Rajkot people’s co op.bank ltd.


Published on

Published in: Economy & Finance, Business
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Rajkot people’s co op.bank ltd.

  2. 2. DECLARARTION I, the undersigned Bhimani Divyesh P. a student of S.Y.B.B.A. fromthe SHREE R.P.BHALODIA COLLEGE of Commerce & Businessmanagement & Computer studies, declare that this project report is prepared byme. I had taken a help of my college and professor for the purpose of guidanceonly and to add that, myself prepare this report. (Sign. Of Student) Bhimani Divyesh P.Place :: - RAJKOTDate :: - / /07 2
  3. 3. ACKNOWLEDGEMENT It is my great pleasure at a time of presenting this report in front of all theconcern authority. In preparing this report I have received very good help & guidancefrom several source. First, of all I am very thankful to the saurashtra university for introducing thistype of learning system as one can be aware of practical life. Especially, I would like to extend my feeling of gratitude to Mr. R.B.Pandyawho have provide me all the required information for my project report & guide mepersonally on banking operations. I am also very much thankful to my college authority. I am also thankful to myproject guide mr. Kuldeep. for give me very well guidance. (Sign. Of Student) Bhimani Divyesh P. Place: - RAJKOT Place: Date: - / /07 3
  4. 4. PREAFACE “Today, Human life is become more practical.” Practical learning is as importantas theoretical knowledge. And in education field involvement of practical knowledge isjust like a big change. In the B.B.A. stream practical knowledge of the market &environment is more important than other books of management, is like a new way oflearning. And for this type of learning & to prepare my project report for the S.Y.B.B.A Ihave selected THE CO-OPERATIVE BANK OF RAJKOT LTD. Popularly known aspeople’s bank, a very prestigious & developing firm of the banking sector in oureconomy & also it is the life line of the economy. In regard to this I have visited “Rajkot People’s Co-Operative BankLtd”. I have prepared the report of this bank on the basic of information, which Icollected from various department of the bank I got all the information, which I wantedfrom this bank, I noted the matter, which I observed during my visit to “RajkotPeople’s Co-Operative Bank Ltd.” I gathered necessary information regarding variousdepartment Marketing department, Finance department and Personnel department. 4
  5. 5. INDEXSr. No. CONTENTS Page No. 1. General Information 6 2. Human Resource Department 14 3. Marketing Department 28 4. Loan & Service Department 33 5. Account & Finance Department 47 6. S.W.O.T. Analysis 61 7. Future Plan 65 8. Conclusion & Suggestion 67 9 Bibliography 70 5
  7. 7. CONTENTSR.NO. PARTICULARS PAGE NO. 1. Baking Sector In India 9 2. General Information Of Bank 10 3. Objectives of bank 12 4. Policies of bank 13 5. Board of directors 14 7
  8. 8. BANKING SECTOR IN INDIA The Co operative banks in India started functioning almost 100 yearsago. The Cooperative bank is an important constituent of the Indian FinancialSystem, judging by the role assigned to co operative, the expectations the cooperative is supposed to fulfill, their number, and the number of offices thecooperative bank operate. Though the co operative movement originated in theWest, but the importance of such banks have assumed in India is rarelyparalleled anywhere else in the world. The cooperative banks in India play animportant role even today in rural financing. The businesses of cooperative bankin the urban areas also have increased phenomenally in recent years due to thesharp increase in the number of primary co-operative banks. Co operative Banks in India are registered under the Co-operativeSocieties Act. The cooperative bank is also regulated by the RBI. They aregoverned by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. 8
  9. 9. GENERAL INFORMATION OF BANK The name of this bank is Rajkot People’s Co-Operative Bank Ltd. The audit class of the bank is “A” The year of establishment of the Bank is 1998. The register number of this bank is 29673-1997 The banking RBI license No. of this bank is UBD/GUJ/1497P The ChairmanM.D. of this bank is Shree Shamjibhai Khoont. Chartered Accountan of this bank is P.T. Mankadia(C.A.) Concurred auditor of this bank is Sanjay H. khakkhar Accounting year of this bank is 1st April to 31st March 9
  10. 10. The head office of this bank is RAJKOT. The registered office of this bank is in RAJKOT. Rajkot People’s Co-Operative Bank Ltd. “Sabhasad Bhavan”, 1-Manhar Plot,Gondal Raod, Rajkot – 360 002. Ph. :( 0281) 2480942-43-44 Fax : 0281-2480945 There are 5 branches in the Rajkot of this bank. Accounting year of this bank is 1st April to 31st March Working hour of this bank is 10:00 A.M. to 5:30 P.MOff Day - Sunday & approved by negotiable actThe E- mail I.D. of the bank is info@rbcbank@sify.com. 10
  11. 11. OBJECTIVES OF BANK Accumulate deposit to the tune of Rs. 100 crores. Disburse advances to the tune of Rs. 65 crores. Achieve net profits to the tune of Rs. 100 laces. Acquires business per employee for Rs. 200 laces for the year. Reduce cost of deposit to 7% Bring customers satisfaction to 100% Reduce customers complains to 100% Educate customers to bring banking awareness. Train staff to become more effective. Update present software. 11
  12. 12. POLICIES OF BANK Bank is committed to achieving the customers’ satisfaction through1) Providing best services as per norms.2) Enhancing organization’s image and reputation for quality.3) Continuously improving service quality. This commitment is met through nurturing quality culture in theorganization and the by constant adherence to laid down quality managementsystem. BANK’S AREA OF OPERATION “Rajkot People’s Co-Operative Bank Ltd.” operates through 5 branchesincluding main branch. This bank has expanded its area of operations toJamnagar and Junagadh district, over and above Rajkot region. This bank hasgeared up all its procedures to open its branches in these districts. 12
