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People's bank


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People's bank

  1. 1. REPORT ON Submitted To :: - SURASHTRA UNIVERSITY Prepared By :: - SHINGALA ANKIT L. (S.Y. B.B.A) Roll No. :: - 28 Academic Year :: - 2006-2007 Guidance :: - MR. NIRAJ PANDYA College :: - R.P.BHALODIA COLLEGE, RAJKOT. ( 1 )
  2. 2. PREFACE The Objective Practical at T.Y.B.B.A. level to developprospective about the company and the functioning or the followingareas of management. As per our syllabus of the Saurashtra University in B.B.A.course and industrial visit in T.Y.B.B.A. course at practical study orpractical training is lot of important for a management student not onlythe theoretical knowledge and class discussion is not enough butknowledge at various levels of business unit necessary for everystudent industrial visit place an important role to get the practical viewpoint of students and also making them aware about the problemsopportunity and situation all industrial unit. (Sign. Of Student) SHINGALA ANKIT L.Place :: - RAJKOTDate :: - / /06 ( 2 )
  3. 3. ACKNOWLEDGEMENT The preparation of the report is my own work, but I have takenhelp from many persons. I am thankful to all those persons who helpedme in my project report. I express my deepest of gratitude the manager of “RajkotPeople’s Co-Operative Bank Ltd.” Mr. R.B. PANDYA (MANAGER),ASHOKBHAI RAMANI and other members who have provided me allthe necessary information. For the final preparation I received expert guidance of my projectguide Mr. NIRAJ PANDYA., without his guidance, encouragement andenthusiasm. It was difficult to bring this report to its present form. I would be failing my duty if I will not mention thanks to familymembers, relatives and friends to helping me throughout. (Sign. Of Student) SHINGALA ANKIT L.Place :: - RAJKOTDate :: - / /06 ( 3 )
  4. 4. DECLARATION I, the undersigned ANKIT SHINGALA a student of S.Y.B.B.A.from the SHREE R.P.BHALODIA COLLEGE of Commerce & Businessmanagement & Computer studies, declare that this project report isprepared by me. I had taken a help of my college and professor for thepurpose of guidance only and to add that, myself prepare this report. (Sign. Of Student) SHINGALA ANKIT L.Place :: - RAJKOTDate :: - / /06 ( 4 )
  5. 5. Sr. PageNo. CONTENTS No.1. General Information Conclusion & Suggestion 749. Bibliography 76 ( 5 )
  6. 6. 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 ( 6 )
  7. 7. BANKING SECTOR IN INDIA The Co operative banks in India started functioning almost 100years ago. The Cooperative bank is an important constituent of theIndian Financial System, judging by the role assigned to co operative,the expectations the co operative is supposed to fulfill, their number,and the number of offices the cooperative bank operate. Though the cooperative movement originated in the West, but the importance of suchbanks have assumed in India is rarely paralleled anywhere else in theworld. The cooperative banks in India play an important role even todayin rural financing. The businesses of cooperative bank in the urbanareas 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-operative Societies Act. The cooperative bank is also regulated by theRBI. They are governed by the Banking Regulations Act 1949 andBanking Laws (Co-operative Societies) Act, 1965.Some Facts About Cooperative Banks In India :: - Some cooperative banks in India are more forward than many of the state and private sector banks. This exponential growth of Co operative Banks in India is attributed mainly to their much better local reach, personal interaction with customers, and their ability to catch the nerve of the local clientele. ( 7 )
  8. 8. 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.• The Chartered Accountant 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• The head office of this bank is in 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 ( 8 )
  9. 9. 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.M• Off Day - Sunday & approved by negotiable act• The E- mail I.D. of the bank is ( 9 )
  10. 10. 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. ( 10 )
  11. 11. POLICIES OF BANK Bank is committed to achieving the customers’ satisfactionthrough1) 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 qualitymanagement system. BANK’S AREA OF OPERATION “Rajkot People’s Co-Operative Bank Ltd.” operates through 5branches including main branch. This bank has expanded its area ofoperations to Jamnagar and Junagadh district, over and above Rajkotregion. This bank has geared up all its procedures to open its branchesin these districts. ( 11 )
  12. 12. 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 GENERAL MANAGER :: - Shree Jagdihbhai Busa ( 12 )
  13. 13. ( 13 )
  14. 14. SHARE CAPITAL 250 216 200 178AMOUNT (lacs) 147 150 124 100 50 0 2002 2003 2004 2005 YEAR DEPOSITS 10000 8800 8300 8000AMOUNT (lacs) 6800 6000 5000 4000 2000 0 2002 2003 2004 2005 YEAR ( 14 )
  15. 15. ADVANCES 7000 6300 6000AMOUNT (lacs) 5000 4500 3800 4000 3100 3000 2000 1000 0 2002 2003 2004 2005 YEAR NET PROFIT 87 90 92 85 75AMOUNT (lacs) 50 25 0 2002 2003 2004 2005 YEAR ( 15 )
  16. 16. ( 16 )
