A PROJECT REPORT ON

BANKING SECTOR ³SARASWAT CO-OPERATIVE BANK´
For the event µABHIVYAKTI¶ By

A3 Group

INDIRA INSTITUTE OF MANAGEMENT PUNE
(2010-11)

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ACKNOWLEDGEMENT
We solemnly acknowledge a sense of deep gratitude towards our faculty mentor Prof. Waghmare for his guidance and valuable suggestions. We consider it to be our greatest fortune and honor to have been given an opportunity to work under him. We are extremely thankful to our Student mentor Ms. Mashrita for her guidance, valuable advice and timely help. Finally, we want to say a word of thanks to all those who have contributed their sincere efforts and timely co-operation to help in the preparation of this project. Without their efforts the project would not have been possible.

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CONTENTS
Sector Name Group Name and Grades Acknowledgement Index Macro analysis 1) 2) History of banking sector Current trends and technologies 2.1) Internet banking 2.2)Phone banking 2.3)Mobile banking 3) Market structure 3.1) Globalization 3.2) Indian banking market 4) Banking Terminology 4.1) Bank Rate 4.2) Repo Rate 6 9 10 10 10 11 11 12 14 15 15
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I II III IV

4.3) Reverse Repo Rate 4.4)Cash Reserve Ratio 4.5) Statutory Liquidity Ratio 5) 6) 7) Government Policy Top 10 banking companies in world Top 5 banking companies in India MICRO ANALYSIS 8) 9) About Saraswat Bank Current Position 9.1)Graph : Total Business 9.2)Graph : Working Funds 9.3)Graph : Deposits 9.4 ) Graph :Advances 10) Financial Analysis 10.1)Maximizing CASA deposits 10.2) Reduction in NPA 10.3)Marketing 11) SWOT analysis

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22 24 24 24 24 24 27 31 32 32 33

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12)

Services and products offered by the bank

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13)

7 P¶s of marketing 13.1) Product 13.2) Price 13.3 ) Promotion 13.4) Place 13.5) People 13.6) Process 13.7) Physical evidence

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14) 15) 16) 17) 18)

HR Policy and organizational structure CSR (Corporate Social Responsibility) Awards and recognition Conclusion Bibliography and references

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MACRO ANALYSIS
1) HISTORY OF BANKING SECTOR
The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: y Early phase from 1786 to 1969 of Indian Banks y Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. y New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991. Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority.

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The following are the steps taken in chronological order by the Government of India to Regulate Banking Institutions in the Country: y 1949: Enactment of Banking Regulation Act. y 1955: Nationalization of State Bank of India. y 1959: Nationalization of SBI subsidiaries. y 1961: Insurance cover extended to deposits. y 1969: Nationalization of 14 major banks. y 1971: Creation of credit guarantee corporation. y 1975: Creation of regional rural banks. y 1980: Nationalization of seven banks with deposits over 200 crore. The nationalization of banks in India were initiated in 1969 by Mrs. Indira Gandhi, the then prime minister. After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%. In 1991, under the chairmanship of M. Narasimham, a committee was set up by his name which worked for the liberalization of banking practice. The country was flooded with foreign banks and their ATM stations. Efforts were being put to give a satisfactory service to customers. Phone banking and net banking were introduced. The entire system became more convenient and swift. Time is now given more importance than money. The commercial banking structure in India consists of: y Scheduled Commercial Banks in India y Unscheduled Banks in India Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. As on 30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918 branches. The scheduled commercial banks in India comprise of State bank of India and its associates (8), nationalized banks (19), foreign banks (45), private sector banks (32), co-operative banks and regional rural banks. "Scheduled banks in India" means the
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State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank". "Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".

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2) CURRENT TRENDS AND TECHNOLOGIES Technology plays a very important role in bank¶s internal control mechanisms as well as services offered by them. It has in fact given new dimensions to the banks as well as services that they cater to and the banks are enthusiastically adopting new technological innovations for devising new products and services. The latest developments in terms of technology in computer and telecommunication have encouraged the bankers to change the concept of branch banking to anywhere banking. Use of ATMs and Internet banking has allowed µanytime, anywhere banking¶ facilities. Automatic voice recorders now answer simple queries; currency accounting machines make the jobs easier for the employees and ensure faster service to the customers. Credit card facility has encouraged an era of cashless society. Today MasterCard and Visa card are the two most popular cards used world over. The banks have now started issuing smartcards or debit cards to be used for making payments. These are also known as electronic purses. With increasing popularity of telebanking and e-banking, banking has become a 24*7 activity. And a system like Electronic Clearing Service has made receiving dividends and interest easier and safer by making bulk transfers from one account to many accounts (or vice-versa) possible. Mobile banking too is growing rapidly and banks are using SMS as major tool of promotion, giving great utility to their customers. With such changes in technology, banks today have left behind their traditional role of accepting deposits and lending money and focus on providing premium services to their customers to retain their brand name and reputation in the market. y Internet Banking y Phone Banking/Tele-Banking y Mobile Banking

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2.1) Internet banking : Internet banking: Also referred to as E-banking, internet banking is changing the banking industry and is having the major effects on banking relationships. Almost every bank has a website today and provides for delivery of its products & services electronically. In true Internet banking, any inquiry or transaction is processed online without any reference to the branch at any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice to have" service, and it is soon to become a norm from an exception due to the fact that it is the cheapest way of providing banking services. Using e-banking a customer can view account balances & statements, transfer funds between accounts, create FDs Online, request a DD, pay bills, order a cheque book, request stop payment on a cheque, apply for and access credit cards, apply for loans and most importantly gets easy access to complete information about various products and offers. 2.2) Phone Banking : It use an automated phone answering system with phone keypad response or voice recognition capability. This feature is known as Interactive Voice Response System (IVR). With the obvious exception of cash withdrawals and deposits, it offers virtually all the features of an automated teller machine: account balance information and list of latest transactions, electronic bill payments, funds transfers between a customer's accounts, etc. Some banks engage call centres to provide 24*7 services to their customers, via toll-free numbers. Others connect their customers to phone bankers, but in this case, the service is only available for particular hours for which phone bankers are available. Some make use of both i.e. toll-free numbers for some services, and phone bankers for the ones that require professional assistance. Telephone banking representatives are usually trained to do what was traditionally available only at the branch: loan applications, investment purchases and redemptions, cheque book orders, debit card replacements, change of address, etc. 2.3) Mobile Banking: ICICI was the first bank in India to introduce complete mobile banking services in the year 2007. Since then, conducting banking operations using the mobile phone has been fast catching up in the country. It works through a set of text messages (SMS). With SMS a customer can perform a wide range of query-based

