INDEX

Chapter Topic Page

No. No.
1 INTRODUCITON 4
Compay Profile
Capital Structure
Mission
Vision Document For 2014-15 To 2016-17
Organigational Structure
Swot Analysis
2 REVIEW LITERATURE 25

3 Objectives Of Study 28

4 RESEARCH METHODOLOGY 30
Problem Definition
Research Design
Type Of Research
Collection Of Data
5 ANALYSIS AND INTERPRETATION 32
Geographical Coverage
Share Capital
Deposits Of Bank
Advance
Advances
Recovery Performance Profitability
6 CONCLUSION 45

7 BIBLIOGRAPHY 48

1
EXECUTIVE SUMMARY

I have done my summer internship project form KCC BANK KANGRA. During my
summer internship project I implemented many concepts of finance in real life situation.

This project work helped me to apply theoretical knowledge into practical aspects on
collected data which was a worthy experience and during the discussion with company guide
I realized that how important the project report is for the company and me. I also realized
how goal orientation and managing interpersonal relationship and integrate part of
professional life. Therefore this will definitely help me to develop qualities required for
executive. In addition, I understood products of my company and its targeted customers also I
got information what are the basic categories of bank products.

These customers who were not aware about the scheme says that KCC bank should improve
their promotional area through different media like T.V. radio, print media, and through
integrated marketing approach and most of them votes for IMC. More than 80% of the
customers were satisfied with location and condition of the bank and more than 50% were
satisfied with the process of disbursement, but maximum of the customers were dissatisfied
with the behaviour of the employee, they give suggestion of that the KCC bank employees
should change and improve their behaviour towards their customers, from my finding I found
that this behaviour of employee is due to daily routine work load from which they got
stressed. I recommended the bank to change the location of the employee from one branch to
another and give them more and more incentives and also to employ more employee form
which work load gets less and the employee will not feel and pressure and they not feel any
stress. Most of the customers choose KCC and because of simple procedure and more
number of the interest rate regarding their business was suitable according to them most of
the customer rand good about KCC bank.

The main purpose of this project work is to analyse the financial statement of the KCC bank
and to check the level of satisfaction, toward this service among the customers. Financial
analysis has become challenging issue for every financial institution as every organization is
trying to provide service superior to the competitors.

2
I did research at the KCC bank, branch khundian and the information we received there,
along with the secondary research, helped us in strengthening our knowledge base regarding
the topic.

In general customers five the following suggestions like customized products, more number
of counters, improvement in employee behaviour, provision of new schemes, use of IT And
to improve the promotional area. Most of the customers were satisfied with the overall
services of the bank and todays scenario the recommend to choose KCC bank. KCC is a one
of the best friendly bank in overall state. KCC bank cover five district in the state which play
the good role in banking sector. Bank is giving dividend to its Share-holders regularly and
lastly declared @ 18% the highest declared/paid so far. Bank has also introduced three
schemes of welfare nature for its shareholders. First one is If from the membership of the
Bank existing as on 31.12.2013, any member dies, his nominee will be given a death grant of
Rs. 25000/- from Member Welfare Scheme and if he has taken any loan, then loan amount up
to Rs. 75000/- will be exempted from interest.

3
 CHAPTER 1
INTRODUCTION

4
 Company Profile

The Kangra Cooperative Bank Ltd. started in a very humble way as a small Thrift/Credit
Society in March, 1960 by a few friends of Distt. Kangra of Himachal to help out the people
of Himachal residing in Delhi to uplift their economic conditions and tide over the financial
hardships. Dedication, sincerity and honesty of these members/associates brought rich fruits
and this Thrift/Credit Society grew up into a big society within twelve years after its
formation and successful running was converted into a primary urban Cooperative Bank in
1972 by RBI and was permitted to carry out banking activities including acceptance of
deposits from public (non-members) by opening their Saving, Current and RD A/cs. Twenty
three years there from in June 1995 it was granted a license to carry out the banking business
by the Reserve Bank of India . Thereafter, it was granted license to open branches and
consequently six more branches were added in February, May, December 1996, June 1998
,October 2008 and the last one in July 2009. In may 1970 it purchased Paharganj building
and reconstructed the same in 1993. In October, 1997 it purchased the present premises at
Janakpuri to set up administrative, arbitration and recovery department and HO. Central
accounts and Personnel department are functioning from this building. It has a meeting room.
One branch also functions here. The main branch along with its service branch, is situated in
its own three storied building at Paharganj. It purchased another Building in April 2008 At
Jagatpuri where its one of the existing Branches has already been functioning.

Bank enjoys Grade A audit classification since long. Govt. of NCT of Delhi gave to the
Bank "Best Bank Award" for the years 2004-05, 2007-08, 2009-10 and 2011-12.

