SUMMER INTERNSHIP PROJECT ON

Loan & Advances Management In Gopinath Patil Parsik Janta Sahakari Bank Ltd.SUBMITTED TO

SHIVAJIRAO S. JONDHLE INSTITUTE OF MANAGEMENT SCIENCE & RESEARCH (UNIVESITY OF MUMBAI)

FOR THE DEGREE OF

MASTERS IN MANAGEMENT STUDIES (2010-2012)BY

(Ms. Shital Uttam Patil)1|Page

CERTIFICATE

This is to certify that Ms. Shital Uttam Patil (Roll No. 148) student of first year Masters in Management Studies has successful completed the summer internship project work titled Loans & Advances Management with Gopinath Patil Parsik Janata sahakari Bank Ltd. in partial fulfilment for the degree of Masters in Management Studies of University of Mumbai.

Mr. Atul Rawal (Project Guide)

Ms. Lalitha Pillai (Principal)

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PREFACE

The 60 days Summer Internship Training program for an elaborate and practical study on selected topics related to Management is very vital for every management student. In this session I took training in Gopinath Patil Parsik Janata Sahakari Bank Ltd., in loan section of that bank in which I got the chance to know the procedure by which bank lends money to its members. Since it is a cooperative bank so it gives loan to its members only, hence an applicant has to become member of this bank before borrowing money from it. This project work about the survey is a small piece of research work in various aspects of the training. While carrying out I got opportunities to interact with employees at various levels and the people who enhanced my practical knowledge and experience in regard to the topic. In this report I have shown the loans provided by the bank and its recovery procedure .I also include current facts and figures related to the topic.

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ACKNOWLEDGEMENT

Before we get into the thick of thing, I would like to say that it was a great pleasure & privilege for me to have the opportunity of undertaking the training at Gopinath Patil Parsik Janata Sahakari Bank Ltd. for a period of 60 days. I would like to thank the Bank for providing me such an opportunity. I express my sincere thanks to my project guide, Mr. Sanjay Patil, Designation Head of Loan Dept. & Mr. Sanjay Gaikwad, Designation Asst. Manager of the branch as well as Mr. Dilip Jadhav, Designation Supervisior of the Airoli sec 5 branch for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge them for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support they had provided to me with all stages of this project. I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I am sure that the knowledge & information that I have gained during this period would be of immense value for my growth in business world.

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DECLARATION

I hereby declare that the project title Loan & Advances Management in Gopinath Parsik Janata Sahakari Bank Ltd. is submitted in fulfilment of Masters in Management Studies degree of University of Mumbai in the academic year 2010-2012 was carried with sincere intention.

The project period duration was form 04/05/2011 to 03/07/2011.

To the best of my knowledge it is an original piece of work done by me and it has neither been submitted to any other organisation nor published at anywhere before.

_________________________ (Ms. Shital Uttam Patil)

TABLE OF CONTENT5|Page

CHAPTER

CONTENT

PAGE NO.

I. II. III. IV.

Executive Summery Objective of the Study Methodology

7

I.

EXECUTIVE SUMMERY

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The report contains introduction to Banks, which includes past, present and future of banks and challenges for banking industry in future. Banks plays the most important role in providing various banking services. Earlier the banks were engaged in accepting and lending money. But in the recent past the scope of services provided by the banks has increased. The growing competition requires prompt and efficient services to the customers at reasonable cost. These days bank aim to provide maximum satisfaction to their customers. The next part of the report consist the knowledge about the cooperative banks in India. It includes history of cooperative bank in indianite features and service provided by it in rural and urban sector. The structure of cooperative bank in India is also includes in it. Then a brief introduction of Gopinath Patil Parsik Janata Sahakari Bank Ltd. comes in next part of the report which consist the history, management team and objective made by Chairman MR. Ranjit Patil. The current financial position of the bank also includes in this part. Then the meaning of certain terminology includes in this report .these terms are related with the topic for ex. cash credit, lease, secured loan etc. the objective of this section is only to make aware about certain terminology used by bank regarding loan facility. The next section of report i.e. training methodology consist title of report, duration of training session, objective and limitation of study etc. this section basically giving the outline of the report. Next section consist the loan and credit facility provided by bank. This section consist various loans provided by bank the detail regarding those loans, procedure to recover it, actual position of bank in loan area, and recommendation and the various proposals that the Cooperative bank could apply for maintaining its position in the region and to face future challenges and the suggestions for the improvement. Final section of report consist conclusion and bibliography.

II.

OBJECTIVES OF THE STUDY

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The objective of research is as follows:1. 2.

First objective is to find out various loan schemes provided by the bank. To learn various aspects of loan provided by bank. To know the problem faced by customers when obtaining the loan

3.

III. METHODOLOGY8|Page

TITLE OF STUDY: Title of study is Loans and advances Management In Gopinath Patil Parsik Janata Sahakari Bank Ltd. The Gopinath Patil Parsik Janata Sahakari Bank Ltd. generally gives loan for short and medium term requirement in both rural and urban sectors.

DURATION OF TRAINING:Duration of project is 60 days from 4th May 2011 to 3rd July 2011. Though the time available for the study is too less but efforts to the fullest capacity have been put into this result for efficient and effective analysis of the data.

FORMAT OF PROJECT REPORT:The report is exploratory and descriptive in nature. This report is going to describe various loans provided by Jodhpur central cooperative bank hence it is a descriptive in nature but it suggests some important points to improve the services of the bank so it is exploratory in nature also.

SOURCE OF PRIMARY AND SECONDRY DATAFor the purpose of project data is very much required which works as a food for process which will ultimately give output in the form of information. So before mentioning the source of data for the project I would like to mention that what type of data I have collected for the purpose of project and what it is exactly.

PRIMARY DATA:Primary data is basically the live data which I collected on field while talking with the Employees. In some cases I got no response from their side and then on the basis of my previous Experiences I filled those fields.

SOURCE:9|Page

Main source for the primary data for the project was my face-to-face conversation which I got by the employees or sometimes filled myself on the basis of discussion with the employees.

SECONDRY DATA:Secondary data is already published data. It is the data which is funded or collected by someone else before and presently used by further research work. Secondary data for the base of the project I collected from annual report of bank, bank pamphlets and internet etc.

SCOPE OF THE STUDY:Each and every project study along with its certain objectives also has scope for future. And this scope in future gives to new researches a new need to research a new project with a new scope. Scope of the study not only consist one or two future business plan but sometime it also gives idea about a new business which becomes much more profitable for the researches then the older one. The scope of this research is as follows:1.

Research study could give an idea of network expansion for capturing more market and customer with better services and lower cost without compromising with quality. In future customer requirement could add with the product and services for getting the edge over competitors. Different parameters could be used for the purpose of new products with extra benefits which are required by the customers. Factors which are responsible for the performance of the bank can also be used for the modification of the strategy and product for being more profitable.

