Financial Assitance Full Project.docx

CHAPTER-1 INTRODUCTION INTRODUCTION ABOUT FINANCIAL ASSISTANCE TO AGRICULTURE: Agricultural finance is one of the most important tools for agricultural development, since the farming system is becoming increasingly capital-intensive. The policy is primarily to provide adequate credit to support the policyoriented agricultural development measures in particular and agricultural production in general. On the one hand, the government develops policy-oriented farm credit schemes on soft terms, (i.e., low interest rate, long term) to provide financial support to farmers and fishermen for policy fevered operations, e.g., mechanization of farm operations, enlargement of farm size, planting of high-valuecrops, employment of energy-saving fishing vessels, engagement in joint production and marketing in specialized production zones, etc.- 65 – MEANING The financial assistance to the agriculture means providing finance to the agriculture in the form of loans for agricultural operations like growing the crops, producing milk, harvesting and irrigation called a financial assistance to agriculture. DEFINITION: According to “NABARD” provides credit for the development of agriculture, small scale industries, cottage industries, handicrafts and other small crafts and allied economic activities and rural areas”.

TYPES OF FINACIAL ASISSTANCE TO AGRICULTURE 1) Short Term Financial Assistance 2) Medium Term Financial Assistance

3) Long Term Financial Assistance

1) SHORT TERM FINANCIAL ASSISTENCE Providing short term short term financial assistance Up to eighteen months and provide assistance to agriculture activities the short term assistance

provides by state co-operative banks regional rural banks and other

financial institution approved by RBI for the following purposes a) Seasonal agricultural operations; b) Marketing of agricultural production; c) Marketing and distribution of such inputs as pesticides, fertilizers; d) Other activities related to rural/agriculture sector; e) Real commercial trade activities; f) Production and marketing of the following activities: handicrafts, small industries, village and cottage industries, artisans, silk industries, etc.

2) MEDIUM TERM FINANCIAL ASSISTENCE: For approved agricultural purpose the medium term credit provided by NABARD to the SBS, LDBS, RRBS, and other approved institutions for a period ranging from 18 months to 7 years. The medium term loans are given for investment schemes relating to agricultural rural and sector.

3) LONG TERM FINANCIAL ASSISTENCE Provide for the minor irrigation, plantation and horticultural, and land development, plant mechanisation animal husbandry, fisheries etc,The NABARD provides long term credit to state land development banks, RRBS, commercial banks and to any approved financial institutions.

PURPOSES FOR LOANS        

Production credit Investment credit Minor irrigation Plantation and horticulture Land development, soil conservation and water management Animal husbandry Development of fisheries sector Research and development activities

OBJECTIVES OF FINANCIAL ASSISTENCE TO AGRICULTURAL a) b) c) d) e) f) g) h) i) j) k)

To give purpose full direction to integrated rural development To act as a centre piece for the entire rural credit system at the national level To provide fund to the agricultural operations Improvement and development of agricultural sector Improving agricultural productivity Increase the national income of a country Increase the job opportunities and increase the agricultural GDP rate Increase the standard of living of the formers Providing financial assistance in different stages for different purposes Introducing the latest technology in agricultural operation.

SOURCES OF FUNDS TO THE AGRICULTURE NABARD, RBI, CO-OPERATIVE BANKS, the co-operative banks are SCBS, DCBS, DCCBS, RRBS, and other government and private institutions provides assistance to agriculture.

RBI DECLARATIONS FUNDS TO THE AGRICULTURAL SECTOR

(in crore)

(in crore) Year

Relating to

Percentage %

agriculture

Total bank credit to agriculture

2010

1,24,269

11.88

10,45,954

2011

1,73,875

12.04

24,43,920

2012

2,30,180

12.49

18,41,878

2013

2,75,343

12.25

22,47,289

2015

3,38,656

12.78

26,48,501

2016

4,16,133

13.47

30,88,569

2017

4,60,333

12.33

37,31,,466

INTRODUCTION TO AGRICULTURE Agriculture

Agriculture provides the principal means of livelihood for over 58.4% of India's population. It contributes approximately one-fifth of total gross domestic product (GDP). Agriculture accounts for about 10 per cent of the total export earnings and provides raw material to a large number of industries. Low and volatile growth rates and the recent escalation of agrarian crisis in several Parts of the Indian countryside, however, are a threat not only to national food security, but also to the economic well-being of the nation as a whole. In this section important links are given regarding the policies and plans made by Government and numerous other things which may be of a great help to the farming community and a lot of other people dependent on agriculture in one way or other way.

INTRODUCTION ABOUT AGRICULTURE The word agriculture indicates plough a field, planting seed, harvesting a crop, milking cows, or feeding livestock. Until recently, this was a fairly accurate picture. But to days’ agriculture is radically different. Agriculture has evolved into agribusiness and has become a vast and complex system that reaches for beyond the farm to include all those who are involved in bringing food and fibber to consumers. Agribusiness include not only those that farm the land but also the people and firms that provide the inputs (for ex. Seed, chemicals, credit etc.), process the output (for ex. Milk, grain, meat etc.), manufacture the food products (for ex. ice cream, bread, breakfast cereals etc.), and transport and sell the food products to consumers (for ex. restaurants, supermarkets).

Agribusiness system has undergone a rapid transformation as new industries have evolved and traditional farming operations have grown larger and more specialized. The transformation did not happen overnight, but came slowly as a response to a variety of forces. Knowing something about how agribusiness came about makes it easier to understand how this system operates today and how it is likely to change in the future. Initially agriculture being the major venture it was easy to become a farmer, but productivity was low. Average farmer produced enough food to feed just four people. As a consequence most farmers were nearly totally self-sufficient. They produced most of the inputs they needed for production, such as seed, draft animals, feed and simple farm equipment. Farm families processed the commodities they grew to make their own food and clothing. They consumed or used just about everything they produced. The small amount of output not consumed on the farm was sold for cash. These items were used to feed and cloth the minor portion of the country’s population that lived in villages and cities. A few agricultural products made their way into the export market and were sold to buyers is other countries. Farmers found it increasingly profitable to concentrate on production and began to purchase inputs they formerly made themselves. This trend enabled others to build business that focused on meeting the need for inputs used in production agriculture such as seed, fencing, and machinery and so on. These farms involved into the industries that make up the “agricultural inputs sector”. Input farms are major part of agribusiness and produce variety of technologically based products that account for approximately 75 per cent of all the inputs used in production agriculture. Agriculture is the most important sector of the Indian economy. It contributes about 25 percent of the total Gross Domestic Product (GDP) and provides employment to about 67 percent of the working population of the country. About 184 million ha of land are reported as agricultural land using about 17 million met of fertilizer and producing 526 million met of agricultural produce comprising food grains, pulses, oilseeds, cotton, jute, sugarcane, etc. The food grain production of the

country has increased fourfold during the last five decades. However, despite being self-sufficient in the production of food grains farmers are unable to obtain remunerative prices for their farm produce. With the sustained efforts of the Government of India [GOI]. There has been continuous increase in quantity and quality of farm produce due to the provision of farm support services especially to small/marginal farmers.

STORAGE-MARKETING Agricultural marketing includes all aspects of market structure and systems, both functional and institutional. Pre/post harvest operations, assembling, grading, storage, transport and distribution facilities and infrastructure for agricultural marketing in the country have to be considerably improved and strengthened in order to enable small farmers to dispose off their produce at incentive prices, reduce the price spread between the primary producer and the ultimate consumer and ensure the availability of consumer products and agricultural inputs to the small farmers at reasonable prices. The present marketing structure for agricultural commodities in the country consists of about 22,000haats (village periodic markets) serving an area of 8-16 km radius, 5,000 secondary markets serving an area of 700 km2, periodic markets towns based hawkers and representative of big traders, who are available at the farmer’s doorstep to buy his produce. The small farmer, however, does not get a fair deal in the existing marketing structure because of poor holding capacity and trading malpractices. The Ministry of Agriculture as a measure to check exploitation of small farmers has taken initiative to intervene in the market through various government and cooperative agencies to procure small farmers produce at a support price declared every year. The agencies like Food Corporation of India (FCI), National Agriculture Cooperative Marketing Federation Ltd. (NAFED) through a network of cooperatives and other agencies procure small farmers produce at a support price.

The State/provincial governments have set up regulated market yards in their respective States. About80 percent of secondary markets have been brought under the purview of Agriculture Marketing Boards. These market yards provide basic facilities and platform to farmers to market their farm produce. The objective of reorienting the agricultural marketing system is to give the small farmers the benefits of a good marketing facility without subjecting them to the harassment of marketing transactions.- 84 -The primary cooperative marketing societies can render this service. The farmers’ service societies perform marketing functions on their own wherever cooperative marketing societies do not exist. The FCI and other commodity corporations also strengthen their relationship.

