Csr.docx

ASM's INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES

THANE (W) 2017-18 MUMBAI UNIVERSITY

A Project Report on CRITICAL ROLE OF URBAN CO-OPERATIVE BANK FOR SMALL MEDIUM INDUSTRY AND RETAIL TRADERS.

A Project report submitted in partial fulfilment of the requirement for the award of Masters in Management Studies

Submitted by: -

Submitted to: -

Gaurav Gorakh Nimbalkar

Project guide

S.Y.MMS

Prof. D.G.Chaudhury

Finance specialization.

IMCOST, thane(W)

Roll No: - MS1718062

DECLARATION

I hereby declare that the Project report titled CRITICAL ROLE OF URBAN CO-OPERATIVE BANK FOR SMALL MEDIUM INDUSTRY AND RETAIL TRADERS WITH SPECIAL REFERENCE TO THANE BHARAT SAHAKARI BANK LTD.” is my original work and has not been published or submitted for any degree, diploma or other similar titles elsewhere. This has been undertaken for the purpose of partial fulfillment of MASTERS IN MANAGEMENT STUDIES at ASM’s INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES, thane.

Date: Place: Thane

Gaurav Gorakh Nimbalkar MMS 2nd year. (Finance specialization) MS1718062

PREFRACE

This project report attempts to bring under one cover the entire hard work and dedication put in by me in the completion of the project work on “CRITICAL ROLE OF URBAN CO-OPERATIVE BANK FOR SMALL AND MEDIUM INDUSTRY AND RETAIL TRADE WITH SPECIAL REFERENCE TO THANE BHARAT SAHAKARI BANK LTD.” I have expressed my experiences in my own simple way. I hope who goes through it will find it interesting and worth reading. All constructive feedback is cordially invited.

Date: -

Gaurav Gorakh Nimbalkar

Place: Thane MMS 2nd year. (Finance specialization) MS1718062

ACKNOWLEDGEMENT

It is really a matter of pleasure for me to get an opportunity to thank all the persons who contributed directly or indirectly for the successful completion of the project report, “CRITICAL ROLE OF URBAN COOPERATIVE BANK FOR SMALL AND MEDIUM INDUSTRY AND RETAIL TRADE WITH SPECIAL REFERENCE TO THANE BHARAT SAHAKARI BANK LTD.” I wish to express my gratitude to the branch manager Mr. Pankaj Rane and the supportive staff of THANE BHARAT SAHAKARI BANK, THANE(EAST) for giving me an opportunity to be a part of their esteem organization and enhance my knowledge by granting permission to do a summer training Project. They provided me with their assistance and support whenever needed, which has been instrumental in completion of this project. I am thankful to them, for their support and encouragement throughout the tenure of the project.

Date: Place: Thane

Gaurav Gorakh Nimbalkar MMS 2nd year. (Finance specialization) MS1718062

CONTENTS SR NO. CHAPTER 1 INTRODUCTION TO THE STUDY 1.1 Introduction 1.2 Objectives of the Study 1.3 Research Methodology 1.3.1 Research Type 1.3.2 Data Collection a. Primary Data b. Secondary Data 1.3.3 Sampling Technique 1.4 Scope of the Study 1.5 Importance of the Study a. To the Organization b. To the Customers 1.6 Limitations of the Study CHAPTER 2 THE COMPANY PROFILE 2.1 Introduction 2.2 Services provided by the bank. CHAPTER 3 THE CONCEPTUAL BACKGROUND 3.1 Introduction CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 4.1 Data Analysis and interpretation CHAPTER 5 FINDINGS AND SUGGESTIONS 5.1 Findings 5.2 Suggestions BIBLIOGRAPHY ANNEXURE

1.7 1.8 1.9 1.9.1 1.9.2

c. d. 1.9.3 1.10 1.11 c. d. 1.12

2.2

CHAPTER 1 1. INTRODUCTION TO STUDY. 1.1 INTRODUCTION. A co-operative bank is one which performs the borrowing, lending, agency and general utility services, on a co-operative basis. Co-operative is a natural phenomenon. It is found in all living beings. The word “co-operation” is derived from the Latin word “cooperate” meaning working together. In general, a co-operative bank is a co-operative organisation which is registered under the co-operative societies Act. 10 to 20 or more persons voluntarily pool their resources like money, man, material; skill etc. and manager the banking affairs for the socio economic benefit of themselves as members on equal footing as human beings. They follow cooperative principles and practise them. They do business, provide money and services. They follow the bye-laws, Act and rules, service is the main motive but at the same time they earn profit and compete and get all benefits for themselves. The final aim is to improves socieconomic conditions and raise the standard of living of members and do some benefits to the public at large Thus, Urban Co-operative Banks (UCBs) are associations of persons united voluntarily to meet their all types of common needs like economical, social, ethical and cultural and aspirations through a jointly owned and democratically controlled enterprise. Bahansali Committee (1939) in the then Bombay province defined urban co-operatives very systematically in the following way. “ urban credit societies having paid-up share capital of Rs. 20,000 and over and accepting deposits of money on current account or otherwise subject to withdraw by cheque, draft or order come within the category of urban co-operative banks”. However, this committee has not pointed out the ethical values of honesty, openness, social responsibility, caring for others which the founders of co-operative society believe. These enterprises are based on the values of self-responsibility, democracy and equality. Banking Companies Act and Banking Regulation Act of 1949 defined that Primary Co-operative Banks means a co-operative society other than the primary agricultural society. Hence, the Co-operative Bank means a) State Co-operative Bank : It is a principal co-operative society in a state. The primary object of which is to finance other co-operative societies in a state. b) Central Co-operative Bank : It is a principal co-operative society in a district. The primary object of which is the financing of other co-operative societies in the district.

c) Primary Co-operative Bank : It is a co-operative society other than primary agricultural credit society. It is clear from the above that the primary co-operative banks are popularly known as UCBs. The three words in the title have a definite meaning and scope. Urban : It specifies the area of banking operations of these institutions only to urban and semi-urban places. Urban areas have more economic opportunities than rural areas. These include high financial capacity mobility, knowledge, new ideas and high mass consumption of the people. The banks, homes, educational centres, medical centres with aids given by banks grow and the growth rate represents a significant opportunity of the banks in these urban areas to catch up and makes the areas more liveable for all. These can promote thrift and habit of saving, and attract deposits, thus giving rise to capital formation. In this way, economic improvement of the urban middle class and urban salaried people in particular and urban poor in general are the purposes of these institutions. Co-operative: These are expected to attend less towards profits, and more towards service. Normally they work on no-profit no-loss basis. In case they make some profits they plough it back into expansion of the bank as well as on the improvement in the quality of services. Apart from making availability of cheap credit they also educate people about the sense of togetherness amongst all and also generate loyalty. Banking: “Means the accepting for the purpose of lending or investment of deposits of money from the members, repayable on demand or otherwise withdraw able by cheque, draft and order or otherwise. Banking thus indicates the field of activity of UCBs. The UCBs perform banking business in accordance with the Banking Regulation Act of 1949 and Banking Laws Bill of 1965 and came under the regulation of Reserve Bank of India Act of 1934. “The Department of Banking operations and Development was created in 1950 in RBI. So this is meant to extend banking facilities to urban and semi-urban areas and help in solving the problems of finance. The primary function of the Department is the supervision of the whole Indian Banking system”.3 The above analysis clearly reveals the meaning of the three words of UCBs. The UCBs are to function not only as financial institutions but also as instruments of social change, fostering an all sided development of urban, semi-urban rural, industrial and agricultural catering to the weaker as well as the money market sectors. An Urban Co-operative Bank is one which performs more or less the same functions of the commercial banks. Both the banks borrow and lend money on certain terms and conditions. However, UCB is an association of ten or more persons residing in a particular locality, knowing one another intimately and showing interest in the welfare of one another. Rural co-operative banks are found in the villages and are the associations of farmers. They are formed for the purpose of providing cheap credit to the farmers on the basis of unlimited liability which means every member of the society is liable to an unlimited extent for the liabilities of the society. The UCBs are established in towns and are the associations of small traders, artisans and salaried employees. They are formed for the purpose of meeting the credit needs of all economic activities of urban residents. They are organized on the basis of limited liability, which means the member of the society is liable to the liabilities of the society only to the extent of the face value of the shares of the society held by him.

