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A report on ORGANISATION STUDY at

JHARKHAND GRAMIN BANK

Submitted in partial fulfilment of the requirement of


Master in Business Administration Programme
offered by JAIN (Deemed-to-be University)
during the year 2018-19

By
SHUBHAM RAJ
Reg. No: 18MBAR0457
Semester: 2 Section: MH-1

Under the guidance of


Dr. PERIASAMY P.
Professor, CMS Business School

No.17, Sheshadri Road, Gandhi Nagar, Bengaluru – 560 009, India


Tel: +91 8046840400
E-mail: bschool@cms.ac.in, Website: bschool.cms.ac.in

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CERTIFICATE BY THE DEAN

Certificate

Awarded to Shubham Raj. This is to certify that the


Organization Study / Report entitled Jharkhand Gramin Bank:
Role in Rural Development has been submitted in partial
fulfilment of the requirement for the award of Master of Business
Administration of JAIN (Deemed-to-be University).

Date:
Place: Dean – Academics
CMS Business School

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MENTOR CERTIFICATE

Date:

Certificate

This is to certify that this Organization Study Report on


Jharkhand Gramin Bank: Role in Rural Development is a
record of the original and independent work carried out by
Shubham Raj under my guidance and supervision.
This report has not previously formed the basis for the award of
any Degree / Diploma or other similar Title or Recognition.

Date:
Place: Mentor Signature

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Declaration

I, hereby declare that this Organization Study Report on


Jharkhand Gramin Bank is prepared by me during the
academic year 2018-19 under the guidance of Dr. Periasamy P.
This report is not based on any previously submitted project for
the award of any Degree or Diploma offered by any University.
It is the result of my own effort.

Name: Shubham Raj


Sem: 2nd Section: MF-1
Reg. No. : 18MBAR0457

Date:
Place: Signature

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ACKNOWLEDGEMENT

First and foremost, I offer my sincerest gratitude to our Dean, Jain University, for his academic
support and the facilities provided to carry out the project work at the institute. His wide vision
and concern for students have been inspirational.

I take this opportunity to express my profound gratitude and deep regards to my mentor Dr.
Periasamy P for his exemplary guidance, monitoring, and constant encouragement throughout the
course of this project

I also take this opportunity to express a deep sense of gratitude to Mr. P.K. Barnawal(Manager,
Credit and Audit), the Regional Manager, Giridih region for their support, valuable information,
and guidance, which helped me in completing this task through various stages. I owe my
wholehearted thanks and appreciation to the entire staff of the organization for their cooperation
and assistance during the course of my project.

I also extend my thanks to my friends who supported me in collecting the secondary information
from various sources.

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TABLE OF CONTENT

1.1 Introduction to Organization Study 8

1.2 Objective 8

2. Chapter 1: Industry Profile 9-27

2.1 Origin of the Industry 10-12

2.2 Growth and Present Status 12-14

2.3 Global Scenario 14-15

2.4 Key Players in the Industry 16-18

2.5 PEST Analysis 19-23

2.6 Porter’s Five Force Model 24-27

3. Chapter 2: Company Profile 28-38

3.1 Background and History 29

3.2 Vision and Mission 29-30

3.3. SWOT Analysis 30-32

3.4 Product Profile 33-34

3.5 Market Share 34

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3.6 Present Status 34-35

3.7 Future Plans 36

3.8 Balanced Score Card 37-38

4. Chapter 3: Organization Design 39-41

4.1 Board of Directors 41

5. Business Level Functions/Processes 42-47

5.1 Departments 44-46

5.2 Inter-relationship among departments 47

6. Findings/ Conclusion/Recommendation/Learning Outcomes 48-53

6.1 Findings 49-50

6.2 Conclusion 51

6.3 Recommendation 52

6.4 Learning Outcomes 53

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INTRODUCTION TO ORGANIZATION STUDY

Organization Study is a programme and also, part of MBA curriculum that helps the students learn
and understand the practical use of all management principles and theories by connecting with
companies, organizations or firms.

It allows the student to apply their classroom learning knowledge into real life business processes.
Student has to approach an organization and an extensive study of the organization is to be done
and understand its functional areas and how all those functions align together in order to realize
its common goal and objectives.

Organization Study, in fact, is a learning experience for the student and gives an early insight into
the corporate world before actually entering into one of those.

In this Organization Study Report, the organization chosen is JHARKHAND GRAMIN BANK,
which is a regional rural bank and operates in 15 districts of JHARKHAND.

From now on, the emphasis will be on the above mentioned bank and how it functions in the real
economy and what role does it play!

The OS will constitute of five chapters which will elaborate on the (a) industry in which it exists;
(b) organization’s own profile; (c) its structure; (d) its business functions and; (e)
findings/observations/suggestions/learning outcomes.

OBJECTIVE
 To understand the structure of the organization.

 To understand the decision-making process in the organization.

 To learn about the banking industry in detail.

 To understand the financial position of the bank by using various financial ratios.

 To know the various departments and how they work together.

 To know the strength and weaknesses of the organization.

 To learn about the establishment of regional rural banks

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-CHAPTER ONE-
Industry Profile

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Jharkhand Gramin Bank, is a financial institution which is an integral part of the Indian Banking
Industry and also an important part of the Indian economy.

Broadly speaking, Jharkhand Gramin Bank(JGB) is a Regional Rural Bank(RRB) which is a subset
of the banking industry and concerns mainly in the development of rural economy by providing
banking facilities to them.

Before understanding the origin and role of RRBs in the Indian economy; the origin and growth
of the banking industry is explained as a whole and how it has shaped the economic growth and
development of the country.

 ORIGIN OF THE INDUSTRY

In India, banks originated around


late 18th century, that is more than
200 years.
The first bank in India is supposed
to be Bank of Hindustan which was
established in 1770 and liquidated
after around 6 decades(1829-32);
and General Bank of India, being
established in 1786 but only to fail
after 5 years in 1791.
The then Presidency Government
merged three banks namely, Bank
of Calcutta, Bank of Bombay and
Bank of Madras into one in 1921
which was named as Imperial Bank
of India which post-independence
was renamed as State Bank of India
in 1955, which still exists as the
oldest bank operating in the
country.
The three banks merged, acted as
quasi-central banks until a separate entity was established in 1935, the Reserve Bank Of
India, under the Reserve Bank of India Act, 1934.
All the regulatory decisions regarding the banks operating in India started being governed
by the 2nd schedule of RBI Act and such banks were called as scheduled bank.

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Over the time, many commercial banks and cooperative banks were established under the
RBI Act. Commercial banks were again sub-categorized as foreign banks, regional rural
banks, public sector banks(27) and private sector banks(30).

In 1959, 7 subsidiary banks were nationalized as one in the SBI and in 1969, second major
nationalization took place in which 14 major banks were nationalized which constituted
70% of total deposits in India. The main purpose of the nationalization was to bring the
unstructured and unregulated banking system into a proper regulation for better
accessibility, funds mobilization, balanced regional growth and financial expansion.

