1. REVIEW OF PERFORMANCE OF COMMERCIAL BANKS IN
TIRUNELVELI DISTRICT, TAMIL NADU
Dr.C. PARAMASIVAN 1 & P. MARI SELVAM 2
ABSTRACT
Commercial banks in India have traditionally focused on meeting the short-term
financial needs of industry, trade and agriculture. However, given the increasing sophistication
and diversification of the Indian economy, the range of services extended by commercial banks
has increased significantly, leading to an overlap with the functions performed by other financial
institutions. This article is focused on the Performance of commercial bank in Tirunelveli
district, Tamilnadu with reference to banking network, deposits and advances positions and
sector wise advances by the Commercial bank in Tirunelveli district during the study period
2010-11.
Key words: Performance of commercial bank, banking network, advances and deposits, priority
sectors
Introduction
Commercial banks play a key role in the field of Socio-economic development of the
country which involve the Mobilization of savings from large segment of the people through
various bank forms of accounts and deposits and channelize the investments to industrial and
infrastructural developmental activities. In India, almost all the walk of human beings are
directly or indirectly related with banking services at their life time. As per the RBI guidelines,
Commercial banks are divided their lending and advance pattern deepens upon the needs and
availability of finance. Banking sectors are closely associated with the social developmental
activities like agricultural MSM sectors, SHGs, health and Education loan. In this regards, this
1
Dr.C. PARAMASIVAN, Assistant Professor & Research supervisor, Department of Commerce, Periyar
EVR College, Tiruchirappalli – 620 023, Tamil Nadu, India . Cell No. 9442384207 Email: paramselp@yahoo.in
2
P. MARI SELVAM, Ph.D (FT) Research Scholar, Department of Commerce, Periyar EVR College,
Tiruchirappalli – 620 023, Tamil Nadu, India. Cell No. 9976037879
Email: pmariselvam1986@gmail.com

2. paper is focused on Review of Performance of Commercial Bank in Tirunelveli District of
Tamilnadu during the year 2010-11.
Commercial Banks in India
The commercial banking industry in India started in 1786 with the establishment of the
Bank of Bengal in Calcutta. The Indian Government at the time established three Presidency
banks, viz., the Bank of Bengal (established in 1809), the Bank of Bombay (established in 1840)
and the Bank of Madras (established in 1843).
In 1921, the three Presidency banks were
amalgamated to form the Imperial Bank of India, which took up the role of a commercial bank,
a bankers' bank and a banker to the Government. The Imperial Bank of India was established
with mainly European shareholders. It was only with the establishment of Reserve Bank of India
(RBI) as the central bank of the country in 1935, that the quasi-central banking role of the
Imperial Bank of India came to an end.
Commercial banks in India have traditionally focused on meeting the short-term
financial needs of industry, trade and agriculture. However, given the increasing sophistication
and diversification of the Indian economy, the range of services extended by commercial banks
has increased significantly, leading to an overlap with the functions performed by other financial
institutions. Further, the share of long-term financing (in total bank financing) to meet capital
goods and project-financing needs of industry has also increased over the years. A commercial
bank is a type of financial intermediary and a type of bank. Commercial banking is also known
as business banking. It is a bank that provides checking accounts, savings accounts, and money
market accounts and that accepts time deposits. After the Great Depression, the U.S. Congress
required that banks engage only in banking activities, whereas investment banks were limited to
capital market activities. Commercial banking may also be seen as distinct from retail banking,
which involves the provision of financial services direct to consumers. Many banks offer both
commercial and retail banking services.
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.

3. Table No.1 Banking Network
Sl.
Semi-
No.
Agency
Rural
Urban
Urban
Total
1
Commercial Bank
44
61
50
155
2
Regional Rural Bank
27
21
2
50
3
Co-operative Bank
15
20
10
45
4
Other Financial Institutions
-
-
2
2
103
112
73
288
Total
Source: Lead Bank Annual Report 2010-11
The Tirunelveli District has analysed banking network. It focused that 155 Commercial
bank, another 50 Regional Rural bank; 45 Co-operative bank and the remaining 2 of the other
Financial Institutions.
It reveals the fact that majority of 155 of Commercial Bank networking the Tirunelveli
District.
Sector wise Performance
A financial institution that provides services, such as accepting deposits, giving business
loans and auto loans, mortgage lending, and basic investment products like savings accounts and
certificates of deposit. The commercial banks not only protect them but also help transfer of
funds through cheques. Deposits received by the commercial banks are of various types, - fixed
deposits, savings deposits, current deposits and recurring deposits.
Table: 2 Sector wise performance
( Rs. in Lakhs)
Sl.No
Sector
Amount in cores
% of Share
1
Agriculture
1431.17
70.24
2
Industries
185.30
9.09
3
Services
421.17
20.67
Total
2037.64
100.00
Source: Lead Bank Annual Report 2010-11
Commercial banks provides financial assistant to agricultural sector amounted
Rs.1413.17 Lakhs which constitutes 70.24 percent of Total bank credit of Rs.2037.64 Lakhs.

