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A STUDY ON EVENING BANK

PERFORMANCE WITH SPECIAL


REFERANCE TO PORUR SERVICE
CO-OPERATIVE BANK, CHERUKODE
LTD.NO.M.357

Placement training report submitted in


partial fulfillment of the requirement for
the award of

DEGREE OF MASTER OF COMMERCE OF


UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
(financial management)
2014-2016

Prepared By,
SYAMJITH.C
Register No:MLAODCM311
Enrollment No:1402815

1
Fourth semester M.COM

DECLARATION

I, SYAMJITH.C , student of Master of Commerce school of


Distance Education, here by declare that the placement training
prepared by me.

I also declare that the report has not been submitted by me for
the award of any Degree or other similar.

Date : 08/04/2016
Place : THODIKAPPULAM
SYAMJITH.C
Reg: No. MLAODCM311

2
ACKNOWLEDGMENT

I express gratitude to my external guide, Mr.P.NARAYANAN


NAMBOOTHIRI ( secretary porur service Co operative
Bank)&Mr.V.Vijayan(Manager of cherukode evening branch) for
guiding me an extend full support up to all stages of this placement
training.

Place : THODIKAPPULAM
Date : 08/04/2016.

SYAMJITH.C
Reg: No. MLAODCM311

3
CONTENT

CHAPTER DESCRIPTION PAGE NO:


NO:

CHAPTER 1 Introduction 6

Introduction to co-
CHAPTER 2 12
operative movement
Porur Service Co-
CHAPTER 3 25
operative Bank
Management
CHAPTER 4 38
&Administration
Functions of the
CHAPTER 5 50
Porur Service Co-
operative Bank
Analysis and
CHAPTER 6 85
Interpretation
Summery
CHAPTER 7 99
,Findings,Suggestion
&calculations
4
CHAPTER 1
INTRODUCTION

5
INTRODUCTION

Banking system did not originate in any status of government


or by any byelaw of private organization. It has a primitive origin as
signified by the name bank it self, meaning a bench or desk on which
transaction took place in olden days.
Banking made its appearance as a public enterprise around the
middle of 12th century in ITALY when the bank of Venice was
established in the year 1157 originally. It was not a bank but only on
office of the transfer of public debt. Banking in the modern sense of
the term can be said to have originated in England in the foundation
of the bank of England in the year 1964.
However modern banking came in the existence only after the
industrial revolution, that took place in European countries in the 18 th
and 19th century.

Definition and Meaning of Bank


It is very difficult to define the term bank or banker precisely.
Even the best authorities on banking have failed to provide a
satisfactory definition of this term. This is because a modern bank
performs numerous activities and it is really difficult to incorporate
all the activities of the modern bank.

6
Section 5(1) (c) of the Indian Banking Regulation Act of 1949
defines the term banking company as any company which transact
business of banking in India.
Section 5(1) of the same Act defines the term banking as
accepting for the purpose of lending or investment of deposit money
from the public, repayable on demand or otherwise and withdrawal
by cheque, draft, order or otherwise.

Functions of the Bank

Beside the functions like accepting deposit of various types for


the purpose of lending or for the investment banks are permitted to
engage in some other instruments, remittance of funds, opening
letters of credit, issuing travellers cheque, accepting articles for safe
custody, settings out safe deposit locker purchases and sales of
securities, issuing, indemnities and guarantees, acting as agent,
executers and trustees underwriting the issue of shares and
debentures.

Indian Banking System


The banking system in India can be divided to three categories
namely RBI, the commercial bank broadly classified in to nationalize
or public sector bank and private sector banks. The SBI and its
associates banks along with another 20 banks is the public sector
bank. The private sector bank includes a small number of Indian
Scheduled bank which have not been nationalized and branches of
foreign bank.

7
Chart showing Indian Banking system

Indian Banking
System

Central Bank and Monitory Authority

Commercia Regional Co-


l Bank Bank operative

State Co-
Public Private
operative
Sector Sector
Bank

State Natio Dom Forei Dist.


Bank naliz estic gn Co-
ed Bank Bank op.
Bank s Bank
s

State Associ UCB PACB


Bank ates
India Banks

8
METHODOLOGY
For the study, both the primary and secondary data has
been used. The study was mainly base on secondary data.
Secondary data were collected from the various records,
annual audits and by-laws.

IMPORTANCE OF THE STUDY


The Co-operative Banks played an important role of
urban area. The main source of fund for providing loan in
through the deposit made by the public. So the development
of the banks and the area which bank operate depend on the
deposit mobilized by the bank.

OBJECTIVE OF THE STUDY


1. To know the objective of the bank.
2. To know the structure of the bank.
3. To know the various scheme of the bank.
4. To know the different types of loans given by the bank.
5. To know whether the profit of the bank are adequate or
not.

SIGNIFICANCE OF STUDY
Co. operative banks play two important roles as a
mobilise and chanaliser. As a mobiliser it collect the savings
which are kept by the people for the future use and a
chanaliser they chanalise their savings into productive outlets
and bank play as important role in the economic development
of a country. As the matter of fact economical and industrial
development of a country depends mainly upon how
effectively and efficiently the banks manage funds.

9
The major task before any bank is to improve financial
performance, i.e. improving profit, improving efficiency and
productivity completing of other banks and introducing a fair
picture of their financial possession through balance and
receiving of loans.

TOOLS OF ANALYSIS
For easy comparison and analysis of the performance
of the bank, ratio analysis percentages are used. The use of
different graphs, diagrams, tables and chart make the study of
little more easily.

10
CHAPTER 2
INTRODUCTION TO CO-OPERATIVE MOVEMENT

11
INTRODUCTION TO CO-OPERATIVE MOVEMENT

England is considered as the birth place of co.


operative movement in the world. The Industrial Revolution
and its results have a direct bearing on the origin of the co.
operative movement in Britain. Robert Owen is the father of co
operative movement.
While England is considered to be the birth place of
customer Co. operatives, Germany can claim to be the curdle
of credit co. operative in the world. Rasiffeisen and Mr.Schulze
Delitch were the two pioneers of co. operative credit
movement in Germany. The first credit co. operative was
established in Germany in the middle of 19 th century. Schulze
established a Central Bank, which acted as clearing house and
balancing centre of entire co. operative movement.
In the primitive societies the germs of co-operative could
be observed in religious institution and tradition and
eraditional customs. In India the principal of co-operative has
been practical from time in memorial. The spirits of village
communities of India was almost entirely co-operative. The
corporate element in the community life in India was
represented by the joint family system. The ancient Indian
scripture Rig-Veda states;
May you all have common purpose?
May your heart be in union?
May you al be the same mind?

12
So that you can do work efficiently well.

Indian banking system consist organized and unorganized


sector organised banking is represented by commercial bank
co-operative bank industrial bank and the like Unorganised
bank banking represented by money lender indigenous bank
traders etc... Co-operative bank play vital role in development
of rural economy Co-operation has been accepted as one
important medium for regeneration of the countries socio-
economic life. It has very significant role as in under
developed country like India is concerned.

CO-OPERATIVE MOVEMENT IN INDIA

The success achieved many co-operative societies in


western countries made the Govt to think that co-operative
movement was the solution to relive the hardships of farmers
and weakers section of the society. Sir Frederic Nicholson was
deputed to European contries to study the working of co-
operative societies there and to suggest measures for
introduction of co-operative movement in India. On his
recommendation in India by the enactment of the co-operative
societies Act of 1904 under this Act it was possible to establish
of credit co-operative societies. A large number of co-operatve
societies were set up in village under this Act. The co-operative
societies Act 1912 contributed to the esablishment of state of
co-operative bank central co-operative bank which provide
refinance to primary credit societies.

13
In India, more than 70 percent of people depend on
agriculture for their livelihood. A farmer cannot survive
without external financial help in his activities. An important
source of rural credit in India was the money lenders. Co-
operative credit societies were started in India as a bulwark
against the money lenders, his trade and mal practice.
He was exploiting the farmers by charging high
interest rate.
Co-operative movement in Kerala is very strong and
stable. It stand first in the field of deposits amoung the states.
According to Co-operative Societies Act of 1904, the
membership of primary credit society was restricted to persons
of limited means. The members of the primary societies are
villagers. The primary credit societies at the village level are
known as Service Societies or Service Co-operative Bank.
These societies are functioning under certain accepted
principles regarding the rate of interest, amount and duration of
loans, etc...Service co-operative societies aim at economic
progress of its members.
The ultimate aim of cooperative societies is that the
local capital should become the principal source of fund to the
society.
Deposits are considered to be the ideal source of finance.
The Indian co-operative bank system is three type systems it
consist of following three sections.

