project on NKGSB Co-operative Bank

1. EXECUTIVE SUMMARY:
Since India is agriculture oriented country, the importance of co-operative movement in
India is more than any other countries. The development of co-operative movement in
India is on the process but still it is not fully developed. The Co-operative banks in India
was started in 1904.Co-operative movement in India is the result of a deliberate policy
of the state and is vigorously pursued through formation of an elaborate governing
infrastructure. The successive Five-year plans looked upon the co-operation movement
as the balancing sector between public sector and the private sector. In India we find
that the states of Maharashtra and Gujarat are well developed. Whereas the states of
Andhra Pradesh, Rajasthan and Karnataka have shown remarkable progress in the co-
operative movement and there is a vast potential for the e development of co-operative
in the remaining states. This project is mainly focusing on the importance of co-
operative bank movement in the regional rural areas of our country. The NABARD role
in the building of the co-operative credit structure was that of an active collaborator in
drawing up schemes of development with the government of India and the State
Governments, and the provider of finance, first to the State Governments for
contribution to the share capital of co-operative credit institutions at various levels.
The urban cooperative banking sector has witnessed phenomenal growth during the last
one and a half decades. Certain infirmities have, however, manifested in the sector
resulting in erosion of) public confidence and causing concern to the regulators as also
to the well functioning units in the sector. One of the factors significantly affecting the
financial health of the Urban Cooperative Banks (UCBs) is their inability to attract
equity quasi equity investments. At present, UCBs have limited avenues for raising such
funds and even their share capital can be withdrawn. Against this backdrop, an
announcement was made in the Annual Policy Statement for the year 2006-07 to
constitute a Working Group to examine the issue of share capital of UCBs and identify
alternate instruments / avenues for augmenting the capital funds of UCBs. Accordingly,
a Working Group was constituted under the Chairmanship of Shri N.S. Vishwanathan,
Chief General Manager-in-Charge, Urban Banks Department, Reserve Bank of India.
The Indian cooperative movement, like its counterparts in other countries of the world
has been essentially a child of distress. Based on the recommendations of Sir Frederick
Nicholson (1899) and Sir Edward Law (1901), the Cooperative Credit Societies Act was
passed in 1904, paving the way for the establishment of cooperative credit societies in
rural and urban areas on the patterns of Raiffeisen and Schulze Delitzch respectively.

2. The Cooperative Societies Act of 1912 recognized the formation of non-credit societies
and the central cooperative organizations/federations. The state patronage to the
cooperative movement continued even after 1947, the year in which India attained
freedom. The independent India accepted the concept of planned economy and
cooperative organizations were assigned an important role.

3. INTRODUCTION:
A co-operative society is a voluntary association of individuals having common needs
who join hands for the achievement of common economic interest. Its aim is to serve
the interest of the poorer sections of society through the principle of self-help and
mutual help. The main objective is to provide support to the members. Nobody joins a
cooperative society to earn profit. People come forward as a group, pool their individual
resources, utilise them in the best possible manner, and derive some common benefit
out of it.
A Co-operative Society can be formed as per the provisions of the Co-operative
Societies Act, 1912. At least ten persons above of 18 years, having the capacity to enter
into a contract with common economic objectives, like farming, weaving, consuming,
etc. can form a Co-operative Society. Cooperative Societies Act is a Central Act.
However, ‘Cooperative Societies’ is a State Subject (Entry 32 of List II of Seventh
Schedule to Constitution, i.e. State List). Though the Act is still in force, it has been
specifically repealed in almost all the States and those States have their own
Cooperative Societies Act. Thus, practically, the Central Act is mainly of academic
interest and as per preamble to the Act, the Act is to facilitate formation of cooperative
societies for the promotion of thrift and self-help among agriculturists, artisans and
persons of limited means.
Co-operative movement in our country shall not only stay but also grow in times to
come. In spite of the drawbacks experienced in the working and administration of the
co-operative societies, they have positively contributed to the growth and development
of the national economy. Promotion of thrift, self-help and mutual aid are the
fundamental principles of co-operation. The orientations of commercial organization
and co-operative organizations are basically different. In a commercial organization,
earning and maximizing the profits is the sole motive; whereas in a co-operative
organization profit cannot be the sole motive. The prime objectives, in addition to the
three fundamentals of co-operation mentioned above are to make available the goods
and services in required quantity, of better quality and at a reasonable price to its
members. It does not mean that a Co-operative Society is a charitable organization. It
should, therefore, conduct itself in a businesslike manner in attaining its objectives
efficiently.

4. Broadly speaking there are three sectors operating in the Union of India.
 PUBLIC SECTOR wherein the State i.e. he Union of India and the respective State
Government undertake developments projects which are wholly owned by either the
Central Government or the State Government.
 PRIVATE SECTOR which is a sector where private enterprises are permitted in
certain fields of economic activities
 CO-OPERATIVE SECTOR which is beautifully blended in between a public sector
and the private sector. It has benefits of both the sectors and disadvantages of neither
of them
If object of the society is creation of funds to be lent to its members, all the members
must be residing in the same town, village or group of villages or all members should be
of same tribe, class, caste or occupation, unless Registrar otherwise directs. The
provision of minimum 10 members or residing in same town/village etc. is not applicable
if a registered society is member of another society. The Statement of Objects and
reasons states as follows:
(a) Cooperative Society can be established for purpose of credit, production or
distribution.
(b) Agricultural credit societies must be with unlimited liability.
(c) Unlimited society is not best form of cooperation for agricultural commodities.
(d) Unlimited society can distribute profits with permission of State Government.