  13. 13. BOARD OF DIRECTORS CHAIRMANM.D. :: - Shree Shamjibhai Khoont VICE CHAIRMAN :: - Shree Bhikhalal Kamani DIRECTOR :: - Shree Meghjibhai Virani DIRECTOR :: - Shree Parsottambhai Patel DIRECTOR :: - Shree Gordhanbhai Shingala DIRECTOR :: - Shree Sureshbhai Kamani DIRECTOR :: - Shree Premchandbhai Agarwal DIRECTOR :: - Shree Vallabhbhai Vadalia DIRECTOR :: - Smt. Bhagvatiben Khoont DIRECTOR :: - Smt. Meenaben Vaghela DIRECTOR :: - Shree Harikrishnabhai Ghadia DIRECTOR :: - Shree Prafulbhai Patel DIRECTOR :: - Shree Veljibhai Pipalia 13
  14. 14.  GENERAL MANAGER :: - Shree Jagdihbhai Busa 14
  16. 16. CONTENTSR.NO. PARTICULARS PAGE NO. 1. Introduction 16 2. General Meeting 17 3. Qualification Of Directors 18 4. Time Keeping System 19 5. Selection & Recruitment 20 6. Promotion & Transfer 23 7. Personal Record 24 8. Remuneration 25 9. Training & Seminars 26 10. Organization Chart 27 INTRODUCTION The internal department structure of personnel department varies widely from one company to another; the personnel department has to function as a 16
  17. 17. medium to establish healthy relationship between the management and theemployee. Organization is formed by the factor of production namely land,labours, money etc. Middle level management and labourers is the living factorwith the sense of feeling. “Personnel management is the planning, organizing, direction,controlling of the procurement, development, compensation, integration andmalignance of people of the purpose of contribution to organization, individualand social goal.” - EDWARD FLIPPO Personnel management is the direction and co-ordinate of HumanRelations in the business organization, thereby obtaining maximum productionwith minimum of physical and mantel effort, stress and strain on the individualworker and group of workers and without sacrificing the genius well being of theemployees. Now a day, proper direction to achieve the goal is carried out by aseparate department that is personnel,” Personnel management is the planning,organizing, directing and controlling of procurement development,compensation, integration and maintenance of people for the purpose tocontribution, to organization, individual and social goals.” Personnel departmentis concerned with training and development of employees and providing themproper wage and salary. 17
  18. 18. GENERAL MEETING After the financial year within three months annual general meeting hasbeen decided. All the member of bank staff, board of directors is invited toattend the meeting. Generally the entire general meeting can be of annualgeneral meeting and special general meeting two types in all kinds oforganization.1. The agenda of the meeting was to note the audited accounts of bank, and audit report on 31st March,2. The loonies who could not paid their loan; they can get the advantages of one time settlement scheme to their sanction application. The time period is not fixed given to loonies but it is decided in the general meeting.3. Small loan holders who are enable to repay their loan amount as a relief to close their account from bad and doubtful debts reserve to discuss the suggestion by members & chairman of the bank. 18
  19. 19. QUALIFICATION OF DIRECTORS As we know that the directors are the most important part for any kind oforganization, for be the director of any organization, the person should havesome certain qualification.1) The member who have at least the balance of Rs.2000 in the bank at the 31st march, so he can be the director of the bank according to the law of bank.2) The person who have a membership of bank of 24 months before the date of election.3) The age of the person should be above18 years.4) He should not be the creditor of any kind of organization.AUTHORITY OF MANAGING DIRECTOR1) To appoint the managers and secretary.2) To decide the salaries and bonus of particular employee.3) To do punishment if any mistake done by the employees and to see the proper way of work to them.4) To here complains and understand the problems and make the way clear of work by avoiding these kinds of restrictions. 19
  20. 20. TIME KEEPING SYSTEM “Time & tide waits for none” is the famous saying, keeping this view inmind a unit has to develop an efficient time keeping system. There are variousbenefits that a firm is able to avail only because of discipline in timemanagement system. To get these benefits that affect the system of time keepinglike production capacity, demand for products etc. After studding all thesefactors time schedule are adjusted. Time keeping system is important for the businessman and employers.This system can also be used to improve employee relation. People’s bank’sworking hour is 10 a.m. to 5.30 p.m. The employees of this company enjoy oneholiday in a week that is Sunday and holiday which is approved by negotiableact. 20
  21. 21. SELECTION & RECRUITMENT SELECTION :: - Selection means the procedure of selection in terms of best person and allwith required qualification. This process is negative by nature because it selectsonly suitable persons and rejects the other applied. According to Yoder, “the hiring process is of one or many ‘go, no-go’gauges. Candidates are screened by the application of these tools. Qualifiedapplications go on to the net hurdle, while the unqualified are eliminated.” “Rajkot People’s Co-Operative Bank Ltd.” gives advertisement in themagazines and receives applications. From that application interview is taken,and then the person is selected in interview. Finally salary is decided as per thequalification and ability for job. SELECTION PROCESS :: - Selection is a process by which the qualified personnel can be chosenfrom the application selection is process in the hand of management to getqualify and disqualify applicant by various methods. This process is as follow ::-  Interviews  Primary selection  Final selection 21
