You are on page 1of 78

1

Vivekananda shikshan santha’s VIVEKANAND ARTS, SARADAR DALIPSHIG COMERCE & SCIENCE COLLEGE AURANGBAD

Project Report On FIXED DEPOSIT Submitted to
Dr. Babasaheb Ambedker Marathwada University Aurangabad

By
Mr. BAWASKAR KISHOR BHIMRAO B.B.A.VI SEMESTER 2011-2012Guided by MR. GANESH DOKE.SIR

2

Vivekananda shikshan santha’s VIVEKANAND ARTS, SARADAR DALIPSHIG COMERCE & SCIENCE COLLEGE AURANGBAD CERTIFICATE
This is to certify that project entitled fixed deposit Submitted by MR.BAWASKAR KISHOR BHIMRAO is as per the requirement of Dr.Babasaheb Ambedkar Marathwada university in the partial fulfillment of BBA (Bachelor of business Administration) 6 IV Sem for the academic year 2011-2012

GUID MR.GANESH DOKE SIR DR.A.T.GAIKWAD

DRICTOR

3

TO WHO OMSOVER IT MAY CONCERN
this is to Certify that Mr BAWASKAR KISHOR BHIMRAO of B.B.A Student of department of Managemant studies Dr .Babasaheb Ambedkar Marathwada university Aurangabad has undergone training and completed a project on FIXED DEPOSITS of deogiri nagari co-oprative Bank Aurangabad he has carried out this project for deogiri co-oprative Bank date 23/1/2012 to 22/3/2012 in the spen of project duration his candidature was found to be very we wish him a bright futures

MANAGER . MANDLIK MR.ABHAY

samarthnager. faculty member. A. is a record of an original work done by me under the guidance of Ganesh doke sir. B. Aurangabad .M University. and this project work has not performed the basis for the award of any degree/ associate ship/ fellowship and similar project if any Mr BAWAKAR KISHOR BHIMRAO BBA 3rd year . Aurangabad. college institute of management studies.4 DECLARATION I hereby declarer that project worked entitled "production management to the Dr.

Gopal Balloj sir and all teachers of our department who helped me directly or indirectly in completion of this project. BAWASKAR KISHOR BHIMRAO . I would also like to thanks for their support and cooperation during the tenure of the project.5 Acknowledgement I like to thanks Mr. Mr .

6 .

NO Content Pg.7 INDEX SR. No 1 2 3 4 5 6 INTRODUCTION COMPANY PROFILE INTRODUCTION OF PROJECT TOPIC SCOPE&OBJECTIVE RESEARCH & METHODOLOGY ANALYSIS OF THE PROJECT .

8 7 8 9 LIMITATION OF STUDY CONCLUSION&SUMMARY BBLIOGRAPHY Chapter 1 INTRODUCATION OF FIXED DEPOSIT .

are buta cauple of facters for this hunt for security by investors evenat the lost of lower returns.on the hand investors are still straggling nature of some securities and on the others intermediaries are trying to raise the investors awareness. The fund can be used to pledge lone if a fix deposit maturity day is approaching but a customer need fund urgently than the customers can apply for pledge loan to avid interst loss.9 with invesmant avenves increasing the day it is quit easy to forget that until the reformera kicked off in 1991 indianhad very limited means of investing their saving while it is true that we have net yet the money developed economic ther are anumber of instrument today that were unheard of amidst the lay investors just a short decade age . In this segment we willreglotry past detaiks on the three main categories of fixed deposits.the central bank R B I and the market regulatiotion S E B I have been attempatiting to rein in operators from ashing in on this rush for fixed deposit. the slump in the capitak market and larger amount o losses by investers in I p o . Stok favorite such as fixed deposits are men while enjoying a reneved burst of popularity . it is only recentily that credit rating has been made mandatory for fixed deposit raising exercises as werw prudential norms howeres the batterlesson result in investors ignoting almost allother factors barring security while investing ther saving thus the past two yerrs having seen a huges growth in hand deposit and in fixed deposit levels of the batters segment of india. . In fact between 1994 and 1996 afew states like tamil nadu saw literal sxplosiars off fixed deposits offers with promise of impossibal returns like 36 percent to evan so percent per annum is some their saving go uping smoke at the hand of such corporate entities .

The fund can be used to pledge lone if a fix deposit maturity day is approaching but a customer need fund urgently than the customers can apply for pledge loan to avid interst loss.10 The und can be withdrawn ahead of the marurity day If customer need fund argently they can also apply for withdrawing ahead of the maturity day if the customer want to totallywithdrowan the fund before the maturity day fixed deposit refers to the service that customer set deposit term whan making depositand deposit principle at one time . . the account can set to re deposit customers can set re deposit term whan makingdeposit and the principle and past tax interest will be automatically re deposit term on the maturity day. The und can be withdrawn ahead of the marurity day If customer need fund argently they can also apply for withdrawing ahead of the maturity day if the customer want to totallywithdrowan the fund before the maturity day .after whichthey can totally a partially withdraw principle and interests. Higher interst rate the interst rate of fixed deposits are higher than that of currant deposit fixed deposit is a traditional wealth management tool the longer the interest rate .

This means account holders are actually earning less interest with fixed deposits than with other types of loans and accounts. the funds cannot be used even in emergency situations. corporate entities. The actual amount of the fixed rate can be influenced by such factors at the type of currency involved in the deposit. Individuals. While the interest rate on fixed deposits cannot be changed. according to the terms and conditions that govern the account. the monies in the account will earn a fixed rate of interest regardless of any fluctuations in interest rates that apply to other types of accounts. the money remains in the account and cannot be withdrawn for any reason. As an added benefit. and even non-profit organizations that wish to set aside funds and limit their access to the funds for a period of time often find that fixed deposits are a simple way to accomplish this goal. and the location where the deposit is made. Changes in the going interest rate may also rise to a point above and beyond the interest rate applied to existing deposits. there is sometimes a way to work around the issue of obtaining use of funds in an .11 What are fixed deposit Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. fixed deposits carry a duration of five years. The money placed on deposit earns a fixed rate of interest. Because the money cannot be withdrawn until the duration is complete. The most unusual characteristic of a fixed deposit is that the funds cannot be withdrawn for a specified period of time. In most cases. the duration set in place for the deposit. During that time. both these benefits can also turn into disadvantages under certain circumstances. However.

going with an FCFD does contain a slightly higher amount of risk. . The use of fixed deposits can also be helpful when working with various types of currency. this can at least make it possible to deal with the current financial crunch. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD. If the currency did not fare well in the interim. this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the deposit and earn more than with a standard fixed deposit strategy.12 emergency situation. it is possible to choose the type of currency involved in the deposit and lock in a rate of interest. using the fixed account as collateral. there is some chance of obtaining a loss. At times. due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete . If the choice of currency is a good one. Fixed deposits are a credible way to make a return on investment that is somewhat higher than a standard savings account. the lending institution where the fixed deposit is placed may be willing to extend a separate loan to the account holder. since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled. However. While not ideal.

