COMPARITIVE STUDY BETWEEN TWO CO-OPERATIVE BANKSCHAPTER 1INTRODUCTION TO CO-OPERATIVE BANK

Cooperative banking institutions takes DEPOSITS and LEND MONEY in most parts of the world. It differs from STOCKHOLDERS BANK. Follows all PRUDENTIAL banking regulation. It provides FINANCIAL ASSISTANCES to the people with small means to protect them from the debt trap of the money lenders. Its a financial entity which belongs to its members, who are at the same time the OWNERS and the MEMEBERS of the bank. Its often created by person belonging to the same local or personal community or sharing a common interest. Wide range of banking and financial services ( loans, deposits, and banking accounts etc)

CHAPTER 2

CO-OPERATIVE BANKING IN INDIA A co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts etc.). Co-operative banks differ from stockholder banks by their organization, their goals, their values and their governance. In most countries, they are supervised and controlled by bankingauthorities and have to respect prudential banking regulations, which put them at a level playing field with stockholder bank. Depending on countries, this control and supervision can be implemented directly by state entities or delegated to a co-operative federation or central body. Co-operative banking is retail and commercial banking organized on a co-operative basis. Co-operative banking institutions take deposits and lend money in most parts of the world. Co-operative banking, includes retail banking, as carried out by credit unions, mutual savings and loan associations, building societies and co-operatives, as well as commercial banking services provided by manual oganizations (such as co-operative federations) to co-operative businesses.The structure of commercial banking is of branch-banking type; while the co-operative banking structure is a three tier federal one.

- A State Co-operative Bank works at the apex level (ie. works at state level).- The Central Co-operative Bank works at the Intermediate Level.(ie. District Co-operative Banks ltd. works at district level)- Primary co-operative credit societies at base level (At village level)

DEFINATION

A co-operative bank is a financial entity which belongs to its members, who areat the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally providetheir members with a wide range of banking and financial services (loans, deposits, banking accounts) A co-operative bank is a financial entity which belongs to its members, who areat the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally providetheir members with a wide range of banking and financial services (loans, deposits, banking accounts).

CHAPTER 3

HISTORY OF CO-OPERATIVE BANK IN INDIA

For the co-operative banks in India, co-operatives are organized groups of people and jointly managed and democratically controlled enterprises. They exist to serve their members and depositors and produce better benefits and services for them.Professionalism in co-operative banks reflects the co-existence of high level of skills and standards in performing, duties entrusted to an individual. Co-operative bank needs current and future development in information technology. It is indeed necessary for cooperative banks to devote adequate attention for maximizing their returns on every unit ofresources through effective services. Co-operative banks have completed 100 years of existence in India. They play a very important role in the financial system. The cooperative banks in India form an integral part of our money market today. Therefore, a brief resume of their development should be taken into account. The history of cooperative banks goes back to the year 1904. In 1904, the co-operative credit society actwas enacted to encourage co-operative movement in India. But the development of cooperative banks from 1904 to 1951 was the most disappointing one.The first phase of co-operative bank development was the formation and regulation of cooperative society. The constitutional reforms which led to the passing of the Government of India Act in 1919 transferred the subject of Cooperation from Government of India to the Provincial Governments. The Government of Bombay passed the first State Cooperative Societies Act in 1925 which not only gave the movement, its size and shape but was a pace setter of co-operative activities and stressed the basic concept of thrift, self help and mutual aid. This marked the beginning of the second phase in the history of Co-operative Credit Institutions.There was the general realization that urban banks have an important role to play in economic construction. This was asserted by a host of committees. The Indian Central Banking Enquiry Committee (1931) felt that urban banks have a duty to help the small business and middle class people. The Mehta-Bhansali Committee (1939) recommended that those societies which had fulfilled the criteria of banking should be allowed to work as banks and recommended an Association for these banks. The Co-operative Planning Committee (1946) went on record to say that urban banks have been the best agencies for small people in whom Joint stock banks are not generally interested. The Rural Banking Enquiry Committee (1950), impressed by the low cost of establishment and operations recommended the establishment of such banks even in places smaller than taluka towns. The real development of co-operative banks took place only after the recommendations of All India Rural Credit Survey Committee (AIRCSC), which were made with the viewto fasten the growth of co-operative banks. The co-operative banks are expected to perform some duties, namely, extend all types of credit facilities to customers in cash and kind, advance consumption loans, extend banking facilities in rural areas, mobilize deposits, supervise the use of loans etc. The needs of co-operative bank are different. They have faced a lot of problems, which has affected the development of co-operative banks. Therefore it was necessary to study this matter.The first study of Urban Co-operative Banks was taken up by RBI in the year 1958-59. The Report published in 1961 acknowledged the widespread and financially sound framework of urban co-operative banks; emphasized the need to establish primary urban co-operative banks in new centers and suggested that State Governments lend active support to their development. In 1963, Varde Committee recommended that such banksshould be organised at all Urban Centers with a population of 1 lakh or more and not by any single community or caste. The committee introduced the concept of minimum capital requirement and the criteria of population for defining the urban centre where UCBs were incorporated.