  17. 17. CONTENTSR.NO. PARTICULARS PAGE NO. 1. Introduction 20 2. General Meeting 21 3. Qualification Of Directors 22 4. Time Keeping System 23 5. Selection & Recruitment 24 6. Promotion & Transfer 27 7. Performance Appraisal 28 8. Personal Record 29 9. Remuneration 30 10. Training & Seminars 31 11. Organization Chart 32 INTRODUCTION The internal department structure of personnel department varies widely from one company to another; the personnel department has to function as a medium to establish healthy relationship between the management and the employee. Organization is formed by the factor of ( 17 )
  18. 18. production namely land, labours, money etc. Middle level managementand labourers is the living factor with the sense of feeling. “Personnel management is the planning, organizing, direction,controlling of the procurement, development, compensation, integrationand malignance of people of the purpose of contribution to organization,individual and social goal.” - EDWARD FLIPPO Personnel management is the direction and co-ordinate ofHuman Relations in the business organization, thereby obtainingmaximum production with minimum of physical and mantel effort, stressand strain on the individual worker and group of workers and withoutsacrificing the genius well being of the employees. Now a day, proper direction to achieve the goal is carried out bya separate department that is personnel,” Personnel management is theplanning, organizing, directing and controlling of procurementdevelopment, compensation, integration and maintenance of people forthe purpose to contribution, to organization, individual and social goals.”Personnel department is concerned with training and development ofemployees and providing them proper wage and salary. ( 18 )
  19. 19. GENERAL MEETING After the financial year within three months annual generalmeeting has been decided. All the member of bank staff, board ofdirectors is invited to attend the meeting. Generally the entire generalmeeting can be of annual general meeting and special general meetingtwo types in all kinds of organization.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. ( 19 )
  20. 20. QUALIFICATION OF DIRECTORS As we know that the directors are the most important part for anykind of organization, for be the director of any organization, the personshould have some 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. ( 20 )
  21. 21. TIME KEEPING SYSTEM “Time & tide waits for none” is the famous saying, keeping thisview in mind a unit has to develop an efficient time keeping system.There are various benefits that a firm is able to avail only because ofdiscipline in time management system. To get these benefits that affectthe system of time keeping like production capacity, demand forproducts etc. After studding all these factors time schedule are adjusted. Time keeping system is important for the businessman andemployers. This system can also be used to improve employee relation.People’s bank’s working hour is 10 a.m. to 5.30 p.m. The employees ofthis company enjoy one holiday in a week that is Sunday and holidaywhich is approved by negotiable act. ( 21 )
  22. 22. SELECTION & RECRUITMENT SELECTION :: - Selection means the procedure of selection in terms of bestperson and all with required qualification. This process is negative bynature because it selects only suitable persons and rejects the otherapplied. According to Yoder, “the hiring process is of one or many ‘go, no-go’ gauges. Candidates are screened by the application of these tools.Qualified applications go on to the net hurdle, while the unqualified areeliminated.” “Rajkot People’s Co-Operative Bank Ltd.” gives advertisement inthe magazines and receives applications. From that applicationinterview is taken, and then the person is selected in interview. Finallysalary is decided as per the qualification and ability for job. SELECTION PROCESS :: - Selection is a process by which the qualified personnel can bechosen from the application selection is process in the hand ofmanagement to get qualify and disqualify applicant by various methods.This process is as follow :: -  Interviews  Primary selection  Final selection  Placement ( 22 )
  23. 23.  RECRUITMENT :: - “Recruitment is the process of identifying various sources ofrecruitment persons in the organization. It is the process of searchingand encouraging them to apply for jobs in organization”. Recruitmenthas been regarded as the important function of this department. Recruitment has been regarded as the most important function ofpersonnel administration, because unless right the type of people arehired, even the best plans, organization charts and control systemwould not do much good. According to Flippo,” it is a process ofsearching for prospective employees and stimulating and encouragingthem to apply for jobs in an organization. It is often termed positive inthat 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 hand tends tobe 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 havingqualification, ability and experience works in the unit at lower level and ifthe place is vacant, the place is filled by promotion. ( 23 )