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transactions from his/her mobile phone, like funds transfer (within and outside the bank), enquiry services (Balance enquiry/ Mini statement), request services (cheque book request), bill payment (utility bills, credit cards),

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3) MARKET STRUCTURE
3.1) GLOBALIZATION Strengthening financial systems has been one of the central issues facing emerging markets and developing economies. This is because sound financial systems serve as an Important channel for achieving economic growth through the mobilization of financial savings, putting them to productive use and transforming various risks. Many countries adopted a series of financial sector liberalization measures in the late 1980s and early 1990s that included interest rate liberalization, entry deregulations, reduction of reserve requirements and removal of credit allocation. In many cases, the timing of financial sector liberalization coincided with that of capital account liberalization. Domestic banks were given access to cheap loans from abroad and allocated those resources to domestic production sectors. The Man banking sector can be divided into five distinct sub-sectors: 1. Clearing 2. Private 3. Off- Retail 4. Savings 5. Trust ‡ Over the past 15 years the sector has grown by between 3% and 9% pa but has been in decline since 2002 and faces a further sharp reduction. ‡ Banking facilities on the range from basic current and deposit account facilities to complex wealth management structures. However, there is no genuinely uniqueness in Man banking products. ‡ In a global context, the Man banking sector offers a mainly retail, mass-affluent proposition targeting UK expatriates. Its chief revenue stream is derived from international personal client business referred from UK and International Group offices.
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3.2) INDIAN BANKING MARKET Indian banks have compared favorably on growth, asset quality and profitability with other regional banks over the last few years. The banking index has grown at a compounded annual rate of over 51 per cent since April 2001 as compared to a 27 per cent growth in the market index for the same period. Policy makers have made some notable changes in policy and regulation to help strengthen the sector. These changes include strengthening prudential norms, enhancing the payments system and integrating regulations between commercial and co-operative banks. However, the cost of intermediation remains high and bank penetration is limited to only a few customer segments and geographies. While bank lending has been a significant driver of GDP growth and employment, periodic instances of threatened the stability of the system Structural weaknesses such as fragmented industry structure, restrictions on capital availability and deployment, lack of institutional support infrastructure, restrictive labour laws, weak corporate governance and ineffective regulations beyond Scheduled Commercial Banks (SCBs), unless addressed, could seriously weaken the health of the sector. Further, the inability of bank managements(with some notable exceptions) to improve capital allocation, increase the productivity of their service platforms and improve the performance ethic in their organisations could seriously affect future performance. The second unique feature of India¶s banking sector is that the Reserve Bank of India has permitted commercial banks to engage in diverse activities such as securities related transactions, foreign exchange transactions and leasing activities.

EFFECT OF GLOBAL CRISIS ON INDIAN BANKING SECTOR: India escaped a major and fatal injury to its economy even in the context of a full-blown global economic crisis. This happened mainly owing to: y our high savings rate at around 34% to 35% of GDP y our lesser dependence on the external sector y sustained and strong domestic demand particularly in India¶s semi-urban
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and rural sector, y strong regulatory oversight and a well-calibrated monetary policy y our sumptuous foreign exchange reserves y a gradual and lower convertibility on capital account Despite the strong prevalence of domestic sources of growth, the global financial crisis interrupted the growth momentum in India. There was clear moderation in growth by the third quarter of 2008-09. This is evident from the fact that the second-half GDP growth was only 5.8%, down from 7.8% for the first half of the year and 9.0% for the previous financial year 2007-08. MERGERS AND ACQUISITIONS: A large number of international and domestic banks all over the world are engaged in merger and acquisition activities. One of the principal objectives behind the mergers and acquisitions in the banking sector is to reap the benefits of economies of scale. With the help of mergers and acquisitions in the banking sector, the banks can achieve significant growth in their operations and minimize their expenses to a considerable extent. Another important advantage behind this kind of merger is that in this process, competition is reduced because merger eliminates competitors from the banking industry. Through mergers and acquisitions in the banking sector, the banks look for strategic benefits in the banking sector. They also try to enhance their customer base. The mergers and acquisitions in the banking sector of India are overseen by the Reserve Bank of India (RBI). Following are some of the major mergers and acquisitions in the global and domestic banking sector: y The merger of Chase Manhattan Corporation with J.P. Morgan & Company. The name of the new company formed as a result of the merger is J.P. Morgan Chase & Company. y The merger of Firstar Corporation with U.S. Bancorp. The name of the resultant entity is U.S. Bancorp. y The merger of Golden State Bancorp, Inc. with Citigroup Inc. The name of the newly formed company is Citigroup Inc
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y The merger of FleetBoston Financial Corporation with Bank of America Corporation. The newly formed entity is Bank of America Corporation. y Merger between IDBI (Industrial Development bank of India) and its own subsidiary IDBI Bank. The deal was worth $ 174.6 million (Rs. 7.6 billion in Indian currency). y Centurion Bank and Bank of Punjab. Worth $82.1 million (Rs. 3.6 billion in Indian currency), this merger led to the creation of the Centurion Bank of Punjab with 235 branches in different regions of India.

