“A STUDY OF LOANS AND ADVANCES AND THEIR
MANAGEMENT BY THE URBAN CO-OPERATIVE
BANKS (UCBs) IN THE PUNE DISTRICT.”
A REPORT SUBMITTED TO UNIVERSITY
GRANTS COMMISSION
AS A
MINOR RESEARCH PROJECT IN
THE SUBJECT OF COMMERCE
BY
DR. NIMBALKAR SUHAS ABASAHEB
BHARATRATNA DR. BABASAHEB AMBEDKAR
COLLEGE AUNDH, PUNE-411007
MAY-2015
DECLARATION BY THE RESEARCHER
I hereby declare that this Minor Research Project titled “A study of
loans and advances and their management by the urban co-operative banks
(UCBs) in the Pune district” submitted is based on actual work carried out by
me. Any reference to works done by any other person or institution or any
material obtained from other sources have been duly cited and referenced. It
is further to state that, this work is not submitted anywhere else for any
examination.
Dr.Nimbalkar Suhas Abasaheb
ACKNOWLEDGEMENT
It is my duty to thank them all those who have helped me in
completing my Minor Research Project work.
I express my sincere gratitude to Prin. Dr. M. V. Bobade and all the
colleagues of my college for their valuable guidance, continuous support
throughout this minor research project.
I would like to mention a special thank to the Managers of all the
selected banks who had provided essential information regarding this
project work.
It would have been impracticable for me to undertake this work
without the inspiration of my wife Sneha and son Yash.
Last but not the least my gratitude are also to all those who directly
and indirectly supported me for completion of work.
Dr.Nimbalkar Suhas Abasaheb
Date: / / /20
CONTENTS
Chapter No Particulars Page No
List of Tables I
List of Graphs II
List of Maps III
Abbreviations III
Chapter-I Introduction 1-6
1.1 Introduction 2
1.2 Origin of the research problem 3
1.3 Need of the Study 4
1.4 Significance of the study 4
1.5 Reason for selection of the topic 4
1.6 Scope and limitations 5
1.7 Objectives of the study 5
1.8 Hypothesis 5
1.9 Research Methodology 6
1.10 Sources of the study 6
1.11 Conclusion 6
Chapter-II Pune City and Review of literature 7-15
2.1 Introduction 8
2.2 Study of Pune District 8
2.3 Study of Pune City 9
2.4 The Geographical area of Pune
city
10
2.5 Administrative information of
Pune District and City
10
2.6 Climatic Conditions 10
2.7 Population 11
2.8 Literacy rate 11
2.9 Educational facilities 11
2.10 Medical Facility 12
2.11 Review of literature 12
2.12 Conclusion 15
Chapter-III Management of loans and advances of
UCBs
16-29
3.1 Introduction 17
3.2 Concept of Management 17
3.3 Process of Management 17
3.4 Stages of Management 18
3.5 The analysis of the selected nine
urban co-operative banks in Pune
district
19
3.6 The classification of progress of Pimpri Chinchwad Sahakari Bank Ltd, Pimpri
21
3.7 The classification of progress of
Pavana Sahakari Bank Ltd, Pune
22
3.8 The classification of progress of Indrayani Co-operative Bank Ltd, Pune
23
3.9 The classification of progress of Prerana co-operative Bank Ltd,
Pune
24
3.10 The classification of progressof
Rajshree Shahu Sahakari Bank
Ltd, Pune
25
3.11 The classification of progress of
Bhagini Nivedita Sahakari Bank
Ltd, Pune
26
3.12 The classification of progress of
Janseva Sahakari Bank Ltd, Pune
26
3.13 The classification of progress of
Dharmvir Sambhaji Urban Co-
operative Bank Ltd, Pune
27
3.14 The classification of progress of
The Seva Vikas Co-operative
Banks Ltd, Pune
28
3.15 Conclusion 29
Chapter-IV Conclusions and Suggestions 30-34
4.1 Introduction 31
4.2 Conclusions 31-33
4.3 Suggestions 33-34
Bibliography 35-38
Photo Gallery 39-41
LIST OF TABLE
Table No. Particulars Page No.
3.1 The analysis of the selected nine urban
co-operative banks in Pune district
20
3.2 The classification of progress of Pimpri
Chinchwad Sahakari Bank Ltd, Pimpri
22
3.3 The classification of progress of Pavana
Sahakari Bank Ltd, Pune
23
3.4 The classification of progress of Indrayani
Co-operative Bank Ltd, Pune
24
3.5 The classification of progress of Prerana
co-operative Bank Ltd, Pune
25
3.6 The classification of progressof Rajshree
Shahu Sahakari Bank Ltd, Pune
26
3.7 The classification of progress of Bhagini
Nivedita Sahakari Bank Ltd, Pune
27
3.8 The classification of progress of Janseva
Sahakari Bank Ltd, Pune
27
3.9 The classification of progress of Dharmvir
Sambhaji Urban Co-operative Bank Ltd,
Pune
28
3.10 The classification of progress of The Seva
Vikas Co-operative Banks Ltd, Pune
29
I
LIST OF GRAPHS
Graph No. Particulars Page No.
3.1 The analysis of the selected nine urban
co-operative banks in Pune district
21
3.2 The classification of progress of Pimpri
Chinchwad Sahakari Bank Ltd, Pimpri
22
3.3 The classification of progress of Pavana
Sahakari Bank Ltd, Pune
23
3.4 The classification of progress of Indrayani
Co-operative Bank Ltd, Pune
24
3.5 The classification of progress of Prerana
co-operative Bank Ltd, Pune
25
3.6 The classification of progressof Rajshree
Shahu Sahakari Bank Ltd, Pune
26
3.7 The classification of progress of Janseva
Sahakari Bank Ltd, Pune
28
3.8 The classification of progress of The Seva
Vikas Co-operative Banks Ltd, Pune
29
II
LIST OF MAP
Figure No. Particulars Page No.
