Commerce Project New1.

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INTRODUCTION The word ‘co-operative’ is derived from the Latin word ‘co-operation’ which means working together. Generally it implies living, thinking and working together. It signifies the spirit of human civilization. It is the basis of the social life of human civilization. Co-operation is the backbone of economic activities and social progress. International Co-operative Alliance defines “co-operative society is an autonomous association of persons united voluntarily to meet their common economic, social and cultural, democratically controlled enterprise. Co-operative movement first originated in England. Later on, it has been introduced in Germany, Russia, China, USA, Japan, India, Israel etc. It is from these countries that the movement spread almost all over the world. In India co-operative movement was started y the passing of the first co-operative societies Act in 1904. By the end of these century, it has 1

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Transcript of Commerce Project New1.

Page 1: Commerce Project New1.


The word ‘co-operative’ is derived from the Latin word ‘co-

operation’ which means working together. Generally it implies

living, thinking and working together. It signifies the spirit of

human civilization. It is the basis of the social life of human


Co-operation is the backbone of economic activities and

social progress. International Co-operative Alliance defines “co-

operative society is an autonomous association of persons united

voluntarily to meet their common economic, social and cultural,

democratically controlled enterprise.

Co-operative movement first originated in England. Later on,

it has been introduced in Germany, Russia, China, USA, Japan,

India, Israel etc. It is from these countries that the movement

spread almost all over the world. In India co-operative movement

was started y the passing of the first co-operative societies Act in

1904. By the end of these century, it has covered almost all

villages and major portion of rural and urban population.

Co-operative institutions have been accepted as a

significant instrumentof socio-economic transformation in rural and

urban area. In India co-operation has its origin in the field of credit

at present of stretches. Its aims to areas such as production,

marketing, processing, public health and consumer sector etc.


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In Kerala, the first legal legislation was passed in 1913. The

first co-operative society was Edvanakkad Service Co-operative

Bank. After the formation of Kerala State, a new legislation was

enacted I 1969, Kerala Co-operative Societies Act. A service Co-

operative Bank access saving Bank deposits, current deposits,

Fixed deposits and Recurring deposits. It gives short and medium

term loans.


The Chengala Service Co-operative Bank Ltd. No.S 66 is

one of the leading banks meeting he financial requirements of the

members. The study is designed to cover the analysis of the

general working of the bank for the last seven years. The study is

done mainly on the basis of the figures reported in the financial

statements. For the purpose of the analysis of the problem of the

bank a seven year period from 2003-04 to 2009-10 is selected.


The main objectives of the study are to get analysed the financial

performance of the Chengala Service co-operative Bank Ltd. No.S.66. The

objectives of the study are

1. To study the organization and working of the Bank.

2. To study the working capital CSCB Ltd.

3. To analyse the lending and deposit policy.

4. To review the growth of the bank during the years.


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5. To analyse the profitability of the bank.

6. To make recommendations based on findings of the study.

7. To extends short term and medium term to agriculturists.

8. To study the different ratios of CSCB Ltd.


This study is based on a single unit and have case study

approach is accepted as a general methodology. Accepted

statistical tools and techniques have been used for the purpose of

analysising the data. Graphic representation of data have also

made to find out the trend behaviour in each year and also to know

the relationship between them.


For this study, both primary and secondary data are used.

Primary data are collected by interviews and discussions with the

secretary, president, staffs, customers and shareholders of the


Secondary data are collected from published accounts,

annual reports and other publications.


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The study attempts to analyse the financial analysis of

C.S.C.Bank, for a period of seven years from 2003-04 to 2009-



The study has the following limitations.

1. It is a study related with single unit. Hence conclusion may

be valid for unit concerned. Generalization of conclusion has their

own limitations.

2. Owing to the constrains of time and money a detailed and

elaborate study could not be attempted.

3. Inter-branch comparison of C.S.C.B. Ltd. could not be made,

owing to the shortage of money.


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Banks are the most important institutions that help business

activities. The success of trade and commercial activities to a

large extent, depends on the availability of finance. Different types

of banks facilitate varied financial requirements of business

community. Banks also aim at collecting tiny saving of investing

public bank are the inevitable part of the economy. Banks have

played a decisive role in the economic well being of the nations

throughout the world. Banks have been established with the simple

objective of keeping the surplus of the society and repaying it

whenever demanded. Through the objective are simple, banks

have grown beyond that and have become the indivisible and

inevitable part of the economy.

In a Society, a section of people to keep for future use, while

others are in need of money either for meeting some contingency

or for making some investment. Banks play an important role by

acting as an intermediary between them. They are the chief

service providers in a country. Banks play a significant role in the

economic development by mobilizing savings of the public and

diverting it into productive activities. They facilitate the production

of different capital and consumer goods and its distribution to the

customers through wholesalers and retailers. By providing

consumer loans, they also help the consumers to acquire costly

consumer durable goods. A part from the above, they render

many kinds of services to their customers.


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Now banks offer access to even a common man and their

activities extend to areas with untouched. A part from their

traditionally business oriented functions, they have now come out

to fulfill national responsibilities. Banks later to the needs of

agriculturists, industrialists, traders and to all the other sections of

the society.


According to kinly “a bank is an establishment which makes

to individuals such advances of money as may be required can

safely mode and to which individuals entrust money when not

required by them for use.

Section 5(1)(b) of banking regulation Act,1949, defines

banking as “Accepting for the purpose of lending or investment, of

deposits of money from the public, repayable on demand or

otherwise and withdrawable by cheque, draft or otherwise”.

Section 5(b) of Banking Regulation Act, defines banking

company as “a company which transacts the business of banking

in India”.

According to Herbert L. hart “the banker is a person or

company carrying on the business of receiving money and

collecting draft for customers subject to the obligation of honoring

the cheques draw upon him from time to time by customers upto

the amount available on their customers account.

Jop Pager defines “a bank is an institution which takes

deposit current account issues and pays cheques and collects

cheques of the customers is not specially include”.


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A bank is an institution, which is primarily engaged in

receiving money from the public by way of deposits and provides

the same to those who are in need of it as loans and advances.

Hence, they are the buyers and sellers of money. Banks offer

interest on deposits and collect a higher rate on loans. The

difference in rates of interest represents the margin received by



Banking industry is an old as authentic history. As an

industry, it has been in existence for very long period. Writers on

banking are divided in their opinion regarding the origin of the word

‘Bank’. According to some writers, the word ‘bank’ was derived

from the French word ‘Banque’, or from the Italian word ‘Banco’ or

from the Latin word ‘Bancus’, all of which means a bench upon

which the medieval European money lenders used to display their

coins. These benches were placed in the market place and they

used to transact their business of money lending and money

changing on benches. In short, the writers concluded that the

word ‘Bank’ was originated from the word ‘Bench’.