In the coming years, the nationalization resulted into:


1. Growth in number of customer base.
2. Reach of banks in different regions.
3. Improved banking services.
4. Increase in employment opportunities.

Even after the nationalization, there were certain regions or sectors which could not avail the
banking facilities. So, in 1975, the Narshimham Working Committee recommended to the then
Government, to include the rural areas into the main economy of the country as 70% of the
population was constituted of the rural orientation. The need arouse to provide:

1. Banking facilities to rural and semi-urban areas.


2. Carry out government operations like disbursement of MGNREGA
workers’ wages, distribution of pension, etc.
3. Para-banking facilities such as locker facilities, debit and credit card
facilities.
4. Small financial banking.

Regional Rural Banks are regulated and supervised under RRB Act, 1976 by the authority board
NABARD(National Bank For Agriculture & Rural Development). The importance of RRBs was
immense in balancing the national economy as it focused mainly in the rural parts of the country.

Regional Rural Banks are also called Gramin Bank are give the status of scheduled banks and is
empowered to undertake all types of banking business as defined in Section 5(b) of Banking
Regulation Act, 1949. These banks operate at the regional level in different states. The RRBs are
owned by the Central Government, State Government and the Sponsor Bank(any commercial
bank). The ratio in which the ownership is shared among them:

 Central Government- 50% of the total shares.


 State Government- 15% of the total shares.
 Sponsor Bank- 35% of the total shares.

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The role of sponsor banks is of great importance for the growth of RRBs. They’ve been given
responsibilities to assist the RRBs in managerial and other staff assistance functions and also to
provide provision for financial assistance.

In the past, banking industry has seen a vast growth in the Indian economy and is still undergoing
major changes with the introduction of digital banking and all such technology aided facilities.

 GROWTH AND PRESENT STATUS

The banking industry has become stronger and has withstood many reforms in the past few
decades, such as nationalization of banks, liberalization of economic policies allowing the
private and foreign banks to operate in the country without the restraints and technological
innovations.
In the recent years, it has undergone many changes which has made it easier for both the
bank and its customers for easy transaction.
Introduction of internet banking, ATM services, telebanking, etc brought in the major
changes in the banking system.

The above provided picture has depicted the market size growth of different banks in US$
billion for the past five financial years and the interest income growth for the same period.
It also has depicted the sector composition of various banks in India.

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The CAGR also has taken a toll in the recent years and has shown a profitable trend in both credit
and deposits.

The NDA government took the charge in May 2014 and introduced many schemes and
programmes in its tenure such as Pradhan Mantri Jan Dhan Yojana(PMJDY), Atal Pension Plan,
Pradhan Mantri Jeevan Jyoti Bima Yojana, etc.

PMJDY aimed at expanding and making affordable access to financial services such as bank
accounts, remittances, credit, insurance and pensions. Under the scheme, 15 million new bank
accounts were opened on its inauguration.

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 Pradhan Mantri Jan Dhan Yojana became an instant success and it geared the market size
dramatically. The table below shows the statistics as on 28 November 2018 (in crores) :

Number of Accounts
Number
Bank Type Balance in Accounts
of RuPay Cards
Rural Urban Total Female

Public
Sector 14.52 12.36 26.88 14.14 ₹67,407.78 21.70
Banks

Regional
Rural 4.61 0.85 5.47 3.00 ₹14,539.99 3.75
Banks

Private
0.62 0.42 1.04 0.55 ₹2,389.60 0.97
Banks

TOTAL 19.75 13.63 33.38 17.69 ₹84,337.37 crore(US$12 billion) 26.42

The present setback banking industry has seen is the rise in NPAs(Non-Performing Asset) which
has decreased the efficiency of the banks as the level of return on its asset has declined vastly.

NPAs do not only result into fall in generation of income but the banks also have to create provision
for such bad debts from their current profit.

 GLOBAL SCENARIO
Indian government opened the doors for foreign banks in India when the Narsimha Committee
brought LPG , i.e. liberalization, privatization and globalization to India. It attracted many foreign
banks to invest in India as the government eased the policies.

RBI policy towards presence of foreign banks in India is based upon two cardinal principles viz.
reciprocity and single mode of presence. By reciprocity and single mode of presence. By
reciprocity, it means that overseas banks are given near national treatment in India only if their

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home country allowed Indian banks to open branches there without much restrictions. By single
mode of presence, it means that RBI allows either of the branch mode or a wholly owned subsidiary
(WOS) mode in India.

Currently, in India, there are 40 foreign banks operating as representative offices. Most foreign
banks in India are niche players, i.e. they target only to a smaller segment of the market. Their
focus mainly stays on trade finance, external commercial borrowings, wholesale lending,
investment banking and treasury services.

According to data, there are totally 159 branches of public sector banks operating in foreign soil,
out of which 41 branches were in loss in FY2016-17. This has led to the process of closing of
around 70 branches in foreign countries which would take place in the year FY2018-19. Earlier
also, there were 35 branches that were closed or rationalized in order to attain efficiency.

State Bank of India has the most number of branches in foreign countries closely followed by Bank
of Baroda and Bank of India. The state-owned banks have the largest number of branches in the
UK (32) followed by Hong Kong and the UAE (13 each) and Singapore (12).

State Bank of India Overseas Branches Latest Update(Source: Internet)


Overseas Location Closure Date

SBI Paris Branch 30 September 2018

SBI Tianjin (China) Branch 30 September 2018

SBI Jeddah (Saudi Arabia) Branch 30 June 2018

SBI Muskat (Oman) Branch 31 March 2019

SBI Jaffna (Sri Lanka) Branch 30 September 2018

State Bank of India (Botswana) Ltd 31 March 2019

SBI London Converted Into Subsidiary

In a similar fashion, other banks’ branches are also to be closed, rationalized or to be converted
into subsidiary.

However, many foreign banks operating in India also pulled out from the Indian market due to the
push for more digital banking.

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 KEY PLAYERS IN THE INDUSTRY

As per the understanding of industry, it is clear that it is a group of


companies/firms/organizations that fulfill the same or similar needs and wants of their
customers. Hence, the banking industry serves its customers by providing banking facilities
such as deposits, financial assistance, and all such financial solutions.

Banking industry is comprised of many banks and leads the Indian economic system. Some of
them are large as well as small. Some of them are as old as a century and some of them have
been incorporated in a decade or so.

As of now, there are 22 Public Sector Banks, which was earlier 27 in number but after the
merger of SBI subsidiaries into SBI recently, those subsidiaries ceased to exist and also a new
bank was created in September 2018, India Post Payments Bank. Again, Dena Bank and Vijaya
Bank is being merged into Bank of Baroda which will reduce the number of PSBs in India.
Apart from the PSBs, there are private banks, foreign banks and regional rural
banks(commercial banks) and cooperative banks.

