September,2013
MACAURO
January 2016
A STUDY ON
SERVICES AND CHALLENGES OF
URBAN CO-OPERATIVE BANK
Smt.Veena P*Smt. Namrata Rani K**
INTRODUCTION
Urban Co-operative movement in India was begin to the close
of nineteenth century, which was inspired by the success of co-
operative movement in Britain & Germany. Co-operative
societies are based on the principles of co-operation, open
membership, mutual help. Co-operatives emerged as a new &
alternative approach to organization as against sole trading
concerns, joint stock companies, commercial Banks which
represent the dominant form of commercial organization.
Urban Co-operative Bank refers to primary co-operative banks
located in Urban & semi-urban areas. It is heterogeneous
character and its uneven geographical spread with most banks
concentrated in the states of Gujarat, Karnataka, Maharashtra
and Tamil Nadu. These banks till 1996 were allowed to lend
money only for non-agricultural purposes and these banks were
traditionally centered around communities, localities work
place groups & they used to lent to small borrowers and
businesses. But today their scope of operations has widened
considerably. Recently the problems faced by a few Urban Co-
operative Bank have highlighted some of the difficulties these
banks face and policy Endeavours are geared to consolidating
and strengthening this sector and improving governance. This
study has mainly conducted in one of Urban co-operative Bank
named Citizen Co-operative Bank which is located in
Rajajinagar and established on 1974 with the motive of service
which is today regarded as one of the customer friendly bank as
compared to other commercial & private banks as it has
adopted customized services for attraction & retention of
customers and through some of the strategy it is successfully
facing the challenges in competitive era. With growing
professionalism, Citizen Co-operative Bank has been showing
signs of good improvement.
NEWSLETTER TO EDUCATE AND EMPOWER
Volume I
OBJECTIVES OF THE STUDY
To analyse the problems faced by Citizen Co-operative
Bank
To study the strategies adopted by CCB for customer
attraction & retention.
To know the customer satisfaction with services of Bank
STATEMENT OF THE PROBLEM
Earlier studies on this topic have been mainly focused on Co-
operative Banks in general. This study mainly focuses on one
particular Urban Co-operative Bank i.e Citizen Co-operative Bank,
as some of these banks are under profit some are not managed
properly & facing difficulties, even though all co-operative bank
transactions are regulated by RBI, as each Bank has got different
management.
Research Methodology
Sources of Data: Both primary and secondary data has been used
for the study.
Primary Data: Primary information has been gathered through
questionnaire to customers and personal interaction with the
Manager of The Citizen Co-operative Bank.
Secondary Data: Annual report of Citizen co-operative Bank 2013-
14 & website
Sample size: Information related to study has been collected from
40 respondents
Sample Unit: Survey has been conducted in and around Citizen co-
operative Bank, Rajajinagar, Bangalore.
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COVER ARTICLE
2. Table showing the income level of respondents
Sampling Method: Respondents are selected by using Random
Sampling method
Income No of Percentage
groups respondents
Tools & Techniques: The Data collected are analysed & interpreted High 05 12.5
by using simple percentage, tables & graph to draw meaningful income
conclusions Middle 20 50
income
Limitations of the study Low 15 37.5
Sample size was limited to only 40 respondents income
Time constraint TOTAL 40 100
DATA ANALYSIS AND INTERPRETATION Source: Primary Data survey 2014

1. Table showing the age of the respondents

2.1 Chart showing the income level of respondents
Age No of Percentage
group respondents

20-30 10 25%
30-40 20 50%
40-50 8 20%
50-60 2 5%
Total 40 100%
Source: Primary Data survey 2014 Source: Primary Data survey 2014

1. 1 Chart showing the age of the respondents Inference: We can infer that 50% of respondents are middle
income group and only least number of respondents belongs to high
income group.

3. Table showing whether customers are satisfied with the

services of Citizen Co-operative Bank.

Particulars No. of Percentage

Respondents
Highly 30
Satisfied 75%
Satisfied 10
Source: primary Data survey 2014 25%
Not Satisfied --

Inference: From the above table and graph, we can infer that Total 40
majority of the respondents are between the age group of 30-40. 100%
Source: Primary Data survey 2014
 -3-

3.1 Chart showing whether customers are satisfied with the

services of Citizen Co-operative Bank. 5. Table showing Customer attraction & retention
strategy adopted by Citizen Co-operative Bank.

Particulars No. of Percentage

Respondents
High rate of interest 05 12.5%
on Deposits
Membership 25 62.5%
Facilities
Insurance on deposits 04 10%
Rebate on Regular 03 7.5%
Payment
Source: Primary Data survey 2014 Quick service 03 7.5%
Total 40 100%
Inference: We can interpret from the above table that 75% of the
respondents are highly satisfied and 25% of the respondents are Source: Primary Data survey 2014
satisfied with the services of the CCB and not even single respondents
without satisfaction. 5.1 Chart showing Customer attraction & retention
strategy adopted by CCB.
4. Table showing whether customers feel, Citizen Co-operative
Bank is a customer friendly compared to other Banks.