5. MEANING OF CO-OPERATIVE SOCIETY?
 A co-operative society is an autonomous association of persons united voluntarily to
meet their common economic, social and cultural needs and aspirations through a
jointly-owned and democratically-controlled enterprise.
 A co-operative society is another means for forming a legal entity to conduct
business besides forming a company. It pools together human resources in the spirit
of self and mutual help with the object of providing services and support to
members.333333333
 The Co-operative Principles under which a co-operative society operates and carries
out its business are :-
1. Voluntary and open membership.
2. Democratic control, one member one vote.
3. Autonomy and independence.
4. Promoting economic activities.
5. Promoting education and information technology.
6. Co-operation among co-operatives.
7. Concern for the social and ecological environment.
DEFINITION OF CO-OPERATIVE SOCIETY:
The Word 'Co-operation' is derived from the Latin word 'Co-operative' meaning "to work
with". It has been defined in various ways.
 Sir Horace Plukelt:
"Co-operation is self-help rendered effective by organisation. It is better farming,
better business, better living".
 International Labour Officer:
"An association of persons, usually of limited means, who have voluntarily joined
together, to achieve a common economic end, through the formation of a
democratically controlled business organisation, making equitable contributions to
the capital required and accepting a fair share of risks and benefits of the
undertaking."

6. VISION:
To make financial services universally available; to promote poverty alleviation through
the development of a strong, sustainable economic infrastructure using financially sound
market mechanisms
MISSION
 Linking the promotion of sustainable livelihoods with income-generation activities
for the community
 Ensure that all members follow the democratic way of making policies and electing
representatives and have an equal voice
 Ensure that all profits are controlled democratically by members and for their benefit
 Enhance accessibility of financial services
OBJECTIVES
 Inculcate good habits of savings in the cooperative members
 Focus on poor, low income and deprived people of the community, especially
women who have no accessibility to any financial institutions
 Provide opportunities to people to organize services collectively by pooling their
resources without depending upon the government or other agencies
 Seek active participation of all members without any kind of social, racial, political,
gender or religious discrimination
 Provide education, training and information to develop their members as well as their
staff
 Enhance women’s participation and decision in policy making-processes at all levels
 To support the recognition and inclusion of the community sector as a social partner
In order to articulate the interests of those who experience social exclusion and
Inequality.
 To promote a global perspective on justice issues and seek to make constructive links
With the sector and development issues in the ‘Third World’

7. HOW IS A CO-OPERATIVE SOCIETY REGULATED?
 The operation of co-operative societies is subject to control so as to prevent fraud
and to ensure that every member enjoys equal rights and benefits (equity and
equality) in respect of the business of the society. There are restrictions on profit
disposal and rules to sustain corporate governance.
 When a co-operative society is dissolved, the remaining surpluses shall be disposed
by the Registrar at his discretion for any co-operative purpose.
 The Co-operative Societies Ordinance, Cap 33 enshrines the Co-operative Principles
and the Director of Agriculture, Fisheries and Conservation is appointed as the
Registrar to register and regulate co-operative societies.
Other than a registered co-operative society, or unless approved by the Chief
Executive, no one shall trade or carry on business under any name or title of which
the word 'co-operative' is part.
HOW TO FORM A CO-OPERATIVE SOCIETY?
 To set up a preparatory committee, preferably with 5 members, to pool human and
other resources together.
 To convene meetings to discuss the organizational structure of the proposed co-
operative society (e.g. name, object, common bond of its members, share and
business scope).
 To draft co-operative by-laws by referring to the model by-laws obtainable from the
Registrar and find suitable premises for the society.
 To recruit members (at least 10 persons, each over 18 in age).

8. CHARACTERISTICS OF CO-OPERATIVE SOCIETY
A co-operative society is a special type of business organisation different from other
forms of organisation you have learnt earlier. Let us discuss its characteristics.
 Open membership:
The membership of a Co-operative Society is open to all those who have a
common interest. A minimum of ten members are required to form a co-operative
society. The Co–operative societies Act do not specify the maximum number of
members for any co-operative society. However, after the formation of the
society, the member may specify the maximum number of members.
 Voluntary Association:
Members join the co-operative society voluntarily, that is, by choice. A member
can join the society as and when he likes, continue for as long a she likes, and
leave the society at will.
 State control:
To protect the interest of members, co-operative societies are placed under state
control through registration. While getting registered, a society has to sub-mitt
details about the members and the business it is to undertake. It has to maintain
books of accounts, which are to be audited by government auditors.
 Sources of Finance:
In a co-operative society capital is contributed by all the members. However, it
can easily raise loans and secure grants from government after its registration.
 Democratic Management:
Co-operative societies are managed on democratic lines. The society is managed
by a group known as “Board of Directors”. The members of the board of directors
are the elected representatives of the society. Each member has a single vote,
irrespective of the number of shares held. For example, in a village credit society
the small farmer having one share has equal voting right as that of a landlord
having 20 shares.

