Loans and deposits One of the primary functions of the commercial bank is ‗lending‘. Through lending commercial banks meet their objective of making profits. The deposits collected from the public cannot be kept idle. It has to be utilized in order to derive benefits out of it. The bank collects deposits with the objective of lending and makes profit out of the interest received and paid. Their main aim is to deal in money and provide for those who need it. The banker performs the job of lending within the framework of statues governing the banking business, the government policy and guidelines issued by the authorities of the country (RBI in India).The basic objective of nationalization of commercial banks was to provide funds to the neglected sectors like agriculture, tiny industries and other weaker sections of the society. Today nearly 40% of the total commercial bank advances are the priority sectors. Greater part of the commercial bank funds are employed in the form of loans and advances. Loans bring good money to the bank in the form of profit by charging interest. Lending function of a commercial bank benefits the bank in the form of profit and the one who takes loans enjoy the benefit of money required for their activities. The wheels of industry cannot run without the bank advances. The bank needs to assess the condition of industry or trade or any business enterprise while making advances.


Banks are known to accept deposits for the purpose of keeping over the year. The process of lending have been stream lined in to purpose oriented lending in India by means of various direction guidelines issued by R.B.I, lending are recorded in, bank books under "loans and advances" of various types the approved purposes for which loans and advances can be usually granted are  Working capital needs of trade, commerce, industry and agriculture introducing priority sectors.  Consumption requirements of individuals.

In to select the objectives of the bank in lending and also to meet the requirements of the people of district co-operative bank, has been lending money for various purposes which include as follows: 1. Short term loans 2. Medium term loans 3. Long term loans Short term loans A short-term loan is given for a period of not exceeding one year and it is given mainly for the working capital requirement of the industries. Medium term loans Medium term loans are granted for a period of month exceeding five years. Loans given for a period of five years and above came under the category long-term loans.

Long term loans Long-term loans are granted for meeting capital expenditure like purchase of machinery construction of factory building etc. Term loans are generally granted for a period of more than three years and less than ten years by banks. Term loans up to seven years are called medium term loans and beyond that are long-term loans. Loan policy can be defined as the decision made in advances about themanage ment of credit. Today the services of bank have expanded and different loan procedures are applied in order to maximize shareholders fund. The bank has used to act as a bridge between the savers and users of fund. However, to maximize the shareholder‘s wealth by accepting deposit and granting loan in society has alwaysremained the prior purpose of commercial bank. The bank cannot remain idol. Therefore, the bank has to invest its fund in loan and advances, risky assets in order to provide maximum return

Deposit is the Money given in advance to show intention to complete the purchase of a property and in other works, Money transferred into a customer's account at a financial institution. Individuals and corporations need money to pursue their daily business. They place the money on deposit to earn interest, using the money market. Deposit is the main sources of fund collected by the bank from different customers. The growth of the bank depends primarily upon the growth of its deposits. The volume of funds that management will use for creating income through loans and investments is determined by the bank‘s policy governing deposits.


 Overnight lending occurs usually from noon to noon. There is regular change in this view in the modern banking industry.the assets of the bank also increases as a result liabilities of the bank rises. In the banking business volume of credit extension muchdepe nds upon the deposits base of the bank. Deposits are one of the aspects of the bank liabilities that management has been influencing through deliberate actions. the depositor has the right to use the money at any time. sometimes short notice periods are agreed. As the depositor can show up any time to request the deposit back. Types of deposits are:  Call deposits. future safety purpose as well as in order to earn interest of total deposit. it is also called sight deposit. Bank provides reasonable rates of interest to the customers for the deposited amount on the basis of the different account.Tr aditionally. and are therefore also called term or time deposits. to give as security or in part payment. Thus bank has evolved from relatively passive acceptors of deposits to active bidders for the funds.  Fixed deposits bear a fixed time and fixed interest rate.Deposit is the collection made by customer in the bank for security purpose. using a special rate. 4 . When the deposit of the bank increases. the deposit of the bank was determines by the depositors not by bank management.

4. This study is mostly focused on deposit & loan of Karimnagar Cooperative Urban Bank. Finally to make suitable suggestions for improving the performance of the bank. To understand the performance of the bank like no. 5 . To study the performance of the bank in relation to loans and advances.of members. there is a need for the study to study on the loans and deposits of Karimnagar Cooperative Urban Bank. 5. it is important to understand the loans and deposits of the Banks. There are various types of deposits such as saving deposits.NEED & IMPORTANCE OF THE STUDY Since the banks are playing a vital role in modern days. 3. Therefore. current deposits etc. share capital and working capital etc. To analyze the effectiveness of the bank performance in analyzing funds in the form of different types of loans for different purposes. Loans and deposits plays a vital role in functioning of the bank. fixed deposits. 1. To know the different types of loans issued by the bank. OBJECTIVES OF THE STUDY The main objective of the present study is to evaluate or appraise loans and advances of Karimnagar Cooperative Urban Bank in respect of loans and advances for the time period of five years. It provides various types of loans to the customers and collects higher interest rate. the loan policy of the bank should be effective to attract the customers. 2. So.

Similarly. The bank accepts deposits from those who can save but not profitably utilize the saving themselves. To attract saving from all sort of individual the bank receives a number of deposits in various fame in various accounts. housing loan. From loan bank collect the interest in higher rate. So. Money from deposit can be invested in the productive and socially desirable sector. bank utilizes the deposited money in the form of loan & advances. the bank also invests this money to purchase share. debenture. For the purpose of study five years financial data has been taken into account. The present study covers exclusively performance of Karimnagar Cooperative Urban Bank in terms of loans and advances. Bank utilize the money from deposit by providing various types of loan like hire purchase loan. bond etc of other company form that bank earn profit after certain time period. The DCCBs have come into existence due to the failure of primary societies to attract required resources in the form of deposits from well to do sections of the village community on one hand and to inspire the habit of thrift and savings among their members to provide strong capital base on the other.SCOPE OF THE STUDY Deposit is the main source of fund for commercial bank to invest in profitable sector. educational loan etc. 6 . the deposit is the main source of income for commercial bank.

Methodology is systematic procedure of collecting information in order to analyze and verifying a phenomenon. The collection of date is done through two principle source viz. 1. Primary Data 2. Secondary Data Primary Data It is the information collected directly without any reference. In the study, it was mainly interviews with concerned officer and staffs either individually or collectively. This study does not include any primary data. Secondary Data Secondary data is defined as data collected earlier for a purpose other than the one currently being pursued. Secondary data are often in a form of public data but the unpublished data such as records, reports or statistics gather or complied by others prior to your study are also secondary data. For the internship report

the statement of Loan and deposit is obtained from books of account and financial record of the bank and reference form text books and journals relating to financial management and articles published in business dairies like the Economics times, Business line etc., Statistical tools used Statistical tools used for the study are tables, percentage analysis and relevant graphs like bar charts.

  The study is based mainly on secondary data. Since the study is confined to only few aspects like loans and advances, so the overall performance of the bank cannot be measured accurately.   Here, the calculations are approximated. The accuracy of the results is subjected to the accuracy of the data furnished by the annual reports.


In finance, a loan is a debt evidenced by a note which specifies, among other things, the principal amount, interest rate, and date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent. Acting as a provider of loans is one of the principal tasks for financial institutions. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

Secured A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral.