Structure of credit co-operative


Stat
e co-operative Central co-operatives Primary co-
operatives

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1) STATE CO-OPERATIVE BANK

The state co-operative bank stands at top of the co-


operative credit structure in the state it is an apex of co-
operative societies. The member ships of state co-operative
bank consist of either central co-operative bank newly co-
operating in the state only for both central co-operative bank
and individuals.

The bank has close relationship with NABARD and the


state Govt.State co-operative bank acts as connecting link
between state Govt. and co-operative movement.
Following are the function of state co-operative bank
1) To land fund to central co-operative bank which in the turn
advances loans to primary credits societies.
2) To borrow funds from the reserve bank of India lend to the
same of co-operative bank to use for financing the primary
credits societies. Thus it acts as link between RBI on the
one hand the central co-operative bank and primary credit
societies on the other hand.
3) It serves as the balancing centre between central co-
operative banks.
4) It guides advices and exercising general supervision and
control over the activities of central co-operative bank.

15
5) It acts as link between the money market and co-
operatives.
6) It helps not only credit institution but also promote other
co-operative societies and there by promote the co-
operative movement in general.
7) It coordinates the activities at deferent co-operative bank.
8) It accepts deposit from general public in the urban are and
make than available for rural credit.

2) CENTRAL OR DISTRICT CO-OPERATIVE


BANK
Central co-operative bank is a financial bank of
primary co-operative societies in the district. One central co-
operative bank for every revenue district is the pattern adopted
here there for, it is also called district co-operative bank.
Central co-operative banks make financial helps technical
guidance and administrative advice to the primary co-operative
societies.
The area of operation of the central co-operative bank
will be extended normally to a revenue district. Member ship
of the bank generally consists of primary co-operative credit
societies and other types of primary societies working the area
of operation. Government can also become a member can
taking share the central co-operative bank. Liabilities of these
banks are limited to shares. Maximum borrowing powers of
central co-operatives are ordinarily ten times of the paid up
share capital plus reserved fund.

16
Central co-operative bank act as a connecting link
between the apex co-operative bank and primary agricultural
credit societies. The main objective of central co-operative
bank is to meet the credit requirement of member societies.
They finance agricultural credit societies for marketing and
supply operation and other societies. Besides providing loans
the central co-operative banks also provides certain normal
banking facilities to members such as acceptance of deposits,
remittance of funds, collection of cheque, etc...

3) PRIMARY CO-OPERATIVE SOCIETIES


Co-operative society at village level is called primary
service co-operative societies. The service co-operative
societies playing an important role in helping agricultural
production.
Service co-operative society is an organization of
village for mutual help co-operation to their common
economic requirements and to increase agricultural production.
The service society provides a package of service to the
members. However the present India idea of service co-
operative appears to have to from the United States. In India
the term service co-operative was first officially used by the
Indian delegation to Chinese an agrarian co-operative. The
term service co-operative got wide currency after the late
Prime Minister Nehru used it in his speech at a press
conference held in New Delhi on 17th February 1959 and the
Rajyasabha on 12th February 1959.
The service co-operative banks have made fairly rapid
progress during the last decades. In addition to providing credit
and discharging other service functions a service society

17
expected to arrange for pooling marketing the agricultural
produce of farmers and storage and go down facilities for
them. Service co-operative banks are expected to embrace the
whole economic and business life of the village community.
Co-operative society together with Panchayath is to be spread
spear head if all development activities in the village and more
specially are to encourage intensive farming with a view to
raising the agricultural produce.

In urban areas, urban co-operative societies are working.


Co-operative urban banks are primary credit societies, formed
for giving credit to people residing in the urban and semi urban
areas. Members of the urban banks are mostly small merchant,
artisans, small traders and salary earners.

Agricultural credit societies are the very foundation


stone of co-operative credit structure and constitute by far the
largest number of the co-operative institutions in India. The
societies extended to in calculate the habit of thrift and savings
among the members.

NEED AND ORIGIN OF CO- OPERATIVE


The co. operative movement in India was started as a
suitable credit agency for areas. The scheme of the formation
of Service co-operative was launched in India about decades
bank. After the working of the societies, these societies would
how ever reveal that by and large, they have succeeded in
achieving their objectives, these societies have been able to
play a significant role in providing adequate finance. Supply of

18
agricultural and other production requirement and in marketing
of member produce.

CONSTITUTION AND WORKING


The area of operation of a service co. operative bank is
specified in the bye-law of the bank. Generally the area is
restricted to a village and panchayath. The liability of the
member of the service co. operative bank is limited to the
shares subscribed by them.

OBJECTIVES OF SERVICE CO.OPERATIVE


BANK

The main objectives of service co operative bank


are;
1. To attract deposit from members and non-members.
2. To provide loans to members.
3. To provide gold loan to members.
4. To arrange for the safe custody of valuable documents
of members.
5. To collect and markets the agricultural products of the
members. A member is open to all persons living within
the area of operation of the bank
6. To provide agricultural loan to the members.
19
FUNCTIONS OF SERVICE CO.OPERATIVE
BANK

Deposit mobilization and providing loans are the main functions


of service co. operative banks. Other main functions of service
co. operative banks are;

To supply of credit both short term and medium term

To supply production requirements such as seeds,


fertilizers,insecticide, etc

Marketing the agricultural produce.

Help to formulate and implement a plan of agricultural


production for the village.

Undertaking such educative advisory.

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Principles of a Co-operative Societies

1. Voluntary Association
A Co-operative society is essentially a voluntary
association of person. Membership is voluntary in two senses.
A person is free to join or not join a c-operative society as its
members. This means that admission is voluntary. Similarly he
is free to leave the society at any time after giving a due notice
to the societies.

2. Open Membership
Any person who has attained the age of majority can become
the member of a society irrespective of caste, creed, religion
etc

3. Unrestricted Membership
There is no limit to the maximum number of members in
a Co-operative society.

4. Association of a Person
It is an association of persons and not of capital.
Individuals join a Co-operative society as human beings and
not as capitalists.

5. Equal Voting Rights


In a Co-operative society has only one vote, irrespective
of his share holdings. One member one vote and not one
share, one vote is the basic principle of a Co-operative society

21
which enable the members to have equal voice in the
management of the society.

6. Democrating Management
The Co-operative society on the fundamental principles
democratic management. The democratic principle each for
all and all for each is the essence of co-operative organization.

7. Service Motto
A Co-operative Society is primarily organized with
object of rending maximum service to its members. It does not
aim at profit at the cost of its members.

8. Liability
The liability of the members of a co-operative society
may be limited or unlimited. But the most co-operative
societies, members liability is limited as in the case of a joint
stock company.

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23
CHAPTER -3

PORUR SERVICE CO-OPERATIVE BANK

24
PROFILE OF PORUR SERVICE CO-
OPERATIVE BANK

Name : Porur Service Co-operative


Bank Ltd. No. M.357
Address : Porur Service Co-operative
Bank
Cherukode, Chathangottupuram
(PO), Malappuram Dist.,Kerala

Area of operation : Porur Grama Panchayath

Registration : 4/01/1986
Commencement : 28/02/1986

Branches : 5 Branches
1.Cherukode main branch
2.Cherukode evening branch
3.Thaliumkundu
4.Cheriprambu
5.Poothrakovu

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Share Capital : 2, 30, 000, 00(Authorised
share4083457(Present
subscribed capital) Membership
and paidup
share Capital (as on
31/03/2014) 54938423.

Employees : No.s 24

Borrowings : 65870
Investment : 78357532

The main function of the bank is to produce short term


and medium term credit, supply of agricultural and other
requisites and marketing of agricultural produce to the members.

The day to day management and supervision of the bank


is vested upon the board of directors elected according to section
28 rule 35 of the Co-operative Societies Act. There are four
types of members in this bank. These are A class, B class, C
class and D class members. The members of the board of
directors will be elected in the general body. The bank has its
own by-law and any change in the by-law will be effective only

26
if has been approved by the Registrar of the Co-operative
Societies.