2.

3.

4.

LIMITATIONS:1.

The rate of interest may vary according to market environment.10 | P a g e

2.

These figures are according to publish in annual report and according to employees of Gopinath Patil Parsik Janata Sahakari Bank Ltd. The report is according to my perception only and cant be taken as final decision. This study only relates to one organization, so conclusions drawn may not be finding its utility in all the other banks. Even the employees of the bank hesitated to give the complete & accurate data.

3. 4.

5.

IV. INDUSTRY INTRODUCTIONWHAT IS BANKING?11 | P a g e

Banking in a traditional sense is the business of accepting deposits of money from public For the purpose of lending and investment. These deposits can have a distinct feature like being withdrawn able by cheques, which no other financial institution can offer. In Addition, banks also offer financial services, which include: The Issue of demand draft & travelers cheque. Credit cards Collection of cheques, bill of exchange. Safe deposit lockers Custodian services. Investment and Insurance Services. The business of banking is highly regulated since banks deal with money offered to them by the public and ensuring the safety of this public money is one of the prime responsibilities of any bank. That is why banks are expected to be prudent in their leading and investment activities. Every bank has a compliance department, which is responsible to ensure that all the services offered by the bank, and the processes followed are in compliance with the local regulations and the Banks corporate policy. The major regulations and act govern the banking business are: Banking Regulation Act, 1949 Foreign Exchange Management Act, 1999 Indian Contract Act Negotiable Instruments Act, 1881 Bank lends money either for productive purposes to individual, firms, and Corporate etc. for buying house property, cars and other consumer durables and for investment Purposes to individuals and the others. However, banks do not finance any Speculative activity. Lending is risk taking.The depositors of banks are also assured of safety of their money by deploying somepercentage of deposit in statutory Reserves like SLR & CLR.

STANDARD ACTIVITIES OF BANKBanks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, and ATM. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account.12 | P a g e

Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too.

REVENUE GENERATIONA bank can generate revenue in a variety of different ways including interest, transaction fees and financial advice. The main method is via charging interest on the capital it lends out to customers. The bank profits from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle. Fees and financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on these revenue lines to smooth their financial performance.

BANKING IN INDIA:Banking means accepting for the purpose of landing or investment of deposits of money from the public repayable on demand or otherwise one withdraw able by cheque, draft or otherwise. Banking in India has its origin as early as the Vedic period. It is believed that the transaction From money lending to money banking must have occurred even before Manu, the great Hindu Jurist, who has devoted a section of his work to deposits and advances and laid down the rules relating to rate of interest, During Mugal Period, the native bankers played a very important role in lending money and finance foreign trade and commerce. During the days of the east- India Company, it was the turn of the agency house to carry on the banking business the general bank of India was the first joint stock bank to be established in the year 1786. The others that followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustanis reported to have continued till 1906 while the other two failed in the meantime. In the first half of the 19th century the east-India company established three banks, the Bank of Bengal in1809, the Bank of Bombay in 1840 and the banks of Madras in 1843.These three banks are also known as the presidency banks were amalgamated in 1920 and a new Bank the imperial bank of India established ion 27th January 1921. With the passing of the state bank act 1955 the under taking of the imperial Bank of India is taken over by the newly constituted the state bank of India.

NATIONALIZATION

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The GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on August 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in there reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

LIBERALIZATIONIn the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be setup), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time -especially in its services sector-the demand for banking services, especially retail banking,14 | P a g e

mortgages and investment services are expected to be strong. One may also expect M &As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pinups to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norm sin 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. In the Indian Banking Industry some of the Private Sector Banks operating are IDBI Bank, INGVyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank are some of the foreign banks operating in the Indian Banking Industry.

INDIAN BANKING INDUSTRYThe Indian Banking system has the Reserve Bank of India (RBI) as the apex body for all Matters relating to the banking system. It is the Combination of Banks of India and bankers to all others banks as well. The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949can be broadly classified into two major categories, non -scheduled banks and scheduled banks.

1. Schedule Banks:These banks must have paid-up capital and reserve of mot less than Rs.50,00,000. They must satisfy the RBI than its affairs are mot conducted in a manner detrimental to the interests of its depositors. These are further classified as follow: State co-operative Banks Commercial Banks Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These banks have over 67,000 branches spread across the country in every city and villages of all nook and corners of the land.

2. Non-Schedule Banks:-

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These are banks, which are not included in the second schedule of the Banking Regulations Act, 1965. It means they do not satisfy the conditions laid down by that schedule. They are further classified as back: Central co-operative banks and primary credit societies Commercial Banks COMMERCIAL BANKS. Commercial Banks in India are broadly categorized into Scheduled Commercial Banks and Unscheduled Commercial Banks. The Scheduled Commercial Banks have been listed under the Second Schedule of the Reserve Bank of India Act, 1934. The selection measure for listing a bank under the Second Schedule was provided in section 42 (60 of the Reserve Bank of India Act, 1934. The modern Commercial Banks in India cater to the financial needs of different sectors. The main functions of the commercial banks comprise: transfer of funds acceptance of deposits offering those deposits as loans for the establishment of industries Purchase of houses, equipments, capital investment purposes etc. The banks are allowed to act as trustees. On account of the knowledge of the financial market of India the financial companies are attracted towards them to act as trustees to take the responsibility of the security for the financial instrument like a debenture. The Indian Government presently hires the commercial banks for various purposes like tax collection and refunds, payment of pensions etc.

CURRENT SCENARIOThe industry is currently in a transition phase. On the one hand, the PSBs, which are the main stay of the Indian Banking system, are in the process of shedding their flab in terms of excessive manpower, excessive non Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. PSBs, which currently account for more than 78 percent of total banking industry assets, are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from traditional sources, lack of modern technology and a massive workforce while the new private sector banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes. Private sector Banks have establish internet banking, phone banking, anywhere banking, and mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena, while the16 | P a g e

PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also, following Indias commitment to the W To agreement in respect of the services sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches.

V.