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4) RELATED TERMS TO THE SECTORS
There are several terminologies being used in day-to-day banking process. Following are the important terms used in BANKING SECTOR: y BANK RATE y REPO RATE y REVERSE REPO RATE y CASH RESERVE RATIO y STATUTORY LIQUIDITY RATIO 4.1) BANK RATE- Bank Rate is the oldest instrument of monetary policy. It is the rate at which RBI lends money to other banks or financial institutions or commercial banks. In other words it is the rate of interest which is charged by RBI on its advances to commercial banks. If bank rate is increased by RBI, then all banks will also hike their own lending rates such as deposit rates and prime lending rates etc. The bank rate policy seeks to affect both the cost and availability of credit. Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes. Any upward revision in Bank Rate by central bank is an indication that banks should also increase deposit rates as well as Prime Lending Rate. This any revision in the Bank rate indicates could mean more or less interest on your deposits and also an increase or decrease in your EMI 4.2) REPO RATE- Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks have any shortage of funds they can borrow it from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive. Under repo transaction the borrower places with the lender certain acceptable securities against funds received and

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agree to reverse this transaction on a predetermined future date at agreed interest cost. It is known as repurchase rate. Therefore, we can say that in case, RBI wants to make it more expensive for the banks to borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks to borrow money, it reduces the repo rate. If increases the repo rate it will increase general interest rates throughout the economy. If the repo rate for commercial banks increases they will pass this onto their own consumers. Higher interest rates have the effect of reducing spending, investment and economic growth. This will reduce inflationary pressures in the economy. 4.3 ) REVERSE REPO RATE - This is the reverse of repo rate. It is the rate at which RBI borrows money from banks. When liquidity or cash floating is excess in banks, RBI sucks it out by reverse repo by lending securities and taking out money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. 4.4) CASH RESERVE RATIO - CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks don¶t hold these as cash with themselves, but deposit such cash with Reserve Bank of India (RBI), which is considered as equivalent to holding cash with them. This minimum ratio (that is the part of the total deposits to be held as cash) is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Suppose a bank has total deposits of Rs.100 Bn and is required to maintain a CRR of say 5%. This means that the bank should maintain in current accounts with the central bank or any other approved bank balances, not less than Rs. 5 Bn. This much amount is impounded and kept in the free form. And the bank cannot lend this money. This acts as a buffer to the bank. RBI uses CRR either to drain excess liquidity or to release funds needed for the economy from time to time. Increase in CRR means that banks have fewer funds available and
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money is sucked out of circulation. Thus we can say that this serves duel purposes i.e. it not only ensures that a portion of bank deposits is totally risk-free, but also enables RBI to control liquidity in the system, and thereby, inflation by tying the hands of the banks in lending money. The RBI is empowered to vary CRR between 3% and 20% respectively. 4.5) STATUTORY LIQUIDITY RATIO - It is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. Every bank is required to

maintain at the close of business every day, a minimum proportion of their net demand and time liabilities as liquid assets in the form of cash, gold or approved securities. This percentage is fixed by RBI. The maximum and minimum limits for the SLR are 40% and 25% respectively. In the above example, suppose the bank is supposed to maintain SLR of 25%, this means that over and above CRR the bank is expected to keep aside an amount of Rs. 25 Bn. This will be kept in easy-to encash securities like, treasury bills of the government and any other approved securities. This again acts as buffer to the bank and prevents the bank from lending the entire amounts of deposits kept with it by various customers. TERMINOLOGY Bank Rate Repo Rate Reverse Repo Rate Cash (CRR) Statutory Ratio Liquidity 25% 07/11/2009 Reserve Ratio RATE 6.00% 5.75% 4.50% 6.00% W.E.F. 29/04/2003 27/07/2010 27/07/2010 24/04/2010

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5) GOVERNMENT POLICIES:
In order to address the severe liquidity crunch, the Reserve Bank of India introduced a slew of measures since mid-September 2008, viz. reduction in CRR from 9% to 5%, SLR from 25% to 24%, buyback of MSS securities, opening of new refinancing windows, increase in ceilings on non-resident deposits and easing of restrictions on external commercial borrowings and on short-term trade credits. Policy rates were also cut ± repo by 400 bps from 9% to 5% and reverse repo by 250 bps from 6% to 3.50%. The fiscal and monetary stimulus measures initiated during FY 2008-09 coupled with lower crude and metal prices somewhat cushioned the down-turn in growth momentum in FY 2009-10. While the domestic financial situation is improving, external financial environment will remain tight. Therefore, investment demand will be at a lower ebb. On balance, with the assumption of a normal monsoon, the GDP growth for FY 2009-10 is expected to be around 7% to 7.5%, going forward. Following are few guidelines directed by the RBI for the UCB sector: y RBI has asked Scheduled Co-operative Banks to draw the ALM structural Liquidity statement on a daily basis. y RBI has notified that approvals for branch expansion including off-site ATMs in respect of UCBs will henceforth be considered based on their Annual Business Plans, subject to certain criteria. y RBI has permitted well-managed and financially sound multi-state UCBs to set up onsite ATMs without prior approval of the RBI. y RBI has instructed large-sized and systemically important UCBs to apply capital charge for market risk with effect from 1st April, 2010.

Basal Norms:
In July 1988, the Basel Committee came out with a set of recommendations aimed at introducing minimum levels of capital for internationally active banks. This first series of recommendations by Basel Committee are popularly known as Basel I norms. These norms required the banks to maintain capital of at least 8 per cent of their risk-weighted loan
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exposures. Different risk weights were specified by the committee for different categories of exposure. For instance, government bonds carried risk-weight of 0 per cent, while the corporate loans had a risk-weight of 100 per cent. The Basel Committee also laid down standard definitions for different types of capital. Capital was categorized as Tier I and Tier II capital. Tier I capital is mainly the permanent capital like equity. Tier II capital is the supplementary capital like subordinate debt. The norms were successful in improving the capitalization ratios of the banks worldwide. In India, the banks were required by the Reserve Bank of India to maintain a higher capital-to-risk-weighted-assets ratio (CRAR) of 9 per cent. Basel II is an international business standard that requires financial institutions to maintain enough cash reserves to cover risks incurred by operations. The Basel accords are a series of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision (BSBS). Basel II also requires companies to publish both the details of risky investments and risk management practices. The full title of the accord is Basel II: The International Convergence of Capital Measurement and Capital Standards - A Revised Framework. The three essential requirements of Basel II are: 1) Mandating that capital allocations by institutional managers are more risk sensitive. 2) Separating credit risks from operational risks and quantifying both. 3) Reducing the scope or possibility of regulatory arbitrage by attempting to align the real or economic risk precisely with regulatory assessment. Basel II has resulted in the evolution of a number of strategies to allow banks to make risky investments, such as the subprime mortgage market. Higher risks assets are moved to unregulated parts of holding companies. Alternatively, the risk can be transferred directly to investors by securitization, the process of taking a non-liquid asset or groups of assets and transforming them into a security that can be traded on open markets.

