You are on page 1of 96

PREFACE

The banking industry is making its mark in the world economy with the coming
of globalization the export opportunity increase for the industries. We can make
good professionals can be obtained only when they are trained both theoretically
& practically.
The students are taught theory in the colleges but practical knowledge can be
obtained only by visiting the industries and gaining knowledge by actually seeing
them working in the bank. The students when trained will help the bank to grow.
A well trained professional understands the values of team and will make a good
team and take the bank to its highest prosperity stage.
Through report I express my sincere gratitude through all those people who
helped me in the preparation of this project which really has been a great
enlightening and a learning experience for me.
This project gives a deep prospective and outlook about the bank which has been
compiled by hard work, devotion, dedication and deep study of the available

PRIYA
MBA (3) Semester

ACKNOWLEDGEMENTS
I would like to express my gratitude to Mr Rajesh Kumar Gangwar, Mr
Gajendra Pal Singh, Mr Ramsevak Gangwar, Mrs Shikha Singh and the whole
staff of the URBAN COOPEARTIVE BANK, civil lines branch for providing
immense encouragement and help.

Its my great privilege to express my regard towards to MR.GULSHAN


SAKUJA, Project Guide, who made my work Possible through his inspiring
guidance and constructive criticism throughout the period of training.

The work in this report is a result of the dedication and commitment

PRIYA
MBA (3) Semester

LIST OF CONTENTS
Introduction
General profile
Product/services of UCB
Vehicle loan
Need of the study
Objective
Research Methodology
Tips of questionnaire
Source of data
Data representation & analysis
Tabular form
Graphical form
Findings
SWOT Analysis
Conclusion
Suggestion & recommendation
Bibliography
Questionnaire

7-32
33-35
36-43
44
45
46-55
56
57
59-66
67-83
84
85-86
87
88-90
91
92-94

LIST OF TABLES
Table no.

Title

page no.

1.

Comparative Statement

59

2.

Interest Rates on T.D.

60

3.

Distribution of Profits

61

4.

Deposits

62

5.

Borrowing Power of Bank

63

6.

Financial Progress Report

64

7.

Profit And Loss Account

65

8.

Estimation of Expenditure

66

LIST OF GRAPHS
Graph no.
Graph 1
Graph 2
Graph 3
Graph 4
Graph 5
Graph 6
Graph 7
Graph 8
Graph 9
Graph 10
Graph 11
Graph 12
Graph 13
Graph 14
Graph 15
Graph 16
Graph 17

Page no.
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83

LIST OF ABBRIBIATION

CCB

Central Cooperative Bank

DCB

District Cooperative Bank

PACS

Primary Agricultural Cooperative Society

SCB

State Cooperative Bank

UCB

Urban Cooperative Bank

T.D.

Term Deposits

INTRODUCTION
URBAN CO-OPERATIVE BANKS
Primary (urban) co-operative banks play an important role in meeting the growing
credit needs of urban and semi-urban areas. UCBs mobilize savings from the middle
and lower income groups and purvey credit to small borrowers, including weaker
sections of the society. The number of UCBs stood at 1,872 at end-March 2005,
including 79 salary earners' banks and 119 Mahila banks. Total number of scheduled
UCBs was 55 at end-March 2005. Scheduled UCBs are under closer regulatory and
supervisory framework of the Reserve Bank.Various entities in the urban co-operative
banking sector display a high degree of heterogeneity in terms of deposits/asset base,
areas of operation and nature of business. In view of its importance, it is imperative
that the sector emerges as a sound and healthy network of jointly owned,
democratically controlled and professionally managed institutions. In order to achieve
these objectives, the Reserve Bank took a series of policy initiatives in 2004-05. The
most significant initiative in this regard was the Vision Document and Medium-Term
Framework (MTF) for UCBs. With a view to protecting depositors' interests and
avoid contagion on the one hand, and enabling UCBs to provide useful service to
local communities and public at large on the other, a draft Vision Document was
prepared and placed in public domain for eliciting comments. Based on the feedback
received from different quarters, the necessary modifications were vehicleried out in
the vision document to evolve as the medium-term framework for the sector
Regulatory Initiatives for UCBs. UCBs have grown rapidly since the early 1990s.
During the phase of rapid expansion, however, the sector showed certain weaknesses
arising out of lack of sound corporate governance, unethical lending, and
comparatively high level of loan defaults, inability to operate in a liberalized and
competitive environment. The Reserve Bank, therefore, has been striving to harness
the growth of UCBs with appropriate application of prudential regulation and
supervision to safeguard the interests of depositors. The Reserve Bank initiated
several regulatory measures during 2004-05 to ensure the growth of UCBs .

REGULATIONS AND SUPERVISION UCBs


The Reserve Bank is entrusted with the responsibility of regulation and supervision of
the banking related activities of primary co-operative banks under the Banking
Regulation (B.R.) Act, 1949 As Applicable to Co-operative Societies (AACS). Other
aspects such as incorporation, registration, administration, management and windingup of UCBs are supervised and regulated by the respective State Governments
through Registrars of Co-operative Societies (RCS) under the Co-operative Societies
Acts of the respective States. UCBs with a multi state presence are registered under
the Multi State Co-operative Societies Act, 2002 and are regulated and supervised
jointly by the Central Government through Central Registrar of Co-operative
Societies and the Reserve Bank. The current legislative framework provides for dual
control over UCBs. For resolving problems arising out of dual control regime, a draft
legislative bill proposing certain amendments to the Banking Regulation Act, 1949
(AACS), based on the recommendations of the High Powered Committee on UCBs,
was forwarded to the Government. Pending the amendment to the Act, the Reserve
Bank is entering into a regulatory arrangement with the State Governments through
Memorandum of Understanding (MoU) to facilitate proper and coordinated regulation
and supervision of UCBs. MoUs have already been signed between the Reserve Bank
and three States that have a large network of UCBs, viz., Andhra Pradesh, Gujarat and
Karnataka. As a follow-up to the signing of MoUs, the Reserve Bank has constituted
TAFCUBs in these States. Efforts are being made to enter into MoUs with other
States having a large number of UCBs.

LICENSING OF NEW BANKS/BRANCHES


Consequent upon the easing of licensing norms in May 1993, more than 800 licences
were issued (up to June 2001) for setting up urban cooperative banks. However, close
to one-third of these newly licensed UCBs became financially weak within a short
period There was, thus, a need to moderate the pace of growth of this sector,
particularly given the vexatious issue of dual control over CBs. The Reserve Bank
proposed certain amendments to the Banking Regulation Act, 1949 (AACS) to
overcome the difficulties arising out of dual control. Pending enactment of these
amendments it was announced in the Annual Policy Statement for 2004-05 that
issuance of fresh licences would be considered only after a comprehensive policy on
UCBs including an appropriate legal and regulatory framework for the sector, is put in
place and a policy for improving the financial health of the urban co-operative
banking sector is formulated. Accordingly, at present, applications for banking
licence, including licence for opening of new branches, are not considered.

SUPERVISION OF UCBS
Inspections
The on site financial inspection vehicleried out by the Reserve Bank continues to be
one of the main instruments of supervisions over UCBs. The Reserve Bnak
vehicleried out statutory inspections of 812 UCBs during 2004-05 as against of 848
UCBs conducted during the previous year.
Off-site Surveillance
The off-site surveillance system (OSS) for supervision was made applicable to all
scheduled UCBs from March 2001.The returns for OSS were reviewed and a revised
set of 8 returns was prescribed from March 2004.The OSS returns of UCBs are
designed to monitor compliance and obtain information from them on areas of
prudential regulations. The main objective of the OSS returns is to obtain relevant
information on areas of prudential interest, address the management information
needs, strengthen the management information system (MIS) capabilities within the
reporting institutions and to sensitise bank managements about concerns of the
supervisory authority. Compliance monitored through these returns covers assets and
liabilities, earnings, assets quality, sector/ segment-wise analysis of advances,
concentration of exposures, connected or related trending and capital adequacy. These
concerns earlier were being addressed through periodical on-site inspections of banks
undertaken at intervals ranging from one to non-scheduled banks with deposit base
base of over Rs.100 crore from June 2004.

10

OPERATIONAL AND FINANCIAL PERFORMANCE OF URBAN


CO-OPERATIVE BANKS
Operations of UCBs (both scheduled and none scheduled) have expanded rapidly
since 1966, when they were brought under the purview of the Banking Regulation
Act, 1949 (AACS). Deposits and advances of UCBs Increased sharply from RS.153
crore and Rs.167 crore, respectively, in 1966 to Rs1, 02,089 crore and Rs, 65,951
crore ,respectively, at end March 2003, registering an annual compound growth rate
of 19.2 per cent and 17.5 per cent, respectively .The annual compound growth rate of
deposits and Advances, however, slowed down to 1.4 per cent and 0.7 per cent,
respectively, during last two years, i,e.,2003-04 and 2004-05.

11

REGULATION OF RURAL CO-OPERATIVE BANKS/CENTRAL COOPERATIVE BANKS


Licensing of State Co-operative Banks / Central Co-operative Banks
No new licence was granted during 2004-05. Total number of licensed State cooperative banks (StCBs) and Central co-operative banks (CCBs) Were 13 and 73,
respectively, at end-March 2005, show cause notices Were issued to six CCBs in
2004-05 for rejection of their licence applications As at end-March 2005, nine CCBs
were placed under the Reserve Banks Directions prohibiting them from granting
loans and advances to certain areas and/or accepting fresh deposits. No scheduled
status was granted to any StCB during the year for inclusion in the Second Schedule
under Section 42 of the RBI Act, 1934. Total number of scheduled StCBs remained at
16at end-March 2005.