4. Service sector constitutes 20.67 percent of total credit of Commercial banks which
amounted to Rs.421.17 Lakhs and credit to industrial sectors performed in third position which
amounted to Rs.185.30 Lakhs (9.09%).
Agency wise Allocations
Finance is one of the essential requirements of any enterprise. The Commercial bank has
provided the allocation of funds in the agency wise classification. The bank operation and
expansion of business and commercial activities depends a great deal on the availability of sector
wise loans / advances from commercial banks. Finance assistance to bank, sector wise loans and
advances, cash credits issued by various sectors.
Table: 3 Agency wise Allocations
( Rs. in Lakhs)
Sl.No
Agency
Amount in cores
% of Share
1
Commercial Banks
1541.47
75.65
2
Regional Rural Bank (PGB)
383.55
18.82
3
Co-operative Banks
112.62
5.53
Total
2037.64
100.00
Source: Lead Bank Annual Report 2010-11
In Tirunelveli district, Commercial bank has distribute to amounted in Agency wise
allocation during the 2010-11.
The agency wise allocation to commercial bank amounted in Rs.154.47 crores and the
percentage of 75.65 percent. Regional Rural Bank allocacted 383.55 Lakhs (18.82) percentage
and Coperative banks allocated to 112.62 Lakhs (5.53) percent.
Commercial banks allocated
more credit to Agriculture & Industrial sectors than the Regiona Rural Bank & Coo-operative
banks.
Targets & Achievements under Annual Credit Plan
The Lead bank scheme was introduced by Reserve Bank in Dec.1969 on the basis of
recommendations of a study group appointed by the National Credit Council. The Commercial
bank provides loans for integrated rural and urban areas development. The presently many
financial institutions are activity contributed to the Achievements and Target of the Credit plan.

5. Table No.4 Targets & Achievement under Annual Credit Plan
( Rs. in Lakhs)
Year
Target
Achievement
% of Achievement
2005-06
778.80
865.27
111
2006-07
955.00
1445.23
151
2007-08
1225.88
1314.08
107
2008-09
1490.01
1394.79
94
2009-10
1883.84
1515.49
80.45
Source: Lead Bank Annual Report 2010-11
Table No.3 reveals that the banking sector wise achievements under the Annual Credit
plan in Tirunelveli district during the year 2010-11.
During the year 2005-06, achievement were more than the targeted credit plan which
constituted 111 percent and it has increased to 151 percent in 2007-08. From the year 2008-09,
Achievement of credit plan was less than the targeted credit plan. It shows that 107 per cent in
2008-09 and 80.45 percent in 2009-10. there is a negative correlation ( -0.24) between the target
and achievement of credit under annual credit plan of the commercial banks in Tirunelveli
district .
Sector wise Achievement
The Commercial bank can establish its sector wise achievements in the agriculture,
Industrial and service sector. The banks provide Institutional credit to service sector, they accept
long term, deposit from public Industries such banks discount bills of exchange and make
advances to trade and industry.
Table No.5 Sector wise Achievement
( Rs. in Lakhs)
Agriculture
Targ
Ach.
Industries
%
2005-
576.0
654.0
114
Ach
t
et
Targe
67.9
Total
.
66.97
Service
%
Target
Ach.
%
Target
Ach.
%
10
135.85
143.62
106
778.80
865.27
111

