Comparative Financial

A REPORT ON THE STUDY AND ANALYSIS ON DEPOSITS OF SHIKSHARI SAHAKARI BANK LTD.

M.B.A. (BUSINESS APPLICATION) For the Academic Year 2008-2010 Submitted By MR. MAULIK KADAO & MR. SHASHANK AGRAWAL Under the Guidance of MRS. SMITA CHOURE

CENTUM LEARNINIG CENTER Nagpur AFFILATED BY ANNAMALAI UNIVERSITY

A REPORT ON THE STUDY AND ANALYSIS ON DEPOSITS OF SHIKSHARI SAHAKARI BANK LTD. Submitted 2008-2010

M.B.A. (BUSINESS APPLICATION) For the Academic Year 2008-2010 Submitted By MR. MAULIK KADAO & MR. SHASHANK AGRAWAL Under the Guidance of MRS. SMITA CHOURE

CENTUM LEARNINIG CENTER Nagpur AFFILATED BY ANNAMALAI UNIVERSITY

CENTUM LEARNING CENTER, NAGPUR AFFILIATED BY ANNAMALAI UNIVERSITY, CHENNAI

CERTIFICATE This is to certify that the project entitled “THE STUDY AND ANANLYSIS OF DEPOSIT WITH RESPECT TO SHISHAK SAHKARI BANK LTD. NAGPUR” submitted in partial fulfillment/ of the degree in Master of Business Administration to Annamalai University. Project report is result of bonafide work carried out by Mr.Maulik Kadao & Mr. Shashank Agrawal a student of M.B.A. of CENTUM LEARNING CENTER Under my guidance and supervision. The candidate has satisfactorily prosecuted his project for not less than one academic session. The project work is result of his original work and is sufficiently high standard to warrant its presentations for evaluation and adjudication for award of the degree. Place:- Nagpur Date:Counter Signed

Mrs. Smita Choure (Project Guide) C.L.C ,Nagpur

Mr. Sanjay Choure

(Managing Director) C.L.C Nagpur

CENTUM LEARNING CENTER, NAGPUR AFFILIATED BY ANNAMALAI UNIVERSITY, CHENNAI ACKNOWLEDGEMENT I take this opportunity to express my sincere gratitude to the management of, “ Shishak Sahakari Bank Ltd.” Mr. Prakash K. Puranik(Chief Executive Officer),and Mr. Shrikant G. Vaidya (Administrative Officer), for giving me opportunity to work with organization for purpose of project completion . I am indeed grateful to Mr. Manoj T. Chakradhari (Assistant Manager) of Head office of Shishak Sahakari Bank Ltd. for extending their invaluable guidance keen interest, cooperation, and of course moral support to me during my project work. I am also thankful to management of Main Branch(Itwari) Mr. Shrikant S. Naringe(Deputy General Manager), Mr. Ravikant S. Ghuse(Branch Manager), Mr. Shirish S. Purohit(Assistant Manager) & all Staff of main branch. I am thankful to my worthy of HOD Director Mr. Sanjay Choure Sir for giving me opportunity to do the training in this organization & all the lecturers of my Dept. who have imported us to predict knowledge which has help me during our training.

Submitted By, Maulik kadao & shashank agrawal

CONTENT Sr. No.

TOPIC CHAPTER 1 EXECUTIVE SUMMERY CHAPTER 2 INTRODUCTION 2.1] Introduction of Co-operative Bank 2.2] Features of Co-operative Bank 2.3] Co-operative Bank CHAPTER 3

HISTORY & DEVELOPMENT OF THE BANK 3.1] About the Bank 3.2] Aim of Bank 3.3] Social Aspects of the Bank 3.4] Silent feature of Bank

4

3.5] Achievements RESEARCH METHODOLOGY

5

4.1] Sources of Data STUDY OF BANKING & It’s PRODUCT 5.1] Definition of Banking 5.2 ] About Deposits

6 7

5.3] Different Types Of Deposits & Services Provided by Bank BALANCE SHEET OF THE YEAR 2008 ANALYSIS AND INTERPRETATION OF DEPOSITS OF YEAR 2007 AND 2008

8

7.1] Analysis By Pie- Chart & Bar Chart CONCLUSION & SUGGESTIONS 8.1] Conclusion

9

8.2] Suggestions BIBLIOGRAPHY

PAGES

CHAPTER 1 EXECUTIVE SUMMRY

EXECUTIVE SUMMERY With the growing competition in the market and globalization coming into role it has become essential for every bank /organization to keep in touch with the recent technology. My subject of project mainly target the deposit in the bank with reference to Shishak Sahakari Bank Ltd. Process that has been adopted. Thus a bank to survive and do business in market it is very essential to fallow the rules and regulations of RBI as it is the governing body of every bank.