BRIEF HISTORY OF PORUR SERVICE


CO-OPERATIVE BANK
The porur service Co-operative Bank is a co-operative
Bankltd no:M357 It was registered co-op societies Act on
4/01/1986. In the economical, social scenario of this village,
Porur co operative Bank has tried its level best to work among
with the members knowing their needs and we are glad forthat
the bank is running in profit and classified as class first .The
main services could be summerised as follows
1) To provide longterm, shortterm &medium term loan
2) TO provide loan for construction&buying of house &other
properties.
3) It provide safe locker facility
4) Bank will act as an agent of the customers
5) It will provide LPG service to ctmr

Now the bank is propose to start a farmers service center


for the society with the assistance of govt of kerala . it is a
social service model focuses as farming as an enterprise on
agriculture value chain and re stratagising extension services
through a demand lead agriculture based mechanism

27
OBJECTIVES OF THE BANK

Following are the important objectives of the bank. To


fulfil the following points and to conduct activities that will help
these points as per co-operative societys principles, rules and
regulation and by-law are the main objectives of a bank.

1. To raise fund from the members by way of shares capital


and admission fee.
2. To raise fund by way of loans deposits, donation, grants,
subsidy from persons, institutions, government
institutions, agencies and financial institution, banks,
board, co. operation, panchayath
3. Raising fund by way of interest,fee, rent,service charge,
etc...
4. Acting as a collecting agent of cheque, bills,drafts of
members and non-members.
5. Money transactions to customers.
6. Make it possible to store and distribute seeds, fertilizers,
etc
7. To supply customer items among the members.
8. To provide go down facilities to members to keep them
agricultural and non-agricultural products.
9. To encourage thrift, self and co. operation, among
members.
10. To provide short term and medium term loans to the
members.
11. To provide financial and technical assistance to self
employed persons for setting up their own business.
12. To collect and transmit money and security to reduce all
kinds of bond scripts valuable on deposits or for safe
custody or otherwise .
13. Prepare agricultural projects.
14. To store the products of the members.

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15. To provide self evident.
16. To attract local savings to maximum extent.
17. To prepare and to finance scheme for amelioration of the
financial condition of the members.
18. To do all such other thinks and conductive to the
promotion or advance of these objectives and of the
business of the bank.

CAPITAL STRUCTURE

The authorized capital of the bank for the


present shall be Rs.15000000 made up of the
following shares;

A class share holders- 1000000


B class share holders- 250000
B class share holders are state government,
central or any other approved body of government
Cclass share holders- 500000
D class share holders- 200000

29
SOURCE OF FUND

The following are the different source which provide the


required fixed and working capital and share capital. Deposit
from members and non members, loans and advances from
central co-operative bank, govt and other agencies. Following
are the main type of deposits received by the bank from their
members. Term deposit, short term deposit, special fixed
deposits agency security deposits, daily deposits and staff
security deposits. The bank has borrowing from ICDP.

MEMBERSHIP

Memberships of the bank open to all peoples good


character who resides within the area of operation of the bank.
No consideration is given to caste or of financial status of the
person applied.
An individual who become the member of the bank
should take one share. No person is allowed to purchase shares
more than the limit fixed by the Act and Rules. Members are
classified in to four. That is A class members, B class
members.C members and D class members.

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A CLASS MEMBERS

As per rules, regulations and by law a person with proper


eligibility can be an A class member. An A class member can
nominate his or her nominee for his or her share deposits, after
their death. A class members are the members inside
catchments area. They also are having voting right in the affairs
of the bank.
B CLASS MEMBERS
A B class member can be the state govt, state co-
operative bank, district co-operative bank, or other enterprises
which are recognised for direct or indirect sharing of their
shares, boards, corporation etc
C CLASS MEMBERS
There are shares issued to parties outside the catchments
area. They also called nominal members or associated members.
They dont have the right to vote. They will not be able to get
the profit their own share. They are less in number. A nominal
member does not have the authority to attend the General Body
Meeting.
D CLASS MEMBERS

D class members will not be having right to vote and


dividend on their in the bank. A self help group with in the
catchments area of the bank can be granted Rs: 50,000.D class
members can nominate his or hr nominee for his or her shares,
after their death.

31
ELIGIBILITIES TO BE A MEMBER

For a person to be member, should satisfy the following criteria.


1. Who as attained the age of 18 years.
2. The person who is sound mind.
3. It is not required to live within the catchments area or to
have land within this area to be A, C or D class
member.
4. A member should be paid the entry fees and rate of share.

DIS ELIGIBILITY

The following persons are disqualified to become a


member in this bank.
1. A person without the completion of 18 years of age. Not
eligible to engage in bonds.
2. A person who works in this bank or in the financing bank
of the bank.
3. A person who doesnt have the eligibility or a person
who has come to be misfit whom the administration is
about to suspend.
4. A person who hasnt completed at least two years after
being suspended from a bank or any other co-operative
societies.
5. The person who is unsound minded.

32
THE RIGHT AND POWERS OF A MEMBER

Following are the right and powers of a member in the Co-


operative Societies bank.
1. According to rules and regulations for each A class members
will have one vote for any deals in the bank.
2. A member can handover his shares has a whole or a part to
another member with the permission administration.
3. Both A class and B class members have the right to get
the profitability over the paid shares.
4. The members will be having the other rights and powers that
are mentioned in the rules, regulations and by-law.
5. It is the duty of the member to participate in General Body
meeting
6. File the application in the prescribed form.
7. It is the obligatory in the part of member to repay the loan
taken along with the interest on before due date.
8. Every member is liable to specify the details of his asset and
liabilities as asked by the bank.
9. Every member should act in accordance with obligation of and
interest of the members.

33
DUTIES AND LIABILITIES OF MEMBERS

DUTIES
1.A member should actively participate in the annual
general body of the bank.
2.A member should never act against the bank.
3.A member should always inform the bank whenever a
change of his living place, his address etcoccurs.
4.A member should keep his shares with him at least for
three years.

LIABILITIES

1. A member has the responsibilities on the debts of the


bank and on the liabilities of the bank will be to the
amount that he has paid on his shares.
2. A member always informs the bank whenever a change
of his living place, his address.
3. A member should keep his shares with him at least for
three years.

34
The following figures shows the membership in the bank in
different years

TABLE SHOWING MEMBERS IN THE BANK

Sl. No Year Members Increase

1. 2006-07 8,974 832


2. 2007-08 9,879 905
3. 2008-09 10,907 1028
4. 2009-10 11,717 810
5. 2010-11 12,527 810
6. 2011-12 12,978 451
7. 2012-13 13,546 573
8. 2013-14 14,164 618
9. 2014-15 14,859 695
10. 2015-16 15,499 640

35
The table shows that the members of the bank continuously
increasing compared to the base year 2005-2006. The members
of the bank up to 2013-2015.This continuous increases in this
bank give the progress of the bank and also the ability to make
up the needs and wants of the members.

Funds of the Bank

The bank can mobilise its fund from:-

1. A,B,C and D class share capital


2. Own fund like reserve fund, other reserve provision, etc
3. Interest source like interest, commission, other income of
profit, etc
4. Members and non-members, bank institutions formed under
companies Act and recognised govt either directly or indirectly
in the form of bank goods, etc
5. Board of Directors in the form of bank, goods, etc
6. Board of Directors have the authority to mobilize fund
from individual co-operative societies in the form of
investment.

36
CHAPTER 4

MANAGEMENT &
ADMINISTRATION

37
MANAGEMENT AND ADMINISTRATION

A silent feature of co. operative management is that it is


being managed in a democratic basis. A registered society,
through a legal entity in the eyes of law, is an artificial person. It
has no mind and body. Therefore, it must act through some
human agency. The shareholders, who are members of the
society, are too many in number. Therefore, they cannot control
and look after day today affair of the society. So they elect
representatives who are individually called Directors.
Collectively they form a board known as the Board of
directors.
Democratic Management is the key note of co.
operations. Accordingly, the management of Porur Service Co.
operative Bank is two wings. i.e., General Body and Managing
Committee including Board of Directors, President and
Secretary.
The management of Porur Service Co. operative Bank is
vested in the hands of Board of Directors. Board of Directors is
elected by the General Body subject to the provisions of the Act
and Rules. General Body acts as a final authority of the bank.
There are types of general meeting, Annual general body
meeting and special body meeting. The annual general meeting
shall be called once or before 31st March of the every year or
within such a period as extended by registrar. The Special
38
general meeting may be called at any time by the Board of
Directors.
The Board of Directors shall be consisting of directors of
whom one shall be a women and another shall be as scheduled
caste or scheduled tribe member. All this members shall be
elected from individual member. The term of office of board
shall be 5 years. The years for this purpose shall beginning from
the date on which the elected director assumed charge of office
and end with after the expiry of15 year from the day of
assuming charge by the board of directors. Five directors shall
form the quorum. The board shall consist of one chairman, one
vice chairman and 7 members.