TRANSPORT Road transport plays an important role in agricultural marketing. The weakest link is rural roads. Rural roads are being improved and a network of rural roads is being developed by Panchayats (rural local bodies),and Rural Engineering Corporation. Besides rural roads, State Public Works Department has undertaken the task for construction and improvement of roads, connecting the rural hinterland to market yards, major towns and metropolitan areas. Efforts are being made by railways to increase transport services, reduce detention time at trans-shipment points and avoid procedural delays at the time of booking and unloading. Detailed studies are being undertaken to assess the requirement of various types of rail-vans needed at production and marketing centres. Sample traffic surveys have been conducted in selected areas to collect data on quantity and type of commodities moved. Special types of trucks have been designed to transport perishable commodities by road.

STORAGE Storage is one of the important requirements for small farmers to prevent distress sale. The private, public and cooperatives sectors are playing an important role in creation of scientific storage capacity for both perishable and non-perishable

commodities. The government agencies like FCI, create storage capacity to procure food grains for public distribution system. The Central Warehousing Corporation (CWC) and State Warehousing Corporation (SWC) create storage at district and block level for farmer to store their farm produce. These warehouses of CWC/SWC are licensed godowns confirming to the standard of scientific storage. The farmers can get credit/loan against the warehousing receipts issued by such licensed warehouses to the extent of 75 percent of the cost of produce. Besides cooperatives provide storage at the rural/farm level for small and marginal farmers. The cooperative pledges the produce of small farmers and provide them pledge loan to the extent of 75 percent of the cost of the produce. Storage Capacity Created by Various Agencies (as on 31 March 2017) (Unit: Million mt) Organization Capacity: 1.Food Corporation of India 19.15 2.Central Warehousing Corporation 7.48 3.State Warehousing Corporation 11.39 4.Cooperatives through National Cooperative Development Corporation (NCDC) 13.74 5.Various agencies through NABARD 13.49 6.State government agencies 8.21 Total 73.46 The GOI in order to augment the storage capacity has approved a National Policy on Handling, Storage and Transportation of Food Grains and have invited private sector participation in creating storage. The Government has also set up a high level expert committee under the chairmanship of Additional Secretary GOI, Department of Agriculture and Cooperation to suggest a time bound action plan to augment storage/cold storage capacity in rural areas for the benefit of small farmers. The Committee has recommended creation of 200,000 mt of storage capacity and

120,000 mt of cold storage capacity in rural areas for which25 percent subsidy shall be made available by GOI.

EDUCATION-RESEARCH-EXTENSION Education for agriculture broadly covers all formal education in the subject from the school to the university level and also informal and non-formal education meant for those who practice the vocation as- 85 -well as for those who support it in various ways. Its aim is to foster a sense of enquiry in every recipient regarding problems of agriculture and a desire to solve them. One of the goals in agriculture is higher, more improved and diversified production. In order to achieve this, a multidisciplinary approach to the application of science and technology in the development of agriculture is necessary. Science cannot be applied to solve problems of food, etc. without bringing the related disciplines together. Just as a single discipline may have a variety of applications in multiplicity of programs, so does a single program involve multiplicity of scientific discipline for its successful culmination? Extension and extension education relate to the process of conveying the technology of scientific agriculture to the farmer in order to enable him to utilize the knowledge for better agriculture and a better economy. Agricultural extension service imparts the necessary skills to the farmers for undertaking improved agricultural operations, to make available to them timely information on improved practices in an easily understandable form suited to their level of literacy and awareness and to create in them a favourable attitude for innovation and change. Besides imparting knowledge and skills, the objective of extension is to change the attitude and outlook of the farming community. There is need for a major education and extension effort to modernize the outlook of the farmer and make him innovative, enterprising and willing to adopt changing situations and new technology.

Education of women in the farm household in subsidiary occupations and nutritional aspects is an important part of the program of farmers’ education. The government has set up agricultural universities, colleges, and engineering institutes to impart higher education in the field of agriculture. The government has set up organizations such as ICAR and “Council of Scientific and Industrial Research” (CSIR) to deal with the task of science and technology more precisely and in a rigorous manner. The extension work is being undertaken by Departments of Agriculture of the State governments through agricultural extension officers in the field. To educate the small farmers’ cooperatives are playing an important role in the field. The government has set up a National Council for Cooperative Training (NCCT). Under the umbrella of NCCT, co-operative training institutes have been set up at the State level and cooperative training colleges have been set up at the field level to extend education and research to small farmers by imparting training to the cooperative leaders. The State Registrar of Cooperative Societies through their Development Officers is extending education and research to small farmers in collaboration with the Departments of Agriculture.

GENESIS AND ROLE OF NCDC The GOI constituted an All India Rural Credit Survey Committee under the aegis of the Reserve Bank of India (RBI). This Committee submitted its report in 1954, designed and laid the foundation of farmers’ cooperative for modernizing agriculture and fostering rural economic activities for the benefit of the rural community constituting small farmers. The Committee recommended that while the RBI – now the NABARD should take upon itself the task of promotion and financing of rural credit cooperatives, the government should set up a statutory corporation for the development of other rural economic activities in the cooperative sector. It was with this background that the National Cooperative Development and Warehousing Board was set up in 1956.

In 1963, the warehousing activity was separated and the National Cooperative Development Corporation was created. The NCDC was established in March 1963, under an Act of Parliament as a successor organization to the National Cooperative Development and Warehousing Board set up in 1956. In terms of the NCDC Act the objectives of the NCDC are planning and promoting programs for production, processing, marketing, storage, export and import of agricultural produce, foodstuffs and certain other notified commodities and collection, processing, marketing storage and export of minor forest produce as cooperative principles. The NCDC has provided financial and technical assistance for various activities for the development of small farmers. The NCDC since inception has provided financial assistance to the tune of Rs.52, 134.5 million for various activities (Table 6). The NCDC not only provides financial assistance but also plays a very important role in providing technical assistance. The organization has experts in various fields such as management, textile, fisheries, agriculture, civil engineering, finance, costing, oilseeds, etc. To supplement the field extension services, the organization has set up a trainees training institute named “TOPIC” (Training of Personnel in Cooperatives)to impart training in the field of project formulation, project

management,

financial

management,

rural

development,

etc.

The

organization’s activities are basically small farmers-oriented through cooperative means. NCDC Financial Assistance(Unit: Rs. millions)

Activity Assistance 1. Marketing and input 6,742.5 2. Storage and cold storage 7,238.5 3. Weaker sections 6,663.8 4. Processing 24,723.7 5. Integrated cooperative development projects 4,369.6

6. Promotional and developmental activities 856.9 7. Rural consumers 1,372.3 8. Credit 176.2.

INDIAN AGRICULTURE Agriculture in India has been the backbone of economic development with two-thirds of the population dependent on agriculture. About 25 percent of the country’s GDP is contributed by this sector which also accounts for about 18 percent share of the value of national exports. It supplies bulk of wage goods required by nonagriculture sector and raw material for a large section of the industry.

Green Revolution During the post-independence era, Indian agriculture has largely been driven by the central concern for food security. Progress under the Green Revolution was spectacular registering a fourfold increase in food grain production from about 50 million mt during 1950-51 to nearly 209 million mt during 1999-2000. With a buffer stock of nearly 50 million mt India has been successful in graduating from an era of food deficits to one of food surpluses. There have been impressive gains in other sectors as well. Oilseed production registered a significant increase from 11 to 25 million mt in the last one decade. With an annual production of over 75 million mt India is now the highest producer of milk in the world. Fish production recorded an Increase from 0.75 million mt to nearly 5 million mt during the last five decades. The country has emerged as one of the largest producers of fruit and vegetables.

Opening Economy Notwithstanding these achievements the problems of food and nutrition security, poverty, and management of the natural resources continue to be of great

concern to the policymakers. Further, in the changed scenario, profitability, competitiveness and efficiency in domestic agricultural production would be issues of high priority together with exploiting export opportunities in world markets. With the removal of trade barriers consequent upon the coming into force of the Agreement on Agriculture (AOA) under the World Trade Organization (WTO), India is confronted with the twin challenges of domestic food security with natural source conservation on the one hand and coping effectively with the international trade regime , on the other. With 142 million ha of cultivated area, variable soil texture, extensive irrigation system, varying gro-climatic conditions, highly skilled manpower, extensive research and development (R&D) and extension, and a buoyant domestic market the country is well poised to meet the situation.

Small Farmers With over a billion populations, there are more than 185 million small and marginal farmers, who comprise over 70 percent of all farming households in the country. These farmers largely undertake subsistence farming owing to a number of constraints, viz., and lack of access to inputs, credit, technology and other resources, lack of organization and above all lack of education. Small farmers, by and large, remain the most vulnerable to various risks involved in agriculture.

