1. REPORT ON
Submitted To :: - SURASHTRA
UNIVERSITY
Prepared By :: - SHINGALA ANKIT L.
(S.Y. B.B.A)
Roll No. :: - 28
Academic Year :: - 2006-2007
Guidance :: - MR. NIRAJ PANDYA
College :: - R.P.BHALODIA COLLEGE,
RAJKOT.
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2. PREFACE
The Objective Practical at T.Y.B.B.A. level to develop
prospective about the company and the functioning or the following
areas of management.
As per our syllabus of the Saurashtra University in B.B.A.
course and industrial visit in T.Y.B.B.A. course at practical study or
practical training is lot of important for a management student not only
the theoretical knowledge and class discussion is not enough but
knowledge at various levels of business unit necessary for every
student industrial visit place an important role to get the practical view
point of students and also making them aware about the problems
opportunity and situation all industrial unit.
(Sign. Of Student)
SHINGALA ANKIT L.
Place :: - RAJKOT
Date :: - / /06
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3. ACKNOWLEDGEMENT
The preparation of the report is my own work, but I have taken
help from many persons. I am thankful to all those persons who helped
me in my project report.
I express my deepest of gratitude the manager of “Rajkot
People’s Co-Operative Bank Ltd.” Mr. R.B. PANDYA (MANAGER),
ASHOKBHAI RAMANI and other members who have provided me all
the necessary information.
For the final preparation I received expert guidance of my project
guide Mr. NIRAJ PANDYA., without his guidance, encouragement and
enthusiasm. It was difficult to bring this report to its present form.
I would be failing my duty if I will not mention thanks to family
members, relatives and friends to helping me throughout.
(Sign. Of Student)
SHINGALA ANKIT L.
Place :: - RAJKOT
Date :: - / /06
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4. DECLARATION
I, the undersigned ANKIT SHINGALA a student of S.Y.B.B.A.
from the SHREE R.P.BHALODIA COLLEGE of Commerce & Business
management & Computer studies, declare that this project report is
prepared by me. I had taken a help of my college and professor for the
purpose of guidance only and to add that, myself prepare this report.
(Sign. Of Student)
SHINGALA ANKIT L.
Place :: - RAJKOT
Date :: - / /06
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6. CONTENT
SR.NO. PARTICULARS PAGE NO.
1. Baking Sector In India 9
2. General Information Of Bank 10
3. Objectives of bank 12
4. Policies of bank 13
5. Board of directors 14
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7. BANKING SECTOR IN INDIA
The Co operative banks in India started functioning almost 100
years ago. The Cooperative bank is an important constituent of the
Indian Financial System, judging by the role assigned to co operative,
the expectations the co operative is supposed to fulfill, their number,
and the number of offices the cooperative bank operate. Though the co
operative movement originated in the West, but the importance of such
banks have assumed in India is rarely paralleled anywhere else in the
world. The cooperative banks in India play an important role even today
in rural financing. The businesses of cooperative bank in the urban
areas also have increased phenomenally in recent years due to the
sharp increase in the number of primary co-operative banks.
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 Regulations Act 1949 and
Banking Laws (Co-operative Societies) Act, 1965.
Some Facts About Cooperative Banks In India :: -
Some cooperative banks in India are more forward
than many of the state and 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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8. GENERAL INFORMATION OF BANK
• The name of this bank is Rajkot People’s Co-Operative Bank Ltd.
• The audit class of the bank is “A”
• The year of establishment of the Bank is 1998.
• The register number of this bank is 29673-1997
• The banking RBI license No. of this bank is UBD/GUJ/1497P
• The ChairmanM.D. of this bank is Shree Shamjibhai Khoont.
• The Chartered Accountant of this bank is P.T. Mankadia(C.A.)
• Concurred auditor of this bank is Sanjay H. khakkhar
• Accounting year of this bank is 1st April to 31st March
• The head office of this bank is in RAJKOT.
• The registered office of this bank is in RAJKOT.
Rajkot People’s Co-Operative Bank Ltd.
“Sabhasad Bhavan”,
1-Manhar Plot,Gondal Raod,
Rajkot – 360 002.
Ph. :( 0281) 2480942-43-44
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9. Fax : 0281-2480945
• There are 5 branches in the Rajkot of this bank.
• Accounting year of this bank is 1st April to 31st March
• Working hour of this bank is 10:00 A.M. to 5:30 P.M
• Off Day - Sunday & approved by negotiable act
• The E- mail I.D. of the bank is info@rbcbank@sify.com.
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10. OBJECTIVES OF BANK
Accumulate deposit to the tune of Rs. 100 crores.
Disburse advances to the tune of Rs. 65 crores.
Achieve net profits to the tune of Rs. 100 laces.
Acquires business per employee for Rs. 200 laces for the year.
Reduce cost of deposit to 7%
Bring customers satisfaction to 100%
Reduce customers complains to 100%
Educate customers to bring banking awareness.
Train staff to become more effective.
Update present software.
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11. POLICIES OF BANK
Bank is committed to achieving the customers’ satisfaction
through
1) Providing best services as per norms.
2) Enhancing organization’s image and reputation for quality.
3) Continuously improving service quality.
This commitment is met through nurturing quality culture in the
organization and the by constant adherence to laid down quality
management system.
BANK’S AREA OF OPERATION
“Rajkot People’s Co-Operative Bank Ltd.” operates through 5
branches including main branch. This bank has expanded its area of
operations to Jamnagar and Junagadh district, over and above Rajkot
region. This bank has geared up all its procedures to open its branches
in these districts.
