DSPMS

K.V.PENDHARKAR COLLEGE OF ARTS, COMMERCE AND SCIENCE

S.Y.B.COM (BANKING & INSURANCE)

SUBJECT FINANCIAL MARKET

PROJECT REPORT ON CO-OPERATIVE BANK

ACKNOWLWDGEMENT

This is a great pleasure for us that we got an opportunity to do project on subject Financial Market. my topic is about the co-operative bank . In this project work, valuable information as well as guidance is provided by tejashri mam. We thanks her for giving this opportunity to us. We are also grateful to Mr. OmakarDatar Co-ordinator of BANKING AND INSURANCE DEPARTMENT.

Date of Submission : 18-02-2012

Presented By:

Mukesh .j. saroj

Roll no. 116190

INDEX
Sr No. 1 2 3 4 5 6 7 8 9 10 Contents Introduction about banking History of Banking System in India Rules of Co-operative Banks 1985 Profile of Nanded Merchants Co-op Bank Ltd, Branch of Taroda Organizational Structure Financial Department Marketing Department Human Resource Department Conclusion Bibliography Page No. 04 05 09 12 15 20 27 28 30 31

INTRODUCTION ABOUT BANKING

INTRODUCTION
A modern industrial society cannot be self-financing of entrepreneurs. Some institutional assistance is necessary to mobilise the savings of the community and to make it available to the entrepreneurs. The people a large majority of whom save in small odd lots, also want an institution which can ensure safely of their funds, together with liquidity. Banks assure this with a further facility that the funds can be drawn back in case of need. From a broader social angle, banks act as a bridge between the users of capital and those who save but cannot use the funds themselves. The idle resources of community are thus activated and brought to productive use. In modern times the field of banking has widely expanded and now covers many sectors of the economy. As the need to mobilise saving for investment has grows, bank has developed many faces. The banking system has capacity to add to the total supply of money by means of credit creation. That is why Crowther has said, The bank is a dealer in credit and its own and other peoples.. It is because of an ability to manipulate credit that banks are used extensively as a tool of monetary policy. The through channeling of funds into one or the other direction on a priority basis or extending it to one or the other concessional terms and conditions, influence the flow of funds and thereby the nature of economic development.

HISTORY OF BANKING SYSTEM IN INDIA

CLASSIFICATION OF BANKS :
In India, the institutions of banking has existed for a long time but previously only individuals or family concern carried on banking. They are called indigeneous bankers and are known as the multans, mahajans, marwaries, or sahukars in different parts of the country. They accept deposits which are not withdrawable by cheque. They make extensive use of hundies for purpose of remittance and extend loans with or without security on varying rates of interest depending on the credit, worthiness of the borrowers. The usual classification of banks apart from indigenous bankers is as follows :

a)

Central Bank :It is the principal banking and monetary institution of a country and

has a monopoly of the note issue. It controls and regulates the activities of other banks. It is usually under government ownership and

management and regulates the monitory and credit conditions in the general interests of the economy.

b) Commercial Banks :
They accept deposit from various sources withdrawable generally at short notice. Since there deposits are mainly for a short, they grant
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loans and advances for a short period to meet the working capital needs of trade and industry.

c) Industrial Banks :
They provide industrial capital by subscribing for shares and debentures of companies. They also grant long term loans to meet the fixed capital needs of the industry.

d) Regional Rural Bank :

These are special types of banks not like the needs particularly of the weaker sections in rural areas because it was felt that the existing institutions have not been able to deliver the goods.

e) Co-operative Bank :
These are organised by the people for their own collective benefit. These encourage thrift through small savings and advance to loan to their members at fair rates of interest. operative societies acts. They are registered under the co-

FUNCTIONS OF A BANK
The functions of a bank can be summarised as follows : i) Receipt of Deposits
A bank receives deposits from individuals, firms and other institutions. Deposits constitute the main resources of a bank. Such deposits may be different types. Deposits which are withdrawlable on demand are called demand or current deposits other are called time deposits. Saving deposits are those from which withdrawals are restricted as regards the amount and the period. Deposits withdrawlable after the expiry of an agreed period are known as fixed deposit. Interest paid by bank is different for each kind of deposit highest for fixed deposit and lowest or even nil for current deposits. ii) Lending of Money : Banks lend money mainly for industrial and commercial purpose. This lending may take the form of cash credits, overdrafts, loans and advances, or discounting of bills of exchange. Interest charged by banks on such lending varies according to the amount and period involved, social priority nature of security offered, the standing of the borrowers etc.

iii) Agency Services : A bank renders various services to consumers, such as :

a) Collection of bills, promissory notes. b) Collection of dividend, interest, premium etc. c) Purchase and sale of shares and securities. d) Acting as trustee or executor when so nominated. e) Making regular payments such as insurance premiums. iv) General Services : A modern bank performs many services of general nature to the public e.g. a) Issue of letters of credit, travelers, cheques, bank rafts, circular notes etc. b) c) Safe keeping of valuable in safe deposit vaults. Supplying trade information and statistics: conducting economic surveys. d) Preparation of feasibility studies, project reports etc.