Rainfed Areas In the first phase of the Green Revolution (mid-1960s to mid-1970s), the small and marginal farmers were largely bypassed. Modern agriculture technology which was based on high-yielding varieties requiring a package of practices including irrigation, fertilizers, pesticides and credit resulted in the benefits of the Green Revolution remaining confined to the irrigated well-endowed regions of the country as also to the resource-rich farmers. However, once the government sponsored tubewell technology demonstrated the benefits of underground water exploitation, groups

of farmers through purchase of tube-wells were able totake advantage of the highyielding varieties. The vast rain fed areas of the country, comprising of nearly two thirds of the cultivated area, however, remained outside the fold of the Green Revolution. The integrated watershed development approach is being followed there.

Strategies for Small Farmers The present thrust is therefore, on evolving strategies to improve the status of small farmers through diversification and commercialization of their agricultural activities. This will imply implementation of- 14 -agricultural policy reforms, optimizing input efficiency, introducing sustainable agricultural practices, bringing about institutional change and improving institutional capacity, developing human resources and encouraging greater participation of the non-governmental sector in agriculture.

COMMON CHARACTERISTICS OF SMALL FARMERS Small and marginal farmers across the developing countries of Asia and the Pacific region have certain common characteristics. The FAO (1990) have described small farmers as: (i) seasonal producers;(ii) fragmented buyers and suppliers unable to exploit economies of scale; and (iii) dominated by household economics where functions such as consumption, investment, work and social activities are undifferentiated and unspecialized. In contrast, buyers and service providers who operate in the market tend to be large-scale operators (at least in relation to farmers); commercially driven; specialized by commodity, process, productive assets or services offered; able to exploit economies of scale; and aiming to even-out operations through the seasons.

Need for Linkages

Effective linkages need to be developed between farmers and service providers and purchasers of agricultural produce to strengthen support services for small farmers. At present such linkages are either nonexistent or very weak. A number of factors govern the development of these linkages such as the external environment in which farmers and service providers operate as well as the nature of product and processing involved, viz., (i) poor transport which limits trade and for some products, such as perishables, may be impossible; (ii) lack of telecommunication facilities which place spatial limits on business and raise risks and costs; availability of utilities which determine the type of processing that is possible; and (iii) if contracts are unenforceable and property rights unprotected, transactions may be restricted to kin and longstanding relationships of trust, excluding majority of business opportunities and shifting innovative initiative.

STEPS TAKEN FOR DEVELOPING AGRICULTURE AND OBJECTIVES. 1. Providing purposeful direction to the firm. 2. Managing survival and growth. 3. Maintaining farm’s efficiency. 4. Meeting the challenge of increasing competition. 5. Managing for innovation 6. Coping with growing technological sophistication. 7. Maintaining relation with various society segments etc.

KARNATAKA AGRICULTURE. State of Karnataka is the eighth largest in the country having an area of 1.91 lakh sq. Kms. It has coastline of 310 Kms. Coastal zone is a narrow strip of land between the Arabian Sea in the West, the Western Ghats in the East, Kerala in the South and Goa in the North. It had a population of 52.73Millions (2001) with

population density of 275 per sq. km. The state had a rural population of 34.81Million and Urban population of 17.92 Million. More than 71 % of this population is engaged in Agriculture. Scheduled Caste and Scheduled Tribe constitute 16.20% and 6.55% of the total population. Average farm size stands at 1.74 hectares as per Agricultural Census 20002001. (Directorate of Land use statistics, Karnataka Government, 2004).

Importance of Agriculture Agriculture plays an important role in the economy of the State. Besides contributing a substantial part of the state domestic product (about 25.3% in 2001), it is also the largest source of employment. Out of 23.52 million workers in the state (as per 2001 census), agriculture and allied activities provide employment to 113.14 million (55.87%).

INTRODUCTION ABOUT THE INDUSTRY The name bank derives from the Italian word banco “desk or bench”, used during the renaissance by Jewish Florentine bankers, who used to make their transitions above a desk covered by a green table cloth. However, there are traces of banking activity even in ancient time. In fact, the word trace its origins back to the ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed court yards called macula on a long bench called a banco, from which the words banco and bank are

derived. As a money changer, the merchant at the banco did so much invest money as primer rely convert the foreign currency into the only legal tender in Rome-that of the imperial mint. The earliest evidence of money changing activity in depicted on a silver drachma coin from ancient Hellenic colony trapezes on the black sea, modern Trabzon, c.350-325BC, presented in the British museum in London. The coin shows a bankers table (trapeze) laden with coins, pun on the name of the city. A bank is a financial institution that accepts deposits and chances those deposits in to lending activities. Bank primarily provides financial services to customers while enriching investors. Government restrictions on financial activities by banks vary time and location. Banks are important players in financial markets and offer services such as investment funds and loans. In some countries such as Germany, banks have historically owned major stakes in industrial corporations while in other countries such as the United States banks are prohibited from owning non financial companies. In France banc assurance is prevalent, as most banks offer insurance services (and real estate services) to their clients. The level of government regulation of the banking industry varies widely, with countries such as Iceland, having relatively light regulation of the banking sector, and countries such as china having a wide verity of regulations but no systematic process that can be followed typical of a communist system.

Co-operative banking Co-operative banking is retail and commercial banking organized on a cooperative basis.co-operative banking institutions take deposits and lend money in most parts of the world.

Co-operative banking includes retail banking, as carried out by credit unions, mutual savings and loan associations, building societies and co-operatives, as well as commercial banking services provided by mutual organizations to co-operative businesses. Central bank, whose legal name is central co-operative bank, was fou8nded in 1915 as a Massachusetts chartered co-operative bank to provide saving deposits and mortgage loans. Between 1970 and 1982, the bank grew through mergers with 6 other Massachusetts co-operative bank.In October 1986, central bank became a public company by converting to a capital stock co-operative bank.In 1944, central bank acquired metro Bancorp, inc., The parent company of metropolitan bank and trust companyIn 1999, central Bancorp.inc. Became the holding company for central bank.Central bank is a full – service community banking operations that provides a Varity of deposits and lending services-including savings and checking accounts for retail and business customers, mortgage loans for constructing, purchasing and financing residential and commercial properties, and loans for education, home improvements and other purposes. The bank operatives 9 full –services offices in the Massachusetts communities of Somerville, Arlington, Burlington, chestnut hill, Malden, Medford ,Melrose and Woburn(two branches). The bank also operates a branch at Woburn high school, and a standalone 24 hours automated teller machine in Somerville.

Co operative bank: A co-operative bank is a financial entity which belongs to its members, who are at the time the owners and customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally provide their members with a wide of banking and financial services. Co-operative banks differ from stock holder’s banks by their organization, their goals, their values and their governance. In most countries, they are supervised and controlled by banking authorities and have to respect prudential banking regulations, which put them at a level playing field with

stockholders banks. Depending on countries, this control an supervision can be implemented directly by state entities or delegated to a co-operative federation or central body. Even if their organizational rules can vary according to their respective national legislations, co-operative banks share common

Features  Customer- owned entities: in a co-operative bank, the needs of the customers meet the needs of the owners, as co-operative bank member are both. As a consequence, the first am of a co-operative bank is not to maximize profit but to provide the possible products and services to its members. Some cooperative banks only operate with their members but most of them also admit non member clients to benefit from their banking and financial services.  Democratic member’s control: co-operative banks are owned and controlled by their members, who democratically elect the board of directors. Members usually have equal voting rights, according it the co-operative principle of “one person, one vote”.  Profit allocation: in a co-operative bank, a significant part of the yearly profit, benefits or surplus is usually allocated to constitute reserves. A part of this profit can also be distributed to the co-operative member, with legal or statutory limitations in most cases. Profit is usually allocated to members either through a patronage dividend, which is related to the use of the cooperatives products and services by each member. Co-operative banks are deeply rooted inside local areas and communities. They are involved in local development and contribute to the sustainable development of their communities, as their members and management board usually belong to the communities in which they exercise their activities. By increasing banking access in areas or markets where other banks are less present –SME, farmers in rural areas, middle or low income households in urban areas-co-operative banks reduce banking exclusion and foster the economic ability of millions of people. They play an influential role on the economic growth in the

countries in which they work in and increase the efficiency of the international financial system. Their specific form of enterprise, relying on the above mentioned principle of organization, has proven successful both in developed and developing countries.

Main article: Credit Union Credit unions have the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members. Credit union members are usually required to share common bond, such as locality, employer, religion or profession. Credit unions are usually funded entirely by member deposits, and avoid outside borrowing. They are typically (though not exclusively) the smaller from of co-operative banking institution. In some countries they are restricted to providing only unsecured personal loans, where as in others, they can provide business loans to farmers, and mortgages.