CHAPTER 4

FEATURES

Even if co-operative banks organizational rules can vary according to their respective national legislations, co-operative banks share common features as follows:

Customer-owned entities: In a co-operative bank, the needs of the customers meet the needs of the owners, as co-operative bank members are both. As a consequence, the first aim of a co-operative bank is not to maximize profit but to provide the best possible products and services to its members. Some co-operative banks only operate with their members but most of them also admit non-member clients to benefit from their banking and financial services. Democratic member control: Co-operative banks are owned and controlled by their members, who democratically elect the board of directors. Members usually have equal voting rights, according to the co-operative principle of one person, one vote. Profit allocation: In a co-operative bank, a significant part of the yearly profit, benefits or surplus is usually allocated to constitute reserves. A part of this profit can also be distributed to the co-operative members, with legal or statutory limitations in most cases. Profit is usually allocated to members either through a patronage dividend, which is related to the use of the co-operatives products and services by each member, or through an interest or a dividend, which is related to the number of shares subscribed by each member.Co-operative banks are deeply rooted inside local areas and communities.They are involved in local development and contribute to the sustainable development of their communities, as their members and management board usually belong to the communities in which they exercise their activities.

By increasing banking access in areas or markets where other banks are less present, farmers in rural areas, middle or low income households in urban areas - co-operative banks reduce banking exclusion and foster the economic ability of millions of people. They play an influential role on the economic growth in the countries in which they work in and increase the efficiency of the international financial system. Their specific form of enterprise, relying on the above38mentioned principles of organization, has proven successful both in developed and developing countries.

CHAPTER 5FUNCTIONS OF CO-OPERATIVE BANK

Co-operative Banks areorganised and managed on the principal of co-operation, self-help, and mutual help. They work on the basis ofno profit no loss. Profit maximization is not their goal. Co-operative bank do banking business mainly in the agriculture and rural sector. However, UCBs, SCBs, and CCBs operate in sub-urban, urban, andmetropolitan areas also. Co-operative banks also perform the basic banking functions of banking but they differ from commercial banks in the following respects Commercial banks are joint-stock companies under the companies act of 1956, or public sector bank under a separate act of a parliament whereas co-operative banks were established under the co-operative societys acts of different states. Commercial bank structure is branch banking structure whereas co-0operative Banks have a three tier setup, with state co-operative bank at apex level, central /district co-operative bank at district level, and primary co-operative societies at rural level.Only some of the sections of banking regulation act of 1949 (fully applicable to commercial banks), are applicable to co-operative banks, resulting only in partial control by RBI of co-operative banks and Co-operative banks function on the principle of cooperation and not entirely on commercial parameters.

TYPES OF CO-OPERATIVE BANK

The co-operative banks are small-sized units which operate both in urban and non-urban centers. They finance small borrowers in industrial and trade sectors besides professional and salary classes. Regulated by the Reserve Bank of India, they are governed by the Banking Regulations Act 1949 and banking laws (co-operative societies) act, 1965. The co-operative banking structure in India is divided into following 5 components:

Primary Co-operative Credit SocietyThe primary co-operative credit society is an association of borrowers and non-borrowers residing in a particular locality. The funds of the society are derived from the share capital and deposits of members and loans from central co-operative banks. The borrowing powers of the members as well as of the society are fixed. The loans are given to members for the purchase of cattle, fodder, fertilizers, pesticides, etc.Central co-operative banksThese are the federations of primary credit societies in a district and are of two typesthose having a membership of primary societies only and those having a membership of societies as well as individuals. The funds of the bank consist of share capital, deposits, loans and overdrafts from state co-operative banks and joint stocks. These banks provide finance to member societies within the limits of the borrowing capacity of societies. They also conduct all the business of a joint stock bank.State co-operative banksThe state co-operative bank is a federation of central co-operative bank and acts as a watchdog of the co-operative banking structure in the state. Its funds are obtained from share capital, deposits, loans and overdrafts from the Reserve Bank of India. The state cooperative banks lend money to central co-operative banks and primary societies and not directly to the farmers.Land development banksThe Land development banks are organized in 3 tiers namely; state, central, and primary level and they meet the long term credit requirements of the farmers for developmental purposes. The state land development banks oversee, the primary land development banks situated in the districts and tehsil areas in the state. They are governed both by the state government and Reserve Bank of India. Recently, the supervision of land development banks has been assumed by National Bank for Agriculture and Rural development (NABARD). The sources of funds for these banks are the debentures subscribed by both central and state government. These banks do not accept deposits from the general public.Urban Co-operative BanksThe term Urban Co-operative Banks (UCBs), 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 groups. They essentially lend to small borrowers and businesses. Today, their scope of operations has widened considerably. The origins of the urban co-operative banking movement in India can be traced to the close of nineteenth century. Inspired by the success of the experiments related to the cooperative 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 cooperation, mutual help, democratic decision making, and open membership. Cooperatives represented a new and alternative approach to organization as against proprietary firms, partnership firms, and joint stock companies which represent the dominant form of commercial organization. They mainly rely upon deposits from members and non-members and in case of need, they get finance from either the district central co-operative bank to which they are affiliated or from the apex co-operative bank if they work in big cities where the apex bank has its Head Office. They provide credit to small scale industrialists, salaried employees, and other urban and semi-urban residents.