There is supposed to be another derivation of the word

‘Bank’. In the year 1171, the state of Venice was involved in a

serious financial difficulty. To tide over this difficulty the ‘Great

Council’ decided to take a forced loan from the citizen at an

interest of 5% per annum. The name for such a loan in Italian

languages is ‘monte’ which means a ‘joint stock fund’ or a

‘common fund’. At this period, the Germans were the masters of a


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greater part of Italy. Hence the German equivalent term ‘Bank

became popular to mean ‘joint stock fund’. The German version

was Italianised into ‘Banco’ Frenchised into ‘Banque’ and, finally,

anglicized into ‘Bank’. Hence it is evident from this etimology that

the word ‘Bank’ denotes a practice of collecting a common fund

from the public.

Gradually several banks were established in different parts of

Italy with the specific intention of collecting joint stock fund or

common fund. The Bank of Milan, the Bank of Florence, the Bank

of St. George at Genoa etcf. were some of them.


The First Bank in India, through conservative was

established in 1786. From 1786 till today the journey of Indian

Banking system can be segregated into three distinct stages.

They are mentioned below.

Early stage from 1786 to 1969 of Indian banks.

Nationalization of Indian Banks upto 1991 prior to India Banking

sector reforms.

New stage of Indian Banking system with the adverty of Indian

Financial and Banking sector reforms after 1991.



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During the first phase the growth was very slow and Banks also

experienced periodic failures between 1913 and 1948.

Reserve Bank of India came in 1935, under the Act of reserve

Bank of India, 1934.

Stage - II

Government took major steps in Indian Banking sector reforms

after independence. In 1955, it nationalized … Imperial Bank of

India; the General Bank of India was set up in the year 1987. Next

came, “Bank of Hindustan” and “Bengal Bank”. The East India

company established “Bank of Bengal” (1809), “Bank of Bombay”

(1840) and “Bank of Madras” (1843) as independent units and

called it as presidency Banks. These three Banks were

amalgamated in 1920 and imperial Bank of India was established

which started as private with extensive Banking facilities. On a

large scale especially in rural and semi-urban areas.

Seven Banks forming subsidiary of State Bank of India was

nationalized in 1960. On 19th July, 1969 major process of

nationalization was carried out and 14 major commercial Banks in

the country was nationalized (Central Bank of India, Indian

Overseas Bank, Bank of Baroda, Bank of Maharastra, Dena Bank,

Union Bank, Punjab National, Allahabad Bank, Syndicate Bank,

United Bank of India, Canara Bank, UCO Bank, Indian bank, Bank

of India).


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Second phase of nationalization was carried out in 1980 with

six more banks. (Andhra Bank, Punjab and Sindh Bank, Vijaya

Bank, Corporation Bank, New Bank of India, Oriental Bank of


Stage III

This stage has introduced many more products and facilities

in the Banking sector with its reforms measure in 1991, under the

chairmanship of M.Narasimham. A committee was set up in his

name, which worked for the liberalization of banking practices.

The country is now flooded with Foreign Banks and their

ATM stations with phone Banking and Net Banking. The entire

system became more convenient and swift.


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Scheduled Banks of India

Scheduled Commercial Banks

Scheduled Urban Co-operative Banks

Scheduled State Co-operative Banks

Public Sector Banks

Private Sector Banks

Foreign Banks

Regional Rural Banks

Nationalized Banks

State Bank of India and

associate Banks

Old Private Banks

New Private Banks


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The importance of bank in the modern economy cannot be

neglected because they perform certain economic functions. A

banking institution is an indispensable part of the modern society.

They collect the savings of the people in the form of deposits and

lend the same of those who stand in need of money. In addition of

these a modern Bank performs a lot of other functions. These

functions are considerable utility to its customers and community in


The organized Banking structure of India consists of

commercial Banks, (scheduled and non scheduled), foreign banks,

Rural Banks, and Co-operative Banks. They are all engaged in

accepting deposits and lending money to the different segment of

our country. The commercial and foreign banks with their

concentrated resources and net work of branches over industrial

commercial centers of the country. They provide credit mainly to

business and commercial establishments. The co-operative banks

on the other hand, have been providing banking facilities on widely

extended bases to the organized agriculture and cottage and small

scale industries of Indian economy.

In most of the developing countries of Asia including India

Co-operative credit and banking sector is the backbone of the co-

operative movement. In our country, co-operative sector has a

well knit structure covering almost all the villages and majority of

the towns and cities and may of the economic commercial and


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banking activities. Co-operation was started in India means for

raising funds and providing financial assistance to each other.

The joint family system, the grama saba etc. are different

system prevailed in India where people works together for there

betterment. Co-operative philosophy aims at equal distribution of

income and wealth by elimination conflicting interest between

employee and employers, producers and avoiding middlemen. In

a democratic sector, the tasks of government are to supplement

peoples efforts to mobilizing and make available the scarce

resources for securing economic equality and development. For

this co-operative especially co-operative credit institution have a

significant hole to play.

The co-operative bank has a history of almost 100 years.

The co-operative movement originative in the west, but the

importance that such bank have assumed in India is rarely paralled

any where else in the world. Their role in rural financing continues

to be important even today and their business in the urban area

also has increased phenomenally in receipt year mainly due to the

sharp increase in the number of primary co-operative bank.

These chapter deals with the profit of co-operative

movement and co-operative credit institutions in general and in

service co-operative banks.


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England is the considered is the homeland of co-operative

consumer movement. The industrial revolution and its results gave

birth to the origin of co-operative movement.

Great Britain is the birth place of Robert Owen who was the

father of co-operative movement. Dr. William king and Christian

socialist also contributed much for the development of co-operative

movement in Britain. Germany is considered the cradle of credit

co-operative in the world. The conditions prevailed in Germany in

the middle of 19 century were pitiable and disheartening. Under

these conditions co-operative movement originated on Germany

from where it spread throughout the world.


Co-operative Movement was introduced in India as a

government sponsored movement. In India the socio economic

conditions were mainly responsible for making the co-operative

movement a government sponsored movement.

In the early stages of the movement India was subjected to

foreign invasions. The foreign invaders in the past never wanted to

disturb the structure of Indian economy. But British becoming the

supreme power had brought about virus reforms. They had made

their own laws to disturb the calm and self sufficient villages life.


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Tax collection was in kind and was related to the yield from

the farms. There was no bearing on the field from the farms.

There was no bearing on the field. Even if the crop was lost, the

farmer has to pay the tax. The farmer has to depend entirely upon

the monsoon. Lack of transport facility forced the farmer to sell

their products in the farms in the harvesting season itself. On a

very low price. The outcome of the large industrial units of British

destroyed the Indian industries. During this time the village money

lenders had a free play. They charged abnormal rates of interest.

At this situations some relief were taken by the government. By

passing the deccan agriculture relief Act of 1879, the agricultural

loans Act of 1884 and the land improvement loan Act of 1885.