A mortgage loan is a very common type of debt instrument. These may be available from financial institutions under many different guises or marketing packages:  credit card debt personal loans bank overdrafts credit facilities or lines of credit corporate bonds (may be secured or unsecured) 10     . however. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer. to recover sums owing to it. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. If the borrower defaults on the loan. used by many individuals to purchase housing. in much the same way as a mortgage is secured by housing. a loan taken out to purchase a new or used car may be secured by the car. In this arrangement. In some instances. direct and indirect. There are two types of auto loans. the money is used to purchase the property. is given security — a lien on the title to the house — until the mortgage is paid off in full. The financial institution. Unsecured Unsecured loans are monetary loans that are not secured against the borrower's assets. the bank would have the legal right to repossess the house and sell it.

a higher interest rate reflects the additional risk that in the event of insolvency. Thus. the ones not already pledged to secured lenders). These may or may not be regulated by law. obtain a money judgment for breach of contract. In the United Kingdom. these may come under the Consumer Credit Act 1974. Subsidized A subsidized loan is a loan on which the interest is reduced by an explicit or hidden subsidy. it refers to a loan on which no interest is accrued while a student remains enrolled in 11 . In the context of college loans in the United States.The interest rates applicable to these different forms may vary depending on the lender and the borrower. In insolvency proceedings. Demand Demand loans are short term loans [1] that are atypical in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime rate. Interest rates on unsecured loans are nearly always higher than for secured loans. and then pursue execution of the judgment against the borrower's unencumbered assets (that is. when applied to individuals. An unsecured lender must sue the borrower. because an unsecured lender's options for recourse against the borrower in the event of default are severely limited. secured lenders traditionally have priority over unsecured lenders when a court divides up the borrower's assets. They can be "called" for repayment by the lending institution at any time. Demand loans may be unsecured or secured. the debt may be uncollectible.

In short. 2. The other negative is that these loans sometimes must be repaid within two years. they range from about 10-12%. personal loans are unsecured. they are essentially taking out a loan with the understanding that it will be repaid at some later lenders will typically require some form of income verification. Typically. The downside is that the interest rates on these loans can be quite high. it may refer to a loan on which an artificially low rate of interest (or none at all) is charged to the borrower. The application for this type of loan is typically only one or two pages in length. Credit Cards When consumers use credit cards. and the proceeds may be used for virtually any expense (from buying a new stereo system to paying off a common bill). making it impractical for individuals looking to finance large projects. Credit cards are a particularly 12 . and/or proof of other assets worth at least as much as the individual is borrowing. Approvals (or denials) are generally granted within a few days.[2] Otherwise. According to the Federal Reserve. and range anywhere from a few hundred to a few thousand dollars. personal loans (in spite of their high interest rates) are probably the best way to go for individuals looking to borrow relatively small amounts of money. Personal Loans These loans are offered by most banks. An unsubsidized loan is a loan that gains interest at a market rate from the date of disbursement 1. and who are able to repay the loan within a couple of years. As a general rule.

see The Importance of Your Credit Rating and How Credit Cards Affect Your Credit Rating. Written applications are typically approved (or denied) within a week or two.) 3.attractive source of funds for individuals (and companies) because they are accepted by many . to obtain a card (and.) There are definitely pitfalls.merchants as a form of payment. see Take Control Of Your Credit Cards. Debit And Charge: Sizing Up The Cards In Your Wallet and Understanding Credit Card Interest. The credit review process is also rather quick. (To read more on this type of loan. credit cards are extremely flexible. In other words. all that's required is a one-page application. by extension. The money can be used for virtually anything these days from paying college tuition to buying a drink at the local watering hole. the homeowner is taking a loan out against the value of his or her home. A good method of determining the amount of home equity available for a loan would be to take the difference between the home's market value and the amount still owing on the mortgage.000 or $10. In addition. however. Online / telephone applications are often reviewed within minutes. In addition.000 worth of credit). 13 .if not most . a consumer is more likely to rack up debt using a credit card (as opposed to other loans) because they are widely accepted as currency and because it's psycho logically easier to hand someone a credit card than to fork over the same amount of cash. Also in terms of their use. Credit. The interest rates that most credit-card companies charge range as high as 20% per year. $5. Home-Equity Loans Homeowners may borrow against the equity they've built up in their house using a home-equity loan. (To find out more about this process.

Note: In situations like these. The downside to these loans is that consumers can easily get in over their heads by mortgaging their homes to the hilt.The loan proceeds may be used for any number of reasons. The interest rates on home-equity loans are very reasonable as well. (To keep reading on this subject. but are typically used to build home additions. However. making them particularly attractive for those looking to borrow large amounts of money. perhaps the most attractive feature of the home-equity loan is that the interest is usually tax deductible. the terms of these loans typically range from 15 to 20 years. or for debt consolidation. Home-Equity Line of Credit This line of credit acts as a loan and is similar to home-equity loans in that the consumer is borrowing against his or her home's equity. these lines of credit are revolving. unlike traditional home-equity loans. and then borrow again. meaning that the consumer may borrow a lump sum. home-equity loans are particularly dangerous in situations where only one family member is the breadwinner. Even a 1% increase in interest rates could mean the difference between losing and keeping your home if you rely too heavily on this style of loan. repay a portion of the loan. It's kind of like a credit card that has a credit limit based on your home's equity! These loans may be tax deductible and are typically repayable over a period of 10 to 20 years. making them attractive for larger projects. life/disability insurance is frequently used to help protect against the possibility of default. and the family's ability to repay the loan might be hindered by that person's death or disability.) 4. see HomeEquity Loans: The Costs and The Home-Equity Loan: What It Is And How It Works. 14 . But. Furthermore. In addition.

such as tax-preparation organizations. For example:  They are not typically tax deductible. Because the amount that can be borrowed can be quite large (typically up to $500. but when rates begin to rise. the interest rate charged is typically pegged to some underlying index such as the "prime rate". particularly large ones. While cash advances may be easy to obtain.Because specific amounts may be borrowed at different points in time.000 depending upon a home's equity). Cash Advances Cash advances are typically offered by credit-card companies as short-term loans. Loan amounts are typically in the hundreds of dollars. the interest rates being charged may be quite low. These consumers are often lured in by low interest rates. There are other downsides as well. consumers tend to get in over their heads. This is both good and bad in the sense that at some times. However. during period of rising rates. making them impractical for many purchases. 15 . Other entities.   The effective interest rate charges and related fees can be very high. may offer advances against an expected IRS tax refund or against future income earned by the consumer. there are many downsides to this type of loan. those interest charges begin racking up and the attractiveness of these loans starts to wane. the interest charges on outstanding balances can be quite high. 5.

which means that they will probably have to put up personal assets as collateral in case the business fails. 16 .) 6. cash advances are a fast alternative for obtaining money (funds are typically available on the spot). there are some loans on the market that offer a variable rate. The SBA and other financial institutions typically require that the individual personally guarantee the loan. (Learn more about cash advances in Payday Loans Don't Pay. Small Business Loans The Small Business Administration (SBA) or your local bank typically extend small business loans to would-be entrepreneurs. be forewarned: getting a business plan approved by the lending institution may be difficult. Small business loans are the way to go for anyone looking to fund a new or existing business. many banks are unwilling to finance "cash businesses" because their books (ie. typically. Keep in mind that borrowers can negotiate with the lending institution with regard to the level of interest charged. However.In short. tax records) often do not accurately reflect the health of the underlying business. consumers will have between five and 25 years to repay the loans. but because of the numerous pitfalls. The amount of interest incurred from the loan depends on the lending institution in which the loan is made. In addition. However. but only after they've submitted (and received approval for) a formal business plan. While the term of the loan may vary from institution to institution. they should be considered only as a last resort. depending on the venture. Loan amounts can range from a few thousand to a few million dollars.