Bank is giving dividend to its Share-holders regularly and lastly declared @ 18% the highest
declared/paid so far. Bank has also introduced three schemes of welfare nature for its
shareholders. First one is If from the membership of the Bank existing as on 31.12.2013, any
member dies, his nominee will be given a death grant of Rs. 25000/- from Member Welfare
Scheme and if he has taken any loan, then loan amount up to Rs. 75000/- will be exempted
from interest. Any member enrolled after 31.12.2013 if dies before attaining a membership of

5
ten years, his nominee will be given a death grant of Rs. 15000/- from Member Welfare
Scheme and loan up to Rs. 50,000/-, if taken, will be exempted from interest. Any member
enrolled after 31.12.2013 if dies after completing membership of ten years, his nominee will
be given a death grant of Rs. 25000/- from Member Welfare Scheme and loan up to Rs.
75000/-,if taken, will be exempted from interest, the second one is where scholarship @
Rs.150/- and Rs.200/- per month is given to the brilliant wards of the members and staff and
the third one is to give one time incentive to those wards of members / staff who get 90 %
marks in Board examination. Amount of incentive is Rs.3100/- and Rs.5100/- for 10th and
12th class respectively.

Commerce & Management

Branches spread throughout the state of Himachal Pradesh. There are 85 branches of all
banks which are serving in the urban areas of the state, 250 branches are serving in the semi-
urban areas and 1,331 branches are serving in the rural areas of the state. In order to fulfil the
demand of long term credit, the Himachal Pradesh state co-operative agricultural and rural
development bank play an important role. On the other hand, Kangra primary co-operative
agricultural and rural development bank which is located in dharmsala that provides medium
and long term financial assistance for agricultural and allied activities with its sixteen
branches spread in three districts namely Kangra, una and hamirpur. There are five urban
cooperative banks catering to the credit needs to their members in the urban areas of
Himachal pradesh. As far as the rural short term credit co-operatives are concerned, there is
an apex state c-operative bank and two district central co-operative banks financing in the
concerned districts of their functioning areas. The Himachal Pradesh state co-operative bank
is the apex bank which also discharges its cooperative role as district central co-operative
bank in six districts i.e. Shimla, mandi, bilaspur, kinnnaur and sirmour respectively. Whereas
the operational areas of the Kangra central co-operative bank are in hamirpur, Kangra, una,
chamba and lahaul spiti district of the state. The jogindra central co-operative bank is
functioning in solan district only.

6
 Capital structure:

Figures in lakhs
Share capital 2765
Funds 3525
Deposits 73616
Loan 45993
Working capital 84401
Profit before tax 1347
Net profit after tax 833

Financial position

It has a board meeting room. The latest audited financial position of the bank as on 31st
March, 2016 is as follows:-

Membership 40782

Clientele other than members 132578

Share money 27.65 crores

Reserve/Other funds 35.25 crores

Working Capital 844.01 crores

Deposits 736.76 crores

Advances 459.93 crores

Net Profit Before Tax 13.47 crores

Net Profit After Tax 8.55 crores

Net NPA 1.40%

CRAR 12.76%

7
Mission

KCC banks began operation in 1995 with a simple mission to be a world class Indian bank.
We realized that only a single minded focus on product quality and service excellence world
help us get there. Today the bank is on the way towards that goal. It is extremely gratifying
that its efforts towards providing customer convenience have been appreciated both
nationally and internationally.

The banks aim is to build a sound customer franchise across distinct business to as to be the
preferred provider of banking services in the niche segments that the bank operates in and to
achieve healthy growth in profitability, consistent with the banks rise appetite.

Chairman

Mr. Laxmi dass elected as a chairman of the bank in the election

held on 20/09/2014. Before electing to the post of chairman of the bank in 2011 he was the
vice chairman of the bank from 2005 to 2011. He has been associated with the bank of the
past 24 year as a shareholder. Mr Laxmi Dass was born on 10/09/194 in village Ujhe Po.
Bathu Tippri, Districk Kangra, Himachal pradesh and holds a post graduate degree in
travelled person with rich and varied country wide experience and exposure in various fields
including khadi and village industries and is an active patron of social movement in the
country. He has held many top and important positions at all India level organizations of
Govt. Of India and state government etc., some of the top level positions held by him are as.

Technology

KCC bank ltd. Operates in highly automated environment in terms of information technology
and communication systems. All the banks branches have online connectivity, which enables
the bank offer speedy funds transfer facilities to its customers. Multi-branch access is also

8
provided to retail customs through the branch network and automated teller machines. The
bank has made substantial efforts and investment in acquiring the best technology available
internationally, to build the infrastructure for a world class bank. The banks business is
supported by scalable and rebuts systems which ensure the our clients always get the finest
services we offer. The bank has prioritized its engagement in technology and the internet as
one of its key goals and has already made significant progress in web-enabling its core
business. In each of the business, the bank has succeeded in leveraging its market position.
Expertise and technology to create a competitive advantage and build market share.

KCC BANK Ltd. Business strategy emphasises the following:

Increase market share in Indias expanding banking the financial series industry by following
a disciplined growth strategy focusing on quality and not on quantity and delivering high
quality customer service. Leverage our technology platform and open scalable system to
deliver more products to more customer and to control operating costs. Maintain current high
standards for asset quality through disciplined credit risk management. Develop innovative
products and service that the targeted customer and address inefficiencies in the Indian
financial sector. Continue to develop products and services that reduce banks cost of funds.