13 Chapter 2 INTRODUCTION OF BANK .

Advances of 333. head office.79 crores paid through its 33.14 Deogiri Nagri Co. well equipped . The bank is also planning to tie up with state and national players to expand its network. The modern DATA centre . Gokhle. All Offices are Air Conditioned .G. The Reserve Bank has opened all Maharashtra as area of operation for us. V. Parabhani&Jalgaon District.79 crores.22 crores. Shri S. Deshpande. fully computerized and interconnected.G. Deogiri Bank is the first bank in Marathwada to opt core banking pattern for its working. KumudRangnekar.U. Jalna. Late Shri. Late Dr. Ahemadnagar. Gharpure. Haribhau Bagade (Ex Minister).66 crores. The bank have 18 Branches including their Training Centre.88 crores. At present the bank has its area of operations in Aurangabad. On 30-Jun-11 the Bank owns funds and reserves of 114. . Mrs. The first branch of the Bank was opened on 23th Jan 1985. Dr M.R. The bank is in the process of establishing ATM all over the city to cater banking services to its customer round the lock.Jayantrao Choudhari (Dhamangaonkar). The bank has Deposits of 456. The Bank has raised paid-up capital of 14. ShriSukhdevNawle. The concept of Deogiri Nagri Co.oprative Bank Was Established In 23th Jan 1984. Late ShriChandumalChotlani. thus the total business is of 789.oprative Bank was originated by Late Pralhadji Abhayankar & the bank came into being under the dynamic leadership of Shri. Shri G. Rege took active part in establishing of the bank.000 Members.

which is one of thbest level. Bank has good Asset value and efficient staff for achieving their desire goal. Bank Profile Deogiri Nagri Co.20%.oprative bank get permission from reserve bank of india to launch four new branches in pune city.increment in that fund it reflect confidence of member over the bank.92cr it is extra. According to banks rules and regulations member have to purchase 2500 Rs. Deogiri nagri Co. mobile van service. Any type of financial problem for any sector of business bank supporting to them.38cr share capital from 32688 member.own fund is the economical capacity of any commericial organization. In upcoming year bank use new and advanced technology. The performance of the Bank is the best in co-operative banking sector.15 The CRAR of the bank is 11% and the Net NPA 0.for growing the whole income of the bank bank made contract between new life insurance companies. 2687 member and recover share capital Rs. Member and recover share capital is the power of co.1.pre printed cheque books facilities to the customer.oprative organization. .share for membership.14.comparism with last year performance between member & share capital.at time of year ending bank get the Rs.oprative Bank is largest bank in Marathwada.

65 31197.39% .07 11. 4. Capital availability The ratio between total risk part of property and capital fund is called as capital availability.55 4141.16 Deogiri nagari Co.getting that benefit bank made expenditure on it. net profit.26 782.10cr profit is extra compare with last year performance.oprative bank system. Accordinf to reserve bank of india’s rules and regulations it is compulsory keep to maintain 9% (Amount in lacs) No. It is extra camparing with last yaer performance.oprative bank have 100.79% the ratio of capital availability on dated 31th march 2011. In 2010-2011 bank started to provide fund supply in all sector. successful management of risk and growth in capital fund Deogiri nagari Co.39 4634.53 35120.21cr rupees in percentage 4.22cr. it is good for bank growth for that purpose establishment of new branches.7.A. This is emblemof bank management and efficiency. making technical side perfect etc.79% .45 14. A B C D E Particulars Tier-1 capital Tier-2 capital Total capital(A+B) Total risk weight of property C. Because this reason the bank had get Rs.98 1107. 31/03/2010 3852. In open economy the capital availability is the good for people co.bank move their maximum profit in reserve fund from net profit and increase their goodwill.86% 31/03/2011 3033.06cr fund at the time of year ending. The amount of extra fund is 4.oprative bank done 11.R.R.

installment of that insurance bank has been fill regularly.71 6.05 25.63% 28.17 Depostie Deogiri Nagari Co. For the purpose os deposite security bank have made insurance from reserve bank of india’s Deposite department . which is 12.30 28194.oprative Bank have available Rs.81% 100% .86 40798.56% 64.75%.75 45898.52% 69.11% 100% Kinds Of Deposite Current deposite Saving deposite Fixed deposite Total 31/03/2011 3042.31 13109. After using all facility and securities which provided by bank people made their fixed deposite in bank.5.99cr Deposite at time of report year ending. To adjusting with national level changeable commercial environment bank have change deposites scheme and keep the cost of deposite is . because of that reason bank have increase their deposite fund for the rupees of 51.37% 10441. 458.50% extra comparing with last year performance.65 29746. Deposite Mixture of bank on Dated 31/03/2011 (Amount in lakh) 31/03/2010 2191.89 5.01cr.

Bank achieve their aim regarding loan recovery using Maharashtra State Co. they contribute their time for achieving loan recovery regarding non performing assets. Employee. Recovery of non-performing assets Deogiri nagari co.oprative Act 1960 of section 101. Negotiable Instrument Act.62% and another ratio of weak sector loan distribution is 18.bank were done loan investigation and risk management.67crat the time of report year ending.35% .40. It is extra of Rs. deogiri bank established director recovery committee at the central level for controlling the ratio of non performing assets. member made very important role Behind this achievement. securitization Act.18 Loan The total amount of loans are Rs. Director. Deogiri nagari co.49cr compare with last year performance in percentages 14. The ratio between total loan and non performing assets is just 0.oprative bank made some rules and regulations for the purpose of non performing assets recovery. Bank take review of each and every branch regarding loan recovery. The ratio of primary sector loan at the time of year ending is 54.at the time of new loan issue.00%. Total of whole amount loan recovery plan and their account detail . Last year the ratio of is 0.10% bank.322.20% on dated 31th march 2011.oprative bank follows all rules and regulations regarding loan distribution to weak sector.37%. Bank set target for next financial year regarding non performing assets and it’s ratio with total amount of loan is 0. Bank tries to distribute small scale loan to public.

05 Information of legal action against outstanding payment holder No.19 (Amount in lacs) Loan Distributed Account No.44 721.76%.59 148. 1. 3.69 297. 2. 2. 5. (Amount in lacs) Particulars Notice from office Notice from advocate Cases to bring a charge but under hiring(section 91. Loan Amount 141 118. 3. (Amount in lacs) No.72 326. 4. 4. 1.44 OTS (remaining Amount) 163.70 851.89 Classification of outstanding payment The Ratio of Deogiri Nagari Co.oprative Bank regarding outstanding payment on dated 31th march 2011 is 16.101) Awarded(section 91 .50 5408. 5.77 OTS Amount 116.25 2324. 101) Loan holder 2381 1462 71 -580 Total amount 1255.101) Cases under hiring but not awarded(section 91. Year Lower than 1 year Between 1-2 year Between 2-3 year Between 3-5 year More than 5 year Total No. Of Account 3673 303 145 180 193 4494 Total 3210.85 – 1679.88 Discounted Amount 46. which is mention in following Table.36 .

oprative bank fulltime/halftime training program Total Total No.208. Deogori nagari co.20 Total 4494 5408.26% on dated 31th march 2011 at the time of report year ending.comparing with last year investment it is extra 7. Bank made such program for employees training according following schedule. No.197 employees use this training centre.119. Whoever Deogiri nagri co.of program 14 14 Insurance business .05 Investment Deogiri Nagari Co.52cr.oprative bank have its own training centre with advance technology for the purpose of increase the employees effectiveness and efficiency.oprative bank invest in government securities Rs. of Trainy 197 197 No. making good plan for loan recovery and trying its implementation it reflecting with increasing bank liquidity and this is also useful for investment increment. Bank follows CRR and SLR rules and regulation from the date of its foundation. 1.oprative bank have Total investment on dated 31th march 2011 is Rs. Minimum 25% amount is compulsory to invest in government securities. Human resource development Deogori nagari co. Bank liquidity management is on top at time of report year ending.83cr.04cr in percentage 26.