In the present economic scenario it is very necessary for bank to accept deposits as to do business in the market if they will not except deposit how they will give loans to the public. On keeping this in mind we are doing study of deposits on shishak sahakari bank ltd.

We had shown different schemes of behalf of which the bank accepts deposits from public and also how it is growing in a rapid speed.

In many financial services deposits play vital role in all institution without which the organization cannot survive. Shishak Sahakari Bank Ltd. Has very efficient deposits schemes for public. It has separate department to handle the deposit schemes of bank which are equipped with very good system. The departments acts in a more proactive and calm and respectful manner.

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CHAPTER – 2 INTRODUCTION

I ] INTRODUCTION OF CO-OPERATIVE BANKS

The co-operative banks are small-sized units organized in the co-operative sector, which operate both in urban and non-urban centres. They finance small borrowers in industrial and trade sectors besides professional and salary classes. Regulated by the Reserve Bank of India, they are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. The co-operative banking structure in India is divided into 4 components a) Primary Co-operative Credit Society The Primary Co-operative Credit Society is an association of borrowers and non-borrowers residing in a particular locality. The funds of the society are derived from the share capital and deposits of members and loans from central co-operative banks. The borrowing powers of the members as well as of the society is fixed. The loans are given to members for the purchase of cattle, fodder, fertilizers, pesticides, implements, etc. b) Central Co-operative Banks These are the federations of primary credit societies in a district and are of two types - those having a membership of primary societies only and those having a membership of societies as well as individuals. The funds of the bank consists of share capital, deposits, loans and overdrafts from state cooperative banks and joint stocks. These banks finance member societies within the limits of the borrowing capacity of societies. They also conduct all the business of a joint stock bank.

2

c)State Co-operative Banks The state co-operative bank is a federation of central co-operative bank and acts as a watchdog of the co-operative banking structure in the state. Its funds are obtained from share capital, deposits, loans and overdrafts from the Reserve Bank of India. The state co-operative banks lend money to central cooperative banks and primary societies and not directly to farmers.

Although co-operative banks are underrated in terms of their contribution to Indian Financial System. They form an important faction of the same Their performance has been exemplary in accordance to the role assigned to them, the expectations they are supposed to fulfil, their number, and the number of offices they operate. Although the genesis of the co-operative movement can be traced back in the West. The importance that such banks have assumed in India is rarely paralleled anywhere else in the world. Their role in rural financing continues to play a pivotal role even today, and their business in the urban areas also has increased in recent years mainly due to the sharp increase in the number of primary co-operative banks

3

II]

FEATURES OF CO-OPERATIVE BANKS

In India, co-operative movement has attained its maturity. The activities of cooperative institutions cover a wide range of activities such as production, processing, marketing, and distribution, servicing, and banking in India and have vast and powerful superstructure. Co-operative Banks are important cogs in this structure.

At the advent of this century, availability of credit in India was inconspicuous, more particularly in rural areas, where agricultural and related activities were starved of organized, institutional credit. The rural folk were depended entirely on the moneylenders, who lent often-imposed high rates of interest. The co-operative banks arrived in India in the beginning of 20th Century as part of governments efFort to develop a new type of institution, based on the principles of co-operative organization and management, suitable for problems particular to Indian conditions. These banks were conceived as substitutes for moneylenders, to provide timely and adequate short-term and long-term institutional credit at reasonable rates of interest.

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III] CO-OPERATIVE BANK :

 Are organized and managed on the principle of co-operation , self-help . and mutual help.They are fully democratic in their approach.

 Function on "no profit, no loss" basis. Co-operative banks, do not conduct activities to pursue the goal of profit maximization.

 Co-operative bank performs all the main banking functions of deposit mobilization, supply of credit and provision of remittance facilities. Co-operative Banks provide limited banking products and generally focus on agriculture related products. However, co-operative banks are now diverted to housing loans also.



UCBs also provide working capital loans and term loan as well.

 The State Co-operative Banks (SCBs), Central Co-operative Banks (CCBs) and Urban Co-operative Banks (UCBs) can normally provide housing loans upto Rs 1 lakhs to an individual. The scheduled UCBs, however, can extend their lending upto Rs 3 lakhs for housing purposes- The UCBs can provide advances against shares and debentures also.