Co-operatives banks: Larger institutions are often called co-operative banks. Some of these banks are tightly integrated federations of credit unions, though those members’ credit unions may not subscribe to all 9 of the strict principles op the world council of credit unions (WOCCU). Like credit unions, co-operative banks are owned by their customers and follow the co-operatives principle of one person, one vote. Unlike credit unions, however, co-operative banks are often regulated under both banking and co-operative legislation. They provide services such as saving and loans to non members as well as to members and some participate in the wholesale market for bonds, money and even equities. Many co-operative banks are traded on public stock markets, with the results that they are partly owned by non members. Member control is diluted by these outside stakes, so they may be regarded as semi- co-operative. Co-operative banking system is usually more integrated than credit union system. Local branches of co-

operative banks elect their own boards of directors and manage their own operations, but most strategic decision requires approval from a central office. Credit unions usually retain strategic decision- making at a local level, though they share back – office functions, such as access to the global payments system, by federating. Some co-operative banks are criticized for dilution of co-operative principle. Principle 2-4 of the statement on the co-operative identity can be interpreted to require that members must control both the governance system and capital of their cooperatives. A co-operative bank that raises capital on public stock markets creates a second class of share holders who complete with the members for control. In some circumstances, the members may lose control. This effectively means that the bank ceases to be a co-operative. Accepting deposits from non members may also lead to a dilution of member control.

Building societies: Building societies exist in Britain, Ireland and common wealth countries. They are similar to credit unions in organization, though few enforce a common bond. However, rather than promoting thrift and offering unsecured and business loans, their purpose is to provide home mortgage for members. Borrowers and depositors are society members, setting policy and directors on a one member one vote basis. Building societies often provide other retail banking services, such as current accounts. Credit cards and personal loans. In the United Kingdom, regulations permit up to half of their lending to be funded by debt to non-members, allowing societies to access wholesale bond and money markets to find mortgages. The worlds largest is Britain’s nationwide building society.

Others: Mutual savings bank and mutual saving and loan associations were very common in the 19th and 20th centuries, but declined in member and market share in the late 20th century, becoming globally less significant than co-operative banks, building societies and credit unions. Trustee savings banks are controlled by trustees, rather than their depositors.

India:

The origins of co-operative banks in India can be traced to the close of the 19 th century when inspired by the success of the experiments related to the co-operative movement in Britain and the co-operative credit movement in Germany. Such societies when set up in India co-operative banks are an important constituent of Indian financial system. They are the primary financiers of agriculture activities, some small scale industries and self employed workers. The anyone co-operative bank in India is considered to have been first co-operative bank in Asia.

CHAPTER- 2 REVIEW OF LITERATURE & RESEARCH DESIGN REVIEW OF LITERATURE.

Natarajan etal calculated liquidity, profitability and a long term solvency ratios to evaluate the financial performance of the consumers'

co-operative stores in Andhra Pradesh. The study revealed that the liquidity position was not satisfactory with low current ratios compared to the ideal norm 2:1. The debt finance was in excess of the equity with high debt equity ratio. Similarly other ratios also disclosed poor inventory turnover, huge stock inventory and ineffective utilization of funds. Anand, G. S. evaluated the performance of the Grape Growers' Marketing and Processing Co-operative Society in Bangalore. He applied the solvency, liquidity, turnover, total sales to fixed assets and total sales to owned funds ratios to examine the performance of the society. S.S. Hugar, studied financial analysis of 19 District Central Cooperative Banks in Karnatak for the period from 1978-79 to 1982-83. The author used Ratio Analysis technique to test the working capital position, deposit mobilization, credit disbursed and recoveries, operating efficiency, cost and profitability of the DCCBS. E.V.K. Padmini and P.K. Lekha

studied the fmancial

performance of Shire Narayana Powerloom Industrial Co-operative Society, Nadathara in Kerala for the period from 1980-81 to 1987-88. The performance was evaluated with the help of the selected ratios namely turnover ratios, financial ratios and liquidity ratios. The relevant parameters used for the evaluation were: cost of goods sold, administrative expenses, sales, current assets, current liabilities and fixed assets. The study revealed that the cost of goods ratio was very high around 70to 80 percent of the value of sales, administrative ratio more or less remained the same, current and liquidity ratios were found to be low

from 1983-84 onwards. The study concluded that the financial performance of the society was not up to the level.

2.1 TITLE OF THE STUDY “A study on Financial Assistance towards Agriculture at PLD BANK , Kolar.

2.2:-STATEMENT OF THE PROBLEM The statement of the problem under study is an “analysis the different levels of financial assistance to agriculture provided by Primary co-operative agricultural & rural development bank to the farmers”. This topic is being explained in the light of different tools of financial assistances, in long term, medium term and short term and what purpose they are providing the assistance. 2.3: OBJECTIVES OF THE STUDY 1) To collect the data regarding what type of loans provided by PLD BANK to the agriculture sector. 2) To gain the theoretical and practical exposure from selected domain. 3) To study on role of PLD BANK to the agricultural development. 4) To collect the data regarding purpose of loans landing and any subsidies they are given to farmers. 5) To collect the opinions and expectations from the customers regarding cooperative bank assistances.

2.4: SCOPE OF THE STUDY This study covers the all the aspects regarding financial assistances to agriculture. The study conducted in Kolar PLD BANK and I will concentrate only on the development of particular district .it is a regional bank, hence the study on financial assistance to agriculture, it covers 1. Short term financial assistance, 2. Medium term financial assistance, 3. Long term financial assistance

2.5: SAMPLING Collection of data is made from bank and personnel interview.

2.7: METHODOLOGY The research methodology means a set of techniques and tools for a collect the data. The word methodology has “the sample frame work for with in which the data is collected is called a methodology. The methodology is a blue profit also.

METHODOLOGY ADOPTED IN THIS RESEARCH 

Descriptive research

  

Analytical research Descriptive research The descriptive research means the survey of fact findings through from respondents and collects the facts and formation. The data will be control in the

 

hands of respondents only not in the hands of researcher is called descriptive. Analytical research The data is already in the hands of researcher at the time researcher analysis the past information with the present data is called a analytical research.

2.8: SOURCES OF DATA COLLECTION (TOOLS FOR DATA COLLECTION  Primary sources  Secondary sources The primary sources is the fresh source of data collection and it is fresh information collecting through from  Questionnaires  Interviews Secondary data is a already existing data its already collected some one is called secondary data.

This will be collecting through from,     

Books Library Internet Company profile Magazines and news papers.

2.9: TOOLS FOR DATA ANALYSIS    

Pie charts Trend lines Bar diagrams histographs

2.10: REFERENCE PERIOD The reference period of this study was forty five day’s i.e., one month and fifteen days.

2.11: LIMITATIONS OF THE STUDY The study no doubt displays all most all relevant data, but it suffers from inherent limitations, they are as follows 1] The lack of time period for collecting the data, 2] Lack of information due to work pressure in bank 3] Lack of appropriate data regarding survey due to financial year end. 4] Lack of sufficient statistical data regarding agriculture.

2.12 CHAPTER SCHEME Chapter1: introduction

in this chapter , we look into the general back ground of the study. Introduction of finance and introduction of financial assistance to agriculture is included in this chapter. Chapter 2: research design In this , the methodology followed for the study ,the scope , need and importance, objectives, sources and methods of data collection used, tools and analysis of data used and limitations of the study of this project is included . Chapter 3: Company profile In this Chapter, details about the PLD BANK , its origin , history, mission and vision, various financial services, its growth and its future plans is included. Chapter 4: Data analysis and interpretation It includes, analysing the collected data by using charts and graphs and interpreting the analysed data those are includes, Pie charts His to graphs Bar diagram Trend lines Chapter 5 This chapter includes    

Findings- meaning what has been found through this project. Suggestions-it includes suggestions for the company to improve if any. Conclusions- the overall summary about the project. Bibliography-it includes the references that have been used to complete the



study successfully. annexure

CHAPTER: 3 COMPANY PROFILE

EVOLUTION OF CO-OPERATIVE BANK: History of almost 100 year. These-cooperative banks are an important constituent of the co-operative banks have Indian financial system, judging by the role assigned to them, the expectations they are supposed to fulfill their number, and the

number of offices they operate. The co-operative movement originated in the west, but the importance that such banks have assumed in India is rarely paralleled anywhere else in the world. According to NAFCUB the total deposits and lending’s of co-operative banks is much more than Old Private Sector banks & also the New Private Sector Banks. This exponential growth of co-operative banks is attributed mainly to their ability to catch the nerve of the local clientele. Though registered under the Co-operative Societies Act of the co-operative banks are also regulated by the Reserve Bank of India. They are governed by the Banking Regulation Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. MEANING: The co-operative banks are small-sized units organized in the co-operative sector, which operate both in urban & non-urban centers. 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. DEFINITION: According to business dicitionery “A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.”

