c.paramasivan Financial institutions and its performance in tirunelveli district, tamilnadu

  • 205 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
205
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
5
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. FINANCIAL INSTITUTIONS AND ITS PERFORMANCE IN TIRUNELVELI DISTRICT, TAMILNADU Dr.C. PARAMASIVAN, Assistant Professor &Research supervisor, P.MARISELVAM PhD ( FT) Research scholar , Department of commerce, Periyar EVR College Trichy, Tamilnadu ABSTRACT Financial Institutions in India consist of commercial banks, regional rural banks (RRBs), urban co-operative banks (UCBs), rural co-operative credit institutions, development finance institutions (DFIs), non banking financial companies (NBFCs), mutual funds and insurance organisations. This article is focused on the financial institutions and its performance in Tirunelveli district of Tamilnadu with reference to banking net work, deposits and advances positions and sector wise advances by the financial institutions in Tirunelveli district during the study period 2010-11. -----------------------------------------------------------------------------------------------------Key words: financial institutions, banking network, advances and deposits, priority sectors Introduction Financial Institution is considered as a major component of financial system of the country which helps to promote the systematic flow of finance from the available hands to needed hands. These institutions are primarily established for the purpose of systematic and sustainable growth of the country. Presently many financial institutions are activity contributed to the Socioeconomic development of the nation through its lending and advances. Indian financial institutions are grouped into banking and non banking financial institutions. Banking institutions are again classified into public sector banks, 1
  • 2. private sector banks and foreign banks. Non banking institutions also classified into national level financial institutions and state level financial institutions. At present there are 83 banking and 4 non banking financial institutions in the country. In this regards, this paper is an attempt to discuss the role of financial institution in Tirunelveli District of Tamilnadu during the year 2010-11. Financial Institution in India Financial Institutions in India consist of commercial banks, regional rural banks (RRBs), urban co-operative banks (UCBs), rural co-operatie credit institutions, development finance institutions (DFIs), non banking financial companies (NBFCs), mutual funds and insurance organisations. These institutions, which provide a meeting ground for the savers and the investors, form the core of India’s financial sector. Through mobilisation of resources and their better allocation, financial intermediaries play an important role in the development process of underdeveloped countries. Financial institutions have transited since the mid-1990s from an environment of an administered regime to a system dominated by market-determined interest and exchange rates, and migration of the central bank from direct and quantitative to price – based instruments of monetary policy operations. However, increased globalisation has resulted in further expansion and sophistication of the financial sector, which has posed new challenges to regulation and supervision, particularly of the banking system. In this context, the capabilities of the existing regulatory and supervisory structures also need to be assessed by benchmarking them against the best international practices. Profile of Tirunelveli District The Tirunelveli District was formed in 1790 by the East India Company, later came under the direct control of the British Crown Queen Victoria. The 2
  • 3. name Tirunelveli has been composed from the three Tamil words i.e. “ThiruNel-Veli” meaning “Sacred Paddy Hedge”. This District is located in the southern part of Tamilnadu and surrounded by Virudhunagar District on the North, Tutticorin District on the East, kanyakumari District on the South and Western Ghats on the West Tirunelveli has its own individuality from rice to culture. Agriculture plays a vital role in the District’s economy. The total cropped area was 193905 hectares, which worked out 28.91% of the total Geographical area. Tirunelveli District is industrially backward. There are 25 medium and major industries such as Cement, Cotton yarn, Calcium Carbide, Sugar, Cotton seed oil, Printing papers and flour mills etc., In addition to this there are about 14389 Small scale industries registered in this district. Financial Institutions in Tirunelveli District The district is having a well developed banking system with a network of 288 branches of various banks as detailed below. Table No. 1 Financial Institutions Sl.No. Banking Sector No. of Banks No. of branches 1 Public Sector 16 155 2 Private Sector 10 36 3 Pandiyan Grama Bank 1 50 4 TCCB Ltd., 1 26 5 TNCSARD (L.D.Bank) 1 8 6 Urban Co-operative Bank 1 11 7 TIIC 1 1 8 TAICO 1 1 32 288 Total Source: Lead Bank Annual Report 2010-11 3
