fm - bhavla nagrik bank

7/27/2019 FM - Bhavla Nagrik Bank

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A

Project Repot

On

A study on Financial Performance and Deposits and Loans & Advances ofBavla Nagrik bank

At

Bavla

Under the Guidance of (in Company)

Mr. H. J. Trivedi

Under the Guidance of (College)

Ms. Arpita Vaghela

Institution

Submitted toGujarat Technological University - Ahmedabad

Prepared By

Poonam J. ThakkarMBA- 2nd semSeat No. 13929


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K. K. Parekh Institute of Management Student Amreli

Dr. Jivraj Mehta Vidhya Vihar Campus Lathi road Amreli


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Ph: (02792) 223509 fax: (02792) 223509

E-mail: [email protected]

Web: kkpimsamreli.com

DIRECTORS RECOMMENDATION

TO,

The Registrar

Gujarat Technological University

Ahmedabad

Subject: MBA Summer Training Project Report

Respected Sir,

I am recommending the Summer Training Project entitled-

Financial Performance and deposits and loan & advances of the Bavla nagrik Bank

prepared by POONAM J. THAKKAR at THE BAVLA NAGRIK CO-OPERATIVE BANK,

BAVLA. As the partial fulfillment of the University requirement for the award of MBA

degree of Gujarat Technology UniversityAhmedabad

Date: - Thanking You,

Place: - Amreli Yours Faithfully,

Director

S T U D E N T D E C L A R A T I O N

I the undersigned student of POONAM J. THAKKAR K. K. Parekh Institute of

Management Studies Amreli M.B.A. II Semester, hereby declare that, the project on -

Financial Performance and deposits and loan & advances of the Bavla nagrik Bank


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I am really oblidged to the bank and all those Manager, officers, other staff

members of the bank who heartily give me information about the bank by answering question. I have

done sincere efforts in making this project as an implement-able and intelligent task. Most of all and

more than ever, I would like to thanks my parent, for their support, encouragement, kindness and

patience. At last, I am also thankful to all the members of Nagrik Co-operative bank ltd. for their

honest support and also to the staff members of our college.

Date: Sincerely and with Regards, Place

Thakkar Poonam J.

INDEX

Sr. no Particular Page no.

1 Industry profile 1

1.1 Brief History 2

1.2 Banking 3

1.3 Characteristic of Banking 3

1.4 Structure of the Banking Industry in India 4

1.5 RBI Overview 7

2 Company Profile 11

2.1 History and Development 12

2.2 Vision & Mission 14

2.3 Competitors 15


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2.4 Bank Profile 16

2.5 Organization Structure 17

2.6 Board of Directors 18

2.7 Branch managers 19

2.8 Bankers 19

2.9 SWOT Analysis 20

3 Study of four functional area 21

3.1 Finance Department 22

3.2 Human Resources Department 30

3.3 Operation Department 34

3.4 Marketing Department 38

4 Research methodology 41

4.1 Introduction 42

4.2 Define the problem 44

4.3 Literature review of report 45

4.3.1 Maintenance of Deposit accounts 45

4.3.2 Maintenance of loan & advances 47

4.3.4 Sources 49

4.3.4 IT (Info. Technology) 61

4.3.5 Time value of money 61

4.3.6 Investment 62

4.3.7 Investment policy 63

4.4 Objectives of the study 66

4.5 Rationale of the study 67

4.6 Limitations of the study 68

4.7 Variables & Hypothesis formulation 69

4.8 Data collection 71


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4.9 Data Analysis & interpretation 72

4.10 Social responsibility 80

4.11 Findings 81

4.12 Suggestions 82

4.13 conclusion 83

4.14 Bibliography 84


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1.1 BriefHistory

Many years ago economic advancement was unknown. Consequently, the use of money for buying

and selling was very much restricted. With the development of

Communication,

- Economic progress

- Spread of science, and

- Political institutions, the use of money, the use of credit instruments also

developed. Finance became a powerful instrument for any change.

The origin of the word bank can be traced back to the German word bank which translated means

help or mound or joint stock fund. The Italian word banco was derived from this to mean heap of

money.

In French bancus or banque means a bench. Business was transited by the Jews in farce on

benches in the market place. The benches resembled banking counters. If a banker tailed his bench

was broken up by the people leading to the word bankrupt which means one who has lost all

money, wealth or financial resources. Bank as it is largely understood in English today is an

institution that accepts money as a deposit to further lend it out for profit.


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1.2 Banking

In India, the banking regulation act, 1949, under which banks are regulated by the

reserve bank of India, defines a banking company and banking as:

Section 5(b) of BR act, 1949 banking as accepting for the purpose of lending or

investment of deposits of money from the public, repayable on element or otherwise and withdrawal

by cheque, draft order or otherwise section 49 a of the act prohibits any institution other than a

banking company to accept deposit money from public withdrawal by cheque.

In other words, the combination of the functions of acceptance of public deposits and

withdrawal of money by cheque by any institution can not be pertained without the approval of

reserve bank. "Banking in the most general sense, is meant the business of receiving, conserving &

utilizing the funds of community or of any special section of it."

"A banker of bank is a person, a firm, or a company having a place of business where

credits are opened by deposits or collection of money or currency or where money is advanced and

waned.

1.3 Characteristic of Banking: -

The characteristic of capture the essential features of banking are as under,

I. DEALING IN MONEY:

Banks main transaction is to monetary dealing. it accept deposits from the public and

advancing them as loans to the needy people.

II. DEALING WITH CREDIT:

The banks are the institution that can create credit i.e. creation of additional money

for lending thus creation of credit is the unique feature of banking.

III. COMMERCIAL IN NATURE :

Since all the banking functions are carried on with the aim of making profit, it is

regarded as a commercial institution.

IV. NATURE OF AGENT:

The basic function of accepting deposits and lending money as loans bank possesses

the character of and agent because of its various agency services.


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1.4 Structure of the Banking Industry in India: -

Financial requirements in a modern economy are of a diverse nature, distinctive variety and large

magnitude. Hence different types of banks have been instituted to eater to the varying needs of the

community.

The following chart depicts the structure of the banking industry in India:

1. SCHEDULED COMMERCIAL BANKS:-

The second schedule of the reserve bank of India act contains a list of banks which

are described as scheduled Banks. A bank in order to be designated as a schedule bank should

have a paid up capital and reserved as prescribed by the act. In terms of Sec. 42(6) of RBI act, its

prescribed a minimum capital of Rs.100crore and its business must be managed in a manner

which, in the opinion of the RBI is not detrimental to the interest of its depositors. The scheduled

banked required to maintain with the RBI a deposit in the form of cash reserve ratio, based on its

demand and time liabilities at a prescribed rate.

Scheduled commercial banks are:

- public sector banks

- private sector banks

- foreign banks

- local area banks


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2. NON SCHEDULED COMMERCIAL BANKS: -

The commercial banks not included in the second schedule of the RBI act are known

as Non-scheduled banks. They are not entitled to facilities like refinance and rediscounting of

bills, etc. from RBI they do not get the prestige as do scheduled banks. They are mainly engaged

in lending money, discounting and collecting bills and various agency services. They insist

higher security for loan

3. REGIONAL RURAL BANKS: -

In the Indian banking structure the regional rural banks occupy a government place

The RRBs are government sponsored, regionally based and rural oriented banking. They are

virtually commercial banks in character, operating in rural areas, and providing banking facilities

for rural development regional rural banks combines the local feel and familiarity with local

problems which co-operatives possess and the degree of business organization, ability to

mobilize deposits, access to central money markets and a modified outlook which thecommercial banks have.

In the regional banks have shareholding pattern is.

- 50% central government

- 15% concerned state govt.

- 35% sponsor bank.

4. CO-OPERATIVE BANKS: -

Co-operative banks are distinct entities by themselves with separate jurisdiction and an

independent board of directors. the co-operative banks are organized on a co-operative basis and are

governed by their members according to the co-operative laws.

There are various types of co-operative banks:

Primary urban co-operative banks

District central co-operative banks

State co-operative agricultural & rural development banks.

