Summer Internship Report on Chengalpattu Urban Bank

8/4/2019 Summer Internship Report on Chengalpattu Urban Bank

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A report on internship training undergone at

CHENGALPATTU URBAN CO-OPERATIVE BANK

Submitted in partial fulfillment of the requirements for the award of

degree of

MASTER OF COMMERCE

(Computer Oriented Business Application)

Submitted by

ALI ASGAR

(REG.NO.108CO117)

DEPARTMENT OF COMMERCE (SFS)

MADRAS CHRISTIAN COLLEGE (AUTONOMOUS)

TAMBARAM, CHENNAI-600059


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CERTIFICATE

This is to ceritify that the A report on internship training undergone atCHENGALPATUU URBAN CO-OPERATIVE BANK

submitted by ALI ASGAR in partial fulfilment of the post graduate

degree in commerce during 2010-2012. Department of commerce (Self

Financed), Madras Christian College, Tambaram.

SIGNATURE

Mrs. Nirmala Mohan

HEAD OF THE DEPARTMENT


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ACKNOWLEDGEMENT

I would like to than our respected Principal Mr.R.W. Alexanderjesudasan, Msc., Phd., FRES., FAZRA., FMSF., FEAI., FPPI of

Madras Christian College (Autonomous) and Self-Financed

Stream Coordinator Mr.J.Chandradas and college faculty for

organizing this summer internship programme.

I deeply indebted to express my gratitude to our Head of the

Department Mrs. Nirmala Mohan, M.Com., M.Phil, for giving this

excellent opportunity and for her constant encouragement.

I would like to dedicate my sincere thanks to the

CHENGALPATTU URBAN CO-OPERATIVE BANK. MCC for

grating me permission to do this project work. I am also thankful

to all the employees who had given their responses with full zeal

and spirit.

Last but not the least I would like to thank to my family and friends

for their constant support, which enables me to complete this

project on time.

ALI ASGAR


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DECLARATION

I, ALI ASGAR hereby declare that the internship report onCHENGALPATTU URBAN CO-OPERATIVE BANK is a

record of the original work done by me for the requirement

of Master Of Commerce.

Ali Asgar


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TABLE OF CONTENT

Chapter

Number Title PageNumber

1 INTRODUCTION

2 PROFILE OF BANK

3 INTERNSHIP DESCRIPTION

4 ANALYSIS AND LEARNING

PROCESS

5 SUGESSTION AND CONCLUSION

6 DAILY REPORT


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CHAPTTER1

INTRODUCTION


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INTRODUCTION TO BANKING:

India cannot have a healthy economy without a sound and effective banking

system. The banking should be hassle free and able to meet the new challenges

posed by technology and other factors, both internal and external.

In the past three decades, Indias banking system has earned several outstanding

achievements to its credit. The most striking is its extensive reach. It is no longer

confined to metropolises or cities in india. In fact, Indian banking system has

reached even to the concern of the country. This is one of the main aspects of

Indias growth story.

The Governments regulation policy for banks has paid rich dividends with thenationalization of 14 major private banks in 1969. Banking today has become

convenient and instant, with the account holder not having to wait for hours at the

bank counter for getting a draft or for withdraw money from his account.

Banks in India

In India, banks are segregated in different groups. Each group has its own

benefits and limitation in operations. Each has its own dedicated target market.

A few of them work in the rural sector only while others in both rural as well asurban. Many bank are catering in cities banks in India can be classified into:

Public Sector Banks

Private Sector Banks

Co-operative Bank

Regional Rural Banks

Foreign Banks

One aspect to be noted is the increasing number of foreign banks in India.

The RBI has shown certain interest to involve more foreign banks. This step has

paved the way for a few more foreign banks to start business in India.