5.00 1000000.72199901. 4.oprative bank earned net profit Rs. Profit Distribution Deogiri Nagari Co. Bank make mutual contract between another bank for ATM transaction.in report year. Bank made contract for general insurance between FUTURE GANERALLY INSURANCE COMPANY PVT.72.84 at the report year ending. Computerization Bank started SMS service for each and every account holder for their each every transaction. with last surplus net profit of Rs. Bank knows needs of customer. Bank made such transaction with different insurance companies and reserve bank of india give permission for that. Bank use computer technology with their perfect security.LTD.91 are available.02 including this total net profit Rs.00 16000000.00 1500000. Lot many insurance companies coming in that market follow all rules and regulation. Profit Distribution Chart No.72199973.00 1000000. 2.00 10000000.00 20580624. 1.in upcoming year bank start NET Statement facility for every transaction. 3. Bank provide RTGS and ECS facility to customer for more than two lacs transaction with ICICI bank. Particulars Statutory Fund Profit (12%) Servent development fund Member development fund Building fund Dharmaday fund Investment up-down fund Deffered asset reserve Amount in rupees 18050000. 6.00 4069276. 7. 8.00 . Using advanced technology bank tries gives good service to the customer.21 Bank made insurance from insurance companies to secure their securities amount.

Kalantri and second is Prassanna P.B.g mundada(statutory Accountant) Aurangabad Made their Auditing And account inspection and give bank one of the best rating. They decide their goal for next financial year.oprative bank follows all rules and regulation of reserve bank of India and responsible for member and its deposite securities. Deogiri Nagari co. . The Director Board give permission to establish new vice committees.these two controller take inspection and account investigation of public cooprative banks.Kala and Associates. Using their knowledge regarding banking sector bank achieve their desire goal.E. Without this there are two more company made investigation regarding accounts one is S. Director Board And Its Different Committees Director Board and Different Committees of banking management made their role for effective control.91 Account inspection and Investigation Central government and state government made control over the public co. In 2010-2011 financial year Mr. They are gave rating in accountancy for best performance.22 9.91 72199973.oprative banks from state and central government.Jaju company for Internal account investigation for accurate working within the bank. Deogiri nagari co. Bank appointed knowledgeable personnel within their different committees. rating A given to the bank. Indapurkar and Mundada partner M.oprative banks through the reserve bank of india. dwell control on co.oprative bank appointed M. They are arranging the meeting on different issue. Surplus net profit Total amount 73.

5.00 111451808. 7. 8. 6.00 .00 Life and Debtor • • • Cash in hand (with ATM) Cash at bank State bank of India Notified banks and nationalized banks Maharashtra state cooprative bank and district centralized bank (CASH) Other commercials and cooprative bank(CASH) Term deposits in banks Maharashtra state cooprative bank Current year amount March 2011 712695 86. 1. 4. Particulars Director Board Meeting Loan Committee Meeting Loan Recovery Committee Meeting Worker Committee Meeting Audit And Inspection Committee Meeting Purchase Committee Meeting Investment Committee Meeting Assets liabilities management committee meeting No. 2.60 101025977. 3.00 • 328611576.25 • 513195258.34 15898829.35 19317692.75 • 40576175.36 25849315. Of Meeting 20 18 05 05 02 06 06 06 Banking regulation act 1949 section 29 and 31 Last Year Amount March 2010 39699053.46 • 167926 813.23 No.31 146192985.

Fund Investment State partnership fund/fund investment 555123962.oprative Org.00 • Loan issued Short term loan Government security shares 362949.24 689394454.00 4125000.00 120457 9050.0 0 0.00 • 1202589712.00 50.00 883735 538.00 2199028300.00 0. Mumb ai Apex Bank.00 • • • • • 0.00 3010000.00 0.Mumbai Pvt.00 4125000.00 8500000.00 3010000.00 7000000.00 810546550.oprative bank.00 • • 50. Shares Aurangabad district centralized bank Maharashtra co.00 794911500.00 • • and district centralized banks term deposits Nationalized and other commercials banks term deposits Investment (shares) District centralized and state cooprative banks shares Trustee Org.46 • • • 613620.& other share Co.00 National 232751 0987.2 5 .00 1190444000.

61 42986008.18 • • • 51097504.00 438965081.11 686637712.20 248427221.59 9063452.55 724262560. discounting • Project financing Arrears Rs.52 8957889.16 725766.61 889674881.25 33879457.00 8575762.91 761490.C.58 .95 1072454708.87 13546991.41 29677911.00 Suspected and bad debts Rs.48 1310313188.83 422243415.00 1118332.59 535000.95 1198622772.92 security • Other security • Gold/silver security • Term deposits security • Cash credit/overdraft • Mortgage security cash credit • Default guarantee payment account • IBP and Bills Discount • Advanced against supply bills • L.12 7047593803 662191643.31 47905931.48 1534742850.00 442992687.00 3005550.80 Arrears of director’s board • Middle term loan • Higher purchase/ vehicle security • Mortgage term security • Personal guarantees • Home 44331103.371430386.59 2471952.05 130213650.00 97422689.200795129.00 3009365.

3 6 • • • 5020781021.74 282226681.00 Suspected and bad debts Rs.98 594390776.6579481. furniture.44 28870014. fixture Building and land Bank vehicle Interest receivable On investment On loan 555423 3618.74 121627533.73 119397 677.45 28282793.26 • 253560335.00 Suspected and bad 211130327.45 .98 • • • • • • • Bills available for recovery Dead stock.00 684301167.75 327486 78.105287650.43 526830.6 1 272372 2.00 debts Rs.00 438984823.12 493357008.00 566107983.20 4132348.64 185424488.162795044.66 Arrears of board of director • Long term loan • Home construction loan • Industrial & Other loan Arrears Rs.75 Arrears of board of director Total loan 322672 2631.66 Arrears Rs.68 216215 1.22199694.77 26963487.64 • • • construction Other 2821752720.

00 591424 2.00 42779987.29 0.27 711264 654.36 156578 871.53 1835584.00 64016380.00 548638.73 • 6085394.26 0.00 23513254.2 8 535885 .00 778980.00 .00 1116107.00 346500.88 830490. Deposits Tax receivable Advance tax paid Other receivable 3012099.00 30000000.00 760317.00 55620000.00 300000.00 Branch coordination Differed tax assets Goodwill on merger account Loss (if Happened) Total LC Bank gurantee receivable • • • • • • • • • • • Other property & Receivable Deposits receivable Library books Stationary & printing stock Deposits for building Clearing Telephone deposits Building rental in advance M.96 113443 125.29 6584.00 669892 8051.00 7885656.00 1611681.00 201703.E.67 461308 .59 1835584.47 64459311.B.00 6441851.12 7077.00 16590.00 670877 09.00 152509595.00 0.00 1084504.35 0.00 • • • • 5995183087.S.

18 291275577.00 631742.28 Expenditure Detail of the year 01/04/2010 To 31/03/2011 Last Year Amount March 2010 291223367.1 Detail Of expenditure • • • Interest paid On Fixed Deposits On Loan Current year amount March 2011 263852182.00 52210.00 .00 26448392 4.

9 8 1494793.00 4213995.00 • • • • • • • • • • • • • • Salary.00 170566. Director Fess & allowances Rent .telephone & fax charges Auditing charges Stationary .5 0 409849. tax.00 563426.lig hting Post offices . 36 174750.00) General council expenditure Commission Depreciation State cooprative education fund Office expenses Other expenditure Election expenditure 75805941.00 7528972.00 1067462. allowances.04 2587515.36 0.00 616130. providend fund.0 0 30000.9 4 0.00 7909089.00 1770955. P.F.00 7951108.00 168952.3 8 1774391.32 30000.85 1546328. 00 .7 0 150000.50 419675. insurance.00 6537336. gratuity.00 8765356.29 50114486.00 9760184.0 0 1645075.78 69500. printing and advertising Legal advisor fees Fixed insurance 46560495. Bonus etc.00 premium (4069276. Management expenditure.00 43058605.00 6568092.0 0 2060917.00 50587577.00 42491219.17 • 174375.00 3750540.