1.2 OBJECTIVE OF THE STUDY. The objective of study is as follows. 

To study performance of urban co-operative bank in small medium industry.



Understand how urban co-operative bank help small medium industry development.



To analysis how urban co-operative bank help towns and villages development healthy banking practices.



To study the effects of development to retail traders in terms of financial service of rural bank.

1.3 RESEARCH METHODOLOGY Research methodology decides the territory of proposed study and gives information to the readers about adopted process of analysis for the respective study. This includes aim for which the study undertaken. This also clarifies time, scope, data sources etc. of proposed study. Another significant aspect is tools and techniques which are used for the study. In brief this chapter helps to the researcher to decide his path of research work.

1.3.1 RESEARCH TYPE. The research is based on quantitative method of research. Where the data is collected by using various ways of data collection techniques and after doing interpretation on data collected the result is obtained.

1.3.2 DATA COLLECTION. (A)Primary Data: The primary data was collected by means of a personal interview. Questions were asked to the customers and employees of the banks at branch, were approached to get relevant information. The interview contains around 5-6 questions which reflect on the role of urban co-operative bank in small and medium industry. The collected information was later analysed to obtain the required interpretation and the findings.

(B) Secondary Data: In order to have a proper understanding of the role of urban bank a depth study was done from the various sources, a lot of data is also collected from the official website of the bank and from various search engines like Google, Wikipedia and answers.com.

Population :The population includes the individuals that the work in bank on the daily basis that is the employees working in the bank and also the customers use the service of urban bank in day to day life.

Sample size:Sample size determination is the act of choosing the number of observations or replicate to include in a statistical sample. The sample size is an important feature of any empirical study in which the goal is to make inferences about a population from a sample. In practice the sample size used to have sufficient statistical power. In complicated studies there may be several different sample size involved in the study: for example, in a stratified survey there would be different sample sizes for each stratum. In a census, data are collected on the entire population, hence the sample size is equal to the population size. In experimental design where a study may be divided into different treatment groups, this may be different size for each group. The sample size for this research project 10, this also includes the employees and the customers of thane bharat sahakari bank.

1.3.3 Sampling Techniques :Sampling is concerned with the selection of a subset of individuals from within statistical population to estimate characteristics of the whole population. Two advantages of sampling are that the cost is lower and data collection is faster than measuring the entire population. In this research project the sampling technique that is used is stratified sampling (A) Stratified Sampling:Stratified sampling is possible when it makes sense to partition the population into groups based on a factor that may influence the variable that is being measured. These groups are then called strata. An individual groups is called a stratum. With stratified sampling one should:  Partition the population into groups (strata)  Obtain a simple random sample from group (stratum)  Collect data on each sampling unit that was randomly sampled from each group (stratum) Stratified sampling works best when a heterogeneous population is split into fairly homogeneous groups. Under these conditions, stratification generally produces more precise estimates of the population per cents than estimates that would be found from a simple random sample. The following table will show the stratified sample of this research project:-

Stratified samples . Population Groups

Obtain a simple random sample Sample

All the employees and customer of thane bharat sahakari bank in kopri Branch The groups are divided in 2 parts 1. Employees 2. Customer 20 people from each of the group 20 selected people

1.4 SCOPE OF THE STUDY: The scope of this research is to identify the role of the urban cooperative band in small and medium industry. This research is based on primary and secondary data. This study only focuses on role of the bank in urban sector. It aims to understand the role and performance of bank. The study was done taking THANE EAST branch of TBSB into consideration. The study was restricted to the bank customer and employees in thane east only. 1.5 IMPORTANCE OF STUDY: (A) TO THE ORGANIZATION:_ The study would try to throw some insights into the role of bank and performance in small industry. The result would be able to recognize the loopholes in the system and thus provide key areas where improvement is required for the only differentiator left before the bank to attract, retain and partner with the customer. Superior service quality enables a firm to differentiable itself from its competition, gain a sustainable competitive advantage, and enhance efficiency. (B) TO THE CUSTOMER:_ The research will help the customer to make decision like whether to kale loan to development of business or any other facilities available. Whether they should avail facility at TBSB or at any other bank. To find out the key areas of bank which will allow them to get facility instantly and easily.

1.6 LIMITATIONS OF THE STUDY 



The study is only for the TBSB bank confined to a particular location and a very small sample of respondents. Hence the findings cannot be treated as representative of the entire banking industry. The study can also not be generalized for public sector bank of the country.



Respondents may give biased answers for the required data. Some of the respondents did not like to respond.



Employees tried to escape some statements in fear of their job. This was one of the most important limitations faced, as it was difficult to analyse and come at a right conclusion.



In our study we have included 10 customers and 10 employees of bank because of the limit.

CHAPTER 2 THE COMPANY PROFILE

The Thane Bharat Sahakari Bank Ltd., established in 1979, is one of the leading Co-operative Banks in Thane district. Since the date of inception, the Bank has grown by leaps & bounds with 24 branches, spread over Mumbai, Thane, Raigad and Pune districts. (as on 31.03.2016) At the time of inception of the Bank, i.e. in late 1970s, there were only 2 Cooperative Banks in Thane city. Thane city, being centrally situated in the growing industrial belt on one hand, and being equidistant to western side on Ghodbunder Road to Karjat, Kasara and also Mumbai on the other, was developing vertically and horizontally as well, which resulted into growth in the population belonging to all strata of the society. Naturally, a need for another Bank was evident. Two enthusiastic persons, viz. Dr.V.N. Bedekar and Mr.M.Y. Gokhale, along with many such likeminded senior social workers, came up with an idea of having one more Co-operative Bank for Thane city and district. After completing preliminary formalities, the Bank was registered with District Cooperative Registrar on 25th September 1978. Subsequently, the first General Body Meeting of the Bank was held on 28th October 1978 and in that Meeting, a Team of first Board of Directors was elected. Dr.V.N. Bedekar was elected as the Chairman and Mr.M.Y. Gokhale as Vice Chairman. The relative Reserve Bank of India (RBI) License for opening the Bank was obtained on 19th April 1979 and on the auspicious day of ‘Akshaya Tritiya’, on 29th April 1979, the Bank was inaugurated at the hands of noted Economist of that era, Dr.V.N. Dandekar. The Bank started functioning at spacious premises at ‘Shatatarka’, with its Administrative Office and the first Branch Viz. Main Branch. The Bank was awarded status of ‘Scheduled Bank’ on 8th March 2003. The Bank is well equipped in the area of mechanization / computerization of its services through 24 ATMs, Mobile Banking, RTGS, NEFT etc.