ADVANTAGES OF CO-OPERATIVE BANK

1. Easy to form:The formation of a cooperative society is very simple as compared to the formation of any other form of business organisations. Any ten adults can join together and form a cooperative society. The procedure involves in the registration of a cooperative society is very simple and easy. No legal formalities are required for the formation of cooperative society.2. No obstruction for membership:Unless and otherwise specifically debarred, the membership of cooperative society is open to everybody. Nobody is obstructed to join on the basis of religion, caste, creed, sex and colour etc. A person can become a member of a society at any time he likes and can leave the society when he does not like to continue as ; member.3. Limited liability:In most cases, the liabilities of the members of the society is limited to the extent of capital contributed by them. Hence, they are relieved from the fear of attachment of their private property, in case of the society suffers financial losses.4. Service motive:In Cooperative society members are provided with better good and services at reasonable prices. The society also provides financial help to its members < the concessional rates. It assists in setting up production units and marketing of produces c small business houses so also small farmers for their agricultural products.5. Democratic management: The cooperative society is managed by the elected members from and among themselves. Every member has equal rights through its single vote but can take active part in' the formulation of the policies of the society. Thus all member are equally important for the society.6. Stability and continuity:A cooperative society cannot be dissolved by the death insolvency, lunacy, permanent incapability of the members. Therefore, it has stable life are continues to exist for a longer period. It has got separate legal existence. New members m< join and old members may quit the society but society continues to function unless are otherwise all members unanimously decided to close the same.7. Economic operations:The operation carried on by the cooperative society economical due to the eliminations of middlemen. The services of middlemen are provided by the members of the society with the minimum cost. In the case of cooperative society, the recurring and non-recurring expenses are very less. Further, the economies of scale-ma production or purchase, automatically reduces the procurement price of the goods, thereby minimises the selling price.8. Surplus shared by the members:The society sells goods to its members on a nominal profit. In some cases, the society sells goods to outsiders. This profit is utilised for meeting the day-to-day administration cost of the society. The procedure for distribution of profit that some portion of the surplus is spent for the welfare of the members, some portion kept reserve whereas the balance shared among the members as dividend on the basis of this purchases.9. State patronage:Government provides special assistance to the societies to enable them to achieve their objectives successfully. Therefore, the societies are given financial loan at lower rates. Government also extends many type of subsidies to cooperative societies strengthening their financial stability and sustainable growth in future.

DISADVANTAGES OF CO-OPERATIVE BANK

Despite many an advantages, the cooperative society suffer from certain limitations c drawbacks. Some of these limitations, which a cooperative form of business has are as follows:1. Limited resources:Cooperative societies financial strength depend on the cap contributed by its members and loan raising capacity from state cooperative banks. The membership fee is limited for which they are unable to raise large amount of resources as their members belong to the lower and middle class. Thus, cooperative^ are not suitable for the large scale business which require huge capital.2. Inefficient management:A cooperative society is managed by the members only. They do not possess any managerial and special skills. This is considered as major drawback of this sector. Inefficiency of management may not bring success to the societies.3. Lack of secrecy:The cooperative society does not maintain any secrecy in business because the affairs of the society is openly discussed in the meetings. But secrecy is very important for the success of a business organisation. This paved the way for competitors to compete in more better manner.4. Cash trading:The cooperative societies sell their products to outsiders only in cash. But, they are usually from the poor sections. These persons require to avail credit facilities which is not possible in the case of cooperatives. Hence, marketing is a shortcoming for the cooperatives.5. Excessive Government interference:Government put their nominee in the Board of management of cooperative society. They influence the decision of the Board which may or may not be favourable for the interest of the society. Excessive state regulation, interference with the flexibility of its operation affects adversely the efficiency of the management of the society.6. Absence of motivation:The members may not feel enthusiastic because the law governing the cooperatives put some restriction on the rate of return. Absence of relationship between work and reward discourage the members to put their maximum effort in the society.7. Disputes and differences:The management of the society constitutes the various types of personnel from different social, economical and academic background. Many a times they strongly differs from each other on many important issues. This becomes detrimental to the interest of the society. The different opinions and disputes may paralyses the effectiveness of the management.

