EXECUTIVE SUMMARY The object of any business is to earn profits.

The main factors affecting the profits of the business is the magnitude of the sales. But the sales cannot be converted into cash immediately. There is a time lag between the sales of goods and realization of cash. Hence there is a need of working capital in the form of current assets to fill up this time lag. Technically, this is called as Operating Cycle or Working Capital Cycle, which is the heart of the need for working capital. This working capital cycle may be defined as the intervening period from the time the goods and services enter the business till their realization in cash. This intervening period depends upon the combination of various steps: 1. Acquisition and shortage of raw materials. 2. Actual production process that takes place. 3. Shortage of finished goods awaiting sales. 4. Sale of finished goods and realization of cash. Working capital needs of the company arise to cover the requirement of funds during this time gap, and the quantum of working capital needs, varies as per the length of this time gap. Net Working Capital= Current Assets – Current Liabilities. The major aspects of the working capital management are as follows: 1. Management of cash. 2. Management of receivables. 3. Management of inventory.

Hence, the study is based on the working capital management of a cooperative bank and also covers all important aspects related to it.


INTRODUCTION The working capital is commonly used for day to day working business. In simple words working capital means difference between current assets and current liabilities. Net Working Capital= Current Assets – Current Liabilities. Working capital is also known as “Circulating Capital”, “Fluctuating Capital”, and “Revo lving Capital”. Bank prepares the working capital by source of deposit as well as other incomes like as; Commission on Drafts, Locker Rent, and Interest on Loan etc. The main source of working capital of bank is various types of deposits such as Fixed Deposit, Saving Deposit, and Term Deposit etc. If banks current assets do not exceeds its current liabilities then it may run in to trouble paying back creditors in the short term. The worst case scenario is bankruptcy. A declining working capital ratio over a longer time period could also be a red flag that warrants further analysis.



A.CURRENT ASSETS: 1. Stock 2. Debtors 3. Investments 4. Cash in Hand 5. Cash at Bank 6. Loan and Advances 7. Prepaid Expenses

B. CURRENT LIABILITIES: 1.Loans 2. Creditors 3. Dividends 4. Outstanding Expenses.

Net Working Capital = (A-B)



Working Capital is most important pat in every business. Every bank required working capital for daily business. The concept o working capital can be broadly divided in to two categories as follow: 1] GROSS WORKING CAPITAL: It implies the firm‟s investment in current assets. The current assets are that assets can be converted in to cash with in an accounting year or an operating cycle. The current assets included Cash and Bank Balance, Debtors, Bills Receivable, Stock, Prepaid Expenses etc. 2] NET WORKING CAPITAL: The concept o net working capital referred the difference between current assets and current liabilities. The net working can be positive or negative. If current assets exceed current liabilities the difference is positive net working capital and when current liabilities exceeds than current assets the difference is negative working capital.

Net Working Capital= Current Assets – Current Liabilities.


TYPES OF WORKING CAPITAL The concepts of the working capital can be broadly divided into the following categories:

1. Gross Working Capital: This concept implies the total of all current assets of the business firm. A current asset is that asset which can be converted into cash within an accounting year or an operating cycle.

2. Net Working Capital: This concept of working capital is the difference between current assets and current liabilities. Current liabilities can be explained as those liabilities, which are expected to mature for payment within one accounting year.

3. Permanent Working Capital: There is always a minimum level of current assets, which is continuously required by the firm to carry out its business operations. Such current asset is referred to as permanent or fixed working capital.

4. Variable Working Capital: The extra working capital, need to support the changing production sales activities is called as fluctuating, variable or temporary working capital.


Working capital management is concerned with the problems that arise in attempting to manage the current assets.NATURE OF WORKING CAPITAL MANAGEMENT 1. 6 . 3. the current liabilities and the inter relationship that exists between them. 2. Working capital when kept in an adequate amount makes money available for several operations. Working capital plays an important role in interaction between current assets and current liabilities. 4. Working capital if not maintained in sufficient amount has an ability to take the firm headlong into the depths of bankruptcy.

work-in-progress. Example:. finished goods and debtors. This is the precise reason why the needs for working capital arise. 7 . workers are also to be paid periodically etc…But still the amounts required to be invested in these current assets is always higher than the funds available from current liabilities. bank.WORKING CAPITAL MANAGEMENT Cash or Bank Raw Material Sundry Debtors Work in Progress Finished Goods The working capital cycle contains of current assets like cash. Some part of the current assets may be financed by the current liabilities. raw material.Some raw material may be available on credit basis etc…All the expenses need not be paid immediately.