CO-OPERATIVE BANKS

Co-operative banks are small-sized units organized in the co-operative sector which operate both in urban and non-urban centers. These banks are traditionally centered on communities, localities and work place groups and they essentially lend to small borrowers and businesses.17 | P a g e

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. These banks, until 1996, could only lend for non-agricultural purposes. However, today this limitation is no longer prevalent. While the co-operative banks in rural areas mainly finance agricultural based activities including farming, cattle, milk, hatchery, personal finance, et cetera, along with some small scale industries and self employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for self-employment, industries, small scale units and home finance. Co operative Banks in India are registered under the Co -operative Societies Act. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act; 1965. These banks provide most services such as savings and current accounts, safe deposit lockers, loan or mortgages to private and business customers. For middle class users, for whom a bank is where they can save their money, facilities like Internet banking or phone banking is not very important. Co-operative banks function on the basis of 'no-profit no-loss'. Co-operative banks, as a principle, do not pursue the goal of profit maximization. Therefore, these banks do not focus on offering more than the basic banking services. So, co-operative banks finance small borrowers in industrial and trade sectors, besides professional and salary classes. 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 banking authorities and have to respect prudential banking regulations, which put them at a level playing field with stockholder banks. Depending on countries, this control and supervision can be implemented directly by state entities or delegated to a co-operative federation or central body. Even if their organizational rules can vary according to their respective national legislations, co-operative banks share common features:

Customer-owned entities:In a co-operative bank, the needs of the customers meet the needs of the owners, as cooperative 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.18 | P a g e

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 cooperative 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. Apart of this profit can also be distributed to the cooperative 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 - SMEs, 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 abovementioned principles of organization, has proven successful both in developed and developing countries. The Co operative banks in India started functioning almost 100 years ago. The Cooperative bank is an important constituent of the Indian financial system judging by the role assigned to co operative, the expectations the co operative is supposed to fulfill, their number, and the number of offices the cooperative bank operate Though the co operative movement originated in the West, but the importance of such banks have assumed in India is rarely paralleled anywhere else in the world. The cooperative banks in India play an important role even today in rural financing the Businesses of cooperative bank in the urban areas also have increased phenomenally in recent years due to the sharp increase in the number of primary co-operative banks. Co operative Banks in India are registered under the Co -operative Societies Act. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Cooperative banks in India finance rural areas under:

Farming Cattle Milk19 | P a g e

Hatchery Personal finance

Cooperative banks in India finance urban areas under:

Self-employment Industries Small scale units Home finance Consumer finance Personal finance

Some facts about Cooperative banks in IndiaSome cooperative banks in India are more forward than many of the state and private sector banks. According to NAFCUB the total deposits & landings of Cooperative Banks in India is much more than Old Private Sector Banks & also the New Private Sector Banks. This exponential growth of Co operative Banks in India is attributed mainly to their much better local reach, personal interaction with customers, and their ability to catch the nerve of the local clientele.

There are two main categories of the co-operative banks.

a. Short term lending oriented co-operative Banks- Within this category there are three sub categories of banks viz state co-operative banks, District co-operative banks and Primary Agricultural co-operative societies.

b. Long term lending oriented co-operative Banks-within the second category there are land development banks at three levels state level, district level and village level.

The cooperation banking structure is divided into following five categories1. Primary urban cooperative banks 2. Primary agriculture credit societies 3. District central cooperation bank 4. State cooperative bank 5. Land development bank20 | P a g e

Primary urban cooperative bank:The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative 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 around communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably.

Primary agriculture credit societies:Agriculture continues to be the most vital sector of Indian economy, contributing a major share to our national income and also providing livelihood to the majority of our population. A strong base of agriculture growth is must for the overall economic development in a country like India. So to help the farmers and make the financial help for them these cooperative societies are established .these societies finance farmers not only for their short term requirements (use of improved seeds, fertilizers, insecticides, etc)but for medium and long term(irrigation and land development activities)activities also.

District central cooperation bank:These are the principal co-operative societies in the districts, in a state, the primary object of which is financing other co-operatives, particularly the PCAs in the district. The DCCBs came in to existence after the passing of Co-operative Societies Act1912. These institutions also undertake banking business. These institutions act as Balancing Centers of Finance at the district level. They provide the short term and medium term credit to the agriculturists. They also supervise the PCAs in the districts.

State cooperative bank:The state cooperative bank is the apex body of cooperative bank in any state. The longterm cooperative credit structure has two tiers in many states with Primary Cooperative Agriculture and Rural Development Banks (PCARDB) at the primary level and State Cooperative Agriculture and Rural Development Bank at the state level. Under the Banking Regulation Act1949, only State Cooperative Apex Banks, District Central Cooperative Banks and select Urban Credit Cooperatives are qualified to be called as banks in the cooperative sector.21 | P a g e

Land development bank:The long term credit needs of the agricultural sector are met by another type of co-operative institutions known as Land Development Banks. The Land Development Banks meet the requirements of the farmers for developmental purposes viz., provision of equipment like pump-sets, tractors and machinery and land improvement in the form of leveling, bundling, reclamation of land, fencing, sinking of new wells and repairs to old wells, Loans are granted on the security of mortgage of immovable property of the farmers. Credit cooperatives are the oldest and most numerous of all the types of cooperatives in India. The cooperative credit institutions in the country may be broadly classified into urban credit cooperatives and rural credit cooperatives. There are about 2090 urban credit cooperatives and these societies together constitute for about 10 percent of the aggregate banking business and therefore regarded as an important segment of the banking system. The urban credit cooperatives are also popularly known as Urban Cooperative Banks. The rural credit cooperatives may be further divided into short-term credit cooperatives and long-term credit cooperatives. With regard to short-term credit cooperatives, at the grass-root level there are around 92,000 Primary Agricultural Credit Societies (PACS) dealing directly with the individual borrowers. At the central level (district level) District Central Cooperative Banks (DCCB) function as a link between primary societies and State Cooperative Apex Banks (SCB).

VI. Gopinath Patil Parsik Janata Sahakari Bank Ltd.Gopinath Patil Parsik Jananta Sahakari Bank Ltd. (GPPJSB Ltd.) Founded on 21st May 1972, in a remote village in Kalwa (Thane District, Maharashtra), Gopinath Patil Parsik Janata Sahakari Bank enjoyed tremendous patronage right since the inception. It established under the leadership of Shri. Gopinath Shivram Patil and other founding directors, the bank flourished and expanded its reach to Thane, Navi Mumbai, Pune and Nashik. With an inspiring deposit base more than Rs 1100 Crores, Gopinath Patil Parsik

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Janata Sahakari Bank is riding high on customer satisfaction and trust. What is even more heartening is that the bank has helped many to meet their financial needs. They are currently operating through 33 fully-equipped branches and 1 Extension Counters. Gopinath Patil Parsik Janata Sahakari Bank is getting ready for the next phase of rapid expansion.