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12. BOARD OF DIRECTORS
CHAIRMANM.D. :: - Shree Shamjibhai Khoont
VICE CHAIRMAN :: - Shree Bhikhalal Kamani
DIRECTOR :: - Shree Meghjibhai Virani
DIRECTOR :: - Shree Parsottambhai Patel
DIRECTOR :: - Shree Gordhanbhai Shingala
DIRECTOR :: - Shree Sureshbhai Kamani
DIRECTOR :: - Shree Premchandbhai Agarwal
DIRECTOR :: - Shree Vallabhbhai Vadalia
DIRECTOR :: - Smt. Bhagvatiben Khoont
DIRECTOR :: - Smt. Meenaben Vaghela
DIRECTOR :: - Shree Harikrishnabhai Ghadia
DIRECTOR :: - Shree Prafulbhai Patel
DIRECTOR :: - Shree Veljibhai Pipalia
GENERAL MANAGER :: - Shree Jagdihbhai Busa
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17. CONTENT
SR.NO. PARTICULARS PAGE NO.
1. Introduction 20
2. General Meeting 21
3. Qualification Of Directors 22
4. Time Keeping System 23
5. Selection & Recruitment 24
6. Promotion & Transfer 27
7. Performance Appraisal 28
8. Personal Record 29
9. Remuneration 30
10. Training & Seminars 31
11. Organization Chart 32
INTRODUCTION
The internal department structure of personnel department varies
widely from one company to another; the personnel department has to
function as a medium to establish healthy relationship between the
management and the employee. Organization is formed by the factor of
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18. production namely land, labours, money etc. Middle level management
and labourers is the living factor with the sense of feeling.
“Personnel management is the planning, organizing, direction,
controlling of the procurement, development, compensation, integration
and malignance of people of the purpose of contribution to organization,
individual and social goal.”
- EDWARD FLIPPO
Personnel management is the direction and co-ordinate of
Human Relations in the business organization, thereby obtaining
maximum production with minimum of physical and mantel effort, stress
and strain on the individual worker and group of workers and without
sacrificing the genius well being of the employees.
Now a day, proper direction to achieve the goal is carried out by
a separate department that is personnel,” Personnel management is the
planning, organizing, directing and controlling of procurement
development, compensation, integration and maintenance of people for
the purpose to contribution, to organization, individual and social goals.”
Personnel department is concerned with training and development of
employees and providing them proper wage and salary.
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19. GENERAL MEETING
After the financial year within three months annual general
meeting has been decided. All the member of bank staff, board of
directors is invited to attend the meeting. Generally the entire general
meeting can be of annual general meeting and special general meeting
two types in all kinds of organization.
1. The agenda of the meeting was to note the audited
accounts of bank, and audit report on 31st March,
2. The loonies who could not paid their loan; they can get the
advantages of one time settlement scheme to their sanction
application. The time period is not fixed given to loonies but it is
decided in the general meeting.
3. Small loan holders who are enable to repay their loan
amount as a relief to close their account from bad and doubtful
debts reserve to discuss the suggestion by members & chairman
of the bank.
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20. QUALIFICATION OF DIRECTORS
As we know that the directors are the most important part for any
kind of organization, for be the director of any organization, the person
should have some certain qualification.
1) The member who have at least the balance of Rs.2000 in the
bank at the 31st march, so he can be the director of the bank
according to the law of bank.
2) The person who have a membership of bank of 24 months before
the date of election.
3) The age of the person should be above18 years.
4) He should not be the creditor of any kind of organization.
AUTHORITY OF MANAGING DIRECTOR
1) To appoint the managers and secretary.
2) To decide the salaries and bonus of particular employee.
3) To do punishment if any mistake done by the employees and to
see the proper way of work to them.
4) To here complains and understand the problems and make the
way clear of work by avoiding these kinds of restrictions.
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21. TIME KEEPING SYSTEM
“Time & tide waits for none” is the famous saying, keeping this
view in mind a unit has to develop an efficient time keeping system.
There are various benefits that a firm is able to avail only because of
discipline in time management system. To get these benefits that affect
the system of time keeping like production capacity, demand for
products etc. After studding all these factors time schedule are adjusted.
Time keeping system is important for the businessman and
employers. This system can also be used to improve employee relation.
People’s bank’s working hour is 10 a.m. to 5.30 p.m. The employees of
this company enjoy one holiday in a week that is Sunday and holiday
which is approved by negotiable act.
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22. SELECTION & RECRUITMENT
SELECTION :: -
Selection means the procedure of selection in terms of best
person and all with required qualification. This process is negative by
nature because it selects only suitable persons and rejects the other
applied.
According to Yoder, “the hiring process is of one or many ‘go, no-
go’ gauges. Candidates are screened by the application of these tools.
Qualified applications go on to the net hurdle, while the unqualified are
eliminated.”
“Rajkot People’s Co-Operative Bank Ltd.” gives advertisement in
the magazines and receives applications. From that application
interview is taken, and then the person is selected in interview. Finally
salary is decided as per the qualification and ability for job.
SELECTION PROCESS :: -
Selection is a process by which the qualified personnel can be
chosen from the application selection is process in the hand of
management to get qualify and disqualify applicant by various methods.
This process is as follow :: -
Interviews
Primary selection
Final selection
Placement
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23. RECRUITMENT :: -
“Recruitment is the process of identifying various sources of
recruitment persons in the organization. It is the process of searching
and encouraging them to apply for jobs in organization”. Recruitment
has been regarded as the important function of this department.
Recruitment has been regarded as the most important function of
personnel administration, because unless right the type of people are
hired, even the best plans, organization charts and control system
would not do much good. According to Flippo,” it is a process of
searching for prospective employees and stimulating and encouraging
them to apply for jobs in an organization. It is often termed positive in
that it stimulates people to apply for jobs to increase the ‘hiring ratio’ i.e.,
the number of applicants for a job. Selection, on the other hand tends to
be negative because it rejects a good member of those who apply,
leaving only the best to be hired.”
“Rajkot People’s Co-Operative Bank Ltd.” uses both internal and
external sources of recruitment. When any employee having
qualification, ability and experience works in the unit at lower level and if
the place is vacant, the place is filled by promotion.