These aims to provide agricultural loans to the farmers directly

from the government. Now the government was deeply through

the co-operative movement.


The Kerala State was formed in the year 1956. At this time

two different laws were in existence, Travancore, Cochin Co-

operative Society Act and Madras Co-operative Societies Act. It

was in 1969, the Kerala government passed the first co-operative

Societies Act 1969 come into force on 15 May 1969.

The co-operative societies in Keralaare divided into two

groups. They are:-

1. Agricultural societies.

2. Non-agricultural societies.


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Agricultural societies are again divided into two types.

Agricultural credit societies and agricultural non credit societies.

Non agricultural societies may be non agricultural credit societies

and non agricultural non credit societies.


After the introduction of Kerala Co-operative societies Act

1969, co-operation became a provisional subject. Co-operative

forms of organization have entered into all the societies of

economy like Banking, marketing, Education, Hospital,

Transportation etc. The co-operative Banking structure in Kerala

State consists of agricultural credit societies. Initially the co-

operative banking in Kerala concentrated mainly in agricultural

sector. But now it is extended to activities of non-agricultural credit

sector also.

Agriculture Non-Agriculture

AgriculturalCredit Societies

AgriculturalNon Credit Societies

Non Agricultural Credit Societies

Non Agricultural Non Credit Societies


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Germany was the birth place of co-operative credit societies.

Mrs.Wraiffeisen and Heer Schulze were the pioneer of co-

operative banking in germany. According to them, co-operative

credit was the only way to eliminate the problems of poor people.

In schulze societies, membership was given to artisan’s industrial

workers and middle class people living in cities and town, liability

of the members was limited. It gave discounted bill.

In Raiffeisen societies, membership was given to rural

farmers and cultivators. Liability of members is unlimited. It gave

three types of loans, current account and property transfers.


Co-operative Banks play an important role in the

development of Kerala. It gives priority to the agricultural sector,

which is the backbone of our economy. It also gives loans to

subsidiary occupations like poultry, dairy, sericulture, pisciculture

etc. it also finances non-agricultural sector.

The co-operative Banks provide short term, medium terms

and long term loans. Co-operative credit structure in Kerala is as


Three tier pattern with state co-operative Bank at the upper

level, District Co-operative Bank at the District level and primary

co-operative Bank at the village level.


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Co-operative Bank can be defined as “A mutual society

formed, composed and governed by working people themselves

for encouraging regular savings and granting small loans on easy

terms of interest and repayment.

The statutory definition of co-operative Bank as section 2 of

the RBI ct as follows. A co-operative Bank means, a sate co-

operative Bank, Central co-operative Bank and primary Co-

operative Bank. “Primary co-operative Bank means a co-operative

society other than a primary agricultural credit society”.



Co-operative credit societies aim at providing loan at a

reasonable rate of interest and getting bank loans. The primary

credit societies at villages level are known as Service Co-operative

Societies or Banks. The members of these societies are farmers

and their management is also related in them.

Since the inception of the service co-operative Bank in India,

the number of co-operative banks showed a steady growth rate.

Till 1949, the number of service co-operative banks in the country

were 815. During the period of 1948-60, it increased from 815 to

1242. In 1997 the number of co-operative Banks were 1350.


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The important functions of service co-operative banks are

listed as below:

1. To provide short term loans and medium term loans to


2. To arrange for the supply of farm requirements such as

seeds, fertilizers etc.

3. To maintain and supply the farm equipments like tractors,

sprayers etc.

4. To mobile funds from members and non-members.

5. To arrange for the marketing.



Co-operative Department


District level Circle level

Additional Registrar

Joint Registrar (General)

Joint Registrar


Assistant Registrar

Inspectors or Auditors

Assistant Registrar (General)

Additional Registrar (General)

Additional Registrar


Additional Registrar (Credit)

Additional Registrar


Additional Registrar

(ICDPAssistant Registrar


State level


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Registrar is the top level officer in the co-operative

department appointed by the government to the whole state of

Kerala. In Kerala Registrar of Co-operative department is

appointed by the government of Kerala as per section 3 of the

Kerala co-operative Societies Act 1969.

Additional Registrar:

Five additional Registrars appointed by the government in

the state leel under the control of Registrar. One Additional

Registrar for general administration of the co-operative department

and another one for audit using of co-operative department. Also

one additional Registrar each appointed to credit section,

consumer section and ICDP section of co-operative department

Joint Registrar:

Under the additional Registrars – 2 joint Registr ars

appointed for every district. In every district one joint Registrar for

general administration and another one for audit. Joint Registrar is

the district level officer.

Assistant Registrar:

Two assistant registrars are appointed in each circle.

Assistant Registrars (General) and Assistant Registrar (Audit)

working in every circle for and on behalf of the Registrar of co-

operative Societies. Assistant Registrar have the power to control

all the societies in the circle. Assistant Registrar is the taluk level



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Inspectors / Auditors:

Inspectors and auditors are working in the circle under the

control of Assistant Registrar. Inspectors conducting inspection

work and auditors conducting audit work in the co-operative

Societies / Bank for an on behalf of the Assistant Registrar.


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The Chengala Service Co-operative bank is one of the

leading financial institute in our district. Chengala Service Co-

operative Bank Ltd. No.S.66 was registered service Co-operative

Bank on 3.2.1992 and started its working. It is situated in Cherkala

of Kasaragod District. It has two branches: 1) 4th Mile Branch 2)

Cherkala Evening Branch. Now the bank has completed 18 years

of its service.


The Chengala Service Co-operative Bank operate in

Chengala Village of Chengala Panchayath.It was situated in



Any person who is a resident of area with in the Chengala

villages and who has attained the age of majority is eligible for

admission as a member. He should take atleast one A class share

to admitted as a member.

The membership which was 3938 in 2003-04 rose to 8492 in

2009-2010. The given table shows the membership of Chengala

Service Co-operative Bank Ltd for the last seven years period from

2003-2004 to 2009-2010.


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Membership of CSCB Ltd. From 2003 to 2010.



2003-04 3938

2004-05 4834

2005-06 5112

2006-07 6248

2007-08 7138

2008-09 7963

2009-10 8492


The total authorized share capital bank of the Rs.1 crore

consisting A, B and C shares.

The ‘B’ class share issued only to state government, state

co-operative bank and district co-operative bank.

As per the bylaws of the Chengala Service Co-operative

bank the ‘C’ class member has only the right to take the loan or

pledge of tangible securities such as gold, silver etc.


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Subject to such resolution as the General Body may from

time to time pass the execute the management of the affairs of the

Bank shall vest in Board of Directors. The Board of directors

consists of 9 members. In which one person should belong to

SC/ST and one person should be a women.