Map No.2.1 Pune District 8
Map No.2.2 Pune City 9
ABBREVIATIONS
Per. Percentage
i.e. That is
Govt. Government
NA Not Available
Ltd. Limited
III
1
CHAPTER-I
INTRODUCTION
2
CHAPTER-I
INTRODUCTION
1.1 Introduction
Co-operative banks are a group of financial institutions organized under the provisions
of the cooperative society‟s act of the states. These banks are essentially co-operative
credit societies organized by members to meet their short term and medium term
financial requirements. 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 enterprise. Mutual co-operation leads to
co-operatives. Co-operatives banks are constituted on co-operative principles of
voluntary association, self-help and mutual aid, one share one vote and non-
discrimination and equality of members. Co operative Banks in India are registered
under the Co-operative Societies Act 1904.
Theco-operative bank is also regulated by the RBI. They are governed by the
Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.
The term Urban Co-operative Banks (UCBs), though not formally defined, refers to
primary cooperative banks located in urban and semi-urban areas. These banks were
traditionally centered on communities, localities work place groups. They essentially
lent to small borrowers and businesses. Today, their scope of operations has widened
considerably.
The co-operative banking along with other types of cooperatives, later on
strengthens the cooperative spirit. Cooperative banking is one of the most important
economic systems, run on self-governing lines to attain economic escalation with
social and economic egalitarianism both agro-rural and industrial-urban sectors and
people in them. In fact, urban people with small means are unable to offer any tangible
security other than their own personal security. They so not satisfy the standards
followed by the commercial banks, thus they do not get adequate credit. Thus urban
people have obtained credit from moneylenders. The circumstances needed an agency,
3
which will provide cheaper and adequate credit to extricate the urban people with a
limited means from the clutches of usurers. From the inception of the palling era in the
country, the thrust of the government policy has been the development of agricultural
and allied activities as, initially the rural areas deserved urgent attention than urban
areas. Nevertheless, ameliorative programmes concerning the urban lower middle and
poor classes cloud not receive the attention up to the First Five Year Plan.
1.2 Origin of the research problem
The need for the provision of credit facilities to town-dwellers was as much
urgent as it was in villages in order to combat usury. Joint stock banks were not
interested in developing the business of small loans, because the cost of advancing and
recovering them was high. Further, as joint stock banks were not likely to have under
ordinary circumstances full and intimate knowledge of the standing and resources of
persons of moderate means, they would not advance loans on personal security.
Ultimately, number of persons with small means, residing in urban and semi- urban
area like small traders, artisans, townsmen, factory workers, self-employed persons ,
petty shopkeepers, retailers, small industrialists, professional, firewalls, cottage
workers etc. require credit for their productive and consumption needs. This has given
a rise to the movement of developing urban cooperative banking for the use of urban
dwellers.
Although the urban co-operative banks operate under the purview of Banking
Regulation Act, they are philosophically quite different from the commercial banks.
They are smaller, their area of operation is limited and they have limited but particular
and committed clientele. The urban co-operative banks have less of „Walk-in‟
customers. The deposit base of them generally does include corporate and large
institutional funds. The urban cooperative banks being the cooperative institutions,
they are bound to follow the cooperative principles and values (i.e. open and voluntary
membership, democratic management, equitable distribution of surplus, limited
interest on capital, cooperative education, cooperation among cooperative and concern
for the community etc.) considering the role, importance and responsibility of urban
cooperative banks, they must be viable, productive and operationally efficient enough
4
in performing their socio-economic responsibility in an effective manner.
Looking at the significance of Urban Cooperative Banks, it has been decided to
focus on the study of loans and advances and their management by the Urban
Cooperative Banks (UCBs) in the Pune City
1.3 Need of theStudy
The urban co-operative credit movements started in India with the chief object
of catering to the banking and credit requirements of the urban middle class, e.g., the
small traders or businessmen, the artisans or factory workers, the salaried people with
a limited fixed income in urban or semi-urban areas. Besides protecting the middle
classes and men of modest means from the clutches of the moneylenders, the
movement is also expected to inculcate the habit of thrifts and savings amongst them.
The movement provides the frugal section of the community an opportunity of
investing then savings and people tide over the period of stress and strain.
1.4 Significance of thestudy
Socio-economic development of the people is impacted by the industrial
development of the area. Availability of financial and banking services are essential
for boosting industrial development. Such financial and banking services are not
available in sufficient number in rural, urban and semi-urban area hence remain
undeveloped. In 1931 the central banking enquiry committee recommended that
limited liability of co-operative societies generally known as Urban banks should be
established wherever necessary for the benefit of middle class people. How for Urban
Co-operative Banks in Pune district helped to the people is essential to study. In this
minor research project the performance of Urban Cooperative banks working in the
district has been studied
1.5 Reason for selection of thetopic
Theresearcherbeing the member of a UCBknows theproblemsof Urban
Cooperative Banks. The term Urban Cooperative Banks (UCBs) till 1996 were
allowed to lend money only for agricultural purpose but now their scope
5
has widened considerably to small industries, housing finance etc. In the
era of globalization there is a rapid change in the lives of the people
residing in the city area. In order to fulfill the different financial needs,
large numbers of people rely on the Urban Co-operative Banks. This has
resulted in providing loans and advances to the large number of people and
it required the management of the loans and advances, hence the researcher
has selected this topic with the view of getting information about nature of
loans and advances provided by UCBs in Pune city.