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24. RECRUITMENT POLICY
According to Yoder,” the recruitment policy is concerned with
quantity and qualifications of manpower.” A good recruitment policy
must contain these elements:
a) Organization’s objectives – both in the short term and long term
must be taken into consideration as a basil parameter for
recruitment decisions and needs of he personnel – area wise, job
– family - wise.
b) Identification of the recruitment needs to take decisions
regarding the balance of the qualitative dimensions of the would
be recruits i.e., the recruiters should prepare profiles for each
category of workers and accordingly work out the man
specifications, decide the sections, departments or branches
where they should be placed and identify the particular
responsibilities which may be immediately assigned them.
c) Preferred sources of recruitment, which would be tapped by the
organization e.g., for skilled or semi-skilled manual workers,
internal sources and employment exchanges may be preferred;
for highly specialized categories and managerial personnel, other
sources besides the former, may be utilized.
d) Criteria of selection and preferences: these should be based on
conscious thought and serious deliberations. In some cases
trade unions may be consulted in working out the recruitment
policy. In others, management may take the unilateral decision.
e) The cost of recruitment and financial implications of the same.
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25. PROMOTION & TRANSFER
PROMOTION :: -
Promotion may be defined as, “upward of an employee in an
organization, which commands better wages, better status, higher
responsibility & authority etc. In short a promotion is the transfer of an
employee to a job, which pays more money or one that carries out some
preferred status.”
Promotion may be given on the basis of seniority, merits on the
basis of seniority, but here promotion is given on the basis of ability,
performance, capability, merits and qualification.
Rajkot People’s Co-Operative Bank Ltd. does not promote its
employees on the basis of seniority, but promotion is given on the basis
of ability, performance, capability, merits and qualification.
TRANSFER :: -
“Transfer is a horizontal moment of employees from one selected
job, department to another place where the salary, status and
responsibility are remaining same”.
In “Rajkot People’s Co-Operative Bank Ltd.” employees are
transferred from one department to another and from one position to
another.
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26. PERFORMANCE APPRAISAL
For personnel management a performance appraisal is an
important tool. Performance appraisal means person’s performance in
the company.
Ones the employee has been selected trained and motivated, he
is then appraised for his performance. Performance appraisal is the step
where the management finds out how effective it has been at hiring and
placing employee. A performance appraisal consists of evaluating an
employee’s performance of a job in terms of a job in terms of its
recruitment.
“Rajkot people’s Bank” consider its employees as it’s most
valuable and therefore it believes in perfect and accurate performance
appraisal system. They believe that employees’ efficiency, productivity
and great performance is a ladder to success. “Rajkot people’s Bank”
has an efficient performance appraisal system for evaluating their
employees’ performance.
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27. PERSONAL RECORD
In personal record, compete up to date information is maintained
about employees. Every unit have record book for employees in which
record information about employ, leave, promotion, punished men etc.
“Rajkot People’s Co-Operative Bank Ltd.” has record books of
employees. These record books are as follow.
Attendance register
Salary-wages register
Provident fund register
Casual leave register
Bonus register
Others
SOCIAL RESPONSIBILITIES
“Rajkot People’s Co-Operative Bank Ltd.” has remained ahead in
fulfilling social responsibilities. “Rajkot People’s Co-Operative Bank Ltd.”
has always remained active for maintaining good health of the people of
the society, by sponsoring “Sharir Santulan Shibirs” and “Yog Shibirs”.
Taking into consideration various benefits availed by participants of
such programs, we are successfully organizing such programs every
year.
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28. REMUNERATION
Remuneration’s main purpose is to maintain equitable
remuneration structure. It is the duty of the firm to pay proper, relative
and reasonable amount to the worker for their service.
“Rajkot People’s Co-Operative Bank Ltd.” is under consideration
follow the time wages (remuneration). This is oldest & most common
method of wages (remuneration). Under this system workers are paid
according to the work done during certain period. Like hour, par day,
weekly, monthly or any fixed period of time.
“Rajkot People’s Co-Operative Bank Ltd.” pays salary
(remuneration) their worker on monthly basis.
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29. TRAINING & SEMINARS
Training is the organized procedures by which people acquire
knowledge for a benefit. It is the act of increasing the knowledge and
skill of workers for doing a certain job.
As the trained labours are considered the valuable assets to the
organization training is considered as a vital part of managerial control.
By arranging training programs and seminars “Rajkot People’s
Co-Operative Bank Ltd.” is trying its best to improve the banking skill of
the staff, thereby bring momentum in the bank’s work. And for this,
continuous training is being given to the staff within the premises as well
as deputing them to other institution on regular basis. The Chairman,
Vice-Chairman and Members of the Board of Directors are also taking
part various seminars and thereby get acquainted with various pros and
cons of co-operative banking arena.
Thus, good training is provided to the employees who become
more effective and productive after this process.
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30. ORGANIZATION CHART
CHAIRMAN
VICE CHAIRMAN
MANAGING DIRECTOR
GENERAL MANAGER
MAIN BRANCH OTHER BRANCHES
MANAGER MANAGER
DEPUTY MANAGER ASSISTANT MANAGER
ASSISTANT MANAGER CLARK
CLARK PEON
PEON
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32. CONTENT
SR.NO. PARTICULARS PAGE NO.
1. Introduction 35
2. Deposits 37
3. Loans 40
4. Other Services 46
5. Process Of Granting Loan 47
6. Recovery Of Loan 49
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33. INTRODUCTION
With years, banks are also adding services to their customers.
The Indian banking industry is passing through a phase of customers
market. The customers have more choices in choosing their banks. A
competition has been established within the banks operating in India.
With stiff competition and advancement of technology, the
services provided by banks have become more easy and convenient.
The past days are witness to an hour wait before withdrawing cash from
accounts or cheques from north of the country being cleared in one
month in the south.