Primary co-operative agricultural and rural development banks.

Primary agricultural credit societies.


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5. FINANCIAL INSTITUTION OR DEVELOPMENT BANKS: -

For the development of small scale industries in each state, specialized institutions

like small scale industries development corporations and have been established. Firstly in 1964,

the government of India set up a central bank of development banks called industrial

development banks of Indian (IDBI).

There are several wide development banks in India like:

IFCI: - Industrial Finance Corporation of India.

BOB: - Industrial Credit & Investment Corporation of India

IDBI: - Industrial. Development Banks of India

SFCS: - State Finance Corporations

SIDCS: - State Industrial Development Corporation.

SIDBI: - Small Scale Industrial Development Banks of India

EIBI: - Export Import Banks of IndiaLIC: - Life Insurance Corporation of India

GIC: - General Insurance Corporation of India

UTI: - Unit Trust of India

NABARD: - National Bank of Agriculture and Rural

Development.


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1.5 RBI OVERVIEW:

Brief Introduction

The reserve bank of India was constituted under the reserve banks of India act,1934

to regulate the issue of bank notes and the maintained of reserves with a view to securing the

monetary stability in India and generally to operate in currency and credit system of the country to

its advantage.

FUNCTIONS OF THE RESERVE BANK OF INDIA: -

The functions of the RBI can be classified into:

Traditional

Promotional and

Supervisory.

The RBI functions the traditional liner for the following activities.

a. Monopoly of note issue.

b. Banker to the government

c. Agent and advisor of the govt.

d. Banker to the banks.

e. Acts as national clearing house

f. Lender of the last resort

g. Acts as the controller of credit.

h. Maintaining the value of currency.

i. Publisher the economic satieties and other international.

j. Fights against economic crises.

The promotional function of the reserve banks of India includes:a.Promotions of banking habits.

b.Provider refinance for export promotion.

c.Facilities for agriculture

d.Facilities to small scale industries.


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e.Helps co-operative sector.

f.prescription of minimum statuary requirement for banker

The RBI controls and administer as the entire financial and banking systems in India

through its wide supervisorypower key among them are:

a. Granting licenses to banks.

b. Inspection and enquiry.

c. Administers the deposit insurance scheme.

d. Periodical review of the working of commercial banks in India.

e. Control of the non-banking financial companies.

ORGANIZATIONAL STRUCTURE OF RBI: -

The affairs of the RBI are managed by a central board of directors which consists of:

1. The governors and not more than tour deputy governors appointed by the centralgovernment.

2. Four directors nominated by the central government one from each of the four local

boards.

3. Ten directors and one government official nominated by the govt. of India.

The RBI has four local boards with head quarters at

- Mumbai

- New Delhi

- Chennai

- Kolkata.

The chairman of the central board of directors in the chief executives authority of the

bank also known as the governor. The governor has the powers of general superintendence and

direction on the affairs and business of the bank.


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CO-OPERATIVE BANKING

Co-operative banks are group of financial institutions organized under the provisions

of the co-operative societys act of the states. These banks are essentially co-operative credit

societies organized by members to meet their short term and medium term financial requirements.The main object of co-operative banks is to provide cheap credit to their members.

They are based on the principles of self reliance and mutual co-operation. The co-operative banking

system in India is, however small razed in comparison to the commercial banking system. Its credit

outstanding is just less than one fifth of the total credit outstanding of the commercial banks.

Nonetheless, co-operative credit system is the main institutional source of rural, especially

agricultural finance in India. Co-operative banking system in India has the shape of a pyramid, i.e. a

three tire structure, constructed by:

1. Primary credit societies

2. Central cooperative banks and

3. State co-operative banks.

Primary credit societies lie at the local on base level. in rural areas there are primary

agricultural credit societies (PACS), which cater to the short and medium term credit needs of the

farmers. In urban areas, urban banks usually provide short term loans to they also accept deposits

from members and non members too thus, their functions and working are more or less similar to

those of commercial banks. But by nature, their from a major destination between these and

commercial banks which are joint stock companies.

The central co-operative banks (CCBs) are federation of primary societies belonging

to a specified district. By furnishing credit to the primary societies, central co-operative banks serve

as an important link between these societies and the money market of the country. No central co-

operative bank lends to individuals it lends to societies only.

The state co-operative banks (SCBs) lie at the apex of the entire co-operative credit

structure. Every state co-operative banks basic function is to furnish loans to the central co-operative

banks order to enable then to promote the lending activities of the primary credit societies.


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BRANCH BANKING

Over the years, the structure of banking also has undergone tremendous changes.

Consequently, several systems of banking have emerged in the branch banking.

Branch banking is a system in which every bank work is a legal entity having one

board of directors and one group of shareholders and operates through a network of branches spread

throughout the country. The head office of the bank is located in a big city or state capital the

braches operate throughout the country. Thus branch banking is another name for de-localized

banking which arise on business through a number of offices.

SERVICES PROVIDED BY BANK

Demat Account

Lockers

Cash Management

Insurance Product

Mutual Fund Product

Loans

ECS(Electronic clearance system)

Taxes


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2.1 HISTORY & DEVELOPMENT:

Because of high developed areas and crowd of Nagrik people, and mutual co-

operation of some visionary personalities, the Nagrik co-operative bank was started by taking license

no UBD Guj. 1153-P on 22nd

September 1980. It was became the first giant and fast developed

computerized and well staffed bank in Bavla area. During its work bank get splendid respect and

honor and also account holder get more satisfaction by better services.

Bavlas leading co-operative banks, established in 1980 with the help of local

known and established Rice Mill owners, Cotton Merchants and other well known personalities. I

has been near 29 years since inception. Silver Jubilee function was celebrated in the presence of

Shri Narendra Modi, Chief Minister of Gujarat who appreciated banks performance.

It is to be noted that board member personally took interest in building

present premise of the Bank. Due to their dedication and paying personal attention by remaining

present at the time of construction, bringing best material at the cheapest price, todays tall building

could be build. The inauguration of the building was also done by Shri Amarsinh Chaudhry, Chief

Minister, in the year 1988. Thereby bank has proud on both occasions when Gujarat Chief Mister

could remain present and join hand in appreciating progress of the bank.

Shri Purshottam Priyadasji, Acharya Swamiji of Maninagar Gadi Sansthan

visited personally to the bank during silver jubilee year 2004 and blessed too all Directors, Staff and

Members of the Bank. He handed over divine light (Mashal) to the Chairman of the Bank who then

travelled through Bavla town with other members of the Bank and staff.

We maintain financial discipline with utmost care and insist that our clients also to maintain

good financial discipline. Bank is running with ZERO OVERDUE OR ZERO NPA since 1s

April 2007. This is our major achievement.


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The main characteristics of Nagrik co-operative bank are:

Faith

Service

Transparent

Success

And also Nagrik co-operative get rank in top co-operative bank of Bavla area. In

short, we can say that Nagrik bank is the bless for uneducated people of Bavla area.


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2.2 VISION & MISION

Vision :-To provide required financial services to local community, in particular to paddy and

cotton industry.

Mission :-

To provide best and cheapest banking services to industrial units located at Bavla, and

see that Depositors also get value return of their money deposited with the Bank with THE BEST

services for their problems like TDS solution etc.

Group Values :-

From inception three vales have driven all the activities of the Nagrik

bank group. They are central to our operations worldwide and will continue to be at the core of all

our banks.Trust We will deliver all services on all our promises.

Our word is our bond.

Courage-We will support our decisions and actions with conviction.

InnovationWe will think laterally & never fight shy of embracing big ideas.


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2.3 COMPETITORS:

MAIN COMPETITORS FOR BANKING SECTOR

Post offices

Mutual fund

Share market

Insurance

Money lenders

Family and Friends


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2.4 BANK PROFILE:

NAME & ADDRESS :-

THE BAVLA NAGRIK CO-OPERATIVE BANK LTD.

Near, R.A.Patel market,

BAVLA-382220.

Tel.: (02714)232719 /232819

Fax : 230714

YEAR OF ESTABLISHMENT :-

The year of establishment is 1980.