Board of Directors

Madhav Yashwant Gokhale Chairman

Dr Ravindra R Randive Director

Hemant Waman Mahajan Director

Uttam Bhaskar Joshi Vice Chairman

Chandrashekhar P Paranjape Director

Dr Rajeshwar Maroti Moghekar Director

Milind Madhav Gokhale Director

Kiran Vasudeo Vaidya Director

Mrs Manisha Madhav Natu Director

Dr. Lalita Sharad Deodhar Director

Sanjay Gopinath Patil Director

Sitaram Ananda Gosavi Director

Suhas Laxman Karandikar Shekhar Atmaram Desai Advisor To Board Chief Executive Office

Performance of last 5 Years

Year

31.03.2011 31.03.2012 31.03.2013 31.03.2014 31.03.2015

Particulars

Amt In Cr.

Amt In Cr.

Amt In Cr.

Amt In Cr.

Amt In Cr.

Capital

2,292.98

2,692.22

2,966.70

3,172.57

3,340.75

Reserve

1,205.79

1,429.30

1,568.01

1,725.30

1,902.53

Other Reserve

1,585.77

2,017.37

2,208.49

2,444.50

2,019.33

Own Funds

5,790.64

6,043.65

6,534.36

7,121.49

6,991.81

Deposit

75,746.24

89,385.70

93,879.62

104,194.98 117,299.42

Investment

34,103.34

35,756.50

41,703.43

42,074.83

37,143.31

Loan

52,441.94

57,159.68

60,575.95

69,802.99

80,719.53

Working Capital

93,912.92

101,287.02 111,512.20 123,217.77 129,105.29

Profit

832.99

516.52

557.99

610.19

701.71

QUALITY POLICY

SECURITY: The bank provides long term financial security to their policy. The bank does this by offering life insurance and pension products. TRUST: The bank appreciates the trust placed by their policy holders in the bank. Hence, it will aim to manage their investments very carefully and live up to this trust. INNOVATION: Recognizing the different needs of their customers, the bank offers a range of innovative products to meet these needs. INTEGRITY- The bank has integrity in its every function. CUSTOMER CENTRIC- The bank follows ‘customer is a king’ rule very strictly. TEAM WORK – The bank has well qualified and experienced staff members, they believe in team efforts. JOY AND SIMPLICITY – Work environment at bank is very friendly. They work with joy and simplicity which leads to motivation of employees and long run growth of organization.

VARIOUS SERVICES at THANE BHARAT SAHAKARI BANK LTD. A. GENERAL INSURANCE They are having Bank Assurance Tie up with ICICI Lombard General Insurance Company Ltd for General Insurance. ICICI Lombard GIC Ltd. is the largest private sector general insurance company in India since 2004. Key Product Offered: 1) 2) 3) 4) 5) 6)

Home insurance. Standard fire and special peril policy. Project insurance. Merchant cover. Motor vehicle insurance. Health insurance.

B. Franking Stamp franking activity: The Bank has been authorized by the Chief Controlling Revenue authority of Maharashtra State, Pune for handling collection of stamp duty by vending stamps through franking of special Adhesive stamp at the following designated branch, up to value of Rs.5000/Main Branch : Shatatarka, Baji Prabhu Deshpande Marg, Vishnu Nagar, Naupada, Thane (W) – 400602. Time : Mon To Fri. 10.00 am to 12.30 pm & 02.30 pm to 06.00 pm Sat.: 10.00 am to 12.30 pm

This facility is available to all general public, any company, institution, bank or firm for franking of all type of documents except following.          

Bill of Exchange Letter of credit Brokers Note Debenture Foreign Bills Hundi Insurance documents Promissory Note Forward contract Share Transfer Form

A. NEFT/RTGS National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) allow individuals, companies and firms to transfer funds from one bank to another. one can check the RBI website for a list of NEFT and RTGS-enabled branches of your bank. These facilities can only be used for transferring money within the country. To opt for these, you need to fill a form providing you’re or the beneficiary’s details — name, bank branch where the account is held, the Indian Financial System Code, a unique code for identifying the branch, and the account number and type. You have to submit a cheque while opting for this facility. You can also transfer funds through net banking. These are third-party transfers and the option is available under the same header on your net banking home page. All of the branches of TBSB provide NEFT/RTGS facility. The account holder can easily transfer money within short period with minimal charges. There is no ceiling on the minimum or maximum amount that can be transferred through NEFT. one can even transfer Re 1. However, a minimum of Rs 2 lakh must be transferred through the RTGS service. There is no cap on the maximum amount in NEFT.

B. LOCKERS FACILITY

Most of the branches are equipped with Lockers facility. they have lockers in various sizes. one can visit the branches to get a locker suiting their particular needs. The Lockers are available at all branches except Rutu Park, Airoli, Lokmanya Nagar, Pen and Shahapur Branches.

C. SMS BANKING

To enable customers to take advantages of Technology in Banking, we have started SMS Banking. This facility is available at all our branches. With this facility customer get text messages on all the activities of their account.

C. E-STATEMENT

Statement on E-mail facility Register for Green Banking through E-Statement. E-Statement facility furnishes the account statement of customer on their registered E-mail Id.

D. MOBILE BANKING  Salient Features of Mobile Banking 24×7 availability Instant Inter-bank fund transfer Confirmation of debit & credit Saves time Simple & user friendly operation Safe & secure Easily adaptable for financial inclusions & merchant transactions

E. EMI Calculator With the Simple EMI calculator available on website of bank, one can calculate EMI of their loan. One Just need to fill up the Loan Amount, Interest rate and Tenure in Years and he/she will get EMI of their loan.

F. MISSED CALL FACILITY FOR BALANCE ENQUIRY To provide hassle free and convenient banking services to customer by leveraging technology, Bank has introduced “Missed Call” facility for “Balance Inquiry”. All customers who have registered their mobile number can get the balance of their accounts by just giving a missed call from their registered mobile number to 9223191010 The call made to the above number will automatically disconnect after ring. Customer will then receive an SMS giving the last four digits of account and current balance of accounts Main features of this facility are as under:   



This facility is “free of cost’’ This facility is available 24X7 Balance of accounts under Saving Bank (SB), Current Account (CA), RMS (Ready Money Scheme), Overdraft (OD), and Cash Credit (CC) will be provided through this facility SMS will generate to all accounts, even Customer may have more than one accounts with same mobile number.