This section of banking deals with the latest discovery in the
banking instruments along with the polished version of their old
systems.
Banks in India with the way of development have become easy to
apply in loan market. Generally, Loan against Shares, Personal Loan,
Home Loan, etc, Loans is given by almost all the banks in the country:
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34. SERVICES AT A BANK
DEPOSITS :: -
Current deposits (account)
Fixed deposits (account)
Saving deposits (account)
LOANS :: -
a) Term Loans :: - b) Cash Credit :: -
Housing loan Loan to Small Scale
Industry
Business loan Others
Vehicle loan
Personal loan
Professional loan
Loan against NSCKVPLIC
OTHER SERVICES :: -
In other services, bank provides following services,
Locker system
Demand draft
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35. DEPOSITS
1) CURRENT DEPOSIT (ACCOUNT) :: -
While opening this account person or who so ever is going to
open this type of account, he has to make the regular transactions with
this account. Generally, this type of account can be opened by
businessmen, companies, industrialist, and common men etc, who have
working capital in his hand and interested to keep his money safe.
Mostly the businessmen open this type of account because they have to
receive and make payments through cheques many times in a day.
Required Documents To Open Current
Account :: -
A. For partnership firm B. For
proprietorship firm
All partners’ photos. All
partners’ photos.
Copy of partnership deed. P.A.N
card Copy of firm.
P.A.N card Copy of firm. Proof of
existing of firm.
Registration copy (If). Copy of
S.T & C.S.T no. (If).
Proof of existing of firm. Proof of all
partners’ address.
Proof of all partners’ address.
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36. A person has to deposit minimum Rs. 3000 in current account.
Bank takes Rs. 300 service charge at the end of the year. If a person
wants to close his current account, bank charge Rs.50 (if a person
having cheques book) and bank will charge Rs. 25(if person is not
having cheques book).
2) SAVING DEPOSIT (ACCOUNT) :: -
It is an ideal account for those who have sufficient money to
save. Generally, common men who save money from his salary and he
deposits in to bank for saving purpose. Saving account is the best way
and when ever need of money occur he can get or withdraw money
from his saving account.
If a person wants to open his saving account with a bank, he has
to fill up a firm of the banks saving account, he has to give required
documents such as photo, address proof, license or election card as
identity etc, and he has to deposit minimum Rs. 1,000. If a person wants
a new cheques book, bank charges Rs, 50 for every cheques book.
While closing a saving account, a person has to surrender all
documents which have already been given by a bank like, cheques
book, pass book, etc.
Rate on saving account is 3.5%.
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37. 3) FIXED DEPOSIT (ACCOUNT) :: -
A person who has spares money for a particular period of time
and he wants to get it as double so for him fixed account is a best way
to deposit money. In this account he has to deposit his money for a
specific period of time and as a reward he can get double amount after
completion of time. If a person wants to open his fixed account with a
bank, he has to fill up a firm of the banks fixed account, he has to give
required documents such as photo, address proof, license or election
card as identity etc, and he has to deposit minimum Rs. 1,000. While
closing a saving account, a person has to surrender all documents
which have already been given by a bank. A person can get double at
109 months.
RATES ON FIXED DEPOSITS
30 days to 45 days :: - 3.5%
46 days to 90 days :: - 5%
91 days to 179 days :: - 6%
180 days to 1 year :: - 7%
1 year to 2 years :: - 7.5%
2 year to 5 years :: - 8%
Above 5 years :: - 7.75%
Rate on senior citizenship above 6 months :: - 0.5%
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38. LOANS
A) TERM LOANS :: -
It is one of the major sources of debt finance for a long term
project. Term loans are generally repayable in more than a year but less
than 10 years. These loans are offered by all Indian financial
institutions. Term loans are generally secured through a first mortgage
or by way of deposit of title deeds of immovable properties.
1) Housing Loan :: -
Home loan is the latest craze in the banking sector with the
development of the infrastructure. Now people are moving to township
outside the city. More number of townships is coming up to meet the
demand of 'house for all'. The RBI has also liberalized the interest rates
of home loan inorder to match the repayment capability of even middle
class people. Almost all banks are dealing in home loan. Again SBI,
ICICI, HDFC, HSBC are leading.
Local residential can get housing loan for the purpose of to
purchase or build home. Rate of interest is 10.5% for Rs. 5 lacs and
above Rs. 5 lacs; rate of interest is 11.5%. As a security bank takes the
documents of property which is mortgage by the person. A person, who
is grated loan, has to repay loan to bank up to 5 years.
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39. 2) Business Loan :: -
A person who is engaged in their business at least from last one
year can get this kind of loan for the purpose of fulfillment of the short
term working capital needs. A business man get loan up to 10 lacs but
in special cases bank allow him to grant above 10 lacs and person has
to repay the loan in installments which should have already been
decided. As a security bank takes all documents of property which is
being mortgaged by a person. Rate of interest on this loan is as under ::
-
Up to Rs. 2 lacs :: - 12%
Rs. 2 lacs to Rs. 5 lacs :: - 12.5%
Rs. 5 lacs to Rs. 10 lacs :: - 13%
Above Rs. 10 lacs :: - 14%
3) Vehicle Loan :: -
A person or a businessman who wants to purchase new or old
vehicle for the purpose of the transportation or for personal use can get
this kind of loan. Bank grants this kind of loan up to 85% of the face
(quotation) value of vehicle and person has to repay the loan in
installments which should have already been decided. Rate of interest
on this loan is as under :: -
For transport operator :: - 14%
For personal use :: - 13%
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40. 4) Professional Loan :: -
This kind of a loan is granted to professional persons such as
lawyers, C.A, doctors, etc, for the professional purpose like, to the
doctor bank grants this type of loan to build new clinic, to buy new
medical equipments, and so on. Bank grants this loan up to 10 lacs but
in some cases bank grants loan above 10 lacs and person has to repay
the loan in installments which should have already been decided. Rate
of interest on this loan is as under :: -
Up to Rs. 2 lacs :: - 12%
Rs. 2 lacs to Rs. 5 lacs :: - 12.5%
Rs. 5 lacs to Rs. 10 lacs :: - 13%
Above Rs. 10 lacs :: - 13.5%
5) Loan against NSCKVPLIC :: -
Loan against NSCKVPLIC is very easy to get because liquid
guarantee is involved in it. Bank grants loan against NSCKVPLIC.
