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ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK

MACRO ANALYSIS CHAPTER 1 1 INTRODUCTION
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:  Early phase from 1786 to 1969 of Indian Banks  Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.  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, Canada 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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ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK

The following are the steps taken in chronological order by the Government of India to Regulate Banking Institutions in the Country:  1949: Enactment of Banking Regulation Act.  1955: Nationalization of State Bank of India.  1959: Nationalization of SBI subsidiaries.  1961: Insurance cover extended to deposits.  1969: Nationalization of 14 major banks.  1971: Creation of credit guarantee corporation.  1975: Creation of regional rural banks.  1980: Nationalization of seven banks with deposits over 200 crore. The nationalization of banks in India was 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 11,000%. In1991, 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:  Scheduled Commercial Banks in India  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), cooperative banks and regional rural banks. "Scheduled banks in India" means the 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
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approximately 800% in deposits and advances took a huge jump by

ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK

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".

LIST OF MAJOR SCHEDULED URBAN CO-OPERATIVE BANKS 1. Saraswat Co-Op. Bank Limited, MUMBAI 2. Abhyudaya Co-Op. Bank Limited, MUMBAI 3. Bombay Mercantile Co-Op. Bank Limited. MUMBAI 4. Citizen Credit Coop. Bank Ltd. Dadar, MUMBAI 5. Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. HYDERABAD 6. Cosmos Coop. Urban Bank Ltd. MUMBAI 7. Janakalyan Sahakari Bank Ltd., Bombay MUMBAI 8. Shamrao Vithal Co op Bank Ltd. MUMBAI 9. Punjab & Maharashtra Coop Bank Ltd. MUMBAI 10. Charminar Coop.Urban Bank Ltd. HYDERABAD 11. Dombivli Nagari Sahakari Bank Ltd. MUMBAI 12. Goa Urban Co-Op. Bank Limited. MUMBAI 13. Kapole Cooperative Bank Ltd., Bombay MUMBAI 14. Thane Janata Sahakari Bank Ltd. NAGPUR 15. Bharat Co-Operative Bank (Mumbai) Ltd. MUMBAI And many more.

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ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK

CHAPTER 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 „anytime, anywhere was 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.  Internet Banking  Phone Banking/Tele-Banking  Mobile Banking

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ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK

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 ebanking 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 centers 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.

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financial institution-to-consumer versus commercial institution-to-consumer for mobile banking and payments. incorrectly. credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). Mobile Banking involves using mobile devices gain to access financial services. m-banking) is a term used for performing balance checks. Bill payment is not considered a form of mobile payment because it does not occur in real time. downloaded to the mobile device. Mobile payments on the other hand may be defined as the use of mobile devices to pay for goods or services either at the point of purchase or remotely.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 2. account transactions. used interchangeably. Apple‟s initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs. respectively. payments. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999. the first European banks started to offer mobile banking on this platform to their customers. The two terms are differentiated by their service provider-to-consumer relationship. Page | 6 . The earliest mobile banking services were offered over SMS. Mobile banking has until recently (2010) most often been performed via SMS or the Mobile Web.3 Mobile Banking: (also known as M-Banking. called apps. Mobile banking and Mobile payments are often. a service known as SMS banking.

Page | 7 . Private 3. Many countries adopted a series of financial sector liberalization measures in the late1980s and early 1990sthat included interest rate liberalization.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 3 MARKET STRUCTURE 3. Domestic banks were given access to cheap loans from abroad and allocated those resources to domestic production sectors. entry deregulations. Off. mass-affluent proposition targeting UK expatriates. there is no genuinely uniqueness in Man banking products. The Main banking sector can be divided into five distinct sub-sectors: 1. the Man banking sector offers a mainly retail. Its chief revenue stream is derived from international personal client business referred from UK and International Group offices.Retail 4.  Banking facilities on the range from basic current and deposit account facilities to complex wealth management structures. Clearing 2. the timing of financial sector liberalization coincided with that of capital account liberalization. Savings 5. reduction of reserve requirements and removal of credit allocation. This is because sound financial systems serve as an Important channel for achieving economic growth through the mobilization of financial savings. In many cases.1 GLOBALIZATION Strengthening financial systems has been one of the central issues facing emerging markets and developing economies. putting them to productive use and transforming various risks. However. 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.  In a global context.

lack of institutional support infrastructure. periodic instances of threatened the stability of the system Structural weaknesses such as fragmented industry structure. asset quality and profitability with other regional banks over the last few years. Page | 8 . While bank lending has been a significant driver of GDP growth and employment. Further.2 INDIAN BANKING MARKET Indian banks have compared favorably on growth. Policy makers have made some notable changes in policy and regulation to help strengthen the sector. However. 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. These changes include strengthening prudential norms.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 3. foreign exchange transactions and leasing activities. the inability of bank managements (with some notable exceptions) to improve capital allocation. restrictive labour laws. weak corporate governance and ineffective regulations beyond Scheduled Commercial Banks (SCBs). the cost of intermediation remains high and bank penetration is limited to only a few customer segments and geographies. 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. unless addressed. enhancing the payments system and integrating regulations between commercial and co-operative banks. could seriously weaken the health of the sector. increase the productivity of their service platforms and improve the performance ethic in their organizations could seriously affect future performance. restrictions on capital availability and deployment.

This is evident from the fact that the second-half GDP growth was only 5. the global financial crisis interrupted the growth momentum in India.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 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. There was clear moderation in growth by the third quarter of 2008-09.0% for the previous financial year 2007-08.8% for the first half of the year and 9.8%. Page | 9 . This happened mainly owing to:  Our high savings rate at around 34% to 35% of GDP  Our lesser dependence on the external sector  Sustained and strong domestic demand particularly in India‟s semi-urban and rural sector  Strong regulatory oversight and a well-calibrated monetary policy  Our sumptuous foreign exchange reserves  A gradual and lower convertibility on capital account Despite the strong prevalence of domestic sources of growth. down from 7.