1.6 Scope andlimitation
The study deals with the work done by Urban Co-operative Banks in their areas
of operation i.e. Pune city. The detailed study covers only from the year 2010-11
to 2012-13. The functioning of Urban Co-operative Banks thus becomes the
universe of the present study. The complete study on the functioning of UCBs and
sample respondents (Bank Managers) would certainly disclose and highlight the
factors affecting the performances of the UCBs.
1.7 Objectives of thestudy
1) Tostudy the progress of Co-operative banks of Pune city.
2) Toanalyze the growth and composition of loans and advances of Urban
Co-operative Banks.
3) To make suggestions about the problems faced by Urban Co-operative
Banks of Pune city.
1.8 Hypothesis
1) The urban co-operative banks in Pune city have made remarkable progress
during the study period.
2) The organization and management of Urban Co-operative Banks is active.
3) There are some difficulties faced by banks officials in granting loans and
advances to its customers in Pune city.
6
1.9 ResearchMethodology
The research topic is based upon exploratory research. Secondary data such as
annual reports with schedule and loans and advances of selected nine Urban Co-
operative Banks have been collected for the period 2010-11 to 2012-2013. Some of the
data were collected from National Institute of Banking Management (NIBM) - Pune,
RBI statistical department publication and Indian banks association publications,
Published journals, news papers and Books.
It is important to make a plan in order to study and to understand the
problems.Theaimofthestudydoesnotgetfulfilled,iftheproperplanisnotdone.Hencet
hetopic “A study of loans and advances and their management by the urban co-
operative banks (UCBs) in the Pune
district”wascarriedonaftermakingaproperandauthenticplan.
1.10 Sources of thestudy
Secondarysources:
The study has been undertaken through reading of various annual
reports, books,magazines,researcharticlesandstatisticsgiveninthe various
sources.
1.11 Conclusion
The present research is based on the management of the loans and advances
of the nine urban co-operative banks of Pune city. In the present research topic
the origin of the research problem, the need of the study, significance of the
study, the reasons behind selecting the topic, scope of the topic, the various
objectives of the research and hypothesis, research methodology and source of
the study have been analyzed by the researcher.
7
Chapter-II
PuneCityandReview
ofliterature
8
Chapter-II
Pune City and Review
ofliterature
2.1 Introduction
2.2 Study of PuneDistrict
Puneis one of
thedevelopeddistrictsofMaharashtra,adevelopedstateofIndia.Punedistrictcomesi
ntothewesternMaharashtradivisionandhasgreathistory.Puneisknownasthecultura
lcapital of Maharashtra. It includes 14 blocks (Taluka) Pune, Haweli,
Indapur,Baramati,Daund,Bhor,Purandar,Velhe,Khed,Shirur,Junnar,Ambegaon,
Maval and
Map No2.1
PuneDistrict
9
Mulashi.Punecityislocatedatthesouthernpartofthedistrict.Thegeographicalare
aandextentofPunedistricthasnaturallybeenwellstructured.ThePunedistrictislo
cated 17.54 to 19.24 north latitude and 73.19 to 75.10 east longitude. It
borderswithAhamadhnagar from north and east, it has Satara and Raigad
districts from south andwestrespectively. It is bound with Solapur and Thane
districts. It covers the 5% of total areaofMaharashtra.
2.3 Study of PuneCity
PuneistheeighthlargestmetropolisinIndiaandsecondlargestinthestateofMaharas
htra.
Map No2.2
PuneCity
10
Itissituated560meters(1837feet)abovesealevelontheDeccanplateauattheri
ghtblankoftheMuthariver.PunecityistheadministrativeheadquarterofPunedistrict
andwasoncethecentreofpoweroftheMarathaEmpire.Puneisknowntohaveexisteda
satownsince1847.ChhatrapathiShivajiRajeBhosalemadeitastheCapitalofMarath
aEmpire.LaterPunewasruledbyPeshwas,whowerethePrimeministersofMarathaE
mpire.
2.4The Geographical area of Punecity
The total area of Pune city is 450.69 sq. Km. Out of total area,38.6 %
isresidentialarea,1.8%iscommercialarea,9.5%isdefensearea,11%isindustrialarea
and9.7%isrecreationalarea.
2.5 Administrative information of Pune District andCity
Thereare14Talukasand13PanchayatSamitisinPunedistrict.IthasTwomuni
cipalcorporations. Pune Municipal Corporation (PMC) and Pimpri –
ChinchwadMunicipalCorporation(PCMC).Therearearound1,866villagesinthePu
nedistrict.
In the modern age, the city has received unique importance because of
beingfamousinthefieldofmanufacturing,automobileindustries,Governmentandpr
ivatesectorresearchinstitutes, information technology, and educational,
management, training institutes.Thecity of Pune is referred as the Oxford of
East proudly. Many research instituteslikeUniversity of Pune, National
Chemical Laboratory, and C-DAC do their research
invarioussubjects.ThelargesttelescopeofAsiahasbeensetupnearPune-
Nashikhighwayinkhodad.The students from India as well as the various
countries come here to have thequalityeducation.
2.6 ClimaticConditions
Thetemperatureofcityrangesbetween12c
to37c.Theaveragerainfallrecordedis600to700mm.Maximumrainfallisabsorbedfr
11
omJunetoSeptembereveryyear.
Owingtoitsgeographicallocation,theclimateofthecityiscoolandpleasantthrougho
utthe year. ThenaturalbeautyofthecityhasgivenitthetitleofDeccanQueen.