The elected members of the Board of Directors shall hold the

office for 5 years. An elected director can be removed from office

by 2/3 votes of those present in the general body meeting. The

board of directors should be elected from among the general body

member in accordance with the rules from order Kerala co-

operative Societies Act 21 of 1969.

All the elected members of the board of directors shall

vacate their office on the expiry of 5 years. If any casual vacancy

arises among the elected directors, the vacancy will be filled up as

per the procedure laid down in rule. The members of the board of

directors shall be elected in advance, so as to enable the new

board of directors to take up the administration of the board of

directors to take up the administration of the board as and when

the term expires.


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Following are the present Board of Directors.

President : Balakrishna Vorkudlu

Vice President : Moideen Kunhi C.H.

Directors : Abdulla C.B.

Mohammed B.

James C.V.

Gopalan K.

Abdul Nazar

Vinod Kumar

Madhavi P.


The Chengala Service Co-operative Bank Ltd. Was

organized by promoting committee consist of members. Over all

control of the bank is visited in the hands of board of directors. In

order to meet the banking transaction, chief accountant, manager,

auditor, accountant, clerk and attender are working.


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Chart No. 4.1 Chart showing organization structure of

Chengala Co-operative Bank Ltd.


Assistant Secretary

Chief Accountant


Internal auditor


Senior Clerk

Prior Clerk




The following are the current office bearer


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1 Secretary P. Giridharan

2. Assistant Secretary A. Anil Kumar

3. Internal Auditor/Branch


P. Savitha

4. Internal Auditor/Branch


M. Bhavani

5. Head Clerk/Accountant K.


6. Senior Clerk K.Balakrishnan

7. Junior Clerk K. Kanakam

8. Junior Clerk p. Radhamani

9. Junior Clerk P.Sathi

10. Junior Clerk P. Rashmi

11. Junior Clerk T. Pushpa

12. Junior Clerk K. Narayanan

13. Peon Anil Kumar


14. Peon Mamatha C.H.

15. Attender Haseena C.

16. Salesman Manikantan L.



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Following are the main objectives of Chengala Service Co -

Operative Bank Ltd.

1. To grant short term or medium term loans to the members of


2. To encourage among member of spirit of economy self

sufficiency and Co- Operation and to formulate implement shares

for the same.

3. To collect and distribute improved varieties of seeds,

manures and fertilizers, improved agriculture implements etc. for

agricultural purpose and necessary materials for home industries

and house hold use.

4. To sell out industrial products trough marketing societies or

other wise to the advantage of the member.

5. To formulate schemes of agricultural production for member

and implement them.

6. To give necessary help and Co- Operation to the member for

growing new types of seeds.

7. To arrange safe deposited locker facilities to member of the


8. To receive deposit from individuals, charitable institution,

trusts and than public institutions.

9. To receive grant on assistance from various government

agencies like NABARD.

10. To invest surplus funds of the Bank in Govt. promissory

notes, shares loan bonds of such Co- Operative Societies which

are guaranteed by the Government and other institution as

permitted under sec 15 of the Act.


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11. To collect funds require3d for carrying out these objects from

individuals and institutions.

12. To undertake collections and discounting of bills, cheques

and Drafts issued by reputed Banks and firms in favour of the

members and customers of the bank.

13. To receive various types of deposits from members general

public, charitable institutions/trusts and other public institutions.

14. To create funds for promotion of education of members

children subject to the limits prescribed by the board with the

approval of the Registrar of Co-operative Societies.


During 2008- 2009 number of number of members in the Co-

Operative bank was 7963 and as at 2009- 2010 it is 8492.Each

year there is an increase in number of member and during the time

there was an increase in 529 member ship .

The share capital of the bank in 2003 -2004 is 39.38 lakes

and in 2009 -2010 was 84.92 lakes and increased

Highlights of Chengala service Co-Operative Bank Ltd

between Year 2003-2010


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Year No. of member Share Capital

2003-2004 3938 39.38

2004-2005 4834 48.34

2005-2006 5112 51.12

2006-2007 6248 62.48

2007-2008 7138 71.38

2008-2009 7963 79.63

2009-2010 8492 84.92


Various kinds of deposits are received from both members

and non-members. The deposit include savings Bank deposit,

Fixed deposit, Day deposit and other deposits. The interest rate is

varying on accounts and to the extent of the deposit.


The Chengala Service Co-operative Bank issued various

loans to its members. On the basis of period the loans are

classified into short term and long term loans.


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Deposit accounts are one of important source of banks fund.

In order to attract customers the banks offer attraction facilities to

different types deposit account holders. In order top avoid

unhealthy competition among different banks the Reserve Bank of

India has been given the power to fixed deposit interest rates. The

Reserve Bank for this purpose issues directive from time to time.


The Board of Directors may receive deposits from both

members and non members at any time and shall frame suitable

subsidiary rules in accordance with the directives issued by the

Registrar from time to time for handling each deposits and

implement the same with the approval of the joint Registrar of the


In receiving deposits preference shall be given to members.

Mainly a kind of deposits may be accepted in the Bank. They are:

1. Fixed Deposit

2. Saving Bank Deposit

3. Current Account

4. Recurring Deposit

5. Day Deposit.

1. Fixed Deposit


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Fixed Deposits are accepted by banks for a fixed period.

They are normally, repayable after the expiry of the fixed period.

Fixed Deposits are made by people who expects a fixed and

steady income at regular intervals.

2. Saving Bank Deposit

Saving Bank Deposit meant for people of average means. It

aims at promoting the habit of savings among ordinary people.

Bank pay moderate rate of interest on saving Deposit.

3. Current Account

Current Deposit Account is intended for business people. No

restrictions are imposed on the operations of this account. Current

Deposit is repayable on demand and withdrawal by means of

cheques. People can invest money even for one day. No in

payable of current deposit.

4. Recurring Deposit

In recurring or cumulative deposit, a fixed amount is

deposited at regular intervals for an agreed period. At the end of

the agreed period, the deposit is repaid with interest accrued there


5. Day Deposit

In day deposit the deposit amount collected by the collector

from the depositor daily for a period of one year. In this deposit

amount are collected daily Rs 10 each. The total annual amount

collected Rs 3650/- and interest is provided at the rate of 2.5%.


Page 33: Commerce Project New1.

Table 5.1

The following table and graph depicts the position of the loan

over the year 2003- 04 to 2009- 10.

2003 -


18865744 20224050 18398 35400 2057704 4120196



23872299 20361784 14498 45000 2192842 4648642



30482946 28483920 14498 13700 3083074 6207813



38173490 29273984 14498 35800 3956469 7145424



57571493 35673177 14498 73400 3315294 9664782



85140050 54864971 14498 138600 5025569 145183688



115031083 78026631 20600 230200 7051835 200360349

Graph No.5.1







2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10





Page 34: Commerce Project New1.


