hapter 5 secondary ata...

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Chapter 5 Secondary Data Analysis

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5.1 Introduction

This research is a triangulation of both longitudinal and cross-sectional data. This

chapter analyses the longitudinal data collected from various documentary

sources – RDCCB, RBI, NABARD and CAB. Other important secondary data is in

the form of the profile of Raigad District. The profile of Raigad District helps set

the research in the right context.

The longitudinal data is in form of history of RDCCB, management structure,

organisational structure, financial information such as authorised and subscribed

share capital, profit, working capital and loans outstanding and issued. Another

useful data is about mobilisation of funds to enable the RDCCB to contribute to

the rural development of the Raigad District.

This chapter analyses the longitudinal secondary data.

5.2 A Profile of the Raigad District

5.2.1 Historical Background

The District of Raigad (called Raigarh in the census) derives its name from the

fort of Raigad. It was part of the erstwhile Kolaba District of the Maharashtra

State. Shivaji in the year 1656 conquered Rairi (Raygad), which was then almost

an inaccessible plateau, from Chandrarao More, the Maratha Chieftain in Bijapur

Court and named it as Raygad (Raigad). Shivaji later made Raigad the seat of his

Government in the year 1664. This district remained a part of the Maratha Empire

until 1818. Thereafter it was merged into the Bombay Province of British India.

The sixteenth century saw the advent and rise of Portuguese power on the west

coast of India and Raigad was no exception. The sultan lost hold on the district in

1675 and it went to the Marathas. The Marathas continued to rule the district until

1817, i.e., when the struggle between the British and the Peshwas came to an

end and the whole of Konkan was transferred to the British. In 1819, South

Konkan was formed as a separate district with headquarters first at Bankot and

later at Ratnagiri. The trade in these ports shrank from foreign commerce to local

traffic when Kolaba became a part of Gujarat ruled by a local chief.

147

5.2.2 Geographical Location and Features

Raigad District, with a total geographical area of 7148 sq.KM, is located in the

state of Maharashtra in India. The maps of India, Maharashtra and Raigad District

are given below:

Figure 16: Map of India with location of Maharashtra [Source:

www.mapsofindia.com]

148

Figure 17: Districts of Maharashtra (source Maps of India,

http://www.mapsofindia.com/maps/maharashtra/maharashtra.htm)

149

Figure 18: Map of Konkan Region (http://www.konkanonline.com/maps/konkan-

map.html)

http://www.konkanonline.com/maps/konkan-map.html

http://www.konkanonline.com/maps/konkan-map.html

150

Figure 19: Map of Raigad District (mapsofindia.com)

Raigad Census 2011

Figure 20: Raigad Census 2011 overview

District : Raigad

State : Maharashtra

Population 2,635,394

Population Density 368 Persons/sq. Km.

Male Population 1,348,089

Female Population 1,287,305

Sex-Ratio 955

Total Literacy rate 83.89 %

Male Literacy Rate 90.68 %

Female Literacy Rate 76.79 %

Area (square Kilometre) 7,161.4

151

Raigad District profile based on 2001 Census

Total Area 7,148 Thousand Hectare

Climate & Rainfall

Average Rainfall in District 3884.3 M.M.

Minimum Temperature 16.1 Degree Celsius

Maximum Temperature 40.4 Degree Celsius

Geographical Location

North Latitudes 17.51 to 19.80

East Longitudes 72.51 to 73.40

Population (2001 Census)

Total 22.07 lacs

Male 11.17 lacs

Female 10.90 lacs

Rural 16.73 lacs

Male 8.34 lacs

Female 8.39 lacs

Urban 5.34 lacs

Male 2.83 lacs

Female 2.51 lacs

0-6 Population

Persons 3.1 lacs

Males 1.6 lacs

Females 1.5 lacs

Literacy Rates (%)

Total 77

Male 86.1

Female 67.7

Illiteracy Rates (%)

Total 39.6

Male 30.9

Female 48.5

Scheduled Castes-Proportion (%)

Total 2.4

Male 2.4

Female 2.4

Scheduled Tribes-Proportion (%)

Total 12.2

Male 12.2

Female 12.2

Work Participation Rate (%)

152

Total 41.4

Male 52.7

Female 29.8

Proportion of Main Workers (%)

Total 30.9

Male 43.3

Female 16.5

Proportion of Marginal Workers (%)

Total 11.3

Male 9.4

Female 13.3

Proportion of Non-Workers (%)

Total 58.6

Male 47.3

Female 70.2

Cultivators-Proportion of Total Workers (%)

Total 28.6

Male 21.8

Female 40.9

Agricultural Labourers-Proportion of Total Workers (%)

Total 20.4

Male 13.9

Female 32.1

Workers in Household Industry -Proportion of Total Workers (%)

Total 2.7

Male 2.3

Female 3.2

Workers in other then Household Industry -Proportion of Total Workers (%)

Total 48.4

Male 62.0

Female 23.8

Sex Ratio

Female per 1000 Males 976

Household size 5.0

Administrative Divisions

Revenue Sub-divisions Alibag, Panvel, Mangaon, Mahad

Tehsil Offices Alibag, Pen, Murud, Panvel, Uran, Karjat, Khalapur, Mangaon, Roha, Sudhagad, Tala, Mahad, Mhasala, Shrivardhan, Poladpur

Municipal Councils 11

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Panchayat Samitis Alibag, Pen, Murud, Panvel, Uran, Karjat, Khalapur, Mangaon, Roha, Sudhagad, Tala, Mahad, Mhasala, Shrivardhan, Poladpur

Gram Panchayats 821

Villages 1919

Table 11: Overview of Raigad District64

5.2.3 Soil and Cropping Patterns

The soils of the Raigad District are essentially derived from the Deccan trap,

which is the predominant rock formation of the district with small out crops of

laterite soil at a few places in Poladpur Tehsil and in the Matheran hills. The main

types of soils found in the district are forest soils, varkas soils, khar or salt soils,

coastal alluvium and laterite soils. Laterite soil yields kharif millets. Rice soils are

formed from the trap rock under heavy rainfall and humid conditions. Coastal

alluvium is devoid of clan fraction or humus and is open in nature. Good garden

crops like coconut, areca nut, plantain etc. are grown in these soils depending

upon the availability of water. They yield coarse millets.

5.2.4 Climate

The climate of the district is typical of that on the west coast of India, with plentiful,

regular and seasonal rainfall during the monsoon season.

The year is divided into four seasons:

i. Summer - March to May

ii. Rainy - June to September

iii. Post Monsoon - October and November

iv. Winter - December to February

The average annual rainfall for the district as a whole is 3028.9 mm. The summer

from March to May is a period of increasing temperature. May is the hottest

month of the year. In the afternoon sea breeze relieves the oppressive heat

particularly in the coastal region. The air is humid throughout the year. During the

southwest monsoons, skies are overcast with clouds. Winds are very strong

during the monsoon season and blow from west to southwest. From October to

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December, the winds are generally moderate and between January and March,

the winds continue to be moderate. In association with cyclonic storms in the

Arabian Sea in the post-monsoon month and to a lesser extent in May, the district

experiences very strong winds, sometimes reaching gale force strength, and

heavy widespread rain. Occasionally these storms cross the coast in the northern

part of the district and cause heavy damage.

5.2.5 Natural Wealth

Minerals: Geologically, the Konkan lowlands are a platform of marine denudation

raised to form a narrow plain. The geology of the entire district consists of dark-

coloured volcanic lava flows and laterite, which date back to the Mesozoic era.

These are spread out in the form of horizontal sheets of beds and have

innumerable spurs, hills, ridges, peaks and plateaus. The Deccan traps generally

lack minerals of economic importance but being hard, dense and durable are

most suitable as building materials. Along the north-south coastal tract between

the sea and the Sahyadris there are three well-known groups of springs in the

district, namely the ‘unhere’, Sav and Vadavali springs. These are known to

possess medicinal value in curing skin diseases and rheumatic complaints.

Nodular kankar, a concretionary lime carbonate, is usually found sporadically on

soils and alluvium covering the Deccan trap in the district. The Kankar, on

burning, yields good time almost comparable in quality with the hydraulic lime. In

addition to kankar, the seashells found along the coast at places are used for the

manufacture of lime. Salt is produced by direct solar evaporation of seawater near

Uran, Sheva, Karanja, Pen and Panvel.

Fisheries: Raigad District, with a coastline of about 240 kilometres is one of the

most important maritime districts of the state. Fishing though considered under-

developed, ranks only next to agriculture as far as means of livelihood is

concerned. The fishing industry is mainly dependent upon the exploitation of

marine resources. The fishing season commences from September and lasts until

the end of May. Sharks, skates, rays, mackerels, sardines, tuna, surmai, pomfret,

karel, dagol and catfish form the main varieties. Bulk of the catch is sent to

Mumbai market. The production is 46,176 tones.

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Forest: According to 1989 records, the forest area in the district is distributed

among 1857 villages accounting for 62.78 percent of the villages in the district.

The total area under forest in Raigad is about 152,634.97 hectares and social

forestry area is about 756.25 hectares. Among the 15 tehsils of the district,

maximum forest area falls under Roha tehsil accounting for 14.34 percent of the

total forest area. Northern tehsils (with clearly marked hill ranges) have rich

forests. Forest products include teak, and Greater Mumbai and Pune provide the

main market for teak wood. The other forest produces are Ain, Deodar, Kinjal and

Khair.

Irrigation: The irrigated area in Raigad District is distributed into 195 villages

constituting 10.53 percent of the total villages. In 32 villages, irrigation is done

only by well. Government canals irrigate a major proportion of area (54.70

percent), while tanks and wells irrigate 14.10 percent and 13.56 percent of the

total area. Rivers and other sources account for nearly 10.00 percent of the total

irrigated area. The percentage of cultivable area to total area of the district is

36.47 percent.

5.2.6 Social Structure

Within the district, the largest village is Ghera Sudhagad with 3753 hectares area

in Sudhagad tehsil, while the smallest village is Shivasangh (uninhabited) with

0.97 hectares area. In terms of population, Chanje village in Uran tehsil has the

highest population of 12,452 while Gavkhar is the smallest village, only four

persons residing in one household.

Population: According to 2001 Census, the total population of the district was

2,205,972 with 1,116,821 males and 1,089,151 females. Among the 15 tehsils,

Panvel tehsil was the most populous having 281,397 people, whereas Poladpur

tehsil falls in the lowest rank with a population of 55,300.

A major proportion of the population of the district i.e., 81.99 percent lives in rural

areas while remaining 18.01 percent reside in urban areas. Out of 1908 villages,

1851 are inhabited. Mangaon tehsil has the highest rural population in the district

and the largest number of inhabited villages. The average size of a village in

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Raigad District is 808. Small-sized villages of less than 500 people together

account for 40.47 percent.

Sr.

No Taluka Geographical Area Population (In ’000)

Inhabited

Villages

Deserted

Villages Town

Total

Area

(Sq.KM)

Male Female Total

1 Alibag 185 23 02 499 92 94 186

2 Uran 52 09 02 186.4 55 52 107

3 Panvel 162 01 03 578.3 148 134 282

4 Karjat 174 01 03 651.2 80 75 155

5 Khalapur 121 01 01 406.1 77 68 145

6 Pen 143 18 01 498.5 75 73 148

7 Sudhagad 95 01 01 458 31 31 62

8 Roha 170 00 01 632.4 70 69 139

9 Mangaon 244 00 01 938.6 85 97 182

10 Mahad 183 00 01 810.5 78 86 164

11 Poladpur 87 00 00 371.5 25 30 55

12 Mhasla 80 02 01 311.7 25 33 58

13 Srivardhan 78 00 01 260.2 35 43 78

14 Murud 72 01 01 265.2 31 33 64

15 Tala * - - - - - - -

Raigad

Dist. 1851 57 19 7148 908 907 1825

Table 12: Raigad District - Taluka wise Area Population (*newly created Taluka,

details included in Roha.

Note: The area of district is from the record of survey of India and area of each

Taluka from the revenue records of the district. Hence, the calculation will not

tally. Source: (1) Survey of India (2) Revenue records (3) Census record-2001.

Population Growth: The population of Raigad District increased from 1,486,452

in 1981 to 1,824,816 in 1991 registering a decadal growth rate of 22.76 percent,

and a decadal growth rate of 20.89 percent from 1991 to 2001. The following

table shows the growth of population in the last two decades.

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District Decadal growth rate

1981-1991 1991-2001

Raigad 22.76% 20.89%

Table 13: Decadal growth of population during 1981-1991 and 1991-2001

(Source: Census of India 2001)

Khalapur Tehsil has shown the highest growth rate of 47.21 percent while

Poladpur has indicated lowest growth rate of 9.85 percent. The level of

urbanisation increased by nearly 4 points during 1981-91. Panvel and Khalapur

Tehsils are the two most urbanised tehsils with 38.80 percent and 31.90 percent

population being urban. Mangaon Tehsil is less urbanised with only 3.63 percent

of population in urban areas.

Population Density: The overall density of population of Raigad District is 255

persons per sq. km. The density of population increased from 209 in 1981 to 255

in 1991 ranking eighth district in Maharashtra state. The Raigad District has a

very high urban density of 2016 persons per square kilometre compared to rural

density of 214. Sudhagad Tehsil has the lowest density of 134 and Roha Tehsil is

the most densely populated (urban) with a density of 8671.

Sex Ratio: According to the 2001 Census, Raigad District has a sex ratio of 975

females per thousand males, which was higher than the State average of 922

females per thousand males, ranking fourth among the 30 districts. The ratio in

Raigad has come down from 1046 in 1981 to 1010 in 1991 to 975 in 2001.

Population of Scheduled Castes and Scheduled Tribes: According to the 1991

Census, 59 Castes and 47 Tribes have been declared to be recognised as

Scheduled Caste (SC) and Scheduled Tribes (ST) respectively.

(A) Scheduled Castes: The Scheduled castes population of Raigad District as

per the 2001 Census is 50,999 comprising 35,681 males and 15,318 females.

They accounted for 2.34% of the district population. A large majority of 1265

villages (69.24%) have not reported any scheduled caste population. The

scheduled caste population in the district has more than doubled during the

decade 1981-91 with a growth rate of 102.52%, whereas the corresponding

growth rate of the general population in the district was 22.76%. The higher

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growth rate of 217.48 percent was shown by Khalapur tehsil while Murud has the

lowest 18.79 percent. The Sex ratio of scheduled caste population in the area

was 999 females per thousand males.

(B) Scheduled Tribes: The scheduled tribe population of Raigad District in 2001

was 233,953 comprising 118,238 males and 115,715 females. They contributed

12.18% of the district population. Out of total 1851 villages, 591 villages (31.93%)

have no ST population at all. The scheduled tribe population in the district

increased by 23% during the decade. The highest growth rate of 103.64 percent

was shown by Sudhagad tehsil while Shrivardhan tehsil has indicated lowest

growth rate 3.69 percent. The sex ratio among the scheduled caste population

was 979 females per 1000 males.

Literacy Rate: According to 2001 Census, 1,470,309 persons were reported as

literate constituting 829,581 male literates and 640,728 female literates. Literacy

in rural areas was 60.48 percent and in the urban areas, it was 73.36 percent.

Table 14: Literacy rates in 1991 and 2001 [Source: Census of India 2001]

5.2.6 Economy of Raigad District

Raigad District is endowed with three major economic resources - agricultural

land, maritime fishery and an abundance of mineral deposits. The district is

famous for paddy and large areas of land have been brought under paddy

cultivation. In addition, coconut, kokum and arecanut trees are grown. The district

also has a long coastline and has considerable fishing activities of prawns, tuna

and other varieties of fish. Many types of fish are sent from this district to Mumbai

and Pune.

Rasayani is one of the main industrial centres developed with large-scale public

and private industries. In addition, as Raigad is a coastal district of Maharashtra,

there are many ports on the seashore of the district. Nhava-Sheva is the famous

Literacy rates

1991 2001

Persons Males Females Persons Males Females

64 76 52 77 86 68

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international port located near Uran. Elephanta, Alibag, Uran and Murud have

some of the best beaches on the western coast. Large number of sites on the

western region of the district has been identified by the MIDC for development of

tourism.

Economic Activities: The workers have been categorised into three types,

namely- main workers, marginal workers and non-workers depending upon the

number of days put in at work. According to 1991 Census, there are 39.46

percent main workers, 4.41 percent marginal workers and 56.13 percent non-

workers to total population. Among the tehsils, Sudhagad tops in work

participation rate (46.34 percent) with male 52.76 percent and female 39.71

percent. The lowest participation rate was in Murud Tehsil (32.76 percent). The

table below gives a comparative picture of main workers distributed in nine

industrial categories for the district.