4. 3. Sales and Demand Conditions: The working capital needs are related to its sales.FACTORS AFFECTING WORKING CAPITAL The working capital needs of a firm are affected by numerous factors. Manufacturing cycle plays an important role in determining the working capital requirement and hence should be carefully selected and also it should be ensured that the manufacturing cycle is completed within specific period. In order to resolve the problems arising out of fluctuations as in demand a strategy of constant production can be adopted. The firm should use different policies for different customers depending upon their credit 8 . 2. It is necessary to employ the current assets before growth takes place. Technologies and Manufacturing Policy: The manufacturing cycle comprises of the purchase and use of raw materials and the production of finished goods. The important factors are as follows: 1. Manufacturing industries have to make adequate investment in current assets depending upon the total asset structure and the variables. These variations affect the working capital requirement of the firm. Nature of Business: Working capital requirements of a firm are basically influenced by the nature of its business. Most of the firms experience seasonal and cyclical fluctuations in the demands for their products and services. Credit Policy: While fixing the credit policy the firm may either follow the „foot -steps‟ of other firms belonging to same industry or it can fix its own credit policy.

attitude towards risk. When the competition in the market is keen. cash requirements. the company is required to follow the liberal credit policies so as to attract the customers. cash reserves operation efficiency. spares. manufacturing time. Also. 9 . the company is required to maintain high working capital because of higher investment in inventories and accounts receivables. repayment ability. the firm can manage with small inventory. terms of purchase and sales. However. 5. profit planning and control. 6. firm‟s finance and dividend policy. if the supply is unpredictable and scant then the firm. Thus. inventory turnover. that act is to be thoroughly investigated. In case if any customer makes delay payment. Market Conditions: The degree of working capital plays an important role in determining the working capital needs of the firm. If the supply is prompt and adequate. Other factors that affect the working capital requirement are such as: Nature of the industry.worthiness. Conditions of Supply: The inventory of raw materials. current assets requirements. would have to acquire stocks as and when they are available and carry larger inventory on an average. inflation or price level changes. and stores depend on the conditions of supply. volume of sales. business turnover. If the company does not keep larger inventory then the company may loose its customers because the customers may shift over to other companies. business cycle. demand of industry. the company obviously has to maintain adequate amount of inventory. production cycle. to ensure continuity of production.

It means that it can be increased or decreased. At that time bank must able to pay the amount of customer like this can make effect on working capital of bank. 3] Interest on loan: Bank provide loan to customer and charged interest on it so interest on loan is prime source of working capital. 2] Commission and Rent’s: Commission is also another important factor will be affect on working capital of bank. There are some factors which are affecting on banks working capital this are as follow: 1] Deposit: Deposits are the main source of working capital of bank. Demand Draft.G. R. Growth Rate Of Deposit etc. 5] Other factors : Staff Expenses. Administrative Expenses. Locker Facility etc. as well as it is fluctuating factor. Net Profit.S. Banks are provided various facilities to customer like as.FACTORS AFFECTING ON WORKING CAPITAL OF BANK The working capital is important need of bank. 1) Fixed Deposit 2) Saving Deposit 3) Term Deposit Bank can use this deposit as working capital like as deposit affects working capital. this are some factors which can affect on working capital of bank.T. Management Expenses. Rent on locker facilities this are source of working capital. Discounting Of Bills. some important types of deposit such are as below. 4] Provide on demand cash: The account holder‟s in bank can withdraw the cash when they have need of it. 10 . and banks are charged commission on it . System.

 Day-to-day liquidity worsens. the market value of shares may fall. creditworthiness suffers. 11 . higher incidence of B/D. poor ROI. Disadvantages of Redundant or Excess Working Capital:  Idle funds.EXCESS OR INADEQUATE WORKING CAPITAL Every business concern should have adequate working capital to run its business operations.  Due to low rate of return on investments. Both excess as well as shortage of working capital situations are bad for any business. Disadvantages or Dangers of Inadequate or Short Working Capital:  Can‟t pay off its short-term liabilities in time. However.  Unnecessary purchasing and accumulation of inventories over required level.  Overall inefficiency in the organization.  Economies of scale are not possible. out of the two. non-profitable for business.  Improper utilization the fixed assets and ROA/ROI falls sharply.  Excessive debtors and defective credit policy.  Difficult for the firm to exploit favorable market situations.  When there is excessive working capital. It should have neither redundant or excess working capital nor inadequate nor shortage of working capital. inadequacy or shortage of working capital is more dangerous from the point of view of the firm.

Work in Progress c. Cash and Bank Balance 4. Creditors 2.FORMAT OF WORKING CAPITAL BUDGET Particulars Current Assets: 1. Debtors 3. Raw Material b. Stores and Spares 2. Delay in Payment of Expenses Total Current Liabilities (B) Net Working Capital (A-B) Add: Contingency margin if any Total Working Capital Required Amount Amount XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX 12 . Prepaid Expenses Total Current Assets (A) Current Liabilities: 1.Inventory a. Finished Goods d.