0 9 • 428426458.79 . 84 52422244 6.00 7407408.30 • • • • Training expenditure Tax Current year tax Deffered tax 0.00 494408.00 2065649.70 45202254 4.29 31227446.41 459653904.00 1971414.95 72199901.00 6913000. 00 1971414.09 • • • • • Fringe benefit tax Other provision Suspected and bad debts provision Standard assets provision Investment depreciation Goodwill on merger account Total Net Profit Total 0.00 0.00 9923000.00 29488649.00 17500000.

20 1242568.69 1692459 .00 • Particulars of production Current year amount March 2011 • • • Interest received 350447467.28 1611397 811. Loss Total 5242224 46.70 0.81 On Loan 133703203.70 Total Income Rs.31 Profit And Loss Statement Last Year Amount March 2010 2848881 72.00 5242224 46.83 4460279 54.86 On Investme nt Commis sion & bill of exchang e Investiga tion charges and other income Locker rent Extra refund provisio n 4841506 71.44 2484335 2.79 0.79 .67 3342284 .99 1019367 8. 96 9359707.00 • • • 4596539 04. 43 22041.00 4596533 904.11 3001633.

Statement of compliance: The consolidated financial statement of bank is prepared in accordance with Indian accounting Standards. in complicance with the said the valuation of investments under “Held to Maturity” category have been valued at acquisition cost. Advances : • The bank has clasified advances into standard. It conform to the generally accepted accounting principles & practice prevailing in the co. In addition.32 NOTES FORMING THE PART OF BALANCE SHEET AS AT 31st MARCH 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2011. • • • • .operative banks.operative banks in India except otherwise stated.76 lacs has been made for BDDR over and above the provision as required by Reserve Bank Of India directives. An additional provision of Rs. • Provisions on advances classified as sub-standard.1654. the bank has classified its investment portfolio as on 31st march 2011 under held to maturity. Investments: • In accordance with the Reserve Bank of India directives applicable to Urban co. a general provision has been made on all standard Assets as per Reserve Bank Of India directives. • Significant accounting policies: • Accounting convention: The financial statements are drawn up in accordance with the historical cost conventions and on the going concern basis. doubtfuland loss assets is made in accordance with the directives issed by the Reserve Bank Of India from time to time. doubtful and loss assets in accordance with the guideline issued by Reserve Bank Of India from time to time. • Further. Any premium on acquisition of security is amortized over the balance period of maturity.

cost includes incidental expenses incurred on acquisition and installation of the assets. Particulars Amount (in Lacs) 1. specific provisions have been made as follows: Sr. Depreciation charge on revalued amount is debited to the revaluation reserve.75 3. Fixed asstes are depreciated at the rate considered appropriate by the management. No. otherwise it is charged at 50% of the normal rate.5% Furniture & Fixtures WDV 10% Vehicle WDV 15% Electrical % Electronic Items WDV 25% Computers WDV 33. .33% • • • • Depreciation on fixed assets purchased during the year is charged for the full year. if the assets is purchased and retained for 180days or more.76 • Fixed Assets And Depreciation: • Fixed Asset are stated at historocal cost except premises which includes land and Buildings which are stated at revalued amount. Provison as per RBI Norms 2512. Details are listed below: Assets Method Rate Premises WDV 2.33 • The overdue interest in respect of advances classified as NonPerforming Assets is provided saparately under “Overdue Interest Reserve:” as per the directives issed by the Reserve Bank Of India Provision for loan Losses specific provisions for possible loan lossesare based on a continuous review of the loans and advancesportfolio and the parameters set the Reserve Bank Of India Accordingly. Gross NPA 4225. Depreciation is calculated on written down value basis on fixed assets. Additional Provision 1652. Land and building were revalued during the financial year 20072008 and asset Revaluation Reserve is created to the extent of revalued cost. No depreciation is charged on fixed assets sold/disposed off during the year as per generally accepted norms.04 2.

Fees and commission income other than fees receivable are recognized on cash basis. Interest received on advances classified as non-performing is accounted for on cash basis. a segment is a . Interest ceases to be taken into revenue when the recovery of interest and/principal is in arrears for three months or more. • Rental income(Locker Rent): • Dividend: Rental income is recognized on accrual basis. • • • Segment reporting: According to accounting standard-17 on segment reporting issued by the institute of chartered accountants of India. The provision for leave encashment is made on accrual basis.34 • Revenue Recognition • Interest Income: In terms of the provisions of the accounting standard-9 issued by Institute of Chartered Accountants of India on revenue recognition. During the year under audit the bank has made premium payment of Rs. the interest receivable is recognized on accrual basis. • Fees and commission Income: The bank earns fees and commission income from a diverse range of services it provides to its customers.98. Commission received in advance on bank guarantee is shown as advance commission received. This includes fees and commission income arising on financial services provided by bank. The bank has made payment for gratuity to LIC based on information received form LIC. Dividends on investments are accounted for as and when received. • Retirement Benefits to Employees: • The bank’s contribution to providend fund is accounted for on basis of contribution to the scheme and is charges to the profit and loss account. Interest falling due and remaining unrealised on non performing advances is credited to overdue interest reserve account.00 lacs towards gratuity fund.

Goodwill Goodwill is amortised over 5 years.35 distinguishable component of the group that is engaged in providing services (Business Segment) or in providing services within a particular economic environment (Geographical Segment) which subject to risks and rewards that are different from those of other segments.2 Deferred Tax: As per the accounting standard-22 “accounting for taxes on income” issued by institute of chartered accountants of India. Provision for taxation is made on the basis of the profit for the year as adjusted for taxation purposes in accordance with the provisions of the relevant statues. 11.Impact of Deferred Tax Assets: Net Profit Before adjusting Deferred Tax Rs.84 Hence the net profit has increased by Rs. Deferred tax assets are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.4069276.68130625.1 Current taxation Current tax assets and liabilities consist of amounts expected to be recovered from or paid to the taxation authorities in respect of the current as well as prior years.4069276.00 Net Profit after adjusting Deferred Tax Rs. . based on tax rates and tax laws that have been enacted or substantially enacted at the deferred Tax are as under: 10. • Taxation: 9. The tax rates and laws used to compute the amount are those that are enacted or substantially enacted by the balance sheet date. The AS-17 on segmental information is not applicable to the bank.00 due to provision of deferred tax but same is overstated due to excess calculation.72199901. 9.84 Deferred Tax Provision Rs. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the assets are realized or the liabilities are settled.

2010 64016380. Investment: • Book value • Face value • Market value 31/03/2010 14. Directors Responsibility Statement: The Board of Directors takes the responsibility for the preparation and presentation of these final Statements.00 830490. Events Occuring after the balance sheet date are taken care 13.86% 20131. 14.50 . of.2011 67087709.00 Particulars Bank Guarantee Letter of Credit 31.15 19546. Previous years figure have been regrouped/ rearranged whenever necessary to confirm to the presentation of the accounts of the current year.032.79 31/01/2011 11.26 18697.36 12.00 16. Particulars No 1.79% 20883. Contingent Liabilities: Contingent Liabilities on account of bank guarantees and letters of credit are as follows: 31. The Bank is taking effective steps in adjusting the outstanding entries. 15.58 18850.65 19553. st Reconciliation of various inter branch accounts is made up to 31 March 2011.00 535885.03. Capital to risk assets ratio 2. Account related Information: Sr.