G. AADHAAR LINKED SB ACCOUNT 

AADHAAR Card linking to Saving Account Thane Bharat Sahakari Bank is empaneled with UIDAI to receive Central & State Government Scheme Benefit and credit directly to Aadhaar Card Linked Saving Account of Customer. The new payment service is offered by the National Payments Corporation of India (NPCI) using the ‘Aadhaar’ number, issued by the Unique Identification Authority of India (UIDAI) is known as ‘Aadhaar Payment Bridge System’ and referred to as “APBS”. APBS is launched in India to bring Indian urban, semi-urban and rural population into the main-stream and help banks to serve customers across geography. APBS, which enables Sponsor Banks/Government Department to transfer money to bank accounts of the beneficiaries, is a centralized electronic benefit transfer system to undertake direct mandates from respective sponsor or accredited bank attached to various government departments for the purpose of disbursing entitlements using Aadhaar numbers.

Objectives of Aadhaar Payment Bridge System (APBS):   

 

Credit disbursements based on UID number. Credit transactions for Government/ Government agency disbursements. To serve the goal of Government of India (GOI) and Reserve Bank of India (RBI) for Financial Inclusion by way of processing government disbursement using Aadhaar number. To promote electrification of retail payments. To support various Schemes like NREGA, Social Security Pension, Handicapped Old Age Pension etc. of any Central or State Government bodies, to send financial details to the beneficiary using Aadhaar number.

H. DEPOSIT SCHEMES The Bank offers various Deposit Schemes which are convenient to various types of investors. They have Fixed Deposit and Recurring Deposit (RD) Plans. They offer special rates of interest to Senior Citizen as well as Co-operative Housing Societies on their Fixed Deposits. They also have Tax Benefit Schemes spanning 60 months. The bank has Best Interest Rates on Deposits like: -

1) 2) 3) 4)

RECURRING DEPOSITE FIXED DEPOSITE SAVING ACCOUNT CURRENT ACCOUNT

I. KISHORE BACHAT YOJANA Facilitate the learning of money management in children with the Saving Bank Account. Inculcate the habit of saving from an early age. Saving account for children with minimum balance of Rs. 50/1) Who can Open Account Minors of age 10-18 years 2) Benefits   

Small Savings. Any Branch Banking Rs. 1000/- per day (withdrawal allowed through ATM.)

J. LOAN SCHEMES Bank offers Attractive Loan Schemes for Individual / Business needs. These are listed below.

1) 2) 3) 4) 5) 6) 7) 8)

GOLD LOAN LEASE RENTAL DISCOUNTING MORTGAGE OD/TERM LOAN WORKING CAPITAL/CASH CREDIT PERSONAL LOANS EDUCATION LOANS VEHICAL LOANS HOME LOAN ETC.

Interest Rates – Loans and Advances w.e.f: 1 July 2016 Sr. No.

Product / Scheme

Remark Up to Rs.25.00

1 2

3

Housing Loan Education Loan

Vehicle Loan

Rate of Interest p.a. lacs

9.50%

Above Rs.25.00 lacs up to Rs.70.00 lacs

10.50%

Maximum up to Rs. 20.00 lacs

12.00%

Personal Use New Vehicle (Up to 36 months )

9.50%

Personal Use New Vehicle (Above 36 months)

10.50%

Pre-owned cars

13.50%

With Section 49

14.00%

Without Section 49

15.00%

4

Personal Loan

5

Cash Credit

Business Loans

12.25% to 15.00%

6

Term Loans

Business Loans or Commercial Vehicles

12.25% to 15.00%

Loan up to Rs. 2.00 lacs

12.00%

7

Term Loan/SOD against NSCs / KVPs / LI Policies etc.

Loan above Rs 2.00 lacs

11.00%

Maximum up to Rs. 25.00 lacs

11%

8

Gold Loan

9

Mortgage Loans

For House Repairs up to Rs.2.00 lacs

14.00%

Other

14.00%

10

Loans Under Lease Rent Discounting (LRD)

11.5% to 12.5%

11

Loans to Builders and Developers

15.5% to 17.5%

 VARIOUS UNIQUE SERVICES AT THANE BHARAT SAHAKARI BANK LTD

1) LOANS UNDER SUKHDAYEE SCHEME (LOANS TO MEET VARIOUS DOMESTIC / PERSONAL NEED)

Details of SUKHDAYEE SCHEME 1.

Maximum Loan Limit

Rs.5,00,000/- (Rupees Five Lacs Only)

2.

Purpose

For meeting personal/ceremonial/medical expenses of self / dependent. For purchase of household articles, consumer durables, repair / renovation of house property, repayment of debt etc.

3.

Period of Loan

Maximum 60 months

4.

Margin

Nil

5.

Collateral Security

50% of loan amount. Can be waived, if undertaking from employer for deduction of EMI is available.

7.

Guarantors

Minimum two guarantors acceptable to bank having minimum net salary / income of Rs.10,000/- p.m.

8.

Share Holding

5% of the loan amount & guarantors will have to become nominal members of our bank

9.

Process fee

1% + Service Tax.

1) SWAPNAPURTI HOME LOANS.

Details of SWAPNAPURTI HOME LOANS Maximum Loan Limit

Rs.70,00,000/-(Rs Seventy Lacs Only) per beneficiary of a dwelling unit

2.

Purpose

For construction / purchase of houses/ flats by individuals for residential use or for repayment of loan obtained for purchase / construction of house property.

3.

Period of Loan

Maximum 240 months, inclusive of moratorium or repayment holiday granted.

4.

Moratorium Period

Maximum 18 months from the date of initial disbursement or completion of construction, whichever is earlier.

5.

Margin

20% of agreement cost. Stamp duty and registration fee not to be reckoned for eligibility.

6.

Security

Mortgage of the residential house / flat purchased with bank finance.

7.

Guarantors

Minimum two guarantors acceptable to bank having net income and net worth commensurate with the quantum of loan / EMI of housing loan.

8.

Share Holding

9.

Process fee

1.

2.5% of the loan amount & guarantors will have to become regular members of bank As per the prevailing schedule of service charges of our bank

1) MANORATH VEHICAL LOANS.

Details of MANORATH VEHICAL LOANS

1.

Maximum Loan Limit

Loan can be sanctioned covering cost of vehicle + registration charges subject to the repayment capacity of the applicant. However, the insurance and cost of other accessories not to be included in the cost of vehicle for arriving at the maximum eligible loan amount. Amount is depending on repayment capacity of applicant.

2.

Purpose

For purchase of new vehicle (2 / 4 wheelers)

3.

Period of Loan

Maximum 60 months

4.

Margin

Nil

5.

Security

Hypothecation of vehicle

6.

Guarantors

Minimum one guarantor acceptable to bank having net income and net worth commensurate with the quantum of loan / EMI of vehicle loan.

7.

Share Holding

Share of Rs. 1,000/- for borrower & guarantor will have to become regular member of our Bank.

8.

Process fee

1% of loan amount + service tax

2) DYAN VARDHINI EDUCATION LOANS.