Business

KCC bank offers a wide range of commercial and transactional banking services and treasury
products to wholesale and retail customers. The bank has two key business segments:

Whole sale banking services

The banks target market ranges from large, blue-chip manufacturing companies in the India
corporate to small and mid-sized corporate and agri-based business. For these customers, the
bank provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transaction services, cash management, etc. The bank
is also a leading provider of structured solutions, which combine cash management services
with vendor and distributor finance for facilitating superior supply chain management for its
corporate customers. Based on its superior product delivery levels and strong customer
orientation, the bank has made significant inroads into the banking consortia of the number of
leading Indian corporate including multinationals, companies from the domestic business

9
house and prime public sector companies. It is recognized as a leading provider of cash
management and transactional banking solution to corporate customers, mutual fund, stock
exchange members and banks.

Retail banking services

The objective of the retail bank is to provide its target market customer a full range of
financial products and banking services, giving the customer a one-stop window for all
his//her banking requirements. The products are backed by world-class services and delivered
to the customer through the growing branch network, as well as through alternative delivery
channels like ATMs, Phone Banking and Mobile Banking.

Vision Document for 2014-15 to 2016-17

All the branches are fully computerized with CBS. The implementation of CTS,
NEFT/RTGS, ATM have already been done .Board of Directors has also prepared a Vision
Document for 2014-15 to 2016-17 according to which various targets have been fixed.

Membership has been planned up to 41000

Efforts will be made to maintain the highest percentage of dividend Clientele 1.40
lakhs
Share Money up to 30 cores
Deposits to increase 850 crores from 548 crores
To increase working capital from Rs. 635 cr. to Rs. 1000 cr.
To increase the Net Worth of the bank to Rs.55 crores
ATM Card Holders Upto 15000
To purchase two buildings
To be eligible for scheduled status
To computerize HO and CRD
To open two branches.
To strengthen HO working
To get "A" RBI inspection rating
To hold minimum two customer meetings in a year, six in three years in different
parts

10
 To open onsite ATMs in all branches
To make customer service quick and satisfactory
To arrange minimum two lectures in a year on important topics such as investments,
NPA, customer service, credit appraisal, KYC norms, CRAR, ALM, Internal Control,
Profitability etc.
To maintain net NPA 0% and gross NPA not more than 4.5%

Deposit Policy

Customers are most important visitors in our premises they are not dependent on us we are
dependent on them. We are determined to serve them in particular and our community as a
whole in general with smile to their utmost satisfaction through cooperatives

TYPES OF DEPOSIT ACCOUNTS

The Deposit Products offered by the bank are broadly categorised in the following types.

1. Savings Bank Account

2. Current Account

3. Term Deposits

Savings Bank Account: -

Savings Bank account as the very name suggests is intended for savings for the future. There
are no restrictions on the number and amount of deposit that can be made on any day.
Minimum amount of withdrawal / deposit is Rs.10/-. Balance in the account earns interest at
rates advised by the Head Office from time to time. The facility of withdrawal by cheque is
also allowed subject to certain restrictions. These accounts can be opened by eligible persons
and also certain organisations and agencies (as approved by the RBI).

As required by Law, while opening the account, we will satisfy ourselves about the identity,
including verification of address of a person/s seeking to open an account, to assist in
protecting the prospective customers, members of the public and ourselves against fraud and

11
other misuse of the Banking system duly observing the Know your customer (KYC)
guidelines of RBI.

Current Account: -

Current Accounts are designed to meet the needs of such sections of the public who operate
their account regularly and frequently. Traders, Businessmen, Corporate bodies or the like
who receive money and make payments very often. Current accounts are suitable to such
category of customers as there are no restrictions on the number of withdrawal or deposit.
Current accounts can be opened by individuals, partnership firms, Private & Public Ltd Co.,
HUFs, / Specified associates, Societies, Trusts, etc.

As required by law, while opening the account, we will satisfy ourselves about the identity,
including verification of address of the person/s seeking to open an account to assist in
protecting the prospective customers, public and ourselves against fraud and other misuse of
the Banking system duly observing the guidelines of RBI.

Term Deposit Account:-

The deposits received by the bank for a fixed period withdraw able after the expiry of the
fixed period and include deposits such as Recurring / Fixed /Term etc.

Term Deposits can be opened by individuals, partnership firms, Private / Public Ltd Co. ,
HUFs,/ Institutions/Societies/Trusts etc.

As required by law, while opening the account we will satisfy ourselves about the identity,
including verification of address of the person/s seeking to open an account to assist in
protecting the prospective customers, public and ourselves against fraud and other misuse of
the Banking system duly observing the KYC guidelines of RBI.

GENERAL

Joint accounts.

Special types of accounts.

Minor accounts.

Accounts of illiterate persons.

12
 Accounts of Blind persons.

Repayment under Joint Deposits.

DEPOSITORS' RIGHTS

Depositors are entitled to the following rights:

RIGHT TO INFORMATION

A depositor will have right to information about charges, quality and standard of the services
offered by the Bank to enable him / her to take an independent decision.

RIGHT TO CHOOSE

A depositor will have the absolute freedom to choose among the various services offered by
the Bank to suit his / her requirements.

RIGHT TO AVAIL/UTILISE THE PRODUCTS AND SERVICES

A depositor will have the right to avail/utilise the services chosen by him / her without any
intervention / obstacle.

RIGHT TO BE HEARD AND REDRESSAL OF GRIEVANCES

A depositor will have the right to be heard and seek redresses against deficient service / poor
quality of services, unfair Trade practices and unscrupulous exploitation. This includes his/
her right to fair redressed of any genuine grievance relating to services which he /she has
chosen to utilise.