  24. 24. RECRUITMENT POLICY According to Yoder,” the recruitment policy is concerned withquantity and qualifications of manpower.” A good recruitment policymust contain these elements: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. ( 24 )
  25. 25. PROMOTION & TRANSFER PROMOTION :: - Promotion may be defined as, “upward of an employee in anorganization, which commands better wages, better status, higherresponsibility & authority etc. In short a promotion is the transfer of anemployee to a job, which pays more money or one that carries out somepreferred status.” Promotion may be given on the basis of seniority, merits on thebasis of seniority, 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 itsemployees on the basis of seniority, but promotion is given on the basisof ability, performance, capability, merits and qualification. TRANSFER :: - “Transfer is a horizontal moment of employees from one selectedjob, department to another place where the salary, status andresponsibility are remaining same”. In “Rajkot People’s Co-Operative Bank Ltd.” employees aretransferred from one department to another and from one position toanother. ( 25 )
  26. 26. PERFORMANCE APPRAISAL For personnel management a performance appraisal is animportant tool. Performance appraisal means person’s performance inthe company. Ones the employee has been selected trained and motivated, heis then appraised for his performance. Performance appraisal is the stepwhere the management finds out how effective it has been at hiring andplacing employee. A performance appraisal consists of evaluating anemployee’s performance of a job in terms of a job in terms of itsrecruitment. “Rajkot people’s Bank” consider its employees as it’s mostvaluable and therefore it believes in perfect and accurate performanceappraisal system. They believe that employees’ efficiency, productivityand great performance is a ladder to success. “Rajkot people’s Bank”has an efficient performance appraisal system for evaluating theiremployees’ performance. ( 26 )
  27. 27. PERSONAL RECORD In personal record, compete up to date information is maintainedabout employees. Every unit have record book for employees in whichrecord information 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.”has always remained active for maintaining good health of the people ofthe society, by sponsoring “Sharir Santulan Shibirs” and “Yog Shibirs”.Taking into consideration various benefits availed by participants ofsuch programs, we are successfully organizing such programs everyyear. ( 27 )
  28. 28. REMUNERATION Remuneration’s main purpose is to maintain equitableremuneration structure. It is the duty of the firm to pay proper, relativeand reasonable amount to the worker for their service. “Rajkot People’s Co-Operative Bank Ltd.” is under considerationfollow the time wages (remuneration). This is oldest & most commonmethod of wages (remuneration). Under this system workers are paidaccording to the work done during certain period. Like hour, par day,weekly, monthly or any fixed period of time. “Rajkot People’s Co-Operative Bank Ltd.” pays salary(remuneration) their worker on monthly basis. ( 28 )
  29. 29. TRAINING & SEMINARS Training is the organized procedures by which people acquireknowledge for a benefit. It is the act of increasing the knowledge andskill of workers for doing 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’sCo-Operative Bank Ltd.” is trying its best to improve the banking skill ofthe staff, thereby bring momentum in the bank’s work. And for this,continuous training is being given to the staff within the premises as wellas deputing them to other institution on regular basis. The Chairman,Vice-Chairman and Members of the Board of Directors are also takingpart various seminars and thereby get acquainted with various pros andcons of co-operative banking arena. Thus, good training is provided to the employees who becomemore effective and productive after this process. ( 29 )
  31. 31. ( 31 )
  32. 32. CONTENTSR.NO. PARTICULARS PAGE NO. 1. Introduction 35 2. Deposits 37 3. Loans 40 4. Other Services 46 5. Process Of Granting Loan 47 6. Recovery Of Loan 49 ( 32 )
  33. 33. INTRODUCTION With years, banks are also adding services to their customers.The Indian banking industry is passing through a phase of customersmarket. The customers have more choices in choosing their banks. Acompetition has been established within the banks operating in India. With stiff competition and advancement of technology, theservices provided by banks have become more easy and convenient.The past days are witness to an hour wait before withdrawing cash fromaccounts or cheques from north of the country being cleared in onemonth in the south. This section of banking deals with the latest discovery in thebanking instruments along with the polished version of their oldsystems. Banks in India with the way of development have become easy toapply in loan market. Generally, Loan against Shares, Personal Loan,Home Loan, etc, Loans is given by almost all the banks in the country: ( 33 )
  34. 34. 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 ScaleIndustry Business loan  Others Vehicle loan Personal loan Professional loan Loan against NSCKVPLIC OTHER SERVICES :: - In other services, bank provides following services,  Locker system  Demand draft ( 34 )
