CHAPTER:1

INTRODUCTION TO

BANKING SECTOR

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Introduction to Banking in India:-

Finance is the life blood of trade, commerce and industry. Now-a-days, bank money acts as the

back bone of modern business. Development of any country mainly depends upon the banking

system. The term bank is derived from the French word “Banco” which means abench or money

exchange table. In olden days, European money lenders or money changers used to display coins

of different countries in big heaps on benches or tables for the purpose of lending or exchanging.

A bank is a financial institution which deals with the deposits and advances and other related

services. It receives money from those who want to save in the form of deposits and lends money

to those who need it.

In this modern world, bank has improved a lot in each and every aspects and services given by

bank to their customers. Bank performs variety of functions such as primary functions and

secondary functions. Under primary functions there are certain functions such as accepting

deposits and granting loans to the needed persons. Bank accepts deposits in various forms like as

saving deposit, current deposit, fixed deposit, recurring deposit. Bank grants advance in various

ways viz overdraft, cash credit, loans, discounting bills.

Bank performs secondary functions such as agency functions and utility functions. Now, under

agency functions there are services like transfer of funds, portfolio management, collection of

cheques. Utility functions viz drafts, lockers, underwriting projects, etc.Now-a-days bank is

developing in the field of insurance also. Bank deals with big project. Bank provides loans on

short term basis as well as long term basis.

There are number of banks in India. The different banks like as Saraswat bank, Nav-Jeevan bank,

Axis bank, Punjab national bank, Canada bank, HDFC bank, Union bank, State bank of India,

and many more. The Reserve bank of India is bankers bank. The various differences in all the

banks and RBI are - it prints notes, it does not deal with people; it deals with banks. It frames

rules, regulations and policies for all the banks. All banks work under RBI.The nationalized

banks initially concentrated on large cultivators and small farmers who were engaged in raising

high yielding varieties of food grains. The government has extended the integrated rural

development programmers to all development blocks in the country and has asked the

commercial banks to finance the IRDP.

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Definitions of bank:-

Oxford dictionary defines a bank as,

“An establishment for custody of money which it pays out on customers order.”

The Indian banking act 1949 defines banking company as,

“A company which transacts like business of banking has in India” & the word banking has been

defined as “accepting for the purpose of lending or investments of the deposits of money from

the public, repayable on demand or otherwise & withdraw able by cheque, draft, order or

otherwise.”

 GLOBALIZATION

Strengthening financial systems has been one of the central issues facing emerging markets

and developing economies. This is because sound financial systems serve as an Important

channel for achieving economic growth through the mobilization of financial savings,

putting them to productive use and transforming various risks.

Many countries adopted a series of financial sector liberalization measures in the late1980s

and early 1990sthat included interest rate liberalization, entry deregulations, reduction of

reserve requirements and removal of credit allocation. In many cases, the timing of

financial sector liberalization coincided with that of capital account liberalization.

Domestic banks were given access to cheap loans from abroad and allocated those

resources to domestic production sectors. 

The Main banking sector can be divided into five distinct sub-sectors:

1. Clearing

2. Private

3. Off- Retail

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4. Savings

5. Trust

Over the past 15 years the sector has grown by between 3% and 9% pa but has been

in decline since 2002 and faces a further sharp reduction.

Banking facilities on the range from basic current and deposit account facilities to

complex wealth management structures. However, there is no genuinely uniqueness

in Man banking products.

In a global context, the Man banking sector offers a mainly retail, mass-affluent

proposition targeting UK expatriates. Its chief revenue stream is derived from

international personal client business referred from UK and International Group

offices.

Characteristics:

In this modern world, there must be certain features of bank. Following are the characteristics of

bank:-

Dealing in bank

Individual firm or company

Acceptance of deposits

Giving advances

Payment & withdrawal

Agency & Utility services

Profit and service orientation

Ever increasing functions

Connecting link

Banking business

Name identity

Development role

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Functions:

Bank performs certain functions such as primary functions and secondary functions.bank gives

us various facilities such as accepting deposits, granting loans, drafts, locker facilities,

underwriting projects, discounting of bills of exchange cash credit, periodic payments, periodic

collections, etc.

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CO –OPERATIVE BANK

History

The Bank was formed in 1872 as the Loan and Deposit Department of Manchester's Co-

operative Wholesale Society, becoming the CWS Bank four years later. However, the bank

didnot become a registered company until 1971. In 1975, the bank became the first new

memberof the Committee of London Clearing Banks for 40 years, and thus able to issue its

owncheques. Since 1974 the Co-operative Bank has consistently offered free banking for

personalcustomers who remain in credit. It was also the first Clearing Bank to offer an interest

bearingcheque account called Cheque & Save, in 1982. In 1991 the Bank shook the credit card

marketwhen it introduced a guaranteed "free for life" Gold Visa card.The Co-operative banks in

INDIA have a history of almost 100 years. The Co-operativebanks are an important constituent

of the Indian Financial System, judging by the role assignedto them, the expectations they are

supposed to fulfil, their number, and the number of officesthey operate. The co-operative

movement originated in the West, but the importance that suchbanks have assumed in India is

rarely paralleled anywhere else in the world. Their role in ruralfinancing continues to be

important even today, and their business in the urban areas also hasincreased phenomenally in

recent years mainly due to the sharp increase in the number of primary co-operative banks. Co

operative Banks in India are registered under the Co-operativeSocieties Act. The cooperative

bank is also regulated by the RBI. They are governed by theBanking Regulations Act 1949 and

Banking Laws (Co-operative Societies) Act, 1965.

Introduction

Co-operative movement is quite well established in India. The first legislation on co- operation

was passed in 1904. In 1914 the Maclagen committee envisaged a three tierstructure for co-

operative banking viz. Primary Agricultural Credit Societies (PACs) at the grassroot level,

Central Co-operative Banks at the district level and State Co-operative Banks at statelevel or

Apex Level. The first urban co-operative bank in India was formed nearly 100 years backin

Baroda.The co-operative banks arrived in India in the beginning of 20th Century as an

officialeffort to create a new type of institution based on the principles of co-operative

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organisationand management, suitable for problems peculiar to Indian conditions. These banks

wereconceived as substitutes for money lenders, to provide timely and adequate short-term

andlong-term institutional credit at reasonable rates of interest.In the formative stage Co-

operative Banks were Urban Co-operative Societies run oncommunity basis and their lending

activities were restricted to meeting the credit requirementsof their members. The concept of

Urban Co-operative Bank was first spelt out by MehtaBhansali Committee in 1939 which

defined on Urban Co-operative Bank. Provisions of Section 5(CCV) of Banking Regulation Act,

1949 (as applicable to Co-operative Societies) defined anUrban Co-operative Bank as a Primary

Co-operative Bank other than a Primary Co-operativeSociety was made applicable in 1966.

DEFINITION OF CO-OPERATIVE BANKS

A co-operative bank is a financial entity which belongs to its members, who are at the sametime

the owners and the customers of their bank. Co-operative banks are often created bypersons

belonging to the same local or professional community or sharing a common interest.Co-

operative banks generally provide their members with a wide range of banking and

financialservices (loans, deposits, banking accounts ). Co-operative banks differ from

stockholder banksby their organization, their goals, their values and their governance. In most

countries, they aresupervised and controlled by banking authorities and have to respect

prudential bankingregulations, which put them at a level playing field with stockholder banks.

Depending oncountries, this control and supervision can be implemented directly by state entities

ordelegated to a co-operative federation or central body.

Features:

Customer-owned entities

In a co-operative bank, the needs of the customers meet theneeds of the owners, as co-operative

bank members are both. As a consequence, the first aimof a co-operative bank is not to maximise

profit but to provide the best possible products andservices to its members. Some co-operative

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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 control

Co-operative banks are owned and controlled by theirmembers, who democratically elect the

board of directors. Members usually have equal votingrights, according to the co-operative

principle of one person, one vote .

Profit allocation

In a co-operative bank, a significant part of the yearly profit, benefits orsurplus is usually

allocated to constitute reserves. A part of this profit can also be distributed tothe co-operative

members, with legal or statutory limitations in most cases. Profit is usuallyallocated to members

either through a patronage dividend, which is related to the use of theco-operative s products

and services by each member, or through an interest or a dividend,which is related to the number

of shares subscribed by each member.

Co-operative Banks are organized and managed on the principal of co-operation, self-help, and

mutual help. They function with the rule of one member, one vote . Functionon no profit,

no loss basis. Co-operative banks, as a principle, do not pursue the goalof profit

maximization. Co-operative bank performs all the main banking functions of deposit

mobilization, supply of credit and provision of remittance facilities. Co-operativeBanks provide

limited banking products and are functionally specialists in agriculturerelated products.