MANAGEMENT OF BANK RELATED WITH WORKING CAPITAL As per banking regulation act the financial condition o bank must be good as well as the bank accept whatever deposit from customer it must be fully paid of at any condition. 13 . 3] Portfolio Management : Mainly the interest on loan and advances is the most important way of income for the bank so the portfolio management is most important management by view o bank. there are 3 important things by view of banking management.e. on demand at any time so there were great importance for cash management Bank should not get income on cash so that the bank should transfer the excess cash to another branch or Head Office A/c as per need. If in any case bank will not fulfill this condition then bank can be prohibited from fresh deposit so there is great importance to assets management and liabilities management in banking business. Deposit. To earning the working capital the most important thing is that the bank must pay interest on deposit. Its effective management is the key determinant of efficient working capital management. CASH MANAGEMENT „Cash is both the beginning and the end of working capital management‟. Bills etc. USE OF WORKING CAPITAL BY BANK 1) 70% used as Investments and Advances. 2) 30% used as for daily work. Working Capital) this transaction known as “Fund Business”. at the time of investment and giving the loan bank use own funds (i. Rent. 1] Cash Management: This is most important management system in bank. 2] Funds Management : The type of this management is related with investment when bank get excess amount then bank will be invest this amount and get income on it. Bank always be ready to paid of Salary.

it involves trade of between risk and profitability. Management of cash is primarily concerned with following:  Determination of minimum level of cash that a bank should hold.  Controlling cash outflows.Cash is the most important component of current assets. 14 .  Controlling cash inflows. So like this cash is most important factors in working capital.  Proper investment of surplus cash.e.  Matching cash inflows and cash outflows through cash budgeting. Importance of cash The goal of cash management is to maintain the minimum cash balance which provides the bank with sufficient liquidity needed to meet its financial obligation at the same time it should enhance banks profitability without exposing it to under risk i.

it must necessarily rely on trade credit and short term bank loans. Further. current assets represent more than half of a business firm because they represent large investment and it tends to be relatively volatile. but there is no way it can avoid investment in cash. Therefore current assets are particularly significant for the financial manager of a small firm. 3. A small firm may minimize its investment in fixed assets by renting or by leasing plant and equipment. Importance for small firms: Working capital management is particularly important for small firm. Investment in current assets: Characteristically. because a small firm has relatively limited access to the long term capital markets. 2. 15 . 1. Exploitation of favorable market conditions: Only concerns with adequate working capital that can exploit favorable market conditions such as purchasing its requirement in bulk when the prices are lower and by holding inventories for higher prices. both of which affect net working capital by increasing current liabilities. Current assets are the worth of financial manager‟s careful attention.IMPORTANCE OF WORKING CAPITAL MANAGEMENT The task of financial manager in managing working capital efficiency is to ensure sufficient liquidity in the operation of the enterprises. The liquidity of the business firm is a measured by its ability to satisfy short term obligation as they become due. receivables and inventory.

increases their efficiency. this may be appropriately subsumed under the head working capital management. Easy loans: Adequate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms. Goodwill: Sufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill. 5. reduces wastage and costs and enhances production and profits. 6. Time devoted to working capital management: Surveys indicate that the largest portion of a financial manager time is devoted is the day to day internal operation of the firm. 16 .4. Wages And Other Day TO Day Commitments: It leads to the satisfaction of the employees and raises the morale of its employees. Regular Payment of Salaries.

The first divides bank in to three categories as below. The commercial banks divide in to two categories as below: 1] Scheduled Bank.THE STRUCTURE OF INDIAN BANKING The structure of Indian banking system can be categorized in two ways. The nationalization of banks in India took place in 1969 by Mrs. 3] Cooperative Banks. These banks were mostly owned by businessmen and even managed by them. Indira Gandhi the then prime minister. 2] Non-scheduled Bank. 1] Reserve Bank Of India. RBI holds the reserve capital of all commercial and scheduled banks in the country. 2] Commercial Banks. 17 . In both of these systems of categorization the Reserve Bank of India sits at the center of the banking structure. It nationalized 14 banks then.