WEB-SITE :-

www.bavlabank.com


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2.5 ORGANIZATIONAL STRUCTURE:

MANAGEROF

DEPT.

FINANCIALMANAGER

HUMAN RESOURCEMANAGER

MARKETINGMANAGER


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2.6 BOARD OF DIRECTORS

Name Post

Shri Ramubhai Govindlal Patel Chairman

Shri Rameshbhai Baldevbhai Patel Vice Chairman

Shri Vinodchandra Jayantilal Patel Managing Director

Shri Narsinhbhai Zinabhai Amin Director

Shri Balvantbhai Karansinh Desai Director

Shri Ajiikumar Govindlal ShahDirector

Shri Anilkumar Kanubhai Desai Director

Shri Baldevbhai Amrutlal Patel Director

Shri Girishkumar Manubhai Patel Director

Shri Ghanshyambhai Manilal Thakkar Director

Shri Harshilbhai Kaushikbhai Patel, C.A. Director

Shri Ramubhai Govindlal Patel Chairman

Shri Rameshbhai Baldevbhai Patel Vice Chairman

Shri Vinodchandra Jayantilal Patel Managing DirectorShri Narsinhbhai Zinabhai Amin Director

Shri Balvantbhai Karansinh Desai Director

Shri Ajiikumar Govindlal Shah Director

Shri Anilkumar Kanubhai DesaiDirector

Shri Baldevbhai Amrutlal Patel Director

Shri Girishkumar Manubhai Patel Director

Shri Ghanshyambhai Manilal Thakkar Director


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2.7 BRANCH MANAGER

Name Post

Shri Harshadbhai J. Trivedi GENERAL MANAGER

Shri Harshadbhai K. Patel BRANCH MANAGER

(NARANPURA)

Shri Harshadbhai J. Trivedi BAVLA SHAKHA

Shri Hiteshbhai Manharlal Pomal, C.A., Ahmedabad AUDITORS

2.8 BANKERS

The Gujarat State Co-operative Bank Ltd.

The Ahmedabad District Co-op. Bank Ltd.

State Bank of India

HDFC Bank Ltd.


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2.9 SWOT ANALYSIS:

During the project work two months at Nagrik co-operative bank, I find out some

strength, weaknesses, opportunities and threats by SWOT analysis are as under:

Strength:-

Customer segmented well staff and effective implementation of Customer Relationship

Management and Quality Management System.

In the uneducated area of Nagrik bank is the bless for uneducated people by friendly advice

and better services and really it yield lump sum amount of profit and deposits.

Nagrik bank got award of excellence of the best co-operative bank in bavla area it shows

the best banking operation.

Weakness:-

Rules for deposits and loans are very strict opening deposit is high and they require perfect

documents, it can be limitation for slow inflow of deposits.

In recent competitive era, Nagrik bank not provide some modern facilities like ATM service,

debit card credit card and even not website on intent for show the growth of bank.

There are lack of linking performance and reward.

.

Opportunities:-

Its great opportunity to cover most power area of Bavla because of continues growthstrategy, it build good image among the customers and public and reliance on Nagrik co-

operative bank, so it has opportunity to prove the proved growth pulls growth

Threats :-

There are strict rules and deposit for opening saving or current account is high in compare to

other co-operative banks, so it can create bed image among customers and public and it can

be limitation for slow inflow of opening account.

In the modern era, Nagrik bank is not providing ATM facility, internet banking and also

credit and debit card, so it can be dangerous threats for Nagrik bank.


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INTRODUCTION

Finance is the science of funds management. The general areas of finance are business

finance, personal finance, and public finance includes saving money and often includes lending

money. The field of finance deals with the concepts of time, money and risk and how they are

interrelated. It also deals with how money is spent and budgeted. Finance works most basically

through individuals and business organizations depositing money in a bank. The bank then lends the

money out to other individuals or corporations for consumption or investment, and charges interest

on the loans.

Finance is regarded as the life blood of a business organization. The study of financial

management relates to the process of procuring financial resources and its judicious utilization with

a view of maximizing the shareholders wealth. Efficient management of every business enterprises.

In financial management, two functions are considered to be importance.

1. The procurement of funds.

2. The effective utilization of funds

According to Guthman and DGoulFinancial management means managerial function

like planning, controlling, pertaining to acquisition and using of funds needed in the business.


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SCHEDULE ACCORDING TO RBI

RBI is the main central bank of India objectives of RBIs are to regulate the issue of

bank notes and the keeping of reserves with a view to securing monetary stability in India and

generally to operate country to its advantage.every scheduled commercial bank has to operate the commercial bank has to operate

the bank account and follow the bank format for account according to RBI schedule.

According to section 29, schedule of RBI banking taken from the final accounts are

as under:

Balance sheet format

Capital Schedule

Reserve & Surplus Schedule

Deposits Schedule

Advances Schedule

Fixed asset Schedule

Other asset Schedule

Borrowings Schedule

Liabilities & Provisions Schedule

Cash and balance with RBI Schedule


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FORM OF BALANCE SHEET

Particulars Schedule

no.

As on 31.3.

(current year)

As on 31.3.

(previous year)

CAPITAL & LIABILITIES

Capital

Reserve & surplus

Deposit

Borrowings

Other liabilities & provisions

P & L A/C

TOTAL:

ASSETS

Cash and balance with

Reserve bank of India

Balance with banks & money

call and short term

Other assets

Investment

Advances

Fixed assets

Contingent liabilities

TOTAL:

1

2

3

4

5

6

7

8

9

10

21380100.00

117746645.05

608024666.66

00

6736562.00

12538326.91

766426300.62

50909147.00

5117216.78

467967500.00240699917.84

1732519.00

766426300.62

22015900.00

114780403.58

508345234.64

00

2761021.00

8556795.47

656459354.69

66679329.97

4751636.23

333438750.00250259041.49

1330597.00

656459354.69


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SCHEDULE 1: CAPITAL

Particulars As on 31.3

(Current year)

As on 31.3

(previous year)

I. FOR NATIONAL BANKS

Capital (fully owned by central Govt.)

II. FOR OTHER BANKSAuthorized capital

(300000 shares of Rs. _100 each)

issued capital

( shares of Rs. 100 each)

subscribed capital

( shares of Rs. 100 each)

TOTAL:

30000000.00

21380100.00

21380100.00

30000000.00

22015900.00

22015900.00

SCHEDULE 2: RESERVES & SURPLUS


(Current year)

As on 31.3

(previous year)

Dividend equalization fund

Statutory reserve

Building Fund

Bad-debt reserve fund

Agriculture credit fund

Investment dep. Reserve fund

Other funds

TOTAL:

5156344.00

44746413.25

24150258.00

00

00

33071750.00

10621879.80

117746645.05

4716026.00

39348963.25

24115547.00

10594349.00

00

16000000.00

20005518.33

114780403.58


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SCHEDULE 3: DEPOSITS


(Current year)

As on 31.3

(previous year)

A. I. Demand Deposits

(i) from banks

(ii) from others

II. Savings Bank Deposits

III. term deposits

IV. Current deposits

TOTAL :

( I, II, & III)

B. (I) deposits of branches in India

(ii) Deposits of branches outside

India.