FORMATION AND STRUCTURE


The administration consists of 9 members who are from
the class A. One among these 9 seats is reserved for SC\ST
members and another one for a woman. SC\ST members and the
women members of A class can participate in an election. A
member can complete for a single position in an election. The
term of direct board is 5 years. The election of Director Board is
common in according with values of this Co. operative societies
Act (Sec.28 Rule 35).

GENERAL BODY
The supreme command over the matters relating to Porur
Service Co-operative bank is vested with General Body. All
members of a co. operative society constitute its General Body.
Every member is given equal opportunity to participate in the
working and management. To this end, members of Co.
operative society are invited to attend its General Body meeting,

39
which is held annually. Decisions are taken on the basis of
majority vote. All members have equal voting rights irrespective
of their shareholding.
The General Body of the bank has the right to take
decisions on bank. The ultimate responsibility for the entire
management of the bank is vested in the General Body of
members. Normal members are not eligible to attend the
General Body meeting. General body meeting must be held in
the following occasion;

1. Within one month after the completion of a co-operative


year. This meeting is called annual General Body Meeting.
2. On request made by majority of members on the director
board.
3. On request made by the registrar of any co-operative office.
4. Request made by not less then 1/5th of the total members.

RIGHTS AND DUTIES OF GENERAL BODY


1. Elect the members of Board of Directors.
2. Consider the audit report and balance sheet and pass it.
3. Distribute the project according to Act and Rules.
4. Decide the borrowing power of the members for sanctioning
short term and long term loans with respect to the suggestions
of the Registrar.
5. Consider and pass the budget.
6. Consider and pass the annual report.
7. Take decision for the progress of the bank.
8. Affiliation of society with the federation of co. operative
bank.
Needs for General body comes in the
following situations:

40
1. There should be a General Body of A class members at
least one in each year, thus is known as Annual General
Body.
2. If majority of the members of 1\5th of the members request for
a General Body meeting.
3. If the registrar ask for such meeting.
4. The General Body for the administrative election should be
called as per rules and regulation.
5. The administration has the power to have the general body
meeting whenever there comes a special need or special
purpose.
6. The quorum for General Body is 1\5th of A class members
or 25 whichever is less.
7. The general Body notice should be published in any two
newspapers which has having a better circulation in the
catchments area.
8. The subject matter that is having support of the majority of the
members is considered for the general body.

BOARD OF DIRECTORS
The Board directors are elected by the members in the
general Body Meeting. The Board is vested with the day-to-day
administration of the society. Director board has the
responsibility of overall supervision and control for proper
functioning of the -
bank. It consists of nine members, out of which two are
nominated to the Deputy Registrar.

BOARD MEETING
The Director Board should meet as and when necessary.
All decisions in respect of the management of the business are

41
taken in meeting. Quorum is fixed as 50% of the total number of
members. President presides over the meeting. Registrar of Co-
operatives has the right to issue order of the proper conduct of
business. In those societies where the number of members is
more than 1000, it may from a representative body for the
proper conduct of business president of meeting has the power
of casting vote.

POWERS OF BOARD OF DIRECTORS

Following are the main powers of board directors of the bank.

1. Maintaining of accounts of purchases and sales as well as


asset and liabilities.
2. Maintaining of register of members.
3. Sanctioning of loans to members in the case of credit societies.
4. Accepting of deposits and raising of loans.
5. Taking legal actions against the defaulters of loans.
6. Exercising control and supervision of the staff.
7. Safeguarding the legal interests of the societies.
8. Making appointments of the staff.
9. To consider application for membership, allotment, transfer
of shares and registration.
10. To receive the resigning letter of the members.
11. To approve the annual balance sheet, statement of profit and
loss account and other statement for being place before the
members of annual general body meeting.
12. To consider application for loans and advances, discounting
bills, to determined terms and conditions.
42
13. To enter in to participation arrangement with any
commercial Co-operative bank and financial corporation
for the purpose of loans advances and to determined
the terms and condition of the participation.
14. To fix rate of interest on loans and deposits.
15. To make arrangement for the election of the members of the
bank.
16. To appoint a chief executive officer for efficient conduct of
the banks business.
17. To consider proposal to modify, alter, delete and add to the
terms and condition governing the outstanding loans,
overdraft, cash receipt, and advances due from the
constitution.
18. To perform all acts connected with the administration of the
bank and to undertake all activities in further of the aims and
objectives of the bank.

Circumstances where a member couldnt be elected as


director:

In the following circumstances a member could not be


elected as a director of the affairs of bank.
1. If he or she is below 21 year old.
2. If he is proclaimed as an insolvent.
3. If he doesnt have a sound mind.
4. If he was imprisoned for criminal or moral turpitude within
five years back from the date of election.
5. If either he or his close relative is an employee in the bank or
involved in any business from which he derives profit from the
bank.
6. If he had made any overdue in the bank.

43
7. If he had made an overdue in the bank continuously for
three months.
8. If he is a convict in an award procured by any Co- operative
bank.

PRESIDENT

President is elected from Director Board. He has overall


control of the Director Board. He has the power of casting vote
on an issue where votes are cast in equal members. President
presides over the General Body Meeting as well as the meeting
of Directors. In his absence, the Vice President has to act on
behalf of him.

SECRETARY

The Chief Executive of the bank is the secretary. Secretary


will be under the direct control of the President of the bank and
is appointed by Director Board. He has the right and he needs to
conduct the bank. Secretary is the custodian of cash seal and all
other important records of the society and he is also an
employee of the bank. He controls the internal management of
the bank.

Duties of the Secretary:

44
Following are the main duties and responsibilities of the
secretary in the operation of the bank.
1. Conduct annual General Body meeting and Director Board
meeting.
2. Record all transactions in the minutes book.
3. Keep all records and registers promptly.
4. Keep all cash in the absence of cashier.
5. Submit Audit Report before the Annual General Body Meeting.
6. Records of the Banks movable properties, seeds, manure,
implements, etcare under the control of the secretary.
All these responsibilities are vested with the secretary of
the bank.
7. The control and supervision of the staff.

Records and Registers


1. Admission registers.
2. Share application Register.
3. Nomination Register.
4. Minutes Book.
5. Cash Book.
6. Day Book.
7. General ledger.
8. Receipt and Disbursement Register.
9. Register of dividend.
10. Loan Ledger.
11. Liability Ledger.
12. Voucher File.
13. Deposit Register RD, FD, CA, SB.
14. Loan Ledger.
15. Register of identity Card.

Qualification of Secretary

45
Degree of B.A\ B.Com\ B sc from any recognized
University
Training in govt institute of commerce.
A pass in the technical examination in the book keeping,
banking, co-operative institute in this subject.