Against this backdrop. As a result. procyclical tendencies of regulatory frame work. it would not be out of place to start with a bird‟s eye view of the global financial crisis to put the recent developments in proper perspective. world stock markets fell. laxity in oversight of shadow banking entities. started to show its severe effects from the latter part of 2007 and into 2008. financial innovation outpacing regulation and weaknesses in accounting and disclosures.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK GLOBAL FINANCIAL CRISIS As we are passing through difficult but challenging times as far as the financial sector is concerned. there has been an international endeavor to strengthen regulation of banks and financial institutions and bring about a greater element of convergence therein. I thought of sharing with you some of the issues which are currently engaging the attention of the regulators around the world including the Reserve Bank of India for ensuring the stability and resilience of the financial sector. Some of the more salient weaknesses identified as drivers of the turmoil include lack of oversight of systemic risk. Under its impact. Page | 10 . Though. it has been analyzed threadbare in different for a. Fourthly I will touch upon certain issues which are specific to Chhattisgarh before concluding my speech. over-reliance on credit rating agencies. firstly. I would analyze the likely impact of the evolving convergence in terms of implementing the said-agenda. shortcomings in risk management practices. I would outline the drivers for changing regulation of banks. I would briefly present the global efforts aimed at formulating a regulatory reform agenda. though brewing for a while. The global financial crisis. Thirdly. There has been a broad consensus that regulatory failures are among the causes underlying the recent global financial crises. Secondly. large financial institutions collapsed or were bought out and Governments in most developed countries had to use public funds to formulate rescue packages to bail out their financial systems.

Following are the important terms used in BANKING SECTOR:  BANK RATE  REPO RATE  REVERSE REPO RATE  CASH RESERVE RATIO  STATUTORY LIQUIDITY RATIO 4. Page | 11 . Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. It is the rate at which RBI lends money to other banks or financial institutions or commercial banks. which central bank uses for short-term purposes. The bank rate policy seeks to affect both the cost and availability of credit. 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. 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. Bank Rate is a tool.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 4 BANKING TERMINOLGY There are several terminologies being used in day-to-day banking process. then all banks will also hike their own lending rates such as deposit rates and prime lending rates etc. If bank rate is increased by RBI.1 BANK RATEBank Rate is the oldest instrument of monetary policy. In other words it is the rate of interest which is charged by RBI on its advances to commercial banks.

4.S) and commercial banks involve in repo transactions but not restricted to these two. This interest rate is called „repo rate‟. banks. usually bonds to Reserve Bank with an agreement to repurchase the same at a predetermined rate and date. The lender of securities is said to be doing repo whereas the lender of cash is said to be doing „reverse repo‟. Higher interest rates have the effect of reducing spending.3 REVERSR REPO RATEA repo or repurchase Agreement is an instrument of money market. the banks which borrow money from Reserve Bank to meet short term needs have to sell securities. Page | 12 . If the repo rate for commercial banks increases they will pass this onto their own consumers.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 4. Therefore.e.2 REPO RATERepo rate is the rate at which our banks borrow rupees from RBI. It is known as repurchase rate. If increases the repo rate it will increase general interest rates throughout the economy. Whenever the banks have any shortage of funds they can borrow it from RBI. financial institutes can also participate in repurchase agreement. RBI wants to make it more expensive for the banks to borrow money. Repo is a collateralized lending i. This rate is usually less than the interest rate on bonds as the borrowing is collateral. When the repo rate increases. it increases the repo rate. Reserve bank charges some interest rate on the cash borrowed by banks. similarly. In this way for the lender of the cash (usually Reserve Bank) the securities sold by the borrower are the collateral against default risk and for the borrower of cash (usually commercial banks) cash received from the lender is the collateral. investment and economic growth. borrowing from RBI becomes more expensive. Individuals. This will reduce inflationary pressures in the economy. Under repo transaction the borrower places with the lender certain acceptable securities against funds received and agree to reverse this transaction on a predetermined future date at agreed interest cost. it reduces the repo rate. if it wants to make it cheaper for banks to borrow money. we can say that in case. Usually reserve bank (federal bank in U. A reduction in the repo rate will help banks to get money at a cheaper rate.

inflation by tying the hands of the banks in lending money. but deposit such case with Reserve Bank of India (RBI) / currency chests. and thereby.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK In a reverse repo Reserve Bank borrows money from banks by lending securities. and if the cash reserve ratio is 9%. The interest paid by Reserve Bank in this case is called reverse repo rate.e. which is considered as equivalent to holding cash with themselves.4 CASH RESERVE RATIOThe Reserve Bank of India (Amendment) Bill. Borrower of funds is called as seller of repo and lender of funds is called as buyer of repo. actually Banks don‟t hold these as cash with themselves. when a bank‟s deposits increase by Rs100. Thus. The forward clean price of bonds is set at a level which is different from the spot clean price by adjusting the difference between repo rate and coupon earned on the security. the Reserve Bank. What is CRR (For Non Bankers): CRR means Cash Reserve Ratio. can prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate. in terms of Section 42(1) of the RBI Act. Increase in CRR means that banks have less funds available and money is sucked out of circulation. 4. but also enables RBI to control liquidity in the system. However. Thus we can say that this serves duel purposes i. having regard to the needs of securing the monetary stability in the country. Banks in India are required to hold a certain proportion of their deposits in the form of cash. it not only ensures that a portion of bank deposits is totally risk-free. [Before the enactment of this amendment. the banks will have to hold additional Rs 9 with RBI and Bank will be able to use only Rs 91 for investments and lending Page | 13 . RBI uses CRR either to drain excess liquidity or to release funds needed for the economy from time to time. Consequent upon amendment to sub-Section 42(1). 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. the Reserve Bank could prescribe CRR for scheduled banks between 3 per cent and 20 per cent of total of their demand and time liabilities]. When the term of the loan is for one day it is known as an overnight repo and if it is for more than one day it is called a term repo. 2006 has been enacted and has come into force with its gazette notification..