Some of the key players in the Public Sector Banks, who are the part of this vast industry, and
have influence on the industry at large are:

1. Andhra Bank – Andhra Bank was established on 20 November 1923 in Hyderabad,


Telangana. Genius and freedom fighter, Pattabhi Sitaramayya, founded this bank.
2. Allahabad Bank– Allahabad Bank was established on 24 April 1865 in Kolkata, West
Bengal.
3. Bank of India– Established on 7 September 1906 in Mumbai, Maharashtra. The government
has a stake of 64.4% in this bank.
4. Bank of Baroda– This bank was established on 20 July 1908 in Vadodara Gujarat. The
Maharaja of Baroda, Maharaja H.H. Sir Sayajirao Gaekwad III, founded this bank.
5. Bank of Maharashtra– The Bank of Maharashtra was started on 16 September 1935 in Pune,
Maharashtra.
6. Corporation Bank– Corporation Bank was set up on 12 March 1906, in Mangalore,
Karnataka. The government of India has a 100% stake in this bank.
7. Central Bank of India– Established on 21 December 1911 in Mumbai, Maharashtra.
8. Canara Bank– Canara Bank was set up on 1 July 1906 in Mangalore, Karnataka.
9. Dena Bank– This bank was established on 26 May 1938 in Mumbai, Maharashtra.
10. Indian Overseas Bank– Indian Overseas Bank was set up on 10 February 1937 in Chennai,
Tamil Nadu.
11. Indian Bank– Established on 15 August 1907 in Chennai Tamil Nadu, the government has a
share of 81.51% in this bank.

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12. IDBI Bank– Set up on 1 July 1964 in Mumbai, Maharashtra, IDBI Bank is one of the most
popular banks out there currently.
13. Oriental Bank of Commerce– Oriental Bank of Commerce was established on 19 February
1943 in Gurgaon, Haryana.
14. Punjab National Bank– Punjab National Bank or PNB as popularly known amongst people
was set up on 19 May 1894 in New Delhi. Lala Lajpat Rai and Dyal Singh Majhithia founded
Punjab National Bank.
15. Punjab & Sind Bank- This respective bank was established on 24 June 1908 in New Delhi.
16. Syndicate Bank- Established in 1925 in Bengaluru, Karnataka, the Syndicate Bank is
considered as one of the most trustworthy banks in this country.
17. State Bank of India- State Bank of India is the oldest bank in this country and the name says
it all. Almost every Indian citizen has an account is this bank which was established on 2 June
1806 in Mumbai, Maharashtra. Rajnish Kumar is currently serving as the chairperson.
18. United Bank of India- Set up on 1950 in Kolkata, West Bengal.
19. Union Bank of India– Union Bank of India was set up on 11 November 1919 in Mumbai,
Maharashtra.
20. UCO Bank– This bank was established on 6 January 1943 in Kolkata, West Bengal. It was
founded by Ghanshyam Das Birla.
21. Vijaya Bank– Established on 23 October 1931 in Bengaluru, Karnataka.
22. India Post Payments Bank– This bank was set up on 1 September 2018 in New Delhi, and
the government has a 100% stake in it.

However, the largest banks’ ranking as per their market capitalization is:

a. State Bank of India


b. ICICI Bank
c. HDFC Bank Ltd.
d. Punjab National Bank
e. Bank of Baroda
f. Axis Bank Ltd.
g. Canara Bank
h. Bank of India
i. IDBI Bank
j. Central Bank of India

These are the banks from both public sector and private sector banks.

The organizations' environment is influence by both internal and external environment.

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An organization's performance is highly related to the internal environment. However, while
internal environment deals mainly with the organization and it’s internal characteristics, external
environment deals at the macro level which consists of the impacts of political, economical, social,
technological factors. When such study is carried out, it explains not only how an organization is
affected but also explains how the whole industry is affected by such changes.

To understand the impact of external factors, there are theories which help to study and understand
the faces which affect the industry. Tools used are PEST Analysis and Porter’s five force analysis.

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 PEST ANALYSIS

PEST analysis, as understood is the analysis of the external macro-environment that affects the
firms in an industry.

Each organization should conduct PEST analysis in order to understand the factors that influence
them. Though it is carried out by the firms individually, it is still macro in approach and covers the
entire industry for the analysis.

PEST is abbreviated for Political, Economic, Social and Technological. Firms study these areas
in order to see what are the political influences in the industry, what is the economical situation
playing in the market, what social factors are or may affect the industry and what technologies are
coming in the market that may have potential to gain core competence from that of its competitors.

The figure below briefly tries to summarize what PEST analysis is:

Now, as the study being carried out is for banking industry, the attempt is made so that the
concepts of PEST analysis align with the banking industry.

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POLITICAL FACTORS
1. Pradhan Mantri Jan Dhan Yojana became a ‘Herculean Task’. After the Prime
Minister first announced the scheme, every bank was given a six-month period to meet a
specified target. To complete this mission in the challenging time of six months “was a
Herculean task” which some saw as a burden on the banks, especially the government-
owned banks, Rakesh Sethi, former executive director of Union Bank of India said in an
interview. State-owned banks, he said.
State-owned banks, he said, have lived up to the government’s expectations by opening 78
percent of Jan Dhan accounts, while 19 percent were opened by cooperative banks and a
meagre 3 percent by private sector banks, Sethi added.
2. All such schemes like Pradhan Mantri Jeevan Jyoti Beema Nigam, Atal Pension
Yojana(National Pension Scheme), etc had the banks busy all the time and banks felt the
pressure with each new schemes coming from the government in very short span of time.
3. Demonetization- was the withdrawl of all the 500 and 1000 rupees notes from circulation.
The banks had to play the most major role in collecting back the old notes and also
exchanging the old notes with the new ones.
Demonetization gave the economy a backlash as it created a ruccuss in the economy which
resulted into cash crunch. The demand for the cash went higher but the supplies weren’t
upto mark. As a result, the economic growth was slowed down.
Banks became overcrowded because of the high demand and the deadline to replace all the
notes by 31st December 2016. Although, the date was extended later but yet, the overall
economy of the country as well as the cash requirement of the banks were hindered. It
affected the main functionalities of the banks.
4. Linking of Aadhar- The Reserve Bank of India (RBI) had made it mandatory for lenders
to link bank accounts with the 12-digit ID. However, a few weeks before that cut-off
date, the order was struck down by the Supreme Court. But overzealous banks’ self-
imposed deadlines were further advanced, spelling trouble for customers.
Unique Identification Authority of India (UIDAI), which manages Aadhaar had
aggressively pushed banks forward in this enrollment drive.
To some, it was helpful in lending money as it reduced the verification process as it
provided all information regarding the customer.
5. Waivers to Farmers- The ruling government in Chhattisgarh, MP and Rajasthan have
waived the farmers’ loans due to which lending would freeze for agriculture in the coming
quarter as banks stare at a jump in non-performing assets and disruption in repayment
cycle.
“If banks don’t get repayment of loans, where will funds to lend for the next cycle come
from?” said a banking official, pointing that states going in for the loan waivers do not
make an upfront payment of the total loans due.