A loan is a lumpsum advance given to a borrower. Under a

loan agreement, specified sum money is given to a person or firm

against some collateral security. This may be given either in cash

or by way of transfer to his currents account. When a loan is

granted to a customer, the bank opens a separate loan account in

the name of the customer and the entire loan amount is debited

with loans classified mainly three types. They are

1. Long Term Loans

2. Medium Term Loans

3. Short Term Loans

1. Long Term Loans

Loan issued means the total amount of loans issued under

the different credit facilities to the member during every year long

term loans is long period. When the period exceeds seven years

the loan is called long term loans.

2. Medium Term Loans

When a loan is granted for a period exceeding one year is

called term loan. When the period of loan ranges between 5 to 7

years, it is called medium term loan.

3. Short Term Loans

When loans are short period this type of loan is called Short

Term Loans. Consumer loans are personal loans made to

customers to purchase durable customer articles like Television,

Refrigerator, Automobiles, Washing Machines etc.


Page 35: Commerce Project New1.

Table 5.2

The following able and graph depict if the position of the loan

over the year 2003- 04 to 2009 -10.

YearShort Term



Term Loan

Long Term


2003- 04 77071827 5973114 4068673 87113614

2004- 05 89506702 9874300 5486712 104867714

2005- 06 102374481 12165416 6872734 121412631

2006- 07 128312257 14963741 7862417 151138415

2007- 08 166284023 21137839 11062648 198484510

2008- 09 213872845 27274715 13725256 254872816

2009- 10 249294000 37621000 18438380 305353380

Graph No 5.2








2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10





Page 36: Commerce Project New1.


Finance is an integral part of every business organization.

Finance is the art and science of handling money. It is the

foundation stone of every business in the present day set up. The

success of every business depends upon adequate source of

finance. Finance needed by a firm can be classified into two. They

are long term finance and short term finance. The long term funds

are needed for fixed capital requirement, where as the short term

finance is required for working capital requirement.

It is considered as the life blood of every business enterprise.

It is one of the basic foundations of all economic activity. It has

rightly been that business needs money to make more money.

When it is properly managed. Finance is one of the basic

requirements of any business. Business needs money to make

money. In order to carry out business operations effectively, there

should be sufficient finance. The success of every business

depends upon the way in which the required funds are arranged at

the right time, in the right quantity from the right source and at the

least cost. All these aspects of finance are covered by financial

management. Management to finance or financial management

has become so important that it has assumed a crucial role in the

total management of a organization. The finance function of a

business is put under the charge of a senior executive called

finance manager.


Page 37: Commerce Project New1.


Finance function refer to the management of money. It is

convened with the evolution of how funds are procured and used.

The financial management has, therefore, been assigned the task

of planning and controlling the long term and short term financial

needs of the business. Financial management simply means

management of finance.

Financial management involves the application of general

management principles to finance operations. It is thus mainly

concerned with the efficient management of funds. The funds must

be procured in a manner that the risk, cost and control

considerations are properly balanced. The funds must be utilized

for the benefits of the concern. Financial management is

concerned with three broad decision areas like investment

decisions, finance decisions and dividend decisions. Investment

decisions are decisions related to the identification of investment

opportunities and selection of assets for the project. Decisions

related to the selection of the sources of finance are financing

decision ie whether finance should be raised through issue of

shares, issue of debentures or from financial institutions. Dividend

decisions are related to distribution of dividends ie. what

percentage of profit must be distributed to the share holders.


Financial statement is a business has to prepare such

accounts and statements that can show the final results of the

business transactions and the financial position of the business.


Page 38: Commerce Project New1.

Financial statements are prepared at the end of a financial period.

Financial statements are of much interest to a number of group of

person. These groups are very much interested in the analysis of

financial statement.

Financial statement explains financial information. Financial

statements are the end products of the process of accounting.

These include certain basic statements like balance sheet and

income statement. In addition to that there are some more

statements, reports, schedules etc. These will enrich not only the

contents of financial statements but also the quality and reliability

of the information. These supportive statements help in the

harmonization of the financial statements across the globe.

Financial statements from the net result of the summarizing

process account.


Analysis means to put the meaning of a statement into

simple terms for the benefit of a person. Financial analysis is the

process of identifying the strength and weekness of the company

with the help of accounting information provided by the profit and

loss account and balance sheet. In short the technique of financial

analysis is typically devoted to evaluate the past, current and

projected performance of a business firm.

The term financial analysis, also known as “analysis and

interpretation of financial statements”. This is done by establishing

strategic relationship between the items in financial statements.


Page 39: Commerce Project New1.

In the words of Myer, “Financial analysis is largely a study of

relationship among the various financial factors in a business, as

disclosed by a single set of statements and a study of trends of

these factors, as shown in a series of statements”. Analysis of

financial statements involves their division into similar groups and

arrangements in proper form. It is an attempt to determine the

meaning and significance of the financial study of the relationship

among the financial data shown in various statement.


A number of techniques and devices are used to undertake

financial analysis. The fundamental object of any analytical method

is to simplify the data more understandable of terms. The following

are the important tools of financial analysis.

1. Comparative Financial Statements

2. Trend Analysis

3. Common size statement

4. Ratio Analysis

5. Fund flow analysis

6. Cash flow analysis

1. Comparative Financial Statements

The changes in the financial data over a period can be best

understood. If the statements of two or more years are place side

by side to facilities comparison. Such statements are called

comparative Financial Statements.


Page 40: Commerce Project New1.

No meaningful analysis can be done without comparative

study of various factors. Analysis of single set of financial

statements of one year has limited value. The change in various

components in financial statements can be best analysed and

understood if previous year/years items are placed side by side

with the items of the current period. Comparison of two or more

years data provide clues to trends and changes in financial

relationships. The basis of these comparisons in generally the data

included in comparative financial statement. Presentation of data

for more than one year in financial statements has been

emphasizes by various accounting bodies especially the American

institute of certified public Accountants.

2. Trend Analysis

Comparing the past data over a period of time with a base

period is called trend analysis. It helps to know how well the

business is operating in comparison with planned performance and

is actual results are not good enough what should be the future

indicate for the company. Each item of the base year as taken as

100 and on that basis the percentage for other years are


Financial data for several years are helpful in making a

comparative study. The increase or decrease in the financial data

may be referred to as trend and the analysis is termed trend

analysis. The analysis indicates the direction or movement over a

long period. The financial data for a number of years are taken up

and one year, usually the first year, is taken as the base year.


Page 41: Commerce Project New1.

3. Common size statement

Common size statements are those statements, in which

items are converted into percentage taking some common base.

These statements are also called 100% statement because each

statement is reduced to the total 100 and ach individual item is

expressed as percentage of their total.