Co-operative bank functions business mainly in the agriculture and rural

sector. However, UCBs, SCBs, and CCBs operate in semi urban, urban, and metropolitan areas also. The urban and non-agricultural business of these banks has grown over the years. The co-operative banks demonstrate a shift from rural to urban, while the commercial banks, from urban to rural. 5



Co-operative banks are perhaps the first government sponsored,

government-supported, and government-subsidised financial agency in India. They get financial and other help from the Reserve Bank of India and NABARD, central government and state governments. They form the "most favored" banking sector with risk of nationalisation. For commercial banks, the Reserve Bank of India is lender of last resort, but co-operative banks it is the lender of first resort, which provides financial resources in the form of contribution to the initial capital (through state government), working capital, refinance.



Co-operative Banks can be classified in to the money market as

well as

to

the

capital

market.

Primary

agricultural

credit

societies extend short term and medium term loans.



Land Development Banks (LDBs) provide long-term loans. SCBs and

CCBs also provide



both short term and long-term loans.

Co-operative banks are financial intermediaries only partially. The sources

of their funds (resources) are (a) central and state government, (b) the Reserve Bank of India and NABARD, (c) other co-operative institutions, (d) ownership funds and, (e) deposits or debenture issues. Ironically the intra-sectoral flows of funds are much greater in co-operative banking than in commercial banking. Inter-bank deposits, borrowings, and credit from a significant part of assets and liabilities of co-operative banks. This means that intra-sectoral competition is absent and intra-sectoral integration is high for co-operative bank. 6



Some co-operative banks are scheduled banks, while others are non-

scheduled banks. For instance, SCBs and some UCBs are scheduled banks but other co-operative banks are non-scheduled banks. At present, 28 SCBs and 11 UCBs with Demand and Time Liabilities over Rs 50 crores each included in the Second Schedule of the Reserve Bank of India Act.



Like other scheduled and non-scheduled Co-operative Banks are

subject

to

CRR

and

liquidity

requirements.

However,

their

requirements are less than commercial banks.



Since 1966 the Reserve Bank of India has directly regulated the

lending

and

deposit

rate

of

commercial

banks.

Although

the

Reserve Bank of India had power to regulate the rate co-operative bank but this have been exercised only after 1979 in respect of non-agricultural

advances

they

were

free

to

charge

any

rates

at

their discretion.

Although the main aim of the co-operative bank is to provide cheaper credit to their members and not to maximize profits, they may access the money market to improve their income so as to remain available.

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CHAPTER-3 HISTORY & DEVLOPMENT OF THE COMPANY

Shishak Sahakari Bank ltd. is firstly started with the intension for only fulfill the basic needs of the thachers. The founder of its was teachers.. The 21 people started it on 1st January 1979 by keeping

the ideal as a teacher to Dr.Sarvapalli Radhakrishanan. After some time then it had been commarcialise for the all people now this is works as a scheduled bank in the cooperative sector the shishak sahkari bank cover wider area. According to the geography the shishak sakari bank reach towards the urban as well as rural people, the main moto of the bank is to fulfill the needs and satisfaction of the “Customer” Approach in its services. ABOUT THE COMPANY Company’s introduction : Shikshak Sahakari bank (SSB) is a leading co-opretive bank providing the entire of banking services. The Bank founded in 1979 by some teachers together, Now it has 20 branches including one main branch and one extension

counter.

It

has

branches

at

Nagpur,

Wardha,

Chandrapur,Gadchiroli, Bhandara, Yawatmal, Districts in Maharashtra. Aim :The bank wishes to fulfill all type of needs of common man to increase the standard of living. SSB provides a breadth of banking services including costumer services, investment banking, corporate financing, various types of loans etc.

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Social Aspects :-

The bank's philosophy is entirely customer centric, with a clear focus on providing long term value addition to costumers, Bank excels in Social Banking , overlooking the profit aspect. The social aspect covers Priority Sector, Agriculture, Small Scale Industries, Builder, Servicemen, Small Businesses, Association etc. Bank is advancing loans to professional, to industries, against immovable property, personal security loan, gold loan, and also loan against LIC policies, NSC,KVP etc. SALIENT FEATURES OF THE BANK :1. All branches of the bank work in two shifts, morning and evening. 2. All branches are computerized and inter connected with main branch. 3. Locker facility is available in the bank. 4. Teller counter is available in some of the branches of SSB.

ACHIVMENTS :1 . In year 1996-97, bank achiveved its aim to complete 100 corer deposits and on 22/05/1999 it achieved status of “SCHEDULED BANK”

2 . It is the only cooperative bank, which achieved ‘Scheduled Bank’ status in only 20 years. It secured 1st rank in Vidharbha region for highest deposits in year 1999-2000.