Any activity of the bank will not adversely affect the interests of depositors.SCHEDULED BANK Scheduled banks are those who is member of Reserve Bank Of India and nationalized bank has Govt. RBI in turns includes only those banks in this schedule which satisfy the criteria laid down vide section 2 (6) (a) of the Act. The paid capital and collected funds of bank should not be less than 5 lacs. Every scheduled bank enjoys the following facilities: 1. 2. The following are some example of scheduled banks in India: 1] State Bank of India. controlling along with membership o RBI. Scheduled banks in India constitute those banks which have been included in the second schedule of Reserve Bank of India (RBI) act 1934. Such bank becomes eligible for loans on bank rate from the RBI. 2] State Bank Of Hyderabad 3] Bank Of India 4] Canara Bank 5] Central Bank Of India. 18 . Such bank automatically acquires the membership of clearing house. The banks include in this schedule list should fulfill two conditions: 1. 2.

composition of short and long term sources of funds and relationship between gross working capital and sales. It was revealed that the amount of fixed assets increased but were not properly utilized. examined 21 paper mills during the period 1983-84 to 1992-93. Nellore. The study examined fixed assets management. Jayachandra (2005) in his paper studied financial management in Kovur Cooperative Sugar Factory Ltd. Further. The study concluded that the financial position of HIMFED was satisfactory but it required an improved system of managing working capital.. inventory management. The problem of working capital in the organization was related to surplus investment in current assets than of inadequacies. components of working capital. It was revealed that the working capital was inadequate in all the units and the rate of return on current assets was negative in many years of the study. there were small proportion of cash and bank balances. inventory formed major part in current assets. Andhra Pradesh during the period of 5 years from 1999-00 to 2003-04. "Working Capital Management in Paper Industry". fund flow analysis. the circulation of working capital was also not efficient. The study was based on both primary and secondary data and for analysis ratio analysis. liquidity position was not good and Kovur Cooperative Sugar Factory 19 . The study was based on both primary and secondary data sources of information. The elements analyzed were liquidity position. linear regression equation and correlation techniques were used. the inventory level in some mills was excessive and there was poor planning of cash balances and the receivables were also not managed properly. cash management and profitability. Pathania and Sharma (2001) analyzed the working capital management of Himachal Pradesh State Cooperative Marketing Federation (HIMFED) during the period 1990-91 to 1998-99. The techniques like ratio analysis. and working capital was mostly financed through long term sources of funds which was not a healthy sign. Further. averages and percentages were used for the analysis of data.LITERATURE REVIEW Prasad (2000) in his paper titled.

evaluated the financial performance of Cuddalore district central cooperative bank during the period from 1998-99 to 2007-08.was not in a position to meet its obligation out of cash flows. efficiency. profitability and ratios of strength were calculated. raise funds through long term sources of finance so as to reduce interest charges. control cost of production and operating expenses etc. 20 . The ratio of strength further indicated weakness as the ratio of net worth to total liabilities was below standard norm and the total assets were also not sufficient to satisfy the total liabilities of the bank throughout the study period. The study was based on secondary sources of information and financial ratio analysis was used as tool to view the performance of bank. The solvency and liquidity ratios revealed bank's inability to meet its short and long term obligations. The key solvency. set up a purchase committee for inventory. It was also found that cost of production and selling and administrative expenses increased but in last two years operating expenses were controlled due to which net operating profits were very high. The efficiency and profitability ratios found inefficiency and fewer profits. proper cash planning. liquidity. "Performance of the Cuddalore District Central Cooperative Bank in Tamil Nadu--A Ratio Analysis". It was recommended that the Kovur Cooperative Sugar factory should do proper evaluation of investment proposals on fixed assets. Amuthan (2010) in his research paper titled.

OBJECTIVE OF RESEARCH  To analyze the concept of working capital. current liabilities and the inter relationship that exists between them.  To study the various elements of working capital.  The goal of working capital management is to manage the bank‟s current assets and current liabilities in such a way that a satisfactory level of working capital is maintained.  If there is no proper working capital management it is likely to force in to bankruptcy. 21 .  Each of the short term sources of financing must be continuously managed to ensure that they are obtained and used in the possible way.  To determine the financial position of the bank. METHOD OF DATA COLLECTION SECONDARY DATA: It is collected from financial statements of bank as well as audit report of branch. SCOPE OF RESEARCH  Working capital management is concern with the problem that arises in attempting to manage the current assets.METHODOLOGY RESEARCH PROBLEM Analysis of Working Capital Management in “Karad Urban Co -Operative Bank”.

which are prepared on the historical cost basis.LIMITATIONS OF THE RESEARCH 1. 4. So it gives a view on particular date. 2. These financial statements are prepared at the end of financial year. The main limitation of the research is the data source. 22 . Due to less time calculations are of some figures are taken only. Some data due to the purpose of secrecy was not disclosed. The data is collected from the audited financial statements. 3. 5. Period of research up to 5 years so the observation more than 5 years cannot be ascertained.