TOTAL:

341924851.29

165203441.36

159246.42

100737127.59

608024666.66

00

00

00

317397664.93

111914097.09

1320928.81

77712543.81

508345234.64

00

00

00

SCHEDULE 4: BORROWINGS


(Current year)

As on 31.3

(previous year)

I. Borrowing In India

(i) reserve bank of India

(ii) other institutions of

agencies

II. Borrowings Outside India

Secured borrowing in I & II above

00 00


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SCHEDULE 5: OTHER LIABILITIES AND PROVISIONS


(Current year)

As on 31.3

(previous year)

I. bills payable

II. inter office adjustments (net)

III. interest accrued

IV. others (including provisions)

TOTAL:

597808.00

00

654602.00

5484152.00

6736562.00

634976.00

00

00

2126045.00

2761021.00

SCHEDULE 6: CASH AND BALANCE WITH RESERVE BANK OF INDIA


(Current year)

As on 31.3

(previous year)

I. cash in hand

II. cash in banks

III. cash in other bank

i). in current account

ii) in other account

3537062.91

35170915.65

12201168.44

2201168.44

10000000.00

50909147.00

6803179.90

34077651.25

25798498.82

5798498.82

20000000.00

66679329.97

SCHEDULE 7: OTHER ASSETS


(Current year)

As on 31.3

(previous year)

I. interest accrued

II. stationery

III. non banking assets acquired in

satisfaction of claims

TOTAL

4358027.78

597808.00

161381.00

5117216.78

3817967.23

634976.00

213693.00

4751636.23


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SCHEDULE 8: INVESTMENTS


(Current year)

As on 31.3

(previous year)

I. Investment In India In

(i) government securities

(ii) other approved

securities

(iii) shares

(iv) debentures and bonds

(v) call and short term

investment

457462500.00

505000.00

00

00

10000000.00

00

467967500.00

467463500.00

525000.00

00

0072500000.00

00

488169500.00

SCHEDULE 9: ADVANCES


(Current year)

As on 31.3

(previous year)

A. (I) bills purchase and disco.

(i) cash credits, overdrafts

and loans, repayable on

demand

(iii) terms loan

TOTAL

B. SHORT TERM :-(i) secured by tangible assets& Covered by bank/govt.

Guarantees.

(iii) unsecured

TOTAL

C. MIDDLE TERM :-(i) secured by tangible assets& Covered by bank/govt.

Guarantees.

00

187147910.67

1630475.20188778385.87

37647666.00

00

189352857.49

2350865.00191703722.49

47404342.00


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(iii) unsecured

TOTAL

D. LONG TERM :-(i) secured by tangible assets

& Covered by bank/govt.

Guarantees.

TOTAL

GRANT TOTAL (C.I. & II.)

140052.00

37787718.00

14133813.97

14133813.97

240699917.84

161711.00

47566053.00

10989266.00

10989266.00

250259041.49

SCHEDULE 10: FIXED ASSETS


(Current year)

As on 31.3

(previous year)

I. Premises

At cost as on 31st March of the

preceding year

Additions during the year

Deductions during the year

Depreciation to date

II. other fixed article (including

furniture & fixture)

at cost as on 31st

March of the

preceding year

additions during the year

deductions during the year

depreciation to date

TOTAL:

00

1732519.00

1732519.00

00

1330597.00

1330597.00


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INTRODUCTION

Organizations have become increasingly aware of the importance

human resource. This awareness is generated by the realization that people-sub-system is a critical

dimension in organizational effectives. Real life experiences substantiate the assumption that no

matter how sophisticated and modern the business activities of an organization become, it will be

extremely difficult to sustain its growth and effectiveness unless its human resource are

complementary to its operations.


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This realization has propelled human resource mangers into a major field of activity in

recent years, and the renewed interest has further facilitated in developing newer approaches in

managing human resource. The emerging concerns about new values of humanism and

humanization have also added to this renewed interest in human resource management.

Human resource (or personnel) management, in the sense of getting things done through

people. It's an essential part of every manager's responsibilities, but many organizations find it

advantageous to establish a specialist division to provide an expert service dedicated to ensuring that

the human resource function is performed efficiently.

"People are our most valuable asset" is a clich which no member of any senior management team

would disagree with. Yet, the reality for many organizations is that their people remain

under valued

under trained

under utilized

poorly motivated, and consequently

perform well below their true capability

The rate of change facing organizations has never been greater and organizations must

absorb and manage change at a much faster rate than in the past. In order to implement a successful

business strategy to face this challenge, organizations, large or small, must ensure that they have the

right people capable of delivering the strategy. The market place for talented, skilled people iscompetitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it

takes time to develop 'cultural awareness', product/ process/ organization knowledge and experience

for new staff members.


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RECRUITMENT :

Recruitment is understood as the process of searching for and obtaining applicants for jobs,

from among whom the right people can be selected. A formal definition of recruitment is: it is

process of finding and attracting capable candidates for employment. The process begins when the

new recruits are sought and ends when their applicant are submitted. The result is pool of applicant

from which new employees are selected.

TRAINING:

Training and development means it is any attempt to improve current or future employee

performance by increasing an employees ability to perform, through learning, usually by changing

the employees attitude or increasing his or her skill and knowledge. The need for training and

development is determine by the employees performance deficiency, computed as follow;

Training and development need = Standard performanceActual Performance

T in

Interview

Written test


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THE BANKING SYSTEM, PROCESS AND PRODUCTS:-

To understand the computerized system which is essentially computerized implementation of the

functionfirst, it is necessary to understand function in their own respects.

SERVICE GIVEN TO THE CUSTOMER:-

1. clearing service

2. Current account

3. Saving account

4. Fix deposit account

5. Clearing service

6. Insurance service

7. Mobile banking service

8. Draft facility at all over India

9. Locker facility

10.ECS facility

11.loan service


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CLEARING:

Clearing is the process related to the payment system in the Banking Industry. Cheque

and DD is the major instrument of the payment system. Clearing is the process through which

customer are able to pay/receive the money through cheque, DD, Dividend warrant and others such

instruments. Clearing involve the processing of outward cheque and inward cheque.

ECS:

The RBI has asked the banks in October 2005, to

provide the required details to the customers in their pass

book/account statement regarding the credits affected

through ECS.

Electronic Clearing service (ECS) is increasingly

being used by various users like Govt. Departments,

corporate bodies, etc. for repetitive payments like salary,

pension, dividends, interest, etc

The Electronic Clearing Service (ECS) from BNB entails automatic payment of utility and

routine monthly bills / installments from your savings / current account subject to your prior one

time approval. Similarly, refunds of IPO, Interest Warrants, and Dividend etc. can also be credited to

your account automatically. Here you do not have to go to anywhere to pay for the utility services or

stand in long queues for any kind of Bill Payment. Based on the standing instructions, payments will

be debited in your account

Safe deposit:

BNB provide safe deposit volt service also. there deposited amount then no

charge on it. The bank offers safe deposit lockers for safety of valuable things like

gold, silver, hard cash, diamonds, and important documents. Bank offers to its

customers safe deposit vault or locker at a large number of branches. . Basically use of lockers is to

make most valuable thing secure.


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Quality management system:

Simply quality management system (QMS) means,

1. Managing systems qualitatively.

2. Managing quality through systems.

Quality is the totality of features and characteristic of a product or service that bears

on its ability to satisfy stated and implied needs

Quality is

Quality is every ones job.

Quality comes from prevention not from correction.

Quality means meeting the needs of customers.

Quality demands term work

Quality demands strategic planning

Quality means results.

Quality management system is to direct and control an organization with regard to

quality.

Features of Strong QMS:-

understanding of roles & responsibility

understanding of authority & accountable

clarity on decision making effective communication

proper planning

Nagrik Bank Focus towards QMS:-

system strengthening

reduction in complains

increasing customer satisfaction

cost reduction

new product development

serving to new customers


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proactive suggestions for improvement

continual improvement

Principles Considering For QMS: -

customer focus

leadership

involvement of people

process approach

system approach to management

continual improvement

factual approach to decision making

mutually beneficial supplier relationship

CONTINUOUS IMPROVEMENT OF QMS IN NAGRIK BANK :


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INTRODUCTION

Marketing department is core of base of any corporate. Marketing means the process of

distribution. Marketing involves two important things.

1. The matching of an article of trade with markets.

2. The process of exchange.

P. Kotler defined Marketing as, The set of human activities directed at facaliting and

consummating of exchanges.According to American Marketing Association, Marketing

Management is the process of planning and executing the conception, pricing, promotion and

distribution of idea, goods and services to created exchanges that satisfy individual and

organizational goals.

A product is something that is made in a factory, A brand is something that is bought by

customers, A product can be copied by a competitor. But brand is unique. A product can be quickly

outdated, a success brand is timeless. Marketing deals with identifying and meeting human and

social needs. One of the shortest definitions of marketing is meeting needs profitably.

