the world. Their role in
rural financing continues to be important even today, and their business in the urban areas
also has increased phenomenally in recent years mainly due to the sharp increase in the
number of primary co-operative banks.
While the co-operative banks in rural areas mainly finance agricultural based activities
including farming, cattle, milk, hatchery, personal finance etc. along with some small scale
industries and self-employment driven activities, the co-operative banks in urban areas
mainly finance various categories of people for self-employment, industries, small scale
units, home finance, consumer finance, personal finance, etc.

Some of the co-operative banks are quite forward looking and have developed sufficient
core competencies to challenge state and private sector banks.

33

According to NAFCUB the total deposits & landings of Co-operative Banks is much more
than Old Private Sector Banks & also the New Private Sector Banks. This exponential
growth of Co-operative Banks is attributed mainly to their much better local reach,
personal interaction with customers, their ability to catch the nerve of the local clientele.
Though registered under the Co-operative Societies Act of the Respective States (where
formed originally) the banking related activities of the co-operative banks are also
regulated by the Reserve Bank of India. They are governed by the Banking Regulations
Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

FEATURES OF CO-OPERATIVE BANKS

Some distinguishing characteristics of the nature of co-operative banks are as follows:

(i) They are organised and managed on the principles of co-operation, self-help, and
mutual help. They function with the rule of "one member, one vote".
(ii) They function on "no profit, no loss" basis. For commercial banks also, profitability is
no longer the main objective, but in their case this change has been brought about as a
result of social or public policy, while co-operative banks, by their very nature, do not
pursue the goal of profit maximisation.
(iii) Co-operative banks perform all the main banking functions of deposit mobilisation,
supply of credit and provision of remittance facilities. However, it is said that the rang~, of
services offered is narrower and the degree of product differentiation in each main type of
service is much less in the case co-operative banks, compared to commercial banks. In
other words, co-operative banks are characterised by functional specialisation. It should be
added that this is true with much less force now, because many changes have taken place
in the co-operative banking system since the Banking Commission arrived at the abovementioned conclusion..

34

(iv) As said earlier, co-operative banks do banking business mainly in the agricultural and
rural sector. However, certain types of banks viz., UCBs, SCBs and CCBs operate in semiurban, urban, and metropolitan areas also. The urban and non-agricultural business of these
banks has grown over the years. The co-operative banks demonstrate a shift from rural to
urban, while the commercial banks, from urban to rural.
(v) Co-operative banks are perhaps the first government-sponsored, government-supported,
and government-subsidised financial agency in India. They get financial and other help
from the RBI, NABARD, Central government and state governments. They constitute the
"most favoured" banking sector with no risk of nationalisation. For commercial banks, the
RBI is a lender of last resort, but for co-operative banks, it is the lender of first resort
which provides financial resources in the form of contribution to the initial capital (through
state governments), working capital, and refinance. The promotional role of the RBI can be
seen in respect of co-operative banks, and this role supersedes its regulatory role, in respect
of these banks. A corollary of government help to co-operative banks is that there is much
government intervention in their working. Co-operative banks are subject primarily to the
control, audit, supervision and periodic inspection of the co-operative department of the
state government under the Cooperative Societies Act, but less rigorously, by the RBI
under the Banking Regulation Act. The RBI and the state government lay down rules for
investment of surplus resources, reserves, and the loan policy of co-operative banks.
Consequently, compared to commercial banks, they have less freedom and flexibility in
conducting their operations.
(vi) Co-operative banks belong to the money market as well as to the capital market.
Primary agricultural credit societies provide short-term and medium-term loans. Land
Development Banks LDBs) provide long-term loans, DCBs meet working capital as well
as fixed capital requirements, and SCBs and CCBs also provide both short-term and term
loans. Similarly, they accept short-term and long-term deposits, and some of them mobilise
resources through the issue of debentures.
(vii) Co-operative banks are financial intermediaries only partially. The sources of their
funds resources) are: (a) Central and state governments, (b) the RBI and NABARD, (e)
other cooperative institutions, (d) ownership funds, and (e) deposits or debenture issues. It
is interesting to note that intra-sectoral flows of funds are much greater in co-operative
banking than in commercial banking. Inter-bank deposits, borrowings, and credit form a
35

significant part of assets and liabilities of co-operative banks. This means that intrasectoral competition is absent and intra-sectoral integration is high for co-operative banks.
(viii) Co-operative banks have a federal structure of three-tier linkages. Further, their
operation - of mixed banking type. Primary credit societies are unit banks; many DCBs
also are unit banks. But SCBs, DCBs (CCBs), and SLDBs, PLDBs and many DCBs have a
number of branches. object to this, it can be said that each co-operative institution in each
tier is a separate entity with definite jurisdiction and has an independent board of
management.
(ix) Some co-operative banks are scheduled banks, while others are non-scheduled banks.
For instance, SCBs and some DCBs are scheduled banks but other co-operative banks are
non-scheded banks. At present, 28 SCBs and 11 DCBs with Demand and Time Liabilities
over Rs 50 crores each are included in the Second Schedule of the RBI Act.
(x) As said earlier, co-operative banks accept current, saving, and fixed or time deposits
from individuals and institutions including banks. Some DCBs numbering about 40 in
1989 are allowed open and maintain NRI accounts in rupees but not in foreign currency.
Deposits mobilised by them in a given area are used for financing activities in that locality.
Some co-operative banks, namely, Land Development Banks (LDBs), issue debentures to
raise resources for their operations. These debentures are secured by mortgaging lands
belonging to borrowers from LDBs and are often guaranteed by the state government.
They are regarded as -tee securities and are treated on par with government securities for
making advances. There are three types of such debentures: ordinary, rural, and special.
These debentures are almost entirely subscribed by such institutional investors as banks,
LIC, and the government.
(xi) The co-operative banks are subject to CRR and liquidity requirements as other
scheduled non-scheduled banks are. However, they are required to maintain the CRR and
SLR only at = level of three per cent and 25 per cent respectively, at present. They are
subject to SCCs also. Further, the DCBs have been advised to lend 60 per cent of their total
advances to the priority ors. It means that the target for priority sector lending has been
fixed at a higher level for these banks compared to commercial banks. Similarly, while the
CAS has now/been withdrawn in the e of commercial banks, it is still applicable to the
DCBs, although in a liberalized form. With effect from January 1989, they have to seek
36

prior approval of the RBI for grant of advances to a single party exceeding certain credit
limits, which vary from bank to bank depending on their size.
(xii) Since 1966, the lending and deposit rates of commercial banks have-been directly
regulated by the RBI. Although the RBI had powers to regulate the 'rates of co-operative
banks also, these powers were not exercised much till about 1979, in respect of their
lending rates. From the early years till 1979, the SCBs and CCBs were expected to provide
finance for agricultural and allied activities to the ultimate borrowers at reasonable rates,
i.e., at concessional rates, by virtue of their being entitled to concessional refinance from
the RBI. In case of their non-agricultural advances for the purpose of production and
marketing activities of cottage and small scale industries, the RBI imposed certain
conditions as regards rates to be charged by these banks for such purposes. In respect of
their non-agricultural advances, they were free to charge any rates at their discretion. The
RBI did not regulate at all the lending rates of DCBs, because of which there was little
uniformity in the rates charged by different DCBs. The SCBs were also exempted from the
levy of interest tax.

(xiii) Although the main aim of the co-operative banks is to provide cheaper credit to the
members, and not to maximise profits, they may access the money market to improve their
income so that they remain viable. This is in keeping with the opening up of the non-farm
sector to them in the recent past. Their need to access money market arises due to a variety
of factors. First, CCBs are mainly in the field of financing seasonal agricultural operations,
which creates cycles of flows of funds. Second, the short-term agricultural loans are given
at a concessional rate of interest whereas interest rates paid on deposits by co-operative
banks are higher than those paid by the commercial banks. It is true that they get
concessional refinance from the NABARD, but its availability depends upon fulfilling
conditions such as minimum involvement, non-overdue cover, etc. Similarly, many DCBs
often have surplus funds which they mostly keep with the SCBs at a fixed rate of interest.
There is, therefore, a need for co-operative banks to access money market to deploy their
short-term funds profitably and cross-subsidise their lending operations.

37

(xiv) Co-operative banks (COBs), in short, have played a pivotal role in the development
of short-term and long-term rural credit structure in India over the years. The co-operative
credit endeavour is said to be the first ever attempt at micro-credit dispensation in India.
The entire cooperative credit system covers more than 74 per cent of rural credit outlets,
and it has a market share of about 46 per cent of total rural credit in the country. From
being the providers of loans for redemption of debt, COBs have gone on to meet the
investment requirements of all activities in rural areas. The co-operative credit structure
had a membership of 1.3 crore, net owned funds of Rs 3191 crore, and outstanding loans
and advances of Rs 17261 crore in 20012. The COBs have borne the major share of the
task of widening institutional agricultural credit because their retail outlets are so
widespread and far flung that no other type of agency can percolate to all corners of the
country as COBs have done. However, too much intervention by the State in day-to-day
management has contributed to the lack of involvement and ownership of people in their
functioning. The COBs need to become member-driven banks. There is also a need to do
away with the duality of control over them by the RBI and state government. They need
support in respect of infrastructure, resource base, professional management, etc.