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Pre-Independence banking

Banking in India originated in the last decades of 18th

century. The first

banks were the General Bank of India which started in 1786, and the Bank of

Hindustan, both which are now defunct. The oldest bank in existence in India is theState bank of India, which originated in the Bank of Calcutta in June 1806, which

almost immediately became the bank of Bengal. This was one of the three

presidency banks, the other two being the Bank of Bombay and the Bank of

Madras, all three of which were established under charters from British East India

Company. For many years the Presidency banks acted as quasi-central banks, as

did their successors. The three banks merged in 1921 to form the Imperial Bank of

India, which upon Indias independence, became the State Bank of India.

Indian merchants in Calcutta establish the Union Bank in 1839, but it failed in1848 as a consequence of the economic crisis of 1848-49. The Allahabad bank,

established in 1865 and still functioning today, is the oldest Joint Stock bank of

India. It was not the first though. That honor belongs to the Bank of Upper India,

which was established in 1863, and which survived until 1913, when it failed with

some of its assets and liabilities being transferred to the Alliance Bank of Simla.

When the American Civil War stopped the supply of cotton to Lancashire from the

confederate states, promoters opened banks to finance trading in Indian cotton.

With large exposure to speculative opened banks to finance trading in Indian

during that period failed. The depositors lost money and lost interest in keeping

deposits with banks. Subsequently, banking in India remained the exclusive

domain of Europeans for next several decades until the beginning of the 20th

century.

Foreign banks too started to arrive, particularly in Calcutta in the 1860s. The

comptoired Escompte de paris opened a branch in Calcutta in 1860, and another in

Bombay in 1862 branches in Madras and Pondicherry, then a French colony,

followed.

HSBC established itself in Bengal in 1869. Calcutta was the most active trading

port, India mainly due to the trade of British Empire, and so became a banking

center.


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The fist entirely Indian stock bank was the Iudh Commercial bank, established in

1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank,

established in Lahore in 1895, which was survived to the present and is now one of

the largest banks in India.

Around the turn of the 20th

century, the Indian economy was passing through a

relative period of stability. Around five decades had elapsed since the Indian

Mutiny, and the social, industrial and other infrastructure had improved. Indians

had established small banks, most of which served particular ethnic and religious

communities.

The presidency banks dominated banking in India but there were also some

exchange banks and a number of Indianjoint stockbanks. All these banks operated

in different segments of the economy. The exchange banks, mostly owned byEuropeans, concentrated on financing foreign trade. Indian joint stock banks were

generally under capitalized and lacked the experience and maturity to compete

with the presidency and exchange banks. This segmentation let Lord Curzon to

observe, "In respect of banking it seems we are behind the times. We are like some

old fashioned sailing ship, divided by solid wooden bulkheads into separate and

cumbersome compartments."
http://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Joint_stock_company


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Reserve Bank of India

The central bank of country is the Reserve Bank of India. It was established in

April 1935 with a share capital of Rs.5crore on the basis of the recommendations

of the Hilton Young Commission. The share capital was divided into fully paidshares of Rs.100 each, which was entirely owned by private shareholders in the

beginning. The government held shares of nominal value of Rs.220,000. The RBI

commenced operation on April 1, 1935 under the Reserve Bank of India Act, 1934.

The Bank was constituted to meet the following requirements.

1. Regulate the issue of currency notes.

2. Maintain reserve with a view to securing monetary stability

3. Operate the credit and currency system of the country to its advantage

4. The Reserve Bank of India, Indias central banking authority, wasnationalized on January 1, 1949 under the terms of the Reserve Bank of

India Act, 1948

5. In 1949 the Banking Regulation Act was enacted which empowered the

Reserve bank of India to regulate control and inspect the banks in India.

6. The Banking Regulation Act also provided that no new bank or branch of an

existing bank could be opened without a license form the RBI, and no two

banks could have common directors.

However, despite these provisions, control and regulations, banks

in India except the State Bank of India or SBI continued to be owned

and operated by private persons. By the 1960s, the Indian economy. At

the same time it had emerged as a large employer and a debate had

ensured about the possibility to nationalize the banking industry. Indira

Gandhi, the-then Prime Minister of India expressed the intention of the

GOI in the annual conference of the All India congress meeting in apaper entitled Stray thoughts on Bank Nationalization. The paper was

received with positive enthusiasm.