Bank grants loan for the purpose of purchase or to build home. If a
person wants to get this kind of loan, should have share certificate or
any LIC policy holder of his own name only. Bank grants this loan up to
75% to 90% of market value of NSC, KVP and LIC policy. Applicant has
to give share certificate or LIC policy to bank. Bank will charge 12% rate
of interest on this loan. A person has to repay this loan to bank up to the
due date of share certificates or policy. As a security bank takes share
certificates or LIC policy.
6) Personal Loan :: -
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41. In Personal Loan, one can get a sanctioned loan amount
between Rs. 25,000 to Rs. 1 lacs depending upon the profile of person
applying for the loan. SBI, ICICI, HDFC, HSBC are some of the leading
banks which deals in Personal Loan.
Local residential can get this kind of a loan for the purpose of to
buy home appliances, like TV, fridge, etc or any thing a person wants to
buy. Bank grants this kind of loan up to 25,000 but in some cases bank
grants above 25,000 and person has to repay the loan in installments
which should have already been decided. Rate of interest on Personal
loan is as under :: -
Up to Rs. 25,000 :: - 13 %
Above Rs. 25,000 :: - 14 %
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42. B) CASH CREDIT :: -
1) Loan to Small Scale Industry :: -
A person who has his own business and wants to start his own
business as small scale sector can get this kind of the loan for the
purpose of fulfillment of the short term working capital needs or to
purchase new machineries or so on. A business man can get loan up to
15 lacs but in special cases bank allows him to grant above 15 lacs and
person has to repay the loan in installments which should have already
been decided. In cash credit type loan, person can withdraw money (up
to decided) if there is no money in his account. Bank grants this loan
against the raw material, stock, and any mortgaged properties. The
insurance of stock and mortgaged properties is taken by the bank as a
security. Rate of interest on this loan is as under :: -
Up to Rs. 2 lacs :: - 11%
Rs. 2 lacs to Rs. 5 lacs :: - 11.75%
Rs. 5 lacs to Rs. 15 lacs :: - 12.25%
Above Rs. 15 lacs :: - 13%
( 42 )
43. 2) Other Cash Credit Loan :: -
Bank also grants cash credit to the local residential or to an
ordinary people to fulfill their needs for money. A person can get loan up
to 10 lacs but in special cases bank allows him to grant above 10 lacs
and person has to repay the loan in installments which should have
already been decided. In cash credit type loan, person can withdraw
money (up to decided) if there is no money in his account. As a security
bank takes all documents of property which is being mortgaged by a
person. Rate of interest on this loan is as under :: -
Up to Rs. 2 lacs :: - 11.5%
Rs. 2 lacs to Rs. 5 lacs :: - 12.25%
Rs. 5 lacs to Rs. 10 lacs :: - 12.75%
Above Rs. 10 lacs :: - 13.5%
( 43 )
44. OTHER SERVICES
1) Locker System :: -
Bank also provides locker system to their customer or peoples.
Basically, bank provides A, B, C - three types of lockers and size of
lockers are 6*6, 6*12, and 12*1 respectively. Bank also charge for
locker Rs. 350, Rs.450, Rs. 550 respectively. A person who is going to
open locker with bank, he has to deposit Rs. 5, 500, Rs. 6,500, Rs.
7,500 for A, B, C respectively. Person also has to open his current
account with bank because bank will debit service charge of locker in
his current account.
2) Demand Draft :: -
Purchase of demand draft is required to fill up the requisite
application form of bank which contains following columns :: -
Date of the application.
Scroll no.
Name of the drawer bank and its branch
Account type no. and cheques no.
Beneficiary’s name.
Demand draft no. and bank code no.
Amount of demand draft in figures and commission and total Rs.
Purchaser’s name, address, and sign.
CashierClerk and officers initials.
( 44 )
45. PROCESS OF GRANTING LOANS
Primary Investigation :: -
In primary investigation, bank investigates all the things of the
customer such as, name, address, purpose of loan, amount of loan,
assets which is going to be mortgaged, etc. After knowing all the things
about the customer, bank will give loan form to customer. He has to fill
up all the things clearly.
Bank will need some documents for assurance. The one and
common document bank demand is demand promisenary this because
customer needs loan. If bank is granting loan to partnership firm and
proprietorship firm following documents are required.
All Partners’ / Proprietors’ photos.
Copy of Partnership / Proprietors’ deed.
P.A.N card Copy of firm.
Registration copy (If).
Proof of existing of firm.
Proof of all Partners’ / Proprietors’ address.
If bank is granting loan in the form of vehicle loan, bank will try to
know the purpose of getting loan whether it is getting to buy new or old
vehicle and bank also grant loan against the vehicles. If bank is going to
grant loan to the company, bank will demand for registration documents
of the company.
( 45 )
46. After investigating all above things and required documents
General Manager of the bank will decide to grant loan or not. For taking
this decision he may call meeting and General Manager takes an
opinion of the others. Thus they will decide to grant loan of not and
customer will get loan whether he has submitted all the required
documents and if he has not submitted the entire required document he
might not be granted loan.
( 46 )
47. RECOVERY OF LOAN
Customer who is being granted loan by bank, he has to repay the
loan in small installments which have already been decided earlier.
Customer has to pay his installment in 1st to 10th of month otherwise he
has to pay fine (penalty) interest 2% more for per day.