Milestones Scheduled Bank status on 30th January, 1998. Ranked as the The Best Urban Bank" among the 400 Urban Banks in Maharashtra. (Three Times Award) Only bank in Maharashtra with low/negligible rate of defaulters

CSR (Corporate Social Responsibility) Initiatives

Financial assistance to various Charitable Trust, Education of students (members), medical help to members Nature conservation - plantation programmes in and around Thane Closely associated with a Charitable Trust managing an Agricultural College (Diploma), Secondary School and a Vruddhashram (Old-Age Home). Recently, the committee has given the Founder's name to the Bank "GOPINATH PATIL PARSIK JANATA SAHAKARI BANK"

HistoryIn the year 1971 the Government of Maharashtra acquired all agricultural land of 68 villages of Thane-Belapur belt in Thane district of Maharashtra, for the purpose of setting up a new city i.e. New Bombay. Acquisition of land for New Bombay project means compulsorily depriving several thousands of people of their means of livelihood. Though Government was paying them money as compensation, but they were away their land which was the only mean of livelihood for them.23 | P a g e

To equip the project affected persons and their family members with strength and ability, to survive with new urban means of livelihood, it was necessary to provide them financial assistance. CIDCO (City Industrial Development Corporation) was established by Government of Maharashtra for the purpose of development of infrastructure and city of New Bombay. Development of infrastructure requires plenty of resources like men, machines, earthmover, vehicles & money. The idea of formation of Urban Co-operative Bank for the area was visualized in 1971 by a group of youngsters of Kalwa village, which is on the boundary of Thane Belapur Belt. This group of youngsters were successful in running a Consumer Co-operative Society by name Kalwa Consumer Co-operaive Society. This group of youngsters, on their studytour to Western Maharashtra, for study of co-operation, was fascinated by network and growth of cooperative societies and the role played by Urban Cooperative Banks in the development of that region. The group of youngsters called a meeting of residents from Kalwa and nearby villages when they came back from their study tour. They collect the Share Money in December 1971 for the formation of the bank. Collection of share money was the most difficult task at that time. In a village where there were no banking facility available these youngsters started collection Rs. 50/- as contribution towards share capital. In year 1971 Rs.50/- was also a substantial amount, it took lot of efforts and hardship to collect the require numbers of members. All the 360 members came together for the formation of bank. The registration of Parsik Janata Sahakari Bank Ltd. was approved by Co-operative Department in the month of April, 1972, with registration number TNAK/BNK/160 dated 24th April, 1972. The first branch office at Kalwa Naka was opened on 21st May; 1972.The bank was named as Parsik because active jurisdiction of bank was the west side area of Parsik Hill, which has range from Kalwa to Belapur (the famous Parsik Railway Tunnel is situated in the same range). Parsik is also mean Parshwanath ( Lord Shiva), whose temple was existed on the hill as per history.

SOCIAL OBLIGATIONS OBSERVED BY BANKThe main purpose of social audit is to ascertain the responsibilities and performance of an organization towards the society, stake holders and community. Until now social audit is not compulsory but it will be worth while to take note of what parsik bank has done towards the society, stake holders and community. the principles of cooperation always keeps community or society to the fore front. What ever is done through cooperation is done for the welfare and upliftment of the community.24 | P a g e

The board of parsik bank until now has undertaken following activities towards the betterment of the society 1. The founder of Parsik Janata Sahakari Bank Ltd. Mr. Gopinath Shivram Patil had

initiated a proposal through their consumer co-operative society in October, 1985 to Forest Department, Pune. Through which they sought permission for a project, which included allotment of one hill, called Parsik Hill, which is situated nearby Kalwa Village and the well known Parsik Railway Tunnel passes through it, for plantation. Forest Department gave permission for the plantation on the Parsik Hill only after 1990. For last 20 years the work of plantation and other related activities like minor irrigation , forest conservation are going on. The employees of Parsik Bank with their Board of Directors has been regularly visiting the Parsik Hill , due to their hard work and consistency the land admeasuring 70 hectare came under plantation. Once a barren hill is now covered with fifty to fifty five thousand plants. The Board of Directors of Parsik Bank has taken tremendous efforts for last 20 years for this project , which is a huge successes. Other organizations has also started similar project by taking inspiration from Mr. Gopinath Shivram Patil.

In the year 1988-89 Parsik Bank has been allotted one plot of land, adjoining to Kalwa bridge for development of garden by Thane Muncipal Corporation. 2. At the request of CIDCO LTD. in the year 1993, Parsik Bank has undertaken the development of garden on 14 acres of land situated near Belapur in Navi Mumbai area. The said garden was also named as Parsik Hill Garden. The employees and members of Board have given their total commitment for the development of garden.

3. Parsik Bank in the year 1998-99 has planted nearly 1200 plants in Kalwa Vitawa region under scheme called Clean Thane Green Thane, which was initiated by Thane Muncipal Corporation. It also included decoration of one traffic island and building a bus stop.

4. Other activities 1. Educational help 2. Medical help 3. Building of shed for funeral & other religious activities 4. Sports 5. Financial assistance to social organizations25 | P a g e

5. For last 28 years bank is retaining amount out of their net profit for charitable purpose. Generally 1% of net profit is appropriated for the charitable purpose.

6. Bank has maintained a fund called Member Welfare Fund. Every year a considerable amount is contributed to this fund out of net profit earned by the bank. At present the amount in Member Welfare fund is around 1.29 crore of rupees.

Moments of Pride1. Congress Seva Dal Navi Mumbai awarded Seva Bhushan Award in the year

1995-96.

2. Maharashtra State Cooperative Banks Association awarded the Best Urban Bank Padmabhushan Vasantdada Patil Award for three consecutive years 1996-97, 1997-98 and 1998-99.

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3. Parsik Bank got awards for three consecutive years ending 98-99 from Organization called Yuvak Mudra, who organized competition in memory of Rajarambapu patil in regards with merit and principal of cooperative banks.

4. Bris Indiglo has ranked Parsik Bank as follows in their survey First Number in Overall Ranking in Thane District. Second Number in Overall Ranking in all over Maharashtra State. Fourth Number in Safest Category

Board of Directors of GPPJSB Ltd.No. Director's Name 1 Mr. Ranjit G. Patil 2 Mr. Devraj B. Patil 3 Mr. Jayram K. Patil 4 Mr. Namdev B. Patil Designation Chairman Vice- Chairman Director Director

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5 Mr. Dashrath D. Gharat 6 Adv. P. C. Patil 7 Mr. Gopinath B. Patil 8 Mr. Prakash N. Patil 9 Mr. Narayan G. Gawand 10 Mr. Kayyum R. Cheulkar 11 Mr. Pandurang D. Bunde 12 Mr. Ravindra K. Patil 13 Mr. Rupaji S. Khulat 14 Mrs. Rajashree P. Patil 15 Mrs. Shashikala D. Patil 16 C.A. R. R. Lahoti 17 Mr. Kesarinath B. Gharat

Director Director Director Director Director Director Director Director Director Director Director Banking Expert Banking Expert

Current ScenarioCurrently operating through 33 fully-equipped branches and 1 Extension Counters. Gopinath Patil Parsik Janata Sahakari Bank is getting ready for the next phase of rapid expansion. Branch Name Thane Region Kalwa Branch Creek View Apartment, 1st floor, Mumbai Pune Road, Kalwa, Thane - 400 605. Tel : 25378350 / 25426471