VALUES: Co-operative societies are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others. OVERVIEW:

The credit requirements of their customers they started catering to various sorts of customers viz. Self-employed Co-operative movement is quite well established in India. The first legislation on co-operation was passed in 1904. In 1914 the McAllen committee envisaged a three-tier structure for co-operative banking viz. Primarily Agricultural Cultural Credit Societies (PACs) at the grass root level or Apex Level. The first urban co-operative bank in India was formed nearly 100 years back in Baroda. Co-operative Institutions are engaged in all kinds of activities namely production, processing, marketing, distribution, servicing, and banking in India and have and powerful superstructure. Co-operative Banks are important cogs in this structure. In the formative stage Co-operative Banks were Urban Co-operative Societies run on community basis and their lending activities were restricted to meeting the requirements of their members. With gradual growth & also given Philip with the economic boom, Urban Banking sector received tremendous boost & started diversifying its credit portfolio. Besides giving traditional lending activity meeting, small businessmen / industries, house finance, consumer finance, personal finance etc. CATEGORIES: There are two main categories of the co-operative banks.

(a) Short term lending oriented Co-operative Banks - within this category there are sub categories of banks state-vise co-operative banks, District co-operative banks and Primary Agricultural Societies.

(b) Long-term lending oriented co-operative Banks - within the second category there are land development banks at three state levels, district level and village. The cooperative banking structure in India is divided into following main categories: TYPES OF CO-OPERATIVE BANKS: o PRIMARY CO-OPERATIVE CREDIT SOCIETY o CENTERAL CO OPERATIVE BANKS

o STATE CO-OPERATIVE BANKS

1. 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 of members and loans from central co-operative banks. The borrowing powers of the members as well as the society are fixed. The loans are given to members for the purchase of cattle, fodder, fertilizers, pesticides, Implements, etc. 2. 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 consist of share capital, deposits, loans and overdrafts from state co-operative 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. 3. 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 co-operative banks and primary societies and not directly to farmers. FEATURES: 1. Principle of co-operation: Co-operative Banks are organized and managed on the principle of cooperation, self-help, and mutual help. They function with the rule of “one number, one vote”. Function on “no profit, no loss” basis. Co-operative banks, as a principle, do not pursue the goal of profit maximization. 2. Banking Functions:

Co-operative bank performs all the main banking functions of deposit mobilization, supply of credit and provisions of remittance facilities. 3. Agricultural & Rural Focus: Co-operative bank do banking 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. 4. Government Regulations: Co-operative banks are perhaps the first government sponsored, governmentsupported, and government subsidized financial agency in India. They get financial and other help from the Reserve Bank of India NABARD, central governments. They constitute the “most favored” banking sector with risk of nationalization. 5. RBI Guidelines: Some co-operative banks are scheduled banks, while others are non-scheduled banks. For instance, SCBs and some UCBs are scheduled banks but other cooperative banks are non-scheduled banks. At present, 28 SCBs and 11 UCBs Demand and Time Liabilities over Rs 50Crore each included in the Second of the Reserve Bank of India Act. Co-operative Banks are subject to CRR and liquidity requirements as other scheduled and non-scheduled banks are. However, their requirements are less than commercial banks. Since 1966 the Reserve Bank of India has directly regulated the lending & deposit rate of commercial banks. RBI POLICIES: The Reserve Bank of India appointed a High Power Committee in May 1999 under the Chairman of Shri K. MadhavaRao, Ex-Chief Secretary, Government of Andhra Pradesh to review the performance of Urban Co-operative Banks (UCBs) and to suggest necessary measures to strengthen this sector. With reference to the terms given to the Committee identified five broad objectives,  To preserve the co-operative character of UCB’s.

 To protect the depositor’s interest.  To reduce the systematic risks to the Financial Systems.  To put in place strong regulatory norms at the entry level so as to sustain the Operational Efficiency of UCB’s in a competitive environment and evolve measures to strengthen the existing UCB structure particularly in the context of ever increasing number of weak banks. CASH RESERVE: Every Co-operative bank governed by the banking Regulation Act in India must maintain a way of cash reserve with itself or in current account with the Reserve Bank of India, or the State Co-operative Bank of the state concerned or with any other bank notified by the central government in this behalf or in the case of primary cooperative bank with the central co-operative bank of the district concerned or partly in cash itself and partly in the above mentioned account or accounts a sum equivalent to at least 11%(originally 3%) of the total of its time and demand liabilities in India. HISTORY OF THE PLD BANK IN INDIA: For the co-operative bank in India, co-operatives are organized groups of people and jointly managed and democratically controlled enterprises. They exist to serve their members and depositors and produce better benefits and services for them. Professionalism in co-operative banks reflects the co- existence of high level of silks and standards in performing duties net trusted to an individual cooperative bank needs current and future development in information technology. It is INDEED necessary for co-operative banks to devote adequate attention for maximizing their returns on every unit of resources through effective services, cooperative banks have completed 100 years of existence in India, they play a very important role in the financial system. The co-operative banks in India form an integral part of our money market. INCEPTION:

The bank was established on 27/1/1935. Basically it was started its service cooperative society for few villages only and later on it was converted as V.S.S.N which included 8-10 villages then it got expanded as sericulture cum farmer co-operative society by which it started lending to both Seri culturists and farmers. In later days according to Karnataka co-operative society act 1959, it started as primary cooperative and agricultural and rural development bank ltd., in each districts of Karnataka. Finally all this funds will be reaching to the farmers with the help of primary agriculture co-operative society though P.L.D BANK. BRANCHES: Primary co-operative and agricultural and rural development bank ltd., has 12 branches, they are;            

Bangarpet Bagepalli Chikkaballapur Chintamani Gowribidanur Gudibande K.G.F Kolar Mulbagal Malur Srinivasapur Sidlaghatta

TYPE OF INDUSTRY: PLD bank is a service oriented institution which mainly focuses on extending economic strength to farmers, who are considered as back bone of the national. NATURE OF INDUSTERY: Nature of P.L.D bank is secondary institution as it will depend mostly on the man power in order to carry out different activities in the banking process.

MISSION STATEMENT: As it is a bank it is known to all that the main mission of it will be obviously accepting the deposits and lending to its customers, as and when the depositors demand for their money giving back to them. VISION: The current vision of the bank is to increase the deposits, issue the crop loans, Providing cash credit loans, increasing the present share investment, provide

medium term loans, non-agricultural loans and the most important may be collecting back the loan amounts given to the customers. GOAL AND OBJECTIVE: THE

PRIMERY

CO-OPERATIVE

AGRICULTURAL

AND

RURAL

DEVELOPMENT BANK HAS NUMBER OF OBJECTIVES , SOME OF THEM ARE:    

Undertaking common banking activity. Lending money and there by extending economic support to farmers. Giving loans to the depositors by keeping their deposits as security. Bank will provide safe deposit vault and lockers to both its members and



others for rent. Establishing branches of the bank, extension counters and other offices and undertaking all banking activities with the permission of regulators of the



bank. Encouraging and taking steps to provide loans to the self-help group which are



the limits of bank. Creating funds in order to facilitate or help their staff members and their

 

dependents. To undertake and execute trust. Undertaking international exchange business with the permission of Indian



reserve bank. Training facilities to its employees, member co-operative providing society about banking and managing activities.



To buy fixed assets for the own use of the bank with the permission of the department whenever needed.

SPECIAL PROVISIONS TAKEN BY THE CO-OPERATIVE BANK FOR IMPROVING THE AGRICULTURE AND OTHER SECTOR. 1. An temporary employees working in the organization more than 10 years that time government will take considering and giving appointment orders and holding permanent basis on the basis of education and experience. 2. Giving special assistant to non-agriculture operations without interest and the borrower should pay the loan principle amount lump sum in at a time. 3. The security and future reference purpose conversion of books of accounts in to computerization. 4. An employee contributing his service more than 10years in a particular bank at the time he has to get all the society benefits. 5. Increasing the special scheme relating to increasing the employee salaries for protecting their interests. 6. Granting funds for providing pension to the retired employees as soon as possible. 7. Increasing the bank capital reserve ratio more than compare to last year for the purpose of avoiding bankruptcy. 8. Special importance given to the tribal area peoples and below poverty line groups for strengthening their lives. 9. On borrower repaying their loan before the due date at the time he has to get other types of loans from bank with confidence 10. Special provisions for trade and commerce development.