Financial assistance to support students for pursuing higher professional/ either at graduate or post graduate level in India and abroad.

DETAILS OF DYAN VARDHINI EDUCATION LOANS. Purpose – To meet expenses for pursuing higher studies from Recognized Institute/ University in India/ abroad. Maximum loan amount – Rs. 10.00 lacs for pursuing higher studies in India. Rs. 20.00 lacs for pursuing higher studies in abroad. Period of loan – Maximum 54 months (excluding Moratorium period). Moratorium Period – Course tenure of education + 6 months if required subject to maximum period of 30 months. Rate of Interest – 12%

Security – A. 125% of loan amount if security is in the form of immovable property.

B. 100% of loan amount in case of liquid security by way of FD, NSC, KVP, assignment of LI policy (Surrender Value) C. May be waived for loan up to Rs. 2.00 lacs. D. Desirable to have term insurance policy of student applicant for loan exceeding Rs. 5.00 lacs.

Guarantors – Minimum two guarantors acceptable to bank. Shareholding – 2.5% of loan amount if loan is secured or 5% if loan is unsecured. Guarantors to become ordinary member of bank. Process Fee – 1% of the loan amount.

CHAPTER -3 THE CONCEPTUAL BACKGROUND. The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary co-operative banks located in urban and semi urban areas. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally cantered on communities, localities, work place groups. They essentially lend to small borrowers and businesses. Today, their scope of operations has widened considerably. The origins of the urban co-operative banking movement in India can be traced to the close of nineteenth century. Inspired by the success of the experiments related to the co-operative movement in Britain and the cooperative credit movement in Germany, such societies were set up in India. Co-operative societies are based on the principles of cooperation, mutual help, democratic decision making, and open membership. Co-operatives represented a new and alternative approach to organization as against proprietary firms, partnership firms, and joint stock companies which represent the dominant form of commercial organization. They mainly rely upon deposits from members and non-members and in case of need, they get finance from either the District central co-operative bank to which they are affiliated or from the Apex co-operative bank if they work in big cities where the apex bank has its Head Office. They provide credit to small scale industrialists, salaried employees, and other urban and semi-urban residents

STRUCTURE OF COOPERATIVE CREDIT INSTITUTIONS

Cooperative credit institutions

Urban cooperative bank

Schedule UCBs

Multi states

Rural cooperative credit

Non-schedule UCBs

State cooperative bank

Single states

Multi state

long term

Short term

District central cooperative bank

Primary agricultural credit societies

Single state

Tier 1

Unit UCB

Tier 2

Non unit UCB

SCARDBs

PCARDBs

URBAN COOPERATIVE BANK (UCBs) Urban bank are registered under cooperative societies Acts of the respective state. Prior to 1966, UCBs were exclusively under the purview of the state governments effective 1 march 1966 certain provisions of the banking regulation Acts have been made applicable to these bank. Consequently, the RBI becomes the regulatory and supervisory authority of UCBs for their banking related operations. Managerial aspects of such banks continue to the remain with the state governments under the respective cooperative societies Acts. UCBs with multi-presence are regulated by the central governments and registered under the multistate cooperative societies Act.

PRIORITY SECTOR LENDING UCBs are required to channelized 60per cent of total loans and advances towards priority sector. Furthermore, within the priority lending, lending. To weaker sections should constitute 15 per cent of the advances of UCBs. Fulfilments of priority sector lending targets are taken into consideration by the RBI while granting permission for branch expansion, expansion of areas of operation schedule status etc. Based on revised guidelines on the priority sector issued in august 2007, 52.7 per cent of cash advance were extended to the priority sector by UCBs, small enterprises constituted the largest share (16.9 per cent of the priority sector lending following by housing loans (13.4 per cent ) and retail trade (11.5 per cent). Lending to the weaker section constituted 13.7 per cent of advance. The priority sector lending target for UCBs brought down to 40 per cent of the adjusted bank credit (total loan and advance plus investment made by UCBs in non SLR bond) or credit equivalent of off-balance-sheet exposure (OBE), whichever is higher as on 31 march of the previous year and thus brought at par with target applicable to commercial bank. The revised target came into effect from 1 April 2008. Sector that quality for inclusion as priority sectors now include  Total agriculture credit (both direct and indirect)  Total credit to small enterprise (direct and indirect)  Retail trade  Micro credit  State sponsored organization for SC/ST  Education  Housing

DEVELOPMENT OF URBAN COOPERATIVE BANK Urban cooperative bank are an important part of the financial system in India. Is therefore necessary that the UCBs emerge as a sound and healthy network of jointly Own and democratically control and ethically manage banking institution providing need-based quality banking services, essentially to the middle and lower middle classes and marginalized sections of the society. This document sets out the broad approach and strategies that need to be adopted to actualize this vision. The UCBs system has witnessed phenomenal growth during the last one and a half decades. From 1307 urban cooperative bank in 1991, the number of UCBs has risen to 2105 in the year 2004. Deposits have increased by over 1100 per cent from Rs 8600 crore to over Rs. 100,000 crore, while advances have risen from Rs7800 crore to over Rs 6500 i.e by 733 per cent during the above 15 year period. This growth path have been possible mainly on account of the enabling policy environment in the post 1991 period, which encourage setting-up of new urban cooperative bank. Further the deregulation of interest rates, as available to commercial bank, enable the UCBs to mobilize vast deposits, which together with the liberal licencing policy propelled the growth of UCBs in terms of number as also in size.

PERFORMANCE OF URBAN COOPERATIVE BANKS The urban cooperative banks were brought under the ambit of the Banking Regulations Act of 1949 in 1966. The spatial pattern of the urban cooperative banks is highly skewed. They are largely concentrated in five States namely Maharashtra, Gujarat, Karnataka, Tamilnadu and Andhra Pradesh accounting for about 79 per cent of total urban cooperative banks in the country. Of this, the Maharashtra alone accounts for about 32 per cent of the urban cooperative banks. A regional imbalance is the growth of urban cooperative banks is observed. Of the urban cooperative banks, 35 per cent of urban cooperative banks had a deposit base of less than $ 10 crore and 9.00 per cent had a deposit base between $ 10 crore and $ 25 crore The late involvement of Reserve bank of India in the development of the urban cooperative banks, their poor image among the public, absence of cooperative leadership and lack of appropriate cooperative environment are the important reasons for the uneven growth of urban cooperative banks in the country.