  35. 35. DEPOSITS1) CURRENT DEPOSIT (ACCOUNT) :: - While opening this account person or who so ever is going toopen this type of account, he has to make the regular transactions withthis account. Generally, this type of account can be opened bybusinessmen, companies, industrialist, and common men etc, who haveworking capital in his hand and interested to keep his money safe.Mostly the businessmen open this type of account because they have toreceive and make payments through cheques many times 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). Proof of existing of firm.  Proof of all partners’ address. Proof of all partners’ address. ( 35 )
  36. 36. A person has to deposit minimum Rs. 3000 in current account.Bank takes Rs. 300 service charge at the end of the year. If a personwants to close his current account, bank charge Rs.50 (if a personhaving cheques book) and bank will charge Rs. 25(if person is nothaving cheques book).2) SAVING DEPOSIT (ACCOUNT) :: - It is an ideal account for those who have sufficient money tosave. Generally, common men who save money from his salary and hedeposits in to bank for saving purpose. Saving account is the best wayand when ever need of money occur he can get or withdraw moneyfrom his saving account. If a person wants to open his saving account with a bank, he hasto fill up a firm of the banks saving account, he has to give requireddocuments such as photo, address proof, license or election card asidentity etc, and he has to deposit minimum Rs. 1,000. If a person wantsa new cheques book, bank charges Rs, 50 for every cheques book.While closing a saving account, a person has to surrender alldocuments which have already been given by a bank like, chequesbook, pass book, etc.Rate on saving account is 3.5%. ( 36 )
  37. 37. 3) FIXED DEPOSIT (ACCOUNT) :: - A person who has spares money for a particular period of timeand he wants to get it as double so for him fixed account is a best wayto deposit money. In this account he has to deposit his money for aspecific period of time and as a reward he can get double amount aftercompletion of time. If a person wants to open his fixed account with abank, he has to fill up a firm of the banks fixed account, he has to giverequired documents such as photo, address proof, license or electioncard as identity etc, and he has to deposit minimum Rs. 1,000. Whileclosing a saving account, a person has to surrender all documentswhich have already been given by a bank. A person can get double at109 months. RATES ON FIXED DEPOSITS30 days to 45 days :: - 3.5%46 days to 90 days :: - 5%91 days to 179 days :: - 6%180 days to 1 year :: - 7%1 year to 2 years :: - 7.5%2 year to 5 years :: - 8%Above 5 years :: - 7.75%Rate on senior citizenship above 6 months :: - 0.5% ( 37 )
  38. 38. LOANSA) TERM LOANS :: - It is one of the major sources of debt finance for a long termproject. Term loans are generally repayable in more than a year but lessthan 10 years. These loans are offered by all Indian financialinstitutions. Term loans are generally secured through a first mortgageor by way of deposit of title deeds of immovable properties.1) Housing Loan :: - Home loan is the latest craze in the banking sector with thedevelopment of the infrastructure. Now people are moving to townshipoutside the city. More number of townships is coming up to meet thedemand of house for all. The RBI has also liberalized the interest ratesof home loan inorder to match the repayment capability of even middleclass people. Almost all banks are dealing in home loan. Again SBI,ICICI, HDFC, HSBC are leading. Local residential can get housing loan for the purpose of topurchase or build home. Rate of interest is 10.5% for Rs. 5 lacs andabove Rs. 5 lacs; rate of interest is 11.5%. As a security bank takes thedocuments of property which is mortgage by the person. A person, whois grated loan, has to repay loan to bank up to 5 years. ( 38 )
  39. 39. 2) Business Loan :: - A person who is engaged in their business at least from last oneyear can get this kind of loan for the purpose of fulfillment of the shortterm working capital needs. A business man get loan up to 10 lacs butin special cases bank allow him to grant above 10 lacs and person hasto repay the loan in installments which should have already beendecided. As a security bank takes all documents of property which isbeing mortgaged by a person. 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 :: - 14%3) Vehicle Loan :: - A person or a businessman who wants to purchase new or oldvehicle for the purpose of the transportation or for personal use can getthis kind of loan. Bank grants this kind of loan up to 85% of the face(quotation) value of vehicle and person has to repay the loan ininstallments which should have already been decided. Rate of intereston this loan is as under :: - For transport operator :: - 14% For personal use :: - 13% ( 39 )