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FUNCTIONS OF RESERVE BANK OF INDIA:

Monetary authority

The Reserve Bank of India is the main monetary authority of the country and beside that

the central bank acts as the bank of the national and state governments. It formulates, implementsand monitors the monetary policy as well as it has to ensure an adequate flow of credit to

productive sectors. Objectives are maintaining price stability and ensuring adequate flow of

credit to productive sectors. The national economy depends on the public sector and the central

bank promotes an expansive monetary policy to push the private sector since the financial market

reforms of the 1990s.[26]

The institution is also the regulator and supervisor of the financial system and prescribes broad

parameters of banking operations within which the country's banking and financial system

functions. Objectives are to maintain public confidence in the system, protect depositors' interestand provide cost-effective banking services to the public. The Banking Ombudsman Scheme has

been formulated by the Reserve Bank of India (RBI) for effective addressing of complaints by

bank customers. The RBI controls the monetary supply, monitors economic indicators like

thegross domestic productand has to decide the design of the rupee banknotes as well as coins.

Manager of exchange control

The central bank manages to reach the goals of the Foreign Exchange Management Act,

1999. Objective: to facilitate external trade and payment and promote orderly development and

maintenance of foreign exchange market in India.

Issuer of currency

The bank issues and exchanges or destroys currency and coins not fit for circulation.

The objectives are giving the public adequate supply of currency of good quality and to provide

loans tocommercial banksto maintain or improve the GDP. The basic objectives of RBI are to

issue bank notes, to maintain the currency and credit system of the country to utilize it in its bestadvantage, and to maintain the reserves. RBI maintains the economic structure of the country so

that it can achieve the objective of price stability as well as economic development, because both

objectives are diverse in themselves
http://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-25http://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-25http://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-25http://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-25


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Developmental role

The central bank has to perform a wide range of promotional functions to support national

objectives and industries.The RBI faces a lot of inter-sectoral and local inflation-related

problems. Some of this problems are results of the dominant part of the public sector.

Related functions

The RBI is also a banker to the government and performs merchant banking function for the

central and the state governments. It also acts as their banker. TheNational Housing

Bank(NHB) was established in 1988 to promote private real estate acquisition. The institution

maintains banking accounts of all scheduled banks, too.

There is now an international consensus about the need to focus the tasks of a central bank upon

central banking. RBI is far out of touch with such a principle, owing to the sprawling mandate

described above. The recent financial turmoil world-over, has however, vindicated the Reserve

Bank's role in maintaining financial stability in India.

Policy rates and Reserve ratios

1- Bank Rate: RBI lends to the commercial banks through its discount window to

help the banks meet depositors demands and reserve requirements. The

interest rate the RBI charges the banks for this purpose is called bank rate. If the

RBI wants to increase the liquidity and money supply in the market, it will

decrease the bank rate and if it wants to reduce the liquidity and money supply in

the system, it will increase the bank rate. As of 5 May, 2011 the bank rate was

6%.

2- Cash Reserve Ratio(CRR): Every commercial bank has to keep certain

minimum cash reserves with RBI. RBI can vary this rate between 3% and 15%.

RBI uses this tool to increase or decrease the reserve requirement depending on

whether it wants to affect a decrease or an increase in the money supply. An

increase in Cash Reserve Ratio (CRR) will make it mandatory on the part of the

banks to hold a large proportion of their deposits in the form of deposits with the

