1.NAME - Ankita SinghCLASS S.Y.B.M.S. CROLL NO. 2386SUBJECT - Aspects of Banking & InsuranceTOPIC Co-operative Bank{Abhyudaya Co-operative Bank}GUIDED BY Prof. Nitya Varghese

2. The objective of research is to study the Co-operative Banking in Abhyudaya Co-operative Bank Ltd. The area of study in Abhyudaya Co-operative Bank Ltd. include:-1. To make an item wise study of the component of Credit Appraisal and renewal Process.2. The study also involves the study of procedural formalities included in sanctioning the finance to itsclients.3. This study would involve analyzing the balance sheets of their clients in determining their financialneeds.4. To suggest the step to be taken to increase the efficiency in Credit Appraisal. 3. The term Co-operative Bank (CBs), though not formally defined, refers to primary co-operative banks located in urban and semi urban areas. These banks, till 1996 were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally centered on communities, localities work place group. They essentially lent to small borrowers and businesses. Today, their Scope of operations has widened considerably. The origin of the urban co-operative banking movement in India can be traced to the chose of nineteenth century when, inspired by the success of the experiments related to the co-operative movement in Britain and the co-operative credit movement in Germany such societies were set up in India. Co-operative societies are based on the principles of co-operation,-mutual help, democratic decision making and open membership. Co-operative represented anew and alternative approach to organization as against proprietary firm, partnership firm and joint stock companies which represent the dominant form of commercial organization. * MAIN FEATURES OF CO-OPERATIVE ORGANIZATION:The main features of co-operative organization are:-1. Voluntary Association2. Democratic Administration3. Self- help and Mutual Aid4. Common Welfare through Common Action 4. Abhyudaya Co-op. Bank Ltd., one of the leading Urban Co-operative Banks in India, in its outlook and approach, hasthe objective of progress and prosperity of all. From a humble beginning in January 1964 as a Co-operative Credit society with a share capital of a merely Rs.5,000/-held by 83 members, today Abhyudaya Co-op Bank has become one of the large Urban Co-operative Banks with a"Scheduled Bank" status. The Bank has been converted into a Multi-State Scheduled Urban Co-op. Bank w.e.f. 11thJanuary, 2007. The area of operation which was restricted to the State of Maharashtra has now been extended toKarnataka & Gujarat State. Currently, the capital base of the bank stands at Rs. 72 Crore and Reserves and surpluses atRs.804.18 Crore as on 31.03.2011.The bank has 1,38,000 members and more than 14 lakh depositors. The Bank has seen a tremendous growth in deposits. The deposits of the bank are over Rs. 5260.63 Crore as on31.03.2011, which were Rs. 4170.62 Crore as at the end of the financial year 2009-2010.The loans and advances stood atRs. 3453.61 Crore as on 31.03.2011. The bank had posted a Net Profit of Rs. 77.65 Crore as on 31.03.2011. The growthrate of the bank compares well with that of others in the sector. The Bank has maintained a steady growth. The bankhas been paying dividend @ 15% to its members which is maximum permissible as per the MCS Act. The Bank haslaunched different loan schemes tailor-made to suit the needs of various customers. The schemes aim at providingloans for purchase or construction of residential premises, repair/renovation of house property, purchase of car,seeking higher education and for purchase of household consumer durable. The procedure for sanctioning of loansunder the schemes has been simplified and relaxed with a view to benefit the customers and facilitating speedysanction of loans. The Bank has total 105 branches including a Mobile Bank at Navi Mumbai. Bank is committed tospread network of branches throughout the State and provide much needed banking services to the population,which has been deprived of the banking facilities.Innovative Banking is another area of operation that Abhyudaya is currently focusing on for a sustainable long termgrowth. The Bank has always endeavored for providing excellent customer service with the help of the latesttechnology. The Bank has provided fully computerized services to its valued clients. Bank is offering 11 hours fullycomputerized services and 7 days working at 18 branches and 24 hours ATM service at 85 branches. 5. * WHO CAN OPEN AN ACCOUNT? a) An Individual in his/her name b) More than one person jointly (Maximum 4 persons) c) An illiterate person d) A blind / visually Impaired / Incapacitated Persons e) A guardian on behalf of minor in the minors name f) Charitable/ Religious institutions g) Trust, Clubs, Association, NGO h) Local bodies, all types of Co-operative Societies or any other body i) Staff members j) Student who has completed 14 year of Age. {Initial Deposit for opening Savings Bank Account & minimum balance to be maintained in the account:With Cheque Book Facility - Rs.1, 000/-Without Cheque Book Facility - Rs. 300/-}* INTEREST: Interest will be calculated @ 4% p.a. on the basis of Daily Product and will be credited to the account at half yearly intervals in March and September.