WORK FORCE STRENGTH: All the activities of Primary co-operative and agricultural and rural development bank ltd., are carried out by totally 13 members, who include 1 manager,1 first divisional assistants, 1 second divisional assistants, 1drivers and 1 attenders, 1 typist, 1 system operator to execute various activities. Man power is considered to be important power in the bank because each and every activity in the bank has to be carried out by men itself and without their efforts none of the operations can be done WORK FORCE CHART: MANAGER  FIRST DIVISIONAL ASSISTANT  SECOND DIVISIONAL ASSISTANT  SUB STAFF SERVICE PROFIT: 1. Agricultural loans: Under this, bank will provide loans for agricultural purposes, such as long term, medium terms and short term loans under different schemes. All these loans are given to the farmers only after making a study on various like the area of land that the farmer has, the ability of the farmer to repay the loan etc. 2. Non - agricultural loans These loans include different forms of schemes, they are:

A. Loans on gold ornaments: These loans are provided through all branches. This is a package of program that they have undertaken to provide loans to needy people at comparatively at very low percentage. In this constantly improving society every man desires to build their own house. As they are not able to fulfill this dream they are opting for loans at a low rate of interest which s provided by this bank. B. Loans for self-helping groups: In the year 2017-17 bank is providing loans to these groups to establish 100 groups newly and among already existing 60 groups are considered to be worth to give loans. The bank is rendering its services by registering member farmers of the society under this scheme in order to make them obtain the complete service provided by the government of Karnataka. Through the bank was initially concentrating on farmers it is now broadened its services by considering sericulture, dairy farmers, merchants, small scale industries and women to provide economic strength to them

SHORT TERM LOANS FOR BELOW MENTIONED IMAGES PURPOSE. SEEDS:

WHEAT SEEDS:

PADDY CROP:

CROPCUTTING MACHINE:

MALBURRY:

TOMATO:

MEDIUM TERM FOR BELOW SHOWN IMAGE PURPOSE COWS

GRAPES:

SOURCES OF FUNDS 

Shares, Entrance fees, Share price.



Deposits.



PCARDB bank is obtaining funds from government of Karnataka, government of India according to the low of India.



Gifts, Provident and Donations.



Interest on deposits.



Commission

ORGANIZATIONAL STRUCTURE Special officer PLD bank  Managing Director  General Manager  Manager  Senior Assistant  Junior Assistant

COMPETITORS:  Pragathi Gramina Bank  State Bank of India.  DCC Bank.  State Bank of Mysore

KEY PERSONS

CEO  BOD  MD  BRANCH MANAGER

Chapter-4 DATA ANALYSIS AND INTERPRETATION MEANING OF ANALYSIS: It is a process of establishing the meaning full relationship between the items of

two

financial statements with the objectives of identified the financial and operational strength and weakness. This process includes both analysis and interpretation. The term “Analysis” means methodically classifying data given in the statements into a simplified form. The interpretation involves the explanation of the facts in a simplified manner. It involves the comparison of similar figures at different points of time and different figures at same point of time. MEANING OF INTERPRETATION: It refers to the comparison of various components and definite conclusion may be drawn about the earning capacity efficiency profitability liquidity solvency trend etc. Comparison is very much essential for interpretation. Analysis and interpretation of a financial statement refers to such a treatment of the data found in the financial statement as to provide a full diagnosis of the profitability and the financial soundness of the business. It brings out the mystery behind the figures in financial statements.

TABLE-4.1 4.1 PLD BANK SHARE CAPITAL [Rs in lakhs] SL. NO 1 2

PARTICULARS State govt contribution Co-operative unions TOTAL

31-03-2013 1 766 767

135.28 680.90 816.18

31-03-2014

31-03-2015

1 766 767

1 870 871

135.28 718.00 853.28

135.28 912.25 1047.5 3

From the above table we can observe the state government & co-operative Unions contributions to the PLD BANK share capital as follows. Analysis 2013-2014= 816.18 [in lakh rs] 2014-2015= 853.28 [in lakh rs] 2015-2017= 1047.53 [in lakh rs]

4.1GRAPH CHANGES OF SHARE CAPITAL IN PLD BANK

share capital 1200

1047.53

1000

816.18

853.28

800

share capital

600 400 200 0 31.03.2010

31.03.2011

31.03.2012

Interpretation From the above graph we can observe the changes in share capital amount according to annual basis in the year 2013 the PLD BANK share capital 816.18 [lakh rs], in the year 2014 increases the share capital from last year 853.28, in the 2015 its share capital had radical changes from last two years 1047.53 lakh ,rs

TABLE 4.2 COMPARATIVE CONTRIBUTION OF STATE GOVERNEMNT & COOPERATIVE UNIONS (RS in lakhs) SL.NO 1.

PARTICULARS STATE

31.03.2013 1 135.28

31.03.2014 1 135.28

31.03.2015 1 135.28

TOTAL 405.84

2.

GOVERNMENT CO-OPERATIVE

SHARE 766

SHARE 766

SHARE 870

2311.15

UNIONS

SHARE

680.90

718.00

SHARE

912.25

SHARE

ANALYSIS The above table shows the state government & co-operative Unions contribution to the PLD BANK in 3 years & collecting the statistical data on annual basis. State government contribution (3 years capital) = 405.84 Co-operative Unions (3years capital) = 2311.15

4.2 GRAPH STATE GOVERNEMENT & CO-OPERATIVE UNIONS SHARE CAPITAL COMPARISION

SHARE CAPITAL

STATE GOVERNEMNT CO-OPERATIVE UNIONS

INTERPRETATION The co-operative bank share capital contributors are state government & co-operative unions, above the diagram represents the difference between the share capital contributions. In the year 2013, 2014, 2015 the state government contributes 405.84 lakh rupees & co-operative union contributes 2311.15 lakh rupees. The co-operative unions’ contribution is higher than the state government contribution. differences can be predicted on the basis of 3 financial years’ statistical data.

The

TABLE 4.3 PLD BANK AGRICULTURE LOANS DISTRIBUITONS (In lakh rupees) SL.N

PARTICULARS

2013-14

2014-15

2015-16

O 1. 2. 3. 4.

SHORTERM LOAN MEDIUM TERM LOAN OTHER LOANS TOTAL

51.97 64.35 142.73

623.41 432.47 1055.88

2697.71 6.35 1436.47 4140.53

ANALYSIS The above table represents the agriculture loan distribution by co-operative bank to their customers it includes short-term, medium- term & no long- term loans. The short-term loans providing for the purpose of purchasing the seeds, pesticides & some other minor instruments of agriculture operations. statistical data.

This table contains 3 years

GRAPH 4.3 SHORT-TERM & MEDIUM-TERM LOAN AMOUNTS COMPARISION 3000 2697.71 2500 2000 2013-14 2014-15 2015-16 Linear (2015-16)

1500 1000 500 6.35

0 SHORT-TERM LOAN

MEDIUM-TERM LOAN

INTERPRETATION The above represents diagram shows the medium term loans contribution by PLD BANK to the farmers. In the year 2013-14 dcc provides 51.97 [lakh rs], the 2014-15 increases the agricultural loans contribution from 51.97 to 623.41 [lakh rs]. In the year 2015-2017 drastically changes from the last years, in this year contribution 2697.71[lakh rs].

4.4 Tables NON REDUMPTION OF LOANS FROM THE CUSTOMERS S.N

PARTICULARS

2013

2014

2015

1

SHORT- TERM LOANS

7031.32

4771.58

5288.29

2

MEDIUM-TERM LOANS

1354.74

774.25

604.98

O

ANALYSIS The irrecoverable loans of customers to the PLD BANK in three years data. The statistical data represents the redemption of loan from customers. The above table shows three years statical data.

4.4 diagram Irrecoverable loans from customers

604.98 774.25 1354.74 short term medium term

7031.32 4771.58 5288.29

INTERPRETATION The customers are taken from the PLD BANK and irrecoverable of their loans taken. The short term loan [KCC] are drastically decreases from the one year to another the loans are little bit recovered by borrowers to the bank in the year 2014 the loans are due from the customers 7031.32[Rs in lakhs], in the year 2015 its decreases to 5288.29[Rs in lakhs]. The term loan due from the customers also spontaneously decreased from 2013 to 2015 its amounts Rs 604.98

4.5 TABLES AGRICULTURAL LOANS COLLECTION FROM THE FARMERS IN THE YEAR 2013 [RS IN LAKHS] S .NO 1 2 3

YEARS 30-6-2013 30-6-2013 30-6-2013

PARTICULARS Short-term loan Medium-term loan Other loan TOTAL

AMOUNT 739.89 269.95 67.86 1077.70

ANALYSIS Above the represented table shows the short-term, medium-term and other nonagriculture loans collected from the borrowers. In the year 2013 the short-term and medium-term loans are collected the amounted Rs.739.89 (short-term), Rs. 260.95 (medium-term) and other loans amounted Rs. 67.86.

4.5 GRAPH

THE COLLECTION OF AGRICULTURE LOANS FROM CUSTOMERS IN THE YEAR 2013

Amount 800

739.89

700 600 500

Amount

400 269.95

300 200

67.86

100 0 Short-term

medium-term

Other loans

INTERPRETATION The above mentioned statistical data represents the collection of short-term loan, medium-term loan and other loans. In the year 2013 the short-term loans are collected large in size compare to the medium-term agriculture loan, and medium-term agriculture loan drastically changes from the other loans totally the short-term loans amounted rs 739.89 collected from the customers.