12

SUPERVISION OF THE RURAL CO-OPERATIVE STRUCTURE


NABARD undertakes inspection of RRBs, StCBs and CCBs in accordance with the
powers vested under Section 35(6) of the Banking Regulation Act, 1949 (AACS).
Besides, NABARD conducts voluntary inspection of SCARDBs, Apex weaver Cooperative Societies and State Co-operative Marketing Federations. The frequency of
statutory/voluntary inspections by NABRAD is being increased from 2005-06.
Accordingly, statutory inspections of all StCBS as well as of those CCBs and RRBs
which are not complying with minimum capital requirements as required under the
B.R.Act, 1949 (AACS) and the Reserve Bank of India Act, 1934, respectively, and
voluntary inspections of all SCARDBs will be conducted on an annual basis. The
statutory inspections of CCBs and RRBs with positive net worth as also the voluntary
inspections of Apex co-operative Societies/Federations would continue to be conduct
once in two years. With the introduction of annual inspection, the system of
conducting quick inspection has been dispensed with. Inspection of 326 banks
(12StCBs, 181CCBs and 133 RRBs) and voluntary inspection of 11 SCARDBs and
four Apex institutions were vehicleried out during the year.

13

STATE CO-OPERATIVE BANKS


Operation of state Co-operative

Assets/liabilities of StCbs grew at a higher rate during 2003-04 as compared with the
preceding year. Deposits of StCBs grew significantly during the year. Most of such
deposits were deployed in investments, a trend which wa observed in respect of other
financial institution as well. Many financial institutions increased their exposure to
investments for making capital gains in a declining interest rate scenario. Loans and
advances extended by StCBs. However,decelerated further from the low growth
witnessed in the previous year.

FINANCIAL PERFORMANCE OF STATE CO-OPERATIVE BANKS


Interest income of the StCBs declined by Rs 267 crore during 2003-04.This, however,
was more than compensated by a sharp increase in other income, on the one hand,
and decline in interest expense ded and operating expenses, on the other. As a result,
operating profits of StCBs improved marginally during the year. However, a sharp
increase in provisions and contingencies resulted in declined in net profits by Rs 20.6
crore at end-March 2004 from Rs.343 crore at end of the previous year.twenty seven
out of 31 StCBs earned profits, while four incurred losses during the year. Twenty
StCBs earned higher Profits during 2003-04, while seven earned lower profits. Losses
incurred by three loss making StCBs declined while it increased for one.

14

CENTRAL CO-OPERATIVE BANKS


OPERATION OF CENTRAL CO-OPERATIVE BANKS
Total Assets and Liabilities of Central co-operative banks (CCBs) expanded at a lower
rate during 2003-04 as compared with the previous year mainly due to slowdown of
deposits, borrowings and internal generation. The impact of this slowdown was felt
mainly on loan and advances, which grew at a much lower rate as compared with the
previous year. Investments, however, increased sharply, a trend which was observed
in respect of other financial intermediaries as well. The structure of liabilities and
assets of CCBs remained broadly unchanged.

PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS)

A primary agricultural credit society (PACS) is the foundation of the co-operative


credit system on which the superstructure of the short term co-operative credit
system rests. It is the PACS which directly interface with individual farmers, provide
short-term and medium-term credit, supply agriculture inputs, distribute consumer
articles and arrange for making of produce of its members through a co-operative
marketing society.

15

CO-OPERATIVE BANKS
INTRODUCTION

Co-operative banks are an important constituent of the Indian financial system,


judging by the role assigned to them, the expectations they are supposed to fulfills,
their number, and the number of offices they operate. The co-operative movement
originated in the West, but the importance that such banks have assumed in India is
rarely paralleled anywhere else in the world. Their role in rural financing continues to
be important even today, and their business in the urban areas also has increased in
recent years mainly due to the sharp increase in the number of primary co-operative
banks.

ORIGIN AND GROWTH OF CO-OPERATIVE BANKS

Co-operative banks are a part of the vast and powerful superstructure of co-operative
institutions which are engaged in the tasks of production, processing, marketing,
distribution, servicing, and banking in India. The beginning of co-operative banking
in this country dates back to about 1904 when official efforts were initiated to create a
new type of institution based on the principles of co-operative organization and
management, which were considered to be suitable for solving the problems peculiar
to Indian conditions. In rural areas, as far as agricultural and related activities were
concerned, the supply of credit, particularly institutional credit, was woefully
inadequate, and unorganized money market agencies, such as money lenders, were
providing credit often at exploitatively high rates of interest. The co-operative banks
were conceived in order to substitute such agencies, provide adequate short-term and
long-term institutional credit at reasonable rates of interest, and to bring about
integration of the unorganized and organized segments of the Indian money market.

16

When the national economic planning began in India, co-operative banks were made
an integral part of the institutional framework of community development and
extension services, which was assigned the important role of delivering the fruits of
economic planning at the grass root levels. In other words, they became a part of the
arrangements for decentralized plan formulation and implementation for the purpose
of rural development in general and agricultural development in particular. Today cooperative banks continue to be a part of a set of institutions which are engaged in
financing rural and agricultural development. This set-up comprises the RBI,
NABARD, commercial banks, regional rural banks, and co-operative banks. The
relative importance of co-operative banks in financing agricultural and rural
development has undergone some changes over the years. Till 1969, they increasingly
substituted the informal sector lenders. After the nationalization of banks and the
creation of RRBs and NABARD, however, their relative share has somewhat
declined. All the institutional sources contributed about 4 per cent of the total rural
credit till 1954. The contribution increased to 62 per cent by 1990.
The share of co-operative banks in this institutional lending has declined from 80 per
cent in 1969 to about 42 per cent at present. The percentage of rural population
covered by the agricultural credit co-operatives was 7.8 in 1951, 36 in 1961, and
about 65 per cent at present

17

Cooperative banks in India finance rural areas under:


Farming
Cattle
Milk
Hatchery
Personal finance

Cooperative banks in India finance urban areas under:


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

18

GOVERNMENT INITIATIVES TO STRENGTHEN THE


DEVELOPMENT OF CO-OPERATIVE BANKS

Even before the submission of the Khusro Committee Report, the government and the
RBI had initiated certain measures to strengthen the development of co-operative
banks. Some of these policy initiatives were as follows:
(i) The NABARD had formulated a scheme for the reorganization of PACSs and the
implementation of this scheme had started in those states which have accepted it.
(ii) The programme for development of selected PACSs into truly multi-purpose cooperative societies has been implemented in many states and Union Territories.
(iii) In addition to such programmes, certain state governments like Andhra Pradesh,
Madhya Pradesh West Bengal had also initiated development programmes to
strengthen the working of the co-operative credit institutions at the base level.
(iv) On the basis of their financial position as on 30 June 1987, 175 CCBs and 7 SCBs
in the country were identified as 'weak' banks and brought under the programme of
rehabilitation which, however, did not really work quite well.
(v) With a view to enabling weak banks which were either ineligible or were on the
verge of becoming ineligible for refinance ,a 12-Point Action Programme had been
formulated and circulated by NABARD to all the state governments.

19

FEATURES OF CO-OPERATIVE BANKS


Some distinguishing characteristics of the nature of co-operative banks are as follows:

(i) They are organized and managed on the principles of co-operation, self-help, and
mutual help. They function with the rule of "one member, one vote".
(ii) They function on "no profit, no loss" basis. For commercial banks also,
profitability is no longer the main objective, but in their case this change has been
brought about as a result of social or public policy, while co-operative banks, by their
very nature, do not pursue the goal of profit maximization.
(iii) Co-operative banks perform all the main banking functions of deposit
mobilization, supply of credit and provision of remittance facilities. However, it is
said that the range, of services offered is narrower and the degree of product
differentiation in each main type of service is much less in the case co-operative
banks, compared to commercial banks.
In other words, co-operative banks are characterized by functional specialization. It
should be added that this is true with much less force now, because many changes
have taken place in the co-operative banking system since the Banking Commission
arrived at the above-mentioned conclusion. For example,co-operative banks now
provide housing loans also. The UCBs provide working capital loans and term loans
as well. The State Co-operative Banks (SCBs), Central Co-operative Banks (C0)3s)
and Urban Co-operative Banks (UCBs) can normally extend housing loans up to Rs
one 1akh to an individual. The scheduled UCBs, however, can lend up to Rs three lacs
for housing purpose. The UCBs can provide advances against shares and debentures
also.
(iv) As said earlier, co-operative banks do banking business mainly in the agricultural
and rural sector. However, certain types of banks viz., UCBs, SCBs and CCBs operate
in semi-urban, urban, and metropolitan areas also. The urban and non-agricultural
business of these banks has grown over the years. The co-operative banks demonstrate
20