  22. 22.  Placement RECRUITMENT :: - “Recruitment is the process of identifying various sources of recruitmentpersons in the organization. It is the process of searching and encouraging themto apply for jobs in organization”. Recruitment has been regarded as theimportant function of this department. Recruitment has been regarded as the most important function ofpersonnel administration, because unless right the type of people are hired, eventhe best plans, organization charts and control system would not do much good.According to Flippo,” it is a process of searching for prospective employees andstimulating and encouraging them to apply for jobs in an organization. It is oftentermed positive in that it stimulates people to apply for jobs to increase the‘hiring ratio’ i.e., the number of applicants for a job. Selection, on the other handtends to be negative because it rejects a good member of those who apply,leaving only the best to be hired.” “Rajkot People’s Co-Operative Bank Ltd.” uses both internal andexternal sources of recruitment. When any employee having qualification, abilityand experience works in the unit at lower level and if the place is vacant, theplace is filled by promotion. 22
  23. 23. RECRUITMENT POLICY According to Yoder,” the recruitment policy is concerned with quantityand qualifications of manpower.” A good recruitment policy must contain theseelements:a) Organization’s objectives – both in the short term and long term must be taken into consideration as a basil parameter for recruitment decisions and needs of he personnel – area wise, job – family - wise.b) Identification of the recruitment needs to take decisions regarding the balance of the qualitative dimensions of the would be recruits i.e., the recruiters should prepare profiles for each category of workers and accordingly work out the man specifications, decide the sections, departments or branches where they should be placed and identify the particular responsibilities which may be immediately assigned them.c) Preferred sources of recruitment, which would be tapped by the organization e.g., for skilled or semi-skilled manual workers, internal sources and employment exchanges may be preferred; for highly specialized categories and managerial personnel, other sources besides the former, may be utilized.d) Criteria of selection and preferences: these should be based on conscious thought and serious deliberations. In some cases trade unions may be consulted in working out the recruitment policy. In others, management may take the unilateral decision.e) The cost of recruitment and financial implications of the same. 23
  24. 24. PROMOTION & TRANSFER PROMOTION :: - Promotion may be defined as, “upward of an employee in anorganization, which commands better wages, better status, higher responsibility& authority etc. In short a promotion is the transfer of an employee to a job,which pays more money or one that carries out some preferred status.” Promotion may be given on the basis of seniority, merits on the basis ofseniority, but here promotion is given on the basis of ability, performance,capability, merits and qualification. Rajkot People’s Co-Operative Bank Ltd. does not promote its employeeson the basis of seniority, but promotion is given on the basis of ability,performance, capability, merits and qualification. TRANSFER :: - “Transfer is a horizontal moment of employees from one selected job,department to another place where the salary, status and responsibility areremaining same”. In “Rajkot People’s Co-Operative Bank Ltd.” employees are transferredfrom one department to another and from one position to another. 24
  25. 25. PERSONAL RECORD In personal record, compete up to date information is maintained aboutemployees. Every unit have record book for employees in which recordinformation about employ, leave, promotion, punished men etc. “Rajkot People’s Co-Operative Bank Ltd.” has record books ofemployees. These record books are as follow.  Attendance register  Salary-wages register  Provident fund register  Casual leave register  Bonus register  Others SOCIAL RESPONSIBILITIES “Rajkot People’s Co-Operative Bank Ltd.” has remained ahead infulfilling social responsibilities. “Rajkot People’s Co-Operative Bank Ltd.” hasalways remained active for maintaining good health of the people of the society,by sponsoring “Sharir Santulan Shibirs” and “Yog Shibirs”. Taking into 25
  26. 26. consideration various benefits availed by participants of such programs, we aresuccessfully organizing such programs every year. REMUNERATION Remuneration’s main purpose is to maintain equitable remunerationstructure. It is the duty of the firm to pay proper, relative and reasonable amountto the worker for their service. “Rajkot People’s Co-Operative Bank Ltd.” is under consideration followthe time wages (remuneration). This is oldest & most common method of wages(remuneration). Under this system workers are paid according to the work doneduring certain period. Like hour, par day, weekly, monthly or any fixed period oftime. “Rajkot People’s Co-Operative Bank Ltd.” pays salary (remuneration)their worker on monthly basis. 26
  27. 27. TRAINING & SEMINARS Training is the organized procedures by which people acquire knowledgefor a benefit. It is the act of increasing the knowledge and skill of workers fordoing a certain job. As the trained labours are considered the valuable assets to theorganization training is considered as a vital part of managerial control. By arranging training programs and seminars “Rajkot People’s Co-Operative Bank Ltd.” is trying its best to improve the banking skill of the staff,thereby bring momentum in the bank’s work. And for this, continuous training isbeing given to the staff within the premises as well as deputing them to otherinstitution on regular basis. The Chairman, Vice-Chairman and Members of theBoard of Directors are also taking part various seminars and thereby getacquainted with various pros and cons of co-operative banking arena. Thus, good training is provided to the employees who become moreeffective and productive after this process. 27
  30. 30. SR.NO. PARTICULARS PAGE NO. 1. Introduction 30 2. Promotional Activity 31 3. Marketing research 32 CONTENT 30