TABLE 4.6

THE COLLECTION OF AGRICULTURE LOANS IN THE YEAR 2014 [RSin lakhs] S. no 1 2 3

Years 30-6-2014 30-6-2014 30-6-2014

particulars Short-term loans Medium- term loans Other loans total

Amount 3675.89 707.80 200.07 4583.76

ANALYSIS The table shows the 2014 year loans amount collection from the customers, the loan related to short term and medium term loan. The total loan amounted collection is to Rs 4583.76

GRAPH 4.6

THE AGRICULTURAL LOAN COLLECTED FROM THE CUSTOMERS IN THE YEAR 2014

amount 4000

3675.89

3500 3000 2500

amount

2000 1500 1000

707.8

500

200.07

0 short-term

medium-term

other-loans

INTERPRETATION The above diagram represents the agricultural loan collections from the customers in the year 2014. The short term loans are collected in large size compare to the other loans, the short term loans [agricultural] amounted to Rs 3675.89, the medium term loans amounted to Rs707.80.This year loans collections are large in size compare to the 2014.

4.7 TABLES

AGRICULTURAL LOAN COLLECTIONS IN THE YEAR 2011 S.no 1 2 3

year 2015 2015 2015

particular Short-term loans Medium-term loans Other- loans

Amount 1508.66 124.74 592.13 2225.53

ANALYSIS The above table represents the statistical information relating to the agricultural loans. This data shows the medium-term and short-term loans, the total agricultural loans collections in this year amounted to Rs 2225.53. This year statistical data totally difference from last two years information.

GRAPH 4.7

STATISTICAL DATA RELATING TO LOANS COLLECTION IN THE YEAR 2015

amount 1600

1508.66

1400 1200 1000

amount Linear (amount)

800 592.13

600 400 200

124.74

0 short-term

medium-term

other- loans

INTERPRETATION The short-term loans relating to small agricultural operations, for the purpose of purchasing seeds, and pesticides. Relating to this bank was lend the loans, and customers are repaid the loans amounted to Rs 1508.66. The medium-term loans for purchasing cows and some other purpose. The total medium term loan amount collected to rs 124.74[lakhs] In the 2015.

TABLE-4.8

COMPARISON BETWEEN THREE YEARS AGRICULTURAL LOANS COLLECTION.[Rs in lakhs] s.no 1 2 3

years 2013 2014 2015

particulars Agri loans collection Agri loans collection Agri loans collection

Amount 1009.84 4383.69 1633.4

ANALYSIS The above table represents the 3 years loans collection amount, The amounts are continuously increase from one year to another related to the lending and collection the data related to the 2013,2014,2015 and its amounted to Rs 1009.84,4383.69and 1633.4 .

GRAPH 4.8 AGRI CULTURAL LOANS COLLECTION 5000 4500 4000 3500 3000 AMOUNT PARTICULARS

2500 2000 1500 1000 500 0 2013

2014

2015

INTERPRETATIONS The above represented diagram represents three years loans amount collection from the customers. Comparison of three years loans repayment from the farmers, in the year 2014 large amount of repayment from the barrowers and the optimum collection, compare to 2013 and 2015.

TABLE 4.9 INTREST RATES OF AGRICUTARAL LOANS.[2014-2015] S-NO 1 2

YEAR 2014-2015 2014-2015

LOANS

RATE

SHORT TERM MEDIUM TERM

INTEREST 1% 4%

OF

ANALYSIS The above table represents the interest rates of the short-term and medium-term loans in the year 2014-15 The short -term loans interest rates 1% and medium term loans interest rates 4%.

GRAPH 4.9 2014-2015 AGRICULTURAL LOANS INTEREST RATE

INTEREST 20.00%

SHORT TERM MEDIUM TERM

80.00%

INTERPRETATION The above represented pie diagram represents the short-term [agri] loans & mediumterm [agri] loans interest rates % in the year 2014-2015.The short-term loan duration period for repayment is 1 year &interest rate is 1%. The medium-term loan duration period for repayment is 1-4 years interest rate is 4%.

TABLE 4.10

THE AGRICULTURAL DEVELOPMENT ACTION PLAN IN THE YEAR 2010-2011&2011-2012

RELATED

TO

AGRICULTURAL

LOAN

DEVELOPMENT[RS IN LAKHS] s-no 1 2

year 2011 2012

particular Crop loan[kcc] Crop loan[kcc]

Amount 2500.00 4500.00

ANALYSIS The above table represents the 2014 and 2015 agricultural loans developmental action plans, for the purpose of strengthening the farmers and promotes the agricultural operations The plans are executed on the particular estimated years.

GRAPH 4.10 THE CROP PLAN DEVELOPMENTAL POLICY IN THE 2014AND 2015

5000 4500

4500 4000 3500 3000 2500

2500

loan type amounts Exponential (amounts)

2000 1500 1000 500 0 2014

2015

INTERPRETATION The above represented diagram shows the two years crop loans developmental policies mainly this crop loan related to the shot term agricultural purposes. In the year 2014 the PLD BANK provides 2500[lakh Rs] to the farmers, And in the year 2015 it provides 4500[lakh Rs] comparing these two years contribution spontaneously changes from the last year 2014.

TABLE 4.11 2014& 2015 MEDIUM TERM LOAN POLICY OF THE PLD BANK [RS IN LAKHS]

s-no 1 2

year 2014 2015

Loan type Medium term Medium term

Amount 300.00 200.00

ANALYSIS In the year 2014& 2015 PLD BANK provides short term loan to the farmers for cow purchases and major agricultural operations. 2014- 300.00[lakhs Rs] 2015-200.00[lakhs Rs]

GRAPH 4.11 COMPARISON BETWEEN 2014&2015 MEDIUM TERM LOANS POLICY’S OF AGRICULTURAL.[RS IN LAKHS].

350 300

300 250

200

200

loans amount Linear (amount)

150 100 50 0 2014

2015

INTERPRETATION The above represented diagram explains the two years medium term loans for cow purchases. In the year 2014 bank provides 300.00[lakh Rs], but in the year 2015 bank provides 200.00[lakh Rs] only for cows purchases for the purpose of lack of repayment from the customers.

4.12 TABLE

COMPARISION

BETWEEN

2014

&

2015 TOTAL AGRICULTURAL

ESTIMATION FUND FOR PROVIDING LOANS.[Rs in lakhs]. S-NO 1 2

YEAR 2014 2015

PARTRICULARS Agricultural loans Agricultural loans

AMOUNTS 2800 4700

ANALYSIS The 2014 & 2015 agricultural loans proposal describes the differentiates loans funds in these two years. In the year 2014 dcc provides total agricultural loan to the farmers, the amounted to Rs 2800[lakh Rs] and in the year 2015 it’s amounted to Rs 4700[lakhs].

GRAPH 4.12 COMPARISON BETWEEN 2014 &2015 PLD BANK CONTRIBUTIONS TO THE AGRICULTURE.[RS IN LAKHS].

2800 2011 2012 4700

INTERPRETATION This diagram represents the agricultural loans contribution of PLD BANK to their customer farmers. PLD BANK gives more importance to the agriculture in the year 2015 Compare to the 2014 year agricultural loan. In the year 2014- PLD BANK provides 2800[lakhs Rs] and in the year 2015 it provides agricultural loan4700 [lakhs Rs].

TABLE-4.13 THE TOTAL REVENUE DERIVED FROM AGRICULTURAL LOANS INTEREST TO THE PLD BANK .

IN THE YEAR 2013 & 2014 INFORMATION [INRS] s-no 1 2

years 2013 2014

particular revenue revenue

Amount 139299391.15 10575712.15

ANALYSIS The above table represents the PLD BANK revenue, and its revenue derived from the agricultural loan interest. In the year 2013- DCC derives 139299391.15Rs And in the year 2014 DCC derives 10575712.15 Rs income from the agricultural loans interest.

GRAPH 4.13 THE COMPARITIVE REVENUE OF PLD BANK FROM AGRICULTURAL LOANS INTEREST [2013&2014].

105757172.15 2013 2014 139299391.15

[Amounted in Rs] INTERPRETATION Above the represented diagram shows the 2013 and 2014 agricultural revenue of the PLD BANK . In the year 2013 PLD BANK earns39299391.15 (rs) revenue but in the year 2014 PLD BANK earns the revenue from agricultural loans amounted to Rs 105757172.15.

Chapter 5 Summary of findings, suggestions and conclusion 5.1 FINDINGS

1. DISTRICT CENTRAL CO-OPERATIVE BANK (DCC) is one and only the bank, to meet the rural peoples, if formers demand in the angle of loan, interest and benefits. 2. Mainly PLD BANK provides short-term and medium-term assistance to the agriculture. 3. Major portion of loans are taken by big land lards and the small and poor peoples are not able to get the loans. 4. DISTRICT CENTRAL CO-OPERATIVE BANK (DCC) act like a non profit organisation, it charges a cheaper rate of interest on their landings. 5. Irregularity of medium-term loan redemption from the customer compare to short-term loan. 6. The financial assistance to agriculture strengthens the rural people’s lives. 7. Short-term loan duration 1 year and medium- term duration is up to 7 years maturity but at the time of lending loan they are not meet the formers demand in required time. 8. DISTRICT CENTRAL CO-OPERATIVE BANK (DCC) mainly provides (K C C) short-term loan to the formers and average of medium-term loan for the sake of maintain bank solvency position. 9. In the year 2013 extraordinary loans collection from the customers. 10. In the year 2014-2015 they are adopted agriculture developmental action plans. 11. There is no long-term financial assistance to agriculture. 12. In the year 2013 and 2014 DISTRICT CENTRAL CO-OPERATIVE (DCC) BANK earns income from the agriculture loan is very less compare to the 2012 and 2013. 13. The agricultural loan borrower repays their loan before the due date at the time he will get some other loans based on his past loan repayment. 14. Lack of agricultural loans awareness in the minds of rural peoples. 15. Lack of sufficient media for optimum reaching of agriculture loans to the formers and backward peoples.