a shift from rural to urban, while the commercial banks, from urban to rural.
(v) Co-operative banks are perhaps the first government-sponsored, governmentsupported, and government-subsidized financial agency in India. They get financial
and other help from the RBI, NABARD, Central government and state governments.
They constitute the "most favored" banking sector with no risk of nationalization. For
commercial banks, the RBI is a lender of last resort, but for co-operative banks, it is
the lender of first resort which provides financial resources in the form of contribution
to the initial capital (through state governments), working capital, and refinance. The
promotional role of the RBI can be seen in respect of co-operative banks, and this role
supersedes its regulatory role, in respect of these banks.
A corollary of government help to co-operative banks is that there is much
government intervention in their working. Co-operative banks are subject primarily to
the control, audit, supervision and periodic inspection of the co-operative department
of the state government under the Cooperative Societies Act, but less rigorously, by
the RBI under the Banking Regulation Act. The RBI and the state government lay
down rules for investment of surplus resources, reserves, and the loan policy of cooperative banks. Consequently, compared to commercial banks, they have less
freedom and flexibility in conducting their operations.
(vi) Co-operative banks belong to the money market as well as to the capital market.
Primary agricultural credit societies provide short-term and medium-term loans. Land
Development Banks LDBs) provide long-term loans, DCBs meet working capital as
well as fixed capital requirements, and SCBs and CCBs also provide both short-term
and term loans. Similarly, they accept short-term and long-term deposits, and some of
them mobilize resources through the issue of debentures.
(vii) Co-operative banks are financial intermediaries only partially. The sources of
their funds resources) are: (a) Central and state governments, (b) the RBI and
NABARD, (e) other cooperative institutions, (d) ownership funds, and (e) deposits or
debenture issues. It is interesting to note that intra-sectoral flows of funds are much
greater in co-operative banking than in commercial banking. Inter-bank deposits,
21

borrowings, and credi\t form a significant part of assets and liabilities of co-operative
banks. This means that intra-sectoral competition is absent and intra-sectoral
integration is high for co-operative bank.
However, co-operative banks face stiff competition from commercial banks and other
financial intermediaries. Till their nationalization, commercial banks did not pose any
competition to co-operative banks. In fact, till then, certain areas of operations were
deliberately left to co-operative banks. But recently, the competition from LIC and
small-savings organization has become quite tough, and co-operative banks are in a
disadvantageous position in this area of inter-sectoral competition.
(viii) Co-operative banks have a federal structure of three-tier linkages. Primary credit
societies are unit banks; many DCBs also are unit banks. But SCBs, DCBs (CCBs),
and SLDBs, PLDBs and many DCBs have a number of branches. It can be said that
each co-operative institution in each tier is a separate entity with definite jurisdiction
and has an independent board of management.
(ix) Some co-operative banks are scheduled banks, while others are non-scheduled
banks. For instance, SCBs and some DCBs are scheduled banks but other cooperative banks are non-scheduled banks. At present, 28 SCBs and 11 DCBs with
Demand and Time Liabilities over Rs 50 crore each are included in the Second
Schedule of the RBI Act.
(x) As said earlier, co-operative banks accept current, saving, and fixed or time
deposits from individuals and institutions including banks. Some DCBs numbering
about 40 in 1989 are allowed open and maintain NRI accounts in rupees but not in
foreign currency. Deposits mobilized by them in a given area are used for financing
activities in that locality. Some co-operative banks, namely, Land Development Banks
(LDBs), issue debentures to raise resources for their operations. These debentures are
secured by mortgaging lands belonging to borrowers from LDBs and are often
guaranteed by the state government. They are regarded as -tee securities and are
treated on par with government securities for making advances. There are three types
of such debentures: ordinary, rural, and special. These debentures are almost entirely
22

subscribed by such institutional investors as banks, LIC, and the government.

(xi) The co-operative banks are subject to CRR and liquidity requirements as other
scheduled non-scheduled banks are. However, they are required to maintain the CRR
and SLR only at level of three per cent and 25 per cent respectively, at present. They
are subject to SCCs also. Further, the DCBs have been advised to lend 60 per cent of
their total advances to the priority ors. It means that the target for priority sector
lending has been fixed at a higher level for these banks compared to commercial
banks. Similarly, while the CAS has now been withdrawn in the of commercial banks,
it is still applicable to the DCBs, although in a liberalized form. With effect from
January 1989, they have to seek prior approval of the RBI for grant of advances to a
single party exceeding certain credit limits, which vary from bank to bank depending
on their size
(xii) Since 1966, the lending and deposit rates of commercial banks have-been
directly regulated by the RBI. Although the RBI had powers to regulate the 'rates of
co-operative banks also, these powers were not exercised much till about 1979, in
respect of their lending rates. From the early years till 1979, the SCBs and CCBs were
expected to provide finance for agricultural and allied activities to the ultimate
borrowers at reasonable rates, i.e., at concessional rates, by virtue of their being
entitled to concessional refinance from the RBI. In case of their non-agricultural
advances for the purpose of production and marketing activities of cottage and small
scale industries, the RBI imposed certain conditions as regards rates to be charged by
these banks for such purposes. In respect of their non-agricultural advances, they were
free to charge any rates at their discretion. The RBI did not regulate at all the lending
rates of DCBs, because of which there was little uniformity in the rates charged by
different DCBs. In early 1979, the RBI decided to maintain parity with regard to the
rates of interest on all agricultural advances irrespective of the credit agency. As a
result, the rates of interest charged to the ultimate borrowers by co-operative banks
were also brought in line with those charged by commercial banks. Accordingly, the
RBI advised all SCBs in 1980 to charge certain ceiling rates on agricultural advances.
While ceiling rates were prescribed for short-term agricultural advances, the lending
23

rates for medium-term agricultural credit were stipulated as fixed rates. Similarly,
lending rates of co-operative banks including DCBs for non-agricultural advances
also became subject to the directives issued by the RBI with effect from 1981. As a
result of measures adopted by the RBI in 1980 and 1981, a certain amount of
uniformity has been brought about with regard to the lending rates charged by cooperative banks in different states, and between commercial banks and co-operative
banks.
However, since 1974, the deposit rates of co-operative banks including DCBs, have
been regulated by the RBI. To begin with, the RBI policy in this respect was to
specify that the rates prescribed for commercial banks should be considered as the
minimum to be offered by the cooperative banks. This was unlike the directives in the
case of commercial banks for which fixed rates have been stipulated for different
types of deposits. Their current accounts were also excluded from the purview of the
directive, while commercial banks were prohibited from paying interest on current
accounts. This, however, led to relatively higher rates being paid by co-operative
banks on their deposits which adversely affected the deposit mobilization efforts of
the commercial banks. Therefore, the RBI once again changed its policy in 1974 and
began to direct co-operative banks not to pay interest at rates in excess of certain
percentages over the minimum rates prescribed by the RBI for commercial banks. The
ceilings laid down over the minimum rate were 0.25, 0.5, and 1.0 per cent with regard
to SCBs, CCBs, and Primary Agricultural Credit Societies (PACSs) respectively, on
term and saving deposits. Likewise, they have been prohibited since 1975, from
paying interest at a rate exceeding 0.5 per cent per annum on current accounts.
deposits up to 14 days, and those subject to withdrawal or repayment after a notice of
14 days or less. The latter facility, however, has been withdrawn with effect from
March 1989 in respect of DCBs. In the recent past; the RBI has introduced changes in
interest rates of co-operative banks also along with changes in interest rates of
commercial banks. The interest rates structure of cooperative banks is quite complex.
The rates charged by them depend upon the type of bank, and vary from state to state.
(xiii) Although the main aim of the co-operative banks is to provide cheaper credit to
the members, and not to maximize profits, they may access the money market to
24

improve their income so that they remain viable. This is in keeping with the opening
up of the non-farm sector to them in the recent past. Their need to access money
market arises due to a variety of factors. First, CCBs are mainly in the field of
financing seasonal agricultural operations, which creates cycles of flows of funds.
Second, the short-term agricultural loans are given at a concessional rate of interest
whereas interest rates paid on deposits by co-operative banks are higher than those
paid by the commercial banks. It is true that they get concessional refinance from the
NABARD, but its availability depends upon fulfilling conditions such as minimum
involvement, non-overdue cover, etc. Similarly, many DCBs often have surplus funds
which they mostly keep with the SCBs at a fixed rate of interest. There is, therefore, a
need for co-operative banks to access money market to deploy their short-term funds
profitably and cross-subsidise their lending operations.
(xiv) Co-operative banks (COBs), in short, have played a pivotal role in the
development of short-term and long-term rural credit structure in India over the years.
The co-operative credit endeavor is said to be the first ever attempt at micro-credit
dispensation in India. The entire cooperative credit system covers more than 74 per
cent of rural credit outlets, and it has a market share of about 46 per cent of total rural
credit in the country. From being the providers of loans for redemption of debt, COBs
have gone on to meet the investment requirements of all activities in rural areas. The
co-operative credit structure had a membership of 1.3 crore, net owned funds of Rs
3191 crore, and outstanding loans and advances of Rs 17261 crore in 20012. The
COBs have borne the major share of the task of widening institutional agricultural
credit because their retail outlets are so widespread and far flung that no other type of
agency can percolate to all corners of the country as COBs have done. However, too
much intervention by the State in day-to-day management has contributed to the lack
of involvement and ownership of people in their functioning. The COBs need to
become member-driven banks. There is also a need to do away with the duality of
control over them by the RBI and state government. They need support in respect of
infrastructure, resource base, professional management, etc.

