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7/22/2019 Project Report on Fixed Deposit in Devgiri Bank
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Vivekananda shikshan santha’s
VIVEKANAND ARTS, SARADAR DALIPSHIG
COMERCE & SCIENCE COLLEGE
AURANGBAD
Project Report
On
FIXED DEPOSIT
Submitted to
Dr . Babasaheb Ambedker Marathwada University
Aurangabad
By
Mr. BAWASKAR KISHOR BHIMRAO
B.B.A.VI SEMESTER
2011-2012Guided by
MR. GANESH DOKE.SIR
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Vivekananda shikshan santha’s
VIVEKANAND ARTS, SARADAR
DALIPSHIG
COMERCE & SCIENCE COLLEGE
AURANGBAD
CERTIFICATE
This is to certify that project entitled fixed deposit Submitted by
MR.BAWASKAR KISHOR BHIMRAO is as per the requirement of
Dr.Babasaheb Ambedkar Marathwada university in the partial fulfillment of
BBA (Bachelor of business Administration) 6 IV Sem for the academic year
2011-2012
GUID DRICTOR
MR.GANESH DOKE SIR
DR.A.T.GAIKWAD
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TO WHO OMSOVER IT MAY CONCERN
this is to Certify that Mr BAWASKAR KISHOR BHIMRAO of B.B.A
Student of department of Managemant studies Dr .Babasaheb Ambedkar
Marathwada university Aurangabad has undergone training and completed a
project on FIXED DEPOSITS of deogiri nagari co-oprative Bank
Aurangabad
he has carried out this project for deogiri co-oprative Bank date 23/1/2012
to 22/3/2012 in the spen of project duration his candidature was found to be
very
we wish him a bright futures
MANAGER
. MR.ABHAY
MANDLIK
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DECLARATION
I hereby declarer that project worked entitled "production management to the
Dr. B. A.M University, Aurangabad , is a record of an original work done by
me under the guidance of Ganesh doke sir, faculty member, college institute
of management studies,
samarthnager, Aurangabad, and this project work has not performed the basisfor the award of any degree/ associate ship/ fellowship and similar project if
any
Mr BAWAKAR KISHOR BHIMRAO
BBA 3rd year
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Acknowledgement
I like to thanks Mr. Gopal Balloj sir and all teachers of our
department who helped me directly or indirectly in completion of
this project. I would also like to thanks for their support and
cooperation during the tenure of the project.
Mr . BAWASKAR KISHOR
BHIMRAO
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INDEX
SR.NO Content Pg.
No
1 INTRODUCTION
2 COMPANY PROFILE
3 INTRODUCTION OF PROJECT
TOPIC
4 SCOPE&OBJECTIVE
5 RESEARCH & METHODOLOGY
6 ANALYSIS OF THE PROJECT
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7 LIMITATION OF STUDY
8 CONCLUSION&SUMMARY
9 BBLIOGRAPHY
Chapter 1
INTRODUCATION OF FIXED DEPOSIT
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with invesmant avenves increasing the day it is quit easy to forget that untilthe reformera kicked off in 1991 indianhad very limited means of investing
their saving while it is true that we have net yet the money developed
economic ther are anumber of instrument today that were unheard of amidst
the lay investors just a short decade age .on the hand investors are still
straggling nature of some securities and on the others intermediaries are
trying to raise the investors awareness. Stok favorite such as fixed deposits
are men while enjoying a reneved burst of popularity .
the slump in the capitak market and larger amount o losses by investers in I p
o .are buta cauple of facters for this hunt for security by investors evenat the
lost of lower returns.the central bank R B I and the market regulatiotion S E B
I have been attempatiting to rein in operators from ashing in on this rush for
fixed deposit. In fact between 1994 and 1996 afew states like tamil nadu saw
literal sxplosiars off fixed deposits offers with promise of impossibal returns
like 36 percent to evan so percent per annum is some their saving go uping
smoke at the hand of such corporate entities .
it is only recentily that credit rating has been made mandatory for fixed
deposit raising exercises as werw prudential norms howeres the batterlesson
result in investors ignoting almost allother factors barring security while
investing ther saving thus the past two yerrs having seen a huges growth in
hand deposit and in fixed deposit levels of the batters segment of india. In this
segment we willreglotry past detaiks on the three main categories of fixed
deposits.
The fund can be used to pledge lone if a fix deposit maturity day is
approaching but a customer need fund urgently than the customers can apply
for pledge loan to avid interst loss.
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The und can be withdrawn ahead of the marurity day If customer need fund
argently they can also apply for withdrawing ahead of the maturity day if the
customer want to totallywithdrowan the fund before the maturity day
fixed deposit refers to the service that customer set deposit term whan making
depositand deposit principle at one time .after whichthey can totally a
partially withdraw principle and interests. Higher
interst rate the interst rate of fixed deposits are higher than that of currant
deposit fixed deposit is a traditional wealth management tool the longer the
interest rate .
the account can set to re deposit customers can set re deposit term whan
makingdeposit and the principle and past tax interest will be automatically re
deposit term on the maturity day. .
The fund can be used to pledge lone if a fix deposit maturity day is
approaching but a customer need fund urgently than the customers can apply
for pledge loan to avid interst loss.
The und can be withdrawn ahead of the marurity day If customer need fund
argently they can also apply for withdrawing ahead of the maturity day if the
customer want to totallywithdrowan the fund before the maturity day
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What are fixed deposit
Fixed deposits are loan arrangements where a specific amount of funds is
placed on deposit under the name of the account holder. The money placed on
deposit earns a fixed rate of interest, according to the terms and conditions
that govern the account. The actual amount of the fixed rate can be influenced
by such factors at the type of currency involved in the deposit, the duration
set in place for the deposit, and the location where the deposit is made.
The most unusual characteristic of a fixed deposit is that the funds cannot be
withdrawn for a specified period of time. In most cases, fixed deposits carry a
duration of five years. During that time, the money remains in the account
and cannot be withdrawn for any reason. Individuals, corporate entities, and
even non-profit organizations that wish to set aside funds and limit their
access to the funds for a period of time often find that fixed deposits are a
simple way to accomplish this goal. As an added benefit, the monies in the
account will earn a fixed rate of interest regardless of any fluctuations in
interest rates that apply to other types of accounts.
However, both these benefits can also turn into disadvantages under certain
circumstances. Because the money cannot be withdrawn until the duration is
complete, the funds cannot be used even in emergency situations. Changes in
the going interest rate may also rise to a point above and beyond the interest
rate applied to existing deposits. This means account holders are actually
earning less interest with fixed deposits than with other types of loans and
accounts.
While the interest rate on fixed deposits cannot be changed, there is
sometimes a way to work around the issue of obtaining use of funds in an
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emergency situation. At times, the lending institution where the fixed deposit
is placed may be willing to extend a separate loan to the account holder, using
the fixed account as collateral. While not ideal, this can at least make it possible to deal with the current financial crunch.
Fixed deposits are a credible way to make a return on investment that is
somewhat higher than a standard savings account. The use of fixed deposits
can also be helpful when working with various types of currency. By
establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it
is possible to choose the type of currency involved in the deposit and lock in a
rate of interest. If the choice of currency is a good one, this means the
investor can enjoy a healthy fixed deposit currency rate for the duration of the
deposit and earn more than with a standard fixed deposit strategy. However,going with an FCFD does contain a slightly higher amount of risk, since the
funds deposited must be converted to the currency of choice and then
converted back when the deposit is fulfilled. If the currency did not fare well
in the interim, there is some chance of obtaining a loss, due to the changes in
the rate of exchange from the time the fixed deposit was activated until the
time the deposit is considered complete .
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Chapter 2
INTRODUCTION OF BANK
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Deogiri Nagri Co- oprative Bank Was Established In 23th Jan 1984. The bank
have 18 Branches including their Training Centre. The modern DATA
centre , head office. All Offices are Air Conditioned , well equipped , fully
computerized and interconnected. Deogiri Bank is the first bank in
Marathwada to opt core banking pattern for its working. The bank is in the
process of establishing ATM all over the city to cater banking services to its
customer round the lock.