9.  Service motive:
Co-operatives are not formed to maximise profit like other forms of business
organisation. The main purpose of a Co-operative Society is to provide service to
its members. For example, in a Consumer Co-operative Store, goods are sold to
its members at a reasonable price by retaining a small margin of profit. It also
provides better quality goods to its members and the general public.
 Separate Legal Entity:
A Co-operative Society is registered under the Co-operative Societies Act. After
registration a society becomes a separate legal entity, with limited liability of its
members. Death, insolvency or lunacy of a member does not affect the existence
of a society. It can enter into agreements with others and can purchase or sell
properties in its own name.
 Distribution of Surplus:
Every co-operative society in addition to providing services to its members also
generates some profit while conducting business. Profits are not earned at the cost
of its members. Profit generated is distributed to its members not on the basis of
the shares held by the members (like the company form of business), but on the
basis of members’ participation in the business of the society. For example, in a
consumer co-operative store only a small part of the profit is distributed to
members as dividend on their shares; a major part of the profit is paid as purchase
bonus to members on the basis of goods purchased by each member from the
society.
 Self-help through mutual cooperation:
Co-operative Societies thrive on the principle of mutual help. They are the
organisations of financially weaker sections of society. Co-operative Societies
convert the weakness of members into strength by adopting the principle of self-
help through mutual co-operation. It is only by working jointly on the principle of
“Each for all and all for each”; the members can fight exploitation and secure a
place in society.

10. BENEFITS OF COOPERATIVE SOCIETIES TO THE
INDIVIDUAL
The first thing cooperative societies do to individual members is development
of savings culture. It is an age long established fact that nobody can escape poverty
without a savings habit. Anybody that spends everything on consumption is just a step
away from poverty and its various consequences, no matter how rich the person is
today. The story of the prodigal son is instructive in this regard.
Savings culture means, irrespective of how much you earn today, and your needs, you
put something aside for tomorrow, or invest, to make additional income. This, however,
is a great challenge for many people, especially for low income people, whose needs are
far more than what they earn. Some of them attempt to save, but because the saving is
always within their reach, they find it difficult not to spend the money. Yet, everybody
needs to save and invest to escape poverty. This is made relatively easy with
cooperatives.
As a member of a cooperative, you must contribute regularly, most times monthly. The
contribution is usually deducted from your income, before you even receive it. So,
irrespective of your needs, you save compulsory. Also, because the money is not within
easy reach, you cannot easily access it to spend.
The second thing you benefit from cooperative as an individual is access to loans either
in cash or in the form of goods. As it is difficult for a camel to pass through the eye of a
needle, so it is for the average individual to get loan from the banks in Nigeria. For low
income earners, it is even worse, because they don’t have collateral.
Even for those that can meet the conditions for bank loans, the loan may not come
promptly as needed. But as a member of a cooperative, you can access loan promptly.
Your contributions serve as collateral and fellow contributors are accepted as
guarantors. Also, the interest rate and repayment terms are not crushing as that of the
banks. This easy access to loans has helped many people achieve improved welfare.
Corporate power is another benefit of cooperative to an individual. There are some
things that a corporate body can achieve easily, which are near impossible for an
individual. For example, if an individual buys a parcel of land, the land owners can go
back and resell the same land to another person. The individual, especially a low
income earner, most of the time loses out eventually or may have to repurchase the land.

11. But if it was a corporate body, especially a cooperative, the land owners will not even
try such mischief, because from the beginning, a legal expert and government is
involved (remember cooperatives are regulated by government).
Also, with a co-operative, the individual participates in the running of the business of
the group, and in the process, acquires knowledge and expertise, which can be
beneficial in his personal affairs.
Compare these benefits to investment in shares or bonds or in a collective investment
scheme. These other investment options do not impact savings culture; neither do they
provide easy access to loans. The individual also does not have the opportunity to enjoy
corporate power. In fact, he may become a victim of corporate power. And because the
individual does not participate in the management of the companies or his investment,
he does not have opportunity to acquire business acumen.
IMPORTANCE OF CO-OPERATIVE SOCIETY
Cooperative societies are important in order to help organize mutual benefits.
Within a cooperative structured society in its original tribal form, jobs are allocated
and resources are exchanged among each other and trading is only done with external
communities. Now cooperative societies are extremely important in the savings market
and for mortgage and professional credit within banks. Cooperative societies
are businesses that are set up by a number of individuals with the intention of gaining
mutual benefits from them. These societies are important to ensure that everyone who
has put an investment into them gets a fair and equal return.

12. ADVANTAGES OF CO-OPERATIVES:
The following are the main advantages of co-operatives:
 Easy formation:
The formation of cooperative society is very simple as compared to the formation
of other form of business organization. Any two adults can come together and
join their hand and form a cooperative society.
The procedure of registration of the society is also very simple and easy. No legal
formalities are required for the formation of cooperative society.
 Democratic management:
The management or co-operative is rest on the elected members from among
themselves by forming a committee. Every member gas equal say in making
policies of the society. “The one man, one vote” principle ensures a democratic
management.
 Open membership:
The membership of co-operative societies is open to each and every person.
Anybody wishing to enjoy the fruits of a co-operative can join it. Nobody is
barred from joining societies on the basis of economic position, caste, colour or
creed. A person can enrolled as a member any time he/she likes by contributing
the minimum capital. He/she can also withdraw the membership whenever he
does not like to continue as a member.
 Service motto:
The cooperative societies are formed not for profits but for providing service. The
societies try to promote the interests of the members. A feeling of co-operation is
created among members.
 Economical Operation:
The operation carried out by the cooperative society is economical due to the
elimination of middlemen. The societies purchase goods directly from producers
and sell them to the members at cheap at rates. The services of the middlemen are
provided by the members at cheaper rate.