However, co-operative banks now provide housing loans also.

Co-operative Banks belong to the money market as well as to the capital market.

Primary agricultural credit societies provide short term and medium term loans.

LandDevelopment Banks (LDBs) provide long-term loans. SCBs and CCBs also provide

bothshort term and term loans. Co-operative banks are financial intermediaries onlypartially. The

sources of their funds (resources) are (a) central and state government, (b)the Reserve Bank of

India and NABARD, (c) other co-operative institutions, (d)ownership funds and, (e) deposits or

debenture issues. It is interesting to note thatintra-sectoral flows of funds are much greater in co-

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operative banking than incommercial banking. Inter-bank deposits, borrowings, and credit from a

significant partof assets and liabilities of co-operative banks. This means that intra-sectoral

competitionis absent and intra-sectoral integration is high for co-operative bank.

MAIN FUNCTIONS OF CO-OPERATIVE BANKS

1.Co-operative Banks are organised and managed on the principal of co-operation, self-help,and

mutual help. They function with the rule of "one member, one vote" function on "noprofit, no

loss" basis. Co-operative banks, as a principle, do not pursue the goal of profitmaximisation. Co-

operative bank performs all the main banking functions of depositmobilisation, supply of credit

and provision of remittance facilities. Co-operative Banksprovide limited banking products and

are functionally specialists in agriculture relatedproducts. However, co-operative banks now

provide housing loans also. UCBs provideworking capital loans and term loan as well.

2. 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

urbanand non-agricultural business of these banks has grown over the years. The co-

operativebanks demonstrate a shift from rural to urban, while the commercial banks, from urban

torural. Co-operative Banks belong to the money market as well as to the capital market.Primary

agricultural credit societies provide short term and medium term loans.

3. Cooperative banks in India finance rural areas under:·

Farming

Cattle

· Milk·

Hatchery·

Personal finance

4.Cooperative banks in India finance urban areas under:·

Self-employment·

Industries·

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Small scale units·

Home finance·

Consumer finance·

Types

There are two types of co-operative banks in INDIA.

1. The first is the short term lending oriented Co-operative Banks. In this category there areagain

three sub categories of banks which are the State Co-operative banks, District Co-operative

banks and the Primary Agricultural Co-operative societies.

2. The second is the long term lending oriented Co-operative banks. In this second categorythere

are land developments banks which are at three levels. First is the state level, thesecond is district

level, and the third is the village level.

Again the Co-operative banking structure in India is divided into five main categories and

thesecategories are:

1. Primary Co-operative Credit Society

.2. Central Co-operative Banks.

3. State Co-operative Banks.

4. Land Development Banks.

5.Urban Co-operative Banks.

It is very much clear that co-operative banks have very much importance in

nationaldevelopment. Without the help of co-operative banks, millions of people in INDIA

would belacking the much needed financial support.

1.Primary Co-operative Credit Society :

The primary co-operative credit society is an association of borrowers and non-

borrowersresiding in a particular locality. The funds of the society are derived from the share

capital anddeposits of members and loans from central co-operative banks. The borrowing

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powers of themembers as well as of the society are fixed. The loans are given to members for the

purchase of cattle, fodder, fertilizers, pesticides, 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

aswell as individuals. The funds of the bank consist of share capital, deposits, loans and

overdraftsfrom state co-operative banks and joint stocks. These banks provide finance to

membersocieties within the limits of the borrowing capacity of societies. They also conduct all

thebusiness 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 watchdogof

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 cooperative banks lendmoney to

central co-operative banks and primary societies and not directly to the farmer.

4.Land development banks:

The Land development banks are organized in 3 tiers namely; state, central, and primary

leveland they meet the long term credit requirements of the farmers for developmental

purposes.The state land development banks oversee, the primary

land development banks situated inthe districts and tehsil areas in the state. They are governed

both by thestate government and Reserve Bank of India. Recently, the supervision of land

developmentbanks has been assumed by National Bank for Agriculture and Rural development

(NABARD).The sources of funds for these banks are the debentures 42subscribed by both

central and stategovernment. These banks do not accept deposits from the general public.

5.Urban Co-operative Banks :

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary co-

operative banks located in urban and semi-urban areas. These banks, till 1996, were allowed

tolend money only for non-agricultural purposes. This distinction does not hold today. These

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banks were traditionally centered on communities, localities, work place groups. Theyessentially

lend to small borrowers and businesses. Today, their scope of operations haswidened

considerably. The origins of the urban co-operative banking movement in India can betraced to

the close of nineteenth century. Inspired by the success of the experiments relatedto the

cooperative movement in Britain and the co-operative credit movement in Germany,such

societies were set up in India. Co-operative societies are based on the principles of cooperation,

mutual help, democratic decision making, and open membership. Cooperativesrepresented a new

and alternative approach to organization as against proprietary firms,partnership firms, and joint

stock companies which represent the dominant form of commercial organization. They mainly

rely upon deposits from members and non-members andin case of need, they get finance from

either the district central co-operative bank to whichthey are affiliated or from the apex co-

operative bank if they work in big cities where the apexbank has its Head Office. They provide

credit to small scale industrialists, salaried employees,and other urban and semi-urban residents.

Recent developments

Over the years, primary (urban) cooperative banks have registered a significant growth in

number, size and volume of business handled. As on 31st March, 2003 there were 2,104 UCB s

of which 56 were scheduled banks. About 79 percent of these are located in five states, -Andhra

Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. Recently the problems facedby a few

large UCBs have highlighted some of the difficulties these banks face and policy endeavours are

geared to consolidating and strengthening this sector and improving governance.

1.The cooperative banks/credit institutions constitutes the second segment

2.of Indian banking system, comprising of about 14% of the total banking

sector asset (March 2007).

3.Bulk of the cooperative banks operate in the rural regions with rural coop

4.banks accounting for 67% of the total asset and 67% of the total branches

of all cooperative banks.

5.Share of rural cooperatives in total institutional credit was 62% in 1992-93,

34% in 2002-03 and 53% in 2006-07.

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CHAPTER 2:

SARASWAT CO-OPERATIVE

BANK

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 HISTORY OF SARASWAT CO-OPERATIVE BANK

The Bank has a very humble but a very inspiring beginning. On 14th September 1918, “The

Saraswat Co-operative Banking Society" was founded. Mr. J.K. Parulkar became   its first

Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first Secretary and

Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were the people with deep and

abiding ideals, faith, vision, optimism and entrepreneurial skills. These dedicated men in charge

of the Society had a commendable sense of service and duty imbibed in them. Even today, our

honorable founders inspire a sense of awe and respect in the Bank and amongst the shareholders.

The Society was initially set up to help families in distress. Its objective was to provide

temporary accommodation to its members in eventualities such as weddings of dependent

members of the family, repayment of debt and expenses of medical treatment etc. The Society

was converted into a full-fledged Urban Co-operative Bank in the year 1933.

The Bank has the unique distinction of being a witness to History. The Bank, which was

originally founded in 1918, i.e. close on the heels of the Russian Revolution, also witnessed as a

Society and as Bank-the First World War, the Second World War, India's freedom Movement

and the glorious chapter of post-independence India. During this cataclysmic cavalcade of

history, the Bank as a financial institution and its members could not of course remain unaffected

by the economic consequences of the major events. The two wars in particular brought in their

wake, paucities of all kinds and realities and stand by its members in distress as a solid bulwark

of strength. The Founder Members and the later-day management's of the Bank continu

demonstrate their unwavering faith in the destiny of the common man and the co-operative

movement and they encouraged the shareholders to save despite all odds.

Last two decades the Bank has witnessed a steady growth in the business and also taken several

Strategic Business Initiatives like undertaking Business Process Reengineering initiative.

Merging seven coop Banks and then consciously nurturing them.    Bank tied up with VISA

international for issuance of Debit Card.   The Bank has a network of 226 fully computerized

branches as on 31st-Mar-2012 covering six states viz. Maharashtra, Gujarat, Madhya Pradesh,

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Karnataka, Goa and Delhi. The Bank is providing 24- hour service through ATM at 147

locations. As on 31st March, 2012 Bank business had surpassed Rs 33000 Crores. Bank has

retained its coveted position as ZERO NET NPA Bank for the eighth successive year.

In 2011 Bank was granted permission for All India Area of Operation by Reserve Bank of India.