Product scope

KCC and ltd. Offers a bunch of products and services to meet the every need of the people.
The company cares for both, individuals as well as corporate and small and medium
enterprises. For individuals and cards that assist the customers. The customers can choose the
suitable one from a range of products which will suit their life-stage and needs. For
organization the company has a host of customized solution that range form funded services,

13
non-funded services, value addition services, mutual funds etc. These affordable plans apart
from providing long term value to the employee help in enhancing goodwill of the company.
The products of the company are categorized into various section which are as follows:

1. Accounts and deposits.

2. Loans
3. Investments and insurance.
4. Forex and payment services.
5. Cards.
6. Customer centre.

PERSONAL BANKING SERVICES

1. Accounts and deposits

Saving account
regular saving account
saving plus account
saving max account
senior citizens account
no frills a account
institutional saving account
payroll salary account
classic salary account
regular salary account
defence salary account
kids advantage account
pension saving bank account
family saving account
kissan No frills saving account
kissan club saving account

current account
plus current account

14
 trade current account
premium current account
regular current account
apex current account
max current account

Fixed deposit
regular fixed deposit
super saver account
sweep-in account
recurring deposit
demat account
safe deposit locker

2. loans
personal loans
home loans
two wheeler loans
new car loans
used car loans
Overdraft against car
Express loans
Commercial vehicle finance
Working capital finance
Construction equipment finance
Investment and insurance
Mutual funds
Insurance
Bonds
Financial planning
Knowledge centre

15
 Equities and derivatives
mudra gold bar

3. Forex services
Trade finance
Travellers cheques
Foreign currency cash
Foreign currency drafts
Foreign currency cheque deposit
Foreign currency remittance
Forex plus card
Payment services
Net safe
Prepaid refill
Dill pay
Direct pay
Visa money transfer
E-monies electronic funds transfer
Excise and services tax payment
Access your bank one view
Install alerts
Mobile banking
ATM
Phone banking
Branch network
4. Cards
Silver credit card
Gold credit card
Womans gold credit card
Platinum plus credit card
Titanium credit card

16
 Value plus credit card
Health plus credit card
KCC bank idea silver card
KCC bank idea gold card
Wholesale banking services
Funded services
Non funded services
Value added services
Internet banking
Clearing sub-membership
Fund transfer
ATM tie-ups
Corporate salary account
Tax collection
Financial institution
Mutual funds stock brokers insurance companies.

5. NRI Banking Services

Rupee saving account
Rupee current account
Rupee fixed deposits
Foreign currency deposits
Accounts for returning Indians
Payment services
Net safe
Bill pay
Insta pay
Direct pay
Visa money
Online donation
Remittances

17
18
ORGANIZATION STRUCTURE

MANAGING DIRECTOR

GENRAL MANAGER

D.G.M. D.G.M D.G.M D.G.M

A.G.M (ZONE WISE)

SENIOR MANAGER (GRADE 1)

MANAGER (GRADE @

ACCOUNTANT (GRADE 3)

SENIOR CLERK

JUNIOR CLERK

19
SWOT ANALYSIS

STRENGTH

The biggest strength of bank is direct banking channels. As direct banking channels saves
time and money both as a customer does not need to go to bank for any kind of transaction
except cash withdrawal and cash deposits all other things are done sitting anywhere in the
world.

All services and products of KCC bank are available through direct banking channels.
Free ATM, Net banking, phone banking and 24 hour services.
Very easy to access and use.
A highly personalized services provided by the bank.
KCCs direct banking channels provide real time and accurate information.

Weakness:

Unawareness about all direct banking channels due to less advertisement.

Other private banks have stared direct banking channels it may put some competition
to KCC banking near future.
Resistance to change.
One should have the knowledge of the operation of the computers and of course the
internet.

Opportunities:

Centralized banking makes easy for KCC bank to provide services to customers.
Huge markets of shareholders.

Threats:

Vulnerable to reactive attack by competitors.

Attacks of web hackers.
Lack of infrastructure in rural area could constrain investment.
High volume/low cost market is intensely competitive.

20
 The Kangra Central Co-Op Bank Limited

KCCB, KHUNDIAN

The Kangra central co-op bank limited KCCb located in the state of Himachal pradesh, area-
Kangra. The branch is located at tehsil khundian distt. Kangra H.P 176030, phone number,
IFSC code is an 11digit code with the first 4 alpha characters representing the bank, and the
last 6 characters representing the branch.

BRANCH NAME: KHUNDIAN

IFCE CODE: KACEOOOOO83

SWIFT CODE: NA

DSR CODE: NA

MICR CODE: 176859115

CONTRACT PERSON: CUSTOMER CARE

CITY: KHUNDIAN

DISTRICT: KANGRA

STATE: HIMACHAL PRADESH

COUNTRY: INDIA

TOLL FREE NUMBER: 18001808008

EMAIL: COMPLAINT@KCCB.IN

MOBILE NUMBER: 01892-222208

FAX NUMBER: 01892-222386

LANDLINE NUMBER 01892-222208

ADRESS: TEHSIL KHUNDIAN DISTT. KANGRA H.P. 176030

21
At KCC bank, I was assigned with the topic as financial analysis for my project work. I
joined the company as a personal banker. Financial analysis refers to an assessment of the
viability, stability and profitability of a business, sub-business or project. Also referred to as
financial statement analysis or accounting analysis or Analysis of finance. It is performed by
professionals who prepare reports using ratios that make use of information taken from
financial statements and other reports. These reports are usually presented to top management
as one of their bases in making business decisions. Financial analysis may determine if a
business will:

Continue or discontinue its main operation or part of its business.