Securitization Act. 23 . Maharashtra State Co-Op Act.DATA ANALYSIS AND INTERPRETATION BANKING BUSINESS Banking is referred as “to collect the money from people as a deposit and use it as an investment and or giving loan this is banking”. Negotiable Instrument Act. issue of currency. role of RBI.D. This is implied trust or faith while a customer keep deposit with the bank. S. Depositors keep faith that bank will return his deposit as and when he demands.Ratio. Trust: The money is given or borrowers belong to public hence repayment of loans must be proper and bank has to take utmost care in that respect i. C. Laws: Banking Regulation Act.R. Hence banker is the TRUSTY of each paisa of depositor. licensing policy. etc. loan must go in good hands. Depositor‟s interest is having utmost importance in all walks of banking life and that is the main theme of banking.e. Indian Contract Act. Registration and Stamp Act etc.R.L.R. Banking Regulation Act defines what bank should do keeping to C.

is a highly effective instrument of monetary regulation. level. act 1934 enjoins the schedule commercial banks to maintain with the R. As per banking regulation act 1949 the banks are maintain at the close of business every day a minimum amount equal to not less than 25% of their total demand and time liabilities. level.O.e.R. 2.R. to D.T. empowered to increase this ratio up to 40% now it is 25% it is also maintain on H.B.R.I. C.D. The R. The C. securities against their deposit liabilities in addition to cash reserve requirement this is known as supplementary or secondary reserve requirement. is known as Cash reserve ratio (i.L.e.) in India outstanding as on the Friday of previous week . Cash Reserve Ratio (i.IMPORTANT RATIOS AS PER THE BANK VIEW 1. Statutory Liquidity Ratio (i.42 of R. The ratio of cash reserves with R.R.I.): Sec.e. is empowered to vary the C.R. C.I.R. every forth night a minimum average a minimum average daily cash reserve equivalent to 3% of their demand and time liabilities (i.B.L.B.R.): Central bank generally require commercial banks to hold liquid assets such as Govt. between 3% to 15% now it is 4.L.75%. S.I. This is maintained on H.e.) The R.B.T.R.R. 24 .I.O.B.

T. 1] R. 2] NIFTY: Nifty is also one of the important system which is provided by bank. By using this service A/c holder can deposit/transfer amount above 2 lacs instantly in any bank and any branch.R. no.O. guideline so this commission is also source of working capital.S.).G. party get whole information about transaction.G.R no. By providing this facility bank has been charged commission as per R.e. It is the satellite system. in this system there is U. 25 .C code and A/c no.SOME ADVANCED SYSTEMS OF TRANSACTION IN BANK Bank charged commission on this system so this is an important source of working capital.T.T.B. this is most important system in today‟s modern era. In this system bank required I. Unit Transaction No. This system useful for amount below Rs. after completing this transaction customer gets U.I.O level but branch can do it! The term R.S. SYSTEM : This transaction occurred on H.B.1 lacs bank charged commission on it so it is source of working capital. By using this no. have an account in R.T.I. (i. is referred as “Real Time Gross Settlement”.F. In this system H.

After computerizing of branches‟. bank has plan for introducing core banking solution and ATM centers to offers integrated service to its customer. The management of the bank is always forward looking in utilizing the latest technologies. Karad knows the importance of computerization thus in the early of mid 87 management decided to computerize all the branches. 5. The bank performance significantly improved after computerization in the last several years. Subhash Erram. Vidyadhar Gokhale. Dilip Gurav. “BANK’S VISION IS BANK’S MISSION”  IT Infrastructure: Information Technology and its infrastructure has been playing very vital role in all walks of our life.BANK PROFILE  Board of Directors: 1. Mr. Anil Lahoti. 4. The banking sector is greatly benefited by modern technology The Karad Urban Co-operative Bank ltd. Bank has a vision becoming a multi state scheduled co-operative bank and has targeted to achieve Rs. Now a days all branches are computerized. 3. of mix business tuning with competitive banking scenario. 3000 crs. Information Technology department has been set up to look after this aspect. Subhashrao Joshi. Dr. Mr. : : : : : [Head of Urban Family] [Chairman] [Vice Chairman] [Chief Executive Officer] [Ex. Chief Executive Officer]  Vision and Mission: Bank has a network of 48 branches in 7 districts of Maharashtra and is planning for spreading network of 60 branches by the year 2013. 26 . Mr. 2. Dr.

urban credit society in the year 1917 and was subsequently converted in to a bank who were from different walk of life. Ratnagiri.The IT department is looking after entire maintenance of the hardware and development of the software modules in house. Scheduled Status: Due to its professional management dynamic leadership of late Dr. Shubhashrao Joshi and other board of members was able to achieve all round progress. The late Dr.S. Raigad. Till 1993 the bank had only 8 branches spread over Satara district only. HISTORY OF BANK The beginning and progress: The Karad Urban Co-op. working in a various fields but having future out-look recognizing the need. Karad is now a prominent name in Urban Banking Sector.Erram and Mr. The bank was established first as a Co-op. Solapur. Sangli. Ahamadnagar and also planning to go Multi-State by opening branches in Ahmedabad and Belgaum in Gujarat and Karnataka state respectively. Computerization: In keeping with the technology developments in banking sector the bank had computerized all the branches providing quick and delightful service to its valued customers.. D. established this bank way back 90 years ago. Shubhashrao Joshi the bank made tremendous progress in last 10 years and during the year 1999-2000 it was conferred with the Scheduled Status as mark o its financial health and confidence of the public. Pune and Mumbai.S. Computerization was initiated in 1989. Bank Ltd.Erram who had vision and who along with dedicated co-operation from Mr. D. The bank has made tremendous progress in all this districts and considering the need and demand has amended its bye-laws to cover other districts of Maharashtra viz. Kolhapur. in phases we did all the branches 27 . Since then it has expanded its wings in other prominent districts of Maharashtra viz.