PROBLEMS AND POLICY

As in the case of commercial banks, the quantitative growth of co-operative banks has not
been accompanied by a qualitative growth. There have always been a number of
weaknesses in their performance. Many of these weaknesses were identified by the All
India Rural Credit Survey Committee (AIRCSC) in the early 1950s. By that time, cooperative banks had been in the business for 45 years and the AIRCSC had concluded that
co-operatives had failed, but that they must succeed. As a result, special measures were
introduced by the government and the RBI to revive and strengthen co- operative banks.
Even after a span of 35 years, an assessment of the cooperative banks shows that" ... many
of the weaknesses of the co-operative credit system identified by the Rural Credit Survey
Committee continue to persist even today.

38

In the same vein, the Khusro Committee asserts: "No credit system has been subjected to
as much experimentation at the dictates of those outside the system as the co-operative
credit system has been The history of co-operative credit system has been the history of
alternating periods of growth, stagnation and reorganisation and yet quantitatively the
achievements of the co-operative systems have by no means been insignificant. Thus
looking to the stake of the movement even in the limited sphere of credit, the classic
assertion of the Rural Credit Survey made 35 years ago still seems valid that Co-operation
has failed but Co-operation must succeed.

MAIN WEAKNESSES OF CO OP BANKS:

The main weaknesses of co-operative banks are as follows:

(a) The vital link in the co-operative credit system namely, the PACSs, themselves remain
very weak. They are too small in size to be economical and viable; besides too many of
them are dormant, existing only on paper.

(b) With the expanding credit needs of the rural sector, the commercial banks have come in
actively to meet the credit requirements of this sector, and this has aggravated the
difficulties of co-operative banks. The theory that co-operative banks would be buoyed up
by the competition from other financial institutions does not appear to have worked.

(c) Co-operative banks are not doing well in all the states; only a few account for a major
part of their business. For example, 75 per cent of total deposits mobilised by SCBs was
from only seven states in 1987-Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh,
Maharashtra, Tamil Nadu, and Uttar Pradesh.

39

(d) These banks still rely very heavily on refinancing facilities from the government, the
RBI, and NABARD. They have yet not been able to become self-reliant in respect of
resources through deposit mobilisation.

(e) They suffer from dangerously low or weak quality of loan assets, and from highly
unsatisfactory recovery of loans.

(f) They suffer from infrastructural weaknesses and structural flaws. They do not look like
banks and do not inspire confidence in the potential members, depositors and borrowers.

(g) They suffer from too much officialisation and politicisation. Undue governmental
interventions have prevented them from developing steadily as a self-reliant and resilient
credit system. Most of them are headed by politicians.

(h) They unduly depend on government capital rather than member capital. (i) There is no
active participation of their members in their working, which can come about if they work
with members' money rather than government largesse.

(j) They have been resorting to unethical practices. There are many regulators for them, but
still there are many lacunae in their regulation. In fact, the existence of multiple regulatory
authorities has come in the way of effective regulation, control, and monitoring of COBs.

40

GOVERNMENT INITIATIVES TO STRENGTHEN THE DEVELOPMENT OF

CO-OPERATIVE BANKS
Even before the submission of the Khusro Committee Report, the government and the RBI
had initiated certain measures to strengthen the development of co-operative banks.
Some of these policy initiatives were as follows:
(i) The NABARD had formulated a scheme for the reorganisation of PACSs and the
implementation of this scheme had started in those states which have accepted it.
(ii) The programme for development of selected P ACSs into truly multi-purpose cooperative societies has been implemented in many states and Union Territories.
(iii) In addition to such programmes, certain state governments like Andhra Pradesh,
Madhya Pradesh West Bengal had also initiated development programmes to strengthen
the working of the co-operative credit institutions at the base level.
(iv) On the basis of their financial position as on 30 June 1987, 175 CCBs and 7 SCBs in
the country were identified as 'weak' banks and brought under the programme of
rehabilitation which, however, did not really work quite well.
(v) With a view to enabling weak banks which were either ineligible or were on the verge
of becoming ineligible for refinance SUPP011, a 12-Point Action Programme had been
formulated and circulated by NABARD to all the state governments.

STRUCTURE OF CO-OPERATIVE BANKS IN INDIA:

Credit cooperatives are the oldest and most numerous of all the types of cooperatives in
India. The cooperative credit institutions in the country may be broadly classified into
urban credit cooperatives and rural credit cooperatives. There are about 2090 urban credit
cooperatives and these societies together constitute for about 10 percent of the aggregate
banking business and therefore regarded as an important segment of the banking system.
The urban credit cooperatives are also popularly known as Urban Cooperative Banks. The
rural credit cooperatives may be further divided into short-term credit cooperatives and
long-term credit cooperatives.
41

With regard to short-term credit cooperatives, at the grass-root level there are around
92,000 Primary Agricultural Credit Societies (PACS) dealing directly with the individual
borrowers. At the central level (district level) District Central Cooperative Banks (DCCB)
function as a link between primary societies and State Cooperative Apex Banks (SCB). It
may be mentioned that DCCB and SCB are the federal cooperatives and thus the objective
is to serve the member cooperatives. As against three-tier structure of short-term credit
cooperatives, the long-term cooperative credit structure has two tiers in many states with
Primary Cooperative Agriculture and Rural Development Banks (PCARDB) at the primary
level and State Cooperative Agriculture and Rural Development Bank at the state level.
However, some states in the country have unitary structure with state level cooperative
operating with through their own branches and in one state an integrated structure prevails.
Interestingly, under the Banking Regulation Act 1949, only State Cooperative Apex Banks,
District Central Cooperative Banks and select Urban Credit Cooperatives are qualified to
be called as banks in the cooperative sector. In other words, only these banks are licensed
to conduct full-fledged banking business.
The Co-operative Banks function in India on State Levels. Most of the Rural Co-operative
banks function on Three-Tier and the urban banks function on Two-Tier. At the National
Level there is NABARD to organize the Agricultural Co-operatives. Also there is National
Co-operative Union of India, as an apex institution at National Level.
The Reserve Bank of India controls the Co-operative Banks that falls under the Banking
Regulation Act of 1949.

42

CO-OPERATIVE BANKS- CLIENT FRIENDLY :

If investor are looking to park his surplus funds in a fixed deposit or is eager to take that
loan, he must check out the schemes at co-operative banks. Investor may land up with the
best deal, not only on the interest rate front, but also in the terms and conditions.

One of the frontrunners in offering double digit interest rates on deposits, when the high
rate party began in the recent past, was a co-operative bank. When investor borrows
money from a co-operative bank, he is most likely to pay a lower interest cost than what
investor would have paid, to a private or public sector bank.

Co-operative banks that were set up on the principal of co-operation that is mutual help
are indeed leading the pack when it comes to deposits and lending. Not only are their rates
the most attractive in the industry, the products meted by them are also equipped with
customer friendly terms.

These banks offer some of the highest rates on fixed deposits. For instance, the countrys
largest co-operative bank, Saraswat Co-operative Bank, offers an interest rate of 9.5 to 10
per cent on its 15 to 24 month term deposit. However, the rates differ from bank and bank
and investor need to scout around to zero in on a co-operative bank that offers the best rate
for the term he wants to place the money for.

For all types of borrowing, right from housing loans, auto loans to education loans, cooperative banks might come as a boon. The following factors go on to justify how investor
stand to gain by taking a loan from a co-operative bank as against any other public or
private sector lending institution.

43

* Lower rate of interest: Firstly, the key consideration while taking a loan, i.e., the interest
rate concerned, is lower in the case of a number of co-operative banks. For example, the
Jankalyan Sahakari Bank charges 10.5 per cent on a housing loan for 5 years tenure or
more.

* Terms of borrowing: Co-operative banks are less strict when it comes to lending. For
instance, when investor takes an education loan from one of these banks, investor may not
be required to undertake the studies from a recognized university, in order to avail of the
loan. Moreover, these banks usually calculate the interest on the loan using the daily
reducing balance method. Under this method, the interest outgo is the lowest from
investors end and investor stand to benefit by way of a lesser interest burden.

TYPES OF CO OPERATIIVE BANKS:

1. URBAN CO OPERATIVE BANKS

2. DISTRICT CENTRAL CO OPERATIVE BANKS
3. STATE CO OPERATIVE BANKS

URBAN CO OPERATIVE BANKS:

Primary (urban) co-operative banks play an important role in meeting the growing credit
needs of urban and semi-urban areas. UCBs mobilise savings from the middle and lower
income groups and purvey credit to small borrowers, including weaker sections of the
society. The number of UCBs stood at 1,872 at end-March 2005, including 79 salary
earners' banks and 119 Mahila banks. Total number of scheduled UCBs was 55 at endMarch 2005. Scheduled UCBs are under closer regulatory and supervisory framework of
the Reserve Bank.

