A SUMMER TRAINING REPORT ON

DEPOSIT SCHEMES AT COOPERTAIVE BANK

AT CO-OPERATIVE BANK KAPURTHALA Submitted to PUNJAB TECHNICAL UNIVERSITY JALANDHAR In the partial fulfillment of Masters of Business Administration [M.B.A]

Guided by: MR Ravish verma Assistant professor Session (2012-2013)

Submitted By: DEEPAK PAL SINGH Roll No.3172 MBA 3rd Semester

APEEJAY INSTITUTE OF MANAGEMENT TECHNICAL CAMPUS JALANDHAR

GUIDES DECLARATION

This is to certify that this project report submitted by DEEPAK PAL SINGH to
APEEJAY INSTITUTE OF MANAGEMENT AND TECHNICAL CAMPUS for the reward

of the degree of MBA is a record of her own work carried out by her under my guidance and supervision. The quality of work fairly fulfills the entire requirement to the said degree. To the best of my knowledge and information, no part of this report is reproduced earlier or elsewhere.

Date:

(Signature) Mr. Ravish verma Assistant professor

STUDENT DECLARATION
This is the report of the project work entitled DEPOSIT SCEMES AT INDIAN
COOPERATIVE BANK undertaken by me during the one and half month training at COOPERATIVE BANK, KAPURTHALA.

I hereby declare that project report is being submitted by me to the Department of Management for the partial fulfillment of the degree of Master of Business Administrative. A copy of this project has been submitted to the organization where the project was developed. This project is not submitted to any other organization or university or college and is the outcome of my work.

(DEEPAK PAL SINGH)

ACKNOWLEDGEMENT
This project has been possible through the direct and indirect co-operation of various persons to whom I wish to express my appreciation and gratitude. First and foremost, my thanks go to Mr. NIRMAL SINGH (Branch Manager) whose versatility of creativeness, interest and enthusiasm gave a new dimension to my work with a motto to seek, to strive and not to yield. His unfailing guidance and encouragement made me understand the vagaries of appropriation and help to solve my problems. In addition to this, I would like to thank all my respondents, who has spent their valuable time with me and help me in getting the requested information for this project. I am equally thankful to the whole team of Department of management studies,
APEEJAY INSTITUTION MANAGEMENT AND TECHNICAL, who extended their full

co-operation and assistance. Words are not sufficient to express the greatness for the help, guidance and knowledge dispensed to me by Respected project Guide, Mr. Ravish verma, who not only lent his considerable time and energy to the understanding, but also helped me a great deal in making this report see the light of the day. Last but not least, I owe my special regards to my parents and my elders for their blessings and good wishes.

(DEEPAK PAL SINGH)

TABLE OF CONTENTS CHAPTER NO. CHAPTER TITLE

CERTIFICATE ACKNOWLEDGEMENT

PAGE NO. 4

CHAPTER:-1 EXECUTIVE SUMMARY 1

EXECUTIVE SUMMARY

10

CHAPTER:-2 INTRODUCTION 2
ORIGIN OF BANKS PROFILE OF CENTRAL COOPERATIVE BANK KPT. FEATURES OF BANK

12-41

CHAPTER:- 3 OBJECTIVES OF RESEARCH 3

OBJECTIVES OF RESEARCH

42-44

CHAPTER:- 4 REVIEW OF LITERATURE 4

REVIEW OF LITERATURE

46-47

CHAPTER:-5 METHODOLOGY & LIMITATIONS OF THE STUDY 5

METHODOLOGY& LIMITATIONS OF THE STUDY

49-63

CHAPTER NO:-6 OBSERVATION, ANALYSIS & DISCUSSION 6

OBSERVATION, ANALYSIS & DISCUSSION

65-73

CHAPTER:-7 FINDINGS & SUGGESSTIONS 7

FINDINGS & SUGESSTIONS

74-76

CHAPTER:-8 CONCLUSION 8
CONCLUSION ANNEXURE BIBLIOGRAPHY

77-78 79-81 82

LIST OF TABLES TABLE NO. TABLE TITLE PAGE NO.

5.1

PERCENTAGE CHANGE IN SAVING BANK DEPOSIT ACCOUNT NUMBER OF NEW ACCOUNT OPENED IN SAVING BANK ACCOUNT TOTAL INTEREST AMOUNT PAID BY BANK DEPOSIT HOLDER PRESENT AMOUNT PAID BY BANK TO F.D. DEPOSIT HOLDER INCREASE AND DECREASE OF SAVING BANK DEPOSIT ACCOUNT PERCENTAGE OF NEW ACCOUNT OPENED IN FIXED DEPOSIT ACCOUNT

54

5.2

55

5.3

56

5.4

60

5.5

62

5.6

63

LIST OF GRAPHS AND CHARTS TABLE NO. 6.1 6.2 6.3 TABLE TITLE NUMBER OF PEOPLE HAVING BANK ACCOUNTS OCCUPATION OF RESPONDENTS IN WHICH BANK THE RESPONDENTS HAVE BANK ACCOUNTS TYPES OF BANK ACCOUNT LOCKER FACILITIES VIEWS ABOUT ONLINE SYSTEM MOST PREFERED SERVICE BY RESPONDENTS RESPONDENTS VIEWS ABOUT BANK QUALITY OF SERVICES PROVIDED BY THE BANK PAGE NO. 65 66 67

6.4 6.5 6.6 6.7 6.8 6.9

68 69 70 71 72 73

10

EXECUTIVE SUMMARY
The practical training is far better than the classroom training. During the practical training person comes to know about actual difficulties during the work. As a part of my summer training, I got an opportunity to work with Co-Op. bank Ltd. Today banks are providing different types of deposits with lots of customer friendly facilities under one roof. I have made this project on saving and deposit scheme of bank. An effort has been made to present the report in a most lucid, simple & accurate manner. All the efforts will be fruitful if you all appreciate the report.

11

12

INTRODUCTION Introduction
In an organization there will be a normal of activities carried on like production, Marketing, planning, financier etc., among all these faineances plays a major role, Which made to study on this. Finance came to studied as a part of Economics before the turn of the present category formation of large sized undertakings by consolidating the smaller ones brought before the Managements the problem of financing to these enterprises. The study of potentiality of different securities as a source of procuring funds form out side world & the role & function of institutional agencies continue to be emphasized during 1921. The problem of financing ensured a new dimension in the IInd world war. In 1940s financial wizards continued to be concern with the necessity for choosing sells a financial structure as would be able to with stand stress & strains of the part war adjustments. In 1960s & 70s period was marked by a very faithful & exciting Era for a nor of alternative developments. The financial manager started thinking on such important issues. As aggregate stock prices, business sale & etc.The dimension of Business financial that was Earlier limited to period but in recent years broadened according to- day-to-day operations. Finance is regarded as lifeblood of an Enterprise. This is because in the modern money oriented of all Economy finance is one of the basic foundations of all kinds of economic activities. It is the master key. Which provides accedes to all sources for being employed in manufacturing activities. It has been rightly said that business needs money to make more money, however, it also true that money begets more money only when it is

13

properly managed: there fore efficient management of every business enterprise is closely linked with efficient management of its finance.

Meaning of Business finance: Business finance explains the two terms. They are
Business & Finance . In common speaking the word Business is used to denote merchandising the operation of some sort of a shop or store. Large or small. It is however giving too narrow.

Definitions: According to Bonneville & Dewey = Financing consists in the raising

providing & managing of all the money or funds of any kind used in connection with the business. According to Prather & wert, Business Finance deals primarily with raising administrating & distributing funds by privately owned business units operating in Non financial fields of Industry.

Function of Business Finance:

Finance function can be classified into two types Recurring finance function Non- Recurring finance function

1.

Recurring function: Recurring finance functions Encompassed all such

Financial activities as are carried out regularly for the efficient conduct of a firm planning of funds. Placing of funds, allocation of funds, income & controlling the uses of funds are the contents of recurring finance function. Planning for funds Rising of funds Allocation of funds Allocation of income Control of funds 14

Non-recurring functions: It refers to the use of functional activities that a functional

activity has to prefer very infreavently, preparation of financial plant at the time of promotion of the company. The Financial readjustment in time of liquidity crisis, valuation of the firm at the time of merger Success full handle of such problems .