Bank loans are available to finance the purchase of inventory and equipment as well as to obtain operating capital and funds for business expansion. Difficulties in Obtaining Loans One of the greatest disadvantages to bank loans is that they are very difficult to obtain unless a small business has a substantial track record or valuable collateral such as 17 . Even if the loan is an adjustable-rate loan. ADVANTAGES OF LOANS A bank loans money to a business based on the value of the business and its perceived ability to service the loan by making payments on time and in full. Business owners should weigh the advantages and disadvantages of bank loans against other means of finance. Banks do not take any ownership position in businesses. but banks often only finance firms with substantial collateral and a long track record. Bank personnel also do not get involved in any aspect of running a business to which a bank grants a loan. especially with fixed-rate loans. This makes it easy for businesses to budget and plan for monthly loan payments. business owners can use a simple spreadsheet to compute future payments in the event of a change in rates. Tax and Financial Planning Advantages The interest on business bank loans is tax-deductible. in which the interest rate does not change during the course of a loan. loan servicing payments remain the same throughout the life of the loan. In addition. Once a business borrower has paid off a loan. and the terms they offer are often very strict. there is no more obligation to or involvement with the bank lender unless the borrower wishes to take out a subsequent loan. These loans are a time-honored and reliable method of financing a small business.

vehicles or home renovations. a qualified borrower can complete a bank loan transaction. The high interest rate for the funding a business does receive often stunts its expansion. Cost of Bank Loans Interest rates for small-business loans from banks can be quite high.real estate. Loans guaranteed by the U. which means the borrower's personal assets can be seized in the event the business fails and is unable to repay all or part of a loan. Business borrowers can be required to provide personal guarantees. A bank loan can be used in a number of ways. but the requirements to qualify for these subsidized bank loans are very strict. and they also make sure that they are able to cover losses in the event of default.S. because the business needs to not only service the loan but also deal with additional funding to cover funds not provided by the bank. money can be borrowed for many large-ticket items. 18 . Speed A bank loan can be secured quickly. in less than an hour. and the amount of bank funding for which a business qualifies is often not sufficient to completely meet its needs. Small Business Administration offer better terms than other loans. Banks are careful to lend only to businesses that can clearly repay their loans. such as furniture.

preventing the borrower from paying the note off early without incurring extra cost.Disadvantages Fees Some loans carry a prepayment penalty. Types of deposits are: One of the most essential aspects in the functioning of a bank is to accept the deposits from public. DEPOSITS Individuals and corporations need money to pursue their daily business. this is why many loan payments are limited to a certain percentage of a borrower's income. and there are stipulations on how the money can be used. Good credit is often required to borrow money. using the money market. Cash Flow Borrowing too much money can lead to decreased cash flow and payments can even overtake income in some cases. Limitations There are a number of limitations on the transaction. Hence it is necessary to classify the deposits. They place the money on deposit to earn interest. basically there are basically four types of deposits – 19 .

A time deposit (also known as a certificate of deposit in the United States. certificate deposit is different from that of time deposit in terms of its negotiability. a term deposit. 20 . a bond in the United Kingdom.. money deposited in a checking account or savings account in a bank. Australia and New Zealand. CDs are negotiable and can be rediscounted when the holder needs some liquidity. the return on a time deposit is generally lower than the long-term average of that of investments in riskier products like stocks or bonds. without any notice or penalty: e. The opposite. sometimes known as a sight deposit or "on call" deposit. The rate of return is higher than for savings accounts because the requirement that the deposit be held for a prespecified term gives the bank the ability to invest it in a higher-gain financial product class. Fixed Deposits in India and in some other countries) is a money deposit at a banking institution that cannot be withdrawn for a certain "term" or period of time (unless a penalty is paid)[citation needed]. In its strict sense. the longer the term the better the yield on the money.g. They offer the maximum amount of interest. while time deposits must be kept until maturity. When the term is over it can be withdrawn or it can be held for another term.1. If it is withdrawn in advance then it involves penalty. particularly in Canada. can be withdrawn at any time. Time or term deposits These are those deposits that are deposited by savers for a fix period of time hence they can withdrew the deposit only on the maturity of deposit. Generally speaking. However.

freeing up cash from the bank's vault to be lent out with interest.S..000. Saving deposits This is a kind of demand deposit and there is certain limit on number of withdrawals from the account during a specific period of time. In the U. Saving accounts are accounts maintained by retail financial institutions that pay interest but cannot be used directly as money in the narrow sense of amedium of exchange (for example.000 or greater in size. For the bank. The other major types of deposit account are transactional (checking) account. non compliance of which leads to penalty. does not incur a reserve requirement. "Small" time deposits are defined in the U. 2. also account holder has to maintain minimum balance in the account which is decided by the bank. as those under $100. The term "jumbo CD" is commonly used in the United States to refer to large time deposits. money market account. or (b) the institution may require a minimum period of notification before a withdrawal is made. and time deposit. 21 . banks are not subject to a reserve requirement against their time deposit holdings. money in a savings account may not be callable immediately and in some jurisdictions. while "large" ones are $100.A deposit of funds in a savings institution is made under an agreement stipulating that (a) the funds must be kept on deposit for a stated period of time.S. These accounts let customers set aside a portion of their liquid assets while earning a monetary return. by writing a cheque). Interest rates offered on these deposit is lower than that of term deposits.

under Regulation D. 12 Code of Federal Regulations(CFR) 204. 22 . no interest is earned.2(d)(2). The European Union Savings Directive has made arrangements with many offshore financial centres for either information on interest earned to be shared with EU tax authorities or for withholding tax to be deducted on interest paid on offshore accounts. Withdrawals from a savings account are occasionally costly.In the United States. However. In the United States. The high rates of some countries has led to the development of a significant offshore savings industry. or even a downgrade of the account to a checking account. most saving accounts do not limit withdrawals. and they are more timeconsuming than withdrawals from a demand (current) account. unlike certificates of deposit. the depositor is permitted to make up to six pre-authorized transfers or withdrawals per month or statement cycle of at least four weeks.2(d)(1) and from under the terms of the deposit contract or by practice of the depository institution. 204. violations of Regulation D often involve a service charge. because of concerns relating to potential tax evasion.[clarification needed] interest paid on deposit accounts is taxed at source. With online accounts. Account holders must either pay the withholding tax or disclose account holder information to relevant tax authorities. the term "savings deposit" includes a deposit or an account that meets the requirements of Sec. During the period between when funds are withdrawn from the online bank and transferred to the local bank. the main penalty is the time required for the Automated Clearing House to transfer funds from the online account to a "brick and mortar" bank where it can be easily accessed. Within most European countries. There is no regulation limiting number of deposits into the account.

weekly or monthly basis. a Current Deposit will often be made into a bank or other financial institution‘s account in the local currency.3. Current deposits – Though it is similar to saving deposit but it does not offer any interest and hence there is no limit on the number of withdrawals by individuals from his account. it can be on a daily. Current accounts may also allow borrowing via an overdraft facility. Current Deposit Example: For example. The interest offered on this is almost equivalent to that of term deposits. Current Deposit Meaning: In deposit terminology. offering various flexible payment methods to allow customers to distribute money directly to others. Most current accounts come with a cheque book and offer the facility to arrange standing orders. direct debits and payment via a debit card. the term Current Deposit refers to a deposit to a bank account or financial institution without a specified maturity date. 3. Apart from above there is another type of deposit which is called recurring deposit in which individual will have to pay a small sum every month for a particular period of time. The deposit will then generally be m ade 23 . Current account Current account is the name given to a transactional account in the United Kingdom and countries with a UK banking heritage. This type of account is normally maintained by companies and individuals who have higher frequency of withdrawing from their accounts. These types of Current Deposit account generally only earn demand deposit interest.