44

Various entities in the urban co-operative banking sector display a high degree of
heterogeneity in terms of deposits/asset base, areas of operation and nature of business. In
view of its importance, it is imperative that the sector emerges as a sound and healthy
network of jointly owned, democratically controlled and professionally managed
institutions. In order to achieve these objectives, the Reserve Bank took a series of policy
initiatives in 2004-05. The most significant initiative in this regard was the Vision
Document and Medium-Term Framework (MTF) for UCBs. With a view to protecting
depositors' interests and avoid contagion on the one hand, and enabling UCBs to provide
useful service to local communities and public at large on the other, a draft Vision
Document was prepared and placed in public domain for eliciting comments. Based on the
feedback received from different quarters, the necessary modifications were carried out in
the vision document to evolve as the medium-term framework for the sector

Regulatory Initiatives for UCBs: UCBs have grown rapidly since the early 1990s.
During the phase of rapid expansion, however, the sector showed certain
weaknesses arising out of lack of sound corporate governance, unethical lending,
comparatively high level of loan defaults, inability to operate in a liberalised and
competitive environment. The Reserve Bank, therefore, has been striving to harness
the growth of UCBs with appropriate application of prudential regulation and
supervision to safeguard the interests of depositors. The Reserve Bank initiated
several regulatory measures during 2004-05 to ensure the growth of UCBs along
sound lines.

Supervision of the Rural Co-operative Structure

NABARD undertakes inspection of RRBs, StCBs and CCBs in accordance with the
powers vested under Section 35(6) of the Banking Regulation Act, 1949 (AACS). Besides,
NABARD conducts voluntary inspection of SCARDBs, Apex weaver Co-operative
Societies

and

State

Co-operative

Marketing

Federations.

The

frequency

of

statutory/voluntary inspections by NABRAD is being increased from 2005-06.

Accordingly, statutory inspections of all StCBS as well as of those CCBs and RRBs which
are not complying with minimum capital requirements as required under the B.R.Act,1949
(AACS) and the Reserve Bank of India Act, 1934, respectively, and voluntary inspections
45

of all SCARDBs will be conducted on an annual basis. The statutory inspections of CCBs
and RRBs with positive net worth as also the voluntary inspections of Apex co-operative
Societies/Federations would continue to be conduct once in two years. With the
introduction of annual inspection, the system of conducting quick inspection has been
dispensed with. Inspection of 326 banks (12StCBs, 181CCBs and 133 RRBs) and
voluntary inspection of 11 SCARDBs and four Apex institutions were carried out during
the year.

STATE CO OPERATIVE BANKS:

Operation of state Co-operative:
Assets/liabilities of StCbs grew at a higher rate during 2003-04 as compared with the
preceding year. Deposits of StCBs grew significantly during the year. Most of such
deposits were deployed in investments, a trend which wa observed in respect of other
financial institution as well. Many financial institutions increased their exposure to
investments for making capital gains in a declining interest rate scenario. Loans and
advances extended by StCBs. However, decelerated further from the low growth witnessed
in the previous year

Financial performance of state Co-operative Banks

Interest income of the StCBs declined by Rs 267 crore during 2003-04.This, however, was
more than compensated by a sharp increase in other income, on the one hand, and decline
in interest expense and operating expenses, on the other. As a result, operating profits of
StCBs improved marginally during the year. However, a sharp increase in provisions and
contingencies resulted in declined in net profits by Rs 20.6 crore at end-March 2004 from
Rs.343 crore at end of the previous year. twenty seven out of 31 StCBs earned profits,
while four incurred losses during the year. Twenty StCBs earned higher Profits during
2003-04, while seven earned lower profits. Losses incurred by three loss making StCBs
declined while it increased for one

46

Central Co-operative Banks Operation of Central Co-operative Banks

Total Assets and Liabilities of Central co-operative banks (CCBs) expanded at a lower rate
during 2003-04 as compared with the previous year mainly due to slowdown of deposits,
borrowings and internal generation. The impact of this slowdown was felt mainly on loan
and advances, which grew at a much lower rate as compared with the previous year.
Investments, however, increased sharply, a trend which was observed in respect of other
financial intermediaries as well. The structure of liabilities and assets of CCBs remained
broadly unchanged

Primary Agricultural Credit Societies (PACS)

Primary agricultural credit societies (PACS) are the foundation of the co-operative credit
system on which the superstructure of the short term co-operative credit system rests. It is
the PACS which directly interface with individual farmers, provide short-term and
medium-term credit, supply agriculture inputs, distribute consumer articles and arrange for
making of produce of its members through a co-operative marketing society.

47

CHAPTER 6.SARASWAT BANK:

ABOUT SARSWAT BANK

The Bank has a very humble but a very inspiring beginning. On 14th September 1918,
"The Saraswat Co-operative Banking Society" was founded. Mr. J.K. Parulkar became its
first Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first
Secretary and Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were the people
with deep and abiding ideals, faith, vision, optimism and entrepreneurial skills. These
dedicated men in charge of the Society had a commendable sense of service and duty
imbibed in them. Even today, our honourable founders inspire a sense of awe and respect
in the Bank and amongst the shareholders.

The Society was initially set up to help families in distress. Its objective was to provide
temporary accommodation to its members in eventualities such as weddings of dependent
members of the family, repayment of debt and expenses of medical treatment etc. The
Society was converted into a full-fledged Urban Co-operative Bank in the year 1933.

The Bank has the unique distinction of being a witness to History. The Bank, which was
originally founded in 1918, i.e. close on the heels of the Russian Revolution, also
witnessed as a Society and as Bank-the First World War, the Second World War, India's
freedom Movement and the glorious chapter of post-independence India. During this
cataclysmic cavalcade of history, the Bank as a financial institution and its members could
not of course remain unaffected by the economic consequences of the major events. The
two wars in particular brought in their wake, paucities of all kinds and realities and stand
by its members in distress as a solid bulwark of strength. The Founder Members and the
later-day management's of the Bank continued to demonstrate their unwavering faith in the
48

destiny of the common man and the co-operative movement and they encouraged the
shareholders to save despite all odds.

MISSION STATEMENT
"To emerge as one of the premier and most preferred banks in the country by adopting
highest standards of professionalism and excellence in all the areas of working !!!"
MILESTONES
Thanks to these sustained and assiduous efforts over 25 years after its inception, the Bank
had gained Strong foundation in terms of its membership, resources, assets and profits. By
1942, the Bank was fulfilling all the banking needs of its customers.
During the late fifties, the Bank grew from strength to strength. The Bank had established
five branches within the city of Mumbai and one each at Pune and Belgaum. In its 50th
year, the Bank chose a bee motif to symbolise the Bank's emblem - a fitting and
appropriate characteristics of a Bank that believed in hard work, a search for all that is
good, a team spirit to achieve its objectives and a selfless service to its members and
customers. The Bank has grown in stature, progressed in its social and economic objectives
and produced an image of what an ideal bank should be. Resultantly, in the year 1977-78,
the Bank's gross income crossed the Rs.3.00 crore mark for the first time.
Last two decades the Bank has witnessed a steady growth in the business. The bank has a
network of 187 fully computerised branches covering six states viz. Maharashtra, Gujrat,
Madhya Pradesh, Karnataka, Goa and Delhi. The Bank is providing 24- hour service
through ATM at 67 locations.
In 1988 the bank was conferred with "Scheduled" status by Reserve Bank of India. The
Bank is the first co-operative bank to provide Merchant Banking services. The Bank got a
permanent license to deal in foreign exchange in 1978. Presently the Bank is having
correspondent relationship in 45 countries covering 9 currencies with over 125 banks.
In 1992 Bank completed 75 years. Platinum Jubilee Celebrations were inaugurated on 14th
September, 1992. Bank also crossed the business level of Rs 700 Crores

49

The Beginning of the 21st Century has been a giant leap forward for the Bank. Bank chose
a path of organic/inorganic growth and our pace of growth accelerated .Bank's total
business which was around Rs 4000 Crore in 2000 almost tripled to Rs 15295 Crore in
2007.
Bank in the year 2008 launched the Branding Initiative .The purpose of such an exercise
was to reconfirm the thrust of Bank on its core values, which can be summed up as "Sense
of Belonging ".The name of the Bank should always inspire the Sense of Belonging in all
its stakeholders and that Bank continues to fulfill the changing needs and expectations of
the customer with unflinching gusto and aplomb.