Marketing research is the function which links the Depositors and Borrowers and publicto the bank through information used to identify and define marketing opportunities and problems:

generate and evaluate marketing actions: monitor performance: and improve understanding as a

process. The bank is done marketing for getting more advances \ from the public.

CUSTOMER RELATIONSHIP MANAGEMENT:-


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In the banking world CRM has come to mean a customer-centric business strategy

The strategy exploits information technology to detect and project customer financial needs. It seeks

to utilize all the business lines in the bank to satisfy the said needs.

Bankers have traditionally used the branch system and mass marketing techniques to

attract deposit account and advance loans. Technology driven banks with their super computers can

manipulate customer information in any number of ways and at lighting speed. Customers have

more disposable incomes and increasingly comfortable with technology. Today the competition in

the banking industry has forced every bank to opt for this novel tool to hold on to their customers, le

alone attracting new ones. Before long the Indian banks should take on their foreign counterparts

head on. There is scope for improvement. Each bank should eventually design its own foundation

most appropriate to its customers.

For effective customer relationship management and HRD Nagrik co-operative bank is focused on

following points.

Managers should be friendly with his employees and exchange friendly greetings.

Formal acknowledgement of his staff achievements.

Feedback about staff performance.

Accept quality suggestions of staff and try to implement.

Assigning job with more responsibility.

Adapting job rotation.

Provide all possible opportunity to staff to participate in management of the branch

Conduct periodical performance appraisal of staff and make than understand their

weakness if any.

Employees should be friendly with customers and give guideline and information.

Employees should listen customer complaint and suggestions and try to remove the

services as per customer requirement.


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Extra services provided by Nagrik co-operative bank according to 9th

annual report:

Account holders can get 20,000 from current account and 10,000 from through

taller payment.

D-mat account is provided by bank.

Account holders can know their balance through tale banking.

Any account holder can get bank statement through tax from anywhere.

Balance can be shown through VAT machine.

All Indias draft can be issued quickly and with reasonable commission


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4.1 INTRODUCTION

In fact research is an art of scientific investigation research is the systematic &

intensive study directed towards a more complete knowledge of subject study and if start due to

some specific question or problem.Research is essentially an investigation a recording & analysis of evidence for the

purpose of gaining knowledge. Research methodology defines what the activity of research is

how to proceed, how to measure progress, and what constitutes success. A specific way of

performing an operation that implies precise deliverables at the end of each stage. According to

Clifford woody research comprises defining and redefining problems, formulating hypothesis or

suggested solutions, collecting organizing and evaluating data, making deductions and reaching

conclusions and at lest carefully testing the conclusions to determine weather they fit the formulating

hypothesis.

Research is common parlance refers to a search for knowledge. Once can also define

as a scientific and systematic search for pertinent information on a specific topic. In fact research is

an art of scientific investigation. The advanced learners dictionary of current English lays down the

meaning of research a careful investigation or inquiry specially through search for new facts in any

branch of knowledge. Redman and more define research as a systematized effort to gain new

knowledge. Some people consider research as a movement, a movement from the known to the

unknown. It is actually a voyage discovery. The data will be collected through the annual reports of

the bank. It also collected through the different bank websites, different published books by the

authors and magazines & Bulletins of RBI. It is also collected from the Master circular of RBI. The

data is also to be collected from the practical work and opinions of the staff-members.

It refers to the rearrangement of the data given in the Financial statement. The data is

analysed by the various financial statement analysis. It is analysed by the Ratio Analysis, Leverage,

Common size statement. It is analysed by the various methods. .Analysis of financial statements

Judging the Profitability of the business, liquidity of the business, long term solvency of the

business It helps to show the financial situation of bank and from this statement they can take

appropriate Decisions. It refers to the meaning and significance of the data so simplified.. It helps to

showIntra-firm and Inter-firm comparison. Ratio Analysis helps


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To judge the earning capacity, financial soundness and operating efficiency of an

enterprise

To simplify the accounting information.

To help in comparative analysis.

Data interpretation is used for to understand easily in the mind of public. It helps

to know the results of bank to the share-holders and to revaluate the performance of any bank. It will

fairly good idea about various aspect financial position.


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4.2 Define the problem :-

The Problem of the study is why the deposits and loan & advances is increase or

decrease every year.

Title of the Project:-

Financial Performanceand Deposits and Loans & Advances of Bavla Nagrik bank

Itincludes the lending & borrowing of money in the bank and how the functions work

in the bank.

Description of the Project:-

This is mainly done to avail loan from the bank by the public, which is must for the

sanction of loan. Other main aspect of the project was to get the loan sanction from the bank, which

is entailed fulfilling requirements of the bank for the same.

The project also involves Ratio Analysis and Sensitivity Analysis of Nagrik Bank.

With the help of Ratio Analysis a firm can get the idea about its liquidity, profitability, proportion of

long term liabilities, working capital, risk factors. And with sensitivity analysis a firm can study the

changes in various ratios in proportion with changes in other factors.


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4.3 LITERATURE REVIEW OF REPORT:

I have select the secondary data for the research purpose. secondary data are

selected because I want to collect all the information about bank activity and try to do changes and

provide require facilities to the account holders and give satisfaction to them.

4.3.1 Maintenance of Deposit Accounts

Acceptance of deposits and maintenance of deposit accounts is the core activity

in any bank. The very basic legal interpretation of the word 'banking" as defined in the Banking

Regulation Act, 1949 means accepting deposits of money, for the purpose of lending or investment

from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or

otherwise. Thus, deposits are the major resource and mainstay of a bank and the main objective of a

bank is to mobilise adequate deposits. Products/services are provided with the focus, which include

the satisfaction of wants and needs of the customers. Without such focus, no product/service canexist for a long period of time.

Safeguards:

PAN/GIR Number

The banks are required to obtain PAN/GIR number of a depositor

opening an account with an initial deposit of Rs.50,000/- and above.

Authorization

The opening of new accounts should be authorised only by the BranchManager or by the Officer-in-Charge of the concerned deposit accounts department at

bigger branch.

Completion of Formalities

The banks should ensure that all account opening formalities are

undertaken at the bank's premises and no document is allowed to be taken out for

execution.


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Types of Deposit Accounts:

Saving Account

Safe Deposit Locker Account

Joint Account

Current Account

Recurring Account

Saving Account:-

Any individual can open this account maximum 4 names are allowed in joint

account in this account but it is not rule of RBI that minimum balance Rs.500 for this account is

require. If there is not minimum balance of Rs 500 then Rs 50 is charged every 6 month. Any

institution co-operative society can also open this account moreover minor can also open thisaccount withdraw are allowed maximum 8 times in a month & 50 times in 6 month. in this

account nomination facility are also available.

In this account current interest rate is 3.5% but it change any time as per

RBIs rules. Cheque book charge is not charge for regular usage but for extra cheque book there

is some charge. when person open his saving account at that he had given a pass-book which is

free of charge but if this pass book is loss by mistake then new pass book is chargeable with Rs

10.if this account is closed within one year then Rs.20.is charged for pass book. moreover if

there is not enough balance in account than Rs.25 are charged on every return cheque.

Safe Deposit Locker Accounts:-

In order to facilitate the identification of locker keys by the Income-tax

officials, the banks should emboss on all locker keys an identification code which would

indicate the bank and the branch which had hired the lockers.

Joint Accounts:-While there are no restrictions on the number of account holders in a joint

account, it is incumbent upon the banks to examine, every request for opening joint accounts

very carefully. In particular, the purpose, nature of business handled by the parties and other

relevant aspects relating to the business, and the financial position of the account holders, need to


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be looked into before opening such accounts. Care has also to be exercised when the number of

account holders is large.

Current Accounts:-

This account can be open for only business establishment like

proprietorship business, partnership business, private limited, company limited .any other

institution, trust, co operative sector etc i.e. service men cannot open this account & minimumbalance require in this account is Rs 3000 and if balance is less then Rs 3000 than Rs. 25 is

charged per every return cheques. services charge in this account is Rs. 10 which is the lowest

charge in the banking industries. in this account nomination facility is available. cheque book is

also issued in this book. in this account person can withdraw or deposit at any time he want in

this account no restriction like saving account that only 8 time withdraw in one month.