If customer does not pay more than 3 installments, bank will
issue legal notice. And though customer will not pay installment bank
will claim in court and generally court will also take decision in favor of
the bank then after Bank will again issue notice of confiscation assets
for 30 days. After these entire if customer will not pay installment bank
will issue notice of auction of his assets and bank will give an
advertisement in news paper and after 30 days bank will get its money
from selling assets.
( 47 )
49. CONTENT
SR.NO. PARTICULARS PAGE NO.
1. Introduction 52
2. Financial Analysis 53
3. Financial Planning 54
4. Ratio Analysis 55
5. Importance Of Ratio Analysis 57
6. Financial Report 58
7. Information Of Shares 63
8. Auditor’s Report 65
( 49 )
50. INTRODUCTION
Today, Finance is considered as the “Life Blood of the Business”
without finance no business activity is possible. So for an organization, it
must have a large amount of finance and for this it should have finance
department.
Finance management is concerned with the acquisition, financing
and management of assets with some overall goal in mind. Finance
management continuous to develop at an even more rapid pace.
Advancement is occurring not only in the theory of finance management
but also in its real world practice.
The finance manager has dynamic role in a modern company’s
development. Until around the first half of century, finance manager
primarily raised funds and managed their firm’s cash and that was pretty
much it. Today internal factors have an increasing impact on the
financial manages. Corporate competition, technological changes
volatility in inflation and interest rates, worldwide economic uncertainty,
fluctuating exchange rats, tax low changes, and ethical concourse over
certain financial dealings must be dealt with the corporation.
Finance management is very important i.e. first to manage
financial resource, then to distribute that finance among the various
department according to their need and lastly has to check whether it is
used in right way or not. Thus, only finance gathering has not become
the goal or aim of finance management but is holds a key position in top
management of companies.
( 50 )
51. FINANCIAL ANALSIS
The nature of analysis will differ depending on purpose of the
analyst. Trade creditors are interested in firms’ ability to meet their
claims over a very short period of time. Their analysis will therefore
confine to the evaluation of the firms liquidity position.
Suppliers of the long term debit on the other hand are concerned
with the firms’ long term solvency and survival. They analyze the firms’
profitability over time, over its ability to generate cash to be able to may
interest and repay principal and relationship between various sources of
funds.
Investors who have invested their money in the firms’ shares are
concerned about the firms’ earnings. They restore more confidence in
there firms’ that show steady growth in evening. Management of the firm
would be interested on every aspects of the financial analysis. It is their
overall responsibility to see that the resources of the firm are used most
effectively and efficiently and that the firms’ financial condition is found.
( 51 )
52. FINANCIAL PLANNING
The pursuit of increased profitability usually requires careful
planning of a financial instructions future operations. Growing number of
banks and other financial institutions have turned to formalized planning
methods to achieve their goals.
Though planning techniques vary widely in scope & design,
many of largest financial instructions use both short run and long run
plans. Short run plans may include a monthly or weekly projected cash
budget that tracks cash inflow and reveals how the institution’s level of
cash reserves will vary overtime of the projections turn out to be true.
The planning over a year is formalized in a so-called profit plan, which
projects key items on the balance sheet and income and expenditure
statement for a 12 month period.
Long term plans frequently include a capital budget, charging
projected growth in facilities and a strategic plan. Strategic plans
forecast organizations future position in various target markets.
( 52 )
53. RATIO ANALSIS
Ratio analysis is a powerful tool of financial analysis. A ratio is
defined as “the indicated quotient of two mathematical impression” and
as the relationship between two or more things. It helps to ascertain the
financial condition of the firm. Ratio analysis is a process of identifying
the financial strength and weakness of the firm.
A financial ratio is a relationship between two variables which
are drawn from the financial statements of business enterprises it is
important for there variables which are related to each other. It is one
the financial control tools in the head of management and is widely used
by business.
Ratios as shown above are relative figures reflecting the
relationship between variables. They enable analyst to draw conduction
regarding financial operations. The use of ratios as a tool of financial
analysis involves their comparison for a single ratio like absolute figures,
fails to reveal the true position. For example, if in the case of a firm the
return on capital employed is 15% in a particular year, what does it
indicate? Only if the figure is related to the fact that in the preceding
year the relevant return was 12% or 18% can it be informed whether the
profitability of the firm has dedicated or improved. Alternatively if we
know that the return for the industry as a whole is 10% or 20%, the
profitability of the firm in question can be evaluated. Comparison with
related facts is therefore the basis of ratio analysis. Four types of
comparisons are involved ( 1 ) trend ratio ( 2 ) inter firm comparison ( 3 )
comparison of items within a single year’s financial statement of a firm (
4 ) comparison with standards as plans.
( 53 )
54. Trend ratio involved a comparison of ratio of a firm over time, i.e.,
presents ratios are compared with past ratio for the same firm. Trend
ratio indicates the direction of change in the performance improvement,
deterioration as constancy over the years.
The inter firm comparison involving comparison of the ratio of a
firm with there of others in the same line of business on for the industry
as a whole reflects its performance in relation to its competitors. Other
types of comparison may relate to comparison of items within a signal
year’s financial statement of a firm and comparison with standards as
plans. Some ratios of the year 2005 (Rs. In lacs) are as under :: -
( 54 )
55. IMPORTANCE OF RATIO ANALYSIS
Importance of ratio analysis are as follows :: -
1) It helps in knowing the liquidity position of a firm.
2) Ratio analysis helps in assessing long term financial viability of a
firm.
3) It helps management in evaluating operating efficiency of
management & utilization of its assets.
4) It also helps investors on outsiders in evaluating even all
profitability.
5) Ratio analysis helps in inter firm comparison that helps in
comparing firms’ performance.
6) Finally, ratio analysis enables to tale the time dimension into
account. In other words whether the financial position of a firm is
improving or determining over the years.