SERVICES PROVIDED BY SARSWAT BANK:

VISA Debit Card

Mobile Banking

ATM Services

Easy Pay

Insurance

Mutual Fund

BANCS

1. VISA Debit Card

50

To add to your convenience , your Bank has tied up with VISA for issuing Debit Card.
VISA has a long-standing name in the banking industry in India as well as abroad. Visa is
a reliable, international brand. Debit Card is basically a convenience card which can be
used at a POS for making purchases at Merchant Establishments. This card can also be
used as an ATM card for withdrawing cash at the ATMs
Debit Cards: This card can be used as an ATM card for withdrawing cash at the following
ATMs:
a. Saraswat Bank ATMs
b. BANCS ATMs
c. Visa enabled ATMs
Debit Card looks similar to a credit card, bearing a Visa logo, and can be used wherever
the card's brand name is displayed.
Debit card can be used at Domestic as well as International ATMs and POS machines
bearing the Visa logo.

Benefits to You:
a. Facilitates electronic transactions and saves the customer from carrying cash or
withdrawing cash.
b. Provides access to merchant establishments and ATM access.
c. Offers the customers safety and security.
d. Extensive usage across a number of establishments as VISA is widely recognised in all
leading departmental stores/retail outlets all over the world.
e. Helps customer stay in control as it tracks their expenses.
f. In case of international traveller, it can save the customer from having to stock up on
traveller's cheques or cash when he/she travels.

51

g. Debit cards may be more readily accepted than cheques, especially in other states or
countries as one need not verify the authenticity of the payment and the merchant is
assured of immediate payment.

Registration: For registration you may contact your nearest branch .The form for

Registration can be downloaded from the "forms section in the website.

Fees: First year free and then membership fees of Rs 99 per year.

2. Mobile Banking
Saraswat Bank has introduced Mobile Banking.
Bank has started forwarding various messages to its customers on their mobile
a. Debit / Credit Transaction Message for amount of Rs.5000/- & above.
b. Term Deposit maturity intimation (7 days prior to maturity)
c. Inward Cheque Returned Intimation.
d. Outward Cheque Returned Intimation.
e. Account overdrawn intimation.
f. Greetings / Promotional messages
g. New product launch message
Customers can now initiate the following transactions at their end
a) Account balance enquiry
b) Last three transactions
c) Cheque Status Inquiry

52

3. ATM Services
Please do not waste your valuable "Time" for "Money", as the "Time" itself is "Money".
We issue ATM card to all our clients who open account with our Bank.
Being A Saraswat Bank ATM cardholder, you enjoy the privilege and convenience of
withdrawing cash at your convenience at time during day and night on all 365 days in a
year. You can draw cash from ATMs of Saraswat Bank as well as over 2461 ATMs of 20
members Banks in "BANCS" network. For drawing cash from the ATMs of Consortium
banks, no charges are levied.
To avail ATM Card, You can download the form and submit it to nearby branch.

4. Easy Pay
Here is one more exciting facility your Bank has offered to relieve you, our esteemed
client, from spending your valuable time standing in a queue for routine utility bill
payments.
All you have to do is to walk into any of our branch and register yourself under : Easy Pay"
scheme for all your recurring utility bill payments such as Telephone, Electricity Bills,
Cellular Phone Bills, Insurance Premium & many more. Once you are registered all your
future bills will be paid automatically through your bank account with us.
So do visit the nearest branch for few formalities & say "Good Bye" to all the hassles of
making routine utility bill payments.

53

5. Insurance
It is our earnest endeavour to offer suite of new and competitive financial products and
services. We have for this purpose tied up with various insurance companies. The details of
tie-up and products offered are given below:
[A] LIFE INSURANCE
For Life Insurance products, we have entered into a tie-up with M/s. HDFC Standard Life
Insurance Company Limited. We offer following products:
1) Endowment Plan:
This being a popular savings plan is useful for meeting all long/ short-term financial needs
and also covers the risk of the applicant's life. Tax benefit under Sec 80 C are also
available.
2) Childrens Double benefit plan:
It is the most popular plan which helps you save and secure your child's future to meet
expenses for education, marriage etc. It is also known as double benefit plan as on death of
life insured the beneficiary (child) gets the sum assured on death of applicant as well as on
maturity of the policy. Tax benefit under Sec 80 C is also available.
3) Term Assurance plan: It is purely life risk cover plan. On death of the life insured the
nominee gets the policy amount. Tax benefit under Sec 80 C is available.
4) Regular Personal Pension Plan:
It is plan, which provides annuity at the retirement age. This plan is a with profit pension
plan suitable for everyone to help provide regular financial security to the family. Plan
takes care of retirement age, return on investment, inflation etc. Tax benefit under Sec 80 C
available.

54

[B] NON-LIFE INURANCE:

For Non-Life Insurance we have a tie-up with M/s. Bajaj Allianz General Insurance Co
Ltd. Under the arrangement we offer following insurance products:
1) Health guard: This plan provides for reimbursement of Hospitalisation expenses
incurred for illness/ diseases or injury sustained. The key features are lowest premium,
takes care of pre and post hospitalisation expenses, ambulance charges, family discount,
cashless facility with network of 600 hospitals across India. Tax benefit under Sec 80 D is
available.
2) Travel Companion: It is an Overseas Travel Insurance that covers reimbursement of
medical expenses at abroad, along with loss of passport/ baggage during overseas travel.
3) Personal Accident Insurance: It covers risk of death on accident.
4) Vehicle Insurance: It insures your vehicle incase of damage or loss to the vehicle.

6. Mutual Fund
Considering the changes in Indian demographics (more than 70%of the population below
the age of 35), changes in investment pattern (rising disposable incomes created a huge
potential for investment in Insurance and Mutual Funds), increased competition and
thinning of Interest margins, the Indian Banking Industry had to redesign their bouquet of
products and introduce marketing of third party products like Insurance and Mutual Funds,
to increase fee based income.
To encash on this sentiment, our bank has entered into the Mutual fund distribution
business 5 years back and today we have a successful tie up with 21 fund houses with total
funds invested at around Rs 100 crores.
The Mutual Fund industry currently has 35 Fund houses with 1800 schemes spread across
30 different categories. During this financial year the industry saw 900 new fund
offers(equity, debt, liquid and Fixed Maturity Plans included).The AUM (Asset Under
Management) of the Mutual fund industry closed at Rs 5,67,60 Cr on April 2008.

55

THE MAJOR FUND HOUSES ARE AS FOLLOW:

Fund House
Birla Sunlife Mutual Fund
Franklin Templetoin Mutual Fund
HDFC Mutual Fund
ICICI Prudential Mutual Fund
Kotak Mahindra Mutual Fund
Principal PNB Mutual Fund
Reliance Mutual Fund
Tata Mutual Fund
UTI Mutual Fund

7. BANCS
BANCS stands for Banks ATM Network and Customer Services
We are pleased to inform you that Saraswat Bank has joined the 'BANCS' network
consortium for ATM sharing and has started operations since 15th June 2004.
BANCS currently comprises of 2461 (Two thousand Four Hundred and Sixty One only)
ATM's of 13 member banks including Saraswat Bank. Saraswat Bank has ensured that our
customers can use existing ATM cards in 'BANCS' network for ATM transactions. Please
note that there are no charges levied on customers for BANCS transaction.

PERSONAL
56

Saraswat Co-operative Bank being the No.1 co-operative bank in Asia, our efforts are
always directed towards developing and offering competitive and innovative products and
services.
In the wholesale banking business, the Saraswat Co-operative Bank Ltd. provides a wide
range of products from a traditional term loans to short term products like Bills discounting
under Letter of Credit etc.
The Bank also offers a bouquet of Retail Loan Products such as Vastu Siddhi Home Loan,
Saraswati Education Loan, Car Loan etc. and wide array of Deposit schemes with
customer friendly features and attractive Rate of Interest.
With a view of fulfilling all the needs of the customers under one roof Bank has entered
into tie-ups with various premium institutions, through which we are offering third party
products like Life and non-Life Insurance, Mutual Funds and Demat Services.

The details of these various products and services offered by our Bank are given in the
sections one could click on to.
1. Deposit Schemes
In this section Bank provides information of it's various deposit schemes
Saving Deposit
Elite Saving Account Scheme
Saving for Kids (Cubs Account Scheme)
Janhit Account Scheme
Salary Earners Scheme (Akshay Salary Scheme)
Current Account Scheme
Elite Current Account Scheme
Fixed Deposit

57

Madhukar Tax Saving Deposit Scheme

Recurring Scheme
Nischint Lakhpati scheme
2. Elite Savings (Apply Online)
An account which gives you a cutting edge with a minimum average quarterly balance of
just Rs 5000. Bank offers you a plethora of services, many of which are absolutely free.
All the branches of the Bank are on Core Banking. You can deposit /withdraw /transfer
cash from any of our branches free. There are no stipulations on number of transactions or
amount of money which you can withdraw/ deposit. Free SMS Banking by which
messages regarding cheque received and other debits above a certain amount are informed
to you. Bank also offers you facility of free for one occasion of Demand Draft. The details
of the scheme are given below:

Bank offers you a higher interest saving account as you are offered Sweep in

/Sweep out facility wherein excess balance of Rs 10000 would be transferred to a term
deposit in multiple units for 1 year.