or gold or govt. it is a tool used by RBI to control liquidity in the banking system. Reserve Bank of India fixes the level of Statutory Liquidity Ratio. Therefore. • By determining Statutory Liquidity Ratio. Reserve Bank of India. Statutory Liquidity Ratio is determined and maintained by the Reserve Bank of India in order to control the expansion of bank credit.In India. Following this requirement.It regulates the credit growth in India The liabilities that the banks are liable to pay within one month's time. Thus.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK / credit purpose. approved securities before providing credit to the customers. Time Liabilities refer to the liabilities. the minimum limit of Statutory Liquidity Ratio that can be set by the Reserve Bank is 23% AS ON AUGUST 2012 Objectives of SLR: The main objectives for maintaining the Statutory Liquidity Ratio are the following: • Statutory Liquidity Ratio is maintained in order to control the expansion of Bank Credit. There are some statutory requirements for temporarily placing the money in Government Bonds. At present. compels the commercial banks to invest in government securities like government bonds. CRR). This power of RBI to reduce the lendable amount by increasing the CRR makes it an instrument in the hands of a central bank through which it can control the amount that banks lend. higher the ratio (i. By changing the level of Statutory Liquidity Ratio. are also considered as time liabilities. It is determined as percentage of total demand and percentage of time liabilities. due to completion of maturity period. Reserve bank of India can increase or decrease bank credit expansion. 4. • Statutory Liquidity Ratio in a way ensures the solvency of commercial banks. Page | 14 . cash or other approved securities. it is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold.5 STATUTORY LIQUIDITY RATIO– Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form of cash. which the commercial banks are liable to pay to the customers on there anytime demand. Thus. bond and shares of different companies. the lower is the amount that banks will be able to use for lending and investment. The maximum limit of SLR is 40% and minimum limit of SLR is 23%. in a way. we can say that it is ratio of cash and some other approved liabilities (deposits).e. Here by approved securities we mean. Reserve Bank of India always determines the percentage of Statutory Liquidity Ratio.

The defaulter bank pays penal interest at the rate of 3% per annum above the Bank Rate. But.E.00% 4.00% 8.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK If any Indian Bank fails to maintain the required level of Statutory Liquidity Ratio.00% 7. Reserve Bank of India. released by the Department of Banking Operations and Development. on the shortfall amount for that particular day.75% 23.F. according to the Circular. then the rate of penal interest can be increased to 5% per annum above the Bank Rate. TERMINOLOGY Bank Rate Repo Rate Reverse Repo rate Cash Reserve Ratio(CRR) Statutory Liquidity Ratio RATE 9.00% W. then it becomes liable to pay penalty to Reserve Bank of India. if the defaulter bank continues to default on the next working day. Gold and Government Securities (or Gilts) are included along with cash because they are highly liquid and safe assets. This restriction is imposed by RBI on banks to make funds available to customers on demand as soon as possible. 17/04/2012 17/04/2012 17/04/2012 10/03/2012 11/08/2012 Page | 15 .

2010.5%.50%. On balance. Page | 16 .  RBI has permitted well-managed and financially sound multi-state UCBs to set up onsite ATMs without prior approval of the RBI. going forward. Following are few guidelines directed by the RBI for the UCB sector:  RBI has asked Scheduled Co-operative Banks to draw the ALM structural Liquidity statement on a daily basis. SLR from25% to 24%. with the assumption of a normal monsoon. opening of new refinancing windows.  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. Therefore. While the domestic financial situation is improving. the Reserve Bank of India introduced a slew of measures since mid-September 2008. external financial environment will remain tight.  RBI has instructed large-sized and systemically important UCBs to apply capital charge for market risk with effect from 1st April. buyback of MSS securities. 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. 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. the GDP growth for FY 2009-10 is expected to be around 7% to 7. viz. investment demand will be at lower ebb.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 5 GOVERNMENT POLICIES In order to address the severe liquidity crunch. reduction in CRR from 9% to 5%. subject to certain criteria.

the banks can achieve significant growth in their operations and minimize their expenses to a considerable extent. 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. 3. Morgan Chase & Company.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK MERGERS AND ACQUISITIONS A large number of international and domestic banks all over the world are engaged in merger and acquisition activities.  The merger of Firstar Corporation with U. competition is reduced because merger eliminates competitors from the banking industry. this merger led to the creation of the Centurion Bank of Punjab with 235branches in different regions of India.S.P.P.  Merger between IDBI (Industrial Development bank of India) and its own subsidiary IDBI Bank. The mergers and acquisitions in the banking sector of India are overseen by the Reserve Bank of India (RBI). Inc.1 million (Rs.  The merger of Golden State Bancorp. The name of the newly formed company is Citigroup Inc  The merger of FleetBoston Financial Corporation with Bank of America Corporation. Another important advantage behind this kind of merger is that in this process. The deal was worth $ 174. The newly formed entity is Bank of America Corporation. They also try to enhance their customer base. Bancorp. Worth $82.6 billion in Indian currency). Through mergers and acquisitions in the banking sector. The name of the resultant entity is U. with Citigroup Inc.6 million (Rs.  Centurion Bank and Bank of Punjab.6 billion in Indian currency). Bancorp. the banks look for strategic benefits in the banking sector. Page | 17 . Following are some of the major mergers and acquisitions in the global and domestic banking sector:  The merger of Chase Manhattan Corporation with J.S. Morgan & Company. 7. The name of the new company formed as a result of the merger is J.

HDFC Bank 3. Citi Bank 8. Bank of Baroda 7. Canara Bank Page | 18 . IDBI bank 9. Bank 5.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 6 TOP TEN BANKS IN INDIA 1. Axis Bank 6. Bank of India 10. National bank 4. State Bank of India 2.