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ORGANIZATIONAl CHART

Board of Directors

General Manager

Administ -ration Depart.

Planning & Develop.

A/c. & Treasury.

Audit Departme nt.

Credit Departme nt

Recovary Departme nt

Deputy General Manager

Deputy General Manager

Deputy General Manager

Deputy General Manager

Deputy General Manager

Deputy General Manager

Manager

Manager

Manager

Manager

Manager

Manager

Assitant Manager

Departm ent Staff

Assitant Manager

Assitant Manager

Assitant Manager

Assitant Manager

As sit an tM an ag er

Departm ent Staff

Departm ent Staff

Departm ent Staff

Departm ent Staff

Departm ent Staff

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CHAPTER – 4 RESERCH METHODOLOGY

A) SOURCE OF DATA The Research is done on the basis of Primary Data and Secondary Data. 1. Primary Data For the study purpose the primary data will be collected from the various Employees & officers from Shishak Sahakari bank ltd First I have asked questionnaires related to the subject and then I have collected required information from them. 2. Secondary Data The secondary data for study collected from various manuals and records of company. Balance sheet of the company.

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CHAPTER-5 STUDY OF BANKING & DEPOSIT PRODUCTS

1] What is Banking ?

Ans: - The banking regulation Act, 1949 defines the term banking. ‘Accepting for the purpose of lending or investment of deposits of money from the public, repayable on emand or otherwise, and withdrawals by cheques, draft, order is called banking. The phrase “ DEPOSITS OF MONEY FROM THE PUBLIC” has great significance. The banker accepts deposits from the public i.e., whoever offers his/her money as deposit. However a banker can refuse to open accounts for undesirable person. The definition also explains the time and mode of withdrawal. The banker does not refund the money on his own accord, but the customer has to demand for the same either through an order, cheque, draft or otherwise.

2] What is deposit? Ans:- Deposit is the credit creation and investment in securities, both require bank to mobilize deposit heavily from the market place. Deposit are the foundation upon which bank thrives and grow. In today’s intensely competitive and increasingly deregulated market place, both the cost and amount of deposit of the banks are heavily influenced by the pricing schedules and maneuvering of scores of bank and non –bank institutions offering similar services. The globalization of the financial markets has widened the avenues of fund for the banks in the capital market. Banks are now able to raise capital both the national and intentional markets. Nevertheless, deposit gathered from local markets are considered the primary support for assets in most of the banks. Deposits have typically lower interest cost than the other types of funds. Another important feature of these deposits is their relative stability compared to hot money hot money i.e,. the money raise from the money market etc. these two 22

features of the deposits-stability and low cost sources of funds, make them 2

more preferred sources of fund by banks. All things being equal, banks that have a greater deposit base are more valuable than the banks with poor deposits. In India, traditionally banks have been offering only mass banking products. Some of the most common deposits products are saving bank, current account ,and term deposits account. The common lending products are cash credit and term loans. In the past, banks had little choice in the matter and had to accept deposits at rates and amounts fixed by Reserve Bank of India. Bank rate, which is dictated by the RBI, is the benchmark for interest on the lending products. Further, remittance products were limited to issuance of drafts, telegraphic transfer, bankers cheque and internal transfer of funds.

3] Which type of deposits and services are provided by the bank ? Ans: Types of deposits offered by the banks a] Transaction(Payment) deposits  Non-interest Bearing Demand Deposits  Interest Bearing Demand Deposits b] Non – Transaction(Saving, or Thrift) Account  Current Account  Saving Bank Account c] Term deposits d] Fixed deposits scheme  Reinvestment scheme  Cash Certificate  Recurring Deposit Scheme e] Pigmy Deposits g] Dhanwardhini Yojan

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and various loan services also provide such as Over draft, Cash Credit , Term Loan, Personal Security loan, Housing Loan, Loan Against Deposit, Loan Against Tangible Security etc.

3] Explanation of Different deposits ? Ans :- Deposits are accepted in different ways. Differentiation of deposits types may arises from the type of customer who holds the deposits, tenure of the deposits, its nature and the interest factor, based on these parameters, the deposits can be broadly classified into transaction and non-transection. Transection( Payments) Deposits :A deposit which facilitates the account holder to transact through a negotiable or transferable instruments, cheque, a written order of withdrawal, telephone order to transfer funds, or other similar means of makings payments and transferring monies to third parties is known as a transaction account . these are one of the oldest deposits services offered by banks where banks make payment on behalf of its customers. This transaction or demand deposits service requires the bank to honor cheques and withdrawals. Transaction deposits include regular non-interest , bearing demand deposits, which do not earn an explicit interest payment but provide the customer with payment services, safe keeping of funds and records keeping for any transactions carried out through cheques. They also include interest bearing demand deposits that provide all of the foregoing services and pay interest to the depositor. Current account and Savings account are the most widely use transaction accounts. Non-Interest bearing demand deposits:-