13.  Low management costs:
The management of a co-operative society is in the hands of persons elected by
the shareholders. Members take active interests in the working of the society.
Thus, the recurring and non-recurring costs are low.
 Sharing of surplus:
The societies sell goods to its members on a nominal profit to cover up
administrative costs. The surplus earned by the society is spent on the basis of
cooperative Act.
After meeting the expenses, some portion of the surplus spent for welfare of the
members, some portion kept as reserve and balance is distributed among the
members.
 Check on business:
The co-operative are stared with service motive while all other forms of business
are launched with a profit motive. When businessmen try to exploit consumers by
increasing prices of their goods, co-operatives supply commodities at reasonable
prices.
The co-operatives provide a check on the business of the other forms of
enterprises. Other traders will have to reduce their prices when co-operatives are
supplying these goods at lower prices. Consumers are not at the mercy of selfish
businessmen.
 Limited liability:
The liability of individual members is limited to the extent of shares purchased
capital contributed by him. Thus members can enjoy the benefits of limited
liability. This makes them free from the tear of utilization of their private
property, in case of financial crunch to the society.

14. DISADVANTAGES OF COOPERATIVE SOCIETY
Following are the disadvantages of cooperative societies:
 Lack of Capital
Generally the members of cooperative societies are related to poor group and they
cannotprovide the capital on large scale. External financial resources are also limi
ted. So,
cooperative society faces the shortage of capital, which isa handicap to their devel
opment.
 Untrained Supervision
The government has sufficient control over the movement of this societies.Theses
ocietiescannot prosper because the staff appointed for supervision is mostly untrai
ned.
 Defective Organization
The organizations of cooperative societies are defective and these cannot operate
efficiently to fulfil their objectives.
 Illiterate and Ignorant
In our country, the villagers are generally illiterate and ignorant. So, they are not
Familiar with the basic concept of the cooperative societies.
 Lack of Experience
The members of societies have less experience of business. Due to lack of capital,
they cannot hire the services of experts.
 Lack of Discipline
Every member of the cooperative society considers himself as the owner of the
Business. Due to lack of discipline, business suffers a loss.
 Lack of Sincere Management
Itis our common observation that the management of society remains in the hands
of selfishand dishonest persons or members who obtains undue advantage form
Their powers. So, business suffers a loss.

15.  Lack of Profit Incentive
It’s not a profit earning institution.Due to absence of profit incentive, the progress
of cooperative society is very poor.
 Lack of Secrecy
There is no secrecy in the business of cooperative societies.
 Lack of Knowledge
The members of cooperative society do not know the principles and rules of
society. So, they create great problem for society.
 Lack of Unity
In the absence of proper education and training, it’s useless to think about unity.
The lack of unity leads towards the destruction of the business.
 No use of New Technology
The cooperative societies cannot use the latest technology in production. As
a result of this, demand and profit remains low.
 No Public Confidence
A cooperative society is not bound to publish annual financial statements for the
information of general public. Due to this public shows less confidence in them.
 Delay in Decision
The main cause of failure of cooperative societies is delayed in decisions.
 Government Control
The cooperative department of the provincial government supervises the work of
all,cooperative societies. The business ofa society is not free like other forms of b
usiness, so it cannot earn maximum profit.

16. TYPES OF CO-OPERATIVES SOCIETY:
Although all types of cooperative societies work on the same principle, they differ with
Regard to the nature of activities they perform. Followings are different types of
Co-operative societies that exist in our country
Housing Cooperative:
A housing cooperative is a legal mechanism for ownership of housing where residents
either own shares reflecting their equity in the co-operative's real estate, or have
membership and occupancy rights in a not-for-profit co-operative and they underwrite
their housing through paying subscriptions or rent.
Building Cooperative:
Members of a building cooperative (in Britain known as a self-build housing co-
operative) pool resources to build housing, normally using a high proportion of their own
labour. When the building is finished, each member is the sole owner of a homestead,
and the cooperative may be dissolved.
Retailers' Cooperative:
A retailers' cooperative (known as a secondary or marketing co-operative in some
countries) is an organization which employs economies of scale on behalf of its members
to get discounts from manufacturers and to pool marketing. It is common for locally-
owned grocery stores, hardware stores and pharmacies. In this case the members of the
cooperative are businesses rather than individuals.
Utility Cooperative:
A utility cooperative is a public utility that is owned by its customers. It is a type of
consumers' cooperative. In the US, many such cooperatives were formed to provide rural
electrical and telephone service.
Worker Cooperative:
A worker cooperative or producer cooperative is a cooperative that is owned and
democratically controlled by its "worker-owners". There are no outside owners in a
"pure" workers' cooperative, only the workers own shares of the business, though hybrid
forms in which consumers, community members or capitalist investors also own some