Recurring account:-

Any person can open this account on the name of his firm, institution etc

in this account daily credited decided amount whether Rs.30, Rs.50 or Rs.100.in this account the

agent recognized by bank collect the money at the address given by account holder. One

passbook is given to account holder in which daily transaction are noted by agent and account

holder,after communicating one month check it and sign it bank given and identify card to its

recognized agent with the help of this card account holder become sure that he is banks agent

this account are open for 1 year on which annually 7% interest is given.

4.3.2 Management of Loans and Advances

Types of Loan & Advances :-

Loans and Advances against Shares, Debentures and Bonds

Advances against Fixed Deposit Receipts (FDRs) Issued by Other Banks

Financing Infrastructure/ Housing ProjectsAdvances against Gold Ornaments & Jewellery

Loans and advances to Small Scale Industries

Grant of Loans for acquisition of Kisan Vikas Patras (KVPs)

Working Capital Finance to Information Technology and Software Industry


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Loans and Advances against Shares, Debentures and Bonds:-

Banks are required to strictly observe regulatory restrictions on grant of loans and advances

against shares, debentures and bonds which are detailed in the Master Circular on 'Bank Finance

Against Shares and Debentures' dated August 28, 1998 read with the Master Circular dated July 1,

2009 on Exposure Norms and the Circular on Financing of acquisition of equity in overseas

companies dated June 7, 2005. The restrictions, inter alia, on loans and advances against shares and

debentures, are no loans to be granted against partly paid shares. No loans to be granted to

partnership/proprietorship concerns against the primary security of shares and debentures.

Advances against Fixed Deposit Receipts (FDRs) Issued by Other

Banks:-

There have been instances where fake term deposit receipts, purported to have been issued by

some banks, were used for obtaining advances from other banks. In the light of these happenings, thebanks should desist from sanctioning advances against FDRs, or other term deposits of other banks.

Financing Infrastructure/ Housing Projects:-

Any credit facility in whatever form extended by lenders (i.e. banks, FIs or NBFCs) to an

infrastructure facility as specified below falls within the definition of "infrastructure lending". In

other words, a credit facility provided to a borrower company engaged in

developing or

operating and maintaining, or

developing, operating and maintaining any infrastructure facility.

Advances against Gold Ornaments & Jewellery:-

Hallmarking of gold jewellery ensures the quality of gold used in the jewellery as to caratage

fineness and purity. Therefore, banks would find granting of advances against the security of such

hallmarked jewellery safer and easier. Preferential treatment of hallmarked jewellery is likely to

encourage practice of hallmarking which will be in the long-term interest of consumer, lenders and

the industry. Therefore, banks while considering granting advances against jewellery may keep in

view the advantages of hallmarked jewellery and decide on the margin and rates of interest thereon.


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Mainly there are sources of inflow described as under.

Deposit creation

Interest on loans

Income on investments

Commission and incidental changes

Notice, share transfer and locker entrance fee.

NOTE: - this theorical portion is taken by considering Nagrik banks operation.

The explanation of various sources of inflow is as under:-

Deposit Creation

Deposit creation is an important function of commercial banks. Deposit creation is by

two types, when the banks receive cash from the customers deposits are created. These deposits may

be saving bank deposit or current bank deposits. Any amount deposited in these accounts could be

withdrawal, by issuing cheque.if there is no limit for withdrawal, then that deposit is called current

account. if there is any restriction for withdrawal, then it is called saving bank account saving

deposits may be of several types such as fixed deposits, recurring deposits etc. in the case of current

deposits the depositor wants the bank to offer facilities to withdraw in the torn of cheque as many

times as possible. so for getting deposits, bank attracts deposits from the people either by means of

offering interest or other facilities.

Interest on Loans

Loan is the outflow or credit creation of bank. Bank always provides the different

types of loan against some valuable property with 15% or 20% margin. Various types of loan are

provided to different motive against the loans, bank get higher interest from loan holder. In concern

with Nagrik co-operative bank its provide mainly 9 or 12 types of loan like

mortgagee loan

vehicle loan

cash credit loan

machinery loan

FD loan

NSC loan

self employed loan


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term loan

Gold loan etc.

Against these loan, bank get 13% to 15% interest per annum so its wide and vast

inflow for the bank so high loan issue means high profit for bank. the figure of Nagrik bank of last

three years are given below.

Year Interest of loan

2008 53012873

2009 55629285

2010 61018325

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

1 2 3

Interest of loan

Year

Commission ExchangeBank also provide various other services like colleting light bill, issuing draft and pay order, bill of

exchange purchase of load & foreign current etc.

By providing these types services, banks can get commission its also one type of income for bank

The following figure share the commission flow of Nagrik bank for 3 years.

Years Commission Exchange

2008 1356625

2009 1243396

2010 407268


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0

200000

400000

600000

800000

1000000

1200000

1400000

1 2 3

Commiss ion Exchange

Years

Incidental Charges & Dividend

Incidental charges are those charges against bank provides various types of extra

services to the customer.

Services provides like:- Guarantee such as performance quite and financial guarantee.

- Rate custody of deed & securities.

- safe deposit volts

- Remittance of fund such as bank drafts mail target telegraphic transfer.

- Emergency vouchers etc

The figure shown below the incidental charges & dividends of Nagrik bank.

Years Charges & dividend

2008 167825

2009 204723

2010 183986

0

50000

100000

150000

200000

250000

1 2 3

Charges & dividend

Years


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Notice Fee, Share Transfer Fee, Locker Entrance Fee

Notice fee charged by bank against they send any notice to customer for loan

installation or for any banking transaction Share transfer transaction like bank is a broker who helps

to shareholder for buying and selling against these banks take share transfer fees. Bank provide

service of rate deposit vault or locker facility for this becoming a local holder, they take the local

entrance fees.

Following figure indicates the fees taken by Nagrik bank for 3 years.

Years Fees

2008 216480

2009 275400

2010 281385

0

50000

100000

150000

200000

250000

300000

1 2 3

Fees

Years

CREDIT CREATION OR OUTFLOW

In the sense of bank outflow means the flow of finance or money from the bank to

the outside customers. As per the operation of bank of lending and borrowing money to thecustomers and by the customer. Its main requirement of bank to know that which sources are for

credit creation or outflow from the bank. outflow of the bank mainly depends on the RBI regulation

as per the service sector, its main duties of bank to lending the money in the from of loans, cash

credit overdrafts for development of business and other purposes there are main sources of out flow

are as under:


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- Interest on deposits.

- salary and other expenses

- primary expenses

- fees

- fund and cost

Detail information of these outflows is as given below:

Interest on Deposits

Interest on deposit is based on the RBI regulation and banks actual rate. More depositor

required payment of more interest. In the bank there are mainly three or four types of deposit

provided to customer. It there is more flexible amount in the bank means low interest like current

deposit Because of more transaction in the current deposit the bank pay less interest of 0% per 6

month.in the saving deposit and recurring deposit, interest is paid to customer are regimentally 3.%and 3.5% there high stake or amount with steely movement in fixed deposit holder get more interest

like 7%to 7.5% so bank provide these interest against different deposits which outflow for bank.

Figure shown below indicate the interest on deposit and debts:

Years Interest on dep. & debt.

2008 25735420

2009 29070511

2010 33500262

DEPOSIT RATESSAVING BANK 3.50%

FIX DEPOSIT (APPLICABLE FROM DATE : 17-08-2009)

31 Days to 180 Days 4.00%

181 to 364 Days 5.00%

12 months to 23 months 7.00%

For 2 years 7.50%

Above 2 years and up to 5 years 7.00%


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0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

1 2 3

Interest on dep. & debt.