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6) TOP FIVE BANKS IN WORLD
1. J.P. MORGAN CHASE AND CO The company with its head office in New York has been to make out a huge profit of $ 2.1 billion, in the first quarter of the year 2009.It has branches in 50 countries , including India.This has good experience in off-shore banking and financing in stock markets. 2 CREDIT SUISSE This 150 years old organization has its head office in Zurich, Switzerland. This is now the world Bank In the first Quarter of the year 2009, it got the profit of 200 crores Swiss Francs. 3. GOLDMAN SCATCHS This institution with its head office in New York, has made a profit of $3.23 per share in the first quarter of this year. This was established in 1869 And now it has branches in many important countries in the world, including India. 4. BLACK STONE This American Company provides services in managing properties and finances. Established in 1985, this company had suffered a huge loss of $82.7 crores in the last quarter of 2008. But it recovered so intelligently that in the first quarter of 2009. the loss came down to only $ 9.3 . It is sure that in later quarters of 2009, the insttuition has definitely made profits. 5 BANCO SYANTENDER This bank with its head office in Syantender in Spain, is one of the oldest banks in the world. Established in 1857

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7) TOP TEN BANKS IN INDIA
The Businessworld magazine in India published an India¶s Best Banks of 2009. The factors used to select these banks are growth, size, sustainability and some risk parameters1. 2. 3. 4. 5. 6. 7. 8. 9. 10. State Bank of India HDFC Bank Axis Bank Bank of India Punjab National Bank Bank of Baroda ICICI Bank Union Bank of India Citibank Canara Bank

The Top 10 Banks in India based on Assets1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Punjab National Bank Bank of India Bank of Baroda HDFC Bank Citibank Power Finance Corporation Limited Canara Bank Standard Chartered Bank State bank of India ICICI banks

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MICRO-ANALYSIS SARASWAT CO-OPERATIVE BANK Ltd.

The symbol takes off from our earlier logo and visualizes a hexagon. It is an attempt to appeal to younger and new customers without alienating the existing ones. The logo represents two caring hands in the shape of a hexagon. The upper hand is of golden yellow colour. Yellow is the colour of warmth, sunshine, cheer and happiness. Gold of wealth, prosperity and ever increasing value. They are the colours of the Sun and symbolize life, youth and harmony. The lower hand is burgundy red, the colour of excitement, strength and passion. It symbolizes aggressiveness and in the Indian context, Soubhagya.

8) COMPANY HISTORY:
"The Saraswat Co-operative Banking Society" was founded on 14th September 1918. Mr. J.K. Parulkar became its first Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first Secretary and Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were the people with deep and abiding ideals, faith, vision, optimism and entrepreneurial skills. The Society was initially set up to help families in distress. Its primary objective was to provide temporary accommodation to its members in eventualities such as weddings of dependent members of the family, repayment of debt and expenses of medical treatment etc. The Society was converted into a full-fledged Urban Co-operative Bank in the year 1933. The Bank, which was originally founded in 1918, i.e. close on the heels of the
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Russian Revolution, also witnessed as a Society and as Bank-the First World War, the Second World War, India's freedom Movement and the glorious chapter of postindependence India. During this cataclysmic cavalcade of history, the Bank as a financial institution and its members could not of course remain unaffected by the economic consequences of the major events. The Founder Members and the later-day management's of the Bank continued to demonstrate their unwavering faith in the destiny of the common man and the co-operative movement. By 1942, the Bank was fulfilling all the banking needs of its customers. The Bank had established five branches within the city of Mumbai and one each at Pune and Belgaum. The Bank has grown in stature, progressed in its social and economic objectives and produced an image of what an ideal bank should be. Resultantly, in the year 1977-78, the Bank's gross income crossed the Rs.3.00 Crore mark for the first time. Last two decades the Bank has witnessed a steady growth in the business. The bank has a network of 200 fully computerised branches covering six states viz. Maharashtra, Gujrat, Madhya Pradesh, Karnataka, Goa and Delhi. The Bank is also providing 24- hour service through ATM at 84 locations. In 1988 the bank was conferred with "Scheduled" status by Reserve Bank of India. The Bank is the first co-operative bank to provide Merchant Banking services. It got a permanent license to deal in foreign exchange in 1978. Presently the Bank is having correspondent relationship in 45 countries. The Beginning of the 21st Century has been a giant leap forward for the Bank. Bank chose a path of organic/inorganic growth and pace of growth accelerated .Bank's total business which was around Rs 4000 Crore in 2000 which almost tripled to Rs 15295 Crore in 2007. The Business of the Bank as on 31st March 2009 had crossed Rs 21000 Crores.

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9) CURRENT POSITION OF THE COMPANY:

Fig.: Growth of the bank at a glance

y Total business of the Bank (i.e. deposits plus advances) crossed the Rs. 21,000 crore mark for the first time to stand at Rs. 21,029.26 crore as on 31st March 2009 (from Rs. 18,879.13 crore as on 31st March 2008) i.e. a growth of Rs. 2,150.13 crore in absolute terms and of 11.39% in percentage terms, on a y-o-y basis. The deposits of your Bank increased from Rs. 11,430.82 crore as on 31st March 2008 to Rs. 12,918.85 crore, while advances rose from Rs. 7,448.31 crore to Rs. 8,110.41 crore in FY 2008-09. y The profit of the Bank (before tax and exceptional items) has increased from Rs. 231.84 crore to Rs. 315.61 crore i.e. a rise of 36.13%. The net profit after tax, which stood at Rs. 202.26 crore in FY 2007-08, rose to Rs. 241.29 crore after tax and before exceptional items for FY 2008-09 constituting a growth of Rs. 39.03 crore in absolute terms and 19.30 in percentage terms.