CHAPTER 6COMPANY PROFILESARASAWAT BANK

Saraswat Bankpronunciation(helpinfo) is an urban co-operative banking institution based in Maharashtra, India and operating as a co-operative bank since 1918.[2]In 1988, the Bank was conferred with "Scheduled" status by Reserve Bank of India. The Bank is the first co-operative bank to provide Merchant Banking services. The Bank got a permanent license to deal in foreign exchange in 1978. Presently the Bank is having correspondent relationship in 45 countries covering 9 currencies with over 125 banks. In 1992, the Bank completed 75 years. Platinum Jubilee Celebrations were inaugurated on 14 September 1992 and the Bank also crossed the business level of Rs. 700 Crores. It has 267 branches nationwide.The beginning of the 21st century has been a giant leap forward for the Bank. The Bank chose a path of organic/inorganic growth and its pace of growth accelerated .The Bank's total business which was around Rs.4000 Crore in 2000 almost tripled to Rs.15295 Crore in 2007.In the year 2008, the Bank launched a Branding Initiative . The purpose of such an exercise was to reconfirm the thrust of the Bank on its core values, which can be summed up as a "Sense of Belonging".In the last two decades the Bank has witnessed a steady growth in business and also taken several Strategic Business Initiatives such as undertaking Business Process Reengineering initiative, merging seven Cooperative Banks and then consciously nurturing them. The Bank tied up with VISA International for issuance of Debit Cards. The Bank has also successfully launched RuPay EMV Debit Card during the year 2013-14. The Bank was the first to achieve this mile stone in respect of RuPay EMV Card along with Bank of Baroda.In 2011, the Bank was granted permission for All India Area of Operation by Reserve Bank of India. The Bank has an ambitious business expansion plan in place to have a presence in all major cities of the country, and to reach a business levels of Rs. 50,000 Crores by 2016 and Rs. 1,00,000 Crores by 2018 respectively.The Bank has a network of 267 fully computerized branches as on 31 March 2014 covering six states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi. The Bank provides 24-hour service through ATMs at 205 locations.As on 31 March 2014 the Bank's business had surpassed Rs. 39,000 Crores. The Bank has retained its coveted position as ZERO NET NPA Bank for the tenth successive year.

ABOUT US

The Bank has a very humble but a very inspiring beginning. On14th September 1918,"The Saraswat Co-operative Banking Society" was founded. Mr. J.K. Parulkar became its first Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first Secretary and Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were people with deep and abiding ideals, faith, vision, optimism and entrepreneurial skills. These dedicated men in charge of the Society had a commendable sense of service and duty imbibed in them. Even today, our honorable founders inspire a sense of awe and respect in the Bank and amongst the shareholders. The Society was initially set up to help families in distress. Its objective was to provide temporary accommodation to its members in eventualities such as weddings of dependent members of the family, repayment of debt and expenses of medical treatment etc. The Society was converted into a full-fledged Urban Co-operative Bank in the year 1933.The Bank has the unique distinction of being a witness to history. The Bank, which was originally founded in 1918, i.e. close on the heels of the Russian Revolution, also witnessed as a Society and as Bank - the First World War, the Second World War, India's freedom Movement and the glorious chapter of post-independence India. During this cataclysmic cavalcade of history, the Bank as a financial institution and its members could not of course remain unaffected by the economic consequences of the major events. The two wars in particular brought in their wake, paucities of all kinds and realities and stand by its members in distress as a solid bulwark of strength. The Founder Members and the later-day managements of the Bank continued to demonstrate their unwavering faith in the destiny of the common man and the co-operative movement and they encouraged the shareholders to save despite all odds.

Thanks to these sustained and assiduous efforts over 25 years after its inception, the Bank had gained a strong foundation in terms of its membership, resources, assets and profits. By 1942, the Bank was fulfilling all the banking needs of its customers.During the late fifties, the Bank grew from strength to strength. The Bank had established five branches within the city of Mumbai and one each at Pune and Belgaum. In its 50th year, the Bank chose a bee motif to symbolise the Bank's emblem - a fitting and appropriate characteristic of a Bank that believed in hard work, a search for all that is good, a team spirit to achieve its objectives and selfless service to its members and customers. The Bank had grown in stature, progressed in its social and economic objectives and produced an image of what an ideal bank should be. Resultantly, in the year 1977-78, the Bank's gross income crossed the Rs.3.00 crore mark for the first time.In 1988, the Bank was conferred with "Scheduled" status by Reserve Bank of India. The Bank is the first co-operative bank to provide Merchant Banking services. The Bank got a permanent license to deal in foreign exchange in 1978. Presently the Bank is having correspondent relationship in 45 countries covering 9 currencies with over 125 banks. In1992, the Bank completed 75 years. Platinum Jubilee Celebrations were inaugurated on 14th September, 1992 and the Bank also crossed the business level of Rs. 700 Crores.The beginning of the 21st century has been a giant leap forward for the Bank. The Bank chose a path of organic/inorganic growth andourpace of growth accelerated.The Bank's total business which was around Rs.4000 Crore in 2000 almost tripled to Rs.15295 Crore in 2007.In the year 2008, the Bank launched a Branding Initiative. The purpose of such an exercise was to reconfirm the thrust of the Bank on its core values, which can be summed up as a "Sense of Belonging". The name of the Bank should always inspire a Sense of Belonging in all its stakeholders and theBank continues to fulfill the changing needs and expectations of the customer with unflinching gusto and aplomb.MISSION STATEMENT"To emerge as one of the premier and most preferred banks in the country by adopting the highest standards of professionalism and excellence in all the areas of working"MILESTONESIn the last two decades the Bank has witnessed a steady growth in business and also taken several Strategic Business Initiatives such as undertaking Business Process Reengineering initiative, merging seven Cooperative Banks and then consciously nurturing them. The Bank tied up with VISA International for issuance of Debit Cards. In 2011, the Bank was granted permission for All India Area of Operation by Reserve Bank Of India.The Bank has an ambitious business expansion plan in place to have a presence in all major cities of the country, reach a business level of Rs.50000 Crores by 2016 and Rs.100000 crores by 2021.The Bank has a network of 267 fully computerized branches as on 31st March, 2015 covering six states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi. The Bank is providing 24-hour service through ATMs at 219 locations. As on 31st March, 2015 the Bank's business had surpassed Rs. 44000 Crores.It is a matter of immense pride for the Bank that its new Corporate Office at Prabhadevi,Mumbai has become operational. The officeestablishesour strong presence in thefinancialcapital of thecountry. The massive edifice in crystal glass in the heartofMumbai gently reminds everyone of the Numero-Unoposition which the Bank holds in the Cooperative Sector. The usage of state of art technology coupled with personalambience to make everybody comfortable once again reiterates the Bank's adherence to "Think Global, Act Local". The address of our new Corporate Office is as under:

PROFILE"Service to the Common Man" has been the motto of Saraswat Bank for the last96 years. Bank in spite of its growth in size has been able to offer to the customersthe dual advantage of "Ability of Big Banks and Agility ofSmall Banks"

The Bank still continues to function with the glorious tradition in public services Besides being the largest Urban Co-operative Bank in India, Saraswat Bank has now become the largest in Asia. Saraswat Bank has now 267 fully computerized branches as of 31st March 2015, 4 Zonal Offices and departments located across 6 States viz. Maharashtra, Goa, Gujarat, Madhya Pradesh, Karnataka and Delhi.

Saraswat Bank attributes this success to its undying spirit to serve the common man and to the sharpening of its competitive edge by constantly upgrading technology to match international standards. The Bank is fully computerised and offers convenient working hours.

Saraswat Bank has introduced a wide range of credit schemes at attractive interest rates, which has become very popular, especially among the middle-class in view of the easy repayment plans. Bank offers attractive interest rates on deposits and also various add on features at very market competitive rates.

CHAPTER 7

TYPES OF DEPOSITS OFFERED BY SARASWAT BANK

SAVING DEPOSITA Savings Account for everyone to inculcate the habit of saving and avoid thrift. Bank offers you a host of convenient features and banking channels to transact through. Personalized service coupled with technology enabled products is the hallmark of our service. Types of saving deposits are:- Regular Savings Account CUBS Account for Kids My Money Savings Account CAMPUS Account for College students Akshay Salary Account Suvidha Savings Account Janhit Account Pradhan Mantri Jan Dhan Yojana

Elite Savings Account Elite Silver Savings Account Elite Gold Savings Account CURRENT DEPOSIT

Fasten your pace with a current account which offers you out of the world service experience by combining personalized service with many appropriately priced features. Our customer friendly staff will not leave any stone unturned to make your experience a memorable one. Internet Banking, SMS Banking all will allow you to Bank from the comfortable confines of your home and office.

Types of current deposit:- Elite Current Account Premium Current Account Platinum Current Account FIXED DEPOSITLumpsum amount is deposited at one time for specific period. Higher rate of interest is paid, which varies with the group of deposit. Withdrawals are not allowed before the expiry of the period. Those who have surplus funds go for fixed deposits. RECURRING DEPOSITYou can invest in small amounts every month and see the drop become an ocean. Through this account you can invest small amounts of money every month and end up with a large kitty on maturity. Bank also allows you facility to give standing instructions by which the amount is debited from your account every month.

LOANSIt is normally for short term say a period of one year or medium term say a period of five years. Nowadays, banks do lend money for longer term. repayment of money can be in the form of installments spread over a period of time or in a lumpsum amount. interest is charged on actual amount sanctioned, whether withdrawn or not. The rate of interest may be slightly lower than what is charged on overdraft and cash credits. Loans are normally secured against tangible assets of the company.

TYPES OF LOANS OFFERED BY SARSWAT BANK

PERSONAL LOANS

These are given to individual customers for meeting their personal requirements. These loans are repayable in monthly installments. Saraswat co-operative bank offers various loans to its customers. Bank takes care of its customers by offering comprehensive loan packages at extremely competitive rates, without any hidden cost. Our personalized service coupled with state of the art technology at absolutely market competitive rates shall make your banking experience truly memorable one. The types of personal loans are as follows:

Privilege loan: privilege loan is for personal expenses and only individuals employed with reputed public limited companies and repayment can be done maximum in 60 months

Samruddhi scheme: samruddhi scheme is to meet urgent financial needs of individuals and overdraft facility is subject to renewal every year.