00 31.00 45.00 Page | 19 .026.00 29.747.210.00 34.00 43.No Bank Total Assets (in US $ millions) 1 2 3 4 5 6 7 8 9 10 State Bank of India ICICI Bank Limited Punjab National Bank Bank of Baroda Bank of India Canara Bank HDFC Bank Ltd IDBI Bank Ltd Union Bank of India Central Bank of India 256.124.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 10 THE TOP BANKS IN INDIA BASED ON ASSETS- S.600.169.000.00 49.598.432.777.00 94.00 44.00 36.

close on the heels of the Russian Revolution. the first Vice-Chairman.K. 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 and they encouraged the shareholders to save despite all odds.e.B. Warde. repayment of debt and expenses of medical treatment etc. the first Treasurer. which was originally founded in 1918. The Bank. the Second World War. paucities of all kinds and realities and stand by its members in distress as a solid bulwark of strength. vision. On 14th September 1918. These dedicated men in charge of the Society had a commendable sense of service and duty imbibed in them. also witnessed as a Society and as Bank-the First World War. The two wars in particular brought in their wake.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK MICRO ANALYSIS CHAPTER 7 HISTORY OF SARASWAT CO-OPERATIVE BANK The Bank has a very humble but a very inspiring beginning. Page | 20 . i. “The Saraswat Co-operative Banking Society" was founded. J. Mr. P. Thakur. our honorable founders inspire a sense of awe and respect in the Bank and amongst the shareholders. Even today. Mr. The Society was initially set up to help families in distress. The Bank has the unique distinction of being a witness to History. faith. The Society was converted into a full-fledged Urban Co-operative Bank in the year 1933. India's freedom Movement and the glorious chapter of post-independence India. Shivram Gopal Rajadhyaksha. Parulkar became its first Chairman. the Bank as a financial institution and its members could not of course remain unaffected by the economic consequences of the major events. Mr.N. These were the people with deep and abiding ideals. the first Secretary and Mr. During this cataclysmic cavalcade of history. N. optimism and entrepreneurial skills. Its objective was to provide temporary accommodation to its members in eventualities such as weddings of dependent members of the family.

Karnataka. reach a business level of Rs 50000 Crores by 2016 and Rs 100000 by 2018. The Bank is providing 24. 2012 Bank business had surpassed Rs 33000 Crores. In 2011 Bank was granted permission for All India Area of Operation by Reserve Bank of India. Maharashtra. The Bank has a network of 226 fully computerized branches as on 31st-Mar-2012 covering six states viz. As on 31st March. Merging seven coop Banks and then consciously nurturing them. Page | 21 . Madhya Pradesh. Gujarat. Bank tied up with VISA international for issuance of Debit Card. Bank has an an ambitious business expansion plan in place to have a presence in all major cities of the country. Bank has retained its coveted position as ZERO NET NPA Bank for the eighth successive year.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK Last two decades the Bank has witnessed a steady growth in the business and also taken several Strategic Business Initiatives like undertaking Business Process Reengineering initiative. Goa and Delhi.hour service through ATM at 147 locations.

All the additional data required is collected and accordingly the project is subjected to various boards.cibil. 1 crore and below Rs. www.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 8 RESEARCH METHODOLOGY For processing of Commercial Credit Proposals a proper research methodology is followed by the bank. which in turn helps to calculate the necessary ratios and compare it with previous year and also understand the future projections of the applicant firm. www. Secondary Data The secondary data is mainly obtained after proper acquirement of primary data and analysis is done based on it. Page | 22 . books and website which shows the necessary information for processing the proposals is the secondary type of data.in ii.5 crore is subjected to CENMAC (Central Management Committee) and if above Rs. Data Analysis: After getting all the necessary information the proposals can be analyzed and this helps in fulfilling the processing of the proposals. On receiving a particular request for credit the information or the data related is collected. The websites used mainly are as follows: i.5 crore is subjected to the board of directors.gov.mca. 7. If the applicant firm meets the necessary requirements then a customer meeting is arranged at factory / office where the books are verified and the site / factory is visited. The secondary data is used mostly to create a primary data. The proposal is recommended & sent to respective meeting. The required data collected from annual report.com These websites give the information about the Company Identification Number (CIN) & Directors Identification Number (DIN) and also whether the company is in existence and how its account is rated. The proposal if is below Rs. 7. 1 crore is subjected to Deputy Managing Director. if above Rs. The assessment of the proposals is done by the zonal head who decides whether it meets the banks requirements.

This helps the assessing officers in granting credit facilities to the applicant firm. The calculation of various ratios and the credit rating based upon it helps in interpretation. Page | 23 .ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK Interpretation: After analysis of the data the results are drawn upon.

08 21029.06 Page | 24 .2 WORKING FUNDS Working Funds (Rs in crores) 25000 20000 15000 10745.27 17071.13 23517.47 10000 5000 0 2007 2008 2009 2010 2011 13874.1 15622.26 27312.4 15000 10000 5000 0 2007 2008 2009 2010 2011 18879.82 19186.95 9.1 TOTAL BUSINESS Total Business (Rs in crores) 30000 25000 20000 15295.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 9 CURRENT POSITION OF THE COMPANY 9.

4 1130.95 1174.73 12918.49 9.85 11430.96 14266.3 OWN FUNDS Own Funds (Rs in crores) 1600 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011 1042.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 9.82 8924.37 1473.4 DEPOSITS Deposits (Rs in crores) 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 15800.24 1270.94 2007 2008 2009 2010 2011 Page | 25 .

35 11511.99 Page | 26 .41 9250.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 9.5 ADVANCES Advances (Rs in crores) 14000 12000 10000 8000 6000 4000 2000 0 2007 2008 2009 2010 2011 7448.46 8110.31 6370.

 Maharashtra State has a huge banking business market of around Rs. which is a miniscule of merely 1. Saraswat Bank has a business stake of only Rs.  Bank has implemented Core Banking Solution (CBS) in the Bank. who led a convention at Stanford University in the 1960sand 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).ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 9.  High standard regulatory environment. OPPORTUNITY External conditions that is helpful to achieving the objective(s).700 UCBs in the Urban Cooperative Banking Sector in India with over 90 years of cumulative banking experience. Of these Rs. 17. 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. 1 amongst the 1.  Bank is a member of the Credit Information Bureau India Ltd. Opportunities. 00. 17.000 crore. Page | 27 .000/crore. This provides a huge opportunity to the bank. Weaknesses.000 crore. (CIBIL).6 SWOT ANALYSIS SWOT analysis is a strategic planning method used to evaluate the Strengths. and Threats involved in a project or in a business venture.  Flexible work permit system and good quality staff offering personal client service. This solution primarily aims at having a unified customer approach.2% share in the total banking business in the State of Maharashtra. The technique is credited to Albert Humphrey. 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.00.  Saraswat Bank is No. 20.