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Kharigaon Branch Jay Bharat Sports Club Building, Kharigoon, Pakhadi, Post. Kalwa, Dist. Thane- 400 605. Tel.: 25413268 / 25392134 Parsik Nagar Branch Sahakarmurti Gopinath Shivram Patil Bhavan, Ground floor, Parsik Nagar, Kalwa, Thane 400 605. Tel.:25456547 /25456551 Majiwade Branch Laxmi Apt, 1st Flr, Kapurbawdi Naka,Majiwade, Thane - 400 607. Tel. : 25340359 / 25430777 Kharkar Ali Branch Vaishnav Mandir Building, Gr.floor, Jambhali Naka, Kharkar Ali, Thane - 400 601. Tel. : 25369037 / 25375197 Louiswadi Branch Surabhi Apartment, Ground floor, Louiswadi, Thane. Tel.: 25811096 / 25837982 Kasarvadavali Branch Purushottam Plaza, Bldg. No.1, first floor, Ghodbandar Road, Kasarwadavali, Thane - 400 607. Tel.: 25970629 Naupada Branch Hemendra Shopping Centre, 1st floor, Gokhale Road, Naupada, Thane - 400 602. Tel.: 25364707 / 25379058 Bhayendar Branch Hall No 1 & 2, 1st Floor, Shri Vinayak Building, Sarvoday Complex, Bhayendar (E) 401107. Tel. : 2812 6500 Navi Mumbai Region Belapur Branch29 | P a g e

Bhau Patil Building, Belapur - 400 614. Tel : 27572628 / 27576273 Koparkhairne Branch Plot No. 80, Sector No. 5, Koparkhairne - 400 709. Tel : 27541916 / 27546680 Koparkhairne, Sec-17 Branch Sector No. 17, Dyan Vikas Sanstha Vidyalaya, Koparkhairne Village-400 701. Tel.: 27546051 Nerul Nagar Branch Plot No. 4B, Sector No. 3, Nerul, Navi Mumbai - 400 706. Tel. : 27707654 / 27707559 Sanpada Branch Plot No. 7, Sector - 5, Sanpada, Navi Mumbai - 400 705. Tel.: 27754939 / 27752278 Nerul Phase - II Branch Plot No. 28/B, Sector No. 10, Nerul Opp. Sarsole Bus Stop, Navi Mumbai - 400 708. Tel.: 27716864 /27718739 A.P.M.C. Market Branch Central Facility Building, A.P.M.C.Market, Sector 19, Vashi, Navi Mumbai. Tel. : 27654035 / 27891089 Airoli Sector - 1 Branch Om Shanti Commercial Premises Co.Op. Hsg. Society, Sector No.1, Airoli, Navi Mumbai 400 708. Tel. : 27790662 / 27796890 Airoli Sector - 5 Branch Shivsamartha Sahakari Pathpedhi, Ground Floor, Plot No. 23 A Sector 5, Airoli, Navi Mumbai 400 708. Tel. : 27794883 / 27794976

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Fact and figures Details (till 31.12.2010)Share Holders Employee Deposits Loans Profit Dividend Audit Class : : : : : : : 65073 467 1398.03 Crore 722.07 Crore 20.72 Crore 15% A

VII. What is credit facility?Unlike the personal loans (where people borrowing the finds and the collateral are not likely to change), loans in the world of business require additional flexibility in order to meet the needs of the business as well as satisfy the requirements of the lender. Accomplishing this seemingly difficult task is done by using credit facility which is an over all credit line that can be broken into multiple credit lines and collateral. The term credit can be understood by giving light on following points:

Credit (Loans And Advances)The profit of the banks depends primarily on the utilization of its funds. But bank cannot lend its fund fully. As per banking company act 1991 every banking company has to31 | P a g e

maintain a specified minimum (presently 25 %) of the total of its demand and the time liabilities in the form of cash and approved securities with RBI. This percentage or ratio is termed statutory liquid ratio. Further every scheduled bank has to maintain with RBI an average daily balance, the amount of which has not to be less than a particular percentage (presently 6%) of the total of its demand and time liabilities. As such bank generally goes for short term finance although a small portion of its total deposits is invested as long term lending. Bank allows different forms of advances.

Credit DepartmentCredit Department banking business primarily involves accepting deposits from the public and investing or lending the same and thereby making profit out of it. However lending money is not without risk and therefore banks make loans and advances to farmers, traders, businessman and industrialists against either tangible (land, building, stock, etc.) or intangible security. Even then, the banks run the risk of default in repayment. Therefore the banks follow cautious measures while lending money to others. This core function of a bank is performed by the credit department of the bank. In this case, the relationship of bank and customer is that of creditor and debtor. Unlike personal loans where the persons borrowings the funds and the collateral and not likely to change, loans in the world of business require additional flexibility in order to meet the needs of the business as well as satisfy the requirement of the lender. Accomplishing this seemingly difficult task is done by using a credit facility which is an overall credit line that can be broken into multiple credit lines and collateral.

TYPES OF CREDITS OFFERED BY A BANKBanks usually provides following types of credit: 1. CASH CREDIT (hypo.) 2. CASH CREDIT (pledge) 3. LTR 4. TERM LOAN 5. LEASE FINENCING 6. SECURED OVERDRAFT (SOD) 7. OTHERS

1. CASH CREDIT (HYPO.)-:Cash Credit or continuing credits are those that form continuous debits and credits up to a limit and have and expiration date. A service charge that is effect an interest charge is normally made as a percentage of the value of purchases. These credits may be of the nature of pledged and /or hypothecated and banks should report these in separate heads incorporated under the main head cash credit. Under this arrangement a credit is sanctioned against hypothecation of the raw materials or finished goods. The letter of hypothecation creates a charge against the goods in favor of the Bank but neither the ownership nor its possession is passed on to it; only a right or interest in the goods is created in favor of the Bank and the borrower binds himself to give possession of the goods to the bank when called upon to do so. When the possession is handed over,32 | P a g e

the charge is converted into pledge. This type of facility is generally given to the reputed borrowers of undoubted integrity.

2. CASH CREDIT (PLEDGE)-:Under this arrangement a cash credit is sanctioned against pledge of goods or raw materials. By signing the letter of pledge, the borrower surrenders the physical possession of the goods under the Banks effective control as security for payment of Bank dues. The ownership of the goods, however, remains with the borrower. The pledge creates an implied lien in favor of the Bank on the underlying merchandise. In the event of failure of the borrower to honor hi commitment the Bank can sell the goods for recovery of the advance. No collateral security is normally asked for grant of such credit.

3. LOAN AGAINST TRUST RECEIPTS (LTR)-:This is a loan facility up to a satisfactory limit to the traders / customers by a Bank against security of the value of the imported merchandise. This item also includes loan against Trust Receipts.