68% 9.99 3014.26 4261.00 99. 6.13 4020.20% 8.11 4637.10% 0.22 175. 7.71 4225.17% 0.00 5.00 0.47% 1.58% 392.13 Nil 4.01 0.00 3480. Advance against • Real Estate • Construction business • Housing Advances against shares debentures Advances to directors & their relatives.17 3252.81 0.25% 4262. 4346.75% 13.04 8.96 8. 5. 7.09% 0.00 69.54% 0. companies. Provision made towards • NPAs • Depreciation in investment 11 Movement in provisions • Towards NPAs .11% 4.00 3484.02 1088.05% 15.92 10.00 7.66 Nil 0.76 2. firms in which they are interested • Funds Based • Non-funds Based Average cost of deposits NPAs • Gross NPAs • Net NPAs Movement in NPAs • Towards NPAs Opening balance (+)Additions during the year (-) reduction during the year Closing balance Profitability • Interest income as percentage of working funds • Non interest income as percentage of working funds • Operating profit as percentage of working funds • Returns on assets • Business (deposits + Advances) per employees • Profit per employees 0.23% 0.13 1.44% 457. 1.75 1125.23 4171.37 3.17 4553.37% 0.

00 449.92 449.26 4167.60 Nil Nil 134.00 186.60 4171.51 449.16 0.26 Nil Nil 12.99 4167.66 4.13 0.66 0.33 99.58 190.51 548.56 113. • • • • • 13.00 548.20 69.33 113.60 20. .56 134.00 4171.92 380.38 • • Opening Balance (+) additions during the year (-) Reduction during the year Closing balance Towards depreciation on investments Opening balance (+) additions during the year (-)Reduction during the year Closing balance Towards standard assets Opening balance (+)additions during the year (-) reduction during the year Closing balance Towards NPAs Towards depreciation on investment Towards standard assets Foreign currency assets Foreign currency liabilities 151.23 0.00 113.94 0.33 108.

• We have obtained all the information and explanations. as appears from our examination of those books. and to the best of our information and according to the explanation given to us. These financial statements are the responsibility of the bank’s management. the said account give a true and fair view. on a test basis. • The balance sheet and profit and loss account dealt with by this report. AURANGABAD STATUTORY REPORT: • We have audited the attached balance sheet of DEOGIRI NAGARI CO.B and C.OPRATIVE BANK LTD. which to the best of our knowledge and belief were necessary for the purpose of our audit. in conformity with the accounting principles generally accepted in India. • further to our comments and observations contained in audit memorandum in part A. • We conducted our audit in accordance with auditing standards generally accepted in India. Our responsibility is to express an opinion on these financial statements based on our audit. we report that. • In our opinion. Those standards require that we plan and perform to obtain reasonable assurance about whether the financial statements are free of material misstatement. • Other point as per part A. An audit includes examining. • In our opinion. proper books of account as required by Law have been kept by the bank so far. We believe that our audit provides a reasonable basis for our opinion. evidence supporting the amounts and disclosures in the financial statements. are in agreement with the book of accounts.OPRATIVE BANK LTD. AURANGABAD as at 31st march 2011 and also annexed thereto profit and loss account of the bank for the year ended on the date annexed thereto. as well as evaluating the overall financial statement presentation. An audit also includes assessing the accounting principles used and significant estimates made by management.39 DEOGIRI NAGRI CO.B And C our report: .

profit of the bank for the ear ended on the date. of state of affairs of the bank as 31st March 2011 • In the case of profit and loss account. For the year 2010-2011 audit class “A” is awarded to Bank.40 • In case of balance sheet. For INDAPURKAR & MUNDADA Place: Aurangabad Date: 30/06/2011 Chartered Accountant • Chapter 3 Fixed Deposit .

. Fixed Deposits are also known as term deposits in countries like Australia.41 Fixed Deposit Meaning In deposit terminology. Also. Funds placed in a Fixed Deposit usually cannot be withdrawn prior to maturity or they can perhaps only be withdrawn with advanced notice and/or by having a penalty assessed. while the term Fixed Deposit is in common usage in India and some other countries. Fixed Deposits are relatively safe investments when provided by insured financial institutions such as banks. savings and loan corporations and credit unions that are duly regulated within the country in which they operate. Canada and New Zealand. Fixed Deposit Example For example. businesses and financial institutions around the world as a means of storing their liquid funds for a fixed period of time for future use. the term Fixed Deposit refers to a savings account or certificate of deposit that pays a fixed rate of interest until a given maturity date. In the retail market. as time deposits in the United States and as bonds in Great Britain. a Fixed Deposit will often be used by individuals.

e. offer fixed deposits for their customers. There are several institutions that offer a deposit option. It can also include various non-banking finance companies that are trying to raise funds through the route of deposits so that they can tap a larger investor base for their fund requirements. There is one more area where fixed deposits are offered. the only difference is being the entity that is issuing the deposit. These deposits are unsecured. be they public sector or private sector or even co-operative banks. so there will be a difference in the risk element for the investor in these deposits. This can include housing finance institutions or even other lending institutions that offer deposits as a means of raising funds for their activities. This makes fixed deposits one of the most accessible options for investors because of the fact that most people have a bank account at some place or the other. Financial institutions and Non-Banking Finance Companies (NBFC’s) also accept such deposits. Fixed Deposits in companies that earn a fixed rate of return over a period of time are called Company Fixed Deposits. All types of banks. The second option for investing in a fixed deposit is with a financial institution. The features of all these deposits are the same. the investor .. these are the companies that seek to raise funds through this route. Various companies from the manufacturing to the service sector need funds for financing their various activities and they raise money through the route of company fixed deposits. One of the most common areas where a fixed deposit is offered is the banks.42 INTRODUCTION OF FIXED DEPOSIT There are several options available when it comes to where to make a fixed deposit. Deposits thus mobilised are governed by the Companies Act under Section 58A. if the company defaults. i.

you will see different rates of interest available from the bank / institution for different terms. When selecting your term deposit. A term deposit is an account where you deposit your money and at the time of deposit. As an investment vehicle. The bank rewards the secured term from the depositor with a higher interest paid to the depositor.43 cannot sell the documents to recover his capital. however high interest savings accounts now feature very comparable interest rates to those offered on term deposits (historically term deposits offered far higher rates of interest than a traditional savings account). and when you'll be paid. you know in advance how much you will be paid in interest. term deposits are easy to establish and quick to get started. thus making them a risky investment option Term of deposit A term deposit account is an account where the investor / depositor agrees to a fixed term and interest rate for locking their money away in an account. unlike an investment in property or the stock market which both have significant lead time. These accounts offer more security on the rate of return that the investor can expect when compared with high interest savings accounts. Term deposit accounts are a 'fixed return' option to compare against high interest savings accounts. The key difference is that the interest rates on savings accounts are variable. The history behind the term deposit is that the bank offers a higher interest rate and return to the depositor when there is certainty over the length of time that the bank can have access to the depositor's money to re-lend to other borrowers (and therefore make a profit). .

. from monthly options for interest payments to semi annually. as opposed to the variable rates of interest offered on high interest savings accounts which move up and down in response to official interest rate rises. commercial property or the stockmarket. For term deposit terms longer than one year. For terms shorter than one year. regardless of whatever happens with interest rates and the economy. This means that there is more certainty and security in a term deposit compared to a savings account. A fixed interest rate means that you get a fixed return on your investment. as well having access to the original deposit amount at this date. you will be paid your interest payment at a date 6 months after your deposit. you will have an option of when you you would like to receive interest.44 Interest Rates and Payments: Term deposits typically feature a fixed interest rate. This means that for a 6 month term deposit. your interest will be paid at maturity of the term deposit. This short term deposit is not advantageous if you rely on a regular monthly income stream. and less volatility than other investments in assets like property.

quarterly interest payment options are also available.45 The following options apply for payments of term deposits: Less than one year: Maturity . Both the banks and depositors view term deposit lengths in the same way: Short-term term deposits: one month deposit through to six month deposits. The payment frequency differs between term deposit providers so be sure to pick an interest payment time frame that suits your requirement for income. and in some instances up to 7 years. semi-annually. Long-term : term deposits over 12 months in length and up to 5 years. We compare the term deposit options. .your interest is paid at the end of the term Longer than one year: annually.your interest is paid at the end of the term Longer than one year: Maturity .