  • 4. The Tirunelveli District Central Co-operative Bank is having 26 branches with 162 Primary Agriculture Co-operative Societies affiliated to it. The average population per branch office in the district is less than 9500 which compares favourable with the national average of 13000 and state average of 12000/branch. After the introduction of the new concept of service area approach since 1.4.1989 all the village in the 19 blocks have been allocated to 288 banks branches operating in rural and semi-urban areas in the district. Since many new bank branches have been opened since then, the villages have been re-allocated periodically taking into account the proximity to the village as well as easy access. Banking Network Network of banks providing financial services, a network of commercial, saving, and specialized bank that financial provide financial services, including accepting deposit and providing loans and credit, investment facilities. Table No.2 Bank wise branches in Tirunelveli District Sl.No Public Sector Banks Rural 1 State bank of India 9 SemiUrban 4 Urban Total 7 20 2 State Bank of Travancore 0 5 0 5 3 Allahabad bank - 1 - 1 4 Andhra bank - - 1 1 5 Bank of Baroda - - 2 2 6 Bank of India 1 1 2 4 7 Canara Bank 7 11 10 28 8 Central bank of India 2 3 3 8 9 Corporation Bank 0 2 1 3 4
  • 5. 10 Indian bank 2 9 8 19 11 Indian Overseas Bank 21 20 10 51 12 Punjab National Bank 1 2 1 4 13 Syndicate Bank 0 0 1 1 14 Uco Bank 1 - 1 2 15 Union Bank of India 0 3 2 5 16 Vijaya Bank - - 1 1 44 61 50 155 0 2 0 2 1 5 10 1 1 1 1 0 1 1 1 1 1 9 3 1 1 1 9 1 3 2 1 14 36 21 2 50 21 2 50 - - 8 17 4 26 3 20 6 10 11 45 - 1 1 Total 1 2 3 4 5 6 7 8 9 10 1 Private Sector Banks Axis Bank 2 City Union Bank Feederal Bank HDFC Bank ICICI Bank 7 IDBI 0 Karur Vysya Bank Lakshmi Vilas Bank South Indian Bank Tamilnad Mercantile Bank 8 Total 17 Regional Rural Banks Pandyan Grama Bank 27 Total 1 2 3 1 27 Co-operative Banks Tamilnadu Co-op. State 8 Agriculture and Rural Development Bank Tirunelveli Dist. Central Co-op. 5 Bank Urban Co-operative Bank 2 Total 15 Other Financial Institutions Tamilnadu Industrial Co-op. Bank 5
  • 6. 2 Tamilnadu Industrial Invest Corporation Sub Total Grand Total Source: Lead Bank Annual Report 2010-11 - - 1 1 103 112 2 73 2 288 Table No.2 reveals that the banking networking in Tirunelveli district in the year 2010-11. There are 155 Commercial bank branches in the districts which includes 44 branches in rural, 61 branches in semi urban and 50 branches in urban area. As regards Regional Rural Bank, 27 branches in rural, 21 branches in semi urban and 2 branches in urban area which amounted to 50 branches of Regional Rural Bank in Tirunelveli district. There are 45 Co-operative bank branches in Tirunelveli district which includes 15 branches in rural, 20 in semi urban and 10 in urban areas. Two Financial Institutions also available in the Tirunelveli district as per the records. As on whole, there are 288 banking branches in Tirunelveli district which consist of 103 branches in rural, 112 in semi urban and 73 branches in urban. Deposits and Advance Position Deposits and advances granted by commercial banks are highly beneficial to firms, companies and industrial concerns. The growth and diversification of business activities are effected to a large extent through bank financing. Deposits and advances granted by banks help in meeting short-term and long term financial needs of business enterprises. 6