RBI. This will reduce the size of their deposits and they will lend less. This will in

turn decrease the money supply. The current rate is 6%.
http://en.wikipedia.org/wiki/National_Housing_Bankhttp://en.wikipedia.org/wiki/National_Housing_Bankhttp://en.wikipedia.org/wiki/National_Housing_Bankhttp://en.wikipedia.org/wiki/National_Housing_Bankhttp://en.wikipedia.org/wiki/Reserve_requirementhttp://en.wikipedia.org/wiki/Reserve_requirementhttp://en.wikipedia.org/wiki/Reserve_requirementhttp://en.wikipedia.org/wiki/National_Housing_Bankhttp://en.wikipedia.org/wiki/National_Housing_Bank


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3- Statutory Liquidity Ratio(SLR): Apart from the CRR, banks are required to

maintain liquid assets in the form of gold, cash and approved securities. Higher

liquidity ratio forces commercial banks to maintain a larger proportion of their

resources in liquid form and thus reduces their capacity to grant loans and

advances, thus it is an anti-inflationary impact. A higher liquidity ratio diverts the

bank funds from loans and advances to investment in government and approved

securities.

In well-developed economies, central banks use open market operations--buying and

selling of eligible securities by central bank in the money market--to influence the

volume of cash reserves with commercial banks and thus influence the volume of loans

and advances they can make to the commercial and industrial sectors. In the open

money market, government securities are traded at market related rates of interest. The

RBI is resorting more to open market operations in the more recent years.

Generally RBI uses three kinds of selective credit controls:

1. Minimum margins for lending against specific securities.

2. Ceiling on the amounts of credit for certain purposes.

3. Discriminatory rate of interest charged on certain types of advances.

Direct credit controls in India are of three types:

1. Part of the interest rate structure i.e. on small savings and provident funds, are

administratively set.

2. Banks are mandatorily required to keep 24% of their deposits in the form of

government securities.

3. Banks are required to lend to the priority sectors to the extent of 40% of their

advances.
http://en.wikipedia.org/wiki/Statutory_Liquidity_Ratiohttp://en.wikipedia.org/wiki/Statutory_Liquidity_Ratiohttp://en.wikipedia.org/wiki/Statutory_Liquidity_Ratio


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Nationalization

Thereafter, her move was swift and sudden. The Government of India issued an ordinance

and nationalized the 14 largest commercial banks with effect from the midnight of July 19,

1969.Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political

sagacity."Within two weeks of the issue of the ordinance, theParliamentpassed the Banking Companies

(Acquisition and Transfer of Undertaking) Bill, and it received thepresidentialapproval on 9 August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The stated

reason for the nationalization was to give the government more control of credit delivery. With the second

dose of nationalization, the Government of India controlled around 91% of the banking business of India.

Later on, in the year 1993, the government mergedNew Bank of IndiawithPunjab National Bank. It was

the only merger between nationalized banks and resulted in the reduction of the number of nationalized

banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%,closer to the average growth rate of the Indian economy.

Liberalization

In the early 1990s, the thenNarasimha Raogovernment embarked on a policy

ofliberalization, licensing a small number of private banks. These came to be known asNew

Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation

banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis

Bank(earlier asUTI Bank),ICICI Bankand HDFC Bank. This move, along with the rapid

growth in theeconomy of India, revitalized the banking sector in India, which has seen rapid

growth with strong contribution from all the three sectors of banks, namely, government banks,

private banks and foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxation in the

norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting

rights which could exceed the present cap of 10%,at present it has gone up to 74% with some

restrictions.

The new policy shook the Banking sector inIndiacompletely. Bankers, till this time, were

used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new

wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.All

this led to the retail boom in India. People not just demanded more from their banks but also