  31. 31. INTRODUCTION Today, marketing is spread in every field of like hospitals,services, goods even politics and many more. In banking sector toothe importance of marketing also can not measurable, still it has notdeveloped in public sector it is only limited to foreign banks andprivate sector. The reason for success of foreign in India is only bestmarketing efforts. Today in banking sector there is a cutthroatcompetition among public sector, private sector and foreign bank. Marketing is a human activity directs at satisfying the needsand wants of customers, there are five stages of bank marketingfirstly marketing g is advertising, sales promotion and publicity,secondly marketing is smiling and Co-friendly atmosphere, thirdlymarketing is innovation like the ATMs or cheques with drawls onfixed deposits, fourthly marketing is positioning. When all banksadvertise and innovate, they look alike so, they should try to positionthemselves differently, even through symbols, logos or aggressiveadvertising so that the customer can distinguee between one bankand another and finally marketing is analyzing, planning and control. At Rajkot peoples co-operative bank though there is nospecific marketing department. for marketing of different servicesbut providing vest services to their customers and getting goodcustomer satisfaction, and doing such efforts of marketing like 31
  32. 32. promotion activities they are in directly getting benefits of themarketing. Today they are also planning for such continuousmarketing efforts. PROMOTIONAL ACTIVITIES Promotion tools are also essential in the bank’s marketing mix.We need personal selling in customer contact, development, personalservice. And so on. Similarly, bank marketing program needadvertising as mass communication tool. The bank is a sponsor. Itsends a message to prospective buyers (the audience) by means of amedium (The carrier of the message). An advertisement in bankmarketing is a promise3 a promise of satisfaction to prospects whobuy or use the service offered by the bank or who are willing topatronize the bank. Banks are using all media of advertisement suchas newspaper, radio television, magazines etc., for advertising theirservices and for getting the business. Bank marketing also uses salespromotion devices such as point of purchase materials, advertisingspecialties (ball pens, calendars, diaries, notes pads etc.) brochuresand booklets describing bank services, etc. a bank has also to usepublic relation as mode of promotion to build up and maintain itsbright image in the community. 32
  33. 33. MARKETING RESEARCH Good marketing decisions are not made in a vacuum. Hence,even in bank marketing. We need marketing research andinformation to enable bank executive to make sound decisions. Theincrease in the use of marketing research in bank marketing is due totwo forces: competition pressures to be right, and Customer – orientationin marketing planning and program. Banks are now establishing aseparate marketing organization. Conduction marketing research,setting up sales training program and adopting sales promotiondivides promotion devices to attach customer we have special bankadvertisement through radio. T.V. and newspapers. Marketingresearch may be defines as “The scientific and controlled process ofgathering of none routing, marketing information, helpingmanagement to solve marketing problems.” As far as it concerned with the marketing research process atRajkot peoples co-operative bank. They have been continuouslydoing such research from beginning. But one positive point formarketing research is that they not doing any big expenses formarketing research and for executives. Bank’s staff memberthemselves goes to market and gathers requited information or data.Such information or data they are collection from direct RBI or other 33
  34. 34. banks. So, by this way they are getting benefits by using marketingresearch process. LOAN & SERVICE 34
  35. 35. 35
  36. 36. CONTENTSR.NO. PARTICULARS PAGE NO. 1. Introduction 35 2. Deposits 37 3. Loans 39 4. Other Services 44 5. Process Of Granting Loan 45 6. Recovery Of Loan 46 36
  37. 37. INTRODUCTION With years, banks are also adding services to their customers. The Indianbanking industry is passing through a phase of customers market. The customershave more choices in choosing their banks. A competition has been establishedwithin the banks operating in India. With stiff competition and advancement of technology, the servicesprovided by banks have become more easy and convenient. The past days arewitness to an hour wait before withdrawing cash from accounts or cheques fromnorth of the country being cleared in one month in the south. This section of banking deals with the latest discovery in the bankinginstruments along with the polished version of their old systems. Banks in India with the way of development have become easy to applyin loan market. Generally, Loan against Shares, Personal Loan, Home Loan, etc,Loans is given by almost all the banks in the country: 37
  38. 38. SERVICES AT A BANK DEPOSITS :: -  Current deposits (account)  Fixed deposits (account)  Saving deposits (account) LOANS :: -a) Term Loans :: - b) Cash Credit :: - Housing loan  Loan to Small Scale Industry Business loan  Others Vehicle loan Personal loan Professional loan Loan against NSCKVPLIC OTHER SERVICES :: - In other services, bank provides following services,  Locker system 38
  39. 39.  Demand draft 39
  40. 40. DEPOSITS1) CURRENT DEPOSIT (ACCOUNT) :: - While opening this account person or who so ever is going to open thistype of account, he has to make the regular transactions with this account.Generally, this type of account can be opened by businessmen, companies,industrialist, and common men etc, who have working capital in his hand andinterested to keep his money safe. Mostly the businessmen open this type ofaccount because they have to receive and make payments through cheques manytimes in a day. Required Documents To Open Current Account :: -A. For partnership firm B. For proprietorship firm All partners’ photos.  All partners’ photos. Copy of partnership deed.  P.A.N card Copy of firm. P.A.N card Copy of firm.  Proof of existing of firm. Registration copy (If).  Copy of S.T & C.S.T no. (If). 40