Items in profit and loss account can be shown as

percentages of sales, taking sales as 100. In the same way, all

other items can be converted into percentages. The analysis is

known as vertical analysis. So in the preparation of common size

statement, for balance sheet, assets and liabilities are taken as a

measure of size sales may act as a measure of size for profit and

loss account.

4. Ratio Analysis

Ratio is simply means one number expressed interims of

another number. It refer to numerical relationship between two

figures. It is obtained by dividing one figure by from the other.

A ratio is a relationship between two figures expressed in

arithmetic terms. A ratio is simply one number expressed in terms

of another. It is found by dividing one number into another. Bathy

J. defines Ratio means “the term accounting ratios is used to

describe significant relationships between figures shown on a

balance sheet, in a profit and loss account in a budgetary control

system or in any other part of the accounting organization”.


Page 42: Commerce Project New1.

5. Fund flow analysis

The fund flow analysis is a system of preparing the fund flow

statement to show the changes in working capital during a period

and explain them. It explains how working capital is raised and

used during an accounting period. It is prepared to ascertain the

movement of funds and also the causes changes in assets,

liabilities and net worth.

Fund flow statement of changes if financial position is a

statement which shows the changes in assets and liabilities during

a particular period. Several transactions take place during a year

which may cause changes in assets and liabilities. These changes

may occur as either increase or decrease in assets and liabilities.

6. Cash Flow Analysis

It is a statement showing the changes in cash position from

one period to another. It is prepared as an aim to short term

financial decision on cash receipt basis. It is a most important role

of cash planning and control.

Cash flow statement is a statement which expresses the

reasons of change in cash balances of business between two



Page 43: Commerce Project New1.

Ratio Analysis

Ratio analysis is an important technique which is widely used

for interpreting financial statement. Ratio analysis is defined as

one number expressed interms of another. It is fund by dividing

one number into another. According to the nature and functions.

Ratio can be classified in four different groups. They are as


1. Liquidity Ratios

2. Leverage Ratios

3. Activity Ratios

4. Profitability Ratios

1. Liquidity Ratios

Liquidity refers to the ability of the firm to meet its current

obligations. The liquidity ratios are also called ‘short term solvency

Ratios’. These ratios measure the short term solvency of the

business enterprises. These ratios are calculated for testing the

ability of the firm to meet its short term financial obligation using

the available current or liquid assets. The following ratios reveal

the liquidity position of the firm.

a) Current Ratio

b) Quick Ratio

a) Current Ratio

It shows the relationship between current assets and total

current liabilities. This comparison is made by calculating the

current ratio which can expressed as.

Current Ratio = Current Assets Current liabilities


Page 44: Commerce Project New1.

Table No.6.1

Current Ratio of C.S.C.B. Ltd

2003- 04 603224198 603082384 1.00:1

2004- 05 78182329 77968312 1.00:1

2005- 06 1050394000 104870400 1.00:1

2006- 07 24240000 10233100 2.37:1

2007- 08 174483260 173310320 1.01:1

2008- 09 244960260 244160260 1.00:1

2009- 10 331414340 327570040 1.01:1

This table shows the current ratio CSCB Ltd. A ratio greater

than one means that the firm has more current asset than the

current liability. The table shows in the year 2003-04 the ratio is

1.00:1 and in 2009-10 the ratio is increased to 1.01.:1. Bar

diagram shows the current ratio for the last 7 years.

Graph No.6.1

Current Ratio







2003-04 2004- 05 2005- 06 2006- 07 2007- 08 2008-09 2009-10






Page 45: Commerce Project New1.

b) Quick ratio

Quick ratio is more refined measure of the firms liquidity. It

established relationship between quick or liquid assets and current

liabilities. Stock and prepaid expenses are not included in quick

assets. It is also called Acid Test Ratio. It is computed as follows.

Quick Ratio = Quick Assets

Current Liabilities

Table No 6.2

Quick Ratio of C.S.C.B. Ltd

Year Quick assets Current liability Quick Ratio

2003- 04 603171692 603082384 1.00:1

2004- 05 78129489 77968312 1.00:1

2005- 06 104973400 104870400 1.00:1

2006- 07 24071810 10233100 2.35:1

2007- 08 174362990 173310320 1.01:1

2008- 09 244799490 244160260 1.00:1

2009- 10 331071920 327570040 1.01:1

This table shows Quick Ratio of C.S.C.B. Ltd. A Ratio

greater than one means that the firm has more quick assets than

quick liabilities. The table shows in the year 2003- 04 the ratio is

1.00:1 and in 2004- 05 in ratio is same to 1.00:1 and in 2006=-07

the ratio is decreased to 2.35:1 and in 2009- 10 it was 1.01:1. Thus

quick ratio shows increased tendency.


Page 46: Commerce Project New1.

Graph No 6.2

Quick Ratio of C.S.C.B. Ltd

2. Leverage Ratio

For the analysis of short term solvency or the current

financial position, Liquidity ratios are used. The share holders’

debentures holders and other long term creditors like financial

institutions are more interest in the long term financial position or

long term solvency of a firm. Leverage ratios are used for such

analysis. These ratios are used to analysis the capital structure of

a company. The important leverage ratio are debt equity ratio, total

assets to debt ratio, proprietary ratio etc.

a) Debt- Equity Ratio

This is the ratio between borrowed fund and owner’s fund i.e.

debt and equity. Debt refers to long term liability. It consists of long

term loans from financial institutions, banks, public deposits. Equity

includes share capital, general reserve. It can be calculated as


Debt Equity Ratio = Long Term Loans







2003-04 2004- 05 2005- 06 2006- 07 2007- 08 2008-09 2009-10


ck R



Page 47: Commerce Project New1.

Share holders fund Table No 6.3

Debt- Equity Ratio of C.S.C.B. Ltd

YearLong Term


Share holders


Debt equity


2003- 04 4068673 3938000 1.03:1

2004- 05 5486712 4834000 1.13:1

2005- 06 6872734 5112000 1.34:1

2006- 07 7862417 6248000 1.25:1

2007- 08 11062648 7138000 1.54:1

2008- 09 13725256 7963000 1.72:1

2009- 10 18438380 8492000 2.17:1

The above table shows the debt- equity ratio of C.S.C.B. Ltd.

These table shows in the year 2003- 04 debt equity was 1.03:1

and in 2004- 05 the ratio is increased 1.13:1 and in 2005- 06 the

ratio is increased to 1.34:1 and 2009-10 the ratio is creased to

2.17:1. Thus debt – equity ratio shows decreased tendency.

Graph No.6.6.2.B

Debt-Equity Ratio of C.S.C.B.Ltd.







2003-04 2004- 05 2005- 06 2006- 07 2007- 08 2008-09 2009-10


bt e


ty r



Page 48: Commerce Project New1.

b) Total Asset to Debt Ration

This ratio tries to measure the proportion of total assets

founded by long term debt. This ratio expresses the relationship

between long term loans and total assets of the business. This

ratio is calculated as under.