In India today.  Increase in the number of foreign players would pose a threat to the PSB as well as the private players. 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. there is tremendous untapped growth potential in the Indian subcontinent.  Outsourcing to cheaper jurisdictions  Subsequent impact on rest of finance sector ecosystem Page | 28 .ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK  Saraswat Bank does 0.  Downsizing and reduction in banking operations in favour of rival jurisdictions.3% to 0. WEAKNESS  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.  Lack of competitive differential with other offshore centre‟s  Rigid legislation that inhibits business development THREAT  Rise in inflation figures which would lead to increase in interest rates.4% of the nation‟s banking business.  Anti-offshore regulations in foreign target markets restricting the development of products and new markets. 60%of the population do not have access to a banking product. Thus.

 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. either profit or loss. 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.  Currents liabilities: This indicates the liabilities which are suppose to be paid off which a very short span of time say one year. Liabilities: Credits balances in all the personal and real accounts appear on liabilities side. Page | 29 . Outstanding expenses. Financial accounting ultimately aims at preparing financial statements which are basically in two forms:  Profit and loss statement is a period statement and related to curtained period. The following items may appear on the liabilities side:  Capital: Capital Indicates the amount of funds contributes by the owner of business to requirement of fund of business. 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. it consist Sundry creditors. In practical circumstances. it may consists of long-term loan borrowed from a bank and financial institutes. In practical circumstances. Similarly. 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. Advances received from customer. usually one year. arising out of the conduct of business operations during that period  Balance sheet which is a potion statement and relates to a particular point of time. Liability taxes. This tells about the results of operations.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 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. Income received in advanced.

furniture vehicles. Kamath.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK Assets: Debit balances in all the personal and real accounts appear on assets side. G. Chief General Manager. As CASA deposits carry an average low level of interest. We have repeatedly impressed on our staff the need to mobilize CASA deposits aggressively. while your bank has been hitting only the 22% to 30% range in CASA deposits. machinery. 10.1 Maximizing CASA deposits A sharp focus on reduction in costs has become priority No. Major banks in the country have around 35% to 45% CASA deposits. CASA Deposits + Term Deposits)comes down.  Investments: This indicates the amounts of funds invested by the organization outside the business. building. The drive for reduction in NPAs has been hugely successful under the leadership of Sheri P. Following items may appear on assets side:  Fixed assets: Fixed assets indicate the value of infrastructure properties acquired by the business where the benefit received over long period of time. Current assets are stocks. the cost advantage will be available to your Bank. branches were asked to speed up efforts for recovery in respect of overdue accounts with them.e. and computer. only if the Bank makes rapid strides in mobilization of Current Accounts and Savings Accounts (CASA). Page | 30 . 10. Fixed assets are land. the average cost of funds (i. cash & bank balances.  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. sundry debtors. 1 in your Bank.2 Reduction in NPA To bring down the Gross NPA level as also to ensure that substantial new NPAs are not added. prepaid expenses. On the liability side.

00. Adarkar Mission IV of your Bank.00. 17. Also a large number of our branches are functional in Maharashtra State.000/. equipped and instructed to take extra efforts for marketing all the products and services of your Bank 4 P’s OF MARKETING: Basically.000 crore.00.crore (with aggregate bank deposits of Rs.701 crore in September 2008). it is on the basis of these statistics that we have planned to do a business of Rs.1. 8.771 crore and gross credit of Rs.34.2% share in the total banking business in the State of Maharashtra. This provides a huge opportunity to banks including your Bank. 17. 8. India is a huge banking market but The penetration of Indian Banking is thus one of the lowest in the world. the concept of Marketing is given by McCarthy who has classified “Marketing Mix” tools of four broad kinds called 4 P's and they are as follows  Product  Price  Promotion  Place These marketing mix tools are used by the marketers to influence their trade channels and final consumers.57.000 crore. In fact. we at Saraswat Bank have a business stake of only Rs. 20. The Saraswat co-operative banks 4P's criteria is followed below Page | 31 .000 crore by 2021 under Dr. Of these Rs. which is a miniscule of merely 1.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 11 MARKETING Business Process Reengineering (BPR) initiative primary objective of this initiative is to convert the branches into sales and service outfits. All the employees in the branches are being trained. which has a huge banking business market of around Rs.

2011  The is following the mantra of one branch in every 15 days in programme called 'Ashwamedh' Page | 32 .  This approach has enabled the bank to cluster presence in western Maharashtra.S.  This helps to maintain relationships i. Value addition ingredients of our products and their enrichment. Marketing positions of our products.  This helps the bank to process of redefining and refashioning our existing products and creating new products.e.3% to 0.Adarkar Mission 2.  The fact remains that we do 0.4% to nation's banking business.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 1) Product  Sarswat co-operative bank is No.     Unique Selling Propositions of our Products.  Instead of having an isolated branch.  A Sarswat Co-operative Bank has special Product Development Department which is been seen by Sheri M.General Manager. Dy. to open 70 more branches by 31stMarch.Vaidya.  The product Development department has initiated into all these areas  Products and their attributes. Goa and Karnataka.700 UCBs in the Urban Cooperative Banking Sector in India. helps to maintain CMR 2) Place  The bank has adopted the policies of inorganic growth since 2006 for increasing its branch outlets  From 2009 the bank has been pursuing a mix of inorganic and organic growth for branch expansion purposes.  The bank has planned under Dr. they have 4-5 branches in a far off area.  The bank has adopted the cluster based approach. 1 amongst the 1. Promotional imperatives.

cost leadership is critical to the long term success of the organization.  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  The bank initiatives are as follows   Optimum utilization of the available resources of the bank.  The bank has sustained work of the income and cost council. budding artist. thus improving customer service.  The Sarswat Co-operative bank has appointed Sheri Dilip Prabhavalkar. Page | 33 . Streamlining/Re-engineering various procedures in the bank.  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" 4) Pricing  In any service industry. which helps the bank to offer services to the customers with lower intermediations costs.Shalmali Sukthankar. veteran artist as their Brand Ambassador  This has heed the bank to achieve and promote heights of success in their business  To attract the young generation the bank has appointed a junior brand ambassador to Ms.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 3) Promotion  Promotion of any brand is very necessary. this helps the marketer as well as customer to understand each other well.