25

SALIENT FEATURES OF THE OPERATION OF CO-OPERATIVE


BANKING' SYSTEM
A few salient features of the operations of the co-operative banking system which
emerge from this, and related information are as follows:
(1) There was an increase in the number of all types of co-operative banks except the
CCBs (which declined), during the two decades after 1951. During the 1970s and
1980s, the number of all types of banks except thy PACSs remained constant; the
number of the latter declined drastically. As a result, the total number of co-operative
banks increased till 1970 and declined thereafter. The co-operative banks now
operating in India outnumber the commercial banks. At present, we have about 297
commercial banks (including RRBs) compared to about 92,571 co-operative banks
including the PACSs and 3101 co-operative banks excluding the PACSs. In 1989, the
total number of offices of co-operative banks was 1,02,184 including those of PACSs
and 15,184 excluding them, the latter being one-fourth the size of the total number of
offices of commercial banks. Similarly, the deposits and credit of co-operative banks
were about 15 per cent and 35 per cent respectively of those of commercial banks in
1988-89. In 1996, the total number of offices of co-operative banks was 1, 10,137
including those of PACSs and 20,137 excluding them, the latter being about 32 per
cent of the offices of the commercial banks. Similarly, the deposits and credit of cooperative banks were about 14 per cent and 29 per cent respectively of those
commercial banks in 1994-95. The co-operative banks excluding PACs had the total
deposits of Rs 2, 12,859 crore, or about 17 per cent of the total deposits of scheduled
commercial banks in 200-03. Similarly, their total outstanding credit was Rs 1, 81,912
crore or about 25 per cent of commercial bank credit in that year. The SBI alone has a
far higher amount of deposits than the whole of the co-operative banking sector. It
follows that co-operative banking, unlike commercial banking, is small-scale banking
and it does not suffer from the concentration of business in the hands of a few. Table
9.2 gives an idea about the average (per bank) size of different types of co-operative
banks in 1950-51, and 1994-95 and 2002-03 in terms of deposits and credit. The
average size has increased over the years.

26

(2) Deposits, credit, working capital and other indicators of all types of co-operative
banks and the co-operative banking sector as a whole have also grown manifold over
the period, 1951 to 2003. Their growth has not been uniform over the span of 53
years. On the whole, the annual rate of growth of all co-operative banks (in terms of
deposits) has varied between 13 to 19 per cent in different during 1961-1986.
(3) If we rank different types pf banks, it would be found that in terms of deposits,
CCBs were the most important, followed by UCBs, SCBs and PACSs, in that
descending order in 1988-89. However, in terms of outstanding credit, the descending
order in that year was CCBs, PACSs, SCBs, and LDBs. in 1994-95 was CCBs, UCBs
PACSs, SCBs and SLDBs. In period 2002-03, the descending order was UCBs,
CCBs, SCBs, SLBs and PLDBs in term of deposits as well as outstanding credit.
(4) The composition of resources and other operational ratios of different types of cooperative banks differ significantly from those of commercial banks. The ratios also
vary among the cooperative banks themselves.
(5) In the recent past, a number of COBs have come under stress or failed. Many
DCBs are in prevehicleious conditions. Some of them have been found to have
manipulated government securities transactions. In 2003, as many as 163 DCBs out of
the total number of 2104 of DCBs were under liquidation.
(6) The co-operative banks are not allowed to approach debt recovery tribunals, and
are not covered under the Securitization and Reconstruction Ordinance. They are also
not allowed to access capital markets, bullion markets, and derivatives markets.
(7) Capital adequacy requirements for the COBs are, at present, lower than those
prescribed for commercial banks. However, all DCBs and other COBs would have to
achieve the CRAR level which is applicable to commercial banks by March 31, 2005.
They are required to adhere to capital adequacy standards in a phased manner over a
period of three years beginning with 2002.

27

ABOUT URBAN COOPERATIVE BANK, BAREILLY


This year URBAN COOPERATIVE BANK has entered in twelth year.Mrs
Soubhagya Gangwar is the president of URBAN COOPERATIVE BANK.She was
elected in November, 2005 but due to the governments policy she was re-elected
after two years.
The Bank has achieved tremendous progress under her supervision. The family of
Bank expresses their gratitude to their costomers, depositors for their faith and
devotion to the Bank.

REGESTRATION
This bank was established on 02-03-1996, in Bareilly under U.P. cooperative act.
1965

BANK LICENSE
This Bank has got the license under banking regulation act 1949; code (U-1595)
Reserve Bank of India from Reserve Bank of India.

28

HEAD OFFICE
Its Head Office in A-Block in D.D.Puram, Plibhit road Bareilly.

BRANCHES
PREMNAGAR
C.B.GANJ
CIVIL LINES
SHYAM GANJ
NAWAB GANJ

UBDUP-1277P
UBDUP-LK-71
UBDUP-LK-81
UBDUP-LK-80
UBDUP-LK-109

REGESTRATION NO.
UP-112 Dt.30-12-1996

WORK STARTED ON
05-09-1996

AUDIT CLASSIFICATION
A

DISTRIBUTION OF PROFITS
From 1996-07 onwards, Every Year

PROMOTERS
29

02-09-1996
06-03-1999
10-01-2000
10-01-2000
07-08-2002

OF URBAN COOPERATIVE BANK,


BAREILLY

MR SANTOSH KUMAR GANGWAR

S. AMARJEET SINGH CHUG

S.KULJEET SINGH OBROY

MR SUBODH ARYA

MR RAM AUTOR KHANDELWAL

MR SANJAY KUMAR AGARWAL

MR RAVI PRAKASH RASTOGI

MR HARSHVARDHAN GANGWAR

MR MUNNA LAL VERMA

S. PARAMJEET SINGH OBROY

DR PROMOD KUMAR SAXENA

30

ADMINISTRATION
OF URBAN COOPERATIVE BANK,
BAREILLY

MR P.S. BALYAN

S.MANAGER

MR K.K. GANGWAR

ADVISOR

MR MUNNA LAL VERMA

ADVISOR

MR B.B.L. SHARMA

GENERAL MANAGER

MR RISHI BHARDWAJ

ACCOUNTSMANAGER

MR JAGDISH BABU GANGWAR


MR RAJESH KUMAR GANGWAR

BRANCH MANAGER
BRANCH MANAGER

MR BHARAT BABU AGARWAL

BRANCH MANAGER

MR ARYANDRA SINGH

BRANCH MANAGER

MR ALOK KUMAR AGARWAL

BRANCH MANAGER

31

PRODUCTS-SERVICES
PROVIDED BY URBAN COOPERATIVE BANK
BAREILLY

Current deposit

Saving deposit

Fixed deposit

Safe

Lockers

Loans

Home loans

Personal loans

Agricultural loan

Consumer loan

Self-employment loan

Vehicle loan

32

PRODUT/SERVICES OF
URBAN COOPERATIVE BANK,
BAREILLY
LOANS FOR EVERY NEED
UCB is providing loan to their customers in easy-to-pay monthly installments. Bank
is giving the feasible interest rate and is available with easy documentation and quick
delivery.

HOME LOANS
Buying a property requires a complete knowledge of real estate and in todays
complex financial market it is difficult to choose the appropriate home loan company.
UCB Bank brings home loans at your doorstep. A dedicated team of experts and a
complete package to meet your housing finance needs, ever eager to guide you with a
basket of value added products and services.
Thats why bank say, any one can offer you housing finance, but only the most
experienced can guide you completely.

PERSONAL LOAN
UCB a loan of up to Rs. 5 lakh for a wedding, education, purchase of a computer or
an exciting holiday.

33

AGRICULTURAL LOAN
UCB is providing agricultural loan to their customers who wants to take the
agricultural loan up to 2 lacs and above than 2 lacs. The interest rates are available at
agricultural loan at 9% and 10%.

CONSUMER LOAN
UCB is providing to consumer loan their customers up to 50 thousands and above
than 50 thousands. The interest rates are available at agricultural loan at 12.50 % and
13%.

SELF-EMPLOYMENT LOAN
UCB is providing to their self-employment loan to un-employed people for making
them employed. The loan limit is up to 50 thousands and above than 50 thousands.
The interest rates are available at self-employment loan at 12.50 % and 13%.

VEHICLE LOAN
UCB is providing vehicle loan to their customers. The loan limit is up to 2 lacs and
above than 2 lacs. The interest rates are available at vehicle loan at 10.50% and 11%.

34

SERVICES PROVIDED BY UCB

Banks trust services provide you with the dual advantages of a secure depository and
efficient administration of your securities.
UCB solutions help you maximize returns, meet fiduciary responsibilities, and
improve operational efficiency.
Knowing that their clients' needs are complex and varied, bank leverage their
extensive expertise and experience to provide customers with a customized set of
benefit and investment services that work best in assisting your employee benefits
program.
And what's more, since bank take on custodian services for all types of securities, you
can protect your securities from loss, theft, damage or destruction. In addition to the
benefits of a securities account, you can also take advantage of banks other services
such as professional investment advice as well as banking products.
Incoming credits will be immediately deposited to your account and you receive
regular statement of interest, redemption and payments. You can also request at a
predefined interval a custody account or account statement showing clearly the
account's current holdings.

35

VEHICLE LOAN
New vehicle loan
UCB is providing vehicle loan to their customers at minimum interest rates. So if you
have a dream for the model and colors for your new vehicle you dont have to spend a
moment more than necessary to bring it home.