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y The profit from our foreign exchange business grew from Rs. 63.14 crore in FY 2007-08 to Rs. 65.09 crore in FY 2008-09. y This bank succeeded in maintaining zero net NPA status for the fifth consecutive year. y The number of branches of your bank, grew to 175. While the merger of erstwhile SICBL added ten branches, the merger of the erstwhile KMCBL resulted in an addition of fifteen branches. Your Bank opened seven new branches, one each at 1) New Delhi, 2)Tilak Nagar, Mumbai 3) Lokhandwala Complex, Mumbai, 4) Udupi, 5) Alibaug, 6)Kudal and 7) Sawantwadi. y The first state-of-the-art SME focussed Branch of your Bank was opened at Vikhroli (West), Mumbai, on 27th April 2009. The second SME focussed branch was opened at Panjim, Goa on 9th May 2009. Both the branches are specifically meant to cater to Small and Medium Enterprises. y Capital to Risk Asset Ratio (CRAR), which is known as capital adequacy ratio, improved from 10.85% for FY 2007-08 to 10.92% for FY 2008-09 even after absorbing losses of the two merged banks. y Net profit per employee increased from Rs. 7.14 lakhs for FY 2007-08 to Rs. 7.26 lakhs for FY 2008-09. The productivity per employee also improved from Rs. 6.66 crore to Rs. 7.24 crore during the year 2008-2009 y This bank acquired two weak co-operative banks viz. the South Indian Co-operative Bank Ltd. and the Kolhapur Maratha Co-operative Bank Ltd. y Peer level NET level comparison: The following table gives the net profit earned by some select schedule commercial banks in the private sector and also in the public sector. It clearly shows that the Bank¶s profit stands out in as much as the total business (Deposits plus Advances) of all the other banks. Name of the Bank Total Business (Rs in Crore) Indusind Bank ING Vysa Bank South Indian Bank 37,880 41,341 32,143 Net Profit (Rs in crore) 148.34 188.80 194.75

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Name of the Bank

Total Business (Rs in Crore)

Net Profit (Rs in crore) 210.79 262.48 266.70 276.09 278.92 303.84 336.91 375.24

Saraswat Bank Vijaya Bank Karnataka Bank Kotak Mahindra Bank State Bank Of Indore Yes Bank State Bank Of Mysore Bank of Maharashtra

21,029 54,535 32,143 32,270 50,579 28,572 55,268 87,072

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10) FINANCIAL ANALYSIS AND STRATEGIES:
Financial Accounting is a process of systematic recording of business transactions in the various books accounts maintained by organization with the ultimate intention of preparing financial statements there from. Financial accounting ultimately aims at preparing financial statements which are basically in two forms: y Profit and loss statement is a period statement and related to curtained period, usually one year. This tells about the results of operations, either profit or loss, arising out of the conduct of business operations during that period y Balance sheet which is a potion statement and relates to a particular point of time. This tells about the various properties held by the business (termed as Assets) and obligations accepted by the business (termed as Liabilities) as on particular date. Balance Sheet: The purpose of preparing the balance sheet is to disclose financial status of an organization in the form of assets and liabilities at a given point of time. Liabilities: Credits balances in all the personal and real accounts appear on liabilities side. The following items may appear on the liabilities side: y Capital: Capital Indicates the amount of funds contributes by the owner of business to requirement of fund of business. Similarly, any amount of profit earned in past which is not distributed to the owner also belongs to owner and become a part of the business. y Long term liabilities: This indicates the liabilities which are to be paid off over long period of span of time say 5 to 10 years. In practical circumstances, it may consists of longterm loan borrowed from a bank and financial institutes. y Currents liabilities: This indicates the liabilities which are suppose to be paid off which a very short span of time say one year. In practical circumstances, it consist Sundry creditors, Advances received from customer, Outstanding expenses, Income received in advanced, Liability taxes etc.

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Capital & Liabilities Capital

Sub liabilities Authorized Capital Individual & Societies

Rs. In Crores 7.12

Reserve Funds & Other Reserves

Building Funds Investment General Reserve Special Reserve

101.707

Bank Deposits

Central Co-op Banks Saving Banks Current Deposits

1143.08

Borrowing

Foreign currency Overdraft From Bank Investment Interest on Loans & Advances

93.92

Other liabilities

Branch Adjustment Bills Receivable Interest Payable Bills Payable Sundries

210.72

Profit Earned Past i.e. In 2007. TOTAL 1576.897

20.35

Assets: Debit balances in all the personal and real accounts appear on assets side. Following items may appear on assets side:

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y Fixed assets: Fixed assets indicate the value of infrastructure properties acquired by the business where the benefit received over long period of time. Fixed assets are land, building, machinery, furniture vehicles, and computer. y Investments: This indicates the amounts of funds invested by the organization outside the business.
y Current assets: Current assets are the assets which are likely to be converted in the form

of cash of likely to be consumed during the normal operating cycle of a business within a very short span time say one year. Current assets are stocks, sundry debtors, cash & bank balances, prepaid expenses. Balance Sheet As At 31st March, 2008 Properties & Assets Properties Sub Assets Land Building Work-in-Progress Plant & Machinery Computers Furniture & Fixture Capital Cash Balances with Banks Investment Shares investment Mutual Funds Govt. Securities Members Welfare Funds Advances Short Term Advances Medium Term Advances Long Term Advances Other Assets Interest Receivable Computer Software Losses 227.9 744.83 435 155.44 Rs. In Crores 13.707

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Properties & Assets

Sub Assets Non Banking Assets Bills Receivable

Rs. In Crores

TOTAL

1576.88

Profit and Loss accounts: A profit and Loss account is prepared to disclose the results of operation of the business transaction during certain duration of time. Accounts may have following four components: y Manufacturing accounts: This part of profit and loss accounts discloses the results of manufacturing operations carried out by the organization. The final results in terms of manufacturing accounts is a cost of production incurred by the organization. y Trading accounts: This part of profit and loss accounts discloses the results of trading operations carried by organization. The final results in terms of Gross Profit earned by the organization. y Profit and Loss accounts: This part of profit and loss accounts discloses the final results of business transactions of the organization. The final results in terms of Net profit earned by organization. y Profit and Loss appropriation accounts: This part of profit and loss accounts which mainly applicable to company form of organization, discloses the manner in which the net profit earned by the organization is appropriated. The amounts of profit not appropriated or retained transferred to reserves and surplus in balances sheet. PERFORMANCE HIGHLIGHTS FOR THE YEAR ENDED March, 2009(RS. IN CRORES) Particulars Year ended 31.03.2008 audited Total Income 1177.59 Year ended 31.03.2009 audited 1499.2

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Particulars

Year ended 31.03.2008 audited

Year ended 31.03.2009 audited 1174.56 325.36 9.75 315.61

Total Expenditure Gross profit Provisions Operating profit before tax Income Taxes Net Profit