* PASS BOOK: Pass book will be supplied to every savings bank depositor showing the number of his account name and address and transactions with date, amount and particulars. 6. * INCIDENTAL CHARGES:If a minimum balance of Rs.1000/- (with cheque book facility) or Rs.300/-(without cheque book facility) is not kept, the bank will charge incidental charges at therates as in force from time to time.Also refer to our Service Charges elsewhere on this site for other incidental charges.* REQUIREMENTS FOR OPENING ACCOUNT:a) Two copies of latest photographsb) Proof of residence to the satisfaction of the Bank (passport, Driving License, Ration Card, Voters Card,Electricity Bill, etc.)c) Photo Identity Proofd) Introductions by person known and acceptable to the Banke) Permanent Account Number (PAN) with original for verification or declaration in Form 60/61.f) Initial deposit in cash 7. * WHO CAN OPEN AN ACCOUNT? a) Individual b) Two or More individuals c) Sole Proprietary Firm d) Partnership Firm e) Hindu Undivided Family f) Private Limited Companies g) Public Limited Companies h) Non Governmental Organization i) Public Corporations j) Registered Societies/Associations/Clubs, etc. k) Trust l) Government/Semi-Government Bodies / Departments {No Current Account shall open in the name of minor.} {Initial Deposit for opening Savings Bank Account & minimum balance to be maintained in the account: Rs. 3000/-}* INTEREST: No Interest will be paid on the balance in Current Account. 8. * STATEMENT OF ACCOUNT:Bank will issue statement of account to the accountholder once in a month. * BENEFITS:a) Any Branch Banking (ABB), Inter connectivityb) ATM Facilityc) Remittances Pay Order, Demand Draft on any location in Indiad) Collection of outstation chequee) Telebanking Facilityf) RTGS/NEFT Facilityg) SMS Banking Facility* FREE ATM CARD:For the facility of cash withdrawal up to Rs.15,000/- in a day from account with our any branch at anytime ofthe day through our 35 ATMs, ATM card is issued free of charge at present. No ATM card is however, issued toCash Credit A/c holder.* MINIMUM REQUIREMENTS FOR OPENING ACCOUNT: a) Introduction by person known and acceptable to the Bank b) Two copies of latest photographs c) Business Proof d) Copy of PAN Card of individual, firm, company, society, etc. e) Photo Identity Proof f) Copy of certificate of Incorporation g) Copy of Certificate for commencement of business (this is required for Public Limited Company) h) Partnership Deed i) Trust Deed 9. This account opened under SB-NF Account Scheme is a simplified saving bank account providing the basicsaving bank facilities to customers belonging to financially weaker sections. * WHO CAN OPEN AN ACCOUNT? Only the resident individuals from weaker sections of the economy who are unable to open regular savings account are provided the facility to open this account in a single or joint names and avail banking services. *MINIMUM INITIAL DEPOSIT/MINIMUM BALANCE: ^ Minimum balance Rs.50/-^ No service charges for failure to maintain minimum balance.*RATE OF INTEREST:As per regular, Savings Bank Account i.e. @ 4.0% p.a. 10. *OTHER TERMS AND CONDITIONS:a) No cheque booksb) Only 4 withdrawals per monthc) Maximum amount to be withdrawn shall not exceed Rs.5000/- at a time and Rs.15,000/- in a monthd) Charges for cheque deposited in the account but returned unpaid will be as per regular Saving Bank Account*MINIMUM REQUIREMENT:a) Introduction from a person known and acceptable to the Bankb) Photograph of customer and proof of address or any other evidence of identity and address to the bankssatisfaction 11. * WHO CAN OPEN AN ACCOUNT?a) Individuals of Indian Nationality (NRIs) or origin (PIOs) resident outside India.b) State or Central Govt. officials working in Indian Missions abroad or under International Agencies likeU.N.O., I.M.F., World Bank, etc.* RESTRICTION:Opening of NRE account in the names of individual of Bangladesh/Pakistan nationality requires approvalof RBI.* DOCUMENTS REQUIRED FOR OPENING ACCOUNT:a) Passport (issued by Indian Government)b) 2 copies of latest photographsc) VISAd) Service Contracte) Introduction* SOURCE OF CREDIT: a) Only foreign remittance through A.D. or b) Transfer from one NRE A/c to another NRE A/c 12. * PERMITTED TYPES OF ACCOUNTS: Savings, Current, Recurring Deposit and Term Deposit * REPATRIATION: For the facility of cash withdrawal up to Rs.15, 000/- in a day from account with our any branch at anytime of theday through our 35 ATMs, ATM card is issued free of charge at present. No ATM card is however issued to CashCredit A/c holder. * TAX EXEMPTION: No Income Tax, Gift Tax, Wealth Tax is applicable * NOMINATION FACILITY: Nomination facility is available and both resident and non-resident may be accepted as nominees.* GENERAL:The NRE Accounts are governed by provisions of Foreign Exchange Management Act 1999, administered byRBI and the above conditions may undergo change as advised by RBI.