  41. 41.  Proof of existing of firm.  Proof of all partners’ address. Proof of all partners’ address. A person has to deposit minimum Rs. 3000 in current account. Banktakes Rs. 300 service charge at the end of the year. If a person wants to close hiscurrent account, bank charge Rs.50 (if a person having cheques book) and bankwill charge Rs. 25(if person is not having cheques book).2) SAVING DEPOSIT (ACCOUNT) :: - It is an ideal account for those who have sufficient money to save.Generally, common men who save money from his salary and he deposits in tobank for saving purpose. Saving account is the best way and when ever need ofmoney occur he can get or withdraw money from his saving account. If a person wants to open his saving account with a bank, he has to fill upa firm of the banks saving account, he has to give required documents such asphoto, address proof, license or election card as identity etc, and he has todeposit minimum Rs. 1,000. If a person wants a new cheques book, bankcharges Rs, 50 for every cheques book. While closing a saving account, a personhas to surrender all documents which have already been given by a bank like,cheques book, pass book, etc.Rate on saving account is 3.5%.3) FIXED DEPOSIT (ACCOUNT) :: - 41
  42. 42. A person who has spares money for a particular period of time and hewants to get it as double so for him fixed account is a best way to deposit money.In this account he has to deposit his money for a specific period of time and as areward he can get double amount after completion of time. If a person wants toopen his fixed account with a bank, he has to fill up a firm of the banks fixedaccount, he has to give required documents such as photo, address proof, licenseor election card as identity etc, and he has to deposit minimum Rs. 1,000. Whileclosing a saving account, a person has to surrender all documents which havealready been given by a bank. A person can get double at 109 months. LOANSA) TERM LOANS :: - It is one of the major sources of debt finance for a long term project.Term loans are generally repayable in more than a year but less than 10 years.These loans are offered by all Indian financial institutions. Term loans aregenerally secured through a first mortgage or by way of deposit of title deeds ofimmovable properties.1) Housing Loan :: - Home loan is the latest craze in the banking sector with the developmentof the infrastructure. Now people are moving to township outside the city. Morenumber of townships is coming up to meet the demand of house for all. TheRBI has also liberalized the interest rates of home loan inorder to match the 42
  43. 43. repayment capability of even middle class people. Almost all banks are dealingin home loan. Again SBI, ICICI, HDFC, HSBC are leading. Local residential can get housing loan for the purpose of to purchase orbuild home. Rate of interest is 10.5% for Rs. 5 lacs and above Rs. 5 lacs; rate ofinterest is 11.5%. As a security bank takes the documents of property which ismortgage by the person. A person, who is grated loan, has to repay loan to bankup to 5 years. 43
  44. 44. 2) Business Loan :: - A person who is engaged in their business at least from last one year canget this kind of loan for the purpose of fulfillment of the short term workingcapital needs. A business man get loan up to 10 lacs but in special cases bankallow him to grant above 10 lacs and person has to repay the loan in installmentswhich should have already been decided. As a security bank takes all documentsof property which is being mortgaged by a person. Rate of interest on this loan isas under :: - Up to Rs. 2 lacs :: - 12% Rs. 2 lacs to Rs. 5 lacs :: - 12.5% Rs. 5 lacs to Rs. 10 lacs :: - 13% Above Rs. 10 lacs :: - 14%3) Vehicle Loan :: - A person or a businessman who wants to purchase new or old vehicle forthe purpose of the transportation or for personal use can get this kind of loan.Bank grants this kind of loan up to 85% of the face (quotation) value of vehicleand person has to repay the loan in installments which should have already beendecided. Rate of interest on this loan is as under :: - For transport operator :: - 14% For personal use :: - 13% 44
  45. 45. 4) Professional Loan :: - This kind of a loan is granted to professional persons such as lawyers,C.A, doctors, etc, for the professional purpose like, to the doctor bank grants thistype of loan to build new clinic, to buy new medical equipments, and so on.Bank grants this loan up to 10 lacs but in some cases bank grants loan above 10lacs and person has to repay the loan in installments which should have alreadybeen decided. Rate of interest on this loan is as under :: - Up to Rs. 2 lacs :: - 12% Rs. 2 lacs to Rs. 5 lacs :: - 12.5% Rs. 5 lacs to Rs. 10 lacs :: - 13% Above Rs. 10 lacs :: - 13.5% Up to Rs. 25,000 :: - 13 % Above Rs. 25,000 :: - 14 % 45
  46. 46. B) CASH CREDIT :: -1) Loan to Small Scale Industry :: - A person who has his own business and wants to start his own businessas small scale sector can get this kind of the loan for the purpose of fulfillment ofthe short term working capital needs or to purchase new machineries or soon. A business man can get loan up to 15 lacs but in special cases bank allowshim to grant above 15 lacs and person has to repay the loan in installmentswhich should have already been decided. In cash credit type loan, person canwithdraw money (up to decided) if there is no money in his account. Bank grantsthis loan against the raw material, stock, and any mortgaged properties. Theinsurance of stock and mortgaged properties is taken by the bank as a security.Rate of interest on this loan is as under :: - Up to Rs. 2 lacs :: - 11% Rs. 2 lacs to Rs. 5 lacs :: - 11.75% Rs. 5 lacs to Rs. 15 lacs :: - 12.25% Above Rs. 15 lacs :: - 13% 46
  47. 47. 2) Other Cash Credit Loan :: - Bank also grants cash credit to the local residential or to an ordinarypeople to fulfill their needs for money. A person can get loan up to 10 lacs but inspecial cases bank allows him to grant above 10 lacs and person has to repay theloan in installments which should have already been decided. In cash credit typeloan, person can withdraw money (up to decided) if there is no money in hisaccount. As a security bank takes all documents of property which is beingmortgaged by a person. Rate of interest on this loan is as under :: - Up to Rs. 2 lacs :: - 11.5% Rs. 2 lacs to Rs. 5 lacs :: - 12.25% Rs. 5 lacs to Rs. 10 lacs :: - 12.75% Above Rs. 10 lacs :: - 13.5% 47