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Earlier in 2017 also, Maharashtra, UP and Punjab also raised waivers which is yet under
implementation. Karnataka also raised waivers earlier in 2018 due to which the total NPAs
has increased and has resulted in the poor performance figures of the banks.

ECONOMIC FACTORS: It can be said that the banking industry and the economy are
interrelated, or complementary.
It is good to understand that banking industry’s health is dependent on the overall economic
growth of the nation. Likewise, economic growth is largely dependent on the operations of
banking industry. This interdependency makes it clear that large amount of the nation’s
wealth is affected by the operations of the bank, which eventually is affected by the
economic reforms in the country.

1. Monetary Policies: Any changes in the Repo Rate, Reverse Repo Rate, CRR, SLR,
etc impacts the banks because it changes the bank’s position to do business. For
instance, Repo rate is an interest rate at which the Reserve Bank provides overnight
liquidity to banks against the collateral of government and other approved
securities. Recently RBI lowered the repo rate to 25 bps i.e. 0.25% in its 6 member
Monetary Policy Committee. Earlier the repo rate was 6.5% but after lowering the
rate, it became 6.25%. It will allow the small businesses for availing credit at an
affordable rate. So the asset part of the bank may see an increase in facilitating
loans.
2. Inflation: The banks are inversely effected with higher inflation rate as the value
of money increases and so it the purchasing power. The banks still have to provide

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interest which in turn increases the cost. Recently, the inflation rate is has come
down to 2.19% which is again very low as the average should be somewhere
between 3-4%. And the action taken by RBI to cut the repo rate is an effort to
increase the inflation.
3. Gross Domestic Product(GDP): GDP and banking sector are related in a way that
GDP and the economic growth is more related to the banking sector rather than the
banking sector on GDP.
4. Nationalization of banks: Time and again, private banks were nationalized in
order to facilitate the basic banking services to the common people of the country
and to drive the focus from profit motive to social banking which revolutionized
the whole banking industry. It gave scope for priority sectors and their
development, lending loans to those sectors and creating employment
opportunities. It also gave the government hands on in regulating the private banks.
It also gave the govt. a platform to implement its welfare schemes through the
scheduled or nationalized banks.

SOCIAL FACTORS: The social factors are very dynamic in nature as it changes in a
shorter duration. Lifestyle of people change with change in their economic status as they
can buy better things because of availability of money. Employment growth also results in
changes.

1. Lifestyle: As and when time has passed by, the lifestyle of people has changed, i.e. the
way people conduct themselves in terms of their standard of living, and the way they
conduct themselves. It has affected the banking industry as people have chosen the
contemporary way of doing the banking activities rather than the traditional way of
going to bank for carrying out any banking transaction. It’s the change in lifestyle that
has brought the concept of mobile banking and internet banking that has reduced the
number of customers going to a physical location and hence giving the employees
sufficient time to ponder into its other activities.
2. Population Density: India’s population density is so high that banks are expanding
their reach so that the customers are provided with ease to connect with the banks and
banks also can reach to different set of customers with ease.
3. Financial Literacy: The financial literacy of the country has improved and people
have understood the importance of savings and investment. Government intervention
has also encouraged public to put their monthly savings into banks which would
provide stability in the financial system. People now understand the different products
and services that banks provide unlike in the earlier decades where customers barely
knew about all the products offered by the banks. This has created a need to diversify

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the operations to a large extent by creating employment opportunities in various
banking departments.
4. Priority sectors: Priority Sector Lending is an important role given by the Reserve
Bank of India (RBI) to the banks for providing a specified portion of the bank lending
to few specific sectors like agriculture and allied activities, micro and small enterprises,
poor people for housing, students for education and other low income groups and
weaker sections. Banks are focusing on lending to those sectors more and more to
maintain the urban-rural balance.

TECHNOLOGICAL FACTORS
1. Core Banking System(CBS): CBS refers to the software applications for recording
transactions, storing customer information, calculating interest and completing the
process of passing entries in a single database. The information were centralized so that
a customer’s information can be accessed from any branch. Syndicate Bank was the
first in many PSBs to introduce this system which also created a base for the future of
the banking system. It allowed the customers to access their bank account and initiate
transactions through internet banking, mobile banking, ATM, etc.
2. Internet Banking: This facility gave the transition banking sector needed. The
increasing demand of banking products was giving tough task to the bankers in
handling the number of customers coming for even the smallest transaction. Internet
banking offered ease of access, round the clock transaction, security, etc.
3. Unified Payment Interface: UPI is another leaf in the many technological advances.
It has revolutionized the total system of how payments are made. Government has also
provided with platform named BHIM which allows its user to link their bank with the
UPI and transfer or receive money in real time without much hassle. Many private
organizations have also introduced UPI system in their applications like Google Pay,
Paytm, PhonePe, etc.
4. Debit & Credit Cards: These cards have allowed the customers to withdraw money,
pay utility bills, online shopping, etc. at any point of time.

All these factors have eased the banking activities but yet there are some loopholes which
for which regulations are revised time to time.

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 PORTER’S FIVE FORCE ANALYSIS
This theory is mainly used for strategic purpose and to understand who are a firm’s potential
or existing threats or what can affect its efficiency. An attempt is made to understand what this
theory means and how it can be related to the banking industry and how it affects the
organizations that form part of any industry.

Furthermore, implications of Porter’s Five Force Analysis will be analyzed for the banking
industry and the organization under study.

The strongest competitive force or forces determine the profitability of an industry and so are
of greatest importance in strategy formulation. For instance, even a company with a strong
position in an industry unthreatened by potential entrants will earn low returns if it faces a
superior or a lower-cost substitute product.
Fundamentally, this tool is to understand the competitiveness of the business environment.
When an organization understands all the forces in the environment, it’ll be able to manage the
strategy properly.

Michael Porter introduced the five forces model in the year 1979 which became one of the
most popular and highly regarded business strategy tools. It helps in examining what other
factors could impact the business environment apart from the actions of the competitors.

The five forces are competitive rivalry, bargaining power of supplier, bargaining power
of customers, threat of substitutes, threat of new entrants. The picture below exhibits the
forces that govern the competition in an industry.

Since the study is in regards with banking industry, an attempt is made to analyze the
competitiveness of banks.

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THREAT OF NEW ENTRANTS:
Conceptually, new entrants to an industry bring new capacity, the desire to gain market share,
and often substantial resources. For any industry, this threat remains similar due to the reason
that the market is highly volatile in nature.

In the recent years, it is seen that not many banks are introduced rather many foreign banks
have pulled back their operations from India due to high competition pressure already existing
in the market. In banking industry, it can be said that this threat is at low level because of the
barriers it imposes to newcomers. Some barriers are mentioned below:

i. RBI Guidelines for Licensing of New Banks under Private Sector.


ii. Strict government regulations for foreign banks to enter Indian market.
iii. Skilled manpower requirement.
iv. Huge capital investment in the initial stage.
v. Well set-up banks with large market share already existing.

BARGAINING POWER OF CUSTOMERS:


Customers can force down prices, demand higher quality or more service, and play competitors
off against each other—all at the expense of industry profits.