Years

Salary and Other Expenses

Now days mostly banks are a computerized, yet for maintain computer and for other

manual works, there are requirement of worker and professional persons for customer. Attending

management and for banking practices so against these banks have to provide salute for professional

person and wages for worker or peon. Bank also pays finance for provident funds. There are also

other expenses and allowances provides by bank like traveling and vehicle flue expenses for etc.

Bank also expenses for staff recruitment and on the training of bank staff. For these

expenses, the figures are shown below.

Years Salary & other expenses

2008 5243074

2009 5936689

2010 6927424

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

1 2 3

Salary & other expenses

Years


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Primary Expenses

Primary expenses are those which mainly spend on for banking operation and facility

provides to staff of bank and customers both.

Primary expenses mainly include:

Tax, rent insurance, light bill, telephone & comm. expenses.

Stationary, printing and advertisement cost.

Annual meeting expenses and celebration expenses.

Library sanitary & water expenses.

Deposit insurances etc.

Figures of all these primary expenses for 3 years are shown below:

Years Primary expenses

2008 1696872

2009 1920797

2010 2165721

0

500000

1000000

1500000

2000000

2500000

1 2 3

Primary expenses

Years

Fees

Fees are paid for RBI rules and regulation for,

auditing on bank account,

legal fees,

membership fees,

Clearing house expenses etc.

Following figure indicates the fees are paid of volume bank for last 3 years.


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Years Fees

2008 185950

2009 116350

2010 107100

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

1 2 3

Fees

Years

Fund and Other Cost

Banks make some reserve for future uncertainties like:

depreciation fund on investment deposit insurance premium,

bed debts fund,

Accident fund etc.

There are also other costs like computer, machinery, building repairing cost etc.

Expenses for these all sources are graphically shown below:

Years Fund & Cost

2008 30838911

2009 31994349

2010 33071750

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

1 2 3

Fund & Cost

Years


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CIRCULATION CLEARING OF A CHEQUE

cheque is defined as an instrument in writing containing an unconditional order

signed by the maker directing a certain person to pay certain ram of money only to or to the order of

a certain person or to the bearer of the instrument. The banks have developed and popularized the

cheque system through, which transfer of money is made possible. The cheque system has reduced

the use of cash to a considerable extent. The cheque system is a highly developed system of credit

instrument through, which money can be transferred from one bank to another bank. Circulation of

clearing cheque that how the cheque circulates for clearing the payment, which shown below:

BOBche ue

Customer gives chequeof BOB bank to Nagrik

bank for converting inMoney. Nagrik bank enters the

data of cheque than send

to clearing house.

Record the data asper bank code than

inform to BOBbank.

Bank checks the figure, ifsufficient than inform to

Nagrik bank for clearing.

Customer withdrawsthe money form Nagrik

bank.


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CIRCULATION OR DISTRIBUTION OF CASH FLOW

Co-operative bank are form is on the co-operative principles and as such they are

more service oriented than profit oriented. So main motive of co-operative banks is to distribute the

profit for public welfare and in other part by the portion of profit decided by board of directors

Nagrik Co-operative Bank distribute its net profit by RBI regulations and some portion is by board

of directors. Proportion of distribution the profit is as described below:

Reserve Fund (38.71%)

Share Dividend (12%)

Dividend equalization fund (2%)

Education fund (2.5%)

Bad-debt A/c (15%)

Urban Bank Credit equalization fund (15%)

Building Fund (60%) Bad-debt reserve fund (35%)

Co-operative prachar fund (5%)

Religious fund (0%)

Now the distribution of profit for year ended 31st

March 2010, are as below:

PARTICULARS AMOUNT

Net Profit 12504756.35

Reserve Fund (38.71%) 4853586.35Share Dividend (12%) 2442185.00

Dividend equalization fund (2%) 427602.00

Education fund (2.5%) 2,00,000.00

Bad-debt A/c (15%) 4500000.00

Urban Bank Credit equalization fund (15%) 81383.00

Religious Fund (0%) 00000.00

Net Profit -33750.56

Co-operative prachar fund (5%) 1678.56

Building Fund (60%) 20142.00

Bad-debt reserve fund (35%) 11750.00

Net Profit Appropriation 12538326.91


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CRR (CASH RESERVE RATIO)

In terms of Section 42(1) of the RBI Act 1934, Scheduled Commercial Banks are required to

maintain with RBI an average cash balance, the amount of which shall not be less than three percent

of the total of the Net Demand and Time Liabilities (NDTL) in India. At present, effective from the

fortnight beginning June 14, 2003, the rate of CRR is 4.50 percent of the NDTL.

NPA (NON-PERFORMING ASSETS)

If any advance or credit facilities granted by bank to a borrower become non-performing

then the bank will have to treat all the advances/credit facilities granted to that borrower as non-

performing without having any regard to the fact that there may still exist certain advances / credit

facilities having performing status.

Undoubtedly the world economy has slowed down, recession is at its peak, globally stock

markets have tumbled and business itself is getting hard to do. The Indian economy has been much

affected due to high fiscal deficit, poor infrastructure facilities, sticky legal system, cutting of

exposures to emerging markets by FIIs, etc.

SLR (STATUTORY LIQUIDITY RATIO)

In terms of Section 24 (2-A) of the B.R. Act, 1949 all Scheduled Commercial Banks, in addition

to the average daily balance which they are required to maintain under Section 42 of the RBI Act,

1934, are required to maintain in India,

a. in cash, or

b. in gold valued at a price not exceeding the current market price, or

c. in unencumbered approved securities valued at a price as specified by the RBI from time to

time.


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4.3.4 IT (INFORMATION TECHNOLOGY) :

In banking sector, an information system consists of an organized combination of

people computer hardware, software, communications network, and data resources that collect

transaction and spread information through banking, modern banking relies on computer based

information systems and on information technology. Education of staff on IT should be taken up on

priority. The training establishments of banks should be suitably strengthened with adequate

personnel and other infrastructure to import IT related training to the at all level.

It serves three vital roles in banking

Support of banking operations. This includes maintenance of charges stores of

saving current and fixed deposits data, inflow and outflow of finance.

Support of management decisions. by analyzing deposit, equity debts, loan,

performance of staff and departments,

Support of banking competitive advantages. Information analysis can help a bank to

make decision that will give it an advantage over the competition like addition of

services, effective banking products etc.

4.3.5 Time value of money

Is one rupee today the same as one rupee 10 years from now?

The simple question raises one of the most important concepts in finance the time

value concepts of money. In essence the certainly of having a given sum of money today is worth

more than the certainty of having an equivalent sum at a later date.

For example, the sooner you collect your accounts receivable the sooner you will be

able to deposit the money and earn interest on these funds likewise, the longer you delay your

account likewise, the longer you will earn on those funds as they sit in the bank. in the banking

sector also, this strategy is used when the customer issue the outside cheque than its not directly get

the amount it requires few days and within those days, bank can get interest from that money which

is called float money.


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4.3.6Investment

Bank is financial intermediaries and lending is an important function of a bank. The

bank collects deposits of various kinds from people by means of giving reasonable and sometimes

attractive interest and lends the same to industries trade and transport people at a higher rate of

interest and thus makes some profit. Banks have to earn money if they want functions effectively

their role interest is not to make profit and declare higher dividends to the shareholders. They are

guided by the stators regulations while employing bank funds the banking regulation act and the

credit regulation policy of the reserve bank of India and the social responsibility imposed by the

government on banks are some of the parameters sets in motion a chain of economic activities both

direct and taster new services which are conducive to accelerated socio economic growth.

Bank Finance Results In,

Increased production of goods and services

Creation of more employment and

Income generation in the countries.