17. shares are not uncommon. Membership is not compulsory for employees, but generally
only employees can become members. However, in India there is a form of workers'
cooperative which insists on compulsory membership for all employees and compulsory
employment for all members. That is the form of the Indian Coffee Houses. This system
was advocated by the Indian communist leader A. K. Gopalan.
Consumers' Cooperative:
A consumers' cooperative is a business owned by its customers. Employees can also
generally become members. Members vote on major decisions, and elect the board of
directors from amongst their own number. A well known example in the United States is
the REI (Recreational Equipment Incorporated) co-op, and in Canada: Mountain
Equipment Co-op.
The world's largest consumers' cooperative is the Co-operative Group in the United
Kingdom, which offers a variety of retail and financial services. The UK also has a
number of autonomous consumers' cooperative societies, such as the East of England Co-
operative Society and mid counties Co-operative..
Agricultural Cooperative:
Agricultural cooperatives are widespread in rural areas.
In the United States, there are both marketing and supply cooperatives. Agricultural
marketing cooperatives, some of which are government-sponsored, promote and may
actually distribute specific commodities. There are also agricultural supply cooperatives,
which provide inputs into the agricultural process.
In Europe, there are strong agricultural / agribusiness cooperatives, and agricultural
cooperative banks. Most emerging countries are developing agricultural cooperatives.
Co-Operative Credit Society:
These societies are formed to provide financial support to the members. The society
accepts deposits from members and grants them loans at reasonable rates of interest in
times of need. Village Service Co-operative Society and Urban Cooperative Banks are
examples of co-operative credit society.

18. NORTH KANARA GAUD SARASWAT BANK (NKGSB)
PROFILE
 NKGSB was founded by a great visionary Sheth Shantaram Mangesh
Kulkarni on 26th September, 1917.
 The Bank with a modest beginning in 1917 is now a Multi-State Bank having its area
of operation in the States of Maharashtra, Karnataka, Goa, Gujarat and Union
territories of Daman, Diu, Dadra and Nagar Haveli.
 Today the bank has 90 branches spread over in the state of Maharashtra, Goa,
Karnataka and Gujarat.
 Mumbai – 43 branches
 Navi Mumbai - Vashi, CBD Belapur,, Nerul, Kharghar & Kamothe airoli and
badlapur (7 branches)
 Raigad –panvel and alibaug
 Maharashtra other than Mumbai -Pune - (Kothrud, Aundh, Chikhli, Chakan,
Bhosari & Magarpatta, Sindhudurg ,waked,vadgaon sheri chinchwadgaon,pimpale
saudnager ,F.C raodand puad)Kolhapur - (Kolhapur Main & Uma talkies., Ichalkaranji
salokhe nager and gokul shirgaon), Nashik - (Nashik & Ambad) & sindhudurg -
(Kudal) and ratnagiri, Aurangabad,garkheda
 Goa- Ponda, Panaji, Madgaon, and Mapusa
 Karnataka - Karwar- Main. Karwar -Baad, Hubli, Belgaum ,Sirsi.,kumta,dharwad
and udupi.
 Gujarat –vadodara, surat and ahmedabad

19.  Over the years, the Bank has consistently shown robust growth both quantitatively and
qualitatively. The Bank has not only grown in size of deposits and advances, but has
multiplied its net worth making the institution financially sound and fundamentally
strong.
 The Board of Directors of the Bank consists of well qualified professionals enriched
with varied experience in the strategic fields of Finance, Technology, Business and
Management. Being driven by the co-operative principles, management lays emphasis
on profits but with focus on the welfare of our stakeholders.
 As a part of good governance practice, the Bank has adopted code of good business
principles and accepted the responsibility to ensure that they are observed down the
line as a work culture in its true spirit. The business philosophy is based on four core
values i.e. pillars of service excellence, customer focus, product innovation and
resourceful people
 In terms of our commitment for harnessing the state of art technology, networking all
59 branches counter under 'Core banking solution', customers can access their
accounts and perform banking operations 'anywhere anytime' with value added
services
 The Bank has varied Deposit products to suit every needs of customers, so also the
bank has occupied a place of pride with those who are financed for offering tailor-
made complete credit solutions under one roof packaged at liberal, competitive and
flexible terms, let it be personal finance or loan facilities for Short term as well Long
term requirement of Small Businessman, Professionals, Small & Medium Enterprises
and Corporate.
 The Bank has always been in the forefront to add on value to its products and has
entered into correspondent relationship and strategic alliances to offer best of the
services to its customers efficiently and with convenience such as:
 Tied-up with Insurance Companies to sell both the insurance products, life
insurance with "Max New York Life" and non-life with "Oriential
Insurance Company Ltd."