Free Personal Accident Insurance Cover of Rs 2.00 Lakhs for the first year to the

first account holder only.

Bank conveniently with facilities like Net Banking and Mobile Banking- Check

your account balance.

Never overspend. Shop using your international Visa Debit Card depending on the

balance in your saving account.

Wide ATM usage and get connected to ATM across the world through VISA Debit

Card

Bank provides personalized/non personalized cheque book (50 leaves ) every half

year free.

You can pay your electricity bills, telephone bills through Easy Pay Facility".

Bank does not charge you for availing these services.

58

3. Savings for Kids (CUBS)

"Habit is a habit, why not has a good habit. Good Habits if formed early in the formative
years can make a whole lot of difference as we grow. We understand and therefore the
Bank has come out with a scheme to inculcate the habit of Saving in your children. The
children get attractive gifts and also a personalized passbook.

To be a 'CUBS' account holder you should be a minor/student (upto the age of 21

years).Initial deposit of Cubs account is Rs 50/- and subsequent deposits in multiples of Rs

10/- no periodic compulsion for subsequent Deposit.

Starting with a small amount of Rs. 50/-, a CUB Account holder has to save Rs.

500 /- over a period of one year.

Facility to deposit cash in school premises on predetermined days.

After completion of 14 years of age minor/student can operate the account

Bank does not charge you for non-maintenance of minimum balance for first year.

A gift for every child in whose name account is opened

A personalized passbook in the name of the child

4. Salary Earners Scheme (Akshay Salary Scheme)

Bank offers a scheme for employers and employees to open their salary accounts with us .
The account offers host of premium services which keep you ahead of the Pack . There is
no restriction of minimum balance and employees get access to whole gamut of Banking
services. We indulge employees, thereby enhancing their job satisfaction. For further
details please see as under:

59

You are eligible if you are a salaried individual up to 55 years of age working with reputed
organization.

Zero Balance Account.

Overdraft facility equivalent to average net monthly salary maximum up to Rs

50000/-(salary of last 3 months to be taken into consideration).

Easy Loan up to Rs. 2.00 Lakhs under Multi-purpose Loan Scheme with 0.50%

concession on applicable rate.

Free Net Banking, Mobile Banking.

Three personalized cheque book free .

Any Branch Banking for transfer transactions and also for Cashdeposit/withdrawal

up till Rs 25000 is free.

Preferred weight-age to avail other loans from the Bank.

5. Nischint Lakhpati Scheme

Kaun Banega Lakhpati? No mystery, No Questions. It has all been made so simple . See
your small savings multiply and become a Lakhpati.Saraswat Bank offers you an attractive
Recurring deposit investment scheme with an insurance cover as an added benefit. The
insurance cover is issued at a nominal premium which is included in the monthly
instalment.
This is possible as a result of Bank's tie-up with M/s. Tata AIG LIfe Insurance Company
Ltd. under Group Life Insurance.
Eligibility: Individuals with minimum age of 18 years
Maximum: 55 years.

60

Madhukar Tax Saving Deposit Scheme

Money does not grow on trees. But by saving and investing wisely one can make money
hands over fist. With this intention Bank has come out with a scheme which allows you
higher returns compared to other tax savings schemes. Investments under the scheme are
exempted under Sec 80C of Income Tax Act. For further details please see as under:
Madhukar Term Deposit Scheme:

In the Finance Bill of 2006, the government had announced Tax benefits to Bank
Term Deposits which are of over 5 year tenure u/s 80C of IT Act, 1961 vide
Notification Number 203/2006 and SO1220 (E) dated 28/07/2006.

Accordingly Bank in order to give its customers maximum benefits, came out with
the Madhukar scheme by which you can

Invest minimum Rs 5000 and in multiples of Rs 100. Maximum amount being Rs

100000 during the calendar year.

Maturity Period of the term deposit is minimum 5 years.

Deposit can be kept in a single name or in joint names .Tax benefit under Sec 80 C
shall be available only to the first holder.

Interest on the term deposit is payable Quarterly.

The term deposit cannot be pledged to secure loan/overdraft or as security to any

other asset neither they can be withdrawn prematurely.

The tax on interest earned is deductible in accordance with the provisions of

section 194A or section 195 of the Income Tax Act 1961

Fixed Deposits/Kalaptaru (Cumulative Int Schemes)

Term Deposit - Interest Payout Schemes
(Interest - Half Yearly, Quarterly, Monthly)

61

Kalpataru -Cumulative Interest Schemes

Eligibility
Individuals (singly or jointly), Minor by guardian, Organizations, Co-op. Societies
Minimum Balance: Rs. 1000/- and further rise in multiples of Rs. 100/Rate of Interest :{ CURRENT INTEREST RATES}

Special Features/Facilities
TDS applicable Form 15H/15G required to be submitted for exemption of TDS.
Nominal member of the bank will also be exempted from TDS. If you are exempt from
paying tax, you need to present Form 15H when you open a Fixed Deposit and
subsequently at the beginning of the following financial year.
Charges / Penalty
In case of payment before maturity Interest up to 30 days will be Nil
Above 30 days: 1% less than applicable rate of Interest for the actual period for which
deposit is kept with the Bank.
Account closure:
As above, if payment is before maturity
Current Deposit
Fasten your pace with a current account which offers you out of the world service
experience by combining personalized service with many appropriately priced features.
Our customer friendly staff will not leave any stone unturned to make your experience a
memorable one. Internet Banking, SMS Banking, Mobile banking all will allow you to
Bank from the comfortable confines of your home and office. All our branches are on Core

62

Banking which allows you free transfer of funds from one account to another at any
branch. We also have a tie up with VISA and offer a VISA debit card.

CHAPTER 11.MUMBAI BANK:

ABOUT MUMBAI DISTRCIT CENTRAL CO OPERATIVE BANK:

The Mumbai District Central Co-operative Bank Ltd. is a central financing agency of all
affiliated co-operative societies in Mumbai district, which is popularly known as
"MUMBAI BANK" and is registered under MCS Act in the year 1974 and started its
functioning on 12th Feb.1975. Since there is no agriculture production in this District,
MUMBAI BANK is catering to the financial needs of non agricultural co-operative
societies such as urban co-op. banks, urban co-op. credit societies, Employees co-op. credit
societies, Housing co-op. societies, Co-op. consumers stores, Industrial, fisheries and
labour co-op. societies etc.

In India, an integral part of the policies formed by the Co-operative movement is focused
on the development of the country, upliftment of poor and propagation of principle which
represents the very socio-cultural ethos of the country. Co-operative movement has
enabled us to develop the economy and to bring social change at large. The success of the
co-operative depends largely on their ability to face the challenges by converting these
challenges into opportunities of growth and development in the fast changing liberalized
economic era. The Indian co-operative movement is so far the largest movement in the
world. In India co-operatives operate in almost all important sectors i.e. agricultural, agroprocessing, fertiliser, marketing, credit, dairies, spinning, handloom and handicrafts, sugar,
fisheries, banking, etc.

63

In India co-operatives have gained popularity because they have proven capabilities to
reach at the grass root level and have strengthen the faith in co-operatives. The area of
operation of some of the co-operatives is limited to village, taluka, district, state or all India
bases. Computerization is a new need of business in co-operatives. Operational efficiency,
customer service, communication & management information system are the four
important parameters to ensure success of business organization. These parameters are
improved to a great extent with the help of computers and information technology (IT) by
The Mumbai District Central Co-operative Bank Limited. Co-operatives are based on the
values of self-help, self-responsibility, democracy, equality, equity and solidarity. The cooperative principles are the guidelines by which co-operatives put their values into
practice. The International Co-operative Alliance (ICA) in its centennial conference held in
Manchester in September 1995 approved and adopted seven basic principles of Cooperation.

1. Voluntary and Open Membership

2. Democratic Member Control
3. Member Economic participation & Control
4. Autonomy & Independence
5. Education, Training & Information
6. Co-operation among Co-operation
7. Concern for Community

A co-operative society is an autonomous association of persons united voluntarily to meet

their common economic, social and cultural needs through a jointly owned and
democratically controlled enterprise. There is three tier co-operative credit structure in the
state of Maharashtra. The Maharashtra State Co-operative Bank is the Apex institution
working at the state level whereas the district central co-operative banks are working at
district level. These district central co-operative banks are catering to the financial needs of
64

primary co-operatives in the concerned district. These banks are playing vital role
particularly in providing financial assistance for agriculture as well as non-agricultural
cooperative sector through member co-operatives. District Central Co-operatives are also
acting as a balancing centre of surplus funds of all primary co-operatives in the district.
This leading District Central Co-op Bank has invested their funds in Govt.Securities,
approved Bond & other securities like NABARD,HUDCO,SBI BONDetc. The total
investment of the Bank as on 31st March 2008 stands at Rs.1409.27 crores in various cooperative and Corporations.
We appeal to all co-operatives and corporations to come forward and avail financial
assistance from our bank for the socio- economic Development of the people in greater
Mumbai and Maharashtra.