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There are no interest payments on the current a/c. payment of interest on checking accounts has been prohibited with the passage of the Glass-Steagall Act In the U.S.. These demand deposits are among the most volatile and list predictable of bank’s sources of funds, with the shortest potential maturity as they can be withdrawn without notice. Most non deposit bearing liabilities are held by business firms. Many of the individual a/c. holders have moved towards other types of deposits that pay interest. Non-Interest bearing demand deposits:In the early 1970s in New England, hybrid checking-savings accounts were introduce in the form of Negotiable Order of Withdrawal(Now Accounts). NOWs are interest bearing saving deposits that give the bank the right to insist of prior notice before customer withdraws funds. Two other important interest bearing transaction accounts were created in 1982 with the passage of the Garn-St Germain Depository Institution Act. Bank and non bank thrift institution could offer deposits competitive with the share accounts offered by money market funds that carried higher, unregulated interest rates and were backed by a pool of high quality securities. Banks pay interest rates enough to attract and hold the customer deposits. The customer is usually restricted to limited transfer of or withdrawals per month, with no more than three transactions cheques written against the account the interest rate paid on a money market account is usually higher than that of regular passbook savings rate. Money market accounts also have a minimum balance requirements.

Non-Transection(Saving, or Thrift) Accounts :-

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When the deposit account does not facilitate routine payments or transfer of funds for other transaction purposes, it is a non-transaction account. These deposits are designed to attract funds from customers who wish to set aside certain amount in anticipation of future expenditure or financial emergencies. These deposits pay higher interest rates compared to transaction deposits. While their interest cost is higher, thrift deposits are generally less costly for a bank to process and to manage. Most familiar examples of such accounts are the term deposit accounts. Based on this differentiation of transaction and a non-transaction account, the deposit mobilized by the Indian bank are generally classified into Current Account , Saving Bank Deposits and Term Deposits a detailed discussion on the features of these deposits accounts the computation of interests etc. is given below. Bank receive through three types of basic accounts: Demand Deposits , Saving Deposits and Fixed-time deposits. CURRENT ACCOUNT:The depositor can withdraw the money at any time (as long as money available in the account) and also can order the bank to use the money to pay third parties, generally through a cheque. Bank may or may not to pay interest on these accounts. If they pay interest, the account is called a “NOW”(negotiable order of withdraw) account. It is possible that bank may charge fees for demand deposit accounts but in many cases these fees can be reduced or avoided by maintaining a minimum balance or by satisfying other criteria established by the bank. Some features are given below : Current account is transitioned accounts and hence are offered to

business firms.

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 Due to ease of the business firm have in depositing and withdrawing funds from this account, it actually facilitate cash management for the firms.  No advance notice is required to withdraw the amount.  It being an operating account, these customer can easily withdraw fund from current account using cheque facility.  However banks do require the account holder to maintain a certain amount of minimum balance continuously.  In some cases depending on the credibility of the customer, the bank may

also allow the deposit holder to overdraw form the current account as the amount enables easy liquidity, the deposit in this account does not earn any interest.  These account are non interest bearing liabilities of the bank, they are not

expense free as they generate processing cost to cover these cost, the bank usually collect service charges related to account activity or account balance or both . Saving Bank Account:The depositor usually plans to maintain the fund in the account for an extended period of time. Bank pay interest on these accounts. Bank may also charge fees for saving accounts, but in many cases these fees can reduce or avoid maintaining minimum balance. Other than for business purpose, operating accounts are also necessary for individuals, trusts, non-profit organization etc. However these type of deposit holders have fewer transactions when compare to business firms. Savings bank account facilitates liquidity to these depositors. 27 7

 Similar to the current account the bank do not generally requires any advance notice for withdrawals for the SB account.  The SB account also has cheque facility, only limited numbers of cheques

can be written. Again , banks requires the deposit holder to maintain a minimum balance. while the required minimum balance may vary from bank to bank, most banks require the depositor to maintain this amount on a continuous basis.  Some banks require the depositor to maintain the minimum balance on an

average over a period of time , say three month.  The bank may charge for any shortfall in this minimum balance. Some of the new private banks are however offering zero balance facility i.e., deposit holder need not maintain a minimum balance. The steaps to involved for saving a/c transaction are:A) The steaps involved to deposit money in our saving a/c. 1) In saving a/c we first had to fill a slip for depositing the money. In slip we had to clearily mention out saving a/c no., date, name of a/c holder, amount that we had to deposit, different nomination of types of note that we had depositing, etc are the details we had to mention in the depositing slip while depositing money in our saving a/c. 2) Then we had to take token to depositing money in saving a/c. 3) Then we had to go to the cash receipt counter to deposit our money in our a/c. 4) Then we will get a acknowledgement slip with stamp of the bank and sign of the cashier after the cashier accept our money. 5) Then after receiving acknowledgement our money is deposited in our a/c. 28 8