members are also given financial aid for their higher studies in foreign countries members who make major achievement in special fields are also provided financial help needed by them. 28 . per Rs.     Duplicate Pass Book: Rs. timely financial help is provided to members suffering from chronic diseases and serious ailments like Heart-attacks. Collection : Rs. Rs. Bank provides small collection and receipt print device to pigmy agents so agents can collect small deposit from customers door step.M. has forgotten its social obligation. Charges for late payment of E. 20 per year.I.D.15 In operative A/c : Rs. Though this trust. SERVICES AND CHARGES OF BRANCH Service Charges of Branch:  Saving Bank A/c: Minimum Balance Rs. D. Bank has established a public trust. cardio logical help. Social Obligation: Bank besides making all round progress in its activities.computerized. pathology lab and allied services to the members at affordable rates. 50. kidney failures and person who suffer due to accidents etc.: Re.1000 with cheque book.500 without cheque book. We have vision for centralized data storage for any storage for any time banking through core banking solutions. The trust has planned to establish a diagnosis center in association with other social institution and in near future CT scan.1 per day.

Operating an account Retirement of bill Updating of passbook Statement of A/c Time in minutes 7 15 7 25 15 25 25 10 Within 7 days 29 .D.THE NORMS FOR VARIOUS SERVICE IN BRANCH Cash payment Through Teller Cashier Receipt o cash Issue of drafts Payment of F. Rec.

There is a limit on advances also. LOANS AND ADVANCES Loans and advances are most important part in banking business. Working Capital) The daily limit of branch to retain cash up to Rs. vehicles as a mortgage .Bank provide loan and advances from its own funds (i. 30 days. Advances mean cash credit A/c‟s.COLLECTION OF CHEQUE      Local (through clearing house): 1 day. When bank give term loan to customer then bank kept machinery. 30 .20 lacs only because to retain excess cash is not good for bank because bank not generate the income on it.e. as a mortgage . Outdoor (through counter present): Mumbai / Metro cheques: 1 day. Branch provides this facility by way of mortgage. Other cheques: Foreign Cheques: 21 days. 7 days/ 14 days.There were certain limit to this loan. Advances are beneficial for businessman and bank provide this facility to businessman by taking stock. building etc.

25% 13.Interest rate of branch:- 1] Housing Loan 2] Current A/c Loan 3] Vehicle Loan 4] Gold Loan 5] Personal Loan : : : : : 13.50 to 15.15% 12.25% 14.50% 16 to 18% 31 .

71 % of total 54.07 1510.45 684.LOANS AND ADVANCES OF BRANCH (Rs.55 542.62 50.48 100% Interest received on loan and advances: 199.26 1508.98 Lending rate: - - 13.38 100% Avg.25 32 . growth rate: 53.65 1077.38 % of total 2011-2012 avg.35 100% Avg.65 45.52 46. in lacs) Loan and advances Term loan Cash credit Total 31/3/2012 824.31 702.2011-12 808.2010-11 534.20 % of total 49.

growth rate = (-) Avg. 𝐴𝑣𝑔 . Avg.𝑙𝑜𝑎𝑛 𝑎𝑛𝑑 𝑎𝑑𝑣𝑎𝑛𝑐𝑒𝑠 % 2] Avg. Loan = 𝑇𝑜𝑡𝑎𝑙 𝑎𝑚𝑡 .Calculation of above table:- 1] Lending rate on advances = 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑒𝑐𝑒𝑖𝑣𝑒𝑑 𝑜𝑛 𝑙𝑜𝑎𝑛 𝑎𝑛𝑑 𝑎𝑑𝑣𝑎𝑛𝑐𝑒𝑠 . figure of 2011. 12 3] Avg. 33 .𝑜𝑓 𝑙𝑎𝑠𝑡 𝑓𝑟𝑖𝑑𝑎𝑦 𝑓𝑟𝑜𝑚 𝐴𝑝𝑟𝑖𝑙 𝑡𝑜 𝑀𝑎𝑟𝑐 𝑕 . figure of 2010.