  • 7. Table No.3 Deposits and Advances (Rs. In Lakhs) Sl.N Year Deposits Advances C.D. Ratio o 1 2005-06 346201 248111 72% 2 2006-07 383800 295268 77% 3 2007-08 468799 376774 80% 4 2008-09 577963 430263 74% 5 2009-10 619587 493513 80% Source: Lead Bank Annual Report 2010-11 Table shows that Deposits and Advance Position in Tirunelveli district during the year 2005-06 to 2009-10. Highest C.D ratio were recorded (80%) in the year 2007-08 and 2009-10 and the lowest C.D ratio 72% shown in the year 2005-06. Deposits position has been increased from Rs. 346201 Lakhs in 2005-06 to 619587 Lakhs in 2009-10. Advances in highest C.D ratio for the above detail, as far as the Advance position has been increased from Rs. 248111 Lakhs in 2005-06 to Rs. 493513 Lakhs in 2009-10. Sector wise Advances Operation and expansion of business and commercial activities depend a great deal on the availability of sector wise loans/advances from commercial banks. Financial assistance to bank, sector wise loans and advance, cash credits, overdrafts, etc., from the issued by various sectors. 7
  • 8. Table No.4 Sector wise Advances Agriculture Advances Year Priority D.R.I. Adv. sector 2005-06 2006-07 2007-08 2008-09 2009-10 % Amount % Amount 74217 80346 101383 108980 187988 30 27 27 25 38 150047 183335 243742 229052 361129 60 62 65 53 73 190 38 128 253 228 % 0.08 0.01 0.05 0.11 .05 Weaker SC/ST Amount Advances to Sec. Amount 11533 18181 27091 28532 30872 % 5 6 11.41 12.46 6.26 Amount % 34751 48817 65864 66086 103609 14.01 16.53 17.48 15.36 20.99 Source: Lead Bank Annual Report 2010-11 As regards Agricultural sector, Rs.187988 Lakhs as advances in the year 2009-10 as against Rs. 74217 Lakhs in 2005-06. Percentage of advances to agriculture sector in the year 2009-10 is 38% as against 30% in the year 2005-06. Priority sector Rs.361129 Lakhs as priority sector in the year 2009-10, as against Rs. 150047 Lakhs in 2005-06, Percentage of priority sector in year 2009-10 is 73% as against 60% in the year 2005-06. D.R.I Advances Rs.228 Lakhs as D.R.I advances in the year 2009-10; as against Rs.190 Lakhs in 2005-06, Percentage of D.R.I advances in the year 2009-10 is 0.5% as against 0.08% in the year 2005-06. Advances to SC/ST sector is 6.26%, as in the year 2009-10, as against Rs. 11533 Lakhs in 2005-06, percentage of advances to SC/ST sectors in the year 2009-10 is 6.26% as against 5% in the year 2005-06. As regards the Weaker Sector Rs. 103609 as weaker sector to the year 2009-10, as against Rs.34751 Lakhs in 2005-06, percentage if weaker sector in the year 2009-10 is 20.99% as against 14.01% in the year 2005-06. Major findings Financial Institution is considered as a major component of financial system of the country which helps to promote the systematic flow of finance from the available hands to needed hands. 8
  • 9. Financial Institutions in India consist of commercial banks, regional rural banks (RRBs), urban co-operative banks (UCBs), rural co-operatie credit institutions, development finance institutions (DFIs), non banking financial companies (NBFCs), mutual funds and insurance organisations. Tirunelveli District is industrially backward. There are 25 medium and major industries. In addition to this there are about 14389 Small scale industries registered in this district. The district is having a well developed banking system with a network of 288 branches of various banks. C-D ratio has been increased from 72 per cent to 80 per cent during the period 2005-06 to 2010-11. Agriculture sector advances constitutes more than 35 per cent followed by weaker sections (about 15 %) and advances to SC/ST over a period. Conclusion Financial institutions are the major components of the financial system of the country which play a pivotal role in the field of flow of money from one hands to others. commercial banks are the nerve system of the socio economic development of the nation with concentrate to achieve the overall goals of the people ,government and institutions . The performance of financial institutions in Tirunelveli district plays a key responsibility in the developmental activities of the region and provided liberal and sufficient financial assistance to various sectors including agriculture. Reference books Ahmed, Khan Masood, (1992): Banking in India, Anmol publications, New Delhi. Bilgrami.S.A.R (1982): Growth of Public Sector Banks – A Regional Growth Analysis, Deep and Deep publication, New Delhi. Chakrabarthy.K.C (1990): Banking in 1990, Himalaya Publishing House, Bombay. 9
  • 10. Dep, Kalpada (1998): “Indian Banking since Independence”. Ashish Publishing House, New Delhi. Gupta.S.P (2000): Statistical Methods, Sultan Chand & Sons, New Delhi. Kothari.C.R (1991): “Investment Banking and Customer Service”, Vol. II, Arihant publishers, Jaipur. Sundram K.P.M. Rudder Dutt Indian economy Sultan Chand Publications New Delhi, 2007. Parameshwaran, Indian Banking Sultan Chand Publications New Delhi, 2005. Trend and Progress of Banking in India – 2009-2010 – RBI Report. 10