BANK CAN INVEST THEIR DEPOSITS OR FINANCE IN VARIOUS WAYS LIKE:

Lending of Funds

Overdrafts

Cash-credit

Term Loans

Semi Government

Securities

Bonds of port

trust

Municipal

Council

Treasury

Bills

Guilt edged

Securities

Industrial

Securities


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4.3.7 INVESTMENT POLICY

The investment policy of a commercial bank deals with the technicalities of investment the

investment of bank funds especially the deposits is a difficult and risky task because of the bank

investing some bodies money namely the depositors. Whenever the depositors present cheque forencashment, they must be immediately honored. it the payment is delayed, the confidence of the

public with the bank is threatened infect the activities of the bank depend upon the confidence with

which the depositors are having with the bank. The banks have to pay reasonable rate of interest in

order to attract fixed deposits. If the banks mobilize more or fixed deposits it can invest in profitable

ventures. The bank has the responsibility of paying handsome dividend to shareholders of

administrations, is required to appoint different categories of officers and assistance the

administration charges in the found of salaries, and bonus and incentives are also on the neither side

all these compulsions make the banker to invest the funds in different type of assets.

The investment policy of banks is not uniform throughout the world. The nature and

availability of funds also play a critical role in acquiring different types of assets. The problem that

banks face in rural areas is different from urban areas. Though all these conditions exert influence in

the formulation of an investment policy year. There are some technical conditions which govern the

investment policy of bank. The guiding principles of investment policy of a commercial bank are

profitability

security

Two other sub policies are

Productivity

Diversity

Profitability

Profitability is the important objective of a commercial bank. a commercial of a bank

is a very much concerned with making as high a profit as possible in acquiring money the roleconsideration of a commercial bank is to earn an income. The ban must earn sufficient income form

its assets in order to meet all expenses of the bank including dividend to the shareholder. The

income will be greater if the yield from the assets higher. The bank known that all depositors do not

come to the bank to encase the cheque simultaneously. Therefore it takes the liberty in making

investment on profitable assets. The main profit earning assets are loan and advances. Even here


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some reservations are made by the bank. Only a reasonable percentage of deposits are used to lend

against bill of exchange and overdraft.

Profitability means earning profits on the assets acquired whenever the banks obtain deposits

they have pay interest to shareholders. Beside this the shareholders of the bank should receive some

return on their investment. It is the responsibility of the bank management to have some surplus to

declare dividend to shareholders. Hence banks have to make profit.

Security or Safety

The second principle is security or safety. Since the bank deals in other peoples

money, it has to give greater consideration for security. Unsecured assets are always dangerous. In

order to safeguard the funds of the depositors, a bank should invest its fund on safe-assets. The bank

should never under estimate the safety principle while deciding on investment of funds. It the bank

lends to credit unworthy borrowers, it has to safer very heavy losses. That is why; the banking

principle prohibits the banks in granting advance to unsecured assets.

When the banker advances withdrew security, he will run the risk of losing the

money. If the loans are prompt in repayment than there will be no worry. But it is essential that the

banker should have substantial security for his advances. The banker is not advancing without

sufficient security. Because he will be managing the public money and it the confidence of the

public is lost there will be run on the bank. The security should cover the money advanced interest

there on and other charges. Thus, the banker should also keep in mind the security principle while

lending.

Diversity

The principle of diversity implies that inevitable funds should be invested in a

diversified manner. It means that funds should be provided for all types of activities. According to

this principle, the banks should as for as possible invest its surplus fund in different types of business

enterprises. The reason is that if particular business organization collapses. The bank should not be

made to suffer terrible losses. It the investment evenly distributed among several economic

activities, than the risk also is distributed properly if the bank invests in diversified securities or

makes loans to different types of business enterprises; it ensures for itself a regular flow of cash with

the help of which it can meet the demands of its customers.


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Productivity

This is another important principle put forth by banking expert. According to them,

the bank should invest its surplus funds in such a way as to secure for itself an adequate and

permanent income. The objective of the bank is to earn maximum profits and its income must be

acquired from productive in investments. If the asset are productive. The income to the bank will

also be stable. This principle implies that under no circumstance. The bank should advance funds for

speculative purposes.


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4.4 Objectives of the study :-

To analysis the financial performance of the organization

To Study the financial statement of the organization

To study the loan application and documentation Process

To analyze the trend of the loan and advances

To know the trend of deposits

To study the relationship between interest rate and loan and advances

To study the relationship between interest rate and deposits


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4.5 Rationale of the study :-The study report is useful to understand the knowledge about the performance of

finance in bank and how the functions work. It is helpful to know the quality management system

and how the technology used in bank. it also help to know the deposit creation and loan & advances

in the bank and to measure the profitability of the bank.


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4.6 Limitations of the study :-

Though carrying out the project work was quite thrilling, we admit that we did face certain

limitations like:-

The time given to me was only 6 weeks that was not sufficient to study in deep to the

project.

The secondary data which are to be provided for study may not be reliable.

My study for analysis includes only some years data so it may affect the result of the

analysis.

The unit under study is co-operative sector and it possesses the limitation of the co-

operative sector.


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4.7 VARIABLE & HYPO.FORMULATION :-

(1). Ho: There is no relationship between Deposits and Interest rate.

Ha: There is relationship between Deposits and Interest rate.

(2) Ho: There is no relationship between Loans and Interest rate.

Ha: There is relationship between Loans and Interest rate.

Financial Institutions

Financial intermediaries: institutions through which savers can indirectly provide funds to

borrowers. Examples:

Banks

Mutual fundsinstitutions that sell shares to the public and use the proceeds to buy

portfolios of stocks and bonds.

financial market :

All savers deposit their saving in this market.

All borrowers take out loans from this market.

There is one interest rate, which is both the return to saving and the cost of

borrowing.

The Slope of the Supply Curve

SAVING, INVESTMENT, AND THE FINANCIAL SYSTEM 18

The Slope of the Supply Curve

InterestRate

Loanable Funds($billions)

Supply

An increase in

the interest rate

makes saving

more attractive,

which increases

the quantity of

loanable funds

supplied.

40

4%

60

9%


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An increase in the interest rate makes saving more attractive, which increases the quantity

of loanable funds supplied.

An decrease in the interest rate makes saving less, which also increases the quantity of

loanable funds supplied

Interest rates directly affect to the savings, it will increases or decreases the savings. But i

do not affect to the quantity of loans.

The Slope of the Demand Curve

SAVING, INVESTMENT, AND THE FINANCIAL SYSTEM 20

The Slope of the Demand Curve

InterestRate

Loanable Funds($billions)

Demand

A fall in the interest

rate reduces the cost

of borrowing, which

increases the quantityof loanable funds

demanded.

20

7%

5%

40

Like many other markets, financial markets are governed by the forces of supply and

demand.

Markets are usually a good way to organize an economic activity.

Financial markets help allocate the economys scarce resources to their most efficient

uses. Financial markets also link the present to the future: They enable savers to convert

current income into future purchasing power, and borrowers to acquire capital to produce

goods and services in the future.


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4.8 DATA COLLECTION:

Data collection is a very important part for any project. It is stepwise procedure adopted to

carry out this research project. It is felt that the procedure adopted here is sufficiently effectives and

most limitation.

Sources of data:

- Primary source

- Secondary source

- primary sources:

Primary details about the bank of main branch were collected through the interviews

and personal talk with manager to collect the financial information of bank.

- secondary sources:

The sources of my collection were secondary sources. The information has been

taken from balance sheet, income- statements and audit report of the company.

PROGRESS REPORT OF THE BANK :

PROGRESS REPORT Rupees in Lakh

2007-2008 2008-2009 2009-2010

Paid Of Capital 204.32 220.15 213.80

Reserve & Other Funds 1018.99 1103.51 1177.47

Deposits 4521.95 5083.45 6080.25

No. of Share Holders 3039 3029 2997

Advances 3061.20 2502.59 2406.99

Dividend Paid 15% 15% 12%

Gross Profit 126.16 137.73 171.82

Net Profit After TAX 86.16 85.56 125.38

Working Capital 5895.48 6564.59 7664.26

Audit Class 'A' 'A' 'A'


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4.9 DATA ANALYSIS & INTERPRETATION:

FINANCIAL POSITION

Profit Graph of Nagrik Bank for 3 year:

0

0.5

1

1.5

2007-08 2008-09 2009-10

Profit (in crore)

Profit (in crore)

Profit (in crore)

0.861

0.856

1.254

2007-08

2008-09

2009-10

Profit of the Nagrik ba

fm - bhavla nagrik bank

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