Categories of workers Total

Population Male Female

1 Cultivators 322662 (44.81) 162191 (35.52) 160471 (60.90)

2 Agricultural Labourers 127102 (17.65) 62433 (13.67) 64669 (24.54)

3

Livestock, Forestry, Fishing,

Hunting and Plantations,

Orchards and allied activities

3 21238 (2.95) 18132 (3.97) 3106 (1.18)

4 Mining and Quarrying 2663 (0.37) 2163 (0.47) 500 (0.19)

5

i. Manufacturing,

Processing, Servicing,

Repairs in household

industry

ii. Manufacturing,

Processing, Servicing,

Repairs in other than

household industry

10973 (1.52)

82045 (11.39)

7616 (1.67)

76990 (16.86)

3357 (1.27)

5055 (1.92)

6 Construction 19950 (2.77) 17302 (3.79) 2648 (1.01)

7 Trade and Commerce 45597 (6.33) 36931 (8.09) 8666 (3.29)

8 Transport, Storage and

Communications 24205 (3.36) 23660 (5.18) 545 (0.21)

9 Other Services 63668 (8.85) 49197 (10.78) 14471 (5.49)

Total 72103 (100.00) 456615 (100) 263488 (100)

Table 15: Distribution of Workers in Nine Industrial Categories (% in brackets)

160

It is observed that agricultural sector (I_II) absorbs a majority of working

population (62.46 percent) in the Raigad District. Manufacturing sector other than

household industry is the next important category engaging 11.39 percent of the

workers followed by service sector (8.85 percent). Trade and Commerce occupies

an important position engaging 6.33 percent of the workers. Sudhagad tehsil has

the largest working force in agriculture (84.90 percent) and Khalapur Tehsil has

the lowest (40.35 percent).

Agriculture: The agricultural situation of any given area is controlled by available

land, its quality, rainfall and artificial irrigation and human tendency along with

population pressure. In Konkan area the dearth of flat land, severe effect of

salinity, dearth of annual water supply have a great effect over agriculture and its

product though it is the main economy and majority of the people are engaged in

farming activities, besides fishing. For centuries monsoon was the only source

and season of farming and rest of the months land remain unoccupied. Gradually

the help by Govt., People’s awareness, participation of other financial institutions

help in changing the situation. The Census data tells us that in 1951 out of total

population 909,083 of the district 178,307 persons, i.e. 19.32% were the farmers

and it was 75.51% proportion with the total working persons. In 1981, the

percentage was 66.18% of the farming personnel. The reduction in the

percentage is due to two main reasons viz. i) the explosion of population and their

encroachment on agricultural land reducing the area and ii) Development of

Industry. However, at the same time it is observed that there is an increase in the

agricultural products as well as improvement in the economical situation of the

farmers. This has happened due to several reasons. The farmer of Konkan was

dependent solely on Rice Ragi Vari cultivation. Now few other products like

Mango, Cashew, Rubber plantations Spices and Condiments, Arecanut, support

the one season crop and so on. The details thereof are as under:

161

Use of land Total area 6889 hectares

Area covered by forest 1487

Area not available for farming 1371

Area not cultivated (excluding follow land ) 1484

Follow Land 838

Net area 1659

Area sown more than once 145

Area under cultivation 1804

Cultivable Land 3642

Table 16 Land Utilisation

162

Crop Area

Rice 131633 hectares

Wheat 0

Jowar 0

Vari 5137

Nachani 10322

Total Cereals 15579

Gram 123

Tur 595

Mug 345

Udid 206

Kulith (Horse gram) 169

Mataki 240

Total pulses 6446

Total Food crops 153585

Sugarcane 18

Chillies 323

Turmeric 1

Arecanut 608

Condiments & Spices 60

Mango 1651

Cashew 474

Fruits & Vegetables 4904

Total Food Crops 159499

Groundnut 66

Sesame 275

Coconut 1111

Fodder crops 19474

Non Food crops Total 20927

Total cultivated area 180426

Area sown twice 14531

Table 17: Area under Major Crops

163

Yield per hectare (kg.) and Total production (‘00’ m. tonnes)

Product Yield Production

Rice 2568 3477

Groundnut 1000 3

Nachani 802 101

Sesame 400 2

Other cereals 625 30

Coconut 9944 (pieces) 179 (lakh)

Total cereals 2361 3608

Chillies 667 2

Gram 619 13

Tur 500 5

Udid 750 6

Mug 1000 1

Other pulses 410 39

Total pulses 474 64

Table 18: Yield per hectare (kg.) and Total production (‘00’ m. tonnes)

Surface irrigation 7480

Wells 2867

Net area under irrigation 10347

Total area under Irrigation 11581

Table 19: Area under irrigation (Hectares)

164

Irrigation wells 5266

Wells with Diesel pumps 595

Wells with Electric pumps 1572

Wells not in use 364

Other wells 7878

Bore wells 334

Bore wells with Electric pumps 11

Table 20: Number of wells and their type

Individual Holdings Nos.235132 Area 305476

Joint Holdings 2142240509

Institutional Holdings 6722162

Mouldings under irrigation 68803133

Table 21: Land Holdings (Hectares)

No. of ploughs wooden 99620

Iron 758

Carts 15097

Sugar crusher Power operated 0

Bull operated 0

Diesel pumps for irrigation (Agriculture ) 847

Electric pumps for irrigation (Agriculture ) 1475

Tractors 93

Table 22: Agricultural Implements

Markets: Pen, Nagothane, Revdanda, Roha, Goregaon, Mahad, Panvel, Uran,

Alibag, Karjat, Khopoli, Mangaon and Murud are the market places. There are 22

165

more submarkets. Rice in raw and finished state, Nagli and Vari are the main

commodities. About 14% of the total rice production comes from Raigad District

and out of this 10% is exported to different parts of India through these markets.

Salt is another product for which Pen, Mora & Uran are the large centres and salt

is exported on large scale. Besides dry fish, Poha (made of rice), vegetables,

chemical fertilisers and number of other local products are exported to different

parts of India.

Dairy Industry: The details regarding animal husbandry and dairy development are as under:

Cattle

Bulls

Only for breeding 1725

For breeding & work 21402

Only for work 159881

Others 9754

Cows

Milk 75488

Not once calved 80717

Other 908

Young stock 127330

Bulls

Only for breeding 543

For breeding & work 6224

Only for work 30330

Other 1889

Buffaloes

Milk 42344

Not once calved 34021

Other 275

Young stock (total ) 58097

Sheep 887

Goats 152805

Horse/Ponies 1327

Other 2804

Poultry 1469289

Table 23: Animal Husbandry

166

Hospital 1

Dispensaries State 1

Primary Health Centres 58

Local 25

Research centre & Laboratory NIL

Mobile dispensary 1

Milk Coop. Societies 75

No. of members 8272

Share capital (Rs. in thousands ) 519

Reserved funds 9

Working capital 3804

Milk purchased lakhs 63.68

Milk sold lakhs 67.92

Table 24: Veterinary Institutes

Finance providers: District Central Cooperative Bank, Land Development Bank,

Urban Bank, Primary Agriculture Societies and Credit Societies, Non-agricultural

Cooperative Credit Societies, Nationalised and other Scheduled banks are the

main source of finance to agriculture, dairy industries and related services.

5.2.7 Economic and Industrial Development

Historically, Konkan is on the trade routes and that has helped to develop certain

industries. However, the nature of industries in each period is different. Today the

meaning of economic and industrial development is altogether different. The

Konkan area was and is backward industrially and hence economy was and is

poor. As far as the region of Raigad District is concerned the nearness of the

northern region to the cities like Mumbai and Thane on one side and Pune on the

other, the district is developed in all the aspects as compared to Southern region

of Konkan. The Belapur belt has large industrial area. The data of 1999 shows

that there is increase by 0.27% in the share capital, 78.69% increase in working

capital and 7.78% increase in the number of workers whereas the production is

increased by 46.35% as compared to previous years.

167

The data of industries by district administration shows 106 types of industries in

the district under which in the year 1999 there were 849 factories working and

29981 workers were working (28779) male and 1202 female ).

These are registered factories. At this stage, 137 factories were not functioning.

No of factories No of Workers

Less than 10 workers 201 1086

10 to 19 workers 136 1972

20 to 49 workers 174 5512

50 to 99 workers 93 6246

100 to 499 workers 92 18656

500 to 999 workers 10 7041

1000 to 4999 workers 5 7656

More than 5000 workers 1 5717

Total 712 53885

Table 25: Classification of factories and number of workers

168

Type of industry Capital Share Capital

Income Production

Food Products 43,608 41,485 33,193 515,176

Tobacco & Beverages 836,889 87,415 99,493 1,546,013

Non made Textile 19,010,200 8,120 82,090 1,426,370

Cotton Textile 107,620 54,002 6,573 108,042

Wood Product 5,184 4,669 1,894 18,999

Paper Product 20,600,880 88,046 49,729 574,779

Rubber, Plastic, Petroleum, Coal etc.

27,322,316 8,028,465 2,417,569 51,179,291

Non metallic mineral 3,780,455 612,985 256,929 2,278,651

Basic & alloyed mineral 9,346,338 4,749,445 485,492 14,631,046

Metal parts 211,180 189,034 44,007 799,685

Machinery & Implements 117,881 24,476 50,018 254,586

Electrical Machinery & Parts 3,789 10,081 7,589 132,064

Transport Products 7,983 39,544 11,484 138,760

Other Industries 5,788 175 5,445 29,459

Repairing 50,581 5,982 31,108 61,354

Cooking gas distribution 50,780 1,965 897 9,571

Ware houses 312,378 2,084 2,807 57,158

Other 12,551,571 6,305,037 1,393,360 33,158,773

Table 26: Operations of Industries

Industrialists using employment exchange 150

Newly Registered applicants 21943

No of applicants at the end of year1999 69237

Applicant Employed Private Sector 84

Public Sector 314

Applicant Employed Scheduled Caste & Tribes 77

Others 321

Technical workers Registered 1280

Employed 96

Transport & Communication Applicants 1444

Employed 13

Craftsmen, productions processors Applicants 871

Employed 25

Electrification of villages 1851

Electrification of Towns 19

Table 27: Employment Exchange

169

Domestic 179890

Commercial 34740

Industrial 242941

Streetlights 77000

Agriculture 1630

Other 38580

Table 28: Use of Electricity (‘000’ kilowatt hours)

Type Agricultural Non Agricultural

Rural Urban Rural Urban

Self operated 3578 229 17630 9224

Establishments 749 217 11383 7277

Cooperative 10 1 471 185

Public 8 1 5706 1493

Private 4309 444 23836 14823

Scheduled Caste % 2.98 0.67 4.23 3.66

Scheduled Tribe % 24.17 30.94 1.98 1.29

Total Workers 10508 1709 94443 69983

Table 29: Agricultural & Non-Agricultural Industries

No of Estates 5

Industrial area acquired (hectares ) 408.37

Industrial plots Developed 1875

Allotted 1432

Table 30: Industrial Area and Estate Development

Industrial Estate Founded in

Panvel Sahakari Industrial Estate 1963

Khopoli Coop. Industrial Estate 1964

Jawahar Coop. Industrial Estate Kamothc 1965

Roha Industrial Estate 1963

Taloja Industrial Estate 1968

Patalganga industrial Estate 1979

Mahad Industrial Estate 1980

Table 31: Industrial Estates

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Besides these, few more industrial estates are being developed and functioning

partially Patalganga (Extension), Pen Khopoli Road, Usar, Nagothane, Mangaon

(Bhagad), Shrivardhan. Industrial estates at Murud, Sudhagad and Mhasala are

proposed.

The district has traditional cottage industries

1) Salt - Pen, Panvel, Uran

2) Coal (wood)

3) Handloom

4) Wool weaving

5) Tannery

6) Carpentry

7) Sculpting especially Ganesh images

Labour Movement: The industrial development of this area is the result of post

independent efforts. The number of industries actually increased after 1980 or so.

In the beginning, there were not much problems with industries and workers. Due

to political movements and interference in the field of industry the last decade of

last millennium was the worst period for the industry of the district and number of

industries were shut down and shifted to other states, mainly to Gujarat areas.

There is no data available of this situation but large number of workers became

unemployed.

Industrial Training

There are 14 industrial training institutes, 3 engineering colleges and 3

polytechnics imparting technical knowledge.

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5.2.8 Infrastructure Facilities

Villages No. of Number (With Percentage) of villages having of the following amenities

Education Medical Drinking

water Post

Telegram Market/ Hall

Communication Approach

Road Pucca

Power Supply

1851 1682 210 1851 307 27 1337 952 1831

% (90.87) (11.35) (100) (16.59) (1.46) (72.23) (51.43) (98.92)

Table 32: Distribution of different amenities at the district

Educational Facilities: Out of 1851 villages, 1682 villages in Raigad District

have some or the other type of educational facility covering 96.40 percent rural

population. There are 1862 primary schools, and on an average, there is one

primary school in each village. 169 villages (10.05 percent) in the district have no

educational facilities at all.

Roha Tehsil is best equipped in education with 99.41 percent villages having

educational facilities. A large majority (about 90 percent) has a primary school

within a distance of 5 kilometres. There is only one medical college in the district

located at Alibag and one Engineering College at Pen. One Polytechnic institute

is located each at Panvel and Khopoli.

Medical Services: Medical facility of some or the other type is available in only

210 (11.35 percent) of the total 1851 inhabited villages. Overall, medical facilities

are scarce in most of the villages. The population benefiting from medical facility

ranges from 5.73 percent in Panvel Tehsil to 39.43 percent in Uran Tehsil. In

Khalapur tehsil, the proportion of population availing medical facilities is very low

(7.74 percent). A large number of villages 1641 (88.65 percent) in the district have

no medical facilities of any type. Among these, 69.59 percent have medical facility

available within 5 kilometres, 20.29 percent have such facility at a distance

between 5-10 kilometres whereas 10.12 percent residents have to travel more

than 10 kilometres.

Drinking Water: Drinking water facility is available in all the villages in each tehsil

of the district. However, there are inherent problems in factors such as sufficiency

of availability of water throughout the year and the portability of the available

water. A large majority of the villages i.e., 1564 get water through the wells, while

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587 villages get from the taps. 436 villages get by through hand pumps while 269

villages get water from the rivers and 82 are supplied water through canals.

Postal Services: Post and Telegraph facility is available to only 307 villages

(16.59 percent), out of a total 1851 inhabited villages, serving 31.63 percent of the

rural population of the district. Within the district, the proportion of villages having

post and telegraph facility varies from 3.45 percent in Karjat to 32.05 percent in

Shrivardhan tehsil. This facility is not available to a majority of 1544 villages in the

district. Villages having this facility within a distance of 5 kilometres are 1194

(77.33 percent), between 5-10 kilometres to 231 villages (14.96 percent) and at a

distance of more than 10 kilometres 119 villages (7.71percent).

Weekly Market: Weekly markets are held only in 27 villages (1.46 percent) out of

1851 inhabited villages benefiting 3.75 percent of rural population. Out of the 27

villages holding weekly markets, 17 are at a distance up to 15 kilometres from an

urban centre and 10 villages are at a distance at more than 15 kilometres.

Communication Services: The main communication facility to the rural

population is through bus routes. Over 17 percent of the total inhabited villages

benefit through bus service, whereas only 13 villages have rail facility and 8 have

navigable waterways facility. 1337 (72.72 percent) villages have some type of

communication facility available benefiting nearly 81 percent of the rural

population. Mahad tehsil has the highest proportion of villages enjoying

communication facility (92.90 percent), while Sudhagad tehsil is on the other end

with the lowest proportion of 41.05 percent villages having communication facility.

514 (27.77 percent) villages have no communication facility at all. They have to

avail these facilities from a distance of 5 to 10 kilometres or more than 10

kilometres.

Approach Roads: The length of roads in the district was 3877.82 kilometres in

1988-89. Out of this 4.20 kilometres are cement roads, 1739.96 kilometres tar

roads, 1297.06 kilometres water-bound macadam and 836.06 kilometres others.

The National Highway No.17 i.e. Mumbai – Konkan- Goa passes through Raigad.

Power Supply: In the district, 1831 (98.92 percent) villages have the facility of

power supply. In six out of fourteen tehsils, all the villages are electrified. There

are twenty villages, which do not have power supply of any type. Hindustan

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Organic Chemicals and Reliance Chemical Industries are the other private

Projects located at Rasayani and Patalganga. The most important small-scale

industry manufacturing Ganesh idols is located in Pen tehsil. There are many

other small-scale industries in the district at places such as Mahad, Alibag, Roha,

Pen, Pali, Panvel, Mangaon, etc.