2.7 Population
Apopulationisasummationofalltheorganismsofthesamegrouporspecies,w
hichlive in the same geographical area, and have the capability of
interbreedingwisdom,imaginationdecisionmakingandambitiousaretheimportant.
2.8 Literacyrate
PuneisknownastheeducationalcityofMaharashtra.Thequalityeducationpro
videdherebroughtaboutasignificationincreaseinliteracyrateofPune.Accordingtot
he2011census,thetotalliteracyrateofPunecityis
86.15%outofwhichfemaleliteraryrateis 81.05 and male literacy rate was 90.84
respectively. Pune is 7th
largest literary rate districts of Maharashtra.
2.9 Educationalfacilities
Punehasmorethanhundrededucationinstitutesandnineuniversities.Student
sfromall over the world studying at the colleges of the University of Pune.
Most colleges inPuneare affiliated to the University of Pune established in
1948. Seven others Universitieshavealsobeenestablishedinthecity.
Many research institutions of central Government as well as State
Governmentarelocated in city. There are well-known coaching classes for
UPSC and
MPSCExaminationsbecauseofthiscivilserviceaspiringcandidatesalsopreferPune
City.
12
2.10 MedicalFacility
Puneisthefastestgrowingmetropolitancity
inIndia.Thepopulationofthecityisincreasing day by day. In the city life there is
always a question of health relatedproblems.The Pune city is surrounded with the
number of Hospitals and Medical Institutions
suchasSasoonHospital,PunedistrictHospital.Thecityhasmanyprivatehospitalsalso,S
uchasRubyHall,BirlaHospital,DinanathMangeshkarHospital,andPoonaHospitaletc.
Therearesomemedicalinstitutionswherethemedicalstudentscandotheirpracticeafterc
omplacenceof theirstudy.
2.11 Review ofliterature
A number of studies related to performance of co-operative banking sector in
India have been conducted. Here, an attempt is being made to provide an overview of
various aspects and issues of this study through the review of existing literature. Some of
the main studies selected for review have been discussed below.
Kalyankar (1983)
In his study titled, “Willful Default in Loans of Co-operatives” examined the
trends in deposits, share capital, working capital, loans outstanding, advances, over dues
and recoveries at the district level financing institutes. Socio-economic factors
responsible in projecting and promoting future development in the operations and
approaches of the co-operative credit organizations were also considered to examine the
specific progress made by Central Co-operative Bank of Parbhani District. The study
revealed that the cropping intensity, irrigation facility and working capital of the societies
were the major factors for explaining over dues at primary agricultural credit societies‟
level. The socio-economic factors were notresponsible for increasing over dues at the
borrowers‟ level, but over dues were mainly mounted due to the non-economic factors in
case of willful defaulters.
13
Devadas (1987)
In his book titled, “Co-operative Banking and Economic Development” studied
the role of Assam Co-operative Apex Bank Ltd. in economy of the State. He found that
apart from working as a commercial bank it had to discharge three other functions, i.e., to
finance primary credit societies, to act as banking centre for primary societies, and to
undertake supervision of primary societies. He found that bank had not been able to
achieve much in these three fields due to lack of adequate support from government of
the state.
Prasad (2005)
In his research paper titled, “Co-operative Banking in a Competitive Business
Environment” stated that the technology had made tremendous impact on entire banking
sector, which had thrown new challenges, due to which co-operative banks were
constantly exposed to competition and risk management. Therefore, they needed a
combination of new technologies and better processes of credit and risk appraisal,
treasury management, product diversification, internal control and external regulation
along with infusion of professionalism. In the present business environment, the co-
operative banks should be backed by democratization, decentralization so as to make
them competitive. He felt an urgent need for transformation in the mindset, identity,
business operations, governance and systems & procedures, which will definitely boost
the morale of co-operative banks to face environmental challenges.
Singh and Singh (2006)
In their study titled, “Funds Management in Central Cooperative Banks−Analysis
of Financial Margin” attempted to estimate the impact of identified variables on the
financial margin of the central co-operative banks in Punjab with the help of correlation
and multiple step-wise regression approach. The ratio of own funds to working funds and
the ratio of recovery to demand were observed to be having positive significant influence
on financial margin, whereas over dues to total loans were found to be negatively
associated with the concerned parameter. A high percentage of own funds and timely
14
recovery of previous loansoutstanding, as a source of funding new loans by the bank,
increased the financial margin in these banks.
Dhanappa (2009)
In his study titled, “Performance Evaluation of UCBs: A Case Study of
Kallappanna Awade Ichalkaranji Janata Sahakari Bank Ltd. Ichalkaranji” made an
attempt to examine the working and financial performance of UCBs. The objective of the
study was to examine and analyze the trend, progress and problems of this bank and to
offer some important suggestions for improving the competency and efficiency of the
bank. The related data had been collected for the period from 1995-96 to 2007-08. He
used various statistical tools such as ratios, percentages, averages, and chi-square test to
analyze the data, to know the performance of the UCBs in respect of share capital,
deposits, reserve funds, loans and advances, investment, profit, and NPAs. He observed
that the bank had maintained NPAs under control at the best stipulated level of RBI
norms. There was immense instability in net profit.The bank should focus on non-
interest income sources (commission based services) to increase the profit level and
reduce the NPAs. CD ratio of the bank was declining continuously which was not a good
signal. The economic health of the bank was sound and the Bank was able to compete
with other banks. He further suggested that loans should be provided (at least to regular
borrowers) on competitive rates of interest.