received more.
http://en.wikipedia.org/wiki/Jayaprakash_Narayanhttp://en.wikipedia.org/wiki/Jayaprakash_Narayanhttp://en.wikipedia.org/wiki/Jayaprakash_Narayanhttp://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/President_of_Indiahttp://en.wikipedia.org/wiki/President_of_Indiahttp://en.wikipedia.org/wiki/President_of_Indiahttp://en.wikipedia.org/w/index.php?title=New_Bank_of_India&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=New_Bank_of_India&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=New_Bank_of_India&action=edit&redlink=1http://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Narasimha_Raohttp://en.wikipedia.org/wiki/Narasimha_Raohttp://en.wikipedia.org/wiki/Narasimha_Raohttp://en.wikipedia.org/wiki/Liberalizationhttp://en.wikipedia.org/wiki/Liberalizationhttp://en.wikipedia.org/wiki/Liberalizationhttp://en.wikipedia.org/wiki/Axis_Bankhttp://en.wikipedia.org/wiki/Axis_Bankhttp://en.wikipedia.org/wiki/Axis_Bankhttp://en.wikipedia.org/wiki/Axis_Bankhttp://en.wikipedia.org/wiki/UTI_Bankhttp://en.wikipedia.org/wiki/UTI_Bankhttp://en.wikipedia.org/wiki/UTI_Bankhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/HDFC_Bankhttp://en.wikipedia.org/wiki/HDFC_Bankhttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/HDFC_Bankhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/UTI_Bankhttp://en.wikipedia.org/wiki/Axis_Bankhttp://en.wikipedia.org/wiki/Axis_Bankhttp://en.wikipedia.org/wiki/Liberalizationhttp://en.wikipedia.org/wiki/Narasimha_Raohttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/w/index.php?title=New_Bank_of_India&action=edit&redlink=1http://en.wikipedia.org/wiki/President_of_Indiahttp://en.wikipedia.org/wiki/Parliament_of_Indiahttp://en.wikipedia.org/wiki/Jayaprakash_Narayan


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Currently (2007), banking in India is generally fairly mature in terms of supply, product

range and reach-even though reach in rural India still remains a challenge for the private sector

and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are

considered to have clean, strong and transparent balance sheets relative to other banks in

comparable economies in its region. The Reserve Bank of India is an autonomous body, with

minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to

manage volatility but without any fixed exchange rate-and this has mostly been true.

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

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

mortgages and investment services are expected to be strong. One may also expect M&As,

takeovers, and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in

Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been

allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005

that any stake exceeding 5% in the private sector banks would need to be vetted by them.

Indian banking system: Co-operative banks

Co-operative banks in this country are a part of vast and powerful structure of co-operative

institutions which are engaged in tasks of production, processing, marketing, distribution,

servicing and banking in India. The beginning co-operative banking in this country dates back to

about 1904, when official efforts were made to create a new type of institution based on

principles of co-operative organization & management, which were considered to be suitable for

solving the problems peculiar to Indian conditions.

In rural areas, as far as the agricultural and related activities are concerned, the supply of

credit was inadequate, and money lenders would exploit the poor people in rural areas providing

them loans at higher rates.

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

cooperative bank is also regulated by the RBI. They are governed by the Banking RegulationsAct 1949 and Banking Laws (Co-operative Societies) Act, 1965.
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Definition:

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

same time the owners and the customers of their bank. Co-operative banks are often created by

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

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

services.

Initiatives towards development of co-operative banks:

1. Reorganisation of PACSs (a scheme by NABARD).

2. Licensing of new USBs liberalised.

3. National Co-operative Bank of India (NCBI) was registered in 1993.(Multi-state co-operative

society)-it has no regulatory functions.

4. Co-operative development bank (set up by NABARD).

5. Lending and borrowing rates of all co-operative have been more or less completely freed or

deregulated.

6. Allowing all PCBs to undertake equipment leasing and hire-purchase financing.

Establishments:

Co-operative bank performs all the main banking functions of deposit mobilisation, supply of

credit and provision of remittance facilities.

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

Co-operative Banks provide limited banking products and are functionally specialists in

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

UCBs provide working capital loans and term loan as well.

Functions:

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

mutual help. They work on the basis of no profit no loss. Profit maximization is not their

goal.