20. Vision:-
A premier co-operative bank.
Operating Principles:-
 It will make our Customers, Shareholders and Community at large very proud,
 It will always strive to provide Customers the best products and services that
leads to their progress and prosperity,
 It shall act with high level of integrity, achieving the set goals with active
involvement, devotion and commitment of our employees.
 Identifying what we need to do and then actually doing what we planned to do
Products Offered By The Bank-
 Savings Account- Savings Account comes with a host of convenient features and
banking channels to transact through.
Salient features of the scheme:
Minimum opening balance Rs.500/- without cheque book, Free cheque book of 60
leaves, in case of minimum opening balance Rs.1000/-, Free ATM card facility, Desk
Drawing facility, Free account statement facility, Fund transfer facility through
RTGS/NEFT anywhere in India, Any branch banking facility, Demat facility, Safe
deposit locker facility, Interest @ 4% p.a. on daily balance products.
 Current Deposit-
Salient features of the scheme:
Minimum opening balance Rs.3000/-, Cheque book at nominal price, Free ATM card
facility for Proprietor (s), Desk Drawing facility, Free account statement facility, Fund
transfer facility through RTGS/NEFT anywhere in India, Any branch banking facility,
Demat facility, Safe deposit locker facility.
 Term Deposit-
Salient feature of the scheme-Minimum opening balance- Rs.1000, Minimum period=
15 days and maximum = 364 days, Interest paid along with principal on maturity, Can
avail loan up to 90% of the available deposit, Interest as per card rates.

21.  Retail loans -
Features & Benefits-
Interest charged on daily reducing basis, No pre-payment charges for repayment
through own source, Attractive interest rate, Simplified documentation, Easy repayment
options - ECS/ Post dated cheque / Standing Instruction, Low processing fees, Speedy
loan approval, Offers Insurance cover for all assets at attractive premium.
 Corporate Finance-
Features & Benefits-
Interest charged on daily product basis, at monthly rest, Simple documentation, Low
processing fee, Speedy approval, all services under one roof.
 MTSS-
Money Transfer Service is a boon to NRIs and their families as well as visiting Foreign
Tourists and Students in India. In a strategic tie-up, Bank brings inbound instantaneous
inward remittance to your doorsteps under Money Transfer Services (MTSS Scheme of
RBI). & Others.
Services Offered By The Bank-
 Any Branch Banking
 Quick ATM
 Ancillary Business- Bank offers various Value Added Services, Demat, Stamp
Franking, Desk Drawing, Safe Deposit Locker, Life Insurance / Non-Life Insurance,
Forex, I-Connect.
 Real Time Gross Settlement System (RTGS)
RTGS is a more robust payment system enabling inter-bank fund transfers of above
Rs.1 Lac. Transfer of funds is done by simple instruction to bank to transfer funds from
your account to another bank account whereby settlement is done continuously.
 National Electronic funds transfer (NEFT)
Presently all branches of NKGSB are CBS enabled to offer NEFT facility to our
customers. This system facilitates an efficient, secure, economical, reliable and

22. expeditious system to transfer fund below Rs 1 Lac. And clearing throughout India. &
others.
Cause Of Incorporation
 The Bank was converted into cooperative for the following-
 To satisfy credit needs of people/consumers, by working in cooperation, equality,
morally, economically, socially and legally;
 To deliver products and services of bank to consumers that may satisfy them
(reasonable- rate of interest, credit for all levels of the society, performing functions
of a commercial bank, etc.);
 To enjoy Benefits of a Co-operative Bank (limited liability, exemption from tax,
low cost operation, stability, etc.);
 To increase the security of people’s accounts in a credit cooperative;
 To eliminate exploitation of consumers, any political influence or any other similar
problems related to commercial problems;
 For welfare and development of society;
 Improve the condition in which credit cooperatives work;
 To accept deposits and raise capital through share capital;
 To expand and promote the field of Credit Co-operatives in INDIA.
Activities Done By NKGSB Co-Op. Bank – (special activities) _
 Centralized processing cell at Virar.
 ITES server farm at Gorai.
 Felicitation done of meritorious students to encourage them.
Achievements Of NKGSB Bank -
 Best Urban Co-operative Bank Award,

23. BALANCE SHEET
(` In Lacs)
TOTAL 4,23,871 3,76,258
CONTINGENT LIABILITIES 11 12,422 10,409
Significant Accounting Policies 12
Notes to Accounts 13
CAPITAL AND LIABILITIES Schedule
As at As at
31-Mar-13 31-Mar-12
SHARE CAPITAL 1 6,376 5,328
RESERVE FUND , OTHER FUNDS & RESERVES 2 38,757 36,144
PROFIT & LOSS ACCOUNT 1 -
DEPOSITS 3 3,66,572 3,25,366
BORROWINGS 1,399 -
PROVISION FOR INTEREST CAPITALISED ON NPA 124 88
OVERDUE INTEREST RESERVE ON LOANS AND ADVANCES 4,092 3,342
BILLS FOR COLLECTION 17 36
BEING BILLS RECEIVABLE
(As per Contra)
INTEREST ACCRUED 394 283
OTHER LIABILITIES 4 5,977 5,147
SETTLEMENT CREDIT ACCOUNT (As per contra) 162 524
(Refer Schedule 13, Note no. 3)

24. AS AT 31ST MARCH, 2013
(` in Lacs)
PROPERTY AND ASSETS Schedule
As at As at
31-Mar-13 31-Mar-12
CASH AND BANK BALANCES 5 54,720 63,912
MONEY AT CALL & SHORT NOTICE - 3,583
INVESTMENTS 6 97,771 84,478
ADVANCES 7 2,40,453 1,96,124
INTEREST RECEIVABLE
a) on Investments and Staff loans 8 4,219 3,440
b) on Non-Performing Advances 4,092 3,342
BILLS RECEIVABLE 17 36
BEING BILLS FOR COLLECTION
(As per Contra)
FIXED ASSETS 9 18,721 17,673
OTHER ASSETS 10 3,061 2,809
DEFERRED TAX ASSET (NET) 655 337
(Refer Schedule 13, Note no. 14)
SETTLEMENT DEBIT ACCOUNT (As per contra) 162 524
(Refer Schedule 13, Note no. 3)
TOTAL 4,23,871 3,76,258