Heiko and Martin (2007)
IMF conducted a study on co-operative banks and their financial stability. The
study was based on individual bank data drawn from the Bank Scope Database for 29
major advanced economies and emerging markets that were members of the Organization
for Economic Co-operation and Development (OCED). They found that co-operative
banks in advanced economies and emerging markets had higher scores than commercial
banks, suggesting that co-operative banks were more stable. These findings, perhaps
somewhat surprising at first, were due to much 40 lower volatility of co-operative banks‟
returns, which offsets their relatively lower profitability and cap.
15
2.12 Conclusion
Ithasbeenobservedthroughthereviewofliteraturethattheresearchershavestudi
edthenature of loans and advances of Urban Cooperative Banks of Pune
cityfromdifferent point of view. It is concluded through the above review of
literature that the
urban cooperative banks have unique role to play in 21st century
16
Chapter –III
Management of loans
& Advances in UCBs
17
Chapter –III
Management of loans & Advances in UCBs
3.1 Introduction
This chapter contains ten Urban Cooperative Banks from Pune city. The functions of
these UCBs have deeply been studied in this chapter. A detailed study of various
types of loans and advances provided by UCBs in Pune district has been carried on.
The formal interviews of some selected banks managers have also been taken to
present the statistics based on the annual reports of Urban Cooperative Banks of Pune
district.
3.2 Concepts of Management
As there is no universally accepted definition for management, it is difficult to
define it. A simple traditional definition, defines it as the „art of getting things done by
others‟. This definition brings in two elements namely accomplishment of objective
towards the goal. The weakness of this definition is that firstly it uses the word „art‟
whereas management is not merely an art‟ but it is both art and science. Secondly, the
definition does not state the various functions of a manager clearly. There are various
definitions by eminent experts in the field of management.
A) Fredmund Malik defines it as ‘the transformation of resources into utility’
B) Peter Drunker (1909-2005)
He has the basic task of management as twofold: marketing and Innovation
nevertheless, innovation is also linked to marketing (product innovation is a central
strategic marketing issue).
Andreas Kaplan specifically defines, European Management as a cross
cultural, social management approach based on interdisciplinary principle
3.3 Process of Management
Process management is the ensemble of activities of planning and monitoring
the performance of a process. The term usually refers to the management of business
processes and manufacturing processes. Process of management is the application of
knowledge; skills and toolsvisualize measure, control and report and improve
18
processes with the goal to meet customer requirements profitably.
3.4 Stages of Management
The management process is more than just a set of rules to follow. It is a
philosophical approach to business. The management process is best implemented
when everyone within the business understands the strategy. The five stages of
management are as follows
1) Goal setting
The purpose of goal setting is to clarify the vision of the business. The
stage consists of identifying the various key facets.
2) Analysis
Analysis is key stage because the information gained in this stage will
shape the next two stages. In this stage gather as much information and
data relevant to accomplishing the vision. The focus of the analysis should
be on understanding the needs of the business as sustainable entity, its
direction and identifying initiatives that will help the business grow.
3) Strategy Formulation
The first step in forming a strategy is to review the information gleaned
from completing the analysis. Determine what resources the business
currently has that can help reach the defined goals and objectives.
4) Strategy Implementation
Successful strategy implementation is critical to the success of the
business venture. This is the action stage of the strategy management
process.
5) Evaluation and Control
Strategy evolution and control actions include performance
19
measurements, consistent review of internal and external issues and
making corrective actions when necessary
3.5 The analysis of the selected nine co-operative banks from Pune
City
The researcher has selected nine urbancooperative banks from Pune district
for the present research. The researcher has studied the loans and advances provided
by these nine co-operative banks from 2010 to 2013.
Table No- 3.1
Comparative position of growth of loans and advances duringthe
year(2010-11 to 2012-13)
(Rs. in Lakhs)
Sr.
No
Particulars Year Increase
(+)
2010-11 2011-12 2012-13
1 Pimpri-Chinchwad Sahakari Bank
Ltd, Pimpri.
7177.36 7821.49 8996.09 1818.73
2 Pavana Sahakari Bank Ltd, Pune 10189.41 14292.18 20255.56 10066.15
3 Indrayani Co-operative Bank Ltd,
Pune
3320.25 3850.38 4595.54 1275.29
4 Prerana Co-operative Bank Ltd,
Pune
7056.79 9448.72 10430.19 3373.4
5 Rajshree Shahu Sahakari Bank Ltd,
Pune
11429.86 17690.86 20253.01 8823.15
6 Bhagini Nivedita Sahakari Bank
Ltd, Pune
25348.57 28202.93 33047.09 7698.52
7 Janseva Sahakari Bank Ltd, Pune. 56478.96 72173.90 87560.47 31081.51
8 Dharmvir Sambhaji Urban Co-
operative Bank Ltd, Pimpri-
Chinchwad
3304.82 4181.74 4959.44 1654.62
9 The Seva Vikas Co-operative Bank
Ltd, Pune.