Multi-purpose loan: multi-purpose loan is for purchase of consumer durables, computer, two wheelers, house repairs, medical/ travels/ education/ other expenses. maximum loan amount is Rs 2 lakhs

EDUCATION LOANThe purpose of this loan is for studies in India or abroad. The applicant of this loan is the parent of the student. student will be the co-applicant. The amount of loan for education in India is maximum Rs 10 lakhs and maximum amount is Rs 20 lakhs for education abroad. the period for repayment of such loan is maximum 144 months inclusive of moratorium period of maximum 36 months. The rate of interest charged on such loan is 14.5% p.a. Atleast two guarantures are required for application of loan up to Rs 2 lakhs. The security of Rs 2 lakhs and two gurantures for the application of loan above Rs 2 lakhs and upto Rs 5 lakhs for application of loan above Rs 5 lakhs and upto Rs 20 lakhs securities required are- Tangible security like lic, nsc, kbp, gold, rbi bonds or fd's with the bank . Mortgage of un encumberad . one or more personal gurantes depending on the merits of the proposal.0.5% of the loan amount is charged as processing fees for studies in abroad.documents required for application of education loan are duly filed application formadmission related documents such as. offer letter from universities/ college/ institue stating details of course and admission procedure in case of students going to usa than admission letter is required passport copy ( in case of education abroad) or identify proof. latest academic marksheet. work experince proof if any.

loan related documents such as KYC documents of applicants and guranters such as pancard , address proof, photograph for salaried persons copies of salaries slip for last three months, bank account statement for last six months, itr in form 16 for last three years. for businessman/ professionals copies of last three years audited profit and loss and balance sheet, itr with computation for last three years. bank account statement for last 6 months.

VEHICLE LOANThe purpose of this type of loan is for purchase of new cars .The eligibility for such type of loan is salaried person with one year confirmed sevice.Businessman, professionals and commerical organisation.The repayment for salaried class for this loan is maximum up to 84 months and the repayment for business class is maximum up to 60 months.The security for this loan is hypothecation of vehicle and gurantor depending on merits of the proposal.The processing fees for this loan is 0.5% of the loan amount.

CHAPTER 8

COMPANY PROFILEABHUDAYA BANK

Abhyudaya Co-op. Bank Ltd., one of the leading Urban Co-operative Banks in India, in its outlook and approach, has the 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. 11th January, 2007. The area of operation which was restricted to the State of Maharashtra has now been extended to Karnataka State. Currently, the capital base of the bank stands at Rs. 45.78 crores and Reserves and surpluses at Rs.671.95 crores as on 31.03.2009. The bank has 1, 23,011 members and more than 12 lakhs depositors. The Bank has seen a tremendous growth in deposits. The deposits of the bank are over Rs. 3174.81 crores as on 31.03.2009, which were Rs. 2625.51 crores as at the end of the financial year 2008. The loans and advances stood at Rs. 1856.39 crores as on 31.03.2009. The bank had posted a net income of Rs. 92.36 crores as on 31.03.2009. The growth rate of the bank compares well with that of others in the sector. The Bank has maintained a steady growth. The bank has been paying dividend @ 15% to its members which is maximum permissible as per the MCS Act.The Bank has launched different loan schemes tailor-made to suit the needs of various customers. The schemes aim at providing loans 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. One of the loan schemes, viz. "Udyog Vikas Yojana" is specially designed for the benefit of small entrepreneurs and businessmen. The procedure for sanctioning of loans under the schemes has been simplified and relaxed with a view to attract new customers and facilitating speedy sanction of loans. The Bank has total 75 branches including a Mobile Bank at Navi Mumbai. Bank is committed to spread 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 term growth. The Bank has always endeavored for providing satisfactory customer service with the help of the latest technology. The Bank has provided fully computerised services to its valued clients. Bank is offering 11 Hours fully computerised services at 15 branches and 24 hours ATM service at 42 branches.

Milestones:1964- Established as Co-operative Credit Society.1965- Converted into a Bank with one Branch at Abhyudaya Nagar. 1985-Inauguration of Banks own Building, Staff Training College and Auditorium at Vashi, RBI Permitted the Bank to open and maintain NRI Accounts.1986 - Instituted Educational Prizes to the children of Members and Employees. Became 3rd Biggest Urban Co-op. Bank in India.1988 - Became Scheduled Bank.1990 - Inauguration of Banks own Building at New Panvel.1995- Decision to set up Development Reserve Fund to undertake special schemes.1997- All Branches fully computerized.1999- Eleven Hours & Sunday Banking started in 16 Branches. 2000- ATM installed at 3 branches. 2003- Opened 40th Branch with ATM Facility & 11 hours and Sunday banking At Lokmanya Nagar (Thane).2004- Started RTGS and NDS Facilities.2006- Merger of Citizen Co-operative Bank Ltd., with 13 branches. 2007- Registration of the Bank under Multi-State Co-Op Societies Act on11th Jan., 2007.2008- Merger of Shri Krishna Co-operative Bank Ltd, Vadodara Merger of Janata Sahakari Bank, Udupi Foreign Exchange Department we inaugurated2009 - Opened Bhayander branch And Dahisar branch Opened recovery call centre at Parel

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SERVICES PROVIDED BY ABHYUDAYA BANKDeposit:-Domestic Deposit:-Saving DepositCurrent DepositTerm DepositAbhyudaya Banks other Saving Bank account Products:-1.Abhyudaya Zero Balance Saving Bank Account for Salaried Person (SBZROBAL):An individual working in Govt. Org., Semi Govt. Org., Agents of Life & General Insurance, employees of Educational Institutions & Public ltd. Companies. Accounts can also be opened of the employees of Business Concerns/ Private/ Industrial units (Min 20 Employees) & whose company accounts are with our bank branches.