5. TERM LOAN-:A Bank advance for a specific period repaid with interest under fixed schedules. The term loans may be as follow: Short Term: Up to and including 12 months. Medium Term: More than 12 months up to and including 60 months. Long Term: More than 60 months. [This item includes lease financing]

6. LEASE FINENCING-:An entrepreneur, under this Scheme, may avail of the lease facilities to procure industrial machinery (without having to purchase it by down payment) with easy repayment schedule. The clients also get special rebate in their income-tax payment under the scheme.

6. SECURED OVERDRAFTS (SOD)-:A loan facility on a customers current account at a Bank permitting him to overdraw up to ascertain agreed limit for an agreed period. The terms of the loan are normally that it is repayable on demand or at the expiration date of the agreement.

7. OTHERS-:33 | P a g e

Any loan that does not fall in any of the above facilities is considered as other. Blocked /Segregated continuing credits (Pledge, Hypothecation or Overdraft) when re -scheduled by the Banks for payments over a number of periods should also be reported against the head other.

THE BANK USE EIGHT CS RULE WHILE GIVING LOAN1. Credit (must be god) 2. Capacity (ability to pay) 3. Capital (money that going into business) 4. Collateral (assets that secure the loan) 5. Character (the person) 6. Commitment (ability and willingness to succeed) 7. Cash flow (can it support business debt and expense) 8. Conditions (economic, finance anything that effect the business)

VIII. LOAN AND CREDIT FACILITY

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1. Housing LoanUnder this scheme the parsik bank provides loans or financing for the purchasing of flat or construction of house.

Rate of interestsa. b. c. d.

@10.50% @11.00% @11.00% @11.50%

upto Rs.25 lakhs for 5 years. upto Rs.25 lakhs for 5 years-15 years. above Rs.25 lakhs for 5 years. above Rs.25 lakhs for 5 years-15years.

Eligibility Domicile of Mumbai City who wants to purchase/ construct the building or house within the

district. Employee of Government/ self governed, semi government, leading banks, urban cooperative

bank/court, financial institution, education institutes etc. Business man who fills income tax return for last 3 years. Normally the age limit for applicant is 50 years but it can be extent up to 55 years incertain special cases.

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Time period of loanThe time period for loan is maximum 15 years or date of retirement whichever is earlier.

Documents required from applicant: Loan application form. Photo of applicant and co applicant.

Copy of document of plot which is to be purchased or constructed. Construction approval from office in the case of construction. The cost estimation and approved map of building going to be constructed. Salary statement in case of salaried applicant and income tax return of last 3 years incase of non salaried applicant. Domicile certificate of applicant. Income statement and identity card of two gaunter etc.

Execution of documents after sanction of loans

Promissory note. Loan contract. Grantee deed of two grunters. Mortgage letter of fixed assets Advance cheque Acknowledgment according to selected interest rate. Prescribed document from bank advocate. Other related documents.

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3. House Repairs LoanUnder this scheme of loan bank provides finance for the renovation and repairs of house or flat. It is the special scheme provide to the peoples for renovation of their houses.

Rate of InterestThe rate of interest of this type of loan is @14.50% p.a. as fixed rate.

Limit of Loan AmountThe loan amount is above two lakhs.

Security for LoanThe bank takes mortgage of movable or immovable property.

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Eligibility

Domicile of Mumbai City who wants to purchase/ construct the building or house within the district. bank/court, financial institution, education institutes etc.

Employee of Government/ self governed, semi government, leading banks, urban cooperative

Business man who fills income tax return for last 3 years. Normally the age limit for applicant is 50 years but it can be extent up to 55 years incertain special cases. Documents required from applicant: Loan application form. Photo of applicant and co applicant.

Construction approval from office in the case of construction. Salary statement in case of salaried applicant and income tax return of last 3 years incase of non salaried applicant. Papers of Mortgagable property. Domicile certificate of applicant. Income statement and identity card of two gaunter etc. Execution of documents after sanction of loans Promissory note. Loan contract. Grantee deed of two grunters. Mortgage letter of movable and immovable property. Advance cheque. Prescribed document from bank advocate. Other related documents.

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4. Vehicle loan (for commercial use)Under this scheme of loan bank provides loans for the purchase of vehicle for commercial use.

Rate of interestThe rate of interest for this loan is flat @12.00% p.a.

Eligibility

Domicile of Mumbai City who wants to purchase/ construct the building or house within the district. bank/court, financial institution, education institutes etc.

Employee of Government/ self governed, semi government, leading banks, urban cooperative

The self employed person who earns fixed income and files income tax return and also having PAN Card.

Loan AmountThe amount which is sanction is divided as follows 80% of invoice value + Registration Charges + Insurance.

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Documents Required from Applicants: Photo of applicant and his legal license. Vehicle quotation and income statement of applicant. Fixed assets for mortgage. Two guarantors with their income statement and photo. The nominal membership fee and deposit amount.

For Old VehicleLoan Amount in case of old vehicleThe loan amount provides by the bank in case of loan vehicle 50% of agreement value or valuation whichever is less.

Rate of InterestThe rate of interest for this loan scheme is: - Upto Rs.2 Lakh @ 13.75% p.a. - Above Rs.2 Lakh @15.00% p.a.

Security for the LoanBank takes mortgage of vehicle and salary income as a security.

Repayment of the LoanThe time limit for the repayment of the loan is maximum 5 years.

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5. Article LoanArticle loan is the scheme provided by the bank for its customers for purchase of furniture and fixtures, electronic and consumable appliances.

Rate of InterestRate of interest is providing for this loan is @ 14.50% p.a.

Loan AmountThe loan amount which is sanction for this scheme is maximum upto Rs. 5 Lakhs.

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6. Education LoanThis loan is for pursuing higher studies by their children to brighten the future of bright & committed students by extending financial assistance to pursue higher professional / technical courses studies in India & Abroad through Educational Universities / Institutes / Organizations of good reputation & recognition.

Eligibility:Students who have got admission to some professional or other courses and whose prospects of getting employment are very good.

Loan/Credit Limit:Upto Rs. 10 Lacs for studies in India. Upto Rs. 20 Lacs for studies in Abroad.

Interest Rates:Upto Rs. 10 Lacs @ 10% p.a. Above Rs. 10 Lacs & Upto Rs. 20 Lacs @11% p.a Time Period:

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5 years after the borrower gets employment or one year after completion of course whichever is earlier.