Make or purchase certain materials in the manufacture of its product.

Acquire or rent/lease certain machineries and equipment in the production of its goods.

Issue stocks or negotiate for a bank loan to increase its working capital.

Make decisions regarding investing or lending capital.

Make other decisions that allow management to make an informed selection on various
alternatives in the conduct of its business.

Goals

Financial analysts often assess the following elements of a firm:

1. Profitability - its ability to earn income and sustain growth in both the short- and long-
term. A company's degree of profitability is usually based on the income statement, which
reports on the company's results of operations;

2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-
term;

3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate
obligations; Both 2 and 3 are based on the company's balance sheet, which indicates the
financial condition of a business as of a given point in time.

4. Stability - the firm's ability to remain in business in the long run, without having to sustain
significant losses in the conduct of its business. Assessing a company's stability requires the

22
use of both the income statement and the balance sheet, as well as other financial and non-
financial indicators. etc.

Method:

Financial analysts often compare financial ratios (of solvency, profitability, growth, etc.):

Past Performance

Across historical time periods for the same firm.

Future Performance

Using historical figures and certain mathematical and statistical techniques, including present
and future values. This extrapolation method is the main source of errors in financial analysis
as past statistics can be poor predictors of future prospects.

Comparative Performance

Comparison between similar firms. These ratios are calculated by dividing a (group of)
account balance(s), taken from the balance sheet and / or the income statement, by another,
for example:

Net income / equity = return on equity (ROE)

Net income / total assets = return on assets (ROA)

Asset Management Ratios gauge how efficiently a company can change assets into sales.

Stock price / earnings per share = P/E ratio

Comparing financial ratios is merely one way of conducting financial analysis. Financial
ratios face several theoretical challenges:

They say little about the firm's prospects in an absolute sense. Their insights about relative
performance require a reference point from other time periods or similar firms. One ratio
holds little meaning. As indicators, ratios can be logically interpreted in at least two ways.
One can partially overcome this problem by combining several related ratios to paint a more
comprehensive picture of the firm's performance. Seasonal factors may prevent year-end
values from being representative. A ratio's values may be distorted as account balances

23
change from the beginning to the end of an accounting period. Use average values for such
accounts whenever possible. Financial ratios are no more objective than the accounting
methods employed. Changes in accounting policies or choices can yield drastically different
ratio values.

Financial analysts can also use percentage analysis which involves reducing a series of
figures as a percentage of some base amounts. For example, a group of items can be
expressed as a percentage of net income. When proportionate changes in the same figure over
a given time period expressed as a percentage is known as horizontal analysis. Vertical or
common-size analysis, reduces all items on a statement to a common size as a percentage
of some base value which assists in comparability with other companies of different sizes. As
a result, all Income Statement items are divided by Sales, and all Balance Sheet items are
divided by Total Assets.

Another method is comparative analysis. This provides a better way to determine trends.
Comparative analysis presents the same information for two or more time periods and is
presented side-by-side to allow for easy analysis.

24
 CHAPTER 2
REVIEW LITERATURE

25
 Review Of Literature

Patel and sayed (1980) of the national institute of banking management made a valuable
analysis of performance and prospects of Regional Rural Banks. The also gave a comparative
picture of performance in deposits, branch expansion and credit deployment of the
cooperative banks, commercial bank and Regional Rural Banks in a specified area. This was
an eye opener for many research engaged in this field of rural credit.

Financial express, (1986) published a study on Regional Rural Banks viability, which was
conducted by agriculture finance cooperation 1986. The study revealed that viability of
Regional Rural Banks was essentially dependent upon the fund management strategy, margin
between resources mobility and their deployment and on the control exercised on current and
future cost with advances. The proportion of the establishment cost to total cost and
expansion of branches were the critical factors, which affected their viability. The study
further concluded that Regional Rural Banks incurred losses due to defects in their system
and as such there was need to rectify these and make them viable. The main suggestions of
the study included improvement in infrastructure

Financial express (1986) published a study on REGIONAL RURAL BANKS viability,

which was conducted by agriculture finance corporation I 1986. The study revealed that
viability of Regional Rural Banks was essentially dependent upon the fund management
strategy, margin between recourse mobility and their deployment and on the control
exercised on current and future costs with advance. The proportion of the establishment cost
to total cost and expansion of branches were the critical factor, which affected their viability.
The study further concluded that Regional Rural Banks incurred losses due to defects in their
systems and as such area where Regional Rural Banks were already in operation.

Rendil (1993) conducted a study on Regional Rural Banks taking a sample of 48

beneficiaries of rural artisans in various district of Kashmir under j&k bank. In this study, it
was concluded that the beneficiaries were able to find as increase in their income because of
the finance provided by the bank.

26
Balmi (1999) in his study on performance and growth of regional rural bank in Kangra found
that these banks had benefited the beneficiaries in raising their income, productivity
employment and use of modern practice and rehabilitate the rural artisans.