Table No 6.4

Total Asset to Debt Ratio of C.S.C.B. Ltd

Year Debt Total AssetsTotal asset to

debt ratio

2003- 04 4068673 622089942 0.06:1

2004- 05 5486712 102054628 0.05:1

2005- 06 6872734 135522346 0.05:1

2006- 07 7862417 62413490 0.13:1

2007- 08 11062648 232054753 0.05:1

2008- 09 13725256 330100310 0.04:1

2009- 10 18438380 446445423 0.04:1

The above table shows total assets to debt ratio of C.S.C.B.

Ltd. The table shows in the year 2003-04 the ratio is 0.06:1 and in

2004-05 the ratio is 0.05:1 and 2006- 07 the ratio is increased to

0.13:1 and 2009- 10 the ratio is decreased to 0.4:1


Page 49: Commerce Project New1.

Graph No 6.4

Total assets to debt ratio of C.S.C.B. Ltd







2003-04 2004- 05 2005- 06 2006- 07 2007- 08 2008-09 2009-10

c) Proprietory ratio

It shows the relationship between proprietors fund and total

assets. It can be calculated as

Proprietory Ratio = Share holders fund x 100

Total assets

Table No 6.5

Proprietory Ratio of C.S.C.B. Ltd

YearShare holders



ratio (in %)

2003- 04 3938000 622089942 0.63%

2004- 05 4834000 102054628 4.74%

2005- 06 5112000 135522346 3.77%

2006- 07 6248000 62413490 10.01%

2007- 08 7138000 232054753 3.07%

2008- 09 7963000 330100310 2.33%

2009- 10 8492000 446445423 1.90%


al a







Page 50: Commerce Project New1.

The above table shows proprietory ratio of C.S.C.B. Ltd.

These table shows in the year 2003-04 the ratio was 0.63% and

2008-09 was decreased on 1.90%. The proprietory ratio shows an

decreasing tendency.

Graph 6.5

Proprietary Ratio of C.S.C.B. Ltd








2003- 04 2004-05 2005-06 2006-07 2007-08 2008- 09 2009- 10

3. Activity Ratio

Activity ratios indicate the efficiency with which the affairs of

the firm are being conducted. The performance is related to sales.

Hence these ratios are also called turn over ratios = or efficiency

ratios. The level of activity of a firm is shown by its sales or cost of

goods sold and is compared with investment in various assets.

Following are the major activities ratios are.

a) Stock Turn over Ratio

b) Working capital Turnover Ratio







Page 51: Commerce Project New1.

a) Stock Turn over Ratio

This ratios shows whether investment in stock is efficiently

used or not stock is generally shown at cost in the books and is

related to cost of goods sold for calculating this ratio. It is

computed as follows.

Stock turn over ratio = Cost of goods sold

Average Stock

Cost of goods sold = Sales – Gross Profit

Average Stock = Opening stock + closing stock


Table No 6.6

Stock Turn over Ratio of C.S.C.B. Ltd.

YearCost of goods

sold Average stock


turnover ratio

2003- 04 832602 380433 2.19:1

2004- 05 6077390 276617 21.97:1

2005- 06 1281310 382000 3.35

2006- 07 1740270 117245 14.84:1

2007- 08 1033270 144230 7.16:1

2008- 09 2694920 141520 19.03:1

2009- 10 3638330 251595 14.46:1

The above table shows the stock turn over ratio of C.S.C.B.

Ltd. This table shows in 2003-04 the ratio was 2.19:1 and 2009-10


Page 52: Commerce Project New1.

it was increased to 14.46:1. Thus stock turn over ration shows that

increasing tendency

Graph No 6.6

Stock turnover ration of C.S.C,.B. Ltd







2003-04 2004- 05 2005- 06 2006- 07 2007- 08 2008-09 2009-10

b) Working capital turnover ratio

Working capital turnover ratio indicates the velocity of

utilization of net working capital. Net working capital is the

difference between current asset and current liabilities. This ratio

stands for the number of times the working capital is turned over in

the course of a year. It is calculated as follows.

Working capital Turnover Ratio = Cost of sales

Net working capital

Net working capital = current assets – current liabilities


ck tu





Page 53: Commerce Project New1.

Table No 6.7 working capital turnover Ratio of C.S.C.B. Ltd

Year Cost of Sales Net working




turnover ratio

(in %)

2003- 04 832602 141814 5.87:1

2004- 05 6077390 214017 28.39:1

2005- 06 1281310 169000 7.58:1

2006- 07 1740270 14006900 0.12:1

2007- 08 1033270 1172940 0.88:1

2008- 09 2694920 800000 3.36:1

2009- 10 3638330 3844300 0.94:1

The above table shows the working capital turnover ratio of

C.S.C.B. Ltd. This table shows in 2003- 04 it was 5.87:1 and in

2008- 09 it increased to 3.36:1 and in 2009- 10 it was decreased to


Table No 6.8

Working Capital Turnover Ratio of C.S.C.B. Ltd








2003-04 2004- 05 2005- 06 2006- 07 2007- 08 2008-09 2009-10Wo


g C


tal t



r ra



Page 54: Commerce Project New1.

4. Profitability Ratio

The object of every business is to earn profit. Profit is

necessary for the survival and growth of any business. It is a

measure is efficiency. Profit can be related to sales or to capital.

Management is very much interested in these ratios. Besides

owners and lenders are use these ratios because they invest their

funds in the expectation of reasonable return. Major profitability

ratios are.

a) Gross Profit Ratio b) Net Profit Ratio

a) Gross Profit Ratio

Gross profit ratio shows the relationship between gross profit

and sales. It is expressed as a percentage. It can be calculated as


Gross Profit Ratio = Gross Profit x100


Table No 6.9 Gross Profit Ratio of C.S.C.B. Ltd

Year Gross profit SalesGross Profit


2004- 05 30877 6081267 0.51%

2005- 06 43220 1324530 3.36%

2006- 07 12570 1865640 6.72%

2007- 08 235310 3068580 7.76%

2008- 09 232320 2927240 7.94%

2009- 10 223045 3861375 5.78%

Above table shows the gross profit ratio of C.S.C.B. Ltd. This

table shows that in 2004- 05 it was 0.06% and in 2007- 08 it


Page 55: Commerce Project New1.

increase to 7.76% and in 2009-10 it decreased to 5.78%. Thus

gross profit ratio shows an decreasing tendency.

Graph No 6.9

Gross Profit Ratio of C.S.C.B. Ltd






2004- 05 2005- 06 2006- 07 2007- 08 2008-09 2009-10

b) Net Profit Ratio

Net Profit ratio shows the percentage of profit earned by the

company over its total sales. This ratio shows the efficiency of

management in manufacturing and selling in its products. It is

calculated as follows.