POWERS OF SECRETARY

1. To confine the meeting of General Body, Board of Directors,


sub-committee and other committee and to attend in the
meeting.
2. To take action on the resolution and decision taken by the
General Body and Board of Directors.
3. To conduct correspondence on behalf of the bank.
4. To maintain all book account, register and ledger and may
have been prescribed under the Co-operatives Societies
act, Rules and By-Law.
5. To receive application for membership of the bank and for
additional share and place them before the Board of
Directors with the report and recommendation.
6. To accept deposits of all kinds and arrange for issue of
receipt statement and passbook.
7. To disburse money on behalf of the bank.
8. To be the custodians of cash on hand property both movable
and immovable document, securities and bonds.
9. To seeks orders from the board of directors for appointment of
staff subordinates to him within the sanctioned strength.
10. To take disciplinary action against the bank staff in
accordance with the service rule.
11. To allot work among the bank staff and supervise their
bank

MAN POWER

46
The quality of the service provided by any bank is
depending upon the quality of the work force and their inner
mentality towards the work. That is the ultimate for the success
working of the bank. The bank has now 17 permanent
employees including secretary, who is the chief executive officer
of the bank. In addition there are part time staffs also. In
addition to this there are ten daily deposit collectors on
commission basis. The secretary is appointed by the Board of
Director. Banking is an area in which the quality of service
depends upon the staff and employees. The staffing operating of
the bank is going on a smooth condition. The allocation of the
staff for each section or division of the bank is done in a good
manner.
TABLE SHOWING EMPLOYEES PATERN
Name of the post No. of
Employees
Secretary 1
Accountant 2
Senior Clerk 3
Junior Clerk 4
Attender 3
Night Watchman 1
Peon 2
Total 16
CHART SHOWING ORGANISATIONAL STRUSTURE OF
PSCB

47
Board of Directo
Attende Senior
Secretary
President
Clerk /
General Body

Peon Daily
deposit
Collectors

48
Chapter 5
FUNCTIONS OF THE PORUR
SERVICE CO-OPERATIVE BANK

49
Functions of the Porur Service Co-operative
Bank

This chapter includes the functions of the Porur Service


Co-operative Bank. The functions of the banks are lending
money and accepting deposit. Banking functions are classified
in to two.

A. Primary function
1. Accepting Deposit
2. Lending money

B . Other functions (Secondary functions)

1. Collecting bills
2. Discounting bills
3. Providing remittance facilities
4. Draft facilities

The main Functions performed by the bank are mobilization


of saving from the public as deposit and provide loans and
advances.

50
1. Mobilization of Saving

Mobilization of savings which is also called deposit


mobilization and it is a main source of finance of the bank.
Deposit may be collected as a current deposit, savings deposit,
fixed deposit, recurring deposit, daily deposit and other special
schemes. Thus collecting the savings of the people and by
channelizing it to be the needy by way of loans. The Porur
Service Co. operative Bank play an important role in the
development of village.

2. Providing Loans and advances

The channalisation of the deposits collected by way of


loans and advances act as blessing to the needy. The bank
usually provides short term loans, medium term loans for the
agricultural and non-agricultural purpose. The bank usually
gives priority to agricultural purpose loans.

DEPOSIT MOBILIZATION
Accepting deposit is the basic and most important
function of the bank. These deposits provide the main source
funds for any bank. The bank receives deposits with in the limit
prescribed by the Co-operative Society act and the rules on such
a rate of interest and the subject to such rules and regulations as
fixed by the Board of Directors from time to time and also as per
the govt authorities.

51
Accepting deposit

The bank accept several types of deposits from its members


and non members like fixed deposit current deposit, saving
deposit recurring deposit, daily deposit etc.. The financial
strength of the bank depends upon the deposit collection. The
various deposits received by the bank are as follows.

1. Fixed deposits:
Fixed deposit is a deposit investing a certain amount for a
certain period which may fix by the management from time to
time. Interest may be fixed from time to time by the Board of
Directors. It is the main source of fund for providing loans to
members. The banks usually accept fixed deposits for the
minimum period 15 days. The rate of interest given to fixed
deposit is higher than other type of deposits. Fixed deposits are
also called tome deposits or time liability. The fixed deposits the
customer deposits the money for a fixed period such deposits is
repayable only the expiry of the fixed time. The depositors
cannot draw cheques against fixed deposits. When a customer
make a fixed deposit the bank will issue a deposit receipt and it
is called Fixed Deposit Rate.

52
Fixed deposit

Year Rs in lakhs

2005-06 260.29
2006-07 324.15
2007-08 359.64
2008-09 428.63
2009-10 606.04
2010-11 692.25
2011-12 788.16
2012-13 1068.14
2013-14 1370.38
2014-15 1705.91
2015-16 1905.75

Above table shows the fixed deposit of the bank from the
year 2004-05 to the year 2014-15. According to this fixed
deposit of the bank continuously increasing. The main source of
the bank is the fixed deposit and this give maximum amount to

53
lend the loan to members. At the end of the accounting year
2014-2015 the bank fixed account balance increased up to Rs.
1905.75(in lakhs) from Rs. 260.29(in lakhs) in the year 2002-03.
The following diagram shows the increase in the fixed deposit
of the PSCB.

54
Diagram for fixed deposit

55
Procedure for opening Fixed Deposit Account

A person intending to open a Fixed Deposit account should


make application in the prescribed format. The form contains
details like name and address of the depositor and nominee,
period of deposit, interest rate, date of opening the account,
etc Proper introduction is required. Fixed deposits are not
operated by cheques. The bank issue Deposit receipt to the
depositor is matured the depositor should surrender of Fixed
Deposit receipt and sign on the back of the receipt.

2. Current Deposits:
Current account deposits are generally opened by the
trading and industrial concerns, Public authorities, etc which
have, frequent banking transactions. Bank is liable to repay the
amount on demand. Usually no interest is allows on current
deposit because the bank has to incur heavy operating cost for
the maintenance of the account.

Following are main features of current account


transactions:-

1. Current account may be opened with minimum


balance of Rs.500/- and the same must be maintained as
minimum balance.
2. Interest on current account shall be calculated on
daily product basis and paid on behalf yearly.

56
3. bank may all these descriptions allow interest not
exceeding percentage per annum but now the bank does not
provide interest to the deposit holders.
4. Current account deposit is suitable for
businessman.
5. Current account holder can withdraw any amount
from their current deposits at any time without prior notice.
6. The bank may charge a nominal amount as
incidental charges from the depositors.

But in the early period of operation PSCB was not allowed


current account facility to its customer. But now-a-days PSCB
opened current account facilities to its depositors.

1. Saving Bank Account:-

Customer can deposit any amount of money and any number of


times. But as this accounts are intended to promote the habits of
saving among the depositors. There are restrictions on the
number as well as the amount of withdrawal from his account.
A cheque book facility may be allowed to the account holders
according to the directors of the bank. He must keep a minimum
balance of Rs.500/- through out the account. The interest rate
will be calculated for each calendar month, on the lowest at the
credit of an account between the close of the 10th and last day of
the each month. No interest rate will be allowed under the
amount earn minimum of rs.5 per half year. Now bank gives 6%
interest on SBaccount. The saving bank account is opened with
a minimum amount of Rs.100/-. SB account also called demand
deposits.

57
Procedure for opening SB account:
A person intending to open this account must give
proper application in the prescribed term which includes details
such as name and address of the customer and nominee, nature
of the amount (single or joint), account number of the initial
deposits, etc It is a member, membership number is indicated.
In the case of non members, the prospective customer needs to
be introduced by an existing member. A specimen will be issued
by the bank in which the customer furnishes three specimen
signatures for the future verification. It is a precaution against
forgery.

Saving Deposit
Year Rs in Lakhs
2004-05 115.94
2005-06 140.00
2006-07 187.48
2007-08 236.75
2008-09 341.18
2009-10 386.35
2010-11 424.82
2011-12 618.74
2012-13 681.40
2013-14 808.23
2014-15 883.42

58
(Source: Auditor report from the year 2004-05 to 2014-15)

The above table shows that the saving bank deposit of the bank.
From the year 2004-05 to 2012-13 there is a huge increase in the
saving bank deposit of the WSCB. In the year 2004-05 the total
amount in the saving bank deposit account of the bank is Rs
115.94 (in lakhs), but it reached up to Rs 883.42 (in lakhs) in the
year 2014-15. The following diagram shows the continuous
increase in the saving bank deposit of the PSCB.

59
Diagram showing Saving Deposit

60
4. Recurring Deposit

It is a deposit remitting monthly minimum of Rs 100 for a


minimum period of 12 months. The sum accumulated of the
maturity period will be paid interest after one month from the
last date of remittance for defaulted instalment, panel interest at
the rate fixed by RBI from time lotion will be collected. The rate
of interest on these deposits is nearly the same as on the fixed
deposit. Recurring deposit is also called cumulated deposit.