RULES OF CO-OPERATIVE BANKS-1985

A) Period of Preservation of Records: In terms of these rules, the period of preservation of various records are : (A) i) To be preserved for a period not less than five years preceding the current calendar year, Ledger and Registers 1. Cheque Book Register, 2. Delivery Order Registers, 3. Demand Liability Registers, 4. Demand Remittances Dispatched Registers, 5. Demand Remittances Received Registers, 6. Vault Registers ii) Records Other than Registers 1. Telegraphic Transfer Confirmations. 2. Telegrams and Telegram Confirmations. (B) To be preserved for a period not less than Fight year preceding the (i) Ledgers and Registers current calendar year. 1. All personal ledgers. 2- Loans and advances register or ledgers. 3. Call, Short or Fixed Deposit Registers or Ledgers. 4. F. D, Interest Registers. 5. Draft, TT and Mail Transfer Registers. 6. Remittance Registers. 7. Bills Registers. 8. Clearing Registers. 9. Demand Loan Liability Registers.
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10. Draft and Mail Transfer Advices Received Registers, 11 Draft payable Registers, 12. Drawing Power Registers, 13. Stock Registers showing collection of dividends and interest on securities on behalf of constituents .

14. Registers or ledger of Bank's Own Investment. 15. Branch Ledgers. 16. Overdrafts and Loan Registers. 17. Safe Custody Registers. 18. Equitable Mortgage Registers. 19. Trust Registers. 20. Clean Cash Books, ii) Records Other Than Registers 1. Bank Cash Scrolls. 2. Bank Transfer Scrolls. 3. Remittances Schedules, 4. Paid Cheques. 5. Paying slips. 6. Vouchers relating to DDs, TTs, I'ixed Deposits. Call Deposits. Oasli credit and other deposit and loan accounts including vouchers relating lo payment Lo nominees. 7. 9. Account opening nomination forms, Application for TTs, DDs, MTs, and other remittances. 8. Standing Instructions regarding current account. 10. Applications for overdrafts, loans and advances, 11. Press Copy Rooks.

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B) Nomination: In terms of the above rules, person/s who hold deposit accounts/.sate custody accounts/safe deposit lockers in their individual capacity and not in representative capacity may avail of the facility of nominating a person to receive payment of deposit/to receive the articles kept in safe custody/the contents of the safe deposit locker in the event of his/their death. In Respect of a joint account, ail joint account holders together can make the nomination. In case of the deposit in the name of a minor, the person lawful ly entitled to act on behalf of the minor can make the nominationNote : The Reserve Bank of the India by its circular UDB No, BR,32.16.04.00.9K-99 dared 28"1 June, 1999, has advised the banks to incorporate the legend "Nomination Registered" on every pass hook or the deposit receipt so as to enable the relatives to know from the Pass Book Deposit Receipt the availment of nomination facility by the deceased depositor. The nomination can be made, cancelled or varied in the prescribed Form. No., as follows : Deposit Account Nomination DA1 Safe Custody Safety Locker Sole Hirer Joint Hirer SL1A SL 2 SL 3A

Account SC 1 SL 1 SC2 SC3 SL 2 SL 3

Cancellation DA 2 Variation DA 3

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PROFILE OF THE NANDED MERCHANTS CO-OPERATIVE BANK LTD BRANCH OF TARODA NANDED
The Nanded Merchants Co-operative Bank Ltd. Branch of

Taroda , started its working in Nanded 1974. The registration number of the bank is NND/BNK 136 of 1983 dated 15.04.1974. As per the given accounts, it shows that from last eighteen years, the bank progressed in many issues and steps. But the analysis of the bank on the several accounts doesnt shows its progress. Marathwada region is one of the most backward region in Maharashtra. Thats why from Reserve Bank of India to government shows their doubt to open this bank in Nanded. But from last eighteen years positive progress of bank has fulfilled this doubt. The success of any co-operative sector / society is depend on the working strategy of co-operative directors boards. If we can think on the same issue, this bank has shown a new progressive policy which is established now, in account of director board working shows the full faith of bank. Last Eighteen years working of directors shows the progressive image of bank. As per law any directors of bank can take loan. But this bank develops their own policy. None of them cant take loan from this bank. On behalf of good progress bank shows their positive and progressive attitude. From the above figures we can come to know that as the business of the bank get expanded its members are also increasing.