( 55 )
56. FINANCIAL REPOERT
The directors have pleasure in presenting the 8th report of Rajkot
People’s Co-Operative Bank’s Audited Statement of Accounts of the
year ended on 31st March 2005.
Due to irresponsible attitude of some of the Co-Operative Banks’
management in the last few years, lay men had to suffer immense loss.
However, under the adverse circumstances, Rajkot People’s Co-
Operative Bank has kept the pace with the progress all around and has
sustained faith of the people, which is highlighted from the following
information.
Profit and Appropriation Thereof :: -
The Profit & Loss Account of the Bank shows Gross Profit of
Rs.1, 59, 00,000 and after making the provisions under Bye-Laws and
the Gujarat Co-Operative Societies Act, the Net Profit comes to Rs. 91,
00,000.
The board expects your confirmation for the appropriation of Net
Profit as under:
Reserve Fund -40% of Net Profit
Dividend – 15% of Net Profit
Education Fund – 2.5% of Net Profit
Under credit Equalization Fund – 15% of the Residual
Profit after above appropriate
Building Fund – 20% of Net Profit
( 56 )
57. Residual Profit after making above
appropriate:: -
Dividend Equalization Fund – 20% of Residual Profit.
Charity Fund – 20% of Residual Profit.
Co-op, Movement Propaganda Fund – 20% of Residual
Profit.
Members’ Welfare Fund – 20% of Residual Profit.
Social Welfare Fund – 10% of Residual Profit.
Employees’ Welfare Fund -5% Residual Profit.
Festival Fund – 5% of Residual Profit.
DIVIDEND :: -
As per the provision of the Gujarat Co-Operative Societies Act of
maximum limit of Dividend, Board or Directors recommends 15%
Dividend. Rajkot People’s Co-Operative Bank has shown consistency in
maintaining the same rate of Dividend since inception.
CAPITAL ADEQUACY :: -
Against the statutory Requirement to maintain capital adequacy
ratio that is capital to risk weighted assets ratio-CRAR at 9% Rajkot
People’s Co-Operative Bank has maintained as high as 11.57%. Higher
( 57 )
58. CRAR suggests high financial soundness of the bank. The CRAR is an
indictor to measure the risk against the capital.
( 58 )
59. FINANCE :: -
The liberalization of the financial sector is the key for the over all
liberalization process. Gradually, the structure of the financial market
itself has begun to change, in the changing Financial Market; Rajkot
People’s Co-Operative Bank has market the progressive growth and
profitability both the financial year 2004-2005 which is reflected in the
following Financing since inception:
(Rs. In Lacs)
Particulars 31-3-04 31-03-05
Members 13,000 13,300
Share Capital Rs. 178 Rs. 216
Deposit Rs. 8,300 Rs. 8,800
Advances Rs. 4,500 Rs. 6300
Net Profit Rs. 90 Rs. 92
Working Capital Rs. 9,100 Rs. 10,200
( 59 )
60. DEPOSITS :: -
The condition of many banks became vulnerable during last few
years. However Rajkot People’s Co-Operative Bank was successful in
sustaining the trust of its Depositors and has sustained the same growth
in all adverse circumstances.
Rajkot People’s Co-Operative bank’s deposits, in comparison to
previous year have increased by 5.59% and reached to Rs.88, 00,
00,000 as at 31.03.2005. The ruse in the deposits is the symbol of trust.
The percentage of low cost deposits to total deposit is rising year by
year which is the key for gradual but steady growth in profitability.
ADVANCES :: -
Rajkot People’s Co-Operative bank grants various loans and
advances for the actual needs of the fundamental principles of co-
operation. As a matter of fact, Rajkot People’s Co-Operative Bank is
“Big for Small (lay) people and small for big (rich) people”. Rajkot
People’s Co-Operative Bank has always tried to be helpful to common
people, which are 6,300 (in lacs).
Rajkot People’s Co-Operative Bank’s financial portfolio is
distributed in entire economic and varied activities so that changes
arising from the market may not have direct adverse impact on the
recovery and economy affairs of the bank.
( 60 )
61. Advances made to the directors and their relatives have been
fully recovered. As per instruction of Reserve bank of India, Rajkot
People’s Co-Operative has not financed a single rupee against security
of shares, debentures etc.
INVESTMENT :: -
Out of total investment of Rs. 21, 85, 00,000 of Rajkot People’s
Co-Operative Bank at 31.03.2005, Rs 21, 16, 00,000 has been invested
in various central government securities. The face value of the
investment is Rs. 21, 20, 00, 000 and market value of the investment is
Rs. 21, 60, 00,000.
Rajkot People’s Co-Operative Bank has adopted the policy of
investment as directed by the reserve bank of India from time to time.
Accordingly, entire investment is kept in RBI’s SGL Account. Rajkot
People’s Co-Operative Bank’s total investment is more than statutory
requirement.
( 61 )
62. INFORMATION OF SHARE
SHARE CAPITAL :: -
Last year there were 13,000 members. This year it has reached
to 13,300 in numbers. During the year 2004-2005, total share capital
gone up to Rs. 2, 16, 00 , 000 which is 21.42% higher than the previous
year’s figure. An increase in number of members is the sign of success
of the bank.
SHAREHOLDING :: -
If a person who wants to become share member of the bank, has
to buy the shares of that bank. He has to fill up form of the bank. Bank
collects the share application form, membership fees and share
application money.
Board sanctioned the share application and provides
membership member and also provide an identity card. Now, the person
becomes a permanent member of this bank.
( 62 )
63. TRANSFER OF SHARE :: -
If any share holder wants to transfer his share in favor of any
person, he has to fill up share transfer form of the bank in favor of
others. He has to pay transfer fees and submit original share certificate
to bank and identity card which has already been given to the share
holder and bank will transfer his share on name of another person.