930.81 246.78 14.94 231.84

29.58 202.26

74.32 241.29

10.1) Maximizing CASA deposits: A sharp focus on reduction in costs has become priority No. 1 for the Bank. On the liability side, the cost advantage will be available to the Bank, only if the Bank makes rapid strides in mobilization of Current Accounts and Savings Accounts (CASA). Major banks in the country have around 35% to 45% CASA deposits, while this bank has been hitting only the 22% to 30% range in CASA deposits. As CASA deposits carry an average low level of interest, the average cost of funds (i.e. CASA Deposits + Term Deposits) comes down. We have repeatedly impressed on our staff the need to mobilize CASA deposits aggressively. 10.2) Reduction in NPA: To bring down the Gross NPA level as also to ensure that substantial new NPAs are not added, branches were asked to speed up efforts for recovery in respect of overdue accounts with them. The drive for reduction in NPAs has been hugely successful under the leadership of Shri P. G. Kamath, Chief General Manager.

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10.3) Marketing: Business Process Reengineering (BPR) initiative primary objective of this initiative is to convert the branches into sales and service outfits. India is a huge banking market but the penetration of Indian Banking is thus one of the lowest in the world. Also a large number of our branches are functional in Maharashtra State, which has a huge banking business market of around Rs. 17,00,000/- crore (with aggregate bank deposits of Rs. 8,57,771 crore and gross credit of Rs. 8,34,701 crore in September 2008). Of these Rs. 17,00,000 crore, we at Saraswat Bank have a business stake of only Rs. 20,000 crore, which is a miniscule of merely 1.2% share in the total banking business in the State of Maharashtra. This provides a huge opportunity to banks including your Bank. In fact, it is on the basis of these statistics that the bank has planned to do a business of Rs.1,00,000 crore by 2021 under Dr. Adarkar Mission IV of the Bank. All the employees in the branches are being trained, equipped and instructed to take extra efforts for marketing all the products and services of the Bank.

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11) SWOT ANALYSIS:
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. STRENGTH: It specifies the attributes of the person or company that are helpful to achieve the objective(s). y Saraswat Bank is No. 1 amongst the 1,700 UCBs in the Urban Cooperative Banking Sector in India with over 90 years of cumulative banking experience. y High standard regulatory environment. y Flexible work permit system and good quality staff offering personal client service. y Bank has implemented Core Banking Solution (CBS) in the Bank. This solution primarily aims at having a unified customer approach. y Bank is a member of the Credit Information Bureau India Ltd. (CIBIL). CIBIL is India¶s first credit information bureau and is a repository of factual information on the credit history and repayment records of millions of commercial and individual borrowers. WEAKNESS: y Refusal to dilute stake in PSU banks: The government has refused to dilute its stake in PSU banks below 51% thus choking the headroom available to these banks for raining equity capital. y Lack of competitive differential with other offshore centres y Rigid legislation that inhibits business development

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OPPORTUNITY: External conditions that are helpful to achieving the objective(s). y Maharashtra State has a huge banking business market of around Rs. 17,00,000/- crore. Of these Rs. 17,00,000 crore, Saraswat Bank has a business stake of only Rs. 20,000 crore, which is a miniscule of merely 1.2% share in the total banking business in the State of Maharashtra. This provides a huge opportunity to the bank. y Saraswat Bank does 0.3% to 0.4% of the nation¶s banking business. In India today, 60% of the population do not have access to a banking product; 80% of the population do not have access to an insurance product and 98% of the population do not have access to a stock market product. Thus, there is tremendous untapped growth potential in the Indian subcontinent. THREATS: y Rise in inflation figures which would lead to increase in interest rates. y Increase in the number of foreign players would pose a threat to the PSB as well as the private players. y Anti-offshore regulations in foreign target markets restricting the development of products and new markets. y Downsizing and reduction in banking operations in favour of rival jurisdictions. y Outsourcing to cheaper jurisdictions y Subsequent impact on rest of finance sector ecosystem

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12) SERVICES AND PRODUCT OFFERED BY SARASWAT BANK
It is our earnest Endeavour to offer suite of new and competitive financial products and services. We have for this purpose tied up with various insurance companies. The details of tie-up and products offered are given below: LIFE INSURANCE : We are the Corporate Agents for the distribution of Life Insurance products, of M/S HDFC Standard Life Insurance Co Ltd. Under this tieup arrangement, we offer following life insurance products: Protection Plans Protection Plans help to shield your family from uncertainties in life due to financial losses in terms of loss of income that may dawn upon them incase of your untimely demise or critical illness. Protection Plans go a long way in ensuring your family¶s financial independence in the event of your unfortunate demise or critical illness. They are all the more important if you are the chief wage earner in your family. No matter how much you have saved or invested over the years, sudden eventualities, such as death or critical illness, always tend to affect your family financially apart from the huge emotional loss. Children¶s Plan Children¶s Plans help to save, so that you can fulfill your child¶s dreams and aspirations. These plans go a long way in securing your child¶s future by financing the key milestones in their lives even if you are no longer around to oversee them. Children¶s Plans help you save steadily over the long term so that you can secure your child¶s future needs, be it higher education, marriage or anything else. A small sum invested by you regularly can help you build a decent corpus over a period of time and go a long way in providing your child a secured financial future alongwith.

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Retirement Plans Retirement Plans provide you with financial security so that when your professional income starts to ebb, you can still live with pride without compromising on your living standards. By providing you a tool to accumulate and invest your savings, these plans give you a lump sum on retirement, which is then used to get regular income through an annuity plan. Given the high cost of living and rising inflation, employer pensions alone are not sufficient. Pension planning has therefore become critical in today's world. Savings and Investment Plans You have always given your family the very best. And there is no reason why they shouldn¶t get the very best in the future too. As a judicious family man, your priority is to secure the well-being of those who depend on you. Not just for today, but also in the long term. More importantly, you have to ensure that your family¶s future expenses are taken care, even if something unfortunate were to happen to you. Our Savings & Investment Plans provide you the assurance of lump sum funds for you and your family¶s future expenses. While providing an excellent savings tool for your short term and long term financial goals, these plans also assure your family a certain sum by way of an insurance . Health Plans Health plans give you the financial security to meet health related contingencies. Due to changing lifestyles, health issues have acquired completely new dimensions becoming more complex in nature. It becomes imperative then to have a health plan in place, which will ensure that no matter how critical your illness is, it does not impact your financial independence. EASY PAY: Here is one more exciting facility the Bank has offered to relieve its customers, our esteemed client, from spending your valuable time standing in a queue for routine utility bill payments.
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All you have to do is to walk into any of our branch and register yourself under : Easy Pay" scheme for all your recurring utility bill payments such as Telephone, Electricity Bills, Cellular Phone Bills, Insurance Premium & many more. Once you are registered all your future bills will be paid automatically through the bank account with us.