In banking industry, buyer’s power is considered to be high as they may push the bank to
provide better service. What may impact the competitiveness of banking industry as a whole,
can have great influence on banks. Some key points are mentioned below:

i. Individual consumers, one consumer may have minimal impact, but loss of
many such consumers in aggregate will cause defects of depositors.
ii. Corporates or HNIs having large amount on deposits or stake in bank can
affect the profitability of the bank.
iii. Consumers can easily shift their banking activities from one bank to other
because of the similarities in the products offered by banks. So, low switching
cost in involved in the part of banking industry.

BARGAINING POWER OF SUPPLIERS:


Suppliers can exert bargaining power on participants in an industry by raising prices or
reducing the quality of purchased goods and services. It will have a negative effect on the
profitability as suppliers are those who provide backbone to the bankers. Such bargaining
power is a high level risk to the industry

25
The suppliers for a bank are:

i. its customers and


ii. its employees,
iii. The Central Bank, i.e. RBI.

who supply primary resource of capital(deposits) to the bank and resource of labour
respectively.
In a similar fashion to buyer power, depositors role in essential to the bank’s revenue as without
deposits, bank would not be able to lend money which would result in loss of revenue. Again,
individual customer will not have large impact on the bank but many such depositors in
aggregate will cause defects in the profitability.

Even the employees can make demands for raise in their salary or pay-scale, better incentives
and can go for strike for the fulfillment of their demand(like change in banking policies, to
provide better amenities, etc). If not solved strategically, the operations of the bank will be put
at halt.

Reserve Bank of India also plays an important role as a supplier of credit to the banks, and
lends money to the commercial banks at the repo rate decided. If RBI increases the repo rate,
it will restrict the commercial banks to borrow less money from the RBI. The retail loans
interest rates will also increase and customers would not want to pay more interest on their
principal.

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES:


By placing a ceiling on prices it can charge, substitute products or services limit the potential
of an industry. Unless it can upgrade the quality of the product or differentiate it somehow (as
via marketing), the industry will suffer in earnings and possibly in growth.

Substitute products is a product offering from another industry which has the potential to offer
similar benefits that the main industry has to offer.

In banking industry, the threat from substitute can be considered as moderately high as there
are many new avenues coming up after the digitization trend.
Substitutes that have come up which can be used instead of banking products or services are:

i. NBFCs, Non Banking Financial Institutions are the largest threats to the
banking sector as the total NBFC assets amounts to $310 billion which is 17%
of the banking asset. When compared to US and China, it is very high in India.
Indian NBFCs hold the largest share of 46.5% in the local mortgage assets in

26
March 2017 which is a huge amount, so definitely they have a great competition
from the non banking institutions.
ii. With technology, many banking transactions are possible through digital
payment platforms and transfer services like Google Pay, PhonePe, Paytm, etc
which has reduced the need of bank’s online transfer service to much extent.
NETF/RTGS are still in use but the number of transactions have reduced.
iii. In many places in India, people go to jewelers and pawn brokers for borrowing
money as they cannot produce proper documents in the banks and seek for
easier way to borrow money from such unorganized financial markets.
iv. Post Office Savings Scheme can also be considered as a substitute for the
banking sector which provides the savings option to general public.

COMPETITON FROM INDUSTRY RIVALS


Rivalry among existing competitors takes the familiar form of jockeying for position—using
tactics like price competition, product introduction, and advertising slugfests. Intense rivalry is
related to the presence of a number of factors. In India, there are many banks in the form of public
sector banks, private sector banks, foreign banks, regional rural banks, co-operative banks, and
due to similarity in the products each of them offer, customers have huge option to select their
bank from and also, the switching cost will not be much due to the similarity of products offered
by them.

In India, the largest bank is State Bank of India with highest business. As far as Jharkhand Gramin
Bank is concerned, it has its reputation in rural areas that is tough to beat in the state of Jharkhand.

27
-CHAPTER TWO-
Company Profile

28
 BACKGROUND AND HISTORY
Jharkhand Gramin Bank(JGB) is one of the rural banks in India. It was established on June 12,
2006. It operates in the state of Jharkhand in India. The bank is sponsored by Bank of India. It
functions under the ambit of Regional Rural Banks Act, 1976, an act enacted by the
Government of India for “developing the rural economy by providing, for the purpose of
development of agriculture, trade, commerce, industry and other productive activities in the
rural areas, credit and other facilities, particularly to the small and marginal farmers,
agricultural labourers, artisans and small entrepreneurs, and for matters connected therewith
and incidental thereto”

Jharkhand Gramin Bank is an amalgamation of four erstwhile RRBs- Ranchi Kshetriya Gramin
Bank, Singhbhum Kshetriya Gramin Bank, Hazaribagh Kshetriya Gramin Bank and Giridih
Kshetriya Gramin Bank which were amalgamated vide Government of India notification with
the view to improve the financial health of the RRBs. Before the amalgamation, the Kshetriya
Gramin Banks had their headquarters at the district level and were controlled as a separate
entity, however after the amalgamation, the headquarter/head office was shifted to Ranchi from
where centralized control begun.

Jharkhand Gramin Bank operates in 15 districts of Jharkhand with 4 different regions in


Ranchi, Singhbhum, Giridih and Hazaribagh covering their respective administrative districts.
In total the bank has 240 branches across the regions as of 2017-18.

JGB has 240 branches out of which 211 branches are in rural areas, 17 in semi-urban areas and
12 in urban areas. 870 employees are employed as of date in all these branches having a mix
of both experienced and newly joined employees of which officers are around 400. The bank
has Rs. 3,44,044 lakhs as of 2017-18. The bank’s Credit-Deposit Ratio is 31%.

The Board of Directors constitutes of the Chairman, Secretary(Expenditure), Assistant General


Manager, Deputy General Manager and the Zonal Manager. Each position is filled by people
from different areas of expertise.

 VISION AND MISSION

Vision
“To be a friend, philosopher and guide to our constituents, whether small or big
and to render cost – effective and responsive services to their expectations and
total satisfaction.”

29
Mission
“Prompt and efficient Banking Service to all sectors, justifying, our role as
developmental bankers, in our area of operation.”

 SWOT ANALYSIS
SWOT Analysis is a strategic planning tool or can say, a framework which is used to assess a
company’s competitiveness. It is done by identifying the company’s internal and external
factors which are Strength, Weakness, Opportunity and Threat. Internally, an organization can
check its strength and weaknesses while externally, it can check the potential opportunities and
threats.

Every organization must do its SWOT analysis to better understand their position in terms of
competitiveness. Organizations should focus in converting their opportunities into strength and
reducing their weaknesses by properly utilizing the opportunities.

30
An analysis is done based on SWOT theory to understand the competitiveness of Jharkhand
Gramin Bank.

STRENGTH
 Well spread network of branches(240) in 15 districts of Jharkhand.

 All branches on CBS plaform, Finnacle.

 Presence in rural areas where negligible competition. Bank enjoys monopoly in the rural
areas.