ACHIEVEMENTS:
During short span of 35 years this bank has made a tremendous overall progress. Position
at a glance is given below.

Membership 16532

No. of Branches 43 - Ext Counter - 20

No. of Employees 809

Audit Classification "A"

Paid up share capital 58.85 (Rs. In Crores As on 31-03-2009)

Owned funds 147.04 (Rs. In Crores As on 31-03-2009)

Deposits 2590.34 (Rs. In Crores As on 31-03-2009)

Loans Advances 1431.61 (Rs. In Crores As on 31-03-2009)

Investments 1660.39 (Rs. In Crores As on 31-03-2009)

Net profit 15.40 (Rs. In Crores As on 31-03-2009)

65

SALIENT FEATURES
1.

A leading District Central co-operative bank in Asia, standing on very sound

financial footing.
2.

Central financing agency and balancing centre for surplus funds of all co-operative

societies in Brihan Mumbai.

3.

Providing Loans and Advances to all types of co-operative societies at reasonable

rate of interest and on easy repayment installments.

4.

Medium Term Loan to Coperative Housing socities for renovation, repairs painting

or extension to their buildings.

5.

Medium Term Loan to co-operative sugar factories in Maharashtra under

consortum scheme with Maharashtra state co-op Bank Ltd.

6.

Loans are available to socities registered under Socities registration Act 1860 for

Industrial activities.
7.

Overdraft facility against Fixed Deposit receipt and National saving certificate

Govt.
8.

All branches are fully computerised and having facility of safe deposit locker in

some branches

66

SCHEMES AND SERVICES BY MUMBAI BANK:

Less
Sr. No. Type of Deposit
1.

Saving Deposits

2.

Term Deposits

a.

Deposits

for

days

to

14

days

(If single deposit Rs. 15 lacs and above)

than

Rs.50.00 Rs.50

Lakhs

&

Percentage p.a.

Percentage p.a.

3.50

---

3.50

2.75

b.

Deposit for 15 days to 29 days

3.75

3.00

c.

Deposit for 30 days to 60 days

4.00

3.25

d.

Deposit for 61 days to 181 days

4.50

3.50

e.

Deposit for 181 days to 270 days

5.50

3.75

f.

Deposit for 271 days to less than 12 months

6.00

5.25

g.

Deposit for 12 months to less than 24 months

6.75

6.00

h.

Deposit from 24 months upto 36 months

7.25

6.25

i.

Deposit for 36 months to less than 60 months

7.50

6.50

j.

Deposit for 60 months upto 10 years.

7.75

6.75

67

Lakhs
above

MUMBAI DISTRICT CENTRAL CO-OPERATIVE BANK LIMITED

(LOAN SECTION)
LOAN POLICY IN BRIEF
Sr. Type of Loan

Norms

Quantum of Loan

No.
1. URBAN CO-OP. BANK
A. Cash Credit
Banks in 'A' or 'B' Audit90%
Classification

Rate
Interest

of

non-overdue

ofPeriod

Repayment
1 Year

outstanding Loan from its

members or 20% of working
capital of the Bank which
10.50%
ever is less.

B.

M.T. Loan

For Salary Earners Bank

20
30 times of their monthly
Loan Recovery

C.

Short Term Loan forAs

Liquidity purpose

per

to

monthly
Instalments

requirement.

Loan will be sanctioned

6 months

against Pledge of FixedTo be repaid by monthly

2.

instalments.
Deposit.
URBAN CO-OP. CREDIT SOCIETY
Fixed Loan
A+ Audit Classification 5 times of their owned Funds 11.65%

up

to

months
4 times of their owned Funds
up
'A' Audit Classification

to

months
3 times of their owned Funds
up

'B' Audit Classification

Prior

permission

from

concern Registrar. One times

68

to

months

of their owned Funds

C' Audit Classification

up

to

months

3.
A.

SALARY EARNERS CO-OP. SOCIETY

Cash Credit
'A+' Audit Classification 6 times of owned funds, 90%

1 Year

of Non overdue outstanding

11%

loans from members.

'A' Audit Classification

5 times of owned funds, 90%

1 Year

of Non overdue outstanding

loans from members.

'B' Audit Classification

4 times of owned funds, 90%

of Non overdue outstanding
1 Year

loans from members.

'C' Audit Classification

3 times of owned funds,90%

1 Year

of Non overdue outstanding

B.

Fixed Loan

'A'

or

'B'

Classification

loans from members.

Audit10 to 180 times of their11%
monthly recovery of loans.

Up

to

months

(Sanctioned of previous fixed

loans outstanding will be
deducted).
4. CONSUMERS & INDUSTRIAL CO-OP. SOCIETIES
A. Clean Cash Credit
'A'
or
'B'
AuditEqual to owned funds 80%11.50%
Classification

of the Bills Receivable

(Primary
Central

69

1 Year
/

18

Consumer)

'A'
B. Hypothecation

or

'B'

AuditOne and half time of NDR

Classification

60% of the value of stock.12%(Industrial 1 Year

Against the possession ofSociety)
goods.

'A'
C. Pledge

or

'B'

Audit

100% of value of Goods.

Classification

11%
(Mahila

1 Year

Industrial
Society)

D. M. T. Loan

'A'

or

'B'

Audit

Classification
For

to

Sah.

Society

be

General Mahila

to

repaid

monthly

instalments
5. HOUSING CO-OP. SOCIETIES
A. L.T. Loan
For construction

(Seva

be

hypothecated
by

3 to 7 Years
12%

Machinery or Vehicle
of

purchase

machinery

60% to 75% of the value of

&

Society)

90% of the project value12%

Up

Per

Years

member

ceiling

to

Rs.20.00 Lacs.
B. M.T. Loan

For

repairs,

renovation,

additionalrepairs

per

of

Rs.1,00,000/-

etc.

repaid

monthly,which ever is less

by

half

orceiling

or

construction
quarterly,
C. Fixed Loan

painting,Up to 90% of the cost of

member

Up

to

Years.

yearly

instalments
Society's legal payments50% of the pending Bills12%
(e.g. Light Bill, WaterReceivable of the member,
Charges, Property Tax,maximum
70

Rs.10.00

lacs

6 months

Workers

Payment

&(against amount of Fixed

Other Expenses, SolarDeposit

System,

Rain

receipt

of

the

Water,Society)

Harvesting, lift repairing

6.

etc.)
LABOUR CONTRACT CO-OP. SOCIETIES
Clean Cash Credit
'A'
or
'B'
Audit2 times of Owned Funds or12%
Classification

1 Year

maximum Rs.10.00 lacs,

80%

of

the

Bills

Receivable.
7. FISHERIES CO-OP. SOCIETIES
A. Clean Cash Credit
For working Capital

Equal to Owned Funds

B. Production Loan

Rs.2.00 lacs per member

C. Loan

for

Mechanized

For Fish Catching

11%

1 Year

27 months

Non-For purchase of Non-Rs.60,000/- per, member

3 to 7 Years

BoatMechanized Boat

(Govt. subsidy scheme)

M. T. Loan
For

Purchase

of

D.

50% to 60% of the Value

Machinery / Boat
8 MAHILA INDUSTRIAL CO-OP. SOCIETIES
A. Clean Cash Credit
"A" or "B" Audit2 times to Owned Fuinds
Classification
9. SEVA/BEROJGAR /OTHER SOCIETIES
A. Clean Cash Credit
"A" or "B" AuditEqual
B.

Medium Term Loan

Classification
"A" or "B"
Classification

to

Owned

3 to 7 Years
11%

Funds12%

minimum Rs.10.00 lacs

Audit75% of the project cost /12%
Machinery

or

Vehicle

minimum Rs.10.00 lacs

10. BILL DISCOUNTING FACILITY
71

1 Year

1 Year
3 to 7 Years

A. Industrial

B.

Co-op."A"

or

"B"

Audit80% against Govt. / Semi12%

Societies, Mahila Co-op.Classification

Govt.

Societies, Consumer Co-

maximum

op. Societies

Bills

Seva / Berojgar / Other"A"

Societies

or

Bills

Classification

Govt.

working of the society)

Registered

Rs.15.00

Receivable

Bills

(Completion of 1 year formaximum

C.

Receivable
lacs.
period

should be 90 days.
Audit80% against Govt./ Semi12%

"B"

Bills

Company / Firm

Rs.15.00

Receivable

lacs.
period
period17.50%

should be 90 days. 80% of

the

Bills

Maximum

1 Year

Receivable

should be 90 days.
Bills
Receivable

Popular

1 Year

90

Day

(3 Months)

Receivable.
Rs.25.00

lacs.