41 61.19 6.72 Profit 24.67 No.BRANCH REGION AT GLANCE (Rs.22 6.98 7.19 1508. in Lacs) Particulars 31-3-2008 31-3-2009 31-3-2010 31-3-2011 31-3-2012 Deposit 692.24 12.36 35.52 1975.25 Spread (BA) 6. of Employee 8 10 11 12 12 34 .07 1680.04 6.73 6.48 6.58 Lending rate (B) 11.82 Borrow rate (A) 5.02 6.12 1423.21 13 13.23 2259.34 1173.06 1318.23 13.12 1008.41 56.81 Loan & advances 402.64 72.02 5.

05% 66.64 3398.33 68.78 43.13 2998.25% in the year 2012.84 Interpretation: In above statement we can see that the borrow rate of interest on fixed deposit. C.60 283.93% 78. In year 2012 C.46 2181.42 3768. Productivity is depending upon staff‟s business. In simple words extra spread = extra profit.Amount 14. It is tool of bank analysis.D Ratio decreased because loans and advances are decreased .80 218. Spread show the profitability. of employee ) 35 .No.08% 85.P.A 1.   Total Business = ( Deposit + Loan) Total Productivity = (Deposit + Advances ÷ No.11 272.D Ratio 58.44% 72.76% N.53 Total Productivity 136.22 16.47 32.20 314.04 C.D Ratio shows relation between total deposit and loan. In case if there were extra staff in branch then management made transfer of extra staff in other branch where requirement of it. Spread is defined as difference between lending rate and borrowing rate.Total Business 1094.of A/c 19 21 23 13 21 2. It is required minimum 5% and lending rate throw light on interest rate on loan received from customer here % of interest received on loan is 13.

in Lacs 1000 800 600 400 200 0 1 Fixed deposit 2 Saving deposit 3 Other deposit 2008 2009 2010 Years 2011 2012 Interpretation: The above graph shows that all types of deposits were increasing in the financial year 2009 but in the year 2010 the position of fixed deposit and other deposit was going down to some extent .in lacs) 1800 1600 1400 1200 Rs.C.D Ratio = (Loan ÷ Deposit × 100) BUSINESS PERFORMANCE OF BRANCH (Rs. 36 . After the financial year 2010 there were highly growth in the fixed deposit and on the other hand we can see that the position of saving deposit was increasing continuously in whole period. So from this graph we can conclude that there was found ups and downs in the types of fixed deposit and other deposit but saving deposit was show growth in whole period. The business performance of branch was on the right track since the financial year 2011.

MOVEMENT IN No. of A/c‟s at the end of year: 6494 6760 266 2. OF A/c’s IN BRANCH Particulars 31/3/2011 31/3/2012 Variation 1.SAVING: At the end of previous year: (-) Closed during the year: (+) New A/c‟s opened during the year: 259 359 100 6275 40 6494 93 219 53 Total No.CURRENT: At the end of previous year: (-) Closed during the year: (+) New A/c‟s opened during the year: 18 38 20 740 18 740 25 7 Total No. of A/c‟s at the e nd of year: 740 753 13 37 .

] 10403 11063 660 38 .TERM AND OTHER: At the end of previous year: (-) Closed during the year: (+) New A/c‟s opened during the year: 886 2329 1443 3328 951 3263 2042 (65) 1091 Total No.3. of A/c‟s at the end of year: 3263 3550 287 Total No. of depositors: [Saving+ Current+ T.D.

89 39 .33 68.84 125 18. 90 days) this accounts referred as N.P.72 No. of A/c‟s 408 587 712 794 Gross N.P.84 21 23 13 21 110 19. Particulars 31/3/2009 31/3/2010 31/3/2011 31/3/2012 Total advances loan and 1008.) N.78 43.P.A. of A/c‟s 2. But those accounts which are not paid or not recovered interest and installment overdue more than 3 month‟s (i.A.82 159 38. The main cause of creating N.e.Amount 16. total business also increased so like this above chart shows statically and ratio information of branch.47 32.No. is no recovery of loan and advances. NON PERFORMING ASSETS OF BRANCH (i. accounts as per income recognition and assets classification provision has been made.is referred as “Non Performing Assets”.A amt No.e.A.19 1508.STATISTICAL AND RATIO INFORMATION OF BRANCH This information shows that the total no of customer are increased in the year 2012 as compared with the last year as well as Avg.12 1423.A. The customer who has taken the loan he must paid installment on it. of bank is minimum then the position of bank is good or viceversa.P.06 1318.N.P. Bank provides various types of loan by retaining certain mortgage or securities. of A/c‟s Over dues: 1.33 116 59.P. If the N.A.