The concept of Deogiri Nagri Co- oprative Bank was originated by
Late Pralhadji Abhayankar & the bank came into being under the dynamic
leadership of Shri. Haribhau Bagade (Ex Minister), Late Shri.Jayantrao
Choudhari (Dhamangaonkar), Late ShriChandumalChotlani, Late Dr. V.G.
Gharpure, ShriSukhdevNawle, Mrs. KumudRangnekar, Shri S.G. Gokhle, Dr
M.U. Deshpande, Shri G.R. Rege took active part in establishing of the bank.
The first branch of the Bank was opened on 23th Jan 1985. At present the
bank has its area of operations in Aurangabad, Jalna, Ahemadnagar,
Parabhani&Jalgaon District. The Reserve Bank has opened all Maharashtra as
area of operation for us. The bank is also planning to tie up with state and
national players to expand its network.
The Bank has raised paid-up capital of 14.79 crores paid through its 33,000
Members. On 30-Jun-11 the Bank owns funds and reserves of 114.79 crores.
The bank has Deposits of 456.22 crores, Advances of 333.66 crores, thus
the total business is of 789.88 crores.
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The CRAR of the bank is 11% and the Net NPA 0.20%. which is one of
thbest level. The performance of the Bank is the best in co-operative banking
sector.
Bank Profile
Deogiri Nagri Co- oprative Bank is largest bank in Marathwada. Any type of
financial problem for any sector of business bank supporting to them. Bank
has good Asset value and efficient staff for achieving their desire goal.
Deogiri nagri Co- oprative bank get permission from reserve bank of india to
launch four new branches in pune city.
In upcoming year bank use new and advanced technology, mobile van
service,pre printed cheque books facilities to the customer.for growing the
whole income of the bank bank made contract between new life insurance
companies.
Member and recover share capital is the power of co- oprative
organization.own fund is the economical capacity of any commericial
organization,increment in that fund it reflect confidence of member over the
bank.at time of year ending bank get the Rs.14.38cr share capital from 32688
member.comparism with last year performance between member & share
capital. 2687 member and recover share capital Rs.1.92cr it is extra.
According to banks rules and regulations member have to purchase 2500
Rs.share for membership.
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Deogiri nagari Co- oprative bank have 100.06cr fund at the time of year
ending. It is extra camparing with last yaer performance. The amount of extra
fund is 4.21cr rupees in percentage 4.39% .bank move their maximum profit
in reserve fund from net profit and increase their goodwill. This is emblemof
bank management and efficiency.
In 2010-2011 bank started to provide fund supply in all sector, it is good for
bank growth for that purpose establishment of new branches, making
technical side perfect etc.getting that benefit bank made expenditure on it.
Because
this reason the bank had get Rs.7.22cr. net profit. 4.10cr profit is extra
compare with last year performance.
Capital availability
The ratio between total risk part of property and capital fund is called as
capital availability. In open economy the capital availability is the good for
people co- oprative bank system. successful management of risk and growth
in capital fund Deogiri nagari Co- oprative bank done 11.79% the ratio of
capital availability on dated 31th march 2011.
Accordinf to reserve bank of india’s rules and regulations it is compulsory
keep to maintain 9%
(Amount in lacs)
No. Particulars 31/03/2010 31/03/2011
A Tier-1 capital 3852.26 3033.98
B Tier-2 capital 782.39 1107.55
C Total capital(A+B) 4634.65 4141.53
D Total risk weight of property 31197.45 35120.07E C.R.A.R. 14.86% 11.79%
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Depostie
Deogiri Nagari Co- oprative Bank have available Rs. 458.99cr
Deposite at time of report year ending. After using all facility and securities
which provided by bank people made their fixed deposite in bank, because of
that reason bank have increase their deposite fund for the rupees of 51.01cr.
which is 12.50% extra comparing with last year performance. To adjusting
with national level changeable commercial environment bank have change
deposites scheme and keep the cost of deposite is .5.75%.
For the purpose os deposite security bank have made insurance fromreserve bank of india’s Deposite department , installment of that insurance
bank has been fill regularly.
Deposite Mixture of bank on Dated 31/03/2011
(Amount in lakh)
Kinds Of Deposite 31/03/2010 31/03/2011
Current deposite 2191.89 5.37% 3042.31 6.63%
Saving deposite 10441.30 25.52% 13109.65 28.56%
Fixed deposite 28194.86 69.11% 29746.75 64.81%
Total 40798.05 100% 45898.71 100%
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Loan
The total amount of loans are Rs.322.67crat the time of report
year ending. It is extra of Rs.40.49cr compare with last year
performance in percentages 14.35% .at the time of new loan
issue,bank were done loan investigation and risk management.
Deogiri nagari co- oprative bank follows all rules and regulations
regarding loan distribution to weak sector. The ratio of primary sector
loan at the time of year ending is 54.62% and another ratio of weak
sector loan distribution is 18.10% bank. Bank tries to distribute small
scale loan to public.
Recovery of non-performing assets
Deogiri nagari co- oprative bank made some rules and regulations for the
purpose of non performing assets recovery. The ratio between total loan and
non performing assets is just 0.20% on dated 31th march 2011. Last year the
ratio of is 0.37%. deogiri bank established director recovery committee at the
central level for controlling the ratio of non performing assets. Bank take
review of each and every branch regarding loan recovery. Bank achieve their
aim regarding loan recovery using Maharashtra State Co- oprative Act 1960
of section 101, securitization Act, Negotiable Instrument Act. Director,
Employee, member made very important role Behind this achievement, they
contribute their time for achieving loan recovery regarding non performing
assets. Bank set target for next financial year regarding non performing assets
and it’s ratio with total amount of loan is 0.00%.
Total of whole amount loan recovery plan and their account detail
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(Amount in lacs)
Loan
Account No.
Distributed
Loan Amount
OTS
(remainingAmount)
OTS
Amount
Discounted
Amount
141 118.44 163.77 116.88 46.89
Classification of outstanding payment
The Ratio of Deogiri Nagari Co- oprative Bank regarding outstanding
payment on dated 31th march 2011 is 16.76%. which is mention infollowing Table.
(Amount in lacs)
No. Year No. Of
Account
Total
1. Lower than 1
year
3673 3210.44
2. Between 1-2 year 303 721.72
3. Between 2-3 year 145 326.694. Between 3-5 year 180 297.70
5. More than 5 year 193 851.50
Total 4494 5408.05
Information of legal action against outstanding payment holder
(Amount in lacs)
No. Particulars Loan holder Total amount
1. Notice from office 2381 1255.25
2. Notice from advocate 1462 2324.59
3. Cases to bring a charge but under
hiring(section 91,101)
71 148.85
4. Cases under hiring but not
awarded(section 91,101)
-- –
5. Awarded(section 91 , 101) 580 1679.36
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Total 4494 5408.05
Investment
Deogiri Nagari Co- oprative bank have Total investment on dated 31th march
2011 is Rs.208.83cr.comparing with last year investment it is extra 7.52cr.
making good plan for loan recovery and trying its implementation it reflecting
with increasing bank liquidity and this is also useful for investment
increment. Bank liquidity management is on top at time of report year ending.
Bank follows CRR and SLR rules and regulation from the date of its
foundation. Minimum 25% amount is compulsory to invest in government
securities. Deogori nagari co- oprative bank invest in government securities
Rs.119.04cr in percentage 26.26% on dated 31th march 2011 at the time of
report year ending.
Human resource development
Deogori nagari co- oprative bank have its own training centre with
advance technology for the purpose of increase the employees effectiveness
and efficiency. Bank made such program for employees training according
following schedule.197 employees use this training centre.
No. Whoever Total No. of
Trainy
No.of
program
1. Deogiri nagri co- oprative bank
fulltime/halftime training program
197 14
Total 197 14
Insurance business
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Bank made insurance from insurance companies to secure their securities
amount. Lot many insurance companies coming in that market follow allrules and regulation. Bank made such transaction with different insurance
companies and reserve bank of india give permission for that. Bank made
contract for general insurance between FUTURE GANERALLY
INSURANCE COMPANY PVT.LTD.in report year.