Bank has an  an ambitious business expansion plan in place to have a presence in all major cities

of the country, reach a business level of Rs 50000 Crores by 2016 and Rs 100000 by 2018.

MISSION STATEMENT

"To emerge as one of the premier and most preferred banks in the country by adopting highest

standards of professionalism and excellence in all the areas of working !!!"

MILESTONES

Thanks to these sustained and assiduous efforts over 25 years after its inception, the Bank had

gained Strong foundation in terms of its membership, resources, assets and profits. By 1942, the

Bank was fulfilling all the banking needs of its customers.

During the late fifties, the Bank grew from strength to strength. The Bank had established five

branches within the city of Mumbai and one each at Pune and Belgaum. In its 50th year, the

Bank chose a bee motif to symbolise the Bank's emblem - a fitting and appropriate

characteristics of a Bank that believed in hard work, a search for all that is good, a team spirit to

achieve its objectives and a selfless service to its members and customers. The Bank has grown

in stature, progressed in its social and economic objectives and produced an image of what an

ideal bank should be. Resultantly, in the year 1977-78, the Bank's gross income crossed the

Rs.3.00 crore mark for the first time.

Last two decades the Bank has witnessed a steady growth in the business. The bank has a

network of 205 fully computerised branches covering six states viz. Maharashtra, Gujrat,

Madhya Pradesh, Karnataka, Goa and Delhi. The Bank is providing 24- hour service through

ATM at 101 locations.

In 1988 the bank was conferred with "Scheduled" status by Reserve Bank of India.The Bank is

the first co-operative bank to provide Merchant Banking services.The Bank got a permanent

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license to deal in foreign exchange in 1978. Presently the Bank is having correspondent

relationship in 45 countries covering 9 currencies with over 125 banks.

In 1992 Bank completed 75 years. Platinum Jubilee Celeberations were inaugurated on 14th

September,1992. Bank also crossed the business level of Rs 700 Crores

The Beginning of the 21st Century has been a giant leap forward for the Bank. Bank chose a path

of organic/inorganic growth and our pace of growth accelerated .Bank's total business which was

around Rs 4000 Crore in 2000 almost tripled to Rs 15295 Crore in 2007. The Business of the

Bank as on 31st March 2009 had crossed Rs 21000 Crores.

Bank in the year 2008 launched the Branding Initiative .The purpose of such an exercise was to

reconfirm the thrust of Bank on its core values ,which can be summed up as "Sense of Belonging

".The name of the Bank should always inspire the Sense of Belonging in all its stakeholders and

that Bank continues to fulfill the changing needs and expectations of the customer with

unflinching gusto and aplomb .

As on 31 st March,2010 Bank had surpassed the business level of Rs 23000 crore business.

Bank by 1st November,2010 has already surpassed the business level of Rs 25000 crore .

It is a matter of immense pride for the Bank that Bank's new Corporate Office at Prabhadevi -

Mumbai has recently become operational.The office reverberates our strong presence in the

financial capital of the country. The massive edifice in crystal glass in heart of Mumbai gently

reminds everyone of the numero -uno position which the Bank holds in the Cooperative Sector.

The usage of state of art technology coupled with personal ambience's to make everybody

comfortable once again reiterates Bank's adherence to "Think Global, Act Local".

Profile-

"Service to the Common Man" has been the motto of Saraswat Bank for the last 91 years. Bank

inspite of its growth in size has been able to offer to the customers the dual advantage of "Ability

of Big Banks and Agility of Small Banks"

The Bank still continues to function with the glorious tradition in public services Besides being

the largest Urban Co-operative Bank in India, Saraswat Bank has now become the largest in

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Asia. Saraswat Bank has now 205 fully computerised branches, 12 Zonal Offices and 23

departments located across 6 States viz. Maharashtra, Goa, Gujarat, Madhya Pradesh, Karnataka

and Delhi.

Saraswat Bank attributes this success to its undying spirit to serve the common man and to the

sharpening of its competitive edge by constantly upgrading technology to match international

standards. The Bank is fully computerised and offers convenient working hours.

Saraswat Bank has introduced a wide range of credit schemes at attractive interest rates, which

has become very popular, especially among the middle-class in view of the easy repayment

plans. Bank offers attractive interest rates on deposits and also various add on features at very

market competitive rates .

SWOT ANALYSIS:

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,

Opportunities, and Threats involved in a project or in a business venture. It involves specifying

the objective of the business venture or project and identifying the internal and external factors

that are favorable and unfavorable to achieve that objective. The technique is credited to Albert

Humphrey, who led a convention at Stanford University in the 1960sand 1970s using data from

Fortune 500 companies.

STRENGTH:

It specifies the attributes of the person or company that are helpful to achieve the

objective(s).

Saraswat Bank is No. 1 amongst the 1,700 UCBs in the Urban Cooperative Banking

Sector in India with over 90 years of cumulative banking experience.

High standard regulatory environment.

Flexible work permit system and good quality staff offering personal client service.

Bank has implemented Core Banking Solution (CBS) in the Bank. This solution

primarily aims at having a unified customer approach.

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Bank is a member of the Credit Information Bureau India Ltd. (CIBIL). CIBIL is

India’s first credit information bureau and is a repository of factual information on

the credit history and repayment records of millions of commercial and individual

borrowers.

OPPORTUNITY:

External conditions that are helpful to achieving the objective(s).

Maharashtra State has a huge banking business market of around Rs. 17,00,000/-

crore. Of these Rs. 17,00,000 crore, Saraswat Bank has a business stake of only Rs.

20,000 crore, which is a miniscule of merely 1.2% share in the total banking

business in the State of Maharashtra. This provides a huge opportunity to the bank.

Saraswat Bank does 0.3% to 0.4% of the nation’s banking business. In India today,

60%of the population do not have access to a banking product; 80% of the

population do not have access to an insurance product and 98% of the population

do not have access to a stock market product. Thus, there is tremendous untapped

growth potential in the Indian subcontinent

WEAKNESS:

Refusal to dilute stake in PSU banks: The government has refused to dilute its stake

in PSU banks below 51% thus choking the headroom available to these banks for

raining equity capital.

Lack of competitive differential with other offshore centre’s

Rigid legislation that inhibits business development

THREAT:

Rise in inflation figures which would lead to increase in interest rates.

Increase in the number of foreign players would pose a threat to the PSB as well as

the private players.

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Anti-offshore regulations in foreign target markets restricting the development

of products and new markets.

Downsizing and reduction in banking operations in favour of rival jurisdictions.

Outsourcing to cheaper jurisdictions

Subsequent impact on rest of finance sector ecosystem

SERVICES AND PRODUCT OFFERED BY SARASWAT BANK 

It is our earnest Endeavour to offer suite of new and competitive financial products and services.

We have for this purpose tied up with various insurance companies. The details of tie-up and

products offered are given below:

Life insurance:

We are the Corporate Agents for the distribution of Life Insurance products, of M/S HDFCS

standard Life Insurance Co Ltd. Under this tie up arrangement, we offer following life insurance

products:

Protection Plans:

Protection Plans help to shield your family from uncertainties in life due to financial losses in

terms of loss of income that may dawn upon them in case of your untimely demise or critical

illness. Protection Plans go a long way in ensuring your family financial independence in the

event of your unfortunate demise or critical illness. They are all the more important if you are the

chief wage earner in your family. No matter how much you have saved or invested over the

years, sudden eventualities, such as death or critical illness, always tend to affect your family

financially apart from the huge emotional loss.

Children Plans:

Children Plans help to save, so that you can fulfill your child’s dreams and aspirations. These

plans go a long way in securing your child’s future by financing the key milestones in their lives

even if you are no longer around to oversee them. Children’s Plans help you save steadily over

the long term so that you can secure your child’s future needs, be it higher education, marriage or

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anything else. A small sum invested by you regularly can help you build a decent corpus over a

period of time and go a long way in providing your child a secured financial future alongwith.

Retirement Plans:

 Retirement Plans provide you with financial security so that when your professional income

starts to ebb, you can still live with pride without compromising on your living standards. By

providing you a tool to accumulate and invest your savings, these plans give you a lump sum on

retirement, which is then used to get regular income through an annuity plan. Given the high cost

of living and rising inflation, employer pensions alone are not sufficient. Pension planning has

therefore become critical in today's world.