PERFORMANCE OF URBAN COOPERATIVE BANK YEAR

BANK

OWNED DEPOSITS BORROWING WORKING C.D FUNDS CAPITAL RATIO

1951 1971 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

930 946 1306 1401 1399 1400 1431 1501 1653 1502 1587 1784 1618 1854 1941 1926 1902 1884 1776 1863 1652 1662 1645 1824

06 56 1481 1766 2224 2723 3239 3848 4695 5985 7314 9314 10826 13797 10834 12348 12456 12893 12985 12554 11687 11842 11965 12044

20 217 10157 11108 13531 16769 19711 24165 30704 36691 52617 71189 80840 91069 92546 93256 93432 94543 94660 95096 95345 95821 95833 95898

57 186 377 544 565 604 664 756 619 886 1040 1475 2069 NA 1590 1484 1564 1587 1598 1650 1668 1699 1702 1712

27 307 13390 14742 18007 22037 25997 31744 39570 52229 66985 90301 103042 115696 111746 NA 112578 112763 112802 112808 113012 113214 113301 113486

62 67 79 78 74 73 74 74 70 68 65 65 67 67 64 62 61 60 60 65 88 67 70 71

Table shows the trends in number of urban cooperative banks, owned funds, deposits, borrowings, working capital and credit-deposit ratio during the period of 1951 and 2011. In 1951 and 1971, the owned funds of 930 and 946 urban cooperative banks had $ 6 crore and $ 17crore with deposits of $ 20 crore and $ 217 crore; working capital of $ 27 crore and $ 307 crore and overdue of $ 2 crore and $ 15 crore respectively. The owned funds which were $ 1481 crore in 1991 has increased to $10826 crore in 2001 and $ 12044 in 2012. The corresponding figures in deposits are $ 10157 crore, $ 80840 crore and $ 95898 crore; in case of borrowings $ 377 crore, $ 2069 core and $ 1712 crore; in working capital, $ 13390 crore, $ 103042 crore and $ 113486 in crore and credit-deposit ratio of 79, 67 and 56 respectively. The borrowings as proportion of working capital are meagre of 2.81 per cent in 1991, 2.00 per cent in 2001 and 1.51 per cent in 2012. Credit-deposit ratio is widely used as indicator of deployment of credit. It ratio is indicative of the profitability of bank. The creditdeposit ratio of sample urban cooperative banks is around 65 during the period from 19951 to 2012. It is inferred from the analysis of Table 3.1 that: The credit-deposit ratio has declined from a high of 79 in 1991 to a low of 67 in 2001 and 71 in 2012. Unlike other categories of cooperative credit institutions, the urban cooperative banks do not rely much on borrowings from the higher tier structure, but could mobilize savings for their business operations.

Objectives of the Urban Cooperative Bank The UCBs are generally considered as “Small People Bank” because they are organized for Promoting thrift and Co-operation among the lower and middle strata of the society. The objectives of the UCBs are divided in two parts, which are as follows. ( A ) Principal Objectives: ( i ) To promote thrift, self-help and mutual co-operation among the members. ( ii ) To mobilize resources i.e. to borrow funds from members and non–members to utilize for giving loans to their members. (iii) To provide credit to the members at a reasonable rate for productive or trading purpose. (iv) To undertake collection of bills drawn, cheques, draft etc. accepted or endorsed by members and approved constituents; to remit funds and to discount cheques and bills of approved members subject to rules and bye laws on their behalf. (v) To arrange for safe custody of valuables and documents of members and constituents (vi) To provide other banking and subsidiary services and (vii) To give vehicles loans to members of the bank.

(B) Subsidiary Objectives: (i) To give possible help and necessary guidance to traders, artisans etc. who are members of the bank. (ii) To do every kind of trust and agency business and particularly do the work of investment of funds, sale of properties and of recovery or acceptance of money. (iii) To undertake every kind of banking and Sheriff business and also give bank guarantee and letters of credit on behalf of members.

Functions of the UCBs The main functions of urban cooperative banks are to promote thrift by attracting deposits from members and non- members and to advance loans to the members. The objects and Functions of these banks are: 1. Primarily to rise funds for lending money to its members. 2. To attract deposits from members as well as non-members. 3. To encourage thrift, self-help and mutual aid among members. 4. To draw, make, accept, discount, buy, sell, collect and deal in bill of exchange, drafts, certificates, and other securities. 5. To provide safe-deposits vaults.1

Area of Operation of the UCBs The area of operation of UCBs is usually restricted by its byelaws to a municipal area or a town. In some occasion it, exceeds this limit. The Study Group on Credit Co operatives in Non-agricultural sector has recommended that normally, it would be advisable for an urban cooperative bank to restrict its area of operation to the municipality or the taluka or town where it operates. However, in the surrounding of rural and semi urban areas certain persons who would normally be members of the primary agricultural credit society may not be able to get credit from that society and they may be allowed with the permission of the Registrar Cooperative Societies, to become members of the urban cooperative bank in the neighbouring town.

RBI Policies for Cooperative Banks The RBI appointed a high power committee in May 1999 under the chairmanship of Shri. K. MadhavaRao, Ex-Chief Secretary, Government of Andhra Pradesh to review the performance of Urban Cooperative Banks (UCBs) and to suggest necessary measures to strengthen this sector. With reference to the terms given to the committee, the committee identified five broad objectives: 1. To preserve the cooperative character of UCBs 2. To protect the depositors’ interest 3. To reduce financial risk 4. To put in place strong regulatory norms at the entry level to sustain the operational efficiency of UCBs in a competitive environment and evolve measures to strengthen the existing UCB structure particularly in the context of ever increasing number of weak banks. 5. To align urban banking sector with the other segments of banking sector in the context of application or prudential norms in to and removing the irritants of dual control regime 6. RBI has extended the Off-Site Surveillance System (OSS) to all non-scheduled urban cooperative banks (UCBs) having deposit size of Rs.100 Corers and above.

State wise Performance of Urban Cooperative Banks in India during 2010-11 ( Rs. In. Lakhs) S. Name of state in No India

No. of Bank

Total Branches

No. of Total Total ATM’s Deposits Advances Rs. Rs.

Total assets

1

Andhra Pradesh

106

260

1

3133.66

2741.53

4609.09

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 29

Bihar Chhattisgarh Gujarat Jharkhand Jammu &Kashmir Karnataka Kerala Madhya Pradesh Goa Maharashtra-Mumbai Maharashtra-Nagpur New Delhi Assam Manipur Meghalaya Mizoram Tripura Orissa Punjab(/Haryana/Hp) Rajasthan Tamilnadu/Pondicherry Uttar Pradesh Uttara Khand West Bengal Sikkim Total

3 12 243 2 4 268 60 52 6 388 151 15 8 3 3 1 1 12 4 39 129 70 5 46 1

4 23 853 2 19 835 358 90 66 3705 797 78 22 10 6 1 2 46 19 39 319 242 61 105 1

0 0 68 0 0 18 1 0 0 933 27 0 0 0 0 0 0 0 2 2 4 8 3 3 0

64.61 369.28 23255.96 17.15 306.66 14092.18 5528.61 1317.04 1695.97 122911.11 14800.07 1562.62 437.02 186.15 116.55 24.15 18.19 1020.38 1460.13 3712.84 4883.52 3995.95 2037.15 2989.64 12.69

32.75 120.20 3531.28 9.35 161.33 9554.39 4049.65 624.91 1020.88 80261.33 9670.76 855.32 184.70 72.66 47.00 7.61 8.98 576.73 769.22 2162.50 3882.10 1812.22 1342.02 1594.97 9.36

87.72 445.23 28807.75 23.14 369.76 18097.2 6524.59 1618.19 2098.03 154936.01 18287.27 2027.82 497.30 230.88 133.81 32.41 20.94 1266.06 1418.95 4611.81 6383.39 4938.28 2480.76 4090.88 14.41

Table shows the state wise performance of UCBs in India during the period of 2010-11. As mentioned earlier, the Maharashtra, Karnataka, and Gujarat states stand in the first, second and third place for the number of banks, branches, ATM’s. Total deposits, total advances and total assets.