25. PROFIT AND LOSS ACCOUNT
(` In Lacs)
EXPENDITURE
Year Ended Year Ended
31-Mar-13 31-Mar-12
Interest on Deposits 27,604 22,532
Interest on Borrowings 17 17
Staff Salaries, Allowances and Benefits 4,128 3,226
Rent, Rates, Taxes, Service Charges, Insurance and Lighting 1,197 940
Legal and Professional Charges 7 5
Postage,Telegram and Telephone Charges 138 112
Travelling, Lodging and Conveyance 46 38
Audit Fees 63 53
Repairs and Maintenance 196 201
Depreciation on Fixed Assets 965 805
Depreciation on Shifting of Securities 34 23
Premium on Securities amortised 136 98
Printing and Stationery 79 86
Advertisement 237 160
Sundry Expenses 875 653
Bad Debts Written Off 428 12
Loss on Sale of Fixed Assets 3
Operating Profit before provisions & contingencies c/f 6,353 6,357
42,506 35,318
Provisions and Contingencies:
A) Bad and Doubtful Debts Reserve 754 814
B) Contingent Reserve against Standard Assets 180 104
C) Investment Fluctuation Reserve 9 -
D) Interest Transferred to Leave Encashment Fund 51 33
E) Provision for Restructured Advances 11 -
Profit Before Tax c/f 5,348 5,415
6,353 6,366
Provision for Taxes:

26. Income Tax 1,320 1,808
Deferred Tax (318) 6
(Schedule 13, Note No. 14)
Net Profit for the year c/fd 4,346 3,601
TOTAL 5,348 5,415
(` in Lacs)
INCOME
Year Ended Year Ended
31-Mar-13 31-Mar-12
Interest and Discount
a) Interest on Advances 27,242 24,890
b) Income from Investments 7,096 5,975
c) Interest on Deposits with Banks 4,802 2,486
Commission, Exchange & Brokerage 1,351 1,217
Rent on Safe Deposit Lockers 102 78
Amortisation of Revaluation Reserve 352 352
Bad Debts Provision Reversed 982 12
Other Income
a) Profit on Sale of Investments (AFS/HFT) 305 224
b) Profit on Sale of HTM Investments 203 31
c) Profit on Sale of Mutual Fund 56 3
d) Miscellaneous Income 15 6
e) Recovery from bad debts Written off - 43
f) Profit on Sale of Fixed Assets - 1
42,506 35,318
Operating Profit before provisions & contingencies b/f 6,353 6,357
Provision no longer required written back from :
Investment Fluctuation Reserve - 9
6,353 6,366

27. PROFIT AND LOSS APPROPRIATION ACCOUNT
(`inLas)
EXPENDITURE
Year Ended Year Ended
31-Mar-13 31-Mar-12
Appropriations subject to Approval in AGM
A) Statutory Appropriations :-
1 Statutory Reserve Fund (25% of Net Profit) 1,087 905
2 Contingency Reserve Fund (10% of Net Profit) 435 365
3 Education Fund ( 1 % of Net Profit) 44 37
B) Other Appropriations :-
1 Building Fund 1,050 1,000
2 Reserve for Donations 4 8
3 Investment Fluctuation Reserve 105 -
4 Proposed Dividend @ 15% p.a. (pro-rata) 865 700
5 Ex-Gratia to Staff 525 375
6 Staff Loan fund 21 15
7 Staff Welfare Fund 21 40
8 Members' Welfare Fund 15 12
9 Centenary Fund 10 15
10 Special Reserve u/s 36 (1) (viii) of I.T. Act 1961 167 194
4,349 3,666
PROFIT CARRIED TO BALANCE SHEET 1 0
TOTAL 4,350 3,666
Profit Before Tax b/f 5,348 5,415
TOTAL 5,348 5,415

28. FOR THE YEAR ENDED 31ST MARCH, 2013
(` in Lacs)
INCOME
Year ended Year ended
31-Mar-13 31-Mar-12
Profit of last year b/fd - 51
Net Profit for the year b/fd 4,346 3,601
Excess Appropriation of previous year w/back 4 14
TOTAL 4,350 3,666