Raigad District is a developing district in the state. The increase in factories in the

district is significant in as much as the number has swelled from 191 in 1982 to

302 in 1989 indicating a growth rate of 58.12%. Total number of employees

working in Central and State Government and local bodies is around 32,000

accounting for 1.47% of the total state employees.

Trade and Commerce: The chief commodities of export in the district are dry

fish, rice, barley food, salt, steel pipes and rods, chikki, timber wood, betel nuts,

poha and grinding wheels. Most of these are sent to Mumbai. Of the

manufacturing articles, grinding wheels manufactured at Uran and statues and

idols of Ganesh from Pen have a demand outside the country as well.

5.2.9 Administrative Setup

According to the 1991 Census, the district had 14 tehsils. There were 1908

villages and 14 towns. One new tehsil ‘Tala’ had been added recently making it

to15 tehsils.

For administrative purposes, the district is divided into 3 sub-divisions:

i. Alibi - Resident District Collector (RDC) Raigad is in charge of this sub-

division

ii. Panvel - Panvel, Uran, Karjat, Khalapur, Pen, Sudhagad

iii. Mahad - Mahad, Roha, Mangaon, Poladpur, Mhasala, Shrivardhan, Murud

and Tala

The District Collector along with the District Judge, Superintendent of Police,

Chief Executive Officer of Zilla Parishad and other senior officers of the State

Government look after the development and regulatory functions in the district.

District Rural Development Agency (DRDA) looks after the activities related to the

rural development.

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At the Tehsil level, the Tehsildar, Block Development Officer, Judicial Magistrate,

Deputy Engineer and other officers look after their respective department for

development and regulatory functions.

5.2.10 Panchayati Raj

With a view to promote development of democratic institutions and to secure

greater measures of participation by the people in Development Plans and in local

and government affairs by decentralisation of powers and functions, Zilla

Parishad and Panchayat Samitis (Community Development Block) have been

established in the districts of Maharashtra under the Zilla Parishad and Panchayat

Samitis Act of 1962.

The Zilla Parishad elects its President and Vice-President and Chairman of its

committees from amongst the elected councillors. The term of office of the

councillors is five years. The State Government as the Chief Executive Officer to

the Zilla Parishad deputes an officer, in the senior scale of IAS. Various

departments also assist the Parishad and the heads of those departments at the

district level are officers of Class I and Class II service under the State

Government.

At the taluka level, the Panchayat Samitis (C. D. Block) have an elected

chairperson and deputy chairperson. The Block Development Officer works as

Secretary to the Panchayat Samitis. Education officer looks after the educational

problems and needs of education in the tehsil. There is separate machinery

working for nutritional development of children under the Integrated Child

Development Scheme (ICDS).

5.2.11 Municipal Government

The Urban local bodies elect a councillor from each of the wards and the term of

the councillor is five years. The President of the Municipal Council or the Mayor of

the Corporation and also his deputy are elected from amongst elected councillors

and their term is for one year. Although the Chief Officer is responsible for day-to-

day functioning in a municipal council, she works under the administrative control

of the President of the council. In corporations, the state government deputes a

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senior IAS officer as Municipal Commissioner who is responsible for day-to-day

administration and the executive authority lies with him.

5.2.12 in summary

Raigad District is a rural-dominated district. The density of population according to

the 2001 census is 308 ranking eighth in the state. The sex ratio has sharply

decreased from 1991 to 2001, from a favourable sex ratio for women with 1010

per 1000 males in 1991 to 975 women per 1000 males in 2001. Though the

scheduled caste population is 2.97 percent, the scheduled tribe population is

12.82 percent, which shows a predominance of indigenous population in the area.

The literacy rate of the district is 77 percent. However, according to the census

data, certain amenities like drinking water and education is good, health facility is

very poor. In addition, the communication facilities in the tribal areas are scarce or

they are hardly found.

Khalapur Tehsil has shown the highest population growth rate of 47.21 percent,

while Poladpur has indicated lowest growth rate of 9.85 percent. There are 39.46

percent main workers, 4.14 percent marginal-workers and 56.13 percent non-

workers. Agricultural sector absorbs a majority of work force i.e. 62.46 percent.

The Zilla Parishad and Panchayat Samitis have been established to promote the

decentralisation of powers. In urban areas, there are municipalities.

Total literacy rate of the scheduled tribe population is 25.74 percent, which is far

below the general literacy rate of 77 percent of the district. The percentage of

male literate is 33.97 percent and female is 17.30 percent. The Raigad region has

been included in the Mumbai mega polis and has been witnessing an

unprecedented wave of industrialisation and commercialisation. According to the

Maharashtra Key Data of 1997-98, there are 229 mega projects under

implementation in Raigad District amounting to Rs. 19,605 crores. Such macro

developmental initiatives stand a chance of further marginalising the indigenous

population especially, the Katkaris, considering the poor indicators of their socio-

economic status.

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5.3 Activities Undertaken By the RDCCB in Raigad

District

5.3.1 Preamble

Banking as an activity and banks as the institutional device to conduct this activity

are the core components of any financial system. The ability of the banking

system to perform it tasks efficiently and in harmony with the societal needs and

economic goals depends largely on its efficient management, good employee and

customer relations. Sound management is the basic need to create confidence,

trust in customers, and accelerate the process of economic growth.

Agriculture constitutes the backbone of India’s economy.

Agricultural credit is one of the most crucial inputs in all agricultural development

programmes. Private moneylenders were the major providers of agricultural credit

in India for a long time. The available source of credit was inadequate, highly

expensive and exploitative. Since independence, a multi agency approach

consisting of cooperative credit institutions, the scheduled commercial banks and

the Regional Rural Banks, known as Gramin Bank, has been adopted to provide

adequate and timely credit to farmers at a reasonable rates of interest.

The DCC Banks, which form the middle-tier in the three-tier cooperative credit

structure, serve as connecting link between the State Cooperative Bank and the

Primary Agricultural Cooperative Societies (PACS). The main function of DCC

Banks is to lend money to their affiliated PACS. The RDCCB, established in 1961,

plays an important role in overall development of the Raigad District. The focus of

the present research is to analyse and evaluate the RDCCB and its management

in its role as a vehicle for development of the rural Raigad District.

The central issue that the thesis addresses is the role of cooperative credit

institutions in general, and those who manage cooperative credit institutions in

particular, as the agents of development of the weaker sections of the rural

society. This question has assumed pivotal importance as a large number of

studies carried out by the international agencies as well as the review committees

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appointed by the Government of India, have pointed out that the relatively better-

off sections of the rural community take advantage of the cooperative services

and facilities such as government supported credit and technical services

provided through cooperative credit institution. The poorer sections have been

either left out or excluded from the membership of such institutions. The benefits

of development, channelised through cooperative institutions, have not reached

the poorer sections as they are unable to fulfil conditions for availing credit

facilities such as collateral security. They were unable to repay previous loans

within time limit and their inability to complete paper work added to their

difficulties. As a result, they continue to rely on moneylenders who are more

flexible about repayment of the principal as long as they continue to receive high

interest. The rampant corruption and misuse of the position by the ‘big brothers’,

i.e. the office-bearers of the cooperative institutions is another reason for the

precarious condition of the cooperative credit institutions and for the benefits not

flowing to the rural poor. This reality was noted with deep regret by the All India

Credit Review Committee (1969) ‘‘the comparative neglect of the small cultivators

by the cooperatives.’’

The research project undertaken by the United Nations’ Research Institute for

Social Development (UNRISD) revealed that ‘‘Among the ideals associated with

cooperative movement has been elimination or reduction of the class distinction

… and to promote egalitarianism …(However) from the viewpoint of these

classical aims, little progress has been made … ’’

The question that the present research addresses is about the role that the

cooperative credit institutions in the rural area play in practice and whether they

can be expected to play the role as agents of social development and change in

rural environment in developing countries like India. If such cooperatives cannot

benefit the masses of the poor in the rural segment, then the policymakers in rural

development should consider more appropriate measures, such as establishing

direct contact with the target group.

The other related issue that the present research work addresses is the

challenges posed by the ushering in of the ‘New Economic Policy’ in 1990’s and

the forces unleashed by the Liberalisation, Privatisation and Globalisation,

popularly abbreviated as LPG. If the very rationale of the cooperative movement

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is questioned by its failure to realise the classical objectives, the LPG puts its very

existence into jeopardy. This is because the multi-national institutions have

already entered into the field of banking in the urban area. Their professional

approach and competitive strategy have enabled them to capture sizeable chunk

of business in the urban sector and that they are geared up to enter into the rural

sector. The issue that this development of the last decade poses is whether the

cooperative banking institutions in the rural areas are in a position to withstand

their challenge. This anxiety is because the cooperative banking institutions are

highly politicised, function in unprofessional manner and are financially nonviable.

The period from 1999 to 2005 was deliberately selected to ascertain the

capabilities and limitations of the RDCCB and its management when the forces of

the LPG are gaining ascendency.

The researcher is aware that his research work is only a micro-level study,

confined to one cooperative institution, but the operational principles and

procedure as well as the crisis areas of the cooperative financial institutions in the

rural sector are identical to a very large extent. The micro-level findings will

enable the researcher to arrive at broad generalisations, applicable to the macro-

level cooperative financial institutions in India.

As already stated, the present research work is an institutional study applying the

case study research method. It is an in-depth intensive study of a single but

sufficiently large cooperative financial institution. The various financial and

development-related activities undertaken by the RDCCB have been objectively

analysed, as the research work is not intended to be a report or profile or a history

or narration of the achievements of the RDCCB. It is intended to be a

performance analysis as well as an impact study. It reveals the limitations of the

RDCCB and points out the areas where there is scope for improvement in its

functioning.

5.3.2 Role of RDCCB in Rural Development

The very purpose behind the establishment of the District Central cooperative

Banks (DCCBs) was to facilitate the process of rural development. The principal

activity of the DCCBs was to make available credit for agriculture and allied

activities, and thereby facilitates the development of the rural segment. The

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RDCCB was established in 1961 to facilitate agriculture and allied activities in

Raigad District. However, with the rapid industrialisation of Raigad District, the

focus has shifted to non-agricultural activities. Still agricultural credit made

available by the RDCCB facilitates the rural development in Raigad District.

A brief review of these activities is as under:

Development of Agricultural Sector: We have noted elsewhere in the

document the quantum of agricultural credit made available by the RDCCB. We

have also observed the quantum of credit made available by the RDCCB to the

activities allied to agriculture. In addition to these, the RDCCB implements a

number of governmental schemes and programmes meant for the development of

agriculture. A brief review of these activities is as under:

(i) Integrated Crop Production Programmes (ICPP): Paddy is the principal crop

in the Raigad District. Paddy cultivation is undertaken in 149,570 hectares of land,

accounting for 43.3% of the gross cultivable land in the Raigad District. The

RDCCB encourages the agriculturists to bring under Paddy cultivation maximum

cultivable land by launching Integrated Crop Production Programme (ICPP). The

RDCCB extends cooperation to the agriculture department of the Raigad Zilla

Parishad in implementing the ICPP of the Government of India. The RDCCB

provides full and partial subsidy to the agriculturists.

(ii) Integrated Rice Production Programme (IRPP): This scheme is

implemented in all blocks within the district. Under this scheme, help is given for

the purchase of HYV seeds, farm implements, fertilisers and pesticides for Paddy

cultivation.

(iii) Horticulture Development: Approximately 10,717 hectares of land are under

cultivation for the horticultural crops. Mango, watermelon and coconut plantations

form the bulk of horticulture crops. These are fully subsidised under the

Employment Guarantee Scheme of the government of Maharashtra. Other

government agencies and departments also provide assistance. The Department

of Horticulture Training Soil Conservation perform an important role in imparting

knowledge to the formers. Apart from this, the Horticulture Department of the

Raigad Zilla Parishad in collaboration with the RDCCB organises 5 days training

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programmes for farmers at Dapali. Other centrally sponsored programmes are

also implemented by the RDCCB.

(iv) Personal visits by the Bank Officials and Training Activities: With a view

to improving the conditions of agriculture and to transfer the latest technology

developed by the Konkan Agriculture University to the farmers, the officials of the

RDCCB have undertaken extension and training activities since 1982. The

activities include extension work, personal contacts, farmer’s training and field

demonstrations.

(v) Soil Conservation: The soil conservation activity is undertaken by the

RDCCB in cooperation with the Command Area Watershed Department

Programme (CAWDEP). The development activities include Nala Building,

Terracing; (on farm dry land development) under Jawahar Rojgar Yojana.

(vi) Sprinkler Set Scheme: Sprinkler sets are installed for vegetables and

horticultural crops in the district for which the State Government provides 50%

subsidy maximum up to Rs. 12,000 / per hectare. Only those farmers who have

less than 2 hectares are eligible to receive the subsidy.

(vii) Short and Medium Term Credit: The RDCCB also provides short term and

medium term loan at an interest rate of 7.5% per annum to facilitate agricultural

development. The short-term agricultural credit is provided in the Kharif and Rabi

cropping seasons to the members through their primary societies. In addition, the

Bank made available ‘Kisan Credit Cards’ to 2107 individuals-farmers and made

available credit of Rs. 169.58 lakhs in the year 2004-05.

Development of Non-agricultural Activities: The RDCCB was established

primarily to serve the requirements of the agricultural credit. However, the area of

operation of the RDCCB comprises the rural as well as urban segment. The

process of industrialisation has gathered momentum in Raigad District in the last

25 years since 1988. As a result, Raigad District has substantial activities in

manufacturing and service sectors. The RDCCB provides short term and medium

term loans to the non-agricultural cooperative societies. Owing to the rapid

industrialisation, there is ample scope for self-employment. During the year 2004-

05, the bank made available credit of Rs. 14.20 lakhs to 33 individuals. The

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RDCCB also started to provide credit for ‘Fish-Farming’ from the year 2005-06 to

promote self-employment.

Implementation of Rural Development Schemes/Projects: The RDCCB

performs the ‘agency function’ i.e. implements the schemes of the Government of

India and the Government of Maharashtra for the development of rural segment

by means of poverty eradication and employment generation programmes. The

most ambitious programme of the Government of India in this regard was the

Integrated Rural Development Programme (IRDP). The Swarnajayanti Gram

Swarojgar Yojana replaced the IRDP in 1999. The RDCCB was also involved in

the implementation of the Tribal Development Sub Plan (TDSP) in the

predominantly taluka areas in the Raigad District.

Under the IRDP, the RDCCB provided financial assistance in the form of ‘self

credit’ to the persons living below the poverty line. It provided assistance for the

following items:

(1) Bullock Pari/Bullock Carts

(2) Goats/Sheep

(3) Milch animals (Cow/Buffalos)

(4) Minor irrigation works

(5) Land improvement activities

(6) Well-repairs

(7) Wire-fencing

(8) Poultry

(9) Tractors

Similarly, under the TDSP, the RDCCB provided loans for the following items

(1) Bullock Pair/Bullock Carts

(2) Milch animals (Cow/Buffalos)

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(3) Minor irrigation works

In the post-1999 period, the RDCCB took up the responsibility of implementing a

number of development programmes. Swarnajayanti Gram Swayamrojgar Yojana

(SGSY) - The Government of India had discontinued the IRDD, TRYSEM,

SITARA, GKY and MWS on 1-4-1999 and, in their place, launched the SGSY.

The SGSY is operative in the rural areas of the country and covers all aspects of

self-employment such as organisation of the poor into SHG, training, credit,

technology, and infrastructure and marketing. The scheme is implemented by

commercial banks, regional rural banks, cooperative banks and other financial

institutions as well as Panchayat Raj institutions, DRDA, NGOs, etc. Technical

Institutions are a part of planning, implementation and monitoring of the schemes.

SGSY aims at establishing large number of micro enterprises in the rural areas by

the BPL families. The Objective of the Scheme is to bring every assisted family

above the BPL within three years by providing them income-generating assets

through credit and subsidy, coupled with training and technology. The assisted

family is known as Swayamrojgari and can be either individual or a group to be

selected by a team of BDO, Banker and Sarpanch. There is a minimum target of

50% SC/ST, 40% of women, and 5% disabled. The overall target is to bring 30%

BPL families to APL in 5 year. Its main components are as follows:

(1) Skill up Gradation: Once the person or group of persons (Swayamrojgaries)

has been identified, their training needs are ascertained with reference to MSR

(minimum skill requirement). The line departments assess the technical skill

requirements and the banker assesses managerial skills. This training

programme includes bookkeeping, knowledge of market, identification and

appraisal, product costing and pricing. The expenditure incurred on training is

borne by the DARA for a week’s duration. For Swayamrojgaries needing more

training than MSR, appropriate training is arranged by DRDA and the cost for that

is borne by Swayamrojgaries, and that the same may form an element of project

costing. The bank provides loans to the Swayamrojgaries for this purpose.