  48. 48. OTHER SERVICES1) Locker System :: - Bank also provides locker system to their customer or peoples. Basically,bank provides A, B, C - three types of lockers and size of lockers are 6*6, 6*12,and 12*1 respectively. Bank also charge for locker Rs. 350, Rs.450, Rs. 550respectively. A person who is going to open locker with bank, he has to depositRs. 5, 500, Rs. 6,500, Rs. 7,500 for A, B, C respectively. Person also has to openhis current account with bank because bank will debit service charge of locker inhis current account.2) Demand Draft :: - Purchase of demand draft is required to fill up the requisiteapplication form of bank which contains following columns :: - Date of the application. Scroll no. Name of the drawer bank and its branch Account type no. and cheques no. Beneficiary’s name. Demand draft no. and bank code no. Amount of demand draft in figures and commission and total Rs. Purchaser’s name, address, and sign. 48
  49. 49.  CashierClerk and officers initials. 49
  50. 50. PROCESS OF GRANTING LOANS Primary Investigation :: - In primary investigation, bank investigates all the things of the customersuch as, name, address, purpose of loan, amount of loan, assets which is going tobe mortgaged, etc. After knowing all the things about the customer, bank willgive loan form to customer. He has to fill up all the things clearly. Bank will need some documents for assurance. The one and commondocument bank demand is demand promisenary this because customer needsloan. If bank is granting loan to partnership firm and proprietorship firmfollowing documents are required.  All Partners’ / Proprietors’ photos.  Copy of Partnership / Proprietors’ deed.  P.A.N card Copy of firm.  Registration copy (If).  Proof of existing of firm.  Proof of all Partners’ / Proprietors’ address. If bank is granting loan in the form of vehicle loan, bank will try to knowthe purpose of getting loan whether it is getting to buy new or old vehicle andbank also grant loan against the vehicles. If bank is going to grant loan to thecompany, bank will demand for registration documents of the company. After investigating all above things and required documents GeneralManager of the bank will decide to grant loan or not. For taking this decision he 50
  51. 51. may call meeting and General Manager takes an opinion of the others. Thus theywill decide to grant loan. RECOVERY OF LOAN Customer who is being granted loan by bank, he has to repay the loan insmall installments which have already been decided earlier. Customer has to payhis installment in 1st to 10th of month otherwise he has to pay fine (penalty)interest 2% more for per day. If customer does not pay more than 3 installments, bank will issue legalnotice. And though customer will not pay installment bank will claim in courtand generally court will also take decision in favor of the bank then after Bankwill again issue notice of confiscation assets for 30 days. After these entire ifcustomer will not pay installment bank will issue notice of auction of his assetsand bank will give an advertisement in news paper and after 30 days bank willget its money from selling assets. 51
  52. 52. ACCOUNT &FINANCE 52
  53. 53. CONTENTSR.NO. PARTICULARS PAGE NO. 1. Introduction 49 2. Financial Analysis 50 3. Ratio Analysis 51 4. Financial Report 53 5. Information Of Shares 57 6. Auditor’s Report 58 53
  54. 54. INTRODUCTION Today, Finance is considered as the “Life Blood of the Business” withoutfinance no business activity is possible. So for an organization, it must have alarge amount of finance and for this it should have finance department. Finance management is concerned with the acquisition, financing andmanagement of assets with some overall goal in mind. Finance managementcontinuous to develop at an even more rapid pace. Advancement is occurring notonly in the theory of finance management but also in its real world practice. The finance manager has dynamic role in a modern company’sdevelopment. Until around the first half of century, finance manager primarilyraised funds and managed their firm’s cash and that was pretty much it. Todayinternal factors have an increasing impact on the financial manages. Corporatecompetition, technological changes volatility in inflation and interest rates,worldwide economic uncertainty, fluctuating exchange rats, tax low changes,and ethical concourse over certain financial dealings must be dealt with thecorporation. Finance management is very important i.e. first to manage financialresource, then to distribute that finance among the various department accordingto their need and lastly has to check whether it is used in right way or not. Thus,only finance gathering has not become the goal or aim of finance managementbut is holds a key position in top management of companies. 54
  55. 55. FINANCIAL ANALSIS The nature of analysis will differ depending on purpose of the analyst.Trade creditors are interested in firms’ ability to meet their claims over a veryshort period of time. Their analysis will therefore confine to the evaluation of thefirms liquidity position. Suppliers of the long term debit on the other hand are concerned with thefirms’ long term solvency and survival. They analyze the firms’ profitabilityover time, over its ability to generate cash to be able to may interest and repayprincipal and relationship between various sources of funds. Investors who have invested their money in the firms’ shares areconcerned about the firms’ earnings. They restore more confidence in therefirms’ that show steady growth in evening. Management of the firm would beinterested on every aspects of the financial analysis. It is their overallresponsibility to see that the resources of the firm are used most effectively andefficiently and that the firms’ financial condition is found. 55