Particulars No. of Respondents Percentage

Yes 38
95%
No 02
5%
Total 40 100%

Source: Primary Data survey 2014

Inference: We can interpret from the above table that 95% of the
respondents agree that CCB is customer friendly bank as various
customized schemes are adopted for the benefits of customers. Only a
small i.e 5% of respondents do not agree with this.
Source: Primary Data survey 2014
Inference: We can interpret from above table & graph that
one of the major strategy adopted by bank for customer
attraction & retention is open membership facility where
62.5% of respondents agreed with this.
 -4-
6.Table showing Major Challenges to Citizen Co-operative FINDINGS:-
Bank
Cash Reserve Ratio has been increased from 3% to 4%
Particulars No. of Respondents Percentage Statutory Liquid Assets have been reduced from 25% to
Competition 20 50% 22.5% but it should be invested in Govt.Securities, which
RBI Policies 10 25% is subject to market risk.
Debt Recovery 05 12.5% Severe competition from Private and Commercial Banks
Lack of 05 12.5% Tax exemption limit has been cancelled for members
assistance Advance Income Tax @ 33% since 2006, no solution
from Only RBI inspection from Central Govt. No other
Central/Stat assistance
Govt. Once in a year Annual General Meeting is conducted with
the members
Total 40 100%
Managing body of each bank can fix salary and other
Source: Primary Data survey 2014 benefits to their staff
RBI regulates the transactions of the bank & Registrar of
6.1 Chart showing Major Challenges to Citizen Co-operative Co-operative societies monitors the administration of
Bank Bank
Freedom in fixing the rate of interest on Deposits and
Loans
Bank works in the morning & evening time for the
convenience of working class
Present number of members are 9000 and customers are
20000 approximately
Dividend will be proposed by BOD and it will be
finalized in AGM
Membership facilities is the exclusive service provided
only in co-operative banks.
The bank has got excess of income over expenditure
Most of the customers are highly satisfied with the
services of the bank
Services provided are:-
Source: Primary Data survey 2014
Medical facilities, Death fund, gold loan,
property loan, dividend, voting rights, reward
Inference: 50% of the respondents accepts facing competition is
for children of members
the major challenge, 25% of the respondents agree that RBI strict Services in general, issue of bus pass for govt.
policy and 12.5% of respondents accepts that debt recovery
school students, 1% rebate on regular payment,
problem and lack of assistance from Central government.
insurance on deposits, Attractive rate of interest
on Deposits, Benefits to senior citizens,
7. Table showing whether bank is facing Challenges donations for religious activities, safe Deposit
successfully. locker facilities etc.,
SUGGESTIONS
1. Central & State Govt. should provide support to the growth
Particulars No. of Percentage of Urban Co-operative Banks, as it is established with the
Respondents service motive
Yes 40 100% 2. Tax relaxation should be given to the members as it was in
No 0 0% the earlier
3. While granting loan, bank should take sufficient securities
Total 40 100 in order to avoid problems of recovery.

Source: Primary Data survey 2014

Inference: we can analyze from the above table that bank is

able to face the challenges successfully.
 -6-

SUGGESTIONS
4. Central & State Govt. should provide support to the growth
of Urban Co-operative Banks, as it is established with the
service motive
5. Tax relaxation should be given to the members as it was in
the earlier
6. While granting loan, bank should take sufficient securities in
order to avoid problems of recovery
7. In addition to existing schemes, innovative beneficial
schemes has to be implemented for attraction & retention of
customers
8. Facilities provided to the staff members such as Exgratia,
medical facilities etc to be extended to increase the
efficiencies.
9. Liberalization in fixing rate of interest on deposits & loans
has to be properly utilized, as it is an opportunity in a
competitive era.
10. RBI should make a provision for Statutory Liquid Asset
investment in Apex Bank instead of Govt. Securities as it is
subject to market risk.
11. In the interest of society and to gain goodwill, social
responsibility activities to be continued and to be extend to
various sections of the society.
Current Affairs
The year began on a high with United
States President Barack Obama officiating
as the chief guest at the Republic Day
parade.
In a landmark judgement upholding
freedom of expression, the Supreme Court
on Tuesday struck down a provision in the
cyber law which provides power to arrest a
person for posting allegedly "offensive"
content on websites. Terming liberty of
thought and expression as "cardinal", a
bench of justices J Chelameswar and R F
Nariman said, "The public's right to know
is directly affected by section 66A of the
Information Technology Act."

CONCLUSION
We can conclude that Inspite of severe competition from Private
banks and commercial banks and other problems related to the
policies of RBI, Citizen Co-operative Bank by adopting various
strategy in providing Membership facilities & other Services to
the customers ,is able to attract and retain the customers and it is Newsletter will be uploaded on to the
successfully facing challenges and making profit every year and web every fortnight. We invite readers
also able to give attractive dividend to its members and bonus to contribution in the form of articles or
staff along with this it is also undertaking various activities for short essay on topics relating to
the well being of the society which is really appreciable. As these
banks have a distinct advantage and play greater role in different commerce and management. E-mail the
ways should be supported by the Central Government. With soft copy of the same to
growing professionalism, financial position of Urban co- macauro13@gmail.com by 5 and 20th
th

operative Banks has been showing signs of good improvement. of every month.
With this, the Reserve Bank of India should allow greater
freedom and support for the development of the Urban co-
operative Banking sector. Feel free to give suggestions, opinions
and reactions to any of the article
published.

Contact Media Team for any further

information.

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