(2) Activity Clusters: Key – activities – Major share of assistance, 75%, is for

key activities and is taken up in the clusters. 4 to 5 key activities are to be

identified for each block duly approved by Panchayat Samiti and District SGSY

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Committee. The selection of activities should be such that it would create

additional asset and skill to the Swayamrojgaries so as to enable him to net an

income of Rs. 2000/- p.m. in the third year of assistance.

(3) Self Help Groups: The scheme provides that 75% funding should be to

SHGs. The group (SHG) may consist of 10 to 20 persons of BPL families.

However, for minor irrigation and of disabled persons, this number may be a

minimum of 5 members.

A person cannot be a member of more than one group and the group shall not

comprise more than one member from each family. The assistance may be

extended to individuals in a group or to all members of the group for taking up

income generation activities.

(4) Revolving Fund: Every SHG that is in existence at least for a period of 6

months and which has demonstrated the potential of viable group receives a

revolving fund of Rs. 25,000/- from the Banks as cash credit facility, Of this sum,

Rs. 10,000/- is reimbursed by the DRDA to the Bank. The revolving fund imparts

credit discipline and financial management skills to the members so that they

become creditworthy. The SHG’s that have demonstrated their successful

existence receive the assistance from the Bank for economic activities.

(5) Security norms : For individual loans unto Rs. 50,000/- and group loans up to

Rs. 3.00 lakhs, the assets created out of the bank loan can be hypothecated to

the Bank as primary security. In case where immovable assets are not created,

mortgage of land may be obtained. Where mortgage of land is not possible, third

party guarantee may be obtained at the discretion for bank. For loans exceeding

the above norms, in addition to the primary security, suitable margin money /

other collateral security may be obtained.

(6) Subsidy: Subsidy under SGSY is at the uniform rate of 30% of project cost,

subject to maximum Rs. 7,500/-. For SC/ST Swayamrojgaries it is 50% of the

project cost subject to maximum Rs. 10,000/-. For groups of Swayamrojgaries

(SHG) the subsidy is 50% of cost subject to a ceiling of Rs. 1.25 lakhs.

(7) Follow up: The follow-up measures are as follows (i) Bank issues loan pass

books to all Swayamrojgaries. Branches of the bank observe one day in a week

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as non-business working day to enable the staff to go to the fields. The Bank

ensures that quality assets have been procured through proper monitoring and

verification. Necessary documents of acquisition of assets are being kept on

record. In case of non-procurement of assets, the bank may cancel the loan and

recover the money.

(8) Risk fund: The scheme provides for creation of the fund at the district level.

Loan sanctioned for consumption needs up to Rs. 2000/- per Swayamrojgari is

financed. Out of the risk-fund, DRDA provides assistance to the extent of Rs.

10,000/- of the total consumption loan disbursed by the Banks to the Swarojgaries

during the year.

(9) Repayment of loan: The instalment of repayment of loan is of minimum of 5

years. There is moratorium period depending upon the project requirement.

Number of instalments will depend upon the repaying capacity (50% of the

incremental income) interest liability and repayment period. Swayamrojgari will

not be entitled for subsidy if the loan is repaid before the lock-in-period. It will be

three, four and five years for loan period of five, seven and nine years

respectively.

(10) Recovery: Bank takes all possible measures to ensure recovery. In case

even after taking all the measures like personal contact, sending of notices,

recovery camps, legal actions etc. if it fails to recover the entire dues then the

procedure for forfeiture of the subsidy can be initiated by the bank. 340

The RDCCB engages the services of individuals other than the government

servants as monitor-cum-recovery facilitators on commission basis. Processing-

cum-monitoring fees of 0.5% are charged to the Swayamrojgaries to meet this

expenditure.

(11) Role of Banks and State Agencies: The RDCCB is involved in

implementing planning and preparation of projects, identification of key activities,

clusters, SHGs, individual swayamrojgaries, infrastructure planning as well as

capacity building of swayamrojgaries. After the sanction of loan, a line department

ensures technical guidance to the Swayamrojgaries apart from the follow-up for

starting the activities and prompt repayment of bank loan instalments.

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(12) Back end Subsidy: From 1996-97 as per the recommendation of Expert

Committee on IRDP, back end subsidy has been introduced. The full project cost,

including subsidy, is sanctioned and disbursed to borrower as a loan by the

Banks. This system applies to SGSY as well. The Subsidy admissible to the

borrower under SGSY is kept in a separate account titled ‘Subsidy Reserve

Account’. No interest is paid on Subsidy Reserve Account.

Financial Assistance to Self Help Groups (SHGs): Despite massive branch

expansion of Commercial Banks, RRBs and Cooperative Banks in rural areas,

hardly 30% of rural populace is covered by these credit institutions. The

assistance is, in fact, restricted to the cultivator households. SHG is an emerging

area giving access to the rural poor who have not been benefited by various

governments supported Poverty Alleviation Programmes. Hence, SHGs

commence their activities as a ‘Thrift Group’ by mobilising deposits among the

members for their consumption purposes like food, health, education of children,

social functions etc. The members of the Group consist of marginal farmers, petty

rural artisans, agricultural labourers etc., mostly belonging to socially and

economically backward strata of village population.

Such groups emerge out of their genuine need and works on the principle of

helping each other.

While financing SHGs the Bank ensures the following aspects:

1. The groups formed are of the rural poor, i.e., marginal farmers, landless

labourers and preferably of women households.

2. The SHG members have homogeneous background and interest.

3. The group size is not more than 20.

4. The group has been in active existence for at least six months before

financing.

5. The savings per member are less than Rs. 5.00 and the group has been

maintaining proper records and books of accounts.

6. The group has have opened savings bank account with any of the branches of

the RDCCB in the name of SHG signed by all the members, with proper

instructions about operation of the account.

7. The members of SHG are not wilful default of any financial institution.

186

8. The group has had its own byelaws.

9. While forming the SHGs care is taken to select the group leader after the

group is formed. The leader is from the same village to have local affinity. The

group leader served as a link between the bank and the SHG.

10. The rate of Interest to be charged to the members for availing loans from the

SHG is less than 12% p.a.

11. Care is taken to ensure that the members do not borrow from outside sources

to meet the contribution to group fund or repayment of loan availed from the

group.

By 31st March 2005, the RDCCB had formed 550 women SHGs from the weaker

sections. The total number of the members of the SHGs was 8,990.

The RDCCB made available loans to the extent of Rs. 27.37 lakhs to 81 SHGs in

the year 2004-05.

Prime Minister’s Rojgar Yojana

The RDCCB implements Prime Minister’s Rojgar Yojana in its amended form

since its inception on 1 April 1999.

The details are as under:

1. Age: Applicant’s age should be between 18 and 35 years. However,

relaxation up to the age of 45 years is given to SC/ST, Women, Ex-

servicemen, and disabled applicants.

2. Educational Qualification: Minimum 8th standard passed. Priority will be

given to those who have completed training minimum for 6 months in Govt. /

Govt. recognised Institutions like ITI. Etc.

3. Family Income: The Annual Income of the applicant’s family as well as that

of the parents’ family income should be less than Rs. 40,000/-. The family

consists of applicant’s spouse and dependent children.

4. Defaulter: The applicant should not be a defaulter of any financial

institutions.

5. Residence: He must have resided continuously in the district for 3 years.

6. Project cost: For business activity Rs. 1.00 lakhs. Other than business, Rs.

2.00 lakhs.

187

7. Loan, Margin and Subsidy: Subsidy will be 15% of the project cost,

maximum up to Rs. 7500/- per individual applicant. Margin will be ranging

from 5% to 12.5% calculated in such a manner that margin and subsidy put

together should be equal to 20% of the project cost. The subsidy will be back-

ended.

8. Activities: Any economically viable and bankable activity excluding direct

crop raising, etc., can be financed.

9. Security: No collateral security should be insisted for loans up to project cost

of Rs. 1.00 lakhs. However, collateral security can be obtained for loans of

project cost exceeding Rs. 1.00 lakhs.

10. Training: All applicants must be given training before disbursement of loans.

11. Repayment: The loans can be repaid in suitable instalments ranging from 3

to 7 years, leaving moratorium period.

12. Interest: As per existing norms.

13. Refinance: Refinance is available from SIDBI/NABARD.

The branches are authorised by the RDCCB to identify applicants.

Seed Money Assistance to the Educated Unemployed

Its norms are as follows:

A) Eligibility:

1) Age between 18 and 50 years.

2) Educational qualifications minimum 7th std. passed.

3) He should be unemployed.

4) He should have his residence in the State for last 15 years.

B) Financial Assistance:

1) ‘‘Financing institution’’ sanctions 75% of the cost of the project as capital loan.

2) Seed money assistance, with interest @ 10%p.a. is given.

188

C) Procedure:

1) Application to be made to the DIC.

2) The DIC sponsors the applicant with recommendations to the bank. The Seed

money is to be repaid by the borrower within 7 years. Three years gestation

period is allowed. The accrued interest for 3 years to be repaid at the end of 3rd

year. The Principal amount along with the interest applied after 3 years is to be

recovered in remaining 4 years by annual instalments. In case of default, interest

at the rate of 24% shall be charged.

DIC Loan Schemes: The SSI and Service Sector projects having an outlay of up

to Rs. 2.00 lakhs are eligible under this scheme. For such projects, 20% or Rs.

40,000 whichever is less, are provided by the DIC in the form of seed money with

4% interest. Candidates from SC/ST categories are eligible for 30% or Rs.

(50,000 seed money, whichever is less. Promoter is required to contribute 5% of

the Project cost. Remaining amount is to be financed by the Banks.

National Equity Fund: This particular scheme has been introduced by the SIDBI

for the benefit of entrepreneurs to establish and/or rehabilitate Small Scale

Industries, Tiny Industries, in all towns except Mumbai, Chennai, Calcutta and

Delhi, all activities covered under industries and service sector, except transport

operators, are eligible.

The project cost including margin money for working capital should not exceed

Rs. 10.00 lakhs. Equity Fund money is available from the Government of India,

through the SIDBI@ 25% of the project cost subject to the maximum of Rs.

2,50,000/- as a loan. The RDCCB charges 1% as service charge. Funds are also

available for revival of the sick SSI units under this scheme.

Swarnajayanti Shahari Rojgar Yojana (SJSRY): Ministry of Urban Affairs and

Employment, Government of India has launched a new poverty alleviation

programme named the SJSRY, which came into operation from 1st December

1997 in all urban towns in India.

The SJSRY seeks to provide gainful employment to the urban poor whose annual

family income is up to Rs.11, 850, unemployed or underemployed, through setting

189

up of self-employment ventures. The eligible beneficiaries must be resident of the

district for the last three years and should not be defaulters. The eligible project

amount is maximum Rs. 50,000/- with 5% beneficiary margin. It provides 15% of

the project cost as subsidy, subject to maximum of Rs. 7500/-.

5.3.3 The RDCCB – General Performance

The historical background of the RDCCB has been elaborated in earlier. The

RDCCB is a financial institution operating at the micro level, i.e. at the district and

below district levels. The RDCCB, as a financial institution, provides credit

facilities for productive activities and thereby facilitates increase in the income

level of its clientele. The agricultural credit, disbursed by the cooperative financial

institutions for procurement of inputs, land development and development of

micro-level irrigation facilities, led to the ‘Green Revolution’ in 1960s. The

cooperative financial institutions like the RDCCB have encouraged the

agriculturists to adopt new production techniques by providing credit at a

concessional rate and giving financial support and incentives. They also

undertake surveys and extension work to draw their credit plans. In order to make

the activities undertaken by the cooperative financial institutions like the RDCCB

more meaningful, there is a need to coordinate the efforts of the different

agencies providing agricultural credit and the development agencies of the

government, which provide subsidies and incentives. The nationalised banks

evolve and implement the ‘Area Survey Plan’ wherein they are designated as the

lead banks. Linkages and coordination between the nationalised banks, the Land

Development Banks, the Gramin Bank and the DCCBs, can undertake this

activity meaningfully. The RDCCB and its likes in other districts have a crucial role

to play in the economic development of districts. Despite the relatively high

degree of urbanisation, majority of population in the Raigad District lives in the

rural areas. Therefore, the RDCCB has a vital role to play in agricultural

development by providing short and medium term credit. Raigad District has a

sizeable tribal population; therefore, the RDCCB participates in the

implementation of the Tribal Development Sub-Plan (TDSP), and the rural poverty

alleviation schemes of the Government of India. It is also significant to note that

some of the talukas, in proximity with Mumbai, have substantial manufacturing

and service activities, such as cooperative housing etc. Unlike most other

190

DCCBs, the RDCCB makes available substantial credit for the non-agricultural

activities as well.

5.3.3.1 Banking Activities

The RDCCB is primarily a financial institution and undertakes activities related to

banking. As the intermediate financial institution in the three-tier structure of

cooperative credit, the RDCCB undertakes the following activities:

a. Provide finance to the affiliated PACS in their areas of operation

b. Act as a balancing centre for the resources of the PACS in the pyramidal

structure of cooperative credit. Its own resources are intended to serve as

a cushion to absorb the impact of defaults and arrears arising at the

primary level

c. Supervise the working and management of the affiliated PACS and to train

their members in the principles of cooperation

d. Provide a safe place for investing the reserves of the PACS

e. Help the development of the cooperative movement on sound lines by all

possible measures in their areas of operation.

In addition to these activities, the RDCCB also undertakes other banking

activities, similar to those performed by the commercial banks, like accepting

deposits, collecting bills, issuing drafts, safe custody of valuables, advancing

loans, etc.

The analysis of RDCCB performance uses a number of charts wherein the

researcher has used trendline equation and R2. R2 is a statistic that gives some

information about the goodness of fit of a model. In regression, the R2 coefficient

of determination is a statistical measure of how well the regression line

approximates the real data points. An R2 of ‘1' indicates that the regression line

perfectly fits the data.

5.3.3.2 Resources of the Bank

There are internal as well as external sources of resources that can be mobilised

or tapped by the cooperative financial institutions like the RDCCB. The internal

sources include the share capital, the entrance fee, the reserve funds and the

191

deposits received from the members. The external sources include the deposits

received from the non-members, loans received from financial institutions, loans

given by the state government and the financial assistance provided by the

government in the times of crisis.

Share Capital: A detailed analysis of the share capital raised by the RDCCB,

since its inception in 1961 to 2009-10, has already been made earlier in this

thesis. For the present analysis, the vital details in brief are in the Table below.

(1) Authorised Capital (i) Class ‘A’ state Government/State Cooperative Bank 5,000 shares of Rs. 1,000 each

Rs. 0.50 Crore

(ii) Class ‘B’ Cooperative societies in the jurisdiction of the RDCCB 289000 shares of Rs. 500 each

Rs. 14.49 Crores

(iii) Class ‘C’ individual members, residing in the district 2000 share of Rs. 50 each

Rs. 0.01 Crores

Total authorised capital Rs. 15.00 Crores

(2) Subscribed capital

(i) Class ‘B’ 8.83,860* 1582093 shares of Rs.50 each 82037 shares of Rs.500 each

Rs.12.01 Crores

(ii) Class ‘C’ 1,999 shares of Rs. 50 each Rs. 99,950

Total subscribed capital Rs. 120,223,123

Total subscribed capital/ Authorised capital 81.49%

Table 33: Authorised and Subscribed Share Capital (As on 31-03-2010)

[*One nominal member having paid entrance fee of Rs. 50/-] Source: RDCCB

Annual Report for the year 2009-10

The above table indicates that the RDCCB had subscribed capital to the extent of

81.49% of the authorised capital. The RDCCB was in a position to return Rs.

25.50 lakhs to the State Government, which was invested towards the share

capital. The RDCCB will be in a position to approach the Reserve Bank of India to

increase the limit of the authorised capital and increase the subscribed capital by

Rs 9.5 crores. This ability reflects financial viability of the RDCCB.

192

Mobilisation of Deposits: One of the principal activities of a financial institution

is to mobilise deposits from its shareholders and customers to fuel its banking

activities. Deposits are the main external source of a financial institution. The

growth in deposits reflects the ability of the bank to mobilise the local resources

and the degree of the confidence of the local community that it commands. It also

reflects its credibility and the potential for growth. The financial institutions, in the

present competitive age, enter into a cutthroat competition by offering excellent

customer services and attractive novel schemes. Thus, the increase in the

deposits and the efforts made by the financial institutional is a vital banking

activity.

The RDCCB made a very modest beginning and made very rapid progress in

mobilising deposits, especially during the period under analysis.