Sindhu (2005) carried out a study on the topic financial analysis on the basis of the study of
all REGIONAL RURAL BANKS of Kangra it is found that there was an enormous increase
in deposits and outstanding advance. The researcher felt the need to increase the share capital
and to insure efficient use of distribution channels of finance to beneficiaries.

Sameer (2011) polices of current phase of financial year liberalization have had
animmendiate, direct, and dramatic effect on rural credit. There has been a contraction in
rural banking in general and in priority sector landing and preferential landing to the poor in
particular.

Ajut pal (2015) has examined the growth and regional distribution of rural banking over the
period 1975-2015. The documents gain made by historical underprivileged region of east,
north-east and central Kangra during the period of social and development banking.

27
 Chapter 3
Objectives of the study

28
OBJECTIVES OF STUDY

The objective behind the conducting project exercise was to get useful insight about the
nanking sector. I have prepared this report with some specific objective. The primary
objective of my study is to analyze the efficiency and effectiveness by the KCC bank. The
objective of study is as under:

To measure the awareness level of people regarding the financial position of KCC
bank.
To study brand image of the bank.
To increase the business of the bank.
The Followings are the main objectives of the study:
To analyse the pattern of share capital, deposit mobilization and credit management of
the bank.
To examine the growth of the bank through selective indicators.
To study the profitability and recovery performance of the bank.

29
 CHAPTER 3
RESEARCH
METHODOLOGY

30
 NEED, SCOPE AND RESEARCH METHODOLOGY

Research methodology is way to systematically save the research problem. The research
methodology includes the various methods and technique for conducting research. Research
is a careful investigation or inquiry especially through search for new facts in branch of
knowledge.

scope of research project

Problem definition:

Financial analysis is an important part of banking system because most of people connected
with bank who deposits money in bank and who take loan from bank. So financial analysis is
the result which shows the financial position of bank and it also help to predict the future
advantages of bank. Investors are very interested in financial analysis because the want to
invests your money who give the high return. So this is the study which give the idea to
check the financial position of an organization.

Research design:

Research design constitutes the blue print for the collection, measurement and analysis of
data. The present study seeks to identify the financial position of Kangra central cooperative
bank in Kangra. The research design is exploratory in nature. The research has been
conducted on users within Kangra. For the selection of the sample, convenient sampling
method was adopted and an attempt has been made to include all the age groups and gender
within different occupation.

Type of research:

The present study will adopt the exploratory approach where in, there is a need to gather
large amount of information before making a conclusion.

Collection of data:

Primary Data: all the people from different profession were personally visited and
interviewed. They were the main sources of primary data. The methods of collecting of
primary data were direct personal interview through structured questionnaire.

31
Secondary Data: It was collected from internal sources. The secondary data collected on the
basis of organization file, official records, news paper, magazines, management books,
preserved information in the companys database and website of the company. My research is
also depend on the secondary data.

32
 CHAPTER 4
ANALYSIS AND
INTERPRETATION

33
 ANALYSIS AND INTERPRETATION

Geographical Coverage

At present the Kangra Central Co-operative Bank is functioning in five district of the state.
Kangra, Hamirpur, Kullu, Lahaul & Spiti and Una. The Kangra Central Co-operative Bank
was having 129 branches in 2001-02. At present this bank is functioning through 182
branches and 17 extensions counters with the strength of 1,598 employees.

Sr. No. Name Of Zone No Of

District Branches
1 Hamirpur Hamirpur 13
Nadaun 13
Samirpur 11
2 Kangra Baiznath 13
Dehra 14
Indora 11
Kangra 10
Nagrota 13
Bangwan
Nurpur 15
Palampur 15
3 Kullu, Banzar Kullu 9
16
4 Lahul & Spiti Daulatpur 11
Chowk(Amb)
5 Una Una 18
Total 182

34
 No. Of Branches
lahul &spiti
5%
kullu
9%

una kangra
20% 50%

hamirpur
16%

Share Capital

Next table indicates the composition of share capital of the Kangra Central Co-operative
Bank Limited. It shows that the State Government was the main contributor to the share
capital of the Bank. The Government has decreased its contribution by 4.64 percent over the
year 2001-02. But overall share of Government was more than 50% of total paid up capital.
The second major contributor to the share capital of the bank was cooperative Societies. The
Cooperative Societies increased their participation about 36.83 per cent over the year 2001-
02. Average contribution of Societies and State Government were Rs.92.89 lakh (42.89
percent) and 123.59 lakhs (57.07 percent) during the study period. On the basis of above
analysis, it can be concluded that the main contribution was made by the State Government
and secondly by the co-operative societies.