29. SCHEDULES
(` in Lacs)
As at As at
31-Mar-13 31-Mar-12
Schedule – 1
Share Capital
Authorised Share Capital 20,000 20,000
20,00,00,000 shares of ` 10/- each
Issued Subscribed and Paid up Capital 6,376 5,328
6, 37, 64,538 shares of`10/-
each (Previous Year5, 32,
76,423 shares)
Schedule - 2
Reserve Fund, Other Funds & Reserves
I Reserves as per Multi-State Co.Op.Soc.Act
(i) Statutory Reserve Fund (25% of Net Profit) 7,404 6,289
(ii) Contingency Reserve Fund (10% of Net Profit) 2,460 2,025
(iii) Building Fund 7,367 6,317
(iv) Reserve for Donation 14 12
II Reserves as per RBI guidelines
(i) Investment Fluctuation Reserve 1,130 517
(ii) Contingent Reserve against Standard Assets 975 795
(iii) Investment Depreciation Reserve 7 7
(iv) Bad and Doubtful Debts Reserve 4,068 4,796
(v) Provision for Restructured Advances 11 -
III Other Funds as per Bye Laws
(i) Election Fund 45 45
(ii) Members' Welfare Fund 153 144
(iii) Centenary Fund 162 152
IV Others
(i) Special Reserve u/s 36(1) (viii) of I.T. Act 747 580
(ii) Capital Reserve 4 4
(iii) Revaluation Reserve 13,025 13,377
(iv) Shares Forfeited 21 -

30. (v) Deferred Tax Reserve 292 292
V Funds for the benefit of staff
(i) Staff Welfare Fund 110 135
(ii) Staff Loan Fund 226 205
(iii) Staff Leave Encashment Fund 536 452
TOTAL RESERVES (I+II+III+IV+V) 38,757 36,144
(` in Lacs)
As at As at
31-Mar-13 31-Mar-12
Schedule -3
Deposits
I Current Deposits
i) Individuals (Other than Societies) 14,298 13,255
ii) Societies 55 57
II Savings Deposits
i) Individuals (Other than Societies) 72,415 63,489
ii) Societies 3,224 2,532
III Term Deposits
i) Individuals (Other than Societies) 2,52,112 2,23,085
ii) Societies 20,581 18,867
IV Matured Deposits 3,887 4,081
Total ( I+II+III+IV) 3,66,572 3,25,366
Schedule-4
Other Liabilities
i) Unclaimed Dividend 51 54
ii) Proposed Dividend 865 700
iii) Pay orders Issued 2,112 2,485
iv) Others 2,949 1,908
Total 5,977 5,147
Schedule -5
Cash and Bank Balances
(i) Cash in Hand 1,999 1,280

31. (` in Lacs)
As at As at
31-Mar-13 31-Mar-12
Schedule-6
Investments
(i) Government Securities 96,946 83,528
(ii) Shares in Co-op. Institutions & Co-op. Hsg. Societies 0.37 0.36
(iii) P.S.U. Bonds & Bonds of all India Financial Institutions 825 950
Total 97,771 84,478
Schedule-7
Advances
I Short Term Loans, Cash Credit, Bills Discounted and Purchased 90,146 70,587
Of which secured against:
(i)Govt. and Other Approved Securities 13 10
(ii) Other Tangible Securities 90,059 70,413
(iii) Personal Sureties 74 164
II Medium Term Loans : 30,520 30,942
Of which secured against:
(i) Govt. and Other Approved Securities 19 20
(ii) Other Tangible Securities 29,919 30,282
(iii) Personal Sureties 582 640
III Long Term Loans : 119,787 94,595
Of which secured against:
(i) Govt. and Other Approved Securities 1,392 26
(ii) Other Tangible Securities 117,433 93,223
(iii) Personal Sureties 962 1,346
(ii) Balances with Reserve Bank of India 16,182 16,397
(iii) Balances with State Bank of India & its subsidiary 111 117
(iv) Current Deposits with Banks 2,188 1,971
(v) Reserve Fund Investment 8,350 7,043
(vi) Investment against Earmarked Funds 1,038 883
(vii) Fixed Deposits with Banks 24,852 36,221
Total 54,720 63,912

32. Total (I+II+III) 2,40,453 1,96,124
(includes interest capitalised on NPA) 124 88
Schedule-8
Interest Receivable
(i) On Investments 3,716 3,038
(ii) On Staff Advances 395 328
(iii) On Investments against Earmarked Funds 108 74
Total 4,219 3,440
(` in Lacs)
As at As at
31-Mar-13 31-Mar-12
Schedule-10
Other Assets
(i) Security Deposits 23 19
(ii) Lease Deposits 547 534
(iii) Deferred Revenue Expenditure 35 18
(iv) Intangible Assets (Software) 81 127
(v) Others 2,375 2,111
Total 3,061 2,809
Schedule -11
Contingent Liabilities
(i) Guarantees and Acceptance 12,380 10,408
(ii) Income Tax Demand 35 -
(iii) Others 7 1
12,422 10,409

33. CONCLUSION
Cooperative Society is one of the Largest sector Provides nearly 800 million. India is
Employees more employee than to any other country in the world .
Being Agriculture based India’s most population is situated in rural areas nearly 2/3 of
total . So this gives clear indication of scope of cooperative society also Employment
opportunities in this area.
Much can be done to improve efficiency in cooperative society with proper
management implementation and Government policies. The Corporate culture will also
bring sustainable efficiency and thereby cooperatives can compete with strong private
players.
There are a number of agricultural commodities like rice, sugar, fruits, vegetables;
spices etc. that have strong competitive advantage in export markets. Agricultural
cooperatives can take this advantage in foreign market
All co-operative societies should make provision for the education of their members,
officers, and employees and of the general public, in the principles and techniques of
Co- operation, both economic and democratic. To these we have though it important to
add a principle of growth by mutual co-operation among co-operatives:-

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