The RDCCB provides the following deposit schemes:

1. Saving Deposits

2. Current Deposits

3. Fixed Deposits

4. Cumulative Deposits

5. Recurring Deposits

6. Pigmy Deposits

7. Home Saving Deposits

8. Mrit Kumbh Deposits

9. Kalpvriksha Deposits

The bank pays extra interest on the deposits of the senior citizens. The bank has

been registered by the ‘Deposit Insurance Act’. With this, the depositors are

insured. The protection to all types of deposits is given by the bank up to

maximum of Rs. 100,000/- to each individual depositor.

A detailed statistical analysis of the deposits mobilised by the bank in the period

under analysis is given in Tables 24 to 31.

193

Type Coop.

Society INDs LSGs(ZP_PSs) NRI/NRO Total

FD 12629.27 2727.94 1373.07 12.79

FRF 352.29

Savings 1799.44 13972.34 348.03 9.33

RFS 2117.88

Recurring 3.80 361.73

Reinvested 15599.07

Current 1301.15 1698.03 6014.34

STD 412.45

HSD 30.08

AKD 91.19

KVD 40.76

Total 18203.86 34933.62 7735.45 22.18 60895.12

Less 2004-2005

16581.43 33155.59 6973.19 31.81 56742.04

Addition in 2005-06

1622.43 1778.03 762.26 -9.63 4153.08

Table 34: Mobilisation Of Deposits: 2005–2006 (Amount in Lakhs)

(Source: Annual Report 2005-2006)

Chart 1: RDCCB Sources of Mobilisation of deposits 2005-06 (amount in lakhs)

1622.43

1778.03

762.26

-9.63

-200

800

1800

Coop. Society INDs LSGs(ZP_PSs) NRI/NRO

RDCCB Sources of Mobilisation of deposits 2005-06

194

Type Coop.


FD 12289.89 3031.75 1229.01 13.03

FRF 371.05

Savings 2298.78 18001.27 271.96 10.2

0.05

RFS 2396.78


Reinvested 15582.39

Current 1360.93 2751.31 7603.87

STD 465.16

HSD 28.07

AKD 101.71

KVD 14.14

Total 18721.57 40317.12 9104.84 23.28 68166.81

Less 2005 - 06 18203.86 34933.62 7735.45 22.18 60895.11

Addition in 2006 - 07 517.74 5383.54 1369.4 1.1 7271.78

Table 35: Mobilisation of Deposits: 2006–2007 (Amount in Lakhs)

Source: RDCCB Annual Report 2006-2007

Chart 2: Mobilisation of Deposits: 2006–2007 (amount in lakhs)

517.74

5383.54

1369.4

1.1 0

2750

5500


RDCCB Sources of Mobilisation of deposits 2006-07

195

Type Coop.


FD 19251.79 4541.08 1476.81 10.62

FRF 407.68

Savings 2545.56 25426.07 834.66 11.54

0.05

RFS 2790.75


Reinvested 30105.84

Current 1305.06 2713.08 2928.8

STD 562.6

HSD 30.12

AKD 114.59

KVD 3.79

Total 26302.29 63868.55 5240.27 22.21 95433.32

Less 2006-07 18721.57 40317.12 9104.84 23.28 68166.81

Addition in 2007-08

7580.72 23551.43 -3864.57 -1.07 27266.51



Chart 3: RDCCB Mobilisation of Deposits 2007-08 (in Lakhs)

7580.72

23551.43

-3864.57 -1.07

-5000

10000

25000


RDCCB Sources of Mobilisation of Deposits 2007-08

196

Type Coop.


FD 18263.85 6014.9 1598.57

FRF 495.84

Savings 3709.36 27194.86 1231.83 10.24

RFS 2829.24


Reinvested 24196.76 11.33

Current 1597.93 2114.52 10539.75

STD 700.54

HSD 32.14

AKD 131.22

KVD 0.09

MBNC 1663.17

Total 26897.95 62490.62 13370.15 21.57 102780.29

Less 2007-08 26302.29 63868.55 5240.27 22.21 95433.32

Addition in 2008-09 595.66 -1377.93 8129.88 -0.64 7346.97



Chart 4: RDCCB sources of mobilisation of deposits 2008-09 (in lakhs)

595.66 -1377.93

8129.88

-0.64

-2000

4000

10000


RDCCB sources of mobilisation of deposits 2008-09

197

Type Coop.


FD 24331.36 5985.25 3399.14

FRF 588.78

Savings 3956.92 32392.69 9357.01 10.6

RFS 3218.27


Reinvested 25272.55 70.41

Current 1458.79 1416.63 6081.4

STD 799.59

HSD 46.77

AKD 140.76

KVD 0.99

MBNC 2619.4

Total 33554.13 69137.25 18837.55 81.01 121609.94

Less 2008-09 26899.95 62359.46 13370.15 21.57 102651.03

Addition in 2009-10 6654.18 6777.79 5467.4 59.44 18958.91

Table 38: Mobilisation of Deposits 2009-2010 (Amount in Lakhs)

Chart 5: RDCCB sources of mobilisation of deposits 2009-10 (in lakhs)


6654.18 6777.79

5467.4

59.44 0

3500

7000


RDCCB sources of mobilisation of deposits 2009-10

198

Years Cooperative


1999-00 1732.32 3326.18 977.78 5.4 6041.68

2000-01 4953.24 40007.74 -2183.33 16.72 42794.37

2001-02 979.52 2711.52 1014.4 40.12 4745.56

2002-03 1715.31 2888.14 1318.61 30.33 5952.39

2003-04 -436.763 2654.35 2247.75 -31.05 4434.287

2004-05 958.25 2291.04 -209.51 -13.03 3026.75

2005-06 1622.43 17778.03 762.26 9.63 20172.35

2006-07 517.74 5383.54 1369.4 1.1 7271.78

2007-08 7580.72 13551.43 -3864.57 -1.06 17266.52

2008-09 597.63 690.87 8130.87 -0.65 9418.72

2009-10 6654.18 6776.89 5457.4 59.46 18947.93

Total 26874.577 98059.73 15021.06 116.97 140072.337

Table 39: Progress in Mobilisation Deposits 1999-2000– 2009-2010 (Amount in

Lakhs)

Source: RDCCB Annual Reports from 1999-00 to 2009-10

Chart 6: RDCCB Progress in Mobilisation Deposits 1999-2000– 2009-2010 (in Lakhs)

-5000

7500

20000

RDCCB Progress in Mobilisation Deposits 1999-2000– 2009-2010

CooperativeSocietyINDs

LSGs(ZP_PSs)NRI/NRO

199

Year Aggregate amount of deposits

1962 46.01

1972 250.2

1982 1368.14

1992 7028.6

2002 43328.39

2003 49289.08

2004 53715.38

2005 56742.05

2006 60895.12

2007 68266.91

2008 85433.43

2009 102651.03

2010 121599.04

Table 40: Progress in Mobilisation Deposits 1962-2010 (₹ Lakhs)

Source: Annual Reports of the RDCCB

Chart 7: RDCCB Progress in Mobilisation Deposits 1962-2010 (in lakhs)

We can draw the following inferences from the above statistical tables and charts:

1. During the first decade i.e. from 1961-62 to 1971-72, the deposits of the

RDCCB increased from Rs. 46.01 lakhs to Rs. 250.20 lakhs.

2. During the second decade, i.e. from 1972-73 to 1981-82, the deposits

increased from Rs. 250.20 lakhs to 1368.14 lakhs.

46.01

121599.04

y = 9911.5x - 19333 R² = 0.9463

0

70000

140000

RDCCB Progress in Mobilisation Deposits 1962-2010

200

3. During the third decade, i.e. from 1982-83 to 1991-92, the deposits increased

from Rs. 1368.14 lakhs to Rs. 7028.60 lakhs.

4. During the fourth decade, i.e. from 1992-93 to 2001-02, the deposits increased

from Rs. 7028.60 lakhs to 43,328.39 lakhs.

5. The deposits at the end of period under analysis, i.e., in 2004-05 to 2009-2010

the deposits increased from Rs. 56742.05 lakhs to Rs.113124.47had crossed

50 crore mark and was Rs. 56742.05 lakhs.

6. During the period under analysis, the Bank had mobilised Rs. 9901.88 lakhs

from the cooperative sector, Rs. 17878.97 from the private sector, Rs.

3166.70 from the public sector and 37.73 lakhs from the NRIs/NROs.

7. The aggregate amount of deposits mobilised during the period under analysis

was Rs. 30,991.69. In other words, the deposits mobilised during the period

under analysis; from 1999-2000 to 2004-05 was about 60% of the deposits

mobilised since 1962.

8. The period from 1962 to 1972 was a period of steady growth, the period from

1972 to 1982 as steady growth at a faster pace, the period from 1982 to 1992

as rapid growth and the period since 1992 as one of phenomenal growth. This

last rate of growth has greater significance in view of the fact that the New

Economic Policy was launched in 1992. The ingredients of the New Economic

Policy, viz. liberalisation, posed a serious challenge to the public sector and

scheduled banks in the urban areas. The multinational and private banks

spread their network in parts of Raigad District due to proximity with Mumbai

city. In spite of this, the RDCCB recorded phenomenal growth in the area of

mobilisation of deposits due to the quality of service, confidence of the local

population, its credibility and most important of all, dynamic leadership

provided by its management.

5.3.3.4 Working Capital

The working capital to a financial institution like the RDCCB is made available

from (i) its own resources and (ii) the external sources, which include funds lent

by the Maharashtra State Cooperative Bank and other financial institutions; the

borrowings from the capital market and the others. The capacity to raise the

working capital from the external sources is linked with the internal sources.

201

Internal Sources: Internal sources of the working capital are the share capital,

deposits from members, customers and the reserve funds. A detailed analysis of

these aspects has already been made in the preceding chapter and the preceding

sections. The statistical summary of the share capital, the deposits and the

reserved funds is given in Table 41.

Year Share

Capital Deposits Total

YoY change

1999-2000 619.57 32102.57 32722.14

2000-2001 734.31 38898.57 39632.88 6910.74

2001-2002 780.95 43328.39 44109.34 4476.46

2002-2003 821.52 49289.08 50110.6 6001.26

2003-2004 821.75 53715.3 54537.05 4426.45

2004-2005 884.86 56742.04 57626.9 3089.85

2005-2006 956.87 60895.12 61851.99 4225.09

2006-2007 1024.4 68166.91 69191.31 7339.32

2007-2008 1083.27 85433.43 86516.7 17325.39

2008-2009 1132.24 102782.43 103914.67 17397.97

2009-2010 1202.23 113124.47 114326.7 10412.03

Table 41: Working Capital of The RDCCB (Internal) (Figures are in lakhs) Source:

Annual Reports of the RDCCB

Chart 8: RDCCB movement in Share Capital (Table 41)

y = 54.117x + 590.02 R² = 0.9823

600

1000

1400

RDCCB movement in Share Capital

202

Chart 8 illustrates that RDDCB has increased its share capital during the period

under analysis, thus increasing its capacity to generate higher interest income

from loans.

Chart 9: RDCCB movements in deposits (Table 41)

Chart 9 illustrates RDCCB’s ability in mobilising deposits. The growing trend over

the period under analysis is encouraging and demonstrates the RDCCB’s

capacity to generate high interest income as a result.

Chart 10: RDCCB total working capital movement (Table 41)

y = 7562.7x + 18667 R² = 0.918

30000

75000

120000

RDCCB movement in Deposits

y = 7616.8x + 19257 R² = 0.9189

30000

75000

120000

RDCCB total working capital movement

203

Chart 10 illustrates that the RDCCB has performed well in increasing the total

working capital over the period under analysis. This is a clear attribute of excellent

management.

External Sources: The tapping of the external sources depends on the sound

financial position and the resultant credibility of the financial institution. The

internal sources in the excess of five hundred and seventy six crore (as on 31-03-

2005) have enabled the RDCCB to tap the external sources, i.e. the Maharashtra

State Cooperative Bank. The details thereof are given in Table 42.

Year Aggregate

Amount Remark

1999-00 7160.60 Includes loans from KDCCB and SDCCB of Rs. 5000.00 lakhs



2002-03 2567.56

2003-04 1310.18

2004-05 933.19

2005-06 848.69

2006-07 685.85

2007-08 773.05

2008-09 366.54

2009-10 239.95

Table 42: Loans Secured From the Maharashtra State Cooperative Bank (₹

Lakhs)


204

Chart 11: Loans Secured From the Maharashtra State Cooperative Bank (₹ Lakhs) [Table 42]

Chart 11 graphically illustrates that over the years under analysis, RDCCB’s

financial dependence on the MSCB has been declining.

Table 42 indicates that, unlike most other DCCBs, the financial dependence of

the RDCCB has gradually declined. The bank was in the financial difficulties and

had borrowed funds from the Kolhapur District Central Cooperative Bank, in

addition to the Maharashtra State Cooperative Bank. The liability of loans was in

excess of seventy-one crores in 1999-2000. The RDCCB gradually repaid the

funds borrowed from the KDCCB and SDCCB in next three years and has totally

wiped out that liability. The liability of the borrowings from the State Cooperative

Bank has gradually declined from Rs. 2160.60 lakhs in 1990-2000 to Rs. 933.19

lakhs in 2004-05 and Rs. 239.95 lakhs in 2009-2010.

5.3.3.5 Utilisation of Resources

Prudent utilisation of resources is as important, in fact more important, as that of

the mobilisation of resources. Banking is the financial activity undertaken by the

RDCCB and, being a commercial entity, maximisation of profits is one of its

objectives. The notion of ‘service and not profit’, as the guiding principle, is of

limited application in case of the financial cooperatives. The realistic objective of

the financial institution in the contemporary times should be to maximise profits

and thereby provide the quality service to its customers. This is because the role

y = -705.56x + 6691.2 R² = 0.7845

0

4000

8000

Loans Secured From the Maharashtra State Cooperative Bank

205

of the multinational and private financial institutions has increased many-fold and

the very survival of the cooperative institution is linked with the quality of service

they provide. Modernisation, computerisation and improvement in the quality of

service entail huge expenditure and to meet the same, the endeavour of the

cooperative financial institutions is maximisation of profit by prudent utilisation of

funds.

The RDCCB is governed by the provision of the Maharashtra State Cooperative

Societies Act, 1961, and is required to set aside a part of surplus to build up its

reserve and development funds. The Reserve Bank of India, the regulatory

authority lays down the norms for investment in specified securities/funds. The

rest of the funds are utilised for the banking operation. The most important

banking operation is the lending of the funds in the form of short-term and

medium-term credit to its shareholders and the other customers. The recovery of

the loans is as vital as giving out the loans. Most cooperative banks and credit

societies are in deep trouble due to the burden of the Non-Performing Assets

(NPA) and the accumulated unrecovered Loans. Unlike most other DCCBs, the

RDCCB has an excellent record of accomplishment, in both disbursement and

recovering of loans.

206

A detailed analysis of the resources utilisation by the RDCCB is made below.

Items 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08 2008-

09 2009-

10

SF 284

388

489

615

745

831

865

895

928

1,018

1,157

ACSF 181

248

317

400

488

550

566

581

597

646

711

BF 255

405

537

692

762

822

828

828

847

947

997

FCSF 57

79

101

129

158

179

184

189

194

211

232

DF 7

5

6

10

104

7

5

4

6

15

31

ISF IFF 1

1

3

5

80

175

175

175

175

175

175

GF 0

0

0

0

0

0

BEF 11

9

9

14

18

18

19

19

19

44

51

RGSCF 26

26

26

26

26

CF 5

5

5

5

5

0

1

1

1

1

1

DLWOF 769 899 1459 2032 2322 2341

MUDF 173

46

PFFNPA 150

150

RBDD 2,341

2,500

3,439

5,000

5,523

IF 46

46

46

46

46

PFFNPA 234

254

BSWF 31

30

SWF 11

26

Special Reserve

65

100

Total 1595 2065 2954 3928 5030 5120 5030 5238 6252 8442 9334

Table 43: Funds Of the RDCCB 1999-2000 TO 2009-2010 (₹Lakhs)


207

Chart 12: Funds of the RDCCB (Table 43)

Chart 12 illustrates the healthy growth trend in the funds of the RDCCB during the

period under analysis, indicating excellent financial management by the bank.

Building up reserve funds: It is a universally accepted fact that every business

enterprise is likely to face adverse circumstances, described as risks and

uncertainties, in the course of its evolution. To provide for such financial

difficulties as well as to take care of development needs, the Maharashtra

Cooperative Societies Act, 1961 prescribes that 25% of profits be transferred to

Reserve funds. Accordingly, the RDCCB has set up a number of such funds. The

RDCCB had accumulated funds to the extent of 5120.11 lakhs rupees as on 31-

03-2005 and Rs. 9334.33 lakhs as on 31.03.2010. The details of the progress

made in this regard, during the period under analysis have been given in Table

43.