35
Year Ownership of Share Capital (lakhs) Total

Individual Co-operative State Government

Societies

Amount % age of total Amount % age of Amount % age of Amount

Lakhs Lakhs total lakhs total Lakhs
2001-02 0.09 0.05 74.44 39.20 115.35 60.75 189.88

2002-03 0.10 0.05 83.21 40.27 123.35 59.69 206.65

2003-04 0.10 0.04 84.94 38.02 138.35 61.95 223.38

2004-05 0.10 0.04 87.80 38.81 138.35 61.15 226.24

2005-06 0.10 0.04 92.56 40.28 138.35 59.89 231.00

2006-07 0.10 0.04 95.38 37.25 160.35 62.68 255.82

2007-08 0.10 0.04 96.90 44.89 122.00 55.71 219.00

2008-09 0.10 0.05 98.41 47.38 107.00 52.07 205.50

2009-10 0.10 0.05 99.12 47.57 110.00 52.58 209.22

2010-11 0.10 0.05 99.89 47.63 110.00 52.38 209.99

2011-12 0.10 0.05 100.12 47.57 110.00 52.33 210.22

2012-13 0.10 0.05 101.86 48.06 110.00 51.89 211.96

2013-14 0.10 0.05 102.34 49.94 110.00 50.45 201.34

2014-15 0.10 0.05 100.98 47.09 110.00 52.35 237.98

2015-16 0.10 0.05 101.56 48.06 110.00 51.89 276.56

MEAN 0.096 92.89 123.59 216.57

S.D. 0.001 8.148 6.0432 15.7755
C.V. 0.579 8.77 12.98 7.28
C.G.R. 0.15 2.94 1.51 1.01

36
 0.579
Individual Amount
Individual Amount

0.15
0.09 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.096
0.001

co-operative societies amount

120

100

80

60

40

20

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

Amount Year

state government amount

180
160
140
120
100
Amount
80
Year
60
40
20
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35

37
Deposits of bank

The co-operative banking system aims at mobilization of saving from the middle-income
groups and provides credit requirement of the middle and economically weaker sections of
the society. Thus, it occupies an important position in the financial system of the economy.

Year Deposits Increases/decrease Growth rate

2001-02 133289 100
2002-03 173780 40491 130.38
2003-04 202398 28618 151.85
2004-05 222944 20546 167.26
2005-06 228559 5615 171.48
2006-07 246925 18366 185.26
2007-08 280425 33500 210.39
2008-09 328178 47753 246.22
2009-10 380864 52686 285.74
2010-11 439346 58482 329.62
2011-12 520067 80721 390.18
2012-13 598248 78181 448.84
2013-14 661451 63216 345.23
2014-15 741982 80531 389.25
2015-16 751965 9983 213.93

deposits
800000
700000
600000
500000
400000
300000 deposits
200000
100000
0

38
 Growth rate
500
450
400
350
300
250
200 Growth rate
150
100
50
0

ADVANCE

The Kangra Central Co-operative Bank Limited provides loans and advances for short term,
medium term and long term to the co-operative societies and individuals. In addition to it, net
credit facility is provided against the cash credit limits to the cooperative societies. The main
objective of the bank is focus on rural development. In order to achieve this objective, the
bank is providing the credit facilities through the cooperative sector in the rural area. The
growth of aggregate loans and advances of the bank shows that this witnessed an increase of
532.47 percent during the periods over the year 2001-02.The short-term loans of the bank
registering an increase of about 744.85 per cent over the period of 2001-02. In case of
medium-term loans which were Rs. 29,852 lakh in 2001-02 increased to Rs. 1,26,475 lakh in
the year 2012-13 which is 4.24times of the amount of medium-term loans in the year 2001-
02. On the other hand a long term loan which was Rs. 3,388 lakh in 2001-02 increased to Rs.
58470.04 lakh. The compound growth rate of short term, medium term and long term loans
was observed 23.31 percent, 14.89 percent and 34.18 percent respectively. The co-efficient of
variation was observed highest in case of long term loans i.e. 81.41 percent and lowest in
medium term loans (38.39%). In 2015-16 it increesed41,563 to 45,993. It shows that long
term loans are less consistent against medium term loans which are more consistent.

39
YEAR ADVANE (lakhs)

Short term Medium term Long term Total

2001-02 11906 29852 3388 45146

2002-03 21882 36378 5267 63528

2003-04 21825 47636 7452 76913

2004-05 24313 52980 11026 88320

2005-06 29603 49771 14570 94124

2006-07 35201 58615 15742 109558

2007-08 35791 60901 18348 115040

2008-09 40687 70526 21610 132128

2009-10 47065 75976 26689 149730

2010-11 69325 82228 30957 182669

2011-12 93451 84412 64296 242158

2012-13 100588 126470 58470 285534

2013-14 101523 128853 73291 314178

2014-15 123653 132982 96106 352741

2015-16 145562 138563 131538 455663

40
 Short term
Short term

145562
123653
101523

69325

35791
24313
11906

2001-02 2004-05 2007-08 2010-11 2013-14 2014-15 2015-16

Medium term
Medium term

132982 138563
128853

82228
60901
52980
29852

2001-02 2004-05 2007-08 2010-11 2013-14 2014-15 2015-16

Long term
Long term
131538

96106
73291

30957
18348
11026
3388

2001-02 2004-05 2007-08 2010-11 2013-14 2014-15 2015-16

41
 Total
Total

415663
352741
314178

182669
88320 115040
45146

2001-02 2004-05 2007-08 2010-11 2013-14 2014-15 2015-16

Advance (Loan) 31 march 2016

long term advance short term advance

32% 35%

medium term
advance
33%

Purpose-Wise Advances

the purpose-wise outstanding loans and advances. Agricultural and Non Agricultural loans.
Table shows that maximum proportion of outstanding loans was made with Non-Agricultural
loans with 83.74 percent to 96.04 per cent during the study period. Agricultural loans
remained 3.97 percent to 16.26 percent per cent of total outstanding loans during the study
period. Agricultural loans registered 31.3 per cent compound growth rate. On the other hand
Non Agricultural Loans shows 17.14 percent compound growth rate. The coefficient of
variation of agriculture loans was observed to be the highest in case of agriculture loans
which indicates that agriculture loans are less stable in comparison to non-agriculture loans.