 Team of 870 employees having mix of experienced and new joinees.

 CASA(Current Account-Savings Account) Ratio is above 60%.

 Interbank Participatory Certificate(IBPC) exchange with other banks for priority sector
lending.

WEAKNESS
 Very low CD(Credit-Deposit) Ratio, approx.. 31%, which should be 60% ideally.

 Generation gap among the employees sometimes leads to difference in opinions.

 Online services are still not made available in a full fledge manner to the general public.

 Most of the employees are of urban orientation.

 High NPA(non performing assets) around 12.5%, for which provision is made from hard
earned money.

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OPPORTUNITIES
 Amalgamation of Jharkhand Gramin Bank with Vananchal Gramin Bank, for improved
scope and growth.

 Capital Growth in terms of asset.

 Such amalgamation will provide for better operational control.

 Area of operation can be expanded in the semi-urban and urban areas.

 To train and excel the employees and technological gap between the bank and commercial
banks.

THREATS
 Presence of correspondence bank in the rural areas.

 Emergence of digital payment apps and shift of rural areas toward online transactions.

 Small financing banks are being established in rural areas.

 Commercial banks are opening in rural areas as per the RBI policies for the development
of such areas/ competition is increasing in rural areas as well.

32
 PRODUCT PROFILE
Jharkhand Gramin Bank has a variety of products in its portfolio which ranges from different
kinds of deposits to advances. The products are designed in a way that caters to the
developmental needs of the rural sector. JGB focuses on the priority sector which includes
marginal farmers, agriculture, small loans below Rs. 5 crores. It also provides the basic
products that any bank provides.

The product portfolio of Jharkhand Gramin Bank is mentioned below:

i. Savings Account Deposit


ii. Current Account Deposit
iii. Recurring Deposit
iv. Term Deposit
v. Home Loan Scheme- Basera
vi. Education Loan
vii. Personal Loan(Jan Suvidha Scheme)
viii. Vehicle Loan
ix. Gold Loan
x. Insurance
xi. Artisan Credit Card
xii. Agri Clinic & Agri Business
xiii. Doctor Plus(MSME) Scheme
xiv. Loan Against Property Scheme
xv. Mortgage Loan Scheme
xvi. KCC Scheme
xvii. Vidya Loan Scheme for premier institutes
xviii. Financing for Farm Meachanization

33
xix. Micro Credit Scheme of NSTFDC for ST
xx. SHG Financing

 MARKET SHARE
Market share can be referred to as the percentage of an industry, or market’s total sales that is
earned by a particular company. In aggregate, all the regional rural banks count to
approximately 3% of the total market share in the country.

Public sector banks account for approximately 70% of the total market share.

Jharkhand Gramin Bank has total income of Rs. 30,16,023 thousands as of 21.03.2018 from
income, interest earned and other incomes.

 PRESENT STATUS
Jharkhand Gramin Bank has announced its 12th annual report and financial statement till now
for the FY2017-18. This year, they will be announcing their 13th annual report. The current
Chairman of the bank is Mr. Brij Lal who has completed his 4th year in succession as the
Chairman.

The bank, despite adverse market conditions, posted a Net Profit of Rs. 10.14 crores and
showed improvement in all business parameters.

For women empowerment in rural areas of Jharkhand, the bank undertook SHG financing with
the help of JSLPS(Jharkhand State Livelihood Promotion Society) and NABARD. JGB linked
6059 SHGs under credit facility against the target of 5000 SHGs

The bank has also issued around 70,000 Kisan Credit Cards(KCCs) against the target of 65000
KCCs.

The bank also participated actively in all social security schemes of Government, like PMJDY,
PMSBY, PMJJBY, SHG Credit Linkage, PMMY and Atal Pension Yojana.

34
The salient features of the performance of the Bank are as under:-

2017-18
KEY PERFORMMANCE INDICATORS (Rs. in Lakhs)

No. of Districts covered 15


No. of Branches 240
a. Rural 211
b. Semi-urban 17
c. Urban 12
d. Metropolitan 0
Total Staff(Excluding Spl. Bank Staff) 818
Of which Officers 396
Deposits 344044
Growth % 4.71
Borrowing Outstanding 3638
Growth % -26.29
Gross Loan & Adv. Outstanding 107288
CD Ratio 31.18%
Cost of Deposit 5.68%
Cost of Borrowings 7.24%
Cost of Funds 5.29%
Yield on Advances 9.32%
Yield on Investments 8.56%
Returns on Fund 8.24%
Net Interest Margin 2.95%

Credit Deposit Ratio of the bank is 31.18% which is very low. Conceptually CD ratio means
for every 100 rupees that a bank collects as deposit, it lends 31.18 rupees. Potentially, bank
can lend 100-(19.25+4)= 76.75; 19.5% being the compulsory SLR requirement and 4% being
the CRR that a bank must have to maintain.
Out of its potential of lending 76.75 rupees, JGB is able to lend only 31.18 rupees as loan.

Net Interest Margin is the difference between the returns on funds(interest earned on loans &
advances) and cost of fund(interest paid to depositors). Higher the net interest margin, more is
the profitability and efficiency. Jharkhand Gramin Bank has a NIM of 2.95%.

35
 FUTURE PLANS
As the mission of the bank clearly specifies, that it is for providing prompt and efficient
banking service to all sectors. Jharkhand Gramin Bank has weaknesses that it has focused on.
The CD ratio, for instance is very much lower from what it ideally should be. The bank’s CD
ratio is 31% but it should be around 60% as per the industry average. It means that the bank is
focusing more on lending activities to earn return on funds.

Because of this, they are now concentrating even in the semi-urban areas and urban areas. This
will diversify their customer base and ultimately may help in increasing the Credit-Deposit
ratio.

The bank was left behind from its competitors as it did not have a proper online banking
service. But the bank has introduced debit cards(RuPay) and online services(internet banking)
and the bank is distributing the debit cards to its customers and also opening internet banking
accounts. The bank aims to increase the number of customers using these services.

The NPA of the bank has raised to 12.5% which is very high, so JGB and its management has
plans to recover the non performing assets.

The Government has also begun to consolidate the number of RRBs in the country. From its
current number of 56, they are to bring it down to 36. In the process, the two RRBs operating
in Jharkhand, viz Jharkhand Gramin Bank (sponsored by BOI) and Vananchal Gramin Bank
(sponsored by SBI) are to be amalgamated to form a new entity vide GOI notification no.
7/8/2017-RRB(Jharkhand). From the amalgamation of the two banks, it is possible that the
35% ownership of the bank’s share will shift from Bank of India to State Bank of India and it
will lead to change in the CBS platform also which is used by the bank for its all banking
transaction. Integration of the CBS platform will become necessary for smooth functioning of
the bank.

The operational control will become better and the area of operation will increase. It will
benefit the financial health of the banks and with their resources combines, it is expected that
there will be ride in the net profit also.