Savings and Investment Plans:

 You have always given your family the very best. And there is no reason why theyshouldnt get

the very best in the future too. As a judicious family man, your priority is to secure the well-

being of those who depend on you. Not just for today, but also in the long term. More

importantly, you have to ensure that your family’s future expenses are taken care, even if

something unfortunate were to happen to you. Our Savings & Investment Plans provide you the

assurance of lump sum funds for you and your family’s future expenses. While providing an

excellent savings tool for your short term and long term financial goals, these plans also

assure your family a certain sum by way of an insurance .

Health Plans:

 Health plans give you the financial security to meet health related contingencies. Due to

changing lifestyles, health issues have acquired completely new dimensions becoming more

complex in nature. It becomes imperative then to have a health plan in place, which will ensure

that no matter how critical your illness is, it does not impact your financial independence.

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Easy pay:

Here is one more exciting facility the Bank has offered to relieve its customers, our  esteemed

client, from spending your valuable time standing in a queue for routine utility bill payments. All

you have to do is to walk into any of our branch and register yourself under : Easy Pay “scheme

for all your recurring utility bill payments such as Telephone, Electricity Bills, Cellular Phone

Bills, Insurance Premium & many more. Once you are registered all your future bills will be

paid automatically through the bank account with us.

MACRO ANALYSIS

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Current trends and technologies

Technology plays a very important role in banks internal control mechanisms as well as services

offered by them. It has in fact given new dimensions to the banks as well as services that they

cater to and the banks are enthusiastically adopting new technological innovations for devising

new products and services. The latest developments in terms of technology in computer and

telecommunication have encouraged the bankers to change the concept of branch banking to

anywhere banking. Use of ATMs and Internet banking has allowed µanytime, anywhere

banking¶ facilities. Automatic voice recorders now answer simple queries; currency accounting

machinesmake the jobs easier for the employees and ensure faster service to the customers.

Creditcard facility has encouraged an era of cashless society. Today MasterCard and Visa

cardare the two most popular cards used world over.The banks have now started issuing

smartcards or debit cards to be used for making payments. These are also known as electronic

purses. With increasing popularity of tele- banking and e-banking, banking has become a 24*7

activity. And a system like ElectronicClearing Service has made receiving dividends and interest

easier and safer by making bulk transfers from one account to many accounts (or vice-versa)

possible. Mobile banking too is growing rapidly and banks are using SMS as major tool of

promotion, giving great utility to their customers. With such changes in technology, banks today

have left behind their traditional role of accepting deposits and lending money and focus on

providing premium services to their customers to retain their brand name and reputation in the

market.

1) Internet banking :

Internet banking: Also referred to as E-banking, internet banking is changing the banking

industry and is having the major effects on banking relationships. Almost every bank has a

website today and provides for delivery of its products & services electronically. In true Internet

banking, any inquiry or transaction is processed online without any reference to the branch at

any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice to

23

have" service, and it is soon to become a norm from an exception due to the fact that it is the

cheapest way of providing banking services. Using e-banking a customer can view

account balances & statements, transfer

funds between accounts, create FDs Online, request a DD, pay bills, order a cheque book,request

stop payment on a cheque, apply for and access credit cards, apply for loans and most

importantly gets easy access to complete information about various products and offers.

2) Phone Banking :

It use an automated phone answering system with phone keypad response or voice recognition

capability. This feature is known as Interactive Voice Response System (IVR). With the obvious

exception of cash withdrawals and deposits, it offers virtually all the features of an automated

teller machine: account balance information and list of latest transactions, electronic bill

payments, funds transfers between a customer's accounts, etc. Some banks engage call centers to

provide 24*7 services to their customers, via toll-free numbers. Others connect their customers

to phone bankers, but in this case, the service is only available for particular hours for which

phone bankers are available. Some make use of both i.e. toll-free numbers for some services, and

phone bankers for the ones that require professional assistance. Telephone banking

representatives are usually trained to do what was traditionally available only at the branch: loan

applications, investment purchases and redemptions, cheque book orders, debit card

replacements, change of address, etc.

3) Mobile Banking :

ICICI was the first bank in India to introduce complete mobile banking services in the year

2007. Since then, conducting banking operations using the mobile phone has been fast catching

up in the country. It works through a set of text messages (SMS). With SMS a customer can

perform a wide range of query-based transactions from his/her mobile phone, like funds transfer

(within and outside the bank),enquiry services (Balance enquiry/ Mini statement), request

services (cheque book request), bill payment (utility bills, credit cards

24

Saraswat Bank has introduced Mobile Banking. Customers can now initiate the following

transactions at their end by using SMS banking long code “9223810000"

a)Account balance enquiry

Type SMS like “SBAL ” & send it to 9223810000. Sample – “SBAL SBPUB 10” 

b)Last three transactions 

Type SMS like “LST3 ” & send it to 9223810000.

Sample – “LST3 SBPUB 10”

ATM facilities

25

VISA Debit Card

To add to your convenience , your Bank has tied up with VISA for issuing Debit Card. VISA

has a long-standing name in the banking industry in India as well as abroad. Visa is a reliable,

international brand. Debit Card is basically a convenience card which can be used at a POS for

making purchases at Merchant Establishments. This card can also be used as an ATM card for

26

withdrawing cash at all the ATMs bearing VISA logo in India and aboard.

Debit Cards

This card can be used as an ATM card for withdrawing cash at the following ATMs:

Debit card can be used at Domestic as well as International ATMs, POS machines

bearing the Visa logo at merchant establishment and for Purchases/Ticket Booking

through Internet that use a secured e-Commerce Payment Gateway.

Debit card can be used up to the balance available in the account of cardholder. The

maximum amount for transaction (Point of Sale + Online + ATM) is maintained at Rs

25000/- per day.

Benefits

a. Facilitates electronic transactions and saves the customer from carrying cash

b. Provides access to merchant establishments, eCommerce transactions and ATM

access.

c. Extensive usage across a number of establishments as VISA is widely recognized in all

leading departmental stores, ecommerce sites and retail outlets all over the world.

27

Registration

The form for Registration can be downloaded from the "forms" section in the website or

visit nearest branch

Charges :

CHARGES HEAD CHARGE

Annual Fee Rs 99/- p.a. plus taxes

Additional Card Rs 99/- per card plus taxes.

Replacement Of a Damaged

Debit Card

NO CHARGE

Replacement Of A Lost Debit

Card

Rs 99/- per card plus taxes.

Pin Replacement Rs 25/-

SARASWAT BANK ATMs 

Cash Withdrawal / Balance

Enquiry

FREE

Other banks ATM for Savings

A/c 

a)Cash Withdrawal/Balance

Enquiry

Free for the first five* transactions in a calendar month.

From 6th transaction onwards cash withdrawal will be

charged at Rs 20/- per transaction(inclusive of service

tax) & balance enquiry will be charged at Rs 10/- per

transaction(inclusive of service tax)

*Includes both financial (cash withdrawal) & non-

financial (balance enquiry) transactions.

Other banks ATM for Current

A/c holders and Overdraft A/c

holders

a) Cash Withdrawal

Charges of Rs 20/-(inclusive of tax) per cash withdrawal

for every transaction. 

Free.

28

b) Balance Enquiry

ATM Cash Withdrawal

(Outside India)

Rs 120/- per transaction.

ATM Balance Enquiry

(Outside India)

Rs 15/- per enquiry.

Sales Slip Retrieval / Charge

Back Processing Fee

Rs 225/-

Combined per day limit for

ATM Cash Withdrawal / POS

Transaction / Online Transaction

Rs 25,000/-

For usage at Merchant

Establishments (POS)

No charges

For Internet Payments No charges

For usage at Petrol Pumps Surcharge @ 2.50% of transaction amount or Rs 10/-

(whichever is higher)

For usage at Railway Stations or

booking train tickets through

Internet

Surcharge @ 2.50% of transaction amount or Rs 10/-

(whichever is higher)

CURRENT POSITION OF THE COMPANY:

29

2007 2008 2009 2010 20110

5000

10000

15000

20000

25000

30000

15295.4

18879.1299999999

21029.2623517.08

27312.95

Total Business(Rs in crores)

2007 2008 2009 2010 20110

5000

10000

15000

20000

25000

10745.47

13874.115622.82

17071.0619186.27

Working FundsRs in crores

30

2007 2008 2009 2010 20110

200

400

600

800

1000

1200

1400

1600

1042.41130.95 1174.24

1270.37

1473.49

Own Funds

2007 2008 2009 2010 20110

2000

4000

6000

8000

10000

12000

14000

16000

18000

8924.94

11430.8212918.85

14266.7315800.96

Deposits

31

2007 2008 2009 2010 20110

2000

4000

6000

8000

10000

12000

14000

6370.467448.31

8110.419250.349999999

96

11511.99

Advances

Following schemes and interests which bank provides:-

Saraswat Bank ups interest on savings accounts to 6.14%

The country's largest urban cooperative Saraswat Bank today announced that it would offer 6%

interest on savings deposits which will be payable every quarter and thus effectively paying

6.14% interest on an annual basis.