RULAR COOPERATIVE Table shows the state wise performance of UCBs in India during the period of 2010-11. As mentioned earlier, the Maharashtra, Karnataka, and Gujarat states stand in the first, second and third place for the number of banks, branches, ATM’s. Total deposits, total advances and total assets. But, according to a study, the performance of Indian Rural Cooperative Banks has revealed a deteriorating trend. To improve efficiency of the Rural Cooperative Banking System, Indian govt. had set up many committees in the past in order to identify the actual problem of rural cooperative banks. But, the suggestions of these committees had not been taken care of. The recommendations and suggested policies had not been implemented properly in India. RURAL COOPERATIVE BANK LONG TERM STRUCTURE 1. Primary agricultural societies 2. Central cooperative banks 3. State cooperative banks

The rural cooperative structure in India consists of two broad structures i.e. short term structure and long term structure. Focus of this study is on short term structure and it consists of three/two tiers depending upon the state cooperative law. The generalized form of short term structure on all India bases is given in the Exhibit

SHORT TERM RURAL COOPERATIVE CREDIT STRUCTURE IN INDIA STATE COOPERATIVE BANK

DISTRICT CENTRAL COOPERATIVE BANK

LARGE

PRIMARY FARMER AGRICULTURAL SERVICE CREDIT SOCIETIES SOCIETIES

SIZED ADIVASI MULTIPUROPSE SOCETIES

The number of the state cooperative banks and district central cooperative banks (DCCBs) mentioned in exhibit is as at the end of March 2008. The short term cooperative structure is an important component of the rural credit structure in India.

PRIMARY AGRICULTURAL CREDIT SOCIETIES The cooperative structure in India comprised of two parts one for the short term and medium term whiles other for long term credit. The former has a three tier structure i.e., (1) Apex Cooperative Bank at State level, (2) Central cooperative Bank at District level, (3) Primary Agricultural Credit Societies (PACS) at grass root level or village level. The PACS are the central visible face for cooperative movement in India. PACS provide credit to farmers in the form of term loans and recover the amount after harvesting of crop from the cultivator. The main objective of cooperative credit is to increase the credit productivity and save farmers from the exploitive tentacles of moneylenders or non-institutional sources of credit. The PACS are working at grass root level and providing credit facilities to farmers at village level and can be organized with ten or more people. There is a nominal value of each share so that even a poor farmer can get the membership easily. Financial institution, the planners and the administrators working for the agricultural development in the states. Mounting over dues can jeopardize the agricultural credit structure designed to accelerate agricultural development.

PACS plays an important role at grass root level or village level as far as the short and medium term credits are concerned. With agriculture as backbone of our economy, timely and adequate credit supply is of utmost importance. So it is extremely essential to assess the past performance of PACS for formulating various financial policies and reforming the present structure. PACS play an unparalleled role as far as short-term credit is concerned. Even though there are many other alternative, which provide short-term credit to the farmers, the PACS are continued to be the most preferred agency of the farming community. But the PACS are subjected to many problems like mushrooming over dues, inadequate capital base, and lack of trained staff. So far, the studies conducted on performance of PACS’s are very limited and have not thrown light on multi facets of the problem.

Details of Primary Agricultural Credit Societies during 2000-01 to 2014-15 Year 2000-01

Total no of PACS 2466

2001-02

2466

2002-03

2418

2003-04

2423

2004-05

2435

2005-06

2441

2006-07

573

2007-08

618

2008-09

622

2009-10

628

2010-11

646

2011-12

640

2012-13

656

2013-14

657

2014-15

663

Viable 2256 (91.48) 2143 (86.9) 2176 (89.99) 2123 (87.62) 1517 (62.3) 1867 (76.49) 573 (100) 618 (100) 622 (100) 628 (100) 646 (100) 640 (100) 656 (100) 657 (100) 663 (100)

Potentially Viable 156 (6.33)

Dormant

Defunct

Other

0

54 (2.19)

0

323 (13.10) 242 (10.01) 3 (0.12)

0

0

0

0

0

0

0

0

916 (37.62) 462 (18.93) 0

0

297 (12.36) 0

0

0

112 (4.59)

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

CENTRAL COOPERATIVE BANKS (CCBS) Central cooperative bank form the middle tier of cooperative credit institution. CCBs are independent unit in as the state cooperative bank have no control to control or supervise their affair. They are of two kinds, viz., “pure” and “mixed”. Those banks the membership of which confined to cooperative organization only are included in the “pure” type, while those bank membership of which in open to cooperative organization as well as individuals are included in the “mixed” type. The pure type of central bank can be seen Kerala, Bombay, Orissa, etc., while the mixed type can be seen in Andhra Pradesh, Assam, Tamil Nadu, etc., the pure type of bank based on strict cooperative principles. However, the mixed type has an advantage over the pure type in so far as they can draw their funds from the nonagricultural sector too. But they allowing individuals to hold shares, loan facility are necessarily extended to them. While in some of them happen to be middleman, who may utilize the proceeds of the loans to carry on their trading operations, then it would be a hard blow on the very basic principal of cooperation, which strive for the elimination of the middlemen. The CCBs draw there fund from share capital, deposits, loans from the state cooperative banks and where state banks do not exist from the RBI, NABARD, and commercial banks. Deposits constitute the major components of sources of funds, followed by borrowing. The main function of CCBs is to financing the primary credit societies. In addition they carry on commercial banking activate. Like acceptance of deposits, granting of loans and advances on the security of first class gilt-edged securities, fixed deposits receipts, gold, bullion, goods and documents of title to goods, collection of bills, cheques, etc.

State cooperative bank State cooperative bank are the apex of the three-tier cooperative structure dispensing mainly short/medium-term credit. A StCB is the principal society in a state which is registered or deemed to be registered under the government societies Act 1912 or any other law for the time Being in force in India related to cooperative societies and the primary object of which is the financing of the other societies in the state which are registered or deemed to be registered. In addition to such a principal societies in a state or where there is no such principal society in a state, the state government may declare any one or more cooperative societies carrying on business in that state to be a states cooperative bank (or bank). As in the case CCBs, state cooperative bank may be “pure” in which case it will be a federation of CCBs only, or “mixed” in which case it will be federation of both CCBs and individual members. The StCBs receive current and fixed deposits from its constituents banks as well as saving, current and fixed deposits from general public and form local boards, other local authorised, etc. further, they receive loans from commercial banks and seasonal loans from the RBI and NABARD. The state government contribute a curtain portion of their working capital.