36
 BALANCE SCORE CARD
Balance Scorecard is a performance measurement tool introduced in the year 1992. It suggests
that to measure a company’s performance, the intangible assets should be integrated with the
tangible assets to improve the overall performance of the company.

The BSC retains financial metrics as the ultimate outcome measures for company success, but
supplements these with metrics from three additional perspectives – customer, internal process,
and learning & growth.
The figure below explains the Balance Score Card:

An overview is provided for JGB by taking Balance Score Card as a measurement tool.

FINANCIAL PERSPECTIVE
The key financial factors to point out about the bank are its productivity in terms of business
per branch and business per staff or employee.

Business per branch in the FY2017-18 was Rs. 1,881 lakhs while business per employee
accounted in the same financial year to be Rs. 650 lakhs

Other financial factors include the cost of deposit (5.68%), cost of borrowings (7.24%), net
interest margin (2.95%) , etc.

37
INTERNAL BUSINESS PROCESS
This perspective focuses on how well the business process are operating and helps the
management to fill any gaps, waste, if occurred.

The bank set a target of 3,71,405 lakhs deposits but achieved just short of it, amounting to
3,44,045 lakhs.

Similarly, it had set a target of 1,16,918 lakhs of lending money but achieved 1,07,288 lakhs.
Target for business per employee was set at 595 lakhs but it crossed the number to 650 lakhs
showing a positive approach of the employees toward the bank. These short term targets
provide the bank to analyze their performance.

CUSTOMER PERSPECTIVE
This aspect of Balance Score Card is focused on the customer growth, market share and
marketing objectives of the bank. The average deposits accounted for an increase by 8.16%
which indicates that there is a growth in number of customers. The average loans & advances
given during the year also indicates an average growth of 7.35% which indicates that the
branding strategy by the organization is working well otherwise the numbers would show a
negative growth.

LEARNING & GROWTH


This aspect of the BSC focuses on the human capital, their skill, training, knowledge, nurturing
the leadership style, aligning the employees and knowledge management.

The management employs managers to different branches as per their skill and knowledge.
Even a Scale-1 manager can hold the position of the Branch Manager if he/she possesses the
knowledge for managing the branch efficiently.

The employees are trained on regular intervals or as and when new technology or process
comes up. Employees are even trained on how to spread banking facilities awareness.

Recently the employees were trained on “Financing on FPOs for Agro Processing and Value
Chain”.

38
-CHAPTER THREE-
Organizational Design

39
For any organization to succeed, it is very important for the organization to integrate its business
functions and align it in such a way that all the activities of the organization is carried out in a
smooth manner and without any hassle.

The organization must be designed in a way that the information flows in a smooth manner.
Different organizations adopt different organization designs according to their requirement.

Organizational design is fundamentally about the hierarchy of the organization. It enables the
employees to understand their relationship with their colleagues, sub-ordinates, seniors, etc.

It provides basis for the work relationship among the employees in different level of business, i.e.
corporate level, business level and functional level.

Jharkhand Gramin Bank follows a formal structure with vertical information sharing. It is
important for the bank to follow a vertical structure because of the reason that bank has to deal
with huge amount of money and technicals are required who specialize in that particular domain.
The vertical hierarchy allows the bank to pass on important messages (like notifications,
amendments, direction, etc.) from top to bottom or from bottom to top level.

In JGB, the policies and regulations are formulated at the corporate level which is again
communicated with the business level and functional level of the organization through formally
structured organizational design.

The information is communicated from the corporate level which is the Board of Directors to the
head office situated at Ranchi, which again passes on the information to different regions.

Jharkhand Gramin Bank is again divided geographically. Currently, JGB has 5 different regions
and under each region, some districts are covered and each region has a regional office which
received any information of any branch operating in that particular region. The five regions in JGB
are Ranchi, Hazaribagh, Giridih, Singhbhum and Gumla.
To understand the information flow concept, here is an example,

 The Board conveys message to the Head Office in Ranchi.


 Head Office sends an official message to the respective Regional Office which is
headed by a Regional Manager.
 The Regional Office again passes the information to the branch/es for which the
information is concerned.

40
BOARD OF DIRECTORS
The decisions are made by the Board of Directors and the decision formed there is communicated
to all the departments or to the department/s in concern.
At Jharkhand Gramin Bank, the Board is constituted of:
i. The Chairman, Jharkhand Gramin Bank
ii. Secretary (Expenditure), Planning cum Finance Dept, Government of
Jharkhand, Ranchi.
iii. Assistant General Manager, Reserve Bank of India
iv. Deputy General Manager, NABARD, Ranchi
v. Zonal Manager, Bank of India, Ranchi
vi. Zonal Manager, Bank of India, Jamshedpur
The board, as mentioned above, is constituted by members from the various organization, like
Government of Jharkhand, RBI, NABARD, Sponsor Bank.

Geographically, as explained earlier, the 15 districts are under the purview of different regions
which fall under the direction of the Head Office.

Head Office, Ranchi

Regional Office, Regional Office, Regional Office, Regional Office, Regional Office,
Ranchi Hazaribagh Giridih Singhbhum Gumla

41
-CHAPTER FOUR-
BUSINESS LEVEL FUNCTIONS / PROCESS

42
Jharkhand Gramin Bank has number of departments which carry out different business functions.
These departments operate at business level and implement the policies and regulations which are
formed at the corporate level by the Board of Directors. The business level departments then
communicate the information to the various regional offices and the respective department at the
regional offices.
The Head Office at Ranchi has all the departments that Jharkhand Gramin Bank has, however, the
Regional Offices do not have all the departments. The regional offices have only some of those
departments which are actually required at that level.

Planning &
Development

Information &
Technology

Financial
Inclusion

Investment
and Taxation

Credit

Risk Mgt. and


Audit
General
Chairman
Manager
Training &
Development

Asset
Recovery

Admin. &
Services

Human
Resource

Vigilance

Legal

43
The vertical hierarchy of the organization allows the bank to formally structure itself in a way that
all the important information is conveyed with the Regional managers and the branch managers.

Branch managers operate at each branch and are responsible for the management of their particular
branch and they report to their immediate superior that is the Regional Manager of that region. The
regional managers along with various departments at their level, report to the Chairman.

At the regional level, which can be called as business level function of the bank, the major
departments operating are:

i. INFORMATION AND TECHNOLOGY DEPARTMENT


ii. CREDIT DEPARTMENT
iii. AUDIT DEPARTMENT
iv. ASSET RECOVERY DEPARTMENT
v. ADMINISTRATION and SERVICES DEPARTMENT
vi. HUMAN RESOURCE DEPARTMENT

These departments are present at all the 5 regional office and these departments carry out the
business effectively in that region. These departments report to the Head office and to the Regional
Manager.

However, JGB do not have any marketing department operating in specific. All the marketing
functions are done by the branch managers who promote their products and services at the branch
level. They act as marketing managers by holding awareness campaigns and any such related
activities. Branch managers get required information from the top-level management and they
communicate it with the customers or any such potential customers.
Below, the various departments operating at the regional level are discussed.