ComputerizationBank started SMS service for each and every account holder for their each
every transaction.in upcoming year bank start NET Statement facility for
every transaction. Bank make mutual contract between another bank for
ATM transaction. Using advanced technology bank tries gives good service
to the customer. Bank knows needs of customer.
Bank use computer technology with their perfect security. Bank provide
RTGS and ECS facility to customer for more than two lacs transaction with
ICICI bank.
Profit DistributionDeogiri Nagari Co- oprative bank earned net profit Rs.72199901.84 at the
report year ending, with last surplus net profit of Rs.72.02 including this total
net profit Rs.72199973.91 are available.
Profit Distribution Chart
No. Particulars Amount in rupees
1. Statutory Fund 18050000.00
2. Profit (12%) 16000000.00
3. Servent development fund 1000000.00
4. Member development fund 1500000.00
5. Building fund 20580624.00
6. Dharmaday fund 1000000.00
7. Investment up-down fund 10000000.00
8. Deffered asset reserve 4069276.00
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9. Surplus net profit 73.91
Total amount 72199973.91
Account inspection and Investigation
Central government and state government made control over the
public co- oprative banks through the reserve bank of india, dwell
control on co- oprative banks from state and central government.these
two controller take inspection and account investigation of public co-
oprative banks. Deogiri nagari co- oprative bank appointed M.B.Jaju
company for Internal account investigation for accurate working
within the bank. Without this there are two more company made
investigation regarding accounts one is S.E.Kalantri and second is
Prassanna P.Kala and Associates. In 2010-2011 financial year Mr.Indapurkar and Mundada partner M.g mundada(statutory
Accountant) Aurangabad Made their Auditing And account inspection
and give bank one of the best rating. They are gave rating in
accountancy for best performance, rating A given to the bank.
Director Board And Its Different
Committees
Director Board and Different Committees of banking managementmade their role for effective control. They are arranging the meeting
on different issue. Bank appointed knowledgeable personnel within
their different committees. The Director Board give permission to
establish new vice committees. Using their knowledge regarding
banking sector bank achieve their desire goal. They decide their goal
for next financial year.
Deogiri Nagari co- oprative bank follows all rules and regulation of
reserve bank of India and responsible for member and its deposite
securities.
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No. Particulars No. Of
Meeting1. Director Board Meeting 20
2. Loan Committee Meeting 18
3. Loan Recovery Committee Meeting 05
4. Worker Committee Meeting 05
5. Audit And Inspection Committee Meeting 02
6. Purchase Committee Meeting 06
7. Investment Committee Meeting 06
8. Assets liabilities management committee meeting 06
Banking regulation act 1949 section 29 and 31
Last Year Amount
March 2010
Life and Debtor Current year amount March 2011
39699053.00
101025977.36
25849315.35
19317692.75
146192985.46
• Cash in hand
(with ATM)
• Cash at bank
• State bank of
India
Notified banks
and
nationalized
banks
• Maharashtra
state co-
oprative bank
and district
centralized
bank (CASH)
• Other commercials
and co-
oprative
bank(CASH)
111451808.34
15898829.60
40576175.31
712695
86.00
167926
813.25
513195258.00
• Term deposits
in banks
• Maharashtra
state co-
oprative bank
328611576.00
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689394454.00
1202589712.00
and district
centralized
banks termdeposits
• Nationalized
and other
commercials
banks term
deposits
555123962.00
883735
538.00
794911500.00
8500000.00
50.00
3010000.00
4125000.00
810546550.00
• Investment
(shares)
• District
centralized and
state co-
oprative banks
shares
• Trustee Org.&
other share
• Co- oprative
Org. Shares
• Aurangabad
district
centralized
bank • Maharashtra
co- oprative
bank. Mumb ai
• Apex
Bank,Mumbai
1190444000.00
7000000.00
50.00
3010000.00
4125000.00
120457
9050.0
0
0.00
0.00
• Pvt. Fund
Investment
• State
partnership
fund/fundinvestment
0.00
0.00
2199028300.46 232751
0987.2
5
613620.00
• Loan issued
• Short term loan
• Government
security shares
• National362949.00
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33879457.00
97422689.41
29677911.11
686637712.59
9063452.00
8575762.00
3005550.59
2471952.00438965081.48
1310313188.18
security
• Other security
• Gold/silver security
• Term deposits
security
• Cash
credit/overdraft
• Mortgage
security cash
credit
• Default
guarantee payment
account
• IBP and Bills
Discount
• Advanced
against supply
bills
• L.C.
discounting
• Project
financing
44331103.05
130213650.87
13546991.61
889674881.52
8957889.00
1118332.00
3009365.59
535000.00442992687.48
1534742850.12
51097504.55
724262560.20
248427221.31
47905931.91
761490.95
1072454708.92
• Arrears
Rs.371430386.00
• Suspected and bad
debts
Rs.200795129.80
• Arrears of
director’s board
• Middle term
loan
• Higher
purchase/
vehicle
security
• Mortgage term
security
• Personal
guarantees
• Home
7047593803
662191643.83
422243415.61
42986008.16
725766.95
1198622772.58
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253560335.64
185424488.00
438984823.64
2821752720.74
construction
• Other
• Arrears
Rs.162795044.00
• Suspected and bad
debts
Rs.105287650.12
• Arrears of board of
director
• Long term loan
• Home
constructionloan
• Industrial &
Other loan
• Arrears
Rs.6579481.00
• Suspected and bad
debts
Rs.22199694.75
• Arrears of board
of director
Total loan
282226681.66
211130327.00
493357008.66
322672
2631.3
6
5020781021.20 555423
3618.6
1
4132348.44
28870014.74
121627533.43526830.45
28282793.00
566107983.98
594390776.98
• Bills available
for recovery
• Dead stock,
furniture,
fixture• Building and
land
• Bank vehicle
• Interest
receivable
• On investment
• On loan
26963487.00
684301167.73
272372
2.75
327486
78.77
119397
677.68
216215
1.45
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711264
654.73
6085394.29
6584.00
760317.53
1835584.00
778980.00
16590.00
1116107.00
0.00
346500.00
30000000.00
23513254.47
64459311.29
0.00
152509595.00
7885656.35
0.00
•Other property& Receivable
• Deposits
receivable
• Library books
• Stationary &
printing stock
• Deposits for
building
• Clearing
• Telephonedeposits
• Building rental
in advance
• M.S.E.B.
Deposits
• Tax receivable
• Advance tax
paid
• Other
receivable
• Branch co-
ordination
• Differed tax
assets
• Goodwill on
merger account
• Loss (if
Happened)
3012099.12
7077.00
1084504.59
1835584.00
1611681.00
201703.00
300000.00
548638.00
42779987.00
55620000.00
6441851.96
113443
125.67
461308
.36
156578871.00
591424
2.26
0.00
5995183087.88 Total 669892
8051.2
8
830490.00
64016380.00
LC
Bank gurantee
receivable
535885
.00
670877
09.00
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Expenditure Detail of the year 01/04/2010 To
31/03/2011
Last Year
Amount March
2010
Detail Of expenditure Current year
amount
March 2011
291223367.00
52210.18
291275577.1
• Interest paid
• On Fixed
Deposits
• On Loan
263852182.00
631742.00
26448392
4.00
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50114486.17
174375.00
6537336.00
1067462.85
1546328.00
1770955.78
69500.00
3750540.50
419675.00
616130.00
7909089.32
30000.00
7951108.04
2587515.360.00
168952.00
50587577.00
7528972.00
43058605.00
• Salary,
allowances,
providendfund,
gratuity, P.F.
Management
expenditure,
Bonus etc.
• Director Fess
&
allowances
• Rent , tax,
insurance,lig
hting
• Post
offices
,telephone &
fax charges
• Auditing
charges
• Stationary ,
printing and
advertising
• Legaladvisor fees
• Fixed
insurance
premium
• General
council
expenditure
• Commission
• Depreciation
• State co-oprative
education
fund
• Office
expenses
• Other
expenditure
• Election
expenditure
46560495.00
(4069276.00)
75805941.