Introduction to Banking
The financial sector plays a major role in the Mobilization & allocation of financial savings. Financial institutions. Instruments & markets & which constitute the financial resources from the net savers to net borrowers, the gains to the real sector of the economy. Therefore, depend on how efficiently the financial sector performs this basic function of intermediation so that the transaction cost is kept minimum. The banks form the most important segment of the financial sector. Deregulation of the banking industry through the abolition of the administrated rates for the deposits & loans gave the banks the freedom in fixing prices for their products to compete effectively with Non bank intermediaries, the banks were permitted to undertake newer activities live investment banking. Securities trading & insurance business through on selective basis. The banks were forced to pay maximum attention on to operational efficiency so that their transactions costs remained at the Minimum. A) Origin of Banks & Banking Business Banking as kind of business is of recent origin but traces of banking & banking institution can be right seen from the ancient past. However its form scope & function went on changing through time. Banking system occupies an important place in a nations economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advance country. The definition of business of banking is given in the Banking Regulation Act, 1949. According to section 5(b) of the Act, banking means

15

The accepting, for the purpose of lending or investment, of deposit of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft or otherwise. In outline of money, crow her maintains that the present day banker shows traces of each of 3 ancestors. Like the merchant, he still makes a specialty of financing foreign trade, like the money lender, he still collects the saving of one set of persons lends them to another set of persons but the unique function of the banker is the provision of a convenient mechanism by which people can make payments to each other without having to walk around each others houses with bags of coins. The origin of word bank is shoved in mystery according to one viewpoint; its derived from Italian word banchi banchari. According to another viewpoint its derived from German word banco. B) Meaning & Definition of Bank Precisely speaking a bank is the one which accepts deposits from the public &lends money. The views of some eminent scholars are quoted below: In the words of Prof. Sayers, A bank is an institution whose debts are widely accepted in settlement of other peoples debts to each other.

According to Findlay Shiras, A bank is a person firm or company having a place of business where credits are opened by deposits or collection of money or currency or where money is advanced or loaned. Section 7 of banking regulation act 1949 makes it essential for every company carrying on the business of banking in India to use as past of its name at least one of the words banks, banker, banking or banking company. C) Indian Banking System 16

Reserve Bank of India

Banking Institutions

Commercial Banks

Regional Rural Banks

Cooperative Banks

Among the banking institution in the organized sector, the commercial banks are the oldest institutions having a wide network of branches. For financing agriculture and allied activities in the rural areas, co-operative credit societies and central co-operative banks have been participating since long. Commercial banks began their active participation after the nationalization of major banks in 1969. Since, the study focuses on co-operative banks,(based on case study conducted in the Kapurthala central cooperative bank ltd. Kapurthala). Therefore cooperative banks are discussed in detail forth with.

Classification of bank: Commercial bank Investment or Industrial Bank Exchange Bank Co-operative Banks Land development Banks Saving Bank Central Bank

1.

Commercial Bank:

Commercial

banks

perform

all

the

business

transactions

of a typical bank Commercial banks accept three types of deposits. The 17

savings Bank deposits, fixed deposits & current deposits. They accept these deposits, which are repayable on demand or on short notice. As such, they send or invest only for shoot durations. They provide funds only short term funds of trade & commerce. The commercial banks confine their activities to day to-day functions of trade & industry. Since the commercial banks are expected to meet immediate requirement of depositors, they cannot invest creditors & our drafts. The commercial banks render an important service by providing to its customers a simple means of exchange

Functions of commercial bank are:

1. Receiving of deposits 3. Investment 2. 4. Lending of funds Creation of Money.

Industrial banks or investment banks: Investment Banks are provides

fixed capital or long term loan to industries. As they finance industries they are called industrial banks. They are also called investment banks as they invest their funds in subscribing to the shares & debenture of industries.

The main functions of industrial Banks are :

1. 2. 3. 4. 5. 6. They grant long term loan to industries. They subscribe to the share capital & dentures of industries. They under write shares & debentures Provide technical assistance Participating in the management by having their representatives in the board of industry Advice the type of industry to be set up

3.

Agricultural Banks: These are the banks provide finance to agriculture. As

they finance agriculture mainly they are called agricultural Bank. Agricultural Banks are in our country based on co-operation system 18

They are of 2 types. 1. Agricultural co operative banks 2. Land development banks.

1. Agricultural co-operative banks land development banks.

The farmer, provides shooter finance to purchase fertilizers, pesticides, seed & the payment of cages where as the later provided long term finance to the farmers to purchase agricultural machinery installing pump set, improving plants, repayment of old debts, construction of Irrigation work ele.,

2.Land development banks: LDB's are those banks which

provide finance to the poor people who are having no land , who are willing to take land's by providing some finace.

4.

Exchange Banks: These are the banks finance mainly the foreign
Exchange business of a country they are called exchange banks because they finance mainly for the foreign exchange business the main functions are: 1. Purchasing discounting, export & import of bills 2. Collecting exports Bill of exchange on behalf exporters 3. accepting Bill of exchange on behalf of Importers 4. Provides necessary trade information to both

5. Provide remittance facility not only to the business men but also to the tourists. 6. They purchase & sell god silver & foreign currency.

5.

Savings bank: These are special banks specialize on the Mobile

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Station of small savings of middle & low-income groups they are called savings bank because they are concocted as mobilization of small savings. In our country the business of selling banks is formed by commercial banks & post office the principle function are: Mobilizing small & scattered savings of people promoting the habit of thrift [loess spending expenses & savings]

6.

Central Bank: A central bank is the highest bank & monetary

Institution of a country it operates under the control of state & works for the promotion of monetary & Economic stability of the country the main functions are a. It has monopoly in issuing currency notes b. Acting as a banker to government c. Serving as bankers bank & Acting all controller of credit d. Acting as custodian of nations gold & foreign

7.

Mixed banking: Mixed banking is the system under with the commercial banks provide shorterm & long-term finance to industrial concern Here the commercial banks mix or combine the commercial banking & industrial or investment banking functions. Commercial Banks: Commercial banks are banks, which accept deposits from the public & lend them mainly to commerce for short periods. As they finance mainly commerce, they are called commercial banks. Commercial banks are found all over the world & they dominate the banking system in every country.

Functions of commercial banks: The functions of commercial banks are numerous they can be broadly divided into two types 1. Primary function 2. Secondary function. Primary Functions: The primary function of commercial bank are : Receiving of deposits 20

 Lending of funds Investment of funds on securities Creation of Money 1. Receiving Deposits: Deposits constitute the main source of funds for Commercial banks. Commercial bank receives deposits form the public on various accounts. The main types are: Current Accounts Savings deposit Account Fixed deposit account Recovering deposit account 2. Lending of funds: Lending of funds constitutes the main business commercial bank. The major portion of the funds of commercial bank is employed by way of advances. As advances from the chief source of profit for banks. Bank lends funds to the public by way of: Loans Occur drafts Cash credit Discounting of bills 3. Investment of funds on securities: They invest considerable amount of their funds in government & industrial securities. In India commercial banks are required by statute to invest a good portion of their funds in government & other approved securities. Creation of Money: Commercial banks not only receive deposits from the public & lend them to needy. But also create money. In the process of lending funds they lend many times more than the cash deposits. They receive from public Secondary Function: A part from performing the main fictional of accepting deposits & granting advances a banker performs a number of subsidiary services banker will be able to earn the good will of his customer & attract fresh customers. 21

D) Co-operative Banks 1. ORIGIN The origin of the cooperation credit movement can be traced to the plight of the masses in Germany and Italy in the middle of the 19th century owing to financial incapacity of people, Hermann Schulz, in 1850, started a loan society with 10 members all artisans and later developed it as a self supporting institution with its own capital. 12 years later, Raiffeisen founded at a co-operative credit society for the benefits of farmers. In small and undeveloped countries, co-operative credit has been found to be an ideal agency for canalizing agricultural finance. Its serving the masses by bringing banking facilities at their doors and enabling them to pursue their productive activities. In Europe, only one third of co-operative societies are credit co-operatives but in Asia the co-operative movement is dominated by credit co-operation and half of the credit societies of the world are located in this one continent. The origin of co-operative banking in India dates back to 1904 with enactment of Cooperative Societies Act 1912 for facilitating the establishment of new organizations for supervision, auditing and supply of co-operative credit. The co-operative banks were conceived in order to substitute unorganized money market agencies, such as money lenders that were providing credit often at exploitative high rates of interest. 2. MEANING A co-operative bank is an organization established in accordance with the provisions of the co-operative acts. They are an important constituent of Indian financial system. Cooperative banks are a part of the vast and powerful superstructure of co-operative institutions which are engaged in the tasks of production, pressing, marketing, distribution, servicing and banking in India. 3. DEFINITION To quote` Devine,

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Co-operative bank is a mutual society formed, composed and governed by working people themselves for encouraging regular saving and granting small loans on easy term of interest and repayment. 4. COMMERCIAL BANKS & CO-OPERATIVE BANKS Co-operative banks similar to commercial banks in the methods of business but differ vastly in matters of organization and management. Establishment: Co-operative banks are established under the co-operative societys acts of different states. Commercial banks are organized either as joint stock companies under the companies act 1956 or as a public co-operative under separate acts of parliament. Structure: Co-operative banks have a three tier set up. Commercial banks are organized on a initiatory basis. Access to bereave bank of India: RBI is lender of first resort for co-operative banks RBI is lender of 19th resort for commercial banks. Area of operations: Co-operative banks function with in a given area. Their operations restricted to a particular state in case of a state bank. Commercial banks function over a wide area which not limited to geographical boundaries. Focus of financing: Co-operative banks have been basically rural oriented and engaged in financing agricultural allied activities. Commercial banks, till 1969 were urban oriented and financed organized trade and industry. Principles of working: Co-operative banks proceed on the principle of co-operative. Commercial banks function on sound business principles. Extent of liability: 23