Compound Interest on Some Accounts Some term deposit accounts offer monthly payments into the same account with the benefit of compound interest on that amount and the balance. there will be a penalty. If you need to get your money out early. This will differ between institutions. However.46 Features & Benefits of Term Deposits One of the great benefits of the term deposits is that the bank / provider is paying you for access to your money. you will be charged either a penalty fee or awarded only a reduced interest rate for the period instead of the interest rate agreed to at the initiation of the term deposit. rather . Automatic Rollover At the conclusion of your term deposit. so there are usually no establishment fees or ongoing account fees. many providers don't require you to have an account with that institution as you can nominate an existing account to have your interest and balance paid into at maturity. The key to a successful term deposit is to be comfortable with the term that you are committing to. Use of Multiple Institutions To access term deposit accounts. so check the terms and conditions carefully. your term deposit provider can automatically roll over your matured deposit to a new term deposit of the same period as your original. there is always a catch with any financial product and the catch is that if you break the term and leave early. at the new interest rate offered for that new term.

fixed deposits. . Make sure you check the credit rating of a company before investing in its Fixed deposit. Advantage and disadvantage of fixed deposit The main advantage is that Fixed Deposit from reputed banks are a very safe investment because such banks are carefully regulated by the Reserve Bank of India . With Fixed deposit you deposit a lump sum of money for a fixed period ranging from a few weeks to a few years and earn a pre-determined rate of interest. RBI. Note that company Fixed Deposit isn't as safe as bank Fixed Deposit because if the company goes bankrupt you may lose your money. The other advantage of Fixed Deposit is that you have the option of receiving regular income through the interest payments that are made every month or quarter. This option is especially useful for retirees. Among safe investments. What you must know fixed deposit A good invesmant strategy requris choosing the fixed mix safe and risk right mix of safe and risky investments. Fixed Deposit are offered by both banks and companies though putting your money with the latter is generally considered riskier. Fixed deposit. You should be especially wary of companies which offer interest rates significantly higher than the average to attract your money.47 than a fixed interest amount. are the most popular today. the banking regulator in India. This is only available to accounts over at least one year in length as monthly interest payments are not available on terms shorter than one year.

000 of interest every month or Rs 6. Note that Fixed Deposit vary quite a bit from bank to bank so you should search around before investing. If inflation rises steeply during the maturity of the Fixed Deposits your inflation adjusted return will fall. Here are the interest rates offered by deogiri Bank on their Fixed Deposit.In this case. the inflation when you deposited the money at a fixed return of 8 per cent per annum is 3 per cent. a fixed deposit won't give you the same returns that you may get in the stock markets. Effective Return Before you invest in Fixed Deposit you need to understand the concept of effective return which is higher than the rate of interest on the Fixed Deposit.48 On the flip side. your inflation adjusted returns is only 3 per cent (8-5). Effective return is relevant if you choose to reinvest your interest every year which means that you will be earning compound interest.000 of interest every quarter. A fixed deposit also doesn't offer protection against inflation. your real rate of return would be 5 per cent (8-3). . Had inflation remained at 3 per cent by the time your deposit matured. So if you invest Rs 3 lakhs in a one year fixed deposit which pays 8 per cent you can earn Rs 2. the inflation increases to say 5 per cent. Interest rates on Fixed Ddeposit The rate of interest on Fixed Deposit varies according to the maturity with longer deposits generally earning a higher interest rate. Say. Interest paid on a fixed deposit is paid either monthly or quarterly according to the investor's choice. for example. For instance a stock-portfolio may rise 20-30 per cent in a good year whereas a fixed deposit typically earns only 7-10 per cent. Now when your Fixed Deposit matures say after 2 years.

Returns of fixed deposit In the first quarter (after 3 months) you will earn an interest of Rs 20 which is re-invested and continues to earn interest in the remaining three quarters. An alternative to breaking a fixed deposit is taking a loan against the FD. For example if you invested in a 3 year Fixed Deposit with 9 per cent and you break it after two years you may receive only 8 per cent interest for those two year instead of 9 per cent. Similarly the interest you earn in the second (after 6 months) and third quarter (after 9 months) is also reinvested and earns interest. At the end of the year because of compound interest you will receive Rs 1. break a fixed deposit? Breaking a fixed deposit means withdrawing the money before the maturity expires. for instance you may receive an interest rate 1 per cent lower than the stated interest rate on the Fixed Deposit.49 For example suppose you invest Rs 1.000 in a fixed deposit with 8 per cent interest which is paid quarterly.4 meaning that your effective return is 8. You will have to pay a cost. Such loans are quite easy to obtain with amounts ranging up to 90 per cent of the principal and accumulated interest.24 per cent rather than 8 per cent.082. This may be necessary if you urgently require the funds or if there are better investment opportunities elsewhere. .

advantage of investing in company fixed deposits is that one can analyse the company before investing in it because companies accepting deposits are old-established reputed companies with proven track records. so that interest from one company does not exceed Rs. Short-term deposits. nomination facility has been introduced in company fixed deposits. The Fixed Deposit holder in such a case should write to the company which shall issue duplicate deposit receipt upon execution of an indemnity and cancel the previous one. Many financial experts believe that fixed maturity plans (FMP) offer exactly such a superior alternative. Recently. The major benefit of fixed deposits is its higher interest rate when compared to interest rate in a regular savings account High Intere No deduction of Income Tax at source up to Rs 5.a. Lock-in period is only 6 months.000. In case it falls into wrong hands .it cannot be misused.000 p. .000 in one financial year .50 alternatives to Fixed deposits Obviously mutual funds and stocks can offer higher returns but the main issue is whether there are low risk investment products which offer a better return than Fixed Deposit. Company Fixed Deposits are non transferable that means there is no fear of Fixed Deposit receipt being stolen. 5. BENEFIT OF FIXED DEPOSIT . Further.Investment can be spread in more than one company. No Income Tax is deducted at source if the interest income is up to Rs 5.

traditional bank or other depository institution. as its name implies. Bank Term Deposit . A fixed deposit account typically yields a greater interest rate than a regular account. Early withdrawals from Fixed Deposits tend to result in a significant penalty.5 percent. 36 months (three years) and 60 months (five years). 12 months (one year). six months.095 days (three years) and its interest rate varies between 3 percent and 7. Certificates of deposit mature in one month. Fixed deposits are also called time or term deposits. also called a Christmas club account. is a fixed sum of money that is held in a savings account for a pre-decided period of time--earning a fixed rate of interest. three months. A fixed deposit. owing to its fixed time period. is a type of fixed deposit account. A holiday account. Certificate of Deposit A certificate of deposit (CD) is a type of fixed deposit account that can be purchased in varying amounts from a credit union.51 Types of Fixed Deposits Fixed Deposits require a customer to place cash in a savings account held with a financial institution for a particular time frame at a given interest rate. its maturity date and the interest applicable on the amount loaned. The time period for a fixed deposit varies from 15 days to 1. Interest rates accrued on certificates of deposit are quoted on a yearly (annual) basis. A CD is a commercial paper that confirms the monetary value of the deposit made.

the entire amount of which is paid when the account matures. six months. small denomination funds till the account matures. 24 months and 36 months. Christmas club accounts accrue monthly interest. 12 months. and add. The terms on revolving fixed deposits range between one week to 12 months Unchanging term deposit An unchanging term deposit. Different types of fixed deposits Consumers and companies throughout the world use Fixed Deposits to save money for future use from time frames varying between one month and several years. three months. also called a single term deposit. companies provide fixed deposits Financial institutions like banks and savings and loan corporations provide Fixed Deposits and they are required to follow the applicable banking regulations in the countries in which they operate. Holiday Account A holiday account.52 A revolving term deposit renews itself automatically for another term of an equal length after its loan period expires. An unchanging fixed term deposit can be opened from one month. but they are also called Term Deposits . A holiday account can be thought of as a short-term savings account that secures a depositor during a holiday season. Some financial institutions and banks require a minimum initial deposit before they can open a holiday account. Fixed deposit in seving account . Cash cannot be withdrawn from the account till it reaches its expiration date. Depositors can put money in a revolving term account through a cashless transfer from an existing account or by direct transfer. typically right before Christmas. does not renew automatically after its maturity date. also called a Christmas Club account. is a special type of fixed term deposit that allows a depositor to put aside. The term Fixed Deposit is especially popular in India for this retail financial product.