Co-operative banks 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 State Co-operative Banks (SCBs), Central Cooperative Banks (CCBs) and Urban Co-

operative Banks (UCBs) can normally extend housing loans up to Rs 1 lakh to an individual.
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The scheduled UCBs, however, can lend up to Rs 3 lakh for housing purposes. The UCBs can

provide advances against shares and debentures

Cooperative banks in India finance rural areas under:

Farming

Cattle

Milk

Hatchery

Personal finance

Cooperative banks in India finance urban areas under: Self-employment

Small scale units

Home finance

Consumer finance

Personal finance

Some facts about Cooperative banks in India

Some cooperative banks in India are more forward than many of the state and private sector

banks.

According to NAFCUB the total deposits & lending of Cooperative Banks in India is much

more than Old Private Sector Banks & also the New Private Sector Banks.

This exponential growth of Co operative Banks in India is attributed mainly to their much

better local reach, personal interaction with customers, and their ability to catch the nerve of the

local clientele.


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CHAPTTER - 2

PROFILE OF BANK


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PROFILE OF THE CHENGALPATTU CO-OPERATIVE BANK:

The Chengalpattu Co-operative bank was registered under the cooperative Societies Act 1

(1912) (2) an urban bank and it was opened on 02.05.1910. This bank co-operatively organizedbanking units which operates in urban and semi-urban area to mainly to the needs of small

borrowers, owner of small scale industrial units retail traders, professional and salaried classes

people.

OBJECTIVES OF URBAN BANK:

The objective of the Chegalpattu Co-operative bank shall be.

1. To borrow form member or others to be utilized for loans to members for useful

purpose.

2. To undertake collections of bills drawn accepted or endorsed by members

discount cheque of approved members subject to the provisions of by law.

3. Generally to exchange thrift self-help and co-operative to among member.

The Chengalpattu co-operative bank was rendering service to the members for 100 years.

Acceptance of different types of deposits such as fixed current, saving recurring deposits from

the members granting to them particularly jewel loan at the reasonable rate of interest are the

main business of their Chengalpattu co-operative bank Ltd. They types of deposits fixed, saving,

current and recurring, have encourage thrift among its members. The grants of loans of

reasonable rates of interest have saved several persons belonging to the middle class and poor

class people from the clutches of various money lenders. The members avail of the loan for

purpose of buying agricultural implements for business for productive purpose etc.

1.AREA OF OPERATION

The area of operation of an urban bank is determined by its bye laws. The study group on credit

co-operatives in non-agricultural sector was of the view that the area of operation of an urban co-operatives in non-agricultural was one of the view that the area of operation of an urban co-

operative bank should be registered to a municipality or Taluk town where it operative. However

if certain members of the primary agriculture credit society are not able to get credit facilities

from their society, they may be allowed to become members of the urban co-operative banks

after obtaining permission from the Registers.


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2.MEMBERSHIP

The membership of co-operatives banks is composed of person living in urban areas, such as

traders merchants salaried and professional classes etc. The condition relating to the membership

of these banks are laid down in their by-laws. Generally membership of urban co-operatives

banks should be open to all person competent to contract and residing in the area of operation.

3.MANAGEMENT AND ADMINISTRAION

Like any other co-operative urban banking institution the management of an urban bank rests in

a Board of Director, who were elected by the general body consisting of all the members. The

final authority in all matters rest with the general body but the actual conduct of the affairs of the

bank rests with the board of directors and the secretary of the bank.

4.FUNCTIONS

1. To attract various deposits from members as well as non-members.

2. To advance loan to members.

3. To act as the agent for the joint purchase of domestic and other requirements of

the members.

4. To undertake collection of bills, accepted or endorsed by members.5. To arrange for the safe custody of valuable documents of members.

6. To provide other facilities as provided by commercial banks.

VARIOUS DEPOSITS, LOAN AND ADVANCES OF

CHENGALPATTU CO-OPERATIVE BANK:

There is not much difference between the functions of a commercial bank and a co-operative

bank. But in the case of commercial banks, they function with a profit motive, while a co-

operative bank services the society in order to improve the condition of the downtrodden, so we

find in the structure of the co-operative banks, banks serving qural urban and city population

with different types of branches. The business of an urban co-operative bank in primary to

provide non-from sector loans to the cottage and small scale industries.