The country's largest urban cooperative Saraswat Bank today

announced that it would offer 6% interest on savings deposits

which will be payable every quarter and thus effectively paying

6.14% interest on an annual basis

"We have decided to offer 6% interest on savings deposits,

effective December 1.

32

In fact, since we will be making the payout every quarter, the effective rate will be 6.14% on an

annual basis," bank chairman Ekanath Thakur told reporters here.

Giving the rationale for effecting the change, Thakur said, "We feel that in today's banking, the

depositor is short-changed. And we, being the largest in the segment, wanted to change that and

reward our depositors and also set the tone for the rest."

It was on October 25, the Reserve Bank had deregulated the yield on savings accounts and let the

banks to set the pricing. However, so far only three mainstream banks, that too mid-size ones -

Yes Bank, Kotak Bank and IndusInd Bank-- have followed suit.

Thakur said, on the day (November 25) the Reserve Bank issued the guidelines deregulating

savings bank deposit rates, their asset liability committee met and decided to reprice the SB

assets.

On the impact of this on his margins, the chairman said it will be about 40-45 basis points. The

bank's current net interest margin, which is a key measure of a bank's profitability, stands at

3.78%, he added.

But Thakur sounded confident about absorbing the higher outgo by better cost rationalisation and

other overhead expenses. On expansion plan, Thakur said, the bank will have 300 branches by

the end of this fiscal and 500 by 2014.

Currently, the bank, set up in 1918, has 223 branches and 141 ATMs. Thakur said the bank has

CASA of 28% with savings deposit accounting for 22% of its deposits while current deposits are

6%.

The overall asset of the bank stood at Rs 29,500 crore as of the September quarter out of which

deposit stood at Rs 17,000 crore and the rest were advances.

Saraswat Co-operative Bank offers various loans to its customers. Bank takes care of its

customers by offering comprehensive loan packages at extremely competitive rates, without

any hidden costs. Our personalised service coupled with state of the art technology at

absolutely market competitive rates shall make your Banking experience a truly memorable

one.

33

Different services provided by bank :

RTGS/NEFT

Cash Pick Up

Nomination of Deposits

Death Claim Settlement

Standing Instructions

Lockers

Various deposit schemes :-

Saraswat Bank provides information of it's various Investment & Insurance products which

customers can avail of with the bank.

I. Savings Deposit

A Savings Account for everyone to inculcate the habit of saving and avoid thrift. Bank offers

you a host of convenient features and banking channels to transact through. Personalized service

coupled with technology enabled products is the hallmark of our service. We offer you a saving

account with host of products like SMS Banking, Mobile Banking and allow you to operate your

account in the confines of your home /office through internet . Bank offers you a VISA debit

card. All the services are offered to you with very simple terms and conditions and minimal

charges. The salient features of the saving account are given as under

Bank conveniently with facilities like Net Banking and mobile banking- Check your

Account Balance. Take advantage of Easy Pay, an instant solution to all your frequent

utility bill payments

Never overspend. Shop using your international Visa Debit Card depending on the

34

balance in your saving account

Wide ATM coverage  and get connected to ATM across the world through VISA Debit

Card 

Free Personalized Cheque Book with name printed on each cheque leaf for enhanced

security.

Avail of facilities like Safe Deposit Locker .

Free Passbook facility available at home branch for account holders (individuals).

II. Fixed Deposit Schemes

Term Deposit - Interest Payout Schemes  

Interest – Monthly, Quarterly, Half Yearly

Eligibility 

Individual Minor by guardian, Organizations, Co-op. Societies

Features

TDS applicable Form 15H/15G required to be submitted for exemption of TDS. 

Nominal member of the bank will also be exempted from TDS. If you are exempt from paying

tax, you need to present Form 15H when you open a Fixed Deposit and subsequently at the

begin

Penalty

In case of payment before maturity Interest upto 15 days will be Nil

Above 15 days : 1% less than applicable rate of Interest for the actual period for which deposit is

kept with the Bank.

III. Current Deposit

35

36

Fasten your pace with a current account which offers you out of the world service experience by

combining personalized service with many appropriately priced features. Our customer friendly

staff will not leave any stone unturned to make your experience a memorable one. Internet

Banking, SMS Banking all will allow you to Bank from the comfortable confines of your home

and office. All our branches are on Core Banking which allows you free transfer of funds from

one account to another at any branch. We also have a tie up with VISA and offer a VISA debit

card.

Bank conveniently with facilities like free Net Banking and SMS Banking - Check your

account balance.

Never overspend. Shop using your international Visa Debit Card depending on the

balance in your saving account.

Wide ATM usage and get access to ATM’s all over the world through our VISA tie-up.

Avail of Safe Deposit Locker  facilities(subject to availability) .

Free monthly statement. 

Avail Personalized chequebook for enhanced security at nominal prices .

Take advantage of Easy Pay. An instant solution to all your frequent utility bill

payments. 

Free Cash Deposit/withdrawal from any branch of Saraswat Bankup to Rs 25000. Free

transfer to any account in any branch of Saraswat Bank through Any Branch Banking.

Essential for small & Medium Enterprises (SMEs)

For a business on the growth phase with a wide range of opportunities to explore, timely

availability of credit is essential to scale new heights.  At Saraswat Bank we see ourselves as

partners to Clients business enabling them  to focus on their business needs.

37

a. Working Capital

We are a Bank with a team of technically qualified  competent customer driven relationship

managers possessing wide industry experience in various segments 

Our Bank has taken lot of efforts to understand customers & empathizing with their needs.

 

We can offer you working capital finance by way of cash credit or loans suitably structured to

your need and risk profile in consortium or as a lead banker. Our working capital solutions are

based on financial , quantitative & qualitative evaluation of your business through our

technically qualified experts.

b. Import Finance

Bank is providing import finance to its valuable customers  by providing letter of credit facility

for its customers to purchase their raw materials . These are generally provided for    90 to 180

days .

Our Bank provides term finance/term loans for business expansion, upgradation of existing

facilities etc to ease the pressures  on margins of the company.The Bank is providing structured

term loans to meet your short term as well as long term funding requirements . We offer specific

solution so as to  match repayment with your cash flows to repay the debt thereby  enhancing

your profitability

c. Export -Credit:

If you are a eligible exporter Sarswat Bank offers you Pre Shipment Credit facilities and

Post Shipment Credit Facilities

d. Pre-Shipment-Credit-facilities:

We offer Pre-shipment credit by way of Packing Credit enabling you to finance

purchase/import of raw materials, processing and packing of the goods meant for exports

Post shipment Credit facilities Post shipment credit facility is offered to an exporter to finance

export sales receivables after the date of shipment of goods till the date of realization of export

38

proceeds .

We offer our client a choice of the following services :

1) Negotiation /Payment /Acceptance of documents under letter of credit. 

2) Purchase/ discount of export document under letter of credit.

3) Advance against export bills sent on collection basis.

4) Advance against exports on consignment basis. 

5) Advance against undrawn balance on exports.

e. Bill Discounting

We are offering facility which are customized to suit your requirement for short term finance

from the   date of sale to date of receipt of payment thereof. Our processes are  simple, allowing

you to establish single window contact with competent dedicated personnel  at any of

our branches as per your convenience.

f. Bank Guarantees

Bank issues various types of guarantees - performance, financial, for its customers. Our

guarantees are well accepted by all government agencies including Customs, Excise, Insurance

Companies, Shipping Companies and all major corporates.

Different types of loans

a) Property Loan

Saraswat Bank offers loan faciltiy for acquiring another asset / property  based on the following

conditions:- 

 

39

Eligibility : 

Salaried employees with minimum net salary of Rs. 10000 pm (Income of spouse may be

added) Professionals, self - employed and others who are income tax assessee having net annual

taxable income of Rs. 150000/- for atleast 3 years continuously.

Firms / companies having net annual taxable income of Rs. 1.50 Lakhs per annum and in

operation for last 3 years making cash profit for last 3 years.

 

Limit-of-Loan

Minimum-Rs.2-lakhs

Maximum - Rs. 50 Lakhs

Security 

Equitable Mortgage of Residential, commercial or industrial property.

Guarantor:

Need not be obtained however in case of firms, companies, guarantee of partners, directors to be

obtained. 