until the given maturity date . It is known as a term deposit or time deposit in Canada. They are considered to be very safe investments. as well as to provide cash for inventories and other such business expenses. It's important to note that banks may offer lesser interest rates under uncertain economic conditions. Funds are typically made immediately available to the customer for withdrawal by writing a check. It may or may not require the creation of a separate account. The tenure of an FD can vary from 10. 15 or 45 days to 1. Some banks may offer additional services to FD holders such as loans against FD certificates at competitive interest rates. such as monthly or quarterly. Australia. They also offer income tax and wealth tax benefits. The interest rate varies between 4 and 11 percent.available to the customer for withdrawal at any time and without an early withdrawal penalty. Such Current Deposit accounts are generally used for businesses that have a need for issuing checks to pay employee salaries and bonuses. Term deposits in India is used to denote a larger class of investments with varying levels of liquidity. Fixed Deposits A fixed deposit (FD) is a financial instrument provided by Indian and South African banks which provides investors with a higher rate of interest than a regular savings account. 24 .5 years and can be as high as 10 years. These investments are safer than Post Office Schemes as they are covered under the Deposit Insurance & Credit Guarantee Scheme of India. and the US. The bank or financial institution where the Current Deposit account is held usually pays out interest on the funds periodically. 4. New Zealand. The defining criteria for a fixed deposit is that the money cannot be withdrawn for the FD as compared to a recurring deposit or a demand deposit before maturity. and as a bond in theUnited Kingdom.

the interest will be paid at 5 per cent. This is known as a premature withdrawal. higher is the rate of interest but a bank may offer lower rate of interest for a longer period if it expects interest rates. will dip in the future. For example. In such cases. while other forms of term Deposits are Recurring Deposit and Flexi Fixed Deposits (the latter is actually a combination of Demand deposit and Fixed deposit). Although banks can refuse to repay FDs before the expiry of the deposit. if FD a/c was opened on 15th Feb. The interest is credited to the customers' Savings bank account or sent to them by cheque. 25 . the interest is paid with the invested amount on maturity of the deposit at the end of the term. The most popular form of Term deposits are Fixed Deposits. a deposit is made for 5 years at 8%. the deposit is called the Cumulative FD or compound interest FD. first interest instalment would be paid on 15 May). Generally. This is a Simple FD. Banks can charge a penalty for premature withdrawal. In this case. (e. the longer the term of deposit. To compensate for the low liquidity. The longest permissible term for FDs is 10 years.Fixed deposits are a high-interest-yielding Term deposit offered by banks in India.[4] The customer may choose to have the interest reinvested in the FD account. but is withdrawn after 2 years. Usually in India the interest on FDs is paid every three months from the date of the deposit. If the rate applicable on the date of deposit for 2 years is 5 per cent.. they generally don't. interest is paid at the rate applicable at the time of withdrawal. at which RBI lends to banks ("repo rates").g. FDs offer higher rates of interest than saving accounts. For such deposits.

000 in a financial year. Income tax regulations require that FD maturity proceeds exceeding Rs 20. The rate of interest on the loan could be 1 to 2 per cent over the rate offered on the deposit.Banks issue a separate receipt for every FD because each deposit is treated as a distinct contract. This is applicable to both interest payable or reinvested per customer or per branch. Taxability Tax is deducted by the banks on FDs if interest paid to a customer at any branch exceeds Rs 10. This is called Tax deducted at Source and is 26 . such deposits are renewed for a similar term as that of the original deposit at the rate prevailing on the date of renewal.000 not to be paid in cash. Repayment of such and larger deposits has to be either by " A/c payee " crossed cheque in the name of the customer or by credit to the saving bank a/c or current a/c of the customer. Some Benefits of Fixed Deposits  Customers can avail loans against FDs up to 80 to 90 per cent of the value of deposits. that has to be surrendered to the bank at the time of renewal or encashment. Many banks offer the facility of automatic renewal of FDs where the customers do give new instructions for the matured deposit. This receipt is known as the Fixed Deposit Receipt (FDR).[7]  Non resident Indian's and Person of Indian Origin can also open these accounts. On the date of maturity.

27 . customers can submit a Form 15 G (below 65 years of age) or Form 15 H (above 65 years of age).[8] If the total income for a year does not fall within the overall taxable limits. Banks issue Form 16 A every quarter to the customer.presently fixed at 10% of the interest. as a receipt for Tax Deducted at Source.

agriculture and foreign trade. which mainly serve as sources of short term credit to industry. Among the institutions in the organized sector of the money market. 28 . Development banking has its genesis in post independence period in India and has contributed significantly to the industrial growth of the country during the period. variety of specialized financial institutions have been set up in the country to cater to the specific needs of industry. institutions in the organized money market have grown significantly and playing an increasingly important role. comparing the money leaders and indigenous bankers. commercial banks and co-operative banks have been in existence for the past several decades. Thus. A banking instruction is indispensable in a modern society. Besides the aforesaid institutions. the organized sector of money market has penetrated into rural areas as well. The unorganized sector. though the money market is still characterized by the existence of both the organized segments. with phenomenal geographical expansion of the commercial banks and the setting up of the regional rural banks during recent past. The regional rural banks came into existence since the middle of seventies. In India. trade. commerce and agriculture.BANKING SYSTEM IN INDIA Banking system occupies an important place in nation‘s economy. It plays a pivotal in the economic development of a country and forms a core of the money market in an advanced country. cater to the credit needs of large number of persons especially in the country side.

National Bank for Agriculture and Rural Development (NABARD) is the fullfledged apex institution in the field of agriculture and rural development. 1982. setup in 1964 is the apex bank. namely ―The Industrial Finance Corporation of India (IFCI)‖. engaged in the task of development are now designated as ‗development banks‘ which are distinct from the traditional commercial banks. All these institutions. a new 29 . Besides. Long and medium term credit to the agriculturists is being provided by another specialized institution. It has contributed significantly to the industrial growth of the country during the period. namely the Land Development Banks at the district level and State Land Development Banks at the state level. For financing agriculture and allied activities in the rural areas. and ―The Industrial Credit and Investment Corporation of India (ICICI)‖. the State Financial Corporation‘s (SFC) and State Industrial Development Corporations (SID) have been setup to meet the requirements of small and medium scale industries. There are two prominent all-infuse institutions in the field. co-operative credit societies and central co-operative banks have been participating since long commercial banks began their active participation after the nationalization of major banks in 1989. the Industrial Development Bank of India (IDBI). which undertakes besides direct financing of big industrial project. Development banking has its genesis in post independence period in India. With the establishment of Export Import Bank of India (EXIM) on January 1. refinancing of term loan granted by other financial institutions including the commercial bank.In the field of industrial finance. In the respect State Industrial Reconstruction Bank of India (IRBI) has been setup to bring back normally the industrial units which fall sick.

we have a need to know something about Reserve Bank of India. The financial system may be claimed to have finest setup comparable to any advanced country. The deposit insurance and credit guarantee corporation (ECGC) provide protection to the banks in respect of risks inherent in financing the export trade. banker‘s bank and banker to the government. As the central bank of the country.APEX BANK has come into existence in the field of financing the foreign trade of the country. To facilitate the banking business and to foster the growth of banking habit. ABOUT RESERVE BANK OF INDIA (RBI) On this occasion. there are few other institutions. the Reserve Bank of India performs both the traditional functions of a central bank and a verity of development and promotional functions. two other institutions have been setup. the institutions which are mainly engaged in meeting the credit needs of various segments of the economy. Besides. they are called the investing institutions or institutional investors. 30 . which are essentially engaged in the business of investing in the corporate and government and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and the Unit Trust of India (UTI) channels them into desirable securities. The Reserve Bank of India Act. Hence. 1934 confers upon it the power to act as note issuing authority.