Shares of co-operative banks carry unlimited liability. Shares of commercial banks carry limited liability. Voting power: Co-operative banks share holders cast only one vote one person, irrespective of number of shares held by a person. Commercial banks share holders cast votes according to number of shares held by them. 5. C-OPERATIVE BANK IN INDIA The co-operative banks in India started functioning almost 100 years ago. The co-operative bank is an important constitute of the Indian financial system, judging by the role assigned to co-operative banks the expectations they are supposed to fulfill their number and the number of offices they operate. The co-operative movement originated in the west, but the importance that such banks have assumed in India is rarely paralleled anywhere else in the world. They play a very important role in rural financing even today. The business of cooperative banks in the urban areas also has increased number of primary banks. Co-operative banks in India are registered under the Co-operative Societies Act. They are also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws Act, 1965. a) Features of co-operative banks: Today co-operative banks continue to be a part of as set of institutions which are engaged in financing rural and agricultural development some distinguishing characteristics of cooperative banks are given below Principles: Co-operative banks are organized and managed on the principles of co-operative self help and mutual help. They function with the rule of one member one vote. Objectives: They function on basis co-operative banks by their very nature do not pursue the goal of profit minimizations. Range of functions: 24

Co-operative banks perform all the main banking function of deposit mobilizations supply of credit and provision of remittance facilities. Functional specialization: Co-operative banks provide limited banking products and are functionally specialized in agriculture related products. How ever co-operative bank now provide housing loans also. State co-operative banks and central co-operative banks can normally extend housing loans up to Rs. One lack to an individual and urban co-operative bank can extend such loan Rs 3 lack. UCBs can provide advances against shares and debentures also. Area of operation: Cooperative banks do banking business mainly in the agriculture and rural sector. However, UCBs, SCBs and CCBs operate in semi urban, urban and metropolitan areas as well. The cooperative banks demonstrate a shift from rural to urban while the commercial banks, from urban to rural Extent of government cooperation: Cooperative banks are perhaps the first government sponsored, government supported and government subsidized financial agency in India. They get financial and other help from the RBI, NABARD, central government and state governments. They constitute the most favored banking sector with no risk of nationalization for cooperative banks; RBI is lender of first resort which provides financial resources in the form of contribution to the initial capital (through state government) working capital and finance. The promotional role of RBI supersedes its regulatory role in respect of cooperative banks. Government intervention: Theres a lot of government intervention in the working of cooperative banks. They are subject to the control audit, supervision and periodic inspection of the cooperative department of the state government under the cooperative societies act, but less rigorously by the RBI under the banking regulation Act. The RBI & state government lays down rules for investment of surplus resources reserves and the loan policy of cooperative banks. Hence they have less freedom &flexibility in conducting their operations. Partial financial intermediaries: 25

Cooperative banks are financial intermediaries only partially the sources of their finds are central & state government, the RBI and NABARD, ownership finds, deposits or debenture issue, other cooperative institutions. CRR &SLR requirements: They are subject to CRR & SLR requirements of 3% and 25% respectively. b) Areas of financing: Cooperative banks finance both rural & urban areas. Rural Areas of financing Farming Cattle Milk Hatchery Personal finance Urban Areas of financing Self employment Industries Small scale units Home finance Consumer finance Personal finance c) Some facts about cooperative banks in India:

Some cooperative banks are more forward than many of the state and private sector banks. According to NAFWB the total deposits & lending of cooperative banks in India is much more than old private sector banks and also the new private sector banks. This exponential growth of cooperative 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. 2. Central cooperative banks: 26

The banks work at district level and the working area of there banks is limited to the one finance their members and they also canalize finds from the SCBs to PA Management: CCBs may have 10-20 members. They are managed by a board of directors who are elected by its members. Every members has one vote, directors are elected on the basis of democracy. Functions: They provide credit to the primary agricultural credit societies without any security. They accept deposits from the public. They grant credit to their customers. They provide remittance facilities. They keep an eye on primary societies and progress of recovery of loans. Limitations: The loans are granted on the basis of political consideration due to intervention of political leaders. They pack proper coordinates. They have low level of deposits and high level of over dies i.e. recovery rate is very low. They lack efficient and trained staff.

3. Primary agricultural credit societies: These societies work at village level and from the base of the cooperative banking. These societies provide short term facilities to agricultural sector. Minimum 10 persons of a village (or area) can form a primary credit society. These societies grant short term loans (generally for one year) for productive purpose, but this period can be extends to 3 years under special circumstances. PACSs have to disburse 60% of their total advance to primary sector and at least 25% to weaker sections of society. 27

Management: PACs are managed on the principles of democracy. All the members of the society collective from the general body of PACs. The members elected the managing committee of the society each year, which consists of president or chairman, secretary and its members. Functions: Encourages saving habits among rural masses. Provides short term loans. Distributes fertilizers and seeds to the members. Short falls: They fail adequately fulfill the credit needs of the small farmers and tenants. A large number of them lack potential liability. PACSs have failed to mobilize deposits from non members. Has insufficient finds to finance advances to the members.

THE MAJOR CO-OPERATIVES WORKING IN THE PUNJAB ARE:1) Punjab state co-operative bank:

Its a premier financing institution of the state which has played a vital role in the development of short term credit structure. It has 19 branches and 3 extension counters in Chandigarh and 20 central co-operative banks along with affiliation of 800 branches which provide agriculture loan to farmers.

28

The bank has bagged national best performance award and its central co-operative banks jalandhar, Nawanshahar have also won the best performance awards time to time. PSCB awarded first prize twice for excellent performance by NABRAND. 2) Punjab state co-operative agricultural development bank:

It gives long term loans for all around development of agricultural and allied activities including the improvement of land and methods of cultivation. 3) Markfed: Markfed is the Asia biggest co-operative venture that helps farmers in marketing of their agriculture produce through co-operative marketing societies. Markfed is acting as a price support agency in the field of food grain, oilseeds and other agricultural products and ensures that the market rates dont fall beyond the support price. It runs which have a status of mandiyard. 4). Milk fed:

Milk fed is an apex federation of milk producers. It has promoted dairy farming at village level in a big way. 5). House fed: Its playing a gigantic role to mitigate the problem of shortage of

houses. Its contributing for the better civilization and life style of the society. It extends loans for the construction of houses in rural as well as urban.

Services Provide By Cooperative Bank

A new scheme namely Kisan Credit Card Scheme has been implemented by the bank for the benefit of farmers. The Scheme improves upon existing scheme of Crop Loans by allowing the farmers flexibility and freedom of choice to avail and repay loans as per their requirements. Under the scheme, Total Limits worth Rs. 5997.50 crore have been sanctioned to 887173 KCC holders in the state. 29

1) Non Farm Sector Loan

With a view to diversify and benefit the small industrialists & businessman, the cooperative bank has started non-farm sector loan depending upon the requirements of the projects. These loans are given to the rural youth for self-employment. The Central Cooperative Banks have advanced Rs.4950.81 lacks from 1-4-2007 to 31-3-2008 to 8013 beneficiaries. During 2008-12(up to Jan.) Rs. 3498.00 Lacks have been disbursed under this scheme.

2) Cash Credit to Traders & Businessmen

With a view to provide the cash credit facility to traders and others for meeting the working capital requirements of the business, a cash credit limit up to Rs.25.00 Lacks can be sanctioned to small businessman and traders depending upon their business turnover on easy terms at a normal rate of interest. During the year 2007-08, the central cooperative banks have sanctioned Rs.29091.28 lacks under the scheme up to Jan. 2012, limits worth Rs. 30426.00 lacks have been sanctioned under this scheme since inception.

3) Personal Loan
A specially designed personal loan scheme has been framed which aims at providing credit facility for meeting out social needs of employees, such as children education, furnishing home, buying a computer, sons/ daughter marriage, holiday tour with family or any other basic requirement without giving any purpose for the loan. Under the scheme, every govt / semi govt employees is provided loan up to Rs.2.00 Lac repayable in 5 years in easy monthly installment. During the year 2007-08, the Central Coop. Banks have advanced Rs.12164.46 Lacks under the scheme. During 2008-12 (up to Jan), Rs.10227.00 Lac have been disbursed in the state.