30058.61 38163.48 49362.37 19303.76
Source- Annual Reports (2011 to 2013) “All Selected Banks”
20
Graph No 3.1
The table& Graph no 3.1 explains that there is increase in the loans and
advances provided by Pimpri-Chinchwad Sahakari Bank with 1818.73 lakhs. The
Pavana Sahakari Bank has 10066.15 lakhs, Indrayani Co-operative Bank Ltd, Pune
has 1275.29 lakhs, Prerana Co-operative Bank Ltd, Pune has 3373.4 lakhs, Rajshree
Shahu Sahakari Bank Ltd, Pune has 8823.15 lakhs, Bhagini Nivedita Sahakari Bank
Ltd, Pune has 7698.52 lakhs, Janseva Sahakari Bank Ltd, Pune has 31081.51 lakhs,
Dharmvir Sambhaji Urban Co-operative Bank Ltd, Pimpri-Chinchwad has 1654.62
lakhs, and The Seva Vikas Co-operative Bank Ltd, Pune has 19303.76 lakhs increase
in their loans and advances. It is concluded that Janseva Sahakari Bank has highest
increase and Indrayani Co-operative Bank Ltd, Pune has lowest increase in loans and
advances.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Increase (+)
Year
Year
Year
21
3.6 The classification of progress of Pimpri-Chinchwad Sahakari
Bank Ltd, Pimpri.
Table& Graph No 3.2
(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No.of Branches 4 4 4 0
No. of Members 6090 6467 6843 753
Share Capital 863.01 895.68 932.37 69.36
Reserve & Other
fund 664.88 811.98 933.56 268.68
Deposit 11585.50 12300.79 13830.29 2244.79
Working capital 12899.37 13837.48 15131.55 2232.18
Profit 101.53 146.11 181.41 79.88
Audit Class A A A A
It has been observed through the above table that there is increase in the
number of members of banks from 2010 to 2013 i.e. 753. The share capital increased
0
2000
4000
6000
8000
10000
12000
14000
16000
No .ofBranches
No. ofMembers
ShareCapital
Reserve& Other
fund
Deposit Workingcapital
Profit
2010-11
2011-12
2012-13
Increase (+)
22
till 69.36 lakhs, the reserve and other fund raised till 268.68 lakhs. There is remarkable
increase in the bank‟s deposit of 2244.79 lakhs and working capital went up to
2232.18 lakhs. The profit of the bank was 79.88 lakhs. „A‟ class has been allotted to
the bank during auditing.
3.7 The classification of progress of Pavana Sahakari Bank
Ltd, Pune
Table & Graph No 3.3(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No.of Branches 08 08 10 03
No. of Members 7236 8004 8949 1713
Share Capital 763 989 1314 551
Reserve & Other
fund 1537 1676 2004 467
Deposit 2510.65 2620.89 3310.70 800.05
Working capital 2790.82 2960.25 3720.87 930.05
Profit 174 325 500 326
Audit Class A A A A
Increase (+)
No. of Branches
No. of Members
Share Capital
Reserve & Other fund
Deposit
Working capital
Profit
23
The table 3.3 shows that Pavana Sahakari Bank Ltd, Pune has increase in the
number of members i.e. 1713. The share capital went up to 551 lakhs and reserve and
other fund were 467 lakhs. The deposit rose up to 800.05 lakhs and working capital
was 930.05 lakhs. The profit that the bank received was 326 lakhs with maintaining
the class „A‟ of the audit.
3.8 The classification of progress of Indrayani Cooperative Bank
Ltd, Pune
Table& Graph No 3.4(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No.of Branches 3 4 4 1
No. of Members 5814 5864 5864 50
Share Capital 680.00 705.00 706.00 26
Reserve & Other
fund 453.65 524.65 617.15 163.5
Deposit 6654.22 7519.82 8316.06 1661.84
Working capital NA NA NA NA
Profit 61.36 76.60 91.97 30.61
Audit Class A A A A
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
No.ofBranches
No. ofMembers
ShareCapital
Reserve &Otherfund
Deposit Workingcapital
Profit
2010-11
2011-12
2012-13
Increase (+)
24
Tableno 3.4 explains the progress of Indrayani Cooperative Bank Ltd, Pune.
There is little increase in the members of the banks during the years. The share capital
increased up to 26 lakhs and reserve and other funds went up to 163.5 lakhs. The
deposit that the bank received was 1661.84 lakhs. The profit of the bank was 30.61
with audit class „A‟.
3.9 The classification of progress of Prerana Co-operative Bank
Ltd, Pune
Table& Graph No 3.5(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No. of Branches 4 4 4 0
No. of Members 5326 5642 5900 574
Share Capital 388.31 463.17 525.86 137.55
Reserve & Other
fund 834.55 1112.36 1372.66 538.11
Deposit 14396.40 17280.89 19258.69 4862.29
Working capital 15985.45 19335.28 22028.25 6042.8
Profit 151.38 203.51 323.28 171.9
Audit Class A A A A
. There is increase in the number of members of the bank i.e. 574. There share
capital and reserve funds raised up to 137.55 and 538.11 lakhs respectively. The
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
No.ofBranches
No. ofMembers
ShareCapital
Reserve &Other fund
Deposit Workingcapital
Profit
2010-11
2011-12
2012-13
Increase (+)
25
deposit that the banks received was 4862.29 lakhs. The working capital of the bank
went up to 6042.8 lakhs with the profit of 171.9 lakhs. The bank maintained its
audit class of „A‟.
3.10 The classification of progress of Rajshree Shahu Sahakari
Bank Ltd, Pune
Table & Graph No 3.6(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No. of Branches 7 7 7 0
No. of Members 9753 10713 11509 1756
Share Capital 686.40 867.34 1020 333.6
Reserve & Other
fund 3905.14 4294.23 4583.80 678.66
Deposit 19309.44 23444.18 31349.14 12039.7
Working capital 25155.58 29731.40 38501.00 13345.42
Profit 261.04 345.58 526.49 265.45
Audit Class A A A A
Table No 3.5 shows that Rajshree Shahu Sahakari Bank has made remarkable
progress in its various sections. The number of the members went up to 1756 in the
0
10000
20000
30000
40000
50000
60000
70000
No. ofBranches
No. ofMembers
ShareCapital
Reserve &Otherfund
Deposit Workingcapital
Profit
Increase (+)
2012-13
2011-12
2010-11
26
given period. The share capital and reserve funds increased 333.6 and 678.66 lakhs
respectively. The deposit the bank received was 12039.7 lakhs and working capital
increased with 13345.42 respectively. The profit made by bank was 265.45 with „A‟
audit class.