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13) 7 P¶s OF MARKETING:
Basically, the concept of Marketing is given by McCarthy who has classified ³Marketing Mix´ tools of four broad kinds called 4 P's and they are as follows y Product y Price y Promotion y Place y People y Process y Physical Evidance These marketing mix tools are used by the marketers to influenc their trade channels and final consumers. The Saraswat co-operative banks 4P's criteria is followed below 13.1) Product y Sarswat co-operative bank is No. 1 amongst the 1,700 UCBs in the Urban Co-operative Banking Sector in India. y The fact remains that we do 0.3% to 0.4% to nation's banking business. y A Sarswat Co-operative Bank has special Product Development Department which is been seen by Shri M.S.Vaidya, Dy.General Manager. y The product Development department has initiated into all these areas o Products and their attributes. o Unique Selling Propositions of our Products. o Marketing positions of our products. o Promotional imperatives. o Value addition ingredients of our products and their enrichment. y This helps the bank to process of redefining and refashioning our existing products and creating new products. y This helps to maintain realtionships i.e helps to maintain CMR
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13.2) Place y The bank has adopted the policies of inorganic growth since 2006 for increasing its branch outlets y From 2009 the bank has been pursuing a mix of inorganic and organic growth for branch expansion purposes. y The bank has adopted the cluster based approach. y Instead of having an isolated branch, they have 4-5 branches in a far off area. y This approach has enabled the bank to cluster presence in western Maharashtra, Goa and Karnataka. y The bank has planned under Dr.Adarkar Mission 2, to open 70 more branches by 31st March,2011 y The is following the mantra of one branch in every 15 days in programme called 'Ashwamedh' 13.3) Promotion y Promotion of any brand is very necessary; this helps the marketer as well as customer to understand each other well. y The Sarswat Co-operative bank has appointed Shri Dilip Prabhavalkar, veteran artist as their Brand Ambassador y This has heed the bank to achieve and promote heights of success in their business y To attract the young generation the bank has appointed a junior brand ambassador to Ms. Shalmali Sukthankar, budding artist. y From last five years the bank has encapsulated and expressed our uniqueness to the customers that the bank is having the "Ability of the Big and Agility of the Small" 13.4) Pricing y In any service industry, cost leadership is critical to the long term success of the organization. y The bank has to compete with other banks on the basis of total reduction of all economic and unwarranted expenditures and also to control costs in all areas.

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y The bank initiatives are as follows o Optimum utilization of the available resources of he bank. o Streamlining/Re-engineering various procedures in the bank, thus improving customer service. y The bank has sustained work of the income and cost council, which helps the bank to offer services to the customers with lower intermediations costs. 13.5) People During the FY 2008-09, a total of 2,225 employees, consisting of 1,058 from management and 1,167 from non-management people working in Saraswat Bank. Today Saraswat Bank have 250 branches, (i.e. 70 more branches by 31st March, 2011),

13.6) Process y Standardization: Bank has got standardized procedures for typical transactions. This is because of the rules they are subject to. Besides this, each of the branch has its standard forms, documentations etc. Standardization saves a lot of time behind individual transaction. y Customization: There are specialty counters at each branch to deal with customers of a particular scheme. Besides this the customers can select their deposit period among the available alternatives. y Number of steps: numbers of steps are usually specified and a specific pattern is followed to minimize time taken. y Simplicity: Banks various functions are segregated. Separate counters exist with clear indication. Thus a customer wanting to deposit money goes to µdeposits¶ counter and does not mingle elsewhere. This makes procedures not only simple but consume less time. Besides instruction boards in national boards in national and regional language help the customers further.

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13.7) Physical Evidence : Internet & Web: Web :www.saraswatbank.com Email : corporateoffice@saraswatbank.com BUSINESS CARD :

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14) HR POLICY AND ORGANIZATIONAL STRUCTURE:
Internal Capability Building Measures (ICBMs): The bank pursued the recruitment and promotional policy during the year 2008-2009 as per Internal Capability Building Measures (ICBM). Promotional Exercise: The Bank had undertaken promotional exercise in the year 2002 when organizational restructuring was done as per the recommendations of M/s Seven S Associates. The Bank has been undertaking expansion of branch network and has been implementing BPR exercise too, which is resulting in transforming the organization. In order to cater to the growing expanse of the Bank and the need for managerial positions in the wake of the same, a promotional exercise to various cadres was conducted. A total of 385 employees were promoted to various cadres. All promoted personnel have been suitably deployed at various branches (including the branches of the merged banks) and/or departments. Training: During the FY 2008-09, a total of 2,225 employees, consisting of 1,058 from management and 1,167 from non-management cadre attended 98 training programmes conducted at the µStaff Learning Centre¶ at Vashi, Navi Mumbai, as well as at various branch locations. A special emphasis was given on training of new recruits and employees of erstwhile banks merged with this Bank at their respective locations as well as at the Staff Learning Centre at Vashi, where the focus was on validation process, know the Bank, the internal software package OMNI and the retail products of the bank. Customer Service: The bank has adopted the following codes based on the Standard codes documented by Indian Bank¶s Association: y Customer Fair Practice Code y Cheque Collection Code

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y Bankers¶ Lender Liability Code y Compensation Policy Saraswat Bank has become a member of the Banking Codes and Standards Board of India. This board ensures that the Codes so defined by the Bank are implemented in letter and spirit. For measuring customer satisfaction, a bank- wide Customer Service Audit has been planned to be commissioned by the Board in the ensuing year. Industrial Relation: The Bank¶s human resources have been organised under the two representative bodies viz. the Officers¶ Association and the Employees¶ Union. The industrial relations with both these organizations have been very cordial with joint discussions being held with the Association/the Union for redressing employee issues in an amicable way. Voluntary Retirement Scheme (VRS): This year, the Bank launched the VRS for its employees. Around 236 employees from your Bank (excluding those of merged banks) opted for VRS under the said scheme. Besides, 83 employees of the erstwhile Nasik Peoples Cooperative Bank Ltd., 43 employees of erstwhile Annasaheb Karale Janata Sahakari Bank Ltd. and at around 100 employees of the erstwhile Murgharajendra Sahakari Bank Ltd. (i.e. in all 462 employees) opted for VRS and have been relieved under the Schemes. The Bank acknowledges with gratitude the sincerity and hard work put in by all these employees during their tenure with the Bank and wishes the retired employees an eventful and healthy post retirement life.