36
174750.00
6568092.0
0
1645075.3
8
1774391.0
0
2060917.7
0
150000.00
4213995.5
0
409849.00
563426.00
8765356.0
0
30000.00
9760184.9
8
1494793.9
4
0.00
170566.00
42491219.
00
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• Training
expenditure
• Tax• Current year
tax
• Deffered tax
0.00
0.00
494408.00
6913000.00
7407408.00
1971414.09
• Fringe
benefit tax
• Other
provision
• Suspected
and bad
debts
provision• Standard
assets
provision
• Investment
depreciation
• Goodwill on
merger
account
17500000.00
2065649.00
9923000.00
0.00
29488649.
00
1971414.0
9
428426458.29 Total 45202254
4.95
31227446.41 Net Profit 72199901.
84
459653904.70 Total 52422244
6.79
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Profit And Loss Statement
LastYear
Amount
March
2010
Particulars of production Current yearamount March
2011
2848881
72.28
1611397
811.83
4460279
54.11
• Interest
received
• On Loan
• On
Investme
nt
350447467.81
133703203.86
4841506
71.67
3001633.
96
9359707.
20
1242568.
43
22041.00
• Commis
sion &
bill of
exchang
e
• Investiga
tion
charges
and other income
• Locker
rent
• Extra
refund
provisio
n
3342284
.99
1019367
8.69
1692459
.44
24843352.00
4596539
04.70
Total Income Rs. 5242224
46.79
0.00 Loss 0.004596533
904.70
Total 5242224
46.79
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NOTES FORMING THE PART OF BALANCE SHEET AS AT 31st
MARCH 2011
AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31st MARCH 2011.
• Significant accounting policies:
• Accounting convention:
The financial statements are drawn up in accordance with the
historical cost conventions and on the going concern basis. It
conform to the generally accepted accounting principles & practice
prevailing in the co- operative banks in India except otherwise
stated.
• Statement of compliance:
The consolidated financial statement of bank is prepared in
accordance with Indian accounting Standards.
• Investments:
• In accordance with the Reserve Bank of India directives applicable
to Urban co- operative banks, the bank has classified its investment
portfolio as on 31st march 2011 under held to maturity.
• Further, in complicance with the said the valuation of investments
under “Held to Maturity” category have been valued at acquisition
cost. Any premium on acquisition of security is amortized over the balance period of maturity.
• Advances :
• The bank has clasified advances into standard, doubtful and loss
assets in accordance with the guideline issued by Reserve Bank Of
India from time to time.
• Provisions on advances classified as sub-standard, doubtfuland loss
assets is made in accordance with the directives issed by the
Reserve Bank Of India from time to time. In addition, a general provision has been made on all standard Assets as per Reserve
Bank Of India directives.
• An additional provision of Rs.1654.76 lacs has been made for
BDDR over and above the provision as required by Reserve Bank
Of India directives.
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• The overdue interest in respect of advances classified as Non-
Performing Assets is provided saparately under “Overdue Interest
Reserve:” as per the directives issed by the Reserve Bank Of IndiaProvision for loan Losses specific provisions for possible loan
lossesare based on a continuous review of the loans and
advancesportfolio and the parameters set the Reserve Bank Of India
Accordingly, specific provisions have been made as follows:
Sr. No. Particulars Amount (in Lacs)
1. Gross NPA 4225.04
2. Provison as per RBI Norms 2512.753. Additional Provision 1652.76
• Fixed Assets And Depreciation:
• Fixed Asset are stated at historocal cost except premises which
includes land and Buildings which are stated at revalued amount.
cost includes incidental expenses incurred on acquisition and
installation of the assets.
• Land and building were revalued during the financial year 2007-
2008 and asset Revaluation Reserve is created to the extent of revalued cost.
• Depreciation is calculated on written down value basis on fixed
assets. Depreciation charge on revalued amount is debited to the
revaluation reserve.
• Fixed asstes are depreciated at the rate considered appropriate by
the management. Details are listed below:
Assets Method Rate
Premises WDV 2.5%
Furniture & Fixtures WDV 10%
Vehicle WDV 15%
Electrical % Electronic Items WDV 25%
Computers WDV 33.33%
• Depreciation on fixed assets purchased during the year is charged for
the full year, if the assets is purchased and retained for 180days or
more, otherwise it is charged at 50% of the normal rate. No
depreciation is charged on fixed assets sold/disposed off during the
year as per generally accepted norms.
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• Revenue Recognition
• Interest Income: In terms of the provisions of the accounting
standard-9 issued by Institute of Chartered Accountants of India onrevenue recognition, the interest receivable is recognized on
accrual basis. Interest ceases to be taken into revenue when the
recovery of interest and/principal is in arrears for three months or
more. Interest received on advances classified as non-performing is
accounted for on cash basis. Interest falling due and remaining
unrealised on non performing advances is credited to overdue
interest reserve account.
• Fees and commission Income: The bank earns fees and
commission income from a diverse range of services it provides to
its customers. This includes fees and commission income arisingon financial services provided by bank. Fees and commission
income other than fees receivable are recognized on cash basis.
Commission received in advance on bank guarantee is shown as
advance commission received.
• Rental income(Locker Rent):Rental income is recognized on accrual basis.
• Dividend:Dividends on investments are accounted for as and when received.
• Retirement Benefits to Employees:
• The bank’s contribution to providend fund is accounted for on
basis of contribution to the scheme and is charges to the profit and
loss account.
• The bank has made payment for gratuity to LIC based on
information received form LIC. During the year under audit the
bank has made premium payment of Rs.98.00 lacs towards gratuity
fund.
• The provision for leave encashment is made on accrual basis.
• Segment reporting:
According to accounting standard-17 on segment reporting issued by
the institute of chartered accountants of India, a segment is a
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distinguishable component of the group that is engaged in providing
services (Business Segment) or in providing services within a
particular economic environment (Geographical Segment) whichsubject to risks and rewards that are different from those of other
segments. The AS-17 on segmental information is not applicable to
the bank.
• Taxation:
9.1 Current taxationCurrent tax assets and liabilities consist of amounts expected to be
recovered from or paid to the taxation authorities in respect of the
current as well as prior years. The tax rates and laws used to compute
the amount are those that are enacted or substantially enacted by the balance sheet date. Provision for taxation is made on the basis of the
profit for the year as adjusted for taxation purposes in accordance with
the provisions of the relevant statues.
9.2 Deferred Tax:As per the accounting standard-22 “accounting for taxes on income”
issued by institute of chartered accountants of India, Deferred tax
assets are recognized to the extent that it has become probable that
future taxable profits will allow the deferred tax reflects the impact
of current year timing differences between taxable income andaccounting income for the year and reversal of timing differences of
earlier years.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the year when the assets are realized or the
liabilities are settled, based on tax rates and tax laws that have been
enacted or substantially enacted at the deferred Tax are as under:
10.Impact of Deferred Tax Assets:
Net Profit Before adjusting Deferred Tax Rs.68130625.84Deferred Tax Provision Rs.4069276.00
Net Profit after adjusting Deferred Tax Rs.72199901.84
Hence the net profit has increased by Rs.4069276.00 due to
provision of deferred tax but same is overstated due to excess
calculation.
11. GoodwillGoodwill is amortised over 5 years.
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12. Events Occuring after the balance sheet date are taken care
of.
13. Directors Responsibility Statement:The Board of Directors takes the responsibility for the preparation and
presentation of these final Statements.
14. Reconciliation of various inter branch accounts is made up to
31st March 2011. The Bank is taking effective steps in adjusting the
outstanding entries.
15. Contingent Liabilities:Contingent Liabilities on account of bank guarantees and letters of
credit are as follows:
31.032.2010 Particulars 31.03.2011
64016380.00 Bank Guarantee 67087709.00
830490.00 Letter of Credit 535885.00
16. Previous years figure have been regrouped/ rearranged whenever
necessary to confirm to the presentation of the accounts of the currentyear.
Account related Information:
Sr.