  56. 56. RATIO ANALSIS Ratio analysis is a powerful tool of financial analysis. A ratio is definedas “the indicated quotient of two mathematical impression” and as therelationship between two or more things. It helps to ascertain the financialcondition of the firm. Ratio analysis is a process of identifying the financialstrength and weakness of the firm. A financial ratio is a relationship between two variables which are drawnfrom the financial statements of business enterprises it is important for therevariables which are related to each other. It is one the financial control tools inthe head of management and is widely used by business. Ratios as shown above are relative figures reflecting the relationshipbetween variables. They enable analyst to draw conduction regarding financialoperations. The use of ratios as a tool of financial analysis involves theircomparison for a single ratio like absolute figures, fails to reveal the trueposition. For example, if in the case of a firm the return on capital employed is15% in a particular year, what does it indicate? Only if the figure is related to thefact that in the preceding year the relevant return was 12% or 18% can it beinformed whether the profitability of the firm has dedicated or improved.Alternatively if we know that the return for the industry as a whole is 10% or20%, the profitability of the firm in question can be evaluated. Comparison withrelated facts is therefore the basis of ratio analysis. Four types of comparisonsare involved ( 1 ) trend ratio ( 2 ) inter firm comparison ( 3 ) comparison of itemswithin a single year’s financial statement of a firm ( 4 ) comparison withstandards as plans. 56
  57. 57. IMPORTANCE OF RATIO ANALYSIS Importance of ratio analysis are as follows :: -1) It helps in knowing the liquidity position of a firm.2) Ratio analysis helps in assessing long term financial viability of a firm.3) It helps management in evaluating operating efficiency of management & utilization of its assets.4) It also helps investors on outsiders in evaluating even all profitability.5) Ratio analysis helps in inter firm comparison that helps in comparing firms’ performance.6) Finally, ratio analysis enables to tale the time dimension into account. In other words whether the financial position of a firm is improving or determining over the years. 57
  58. 58. FINANCIAL REPOERT The directors have pleasure in presenting the 8th report of Rajkot People’sCo-Operative Bank’s Audited Statement of Accounts of the year ended on 31stMarch 2006. Due to irresponsible attitude of some of the Co-Operative Banks’management in the last few years, lay men had to suffer immense loss. However,under the adverse circumstances, Rajkot People’s Co-Operative Bank has keptthe pace with the progress all around and has sustained faith of the people, whichis highlighted from the following information. DIVIDEND :: - As per the provision of the Gujarat Co-Operative Societies Act ofmaximum limit of Dividend, Board or Directors recommends 15% Dividend.Rajkot People’s Co-Operative Bank has shown consistency in maintaining thesame rate of Dividend since inception. CAPITAL ADEQUACY :: - Against the statutory Requirement to maintain capital adequacy ratio thatis capital to risk weighted assets ratio-CRAR at 9% Rajkot People’s Co-Operative Bank has maintained as high as 11.57%. Higher CRAR suggests highfinancial soundness of the bank. The CRAR is an indictor to measure the riskagainst the capital. 58
  59. 59.  FINANCE :: - The liberalization of the financial sector is the key for the over allliberalization process. Gradually, the structure of the financial market itself hasbegun to change, in the changing Financial Market; Rajkot People’s Co-Operative Bank has market the progressive growth and profitability both thefinancial year 2005-2006 which is reflected in the following Financing sinceinception: (Rs. In Lacs) Particulars 31-3-05 31-03-06 Members 13,300 13,550 Share Capital Rs. 216 Rs. 230 Deposit Rs. 8,800 Rs. 9640 Advances Rs. 6300 Rs. 6300 Net Profit Rs. 92 Rs. 97 Working Capital Rs. 10,200 Rs. 10,850 59
  60. 60.  DEPOSITS :: - The condition of many banks became vulnerable during last few years.However Rajkot People’s Co-Operative Bank was successful in sustaining thetrust of its Depositors and has sustained the same growth in all adversecircumstances. Rajkot People’s Co-Operative bank’s deposits, in comparison to previousyear have increased by 9.51% and reached to Rs.96, 50,00,000 as at 31.03.2006.The ruse in the deposits is the symbol of trust. The percentage of low costdeposits to total deposit is rising year by year which is the key for gradual butsteady growth in profitability. ADVANCES :: - Rajkot People’s Co-Operative bank grants various loans and advancesfor the actual needs of the fundamental principles of co-operation. As a matter offact, Rajkot People’s Co-Operative Bank is “Big for Small (lay) people andsmall for big (rich) people”. Rajkot People’s Co-Operative Bank has alwaystried to be helpful to common people, which are 6,300 (in lacs). Rajkot People’s Co-Operative Bank’s financial portfolio is distributed inentire economic and varied activities so that changes arising from the marketmay not have direct adverse impact on the recovery and economy affairs of thebank. 60
  61. 61.  INVESTMENT :: - Out of total investment of Rs. 19, 70, 00,000 of Rajkot People’s Co-Operative Bank at 31.03.2006, Rs 18, 99, 00,000 has been invested in variouscentral government securities. The face value of the investment is Rs. 19, 00, 00,000 and market value of the investment is Rs. 19,11, 00,000. Rajkot People’s Co-Operative Bank has adopted the policy of investmentas directed by the reserve bank of India from time to time. Accordingly, entireinvestment is kept in RBI’s SGL Account. Rajkot People’s Co-Operative Bank’stotal investment is more than statutory requirement. 61
  62. 62. INFORMATION OF SHARE SHARE CAPITAL :: - Last year there were 13,280 members. This year it has reached to 13,550in numbers. During the year 2005-2006, total share capital gone up to Rs. 2,30,00,000 which is 6.02% higher than the previous year’s figure. An increase innumber of members is the sign of success of the bank. SHAREHOLDING :: - If a person who wants to become share member of the bank, has to buythe shares of that bank. He has to fill up form of the bank. Bank collects theshare application form, membership fees and share application money. Board sanctioned the share application and provides membershipmember and also provide an identity card. Now, the person becomes apermanent member of this bank. 62