Recurring

Year Rs in Lakhs
2004-05 0.5
2005-06 0.9
2006-07 1.15
2007-08 1.44
2008-09 2.01
2009-10 2.59
2010-11 3.62
2011-12 3.80
2012-13 4.10
2013-14 4.25
2014-15 5.09

61
Deposit

(Source: Auditor report of the bank from the year 2004-03 to 2014-15)

The following diagram shows the increase in the recurring


deposit of the bank in different years.

62
Diagram showing Recurring Deposit

63
From the above diagram it is clear that there is a big increase in
the recurring deposit of the bank.

5. Daily Deposit
This is the deposit mainly aimed at the merchant and the
farmers. The depositor can invest an equal amount in every day.
The period of this deposit is three months. The bank appoint
collection agent to collect the deposit from the customer.
Usually the customer needs not go to bank to invest their money,
the collection agent directly collect deposit from the customer.
The agent gives the total amount from customers in the bank
before the closing of the bank every day. No interest is allowed
for these types of deposit.

Daily Deposit
Year Rs in Lakhs
2004-05 22.81
2005-06 23.51
2006-07 30.88
2007-08 31.46
2008-09 36.48
2009-10 40.67
2010-11 40.73
2011-12 51.80
2012-13 63.07
2013-14 73.05
2014-15 87.18
(Source: Balance sheet of the PSCB from the year 2004-05 to
2014-15 and Auditor report)
64
Diagram showing Daily Deposit

65
Interest Rate for Deposit

From To Interest Rate


(Days) (Days) (%)
15 45 7.5

46 90 8.00

91 179 8.75

180 364 9.25

365 Above 365 10.00

* .5 % addition for senior citizens

* 1% addition for staff

66
Loans and Advances

Loans overdue:-

Loans overdue are part of outstanding loans. It was not


realized by the bank within certain definite time limit. The loans
are usually provided by the bank from the deposit received to
them. If the loan amount is not repaid in time it will effect the
smooth functioning of the bank. This is most important problem
affecting the successful working of the bank.
Usually the interest and principle amount are collected
periodically from the borrowers. When two instalments of the
loan and interest are in arrear the bank will sent remainder
notice to the person and after that judicial action will be taken
against the defaulter. When a loan amount falls overdue the rate
of interest is increased on the amount which falls due.

67
Loans and Advances:-

Granting of loan is an important function of the bank. The


deposit of the bank is used for providing loans to its members.
The usually grant three types of loans i.e. Short term, Medium
term and Long term loans.

The interest to be charged on the loans shall be fixed by board


of directors from time to time in accordance with direction of
the RBI. The bank shall be line on share capital, dividend
deposit and any other asset of the borrowers in custody of the
bank against any loans taken by him.

A is a financial arrangements under which an advance is bank


to the borrowers. It is granted either against collateral securities
or against personal security of the members. The loan is granted
only to members and depositors on the basis of their deposit. It
is also give on the security of gold. Interest is charged on the
whole amount of loan sanctioned, loan on deposit, gold
ornaments, etc and advances are made by the discounting
negotiable instruments like cheque, bill, draft, etc can be
granted by the secretary. Sanctioning of all other loans required
the approval of Board of Directors. Following are the main loans
and advances provided by the PSCB;

68
1. Kissan credit card
2. Kudumbasree individual loan
3. Merchant loan
4. ST agricultural loan
5. Business over draft
6. Gold loan for agriculture
7. Daily deposit loan
8. PF loan
9. Gold loan business
10. Gold loan crop
11. Employee over draft
12. Mangalya suthra
13. Self help group loan
14. SC annual husbandry loan
15. Joint liability group
16. Of loan
17. Of loan mortgage
18. Consumption
19. Deposit loan FD
20. Kudukbasree linkage loan
21. Suvarna jayanthi sorosgar loan

69
TYPES OF LOANS

Loans can be classified on the basis of their period, purpose,


security, etc The term of period the loan is most acceptable
classification. According to this loans are classified into 3. They
are:-

1. Short Term
2. Medium Term
3. long Term

Short Term Loans:-

Short term loans are generally made for 12 months duration.


These type of loan is given for season agricultural operation
directed towards rising seeds, fertilizers, etcThe loans amount
to be repaid after the harvest. The loan should be provided on
personal security and the statutory charge on crops. Short term
loans are generally granted for the agricultural purpose. To
provide these short term and medium term loans bank borrow
money from the central Co. operative Bank and the state Co-
operate Bank. The main short term loans granted by the banks
are:-

70
1. Short term agricultural loan
2. Kissan credit card
3. Consumption loan
4. Daily deposit loan etc

Short term loans also called production loan. In the case of


gold loan interest shall be calculated for completed number of
days subject to a minimum of 15 days for loans closed with in
15 days for the date of issue.
Short term Loans

Year Rs. in lakhs

2005-06 88.92

2006-07 144.14

2007-08 220.03

2008-09 347.76

2009-10 393.46

2010-11 423.07

2011-12 495.42

2012-13 613.38

2013-14 768.54

2014-15 890.32
2015-16 1033.21

71
Diagram showing Short term Loans

72
Medium Term Loan:-

Medium term loans are the loans neither for short period nor
to long period. These loans are generally granted for a period
ranging from 12 months to 3 years. The banks issue only little
type of medium term loans. These loans should be provided on
personal security and statutory charge on the land. This type of
loans may be taken for the industrial and business purpose. The
loan is also called development loan.

Medium term Loan

year Rs. in Lakhs


2004-05 166.22
2005-06 41.23
2006-0 39.15
2007-08 202.41
2008-09 210.12
2009-10 204.27
2010-11 113.85
2011-12 231.60
2012-13 217.93
2013-14 150.15

73
Diagram showing Medium Term Loan

74
Long Term Loans:-

Long term loans granted above three years are termed as long
term loans. Interest to be charged shall be calculated foe
completed months and number of days subjected to minimum of
15 days.

year Rs. in Lakhs


2004-05 130.98
2005-06 140.11
2006-07 143.19
2007-08 595.35
2008-09 743.65
2009-10 1069.61
2010-11 348.45
2011-12 942.12
2012-13 952.93
2013-14 1100.32

Log Term Loans

75
Diagram showing Long Term Loans

76
Reimbursement Facility Provided by
District Co-operative Bank

The bank has no right to keep more liquid each in its cash
in its custody. The bank cannot lend loans from its owned fund
to all loanees. So the District Co-operative Bank allows loans to
the bank on reimbursement basis. It means that the after
allowing loans to loanee the bank can reimburse this amount
from District Co-operative Bank.

Procedure for Granting Loans


The member who wishes to get loans from the bank
should apply for the loan in the prescribed from, the following is
the procedure.
1. Receiving Application
2. Submitting Application
3. Loan Sanction
4.
1. Receiving Application

The first step for the granting loan is receiving


application. Application for the loan should be submitted to the
secretary in the proper form along with the documents.

77
2. Submitting Application to the District Bank

District Bank is authority to sanction the loan. After


receiving the application it is verified first and should be
submitted to the district bank for approval. If it is admissible, the
Director will prepare a statement called Director Report signed
by the concerned Director.

3. Sanctioning the Loan

Final step is sanctioning the loan, after the receipt of


Director Report the secretary will sanction the loan. After giving
the loan amount of the loan granted will be reimbursed from the
District Co-operative Bank.

Due to insufficient number of staff and inadequate


financial assistance from the District Co-operative Bank, is
unable to sanction the loan in time.

78
Recovery of Loans

It is found records that the borrowers are not refunding


the loans allowed on due date. The loan affects the normal
operations of the bank.

If the loanee fails to repay the loan amount with interest


on due date, the bank will take necessary steps to recover
outstanding dues on the loan. The following are the steps take
by the bank to recover unpaid loans.

1. Send a Demand Notice to the Loanee.


2. Registered Letter to Loanee.
3. Registered Letter to Sureties.
4. Filling the ARC (Arbitration)
5. Getting an Award of Decree and Execution of Decree.

1. Demand Notice

The first for recovering the loan is issuing demand


notice. Through this notice, bank demands to repay the loan.
The notice contains the balance of amount of loans due date and
total interest payable.

79
2. Registered Letter to Loanee

If there is no replay for Demand Notice, the next step is


to send a Registered Notice. This notice inform the loanee
about legal action to be taken the bank.

3. Registered Letter to Sureties

If there is no respond for registered letter, the bank will


send a registered letter to sureties. If the loanee fails to pay
amount, the sureties are liable to discharge the loan amount with
interest.