Banker to government The Reserve Bank of India acts as banker to the central and state governments. exchange and banking transaction in India and in particular deposit free of interest all is cash balance with the bank. According to Bank of India Act. In terms of section 21(A). government puts into circulation one rupee notes through Reserve Bank only. The bank entered into agreements with central and state governments for carrying on the functions. the Reserve Bank performs similar function on behalf of the state governments. According to section 20.FUNCTIONS OF RBI Note issue authority The currency of our country consists of one rupee notes and coins issued by the Government of India and bank notes issued by the Reserve Bank as required by section 38 of the reserve. it is obligatory for the bank to transact government business including the management of the public debt of the union. The reserve bank has the sole right to issue bank notes in India. Reserve bank also bears the responsibility of exchange notes and coins to those of other denominations required by the public. 31 . the bank is not entitled to any remuneration. Section 21 requires the central government on entrust the bank all its money remittance. The notes issued by the Reserve Bank and the one rupee notes and coins issued by the government are unlimited legal tender. To conduct ordinary banking business of the central government.

social and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise. They are generally concerned with rural credit and provide financial assistance for agricultural and rural activities.It holds cash balances of the government free of interest. CO-OPERATIVE BANKING SYSTEM Definition A co-operative bank is an autonomous association of person united voluntarily to meet their common economic. The co-operative banks collect funds through shares. The bank is also required to maintain currency chests of its issued department at places prescribed by the government and to maintain sufficient notes and coins therein. The bank also acts as adviser to the government on important financial matters. 32 . They accept deposits and grant loans. Meaning Co-operative bank is an institution established on the co-operative basis and dealing in ordinary banking business like other banks. ways and means of advances which are repayable within 3 months for the date of making the advance. For the management of the public debt. The Reserve Bank is also authorized to make to the central and state government. the bank is entitled to charge a commission.

Agricultural credit institutions are further divided into short term agricultural credit institutions and long term agricultural institutions or banks. reserves. Non agricultural cooperatives are those which work for the non agricultural purposes. They also guide the co-operative institutions in their state. They perform commercial banking functions also like accepting deposits.TYPES OF CO-OPERATIVE BANKS There are different type‘s co-operative credit institutions or banks working in India. There are 28 state co-operative banks in India. On an average. The state co-operative bank is the apex bank of co-operative sector in the state. they lend about ` 7700 crores annually to central co-operative bank and primary co-operative societies. deposits and borrowings from NABARD and state government. NABARD supplies 60% of the working capital of state co-operative banks in the country. 1) Agricultural 2) Non agricultural Agricultural credit societies dominate the entire co-operative credit structure. granting loan and collection of cheques. State co-operative banks These co-operative banks are formed by federating all districts central co-operative banks in particular state. The state co-operative bank secures fund for its business from share capital. These institutions can be classified into two broad categories. 33 .

From its origins then to today. . till 1996. refers to primary cooperative banks located in urban and semi-urban areas. though not formally defined. Cooperatives represented a new and alternative approach to organisaton as against proprietary firms. The origins of the urban cooperative banking movement in India can be traced to the close of nineteenth century when. Today. historically. They essentially lent to small borrowers and businesses. The Beginnings The first known mutual aid society in India was probably the ‗Anyonya Sahakari Mandali‘ organised in the erstwhile princely State of Baroda in 1889 under the guidance of Vithal Laxman also known as Bhausaheb Kavthekar. in their formative phase came to be organised on a community basis to meet the consumption oriented credit needs of their members. This distinction does not hold today. has been to 34 . democratic decision making and open membership. their scope of operations has widened considerably. especially amongst the middle class as well as organized help. These banks were traditionally centred around communities. the thrust of UCBs. inspired by the success of the experiments related to the cooperative movement in Britain and the cooperative credit movement in Germany such societies were set up in India. partnership firms and joint stock companies which represent the dominant form of commercial organisation. were allowed to lend money only for non-agricultural purposes. Cooperative societies are based on the principles of cooperation. localities work place groups. Urban co-operative credit societies.Brief History of Urban Cooperative Banks in India The term Urban Co-operative Banks (UCBs). These banks. Salary earners‘ societies inculcating habits of thrift and self help played a significant role in popularising the movement.

1904. Gokak Urban (February 15. Amongst the prominent credit societies were the Pioneer Urban in Bombay (November 11. The recommendations of the Committee went a long way in establishing the urban cooperative credit movement in its own right. The enactment of Cooperative Credit Societies Act. with a view to broad basing it to enable organisation of non-credit societies. 35 . 1906) in the South Ratnagiri (now Sindhudurg) district. however. 1906). 1906) and Belgaum Pioneer (February 23. The first urban cooperative credit society was registered in Canjeevaram (Kanjivaram) in the erstwhile Madras province in October.. the No. 1906) in the Belgaum district. 1906). The committee observed that such institutions were eminently suited to cater to the needs of the lower and middle income strata of society and would inculcate the principles of banking amongst the middle classes. 1905). The most prominent amongst the early credit societies was the Bombay Urban Co-operative Credit Society. gave the real impetus to the movement. Cosmos in Poona (January 18.mobilise savings from the middle and low income urban groups and purvey credit to their members . the Kanakavli-Math Co-operative Credit Society and the Varavade Weavers‘ Urban Credit Society (March 13. 1904 was amended in 1912. The committee also felt that the urban cooperative credit movement was more viable than agricultural credit societies. 1904. sponsored by Vithaldas Thackersey and Lallubhai Samaldas established on January 23. The Maclagan Committee of 1915 was appointed to review their performance and suggest measures for strengthening them. The Cooperative Credit Societies Act. 1906.1 Military Accounts Mutual Help Co-operative Credit Society in Poona (January 9.many of which belonged to weaker sections.

This was asserted by a host of committees. The Indian Central Banking Enquiry Committee (1931) felt that urban banks have a duty to help the small business and middle class people. it is of interest to recall that during the banking crisis of 1913-14. when no fewer than 57 joint stock banks collapsed. there was a there was a flight of deposits from joint stock banks to cooperative urban banks. the distinction between two classes of security being well appreciated and a preference being given to the latter owing partly to the local character and publicity of cooperative institutions but mainly. The Government of Bombay passed the first State Cooperative Societies Act in 1925 ―which not only gave the movement its size and shape but was a pace setter of cooperative activities and stressed the basic concept of thrift.‖ Other States followed. recommended that those societies which had fulfilled the criteria of banking should be allowed to work as banks and recommended an Association for these banks. This marked the beginning of the second phase in the history of Cooperative Credit Institutions. The Co36 . there was a movement to withdraw deposits from non-cooperatives and place them in cooperative institutions. Under State Purview The constitutional reforms which led to the passing of the Government of India Act in 1919 transferred the subject of ―Cooperation‖ from Government of India to the Provincial Governments. we think. the crisis had a contrary effect. and in most provinces. to the connection of Government with Cooperative movement‖. self help and mutual aid. There was the general realization that urban banks have an important role to play in economic construction. The Mehta-Bhansali Committee (1939). Maclagan Committee chronicled this event thus: ―As a matter of fact.In the present day context.

audit and liquidation. The committee introduced the concept of minimum capital requirement and the criteria of population for defining the urban centre where UCBs were incorporated. management. interest rates etc. The Rural Banking Enquiry Committee (1950). In 1963.operative Planning Committee (1946) went on record to say that urban banks have been the best agencies for small people in whom Joint stock banks are not generally interested. licensing. 1966 and within the ambit of the Reserve Bank‘s supervision. emphasized the need to establish primary urban cooperative banks in new centers and suggested that State Governments lend active support to their development. Large cooperative banks with paid-up share capital and reserves of Rs. Varde Committee recommended that such banks should be organised at all Urban Centres with a population of 1 lakh or more and not by any single community or caste. This marked the beginning of an era of duality of control over these banks. area of operations. impressed by the low cost of establishment and operations recommended the establishment of such banks even in places smaller than taluka towns.) were to be governed by RBI and registration. governed by State Governments as per the provisions of 37 . concerns regarding the professionalism of urban cooperative banks gave rise to the view that they should be better regulated. The first study of Urban Co-operative Banks was taken up by RBI in the year 195859. Banking related functions (viz. etc. Duality of Control However.1 lakh were brought under the perview of the Banking Regulation Act 1949 with effect from 1st March. The Report published in 1961 acknowledged the widespread and financially sound framework of urban co-operative banks.