You will have to meet the relationship manager for a vehicle to buy a new vehicle and
see how simple the vehicle experience can be UCB banks vehicle loans scheme is the
most convenient way to get a loan for a new dream vehicle.
It is the right time you stepped on the accelerator?

36

ADVANTAGES OF NEW VEHICLE LOAN SERVICES


The processing of vehicle loan is very speedy. The customer will have to fulfill the
documentation and you will be able to get the vehicle loan in short time up to very
short time.
It covers the widest range of vehicles and multi-utility vehicle in, India. Whatever the
vehicle you will choose UCB will finance you.
It has flexible repayment options. it has attractive vehicle loan plans. It gives vehicle
loans at lowest interest rates.
It provides hassle free documentation. The customer will have to pay the loan any
time after six months at a small charge.
They will provide special rates for UCB account holders.

WHERE AND HOW YOU CAN APPLY


Applying for vehicle loan is absolutely simple. You will have to met the relationship
manager of UCB and he/she will tell you each and every step of vehicle loan at
minimum interest rates.

37

USED VEHICLE LOAN


Today, used vehicle of reliable quality and good value for money are readily available.
UCB bank used vehicle loans puts you in the drivers seat. Flexible options are
available for most models at competitive interest rates, and quick approvals. UCB
bank help you select you good quality used vehicle and even value them.

ADVANTAGES OF USED VEHICLE LOAN SERVICES


The processing of vehicle loan is very speedy. The customer will have to fulfill the
documentation and you will be able to get the vehicle loan in short time up to very
short time.
It covers the widest range of vehicles and multi-utility vehicle in India. Whatever the
vehicle you will choose UCB will finance you.
It has flexible repayment options. It has attractive vehicle loan plans. It gives vehicle
loans at lowest interest rates.
It provides hassle free documentation. The customer will have to pay the loan any
time after six months at a small charge.
They will provide special rates for UCB account holders.

WHERE AND HOW YOU CAN APPLY


Applying for vehicle loan is absolutely simple. You will have to meet the relationship
manager of UCB and he/she will tell you each and every step of vehicle loan at
minimum interest rates.

38

ELIGIBILITY OF VEHICLE LOAN


FOR SALARIED INDIVIDUALS

Minimum age of Applicant: 21 years

Maximum age of Applicant at loan maturity: 58 years

Minimum employment: 1 year in current employment and minimum 2 years


of employment

Minimum Annual Income: Rs 100000 net annual income

Telephone: Must at residence

FOR SELF-EMPLOYED

Minimum age of Applicant: 21 years

Maximum age of Applicant at loan maturity: 65 years

Minimum employment: At least 3 years in business

Minimum Annual Income: Net profit Rs. 60000 p.a for standard vehicle and
Rs.100000 p a for mid-sized and premium vehicle

Telephone: Must at residence

FOR PARTNERSHIP FIRMS

Minimum income: net profit Rs 60000 p.a. for standard vehicle and 100000
for mid-sized vehicle and premium vehicles.

Minimum turnover: Rs 4.5 lacs

Telephone: one phone must be at least at business and at residence of the loan
executive partner.

39

FOR PRIVATE LIMITED COMPANY

Minimum income: net profit Rs 60000 p.a. for standard vehicle and 100000
for mid-sized vehicle and premium vehicles.

Minimum turnover: Rs 4.5 lacs

Telephone: one phone at least at business premises

FOR PUBLIC LIMITED COMPANY

Minimum income: net profit Rs 60000 p.a. for standard vehicle and 100000
for mid-sized vehicle and premium vehicles.

Minimum turnover: Rs 4.5 lacs

Telephone: one phone at least at business premises

40

Documentation for Vehicle Loans


For salaried individuals:

Proof of Identity:- Passport copy, PAN Card, Voter Id card, driving license
(Laminated, Recent)

Income Proof: - Latest salary slip with form 16.

Address

Proof:

Ration

card/Driving

license/Voters

card/passport

copy/telephone bill/ electricity bill/Life insurance policy PAN Card.

Bank Statement:- Not mandatory

For self employed:

Proof of Identity:- Passport copy, PAN Card, Voters Id vehicle, driving


license( Laminated, Recent )

Income Proof:- Latest ITR

Address

Proof:-

Ration

card/Driving

license/Voters

card/passport

copy/telephone bill/ electricity bill/Life insurance policy PAN Card.

Bank Statement: - Waived for small vehicle, for mid - sized and premium
vehicle if income is greater than Rs 1.5 lacs then bank statement requirement
can be waived.

41

For partnership firms:

Proof of Identity:- NA

Income Proof:- Audited balance sheet, Profit & loss Account for latest two
years and the latest 2 years IT returns of the company

Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act


certificate/SSI registered certificate/Sales Tax certificate

Bank Statement: - Waived for small vehicle, for mid - sized and premium
vehicle if income is greater than Rs 1.5 lacs then bank statement requirement
can be waived.

For private limited company:

Proof of Identity:- NA

Income Proof:- Audited balance sheet, Profit & loss Account for latest two
years and the latest 2 years IT returns of the company

Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act


certificate/SSI registered certificate/Sales Tax certificate

Bank Statement:- NA

For public limited company:

Proof of Identity:- NA

Income Proof:- Audited balance sheet, Profit & loss Account for latest two
years and the latest 2 years IT returns of the company

Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act


certificate/SSI registered certificate/Sales Tax certificate

Bank Statement:- NA

42

Clearance of Some Doubts


Who can avail of UCB Bank Used Vehicle Loans?
If you are looking for your dream vehicle, and loan to buy it, you've come to the right
place. You have to fall into any of the following categories:

Salaried individuals in the age group of 21 to 60 years (at the end of the
tenure)

Self-employed individuals in the age group of 21 to 65 years (at the end of the
tenure)

Partnership Firms

Public & Private Ltd. companies

43

NEED OF STUDY

Banks performance towards the vehicle loan

Collect the information about customers reaction towards the vehicle loan of
UCB.

To increase the awareness of customers towards the vehicle loan.

To know about the satisfaction level of customers towards the vehicle loan.

To know about the awareness of customers towards the vehicle loans scheme
provided by UCB.

To know about the customers satisfaction level towards the interest rates
provided by UCB.

To know about that customer again opt for vehicle loan.

44

OBJECTIVE

To find out the awareness of the services provided by UCB Bank in the
Bareilly, city.

To find out the satisfaction level of customers towards four wheeler loans
provided by UCB Bank.

To conduct a research for finding out the factors that has an impact on the
satisfaction of customers towards loaning schemes.

The objective of this study is also to help UCB Bank to improve their
marketing strategies & schemes by knowing their customers better.

To find out the rating of UCB Bank in the opinion of customers having loan
from bank.

To find out that customers are satisfy with the documentation procedure of
UCB.

To find out that customers are satisfy with the schemes of UCB.

To find out that customers of bareilly are satisfy with the interest rates which
are provided by UCB.

To find out that UCB is fulfilling the customer need.

To find out those customers is best utilizing the different loans schemes
running by UCB.

To find out that customers are satisfy the services of UCB.

45

RESEARCH METHODOLOGY
Research is a novel contribution of an individual and is a planned and systematic line
of action which gives way to next needed step.
Research methodology is a systematic method of collection & analyzing the data for
the problem solving faced by the company.

RESEARCH
Research is a systematized effort to gain knowledge.
-REDMAN AND MORY
Research is the search for knowledge through objective and systematic method of
finding solution.
TYPES OF RESEARCH
DESCRIPTIVE RESEARCH:
Descriptive research includes and fact-finding enquiries of different kinds. The major
purpose of descriptive research of the state of affairs, as it exists at present.
I have collected the data from the customers those have been consume the services of
the UCB.
ANALYTICAL RESEARCH:
Analytical research, the researcher has to use facts or information already available,
and analyze these to make a critical evaluation of the material.
In this part I took the help of the annual report of bank.
APPLIED RESEARCH:

46

Applied research, aims at finding a solution for an immediate facing by a society,


industry and business organizations.

FUNDAMENTAL RESEARCH:
Fundamental research is mainly concern with generalizations and with the
formulation of the theory.
QUANTITATIVE RESEARCH:
Quantative research is based on the measurement of quantity or amount .it is
applicable to the phenomena that can be expressed in terms of quantity.
QUALITATIVE RESEARCH:
Qualitative research is based on the qualitative phenomena, phenomena relating to or
involving quality.

TYPES OF BUSINESS RESEARCH


In any business organization four types of businesses are most important by which we
can analyze the situation very well. These researches help the researcher to complete
the work in a focused area.

These researches are given below:


Marketing research:
In marketing research it comprises a form of applied sociological study ,which
concentrates on understanding the behaviors, whims and preferences,mainly current
and future.
Market research:
In this research we analyze the market condition i.e. asking questions about
competitors, market structure, government regulations, economic trends, etc.

47

Policies:
In this section we looks that what schemes are available and they will benefited to the
customers.
Advertising research:
This attempts to asses the likely impact of an advertising campaign in advance, and
also measure the success of a recent campaign.

48

Research process
Research process consists of a number of closely relating activities. Such activities
overlap continuously and do not follow a strictly prescribe manner.
Steps involved in Research process
Formulating the research problem:
It is the very first step in research is formulating a research problem. It is well said
that a problem well defined is half-solved.
Extensive literature survey:
Once the problem is formulated, the next step is to write down a brief summary. For
this the researcher should undertake extensive literature survey connected with the
problem. For this purpose the abstracting and indexing journals and published or
unpublished bibliography is the first place to go to.
Preparing the research design:
A research design specifies the methods and procedures for conducting a conducting a
particular study.
Research design can grouped into three categories:
Casual research
Exploratory research
Descriptive research

49

Sample design:
All the items under consideration in any field of inquiry constitute a universe or
population. If we choose right sample then there will be very less chances of facing
errors.