Net Profit Ratio = Net Profit x 100

Net sales


ss P





Page 56: Commerce Project New1.

Table No 6.10

Net profit Ratio of C.S.C.B. Ltd

Year Net Profit Net SalesNet Profit


2004- 05 201416 6077390 3.31:1

2005- 06 403220 1281310 31.47:1

2006- 07 125370 1740270 7.20:1

2007- 08 101240 1033270 9.79:1

2008- 09 332320 2694920 12.33:1

2009- 10 39730 3638330 10.92:1

The above table shows the net profit ratio of C.S.C.B. Ltd. It

shows 2003-04. Net profit ratio was -56.04:1 and in 2008-09 it is

increased to 12.33:1 and in 2009-10 it is decreased to 10.92:1.

Thus net profit ratio shows decreasing tendency.

Graph No.6.10

Net Profit Ratio of C.S.C.B Ltd.









2004-05 2005-06 2006-07 2007-08 2008-09 2009-10






Page 57: Commerce Project New1.


Comparing the past data over a period of time with a

base year is called trend analysis. Each item of the year is taken

as 100 and on that basis the percentage for other year is


Table No.6.11

Trend analysis on net profit of C.S.C. BLtd

Year Net profit Trend analysis

2003-2004 46292 -

2004-2005 201416 435

2005-2006 403220 200

2006-2007 125370 31

2007-2008 101240 80

2008-2009 332320 328

2009-2010 397300 119


Page 58: Commerce Project New1.


The business of banking is as old as authentic history in

India, banking is very ancient origin. The Co-Operative banks

played an important role in the urban development efforts of the

Nation. They provide One of the most essential inputs, namely

credit to rural people. They held rural people from the exploitation

of the money lenders and indigenous banks.

The first chapter of study describes a brief introduction on

Co-Operative movement in the world, India and Kerala. And also

the role of Co-Operative banks, scope of the study, Objective of

the study, methodology, period of the study and plan of the study.

Co-Operative movement was started in India with the

enactment of Co-Operative credit societies. Another act was

passed in 1912, which provided for the formation of Co-Operative

credit societies with the enactment of Government of India Act, Co-

Operative has been transformed as provincial subject in charge of


The Kerala state was formed in the year 1956. But it was

only in1969. That the Kerala Government passed a state Co-

Operative Act. The Co-Operative banking structure in Kerala is

composed of Agricultural credit societies and non- agricultural

credit societies.

Co-Operative banking owes this origin Herr shulze and

Reiffein.They started loan societies in 1849 and 1850 respectively

to save the rural and urban population from money lenders. In the

second chapter a position of bank in the world.


Page 59: Commerce Project New1.

The fourth chapter, a brief description of the Chengala service

Co-Operative Bank Ltd is given. The management is vested in

board of Directors elected by the members at the general body


The authorize share capital of the bank is consists of ‘A’

class ‘B’ class and ‘C’ class shares. During 2003-2004, the number

of ‘A’ class members was 3938; it is increased up to 8492 in 2009-

2010. The main objective of the bank is to accept deposits from

members and to supply short and medium term credit to member.

The source of funds in C.S.C.B Ltd, come from own funds and

borrowed funds. Owned funds include share capital, resources

fund and surplus. Borrowed fund consists of deposits and


Profit of C.S.C.B Ltd, showed an trend. It made profits during

the period of study. Current ratio showed increasing trend during

the period of study. In 2003-2004 was 1.00:1 and in 2009-2010

was 1.00:1.

Proprietary ratio showed and decreasing trend during the

period of study. proprietary ratio during the year 2003-2004 was


The trend analysis of the net profit showed an decreasing

trend. It was -56.04 in the year 2003-2004 and decreased to in



Page 60: Commerce Project New1.


1. The Chengala service Co-Operative Bank was registered on


2. The area of operation of C.S.C.B Ltd. consists of Chengala

Village. Total member in C.S.C.B Ltd During 2009-2010 was


3. 3. C.S.C.B Ltd issue ‘A’ class ‘B’ class and ‘C’ class


4. Sources of fund of C.S.C.B Ltd consist of share capital,

statutory and other reserve and deposits from member.

Share capital and statutory reserve showed an increasing

tread during the period of study.

5. C.S.C.B Ltd deposits its fund and revenue, such as cash

reserves, liquidity assets, loans and advances and

investments and fixed assets.

6. Major portion of lending was by way of loans and advances

of short term period.

7. Profit of the bank showed an increasing term during the

period of study.

8. There is no A.T.M facility.


Page 61: Commerce Project New1.


1. Audit of the bank should be carried out regularly.

2. The rural people must properly educate and enlightened

about the various schemes of the advances.

3. Increase the branches of the bank.

4. The system of Hanging a lower rate of interest from those

who repay their loans in time will be greater incentive to

member to make their payment regularly.

5. Install A.T.M. Facilities in the bank. It will be more helpful the

members. It will increase the profitability of the bank.

6. Provide co-operative education to the members, employees

and managing committees members.

7. Issue maximum dividend at right time to share holders.

8. Issue of credit to all members.

9. Reduce the rate of interest for the loans advanced from the

DCB enabling PCB to reduce the interest for the loan

allowed to customers.

10. Special consideration and priority shall be given to Self Help

Group and Kudumbashree while sanctioning loans and the

volume of loan to such organization shall be increased.

11. Before giving a loan, full scrutiny of the purpose should be

made and it should ensure that the loan is demanded for the

productive and provident purpose only. Now most of the

overdue results from the misuse or wastage loan.

12. conduct recovery campaign.

13. Increase the volume of loans.

14. Strict action should be taken against willful defaulters.

15. Avoid the political interference and political interest.


Page 62: Commerce Project New1.

16. Ensures that the sanctioned loan are utilized for the same

purpose for which they are prescribed in the loan application.

17. The board of directors shall also bear the responsibility of

collecting the dues in addition to sanctioning loan.

18. The board of directors and staff shall jointly come to collect

the dues in the best interest of the bank.

19. Simplify the procedure of sanction of loans.


Page 63: Commerce Project New1.


The study entitled financial performance of Chengala

Service Co-operative Bank Ltd 5.66 was under taken to analyse the

problems in the financial performance of the bank. The period of study

was 2003-04 to 2009-2010. The data 45 required for study were collected

from the annual financial statements, records and published Reports.

The bank as a creator of money can be the agent who

collects the scarces resources in the form of capital and supplies to the

needy people, so that the flow of all other resources and factors of

production are managed in a better and systematic manner. The

established pattern of financial performance in the co-operative sector

reminds the relevance of revitalization of such organization and

fortunately, it is still a successful target oriented activity.


Page 64: Commerce Project New1.



Banking - K.


Research methodology - L.R. Potti

Co-operation principles and practice volume - T.S. Balan


Bye- law

Annual report Others


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