While most banks are unit banks without any branch network. While the Marathe Committee (1992) redefined the viability norms and ushered in the era of liberalization. (1968 known as Damry Group) attempted to broaden the scope of activities of urban co-operative banks by recommending that these banks should finance the small and cottage industries. in a phased manner. control of sickness. better professional standards in urban co-operative banks and sought to align the urban banking movement with commercial banks.respective State Acts. UCBs came to be seen as important players in this context. The Madhavdas Committee (1979) evaluated the role played by urban co-operative banks in greater details and drew a roadmap for their future role recommending support from RBI and Government in the establishment of such banks in backward areas and prescribing viability standards. some of the large banks have established their presence in many 38 . and Tamil Nadu. The Working Group on Industrial Financing through Co-operative Banks. This was reiterated by the Banking Commisssion (1969). Maharashtra. the Madhava Rao Committee (1999) focused on consolidation. The Hate Working Group (1981) desired better utilisation of banks' surplus funds and that the percentage of the Cash Reserve Ratio (CRR) & the Statutory Liquidity Ratio (SLR) of these banks should be brought at par with commercial banks. UCBS were extended the benefits of Deposit Insurance. Karnataka. A feature of the urban banking movement has been its heterogeneous character and its uneven geographical spread with most banks concentrated in the states of Gujarat. In 1968. Towards the late 1960s there was much debate regarding the promotion of the small scale industries.

states when at their behest multi-state banking was allowed in 1985. As on 31st March. . It has resulted in several benefits. Gujarat. About 79 percent of these are located in five states. Instead of hoarding money. c) Small and marginal formers are being assisted to increase the income. Karnataka. The expansion of co-operative banks has resulted in several benefits. Thus. Maharashtra and Tamil Nadu. Recently the problems faced by a few large UCBs have highlighted some of the difficulties these banks face and policy endeavours are geared to consolidating and strengthening this sector and improving governance. especially the rural people. a) They have provided cheap credit to farmers. the rural people lend/deposit their 39 . 2003 there were 2. They discourage unproductive borrowing. b) They have reduced the importance of money lenders.Andhra Pradesh. More than 60% of credit needs for agriculturists are now met by co-operative banks. d) They have promoted saving and banking habits among the people. size and volume of business handled. IMPORTANCE OR BENEFITS OF CO-OPERATIVE BANKS The co-operative movement has become a powerful instrument for rapid economic growth.104 UCBs of which 56 were scheduled banks. Some of these banks are also Authorised Dealers in Foreign Exchange Recent Developments Over the years. co-operative banks have protected the rural population from the clutches of money lenders. primary (urban) cooperative banks have registered a significant growth in number.

social responsibility and earning for others. f) They supervise. Functions The following are the functions of central co-operative banks a) They finance the primary credit societies. 14. b) They accept deposits from the public. inspect and co-ordinate the activities of the primary cooperative societies. gold etc. equality and solidarity. e) They have undertaken several welfare activities. 40 . In the tradition of their founders. The most distressing feature of the functioning of central cooperative banks is heavy and increasing over due loans. c) They provide remittance facilities. democracy. They lend about Rs. co-operative members believe in the ethical value of honesty. Values Co-operatives are based on the values of self help. polity and education. self-responsibility. They have also taken steps to improve the morals. openness.000 crores annually. d) They grant credit to their customers on the security of first class securities.savings in the co-operative or commercial banks.. e) They act as ―balancing centers‖ by shifting the excess funds of a surplus primary society to the defect society. There are now 360 district central co-operative banks in India.

09. The bank was registered with No 1123/TD of 16. To encourage small trading people in urban areas. To encourage self employment schemes.12.295.78. District collector Karimnagar who was the founder and president. 41 . 1. To be in accordance with state government sponsored schemes. was organized and registered during the tenure of Sri K. The bank had started functioning from 7th may 1981. Even since its inception of the bank. OBJECTIVES OF THE BANK The objectives of the urban co-operative bank are as follows.46 lakhs.1980. 3. and IAS). 4. Metpally and Mankammathota of Karimnagar town were also submitted to the Reserve Bank of India during the VIII plan period and the permission is awaiting. The bank has started with the more deposits of ` 4.96 lakhs and the present deposits position has been increased to ` 3.050. To encourage small scale investment.Sc. The bank is functioning in its own building from 04. 2.A. The Karimnagar Co-operative Urban Bank Ltd. The bank was opened a branch at Jagityal in Karimnagar district in the year 06th November 1986 and proposals for opening another three branches at Godavarikani.s Sharma (M.1991. M.HISTORY OF THE KARIMNAGAR CO-OPERATIVE URBAN BANK LTD. with a membership of 1950 at time of registration and with a paid up capital of ` 4. its membership has increased to 17.79 lakhs in the land of municipality which was provided by the government. The bank has constructed its own building at a total cost of ` 11.627.

So that. own funds and borrowed funds. Various forms of resources created of different types of deposits accepted form members and non members. factory workers. Deposits The bank has different types of deposits accepted from the members and non members. face value of shares issued by the bank is ` 10 and ` 5 for A class and B class shares respectively. small traders. Share capital The bank has two sources for its funds viz. Normally. participate and vote in general body meeting.. The deposits are as follows.Membership The membership of the Karimnagar co-operative bank limited is limited to the persons residing in Karimnagar town like salaried employees.. poor people also become members of the bank with the right to attend. Own funds consist of paid up share capital and accumulated profit or retained profit. The area of operations of the bank extends to Karimnagar municipal limits and villagers within radius of 10 km and all other Mandal head quarters except nine mandals of old Siricilla talooq. a) Current deposits b) Saving deposits c) Fixed deposits 42 . contest for elections. special body meeting. professionals etc.

50% 4.25% 8.96 lakhs and the present deposits position has been increased to ` 3.00% 8.00% . INTEREST RATE FOR DEPOSITS Types of deposits Saving deposits 30 days to 45 days 46 days to 90 days 91 days to 179 days 180 days to below 1 year 1 year to below 2 years 2 years to below 3 years Above 3 years Interest rate 3.00% 5.d) Pavani deposits e) Recurring deposits f) Maruthi cash certificates The bank has started the more deposits of ` 4.00% 7.46 lakhs.00% 8.00% 14.50% A fixed deposit on senior citizens and women‘s gives 0.627. Interest on loans All types of loans Gold loans 43 18.25% 6.50% more interest.

BANK MEMBERS: 1) Sri Karra Rajashekar garu 2) Sri MD. Karimnagar. Samiyoddin garu 3) Sri E. Varala Jyothi garu 5) Sri Dhesha vedadri garu 6) Sri Anarasu kumar 7) Sri K. Ravi garu 8) Sri Sarilla Prasad garu 9) Sri Vazeer Ahmad garu 10) Sri Tatikonda Baskar garu 11) Sri Basetti Kishan garu 12) Sri C. Venkateswar garu 14) Sri GT. Laxman garu 4) Smt. Rajireddy garu 13) Sri K. The data presented in the table shows that the rate of interest would be high as the periods of deposits are longer.The above table comprises the information of rates of interest being offered to customers on various deposits in Urban co-operative bank. Venkatreddy garu 44 President Wise president Director Director Director Director Director Director Director Director Director Co-option member Co-option member CEO .

Kanakachari Senior advocate Chartered accountant Valuation engineer Valuation engineer Gold checker and Accountants Assistant accountants Cashiers Counter clerks Typists Attenders Watchmen Security guards Call boy 02 0 03 09 01 04 02 01 01 45 . Mutyam rao garu (BA. Rajeswar rao garu (CA) 17) Sri Kola Annareddy garu (BE) 18) Sri S. Civil) 19) Sri T.LLB) 16) Sri E. Baravi Sharma garu (BE.15) Sri CH.