Table 43 indicates that the reserve funds of the RDCCB have increased from Rs.

1674.50 lakhs (as on 31-03-2005) to Rs. 5120.11 lakhs (as on 21-03-2000). The

most notable aspect is that the provisions to write off bad debts constitute the

biggest chunk of the reserve funds. It has increased from Rs. 786.66 lakhs (as on

31-03-2000) to Rs. 2341.29 lakhs (as on 31-03-2005) and to Rs. 5523.43 lakhs

as on 31.03.2010.

This signifies that the Bank is in a position to withstand the burden of bad debts

and will not be in financial difficulty in case the quantum of bad debts increases.

y = 697.41x + 814.61 R² = 0.9254

0

5000

10000

Funds Of The Raigad District Central Cooperative Bank

208

The growth of all funds is satisfactory. The Bank had set up two additional reserve

funds, to take care of differences in trade transactions and provision for future

NPAs. These details reflect sound financial health, viability, and capability to

withstand and survive in case financial difficulties arise.

Investments: After setting aside the prescribed quantum of the surplus, the

cooperative credit institution may have residency surplus. In this regard, the

Maharashtra State Cooperative Societies Act, 1960 provides that the cooperative

society may invest or deposit its funds, which are not immediately required for the

business of society as under

a) in the Postal Saving Bank

b) in any of the securities specified in sect 20 of the Indian Trust Act 1882

c) in the shares or the securities of any other society

d) with any bank approved for this purpose by the Registrar or

e) in any prescribed manner

209

The details of the investments made by the RDCCB are given in Table 44.

Investment

Year of Investment

1999-00

2000-01

2001-02 2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

GOM Bonds

18 17 17 11 11 11 11 1 1

GOI Bonds

55 55 55 55 55 55 5

NSB 1

IFCI Bonds

Krishna Valley Dev. cor.

35 235 235 218 200 200 200

IFC Bonds 10 10 10 10

N B Bonds

50 50 50 50 50 50 25

REC Bonds

110 110 110 110 110 110 10

Indira Visas Plan

37 37 37 27 10

IDBI Bonds

107

1573 3698

SGL 3681 3665 2449 1503 1500

NABARD 500 1500

Total 316 621 514 480 2009 4124 3932 4165 3950 1503 1500

Table 44: Investment Made By the RDCCB 1999-2000 to 2009-2010 (Amount in

Lakhs)

Source: Annual Report of the RDCCB

210

Chart 13: Total Investment Made By the RDCCB (Table 44)

Chart 13 illustrates that there is a growth trend in the total investment made by

the RDCCB during the period under analysis. During the period between 2004-05

and 2007-08, investment by the RDCCB had peaked.

Other Investments: In addition to the investment in the prescribed securities, the

RDCCB invested funds in the form of subscribing to the share capital of the

Maharashtra State Cooperative Bank and the other cooperative institutions at the

district and the state level. It also invested in the fixed term deposits with the

Maharashtra State Cooperative Bank and the other Financial Institutions. The

details of these ‘other investments’ have been given in Table No. 7.14 to 7.16

y = 264.13x + 516.54 R² = 0.291

0

2250

4500

Total Investment Made By The Raigad District Central Cooperative Bank

211

Cooperative Investment

MSCB RDSC MSFCS MCFDS Total

1999-00 747,000 10 1,000 10,000 758,010

2000-01 747,000 10 1,000 10,000 758,010

2001-02 4,800,000 10 1,000 10,000 4,811,010

2002-03 5,602,000 10 1,000 10,000 5,613,010

2003-04 5,602,000 10 1,000 10,000 5,613,010

2004-05 5,602,000 10 1,000 10,000 5,613,010

2005-06 5,602,000 10 1000 10000 5,613,010

2006-07 5,602,000 10 1000 10000 5,613,010

2007-08 5,602,000 10 1000 10000 5,613,010

2008-09 5,602,000 10 1000 10000 5,613,010

2009-10 5,602,000 10 1000 10000 5,613,010

Table 45: Investment in Share Capital (₹)

Explanation:

MSCB - Maharashtra State Cooperative Bank

RDSCB - Raigad District Supervisory Cooperative Society

MSFCS - Maharashtra State Federal Cooperative Society

MCFDS - Maharashtra Cooperative Floriculture Development Society


212

Chart 14: Investment In Share Capital of other institutions (Table 45)

The above table and chart indicate that the quantum of share holding of the

RDCCB in the MSCB increased from Rs. 747,000 in 1999-2000 to Rs. 5,60,2000

in 2004 - 2005. The Shareholding in the other cooperative societies remained

stationary, as it was nominal contribution. This reflects the sound financial health

of the RDCCB.

Instalment MSCB MCHFC HDFC Total

1999-00 7295.47 100 7395.47

2000-01 9155.52 100 9255.52

2001-02 10523.77 100 10623.77

2002-03 13844.77 13844.77

2003-04 21119.77 21119.77

2004-05 14418.76 14418.76

2005-06 13212.8 13212.8

2006-07 20512.8 20512.8

2007-08 42362.3 42362.3

2008-09 38221.9 9950 48171.9

2009-10 29889.1 6110 17370.5 53369.6

Table 46: RDCCB Fixed Term Deposits (₹ Lakhs)


Explanations:

MSCB - Maharashtra State Cooperative Bank

MCHFC - Maharashtra Cooperative Housing Finance Corporation.

0

3,000,000

6,000,000

Investment In Share Capital of other institutions

213

Chart 15: RDCCB Fixed Term Deposits in MSCB (₹ Lakhs) [Table 46]

Table 46 and Chart 15 indicate that the RDCCB gradually withdrew its fixed term

deposits from the HDFC and MCHFC. The quantum of the fixed term deposits

increased from Rs. 7295.469 lakhs rupees in 1999-2000 to Rs. 21119.769 lakhs

in the year 2003-2004. The Bank withdrew an amount of Rs. 6700 lakhs in the

year 2004-2005 to meet its operational and development requirements. Fixed

term Deposits amounted to Rs.29889.09 in the year 2009-2010.This reflects

sound financial health of the RDCCB.

The RDCCB has been recipient of the capital equalisation fund from the

government of Maharashtra to invest in the share capital of the primary

cooperative societies. This fund was invested in the fixed term deposits with the

Maharashtra State Cooperative Bank. The details of the same are given in Table

47.

Type Reserve Funds

ACSF FCSF Total

1999-00 285.6 178.1 59.5 523.2

2000-01 385.6 243.1 89.5 718.2

2001-02 489.1 309.8 99.15 898.05

2002-03 614.1 391.8 126.15 1132.05

2003-04 741.1 475.8 155.15 1372.05

2004-05 828.1 555.8 235.15 1619.05

2005-06 861.1 566.8 235.15 1663.05

Table 47: RDCCB Fixed Term Deposits (₹ Lakhs)

y = 3001.6x + 2040.9 R² = 0.7003

0

22500

45000

Fixed Term Deposits in MSCB (Amount in Lakhs)

214


Explanation:

ACSF - Agricultural Credit Stabilisation Funds

FCSF - Fishermen Credit Stabilisation Fund

Chart 16: RDCCB Fixed Term Deposits (₹ Lakhs) [Table 47]

The above Table 47 and Chart 16 indicate progress made by the RDCCB in

building up Reserve funds for the primary cooperative societies within its

jurisdiction. The availability of these contingency resources enables the RDCCB

to help the primary cooperative societies in the terms of difficulties. The funds

have tripled in the cause of five years from Rs. 523.20 lakhs in 1999-2000 to Rs.

1619.05 lakhs in 2004-2005, Rs. 1663.05 lakhs in 2005-06 to Rs. 2095.09 lakhs

in 2009-2010. This reflects sound financial health of the RDCCB. The rate of

growth for Reserve Funds exceeds those for ACSF and FCSF – as indicated by

the trendline equations in Chart 14. This is an indication of RDCCB’s financial

performance because Reserve funds are internally generated and this can

happen only with profit generation.

Lending of the funds: The resources generated by the RDCCB are principally

utilised or the lending purpose. The RDCCB serves as a link between the

Maharashtra State Cooperative Bank (MSCB) and the Primary Cooperative

Societies in the Raigad District. It channelised the funds provided by the MSCB

y = 102.27x + 191.6 R² = 0.9846

y = 69.911x + 109.1 R² = 0.9844

y = 31.223x + 17.929 R² = 0.9357

0

450

900

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

RDCCB Fixed Term Deposits (Amount in Lakhs)

ReserveFunds

ACSF

FCSF

Linear(ReserveFunds)Linear(ACSF)

Linear(FCSF)

215

as well as its funds for productive activities. The very purpose for which the

DCCBs have been established is to make available credit to the agricultural

credit. The RDCCB disburses agricultural credit. However, in view of the rapid

industrialisation coming about in the Raigad District in the last two decades, the

quantum of the agricultural credit has progressively declined. Still agricultural

credit remains one of the principal lending activities of the RDCCB. The RDCCB

makes available the following types of agricultural credit.

1. Short-term crop loans

2. Medium and long term loans for the agricultural development

3. Loans for the implementation of Horticulture development scheme

4. Each credit and personal loans are given against the securities offered by the

individual debtors.

The Bank accepts the following as securities against loans.

1. Fixed deposits with the primary credit societies

2. National Saving Certificates

3. Kisan Vikas Patra

4. Gold

The large chunk of the funds has been utilised for giving loans to the non-

agricultural sector. These includes loans given to the industries, traders,

construction activities, housing loans, loans to purpose durable consumer goods

and educational loans. The RDCCB has also lent funds to the MSEB and

MSRDS.

The details of the loan transactions during the period under analysis have been

given below in Table 48 to Table 53.

216

Item 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08

(A) INSTITUTIONAL

ACS 620 519 485 303 347 388 453 543 752

NACS (CC) 2214 4988 6954 6414 4881 7167 8116 7645 7600

NACS (HYP) 167 230 316 290 324 331 312 386 416

MTFCS 57 80 85 87 65 78 62 45 53

Others 0 0 0 0 0 0 0 0 0

Total 3059 5818 7839 7095 5617 7964 8944 8620 8822

(B) LOANS AGAINST SECURITY

CSs 223 1397 1802 1461 1462 694 609 1175 700

Individuals 2107 396 1316 3115 2152 3597 4688 3829 1896

Total 2330 1793 3118 4577 3614 4291 5296 5004 2596

(C) CONSORTIUM FINANCE ON BEHALF OF MSCB

POC 1500 500 10000 4373 4398 3148

Individuals 2100 3440 3437 3926 4102 4355

Dir. /CC /SCC

3600 3940 4102 14355

Total 7201 7880 3437 3926 8203 28711 4373 4398 3148

A+B+C 12589 15491 14394 15598 17434 40966 18613 18022 14566

Table 48: Short Term Loans (₹ Lakhs)

Source: Annual Reports of THE RDCCB

Explanation:

(1) ACS Agricultural Cooperative Society

(2) NACS (CC) Non-Agricultural Society (Cash Credit)

(3) NACSC (HYD) Non-Agricultural Cooperative Society (Hypothecation of

Goods)

(4) M_FSC Maharashtra Fishermen’s Cooperative societies

(5) CSs Cooperative Societies

(6) Ends Individuals

(7) POC Procurement of Cotton under Monopoly Purchase Scheme

(8) Individuals Direct Loan

(9) Individuals SSG Cash Credit

(10) Individuals Self Credit Card

217

Chart 17: Institutional Short Term Loans (₹ Lakhs) [Table 48]

Intuitional short-term loans show a healthy growth trend, as illustrated in Chart 17.

Such loans ensure a steady interest income for RDCCB, because of a reduced

risk of default and RDCCB should explore avenues of growth in this sector.

Chart 18: Short Term Loans against Security (₹ Lakhs) [Table 48]

There is an increasing trend in the short-term loans against security, as illustrated

by Chart 18. This is a good sign because such loans are less likely to become

NPAs, ensuring RDCCB a steady interest income.

y = 575.64x + 4208.2 R² = 0.6596

3000

6000

9000

Institutional Short Term Loans (Rs Lakhs)

y = 246.15x + 2393.7 R² = 0.2933

0

3000

6000

Short Term Loans (Rs Lakhs) Against Security

218

Chart 19: Short Term Consortium Finance On Behalf Of MSCB (₹ Lakhs) [Table

48]

Chart 19 illustrates that there is a declining trend in the short-term consortium

finance on behalf of MSCB. There appears no regular pattern in this finance

section. This type of finance is very safe for RDCCB because the risk is borne by

MSCB and therefore RDCCB should find avenues to increase this type of loan.

Chart 20: Total Short Term Finance (₹ Lakhs) [Table 48]

y = -0.0502x + 7919.9 R² = 3E-10

0

15000

30000

Short Term Consortium Finance On Behalf Of MSCB

y = 821.73x + 14522 R² = 0.0686

0

22500

45000Total Short Term Finance (Rs Lakhs)

219

Chart 20 graphically illustrates that, over the period under analysis, the trend has

been that of a steady growth in the total short-term finance, though after peaking

in 2004-05, there has been a decrease in the total short-term finance.

Item 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08 2008-

09 2009-

10

(A) COOPERATIVE SOCIETIES

Agricultural 185 172 179 297 251 276 312 276 328 188 146

Non-Agricultural

3848 4093 3526 3762 3149 2758 2489 2195 1940 3108 3372

BCSs 109 104 99 170 171 180 207 218 220 213

Total 4143 4369 3804 4059 3570 3205 2981 2678 2486 3516 3731

(B) PERSONAL AND OTHERS

DG (H) 65 252 249 203 191 183 179 174 170 168

Direct 1349 1408 3111 3392 3686 2931 2943 3211 3385 4443 4287

MSEB 10080 8350 6350 4350 2350 0 0 0

SAH 216 294 293 283 396 655 8696 2659 4821 7146

SFs 242 988 1387 1412 1531 16 15 25 44 65

HL 11 12 11 10 9 17 17 71

RH 50 105 172 190 236 337 747 1424

AP 14 24 26 23 21 15 16

SSG 9 20 16 42 69 78 140

SCC 2 7 8 21 19 5 1

SF 7822 219

vc 19 66

SS 8 7

PML 225

NAS 12

Total 11494 10467 10992 9686 8064 5276 4042 12426 6702 18188 13678

A+B 15637 14836 14796 13744 11634 8481 7023 15104 9188 21704 17409

Table 49: Medium Term Loans (₹ Lakhs)

Source: Annual Reports of THE RDCCB

Explanation:

(1) ACS - Agricultural Cooperative Societies

(2) Non-Agricultural Cooperative Societies

(3) BCSs - Balutedar Cooperative Societies

(4) DHCH - Durable Consumer Goods-Hypothecated

(5) MSEB - Maharashtra State Electric Board

(6) SFs - Sugar Factories

220

(7) HL - Housing Loans

(8) RH - Rural Housing

(9) AP - Against Pension

(10) SCC - Self-Credit Card

Chart 21: Medium Term Agricultural Loans (₹ Lakhs) to Cooperative Societies

[Table 49]

Chart 21 graphically shows that there has been an increasing trend in the growth

of medium-term agricultural loans to Cooperative societies during the period

under analysis. However, the growth rate is very gradual as indicated by the

trendline equation. There is a decline in this loan category during the latter years

under analysis.

y = 3.0012x + 219.17 R² = 0.0239

0

175

350

Medium Term Agricultural Loans (Rs Lakhs) to Cooperative Societies

221

Chart 22: Medium Term Non-Agricultural Loans (₹ Lakhs) to Cooperative

Societies [Table 49]

Chart 22 illustrates that there has been a declining trend in the Medium Term

Non-Agricultural Loans during the period under analysis, though the quantum has

been increasing since 2007-08 after a steady decline.

Chart 23: Medium Term Loans - Personal and Others (₹Lakhs) [Table 49]

Medium Term Loans - Personal and Others show a growing trend, as illustrated in

Chart 23. This could be because of changing demographics and lifestyle in the

Raigad District.

y = -135.21x + 3924 R² = 0.4108

0

2250

4500

Medium Term Non-Agricultural Loans (Rs Lakhs) to Cooperative Societies

y = 276.32x + 8434.4 R² = 0.0517

0

10000

20000

Medium Term Loans - Personal and Others (Rs Lakhs)

222

Chart 24: Total Medium Term Loans (₹ Lakhs) [Table 49]

Growth rate in total medium-term loans is not very high, as illustrated in Chart 24.