  63. 63.  TRANSFER OF SHARE :: - If any share holder wants to transfer his share in favor of any person, hehas to fill up share transfer form of the bank in favor of others. He has to paytransfer fees and submit original share certificate to bank and identity card whichhas already been given to the share holder and bank will transfer his share onname of another person. SHARE CERTIFICATE :: - Bank issues the share certificate to share holder and identity card. Theshare certificate is approved by the Co-Operative sector. In which such thingsare covered as Bank shareholder No., Sr. No., Certificate No. signed by the ofbank authority. If a person who deposits Rs25, 000 in the account of the bank,bank will give him a share certificate. RESERVES AND FUNDS :: - Various reserves and funds of Rajkot People’s Co-Operative bank hasreached to the level of Rs. 7,50,00,000 as at 31.03.2006, which is 40.33% higherthan the previous year’s figure. Constant rise in various reserves and funds isalso a land mark of a successful and sound bank. 63
  64. 64. AUDITOR’S REPORT We have audited the balance sheet as on 31.3.2006 and the profit & lossaccount for the year ended on 31.3.2006 of Rajkot People’s Co-Operative BankLtd. With reference to our audit memo and audit note we hereby report asfollow:1) It is bank management duty to prepare the said financial statement our duty is only to give opinion about the genuineness of the informative data disclosed in the said statements.2) We follow the rules and regulation of the existing accounting standards for the said audit purpose. It is to be verified that the said financial statement are true and the information and figurative data disclosed are genuine in all respect.3) As per our opinion all the information and explanations provided to us are disclosed in bank’s books and as per that we report as follows: a) The balance sheet as on 31.3.2006 and the accounting note there in reflect the actual financial position of the bank all the required information is included in it and it is properly prepared. b) The profit and loss account for the year ended on 31.3.2006 reflects the actual profit of the bank. 64
  65. 65. 4) The information and clarifications required by us promptly provided to us and we found them satisfactory.5) The transaction of the bank observed by us are lawful and as per rules and regulation of the respective law.6) As per our opinion all mandatory financial records to be maintained are properly maintained by the bank.7) The NPA classification and the provisions thereof of the bank are as per the norms of income recognition and provisions prescribed by Reserve Bank of India. Rajkot People’s Co-Operative Bank Ltd. satisfies all the needs ofauditors. The audit class of this bank is “A” and the audit grade of this bank is“1”. 65
  66. 66. S.W.O.TANALYSIS 66
  67. 67. STENGTHS WEAKNESSES S.W.O.T. ANALYSIS OPPORTUNITES THREATS S = Strengths W = Weaknesses O = Opportunities T = Threats STRENGTH :: - 67
  68. 68.  This bank is very reputed in local (Rajkot) area. Professional management & co-operate team spirit. Strong brand equity in local (Rajkot) area. Fully computerized. Profitability & sound liquidity. Branches in all most developed part of Rajkot. No mistake in regular transactions can be found because of small network. Against the statutory Requirement to maintain capital adequacy ratio that is capital to risk weighted assets ratio-CRAR at 9% Rajkot People’s Co-Operative Bank has maintained as high as 11.57%. WEAKNESSES :: - Bank is not performing marketing activity because lack of marketing expertise. Lack of modern management concepts and sometimes communication gap can be found which indicates lack of professionalism. Bank is not providing A.T.M. facility in the recent developed era and Bank is not fully developed in modern era. Lower volume of advances due to higher rate of interest may affect the expansion of the organization. Not reputed at national level and less no. of the branches. 68
  69. 69.  OPPORTUNITIES :: - Bank can open branches at state level in near future. Number of branches can be increased in all over nation next 5 to 8 years. Bank can introduce new services like, NRI loan, ATM, student account with minimum Rs. 100 etc. Bank can perform marketing activities by media. THREATS :: - Changes in government policies and in rules and regulation regarding bank can be disturbed in regular services of bank. Crises in the Co-operative banking sector can disturb the bank progress. All the depositors may withdraw their money from bank because of any wrong rumors against bank. 69
  70. 70. FUTUREPLANS 70
  71. 71. FUTURE PLANS Rajkot people’s co-operative bank wants to starts new branches indifferent districts of Gujarat and as possible, may start at India level also.People’s bank may also provide ATM facility if possible. People’s bank wants todevelop close relationship with individual and depositors. People’s bank alsowants to maintain growth and wants more growth. People’s bank may providevarious types of new loans like, student loan, NIR loan, and many more policies.Generally, People’s bank mainly focuses on starting new branches in variousplace of India. 71
  73. 73. CONCLUSION From the bank’s visit I learn a lot. Now I know that how the theoreticallyaspects are applied in the industries. I had found that all the staff members and workers are working in a coordinates manner and in a planned way and they are more concentrating abouttheir work and diversifying their efforts towards the desired target. Due tounprecedented trust and co-operation of the members and customers as well ascontinuous efforts put in by the management and the staff of Peoples Bank hasbeen able to reach to the new heights of success. So, at the end I wish “RAJKOT PEOPLE’S CO-OP. BANK LTD.” and”ALL THE BEST” to get desired success in the future. 73
  74. 74. SUGGESTION Bank is not performing marketing activity because lack of marketingexpertise for this bank should appoint skilled person who has a marketingknowledge. Bank is not providing A.T.M. facility in the recent developed eraand many others facilities which are being providing by other banks so bankshould try to provide or start this facility and other policies in near future. Bankhas not large net work and not fully developed so bank should open newbranches in different states of the India. 74
  75. 75. BIBLIOGRAPHY 75
  76. 76. BIBLIOGRAPHY Web Site:: - www.google.com www.rbi.com  Personnel Management Ashwathappa C.B. Mamoria  Marketing Management Phillip Kotler S.A. Sherlekar Finance Management I. M. Pandey Annual Report of the Bank (2005) 76