No
Particulars 31/03/2010 31/01/2011
1. Capital to risk assets ratio 14.86% 11.79%
2. Investment:
• Book value
• Face value
• Market value
20131.26
18697.58
18850.79
20883.15
19546.65
19553.50
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3. Advance against
• Real Estate
• Construction business• Housing
0.00
3480.99
3014.66
0.00
3484.17
3252.13
4. Advances against shares
debentures
Nil Nil
5. Advances to directors & their
relatives, companies, firms in
which they are interested
• Funds Based
• Non-funds Based7.01
0.00
0.00
0.006. Average cost of deposits 7.05% 5.75%
7. NPAs
• Gross NPAs
• Net NPAs
15.10%
0.37%
13.09%
0.20%
8. Movement in NPAs
• Towards NPAs
Opening balance
(+)Additions during the year
(-) reduction during the year
Closing balance
4346.17
4553.11
4637.26
4261.96
4262.02
1088.75
1125.71
4225.04
9. Profitability
• Interest income as
percentage of working funds
• Non interest income as
percentage of working funds
• Operating profit as
percentage of working funds
• Returns on assets
• Business (deposits +
Advances) per employees
• Profit per employees
8.23%
0.25%
1.54%
0.58%
392.13
1.81
8.17%
0.68%
2.47%
1.44%
457.11%
4.22
10. Provision made towards
• NPAs
• Depreciation in investment
0.00
69.13
175.00
99.23
11 Movement in provisions
• Towards NPAs 4020.76 4171.92
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Opening Balance
(+) additions during the year
(-) Reduction during the year Closing balance
• Towards depreciation on
investments
Opening balance
(+) additions during the year
(-)Reduction during the year
Closing balance
• Towards standard assets
Opening balance
(+)additions during the year
(-) reduction during the year Closing balance
151.16
0.00
4171.92380.20
69.13
0.00
449.33
108.66
4.94
0.00
113.60
186.58
190.99
4167.51
449.33
99.23
0.00
548.56
113.60
20.66
0.00
134.26
12. • Towards NPAs
• Towards depreciation on
investment
• Towards standard assets
4171.92
449.33
113.60
4167.51
548.56
134.26
13. • Foreign currency assets
• Foreign currency liabilities
Nil
Nil
Nil
Nil
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DEOGIRI NAGRI CO- OPRATIVE BANK LTD; AURANGABAD
STATUTORY REPORT:
• We have audited the attached balance sheet of DEOGIRI NAGARI
CO- OPRATIVE BANK LTD. AURANGABAD as at 31st march
2011 and also annexed thereto profit and loss account of the bank for the year ended on the date annexed thereto. These financial
statements are the responsibility of the bank’s management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
• We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we
plan and perform to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
• further to our comments and observations contained in audit
memorandum in part A,B and C, we report that;
• We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purpose of our audit.
• In our opinion, proper books of account as required by Lawhave been kept by the bank so far, as appears from our
examination of those books.
• The balance sheet and profit and loss account dealt with by
this report, are in agreement with the book of accounts.
• In our opinion, and to the best of our information and
according to the explanation given to us, the said account
give a true and fair view, in conformity with the accounting
principles generally accepted in India.
• Other point as per part A,B And C our report:
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• In case of balance sheet, of state of affairs of the
bank as 31st March 2011
• In the case of profit and loss account, profit of the bank for the ear ended on the date.
• For the year 2010-2011 audit class “A” is awarded to Bank.
For INDAPURKAR & MUNDADA
Place: Aurangabad Chartered Accountant
Date: 30/06/2011
Chapter 3
Fixed Deposit
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Fixed Deposit Meaning In deposit terminology, the term Fixed Deposit refers to a savings account or
certificate of deposit that pays a fixed rate of interest until a given maturity
date. Funds placed in a Fixed Deposit usually cannot be withdrawn prior tomaturity or they can perhaps only be withdrawn with advanced notice and/or
by having a penalty assessed.
Fixed Deposit ExampleFor example, a Fixed Deposit will often be used by individuals, businesses
and financial institutions around the world as a means of storing their liquid
funds for a fixed period of time for future use. In the retail market, Fixed
Deposits are relatively safe investments when provided by insured financialinstitutions such as banks, savings and loan corporations and credit unions
that are duly regulated within the country in which they operate. Also, while
the term Fixed Deposit is in common usage in India and some other countries,
Fixed Deposits are also known as term deposits in countries like Australia,
Canada and New Zealand, as time deposits in the United States and as bonds
in Great Britain.
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INTRODUCTION OF FIXED DEPOSIT There are several options available when it comes to where to make a
fixed deposit. One of the most common areas where a fixed deposit is offeredis the banks. All types of banks, be they public sector or private sector or even
co-operative banks, offer fixed deposits for their customers. This makes fixed
deposits one of the most accessible options for investors because of the fact
that most people have a bank account at some place or the other.
The second option for investing in a fixed deposit is with a financial
institution. There are several institutions that offer a deposit option. This can
include housing finance institutions or even other lending institutions that
offer deposits as a means of raising funds for their activities. It can also
include various non-banking finance companies that are trying to raise funds
through the route of deposits so that they can tap a larger investor base for
their fund requirements.
There is one more area where fixed deposits are offered; these are the
companies that seek to raise funds through this route. Various companies
from the manufacturing to the service sector need funds for financing their
various activities and they raise money through the route of company fixed
deposits. The features of all these deposits are the same; the only difference is
being the entity that is issuing the deposit, so there will be a difference in therisk element for the investor in these deposits.
Fixed Deposits in companies that earn a fixed rate of return over a
period of time are called Company Fixed Deposits. Financial institutions and
Non-Banking Finance Companies (NBFC’s) also accept such deposits.
Deposits thus mobilised are governed by the Companies Act under Section
58A. These deposits are unsecured, i.e., if the company defaults, the investor
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cannot sell the documents to recover his capital, thus making them a risky
investment option
Term of deposit
A term deposit account is an account where the investor / depositor agrees to a fixed term and interest rate for locking their money away in an
account. These accounts offer more security on the rate of return that the
investor can expect when compared with high interest savings accounts.
The history behind the term deposit is that the bank offers a higher interest
rate and return to the depositor when there is certainty over the length of time
that the bank can have access to the depositor's money to re-lend to other
borrowers (and therefore make a profit). The bank rewards the secured term
from the depositor with a higher interest paid to the depositor.
Term deposit accounts are a 'fixed return' option to compare against high
interest savings accounts, however high interest savings accounts now feature
very comparable interest rates to those offered on term deposits (historically
term deposits offered far higher rates of interest than a traditional savings
account). The key difference is that the interest rates on savings accounts are
variable.
A term deposit is an account where you deposit your money and at the time of
deposit, you know in advance how much you will be paid in interest, and
when you'll be paid. When selecting your term deposit, you will see differentrates of interest available from the bank / institution for different terms. As an
investment vehicle, term deposits are easy to establish and quick to get
started, unlike an investment in property or the stock market which both have
significant lead time.
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Interest Rates and Payments:
Term deposits typically feature a fixed interest rate, as opposed to the
variable rates of interest offered on high interest savings accounts which
move up and down in response to official interest rate rises. A fixed interest
rate means that you get a fixed return on your investment, regardless of
whatever happens with interest rates and the economy. This means that there
is more certainty and security in a term deposit compared to a savings
account, and less volatility than other investments in assets like property,
commercial property or the stockmarket.
For terms shorter than one year, your interest will be paid at maturity of the
term deposit. This means that for a 6 month term deposit, you will be paid
your interest payment at a date 6 months after your deposit, as well having
access to the original deposit amount at this date. This short term deposit is
not advantageous if you rely on a regular monthly income stream.
For term deposit terms longer than one year, you will have an option of when
you you would like to receive interest, from monthly options for interest
payments to semi annually.
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The following options apply for payments of term deposits:
Less than one year: Maturity - your interest is paid at the end of the
term Longer than one year: Maturity - your interest is paid at the end of
the term Longer than one year: annually, semi-annually, quarterly
interest payment options are also available.
The payment frequency differs between term deposit providers so be sure to
pick an interest payment time frame that suits your requirement for
income. Both the banks and depositors view term deposit lengths in the same
way:
Short-term term deposits: one month deposit through to six month
deposits.