Types of sampling
Deliberate sampling:
In this sampling the sampling methods involves purposive or deliberate selection of
particular unit of the universe for constituting a sample which represent the universe.
Convenience sampling:
In this sampling the population elements are selected for inclusion in the sampling
based on easy of the access.

50

Process of research

Defining the research problem and objectives

Develop a research plan

Collection of the relevant information

Analyzing the information

Present the Findings

Make the decision

51

Research Design
A research design is purely and simply the framework or plan for a study that guides
the collection & analyzing of data.
Research design is some statement or specification of procedures for collecting and
analyzing the information required for the solution of some specific problem.
It provides scientific framework for conduction of some research investigation.
Anticipating and specification are the main characteristics in research design.
It provides information for decision making. Decision regarding what, where, when,
how much and by what means concerning an enquiry as a research study constitutes
in research design.
A research design is the blue print of research work of what we are going to perform
by a research.
Descriptive research design is used and it gives idea about consumption of a product
in relation to customer attitude it gives idea about quality, features of the services,
traits, and liking, disliking, knowledge, interaction, belief, faith and information of
customer.

52

Sampling Techniques
The sample size was so selected that it could be used to explaining the behavior of the
customers of the population of that region. It was selected to be able to identify with
the whole population of the area.
Sampling allows us to concentrate our attention upon a relatively smaller number of
people items and hence to denote energy to ensure that the information collected from
them is accurate. The step involved in determining the sampling technique are:-

A. Defining Population:
The group of individuals or their attributes which can be directly specified
numerically is known as population. It covers elements, units extent and time. For the
given project these are as follows:Element

people

Unit

individuals

Extent

Bareilly

B. Sampling frame:
A list map or other specification of the units which constitute the available
information relating to the population designated for a particular sampling scheme.
25-30 people of Bareilly city are selected for survey. The selection of people was
based on non-probability based judgmental and convenience sampling.

53

C. Sampling errors and data collection errors:


Data collected from a sample will reflect both the underlying reality and the method
used to collect the data. Researcher are interested in measuring this underlying reality,
however they must be aware of possible errors in their data collection method.
When data are collected from a sample an additional source of error is introduced that
of sampling. If the result of a sampling study are found to be incorrect, the tendency is
attributed this to bad sampling technique when in fact the method of data collection
might have been inaccurate.

D. Basic sampling problems:


Definition of the universe being studied three problems must be addressed in
sampling operation. The first problem is to define the universe being studied. The
universe is the entire group of items the researchers wish to study and about which
they plan to generalize. Many decisions must be made if the universe is to be sharply
defined. The second problem to consider is the definition of the variables to be
studied.

E. Sample design:
Sample design is the third problem that must be addressed in any sampling operation.
This subject may be divided into:

Determining sampling problem.

Selecting the sample ratio.

54

Estimating the universe characteristics form the sample data.

F. Selecting the sample:


Another part of the sample design problem is the method of choosing the sample
items. Two general classes of methods exist for selecting samples:

Probability method

Non probability method

Probability sampling methods are in which every item in the universe has a
known chance a probability of being chosen for the sample. The collection of
sample items is independent of the person making the study that is the sampling
operation is controlled objectively so that the items can be chosen strictly at
random.
Non probability sampling methods are those do not provide every item in the
universe with a known chance of being included in the sample. The selection
process is at least partially subjective.

G. Determination of sample size:


The size of the sample has direct relationship with degree of accuracy desired in the
investigation. It depends upon the nature of population as well as the method of
selection. Hence the sample size of 250 respondents was selected from Bareilly.

Research design
Research instruments
Sampling

descriptive research
structured and undisguised questionnaire
20-30 people

55

TIPS OF QUESTIONAIRE

Questionnaire should be according to fulfill the bank need.

Questionnaire should be related to the customers convenience.

If we use the structured Questionnaire, then we should follow appropriate the


structure.

Questions should be straight forward so that the customer could give the
answers.

Questionnaire should not be very lengthy.

We should explain each and every question to our customer.

The communication should be good between the sources and recipient.

We should decide the appropriate question sequence.

We should decide the appropriate wording of questions

We should prepare the type of questions we have to ask.

First, we should know what we want to ask?

We should have the ability to control the situation.

56

SOURSE OF DATA

DATA COLLECTION
The task of data collection begins after a research problem has been defined and
research plan has been solved.

TYPES OF DATA
Primary data:
Primary data is described as those data that have been recorded or observed by the
researchers for the first time to their knowledge.
Secondary data:
Secondary data are statistics not gathered for the immediate study at hand but for
some other purpose.
Secondary data is classified into two parts:
Internal secondary data:
Internal secondary data is based on the internal information of bank.
External secondary data:
External secondary data is based on the external information of bank.

57

Research

Descriptive
Analytical

Sampling

Deliberate sampling
Convenience sampling

Element

People

Unit

Individuals

Extent

Bareilly

Reseanch design

descriptive research design

Sampling frame

20-30 people

Research instruments

structured and undisguised questionnaire

Data collection

secondary data
Internal secondary data
External secondary

58

COMPERATIVE STATEMENT BETWEEN 31-3-06 AND 31-3-07


OF URBAN COOPERATIVE BANK, BAREILLY
The Comparative Statement of URBAN COOPERATIVE BANK is given below:

S.NO.
1.
2.
3.
4.
5.
6.
7.

PARTICULERS

30-09-06
RS
IN
LACS
Share capital
117.06
Funds
690.49
Deposits
5641.38
Loan
and 2358.70
advances
Investments
3724.32
Working capital
7065.14
Profits
54.31

30-09-07
RS
IN
LACS
165.07
713.19
7384.91
3488.81

ABSOLUTE
CHANGE

PERCENTAGE

+ 48.01
+ 22.70
+ 1743.53
+ 1130.11

41.01%
3.29%
30.91%
47.91%

4882.34
9424.55
77.40

+ 1158.02
+ 2359.41
+ 23.09

31.91%
33.40%
42.51%

Table 1

So we can see that in the above table that the bank has been achieved the rapid
progress in the history of Bareilly.
In above table the share capital was Rs117.06 in 2006 and in 07 has increased up
41.01%.

59

The deposits were Rs 5641.38 in 06 and in 07 it has increased up to 30.29%.


The Loans and advances were Rs 2358.70 in 06 and in 07 it has increased up to
47.91%.
The investment was Rs 3724.32 in 06 and in 07 it has increased up to 31.91%.
The working capital was Rs 7065.14 in 06 and in 07 it has increased up to 33.40%.
The profits were Rs 54.31 in 06 and in 07 it has increased up to 42.51%.

INTEREST RATES ON TERM DEPOSITS


OF URBAN COOPERATIVE BANK, BAREILLY

S.NO. DESCRIPTION OF DURATION OF TERM CURRENT RATES


DEPOSITS
1.
DURATON OF 30 DAYS TO 45 DAYS
6.00%
2.

DURATON OF 46 DAYS TO 90 DAYS

6.50%

3.

DURATON OF 91 DAYS TO 180 DAYS

7.50%

4.

ABOVE THAN 181 DAYS BUT LESS THAN


1 YEAR
1 YEAR AND ABOVE THAN 1 YEAR BUT
LESS THAN 2 YEAR
2 YEAR AND ABOVE THAN 2 YEAR BUT
LESS THAN 5 YEAR
5 YEAR AND ABOVE THAN 5

8.00%

5.
6.
7.

60

9.00%
9.25%
9.50%

Table 2

We can see in the above table that UCB provides the minimum interest rates in
term deposits.Duration of 30 days to 45 days it gives 6% interest rate. Duration of 46
days to 90 days it gives 6.50% interest rate. Duration of 91 days to 180 days it gives
7.50% interest rate. Duration of more than 181days but less than 1 year it gives 8%
interest rate. 1 year and above than 1 year but less than 2 year it gives 9% 1 year and
above than 1 year but less than 2 year it gives 9.25% and 5 year and above than 5 year
it gives 9.50%.

PROPSED DISTRIBUTION OF PROFITS YEAR 2006-2007


OF URBAN COOPERATIVE BANK, BAREILLY

PARTICULARS

AMOUNT

PARTICULARS

YEARS PROFIT

77,39,694.26

TRANSFER
INTO 19,35,000.00
RESERVE FUND

61

AMOUNT

(MIN 25%)
INCOME TAX

18,84,357.00

EDUCATIONAL FUND 38,698.00


(MIN 0.5%)
BAD AND DOUBTFUL 14,90,039.26
FUND
DONATION FUND
50,000.00

TOTAL

HOUSING FUND

1,00,000.00

DISTRIBUTION FUND

21,68,600.00

EXCHANGE RATE
INC./DEC.FUND

73,000.00

77,39,694.26

77,39,694.26

Table 3
We can see that from the above table the distribution of profit of UCB was Rs.77,
39,694.26.
The amount transfer into reserve fund was Rs.19, 35,000.00. The income tax paid was
Rs.18, 84,357.00. The amount given to educational fund was Rs. 38, 698.00. The
amount given to bad and doubtful debt was Rs.14, 90,039.26. The amount given to
donation fund was Rs. 50, 000.00. The amount delivered to the housing fund was
Rs.1, 00,000.00. The amount was given to distribution fund Rs. 21, 68,600.00. The
amount given to the exchange rate fund was Rs.73, 000.00

DEPOSITS

Rs in Lacs
Sr. No.