Fixed Deposits generally differ from checking and savings accounts because they cannot be used as money by allowing the account holder to make withdrawals without incurring a significant penalty. They also differ from such accounts by having a fixed maturity date after which funds are either returned or rolled over Risk of fixed deposit Substantial investment security is provided by Fixed Deposits held with reputable and insured financial institutions.53 Although the terms of specific Fixed Deposits can vary significantly among financial institutions and countries. they usually only offer a rather low nominal rate of return or interest to the holder on deposits. but returns are usually lower than those available with riskier investments like some corporate stocks and bonds. . Interest rates available on Fixed Deposits tends to be higher than with regular savings accounts since funds are not readily available until maturity. but as a result of this perceived lack of risk.

Financial institutions offering Time Deposits to retail clients are usually required to follow the applicable banking regulations in the country in which they operate. Funds generally cannot be withdrawn from a Time Deposit prior to the end of its term without incurring a penalty. they are also known as Term Deposits in India .54 Time deposit A Time Deposit requires the placement of cash in a savings account at a fixed rate of interest for a certain term or time period. and the risk involved in doing so is quite low if the funds are deposited with a member of a deposit insurance organization like the financial deposit in India . as Bonds in the Britain and as Fixed Deposits in countries like India. Type of time deposit Time Deposits are used around the world by consumers and businesses to save money for use in the future. Although Time Deposit is the common term used for such accounts in the India . provide time deposits Time Deposits can be placed with a retail financial institution like a bank or credit union.

Time Deposits tend to pay out a higher rate of interest than normal savings accounts. because of the requirement to leave Time Deposit funds alone for a period of time or pay a penalty. . the Reserve Bank of India issues guidance from its meetings and rate decisions indicating reasons for increasing. risky are time deposits A variety of Time Deposit maturity dates ranging from one month to several years are available from financial institutions. major banks can follow or anticipate central banks when determining the rates they publish for depositors. In countries such as India who offer 'term deposits' as savings products from banks. Also.55 guarantees time deposits? In the India . this return is usually considerably less than can be obtained by investing in riskier products like corporation stocks or bonds 6 month deposit A 6 month term deposit is often referred to as a short term investment due to the short time horizon of less than 1 year. These decisions have a major impact on what rates India banks publish. For a period of fixed product 6 months. lower or keeping the same interest rates. Nevertheless. funds deposited in Time Deposits are protected up to a certain amount by the financial deposit in India when the Time Deposit is made with a financial institution that is also an F D I member.

it would be classified as Other Non-Current Assets. Its interest % is high when compare with other deposits like SB (Saving Bank A/C) & Current A/C.. it is still liquid and therefore a current asset.. 4 If deposited into Fixed deposit its more safe for you.56 Advantage of fixed deposit 1 A Fixed Deposit Account is one in which the customer deposits a big sum of money (Usually a few thousands and upwards. 3 No. If it cannot be cashed in before maturity. The bank in return accepts the deposit and. As long as it can be cashed in at any time. There is actually no limit to the amount of money you can deposit in a FD) for a fixed 2 A Fixed Deposit is an agreement between a customer and bank wherein the customer agrees to deposit a fixed sum of money for a specific duration of time. If you're a senior Disadvantages of fixed deposit .

50. for example. you can't withdraw back without completion of the deposit amount Chapter 4 OBJECTIVE OF FIXED DEPOSIT .: You deposit your money into the FD for 5 years upto Rs. (lol) Another 2 if the interest rate increases.00.57 1 Well one disadvantage is being 'hooked' into spending inordinate amounts of time in front of a screen editing spelling and grammar mistakes that people make when asking questions here. After 2 years of deposit.000/-. U need the deposited money in FD. they will not increase your. it will be based on the initial rate 3 The major disadvantage of a fixed deposit is that you cannot withdraw the amount instantly when the need for money suddenly arises. Another disadvantage of fixed deposits is that it is prone to 4 You can't withdraw the deposited money back until the terms of deposit completes.

B.58 To know the fixed deposit position of R.B. to know its actual financial position and performance To sketch the trend of fixed deposit of R.I To identify the position of fixed deposit on total deposit To comparing fixed deposit of R.I with total commercial bank and Indian Bank Ltd.I To see how far the bank is able to utilize the collection deposit To identify the problem in fixed deposit .B.

59 To provide suggestion and possible guideline to improve the bank fixed deposit position based on the finding of the study SCOPE OF FIXED DEPOSITS .

60 In sense of profitability then invest less in fixed deposit try to invest in shares if you are a good player in share market. Market is at it peak lev. I really appreciate tht you have taken an initiative 2 invest & grow.. . how can i save the tax by investing.. pl help me At present. my monthly net salary is 17500.. there is no scope of short term investment in equity based mutual fund.. and what kind OF benefits get from govt.But at least take a look while choosing a category to post . Go for atleast two or three years please. I am a central govt servant..

61 As crr is hiked money will be scarce with bank so who ever wants to take loan it will be dearer but without increasing fixed deposit rate so people Chapter 5 METHODOLOGY OF THE STUDY FIXED DEPOSIT .

B. or a finance or insurance company) to a depositor who opens a certificate ac.. Also called time deposit.. frequency.B fixed deposit by contacting the concern staffs. . credit union. and/or period of withdrawals. Receipt issued by a depository institution (such as a bank. Then the collected data will be presented and analyzed systematically to fulfill the objective of the A deposit of money that pays higher interest than a savings account but imposes conditions on the amount. The task will be fulfilling by the collection of secondary data and Primary data and various published information regarding this context.62 Research Design: The first step of the study is to collect necessary information and data concerning the study of R.

which were published. Papers and magazines. Data required is collected through primary data and secondary data.B. by R. it can be a bank or a corporate offering fixed deposits to raise money for its business. etc Prmaary data 1 Source of data The various data require for the study is collected from concern authorities i.B. R.e.B. specially in India.I 2 Data Gathering and Processing Procedure: . and Nepal Rastra Bank.63 Fixed Deposit is the most common form of savings all over the world. Primary data is collected from concern authority by asking them question or by taking the interview. quarterly economic bulletin. banking and financial statistics. A Fixed Deposit involves locking a certain amount of money for a certain time period with a government approved institution. Secondary data is collected from the annual report.

In this regard.I and N. 2 week. bar diagrams. Fixed deposit is also known as time deposit or time liabilities. 2 Fixed deposit is the main source of funds. bankers use this fund to long-term investments.B. which range from 1 week to 5 years.B.chart.64 All the necessary data were collected on various issues from R. which gives higher return to the bank. Such as 1 week. 6 months. Bank uses this sum of money in its investment activities. 3 Tools Used for Analysis: Then an attempt has been made to analyze the tabulated data to review the financial aspect of R.B. For the analysis of data the various statistical tools like percentage change. This study is based on secondary data but interview techniques has also been used to collected information on the fixed deposit of the bank. Secondary data 1 Fixed deposits are money deposited by the customers for a fixed period. The collected data are processed by tabulating and arranging in a required form for the sequential analysis of data. pie . 3 months. As it is permanent sources of funds.R. time series and correlation will be taken in to use. the analysis will be mainly based on financial aspect. Out of the total deposit higher percentage comes from fixed deposit account as it most stable of all deposit. 9 months and 1 to 5 years. Bank does not need to maintain higher .I.