Cheque should be issued on

Bank

name.

Terms

and

Conditions apply.

MUMBAI DISTRICT CENTRAL CO-OPERATIVE BANK LIMITED

INDIVIDUAL LOAN POLICY
Sr.
No.
1)

Type of Loan
Gold Loan

Quantum of Loan

Period

A) Short Term Loan

Repayment
18 Months

ofRate
Interest
12.25%

ofSanction
By
Branch
Manager

Up to Rs.5.00 lacs
70%

to

90%

(Monthly)
(on

condition) of
18 months

13.00%

Valuation
(Quarterly)

72

OR
B) Overdraft Gold Loan
Up to Rs.5.00 lacs 70%
to
2)

Against N.S.C
&

90% (on condition)

of
valuation.
Up to 80% of face value 1 Year to 3 Years

Branch

for

Manager

maximum

Kisan Vikas Patra

years

period depending

limit

Rs.5.00 due

lacs

date

on

the

of

the

certificate.

12.50%

Up to 90% of face value

(Quarterly)

above 3 years. Maximum

3)

Individual

limit Rs.5.00 lacs.

Hypothecation Up to Rs.25.00 lacs or one 1 Year

Loan against Stock/ Business

14.25%

and half time of NDR,

60% of the value of Stock

H.O. Loan
Section

(Cash Credit)

(Monthly)

Up to 7 Years

11.75%

whichever is less.
Applicant

has

Collateral
Additional
Loan

give

Security/
Security

Sanctioned

Rs.75000/4)

to

by

to

above

way

of

depositing titled deeds.

Education Loan for Student to Up to Rs.25.00 lacs
Medical/ Engineering/ M.B.A.

Section
(including

and other Higher Education/

Courses

H.O. Loan

year(Monthly)

Moratorium Period)
A) 50 times of total Salary

B) 3 times of Average

73

income
of Business.
Applicant

has

to

Collateral
Additional
Loan

5)

Security/
Security

Sanctioned

Rs.75000/-

give

by

to

above

way

of

equitable Mortgage Deed.

Up to Rs.7.50 lacs for 1 5 Years

Vehicle Loan

13.50%

Vehicle

H.O. Loan
Section

Ist Instalment:

(Monthly)

Up to Rs.15.00 lacs for 2

Vehicle. Maximum limit

For

Rs.1.00

amount

Rs.15.00 lacs.

lac

Principal

Rs.1667/- + Interest
75%

of

the

Cost

applicant

Loan

Total

repaying Rs.2792/-

capacity.
Quantum of Loan

Sr. Type of Loan

No.
6) Housing

& Rs.1125/-

Period

ofRate

Repayment
forUp to Rs.20.00 lacs as perUp to 15 Years

Construction/ purchasing ofapplicant repaying capacity.

Interest
11.50%

ofSanction

by
H.O. Loan
Section

EMI:

New/ Resale Flat/ Transfer of

85%

+
For Rs.1.00 lacs
Stamp Duty + Registration

Loan

Agreement

value

Charges

5 yrs.

- 2200/-

7 yrs.

- 1739/-

10 yrs. - 1406/-

7)

Mortgage

LoanFor Salary Earners:

against Residential Property

15 yrs. - 1169/7 Years

H.O. Loan
Section

74

25 times of Gross Salary and No EMI:

Up to Rs.25.00 lacs or
Up

to

65%

of

14.50%

Rs.1.00 lac amount

Govt.Principal Rs.1190/-

Valuation whichever is less. + Interest Rs.1208/= Total Rs.2398/Commercial Property

Ist Instalment
10 Years
Businessmen:
Ist Instalment
Up to Rs.25.00 lacs,
Principal Rs.835/(including

Rs.10.00

lakh

Clean Cash Credit facility ifInterest Rs.1208/-

14.50%

required)
Total Rs.2043/Up to 65% of Valuation or
4 times of Average one year
8)

Machinery Mortgage

income as per I.T. Return

Up to Rs.25.00 lacs, 75% of5 Years

14.25%

Invoice for Purchase New

Machinery

and

H.O. Loan
Section

applicant

repaying capacity.
Applicant

has

Collateral

to

give

Security/

Additional Security to Loan

Sanctioned above Rs.75000/by way of equitable Mortgage
9

Deed.
Mortgage Loan against Life70% of Surrender Value of36 months
Insurance Policy

Life

Insurance

Policy
75

16%

H.O. Loan
Section

maximum Rs.25.00 lacs on

condition of assignment the
10

Policy in favour of Bank.

Bill Discounting Facility to80% of Bill Receivable within90 Days
Registered Firm / Companies 90

days

Companies
11

of

H.O. Loan

Registered

Section

Maximum

Rs.25.00 lakhs
TOD on Current AccountsMaximum Rs.25000/(Individual)

18%

(on30 days

18%

Branch

condition)

Manager

* On condition Apply.
Sr.
No.
9.

Type of Loan

Norms

Quantum of Loan

Rate

ofPeriod

Interest

Repayment

OVERDRAFT
To

individual

or 85% of the amount of FDR 2% more than

Institutions

F.D. Rate

Up to maturity

date of FDR or

maximum 3 years
whichever
earlier.

76

is

SPECIAL SERVICE:

The Mumbai District Central Co-operative Bank takes pleasure in announcing

commencement of ANY BRANCH BANKING facility to its valued Customers w.e.f.
22/05/2008.

RTGS has just started in MUMBAI BANK in recent days;

ABB(any branch banking) is also an advanced service is provided by Mumbai

bank.

Features & facilities provided

1. This service is available to the Customer of The Mumbai District Central Co-operative
Bank Ltd., within its Branches during their respective business hours.
2. Maximum limit for cash withdrawal will be Rs 50000/- for Individual Customers &
Societies.
3. In case of cross cheque of MDCC customer can route the transactions through ABB for
same day credit.
4. Following customers are covered under ABB
. Saving
Current
77

. Overdraft
Cash Credit
Recurring Deposit
Customers other than these are not covered under ABB.
Term Deposit
Term Loan
Account Opening & Closing can not be done through ABB.
5. Following services are available to customers:1) Cash Deposit 2) Cash Withdrawal 3) Fund Transfer 4) Stop payment Instruction 5)
Balance Enquiry 6) Cheque status enquiry 7) Statement of account.
6. In case of third party payment for Society signature of the Payee must be authorized by
office bearers of the Society on the reverse side of the Cheque.
7. Customers must enter proper Account number & Branch Code while depositing Cash /
operations through ABB. Bank is not responsible for any wrong credits arising out of this.
8. Any Branch Banking is based on Leased Line Connectivity & Bank is not responsible
for failures, delays in offering ABB services to Customers as this connectivity can be
disconnected due to Technical failure or Natural & manmade calamities.
9. In case of stop payment instructions made through ABB, Bank is not responsible for
payment of cheque as the updation of these instructions may be delayed for technical
reasons; customer has to take proper precautions. Bank is also not responsible for lost
cheque.
10. If any customer doesnt want to avail this facility, customer can contact Branch
Manager.

78

CHAPTER 8.ABHYUDAYA BANK

ABOUT ABHYUDAYA BANK:

Abhyudaya Co-op. Bank Ltd., one of the leading Urban Co-operative Banks in India, in its
outlook and approach, has the objective of progress and prosperity of all. From a humble
beginning in January 1964 as a Co-operative Credit society with a share capital of a merely
Rs.5,000/- held by 83 members, today Abhyudaya Co-op bank has become one of the large
Urban Co-operative Banks with a "Scheduled Bank" status. The bank has been converted
into a Multi-State Scheduled Urban Co-op. Bank " w.e.f. 11th January, 2007. The area of
operation which was restricted to the State of Maharashtra has now been extended to
Karnataka & Gujarat State. Currently, the capital base of the bank stands at Rs. 45.77
crores and Reserves and surpluses at Rs.682.54 crores as on 31.03.2009. The bank has
1,23,011 members and more than 12 lakh depositors. The Bank has seen a tremendous
growth in deposits. The deposits of the bank are over Rs. 3176.81 crores as on 31.03.2009,
which were Rs. 2625 crores as at the end of the financial year 2007-2008. The loans and
advances stood at Rs. 1856.39 crores as on 31.03.2009. The bank had posted a

as on

31.03.2009. The growth rate of the bank compares well with that of others in the sector.

79

The Bank has maintained a steady growth. The bank has been paying dividend @ 15% to
its members which is maximum permissible as per the MCS Act.