SHARE CERTIFICATE :: -
Bank issues the share certificate to share holder and identity
card. The share certificate is approved by the Co-Operative sector. In
which such things are covered as Bank shareholder No., Sr. No.,
Certificate No. signed by the of bank authority. If a person who deposits
Rs25, 000 in the account of the bank, bank will give him a share
certificate.
RESERVES AND FUNDS :: -
Various reserves and funds of Rajkot People’s Co-Operative
bank has reached to the level of Rs. 5,35,00,000 as at 31.03.2005,
which is 27.75% higher than the previous year’s figure. Constant rise in
various reserves and funds is also a land mark of a successful and
sound bank.
( 63 )
64. AUDITOR’S REPORT
We have audited the balance sheet as on 31.3.2005 and the
profit & loss account for the year ended on 31.3.2005 of Rajkot People’s
Co-Operative Bank Ltd. With reference to our audit memo and audit
note we hereby report as follow:
1) It is bank management duty to prepare the said financial
statement our duty is only to give opinion about the genuineness
of the informative data disclosed in the said statements.
2) We follow the rules and regulation of the existing accounting
standards for the said audit purpose. It is to be verified that the
said financial statement are true and the information and
figurative data disclosed are genuine in all respect.
3) As per our opinion all the information and explanations provided
to us are disclosed in bank’s books and as per that we report as
follows:
a) The balance sheet as on 31.3.2005 and the accounting
note there in reflect the actual financial position of the
bank all the required information is included in it and it is
properly prepared.
b) The profit and loss account for the year ended on
31.3.2005 reflects the actual profit of the bank.
( 64 )
65. 4) The information and clarifications required by us promptly
provided to us and we found them satisfactory.
5) The transaction of the bank observed by us are lawful and as per
rules and regulation of the respective law.
6) As per our opinion all mandatory financial records to be
maintained are properly maintained by the bank.
7) The NPA classification and the provisions thereof of the bank are
as per the norms of income recognition and provisions prescribed
by Reserve Bank of India.
Rajkot People’s Co-Operative Bank Ltd. satisfies all the needs of
auditors. The audit class of this bank is “A” and the audit grade of this
bank is “1”.
( 65 )
67. S.W.O.T ANALYSIS
S.W.O.T analysis means overall evaluation of a firm’s strengths,
weaknesses, opportunities, and threats. S.W.O.T analysis consists of
making analyses of the external environment and internal environment.
External Environment Analysis :: -
External environment consists of out sides of the firm such as
government, competitors, etc. Such environmental analysis is
necessary because it affects the firm or an organization.
Internal Environment Analysis :: -
Internal environment consists of inner sides of the firm such as
personnel, finance, etc. Such environmental analysis is necessary
because it affects the firm or an organization.
( 67 )
68. STENGTHS WEAKNESSES
S.W.O.T.
ANALYSIS
OPPORTUNITES THREATS
S = Strengths
W = Weaknesses
O = Opportunities
T = Threats
( 68 )
69. STRENGTH :: -
This bank is very reputed in local (Rajkot) area.
Professional management & co-operate team spirit.
Strong brand equity in local (Rajkot) area.
Fully computerized.
Profitability & sound liquidity.
Branches in all most developed part of Rajkot.
No mistake in regular transactions can be found because
of small network.
Against the statutory Requirement to maintain capital
adequacy ratio that is capital to risk weighted assets ratio-CRAR
at 9% Rajkot People’s Co-Operative Bank has maintained as
high as 11.57%.
WEAKNESSES :: -
Bank is not performing marketing activity because lack of
marketing expertise.
Lack of modern management concepts and sometimes
communication gap can be found which indicates lack of
professionalism.
Bank is not providing A.T.M. facility in the recent
developed era and Bank is not fully developed in modern era.
( 69 )
70. Lower volume of advances due to higher rate of interest
may affect the expansion of the organization.
Not reputed at national level and less no. of the branches.
OPPORTUNITIES :: -
Bank can open branches at state level in near future.
Number of branches can be increased in all over nation
next 5 to 8 years.
Bank can introduce new services like, NRI loan, ATM,
student account with minimum Rs. 100 etc.
Bank can perform marketing activities by media.
THREATS :: -
Changes in government policies and in rules and
regulation regarding bank can be disturbed in regular services of
bank.
Crises in the Co-operative banking sector can disturb the
bank progress.
All the depositors may withdraw their money from bank
because of any wrong rumors against bank.
( 70 )
72. FUTURE PLANS
Rajkot people’s co-operative bank wants to starts new branches
in different districts of Gujarat and as possible, may start at India level
also. People’s bank may also provide ATM facility if possible. People’s
bank wants to develop close relationship with individual and depositors.
People’s bank also wants to maintain growth and wants more growth.
People’s bank may provide various types of new loans like, student
loan, NIR loan, and many more policies. Generally, People’s bank
mainly focuses on starting new branches in various place of India.
( 72 )
74. CONCLUSION
From the bank’s visit I learn a lot. Now I know that how the
theoretically aspects are applied in the industries.
I had found that all the staff members and workers are working in
a co ordinates manner and in a planned way and they are more
concentrating about their work and diversifying their efforts towards the
desired target. Due to unprecedented trust and co-operation of the
members and customers as well as continuous efforts put in by the
management and the staff of Peoples Bank has been able to reach to
the new heights of success.
So, at the end I wish “RAJKOT PEOPLE’S CO-OP. BANK LTD.”
and ”ALL THE BEST” to get desired success in the future.
SUGGESTION
Bank is not performing marketing activity because lack of
marketing expertise for this bank should appoint skilled person who has
a marketing knowledge. Bank is not providing A.T.M. facility in the
recent developed era and many others facilities which are being
providing by other banks so bank should try to provide or start this
facility and other policies in near future. Bank has not large net work and
not fully developed so bank should open new branches in different
states of the India.
( 74 )