4) Consumer Durable Loan

With a view to provide credit facility to their customers, the cooperative banks have introduced a scheme of loan for purchase of consumer durable. Under the scheme, every employee is provided loan up to Rs.1.00 lack and non-salary person is provided loan up to 30

Rs.50000 repayable in 5 years in easy monthly installments. The loan can be utilized for purchase of T.V., refrigerator, scooter, furniture etc. A significant section of the salary class has benefited from the scheme. During the year 2007-08, the Central Coop. Banks have advanced Rs.7695.31 lacks under the scheme. During 2008-12(up to Jan.) Rs. 6031.00 Lacks have been disbursed under this scheme.

5) Urban Housing Loan Scheme

With a view to provide the housing loan to individual and members of house building society the Bank can advance a loan up to Rs.25.00 Lacks for the purchase of plot, purchase of built up house, construction of house, repair, addition, alteration etc. in the existing house. Loan shall also be given for acquiring a plot, flat, house in an existing cooperative house building society and approved scheme of PUDA, HOUSEFED, Improvement Trust or any other govt. agency. . During the year 2007-08, the Central Coop. Banks have advanced Rs.3961.62 Lacks under the scheme. During 2008-12(up to Jan.) Rs. 3176.97 Lacks have been disbursed under this scheme.

6) Rural Housing Loan Scheme

With a view to provide housing facility to the masses which is a basic need of human need the Central Coop. Banks has designed a scheme particularly for rural people, where other financial institutions are reluctant to advance. Under the scheme, maximum loan up to Rs.15.00 Lacks can be advanced for purchase of built up house, construction of a new house or repair/ renovation / addition/ alteration of existing house in rural areas. During the year 2007-08, the Central Coop. Banks have advanced Rs.5959.08 Lacks under the scheme. During 2008-09, Rs. 4133.25 lack have been disbursed under this scheme upto Jan. 12.

7) Mini Dairy Loan Scheme

The Central Coop. Banks through its branches are extending loan facility to the farmers for dairy development/ mini dairy for purchasing 25 cattle. Under the scheme, a maximum loan up to 5 Lacks can be advanced with a ceiling of Rs.25000 for each animal. During 31

2007-08 Rs. 275.54 Lacks have disbursed by CCBs in the state. During 2008-12(up to Jan.) Rs. 217.78 Lacks have since been disbursed.

8) Vehicle Loan Scheme

With a view to provide the vehicle loan to individuals, firms, HUF, companies, trust and cooperative societies etc. a financial assistance up to Rs.10 Lacks is provided for the purchase of new vehicle. During the year 2007-08, the Central Coop. Banks have advanced Rs.6128.29 under the scheme. During 2008-12(up to Jan.) Rs. 6809.00 Lacks have been disbursed under this scheme.

9) Two Wheeler Loan to farmers

Under the scheme the bank can grant loan to the farmers for purchase of two wheeler up to Rs.50000/-. During the year 2007-08, the Central Coop. Banks have advanced Rs.3962.62 Lacks under the scheme. Similarly, during 2008-12 (up to Jan.) Rs. 1885.59 Lac have been disbursed under this scheme.

10) Second hand vehicle loan scheme In the modern era there is a heavy demand
of second hand vehicles and the banks have surplus loan-able funds to diversify the loan portfolio and to provide financial assistance to the borrowers for purchase of second hand vehicle, this scheme has been devised. Under the scheme loan upto Rs 5 Lacs can be sanctioned for purchase of second hand vehicle. .

11) Education loan scheme

With a view to provide the education facility to the children of the employees a loan up to Rs. 10 Lacks can be sanctioned under the scheme. . During the year 2007-08, the Central Coop. Banks have advanced Rs.234.73 Lacks under the scheme. Similarly, during 200812(up to Jan.) Rs.399.51 Lac have been disbursed under this scheme.

32

New schemes launched by the Bank 1) Loan against property The scheme is for providing finance against mortgage of
immoveable property & is designed to offer instant solutions relating to socio economic and business needs such as children higher education travel / daughter marriage, medical emergencies etc. Under the scheme maximum loan up to Rs.25 Lacks can be advanced. During 2007-08, CCBs have disbursed Rs. 325.14 Lacks in the state. During 2008-12(up to Jan.) Rs.1459.68 Lac have been disbursed.

2) Loan scheme for earnest money In order to meet the requirements of the public
the bank has launched a loan scheme known as Loan scheme for earnest money to meet the financial requirements towards the earnest money deposit to book residential plot/ built up house, flats being sold by govt. housing agency, urban development authority like; PUDA, HUDA and Housing Board etc.

3) Loan against rental income scheme For meeting business/ personal needs a
new scheme for property owners having their property situated it the area of operation of the bank and who have let out or proposal to let out such property to PSUs, reputed govt/ semi govt/ corporate, banks, financial institutions, cooperative societies, insurance companies etc. is launched. The minimum amount under the scheme is Rs.1 lack, there is no upper limit but it must be within prudential exposure norms. During 2008-12(up to Jan.) Rs.77.50 Lac have been sanctioned under this scheme.

4) Commercial Dairy Development scheme

To increase the income of milk producers by helping them to purchase high yielding milt cattle and to purchase necessary equipments for the purpose, a new scheme known as commercial dairy development scheme has been launched for the central cooperative banks. Under the scheme the bank can provide maximum loan up to Rs. 25 Lacks. During 2007-08, CCBs have disbursed Rs. 21.64 Lacks in the state. During 2008-12(up to Jan) Rs.64.49 Lacks have since been disbursed.

33

5) Dairy Loan Scheme for purchase of a cow

Under the scheme a member of the Milk Producers Society can be advanced upto Rs.0.50 Lacks for the purchase of a cow. During 2007-08, CCBs have disbursed Rs. 27.84 Lacks in the state. During the year 2008-12(up to Jan.) Rs. 225.75 Lac have since been disbursed by CCBS in the state.

Future Prospective
Cooperatives are not unaffected by structural adjustments and globalization of commodity market. As a result, Cooperative Banks are required to redesign their strategies for sustainability and growth. The economic reforms initiated by the government of India in 1991 have affected the Financial Institutions including the Cooperative Financial Institutions. These reforms aim at liberalization and deregulation of Indian economy.The Cooperative Banks of Punjab have accepted the reforms in Indian economy, especially, the financial reforms in right spirit. Since these Banks have mainly been providing credit to agriculture sector, changes in agricultural economy affect them more closely. The Banks envisage following scenario as a result of liberalized agricultural policy : Liberalization of agricultural policy would result in greater capital intensity and borrowed capital requirements of agriculturists. In order to induce diversification and produce quality products for international market. For this purpose, Punjab farmers would need greater credit support for improved technology, seeds and agro-inputs. Liberalized agricultural policy would reverse the process of fragmentation of land holdings and would result in exodus of employment opportunities from agricultural sector to other sectors of economy. Such as small business enterprises, services and industrial sector. Liberalization of agriculture would professionalize and modernize agriculture, thereby earning a status of industry attracting high skilled professionals in agriculture sector.

34

Liberalized agricultural economy would lead to a greater role of private research and development institutions in improving the productivity and quality of agricultural operations. .

PROFILE OF THE KAPURTHALA CENTRAL CO-OPERATIVE BANK LIMITED KAPURTHALA

Establishment& location: The kapurthala central co-operative bank ltd. Kapurthala was

registered on July 16, 1920. The area of operation of the bank extends to kapurthala district. Population covered as per 2011 census is 8.15 lack out of which 70% is living in rural areas. Its situated at kanjli road, near octroi, kapurthala. The district is bounded by distt. Hoshiarpur, Gurdaspur, Amritsar and Jalandhar. The Phagwara tehsil of the district is surrounded from all sides by Jalandhar district. The district also touches river beas and sutluj. The normal working hours of bank are from 10.00 a.m. to 5.00 p.m during both seasons summer as well as winter. Network of branches:38 branches operate under the bank out of which 5 are extension counters transacting every type of banking business, being situated at khassan, khallu, kamalpur, dalla and shahwala and risha. 8 branches of the bank accept NRE/NRD deposits. The district has 4 tehsils, 5 blocks and 693 villages. The branches cover under the blocks are;-

35

Kapurthala block Model Town, Kapurthala (Head Office) City branch, kapurthala Baler Khanpur Kala Sanghian Wadala Kalain Shekhupur Sidhwan Dona

Phagwara block Phagwara (Head Office) Ranipur Jagatpu Jattan Rawalpindi Wahad at Monak Rihana Jattan Panchttan Kajurla Palahi

Sultanpur lodhi Block Sultan pur lodhi (Head Office) Tibba Dudwindi Kabirpur Talwandi Chaudhrian

Dhilwan block Dhilwan (Head Office) Srukhpur Bhandal Bet Lakhan ke padde Dhaliwal bet