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The bank employees are very hard worker, discipline politely behave with customers. The bank arrange the seminar for customers so they know what is wrong then they try to done or give best service to the customers. The bank is arranging the different kind of training programme for its employees for the improvement in their efficiency. These training programme are beneficial for bank as well as employees. In this year bank has arrange 33 conferences. H.D.F.C. bank has given the permission to collect the draft from the major cities. The bank is provide best service to its customers. The bank is providing the following facilities to its customers.

1.

The bank has made such arrangements that the customers can make direct interaction with the bank persons.

2.

Whenever the customer is visiting any branch of the bank they are provided with service like tea, coffee etc.

3.

Pass books, statements can quickly get modernised through computers.

4.

All transactions are completed through computers. Upto 1997, the bank is having only 6 branches. Now the bank is

having total 9 branches in Nanded districts. branches in the following area of Nanded city. 1. Old Mondha : 2. Shivaji Nagar. 4. New Mondha. 6. Shrinagar . 8. Taroda

The bank is having its

It is the main branch of the bank. 3. Anandnagar. 5. Vazirabad. 7. Dharmabad. 9. Loha.

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The following dignitaries says the following worlds about bank. 1. Shri Shridhar Nagnur (Rt. Officer, Central Bank of India) An ideal co-operative bank. This is the one sentence description of your bank. After hearing all information about bank i feel proud & happy. I wish you Success and very bright future. 2. Sou. Pratibha Rasal (District judge, Pune) This bank appears to have given new dimension to co-operative banks. This focus is on human excellence. I wish the bank success. 3. Shri Ulhas Joshi (Management Consultant, Pune) I feel very happy the way in which the bank has developed its business & U wish the bank best of luck & success. There are total 123 employees in the bank. They have divided category wise as follows: 1. Chief Executive Officer 2. Manager 3. Branch Officer/Officer 4. Account & Assistant Accountant 5. Clerks 6. Peons 01 12 12 44 100 52

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ORGANIZATIONAL STRUCTURE
BOARD OF DIRECTORS OF THE BANK
The Nanded Merchants Co-operative Bank Ltd Branch at Taroda Nanded is a co-operative bank which is managed by the board of directors through share holders. The chairman of the bank is selected every year among the board of directors. The board of directors are elected through share holders for a period of 5 years. The present Board of Directors of the bank is as follows 1. 2. 3. 4. 5. 6. 7. 8. 9. Shri. Dattaraya Mahjan Shri. Ramdinji Soni Shri. Gudgilla Shri. Patil Shri. Nathmal Purohit Ku. Pratibha Paradkar Shri Kishan Wananje Shri Vijay Kulkarni Shri Madhukar Kulkarni Chairman Vice-Chairman Director Director Director Employee Representative Employee Representative Chief Executive Officer Manager

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COMPUTERISATION
Including its Head Office the bank is having the 3 (Nine) branches. 1. Nanded Merchants Co-op bank Ltd Old Mondha Nanded Main Branch 2. 3. 4. 5. 6. 7. 8. 9. Taorada Nanded Anandnagar, Nanded Vazirabad Nanded Shrinagar Nanded. Dharmabad Loha. Himayatnagar. Tamsa.

All these branches are fully computerised branches. The computerised main branch has been inaugurated by Shri Prakashrao Khedkar M.L.A. of Nanded. All the working procedure of the bank is going through computers. So due to it, there is not a single mistake in the working procedure. As per the instruction of R.B.I., the computer department of the bank deeply studied Y2K problem & successfully faced it. Due to it, the per employee productivity has gone up to Rs. 182.10 lakhs & per employee profit which has been received is Rs. 2.73 Lakhs.

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FINANCIAL DEPARTMENT
(Meaning, Definition, Objectives) What is Financial Management ? The financial management is the most important branch of business administration. One can not think of any business activities in isolation from its financial implications. The management may accept or reject a business proposition on the basis of its financial liabilities. Financial management, as we take it today. is that managerial activity which is concerned with the planning & controlling of the firms financial resources. The finance in the modern business is the life blood of the business economy. We can not imagine a business without finance because it is central point of all business activities. No matter, the business is big or small, semi govt. or no-govt., the finance function of management is equally important for profit as well as no-profit organisation.