00 GOLD LOAN 70000000 60000000 LOAN GIVEN 50000000 40000000 30000000 20000000 10000000 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 16640444 17777126 12243908 32554311 65438674 INTERPRETATION: From the above analysis. the value is 17777126. After 2008-09.50 8.24 100. 46 . The value decreased to 12243908. In the 2009-10. 16640444.TABLE NO. the gold loan issued was increased year by year.46 12. it is clear that in 2007-08. the gold loan given was Rs. 1 GOLD LOAN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 16640444 12243908 17777126 32554311 65438674 144654463 PERCENTAGE OF LOAN GIVEN 11.50 45. It increased upto 65438674 in the year 2011-12.29 22.

After that in the year 2010-11 and 2011-12.2 in the year 2008-09.23 24.20 4287513.20 4586070 4586070 17763388 PERCENTAGE OF LOAN GIVEN 24.2 4586070 4586070 LOAN GIVEN 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 INTERPRETATION: From the above table. 47 .82 100.2 4287513. personal loan was not issued.2.82 25.14 25. we can know that the personal loan given in the year 2007-08 is 4303735. it decreased to 4287513. the personal loan issued was 4586070.00 PERSONAL LOAN 5000000 4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 4303735. 2 PERSONAL LOAN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 4303735. In the year 2009-10.TABLE NO.

the house mortgage loan issued was 158435691.11 26.50 18. 48 . In the year 2008-09. house mortgage loan from the years 2007-08 to 2011-12 is obtained. In the 2007-08.00 HOUSE MORTGAGE LOAN 250000000 202241576 200000000 LOAN GIVEN 158435691 150000000 100000000 50000000 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 97940646 157892685 222299769 INTERPRETATION: From the above analysis. After the year 2009-10.82 11. 3 HOUSE MORTGAGE LOAN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 158435691 202241576 222299769 157892685 97940646 838810367 PERCENTAGE OF LOAN GIVEN 18. the loan was increased to 202241576 and to 222299769 in the year 2009-10.68 100.89 24. the amount of the loan given was decreased to 157892685 and further decreased to 97940646 in the year 2011-12.TABLE NO.

00 NORMAL LOAN AGAINST DEPOSITS 25000000 20000000 LOAN GIVEN 15728241 15000000 10000000 5000000 134729 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 18092555 19142597 17496863 INTERPRETATION: By analyzing the above data.28 25. It incrased to 18092555 in the 2009-10 and to 19142597 in the year 2010-11.19 22. it is clear that the amount of normal loan given against deposits was 134729 in the year 2007-08.TABLE NO. The amount of loan given was 15728241 in the year 2008-09.63 27. 49 . 4 NORMAL LOAN AGAINST DEPOSITS YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 134729 15728241 18092555 19142597 17496863 70594985 PERCENTAGE OF LOAN GIVEN 0. the amount of the loan issued was decreased to 17496863.78 100.12 24. In the year 201112. The value is in fluctuating trend during the study period.

TABLE NO. In the year 2007-08. the amount of loan increased to 4237967 and decreased to 3131561 in the year 2011-12. it is clear that the staff loan was in fluctuating trend during the study period.42 18.47 15. 50 . It decreased to 3558924 in the year 2008-09 and to 3025429 in the year 2009-10. In the year 201011.41 100. 5 STAFF LOAN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 4513167 3558924 3025429 4237967 3931561 19267048 PERCENTAGE OF LOAN GIVEN 23.00 STAFF LOAN 5000000 4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 4513167 3558924 3025429 4237967 3931561 LOAN GIVEN 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 INTERPRETATION: By analyzing the above graph.00 20. the amount is 4513167.70 22.

75 27. it is clear that the amount of self employment loan is in increasing trend up to the year 2010-11.77 21.84 13. 51 . the loan is 371186.78 100. In the year 2007-08.86 27.TABLE NO. 6 SELF EMPLOYMENT LOAN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 371186 578367 918172 1165260 1166741 4199726 PERCENTAGE OF LOAN GIVEN 8.00 SELF EMPLOYMENT LOAN 1400000 1200000 LOVAN GIVEN 1000000 800000 600000 400000 200000 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 371186 578367 918172 1165260 1166741 INTERPRETATION: From the above table and graph.

.TABLE NO. the amount of loans was increased to 2536133 and further to 2619681 in the year 2010-11. it is clear that the amount of vehicle loan issued by the bank is increasing year by year during the study period i. In the year 2009-10.49 21. In the year 2011-12. 52 .e. 7 VEHICLE LOAN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 1860084 2236731 2536133 2619681 3122650 12375279 PERCENTAGE OF LOAN GIVEN 15.00 VEHICLE LOAN 3500000 3000000 LOAN GIVEN 2500000 2000000 1500000 1000000 500000 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 1860084 2236731 2536133 2619681 3122650 INTERPRETATION: From the above table.07 20. the amount of vehicle loan issued was 3122650. from 2007-08 to 2011-12.23 100. The amount is 1860084 in the year 2007-08 the value increased to 2236731 in the year 2008-09.17 25.03 18.

After that the value decreased to 2576326 in the year 2010-11 and to 1738192 in the year 2011-12. In the year 2008-09 was 2857401.09 12.00 21.88 100.86 19. In the year 2009-10.TABLE NO. it is clear that amount of Kisan vikas patram loan issued was 2968980 in the year 2007-08. 53 .00 KISAN VIKAS PATRAM 4000000 3500000 3000000 LOAN GIVEN 2500000 2000000 1500000 1000000 500000 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 1738192 3355322 2968980 2857401 2576326 INTERPRETATION: From the above table. 8 KISAN VIKAS PATRAM YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 2968980 2857401 3355322 2576326 1738192 13496221 PERCENTAGE OF LOAN GIVEN 22.17 24. the value increased to 3355322.

. 2009-10 and 2010-11.00 GROUP LOAN 450000 400000 350000 300000 250000 200000 150000 100000 50000 0 400000 392800 392800 392800 LOAN GIVEN 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 INTERPRETATION: From the above analysis.TABLE NO. it can be concluded that the amount of group loan issued by the bank was 400000 in the year 2007-08. 2008-09. 9 GROUP LOAN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOAN GIVEN 400000 392800 392800 392800 1578400 PERCENTAGE OF LOAN GIVEN 25.34 24.89 100. the amount of loan issued was 392800 for all the three years i.89 24. After the year 2007-08.e. 54 .89 24.

e. the members are 16327 i. the no. OF MEMBERS YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL NO. OF MEMBERS 17400 17200 NO.03 20.37% of the five years. 10 NO.43 100. the members are further increased to 17050. of members was increased to 16801. it is clear that no. OF MEMBERS 19.00 NO. 55 . After that the no is 17218 in the year 2011-12.37 19. OF MEMBERS 17000 16800 16600 16400 16200 16000 15800 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 16327 16801 17050 16877 17218 INTERPRETATION: From the above table. of members are increasing year by year in Karimnagar Cooperative Urban Bank.. In 2009-10.TABLE NO. OF MEMBERS 16327 16801 17050 16877 17218 84273 PERCENTAGE OF NO. In 2008-09. In 2007-08.94 20.23 20. 19.

the share capital is decreased to 12887749 and to 12683305 in 2011-12. In the year 2007-08. the capital is 11180670 it increased to 12389558 in the year 2008-09 and further to 13131622 in the year 2009-10. 11 SHARE CAPITAL YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL SHARE CAPITAL 11180670 12389558 13131622 12887749 12683305 62272904 PERCENTAGE OF SHARE CAPITAL 17.09 20.70 20.TABLE NO. it is clear that the share capital of the bank is in increasing trend. In 2010-11.90 21. 56 .37 100% SHARE CAPITAL 13500000 13000000 SHARE CAPITAL 12500000 12000000 11500000 11000000 10500000 10000000 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 11180670 12389558 13131622 12887749 12683305 INTERPRETATION: From the above table.95 19.

the reserves are 10842479.51 22. In the year 2008-09. 57 . it is clear that the reserves of the bank are in fluctuating trend. In the year 2011-12.58 26. The value of reserves increased to 13459383 in the year 2010-11. the reserves are 15578659.19 17.14 100% RESERVES 18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 15578659 13459383 10842479 9280076 10433913 RESERVES 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 INTERPRETATION: From the above table. In the year 2007-08.57 18. 12 RESERVES YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL RESERVES 9280076 10842479 10433913 13459383 15578659 59594510 PERCENTAGE OF RESERVES 15.TABLE NO. reserves are 9280076.