*NRE Term Deposits [Prevailing Interest rates for the Period 01.07.2011 to 31.07.2011]Period of DepositsRates on Interest (%P.A) 12 months to less than 24 months2.48% 24 months to less than 36 months2.44% 36 months to less than 60 months2.84% 13. Abhyudaya Bank is one of the select few Urban Co-operative banks who have been grantedAD category I license to deal in Foreign Exchange Business by Reserve Bank of India.Bank has entered into tie ups with Bank of India, H. D. F. C. Bank, D. C. B., UAE Exchange& Financial Services Ltd., Thomas Cook and many others to provide Trade FinanceServices, Travel related services, Investment Schemes for NRIs etc. For communication andmoney transfer purpose it will be using SWIFT / RTGS/ ECS / NEFT to provide efficientand prompt service to all its users. 14. The advantage in opening a Recurring Deposit Account that the depositor would be able to save certain sums infixed monthly installments so that he/she would be able to meet an anticipated liability /obligation after the end ofa specified period.* WHO CAN OPEN AN ACCOUNT?Any person or persons approved by the Bank, Co-operative Societies, Registered Trust, Institutions andAssociations.~By two or more persons in their joint names.~By a natural guardian i.e. father or mother approved by the bank on behalf of a minor.* MINIMUM DEPOSIT:Rs.10/- * INTEREST:Interest will be paid on the deposits at the rates in force as per the Reserve Banks directive from time to time.Interest amount will be paid at the time of maturity. * PASS BOOK:The Bank will issue a Pass Book showing the name, address, installment amount,the period for which the deposit is accepted, maturity date and maturity amount.* LOAN AGAINST DEPOSIT:90% Loan against deposit amount is available. 15. * WHO CAN OPEN AN ACCOUNT? Any person or persons approved by the Bank, Co-operative Societies, Registered Trust, Institutions andAssociations.~By two or more persons in their joint names.~By a natural guardian i.e. father or mother approved by the bank on behalf of a minor.* MINIMUM DEPOSIT: Rs.100/-* INTEREST: Interest will be paid on the deposits at the rates in force as per the Reserve Banks directive from time to time.Interest amount will be paid at the time of maturity.* TERM DEPOSIT RECEIPT: The Bank will issue a receipt in favor of the depositor /s showing the amount deposited, the period for which thedeposit is accepted, maturity date and maturity amount.* DUPLICATE RECEIPT: In case of loss of original Fixed Deposit Receipt the depositors would have to intimate the bank immediately. On an application satisfying the prescribed rules the certificate indicating the particulars of the deposit will be issued to the depositor. The Bank will charge Duplicate Receipt Charges at such rates as in force from time to time.* GENERAL: The Bank reserves the right to alter, amend, and rescind the rules from time to time. 16. * WHO CAN OPEN AN ACCOUNT?Any person or persons approved by the Bank, Co-operative Societies, Registered Trust, Institutions andAssociations.~ By two or more persons in their joint names.~ By a natural guardian i.e. father or mother approved by the bank on behalf of a minor.* MINIMUM DEPOSIT:Rs.500/- * INTEREST:Interest will be paid on the deposits at the rates in force as per the Reserve Banks directive from time to time.Interest amount will be paid monthly.Interest will either paid in cash or credited to the Bank Account of the depositor * TERM DEPOSIT CERTIFICATE:The Bank will issue a certificate in favor of the depositor /s showing the amount deposited, the period for whichthe deposit is accepted, maturity date and maturity amount.* DUPLICATE CERTIFICATE:In case of loss of original Fixed Deposit Certificate the depositors would have to intimate the bank immediately.On an application satisfying the prescribed rules the certificate indicating the particulars of the deposit will beissued to the depositor. The Bank will charge Duplicate Certificate at such rates as in force from time to time. 17. In any Branch Banking Scenario the Bank is offering following services to its customers:a) The Abhyudaya Banks all 96 ATMs are interconnected which are located Mumbai, Navi Mumbai,Pune, Aurangabad, Nagpur, Nashik, Nanded, and Udupi.b) The Abhyudaya Banks customer having ATM card can withdraw the Cash from any ATM of the Banksnetwork.c) The Bank is providing the facility to withdraw the cash through the counter from any of Banksbranches.d) Now our Branches can accept cheque other than parent branch, the customer can deposit his/hercheque any of thebranch of the bank other than his parent branch.e) The clearing will be take place as per normal clearing.{In ABB cheque clearing the customers pertaining to Pune can deposit his/her cheque our Pune branches only, likewise for Mumbai/Navi Mumbai customers can deposit his/her cheque any of Mumbai/Navi Mumbai Branches.