1.

Type Of Deposit

Individuals
Current deposit
Saving deposit

Year

Average
In %

2005-06

2006-07

2007-08

190.51
4040.98

330.88
4943.19

485.41
6191.09

62

154.80
53.21

Growth

2.

3.

Fixed deposit
Total
Other deposit (total)
Current deposit
Saving deposit
Fixed deposit
Total
Grand total(1+2)
Relative shares In %
Individual to total deposit
Current to total deposit
Saving to total Deposit
Fixed to total Deposit

2822.78
7054.28

2797.61
8071.68

3334.62
10011.12

18.13
41.92

364.83
366.12
1037.77
1768.77
8822.99

375.98
360.17
1033.41
1769.56
9841.24

400.98
353.66
1062.48
1872.12
11828.24

9.91
(-)3.40
2.38
2.74
34.06

79.95
4.13
4.15
11.76

82.02
3.82
3.66
10.50

84.64
3.39
2.99
8.98

5.87
(-)17.92
(-)27.95
(-)23.64

Table 4
We can see in the above table that UCB has achieved a rapid growth in three years
regularly. In 2005-2006 the current deposits was Rs190.51 lacs, it has increased in
2006-07 was Rs 330.88 and in 2007-08 it has increased Rs 485.41lacs. The average
growth is 154.80%.In 2005-2006 the saving deposits was 4040.98 lacs, it has
increased in 2006-07 was Rs 4943.19 and in 2007-08 it has increased Rs 6191.09lacs.
The average growth is 53.21%.In 2005-2006 the fix deposits was Rs 2822.78 lacs, it
has increased in 2006-07 was Rs 2797.61 lacs and in 2007-08 it has increased Rs
3334.62 lacs. The average growth is 18.13%.
The average growth of relative shares in individual to total deposit is 5.87%, current
to total deposit is (-) 17.92%, saving to total Deposit is (-) 27.95%, Fixed to total
Deposit is (-) 23.64

BORROWING POWER OF THE BANK (2005-06, 2006-07, 2007-08)


BORROWING POWER OF THE BANK (2005-06-2007-08)
Sr.No. Items
1.

Paid up share capital

Year
2005-06
778.77

63

Avg. Growth In %
2006-07
817.92

2007-08
829.10

6.46

2.
3.
4.
5.
6.
7.
8.

General reserves
total
Borrowing power(12* of step3)
Deposits
Borrowing from banks
Total A.C. borrowing(3+6)
Reserve borrowing power(7-4)

315.11
1093.88
13126.56
8822.99
4386.44
13209.43
82.87

423.17
1241.09
14893.08
9841.24
5225.46
15066.70
173.62

577.22
1406.32
16875.84
11828.24
3315.63
15143.87
1731.97

83.18
28.56
28.56
34.06
14.64

Table 5

We can see in the above table that UCB has achieved a rapid growth in three years
regularly. In 2005-2006 the paid up share capital was Rs 778.77 lacs, it has increased
Rs 817.92 in 2006-07 was and in 2007-08 it has increased Rs 829.10 lacs. In 20052006 the general reserve was Rs 315.11 lacs, it has increased 423.17 in 2006-07 was
and in 2007-08 it has increased Rs 577.22 lacs.
The borrowing power of customer was Rs 13126.56 in 2005-06, in 2006-07 it was Rs
14893.08, and in 2007-08 it was Rs 16875.84. The average growth is 83.18%.
The deposits were Rs 8822.99 in 2005-06, in 2006-07 9841.24 it was, and in 2007-08
it was Rs 11828.24 The average growth is 34.06%.
The borrowings from bank were Rs 4386.44 in 2005-06, in 2006-07 it were Rs
5225.46, and in 2007-08 it was3315.63. The average growth is 14.64%.
The reserve borrowing power was 82.87 in 2005-06, in 2006-07 it was173.62, and in
2007-08 it was 1731.97.

Details
Preference capital
Deposits

2005-06
117.06
690.49

2006-07
165.07
713.19

64

2007-08
224.93
830.11

Withdrawals
5641.38
7384.91
10221.34
Investment
3724.32
4882.34
6029.32
Loan & Advances
2358.70
3488.81
4584.82
Working Capital
7002.45
9424.55
11813.91
No. Of Members
3717
4513
5469
Net Profit
54.31
77.40
90.88
No. Of Branches
5
5
5
Examine rank
A
A
Profit
to
preference 17%
17%
shareholders
N.P.A.(Gross)
219.42(9.30%) 348.87(9.98%) 397.47(8.67%)
N.P.A.(Net)
NIL
63.73(1.98%) 40.43(0.09%)
Recovery %
68%
74%
85%
FINANCIAL PROGRESS REPORT OF URBANCOOPERATIVE BANK

Table 6

The preference capital of UCB was 117.06 in 2005-06, in 2006-07 it was Rs 165.07,
and in 2007-08 it was Rs 224.93. The deposits of UCB was Rs 690.49 in 2005-06, in
2006-07 it was Rs 713.19, and in 2007-08 it was Rs 830.11. The withdrawals of UCB
was Rs 5641.38 in 2005-06, in 2006-07 it was Rs 7384.91, and in 2007-08 it
was10221.34. The ivnvestments of UCB was Rs 3724.32 in 2005-06, in 2006-07 it
was 4882.34, and in 2007-08 it was Rs 6029.32. The loans and advances of UCB
was2358.70 in 2005-06, in 2006-07 it was3488.81, and in 2007-08 it was 4584.82.
The working capital of UCB was Rs 7002.45 in 2005-06, in 2006-07 it was Rs
9424.55, and in 2007-08 it was Rs 11813.91. The net profit of UCB was 54.31 in
2005-06, in 2006-07 it was77.40, and in 2007-08 it was90.88.
UCB Bank has got the A examine rank. Its recovery is also increased in every year.

INCOME AND EXPENDITURE

65

Sr.No.
1.

2.

Particulars
Income
1) Interest received from
a)investment
2,75,01,896.61
b) Loan
2,96,47,244.34
2) Commission,
Exchange
&
brokerage
3) Miscellaneous income
Total income
Expenditure
1) Interest paid on
a)borrowing
14,63,147.000
b)Deposits
2,97,20,530.95
2) Salaries & Allowances & Provident
fund
3) Rent,taxes,insurance,lighting etc
4) Law charges
5) Postage, telegrams & telephone
charges
6) Auditors fees
7) Depreciation on & repairs to
property
8) Stationery, printing & advertisement
etc
9) provisions
10) Other expenditure

2007-08
5,71,49,140.95
30,38,651.00
18,44,452.75
6,20,32,244.70
3,11,83,677.95
95,19,800.16
29,18,330.25
1,94,681.00
1,67,173.10
10,000.00
38,22,911.34
21,36,004.34
6,92,595.60

Table 7
In the profit and loss account of the UCB profit of the year was Rs
77, 39,694.26.

ESTIMATION OF EXPENDITURE FOR YEAR 2008-2009


OF URBAN COOPERATIVE BANK, BAREILLY

66

S.NO.

PARTICULARS

1.

FOR NEW BRANCHES

ESTIMATION OF EXPENDITURE
RS
PS
10,00,000
00

2.

FOR SAFE ,LOCKERS

7,00,000

00

3.

FOR FURNITURE FIXTURE


OF NEW BRANCHES
FOR
TELECOMMUNICATIONS
FOR
PURCHING
OF
COMPUTERS
AND
SOFTWARE
FOR LIBRARY

5,00,000

00

6,00,000

00

25,00,000

00

25,000

00

TOTAL

53,25,000

00

4.
5.
6.

Table 8

We can analyze that UCB will expand the amount for new branches, for safe and
lockers, for furniture and fixture of new branches, for telecommunications, for
purchasing of new technology, for library in this current year.

67

graph 1

ANALYSIS
We can see that in the above graph that most of the customers get the information
from their friends.30% customers know about the bank from the media habit.20%
customers know about the bank from the Relation ship manager.

68

graph 2

ANALYSIS

WE CAN see from the above graph that 70% customers are highly satisfied towards
the delivery of payments. 19% customers are satisfied towards the delivery of
payments.9% customers are highly dis-satisfied towards the delivery of payments.2 %
customers are dis-satisfied towards the delivery of payments

69

graph 3

ANALYSIS

We can see that from the above graph tha 28% customers are highly satisfied by the
bank. 59% customers are satisfied with the bank.only 11% customers are dis-satisfied
and mere 2% customers are highly dissatisfied with the bank.

70

Graph 4

ANALYSIS

We can see that 80% customers are satisfied by the services provided the bank. 20%
customers are not satisfied by the services provided by the bank.

71

Graph 5

ANALYSIS
We can see from the above graph that 58% customers gives good rating to the loans
scheme of UCB bank. 28% customer gives very good rating to the customers. 14%
customers gives unsatisfactory rating to the customers.

72

graph 6

ANALYSIS

We can see tht 75% customers say that bank is bank is flexible at credit.only 25%
customers are not satisfied with them.