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15) CSR (CORPORATE SOCIAL RESPONSIBILITIES):
Corporate Social Responsibility (CSR) is not a new fashion but it is an old creed for this organization. The founders and their successors understood and underscored the principle that a cooperative institution must always stay connected with the needs and aspirations of the society at large and hence CSR constitutes the umbilical cord that connects this bank to the society. The laudable gesture of late Wamanrao Varde and his associates on the Board then in spontaneously responding to the grave scarcity of foodgrains during the Second World War and in starting on behalf of your Bank a ration shop at Girgaum in Mumbai to make available foodgrains to all, is a resplendent example of the early awareness of CSR in this Bank. This was so because all members of the community always understood that a cooperative institution must always have a social purpose. Bank thereafter also started scholarships and apprenticeships for deserving students and through that process built the careers of several young men. The Bank has been providing financial assistance to many social, educational and medical institutions by way of grants every year from its funds. From time to time the Board of Directors responded to national and natural calamities like flood, famine, earthquake etc. Following are the few initiatives both at macro and micro level, which spell out the bank¶s vision of Corporate Social Responsibility (CSR): As a macro level expression of CSR, the bank in association with Maharashtra Times created an intellectual platform entitled "Shikhar Maharashtra" with the objective of researching into, debating and finding ways and means to deal with the many stubborn economic and social issues that Maharashtra faces today. The inauguration of this forum of 'Shikhar Maharashtra" will pave the way for bringing to the table the daunting problems that our State faces today. It is proposed that at an interval of every three months, a major issue facing Maharashtra such as farmers' suicides, malnutrition, scarcity of drinking water, famine and hunger, etc. and thereafter recommendations are made to the Government on the remedies that may ameliorate the situation and pursued thereafter.

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16) AWARDS AND RECOGNITIONS:
Bank participated in the study conducted jointly by the Great Places to Work Institute India and the Economic Times, to distinguish a good work place from a great one. Based on the study of over 373 participants spanning a multitude of sectors, the top 50 best workplaces were elected. We are happy to announce that your Bank has been adjudged and included in ³India¶s Best Companies to work for - Year 2009" and in the banking industry vertical, your Bank is placed fourth after American Express, Kotak Mahindra Bank and HDFC Ltd. The citation reads as under: ³The Saraswat Co-operative Bank Ltd. Ranked 4th in Banking & Credit Services for inspiring trust among your people, for instilling pride in them, for creating an Environment within the workplace that promotes camaraderie and for many other reasons that makes your organization one of the India¶s.´

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CONCLUSION
The market is seeing discontinuous growth driven by new products and services that include opportunities in credit cards, consumer finance and wealth management on the retail side, and in fee-based income and investment banking on the wholesale banking side.  Given the demographic shifts resulting from changes in age profile and household income, consumers will increasingly demand enhanced institutional capabilities and service levels from banks.  With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be on rise.  Reserve Bank of India (RBI) has approved a proposal from the government to amend the Banking Regulation Act to permit banks to trade in commodities and commodity derivatives.

SUGGESTIONS
In wake of this, old private sector banks also have the need to fundamentally strengthen skill levels.  even more imperative is their need to examine their participation in the Indian banking sector and their ability to remain independent in the light of the discontinuities in the sector.  Accelerate the creation of world class supporting infrastructure (e.g., payments, asset reconstruction companies (ARCs), credit bureaus, back-office utilities) to help the banking sector focus on core activities.  Slower growth in retail credit and narrow spreads spells better fortune for banks that have higher concentration of corporate assets and low cost deposits along with good asset quality.

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Saraswat Bank perfectly fits into this matrix.  Sustenance of a healthy current and savings account mix and little deterioration in asset quality also reiterates the operating efficiency of the bank.  Being the largest Urban Co-operative bank, Saraswat Bank is also one of the lead contenders to initiate the process of building up scalability by acquiring smaller banks in the PSU and private sectors.  Besides offering the opportunity to cater to borrowing needs of some of the largest corporate in the country, the consolidation process will also bring about economies of scale for the bank.  The banking today is re-defined and re-engineered with the use of Information Technology and it is sure that the future of banking will offer more sophisticated services to the customers with the continuous product and process innovations.  Thus, there is a paradigm shift from the seller¶s market to buyer¶s market in the industry and finally it affected at the bankers level to change their approach from ³conventional banking to convenience banking´ and ³mass banking to class banking´. The shift has also increased the degree of accessibility of a common man to bank for his variety of needs and requirements.  Also, the bank¶s healthy ROA (Return of Average Asset) and CRAR (Capital to Risk Asset Ratio) is a matter of comfort. Having said that, the bank¶s market share of merely 1.2% in the total banking business in the State of Maharashtra is our lingering concern. We have a positive view on the bank with respect to its future growth prospects.

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BIBLIOGRAPHY:
1. History of Banking in India: http://finance.indiamart.com/investment_in_india/banking_in_india.html http://www.bseindia.com/downloads/BankingSector.pdf
2. Banking terminology:

http://www.meridianadvantagemember.com/fileuploads/Bank_Terminology.pdf 3. Mergers and Acquisitions: http://www.economywatch.com/mergers-acquisitions/international/banking-sector.html http://finance.mapsofworld.com/merger-acquisition/india.html 4. Current position and financial analysis of the bank: Saraswat Bank¶s Annual Report for the year 2008 and 2009 5. History of the banks and Corporate Social Responsibilities: http://www.saraswatbank.com/

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