 

Share-Holding 

2.5% of the loan amount, Maximum 2500 shares, Guarantors as nominal members.

 

Documents-Required 

Others:

1)I.T.Returns.

2) For salaried employees income proof such as Form No.16 along with salary certificate from

employer

3)Original Title Deeds of the property offered for mortgage.

4) Other documents as per Vastu Siddhi Loan Scheme

40

b) Rental Loans

Maximum amount or 65 % of the total net rent (i.e. rent after taxes such as property tax, TDS)

to be received whichever is lower.

Margin : 35 % 

Repayment Period: 5 years maximum or till the remaining period of the lease – which is

earlier. 

Security: Equitable mortgage of the property given on rent or any other acceptable property of

value of 35% more than the loan amount, subject to valuation certificate from Bank’s approved

valuer.

Processing Fees. - .0.5 % of the loan amount.

Guarantors : In case the borrower is a partnership firm or a limited company, personal

guarantee of the partners/directors .

41

FINANCIAL ANALYSIS AND STRATEGIES:

Financial Accounting is a process of systematic recording of business transactions in the

various books accounts maintained by organization with the ultimate intention of

preparing financial statements there from. Financial accounting ultimately aims at

preparing financial statements which are basically in two forms:

Profit and loss statement is a period statement and related to curtained period,

usually one year. This tells about the results of operations, either profit or loss,

arising out of the conduct of business operations during that period

Balance sheet which is a potion statement and relates to a particular point of time.

This tells about the various properties held by the business (termed as Assets) and

obligations accepted by the business (termed as Liabilities) as on particular date.

Balance Sheet: The purpose of preparing the balance sheet is to disclose financial status of

an organization in the form of assets and liabilities at a given point of time.

Liabilities: Credits balances in all the personal and real accounts appear on liabilities side.

The following items may appear on the liabilities side:

Capital: Capital Indicates the amount of funds contributes by the owner of

business to requirement of fund of business. Similarly, any amount of profit

earned in past which is not distributed to the owner also belongs to owner and

become a part of the business.

Long term liabilities: This indicates the liabilities which are to be paid off over

long period of span of time say 5 to 10 years. In practical circumstances, it may

consists of long-term loan borrowed from a bank and financial institutes.

Currents liabilities: This indicates the liabilities which are suppose to be paid off

which a very short span of time say one year. In practical circumstances, it

consist Sundry creditors, Advances received from customer, Outstanding

expenses, Income received in advanced, Liability taxes.

42

Assets: Debit balances in all the personal and real accounts appear on assets side.

Following items may appear on assets side:

Fixed assets: Fixed assets indicate the value of infrastructure properties acquired by

the business where the benefit received over long period of time. Fixed assets are

land, building, machinery, furniture vehicles, and computer.

Investments: This indicates the amounts of funds invested by the organization

outside the business.

Current assets: Current assets are the assets which are likely to be converted in the

form of cash of likely to be consumed during the normal operating cycle of a

business within a very short span time say one year. Current assets are stocks,

sundry debtors, cash & bank balances, prepaid expenses.

BALANCE SHEET AS AT MARCH 31, 2011

(Amount in Rs)

CAPITAL & LIABILITIES Schedule 31.03.2011 31.03.2010

1) CAPITAL 1 1,02,83,24,160.00 86,23,11,100

2) RESERVE FUND & OTHER

RESERVES

2 16,46,43,74,616.70 15,52,67,03,382

3) DEPOSITS & OTHER ACCOUNTS 3 1,58,00,96,07,293.8

4

1,42,66,72,86,137

4) BORROWINGS 4 8,45,61,53,945.78 5,62,00,09,609

5) BILLS FOR COLLECTION 15,05,61,88,896.43 14,40,59,01,784

6) BRANCH ADJUSTMENTS 4,64,05,350.95 11,48,47,457

7) OVERDUE INTEREST RESERVE

I. ON INVESTMENTS 86,56,644.00 86,56,644

II. ON LOANS & ADVANCES 1,35,32,79,974.37 1,51,26,21,884

43

8) INTEREST PAYABLE 46,47,62,566.51 49,93,00,234

9) OTHER LIABILITIES 5 8,48,72,72,442.32 7,51,27,72,392

10) PROFIT & LOSS 6 2,12,59,98,810.80 1,21,73,25,875

GRAND TOTAL 211,50,10,24,701.70 189,94,77,36,498

Contingent Liabilities 13 15,63,74,41,052 15,50,03,29,595

(Amount in Rs)

PROPERTY & ASSETS Schedule

31.03.2011

31.03.2010

1) CASH 7 11,03,74,27,758.63 10,00,16,55,468

2) BALANCES WITH OTHER

BANKS

8 2,26,29,21,605.29 4,38,24,29,025

3) MONEY AT CALL & SHORT

NOTICE

34,64,22,562.00 1,31,84,56,314

4) INVESTMENTS 9 52,53,76,68,612.60 53,21,39,11,321

5) ADVANCES 10 1,15

,11,99,23,393.74

92,50,35,46,892

6) INTEREST RECEIVABLE 1,35,32,79,974.37 1,51,26,21,884

7) BILLS RECEIVABLE 15,05,61,88,896.43 14,40,59,01,784

8) FIXED ASSETS 11 5,45,73,77,098.58 5,51,06,28,226

9) OTHER ASSETS 12 8,29,64,60,223.62 7,05,70,97,868

10) COMPUTER SOFTWARE 62,000.02 1,90,000

11) DEFERRED AMORTISATION OF

INVESTMENTS

3,10,14,176.42 3,90,19,314

12) NON-BANKING ASSETS

ACQUIRED IN SATISFACTION

OF CLAIMS

22,78,400.00 22,78,400

TOTAL 211,50,10,24,701.70 189,94,77,36,49

44

Profit and Loss accounts: A profit and Loss account is prepared to disclose the results of

operation of the business transaction during certain duration of time. Accounts may have

following four components:

Manufacturing accounts: This part of profit and loss accounts discloses the results

of manufacturing operations carried out by the organization. The final result in

terms of manufacturing accounts is a cost of production incurred by the

organization.

Trading accounts: This part of profit and loss accounts discloses the results of

trading operations carried by organization. The final results in terms of Gross

Profit earned by the organization.

Profit and Loss accounts: This part of profit and loss accounts discloses the final

results of business transactions of the organization. The final results in terms of Net

profit earned by organization.

Profit and Loss appropriation accounts: This part of profit and loss accounts which

mainly applicable to company form of organization, discloses the manner in which

the net profit earned by the organization is appropriated. The amounts of profit not

appropriated or retained transferred to reserves and surplus in balances sheet.

45

 PERFORMANCE HIGHLIGHTS

Table A

(`in Crore)

Particulars FOR THE YEAR ENDED31-Mar-10 31-Mar-11 % Change

Total Income 1,458.20 1,690.86 15.96%Total Expenditure 1,242.36 1,332.67 7.27%Gross Profit 215.84 358.19 65.95%Less: Provisions 36.68 63.39 72.82%Net Profit Before Tax and Exceptional Items 179.16 294.80 64.55%Less: Income 40.00 81.23 103.08%Net Profit After Tax and Exceptional Items 139.16 213.57 53.47%Less: Exceptional Items 19.49 1.30 -93.33%Net Profit 119.67 212.27 77.38%

AT THE YEAR ENDOwn Funds 1,270.37 1,473.49 15.99%Share Capital 86.23 102.83 19.25%Reserves and Surplus 1,184.14 1,370.66 15.75%Deposits 14,266.73 15,800.96 10.75%Current 1,244.30 1,050.94 -15.54%Savings 3,003.37 3,513.15 16.97%Term 10,019.06 11,236.87 12.15%Advances 9,250.35 11,511.99 24.45%Secured 9,151.61 11,433.19 24.93%Unsecured 98.74 78.80 -20.19%Priority Sector 5,300.48 5,765.90 8.78%% to Advances 57.30% 50.09% -Small Scale Industries 2,946.54 2,443.75 -17.06%Small Businessmen and Traders 689.47 526.94 -23.57%Other Priority Sectors 1,664.47 2,795.21 67.93%Working Capital 17,071.06 19,186.27 12.39%Investments 5,321.39 5,253.77 -1.27%Borrowing And Refinance 562.00 845.62 50.47%Net NPAs (%) 0.00 0.00 0.00Capital Adequacy (%) 14.63 12.74Number of MembersRegular * 1,34,417 1,62,560Nominal 4,94,292 5,26,331Number of Branch Licences/Branches 200 216Number of Employees 2,911 3,338

46

Productivity per Employees 8.08 8.18Profit Per Employes (in laces) 4.11 6.36Return on Average Assets (%) 0.74 1.16Net Interest Margin (%) 2.61 3.52

Maximizing CASA deposits:

A sharp focus on reduction in costs has become priority No. 1 in your Bank. On the liability

side, the cost advantage will be available to your Bank, only if the Bank makes rapid

strides in mobilization of Current Accounts and Savings Accounts (CASA). Major banks in

the country have around 35% to 45% CASA deposits, while your bank has been hitting

only the 22% to 30% range in CASA deposits. As CASA deposits carry an average low

level of interest, the average cost of funds (i.e. CASA Deposits + Term Deposits)comes

down. We have repeatedly impressed on our staff the need to mobilize CASA deposits

aggressively.