Item 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08 2008-

09 2009-

10

(A) INSTITUTIONS

Agricultural 10 4 4 3 7 14 14 13 12 30 33

Non-Agricultural

575 582 828 758 762 761 738 665 841 966 868

(B) INDIVIDUALS+OTHERS

HL-E 443 418 382 326 284 244 358 469 497 1064 1058

NF-A 234 403 384 319 299 289 275 257 255 180 165

MSRDC 6560 10000 10000 9477 9358 7498 6000 4161 2948 1417 0

Sugar Factories

633 607 560 274 107

RTL 932 873 1004 942 842

MSEDCL 16000 16000 14298 12511 10723

Total 7237 10821 10766 10122 9940 8031 24198 22367 19562 16386 12896

A + B 7821 11407 11598 10883 10709 8806 24950 23044 20415 17382 13797

Table 50: Long Term Loans (₹ Lakhs)


Explanation:

(1) ACS - Agricultural Cooperative Societies

(2) NACS - Non-Agricultural Cooperative Societies

y = 160.16x + 12635 R² = 0.0155

0

12500

25000Total Medium Term Loans (Rs Lakhs)

223

(3) HL-E - Housing Loan-Employees

(4) NF-I - Non-Farm Individuals

(5) MSRDC - Maharashtra State Road Development Corporation

(6) NFA - Non-farm activities

(8) RTL - Restructure Term Loan

(9) MSEDCL - Maharashtra state Electric Distribution Company Ltd

Chart 25: Long Term Agricultural Loans (₹ Lakhs) to Institutions (Table 50)

Chart 25 illustrates that long-term agricultural loans to institutions has a growing

trend over the period under analysis. The trendline is a reasonably good fit to the

data. Long-term agricultural loans to institutions are growing faster than long-term

non-agricultural loans to institutions.

y = 2.5031x - 1.9667 R² = 0.6736

0

18

35Long Term Agricultural Loans (Rs Lakhs) to Institutions

224

Chart 26: Long Term Non-Agricultural Loans (₹ Lakhs) to Institutions (Table 50)

Chart 26 illustrates that long-term non-agricultural loans to institutions have an

increasing trend over the period under analysis. The trendline has a reasonably

good fit with the data.

Chart 27: Long Term Loans (₹ Lakhs) to Individuals and Others (Table 50)

Chart 27 illustrates that there has been a growing trend in long-term loans to

individuals and others, though quantum of loans has been declining from its peak

in 2005-06.

y = 25.715x + 604.09 R² = 0.5174

0

600

1200

Long Term Non-Agricultural Loans (Rs Lakhs) to Institutions

y = 1051.7x + 7537.4 R² = 0.3526

0

12500

25000

Long Term Loans (Rs Lakhs) to Individuals and Others

225

Chart 28: Total Long Term Loans (₹ Lakhs) [Table 50]

Chart 28 illustrates that there has been an overall growth trend in total long-term

loans over the period under analysis.

Item 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

ATKK-K 160.5 158.24 156.71 157.35 160.5 158.54

SIL-A 3.28 4.26 48.06 48.25 3.28 3.26

SIL-NA 35.85 35.78 35.94 62.78 34.85 34.79

Total 199.63 198.28 240.71 268.38 198.63 196.59

Table 51: Other Loans (Amount in Rs Lakhs)

Explanation:

(1) ATKK- A Anista Tafavat Karja Khate-Agricultural

(2) SIL-A Society in Liquidation-AGR

(3) SIL-NA Societies in Liquidation-Non-Agricultural


y = 1080x + 8139.5 R² = 0.3683

0

12500

25000

Total Long Term Loans (Rs Lakhs)

226

Chart 29: Other Loans (₹ Lakhs) [Table 51]

Chart 29 illustrates that the trend for other loans, over the period under analysis,

is that of growth.

Year Amount (Rs)

1999-2000 2,994,500

2000-2001 2,994,500

2001-2002 2,994,500

2002-2003 2,994,500

2003-2004 2,994,500

2004-2005 2,568,466

2005-2006 2,568,466

2006-2007 2,568,466

2007-2008 2,568,466

2008-2009 14,652,390

2009-2010 2,568,466

Table 52: Agricultural Loans Waived

(As per Government of India’s Agricultural Loan Waiver Scheme, 1990 to 2010)


y = 0.3863x + 215.68 R² = 0.0006

150

200

250

300

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

Other Loans (Rs Lakhs)

227

Chart 30: Agricultural Loans Waived by RDCCB (Table 52)

Chart 30 graphically illustrates the quantum of agricultural loans waived over the

years. The amount waived in 2008-09 far exceeds those in other years and,

again, reverted to a ‘normal’ amount in 2009-10.

Item 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08 2008-

09 2009-

10

Short term

9212 24797 14394 15597 13261 27305 18613 18801 15621 13511 14936

Med. Term

15377 14836 14796 13381 11634 8882 7023 7306 9188 14664 19313

Long term

7337 10821 10746 10122 9940 8031 24950 17393 13798

ALW 30 30 30 30 30 26

Total 31956 50484 39966 39130 34865 44244 50586 26107 24809 45569 48046

Table 53: Summary of the Loans Disbursed and Other Amounts Receivable (₹

Lakhs)


y = 0.3813x + 1.5727 R² = 0.1244

-

7.50

15.00

Rs

Mill

ion

Agricultural Loans Waived by RDCCB

228

Chart 31: Summary of the Loans Disbursed and Other Amounts Receivable (₹

Lakhs) [Table 53]

Chart 31 demonstrates that disbursement of Long Term loans has grown at a rate

faster than the other two categories. The medium term loan disbursement has

shown a steady declining trend over the years, while the short-term loan

disbursement too has shown a declining trend in disbursement over the years.

The trendline equations corroborate this analysis.

RECOVERY OF LOANS

More important than the disbursement of loans is the recovery of loans/advances

given to the borrowers. The inefficiency in this regard eats into the working capital

of the financial institutions, as it is case with most of the cooperative credit

institutions. However, the RDCCB has carried out this task satisfactorily and the

recovery of the loaned amounts is over 70%. The details thereof are given in

Table 54.

y = -9.8836x + 16973

y = -132.67x + 13196

y = 891.25x + 7718.6

5000

17500

30000

Summary Of The Loans Disbursed And Other Amounts Receivable (Amount In Lakhs)

Short term

Med. Term

Long term

Linear (Shortterm)

Linear (Shortterm)

Linear (Med.Term)

Linear (Longterm)

229

Year Amount

Receivable Amount

Received %

Amount Outstanding

%

1999-00 8655.98 6651.60 77.0 2004.38 23.0

2000-01 15491.65 123156.16 78.5 3335.49 21.5

2001-02 29102.62 24196.66 83.1 4905.96 16.9

2002-03 26640.71 22609.47 84.9 4031.24 15.1

2003-04 21167.82 16191.60 76.5 4976.22 23.5

2004-05 21610.52 15187.45 70.3 6423.07 29.7

Table 54: Recovery of Loans by the RDCCB (₹Lakhs)


Chart 32: Recovery of Loans by the RDCCB (₹ Lakhs) [Table 44]

Receipts and Expenditure of the RDCCB

Receipts: RDCCB is a business enterprise in the service sector.

Although, in theory, the principal objective of cooperation is service and not profit,

no cooperative institution can either survive or render service to the society

without achieving financial viability. The banking and related activities are

undertaken by the RDCCB to meet its operational expenditure in the first instance

and to generate surplus.

y = 2266.8x + 12511 R² = 0.3226

y = 1520x + 10846 R² = 0.1893

y = 746.88x + 1665.3 R² = 0.8414

0

5000

10000

15000

20000

25000

30000

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

Recovery Of Loans By The RDCCB (Amount in Lakhs)

AmountReceivable

AmountReceived

AmountOutstanding

230

The details regarding the surplus generated by the RDCCB are:

Source 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08 2008-

09 2009-

10

Interest on Investment

953 1085 1291 1354 1464 1606 1466 1069 2679 5295 5301

Interest on Amts. Loaned

4318 5450 7068 5473 4623 3195 3038 4051 3935 3935 4343

Commission 242 160 172 198 226 193 211 369 280 341.8 553.6

Dividend Received

2.8 3.92 2.8

Others 217 222 221 197 614.4 5.48

Total 5513 6695 8531 7025 6315.8 5214.9 4939.8 5710 7091 10186 10203

Table 55: Receipts of the RDCCB (1999–2000 to 2009-2010) (₹Lakhs)

Chart 33: Receipts of the RDCCB (Table 55)


Chart 33 graphically illustrates a healthy growing trend in total receipts of the

RDCCB during the period under analysis. Interest income on investment has

been growing whilst interest income on amount loaned has been declining. This

decline is a worrying factor for the RDCCB. This decline could be because of

NPAs. Commission income is increasing over the period under analysis, though

at a slow rate.

y = 383.42x - 158.42 R² = 0.6116

y = -179.66x + 5571.5 R² = 0.2691

y = 26.693x + 107.7 R² = 0.5829

y = 264.45x + 5451.9 R² = 0.2222

0

5500

11000Receipts of the RDCCB

Interest onInvestment

Interest onAmts. Loaned

Commission

Total Receipts

Linear(Interest onInvestment)Linear(Interest onAmts. Loaned)

231

The above table 55 indicates decline in the total receipts of the RDCCB between

2001-02 and 2005-06. This is due to the decline the receipts from the interest on

the funds loaned. This is directly related to the recovery of loans, which, as

already noted, has gradually declined during the same period. The other

observations are as follows:

1. The main source of income is the interest on the funds loaned and the

interest earned on the investments made by the Bank with the gradual

increase in the investments made by the bank; the receipts on account of

interest received have gradually increased from 952.64 lakhs in 1999-2000

to 1605.94 lakhs in 2004-2005 to Rs. 5300.78 lakhs in 2009-2010.

2. The other factor responsible for the decline in the income from the

investments and lending between 2001-02 and 2005-06 is the fall in the

‘other’ sources of income. RDCCB has been trying to tap the other sources

of income. In spite of decline in the income, the performance of the Bank

could be regarded as satisfactory as receipts in excess of fifty crore rupees

are regarded as above average performance.

Expenditure: The receipts are meaningful only in comparison to the expenditure.

The receipts in excess to expenditure generate surplus and indicate financial

viability of a banking institution. On the other hand, expenses in excess to the

receipts imply losses incurred by a banking institution and such losses, over a

period of time, reveal the critical stage. The RDCCB has managed to keep

expenditure below the level of its receipts during the period under analysis. The

details of expenditure are given below in the Table 56.

Item 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08

Interest 3545 4551 5707 4223 3318 3476 3230 3184 3858

Adm. 1134 1238 1276 1265 1404 1276 1421 2119 2020

Dep. 26 41 105 137 181 168 160 160 135

Other 1402 453 953 899 1097 188 25 144 753

Total 6107 6282 8041 6524 6000 5107 4837 5608 6765

Receipts 5513 6695 8531 7025 6316 5215 4940 5710 7091

Surplus -594 413 490 501 315 108 103 102 326

Total 5514 6694 8532 7026 6316 5216 4939 5710 7092

Table 56: Expenditure of the RDCCB (1999–2000 to 2007-2008) (₹ Lakhs)

232

Source: Annual Report of THE RDCCB

The above table indicates that the expenditure of the RDCCB has declined

between 2001-02 and 2005-06 onwards, along with the decline in the receipts

and surplus. It implies regression in the working of the Bank. The management of

the Bank, however, managed to control the total expenditure to below the total

receipts level and that has enabled the Bank to carry on its operations without

facing financial crisis.

Chart 34: RDCCB expenditure heads (Table 56)

The above chart shows that the overall trend is that interest expenses are

decreasing, whilst administrative expenses are increasing. It is evident that the

increase in administrative expenses are a driving the surplus down. ‘Other

expenses’ have also shown a declining trend during the period under analysis – a

healthy occurrence for the RDCCB because declining expenses help improve the

net surplus for the RDCCB.

y = -142.51x + 4611.7 R² = 0.2256

y = 108.13x + 920.78 R² = 0.692

y = -101.52x + 1164.8 R² = 0.3382

0

3000

6000

RDCCB Expenditure

Interest Expenses

Adm. Expenses

Depreciation

Other Expenses

Linear (InterestExpenses)Linear (Adm.Expenses)Linear (OtherExpenses)

233

Chart 35: Expenditure and receipts Of the RDCCB (1999–2000 to 2007-2008) (₹

Lakhs) [Table 56]

The above chart graphically illustrates that total receipts have exceeded total

expenditure for all the years under review, except for 1999-00. However, there is

a declining trend during the period under analysis. It is notable that the rate of

decline in ‘total expenditure’ is higher than that for ‘total income’, ensuring an

operating surplus for the RDCCB.

Surplus: Surplus is the amount in excess to the expenditure. The RDCCB has

been able to earn surplus by meeting all expenditure from its receipts during the

period under analysis, except for year 1999-00. There has been a dip in the

surplus during the period 2003-04 to 2006-07, after which there is an

improvement in the surplus. The details are in Table No. 57 and graphically

shown in Chart below:

Item 1999-

00 2000-

01 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08

Receipts 5513 6695 8531 7025 6316 5215 4940 5710 7091

Expenditure 6107 6282 8041 6524 6000 5107 4837 5608 6765

Surplus -594 413 490 501 315 108 103 102 326

Table 57: Surplus/Profit of The RDCCB (1999–2000 to 2007-2008) (₹ Lakhs)

Source: Annual Report of THE RDCCB

y = -120.29x + 6742.8 R² = 0.1199

y = -93.925x + 6806.9 R² = 0.0516

4000

6500

9000RDCCB Comparison of Total Receipts and Total Expenditure

TotalExpenditure

Total Receipts

Linear (TotalExpenditure)

Linear (TotalReceipts)

234

Chart 36: Surplus/Profit of the RDCCB (Table 57)

Chart 36 illustrates fluctuating fortunes of the RDCCB as far as the surplus is

concerned for the period under analysis. From a very precarious situation in

1999-00, the RDCC has made excellent recovery to ensure surplus in the

remainder of the period under analysis. The surplus declined from 2002-03,

plateaued during the period 2004-05 to 2006-07, and has improved in 2007-08.

The RDCCB needs to ensure a steady growth in its surplus/profit year on year in

order to fulfil its assigned role in Raigad District.

5.3.3.6 Operational Aspects

The performance of the banking operation was evaluated on the basis of the

following criteria:

Profit (_) / Loss (-): The ultimate criterion to evaluate the performance of banking

institutions is its capacity to generate profits. During the period under analysis, the

RDCCB has registered profit. The performance of its branches is given in Figure

21.

y = 26.37x + 64.07 R² = 0.046

-600

-300

0

300

600

Surplus/Profit of the RDCCB

235

Year No. of Branches in Profit Loss

1999-2000 NA NA

2000-2001 NA NA

2001-2002 43 5

2002-2003 43 5

2003-2004 46 2

2004-2005 47 2

Figure 21: Profitability of the RDCCB


The above figure reflects that:

(1) The performance of more than 90% branches is highly satisfactory.

(2) The number of branches making losses had reduced from 5 in 2001-02 to 2 in

2004-05.

Audit Class: The statutory audit of the DCC Bank is undertaken by the

Department of Cooperation every year. The auditors award grade on the basis of

the performance. The performance of the RDCCB, as assessed by the statutory

auditors is given below in Figure 22.

Years Class

1999-2000 ‘A’

2000-2001 ‘A’

2001-2002 ‘A’

2002-2003 ‘A’

2003-2004 ‘A’

2004-2005 ‘A’

Figure 22: Audit Class



(1) The performance of the RDCCB has been highly satisfactory.

(2) The Bank has been ‘A’ grade during the period under analysis.

236

(3) Payment of Dividend: The profitability of the Bank is reflected by dividend

given to its shareholders. The position of the RDCCB in this regard is given below

in Figure 23.

Years Dividend (%)

1999-2000 12%

2000-2001 12%

2001-2002 12%

2002-2003 12%

2003-2004 12%

2004-2005 8%

Figure 23: Dividend paid


Significant Findings: The above figure reveals that:

(1) The RDCCB had paid dividend to its shareholders during the entire period of

analysis.

(2) The Bank had paid dividend @ 12% from 1999-2000 to 2003-2004.

(3) The quantum of dividend was reduced to 8% in 2004-2005 due to decline in

the profit of the Bank.

Assets: The assets reflect the financial position of the Bank. The financial

position of the RDCCB for the year 2004-2005 is given below in Figure 24.