2. Abhyudaya SB Youth Accounts : for School /College going Students.

3.Basic Saving Bank Accounts (BSB). : No introduction required & zero minimum balance.

4.Abhyudaya Small Saving Accounts (SSB): suitable for people of low means. Zero minimum Balance. 5.Savings Bank Account with Zero Balance to MID/QID Deposit Holders:MID/QID depositors having minimum Term Deposit of Rs.10,000/- will be allowed to open Savings Bank Account with Zero balance

Types of Loans and Credit Facilities Given by BanksThe entire operations of the banking industry revolve around obtaining deposits and granting loans and different credit facilities to its customers for viable projects. The different types of loans and credit facilities given by the banks can be broadly classified into two types. Retail Lending Commercial lendingRetail Lending:Retail finance has become the preferred business of banks because of its higher spreads and low risk of delinquency. The Indian consumer is fast changing his habits, borrowing money to buy the product he wants, not content with buying what he can afford. The resultant consumer boom is what market strategists explain as the key to the access of the Indian retail finance market. Retail finance today is a win-win system in which everyone stands to gain. For the Indian consumer, it is an opportunity to upgrade his standard of living right now instead of waiting for years for his savings to accumulate. For manufacturers, it stimulates demand and lowers inventory. For middlemen, its a sales boosting device. For players of consumer finance i.e. banks and lending institutions, its a means of profit generation. There are a number of retails loans given by banks to its customers, which would suite their requirements. They are stated as under: Housing Loan Education loan Mortgage loan Personal loan Senior citizen pension scheme Rent scheme Consumer durables loan Auto finance loan Trade finance loan Loan against National savings certificate (NSC) Loan against Kisan Vikas patra (KVP) Loan against fixed deposit receipt (FDR) Loan against RBI bonds Loan against LIC Loan against FCNR Overdraft against FD/NSC/KVP

Commercial Lending:The entire commercial lending can be broadly classified as fund based commercial credit facility and non-fund based commercial credit facility.

Fund Based Bank Facilities:Term Loans: Term loan is an installment credit repayable over a period of time in monthly/quarterly/half yearly / yearly installments. Term loan is generally granted for creation of fixed assets required for long-term use by the unit. Term loans are further classified in three categories depending upon the period of repayment as under: Short term repayable in less than 3 years. Medium term loans repayable in a period ranging from 3 years to 7 years. Long-term loans repayable in a period over 7 years.

Cash Credit Facility: A major part of working capital requirement of any unit would consist of maintenance of inventory of raw materials, semi finished goods, finished good, stores and spares etc. In trading concern the requirement of funds will be to maintain adequate stocks in trade. Finance against such inventories by banks is generally granted in the shape of cash credit facility where drawing will be permitted against stocks of goods. It is a running account facility where deposits and withdrawals are permitted. Cash credit facility is of two types (depending upon the type of charge on goods taken as security by bank)(i) Cash credit pledge: When the possession of the goods is with the bank and drawings in the account are linked with actual movement of goods from / to the possession of the bank. The bank exercises the physical control of the goods.

(ii) Cash credit hypothecation: When the possession of the goods remains with the borrower and a floating charge over the stocks is created in favour of the bank. The borrower has complete control over the goods and the drawings in the account are permitted on the basis of stock statements submitted by the borrower.

Overdraft Facility: Overdrawing permitted by the bank is current account is termed as an overdraft facility. Overdraft may be permitted without any security as clean overdraft for temporary periods to enable the borrower to tide over some emergent financial difficulty. Secured overdraft facility is against fixed deposits, NSC, and other securities.

Bill Finance: This facility is against bills of sales raised or book debts. Export Finance / Packing Credit: Bank grants export credit on very liberal terms to meet all the financial requirements of exporters. The bank credit for exports can broadly be divided in two groups as under:

Pre Shipment advances / packing credit advances: Financial assistance sanctioned to exporters to enable them to manufacture / procure goods meant for export and arrange for their eventual shipment to foreign countries is termed as per shipment credit.

Post shipment credit: The bills purchase / discount facility granted to exporters is grouped as post shipment advance.

Non Fund Based Bank Facilities: Credit facilities, which do not involve actual deployment of funds by banks but help the obligations to obtain certain facilities from third parties, are termed as non-fund based facilities. These facilities include issuance of letter of credit, issuance of guarantees, which can be performance guarantee / financial guarantee.

LETTER OF CREDIT (LC) A LC represents a commitment of a bank to pay the seller of goods or services a certain amount provided he resents stipulated documents evidencing the shipment of goods or the performance of services within a prescribed period of time. LC can be of two types: Inland ForeignIn other words LC is the undertaking of a bank to make payment on behalf of a person to a third party with a conditional undertaking. There are four principle parties to the LC. They are stated as under. Applicant (opener): He is the buyer of the goods. LC is opened at the request of the buyer, as per his instructions. Issuing Bank (opening bank): The bank (buyers bank) that issues the LC and undertakes conditional payment, at the request of the opener / buyer / importer customer. Beneficiary: He is the seller of the goods. LC is issued in his favour enabling him to obtain payment on submission of stipulated documents / compliance with the terms and conditions of LC. Advisory bank: This is the bank which a normally located in the country of the seller that advises the credit to the beneficiary, establishes the genuineness of the credit.