Long-term : term deposits over 12 months in length and up to
5 years, and in some instances up to 7 years.
We compare the term deposit options.
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Features & Benefits of Term Deposits
One of the great benefits of the term deposits is that the bank / provider is
paying you for access to your money, so there are usually no establishment
fees or ongoing account fees.
However, there is always a catch with any financial product and the catch is
that if you break the term and leave early, there will be a penalty. If you need
to get your money out early, you will be charged either a penalty fee or
awarded only a reduced interest rate for the period instead of the interest rate
agreed to at the initiation of the term deposit. This will differ betweeninstitutions, so check the terms and conditions carefully. The key to a
successful term deposit is to be comfortable with the term that you are
committing to.
Use of Multiple InstitutionsTo access term deposit accounts, many providers don't require you to have an
account with that institution as you can nominate an existing account to have
your interest and balance paid into at maturity.
Automatic RolloverAt the conclusion of your term deposit, your term deposit provider can
automatically roll over your matured deposit to a new term deposit of the
same period as your original, at the new interest rate offered for that new
term.
Compound Interest on Some AccountsSome term deposit accounts offer monthly payments into the same account
with the benefit of compound interest on that amount and the balance, rather
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than a fixed interest amount. This is only available to accounts over at least
one year in length as monthly interest payments are not available on terms
shorter than one year.
What you must know fixed deposit
A good invesmant strategy requris choosing the fixed mix safe and risk
right mix of safe and risky investments. Among safe investments, fixed
deposits, Fixed deposit, are the most popular today.
With Fixed deposit you deposit a lump sum of money for a fixed period
ranging from a few weeks to a few years and earn a pre-determined rate of
interest. Fixed Deposit are offered by both banks and companies though putting your money with the latter is generally considered riskier.
Advantage and disadvantage of fixed deposit
The main advantage is that Fixed Deposit from reputed banks are a very
safe investment because such banks are carefully regulated by the Reserve
Bank of India , RBI, the banking regulator in India.
Note that company Fixed Deposit isn't as safe as bank Fixed Deposit becauseif the company goes bankrupt you may lose your money. Make sure you
check the credit rating of a company before investing in its Fixed deposit.
You should be especially wary of companies which offer interest rates
significantly higher than the average to attract your money.
The other advantage of Fixed Deposit is that you have the option of receiving
regular income through the interest payments that are made every month or
quarter. This option is especially useful for retirees.
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On the flip side, a fixed deposit won't give you the same returns that you may
get in the stock markets. For instance a stock-portfolio may rise 20-30 per
cent in a good year whereas a fixed deposit typically earns only 7-10 per cent.
A fixed deposit also doesn't offer protection against inflation. If inflation rises
steeply during the maturity of the Fixed Deposits your inflation adjusted
return will fall.
Say, for example, the inflation when you deposited the money at a fixed
return of 8 per cent per annum is 3 per cent. Now when your Fixed Deposit
matures say after 2 years, the inflation increases to say 5 per cent.In this case,
your inflation adjusted returns is only 3 per cent (8-5). Had inflation remained
at 3 per cent by the time your deposit matured, your real rate of return would
be 5 per cent (8-3).
Interest rates on Fixed Ddeposit
The rate of interest on Fixed Deposit varies according to the maturity
with longer deposits generally earning a higher interest rate. Here are theinterest rates offered by deogiri Bank on their Fixed Deposit. Note that Fixed
Deposit vary quite a bit from bank to bank so you should search around
before investing.
Interest paid on a fixed deposit is paid either monthly or quarterly according
to the investor's choice. So if you invest Rs 3 lakhs in a one year fixed deposit
which pays 8 per cent you can earn Rs 2,000 of interest every month or Rs
6,000 of interest every quarter .
Effective Return
Before you invest in Fixed Deposit you need to understand the concept of
effective return which is higher than the rate of interest on the Fixed Deposit.
Effective return is relevant if you choose to reinvest your interest every year
which means that you will be earning compound interest.
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For example suppose you invest Rs 1,000 in a fixed deposit with 8 per cent
interest which is paid quarterly.
Returns of fixed deposit
In the first quarter (after 3 months) you will earn an interest of Rs 20 which is
re-invested and continues to earn interest in the remaining three quarters.
Similarly the interest you earn in the second (after 6 months) and third quarter
(after 9 months) is also reinvested and earns interest.
At the end of the year because of compound interest you will receive Rs
1,082.4 meaning that your effective return is 8.24 per cent rather than 8 per
cent.
break a fixed deposit?
Breaking a fixed deposit means withdrawing the money before the
maturity expires. This may be necessary if you urgently require the funds or if
there are better investment opportunities elsewhere. You will have to pay a
cost; for instance you may receive an interest rate 1 per cent lower than the
stated interest rate on the Fixed Deposit.
For example if you invested in a 3 year Fixed Deposit with 9 per cent and you
break it after two years you may receive only 8 per cent interest for those two
year instead of 9 per cent.
An alternative to breaking a fixed deposit is taking a loan against the FD.
Such loans are quite easy to obtain with amounts ranging up to 90 per cent of
the principal and accumulated interest.
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alternatives to Fixed deposits
Obviously mutual funds and stocks can offer higher returns but the main issueis whether there are low risk investment products which offer a better return
than Fixed Deposit. Many financial experts believe that fixed maturity plans
(FMP) offer exactly such a superior alternative.
BENEFIT OF FIXED DEPOSIT. The major benefit of fixed deposits is its higher interest rate when compared
to interest rate in a regular savings account
High Intere No deduction of Income Tax at source up to Rs 5,000 p.a.
Short-term deposits.
Lock-in period is only 6 months.
No Income Tax is deducted at source if the interest income is up to Rs 5,000
in one financial year .Investment can be spread in more than one company, so
that interest from one company does not exceed Rs. 5,000.
Company Fixed Deposits are non transferable that means there is no fear of
Fixed Deposit receipt being stolen. In case it falls into wrong hands ,it cannot
be misused. The Fixed Deposit holder in such a case should write to the
company which shall issue duplicate deposit receipt upon execution of an
indemnity and cancel the previous one.
Further, advantage of investing in company fixed deposits is that one can
analyse the company before investing in it because companies accepting
deposits are old-established reputed companies with proven track records.
Recently, nomination facility has been introduced in company fixed deposits.
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Types of Fixed Deposits
Fixed Deposits require a customer to place cash in a savings account held
with a financial institution for a particular time frame at a given interest rate.
Early withdrawals from Fixed Deposits tend to result in a significant penalty.
A holiday account, also called a Christmas club account, is a type of fixed
deposit account.A fixed deposit, as its name implies, is a fixed sum of money that is held in a
savings account for a pre-decided period of time--earning a fixed rate of interest.
The time period for a fixed deposit varies from 15 days to 1,095 days (three
years) and its interest rate varies between 3 percent and 7.5 percent. A fixeddeposit account typically yields a greater interest rate than a regular account,
owing to its fixed time period. Fixed deposits are also called time or term
deposits.
Certificate of Deposit
A certificate of deposit (CD) is a type of fixed deposit account that can
be purchased in varying amounts from a credit union, traditional bank or
other depository institution. A CD is a commercial paper that confirms the
monetary value of the deposit made, its maturity date and the interestapplicable on the amount loaned. Certificates of deposit mature in one month,
three months, six months, 12 months (one year), 36 months (three years) and
60 months (five years). Interest rates accrued on certificates of deposit are
quoted on a yearly (annual) basis.
Bank Term Deposit
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A revolving term deposit renews itself automatically for another term of an equal
length after its loan period expires. Depositors can put money in a revolving term
account through a cashless transfer from an existing account or by direct transfer.The terms on revolving fixed deposits range between one week to 12 months
Unchanging term deposit
An unchanging term deposit, also called a single term deposit, does not renew
automatically after its maturity date. An unchanging fixed term deposit can
be opened from one month, three months, six months, 12 months, 24 months
and 36 months.