3.11 The classification of progress of Bhagini Nivedita Sahakari
Bank Ltd, Pune
Table No 3.7(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No.of Branches 12 12 13 01 No. of Members 32041 34976 39125 7084
Share Capital 543.00 562.00 585.00 42
Reserve & Other fund 265.00 233.00 307.00 42
Deposit 42369 45193 52899 10530
Working capital NA NA NA NA
Profit 854.73 1027.77 1088.00 233.27
Audit Class A A A A
Table no 3.6 mentions the progress of Bhagini Nivedita Sahakari Bank Ltd,
Pune. There is increase in members of the bank with 7084. The share capital and
reserve funds were same i.e.42 and 42 lakhs respectively. The bank received the
deposit of 10530 lakhs and the profit was 233.27 lakhs with audit class „A‟.
3.12Janseva Sahakari Bank Ltd, Pune.
Table & Graph No 3.8(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No.of Branches 22 25 30 08 No. of Members 24257 28123 39923 15666
Share Capital 2277.11 2741.48 3300.91 1023.8
Reserve & Other
funds 8863.25 10147.32 10981.38 2118.13
Deposit 93172.76 110338.64 136957.37 43784.61
Working capital 108098.22 128988.08 157858.25 49760.03
Profit 1044.03 1212.89 2077.67 1033.64
Audit Class A A A A
27
Table& Graph no 3.7 explains that the number of members of Janseva
Sahakari Bank went up to 15666. The share capital raised by bank was 1023.8 lakhs.
The reserved and other funds of the bank were 2118.13 lakhs. The deposit the bank
received was 43784.61 lakhs. The working capital and the profit of the bank were
49760.03 and 1033.64 lakhs respectively. The audit class of the bank was „A‟.
3.13 The classification of progress ofDharmvir Sambhaji Urban
Co-operative Bank Ltd, Pimpri- Chinchwad
Table & Graph No 3.9 (Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No.of Branches 5 5 6 01 No. of Members 7709 8000 8178 469
Share Capital 296.62 341.16 382.88 86.26
Reserve & Other fund 463.04 541.07 650.28 187.24
Deposit 6566.44 7249.07 8018.05 1451.61
Working capital NA NA NA NA
Profit 94.63 107.05 120.36 25.73
Audit Class A A A A
0%
40%
0%
0%
59%
0% 1%
Increase (+)
No.of Branches
No. of Members
Share Capital
Reserve & Other fund
Deposit
Working capital
Profit
28
Table no 3.9 shows that Dharmvir Sambhaji Urban Co-operative Bank
Ltd, Pune has increase in the number of members i .e. 469. The share
capital and reserve and other funds were 86.26 and 187.26 lakhs
respectively. The banks had deposit of 1451.61 lakhs and profit of the
bank was 25.73 lakhs with audit class of „A‟ grade.
3.14The classification of progress of The Seva Vikas Co-operative
Bank Ltd, Pune.
Table & Graph No 3.10(Rs. in Lakhs)
Particular 2010-11 2011-12 2012-13 Increase
(+)
No.of Branches 13 15 24 11
No. of Members 9938 9938 10270 332
Share Capital 282.46 351.74 600.00 317.54
Reserve & Other fund 5276.60 6497.99 8420.80 3144.2
Deposit 41948.32 51951.97 66664.36 24716.04
Working capital 52450.17 64968.31 82404.94 29954.77
Profit 1263.91 1518.46 1805.29 541.38
Audit Class A A A A
0
50000
100000
150000
200000
250000
Increase (+)
2012-13
2011-12
2010-11
29
Table 3.10 shows that Seva Vikas Bank increased the members
with 332 in the given period. The share capital of the bank was 317.54
lakhs. Reserve and other fund were 3144.2 lakhs. The bank had
deposit of 24716.04 lakhs. The working capi tal and profit of the bank
rose up to 29954.77 and 541.38 lakhs respectively. The „A‟ audit class
has been allotted to the bank.
3.15 Conclusion
It can be concluded through the above information given in the tables that the
urban cooperative banks in Pune district have played an important role in fulfilling the
various financial needs of people living in urban areas. The large numbers of people
rely on these banks. These banks have a vision of national responsibility through co-
operative sector.
30
Chapter - IV
Conclusions and
Suggestions
31
Chapter-IV
Conclusions andSuggestions
4.1 Introduction
Co-operative banking system occupies an important position in the Indian financial
system. Co-operative banks were the first formal institutionsto be conceived and
developed to purvey credit to urban India. Thus far co-operatives banks have been a
key instrument offinancial inclusion in reaching out to the last mile in urban areas. The
researcher has made the following conclusions and suggestions based on the topic.
4.2 Conclusions
1) The percentage of priority sector advances and that of weaker sections of the
society are much higher than that stipulated by the RBI.
2) It is an endeavor of cooperative banks to grant loans on priority to low
income groups.
3) It has been observed during the study that the loans were granted against the
security of term deposits and life insurance policies in accordance with RBI
directives.
4) In accordance with guidelines issued by RBI, advances have been classified
by UCBs as standard, sub-standard, doubtful and loss assets.
5) The selected banks are located in urban area of Pune district, application for
loan and other formalities concerning to borrowing are very easy to
understand without complete help to the others.