FEATURES OF CO-OPERATIVE BANKING 1. Co-operative Banks are organized and managed on the principal of co-operation, selfhelp, and mutual help. They function with the rule of "one member, one vote". function on "no profit, no loss" basis. Co-operative b a n k s , a s a p r i n c i p l e , d o n o t p u r s u e the goal of profit maximization. 2. Co-operative bank performs all the main banking functions of deposit m o b i l i z a t i o n , supply of credit and provision of remittance facilities. 3. Co-operative Banks provide limited banking products and are functionally specialists in agriculture related products. However, co-operative banks now provide housing loans also. 4. Co-operative banks are perhaps the first government sponsored, government-supported, and government-subsidized financial agency in India. They get financial and other help from the Reserve Bank of India, NABARD, central government and state governments. 5. Co-operative Banks belong to the money market as well as to the capital market. Primary agricultural credit societies provide short term and medium term loans. 6. Co-operative banks are financial intermediaries only partially. The sources of their funds (resources) are: (a) Central and state government,(b) The Reserve Bank of India and NABARD,(c) Other co-operative institutions,(d) Ownership funds and,(e) Deposits or debenture issues. 7. Some co-operative bank are scheduled banks, while others are nonscheduled banks. Co-operative Banks are subject to CRR and liquidity 36

requirements as other scheduled and non-scheduled banks are. However, their requirements are less than commercial banks. 8. As said earlier, co-operative banks accept current, saving, and fixed or time deposits from individuals and institutions including banks. 9. In the recent past, the RBI has introduced changes in interest rates of co-operative banks also, along with changes in interest rates of commercial banks. The interest rates structure of co-operative banks is quite complex. The rates charged by them depend upon the type of bank, the type of loans, Co-operative Banking and vary from state to state. 10. Since 1966 the lending and deposit rate of commercial banks have been directly regulated the Reserve Bank of India. Although the Reserve Bank of India had power

.Distinguishing features of the bank

The kapurthala central co-operative bank is the first bank in Punjab that has been issued banking license by the RBI under the banking regulation act, 1949. The bank has its own 7 buildings 8 branches of the bank accept NRE/NRD deposits. Audit classification of the bank is A class. The bank is maintaining this status since 1980. The bank has obtained ISO 9000:2000 certificates. Total no of 493 societies are affiliated with the bank out of which 101 are PACCs. Organization structure of the bank elected as on 27.02.2006

BODs (9)

37

R E S P N S I B I L I T Y

District manager (1)

Senior manager (5)

Manager (45)

A U T H O R I T Y

Assistant manager (60)

Accountants (40)

Clerks (58) Management: The affairs of the bank are regulated, supervised, managed and controlled by the board of directors. Constitution of BODs: 1 Chairman BODs 1 Vice Chairman 1 Managing Director 6 Executive Members

APPOINTMENT AND TENURE:

38

a)

Chairman: Appointment by: Tenure: Elected members 5 years from the date of election

b)

Vice Chairman: Appointment by: Tenure: Elected member 5 years form the date of election

c)

Managing Director: Appointment by: Tenure: Elected member 5 years form the date of election

d)

Executive member: Appointment by: Tenure: Elected member 5 years from the date of election

Objective: The objectives of the bank are:To provide the best banking services to its customers. To be wedded to quick service. To provide services with a smile To achieve customer satisfaction To provide quality service To build and maintain cordial relations with the customers

Principles: The principles governing the work behavior of the bank are:39

Voluntary and open membership Democratic member control Autonomy to independence Education, training to information Deposit: Referring to banks, professor Sayers have said that bank is a not only dealer in money but also manufacture of credit money. It is in the sense of manufacturing that the concept of credit creation is used. The banks cannot create any money. But they can create money through deposit creation. Deposit creation is an important function of commercial banks without deposits. They cannot lend at all. Deposit creation is by two types. When the bank receive cash from the customers. Deposits are created. This deposit may be savings bank deposit or current deposit any amount deposited in these accounts could be withdrawn by issue of cheques. If there is no limit for with drawl. Then that deposit is called current account. If there is any restriction for withdrawal. Then it is called saving bank account savings deposits may be of several types such as fixed deposit, recurring deposits etc current deposit are used for payments that may arise in future. In the case of current deposits the depositor wants the bank to offer facilities to withdraw in the form of cheques as many times as possible. In the savings bank account, the depositor does not expect these facility , but expert compensation in the form of interest. The Bank attracts deposits from the people either by means offering interest or other facilities. Business people want facilities with drawl more than interest. Nonbusiness people opiate savings account. A customer may open any type of account. If he opens a current accounts & if there is substantial money in that account. He may transfer money from current account to the savings account & vice versa. The bank has nothing to do with this behaviors of the customer. Meaning of Deposit : Deposits represents the amounts accepts by a bank from the deposits. It is the most important intern on the liability side because 1. They are major portion of the funds received by a bank 2. The capacity of a bank to earn profits depends on the volume of deposits 3. The efficiency of a bank is judged by its ability to attract deposits.

Primary And Derivative Deposits: Deposits may be created in two ways. When the customer tenders cash into the bank, then the deposit account is opened & the amount is credited to his account. It is called primary deposit. Using this cash the bank buys various assets in the form of short 40

term bills of exchange securities. Share & stocks or it may lend in the form of cash credit to the industries. While buying these assets or lending money to the business people, cash is not given to them but demand deposit are opened, these deposits are called secondary deposits or derived deposits. If the banks have to create demand deposits. Existence of primary deposit is essential. The initiative of creating such deposits lies with the banking system. The banks may either create of May not create such deposits. If the banks find that there are sufficient short term bills of exchange. Then they may show interest in creating these deposits. The cash received in the form of savings deposits will be used by the banking system to create derived deposit They are called derived deposits because they originate from the primary deposits. These derived deposits also add to money supply. Types of Accounts, which are Held in Bank 1. Current deposit account: [Current or Running account}

A current account is an account, which is generally opened by business people for their convenience. Money can be deposited & withdrawn at any time. Money can be withdrawn by means cheques. Usually, a banker does not allow any interest on this account. Even then, people come forward to deposit money on current account because of two important privileges, which they can enjoy in a current account Namely: 1. 2. Over draft facility Other facilities like collection of cheques. Transfer of money & rendering agency & general utility services. That is why current account holder do not mind a banker chagrin some commission for services rendered & incidental charges for maintaining the account whether it is in debit or in credit. Even though a banker does not allow any interest, he charges interest on overdraft on a day to day basis. In bank of Maharashtra US. United constructions co & others, it was held that when a customer over-draw the account with or without express current Account holders should keep a minimum balance of Rest 500/- to keep account running. In a mechanized branch, a minimum balance of Rs 5000 has to be maintained. If this minimum is not kept, a minimum charge of Rs 11/- per operation will be debited to the account. The bank sends a statement of account to the customer every month. As these deposits are repayable on demand. The banker should keep a large cash reserve. This may be one of the reasons why a banker does not pay any interest on the current deposit. 2. Fixed Deposit Account: A fixed deposit is one, which is repayable after the expiry of a predetermined period fixed by the customer himself. The period varies from 15 days to 3 years. A deposit account can be opened for a period of more than 3 years & in that case the rate of interest remains the same level. In England these deposits are not repayable on demand but they are with draw able subject to a period of notice. Hence, it is popularly known as Time Deposit or time liabilities. In India also, the banks have began to call it 41

term Deposit Normally the money on a fixed deposit is not repayable before the expiry of a fixed period. 3. Saving Deposit: This deposit is intended primarily for small-scale savers. The main object of this account is promotion of thrift. Hence there is restriction on with drawls in a month. Heavy with drawls are permitted only against prior notice, generally, the number of with drawls permitted is 30 per half year. This account can be opened with a minimum of Rs500/ Generally, overdraft facility is not available in the savings Bank Account, However, instant credit facility unto Rs 2500/- only is available to savings bank customers for their outstation cheques provided such cheques do not arise out of trade transactions. 4. Recurring Deposit: It is one form of savings deposits depositors save & deposit regularly every month a fixed installment so that they are assured of the sizeable amount at a later period. This will enable the depositors to meet contingent expenses. Banks have found this deposit popular. Many people would not have saved If these deposits had not been introduced. This deposit works on the maximum little drops of water make a big ocean. Any person can open this deposit account. He can even have than one account at a time. This account can be opened in joint name also. For deposit of higher installment, the maturity can be Calculated as multiples of maturity amount for an installment of Rs5/- .

Research design

Introduction: 42

A research design is a plan of action to be carried out in connection with a research project. The design may be a logical presentation of the various steps in the process of research. These steps include The statement of problem , Objectives of the study, Scope of study sampling, tools & techniques of data collection, Plan of analysis limitation and chapter schemes. According to Claire sleets & others A Research design is a arrangement for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. The study has been undertaken on "the schemes of Deposits at INDIAN BANK " the objective of this study envisages on deposits management on loan portfolio of the bank. Also an attempt has been make to identify the techniques and suggest strategies for arresting the existing deposits and prevent the re- emergence of fresh deposits at the INDIAN BANK.

Title of study: A Study on the deposit schemes at Indian bank.