66.10.86.72.52.48.43 4.29.35.00.78 15.701.48.03.47.43.46.96.810.40.23.595 4 8.03.79.64. II.74.53.09.100 15.62.70 31.32 2.74.36.51 8.2011 1.21.73.70 15.56.61.42.50.11.609 14.350.84 1.442.24.498 15.47.566.41.56.784 11.27.00 1.457 3 1.00 16.72.50.392 1.03. 2010 &2011 (Amount in Rs) CAPITAL & LIABILITIES 1) CAPITAL 2) RESERVE FUND & OTHER RESERVES 3) DEPOSITS & OTHER ACCOUNTS 4) BORROWINGS 5) BILLS FOR COLLECTION 6) BRANCH ADJUSTMENTS 7) OVERDUE INTEREST RESERVE I.945.51.59.51.644.26.05.98. ON INVESTMENTS ON LOANS & ADVANCES 8) INTEREST PAYABLE 9) OTHER LIABILITIES 10) PROFIT & LOSS GRAND TOTAL Contingent Liabilities 13 5 6 86.95 5.67.03.24.94.25.07.00.2010 86.616.12.63.05.160.02.77.37 46.875 189.93.61.644 1.896.62.382 Page | 34 .ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 12 PERFORMANCE OF THE COMPANY BALANCE SHEET AS ON 31MARCH.45.974.72.80 211.884 49.72.59.234 7.293.137 Schedule 1 2 31.58.01.21.88.32.83.052 86.00.

03.21.90.78.60 1.2010 10.37 15.00 22.28.10.46.2011 11.74.26.314 34.24.400.97.84.23.21.64.29.70 189.60.02 3.896.27.321 92.26.868 1.400 OF 11 12 9 10 52.025 SATISFACTION OF CLAIMS TOTAL 211.70.29.77.14.05.90.06.51.974.35.00 1.784 5.22.605.10.223.19.38.393.62 62.76.49 Page | 35 .03.29 31.88.01.612.64.24.53.50.000 3.16.55.05.59.50.73.36.098.468 4.03.701.884 14.78.176.79.61.11.15.51.000.892 1.29.77.45.68.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK (Amount in Rs) PROPERTY & ASSETS 1) CASH 2) BALANCES WITH OTHER BANKS 3) MONEY AT CALL & SHORT NOTICE 4) INVESTMENTS 5) ADVANCES 6) INTEREST RECEIVABLE 7) BILLS RECEIVABLE 8) FIXED ASSETS 9) OTHER ASSETS 10) COMPUTER SOFTWARE 11) DEFERRED AMORTISATION INVESTMENTS 12) NON-BANKING ACQUIRED ASSETS IN 22.56.74 1.32.758.562.42 53.35.43 5.21.58 8.39.00.11.226 7.94.99.314 Schedule 7 8 31.40.63 2.31.

ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 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. The final results in terms of Net profit earned by organization. The final results in terms of Gross Profit earned by the organization.  Trading accounts: This part of profit and loss accounts discloses the results of trading operations carried by organization. The amounts of profit not appropriated or retained transferred to reserves and surplus in balances sheet. Page | 36 . The final result in terms of manufacturing accounts is a cost of production incurred by the organization. Accounts may have following four components:  Manufacturing accounts: This part of profit and loss accounts discloses the results of manufacturing operations carried out by the organization. discloses the manner in which the net profit earned by the organization is appropriated.  Profit and Loss appropriation accounts: This part of profit and loss accounts which mainly applicable to company form of organization.  Profit and Loss accounts: This part of profit and loss accounts discloses the final results of business transactions of the organization.

37 10.003.83 1.184.250.151.300.37 86.82% 64.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK PERFORMANCE HIGHLIGHTS (`In Crore) Particulars FOR THE YEAR ENDED 31-Mar-10 Total Income Total Expenditure Gross Profit Less: Provisions Net Profit Before Tax and Exceptional Items Less: Income Net Profit After Tax and Exceptional Items Less: Exceptional Items Net Profit 1.20 1.23 213.74 5.27 % Change 15.06 9.690.00 139.513.14 14.244.511.67 AT THE YEAR END Own Funds Share Capital Reserves and Surplus Deposits Current Savings Term Advances Secured Unsecured Priority Sector 1.96% 7.99 11.39 294.266.55% 103.33% 77.95% 72.61 98.66 15.48 1.08% 53.86 1.75% -15.332.30 212.19% 8.236.93% -20.458.050.15 11.75% 10.90 15.80 5.94 3.45% 24.68 179.84 36.16 19.96 1.54% 16.80 81.49 119.35 9.19 78.36 215.242.49 102.270.370.73 1.23 1.97% 12.019.99% 19.19 63.78% 31-Mar-11 1.47% -93.67 358.25% 15.57 1.30 3.765.87 11.800.27% 65.38% Page | 37 .15% 24.433.16 40.473.

75 526.253.34.417 4.27% 50.74 -17.071.47 17.16 3.94 2.74 2.93% 12.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK % to Advances Small Scale Industries Small Businessmen and Traders Other Priority Sectors Working Capital Investments Borrowing And Refinance Net NPAs (%) Capital Adequacy (%) Number of Members Regular Nominal Number of Branch Licenses/Branches Number of Employees Productivity per Employees Profit Per Employees (in laces) Return on Average Assets (%) Net Interest Margin (%) 57.26.911 8.11 0.946.09% 2.61 1.186.47% 0.39% -1.443.331 216 3.30% 2.54 689.27 5.08 4.52 Page | 38 .62.338 8.664.795.57% 67.560 5.21 19.77 845.292 200 2.36 1.39 562.00 14.47 1.00 0.06 5.63 50.321.00 12.18 6.94.00 1.06% -23.62 0.

ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 13 PRODUCTS The products that are offered by Saraswat Bank can be categorized into SIX groups as follows: Page | 39 .