COMPARISON OF FINANCIAL RATIO

CAPITALBANKS in Rs. (Billion)20152014% change

SARASWAT BANK16768779801269092940132.13

ABHYUDAYA BANK1014453000886129000114.48

DEPOSITSBANKS in Rs. (crore)20152014% change

SARASWAT BANK239395103443211443316405113.21

ABHYUDAYA BANK93308968008036398900116.10

ADVANCES BANKS in Rs. (crore)20152014% change

SARASWAT BANK154700501978150234150595102.97

ABHYUDAYA BANK57004712005108885500111.57

INVESTMENTBANKS in Rs. (crore)20152014% change

SARASWAT BANK7804742067564439983353121.11

ABHYUDAYA BANK36968287223150096700117.35

CHAPTER 10RBI POLICIES FOR CO-OPERATIVE BANK

The RBI appointed a high power committee in May 1999 under the chairmanship of Shri . K. Madhava Rao, Ex-Chief Secretary, Government of Andhra Pradesh to review the performance of Urban Co-operative Banks (UCBs) and to suggest necessary measures to strengthen this sector. With reference to the terms given to the committee, the committee identified five broad objectives:

To preserve the co-operative character of UCBs To protect the depositors interest To reduce financial risk To put in place strong regulatory norms at the entry level to sustain the operational efficiency of UCBs in a competitive environment and evolve measures to strengthen the existing UCB structure particularly in the context of ever increasing number of weak banks To align urban banking sector with the other segments of banking sector in the context of application or prudential norms in to and removing the irritants of dual control regime RBI has extended the Off-Site Surveillance System (OSS) to all non-scheduled urban co-operative banks (UCBs) having deposit size of Rs. 100 Crores and above.

PROBLEMS OF CO-OPERATIVE BANK

Duality of control system of co-operative banks However, concerns regarding the professionalism of urban co-operative banks gave rise to the view that they should be better regulated. Large co-operative banks with paid-up share capital and reserves of Rs.1 lakh were brought under the purview of the Banking Regulation Act 1949 with effect from 1st March, 1966 and within the ambit of the Reserve Banks supervision. This marked the beginning of an era of duality of control over these banks. Banking related functions (viz. licensing, area of operations, interest rates etc.) were to be governed by RBI and registration, management, audit and liquidation, etc. governed by State Governments as per the provisions of respective State Acts. In 1968, UCBs were extended the benefits of deposit insurance. Towards the late 1960s there was debate regarding the promotion of the small scale industries. UCBs came to be seen as important players in this context. The working group on industrial financing through Co-operative Banks, (1968 known as Damry Group) attempted to broaden the scope of activities of urban co-operative banks by recommending these banks should finance the small and cottage industries. This was reiterated by the Banking Commission in 1969.

The Madhavdas Committee (1979) evaluated the role played by urban co-operative banks in greater details and drew a roadmap for their future role recommending support from RBI and Government in the establishment of such banks in backward areas and prescribing viability standards. The Hate Working Group (1981) desired better utilization of banks surplus funds and that the percentage of the Cash Reserve Ratio (CRR) & the Statutory Liquidity Ratio (SLR) of these banks should be brought at par with commercial banks, in a phased manner. While the Marathe Committee (1992) redefined the viability norms and ushered in the era of liberalization, the Madhava Rao Committee (1999) focused on consolidation,control of sickness, better professional standards in urban co-operative banks and sought to align the urban banking movement with commercial banks. A feature of the urban banking movement has been its heterogeneous character and its uneven geographical spread with most banks concentrated in the states of Gujarat, Karnataka, Maharashtra, and Tamil Nadu. While most banks are unit banks without any branch network, some of the large banks have established their presence in many states when at their behest multi-state banking was allowed in 1985. Some of these banks are also Authorized Dealers in Foreign Exchange.

CHAPTER 11

CONCLUSIONAlmost all the Banks offer similar features and facilities with their Savings accounts. There are certain reasons for existing customers of Saving Account of any Bank to shift to another Bank. The level of service in terms of delivering whatever is promised, fast response in case of problems, is the most important benefit that the customers seek, from the Bank they have a Saving Account with.1. Network reach and visibility of a Bank is a very important criterion for the customer while opening a Saving Account. We can also conclude from our analysis that network reach in terms of Branches and ATMs is directly proportional to the market share in case of Private Players. 2. In case of a new customer, if a bank approaches it first for opening a Saving Account with them, then there is a good chance for the bank of getting many future businesses and cross sales from the deal.3. Aggressive Marketing is the key to increasing the market share in this area, since the market has a lot of potential both in terms of untapped market .

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WEBILOGRAPHY

www.moneycontrol.com www.saraswatbank.com www.abhyudayabank.com www.rbi.org.in

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