73

graph 7

ANALYSIS

We can see that the above graph 55% customers say that loaning policies are
assessable to them, only 45% are not agree with them.

74

graph 8

ANALYSIS

We can see from the above graph that 60% customers are satisfied with the processing
of bank only 40% customers are not satisfy with the processing of bank.

75

graph 9

ANALYSIS

We can see in the above graph that 69% customers will again approach to UCB bank
as they are satisfy with the bank and 31% customers are not agree with bank.

76

graph 10

ANALYSIS

We can see the above graph that 35% customers comes in scale 1. 29% say give them
second rank. 15% give it third rank. The decline rate given by the customers are very
less.

77

graph 11

ANALYSIS

We can see in the above graph that the strongest competitor according of UCB are
public sector banks. Then number comes of state bank group. The third no. is
commercial bank. Another strongest competitor is private sector bank.

78

graph 12

ANALYSIS
We can see in the above graph that 72% customers say that vehicle loan from UCB is
easily accessible. Only 28% customers are not agreeing with them.

79

graph 13

ANALYSIS

We can see in the above graph that 68% customers gives it excellent ranking. 23%
gives it second rank, third ranking is 7% which is poor,only 2% cutomers gives it
worst ranking.

80

graph 14

ANALYSIS

We can see in the above graph that 66% cstomers are highly-satisfied with UCB bank.
We can see the performance of UCB bank that a large percentage of customers are
satisfy with the bank. 21% customers are satisfied with the bank. 10% customers are
dis-satisfied with the bank. Only 3% customers are dis-satisfied with the bank.

81

graph 15

ANALYSIS

We can see in the graph that 71% customers say that they will again opt UCB bank for
vehicle loan as they are satisfy with the bank. 22% say that they will not try UCB
bank, 7% are not sure with the banking procedure.

82

graph 16

ANALYSIS
We analyze that UCB is providing loans to their customers at 9-10%. It provides loans
to their customers at 10-11% interest rate.
Interest rates depend upon the amount of loan and it depends upon the time-period.

83

graph 17

ANALYSIS
We can see from the above graph tha UCB is providind iaon amount according to
their customer need. 39% customer takes loan amount 1-2 lacs. 49% customer takes
loan amount 2-5 lacs.12% customer takes loan amount above 5 lacs.

84

FINDING

The organization is dealing with the banking services and has many options to
their program. Serving customers with their needs, wants and satisfaction are
only the way to improve the business and hence profit.

All UCB is putting all effects on their services but as due to lack of
advertisement of the bank, it is facing some sort of problems regarding the
marketing of their services. Hence, keeping in mind they have many changes
in their marketing strategies for the betterment of their services & they are
new running in much structural way.

After going through the findings it is concluded that there are many people
who are not aware about the services of the bank due lack of advertisement but
it is truth that UCB is providing lowest rate of interest.

It is lastly the customers who can make on or destroy a particular business


because in the private sector.

Ultimately it is the customer satisfaction, which works. If the customer is


satisfied it is very easy to capture the market and have an edge over the
competitors, so it is always advisable to move ahead taking customers
convenience into account.

Though UCB bank is putting all of its effort to sustain in this competitive
world but these efforts are not sufficient.

Public sector banks, private sector banks, commercial banks, are the strongest
competitors of the bank.

85

STRENGTHS

Services provided to the customers of urban cooperative Bank is highest in


comparison with its competitors.

The satisfaction level of customers of urban cooperative Bank ranks on the


top.

It provides vehicle loans at the lowest rate of interest.

The processing time taken by the bank is very less.

After documentation, the payment delivered in very less time.

WEAKNESSES

Urban cooperative bank gives very less advertisements in comparison to its


competitors.

Urban cooperative bank has very less number of branches which make it less
reachable.

The working of the bank also poses a problem, in comparison to its


competitors.

86

OPPERTUNITIES

Urban cooperative bank can cover a wider market by advertising more about
its schemes, etc.

The bank and its services can be made more reachable by opening a few more
branches.

The criteria for loan if made more flexible can lead to larger number of loan
customers.

The schemes and services are made more flexible then it will be able to
achieve more market.

If government takes initiative it can perform better.

THREATS

Urban cooperative bank is facing strong competition by other banks such as


public sector banks, state bank, and commercial bank mainly.

Its competitors are providing better facility in comparison to it.

87

CONCLUSION
At the end I would like to say that urban cooperative bank is putting all their
efforts on their services but due to the lack of advertising and lacking of
awareness of the other facilities, it is facing some problems.
Due to the change in the market scenario, bank is changing their marketing
strategies so that it could face the challenges with other banks.
With the expanding credit need of urban areas, urban cooperative bank is
providing lowest rate of interest. Its schemes of loans are attract the customers.
Banks services are up to the mark.
Bank is facing tough competitions with the other financial institutions. Public
sector banks, private sector banks, and state bank of India.
At last this is customers believe and trust that is why bank is firm at its place in
this tough market situation and lacking of marketing ,financing, facilities.

88

SUGGESTION AND RECOMMENDATION

The bank should concentrate on the marketing field.

The advertising of UCB should be good so that the customers can awre of
different schemes of UCB.

The bank should conduct a market survey so that they could analyse the
market situation.

The bank should maintain their credit system. Banks should be more
economical and viable; the progress is existing only is the paper.

Bank should be focus on reality.

With the expanding credit needs of the urban sector, the cooperative banks
have come in actively to meet the credit requirements of this sector.

Urban Co-operative banks should always active by the competition from other
financial institutions.

Urban Co-operative banks are not doing well in all the urban areas; only a few
account for a major part of their business.

Urban cooperative banks still rely very heavily on refinancing facilities from
the government, the RBI, and NABARD. They should have been able to
become self-reliant in respect of resources through deposit mobilization

89

Urban cooperative banks suffer from dangerously low or weak quality of loan
assets, and from highly unsatisfactory recovery of loans. They should have to
strengthen the recovery part of loan.

Urban cooperative banks suffer from infrastructural weaknesses and structural


flaws. They do not look like banks and do not inspire confidence in the
potential members, depositors and borrowers. So they should have to improve
the infrastructural part and structural flaws.

Urban cooperative banks suffer from too much officialisation and


politicization. Undue governmental interventions have prevented them from
developing steadily as a self-reliant and resilient credit system. Most of them
are headed by politicians. Too much officialisation and politicization is not
good in the favor of bank.

Urban cooperative banks unduly depend on government capital rather than


member capital. There is no active participation of their members in their
working, which can come about if they work with members money rather
than government largesse. Its members should take active participation in its
working capital.

Urban cooperative banks should not have been resorting to unethical practices.
There are many regulators for them, but still there are many lacunae in their
regulation. In fact, the existence of multiple regulatory authorities has come in
the way of effective regulation, control, and monitoring.

Government should formulate a scheme for the reorganization of and the


urban cooperative banks implementation of this scheme.

The programme for development of selected urban cooperative banks into


truly multi-purpose co-operative societies has been implemented in many
states and Union Territories.

90

In addition to such programmes, certain state governments should also


initiated development programmes to strengthen the working of the Urban cooperative credit institutions at the base level.

Urban cooperative banks should maintain their financial position so that they
can sustain in this competitive bank.

Government should take the stock of the performance of urban cooperative


bank. Banks which is facing the poor and weak situation government should
strengthen them.

91

BIBLIOGRAPHY

Marketing management

Philip Kotler

Financial management

I.M.Panday

Indian financial management

M Y Khan

Research methodology

C.R.Kothari

Annual report of urban cooperative bank

92

QUESTIONNAIRE
1. Where did you know about urban cooperative bank?
a) Friend
b) Dealer
c) Advertising
d) Other source
2. Are you satisfied towards the delivery of payment system of
Urban cooperative bank?
a) Highly satisfied
b) Satisfied
c) Dissatisfied
d) Highly dissatisfied
3. Are you satisfied the rate of interest provided by the bank to the
customers?
a) Yes
b) No
c) Not sure
4. Do you believe in the loaning policy of urban cooperative bank?
a) Yes
b) No
c) Not sure
5. Are you satisfied with the urban cooperative bank?
a) Highly satisfied
93

b) Satisfied
c) Dissatisfied
d) Highly dissatisfied

6. Are you satisfied with the services of urban cooperative bank?


a) Yes
b) No
c) Not sure
7. Do you think that loan taken with the urban cooperative bank
is convenient?
a) Yes
b) No
c) Not sure
8. Do you think urban cooperative bank is flexible at cedit

transaction?

a) Yes
b) No
c) Not sure
9. Do you think that urban cooperative banks loan is assessible to the
potential customers?
a) Yes
b) No
c) Not sure
10. Are you satisfy with the processing of urban cooperative bank?
a) Yes
b) No
c) Not sure
11. Will you again opt for urban cooperative bank when you need loan?
94

a) Yes
b) No
c) Not sure
12. At the scale of excellent to worst where do you rate urban cooperative
bank?
a) Excellent
b) Good
c) Poor
d) Worst
13. Who is the strongest competitor of urban cooperative bank?
a) Public sector bank
b) Private sector bank
c) Commercial bank
d) State bank
14. Is the vehicle loan of urban cooperative bank easily accessible?
a) Yes
b) No
c) Not sure
15. Will you again opt urban cooperative bank for when you need vehicle
loan?
a) Yes
b) No
c) Not sure

95

96