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The following are the main function of the urban banks:

1) Borrow funds from members and others to be utilized for loans to member for useful

purposes.

2) To act as an effect for the joint purchase of domestic and other requirements of the

members.3) To undertake collection of bills drawn, accepted or endorsed by members ad constituents

and discount change and bills of approved members.

4) To encourage thrift self-help and co-operation among the members.

5) To arrange for the safe custody of valuable and documents of the members and

constituents.

6) To carryout instruction for periodical collections remittance, etc of the member and top

depositors.

DEPOSITE MOBILIZATION:

One of the major important function of the urban Co-operative bank is the mobilization of

deposits. All income of the people should not be consumed, saving in the single habit all

should follow. Drop of water makes the ocean Saving is also a good factorfor flourishing

economy of a country people should be motivated to the same. The government is taking all

possible efforts to the people to save more and more.

Bank also encourages the saving habits. They are giving attractive rates of various

types of Deposits. High interest rate is good motivating for savings. The security offered by

banks for the deposits is another factor which helps the people to save more. The saving

helps the economic betterment of a country. Co-operative banks has the highest saving

among the states of the country. However still measures are taken to improve this and it is as

essential need also. The term deposits are representing the real saving of the community

Deposits from the public, it is an asset to the customers and liabilities to the banker.


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CHAPTTER-3

INTERNSHIP DESCRIPTION


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INTERNSHIP DESCRIPTION:

RECEIVING DEPOSITS:

An important functions of both as co-operative banks and commercial banks is to attract

deposits from the public. Those who have cash balances but who want to keep them in safe

place, deposits the same with the bank. The commercial bank not only protects the but also

provides the depositors with a convenient method for transferring funds through the use of

cheques. It accepts deposits from every class and from every class and of the specific periods,

these deposits are liked by depositors both for their safety as well as for the interest they bring to

them. The Uthiramerur co-operative bank mobilized the following deposits schemes.

1) Current Deposits

2) Fixed Deposits

3) Saving Deposits

4) Recurring Deposits

5) Safety locker Deposits

I. Current deposits

It is also known as current account are those which can be withdrawn by the deposits as

many time as needed by means of cheques. The banks deposits pay interest on current deposits

but infect makes as small charges on the customer with the current account. It may be created in

two ways either by the depositors converting cash into a demand deposits with a bank or by

borrowing from a bank and using the amount with if this type of deposits are used by business

man. Companies, Institution etc., current deposit shall be opened for sum of rupees not less than

Rs.1000/- a credit balance of Rs.1000/- shall always be maintained. All account are to be opened

with proper introduction, current deposits charged at the rate of interest are not given.


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II. Fixed Deposits

Fixed Deposits are a kind of high-interest-yielding deposit offered by banks inIndia.

In India, bank accounts can be broadly categorized into 2 types :

1. Demand deposits, which are repayable by the bank to the customer on demand-They

offer high liquidity but correspondingly low or no interest. Includes the Savings

Accounts and Current Accounts.

2. Term deposits, which are repayable after expiry of the term, that is, on maturity. In return

for the low liquidity (ease of withdrawing money), they offer higher rates of interest than

the demand deposits.

The longest permissible term for FDs is 10 years. Generally, the longer the term of deposit,

higher is the rate of interest but a bank may offer lower rate of interest for a longer period if it

expects interest rates, at which RBI lends to banks ("repo rates"), to dip in the future.

While banks can refuse to repay FDs before the expiry of the deposit, banks do not generally

refuse premature withdrawal. In such cases, interest will be paid at the rate applicable to the term

for which the deposit has remained with the bank. For example, a deposit is made for 5 years at

8 %, but is withdrawn after 2 years. If the rate applicable on the date of deposit for 2 years is 5

per cent, the interest will be paid at 5 per cent. Banks can levy a penalty for premature

withdrawal.