  40. 40. 4) Professional Loan :: - This kind of a loan is granted to professional persons such aslawyers, C.A, doctors, etc, for the professional purpose like, to thedoctor bank grants this type of loan to build new clinic, to buy newmedical equipments, and so on. Bank grants this loan up to 10 lacs butin some cases bank grants loan above 10 lacs and person has to repaythe loan in installments which should have already been decided. Rateof 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%5) Loan against NSCKVPLIC :: - Loan against NSCKVPLIC is very easy to get because liquidguarantee is involved in it. Bank grants loan against NSCKVPLIC.Bank grants loan for the purpose of purchase or to build home. If aperson wants to get this kind of loan, should have share certificate orany LIC policy holder of his own name only. Bank grants this loan up to75% to 90% of market value of NSC, KVP and LIC policy. Applicant hasto give share certificate or LIC policy to bank. Bank will charge 12% rateof interest on this loan. A person has to repay this loan to bank up to thedue date of share certificates or policy. As a security bank takes sharecertificates or LIC policy.6) Personal Loan :: - ( 40 )
  41. 41. In Personal Loan, one can get a sanctioned loan amountbetween Rs. 25,000 to Rs. 1 lacs depending upon the profile of personapplying for the loan. SBI, ICICI, HDFC, HSBC are some of the leadingbanks which deals in Personal Loan. Local residential can get this kind of a loan for the purpose of tobuy home appliances, like TV, fridge, etc or any thing a person wants tobuy. Bank grants this kind of loan up to 25,000 but in some cases bankgrants above 25,000 and person has to repay the loan in installmentswhich should have already been decided. Rate of interest on Personalloan is as under :: - Up to Rs. 25,000 :: - 13 % Above Rs. 25,000 :: - 14 % ( 41 )
  42. 42. B) CASH CREDIT :: -1) Loan to Small Scale Industry :: - A person who has his own business and wants to start his ownbusiness as small scale sector can get this kind of the loan for thepurpose of fulfillment of the short term working capital needs or topurchase new machineries or so on. A business man can get loan up to15 lacs but in special cases bank allows him to grant above 15 lacs andperson has to repay the loan in installments which should have alreadybeen decided. In cash credit type loan, person can withdraw money (upto decided) if there is no money in his account. Bank grants this loanagainst the raw material, stock, and any mortgaged properties. Theinsurance of stock and mortgaged properties is taken by the bank as asecurity. 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% ( 42 )
  43. 43. 2) Other Cash Credit Loan :: - Bank also grants cash credit to the local residential or to anordinary people to fulfill their needs for money. A person can get loan upto 10 lacs but in special cases bank allows him to grant above 10 lacsand person has to repay the loan in installments which should havealready been decided. In cash credit type loan, person can withdrawmoney (up to decided) if there is no money in his account. As a securitybank takes all documents of property which is being mortgaged by aperson. 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% ( 43 )
  44. 44. 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 oflockers are 6*6, 6*12, and 12*1 respectively. Bank also charge forlocker Rs. 350, Rs.450, Rs. 550 respectively. A person who is going toopen locker with bank, he has to deposit Rs. 5, 500, Rs. 6,500, Rs.7,500 for A, B, C respectively. Person also has to open his currentaccount 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. CashierClerk and officers initials. ( 44 )
  45. 45. PROCESS OF GRANTING LOANS Primary Investigation :: - In primary investigation, bank investigates all the things of thecustomer such as, name, address, purpose of loan, amount of loan,assets which is going to be mortgaged, etc. After knowing all the thingsabout the customer, bank will give loan form to customer. He has to fillup all the things clearly. Bank will need some documents for assurance. The one andcommon document bank demand is demand promisenary this becausecustomer needs loan. If bank is granting loan to partnership firm andproprietorship firm following 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 toknow the purpose of getting loan whether it is getting to buy new or oldvehicle and bank also grant loan against the vehicles. If bank is going togrant loan to the company, bank will demand for registration documentsof the company. ( 45 )
  46. 46. After investigating all above things and required documentsGeneral Manager of the bank will decide to grant loan or not. For takingthis decision he may call meeting and General Manager takes anopinion of the others. Thus they will decide to grant loan of not andcustomer will get loan whether he has submitted all the requireddocuments and if he has not submitted the entire required document hemight not be granted loan. ( 46 )
  47. 47. RECOVERY OF LOAN Customer who is being granted loan by bank, he has to repay theloan in small installments which have already been decided earlier.Customer has to pay his installment in 1st to 10th of month otherwise hehas to pay fine (penalty) interest 2% more for per day. If customer does not pay more than 3 installments, bank willissue legal notice. And though customer will not pay installment bankwill claim in court and generally court will also take decision in favor ofthe bank then after Bank will again issue notice of confiscation assetsfor 30 days. After these entire if customer will not pay installment bankwill issue notice of auction of his assets and bank will give anadvertisement in news paper and after 30 days bank will get its moneyfrom selling assets. ( 47 )