12 3783.16 22.84. 13 DEPOSITS YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL DEPOSITS 2471.48 in the year 2011-12.27 3627.46 in the year 2009-10.99 17. 58 .17 PERCENTAGE OF DEPOSITS 14.84 2957.99 22. In the year 2007-08.12 3783.48 INTERPRETATION: From the above table.48 16495.93 21. And to 3783.84 2957. the value increased to 3627.TABLE NO.94 100% DEPOSITS 4000 3500 3000 DEPOSITS 2500 2000 1500 1000 500 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 2471.46 3655. the value of deposits are 2471.46 3655. it is clear that the value of deposits is increasing year by year.27 3627.

35 11718.55 2252. 14 LOANS GIVEN YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL LOANS GIVEN 2030. it is clear that amount of loan given was in fluctuating trend during the study period.36 2000 1500 1000 500 0 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 2441. 59 .35 INTERPRETATION: From the above table.34 100% LOANS GIVEN 3000 2500 LOANS GIVEN 2030. In 2007-08.38 2266.55 2252.33 20.84 23. the value is 2030.38 in the year 2010-11 and again it decreased to 2266.38 2266.55.35 in the year 2011-12.TABLE NO. It decreased to 2252.95 2727.28 19.36.36 2441. it increased to the highest in the year 2009-10 to 2727.95 2727.22 19.59 PERCENTAGE OF LOANS GIVEN 17.

31 17511.45 3185.59 in 2008-09 and to 3793.59 2676. In the year 2007-08. we can know the working capital requirements of the bank.80 100% WORKING CAPITAL 4500 4000 3500 3000 2500 2000 1500 1000 500 0 3793.28 18.67 22.31.59 3793. 15 WORKING CAPITAL YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL WORKING CAPITAL 2676. During the study period. the working capital is 2676.45.45 3863.TABLE NO. It increased to 3185.41 3992.41 3992.19 21.06 22.92 3185.68 PERCENTAGE OF WORKING CAPITAL 15. In the year 2011-12. 60 . the value is 3992.31 WORKING CAPITAL 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 INTERPRETATION: From the above table. the working capital is in increasing trend.92 in the year 2009-10.92 3863.

in 2010-11. 61 . .92 345248.58 4475193.27 26.15 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 INTERPRETATION: From the above table. In 2007-08.1. 16 NET PROFIT YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL NET PROFIT 345248.99. It increased to 1850545.58 in the year 2011-12. the net profit is 345248.89 14. the net profit increased to 119780.35 100% NET PROFIT 2000000 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 1850545.TABLE NO.77 41.99 1850545.71 9.10 442641.1 442641.15.74 PERCENTAGE OF NET PROFIT 7.92 1197980. It increased to 112641.58 NET PROFIT 1197980. we can know that the net profit of the bank is in increasing trend.15 638777.99 638777.

03 19. 62 .54 15368.36 22.54 in 2008-09. we can know that the transactions of the bank is in fluctuating trend.TABLE NO. In 2007-08.03 20.29 85254.23 16494.32 PERCENTAGE OF TRANSACTIONS 18.40 18954.29 in the year 2011-12. It increased to 18954.23 100% TRANSACTIONS PERCENTAGE OF TRANSACTIONS 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 18954. 17 TRANSACTIONS YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL NET PROFIT 15368.35 20.4 2007-08 2008-09 2009-10 YEAR 2010-11 2011-12 INTERPRETATION: From the above table.86 17357.23.86 17357. the value is increased to 16494.54 16494. the value is 15368.29 17079.86.23 17079. It increased to 17079.

88.e.e.. Staff loan given is in a fluctuating manner in the study period i. Group loans issued from the year 2008 to 2011..e. 8.e. 22 to 24. Personal loan in the year 2007-08 is 24.24.78 in the year 201M 2. 17.. No. 3. Gold loan in (he urban bank has increased much when compared to the previous year i. But in the year 2012 group loans not issued.09. 45. 11. of members in the bank is for the year 2012 is 17218. Share capital of the bank is increased from the year 2008 to 2010 i..23 and it is increased to 25.99 to 22.. 10. Deposits are also in increasing trend and increased from 14. 14. 7. it is increased from 15. 24. 4. Normal loan against deposit is increasing from the year 2007-08 i. 6. 9. 17. 2008-2012.86 to 12. Kisan Vikas Patram loan given is increased from 2008-2010 i. 2.e. 12.e.86 and decreased from 2010 to 2012 i.FINDINGS 1..57 to 26. 0.33 to 23.. Loans given by the bank are increased from 2008 to 2010 i.28 and decreased to 19..e.03 in the year 2008 to 25.28.95 to 21..19 to 24. 13. 63 . Self employment loan is in increasing trend from the year 2008-2012 i. House mortgage loan is fluctuating from the year 2007-08 to 2011-12.94 from the year 2008 to 2012.78. 5.23 in the year 2012.34 from 23.14. 8. Because they are increased from 15.e.82 in the year 2011-12. Reserves of the bank are in increasing trend from the year 2008 to 2012.84 to 27.e. Vehicle loan is in an increasing manner i.

Net profit of the bank in the year 2008 h 345248 and it is increased to 18506545 in the year 2012. Working capital in the bank is in increasing manner from the year 2008 to 2012.15. 64 . 16.

Deposits are also in increasing trend. 7. 11. Working capital in the bank is in increasing manner from the year 2008 to 2012. Staff loan given is in a fluctuating manner in the study period i. 65 .e.CONCLUSIONS 1.. Self employment loan is in increasing trend from the year 2008-2012. 5. 10. Reserves of the bank are in increasing trend from the year 2008 to 2012. 12. House mortgage loan is fluctuating in the study period i. Share capital of the bank is increased from the year 2008 to 2010. But in the year 2012 group loans not issued. 4. from 2008-2012. 3. 9. of members in the bank for the year 2012 is increased when compared to the previous year. Net profit of the bank is increased in the year 2012 when compared to previous year. Gold loan in the urban bank has increased much when compared to the previous year.e. Vehicle loan is in an increasing manner.. No. 8. 2008-2012. 6. Group loans issued from the year 2008 to 2011. 2.

Service level provided by the bank should be more efficient and effective for the customer.SUGGESTIONS 1. 66 . It is recommended that bank should offer some unique features to its products to acquire strong identity and can be easily distinguished. It has to issue to expand ita operations. Hence. The bank not issued Group loans in the year 2012. Bank should use latest technologies in banking activities. The bank's variety of loans and deposits are unlimited but they are not communicated well enough to customers. They would rate it as one of the important factor while selecting the loans. 7. Attractive and competitive interest rates should be adopted since it is the main factor considered for taking loans by the customers. 2. The customers are very keen on (he service provided by the bank. 5. 4. 3. it is suggested to make additional efforts to provide information to the customers about the range of loans and deposits. Bank should follow guidelines towards priority sector and get benefits out of it. 6.

co. AUTHOR PUBLISHER PUBLISHING YEAR 2010 2008  Annual reports of Karimnagar Cooperative Urban Bank. Accounting & Financial Management 2 Basic Accounting www.citefin. Shashi K Kalyani Publishers    67 . for the period of 2007-08 to 2011-12. Lalit Bhalla Lyall Bk Depot RK Sharma.P.Rustagi Publications Pvt. BOOK NAME NO Taxman Fundamental of 1 Financial Management Ltd.BIBLIOGRAPHY www.wikipedia.

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