 DEPARTMENTS

i. Information & Technology Department

a. The IT department of the bank looks after the software that the bank works on. It
also looks after the software and hardware installation of new machines at the bank.

b. IT department look after the upgradation of the existing technologies as well.

44
c. IT department caters to the problems that arise in the CBS platform, Finnacle, either
by themselves or through Data Centre situated at Mumbai, depending upon the
situation’s criticality.

d. Collection of debit cards (ATM cards) and supply of the same to the concerned
branches.

ii. Credit Department

a. The main objective of the Credit department is to sanction the loan proposals which is
beyond the delegation power at the branch level.

b. Follow up to generate good and viable proposals to increase the credit portfolio of the
branches to achieve the target set by the bank.

c. Issues circulars regarding loans under different schemes such as Agriculture, Allied
agriculture, MSME, education loan, vehicle loan, housing loan, consumer loan, etc.

iii. Audit Department

a. Carries out Internal Audit in a time frame of 12-15 months as per the guidelines set by
the RBI to control the bank’s system.

b. It also points out the irregularities, if any, observed during the audit of the branch for
its rectification and compliance.

c. Follow up branches so that their internal audit could be closed within 90 days of its
audit.

iv. Asset Recovery Department.

a. Follow up regarding the recovery of advances granted by branches.

b. Focuses to reduce the NPA level by taking corrective measures.

45
c. Instructs and suggests the branches not to let slippage occur in the standard loan
accounts.

d. Also, directs on how to recover the bad debts.

v. Administration and Services Department

a. This department sees after the printing and stationery requirements at various branches
and takes required action.

b. Sanction of bills related to expenses occurring at branch level and which is beyond the
delegation of branch level.

c. Hires security guards from security agencies.

d. Looks after cash remittance from other branches for smooth functioning of day to day
cash transactions.

vi. Human Resource Department (Personnel Dept)

a. Looks after staff related matters like salary, increment, TA bills, bonus, etc.

b. Also looks after the transfer and promotion of employees within or outside the region
as per the need of the bank.

c. Reimbursement of expenses like medical expenses, travelling and halting expenses,


etc.

d. Training and development of the employees and related documentation and


arrangement is done at this department, as per the guidelines provided by the T&D
department at the Head Office.

46
INTER-RELATIONSHIP AMONG DEPARTMENTS
Each department is unique in its function and operations, however, no department can work
effectively without the other. All departments are inter-related in one way or the other.

For instance, audit department does the auditing and all related activities and informs the asset
recovery department to take corrective actions in order to reduce the NPA level.

Human Resource department, infuses training and development programs as guided by the
Training and Development department.

Credit department also stays in touch with the asset recovery department and the audit department
to know the position of the advances granted and to know about the position of the branch in
achieving its targets for improving the credit portfolio of the branch.

IT department stays connected with all the departments to make sure that the systems are in good
condition and if any improvement or upgradation required, they cater to the need.

If one department fails in carrying out its activities, it may hamper the overall system. So, the top-
management also, must make sure that all the business level departments get the required resources
in order to operate effectively.

47
-CHAPTER FIVE-
FINDINGS / CONCLUSIONS / RECOMMENDATIONS /
LEARNING OUTCOMES

48
FINDINGS
The key findings that can be pointed out are:

 Jharkhand Gramin Bank enjoys monopoly in the rural markets of Jharkhand.

 The bank’s management is continuously focused toward the mission of the organization
which states to become the efficient bankers in there are of operation.

 JGB do not have a formal marketing vertical to look after its marketing campaigns, and
inclusion of marketing department can turn the business of the bank positively.

 Currently, the branch managers act as the marketing manager and conduct all marketing
related activities at the branch level.

 Bank provides ample training to the employees to meet the dynamics of the industry and
to tackle the competition effectively.

 The Regional Manager addresses the beginning of the day by setting goals for the entire
day. This shows the dedication toward the work and also provides an insight about the
approach the bank follows to achieve its targets.

 The bank has a formal and vertical structure of reporting, wherein the task is done by skilled
managers and so.

 Under the Government of India notification, the bank is to merge with another RRB in
Jharkhand (SBI sponsored Vananchal Gramin Bank) to form a new entity.

49
 JGB do not have a proper internet banking facility and ATM kiosks, however, BOI ATM
kiosk can be used for withdrawing money from account.

 Meetings are held on regular basis with the branch managers to discuss the current situation
of the branch and on how to improve it.

50
CONCLUSION
Jharkhand Gramin Bank, was established in the year 2006 when 4 erstwhile Kshetriya Gramin

Banks amalgamated. From thereon, the bank has grown to have deposits of more than Rs. 3400

crores in all of its 240 branches spread over 15 districts. The bank published its 12th annual report

in the FY2017-18. All in all, the bank has performed satisfactorily over the years.

However, the CD ratio and the NPA level of the banks are not satisfying. The bank is working

towards these matters and necessary steps are already taken to correct the position of the credit

and the recovery of non-performing assets.

Finally, Jharkhand Gramin Bank is going to amalgamate with Vananchal Gramin Bank in the

FY2019-20 with the view to improve the financial health of both the organizations by infusing the

work resources of the two firms.

51
RECOMMENDATIONS

 The bank do not have the technological presence unlike its competitors. The bank has no

mobile banking, ATM machines. Although, it has debit cards and has begun internet

banking services. The bank should focus in increasing its presence in the modern banking

system.

 The bank also faces staff shortage sometimes which should be addressed by the

management for further recruitment in different positions/cadres.

 The bank should improve its basic infrastructure and amenities to compete in the present

banking scenario of other nationalized banks.

 The bank should install its own ATM machines, at least at all its semi-urban and urban

centers in the beginning phase.

 The management should also recognize its staff on monthly or quarterly basis for their

motivation.

 Welfare fund for the employees and officers should be created for immediate help in case

of financial emergency/crisis of their staff members.

 The bank should focus to increase their CD ratio by granting more loans & advances and

also through NPA reduction.

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LEARNING OUTCOME

The organization study helped to understand the application of theoretical concepts in the practical

life. The organization study allowed to understand the concepts like the origin of the banking

industry in India and how it grew over time and what are its current status in the economy.

It also enabled to practically use the theories like PEST analysis, Porter’s Five Force model in the

banking industry. The study helped to analyze the scope of Regional Rural Banks in India and how

it operates in the country and what is its market share in the country.

From the organization point of view, the major learning was to understand the strength, weakness,

opportunities and threats of JGB and how it is related with the micro and macro environment. It

also gave an insight into the Balanced scorecard of the organization.

The study helped to learn about the organizational structure which, in this organization is vertical.

And the relationship among the departments has a formal reporting system. For example, the low

cadre employees, like cashiers report to their respective branch managers and the branch manager

reports to the regional manager/office which acts as the middle manager. The regional officer

reports to the Head Office.

The bank has many departments and all the departments have different functions and

responsibilities to play.

Conclusively, the entire period of the study was very informative and useful in learning how the

key theories are used by the organization to analyze their performance and improve their business.

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