6) And finally our money is deposited in our saving a/c. B) The steaps involved to deposit a cheque in saving a/c:1) The slip of deposit cheque is to be filled by the saving account holder to deposit cheque in his saving account. 2) In slip we had to clearily mention out saving a/c no., date, name of a/c holder, amount that we had to deposit, different nomination of types of note that we had depositing, etc are the details we had to mention in the depositing slip while depositing cheque in our saving a/c. 3) Then we had to attach cheque with that slip and deposit it at the cheque deposit counter at bank. 4) After the cheque is cleared the bank will deposit the amount in our a/c. B) the steaps involved to withdraw money from the saving account:1) The cheque book that we had got from the bank of our account we had to take 1 leaf of that cheque book and mention on it in the favour self and the amount that we had to withdraw from our account with the signature of the account holder on the cheque. 2) Then we had to give the cheque to the counter and collect token from the counter. 3) Then we had to go to the cash withdrawal counter to withdraw cash from our account. The cashier will give cash on against token to the account holder after verifying all the details of the account like account holder signature, amount, date, name etc. 4) The account holder will receive cash and entry is passed from there account. 19

These are all the transaction passed in the bank in relation to saving account.

Term Deposits :Term deposits are a form of “debt investments” a customer lends, which in essence, means that he is lending a sum of money to a bank or financial institution for a specific period of time and the bank in turns pays him a “rental stream”(interest) for privilege. These accounts pay higher interest rate than any other deposits accounts. This type of account is called a certificate of deposit(CD). These are the accounts of funds to which depositors have no access for fixed period of time and penalties apply for early withdrawals. Cheques cannot be written on term deposits or CDs. Other than liquidity, which SB account and current account ensure, depositors would also prefer to earn interest on their surplus balances. Banks facilitates this through term deposits. This account enables savings plans for funds that can be kept as a deposits for a period of more than 15 days. It is 7 days in case of bulk deposits. While the maximum tenure of the term deposits is 10 years, banks generally would not favor deposits with tenures beyond three to five years. For tenure beyond three years, there will be a flat interest rate structure and this in fact acts as a disincentive for the depositor. The other feature of the term deposit is the de-regulated interested rates. Banks are free to set their own rates depending on the size of the deposit and the tenure. This interest will be paid on a quarterly compounded basis. Apart from the annual compounding, if the interest is compounded monthly/quarterly/half-

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yearly, the effective rate of interest for such periods will be different from the nominal rate. r = (1+k/m) -1 where, r = Effective Rate k = Nominal Rate m = frequency of compounding per year eg.- for instance the nominal rate of interest on a 2 year term deposit is 9.5 percent and the interest amount is compounded on a quarterly basis then the effective rate can be assessed as follows:r = (1+0.095/4)m-1= 9.84%

Fix Deposit Scheme:In this scheme, a lump sum amount is deposited for a fixed term during which the amount cannot be withdrawn. However, the interest is paid on a monthly/quarterly /half-yearly/annual basis. This scheme provides liquidity to the depositor as it can be withdrawn during these periods. By withdrawing the amounts, the depositor can actually earn a return(interest) on this interest amount. However, if monthly interest is withdrawn for the reinvestments, the return earned will be more than that earned for quarterly repayment. To avoid this, the interest rate that is paid for a monthly withdraw scheme should be such that on reinvestment it shall not yield more than the quarterly returns. Eg.:- Discounted monthly Interest = P*R / (12+r) 21

Where, P = Principal/Fixed Deposit Amount R = Interest Rate r = Reinvestment Rate for the monthly interest for a 2 year FD deposit of Rs. 50,000 with the interest rate of 10.5percent a. Ascertain the interest amounts if the payment is made on a quarterly, halfyearly and annual basis. b. What should be the interest rate if the interest rate is withdrawn every month and transferred to the savings bank account? Solun:- a. quarterly interest amount = 50000*0.105/4 = Rs. 1312.50/-only Half-yearly interest amount = 50000* 0.105/2 = Rs. 2625/Annual interest amount =

50000* 0.105 = Rs. 5250/-

b. Discounted Monthly Interest = 50000 * 0.105 =Rs.436.04 12+0.04 This can be verified by adding the monthly interest of 3 months and the interest earned during that period is as follows:(436.04 * 3) + (436.04 * 0.04 * 3/12)= 1312.50/-.