NATIONAL BANK OF AGRICULTURE AND RURAL DEVELOPMENT (NABARD) It is the apex banking institution to provide finance for Agriculture and rural development. National Bank for Agriculture and Rural Development (NABARD) was established on July 12, 1982 with the paid up capital of Rs. 100 cr. by 50: 50 contribution of government of India and Reserve bank of India. It is an apex institution in rural credit structure for providing credit for promotion of agriculture, small scale industries, cottage and village industries, handicrafts etc. Functions of NABARD: 1. To serve as an apex financing agency for the institutions providing investment and production credit for promoting various developmental activities in rural areas; 2. To take measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions and training of personnel; 3. To coordinate the rural financing activities of all institutions engaged in developmental work at the field level and liaison with the Government of India, the State Governments, the Reserve Bank and other national level institutions concerned with policy formulation; and 4. To undertake monitoring and evaluation of projects refinanced by it. 5. NABARD gives high priority to projects formed under Integrated Rural Development Programme (IRDP). 6. It arranges refinance for IRDP accounts in order to give highest share for the support for poverty alleviation programs run by Integrated Rural Development Programme. 7. NABARD also gives guidelines for promotion of group activities under its programs and provides 100% refinance support for them. 8. It is setting linkages between Self-help Group (SHG) which are organized by voluntary agencies for poor and needy in rural areas.

Role of NABARD: 1. It is an apex institution which has power to deal with all matters concerning policy, planning as well as operations in giving credit for agriculture and other economic activities in the rural areas. 2. It is a refinancing agency for those institutions that provide investment and production credit for promoting the several developmental programs for rural development. 3. It is improving the absorptive capacity of the credit delivery system in India, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, and training of personnel. 4. It co-ordinates the rural credit financing activities of all sorts of institutions engaged in developmental work at the field level while maintaining liaison with Government of India, and State Governments, and also RBI and other national level institutions that are concerned with policy formulation. 5. It prepares rural credit plans, annually, for all districts in the country.

Some of the milestones in NABARD's activities are: Business Operations: 1. Production Credit: NABARD sanctioned aggregating of 66,418 crore short term loans to Cooperative Banks and Regional Rural Banks (RRBs) during 2012-13, against which, the maximum outstanding was 65,176 crore. 2. Investment Credit: Investment Credit for capital formation in agriculture & allied sectors, non-farm sector activities and services sector to commercial banks, RRBs and co-operative banks reached a level of 17,674.29 crore as on 31 March 2013 registering an increase of 14.6 per cent, over the previous year. 3. Rural Infrastructure Development Fund (RIDF) Through the Rural Infrastructure Development Fund (RIDF) 16,292.26 crore was disbursed during 2012-13. A cumulative amount of 1,62,083 crore has been sanctioned for 5.08 lakh projects as on 31 March 2013 covering irrigation, rural roads and bridges, health and education, soil conservation, drinking water schemes, flood protection, forest management etc.

New Business Initiatives: 1. NABAR Infrastructure development assistance (NIDA) NABARD has set up NIDA, a new line of credit support for funding of rural infrastructure projects. The sanctions under NIDA during the year 2012-13 was 2,818.46 crore and disbursement was 859.70 crore. 2. Direct refinance assistance to CCBs for short term multipurpose credit: Direct refinance assistance to CCBs was conceived and additional line of finance for CCBs in the light of recommendations of the “Task Force on Revival of Short Term Rural Cooperative Credit Structutre, which enables the latter to raise financial resources other than from StCBs. During 2012-13, refinance assistance aggregating 3,385 crore was sanctioned to 42 CCBs and disbursement stood at 2,363.45 crore.

CHAPTER 4 DATA ANALYASIS Agricultural Cooperative Credit Structure Short-term Structure is a three tire structure with PACS in rural areas, Co-operative Central Banks at the district level and the Apex Bank at the state level. The short-term credit structure provides short-term credit for crop production and medium-term credit for small developments.

Short Term Agricultural Cooperative Credit Distributions and Recoveries Table 1 shows the short-term credit distribution and Table 2 presents short-term credit recoveries for the last three years from 2009-2010 to 2011-2012. Graph 1 and Graph 2 show the same. The credit distribution was increased year by year and recovery of credit was poor.

Table 1. Short-term Agricultural Loan Distribution Year 2009-2010 2010-2011 2011-2012

kharif 82141 90784 121739

Rabi 12417 20809 5203

Total 94558 111674 126942 (up to 31.12.2011)

Source: Cooperative Department Report - 2010-2011 140000 120000 100000 80000

kharif Rabi

60000

Total 40000 20000 0 2011-2012

2010-2011

2011-2012

Short-term Agricultural Loan Recovery Year

Demand

Recovery

% of Recovery

2009-2010 2010-2011 2011-2012

148086 170724 188864

114659 133681 68210

77 78 36 (up to 31.12.2011)

12000 10000 8000 Demand

6000

Recovery 4000 2000 0 2009-10

2010-11

2011-12

Long-term Agricultural Cooperative credit distributions and recoveries Table 3 shows the long term credit distribution and Table 4 presents long-term credit recoveries for the last three years from 2009-2010 to 2011-2012. Graph 3 and Graph 4 show the same. The credit distribution was increased and target achieved above 90%, and poor recovery of credit Table 3. Long-term Agricultural Loan Distribution Year 2009-10 2010-11 2011-12

Target 1500 1424 1215

Distribution 1379 1355 126

% of Distribution 92 95 10 (up to 31.12.2011)

Source: Cooperative Department Report - 2010-2011. 1600 1400 1200 1000 Target

800

Distribution

600 400 200

0 2009-10

2010-11

2011-12

Table 4. Long-term Agricultural Loan Recovery Year 2009-10 2010-11 2011-12

Demand 10943 10235 9764

Recovery 5784 4870 722

% of Recovery 53 48 07 (up to 31.12.2011)

12000 10000 8000 6000

Demand

4000

Recovery

2000

Recovery

0 2009-10

Demand 2010-11

2011-12

CHAPTER 5 FINDINGS AND SUGGESTIONS FINDING From the above data it is clear that cooperative banks are serving in the field of agricultural credit and rural development. Maximum numbers of respondents are satisfied with functioning of cooperative bank. The level of service of cooperative banks is very high. Cooperative banks are playing extraordinary role for agriculture credit and rural development. In short we can say that Cooperative Banks are providing rural all round assistance and proved to be an institution where "Growth with Social Justice" exists. Cooperative Banks plays a major role in rural credit delivery of State.

SUGGESTIONS 1. The Cooperative Banks should try to increase their deposits by opening branches in business areas, improve the services to their clients, introduce different types of deposit schemes and offer competitive rates of interest. 2. Cooperative Banks should change their loan policies on the basis of crop loan systems. 3. The Cooperative Banks must maintain adequate liquid resources, margin, properly scrutiny of loans and should try to qualitative improvement to the staff. 4. Cooperative Banks should try to co-ordinate between the Board of Management, Members, Depositors and Employees of bank. 5. Accountability and transparency need to be brought in the implantation of the schemes.

BIBLIOGRAPHY 1. 2. 3. 4. 5.

RBI Bulletin 2010-11. Www. Cooperative bank in india.com. Report of R.B.I, 1948 and 2013 Mumbai www.coop.cg.gov.in Rajivan A. (2008), Microfinance in India, Yojna, January