The Bank has launched different loan schemes tailor-made to suit the needs of various
customers. The schemes aim at providing loans for purchase or construction of residential
premises, repair/renovation of house property, purchase of car, seeking higher education
and for purchase of household consumer durable. One of the loan schemes, viz. "Udyog
Vikas Yojana" is specially designed for the benefit of small entrepreneurs and
businessmen. The procedure for sanctioning of loans under the schemes has been
simplified and relaxed with a view to attract new customers and facilitating speedy
sanction of loans. The Bank has total 81 branches including a Mobile Bank at Navi
Mumbai. Bank is committed to spread network of branches throughout the State and
provide much needed banking services to the population, which has been deprived of the
banking facilities.
A Network of 80 branches all over Mumbai, Navi Mumbai, Pune, Raigad, Sindhudurg,
Nashik & Thane Districts in Maharashtra state , Udupi & Manglore Districts in Karnataka
State and Vadodara & Ahmedabad Districts in Gujarat state.
Innovative Banking is another area of operation that Abhyudaya is currently focusing on
for a sustainable long term growth. The Bank has always endeavored for providing
satisfactory customer service the help of the latest technology. The Bank has provided fully
computerized services to its valued clients. Bank is offering 11 Hours fully computerized
services and 7 days working at 15 branches and 24 hours ATM service at 52 branches.

80

SERVICES BY ABHYUDAYA BANK:

TeleBanking

1) Latest balance information

2) Account Transactions
3) Inward clearing cheque details
4) Details of another account (Switch)
5) Change of Pin

Fax on demand

1) Statement of Account (Specific date)

2) Latest balance
3) Inward clearing cheque details

Franking: Facility of Franking of Documents available at our following branches :

Dadar (West), Vashi, New Panvel

Lockers

Safe Deposit Locker facilities available at various branches.

* Reliance Energy, BEST, MSEB Bills collection facility available at selected branches.
* ICICI and HDFC Demand Draft payable at various centres all over India is available at
our various branches.

81

RTGS: for Customer Transaction / Remittances

The Real Time Gross Settlement (RTGS) System aims to do what e-mail did for the post
card. Instead of sending instructions for payments through cheques, with Real Time Gross
Settlement System banks can route payments through on-line messages to RBIs RTGS
Payment Gateway. As electronic messages move instantaneously the transactions can be
concluded immediately unlike in the case of cheque clearing. In RTGS environment the
payer has to inform his bank to debit his account and credit the payees account with an
equivalent amount. With RTGS, money would move faster and transactions would be
settled in a matter of minutes and the payee would have funds in his account within a
maximum time-frame of two hours of the settlement.

RTGS is an electronic payment

system of Reserve Bank of India which provides online settlement between participating
Banks continuously throughout the day. Using RTGS Customers of the Bank can make
payment to the beneficiarys account in another Bank.
RTGS facilitate the funds transfer across the Banks and Branches. At present 95 Banks
and 1435 Branches are under RTGS system. Under RTGS system Inter Bank transactions
and Customer Transactions has been enabled by the Reserve Bank of India.

Customer Transaction can be outward or inward remittances i.e. Funds can be transferred
by or received by the Customer under RTGS system. The unique feature of the system is
unlike other clearing system in RTGS Funds can be transferred or received Just In Time
i.e. within 2 hours of instructions so given that to at cost less than draft charges.

For sending the funds through the RTGS all you have to do is fill & sign the Funds
Transfer Instruction Form ( available at Branches ) along with all the necessary details,
such as Name of the beneficiary, Name of the Bank and Branch, A/c No. and IFSC Code
of the beneficiarys Bank. For receipt of the funds you need to give the IFSC Code of our
Bank & Branch to the remitter of the funds. After the instructions are received in
82

prescribed form, duly signed in we will remit the funds through RTGS and within 2 hours
funds will be credited to beneficiarys account.

INSURANCE:
Abhyudaya Bank - Now Corporate Agent of LIC of India
Our bank has taken Corporate Agency of Life Insurance Corporation of India, a prestigious
insurance company in India. The different policies offered by LIC of India are now
available through different branches of our Bank. All interested parties may contact to their
nearest branch or Insurance Dept., HO for insurance advise.

FOREIGN EXCHANGE SERVICE:

Abhyudaya Bank is one of the select few Urban Co-operative banks who have been
granted AD category I license to deal in Foreign Exchange Business by Reserve Bank of
India.
Bank has entered into tie ups with Bank of India, H. D. F. C. Bank, D. C. B., UAE
Exchange & Financial Services Ltd., Thomas Cook and many others to provide Trade
Finance Services, Travel related services, Investment Schemes for NRIs etc.

For

communication and money transfer purpose it will be using SWIFT / RTGS/ ECS / NEFT
to provide efficient and prompt service to all its users.

83

SCHEMES BY ABHYUDAYA CO OP BANK

LOAN SCHEMES:

Personal loan

Housing loan

Educational loan

Mortgage loan

Vehicle loan

Loan against gold ornament

Loan / secured overdraft against Government securities

Women entrepreneurs

DEPOSITE SCHEMES:

Saving deposit scheme

Current deposit schemes

Term deposit scheme

84

CHAPTER 9.SURVEY AND FINDINGS:

SURVEY
NAME:
1.

Please indicate your satisfaction with the following.

Very
Dissatisfied
dissatisfied

Neither
satisfied

Satisfied
nor

Very
satisfied

dissatisfied
The friendliness
of the staff?
The cleanliness
of the facility?
The selection of
services that are
available?
The accessibility
of the facility?
The value vs
pricing of the
services?
The speed of the
service?
Which of the following services do you use?
Automatic Teller
Checking

Debit/Credit Card

Direct Deposit

Education Account

Insurance

Internet/Online

Investment

Loan Services

Services
Retirement Account

Management
Savings

Travel

Club

Account
3.Is your bank is providing the advanced services like ATM, fast cash, zero balance a/c, E
banking mobile banking etc ?
YES

NO
85

Please answer the following in your own words.

4. What MOST attracts you to this bank?
5. If you could change one thing about this company, what would that be?

6.What is the primary reason you chose this bank ?

Service / People
Location / Convenience
Banking Products
Rates and Fee Pricing
7. Over all how do you rate d service of your bank?
Excellent

Good
Satisfactory

FINDINGS:
On the basis of survey taken of 10 customers of each bank I could make out following
findings:
(1)ATM service which is essential service considered in todays competitive world, is lack
by Mumbai bank, where as Saraswat bank and Abhyudaya bank are providing ATM
service to their customers.

86

(2) In branches wise comparison Saraswat bank is standing 1st with 153 branches followed
by Abhyudaya bank with 82 branches and then Mumbai bank with 44 branches and 22
extension counters.
This ultimately results into greater accessibility of branches to its customers in case of
Saraswat bank.
(3) Loan procedure is easy n faster of Saraswat bank & Abhyudaya bank in compare to
Mumbai bank. Mumbai banks loan service is restricted within the city.
(4) Higher customer service has been measured highly in Saraswat bank.
(5)Promotional strategies are better in case of Saraswat bank in compare to other 2 banks.
This is resulted into more no. of customers.
(6)Customers with low cost deposit accounts are excess in case of Mumbai bank.
(7)Customer employee relation is differing from branch to branch in all 3 banks.

OVERALL CUSTOMER SERVICE RATING OF THESE 3 BANKS: (approximately)

The results received are:

100%
80%
sarasw at bank80%

60%

abhyudaya bank

40%

m um bai bank

20%
0%

CHAPTER 10: CONCLUSION

Co-operative banks should unite around a core purpose of customer champions, building
on the platform of member ownership. Good evidence can be found that co-operative
values and ideology are appreciated by customers, in particular the relatively high share
and growth rate of co-operatives in their home markets. A confluence of market and

87

technological factors which have tipped the information advantage in the banks favour,
make it timely to promote Co-operative values under the banner of customer advocacy.

In order to tackle the challenges inherent to the co-operative model and ensure that these
values are delivered, co-operative management need to address five issues:
1. Execution ensure you at least match industry norms on growth and efficiency
2. Membership expand beyond self-imposed boundaries to make membership as catholic
as possible
3. Capitalisation ensure discipline in managing the capital base and in particular overcapitalisation
4. Governance define common approaches as a target operating model for co-operatives
that reinforce the performance and regulatory comfort with the co-operative model
5. Expansion create methods for expanding the co-operative model to new markets and
banks.
Overall, the mantra should be commercial delivery of co-operative values. The cooperative model brings an inherent agency problem which many have overcome to lead the
industry on growth and efficiency. Those that have not managed this problem need to
improve their performance so as not to tarnish the co-operative model as a whole.

CHAPTER 11. BIBILOGRAPHY

1. Name of the book: Service Marketing

Author: Rohini Gupta Suri
Publisher name: Anmol publication
88

Edition: first edition

2. Name of the book: Service marketing

Author: Christopher Lovelock &Jochen Wirt
Publisher name: Prentice Hall
Edition: Sixth edition

3. Prospectus of Saraswat bank, Abhyudaya bank & Mumbai bank

4. Websites :
www.google.com
www.saraswatbank.com
www.abhyudayabank.co.in
www.mumbaidistrictbank.com

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