Definition of Financial Management : Financial management is that specialized function of general management which is related to the procurement of finance & its effective utilization for the achievement of common goal of the organisation. It includes each & every aspect of financial activity in the business.

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The financial management has been defined by the different author as follows: 1. Financial Management is an area of financial decision making, harmonizing individual motives & enterprise goals.

- Weston and Brigham 2.

Financial Management. is the operational activity of a business that responsible for obtaining & effectively utilizing the funds necessary for efficient operations. 3. Financial Management, is the application of the planning & control functions to the finance functions. Howard and Upon. From the above definitions it is clear that financial management is that specialized activity which is responsible for obtaining & effectively utilizing the funds for the efficient functioning of the business & therefore it includes financial planning financial administration & financial control. Objective of Financial Management : Financial Management evaluates how fund are used & procured. it is generally agreed that the financial objective of the firm should be minimization of owners economic welfare. Owners welfare can be maximized. For this purpose there are two well known & widely criteria which are discussed as follows: (a) Profit Maximization. (b) Wealth Maximization.

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a) Profit Maximization : The maximization of profit is generally regarded as the main objective of business enterprise. Each company collects its finance by way of issue of shares. The public purchase these shares in the hope of getting maximum profit from the company as a dividend. It is possible only when the companys goal is to earn maximum profits & available resources & invest their money in such a firm & persons who have already invested will like to sell their stocks. On the other hand, higher profits are the barometer of its efficiency on all fronts, i.e. production, sales & Management. A few replace the foal of Maximization of profits to fair profits. The main object of the Financial Management is to safeguard the economic interest of the persons who are directly or indirectly concerned with the company i.e. promoters, shareholders, creditors & employees. All such interested parties must get the maximum return for their contributions. b) Wealth Maximization : The wealth maximization is universally accepted criteria for financial decision making. The value of an asset should be viewed in terms of benefits it can produce. Wealth maximization means maximizing the net present value of a course of action. The net present value of a course of action the difference between the gross present value of the benefit of action & the amount of the investment required to achieve those benefits. The gross benefits value of course of action is the fund out by discounting or capitalizing it benefits at a rate which reflects their timing & Uncertainty.

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FINANCIAL PARAMETERS
1. Deposits :
The deposits which the bank has raised are as follows: ==================================================== Sr.No. Year Rs. (In lakhs)

==================================================== 1. 2. 3. 4. 5. 6. 7. 8. 2001 2002 2003 2004 2005 2006 2007 2008 1097.65 1405.09 2188.72 3038.58 3852.63 3032.68 4012.22 4321.22

==================================================== The graph showing (See Graph No.1) the constant increase in deposits & it is because the bank is giving the complete return to the customer.

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2. Loans
The loans which the bank has distributed in last 5 years are as follow. ==================================================== Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. Year 2001 2002 2003 2004 2005 2006 2007 2008 Rs. (In lakhs) 722.23 967.72 1342.46 1700.81 2495.25 2880.32 3921.20 4012.22 ====================================================

==================================================== The graph showing (See Graph No.2) the constant increase in distribution of loans.

The loan scheme which the bank is having it is really very attractive in nature. The bank is giving 1% interest rate concession to those persons who are repaying their loan installments regularly.

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3. Investment : The investment which the bank is having in last 5 years is as follows : ==================================================== Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. Year 2001 2002 2003 2004 2005 2006 2007 2008 Rs. (In lakhs) 440.25 560.58 945.00 1389.98 1382.12 1412.03 1493.12 2132.23 ====================================================

==================================================== The graph showing (See graph No. 3)the constant increases in investment.

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4. Recovered Share Capital: Recover share capital which the bank has recover in the last 5 years is as follows: ==================================================== Sr. No. Year Rs. (In lakhs)

==================================================== 1. 2. 3. 4. 5. 6. 7. 8. 2001 2002 2003 2004 2005 2006 2007 2008 34.48 45.97 62.46 78.43 108.08 120.23 148.38 215.22

====================================================

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TYPES OF DEPOSITS
Specific Schemes:
The deposits schemes which the bank is having it is really very attractive in nature. It is giving the complete return to the customers, the money they deposited on the bank under the various deposits schemes for the various & specific period. The rate of interest which the bank is charging on the deposits is as follows: 1. Fixed Deposits Schemes : 30 days to 90 days 91 days to 180 days 181 days to 12 months 13 months to 24 months 36 months to 66 months 67 months and above 2. Recurring Deposits Schemes : 30 Months 39 Months 48 Months 57 Months 66 Months 120 Months 2300 2100 1600 1300 1100 500 1,01,471.40 1,02,093.60 1,00,816.00 1,02,505.00 1,05,913.00 1,15,350.00 6.0% 7.0% 8.0% 9.50% 9.0% 9.0%

NO TDS applicable for recurring deposit schemes.