Dhanwardhini Yojana:This type of deposit is provided by by the bank to the customer and general public who is entitled to keep there money for more than 1 year. In this scheme 22

the customer get more profit than general fix deposit. They get compound interest on their deposited amount. Which will be benified to the customers. For eg. If for 1 year Dhanwardini deposit of Rs.1000 with Shishak Sahakari Bank Ltd. the rate of interest 10 percent interest calculate on quarterly basis Rs.1025/-per quarter and next interest paid on amount 1025 Rs.the interest calculate by compound interest . Pigmy Deposit :This is a type of deposit provided by the shishak sahakari bank ltd. to their customer who is entitled to deposit money on daily basis. It is also called as daily deposit. They will get interest every year on there deposit as per the fixed deposit receipt rate. This deposit scheme is in focus to all the general public & the people who take the loan for small business according to their deposit ability. A pigmy agent is appointed by the bank to collect the money from the bank customer and deposit the money daily into the bank.

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CHAPTER -6 BALANCE SHEET OF YEAR 2008

SHISHAK SAHAKARI BANK LTD. BALANCE SHEET AS ON 31.03.2008 PREVIOUS

LIABILITIES

YEAR 31-03-2007 50,00,00,000.00

AMOUNT AS

AS ON

ON

ON 31-03-2008

31-03-2007

50,00,00,000.00

6,32,23,900.67

31-03-2008 1.AUTHORISE 50,00,00,000.00 SHARE

21,75,54,350.00

AMOUNT AS

SHARE

CAPITAL

5,98,61,84,129.4 6

24,05,10,000.00

DHANWA. YOJNA DHANSHRE. YOJNA MISCLLEANEOUS DEPO.

CREDIT BAL.IN LIMIT A/C.

6,44,08,338.04 CURRENT

25,06,44,208.96

5,98,61,84,129.4 6

STATE /CENTRAL BANK

38,05,06,602.03

1,69,74,64,739.9 2

RESERVE BANK OD INDIA

1,29,41,44,783.2 4

1,86,17,428.29

CO-OPERATIVE

2,38,11,03,342.5 0

52,12,108.18

46,30,18,848.0 5

S.B.I. AND

46,30,18,848.05

1,04,91,133.92

OTHER NOTIFIED

7,73,11117.50

BANK

7,01,09,845.50

81,00,886.87

OTHER BANKS

1,93,67,906.85

4,81,21,701.00 MONEY AT

6,00,00,000.00

CALL & SHORT

51,44,663.00

NOTICE 2,39,99,20,015.5 4

2,05,07,49,049.0 0

INVESTMENT

2,04,87,41,132.00

SLR

12,30,55,798.12 NON SLR SHARES

PIGMY SEC. DEPOSIT SSB CAPITAL GAIN

IN

WITH BANKS

24,33,806.04

FUNDS

SHUBHM. YOJANA

CASH IN HAND A/C

24,05,10,000.00

DEPOSITS CURRENT A/C. SAVING A/C. FIXED DEPOSITS OVERDUE FIX & TIME DEPOSITS RECURRING DEPOSIT PIGMY DEPOSIT

AMOUNT AS ON 31.03.2008

BALANCE

PAID UP SHARE CAPITAL 2,25,85,02,577.1 5

ASSETS

1,31,29,100.00 50,00,000.00 35,61,619.57

NMC BOND 2007 UNIT OF

70,00,000.00 7,65,703.00

1,31,29,100.00 50,00,000.00 50,40,96,444.49

MUTUAL FUND FIXED

1,22,88,769.30

BILLS FOR COLL.BEING BILLS RECEIVABL

1,59,39,934.61

DEPOSITS 33,42,56,974.44 2,10,35,250.74

LOANS & ADVANCES

2,10,35,250.74 3,40,00,92,428.1 0

85,756.42

61692.06

5,01,38,791.86

OTHER LIABILITIES

1,20,63,57,627.6 0

3,07,16,60,431.94

CLEARING SUSPANCE INTEREST

CLEARING ADJUSTME INTEREST ACCURED & PAYABLE ON

45,09,67,672.87

1,39,135.00 1,34,03,05,382.27

RECEIVABLE A/C.