Reduction in NPA:

To bring down the Gross NPA level as also to ensure that substantial new NPAs are

notadded, branches were asked to speed up efforts for recovery in respect of overdue

accounts with them. The drive for reduction in NPAs has been hugely successful under the

leadership of Sheri P. G. Kamath, Chief General Manager.

Marketing:

Business Process Reengineering (BPR) initiative primary objective of this initiative is to

convert the branches into sales and service outfits. India is a huge banking market but The

penetration of Indian Banking is thus one of the lowest in the world. Also a large number

of our branches are functional in Maharashtra State, which has a huge banking business

market of around Rs. 17,00,000/- crore (with aggregate bank deposits of Rs. 8,57,771

croreand gross credit of Rs. 8,34,701 crore in September 2008). Of these Rs. 17,00,000

crore,we at Saraswat Bank have a business stake of only Rs. 20,000 crore, which is a

minisculeof merely 1.2% share in the total banking business in the State of Maharashtra.

This provides a huge opportunity to banks including your Bank. In fact, it is on the basis

47

of these statistics that we have planned to do a business of Rs.1,00,000 crore by 2021 under

Dr. Adarkar Mission IV of your Bank. All the employees in the branches are being trained,

equipped and instructed to take extra efforts for marketing all the products and services

of your Bank

4 P’s OF MARKETING:

Basically, the concept of Marketing is given by McCarthy who has classified “Marketing

Mix” tools of four broad kinds called 4 P's and they are as follows

Product

Price 

Promotion

Place

These marketing mix tools are used by the marketers to influence their trade channels and

final consumers.

The Saraswat co-operative banks 4P's criteria is followed below

1) Product

Sarswat co-operative bank is No. 1 amongst the 1,700 UCBs in the Urban Co-

operative Banking Sector in India.

The fact remains that we do 0.3% to 0.4% to nation's banking business.

A Sarswat Co-operative Bank has special Product Development Department which

is been seen by Sheri M.S.Vaidya, Dy.General Manager.

The product Development department has initiated into all these areas

Products and their attributes.

Unique Selling Propositions of our Products.

Marketing positions of our products.

48

Promotional imperatives.

Value addition ingredients of our products and their enrichment.

This helps the bank to process of redefining and refashioning our existing products

and creating new products.

This helps to maintain relationships i.e. helps to maintain CMR

  2) Place

The bank has adopted the policies of inorganic growth since 2006 for increasing

its branch outlets

From 2009 the bank has been pursuing a mix of inorganic and organic growth

for branch expansion purposes.

The bank has adopted the cluster based approach .

Instead of having an isolated branch, they have 4-5 branches in a far off area.

This approach has enabled the bank to cluster presence in western Maharashtra,

Goa and Karnataka.

The bank has planned under Dr.Adarkar Mission 2, to open 70 more branches

by 31stMarch,2011

The is following the mantra of one branch in every 15 days in programme called

'Ashwamedh'

3) Promotion

Promotion of any brand is very necessary; this helps the marketer as well as

customer to understand each other well.

The Sarswat Co-operative bank has appointed Sheri Dilip Prabhavalkar, veteran

artist as their Brand Ambassador

This has heed the bank to achieve and promote heights of success in their business

To attract the young generation the bank has appointed a junior brand ambassador

to Ms.Shalmali Sukthankar, budding artist.

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From last five years the bank has encapsulated and expressed our uniqueness to the

customers that the bank is having the "Ability of the Big and Agility of the Small"

4) Pricing

In any service industry, cost leadership is critical to the long term success of the

organization.

The bank has to compete with other banks on the basis of total reduction of all

economic and unwarranted expenditures and also to control costs in all areas

The bank initiatives are as follows

Optimum utilization of the available resources of he bank.

Streamlining/Re-engineering various procedures in the bank, thus improving

customer service.

The bank has sustained work of the income and cost council, which helps the bank

to offer services to the customers with lower intermediations costs.

HR POLICY AND ORGANIZATIONAL STRUCTURE:

Internal Capability Building Measures (ICBMs):

The bank pursued the recruitment and promotional policy during the year 2008-2009 as

per Internal Capability Building Measures (ICBM).

Promotional Exercise 

The Bank had undertaken promotional exercise in the year 2002 when organizational

restructuring was done as per the recommendations of M/s Seven S Associates. The

Bank has been undertaking expansion of branch network and has been implementing BPR

exercise too, which is resulting in transforming the organization. In order to cater to the

growing expanse of the Bank and the need for managerial positions in the wake of the

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same, a promotional exercise to various cadres was conducted. A total of 385 employees

were promoted to various cadres. All promoted personnel have been suitably deployed at

various branches (including the branches of the merged banks) and/or departments.

Training

During the FY 2008-09, a total of 2,225 employees, consisting of 1,058 from management

and 1,167 from non-management cadre attended 98 training programmes conducted at the

‘Staff Learning Centre’ at Vashi, Navi Mumbai, as well as at various branch locations. A

special emphasis was given on training of new recruits and employees of erstwhile banks

merged with this Bank at their respective locations as well as at the Staff Learning Centre

at Vashi, where the focus was on validation process, know the Bank, the internal software

package OMNI and the retail products of the bank.

Customer Service

The bank has adopted the following codes based on the Standard codes documented

byIndian Bank’s Association:

Customer Fair Practice Code

Cheque Collection Code

Bankers’ Lender Liability Code

Compensation Policy

Saraswat Bank has become a member of the Banking Codes and Standards Board of

India. This board ensures that the Codes so defined by the Bank are implemented in letter

and spirit. For measuring customer satisfaction, a bank- wide Customer Service Audit has

been planned to be commissioned by the Board in the ensuing year. Industrial Relation:

 

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The Bank’s human resources have been organized under the two representative bodies viz.

the Officers’ Association and the Employees’ Union. The industrial relations with both

these organizations have been very cordial with joint discussions being held with the

Association/the Union for redressing employee issues in an amicable way. Voluntary

Retirement Scheme (VRS):

 

This year, the Bank launched the VRS for its employees. Around 236 employees from your

Bank (excluding those of merged banks) opted for VRS under the said scheme. Besides,

83employees of the erstwhile Nasik Peoples Cooperative Bank Ltd., 43 employees

of erstwhile Annasaheb Karale Janata Sahakari Bank Ltd. and at around 100 employees of

the erstwhile Murgharajendra Sahakari Bank Ltd. (i.e. in all 462 employees) opted for

VRSand have been relieved under the Schemes. The Bank acknowledges with gratitude the

sincerity and hard work put in by all these employees during their tenure with the Bank

and wishes the retired employees an eventful and healthy post retirement life.

CSR (CORPORATE SOCIAL RESPONSIBILITIES):

Corporate Social Responsibility (CSR) is not a new fashion but it is an old creed for this

organization. The founders and their successors understood and underscored the principle

that a cooperative institution must always stay connected with the needs and aspirations

of the society at large and hence CSR constitutes the umbilical cord that connects this bank

to the society.

The laudable gesture of late Wamanrao Varde and his associates on the Board then in

spontaneously responding to the grave scarcity of foodgrains during the Second World

War and in starting on behalf of your Bank a ration shop at Girgaum in Mumbai to make

available food grains to all, is a resplendent example of the early awareness of CSR in this

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Bank. This was so because all members of the community always understood that a co-

operative institution must always have a social purpose. Bank thereafter also started

scholarships and apprenticeships for deserving students and through that process built the

careers of several young men. Your Bank has been providing financial assistance to many

social, educational and medical institutions by way of grants every year from its funds.

From time to time the Board of Directors responded to national and natural calamities like

flood, famine, earthquake etc.