Sr. No. Particular Amount (in lakhs)

(1) (2) (3)

Cash in hand Balance with Bank i) Saving ii) Current iii) Fixed iv) Call Deposits Investment

i. Government Securities ii. Debentures iii. F. D. with MSC Bank iv. Other (including Fixed Assets )

1344.69 1344.69 3361.24 3914.04 56076.00 14419.76 47908.46

Total 127024.19

Figure 24: Assets Position

Source: Annual Report of the RDCCB (2004-05)

237


(1) The financial position of the RDCCB is satisfactory

(2) The bank has invested to the extent of Rs. 74409.80 lakhs in the Government

securities, Debentures and FDs. Their investments account for the sizeable

income of the Bank.

Operational Cost: The operational cost and its management reflect the capability

of the Board of Directors and the managerial officials. The details thereof are in

Figure 25.

Item Expenditure (In lakhs)

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

(a) Salaries 473.32 529.51 580.75 572.58 577.59 591.31

(b) Rent Paid — — — — — —

(c) Depreciation of Fixed Assets

25.84 40.57 104.94 137.32 179.26 151.00

(d) Other Expenses

— — — — — —

Figure 25: Operational Cost



(1) The expenditure on the salary and allowances has increased from Rs. 473.32

lakhs in 1999-2000 to Rs. 591.31 lakhs in 20004–2005.

(2) The Depreciation on the fixed assets increased from Rs. 25.84 lakhs in 1999-

2000 to Rs. 151.00 lakhs in 2004–2005.

(3) The expenditure on rent was nil, as the Bank had shifted its HO and branches

to its own premises.

(4) The operational cost was controlled and, as a result, the Bank did not incur

losses in spite of decline in overall profits.

238

5.3.4 General performance of the DCCBs

Progress Of DCCBs in India from 2003-04 to 2006-07 (₹ Crores)

2003-04 2004-05 2005-06 2006-07

Number of Banks 349 352 349 351

Owned Funds 900 1007 1573.14 1838.31

Deposits 3766 4932 9664.77 11180.56

Borrowings 2000 2351 4580.6 5460.31

Working Capital 6666 8290 15818.51 18479.18

Loans issued 5110 7333 15476.19 18771.01

Loans Outstanding 4705 5444 9881.49 12156.22

Loans outstanding/Loans issued 92% 74% 64% 65%

Table 58: Progress Of DCCBs in India from 2003-04 to 2006-07 (₹ Crores)

Source: Data compiled from

1. Report on Trend and Progress of banking in India, Various Issues.

2. Performance of DCCBs - National Federation of State Cooperative Banks

Limited, 2007-08, Navi Mumbai

3. Except for the number of banks figure, rest of the figures are Rs Crores

239

Chart 37: Progress of DCCBs in India from 2003-04 to 2006-07 (Table 58)

Chart 37 illustrates a growing trend in all the attributes in Table 58. Owned funds

and borrowings have increased at a slower rate as compared to deposits.

Working capital matches the loans issued, indicating very efficient use of the

working capital to generate interest income. Loans outstanding have grown at

slower rate than that for loans issued another healthy sign.

The owned funds increased from Rs. 900 crores in 2003-04 to Rs.1838.31 crores

in 2006-07 registering a two-fold increase. Deposits also increased to

Rs.11180.56 crores in 2006-07 from Rs.3766 crores in 2003-04 showing a 3-time

increase. Borrowings of DCCBs from apex banks increased from Rs.2000 crores

in 2003-04 to Rs.5460.31 crores in 2006-07 with nearly a 2½-time increase.

Working capital also increased to Rs.19079.25 crores from Rs.8663 crores during

this period. From Table 48, it is evident that the advances increased from

Rs.5110 crores in 2003-04 to Rs.18771.01 crores, indicating a 3.5 fold increase.

Loans outstanding also simultaneously increased to Rs.12156.22 crores from

Rs.4705 crores during this period.

The DCCBs are making a very efficient use of their funds, with almost the entire

working capital used to issue loans and thus ensuring high interest income.

The rate of increase in loans issued is higher than the rate of increase in loans

outstanding.

y = 5208.1x - 1299.4 R² = 0.9777

y = 4912.6x - 609 R² = 0.952

y = 2679.1x + 1348.9 R² = 0.9396

0

10000

20000

2003-04 2004-05 2005-06 2006-07

Progress of DCCBs in India from 2003-04 to 2006-07

Owned Funds

Deposits

Borrowings

Working Capital

Loans issued

LoansOutstandingLinear (WorkingCapital)Linear (Loansissued)

240

Year Number of Banks

Owned Funds

Deposits Borrowings Working Capital

Loans Issued

Loans O/standing

Loans outstanding

/ Loans issued

1997-98

352 1984 12340 6552 21103 17047 13589 80%

1998-99

352 2298 14620 6958 25999 24276 15675 65%

1999-00

359 2525 17636 6883 28173 28491 16775 59%

2000-01

362 3300 20827 8781 34696 32699 20679 63%

2002-02

364 3943 24534 10088 38565 36375 24493 67%

2003-03

364 4765 30513 10533 45536 31371 28646 91%

2003-04

367 6223 36628 11547 54655 34780 31516 91%

2004-05

367 7652 45612 12857 65368 40252 36853 92%

2005-06

367 10116 54195 14660 77319 46206 43986 95%

2006-07

367 12180 57574 15836 87821 44678 47635 107%

Table 59: Progress of DCCBs in India from 1997-98 TO 2006-07 (₹ crores)

Source: Data compiled from:

1. Report on Trend and Progress of Banking in India, RBI, Various Issues

2. Performance of DCCBs, National Federation of State Cooperative Banks Limited, Navi Mumbai, 2007-08

Chart 38: Progress of DCCBs in India from 1997-98 to 2006-07 Table 59

y = 5317.5x + 2201.5 R² = 0.9608

y = 7348.6x + 7506 R² = 0.9553

y = 2801.4x + 18210

y = 3888.8x + 6596.5

0

45000

90000

Rs

Cro

res

PROGRESS OF DCCBs IN INDIA FROM 1997-98 TO 2006-07

OwnedFunds

Deposits

Borrowings

WorkingCapital

Loans Issued

LoansOutstanding

241

Chart 38 illustrates that the working capital of DCCBs has been increasing over

the period under analysis, as well as the deposits. The trend for loans outstanding

is increasing whilst that for loans issued is showing a decline.

From Table 59, it is clear that the Total number of DCCBs in India has gone up

from 352 in 1997-98 to 367 in 2006-07. In 1999-2000, there was an increase of 7

banks due to the bifurcation of districts. Since 2003-04, the number of banks has

remained the same. The number of branches of DCCBs in India stood at 14304.

However, it was reduced to 11546 in 1998-99 due to closure of various branches

for want of viability. Since then, the number of branches had increased from

11546 in 1998-99 to 13029 in 2005-06 showing a 12.84 per cent increase. The

owned funds in 1997-98 of Rs.1984 crores increased to Rs.12180 crores in 2006-

07 showing nearly a 6-fold increase. There is an increasing trend throughout the

period. The Deposits mobilised by DCCBs in India showed Rs.12340 crores in

1997-98, which increased to Rs.57574 crores in 2006-07 showing nearly a 4.5

fold, increase. The trend shows a consistent increase over the 10-year period.

The total borrowings by DCCBs in India show Rs.6552 crores in 1997-98 to

Rs.15836 crores in 2006-07 indicating a 2.5 fold increase. This low rate of

increase in borrowings indicates that the DCCBs depended more on deposits

than borrowing for their lending operations.

Table 59 shows that the working capital of DCCBs in India was increasing all

along the 10-year period. The working capital Rs. 21103 crores in 1997-98 had

increased to Rs.87821 crores in 2006-07, nearly a 4-fold increase. Loans and

Advances amounting to Rs.17047 crores in 1997-98 increased to Rs.44678

crores in 2006-07. This shows an increasing trend except in the years 1996-97

and 2006-07 where there was marginal decrease over the previous period. The

loans outstanding show a steady increase over the previous years. In the year

1997-98, loans outstanding stood at Rs.13589 crores which increased to

Rs.47635 crores in 2006-07 indicating a 3.5 fold increase. It is suggested that the

DCCBs should take steps to reduce loans outstanding.

242

Broad Categories of Income and Expenses

1999-00 2000-01 2002-03 2003-04 2004-05

a. Interest Income 8,718 9,807 11,291 11,023 11,427

b. Other Income 469 549 795 888 1,310

Total Income (c) 9,187 10,356 12,086 11,911 12,737

d. Interest Expense 6,149 6,942 7,812 7,318 7,409

e. Provisions and Contingencies 1,453 1,588 2,571 2,414 2,124

f. Operating Expenses 1,681 1,760 1,971 2,071 2,230

Total Expenses (g) 9,283 10,290 12,354 11,803 11,763

h. Operating Profit [c – (d + f)] 1,357 1,654 2,303 2,522 3,098

i. Net Profit (c – g) -96 66 -268 108 974

Rate of increase in interest income 12.5% 15.1% -2.4% 3.7%

Rate of increase in Interest Expense 12.9% 12.5% -6.3% 1.2%

Broad Categories of Income and Expenses

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

a. Interest Income 10,688 10,597 11,980 14,619 15,900 17,600

b. Other Income 1,000 1,055 1,155 1,488 1,800 1,200

Total Income (c) 11,688 11,652 13,135 16,107 17,700 18,800

d. Interest Expense 6,577 6,668 7,872 9,239 10,300 11,100

e. Provisions and Contingencies 2,563 2,284 2,423 2,140 2,230 2,190

f. Operating Expenses 2,341 2,670 2,980 3,413 4,000 4,600

Total Expenses (g) 11,481 11,622 13,275 14,792 16,530 17,890

h. Operating Profit [c – (d + f)] 2,770 2,314 2,283 3,455 3,400 3,100

i. Net Profit (c – g) 207 30 -140 1,315 1,170 910

Rate of increase in interest income -6.5% -0.9% 13.1% 22.0% 8.8% 10.7%

Rate of increase in Interest Expense -11.2% 1.4% 18.1% 17.4% 11.5% 7.8%

Tables 60: Financial Performance Statistics of DCC Banks in India (₹ crores)

243

Chart 39: Total Income and Total Expenses of DCCBs 1999-00 to 2010-11(Table 60)

It is encouraging that, since 1999-00, the trend of total income of DCCBs is rising

faster than the trend of rise in total expenses in 2010-11 (Chart 29).

The Pearson product-moment correlation coefficient between Total income and Total Expenses is 0.976

Chart 40: DCCB Operating Profit over the years (Table 60)

There is a rising trend of increase in operating profit of DCCBs between 1999-00

and 2010-11 (Chart 30).

y = 826.06x + 8258.1 R² = 0.8154

y = 710.11x + 8565.1 R² = 0.8148

9,000

13,500

18,000

Total Income and Total Expenses of DCCBs 1999-00 to 2010-11

Total Income(c)TotalExpenses (g)Linear (TotalIncome (c))Linear (TotalExpenses (g))

y = 162.66x + 1592.7 R² = 0.6322

0

1,750

3,500

DCCB Operating Profit over the years

244

Chart 41: DCCB Net Profit over the years (Table 60)

There is a rising trend in the increase of net profit over the years 1999-00 to 2010-

11. However, there has been a seesaw performance over the years (Chart 41).

Chart 42: Comparison of increase in interest income and expense over the years (Table 60)

The rates of increase in interest income and income expense have been on a

converging trend between 2000-01 and 2010-11(Chart 42).

The Pearson product-moment correlation coefficient between Rate of increase in

interest income and Rate of increase in Interest Expense is 0.939

y = 115.95x - 307 R² = 0.4385

-400

0

400

800

1,200

1,600

DCCB Net Profit over the years

y = 0.0058x + 0.0445 R² = 0.0383

y = 0.0078x + 0.0225 R² = 0.0559

-15%

5%

25%

Comparison of DCCB increase in interest income and expense over the years

Rate of increase ininterest income

Rate of increase inInterest Expense

Linear (Rate ofincrease in interestincome)

Linear (Rate ofincrease in InterestExpense)

245

Though the figures in table 60 are used for further analysis of profitability of

DCCBs, at this stage, a few details are analysed below.

1. It is unequivocal from the above that the interest income (i.e., the interest

earned on the loans and advances sanctioned by the DCCBs) has registered

a continuous increase during the study period except during 2005-06 and

2006-07 during which it registered a downward change. It increased from Rs

11,023 crores in 2003-04 to Rs 14,619 crores during 2008-09 accounting for

an increase by Rs 3,596 crores or by 32.62%.

2. However, the year-on-year rate of change in the interest income differs from

one year to another as evident from Table 50. Further, though the rate of

increase has registered a continuous decline during the first two years, it

improved substantially during the next three years.

Chart 43: DCCB interest income over the years (Table 60)

The trend is that of increase in the interest income for DCCBs over the years

(Chart 43). There is a good fit between the trendline and data.

3. The pattern of change in ‘other income’ is, more or less, similar to that of

interest income (Chart 44). However, its share in the total income of the banks

is trivial accounting for about 10% of total income.

y = 725.91x + 7794.5 R² = 0.7808

8,000

13,000

18,000

DCCB interest income over the years

246

Chart 44: DCCB Other Income over the years (Table 60)

4. Interest expense (i.e., the amount of interest paid to the depositors by the

banks on the deposits accepted) has registered increase for all the years

except for 2005-06 during which it declined when compared to previous year

2004-05. Though the rate of increase in the annual interest expense during

2008-09 is 26.25% when compared to 2003-04, year-to-year change differs

from one year to another. This becomes clear from Table 50. However, what is

important is the overall increase in the rate of interest expense is much lower

at 26.25% than that of interest income at 32.62%.

y = 100.15x + 463.53 R² = 0.7186

400

1200

2000DCCB Other Income over the years

247

Chart 45: DCCB interest expense over the years (Table 60)

Interest expense over the years is showing an increasing trend (Chart 45). There

is good fit between the trendline and data.

5. However, in the case of provisions and contingencies, one can find the

incessant fluctuations year after year in the form of increase and decrease.

However, the banks have reduced the amount of provisions and contingencies

during 2008-09 to Rs 2,140 crores when compared to Rs 2,414 crores for

2003-04. The trend (Chart 46) shows an increase over the years, though there

is a seesaw performance.

Chart 46: Fluctuations in Provisions and Contingencies of DCCBs (Table 60)

y = 389.41x + 5607.7 R² = 0.6513

6,000

9,000

12,000

DCCB interest expense over the years

y = 46.709x + 1899.7 R² = 0.1831

1,400

2,200

3,000

Provisions and Contingencies of DCCBs

248

6. Another broad category of expenses of DCCBs viz., operating expenses

registered a perennial increase year after year. It increased from Rs 2,071

crores for 2003-04 to Rs 3,413 crores during 2008-09 accounting for an

increase by 64.8%, which is much higher than that of any other item of income

and expense. The trendline is showing an increase in operating expenses

over the years (Chart 57).

Chart 47: DCCB operating expenses over the years (Table 60)

7. As a result of the above changes, the amounts of profit (both operating profit

and net profit) registered both upward and downward changes (Chart 48).

Amounts of both operating profit and net profit declined during the mid years

of the study period viz., 2005-06 to 2007-08. However, during 2008-09, the

banks improved their profits substantially. It may be noted here that the

amount of operating profit is computed by considering total income and the

aggregate of interest expense and operating expense. Similarly, net profit is

determined by subtracting total expenses from the total income as follows.

y = 273.99x + 1057.6 R² = 0.9088

1,500

3,250

5,000

DCCB operating expenses over the years

249

Chart 48: DCCB Net Profit fluctuations over the years (Table 60)

8. Operating profit has increased from Rs 2,522 crores for 2003-04 to Rs 3,455

crores during 2008-09 representing an increase by Rs 933 crores or 36.99%.

However, during the six-year period, the amount of operating profit moved in

both the directions – increasing during 2004-05 and registering continuous

decline during the next three years (2005-06 to 2007-08). Again, during 2008-

09, they (i.e., DCCBs) succeeded in increasing their operating profit

substantially. Even the pattern of changes in net profit is similar, more or less,

to that of operating profit. There has been an increasing trend in the operating

profits over the years (Chart 49).

Chart 49: DCCB operating profit over the years (Table 60)

y = 115.95x - 307 R² = 0.4385

-400

0

400

800

1,200

1,600

DCCB Net Profit fluctuations over the years

y = 162.66x + 1592.7 R² = 0.6322

0

1,750

3,500

DCCB Operating Profit

250

State Cooperative Banks and District Central Cooperative Banks showed some

signs of improvement in profitability and asset quality in 2010-11, partly

attributable to the prudential regulatory reforms and implementation of the revival

package for the short-term rural cooperative sector65.

hapter 5 secondary ata...

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