6) It has been realized that most of the customers have little information about
the various schemes for loans and advances provided by UCBs
7) UCBs structure is exemplified by its pronounced focus on needs of small and
micro credit. It underwent phenomenal transformation since 1966.
Heterogeneity in size and space is the hallmark of UCBs. Unlike other
cooperative credit institutions, it is not dependent on external assistance.
32
8) The banks have not extended any finance to the members of the Directors
and their relatives, nor renewed and granted extensions to such loans.
9) Lack corporate governance, dual control, political interference, incidence of
financial weakness, lack of professionalism, etc. are said to be major
drawbacks of the sector. Sustained growth of this sector depends on speed
atwhich those weaknesses are corrected, efficient management and
efficacy of regulation.
10) Due to professional management, dynamic leadership the some Urban Co-
op. Banks made the financial inclusion in last a decade. This shows that the
urban cooperative banks were marching towards the national goals. Of
course, there are a number of deficiencies in the working of the banks such
as members' passive participation and the over dues of loans, and hence the
usefulness of the women's banks is to be provided in future than at present.
11) The urban cooperative banks have unique importance among the people
because they have fulfilled their needs in time.
12) Due to professional management, dynamic leadership the some Urban Co-
op. Banks made the financial inclusion in last a decade. This shows that the
urban cooperative banks were marching towards the national goals. Of
course, there are a number of deficiencies in the working of the banks such
as members' passive participation and the overdues of loans, and hence the
usefulness of the women's banks is to be provided in future than at present.
13) RBI stipulates that 60 per cent of the credit of urban cooperative banks
must flow to priority sector out of which 25 per cent should be for weaker
sections. The urban co-operative banks do not deny their social obligations
but the fact remains that for want of sufficient number of eligible
borrowers to fulfill the target of weaker section advances, these banks find
it difficult to adhere to these stipulations.
14) There seems to be controversy over the principle of 'Open Membership' in
respect of urban banks. Some banks have already become too large in
respect of membership and they feel that any further addition of members
would make them unmanageable.
33
15) Members of urban co-operative banks largely depend on the banks'
finances for acquiring their own houses. The urban banks have been doing
a lot for housing finance in cities and semi -urban places.
16) The democracy among urban banks is mainly found in the state where co-
operative movement is under-developed. The banks which are having high
over dues and are not self-reliant in their resources or mismanaged are
heading towards dormancy and such banks need rehabilitation.
17) It is concluded that Janseva Sahakari Bank has highest increase and
Indrayani Cooperative Bank Ltd, Pune has lowest increase in loans and
advances.
4.3 Suggestions
On the basis of the study made so far it is clear that the growth of urban co-operative
banks on the whole was satisfactory, though therewere imbalances in the various
factors. However, we can suggest some ofthe recommendations which can help to
improve the functioning ofurban co-operative banks.
1) The bank should provide staff with sufficient training. For improving its
performance, it has to concentrate on recovery performance, controlling
expenses, robust risk management practices and diversifying their
operations.
2) The due considerations should be given to the urban areas while opening
the branches.
3) Taking into the consideration the volume of members, deposits and loan
disbursement, the women's banks can divide their work into sub-sections
headed by the sectional head and the member of the board of directors.
The committees such as loan, administration,planning and development,
audit and inspection should beappointed. These sections can help to
speed up the working ofbanks.
4) The experienced and enlightened board of directors will make the
management efficient. Therefore, there is a need for training to board of
directors, as it is said, "It is not the good laws that run the good banking,
34
but it is good people who run the good/sound banks".
5) The refinance facilities of Nations Housing bank should be implemented
through the urban co-operative banks. Generally the loan advanced by
urban banks was for a period of three years. But the loans for
construction purpose require larger amount and longer period, and
therefore, the bank cannot make headway in this respect.
6) It will be wise to take some 'nursing steps' before the bank can go into
rehabilitation. The proper nursing measures can be taken when the
symptoms of financial weakness are seen, so that the bank will not
become weak.
7) There should be uniformity in the presentation of the annual reports of
the banks. The annual reports should give at least 5 years' progress report
in respect of membership, paid-up share capital, deposits, loans, over
dues, profit and loss, audit class, etc.. This will enable the members as
well as the general public to know the working of banks.
8) The 'loan cards' may be issued to the members. Such cards will enable
the member to know the duration, rate of interest and loans outstanding.
9) There should be an Apex bank for the urban co-operative banks to take
care of urban banks.
10) With a view to redressing the complaints of the members and the
customers/deposits the 'Suggestion Box' should be kept in the women's
banks. It was found that none of the banks was having this facility.
35
Bibliography
36
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37
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24) Annual Reports (2011 to 2013) Indrayani Cooperative Bank Ltd, Pune
25) Annual Reports (2011 to 2013) Prerana Co-operative Bank Ltd, Pune
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Ltd, Pimpri- Chinchwad
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.Magazines
1) Economics and Political Weekly. January, March1988.
2) YOJANA
3) SAMPADA
4) LOKRAJYA
5) LOKPRABHA
NewsPaper
1) Lokmat
2) Sakal
38
3) Loksatta
4) The Hindu
5) The IndianExpress
6) MaharashtraTimes
7) Pudhari
8) Times OfIndia
Websites
1) http://www.nibm.com
2) https://www.rbi.org.in
3) http://www.indiastat.com
39
PhotoGallery
40
Photo Gallery
The people are making their transitions in the bank.
The people are making inquiry about loans.
The employees are checking the forms.
41
A woman is submitting her application for account.
The employees are working in the bank.