4. Filling ARC

After sending reminder next is to file the case before the


assistance Registrar against the loanee, who makes default. The
bank will prepare a ledger which includes all details of the loans
taken by the loanee and the Loan ledger so extracted will be
submitted to the Assistance Registrar. Assistance Registrar
verifies the loan ledger extracts and issues a summons to loanee
and if there is no response is will fill the case after giving two
months loan, for appearing.

80
5. Getting award or Decree and Execution

After filling ARC, the Assistance Registrar will issue on


order of punishment to the loanee. The bank has to wait 60 days
within which the loanee may file appeal with the Tribunal. After
the completion of 60 days, the bank has to file EP (Execution
Petition) with Registrar by remitting Rs. 50/- per file. When
decrees filed Registrar will appoint am officer, (Sales Officer) to
execute the punishment. Sales officer after issuing or demand
notice may give sufficient time for remittance of the loan.

After the completion of the time specified in the notice,


be with the presence of Secretary / Manager of the bank may
move the place where the loanee is rending, sales officer if felt
necessary, may issue another notice to loanee and if the loanee
fails to remit the monies at once, be may take steps to the
recovery of loan amount by attaching movable property. First of
all, he will prepare a list of the movable property and get
signature by two witnesses, either from the neighbour or from
any notable persons in the locality. Then after a given period, the
movable property will be realized through option and the
amount of loan may be recorded.

81
BOOK AND REGISTERS BY THE BANK

A bank should maintain all the ledger / register as


prescribed by the REGISTRAR OF CO-OPERATIVE
SOCITIES ANG RESERVE BANK OF INDIA.

1. CASH BOOK
In this daily cash receipt and payment of cash transaction
are recorded.

2. SB LEDGER
This book contains book account of individual account holders
with detailed address of account holders and balance of
accounts.

3. SAVING BANK SUBSIDIARY DAY BOOK

Daily balance of individual receipt and payment of saving bank


account is showing this registrar.
4. LOAN REGISTERS AND GOLD LOAN LEDGER

Details of loans issued to member and non-members such as the


amount issued date of issue and the address of that person are
marked in this ledger.

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5. LOAN SUBSIDIARY LEDGER

The total receipt and payment towards loan account like secured
an unsecured are recorded in the ledger on a daily basis.

6. MAIN DAY BOOK

The total receipt and payment in all types of account like


deposit, loans and other contingent heads are recorded in this
ledger.

7. DAY BOOK

It shows the actual cash transactions. It contains the day to day


receipt payment and balance of cash.

8. ATTENDANCE REGISTER

It is issued to make the attendance of the whole staff of the


bank.

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CHAPTER 6

ANALYSIS AND INTERPRETATION

84
ANALYSIS AND INTERPRETATION

Financial analysis is the process of identifying the strength


and weakness of the firm with the help of accounting
information provided by the profit and loss account and balance
sheet. It is the process of evaluation of relationship between
components part of financial statements to obtain a better
outstanding of the firms position and performance. It is a
technique of x-raying the financial positions as well as progress
of the firm. Financial analysis wills the management
considerable insight in to the level and areas of the strength and
weakness.

Interpretation means explaining the meaning and


significance of the data so arranged. It is the study of
relationship between various components of the financial
statements. The relation between current assets and current
liabilities, gross profit and sales, profit and capitals employed
etc have to be explained

85
OBJECTIVE OF FINANCIAL ANALYSIS

1. To judge the financial position (both liquidity and solvency) of


the enterprise.
2. To estimate the earning capacity of the enterprise.
3. To determine the debit capacity of the concern.
4. To decide about the future purpose of business.

Thus the ultimate objective financial analysis is to get better


insight about the financial strength and weakness of the firm.

TOOLS OF FINANCIAL ANALYSIS

A number of techniques or devices are used to undertake


financial analysis. The fundamental objectives of any analytical
method are to simplify the data to more understandable terms.
The following are the important tools used to financial analysis
are comparative financial statements, trend analysis, ratio
analysis etc...

1. Comparative Financial Statement

The charges in the financial data over a period can be


best understood if the statements of two or more years are
placed side by side to facilitate comparison. Such statements are
86
called comparative financial statements. Comparative financial
statements are two types; they are comparative balance sheet
and comparative profit and loss account.

Comparative a balance sheet indicate whether the


business is moving in the favourable or unfavourable direction.
Comparative statements become difficult to study the trend with
more two period data. In such case trend percentages are more
useful.

2. Trend Analysis

Comparing the past data over a period of time with a


base year is called trend analysis. Under this technique,
information for a number of years is taken and one year (usually
the first year) is taken us the base year. Each term of the base
year is taken as 100 and on that basis the percentages for other
years are calculated. The object of the calculating the trend
percentage is two shows the direction of the change upward or
downward. The trend percentages are generally computed for
major items in the statement.

3. Ratio Analysis

Ratio analysis is once of the most suitable tool for


analysing and interpretation of financial statements. According
to ratios are relationships expressed in the mathematical terms
between two related figures in the financial statements. As its

87
nature ratios can be expressed in terms of time of time,
percentage or proportion.

Ratios are helpful in judging financial performance of an


enterprise over a period of time. The technique of ratio analysis
is possible to test the liquidity, solvency and profitability of the
enterprises. Thus, ratio analysis gives valuable information not
only the managements but also creditors, investors and share
holders.

CALCULATION OF VARIOUS RATIOS

1. Credit deposit ratio:-

Credit deposit ratio relates all recorded deposits to


advances made by the bank. This ratio is to measure the banks
lending operations for which have been established. A high ratio
is preferable indicating that more credit lending is possible for
the bank. When the ratio is more than 100% it shows a bad
picture.

88
Credit deposit ratio = Credit / deposit * 100

Credit deposit ratio

Year Rs in Lakhs

2005-06 68.94

2006-07 70.61

2007-08 70.49

2008-09 76.89

2009-10 86.40

2010-11 77.39

2011-12 81.64

2012-13 74.16

2013-14 80.05

2014-15 82.88

89
Diagram showing Credit deposit ratio

90
Analysis

The above figure shows that the credit deposit ratio. The
loans and advances in the bank are almost equal to the deposit. It
shows a fluctuating trend in the C/D ratio.

2. Interest Ratio:-

Interest ratio established the relationship between interest


paid and interest received. Interest received includes all interest
income which is earned by the bank on various types of loans.
Interest paid is the aggregate of interest expenses which is given
by the bank on various deposits.

Interest ratio= Interest received / interest paid * 100

91
Interest Ratio

Year Ratio
2005-06 78.15
2006-07 75.12
2007-08 73.77
2008-09 64.36
2009-10 60.53
2010-11 73.89
2011-12 71.40
2012-13 84.62
2013-14 76.76
2014-15 85.12

Analysis

Interest received is increasing in a higher proportion than


interest paid. This will increase the profit of the bank.

92
Diagram showing Interest Ratio

3. Gross profit Ratio

Actually profit making is not be the objective of a co-


operative society. Even it may incur some profit, this ratio help
to evaluate the profitability of the bank. It is relationship
between gross profit and sales.

Gross profit ratio = Gross profit / sales * 100

93
Gross profit Ratio

Year Ratio
2005-06 -3
2006-07 .53
2007-08 1
2008-09 2
2009-10 2.5
2010-11 3
2011-12 3.86
2012-13 4
2013-14 4.25
2014-15 5.35

94
Diagram showing Gross profit Ratio

4. Net profit Ratio

Net profit ratio shows the relationship between net profit


and sales. It shows the operational efficiency of the bank.

Net profit ratio = Net profit / sales * 100

95
Net profit Ratio

Year Ratio
2009-10 20
2010-11 22
2011-12 25
2012-13 24
2013-14 26
2014-15 28

Diagram showing Net profit Ratio

96
5. Current Ratio

High current ratio indicates that funds are not being


economically used in the firm. There may be excessive
inventories or account received or large ideal cash balance. A
usually low current ratio indicates that the firm my have some
difficulty in paying off its debts. Conventionally, a current ratio
of 2:1 is considered satisfactory.

Current Ratio = current asset / current Liabilities

6. Liquidity Ratio

Liquidity ratio is considered to be superior to current ratio in


testing the liquidity position of a firm. Liquidity ratio gives a
better picture of the firms liquidity. A liquidity ratio of 1:1 is
considered ideal.