Statement of the problem:

In the present scenario, the banks are playing an important role in the Economic development of our country as they helps in encouraging the people to make savings. These savings are attracted & made to deposit in the banks for further productive investment. For the purpose of this the bank has introduced many deposit schemes according to the convenience of people based on the different categories. So, it is felt very much essential to make a study on these deposit schemes that how it influences on the development of Economy & what are the conditions & terms that are to be fulfilled to make the deposits under various schemes.

43

Objectives of the study:

1. To ascertain the problem faced by bank by Public regarding Deposit 44

2. To know the different schemes of deposits provided by cooperative bank.. 3. To suggest ways & means of developing the deposit schemes. 4. To know the interest rate & other facilities provided by bank to deposit holders 5. To study & know the financial problem of Bank 6. To provide manager with report to help them to Encourage Customers for depositing. 7 . To know the feedback of the customers. 8. . To the findings & suggestions come out with

Scope of the study: In todays world, banking services plays on important role in
every lives of individuals. The technological advancements in the banking sector have grown rapidly in the last years. This has led to the birth of new generation banks & competition. The study basically focuses towards the observation of the operations & performance of Indian Bank regarding deposits. The study with in its scope has tried to find out the new trends promoted by the Indian Bank regarding deposits. This study attempts at understanding how Indian Bank functions in its changing scenario & how each department at the head office contributes to the success.

45

Review of literature focuses on the earlier studies on financial performance. These studies are helpful in assessing the limitations, findings and suggestions involved in such studies. A study by Das 46

compares performance of Public Sector Banks for 3 years in the post reform period, 1992, 95, 98. He notes that while there is a welcome increase in emphasis on non-interest income, Banks have tended to show risk averse behavior by opting for relatively risk free investments over risky loans. Manish Mittal and Aruna Dhade Made a comparative study on Profitability and productivity in Indian Banks. A five years period (1999-00 to 2003-04) has been selected for evaluating the performance. In their study they found that the improved profitability is the only key parameter for evaluating performance from the shareholders point of view. Now it is up to the bank management to decide how to strike a trade-off between social and commercial banking in order to improve market holdings and services and play the role of governments agent at the same time. In our study, we found that the public sector banks are less profitable than the public sector and foreign banks in terms of overall profitability (Spread Burden ratio) but profitability is improving over the last 5 years. Foreign banks top the list in terms of the net profitability. Non interest income of private sector banks is higher as compared to public sector banks because private sector banks are offering more and more fees based services to their different customer categories (like commission, exchange brokerage etc). There is a pressing need for introducing more services to the customer by the public sector banks to have an advantage of competitive over private and foreign banks. Analysis of the Efficiency and Profitability of the Japanese Banking System Elena Loukoianov. The paper analyzes the efficiency and profitability of Japanese banks from2000-06. It uses a non-parametric approach, the data envelopment analysis (DEA) to analyze banks cost and revenue efficiency. One possible reason for the weak profitability of Japanese banks is their low level of risk taking. This paper presents the data on the level of profitability of Japanese banks and then examines the level of risk taking of (i) four segments of the Japanese banking sector and (ii) banks in selected industrial countries. The data, which are present in terms of core profit, average return on assets (ROA), return on equity (ROE), and net interest margin, indicate the low level of profitability of Japanese banks.

A Study by CRISIL According to a Credit Rating and Information Services of India (Crisis) study, Lower operating expenses including rationalization of employee costs have improved the profitability of banks, contrary to the popular perception that only trading profits helped the banking sector shore up their bottom lines. The reduction in operating expenses was achieved through large-scale voluntary retirement schemes implemented by public sector 47

banks. Since this reduction in operating expenses seems sustainable, it promises a brighter future for the banking sector. According to this study for private sector banks, the profitability improvement was mainly because of the increase in treasury income and not due to any material reduction in operating expenses. But since public sector and foreign banks account for over 80 per cent of the total assets of all scheduled commercial banks, a reduction in their core operating expenses contributes significantly in improving the profitability of the entire Indian banking sector .

48

49

Methodology
Personal interview was adopted for collecting data from Indian Bank regarding deposits schemes for collecting primary data and secondary data is collected through the following

1. 2.

Financial Books Annual reports

Tools & the techniques of data: Analysis & interpretation of data in based on both
primary & secondary data.

Primary data: Primary data are the first hand information collected, through various
methods such as observation, interviews.

Secondary data: Secondary data are obtained from text books, magazines, news paper
& Annual reports & Broachers of the bank & official website.

Limitation of study:
Every efforts has been made to make study complete & has exhaustive as possible, however the study is not free from certain limitations. 1. Some times respondents dislikes to discuses regarding data collection. 2. Time limit for the study 3. The study is only confined to Indian Bank & the performance of other banking company is not compared with it. 4. The collected information is limited & factual to some extent since some information is confidential & Bank opposed to dispose it . 5. The Exhaustive study has not been made on Indian Bank & is limited to the partial fulfillment for the degree of B.B.M..Collection of data & study was based purely on observation of the operation of Indian Bank constraint.

50

Steps of methodology:
Collection of data Organization of data Presentation of data Analysis of data Interpretation of data

1. Collection of data: Both the primary data and secondary data has been collected from the bank. The secondary data was provided through the annual report; balance sheet etc. of the bank and the primary data was collected through the medium of face to face interactions/ interviews with the employees of the bank. 2. Organization of data: Data once collected needed to be organized for further processing. 3. Presentation of data: The data collected is of no use unless and until it is given in a presentable form. Thus, after proper organization, the data is given in a presentable form with complete details with the help of Ratios, Trends, bar diagrams, pie charts etc. 4. Analysis of the data: The data is carefully analyzed keeping in consideration both the pros and cons for the purpose of arriving at concrete solutions. 5. Interpretation of data: After carefully analyzing the data, it has been aptly interpreted in order to give concrete solutions and proper recommendations.

ANALISIS AND INTERPRETATION

51

Deposit creation is an important function of commercial bank. The bank attracts deposits from the people either by means offering interest or other facilities business people want facilities with draw more then investment. Meaning : Deposits represents the amounts accepted by a bank from the deposits it is the most important item on the liability side because o They are major portion of the funds received by a Bank o The capacity of a bank to earn profits depends on the volume of deposits o The efficiency of a bank is judged by its ability to attract deposits.

Deposit:

Types of deposits
There are two types of deposits are : Deposits Term Deposits Demand Deposits

Fixed Deposit

Recurring Deposit

Current Account Deposit

Saving Bank A/c Deposits

Saving Bank Deposit scheme :

These are opened by middle & low income groups who save then part of present income for future needs proper introduction is necessary when accounts are operated by cheques. A low rate of interest provided on the deposited money.

Terms and conditions in the savings bank deposit scheme :

52

Conditions which are required for opening Saving Bank Account Savings Bank Account may be opened by the following, who are known at the bank or are properly introduced by other. An individual in His / Her own name By more than one person in their joint names payable to all of them jointly or any one of them or more than one or survivors By natural guardian of a minor on behalf of the minor or by a person in the name of any minor of whom he or she is a guardian appointed by a competent court. The guardian on behalf of a minor should furnish a declaration as t the date of the birth of the minor. By a minor over the age of 12 years in his own name in which case the maximum balance in the minors account shall be restricted to Rs 10000 / - only, provided the minor produces satisfactory proof of his / her date of birth such as school certificate etc. By secretaries, Treasurers, managers or other duly constituted or authorized officers of any club, school, orphanage, Temple, Mosque, church or other religious / charitable institutions of like nature provided the rules & by laws governing such institutions is acceptable to the bank. Companies licensed by the central government under section 25 of the companies Act 1956, & institutions, which are not liable to pay income tax under income tax act 1961.

How to open savings Bank Deposit Account:

Persons desiring to open savings Bank Accounts are required to fill in & sign application form [11-394] along with the usual specimen signature cards, producing two pass port size photographs, details of PAN / GIR numbers or declaration in form No 60161 as the case may be & an introduction from a person acceptable to the bank . 53

Minimum Balance Amount Required to open An Savings Bank Account:

A savings Bank A / C may be opened with a minimum balance of Rs 500/ in fully computerized branches & Rs 500/- in other branches to keep the account running. The same minimum balance should always be maintained. If a cheque book is issued, the account shall have a minimum balance of Rs 1000/-.

The details are specific in a chart i.e. minimum balance / Amount required to open an savings bank account
Minimum balance to be maintained Fully computerized branches For opening / maintaining SB Account [ with out cheque book] For opening / maintaining savings bank a/c s [ with cheque book facilities] Rs 500 /Rs 1000 /Other branches Rs 500/Rs 1000/-

If the savings bank account shows balance below the minimum for a continuous period of one year or above, the branch may at its discretion close such Accounts. .

Cheque Books: Cheque books shall be issued only against production of duly signed
requisition slip from the previous cheque book issued .