} 18. * HOUSING LOAN:The Bank provides facility of housing loan to consumers for purchase, construction, renovations or forrepairs of the house. The Bank as against the loan amount asks for security from the borrower, theconditions for which are as follows:Primary: Mortgage of the house Property to be purchased / constructed.Collateral: Third party Guarantee of two person or assignment of LIC Policies, pledge of Govt. securitiesetc.Share Amount: 2.5% of the Loan amount sanctioned.Purchase of Flats in Building more than 15 years old: For purchase of flat in Building which is more than15 years old, loan will be considered only if it is certified by the Structural Engineer that the residual lifeof the building is more than 20 years and the building is in good condition.Repayment: Up to 180 installments to Salaried Persons & 120 installments incase of others / businessmenin the view of above conditions bank sanctions the loan to the borrower. The Abhyudaya Co-operativeBank charges a processing fee @0.6% of loan amount. Following is the table for rate of interest that bankcharges against housing loan amount. They are subject to change. Rate of Interest (Subject to change)Floating Fixed Abhyudaya Special Housing Loan Scheme up to 30.09.2011 Up to Rs.20 lakhs Above Rs.20lakhs up to 50 lakhs Up to Rs.20 lakhs 10.00% 11.00% 9.00% 19. * EDUCATION LOAN:The Abhyudaya Co-operative Bank also provide assistance to gain education to the Indian Nationals underAbhyudaya Gyan Vardhini Educational Loan Scheme, who have secured admission to professional/technicalcourses through entrance test/selection process or have secured admission to foreign universities/institutions or have passed the qualifying examination for admission to the courses or to employed person intending toimprove their educational qualification and/or receive training in modern technology in India or abroadprovided training offers prospects of better placement.PERSONAL LOAN:The Abhyudaya Co-operative Bank grants Personal Loan for following purpose: Purchase of Consumer Durables / Furniture / Fixtures / Computers Repairs / Renovations of Flat / House Purchase of 2 wheelers Purchase of Gold Ornaments Marriage & other religious ceremonies Domestic / Foreign Tours & Travels Repayment of existing debt Takeover of personal loan from other banks Medical expenses for self / family members etc.Eligibility: For Salaried Persons: Minimum take home pay after EMI amount of loan Rs.4,500/- and netsalary above Rs.7,000 /-p.m.Repayment: Up to 60 installments 20. Rate of Interest: 14% [With 50% Collateral securities 13%] Service Charges: 1.2% of amount sanctionedShare Amount: 5% of the amount sanctioned Mortgage Loan.The main purpose of mortgage loan provided at Abhyudaya Co-operative Bank is as follows: - The loanamount can be used for any purpose but shall not be used for purposes prohibited by law. The propertyshould be in the name of Applicant or Co-applicant of family member.Maximum Amount:(a) Rs.20 lakh to Individuals / Self employed persons / Professionals.(b) Rs.100.00 lakh to business enterprises and self employed and Professional for use in business against ownFlat / House / Gala / Office / Factory Premises, etc. kept in mortgage.Repayment: Up to 84 months.Eligibility: Amount of loan will depend on repaying capacity / DSCR / Loan to the extent of 60 % of thepresent value of the property.Sureties: One surety of good means acceptable to the bank.Service Charges: 1.2 % of the sanctioned amount. 21. The study at Abhyudaya Co-operative Bank gave a vast learning experience to me and has helped toenhance my knowledge. During the study I learnt how the theoretical financial analysis aspects are used in practice during theworking capital finance assessment.I have realized during my project that a credit analyst must own multi-disciplinary talents like financial,technical as well as legal know-how. The credit appraisal for working capital finance system has beendevised in a systematic way. There are clear guidelines on how the credit analyst or lending officer has toanalyze a loan proposal. It includes phase-wise analysis which consists of 5 phases:1. Financial statement analysis.2. Working capital and its assessment techniques.3. Credit risk assessment.4. Documentation.5. Loan administrationAbhyudaya Co-operative banks adoptions of the Projected Balance Sheet method of assessmentprocedures are based on sound principles of lending.This method of assessment has certain flexibility required to avoid any rigid approach to fixing quantumof finance. It is superior and more rational compared to the Turnover Method, Cash Budget Method ofassessment. It also facilitates the Bank to carry on follow up procedures. The PBS method have beenrationalized and simplified to facilitate complete flexibility in decision-making. To ensure asset quality,proper risk assessment right at the beginning, is extremely important. That is why Credit Risk Assessmentsystem is an essential ingredient of the Credit Appraisal exercise. The Credit Policy of the Bank should bereviewed periodically by taking into account changes in money market, changes in credit policyannounced by Reserve Bank of India and happening of other events to protect the interest of the bank andto maintain profitability. 22. THANKYOU....