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3. Cash Certificate Schemes : 36 Months 48 Months 60 Months 66 Months 68130.00 59950.00 52570.00 49480.00 1,00,000.00 1,00,000.00 1,00,000.00 1,00,000.00

4. Saving Bank Account : In it the bank offers 3.50% interest rate in saving bank Account. 5. Current Account : Professionals, individual businessman can get benefit of 0.50% interest while operating their business with the bank.

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TYPES OF LENDING
The loan schemes which the bank is offering to its customers are as follows: 1. 2. 3. 4. Loan up to Rs. 2 lakhs Loan up to Rs. 5 lakhs Loan up to Rs. 5,00,0001 & above 15.00% 15.00% 15.00%

The loan which the bank is giving for the purpose of T.V. Fridge, Vehicle. 14.00%

5.

The loan upto Rs. 2 lakhs which has been given for the purpose of house loans, constructions (10 years). 15.00%

The bank is giving 1% interest rate concession to those persons who are repaying their loans installments regularly. The bank is offering following loan facilities 1. 2. 3. 4. 5. 6. 7. Instant Demand Loan against our own term deposit receipts. Loans for working capital requirements of SSI units. Personal loan for purchase of consumer durables. Loans against personal guarantees. Trade loans for business concern. Bills/ Cheques discounting facility. Terms loans for purchase of plant & machinery for industrial unit. 8. Demands loans available on all Government securities such as National saving certificates, LIC policy, Kisan viks Patra etc. & other Govt. securities. 9. Term loans facilities for house repairing & purchase of ready built house.
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MARKETING DEPARTMENT
MARKETING STRATEGY The marketing strategy which has been applied by the bank is publishing its advertisement. In the news papers such as Sakal, Tarun Bharat. The bank is also heavily relay upon word by mouth publicity as well as mouth to mouth publicity. The bank has created a goodwill in the minds of customers by providing best qualitative service. Due to it, the customer is also doing publicity of the bank. From it, the bank is also getting a lot of business. As the bank has achieved the status of having maximum number of branches is one city. The bank is also using it heavily as a part of its marketing strategy. Regarding the marketing strategy the bank is following the below mentioned principles: 1. 2. 3. 4. 5. Customer service is team work. Customer service is ego management. Customer service is proper communication. Customer service counter service. Customer service is listening.

As part of marketing strategy regarding customer service, the bank is following the below mentioned commandments: 1. 2. Render service with a smile Cultivate positive approach attitude & outlook in respect of customer problem. 3. Extend service with courtesy, speed & accuracy.
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HUMAN RESOURCE DEPARTMENT

GENERAL WORKING CONDITIONS OF THE BANK
A) Employee-Year Wise The year wise employees who are working in the bank is as follows. ==================================================== YEAR 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 NO. OF EMPLOYEES 73 92 94 96 123 137 156 169 ====================================================

==================================================== There are total 236 employees working in the bank. B) Staff Salary & Allowances : From 1st April 1999 to 31st March 2000. Staff Salary Anoriyam Charges Life Insurance Conveyance Allowance Other Allowances 55,12,328.50 12,000.00 5,90,985.00 10,850.00 7,940.00 ============= 61,34,103.50 =============
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Functions of HRM
The functions of HRM can be broadly classified into two categories, viz., i) ii) Managerial functions. Operative Functions.

Functions of HRM

Managerial Functions

Operative Functions

Planning Organizing Direction Controlling

Employment Human Resource Development Compensation Human Relation Industrial Relations Recent trends in HRM

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CONCLUSION
From the above we can conclude that, 1) The working procedure which has been existed in the bank is really

nice in the nature. The staff which is working in the bank is very cooperative in natures and they are working at their best level and providing best kind of services to its customers. As the employees are taking part in the decision making process so they are not having any complaint with the management. 2) As the bank is providing the loans to its employees on the discount

basis for the purpose of house construction, vehicle purchase and computer purchase. So the employees are feeling good about the bank. The bank is providing group insurance facilities to its employees. 3) The bank is conducting many social activities and helping the

needy ones. The bank is facing the tremendous challenge in terms of the service, quality managing service, competition from other firms and customer satisfaction. The management of the bank is liking to accept the challenge for the process of learning and relearning.

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BIBLIOGRAPHY
1. Development Banking Vasant Desai. 2. The Banking Law & Practice H.C. Sarkar. 3. Annual General Reports of Nanded Merchants Co-operative bank Ltd Branch at Taroda.

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