  48. 48. ( 48 )
  49. 49. CONTENTSR.NO. PARTICULARS PAGE NO. 1. Introduction 52 2. Financial Analysis 53 3. Financial Planning 54 4. Ratio Analysis 55 5. Importance Of Ratio Analysis 57 6. Financial Report 58 7. Information Of Shares 63 8. Auditor’s Report 65 ( 49 )
  50. 50. INTRODUCTION Today, Finance is considered as the “Life Blood of the Business”without finance no business activity is possible. So for an organization, itmust have a large amount of finance and for this it should have financedepartment. Finance management is concerned with the acquisition, financingand management of assets with some overall goal in mind. Financemanagement continuous to develop at an even more rapid pace.Advancement is occurring not only in the theory of finance managementbut 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 managerprimarily raised funds and managed their firm’s cash and that was prettymuch it. Today internal factors have an increasing impact on thefinancial manages. Corporate competition, technological changesvolatility in inflation and interest rates, worldwide economic uncertainty,fluctuating exchange rats, tax low changes, and ethical concourse overcertain financial dealings must be dealt with the corporation. Finance management is very important i.e. first to managefinancial resource, then to distribute that finance among the variousdepartment according to their need and lastly has to check whether it isused in right way or not. Thus, only finance gathering has not becomethe goal or aim of finance management but is holds a key position in topmanagement of companies. ( 50 )
  51. 51. FINANCIAL ANALSIS The nature of analysis will differ depending on purpose of theanalyst. Trade creditors are interested in firms’ ability to meet theirclaims over a very short period of time. Their analysis will thereforeconfine to the evaluation of the firms liquidity position. Suppliers of the long term debit on the other hand are concernedwith the firms’ long term solvency and survival. They analyze the firms’profitability over time, over its ability to generate cash to be able to mayinterest and repay principal and relationship between various sources offunds. Investors who have invested their money in the firms’ shares areconcerned about the firms’ earnings. They restore more confidence inthere firms’ that show steady growth in evening. Management of the firmwould be interested on every aspects of the financial analysis. It is theiroverall responsibility to see that the resources of the firm are used mosteffectively and efficiently and that the firms’ financial condition is found. ( 51 )
  52. 52. FINANCIAL PLANNING The pursuit of increased profitability usually requires carefulplanning of a financial instructions future operations. Growing number ofbanks and other financial institutions have turned to formalized planningmethods to achieve their goals. Though planning techniques vary widely in scope & design,many of largest financial instructions use both short run and long runplans. Short run plans may include a monthly or weekly projected cashbudget that tracks cash inflow and reveals how the institution’s level ofcash reserves will vary overtime of the projections turn out to be true.The planning over a year is formalized in a so-called profit plan, whichprojects key items on the balance sheet and income and expenditurestatement for a 12 month period. Long term plans frequently include a capital budget, chargingprojected growth in facilities and a strategic plan. Strategic plansforecast organizations future position in various target markets. ( 52 )
  53. 53. RATIO ANALSIS Ratio analysis is a powerful tool of financial analysis. A ratio isdefined as “the indicated quotient of two mathematical impression” andas the relationship between two or more things. It helps to ascertain thefinancial condition of the firm. Ratio analysis is a process of identifyingthe financial strength and weakness of the firm. A financial ratio is a relationship between two variables whichare drawn from the financial statements of business enterprises it isimportant for there variables which are related to each other. It is onethe financial control tools in the head of management and is widely usedby business. Ratios as shown above are relative figures reflecting therelationship between variables. They enable analyst to draw conductionregarding financial operations. The use of ratios as a tool of financialanalysis involves their comparison for a single ratio like absolute figures,fails to reveal the true position. For example, if in the case of a firm thereturn on capital employed is 15% in a particular year, what does itindicate? Only if the figure is related to the fact that in the precedingyear the relevant return was 12% or 18% can it be informed whether theprofitability of the firm has dedicated or improved. Alternatively if weknow that the return for the industry as a whole is 10% or 20%, theprofitability of the firm in question can be evaluated. Comparison withrelated facts is therefore the basis of ratio analysis. Four types ofcomparisons are involved ( 1 ) trend ratio ( 2 ) inter firm comparison ( 3 )comparison of items within a single year’s financial statement of a firm (4 ) comparison with standards as plans. ( 53 )