Restriction, conditions for with drawls in the Savings Bank Deposit Account:
There is a restriction for the withdrawal of the amount in the Savings Bank Deposit Account. The total number of with drawls i.e. debit in Savings Bank Account should not exceed 30 every half year. It is the obligation of the account holder to take care of the cheque books issued to him or her.

Interest paid to Savings Bank Account :

Interest is allowed on the savings bank account on a half yearly basis at the rate prescribed by the RBI on minimum monthly balance between the 10th & the last day of the month. Interest will be calculated for the half year ending 31st January & 31st July each year & will be credited to each account on or before the 10th February & the 10th August respectively each year.

54

5.1 Chart showing % & Increase / Decrease of saving s Bank deposit Account Years Total amount of Deposit % to the Base year 100% 112% 124% 137% 152% 0 12% 24% 37% 52% % of Increase / decrease

2007 08 2008-09 2009-10 2010-11 2011-12

38,11,9410 42,35,4900 47,06,1000 52,29,0000 58,10,0000

60% 50% 40% 30% 20% 10% 0% 2007 2008 2008 2009 2009 2010 2010 2011

52%

37% 24% 12% 0%

2011 2012

% of Increase/ decrease

INTERPRETATION:From the above table, we can observe that the amount deposited in Saving Bank Account has been increased gradually from 2000-01 to 2004-05 . That is in the base year 2007-08 the % of deposit is 100% then it has been increased to 112 % in the year 2008-09, 137% in 2010-11, & 152% in the year 2011-12 55

5.2 Table showing New Account opened in Savings Bank Account. Years Total no. of persons Deposited % to the Base year % of Increase / decrease

2007 08 2008-09 2009-10 2010-11 2011-12

3500 3650 3980 4390 4630

100% 104% 114% 125% 132%

0 4% 14% 25% 32%

0.35 0.3 0.25 0.2

32%

25%

14%
0.15 0.1

4%
0.05 0 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012

% of Increase/ decrease

INTERPRETATION:From the above table, we can observe, that the no. of persons deposited in saving Bank A/c has been increased gradually from 2007-08 to 2011-12 . That is in the base year 2007-08 the % of Deposit is 100% ,then it has been increased to 104% in the year 2008-09, 114 % in the year 2009-10 125% in 2010 11 , & 132% in the year 2011-12. 56

5.3 Table showing total interest amount paid by the bank to savings Bank Deposit holders. Years 2007 08 2008-09 2009-10 2010-11 2011-12 Total amount deposited 3,81,19410 4,23,54900 4,70,61000 5,22,90000 5,81,00000 Rate of interest 3.5% 3.5% 3.5% 3.5% 3.5% Interest amount paid by the bank 13,34,179.35 14,82,421.5 16,47,135.0 18,30,150.0 20,33,500.0

INTERPRETATION:From the above table, we can observe that the interest amount paid by Bank to Saving Bank A/c holders it has been increased gradually from 2007-08 to 201112 that is in the base year 2007-08 the amount of interest is 13,34,179.35 . Then it has been increased to 14,82,421 in the year 2008-09, in the year 2009-2010 the amount of interest is Rs 16,47,135 & in the year 2010-11 the amount is 18,30,150 & in the year 2011-12 the amount paid is Rs 20,33,500 We can analyze that the interest amount of deposit in its scheme is in increasing trend, so we can conclude that this scheme is performing well in attracting the savings of people.

5.3 Chart showing total interest amount paid by the bank to savings Bank Deposit holders. 57

2033500

1334179

1482421 1830150 1647135

2007 2008

2008 2009

2009 2010

2010 2011

2011 2012

2.

Current Account: 58

. A Current A/c can be opened with the initial deposit of Rs.5000/-. It can be opened in the name of individual, a Sole Proprietary Concern partnership firm, club, Religious Institution, Association Govt/ Semi Govt. Deptt., Local Bodies. As usual, all prospective applicants need to fill in the Account opening forms wherein following documents are required to be attached Sole Proprietary Concern Declaration of Sole Proprietorship Partnership firm - Partnership Deed duly attested Clubs, Schools, Societies, Association. Certificate of Registration Copy of Bye Laws. Memorandum of Association, if any. Resolution of Board of Directors. Limited Companies, Pvt. Ltd. Companies Certificate of incorporation Certificate of commencement of business Memorandum & article of Association Resolution of board. Latest Audited Balance Sheet & P&L Account Trusts Instrument or Document of Trust Resolution Certification of registration. Introduction All Current A/c need to be introduced properly from another current account A/c holder only. Staff members are not allowed to introduce a Current A/c. Minimum Balance A minimum balance of Rs.5000/- has to be maintained. . Terms & conditions in current Account : Conditions required for opening current Account : The following persons, firms etc who are properly introduced, may open current account by singing the prescribed account opening form [s] along with PAN / GIR numbers or declaration in form No. 60/61 Obtaining of photographs : In terms of reserve Bank of Indias guidelines, photograph should be given at the of opening of all categories of deposit of opening of all categories of deposit accounts includes current account of both resident & Non resident account holders inclusive of persons authorized open / operate the accounts as application. Minimum Balance Amount Required to open an Current Account: A current Account may be opened with a minimum of Rs 5000/- Staff members are not allowed to introduce a Current A/c. Minimum Balance A minimum balance of Rs.5000/- has to be maintained. Interest on credit Balance : Interest is not allowed on the credit balance maintained in current accounts

Fixed Deposit Account : [ Term Deposits] 59

These are operated by small investments by depositing fixed amount fixed periods fixed rate of interest. The deposited money is with drawn after the expiry of fixed receipt issued by the bank at the time of opening account. A fixed deposit is one which is repayable after the expiry of a predator mined period fixed by the customer himself. The period varies from 15 days to 3 years. A deposit account can be opened fro a period of more than 3 years & in that case the rate of interest remains the same level. These deposits are not payable on demand but they are withdrawal subject to a period of notice. Hence it is called as term deposits. Terms & conditions to the fixed deposit account: Opening Account: The fixed deposit holder is expected to fill up an application form prescribed fro the purpose, stating the amount & the period of deposit. The application itself contains the rules & regulations of the deposit in addition to the space for specimen signature. As in opening a correct account, a banker does not insist upon a letter of introduction or reference for fixed deposit account because of the absence of frequent transaction on the account. Interest : The interest rate offered on the fixed deposit is so attractive that it has resulted in a change in the composition of bank deposits. Till recently, most of the deposits of commercial banks has been demand deposits & new fixed deposits occupies more than 70% of bank deposits. The rate of interest varies according to the period of deposit. In Indian banking history the first ever highest interest rate of 9.5% was offered on term deposits for 1-2-2007 onwards, However, in recent times, the RBI, has deregulated the interest rates on fixed deposit. The banks are given the freedom to fix their own rates for different periods. However the special rates have been fixed for deposits of senior citizens of 60 years of age or above giving them some schemes. The present rates applicable to the fixed deposits in case of senior citizens.

5.4 Table showings the present interest paid by the bank to fixed deposit holder for different periods . 60

Serial No. 1 2 3 4. 5. 6.

Term of deposit 1 years to less than 2 years 1 day to 14 days 15 days to 45 days 46 days to 179 days 139 days to 1 years 1 years to 3 years 3 years & above

Interest per Annum Nil 5% 7% 8% 9% 9.25%

Period of the deposit ; The minimum period has been fixed as low as 7 days, A per the guidance of the Indian banks Association , banks should not accept deposits for a period longer than 10 years. If the maturity date of fixed deposit falls on a holiday, it should be paid only on the succeeding working day, since a fixed deposit not be claimed before the maturity date as per the terms of original contract. Fixed deposit receipt ; At the time of opening the deposit account, the banker issued a receipt acknowledging the receipt of money on deposit account. It is popularly known as F.D.R [Fixed Deposit Receipt]. It contains the amount of deposit, the name of the holder of the deposit, the rate of interest, due date etc. On the reverse side of the F.D.R separate columns are provided for making entries regarding interest. Particular of A. F. D. R 1. 2. 3. 4. 5. 6. 7. 8. Name of the bank & place Due Date Date Name of the Depositor Amount Period Interest Rate Signature of the manager

Fixed Deposit Receipt

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INDIAN COOPERATIVE BANK ITD No: 12345 City Branch Date ..2005 Received from -----------------------------------------------------------------Rupees --------------------------------------as fixed deposit repayable in -------------------------months after date with interest at the rate ----------------% per Annum RS Accountant Manager Due on

Back View of V.D.R

Memorandum 1. This F.D.R dully discharged should be surrendered at the time of payment or renewal of deposit. To prevent loss of interest, the receipt intended for renewal should be sent on due date 2. The F.D.R is not transferable by endorsement. In the absence of special instructions . The amount of F.D.R can be paid only to the depositor in person. 3. Rate of interest overleaf is subject to resource bank P directive issued from time to time. Received payment / please renew .. month / year shy Signature of the depositors 5.5 Table showing % of increase / decrease of savings Bank deposit account Date Payment of Interest Half year ended Amount Signature of Authorized person

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Years 2007 08 2008-09 2009-10 2010-11 2011-12

Total amount deposited 7995000 9225000 10086000 10455000 12300000

% to the Basic year 100% 115% 126% 130% 154% 0

% of Increase / decrease 15% 26% 30% 54%

INTERPRETATION:From the above table, we can observe that the amount deposited in fixed deposit account has been increased gradually from 2007-08 to 2011-12 that is in the base year 2007-08 % of deposit is 100% . Then it has been increased to 115% . 126% in 200910 , 130% in 2010-11 , 154% in 2011-12..