Security:Collateral security owned by Parents or Guarantor. 'Whole Life' Insurance Policy on the life of the student, for the amount of loan. DOCUMENTS REQUIRED FROM APPLICANT: Attested copies of documents for proof of age/date of birth and proof of residential

address. Passport size photo of the applicant, co-obligates and guarantors. Copy of mark sheets/degree certificates of previous academic qualifications. Income proof/latest income tax return of parents/co-obligates, guarantors. (if any) Details of collateral security along with valuation certificate of Govt. approved value (if any). Details/statements of Bank accounts held by the student applicant/coobligate(s)/guarantors (if any) for the last six months. Copy of Passport/Visa, cost of air fare (documentary detail) in case of studies abroad.

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7. Cash Credit Facility ( Credit on Pledge)This kind of fund based working capital facility is provided to traders/manufacturers & the like. Bank has focus for extending cash credit facility to small & medium size enterprises.

Purpose of the LoanThis facility is given for meeting the requirements of traders, businessman and manufacturer. The requirements such as Working Capital requirements / Additional stock purchase / Repayment of trade condition.

Rate of InterestLOAN AMOUNT Below Rs 50 Lacs Rs 50 Lacs To Rs 2 Crore ABOVE Rs 2 Crore INTEREST 12.50% 12.00% 11.50%

EligibilitySmall traders/ Manufacturers / Partnership firms / companies.

Margin44 | P a g e

Minimum 30% of net inventory *

SecurityClosing Stock, Debtors, Movable/Immovable Properties.

RepaymentThe Maximum period of repayment of loan is up to 12 months on renewable basis.

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8. Technology Upgradation Fund (TUF) ShemeThe Indian Textile Industry occupies a unique position in the Indian Economy, in terms of its contribution to industrial production, employment & exports. Given the significance of this industry to the overall health of the Indian Economy, its employment potential & the huge historical backlog of technology upgradation, particularly in the context of the liberalization of the national industrial & trade policy & globalization of textile trade, it is essential for the textile industry to have access to timely & adequate capital at internationally comparable rates of interest in order to upgrade its technology level. Bank has extending financial assistance by providing concession Interest rate for purchase of machinery for textile business.

EligibilityIndividuals / Partnership Firms / Companies.

MarginMinimum upto 30% of machinery Invoice / Quotation.

SecurityMovable & Immovable Properties.

RepaymentMaximum period upto 84 months. LOAN AMOUNT INTEREST46 | P a g e

A) Machinery Loan Under TUF Scheme UPTO Rs 25 Lacs ABOVE Rs 25 Lacs upto Rs 50 Lacs ABOVE Rs 50 Lacs B) Land & Building and New Plant & Machinery UPTO Rs 25 Lacs ABOVE Rs 25 Lacs upto Rs 50 Lacs ABOVE Rs 50 Lacs C) Land & Building and Old Plant & Machinery UPTO Rs 25 Lacs ABOVE Rs 25 Lacs upto Rs 50 Lacs ABOVE Rs 50 Lacs

13.00% 12.25% 12.00% 13.00% 12.50% 12.25% 13.50% 12.75% 12.50%

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9. Group Loan FacilityIn certain cases where the employer undertakes to deduct the loan installment under sec 49 of Maharashtra State Co op Act, 1960 and remit the same towards the repayment of loan or undertakes to remit the monthly salary of employees directly to the Bank till entire loan is repaid and intimation to that effect is given by Bank. In such cases, Group Loan can be granted provided Minimum number of Employees applying at a time in a group is 10.

Purpose:For Purchase of Consumer durable goods (with or without security of consumer durable goods / Domestic goods being financed) And / Or For any other domestic purpose And / Or For repayment of prior debts And / Or48 | P a g e

For House repairing

Rate of Interest:The rate of interest is chargeable for the group loan is @14.00% p.a.

Eligibility:Minimum number of Employees applying at a time in a group is 10.

Loan amount:The maximum limit of loan amount is up to Rs. 2 lakhs.

Repayment:The maximum limit for the repayment of the loan is up to 7 years.

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10.

Term Loan For Builders and Contractors

This is the loan scheme which is provided to the builders and contractor to the completion of their projects. This also includes the loans to the contractors which are doing government project as well as private projects.

Purpose:It is provided for the various need of the builders and contractors such as business expansion, purchases of machinery, raw material, setting of new project, etc.

Rate of Interest:LOAN AMOUNT Any Amount Eligibility: Individual / Firm / Partnership Firm / Company etc. Repayment: The period of repayment of this loan is maximum 7 years. Margin The bank maintains the margin of 30%.50 | P a g e

INTEREST 15.00%

Last 10 Years Bank's Progress(Rs in Lacs) Year 1999-2000 Share Capital Deposits Loans 9881.47 Asset Fund Customer Base Net Profits Dividend 1892.06 27481 503.46 15%

481.29 24556.88

2000-01

578.81 30893.94 12463.20

2335.54

31898

793.91

20%

2001-02

662.06 37418.04 13283.56

3311.01

36040

859.49

15%

2002-03

782.36 42406.84 14289.81

5100.09

39683

907.47

15%

2003-04

959.33 47979.21 18054.27

6475.50

43762

1059.89

15%

2004-05

1104.59 52042.79 21762.46

7925.91

46612

752.63

15%

2005-06

1254.05 59317.84 26310.61

8897.01

48505

1028.65

15%

2006-07

1457.17 70488.24 32340.40

10638.84

50871

468.28

15%

2007-08

1845.67 88013.54 45535.87

11406.69

54424

1540.16

15%

2008-09

2242.75 94341.95 55482.54

13336.83

58096

1743.26

15%

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This is the graph which presents the growth of the bank in last ten years. Each and every year bank growth in all their fields such as share capital, deposits loans, asset funds, customer base, net profits and provides the greatewst dividend of 15% p.a. The following chartas shows the increment in the loans given to the society: Year Loan Amount Outstanding (Amount in Lakhs) 9881.47 12463.20 13283.56 14289.81 18054.27 21762.46 26310.61 32340.40 45535.87 55482.54

1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

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The chart shows the total amount of loan which will have recovered by bank, the increment shows the trend to take loan from cooperative bank increases; it was a little bit constant in year 2005 and 2006 but then increase which shows the interest of individual in taking loan from cooperative bank. The loan amount provided by bank increase as compare to last 4 years, the interest of different sectors in taking loan from cooperative bank can be seen in following table: Sectors Agriculture Non-Agriculture Other 2004-05 (Amount in Lakhs) 1688.69 9665.15 5555.24 2009-10 (Amount in Lakhs) 5654.24 11164.85 26954.45

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The chart shows the increment in the loans provided by banks and it is clear that the bank not only focus on agriculture loan but on other loan also which includes loans for Self employment, commercial/working capital mortgage etc. it shows cooperative bank is not bounded in providing loan in agriculture area only and can be a good source of fulfill short and medium term requirement of finance in rural area.