Features of the fixed deposits Fixed deposit was received by bank for certain period.you should always have a back up plan. 3 In Nepal. The bank pays a higher interest on such deposit. The bank will charge 2% more than the interest paid to the depositors for granting loan against deposit. Bank repays the fixed deposit principal together with interest after maturity period. But interest provide by the bank depends upon its time duration. 4 The best fixed deposit interest rate can come from a different bank than the one you're currently using. The bank is free to make use of this money for granting loans and advances . so you might want to check into that also. It's definitely something to think about right now with the economy and the threat of no more Social Security . Fixed deposits can be great for saving money when you don't think it's possible or simply are having a tough time saving period.65 cash balances to meet the demand of such account holders because banks have fixed the expiry of the account per head. upto 90% deposit can be withdrawn as loan. However. any fixed deposit can not be withdrawn before the maturity period.

Please post your feedback and add if you have any points in your mind. 5 Rules for Fixed Deposit In this article I will be writing about the important points to consider while opening the fixed deposit account. - Fixed deposit account is automatically closed once the deposit matures. Any additional amount can not be allowed to deposit in the fixed deposit account before the maturity period. I hope you will like the post and will be more informative. This post is intend to list some of the key points which you must be aware before opening the fixed deposit account. I have already published many articles explaining the fixed deposit account and the tax savings involved with the fixed deposit schemes. Split Your Fixed Deposit . subscribe to our future articles here. Bank repays the fixed deposit to customer principal together with interest after maturity period.66 - Any fixed deposit can not be withdrawn by issuing cheque. Bank pays a higher interest on such deposit in comparison with other deposit. If you like the post. 1.

When you hear the rate of interest is 8.10000 in a branch for the specific year. Learn fixed deposit investment If you are not aware that the fixed deposit savings can be used for tax benefits. Might be useful if you are looking for the same one. Appoint a Nominee Always appoint a nominee for your fixed deposit to avoid the hassle free release of amount after you. they will have to bring any of the heirs proof certificate to receive the money. first thing you have to ask whether it is compounded quarterly. Please ask the banker for penalty applicable for the foreclosing. To avoid that please split the fixed deposit and invest in the different banks. half-yearly or yearly. It has limitation of Rs. then TDS must be paid. If the interest is compounded quarterly. Check the compound interest policies This is one of the important consideration while opening a fixed deposit account. then the return rate of interest will be potentially more than the actual one.67 You have to split the fixed deposit to avoid the TDS(Tax deduction at Source). 3. please learn about the tax savings on fixed deposit. If you are not appointing any nominee.0% p. Banks will charge as penalty if you are foreclosing the deposit account.100000 under section 80c. Plan the Tenure It is important to plan the number of years you want to keep the deposit. If the total interest is more than Rs. 4. . 2..a. 5.

68 Chapter 6 DATA ANALYSIS AND INTERPRETIAT CHART .

69 Fixed deposit in deogiri bank 31/3/2010 .

11% seving deposit 25.37% fixed deposit 69.52% currant deposit seving deposit fixed deposit Fixed deposit in deogirin bank .70 currant deposit 5.

71 31/3/2011 currant deposit 6.56% currant deposit seving deposit fixed deposit .81% seving deposit 28.63% fixed deposit 64.

75 10.00 9.75 12.75 7.25 Handicapped/ Blind 5.75 12.50% 11.72 DEPOSIT SCHEM OF DEOGIRI BANK DEPOSIT SCHEM INTERST RATE 2011 DEC 2012 Term Deposit 15 Days To 45 Days 46 Days To 90 Days 91 Days To 180 Days 181 Days To Less Than 13 Months Only for 13 Months Above 13 Months Special Scheme 555 Days Special Scheme 655 Days Unmarried Girls Below 25 Years Co-op Senior Public Societies and Widow Citizen banks 5.50 7.50 7.25 5.00 9.75 7.25% 10.00 7.00 5.00% 12.50 9.75 8.75 11.00 5.50 6.50 7.00 5.75 .25 7.00 5.25 7.00 9.00 9.25 5.25 12.75 5.50 7.

73

Chapter 7

LIMITATION OF STUDY

74

Taxation in case of debt funds is more investor friendly when compared with fixed deposits especially for the investors in higher tax bracket In the short term investment horizon, investor gets the benefit of lower dividend distribution tax in debt funds In the long term investment horizon, investor gets the benefit of indexation in debt funds Debt Funds are highly liquid as the amount invested can be redeemed indays unlike fixed deposits where money gets locked in for a fixed period of tim Though the pre tax returns are in the same range of 8-9%, but variation can be seen in post tax returns. Let us discuss two scenarios: Debt Funds are more liquid than Fixed Deposit Debt Funds deliver better post tax returns when compared with fixed deposits In the short term and long term investment horizon, investor earns better post tax returns by investing in debt funds.Fixed depositgives limited but assured returns.Stocks can give very high returns or even very high losse Debit card is a facility to withdraw your own deposi ed money in the bank. Credit card as the name denotes, you make advance arrangement with a bank

I think there is no certain limit but one loses the interest on such a big amount as the interest rate is very low in savings bank ac and hence he lo. Loan is a fixed amount and to be paid in a certain period OF time where as in cash credit a limit is fixed and u have to be in that limit always a...

75

Chapter 8

SUMMARY&CONCLUSION

the funds cannot be used even in emergency situations. The most unusual characteristic of a fixed deposit is that the funds cannot be withdrawn for a specified period of time. During that time. corporate entities.76 Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. the monies in the account will earn a fixed rate of interest regardless of any fluctuations in interest rates that apply to other types of accounts. it is possible to choose the type of currency involved in the deposit and lock in a rate of interest. While not ideal. there is sometimes a way to work around the issue of obtaining use of funds in an emergency situation. using the fixed account as collateral. Because the money cannot be withdrawn until the duration is complete. This means account holders are actually earning less interest with fixed deposits than with other types of loans and accounts. the lending institution fixed deposit is placed may be willing to extend a separate loan to the account holder. this can at least make it possible to deal with the current financial crunch. and even non-profit organizations that wish to set aside funds and limit their access to the funds for a period of time often find that fixed deposits are a simple way to accomplish this goal. and the location where the deposit is made. As an added benefit. The money placed on deposit earns a fixed rate of interest. At times. according to the terms and conditions that govern the account. Individuals. In most cases. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD. The use of fixed deposits can also be helpful when working with various types of currency. Fixed deposits are a credible way to make a return on investment that is somewhat higher than a standard savings account. the duration set in place for the deposit. If the choice of currency is a good one. Changes in the going interest rate may also rise to a point above and beyond the interest rate applied to existing deposits. this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the . the money remains in the account and cannot be withdrawn for any reason. The actual amount of the fixed rate can be influenced by such factors at the type of currency involved in the deposit. fixed deposits carry a duration of five years. both these benefits can also turn into disadvantages under certain circumstances. where the While the interest rate on fixed deposits cannot be changed. However.

If the currency did not fare well in the interim. since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled. there is some chance of obtaining a loss. . due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete.77 deposit and earn more than with a standard fixed deposit strategy. going with an FCFD does contain a slightly higher amount of risk. However.

yahoo.com Referance book deogiri nagari sahakari bank ltd aurangabad adderss: arth complex kesrsingpura.google.78 Chapter 9 BIBLIOGRAPHY www. adalt rode aurangabad .com www.