Customers can avail loans against FDs up to 80 to 90 per cent of the value of deposits. The rate

of interest on the loan could be 1 to 2 per cent over the rate offered on the deposit.

In case the customer defaults in repaying the loan, the bank can adjust his FD against the loan.

III. Saving Deposits
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IV. Recurring Deposits

Under this some fixed amount periodically deposits which accumulates at compound

rate of interest. This accumulated balance is paid after the expiry of the fixed period. If

payment is delay with in certain period fund will be collected Rs.1. for every amount

Rs.100/-. A recurring deposits account may be opened by a person in his name or in the name

of two or more persons and can be payable to all or to any one of them or to the survivors.The rate of interest allowed on 9%.

V. Safety locker Deposits

Locker are to be let out only to the persons who are known to the bank very well and

long standing customers. The application and other from supplied by the bank are to be

filled up without any omission. Rent to be collected for every calendar year well in

advance.

The following table indicated various deposits of UCB Ltd.

We are infer from the above table No.3.2 the various deposits position of UCB Ltd.

From 2005-06 to 2007-08. The total deposits of the bank for the study period amounting

is Rs.1484.1111 lakhs Rs. 1951.12 Lakhs and 2226.65 lakhs in the year 2005-06 2006-

07, and 2007-08 respectively. During the year 2007-08 the bankers more concentrate to

deposits compared with previous year 2005-06 and 2006-2007.

Finally the safety locker deposits shown trend in the study period from 0.81% to

0.03% due to the customers to invest their money in to commercial banks deposit

schemes.

The urban banker awareness is not reach to the public in the reasons for decreasing

trend of deposits otherwise the fixed deposits saving deposits and recurring deposits is

good.


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CHAPTTER 4

ANALYSIS AND LEARNING PROCESS


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Analysis & Learning process:

Introduction:

I did summer internship in Chengalpattu Co-operative bank. It was a good

experience for me to enhance the career in banking industry. I learnt various activities of co-

operative banking sector. I got a better idea about the working process involved in banking.

Nature of work:

Assisting the manager Entry posting in register

Entering the voucher in computerized format

Prepare documents

Helping the customer by filling the various forms

I learnt following aspects:

Arranging the documents in data wise

Handling the outstation chques

Arranging RBI files data wise

Preparing documents

Entering fresh loan in to loan issued documents


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ANALYSIS:

I assisted the bank staff by posting the entries in the book of accounts.

Assisting in online filing of auditing report to RBI (Reserve bank of India).

Entering of voucher in computer, like Jewel loan, Salary loan, HouseConstruction loan etc.

Arranging of RBI files in data wise in alphabetic order.

Prepare documents for external affairs of bank.

Posting of entries in ledger book.

Helping the fresh borrowers in filling of forms and collect the necessary

documents from them.

Posting of outstation cheques in ledger

SUGGESTIONS:

Some suggestion to improve the services of CHEGALPATTU URBAN CO-

OPERATIVE BANK.

To introduce ATM facilities for co-operative bank

To make people aware about the offers and interest rates of Chengalpattuurban co-operative bank and influence them to open an account in bank.

To improve the operation of the bank by introducing core banking facility.


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CONCLUSION:

From my internship I learnt about the various types of

deposits and services which are offered by the bank, And I came to

know about the basic functioning of the bank and problem faced by

the bankers.

I had experienced the banking services and got the practical

knowledge about the banking and I learnt about the interest

calculations of various deposits such as saving bank account,

recurring deposits, fixed deposits.

From this internship I learnt that bank employees are

customer friendly and I understood the association between the

banker and the customer and how to handle customers problem and

how to solve the problem of the customer

This internship training is very useful for me to learn day to

day banking transactions and activities in live environment.

Date post:	07-Apr-2018
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Summer Internship Report on Chengalpattu Urban Bank

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