Holiday Account
A holiday account, also called a Christmas Club account, is a special type of
fixed term deposit that allows a depositor to put aside, and add, small
denomination funds till the account matures. Cash cannot be withdrawn from the
account till it reaches its expiration date. A holiday account can be thought of as
a short-term savings account that secures a depositor during a holiday season.
Some financial institutions and banks require a minimum initial deposit before
they can open a holiday account. Christmas club accounts accrue monthly
interest, the entire amount of which is paid when the account matures, typically
right before Christmas.
Different types of fixed deposits
Consumers and companies throughout the world use Fixed Deposits to
save money for future use from time frames varying between one month and
several years. The term Fixed Deposit is especially popular in India for this
retail financial product, but they are also called Term Deposits .
companies provide fixed deposits
Financial institutions like banks and savings and loan corporations provide
Fixed Deposits and they are
required to follow the applicable banking regulations in the countries in
which they operate.
Fixed deposit in seving account
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Although the terms of specific Fixed Deposits can vary significantly
among financial institutions and countries, Fixed Deposits generally differ
from checking and savings accounts because they cannot be used as money by allowing the account holder to make withdrawals without incurring a
significant penalty. They also differ from such accounts by having a fixed
maturity date after which funds are either returned or rolled over
Risk of fixed deposit
Substantial investment security is provided by Fixed Deposits held with
reputable and insured financial institutions, but as a result of this perceived
lack of risk, they usually only offer a rather low nominal rate of return or
interest to the holder on deposits.
Interest rates available on Fixed Deposits tends to be higher than with
regular savings accounts since funds are not readily available until maturity,
but returns are usually lower than those available with riskier investmentslike some corporate stocks and bonds.
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Time deposit
A Time Deposit requires the placement of cash in a savings account at a fixed
rate of interest for a certain
term or time period. Funds generally cannot be withdrawn from a Time
Deposit prior to the end of its
term without incurring a penalty.
Type of time deposit
Time Deposits are used around the world by consumers and businesses
to save money for use in the future. Although Time Deposit is the common
term used for such accounts in the India , they are also known as Term
Deposits in India , as Bonds in the Britain and as Fixed Deposits in countries
like India. Financial institutions offering Time Deposits to retail clients are
usually required to follow the applicable banking regulations in the country
in which they operate.
provide time deposits
Time Deposits can be placed with a retail financial institution like a bank
or credit union, and the risk involved in doing so is quite low if the funds are
deposited with a member of a deposit insurance organization like the financial
deposit in India
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guarantees time deposits?
In the India , funds deposited in Time Deposits are protected up to acertain amount by the financial deposit in India when the Time Deposit is
made with a financial institution that is also an F D I member.
risky are time deposits
A variety of Time Deposit maturity dates ranging from one month to
several years are available from financial institutions. Also, because of the
requirement to leave Time Deposit funds alone for a period of time or pay a
penalty, Time Deposits tend to pay out a higher rate of interest than normal
savings accounts. Nevertheless, this return is usually considerably less thancan be obtained by investing in riskier products like corporation stocks or
bonds
6 month deposit
A 6 month term deposit is often referred to as a short term investment
due to the short time horizon of less than 1 year. For a period of fixed product
6 months, major banks can follow or anticipate central banks whendetermining the rates they publish for depositors. In countries such as India
who offer 'term deposits' as savings products from banks, the Reserve Bank
of India issues guidance from its meetings and rate decisions indicating
reasons for increasing, lower or keeping the same interest rates. These
decisions have a major impact on what rates India banks publish.
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Advantage of fixed deposit
1 A Fixed Deposit Account is one in which the customer deposits a big
sum of money (Usually a few thousands and upwards. There is actually
no limit to the amount of money you can deposit in a FD) for a fixed
2 A Fixed Deposit is an agreement between a customer and bank
wherein the customer agrees to deposit a fixed sum of money for a specific
duration of time. The bank in return accepts the deposit and...
3 No. As long as it can be cashed in at any time, it is still liquid
and therefore a current asset. If it cannot be cashed in before maturity, it
would be classified as Other Non-Current Assets.
4 If deposited into Fixed deposit its more safe for you. Its interest % is
high when compare with other deposits like SB (Saving Bank A/C) &
Current A/C. If you're a senior
Disadvantages of fixed deposit
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1 Well one disadvantage is being 'hooked' into spending inordinate
amounts of time in front of a screen editing spelling and grammar mistakes
that people make when asking questions here. (lol) Another
2 if the interest rate increases, they will not increase your. it will be based
on the initial rate
3 The major disadvantage of a fixed deposit is that you cannot
withdraw the amount instantly when the need for money suddenly arises.
Another disadvantage of fixed deposits is that it is prone to
4 You can't withdraw the deposited money back until the terms of
deposit completes.
for example.: You deposit your money into the FD for 5 years upto
Rs.50,00,000/-. After 2 years of deposit, U need the deposited money in FD,
you can't withdraw back without completion of the deposit amount
Chapter 4
OBJECTIVE OF FIXED DEPOSIT
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To know the fixed deposit position of R.B.I
To identify the position of fixed deposit on total deposit
To comparing fixed deposit of R.B.I with total commercial bank and Indian
Bank Ltd. to know its actual financial position and performance
To sketch the trend of fixed deposit of R.B.I
To see how far the bank is able to utilize the collection deposit
To identify the problem in fixed deposit
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To provide suggestion and possible guideline to improve the bank fixed
deposit position based on the finding of the study
SCOPE OF FIXED DEPOSITS
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In sense of profitability then invest less in fixed deposit try to invest in
shares if you are a good player in share market.
I am a central govt servant, my monthly net salary is 17500, how can i save
the tax by investing. and what kind OF benefits get from govt. pl help me
At present, there is no scope of short term investment in equity based mutual
fund. Go for atleast two or three years please. Market is at it peak lev.
I really appreciate tht you have taken an initiative 2 invest & grow......But at
least take a look while choosing a category to post .
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As crr is hiked money will be scarce with bank so who ever wants to take
loan it will be dearer but without increasing fixed deposit rate so people
Chapter 5
METHODOLOGY
OF
THE STUDY FIXED DEPOSIT
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Research Design:
The first step of the study is to collect necessary information and data
concerning the study of R.B.B fixed deposit by contacting the concern staffs.
The task will be fulfilling by the collection of secondary data and Primary
data and various published information regarding this context. Then the
collected data will be presented and analyzed systematically to fulfill the
objective of the
A deposit of money that pays higher interest than a savings account but
imposes conditions on the amount, frequency, and/or period of withdrawals.
Also called time deposit.
Receipt issued by a depository institution (such as a bank, credit union, or a
finance or insurance company) to a depositor who opens a certificate ac...
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Fixed Deposit is the most common form of savings all over the world,
specially in India. A Fixed Deposit involves locking a certain amount of
money for a certain time period with a government approved institution, itcan be a bank or a corporate offering fixed deposits to raise money for its
business, etc
Prmaary data
1 Source of data
The various data require for the study is collected from concern authoritiesi.e. R.B.B. and Nepal Rastra Bank. Data required is collected through primary
data and secondary data. Primary data is collected from concern authority by
asking them question or by taking the interview. Secondary data is collected
from the annual report, banking and financial statistics, quarterly economic
bulletin, Papers and magazines, which were published, by R.B.I
2 Data Gathering and Processing Procedure:
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All the necessary data were collected on various issues from R.B.I and N.R.B.
This study is based on secondary data but interview techniques has also been
used to collected information on the fixed deposit of the bank. The collecteddata are processed by tabulating and arranging in a required form for the
sequential analysis of data.
3 Tools Used for Analysis:
Then an attempt has been made to analyze the tabulated data to review the
financial aspect of R.B.I. For the analysis of data the various statistical tools
like percentage change, bar diagrams, pie - chart, time series and correlation
will be taken in to use. In this regard, the analysis will be mainly based on
financial aspect.
Secondary data
1 Fixed deposits are money deposited by the customers for a fixed
period, which range from 1 week to 5 years. Such as 1 week, 2 week, 3
months, 6 months, 9 months and 1 to 5 years. Fixed deposit is also known astime deposit or time liabilities.