NRO and RFC accounts) and personal loans (against the security of funds held in NRE accounts and NRO accounts) to the NRI segment. to finance its world-renowned most cost effective NANO cars. It can be maintained in the form of Page | 40 . The Bank also offers a bouquet of Retail Loan Products such as Vastu Siddhi Home Loan. With a view of fulfilling all the needs of the customers under one roof Bank has entered into tie-ups with various premium institutions.  NRE ACCOUNT Non Resident (External) Accounts can be opened by Persons of Indian nationality or origin resident abroad. Mutual Funds and Demat Services are offered. US Dollar. The bank‟s International Banking Division monitors the flow of export credit. current and term deposit accounts. The „NO account‟ called „Janhit Account‟ and the „CUBS‟ savings account for the kids are the prominent features of this segment of products offered by Saraswat Bank. NRE.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 1) PERSONAL The bank offers retail deposit products like savings.  FCNR ACCOUNT Foreign Currency Non Resident (FCNR) accounts are permitted to be maintained in term deposits only from one year to five years by NRIs. Saraswati Education Loan. Saraswat Banks accepts such deposits in three currencies i. Car Loan etc. This account is designated in rupees. The Bank has relationship with more than 125 correspondent banks spread over 45 countries covering nine currencies. The bank offers various NRI deposit products (like FCNR. This division plays an active role in the Forex operations through its B-category branches.e. Also. TATA MOTORS. through which third party products like Life and nonlife Insurance. 2) NRI (Non Resident Indian) The Saraswat Co-operative Bank is the only Urban Co-operative Bank having a permanent license from RBI to deal in foreign exchange. the bank has entered into a tie-up with one of the most respected and leading industrial house of the nation. Sterling Pound and EURO.

on production of an undertaking and certificate Interest earned on these deposits is not exempt from Indian Income-tax. The balances in NRE/FCNR accounts and other foreign currency funds brought in by the NRI at the time of return and subsequently from the assets maintained abroad could be freely invested in RFCs. he becomes a person resident outside India. current or term deposit accounts. business or vocation outside India. Accounts can be opened/credited with remittances from abroad/transfer from existing NRE/FCNR accounts/ deposit of foreign exchange brought into India. NRE Accounts can be opened jointly with any other Non-Resident Indian Principal amount with interest earned is eligible for repatriation abroad.  RFC ACCOUNT Resident Foreign Currency Accounts are for the NRIs returning to India permanently. The funds can also be withdrawn by converting into rupees for local payments. Saraswat Bank accepts the RFC accounts in US Dollar currency. indicating his intention to say outside India permanently or for an indefinite period. if any. Funds held in NRO accounts. Page | 41 . If the Returning Indian subsequently goes abroad to become an NRI. The funds in RFCs can be remitted abroad for any bonafide purpose of the account-holder or his dependents without RBI`s approval. in India is designated as an Ordinary Non-resident Account (NRO Account).  NRO ACCOUNT When an Indian national or person of Indian origin residing in India leaves India for a foreign country (other than Nepal and Bhutan) for taking up employment. or for any other purpose. can be repatriated outside India with an overall limit of USD one million per calendar year including sale of assets held by NRI‟s in India. His bank account.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK savings. the balance in his RFC account can be converted into an NRE/FCNR account. Such accounts can also be opened with funds remitted from abroad. during visits to India.

including Government papers Call money lending and borrowing Retailing of Government Securities and other debt market securities Treasury Bills and Commercial Papers trading Page | 42 . The Treasury is located in the city of Mumbai and has a dealing room with „Reuters‟ and „Bridge‟ systems. This is one of the active G. The treasury complies with the statutory obligations of maintaining C. Small & Medium Enterprises (SMEs). The following arrays of facilities are being provided under this segment:          Working Capital Term Loan Export Finance (Pre shipment and Post Shipment) Import Finance Bank Guarantees Bill Discounting Letter of Credit (Inland and Foreign) Property Loan Rental Loans 4) Treasury Saraswat Bank Ltd.R.R. All the treasury operations are completely computerized. for the Bank apart from managing overall funds. The Money Market desk is specialized in Money market and Debt market. The following products are offered:     Debt market securities. Sec traders in the market. Professionals and Women Entrepreneurs. is the first co-operative Bank to set up a „Unified Treasury‟ incorporating Foreign Exchange desk and Money Market desk.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 3) CORPORATE The bank provides various products catering to the needs of the Mid Corporate. Traders.L.R. and S.

Insurance Premium etc automatically through the customers‟ account. The life insurance products includes Endowment plans. Since then it provides the Demat Services to its customers. and Transposition & Transmission. Remat. the bank has a tie-up with Bajaj Allianz General Insurance Company Ltd.This provides the authorized/registered users to avail the services such as information relating to accounts.The bank has a tie-up with HDFC Standard Life Insurance Company Ltd for offering the life insurance products.Payment of utility bills like Telephone. This includes the following:  Easy Pay. Page | 43 . Term plans.  ATMs. Personal Accident Insurance and Vehicle Insurance.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK 5) Demat Modernization in the trading and settlement system has been witnessed in the capital market through automated trading mechanism of Demat. which includes the ATMs of the Saraswat Bank. Services include Pledge. no charges are being levied. Pension plans/ For Non Life Insurance products. Saraswat Bank is registered as depository Participant with NSDL since 22nd February 1999. and offers Travel insurance. The advent of Electronic trading and settlement has brought in transparency in trading and has eliminated risks associated with Bad Delivery and handling huge load of paperwork. Cellular Phone Bills. The country has made a remarkable growth in the capital market by switching over to electronic trading.  Mobile Banking. Electricity Bills. 6) Services The bank‟s value added services can be categorized under this segment. Demat. Children plan.Provides the ATM facility to the customers. The customers can access over 2461 ATMs of 20 members Banks in "BANCS" network. Health Insurance. details about transactions etc. For drawing cash from the ATMs of Consortium banks.  Insurance. Transfer & Settlement.

ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK Mutual Funds. changes in investment pattern (rising disposable incomes created a huge potential for investment in Insurance and Mutual Funds). the Indian Banking Industry had to redesign their bouquet of products and introduce marketing of third party products like Insurance and Mutual Funds. increased competition and thinning of Interest margins. to increase fee based income.Considering the changes in Indian demographics (more than 70%of the population below the age of 35). the Saraswat Bank has entered into the Mutual fund distribution business 5 years back and today it has a tie up with 21 fund houses with total funds invested at around Rs 100 crores. Page | 44 . To encash on this sentiment.

where the focus was on validation process. the internal software package OMNI and the retail products of the bank. know the Bank. All promoted personnel have been suitably deployed at various branches (including the branches of the merged banks) and/or departments. The Bank has been undertaking expansion of branch network and has been implementing BPR exercise too. Training During the FY 2008-09.058 from management and 1. A total of 385 employees were promoted to various cadres. In order to cater to the growing expanse of the Bank and the need for managerial positions in the wake of the same.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 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). 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. Page | 45 . 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. Navi Mumbai. a total of 2. consisting of 1. as well as at various branch locations.167 from non-management cadre attended 98 training programmes conducted at the „Staff Learning Centre‟ at Vashi.225 employees. a promotional exercise to various cadres was conducted. which is resulting in transforming the organization.

This board ensures that the Codes so defined by the Bank are implemented in letter and spirit. Industrial Relation: The Bank‟s human resources have been organized under the two representative bodies viz. (i. Voluntary Retirement Scheme (VRS) This year.e. For measuring customer satisfaction. Besides. 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. 43 employees of erstwhile Annasaheb Karale Janata Sahakari Bank Ltd. and at around 100 employees of the erstwhile Murgharajendra Sahakari Bank Ltd. the Bank launched the VRS for its employees. a bank.wide Customer Service Audit has been planned to be commissioned by the Board in the ensuing year. Page | 46 . 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.. 83employees of the erstwhile Nasik Peoples Cooperative Bank Ltd. Around 236 employees from your Bank (excluding those of merged banks) opted for VRS under the said scheme.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK Customer Service The bank has adopted the following codes based on the Standard codes documented by Indian Bank‟s Association:  Customer Fair Practice Code  Cheque Collection Code  Bankers’ Lender Liability Code  Compensation Policy Saraswat Bank has become a member of the Banking Codes and Standards Board of India. in all 462 employees) opted for VRS and have been relieved under the Schemes.

earthquake etc. etc. From time to time the Board of Directors responded to national and natural calamities like flood. which spell out the bank‟s vision of Corporate Social Responsibility (CSR): As a macro level expression of CSR.with the objective of researching into. famine. Your Bank has been providing financial assistance to many social. is a resplendent example of the early awareness of CSR in this Bank. a major issue facing Maharashtra such as farmers' suicides. scarcity of drinking water. educational and medical institutions by way of grants every year from its funds. we in association with Maharashtra Times created an intellectual platform entitled "Shikhar Maharashtra” . 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. This was so because all members of the community always understood that a co-operative institution must always have a social purpose. famine and hunger.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 15 CSR (CORPORATE SOCIAL RESPONSIBILITIES) Corporate Social Responsibility (CSR) is not a new fashion but it is an old creed for this organization. malnutrition. The programmes went on for two days wherein the social and political leaders from Centre and State participated. Bank thereafter also started scholarships and apprenticeships for deserving students and through that process built the careers of several young men. It is proposed that at an interval of every three months. Page | 47 . A gala opening of Shikhar Maharashtra was held on27th July 2007 at Ravindra Natya Mandir. Mumbai. The laudable gesture of late Wamanrao Varde and his associates on the Board then in spontaneously responding to the grave scarcity of food grains during the Second World War and in starting on behalf of your Bank a ration shop at Girgaum in Mumbai to make available food grains to all. 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. Following are the few initiatives both at macro and micro level. debating and finding ways and means to deal with the many stubborn economic and social issues that Maharashtra faces today.

ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 16 AWARDS AND RECOGNITIONS Bank participated in the study conducted jointly by the Great Places to Work Institute India and the Economic Times. the top 50 best workplaces were elected. The citation reads as under: “The Saraswat Co-operative Bank Ltd. Ranked 4th in Banking& Credit Services for inspiring trust among your people. your Bank is placed fourth after American Express. for instilling pride in them. to distinguish a good work place from a great one. for creating an Environment within the workplace that promotes camaraderie and for many other reasons that makes your organization one of the India‟s. Based on the study of over 373 participants spanning a multitude of sectors.Year 2009" and in the banking industry vertical.” Page | 48 . Kotak Mahindra Bank and HDFC Ltd. We are happy to announce that your Bank has been adjudged and included in “India‟s Best Companies to work for .

ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK CHAPTER 17 CONCLUSION AND SUGGESTIONS The market is seeing discontinuous growth driven by new products and services that include opportunities in credit cards.  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. especially retail banking. Page | 49 . mortgages and investment services are expected to be on rise. consumer finance and wealth management on their tail side.  With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services. 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.

 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.  The banking today is re-defined Andre-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. payments. 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 “conventional banking to convenience banking” and “mass banking to class banking”.  Accelerate the creation of world class supporting infrastructure (e.  Being the largest Urban Co-operative bank.  However. back-office utilities) to help the banking sector focus on core activities. Saraswat Bank perfectly fits into this matrix. credit bureaus.  Thus.  Sustenance of a healthy current and savings account mix and little deterioration in asset quality also reiterates the operating efficiency of the bank..g.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK SUGGESTIONS In wake of this.  Besides offering the opportunity to cater to borrowing needs of some of the largest corporate in the country. 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. The shift has also increased the degree of accessibility of a common man to bank for his variety of needs and requirements. 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. asset reconstruction companies (ARCs). old private sector banks also have the need to fundamentally strengthen skill levels. Page | 50 . the consolidation process will also brings about economies of scale for the bank.

http://www.mca. http://www.ROLE AND PERFORMANCE OF SARASWAT CO-OPERATIVE BANK BIBLIOGRAPHY a. http://www.com f.com c.gov.com i.saraswatbank.in e.com Page | 51 .teachmefinance.com g.in b.rbi. http://www.com h.google.com d. http://www.investopedia. http://www. http://www.wikipedia. http://www. http://www.gov.cibil.moneycontrol.