85,756.42 INVESTMENT

5,41,10,617.00

5,02,84,882.53 5,02,84,882.53

3,60,47,698.12

BILLS

2,10,35,250.74

RECEIVABLE 7,08,80,838.01

7,20,28,538.96 7,08,80,838.01

1,22,88,769.30

BEING BILLS FOR COLLECTION BRANCH ADJUSTMENT

32,15,680.93

25

CHAPTER 7 ANALYSIS AND INTERPRETATION OF DEPOSITS YEAR 2007 AND 2008

DEPOSITS OF THE YEAR 2007 Name of the account Deposit amount Current account 216124140.63 Saving account 1320485784.63 Fixed deposits 1197927064.45 Overdue fixed and 72996173.52

DEPOSITS OF THE YEAR 2008 Name of the account Deposit amount Current account 250644208.96 Saving account 1697464739.92 Fixed deposits 1294144783.24 Overdue fixed and 77311117.50

time deposit Recurring deposit Pigmy deposit Shubhmangal yojna Dhanwadhini yojna Dhanshree yojna Miscellaneous yojna

59291595.00 35391638.00 5638363.00 2380167887.72 23901919614.12

time deposit Recurring deposit Pigmy deposit Shubhmangal yojna Dhanwadhini yojna Dhanshree yojna Miscellaneous yojna

70109845.00 48121701.00 5144663.00 2399920015.54 123055798.12

a.pigmy deposit

2716257.57

a.pigmy deposit

3561619.57

b.ssb capital gain Credit balance in

414070.00 11338814.24

b.ssb capital gain Credit balance in

765703.00 15939934.61

5541511402.88

limit account Total

5986184129.46

limit account Total

Aim:- To know the variances Between the amount of various scheme deposit

26

Aim:- To See the Growth In Deposits are increasing or decreasing the year by year. Observation :-According to the above Pie Chart Shows that the growth is increasing in year 2008 as compare to year 2007.

2007 2008

DEPOSITS, 52%

DEPOSITS, 48%

The above chart shows the difference between the deposit amount of the year 2007and 2008

Aim:- To see the growth of various account wise which is

27

provided by the shishak sahakari bank to their customer.

Observation :- According to the above Bar-Chart shows that the speculating line between the two years deposits shows that some deposits accounts are increase the amount of deposits as compare to year 2007 and some deposits are decrease the amount of deposits.

100% 80%

2008 2008 2008 2008 2008 2008 2008 2008

2008 2008 2008

60% 40% 2007 2007 2007 2007 2007 2007 20% 2007 2007

2007 2007 2007

0% . Cu

O Sh Dh ... .S F R P D .C rr e avin ix De verd ecur igmy ub h hanw ans Misc r edi u r t h nt g l p A/ A/c osit e fix in g D Depo axmi ardh ree Y. Yoj B ala c a i n & tim ep os sits Y oja n i Yo ojan na (P ce . i na ig m n L jn a a e D it s ep y S imit os ec A its ur i / c ty De p

2007

o.+ Ca p

i

2008

The above chart shows the differences in deposit by A/c. between the year 2007 & 2008

28

CHAPTER – 8 CONCLUSION & SUGGESTIONS

8.1 CONCLUSION

1) It has been concluded that the deposits are increasing year by year. 2) According to this study the different deposit schemes are very helpful to general public and customers. 3) On increasing the deposits of the bank the bank can lead more money and can gain more profit. 4) On increase of pigmy deposit the total deposit amount of bank has been increased. 5) Regular Contact with their depositor by giving him quick updates of their account as well as their clearing . 6) one of the reason of increase the deposits is time scheduled of the bank in two shifts it will helpful to their depositor to deposit their whole day cash in bank, so that security purpose bank is helpful for their depositor so it may be one of reason to increase the depositor . 7) facility of tailor counter upto 5000 Rs. Cash can easily whithdraw without taking any token.

29

8.2 SUGGESTIONS 1) The banks should adopts ATM facility and mobile facility so that it will be benefited to the customers and also to the bank too.

2) The bank should develop their web site on which it can become global. 3) The bank should adopt online banking facility so that it should be more Benefited to the customer.

4) The bank should also adopt core banking facility so that it will be easy to handle the customer and branches too.

5) To increase the deposit bank should increase the branches in rural areas to focus the poor people.

6) To keep the regular contact and keep in touch with high value depositors it will increase deposit of the banks.

30

CHAPTER- 9 BIBLOGRAPHY

SR. NO.

REFERENCE

1

2

- Balance sheet of Shishak Sahakari Bank ltd. of the year 2007-2008 Refer Book of “Commercial banking “ by ICFAI University -

3

Internate

31