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RECOVERY OF LOANSThe banks have introduced various deposit schemes which induce the common man to save more money. The urban cooperative banks accept deposits for the purpose of lending. It is the primary duty to and the function of the urban co operative banks to safeguard the interest of the depositors. Whenever deposits are accepted, the bank agrees and undertakes to repay the amount of deposits with interest to the depositor and maturity. The ownership of the deposit amount vests with the customer and the custody of the deposit amount are with the banker. So whenever advances and loans are sanctioned to shareholders / members of the bank, the banker has to take extreme care to see that the borrower repays the amount of loan with interest so as to enable the banker to repay the amount of deposit with interest to the customer. Points which are taken care by the bank while giving loan: This is necessary to ensure that every borrower has a proper repaying capacity for repayment of the amount of loans and advances that would be sanctioned. Securities are also taken to ensure that in case the borrower fails to repay the amount of loan, the securities can be attached and sold out and the debts can be liquidated. Even with this background, though there is a detailed scrutiny of loan application, it is observed that there are very few cases, where the judgment of the bankers fails. In such fail cases the borrowers are not ready and willing to repay the amount of loan, the securities can be attached and sold out and the debts can be liquidated. Following are some points which banks takes care while lending money: Date of sanction of loan Amount of loan sanctioned Rate of interest that would be charged Last date of repayment of loan Period for which the loan is granted Details regarding securities offered

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Normal measures to be adopted by bank officials for recovery of dues:Whenever, a borrower commits breach of agreement in respect of repayment of schedule of the amount of loans with interest etc., we safely say that there are 'OVERDUES ' in the Loan Account. Once the Loan A/c is an overdue A/c i.e. the borrower has committed default in repayment of loan amount as per the dates specified in the Agreement, the n the Banker has necessarily to adopt measures which will result into recovery of overdue amounts. Whenever the borrower commits default in repayment of loan amount, immediately the bank should serve ' Preliminary Notices' on the principal borrower and the sureties advising them to repay the amount of overdue with interest etc. Such Preliminary Notices should invariably mention information which is of factual nature relating to(i) Amount of loan sanctioned.

(ii) Date of sanction of loan. (iii) Names of the sureties. (iv) Amount of the loan sanctioned. (iv)Amount of over dues with interest etc. on a particular date. Addition to the above it must also be communicated the bank shall proceed to take further action against the principal borrower and sureties in case of failure to repay the amount of loan/over dues. It has been often said 'A' stitch in time saves nine'. Thus, the banker must be vigilant; right from the disbursement of loan amount till the recovery of the entire loan amount. There should be effective supervision over the amount of loan sanctioned

Recovery through salary / wagesAfter issue of such preliminary notices, there may be a positive response from the principal borrower and he may repay the amount of defaulted loan installment, or the principal borrower and the surety may approach the authorities of the bank and may explain their genuine difficulties regarding repayment of loan amount or there may offer to repay the dues partially. There may be cases where there is no response from the borrower / sureties. With this background, the bank should precede further to devise such steps which will result in recovery of dues. Under various State Cooperative Acts (e.g. Section 49 of M.C.S. Act 1960)it has been provided that if a member of a society. /Bank authorizes his Employer to make deduction from his salary/wages, in order to satisfy the claims of the society/Bank, and then on receipt of requisition letter from the concerned Bank, the Employer shall proceed to make deduction from the salary/wages from the concerned employee/member to meet the claims of the Bank. The Employer must remit the amount so deducted immediately to the Bank concerned. Non-compliance of these provisions under the State Cooperative Act shall be constructed as' offence' and further Civil and Criminal action can be instituted against such Erring Employer.

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In addition to the above, there are provisions under the Indian Payment of Wages Act 1936(vide Section 7(2) and Section 7(2) (j) which stipulates that the Employer shall make deduction from the salary/wages of an Employee to satisfy the claims of the Cooperative Society / Banks.

Settlement of Disputes:Based on the noting of the Management, the Board of Directors may pass a Resolution authorizing the Manager/or such other officer to file "Dispute Application in the Co-op. Court against the defaulting principal borrower and his sureties. Section 91 of the MCS Act empowers the co-operative courts to decide on Disputes and Section 95 further empowers the court to direct attachment of property before announcement of the award which is called Attachment before award or order and interlocutory order if it is satisfied that the parties to the dispute are likely to remove/ dispose of whole or part of his property. Section 95 similarly empowers the Registrar / Officer authorized by him to take the above measures in case of disputes referred to him. The prayer clause normally consists of following important points The opponents may be held responsible to repay the entire amount of loan with interest. If the opponents fail to pay the amount of loan, the disputant may be entitled to attach the

movable and immovable property of the opponents. The disputant may be entitled to sell the attached property and recover the amount due from the

opponents. Any other orders to meet the ends of justice.

RECOMMENDATION AND SUGGESTIONS57 | P a g e

1. More mass awareness campaigns should be organized in order to enhance market share of bank. So Bank should concentrate on its advertisement itself. 2. Bank should refocus on its interest rate as responded by people. Periodic review of the interest rate should be done. 3. There should be proper computerized system in the bank as it will reduce the time wastage of manual work and will lead to the better performance of the bank. 4. Training of the employees should be there to meet the needs of the time. 5. Proper posting of the staff should be done. 6. Customers satisfaction must be the top priority of the bank. 7. Maximum practical exposure should be provided to the job trainees so that they may handle the various enquiries of customer effectively. 8. Communication gap within the bank and with the head-office should be reduced. 9. Infrastructure facilities should be provided to the branch of Cooperative Bank, as it is catering to the 5-6 nearby villages. 10. Banks is also advised to have proper internal control measures for monitoring its functions and transactions.

CONCLUSION58 | P a g e

The study concludes that Cooperative Bank, which was established for mainly for the service of rural sector, still is not on the line to its goal. It is lacking at various elements, particularly at the branch levels, which reveals the edge of other public and private sector banks over the Cooperative bank, the lines at which the bank is lacking behind. The lacks of commitment in these banks make peoples trust in the cooperative sector a casualty. Some of the co-operative banks are quite forward looking and have developed sufficient core competencies to challenge state and private sector banks. But there is shortage of staff in this bank and the traditional manual banking which is affecting the business and customer services. People are still unaware of the services provided by the Cooperative Banks due to lack of advertisement. There is a need to analyze and pick up early warning signals. A change is needed today in the cooperative banks which is built on confidence in human capital - the most important of all resources in commitment, creativity and innovation brought about by proactive management, membership and employees. The ability to capture knowledge and wisdom gives cooperative banks their competitive advantage. A prerequisite is that participants from all parts of a cooperative organization know and understand its purpose, core values and visions. In this way, by keeping in mind the certain shortcomings, appropriate measures to overcome them should be adopted. So that the real purpose of the Cooperative bank must be realized with a competitive advantage and the gap between the customer perception of the Cooperative Bank and the other private and public sector bank, can be reduced.

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