42
 Purpose-Wise Advance Of The KCC Bank

YEAR Agricultural loan Non-agricultural Total loan

loan

2008-09 15354.49 99685.60 132128

2009-10 21592.73 111230.64 149730
2010-11 21250.75 128479.47 182669
2011-12 20211.05 162157.81 242158
2012-13 24039.11 218119.21 285534
2013-14 39526.00 246008.00 314178
2014-15 45276.56 307464.44 352741
2015-16 48872.05 366791.95 415663
MEAN 13551.30 118652.66 132203.96
S.D. 11485.20 58902.43 64444.34

Advance Of The Kcc Bank

400000

350000

300000

250000

200000 Agricultural loan

Non-agricultural loan
150000

100000

50000

0
2008-092009-102010-112011-122012-132013-142014-152015-16

43
Recovery performance

Recovery performance of the bank in the year 2001-2002, the bank had collected rs. 5270
lakh against the demand of rs. 6434 lakh which amounts to 81.91 percent of the total dues.
On the other hand, the total demand in 205-2006 was rs. 10269 lakh out of which rs 8471
lakh was recover which was amount 82.49 percent of the total demand. 9in the year 2012-13,
the bank had total dues. The maximum percentage of the overdue was recorded 25.62 percent
and minimum 10.69 percent in the years 2003-04 and 2007-08 respectively. The compound
growth rate of demand and collection was recorded at 25.93 percent and 24.90 percent
respectively.

Period Demand Recovery Overdues

2003-04 12195 9071 3124

2005-06 24013 21482 2531

2008-09 31168 27319 3849

2010-11 58743 51261 7882

2013-14 64556 48675 15881

2015-16 66781 52821 13564

80000

70000

60000

50000
Demand
40000
Recovery
30000 overdues

20000

10000

0
2003-04 2005-06 2008-09 2010-11 2013-14 2015-16

Profitability

44
The performance of the bank is decided on the basis of the profit earning capacity. Exhibits
the growth of total income, expenditure and profit of the bank during the study period. The
growth rate of the profit of Bank fluctuated during the period of study. The compound growth
rate of profit of bank for the period under study was -6.25 percent. The compound growth
rate of income and expenditure of the bank for the study period was 11.11 percent and 14.07
percent respectively. This shows that the expenditures of the bank increased with the highest
growth in comparisons with income of the bank. The result of which reflected in the
profitability level of the bank. In the financial year 2011 the net profit before tax of kangra
central cooperative bank was 1208 and after tax was 882. After that in the year 2015-2016 it
increased to 1347 and net profit after tax was 855. And i fond that the average of net profit
before tax is 1101.8 lakhs and the net profit after tax was 772 lakhs. Following table shows
the profitability performance of the kangra central cooperative bank.

Period Net profit before tax Net profit after tax

(lakhs) (lakhs)
2011-2012 1208 882
2012-2013 921 684
2013-2014 976 724
2014-2015 1057 715
2015-2016 1347 855

average 1101.8 772

45
 Net profit before tax
Net profit before tax

1347
1208
1057
921 976

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Net profit after tax

Net profit after tax

882 855
724 715
684

46
CHAPTER 5
CONCLUSION

47
CONCLUSION

It is very much clear that co-operative banks have very much importance in national
development. Without the help of co-operative banks, millions of people in India would be
lacking the much needed financial support. Co-operative banks take active part in local
communities and local development with a stronger commitment and social responsibilities.
These banks are best vehicles for taking banking to doorsteps of common men, unbanked
people in urban and rural areas. Their presence in the social, economic and democratic
structure of the country is essential to bring about harmonious development and that perhaps
is the best justification for nurturing them and strengthening their base. These banks are sure
to win in the race because they are from the people, by the people and of the people.

The preceding discussion brings out that the Kangra Central Co-operative Bank Limited is
working efficiently and increasing the profit level. State government is contributing more in
paid up share capital, deposits and advances increased with a high rate which shows the
efficiency of management. The bank is functioning for more than years and providing credit
facility for agricultural and allied activities so it is recommended that it should retain its
present members. The bank must try to increase number of its members for increasing the
amount of share capital. It should control expenses so the profits will be increased. The
overdue situation shows unfavourable condition so it is recommended that bank must adopt
safe lending practices to reduce over dues. The bank can effectively utilize its resources in a
better way through long-term advances with higher interest rates. Overall it can be concluded
that Kangra Central Co-operative Bank is performing efficiently in the state of Himachal
pradesh.

48
 BIBLIOGRAPHY

WWW.wikipedia.com

www.kccb.in

www.hpbose.org

www.hpfc.nic.in

www.kangrabank.com

www.kangrabank.com/linksfiles/Annual_report.pdf

http://kangrabank.com/linksfiles/fincial-position.htm

http://kangrabank.com/linksfiles/vision-doc-05.htm

https:/www.scribd.com

https:/www.wikipedia.org/wiki/Cooperative_banking.

Abhinav National Monthly Refereed Journal of Research in

Commerce & Management

49