Following are the few initiatives both at macro and micro level, which spell out the bank’s

vision of Corporate Social Responsibility (CSR):

As a macro level expression of CSR, we in association with Maharashtra Times created an

intellectual platform entitled "Shikhar Maharashtra" .with the objective of researching

into, debating and finding ways and means to deal with the many stubborn economic and

social issues that Maharashtra faces today. A gala opening of Shikhar Maharashtra was

held on27th July 2007 at Ravindra Natya Mandir, Mumbai. The programmes went on for

two days wherein the social and political leaders from Centre and State participated. The

inauguration of this forum of 'Shikhar Maharashtra" will pave the way for bringing to the

table the daunting problems that our State faces today. It is proposed that at an interval

of every three months, a major issue facing Maharashtra such as farmers' suicides,

malnutrition, scarcity of drinking water, famine and hunger, etc. is discussed threadbare

on this nonpartisan platform by soliciting the participation of intellectuals and social

workers who are active in the field and thereafter recommendations are made to the

Government on the remedies that may ameliorate the situation and pursued thereafter.

As part of CSR, at the macro-level the Board of Directors took serious cognizance of the

plight of farming community and continuing suicides of farmers and with a view to

instilling hope among farmers, they supported the 'Project Hope' of late Baba

Amte'sMaharogi Sewa Samiti at village Mulgavan, Taluka - Jhari Jamini, Distt. Yeotmal.

A substantial donation of Rs. 1.00 crore was made towards this project, where experts and

volunteers are engaged in offering hope and succor to thousands of farmers by building

check dams and initiating farmers into newer cultivation practices enabling them to bolster

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income generation and income supplementation. At the macro-level, the third major issue

that the Board of Directors took was one belonging to the home turf viz. the 5,90,619 small

depositors losing their hard earned money which they had kept in deposits in urban co-

operative banks. It is here that the bank stepped in, assimilated five ailing UCBs in our

Bank, resurrected all the deposits of all the depositors and even restored those banks back

to pristine health. Along with such macro issues, the Bank has extended support in specific

cases by way of action at micro-level, which would prove inspirational for others. Some of

these commendable acts in CSR are as under:

 

Bank's contribution towards protecting cultural lineage of Maharashtra: The

bank sanctioned a sponsorship grant of Rs. 25 lakh for the RSS volunteers working for the

project "Shilpkaar Charitra Kosh". This project deals with the publication "Vivek",

engaged in bringing out chronicles on the lives of great men of all walks of life who have

contributed to make Maharashtra what it is today Late Annabhau Sathe was a peoples'

poet-singer of Maharashtra. Some nine months ago, the pitiable plight of his entire family

living in indigence was depicted in newspapers. The Bank's representative rushed to Sangli

and in order to provide sustenance to the family.

 

Employment to deserving kith and kin of deprived section of society: Sheri Nitin

RajhansBagwe - son of a mill-worker was born as a dwarf and after reaching manhood

reached a height of barely three feet. It was with the help of surgeries that his height was

artificially pulled up to four and half feet. With sheer determination he completed his

education in commerce and also cultivated the hobby of photography. Recognition of sheer

Grit and Bravery: Sheri Gorakh Newale, a Municipal worker at Chinchwad in Pune was

injured while saving the lives of many people from a tiger, which had entered human

habitat. Sheri Mohan Pandurang Redkar an engineer by profession hailing from Malwan

taluka wasin Mumbai for his mother's treatment. While in Mumbai, he was going by the

Bandraseashore to a medical shop to bring medicines for his mother. At the seashore, he

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happened to see two couples drowning in the sea and he leapt to their rescue. While he

saved all the four lives, unfortunately he was drowned in the process. The news reports

appearing next day saddened every one. His family at Malvan in Sindhudurg District was

drowned in sorrow Bank salutes the Martyrs: In the recent terrorists attack on Mumbai ,

the first and hopefully the last of its kind, many brave soldiers laid their life for the security

of the country.Amongst them were Sheri Tukaram Ombale, Shri.Balasaheb Bhosale, Shri

Arun Chitte,ShriMurlidhar Choudhari and Shri Ambadas Ramchandra Pawar. In

recognition of their services Saraswat Bank appointed Next of Kin of these brave soldiers

in the services of the Bank. Shri Ajit Gawkar , brave Indian soldier died while fighting

intruders/enemies on the Jammu and Kashmir Border. In recognition of his services to the

country, Saraswat Bank appointed his wife in the services of the Bank on the occasion of

61st Independence Day. Ms Krishna Patil the third woman to successfully complete the Mt.

Everest Expedition, was granted loan waiver for Rs 30 lakhs in recognition of her bravery,

grit, determination and never die enthusiasm

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AWARDS AND RECOGNITIONS:

Bank participated in the study conducted jointly by the Great Places to Work Institute

India and the Economic Times, to distinguish a good work place from a great one. Based

on the study of over 373 participants spanning a multitude of sectors, the top 50 best

workplaces were elected. We are happy to announce that your Bank has been adjudged

and included in “India’s Best Companies to work for - Year 2009" and in the banking

industry vertical, your Bank is placed fourth after American Express, Kotak Mahindra

Bank and HDFC Ltd. The citation reads as under: “The Saraswat Co-operative Bank Ltd.

Ranked 4th in Banking& Credit Services for inspiring trust among your people, for

instilling pride in them, for creating an Environment within the workplace that promotes

camaraderie and for many other reasons that makes your organization one of the India’s.”

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CONCLUSION

The market is seeing discontinuous growth driven by new products and services that

include opportunities in credit cards, consumer finance and wealth management on there

tail side, and in fee-based income and investment banking on the wholesale banking side.

Given the demographic shifts resulting from changes in age profile and household

income, consumers will increasingly demand enhanced institutional capabilities and

service levels from banks.

With the growth in the Indian economy expected to be strong for quite sometime-

especially in its services sector-the demand for banking services, especially retail

banking, mortgages and investment services are expected to be on rise.

Reserve Bank of India (RBI) has approved a proposal from the government to

amend the Banking Regulation Act to permit banks to trade in commodities and

commodity derivatives.

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SUGGESIONS

In wake of this, old private sector banks also have the need to fundamentally strengthen

skill levels.

However, even more imperative is their need to examine their participation in the

Indian banking sector and their ability to remain independent in the light of the

discontinuities in the sector.

Accelerate the creation of world class supporting infrastructure (e.g., payments,

asset reconstruction companies (ARCs), credit bureaus, back-office utilities) to help

the banking sector focus on core activities.

Slower growth in retail credit and narrow spreads spells better fortune for banks

that have higher concentration of corporate assets and low cost deposits along with

good asset quality.

Saraswat Bank perfectly fits into this matrix.

Sustenance of a healthy current and savings account mix and little deterioration in

asset quality also reiterates the operating efficiency of the bank.

Being the largest Urban Co-operative bank, Saraswat Bank is also one of the lead

contenders to initiate the process of building up scalability by acquiring smaller

banks in the PSU and private sectors.

Besides offering the opportunity to cater to borrowing needs of some of the largest

corporate in the country, the consolidation process will also brings about economies

of scale for the bank

. The banking today is re-defined Andre-engineered with the use of Information

Technology and it is sure that the future of banking will offer more sophisticated

services to the customers with the continuous product and process innovations

. Thus, there is a paradigm shift from the seller’s market to buyer’s market in the

industry and finally it affected at the bankers level to change their approach from

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“conventional banking to convenience banking” and “mass banking to class

banking”. The shift has also increased the degree of accessibility of a common man

to bank for his variety of needs and requirements.

Also, the bank’s healthy ROA (Return of Average Asset) and CRAR (Capital to

Risk Asset Ratio) is a matter of comfort. Having said that, the bank’s market share

of merely 1.2% in the total banking business in the State of Maharashtra is our

lingering concern. We have a positive view on the bank with respect to its future

growth prospects

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 BIBLIOGRAPHY

1.History of Banking in India:

 http://finance.indiamart.com/investment_in_india/banking_in_india.htmlhttp://

www.bseindia.com/downloads/BankingSector.pdf 

2.Banking terminology:

 http://www.meridianadvantagemember.com/fileuploads/Bank_Terminology.pdf 

 

3.Mergers and Acquisitions:http://www.economywatch.com/mergers-acquisitions/

international/banking-sector.htmlhttp://finance.mapsofworld.com/merger-acquisition/

india.html

 4.Current position and financial analysis of the bank: Saraswat Bank¶s Annual Report

for the year 2008 , 2009 , 2010 ,2011

5.History of the banks and Corporate Social

Responsibilities:http://www.saraswatbank.com

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