.5.5 Chart showing % of increase / decrease of savings Bank deposit account

60% 50% 40% 30% 20% 10% 0%

54%

26% 15%

30%

0%
2007 2008 2008 2009 2009 2010 2010 2011 2011 2012

% of Increase/ decrease

5.6 Table showing new accounts open in fixed deposit account. 63

Years 2007 08 2008-09 2009-10 2010-11 2011-12

Total interest amt paid 98 115 140 158 165

% to the Basic year 100% 117% 143% 161% 168% 0

% of Increase / decrease 17% 43% 61% 68%

INTERPRETATION:From the above table, we can observe that the No. of persons deposited in fixed deposit A/c has been increased gradually from 2007-08 to 2011-12 . That is in the base year 2007-08 the % of deposit is 100% . Then it has increased to 117% , 143% in 2008-09 , 161% in 2010-11 , 168 % in the year 2011-12.

5.6 Chart showing new accounts open in fixed deposit account.

68%
70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012

61%

43%

17%

0%

% of Increase/ decrease

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Ques6.1: Do you have bank account? Preference Yes No No of respondent 97 3 Percentage 97 3

yes no

Interpretation: From the above pie chart we can find that 97% of the respondents said that they have bank account and 3% said that they dont have bank account.

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Ques6.2:What is your occupation? Occupation Farmer Business man Government employee Shopkeepers Percentage 35 20 30 15

Interpretation From the above pie chart we can find that 35% accounts. respondents are farmers. 30% are

govt..employees. 20% are business men and 15% are shopkeepers those who have bank

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Ques6.3: In which bank you have bank account? A. .HDFC C.COOPERATIVE BANK Occupation HDFC ICICI COOPERATIVE BANK Other B.ICICI D.OTHER Percentage 25 20 20 35

Interpretation From the above data we can find that 25% respondent have bank account in HDFC bank. 20% have bank account in ICICI and in cooperative bank and 35% respondent have bank account in other banks.

Ques6.4: what type of bank account do you have in bank?

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Accounts Fixed account Savings account Current account Other

Percentage 25 35 25 15

Interpretation From the above data we can find that 25% respondents have fixed account.35% have saving account. 25% respondents have current account

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Ques6.5 What type of customers mostly using locker facilities in bank? A. Business men C. shopkeepers Account holders Business Man Farmer Shopkeepers Housewives B. Farmers D. housewives Percentage(%) 35 20 20 25

Interpretation: Pie chart shows that 35% business men use locker facility. 20% farmers and shop keepers use this facility and 25 % housewives also use locker facility.

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Ques6.6: Do you think bank services are good without online system? Preferences Yes No Cant Say Percentage(%) 12 76 12

Interpretation From the above pie chart we can observe 76% of the respondent said that bank services are not good without online system. 12% said it is good without online system and left did not give any response.

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Ques6.7: which type of E-banking service you want from bank? A. ATM B. Internet banking C. Mobile banking D. other

Services ATM Internet Banking Mobile Banking Other

Percentage 70 20 5 5

Interpretation From above chart we can find that 70% respondent wants ATM service from bank..20% people wants internet banking and left respondent wants other services.

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Ques6.8: What the people think about the bank? A. Necessity for protection on security B. A compulsory tool for saving C. An ideal investment Preferences Necessity for protection on security A compulsory tool for saving An ideal investment Percentage(%) 30 55 15

Interpretation: From the above chart we can find that 30% respondent have bank account for the protection of the security and 55% said that it is a good tool of saving and remaining 15% said that it is an ideal investment. 73

Ques6.9: Is cooperative bank provide better service from other banks? A. Excellent B. Good C. Fair D. Satisfied E. Poor Customers satisfaction Excellent Good Fair Satisfied Poor Percentage(%) 5 25 15 30 25

Interpretation From the above data we can find that 5% respondent said excellent to co-bank.25% said and 30% are satisfied and remaining give poor remarks to cooperative bank.

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FINDING'S

97% respondent have bank account. 20%resopndent have bank account in cooperative bank.25% respondent have bank account in HDFC bank.35 % respondent prefers other banks. It is find that saving deposits is increasing from year to year. 35% respondent are farmers who have bank account in cooperative bank because it is available in all rural areas. 76% respondent wants online system from bank . 70% respondent demanded ATM service from bank and 20%.wants internet banking service and other customers wants mobile banking. 55% customers said that it is good tool for saving .15% customer saving in bank it is a ideal investment.20% deposit in cooperative bank for the security of money. It is first choice of farmers for saving their amount,

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SUGGESTIONS
Co-operative banks are the important part of banking infrastructure. To make them more effective, efficient and enhance their performance, the various deficiencies and short falls as discussed need to be eliminated. To over come the various short falls the following steps can be helpful: It requires rigorous efforts to mobilize deposits from non co-operative sources as well leaving aside individuals. It should enhance its technological infrastructure. In order to compete in the banking sector, it should provide different online services e.g. ATM facility, mobile banking and internet banking.. Marketing initiatives taken by the bank are minimal. To increase awareness among the mass population, the bank needs to rebuild its marketing program. The bank should take steps to control its cost of management which is very high. The bank needs to control its NPAs by adopting strict standards while advancing loans.

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CONCLUSIONS The financial sector plays a major role in the Mobilization & allocation of financial savings. Financial institutions. Instruments & markets & which constitute the financial resources from the net savers to net borrowers, the gains to the real sector of the economy. Therefore, depend on how efficiently the financial sector performs this basic function of intermediation so that the transaction cost is kept minimum. The banks form the most important segment of the financial sector. Securities trading & insurance business through on selective basis. The banks were forced to pay maximum attention on to operational efficiency so that their transactions costs remained at the Minimum. 97% respondent have bank account and 20% respondent have bank account in cooperative bank. Cooperative bank is mostly used by farmers because its branches are available in all villages. Cooperative bank mostly lends loans to farmers and it also provide vehicle loan.35% respondent use saving account in cooperative bank. Saving account gives 4% interest on saving it also increase the saving habit of respondent provide locker facility which is mostly used by housewives. .bank also provide locker facility which is mostly used by housewives. Bank have not online system, 76% respondent demand online system with atm service from bank. Cooperative bank also good source for saving and it satisfied the wants of rural people.

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ANNEXURE Questionnaire
I am Deepak pal singh of Apeejay Institute of Management technical campus, Jalandhar. I am conducting a Survey on Role of Mutual Funds in Indian Capital Market Growth. So I am requesting you to fill this form. It will take only 2-5 minutes for you to fill this questionnaire. I promise you to keep the information confidential

SECTION-A

Name: ________________________________________ Age: _________________________________________ Male Female Post-Graduate

Gender:

Educational Qualification: Graduate

Any other _________________________________ Marital status: Single Are you a local resident: Yes Income ( ): < 20000 40000-60000 Married No 20000-40000

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Ques1: Do you have bank account? A. Yes B. No

Ques2: What is your occupation? A. farmer B. business men C. Govt. employees D. other Ques3: In which bank you have bank account? A. .HDFC B. ICICI C. COOPERATIVE BANK D. OTHER

Ques4: what type of bank account do you have in bank? A. saving account C. current account B. fixed account D. Others

Ques5: What the people think about the bank? A. Necessity for protection on security B. A compulsory tool for saving C. An ideal investment

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Ques6: What type of customer mostly using locker facilities in bank? A. Business man B. Farmers C. Shopkeepers D. Housewives Ques7: Do you think bank services are good without online system? A. Yes B. No

Ques8: which type of service you want from bank? A. ATM B. Internet banking C. Mobile banking D. other Ques9: Is cooperative bank provide better service from other banks? A. Excellent B. Good C. fair D. Satisfied

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BIBLIOGRAPHY Cherunilam Francis, Business Environment, Himalaya Publishing House, Millennium Edition 2001. Gupta K Shashi, R.K Sharma, Financial Management, Kalyani Publishers, Fifth Edition 2007. Bhalla V.K, Working Capital Management, Anmol Publications, Sixth Edition. Kothari C.R, Research Methodology, New Age International Publisher, Second Edition. Balance sheets of the bank from 2008to 2011.

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