5.2 SUGGESTIONS 1. The DISTRICT CENTRAL CO-OPERATIVE (DCC) BANK should take corrective action for loans disposal in a appropriate manner. 2. They should give more importance for small formers then only its useful and balanced regional development of the country.(they should avoid political influence from the formers, the political influences creates discrimination). 3. The DISTRICT CENTRAL CO-OPERATIVE (DCC) BANK should frame the schedule for loans lending to the formers in required time.

4. The formers are required more and more medium-term and long-term loans for purchasing the tractors and new technological instruments and horticulture purpose for the sake of these requirements they should provide long term loans. 5. If bank adopted the long-term loan schemes they necessary to set the instalments schemes for loans collection this is most required one. 6. Present agriculture loan budgeting is not sufficient for agricultural requirements for this reason they should increase the budgeting funds. 7. The DISTRICT CENTRAL CO-OPERATIVE BANK (DCC) should framing the separate council and members for agriculture loan collection and agriculture loan given on the basis of systematic analysis of the former 8.

requirements. DISTRICT CENTRAL CO-OPERATIVE BANK (DCC) should provide the training programs to the formers for how to conducting agriculture operations in a specified time and limited available fund, and how to utilize the funds,

because of they are illiterates. 9. A new and special scheme from the DISTRICT CENTRAL CO-OPERATIVE BANK (DCC) is required for promoting and developing agriculture sector. 10. Along with agriculture loan they should provide merchant banking and agent banking services to the customers for maintaining customer loyalty and their interest. 5.3 CONCLUSION The DISTRICT CENTRAL CO-OPERATIVE BANK (DCC) linked with its apex institutions those are RBI and NABARD, these institutions give guidelines to the SCBs and DCCs. The PLD BANK provides a triangular type of services to their customers and it is one and only the bank for promoting agricultural operations with a less interest rates. It was established in the year 1954 till from they provide agriculture assistance now al so. It provides short-term and medium-term assistance to the formers for the purpose of purchasing seeds, pesticides and cows for the sake of strengthening their rural lives.

PLD BANK having different policies and schemes for lending funds to the formers and those meet optimum requirements the agriculture is a back bone of the every country. And the country’s GDP depends on agriculture. Presently PLD BANK dons well job in the rural area development. In the year 2013 and 2014 they had special programmes for agriculture it’s worthy and effective utilization in the assessment year. Over all benefits from the PLD BANK to the rural agriculture is effective and some more schemes were required for further agricultural developments.

BIBILOGRAPHY 1] BOOKS AND JOURNALS BOOKS

AUTHOR NAME

Financial management-

N.SUDARSHANAREDDY

Research methodology -

Dr.K .RAMACHANDRA

JOURNALS AND MAGAZINES Company journals Company prospects

Indian agriculture magazine Government publications in news paper WEBSITES WWW.google.com Www. Co-operatives banks.com Www. Wikipedia.com

ANNEXURE Balance Sheet of CO- OPERATIVE AGRICULTURAL

AND

RURAL -------------------

DEVELOPMENT BANK LTD.

Mar '17 12 mths Capital and Liabilities: Total Share Capital 285.36 Equity Share Capital 285.36 Share Application 1.58 Money

in

Rs.

Cr.

------------------Mar '16 12 mths

Mar '15 12 mths

Mar '14 12 mths

Mar '13 12 mths

284.44 284.44 1.53

282.01 282.01 3.20

250.32 250.32 2.96

250.11 250.11 3.02

Reserves Net Worth Deposits

1,661.43 1,948.37 19,289.2

1,455.98 1,741.95 14,925.9

1,251.95 1,537.16 12,609.1

848.07 1,101.35 10,325.1

Borrowings Total Debt

1 1,275.81 20,565.0

9 1,147.90 16,073.8

3 1,163.80 13,772.9

6 860.16 1,525.62 11,185.32 9,889.46

2 Other Liabilities & 1,276.48

9 1,252.47

3 770.81

583.86

386.31

Provisions Total Liabilities

23,789.8

19,068.3

16,080.9

12,870.5

11,225.05

7 Mar '17 12 mths

1 Mar '16 12 mths

0 Mar '15 12 mths

3 Mar '14 12 mths

Mar '13 12 mths

Balances 858.30

703.37

633.68

505.07

378.77

with RBI Balance with Banks, 334.16

188.20

85.49

184.50

504.49

Money at Call Advances

15,817.6

12,921.3

10,465.0

8,140.19

6,586.09

Investments Gross Block Revaluation

3 5,817.94 488.57 256.50

9 4,333.33 248.02 50.22

6 4,470.56 236.68 51.41

3,634.22 238.64 52.60

3,358.66 236.09 53.78

197.80 0.00

185.27 0.00

186.04 0.00

182.31 3.36

Assets Cash &

Reserves Net Block Capital Work

232.07 In 0.00

696.15 949.28 8,363.84

Progress Other Assets Total Assets

729.77 23,789.8

724.22 19,068.3

240.83 16,080.8

220.51 12,870.5

211.38 11,225.06

Contingent

7 3,064.27

1 2,464.72

9 2,832.28

3 2,951.49

4,952.24

Liabilities Book Value (Rs)

68.22

61.19

54.39

43.88

37.83

PROFIT AND LOSS A/C of CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD.

Standalone Profit & Loss account

------------------- in Rs. Cr. -------------------

Mar 17 Mar 16 Mar 15 Mar 14

Mar 13

12 mths 12 mths 12 mths 12 mths 12 mths INCOME Interest / Discount on 1,647.95 1,354.11 1,098.28 Advances / Bills Income from 393.52 307.78 282.52 Investments Interest on Balance with RBI and Other 5.78 3.77 5.11 Inter-Bank funds Others 28.90 32.81 36.51

867.87

711.83

245.31

196.32

14.24

6.75

0.84

1.20

Total Interest Earned Other Income Total Income EXPENDITURE Interest Expended Payments to and Provisions for Employees Depreciation Operating Expenses (excludes Employee Cost & Depreciation) Total Operating Expenses Provision Towards Income Tax Provision Towards Deferred Tax Other Provisions and Contingencies Total Provisions and Contingencies Total Expenditure Net Profit / Loss for The Year Net Profit / Loss After EI & Prior Year Items Profit / Loss Brought Forward Total Profit / Loss available for

2,076.15 1,698.46 1,422.42 1,128.26

916.10

249.45 220.46 165.72 138.66 117.02 2,325.60 1,918.92 1,588.14 1,266.92 1,033.12 1,279.06 1,078.96

914.20

759.87

631.69

308.03

245.09

196.03

157.08

137.90

39.03

30.28

23.36

17.97

13.64

281.27

215.56

177.10

144.03

123.76

628.33

490.93

396.49

319.09

275.29

115.72

99.22

48.49

1.84

0.03

-8.68

-32.63

-9.80

0.00

0.00

111.49

87.91

47.57

34.76

24.04

218.53

154.50

86.26

36.60

24.07

2,125.92 1,724.40 1,396.95 1,115.56

931.06

199.68

194.52

191.18

151.36

102.06

199.68

194.52

191.18

151.36

102.06

136.51 336.19

-4.23 -144.53 -249.47 -323.36 190.30

46.65

-98.10 -221.30

Appropriations APPROPRIATIONS Transfer To / From 49.92 Statutory Reserve Transfer To / From 12.10 Special Reserve Transfer To / From 1.80 Capital Reserve Transfer To / From 0.71 Investment Reserve Transfer To / From Revenue And Other -2.41 Reserves Balance Carried Over 274.07 To Balance Sheet Total 336.19 Appropriations OTHER INFORMATION EARNINGS PER SHARE Basic EPS (Rs.) 7.01 Diluted EPS (Rs.) 6.87 DIVIDEND PERCENTAGE Equity Dividend Rate 5.00 (%)

48.63

47.80

37.84

25.52

6.49

3.05

2.07

0.00

0.68

0.03

0.22

2.26

0.36

0.00

0.17

0.39

-2.37

0.00

0.00

0.00

136.51

-4.23 -138.41 -249.47

190.30

46.65

6.86 6.77

7.21 7.03

6.05 5.99

4.19 4.17

0.00

0.00

0.00

0.00

-98.10 -221.30