6. 0
1
691.0
941.7
0
1
831.8
934.0
6
8
1045.
1021.
57
75
1215.
1010.
88
97
06
5
1
97.0
11
6
6
152.
15
09
6
110.3
84.4
77
0
1
83.1
234.8
173.
73.
5
3
71
97
200607
136
84.00
180.00
406.46
226
955.00
1445.2
151
3
200708
112
97.65
296.37
230.91
78
1225.8
1317.0
8
8
1490.0
1394.7
1
9
76.3
1883.8
1515.4
8
4
107
9
200809
94
334.15
288.64
86
94
200910
433.13
330.82
80.45
Source: Lead Bank Annual Report 2010-11
Target and achievement performance were very high (226) percent in the year 2006-07 in
relation with service sectors.
As regards, agricultural sectors, it shows that 136 percent and
industrial sectors, it shows that 156 percent.
From the year 2008-09 to 2009-10, Target & achievement performance has reduced to
less than 100 percent.
Bank wise Achievement in ACP
Bank wise achievement in Annual Credit Plan is one of the important considerations for
understanding the banking performance. The loans and advances are generally sanctioned up to
50-70 percent of the value of assets offered as security including those created out of the loans.
Table No. 6 Bank wise Achievement in ACP
( Rs. in Lakhs)
2005-06
Sl.
Bank
N0.
wise
1
Com.
2006-07
Banks
Amt.
%
2007-08
Amt
Amt.
%
2008-09
%
.
557.89
64
1025
.18
2009-10
Amt
%
Amt.
%
67.78
1052.3
69.44
.
71
1032.3
4
78.38
945.
39
3

7. 2
R.R.B
199.71
23
236.
16
274.42
20.80
41
3
Co-op.
101.75
12
Bank
4
Other
179.
374.
26.84
359.86
23.74
4.92
103.31
6.82
32
12
8.31
0.63
92
68.6
7
5.92
1
3.72
1
2.01
0.15
6.40
0.46
--
--
865.27
100
1445
100
1317.0
100
1394
100
1515.4
100
F.I
Total
.23
8
.79
9
Source: Lead Bank Annual Report 2010-11
Bank wise achievements in ACP presented in the Table No. 5. Commercial Banks are
the major contributor of the ACP in Tirunelveli district during the study period 2005-06 to 200910.
In the year 2005-06, Commercial banks contributed to ACP shows that 64 percent,
followed by Regional Rural Banks (23) per cent, Co-operative Banks (12) per cent and other
Financial Institutions (1) per cent of the total annual credit of Rs.865.27 Lakhs.
As regards Commercial banks contributed to ACP shows that 71 per cent, followed by
Regional Rural Banks (16) per cent, Co-operative Banks (12) per cent and other Financial
Institutions (1) per cent of the total annual credit of Rs.1445.23 Lakhs in the year 2006-07.
During the year 2007-08 Commercial banks contributed to ACP shows that 64 per cent,
followed by Regional Rural Banks (20.80) per cent , Co-operative Banks (0.63) per cent and
other Financial Institutions (0.15) per cent of the total annual credit of Rs.1317.08 Lakhs.
Commercial banks contributed to ACP shows that 67.78 per cent, followed by Regional
Rural Banks (26.84) per cent , Co-operative Banks (4.92) per cent and other Financial
Institutions (0.46) per cent of the total annual credit of Rs.1394.79 Lakhs.
During the year 2009-10, Commercial Bank contributed to ACP shows that 69.44
percent, followed by Regional Rural Bank (23.74) per cent, Co-operative Bank 6.82 percent and
other Financial Institutions none of the total annual Credit of Rs.1515.49 Lakhs.
Hence, it is evidence that, commercial banks are the major player is the ACP
achievements which constitute more than 65 percent of ACP.

8. Major findings
The major findings of the present study as well as relevant discussion of performance
commercial bank in the study area were presented here.
Commercial Banks in Tirunelveli district consist of 155 commercial banks , 50 Regional
Rural Banks , 45 Co-operative Banks and 2 other Financial Institutions.
As regards Commercial banks it playa key role to provide financial assistance to
agricultural sectors, industrial sector, and service sector during the study period. Flow of credit
to Agricultural sectors constituted (70.24) per cent, followed by service sector (20.89) per cent
and Industrial sectors (9.09) per cent.
As regards the agency wise allocation commercial bank played first and followed by
Regional Rural Bank and Co-operative Bank.
Relationship between target and achievement performance were more than 100 per cent
in the years 2005-06, 2006-07 and 2007-08, and less than 100 per cent in the years 2008-09 and
2009-10.
Service sector recorded highest sector wise achievement (226) per cent the year 2006-07
and industrial sector recorded lowest achievement (73) percentage in the year 2009-10.
Conclusion
ACP is one of the key plans which help to fix the target to each and every sector and
measure the achievements. Performances of banking sector in a particular district were
considered which lead is by the commercial banks in the concerned district. In this regards, this
study made an analysis with the ACP report, it concluded that, commercial banks are provided
mere financial assistance to all the sectors during the study period and flow credit to agricultural
sectors constituted more than 100 percent during the study period. But, which type of agriculture
sector, benefited the flow of audit is not clear. Hence, the banks must concentrate clearly about
their lending pattern which is really benefited to the priority sector of the society.
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