  54. 54. Trend ratio involved a comparison of ratio of a firm over time, i.e.,presents ratios are compared with past ratio for the same firm. Trendratio indicates the direction of change in the performance improvement,deterioration as constancy over the years. The inter firm comparison involving comparison of the ratio of afirm with there of others in the same line of business on for the industryas a whole reflects its performance in relation to its competitors. Othertypes of comparison may relate to comparison of items within a signalyear’s financial statement of a firm and comparison with standards asplans. Some ratios of the year 2005 (Rs. In lacs) are as under :: - ( 54 )
  55. 55. 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. ( 55 )
  56. 56. FINANCIAL REPOERT The directors have pleasure in presenting the 8th report of RajkotPeople’s Co-Operative Bank’s Audited Statement of Accounts of theyear ended on 31st March 2005. 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 kept the pace with the progress all around and hassustained faith of the people, which is highlighted from the followinginformation. Profit and Appropriation Thereof :: - The Profit & Loss Account of the Bank shows Gross Profit ofRs.1, 59, 00,000 and after making the provisions under Bye-Laws andthe Gujarat Co-Operative Societies Act, the Net Profit comes to Rs. 91,00,000. The board expects your confirmation for the appropriation of NetProfit as under: Reserve Fund -40% of Net Profit Dividend – 15% of Net Profit Education Fund – 2.5% of Net Profit Under credit Equalization Fund – 15% of the Residual Profit after above appropriate Building Fund – 20% of Net Profit ( 56 )
  57. 57.  Residual Profit after making above appropriate:: -  Dividend Equalization Fund – 20% of Residual Profit.  Charity Fund – 20% of Residual Profit.  Co-op, Movement Propaganda Fund – 20% of Residual Profit.  Members’ Welfare Fund – 20% of Residual Profit.  Social Welfare Fund – 10% of Residual Profit.  Employees’ Welfare Fund -5% Residual Profit.  Festival Fund – 5% of Residual Profit. 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 inmaintaining the same rate of Dividend since inception. CAPITAL ADEQUACY :: - Against the statutory Requirement to maintain capital adequacyratio that is capital to risk weighted assets ratio-CRAR at 9% RajkotPeople’s Co-Operative Bank has maintained as high as 11.57%. Higher ( 57 )
  58. 58. CRAR suggests high financial soundness of the bank. The CRAR is anindictor to measure the risk against 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 marketitself has begun to change, in the changing Financial Market; RajkotPeople’s Co-Operative Bank has market the progressive growth andprofitability both the financial year 2004-2005 which is reflected in thefollowing Financing since inception: (Rs. In Lacs) Particulars 31-3-04 31-03-05 Members 13,000 13,300 Share Capital Rs. 178 Rs. 216 Deposit Rs. 8,300 Rs. 8,800 Advances Rs. 4,500 Rs. 6300 Net Profit Rs. 90 Rs. 92 Working Capital Rs. 9,100 Rs. 10,200 ( 59 )
  60. 60.  DEPOSITS :: - The condition of many banks became vulnerable during last fewyears. However Rajkot People’s Co-Operative Bank was successful insustaining the trust of its Depositors and has sustained the same growthin all adverse circumstances. Rajkot People’s Co-Operative bank’s deposits, in comparison toprevious year have increased by 5.59% and reached to Rs.88, 00,00,000 as at 31.03.2005. The ruse in the deposits is the symbol of trust.The percentage of low cost deposits to total deposit is rising year byyear which is the key for gradual but steady growth in profitability. ADVANCES :: - Rajkot People’s Co-Operative bank grants various loans andadvances for the actual needs of the fundamental principles of co-operation. As a matter of fact, Rajkot People’s Co-Operative Bank is“Big for Small (lay) people and small for big (rich) people”. RajkotPeople’s Co-Operative Bank has always tried to be helpful to commonpeople, which are 6,300 (in lacs). Rajkot People’s Co-Operative Bank’s financial portfolio isdistributed in entire economic and varied activities so that changesarising from the market may not have direct adverse impact on therecovery and economy affairs of the bank. ( 60 )
  61. 61. Advances made to the directors and their relatives have beenfully recovered. As per instruction of Reserve bank of India, RajkotPeople’s Co-Operative has not financed a single rupee against securityof shares, debentures etc. INVESTMENT :: - Out of total investment of Rs. 21, 85, 00,000 of Rajkot People’sCo-Operative Bank at 31.03.2005, Rs 21, 16, 00,000 has been investedin various central government securities. The face value of theinvestment is Rs. 21, 20, 00, 000 and market value of the investment isRs. 21, 60, 00,000. Rajkot People’s Co-Operative Bank has adopted the policy ofinvestment as directed by the reserve bank of India from time to time.Accordingly, entire investment is kept in RBI’s SGL Account. RajkotPeople’s Co-Operative Bank’s total investment is more than statutoryrequirement. ( 61 )