2 Fixed deposit is the main source of funds. Bank uses this sum of
money in its investment activities. Out of the total deposit higher percentage
comes from fixed deposit account as it most stable of all deposit. As it is
permanent sources of funds, bankers use this fund to long-term investments,
which gives higher return to the bank. Bank does not need to maintain higher
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cash balances to meet the demand of such account holders because banks
have fixed the expiry of the account per head.
3 In Nepal, any fixed deposit can not be withdrawn before the maturity
period. However, upto 90% deposit can be withdrawn as loan. The bank will
charge 2% more than the interest paid to the depositors for granting loan
against deposit. The bank pays a higher interest on such deposit. But interest
provide by the bank depends upon its time duration. Bank repays the fixed
deposit principal together with interest after maturity period.
4 The best fixed deposit interest rate can come from a different bank
than the one you're currently using, so you might want to check into that also.
Fixed deposits can be great for saving money when you don't think it's possible or simply are having a tough time saving period. It's definitely
something to think about right now with the economy and the threat of no
more Social Security - you should always have a back up plan.
Features of the fixed deposits
- Fixed deposit was received by bank for certain period.
- The bank is free to make use of this money for granting loans and
advances
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- Any fixed deposit can not be withdrawn by issuing cheque.
- Bank pays a higher interest on such deposit in comparison with other
deposit.
- Any additional amount can not be allowed to deposit in the fixed
deposit account before the maturity period.
- Fixed deposit account is automatically closed once the deposit matures.
- Bank repays the fixed deposit to customer principal together with
interest after maturity period.
5 Rules for Fixed Deposit
In this article I will be writing about the important points to consider while
opening the fixed deposit account. I have already published many articles
explaining the fixed deposit account and the tax savings involved with the
fixed deposit schemes. This post is intend to list some of the key points which
you must be aware before opening the fixed deposit account. I hope you will
like the post and will be more informative. Please post your feedback and add
if you have any points in your mind. If you like the post, subscribe to our
future articles here.
1. Split Your Fixed Deposit
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You have to split the fixed deposit to avoid the TDS(Tax deduction at
Source). If the total interest is more than Rs.10000 in a branch for the specific
year, then TDS must be paid. To avoid that please split the fixed deposit and
invest in the different banks.
2. Plan the Tenure
It is important to plan the number of years you want to keep the deposit.
Banks will charge as penalty if you are foreclosing the deposit account.
Please ask the banker for penalty applicable for the foreclosing.
3. Appoint a Nominee
Always appoint a nominee for your fixed deposit to avoid the hassle free
release of amount after you. If you are not appointing any nominee, they will
have to bring any of the heirs proof certificate to receive the money.
4. Check the compound interest policies
This is one of the important consideration while opening a fixed depositaccount. When you hear the rate of interest is 8.0% p.a., first thing you have
to ask whether it is compounded quarterly, half-yearly or yearly. If the
interest is compounded quarterly, then the return rate of interest will be
potentially more than the actual one.
5. Learn fixed deposit investment
If you are not aware that the fixed deposit savings can be used for tax
benefits, please learn about the tax savings on fixed deposit. It has limitation
of Rs.100000 under section 80c. Might be useful if you are looking for the
same one.
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Chapter 6 DATA ANALYSIS AND INTERPRETIAT
CHART
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Fixed deposit in deogiri bank
31/3/2010
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currantdeposit5.37%
seving
deposit25.52%
fixeddeposit
69.11%
currant deposit
seving deposit
fixed deposit
Fixed deposit in deogirin bank
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31/3/2011
currant
deposit6.63%
seving
deposit
28.56%
fixed
deposit
64.81%
currant deposit
seving deposit
fixed deposit
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DEPOSIT SCHEM OF DEOGIRI BANK
DEPOSIT SCHEM INTERST RATE
2011 DEC 2012
Term Deposit Public
Co-op
Societies and
banks
Senior
CitizenWidow
Handicapped/
Blind
15 Days To 45Days
5.00 5.50 5.00 5.00 5.00
46 Days To 90
Days5.50 6.00 5.50 5.50 5.50
91 Days To 180
Days7.25 7.75 7.25 7.25 7.25
181 Days To
Less Than 13
Months
7.75 8.25 7.75 7.75 7.75
Only for 13
Months11.50 12.00 12.00 12.00 12.00
Above 13
Months9.25 9.75 9.75 9.75 9.75
Special Scheme
555 Days10.25%
Special Scheme
655 Days 10.50%
Unmarried Girls
Below 25 Years11.00%
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Chapter 7
LIMITATION OF STUDY
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Taxation in case of debt funds is more investor friendly when compared
with fixed deposits especially for the investors in higher tax bracket
In the short term investment horizon, investor gets the benefit of lower
dividend distribution tax in debt funds
In the long term investment horizon, investor gets the benefit of
indexation in debt funds
Debt Funds are highly liquid as the amount invested can be redeemed
indays unlike fixed deposits where money gets locked in for a fixed
period of tim
Though the pre tax returns are in the same range of 8-9%, but variationcan be seen in post tax returns. Let us discuss two scenarios:
Debt Funds are more liquid than Fixed Deposit
Debt Funds deliver better post tax returns when compared with fixed
deposits
In the short term and long term investment horizon, investor earns better
post tax returns by investing in debt funds.Fixed depositgives limited but
assured returns.Stocks can give very high returns or even very high losse
Debit card is a facility to withdraw your own deposi ed money in the bank.
Credit card as the name denotes, you make advance arrangement with a bank
I think there is no certain limit but one loses the interest on such a big amount
as the interest rate is very low in savings bank ac and hence he lo.
Loan is a fixed amount and to be paid in a certain period OF time where as in
cash credit a limit is fixed and u have to be in that limit always a...
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Chapter 8
SUMMARY&CONCLUSION
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Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on
deposit earns a fixed rate of interest, according to the terms and conditions
that govern the account. The actual amount of the fixed rate can be influenced
by such factors at the type of currency involved in the deposit, the duration
set in place for the deposit, and the location where the deposit is made.
The most unusual characteristic of a fixed deposit is that the funds cannot be
withdrawn for a specified period of time. In most cases, fixed deposits carry a
duration of five years. During that time, the money remains in the account
and cannot be withdrawn for any reason. Individuals, corporate entities, andeven non-profit organizations that wish to set aside funds and limit their
access to the funds for a period of time often find that fixed deposits are a
simple way to accomplish this goal. As an added benefit, the monies in the
account will earn a fixed rate of interest regardless of any fluctuations in
interest rates that apply to other types of accounts.
However, both these benefits can also turn into disadvantages under certain
circumstances. Because the money cannot be withdrawn until the duration is
complete, the funds cannot be used even in emergency situations. Changes in
the going interest rate may also rise to a point above and beyond the interest
rate applied to existing deposits. This means account holders are actually
earning less interest with fixed deposits than with other types of loans and
accounts.
where the While the interest rate on fixed deposits cannot be changed, there is
sometimes a way to work around the issue of obtaining use of funds in an
emergency situation. At times, the lending institution fixed deposit is placed
may be willing to extend a separate loan to the account holder, using the fixed
account as collateral. While not ideal, this can at least make it possible to deal
with the current financial crunch.
Fixed deposits are a credible way to make a return on investment that is
somewhat higher than a standard savings account. The use of fixed deposits
can also be helpful when working with various types of currency. By
establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it
is possible to choose the type of currency involved in the deposit and lock in a
rate of interest. If the choice of currency is a good one, this means the
investor can enjoy a healthy fixed deposit currency rate for the duration of the
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deposit and earn more than with a standard fixed deposit strategy. However,
going with an FCFD does contain a slightly higher amount of risk, since the
funds deposited must be converted to the currency of choice and thenconverted back when the deposit is fulfilled. If the currency did not fare well
in the interim, there is some chance of obtaining a loss, due to the changes in
the rate of exchange from the time the fixed deposit was activated until the
time the deposit is considered complete.
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Chapter 9
BIBLIOGRAPHY
www.yahoo.com
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Referance book
deogiri nagari sahakari bank ltd aurangabad
adderss: arth complex kesrsingpura, adalt rode aurangabad
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