Liquidity ratio = Liquid asset / Liquid liabilities

97
CHAPTER 7
SUMMERY, FINDINGS, SUGGESTION AND
CALCULATIONS

98
SUMMERY, FINDINGS, SUGGESTION AND
CALCULATIONS

Summery

In the report on over all review of working KSCB is attempted.


Introduction chapter devoted to be historial review of Co-operative
moments India and in Kerala. In the second chapter, we discuss the
history of KSCB in brief. The third chapter discuss about the organisation
structure and administration of the bank. The fourth chapter describe
about the operation of KSCB with the support of various ratios and in the
fifth chapter we analyse the financial data.

Findings

The study reveals the following aspects with regard to the


functioning of the Bank.

1. The deposits, namely, fixed, saving bank and daily deposits: fixed
deposits are increased trend during period of 2006-07, 2009-10
and 2010-11 and decreasing trend during the period of 2007-08
saving bank deposits and daily deposits are showing increasing
trend during the period of 2006-07, 2010-11.
2. Gold loan disburment of the bank also showed and upward trend.
99
3. Non Agricultural Short Term Loan (NASTL) of an increasing trend during
the period of 2006-07 to 2010-11years.
4. Agriculture loan and fixed deposit loan are showing fluctuating trend
from year to year.
5. Computerisation is not properly used in the bank.
6. Daily collection of the bank is not working properly that affect daily
performance of the bank.
7. The margin of the interest received last four years is more than interest
paid in the same period. That was increase predicted in the future times.
8. The inadequate of sufficient employee and modern office equipments.
9. Legal formalities to sanction the loans are very complex.
10. Time lag between sanctioning a loan and money is too much.

Suggestion:-

For improving the performance of the bank, the following


suggestions are arise.
Bank should introduce new types of deposits for attracting the investors.
This can help the bank to improve the C/D Ratio.
Bank should give proper training to employees to meet the technical
changes.
Computerization of the bank is essential in order to reduce the waiting
time of the customer for availing the banking services.
Daily collectors of the bank should work more efficiently so it with reflect
the smoothness of the daily performance of the bank.
More persons may be appointed as staff, reducing the work load of the
employee.
The repayment of the loan is not effective in the bank. The bank should
take sure achieve the repayment of the loan in time.
Appropriate steps may be taken for reducing time delay in distributing the
loan.

100
Conclusion
The bank has in the last few years are showing a trend of
growth, it reveal a good profit position. The management and its members
provide better services to the customers. Through this poroject I can
understand the bank has an important role in the development in the
society.And is no doubt that Porur Service Co-operative Bank will have a
prosperous future.

101
COMPARATIVE TRADING AND PROFIT AND LOSS ACCOUNT OF THE BANK
FROM THE YEAR 2010-11 TO 2015-16(DEBITS SIDE)
Particulars 2010- 2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Opening 74275 76812 148257 143305 252742 462159


Balance
Purchase 4358890 4043375.06 8509414 8409565 10146847.21 10664667.

Trade charge 97730 98099 1963868 214404.35 152249.31 315188.23


Gross profit 39400.65 131577.64 244014.30 192205 136465.25 139888.12
Total 4570296 4351863.95 8978557 9061676.45 10688305.1 11581902.65
Interest due 4164307.06 4914900.64 7326107.02 9979254.25 13553394 16050972.25
Establishment 1557017 1720410 2246550 2864814.32 4188698 339149
expences
Contigencies 987614.25 1138698 1789465.25 1463595 2005432 2299288.12
Reserve over 832992 23420 200000 197296 4324.15 3250.32
due intst
Advance intst 1749768.32 638625 2151139 2500131
Bad debt 169900 3215 76236 214139 52712.25 27172.32
reserve
102
Depreciation 97175 394109 610449 328180 328570 253828
Provision for 650990 226634 242454 253870 402671.15 10158.32
gratuity
Reserve for 500000 15000000 2200000 2500000
futureloss
Gneral reserve 1700000 4000000
Provision for 6386 5828 5105
sales tax
Provision for 30498.75 8863 542 728
list defferent
Building 97200 97200 1009932
equipment fund
Reserve due 214139
Net profit 354939.59 855618.87 1029659 1317612 2404556 2386822
TOTAL 9852368.65 11138507 17692576.30 1986429 28427131 32438990.97

COMPARATIVE TRADING AND PROFIT AND LOSS ACCOUNT OF THE BANK FROM THE
YEAR 2010-11 TO 2015-16(CREDIT SIDE)

103
Particulers 2010- 2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Sales 4493484 4168505.95 8398571 8402804 9756810.2 10803965.35


Trade 328169 400302.25 469335 538626
income
Deficit 8314 5828
stock
Closing 76812 183358 243503 252742 462159 239311
stock
Total 45702296 4351863 8978557 9061676 10688305 11581902.65
G/P-b/d 39400.65 131577.60 244014.30 192205 136465 139888.12
Interest 6438813 8119224 12280680 14870115 18557229.32 24165854.25
due
Others 1883067 2758934.40 2712140 4764184 7177997.25 5865001
Provision 456676 80786 2261942 17968 2388389 2151131.25
for intst
due
Reserve for 546697 107140.25 117116.35
104
gravity
Reserve for 112600 47985 178981 21957
bad debt
List 14819 59910
different
removed
Reserve for 375115
leave salary
TOTAL 9852368.65 11138507 17692576 19866429 28427131 32438990.97

COMPARATIVE BALANCE SHEET OF THE BANK FOR THE YEAR


2010-2011 TO 2015-2016( ASSET SIDE)
ASSETS 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
105
Cash in 287882 570648 1403188 2518316 5210825 6484799
hand
Cash at 19913497 35330863 41599331 64695535 65811436 721896
bank
Investme 103700 108700 927000 927000 297700 298500
nt in
govt&oth
er public
properties
Other 865132.95 927207.95 2073507 2190960 2328195 2476587
investmen
t
Loans 61825126 76867807 107638307 129102218 169462502 216219924
&advance
s
INTST 2730887 3635086 4161903 62453558 7322703 9965168
due not t
recieved
Other 625540 1645853 1998085 2193765 1971150 1666758
assets
Movable 972995 17554171 1272740 1556106 1620422 1833579
property
106
Fixed 12100 1607854 3327548 3351558 3381558 4018859
asset
Advance 436000 967131 84186104 22750272 14965986.4 17950204
due 0
Closing 111299.28 215845.25 286305 301372.75 510790 287441.25
stock
TOTAL 118746881. 125661568. 171322198. 439317995. 261890674. 334063570.
53 59 32 27 06 96

COMPARATIVE BALANCE SHEET OF THE BANK FOR THE YEAR


2010-2011 TO 2015-2016(LIABILITY SIDE)

Liabilities 2010- 2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016


107
Authorised 1500000 15000000 1500000 1500000 1500000 1500000
capital
Subscribed 288172 2597202 276307 2792632 3231422 3759850
capital
Paid cpl 2588172 2597202 276307 2792632 323142 375985
Deposit 71559454 993201328 131842440 1740925282 211703234 261457678
Borrowing 153000 2183000 2243000 2217870 2117870 105870
Statutory 1235475 2288321 2866931 3324801 3891643 400205
reserve
Other Reserve 7714014 10113799 14491777 1805634 22013222 27704733
Fundd

Reserve for 832992 752606 1749764 2388389 2151131 2500131


interest due
Interest 2868800 2653983 3326213 4475941 5436379 7568659
Payable
Education 45875 43581 40000 40000 80000 80000
Fund

108
Advance Due 20207629 3144716 8558841 2325547 4636966 18613952
by
Other 9711076 1477889 1976120 227605550 3341923 2888011
Liabilities 5
Un 1478452 230710 430145 680761 882326 2597659
Distributed
profit
Net Profit 351939 855618 1029659 1317612 2404556 2386822
TOTAL 118746881.53 125661568. 171322198. 439317995 261890674. 334063570.0.96
59.59 32 .27 06

109
ABBREVIATION

PSCB = PORUR SERVICE CO OPERATIVE BANK

KSCB = KERALA STATE CO-OPERATIVE BANK

SB = SAVINGS BANK

110
111