  62. 62. INFORMATION OF SHARE SHARE CAPITAL :: - Last year there were 13,000 members. This year it has reachedto 13,300 in numbers. During the year 2004-2005, total share capitalgone up to Rs. 2, 16, 00 , 000 which is 21.42% higher than the previousyear’s figure. An increase in number of members is the sign of successof the bank. SHAREHOLDING :: - If a person who wants to become share member of the bank, hasto buy the shares of that bank. He has to fill up form of the bank. Bankcollects the share application form, membership fees and shareapplication money. Board sanctioned the share application and providesmembership member and also provide an identity card. Now, the personbecomes a permanent member of this bank. ( 62 )
  63. 63.  TRANSFER OF SHARE :: - If any share holder wants to transfer his share in favor of anyperson, he has to fill up share transfer form of the bank in favor ofothers. He has to pay transfer fees and submit original share certificateto bank and identity card which has already been given to the shareholder and bank will transfer his share on name of another person. SHARE CERTIFICATE :: - Bank issues the share certificate to share holder and identitycard. The share certificate is approved by the Co-Operative sector. Inwhich such things are covered as Bank shareholder No., Sr. No.,Certificate No. signed by the of bank authority. If a person who depositsRs25, 000 in the account of the bank, bank will give him a sharecertificate. RESERVES AND FUNDS :: - Various reserves and funds of Rajkot People’s Co-Operativebank has reached to the level of Rs. 5,35,00,000 as at 31.03.2005,which is 27.75% higher than the previous year’s figure. Constant rise invarious reserves and funds is also a land mark of a successful andsound bank. ( 63 )
  64. 64. AUDITOR’S REPORT We have audited the balance sheet as on 31.3.2005 and theprofit & loss account for the year ended on 31.3.2005 of Rajkot People’sCo-Operative Bank Ltd. With reference to our audit memo and auditnote we hereby report as follow: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 31.3.2005 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 31.3.2005 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 thisbank is “1”. ( 65 )
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  67. 67. S.W.O.T ANALYSIS S.W.O.T analysis means overall evaluation of a firm’s strengths,weaknesses, opportunities, and threats. S.W.O.T analysis consists ofmaking analyses of the external environment and internal environment. External Environment Analysis :: - External environment consists of out sides of the firm such asgovernment, competitors, etc. Such environmental analysis isnecessary because it affects the firm or an organization. Internal Environment Analysis :: - Internal environment consists of inner sides of the firm such aspersonnel, finance, etc. Such environmental analysis is necessarybecause it affects the firm or an organization. ( 67 )
  68. 68. STENGTHS WEAKNESSES S.W.O.T. ANALYSISOPPORTUNITES THREATS S = Strengths W = Weaknesses O = Opportunities T = Threats ( 68 )
  69. 69.  STRENGTH :: - 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. ( 69 )
  70. 70.  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. 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. ( 70 )
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  72. 72. FUTURE PLANS Rajkot people’s co-operative bank wants to starts new branchesin different districts of Gujarat and as possible, may start at India levelalso. People’s bank may also provide ATM facility if possible. People’sbank wants to develop close relationship with individual and depositors.People’s bank also wants to maintain growth and wants more growth.People’s bank may provide various types of new loans like, studentloan, NIR loan, and many more policies. Generally, People’s bankmainly focuses on starting new branches in various place of India. ( 72 )
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  74. 74. CONCLUSION From the bank’s visit I learn a lot. Now I know that how thetheoretically aspects are applied in the industries. I had found that all the staff members and workers are working ina co ordinates manner and in a planned way and they are moreconcentrating about their work and diversifying their efforts towards thedesired target. Due to unprecedented trust and co-operation of themembers and customers as well as continuous efforts put in by themanagement and the staff of Peoples Bank has been able to reach tothe 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. SUGGESTION Bank is not performing marketing activity because lack ofmarketing expertise for this bank should appoint skilled person who hasa marketing knowledge. Bank is not providing A.T.M. facility in therecent developed era and many others facilities which are beingproviding by other banks so bank should try to provide or start thisfacility and other policies in near future. Bank has not large net work andnot fully developed so bank should open new branches in differentstates of the India. ( 74 )
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  76. 76. BIBLIOGRAPHY Web Site:: -  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 )