82 799.81 Loan 476. in lacs) Years 2008 2009 2010 2011 2012 Deposit 692.40 61.64 72.82 40 .23 2259.3 1173.45 Income 79.36 35.72 144.32 112.38 118.83 235.11 1008.FINANCIAL POSITION OF BRANCH (Rs.18 162.06 1262.57 Expenditure 65.73 169.40 56.53 1975.05 824.13 205.02 83.07 1680.75 Profit/Loss 14.

41 . the position of loan increasing from 2008 to 2010 after that it was shows downwards position and then it was increased.f. the financial year 2008 to 2012 As well as the income also show the position of growth in whole year. 1400 1200 1000 800 600 400 200 0 Deposit Loan Income Expenditure Profit/Loss 2008 2009 2010 Years 2011 2012 Interpretation: The above graph shows the financial position o branch. by studding this graph we know that deposits are increasing continuously w.e. There were balance between income and expenditure in all years. The profit of branch was shown the growth position in whole financial year from 2008 to 2012 continuously The graph of expenditure also shows the position of growth in whole financial year.2400 2200 2000 1800 1600 Rs. like this branch manage the position of profit we know that profit means difference between income and expenditure if the value of difference is positive then this is profit and if it is negative then there are position of loss.in lacs.

69 2012 16. Because the graph of deposit‟s. income‟s.27 From this graph we can conclude that the financial position of branch is very good.in lacs) Total Current Assets 1400 1200 1000 800 600 400 200 0 2010 2011 Amt in lacs 2012 42 .45 839.82 1280. Total Current Assets: (Rs. Like this graph shows the good financial position of branch.PROFIT = INCOME – EXPENDITURE Sr.1 2011 17.94 824. 1 2 Particulars Cash and bank bal.No. profit‟s show the position of growth continuously in all years as well as there were balanced position of income and expenditure .05 841.36 799.67 1262. Loan and advances TOTAL 2010 18.

Total Current Liabilities: (Rs.5 1 0. 43 .39 2011 1.5 0 2010 2011 Amt in lacs 2012 Interpretation: By analyzing this graph we can see that the position of total current liabilities shows increasing position.in lacs) Sr.Interpretation: By analyzing this graph we can see that the position of total current assets shows decreasing position.12 Total Current Liabilities 2.99 2012 2. 1 Particulars Other liabilities TOTAL 2010 1.5 2 1.99 1.12 2.No.39 1.

39 1278.82 799. (Rs.99 839.15 Net working capital 1400 1200 1000 800 600 Amt in lacs 400 200 0 2010 2011 2012 44 .7 2.STATEMENT SHOWING WORING CAPITAL.in lacs) A]CURRENT ASSETS 2010 2011 2012 Cash and bank bal.12 Total: Net working capital:[A-B] 1.36 16.71 1.67 17.94 Loan and advances 1262.69 839.12 837.99 2. 18.1 841.27 B]CURRENT LIABILITIES Other liabilities 1.45 Total 1280.05 824.39 1.

O.64 72.ANALYSIS OF PROFIT AND LOSS ACCOUNT (Rs.56 PROFIT (I-II) 61. 45 .62. in lacs) Particulars 31/3/2011 31/3/2012 Increased/Decreased I.42 08.895 the branch has made a profit of Rs.84 118.EXPENDITURE Interest on deposit Staff salary and allowances Deprecation and repairs Other expenses 17.47 (0.17.INCOME: Interest Received H.37) (2.81 34.70 113.83 235.76 17.15) 07.65) TOTAL I : 205.17 Interpretation: On the review of this details it is observed that there is a rise of Rs.08 06.11.76 04.74 II.72.57 29.477 in a net profit of the branch as compared to the to the last year the total income of the branch as on 31/3/2012 is Rs.1.82.46 186.020 during the year 2012.04 05.82 11.26 17.74. Interest Other Income 151.18 162.17 10.72 43.95 45.92 TOTAL II : 144.41 02.74 18.25 09.76 (2.

15 1761. Interest payable and Borrowings) (Deposit 20.84 3.32 775.61 18. BALANCE SHEET AS ON : 2010-2011-2012. Fixed deposit 1271.14 2.68 18. Other deposit 165.06 1481.50 1. Secured advances 46 18. [Rs.477 in the financial year 2012 as compared with the year 2011. Secured loan 3. Outside liabilities TOTAL: ASSETS 59.63 16.61 20.99 2.50 23.26 .99 2014.87 2313.67 17.82 4. In simple words we can say that bank is on right way of business.39 1.67 24.79 - 624.54 802.No LIABILITIES 2010 2011 2012 1.33 122.37 426. Unsecured loan 4.12 6.27 1707. In Lacs] Sr.71 5.14 371.52 21.59 125. Cash and bank balance 2. Other provisions liabilities and 1.82 30.17.11. Saving deposit 244.14 684.94 1238.By analyzing the Profit and Loss A/c of the branch we can conclude that branch has made excess profit of s.

H.Assets TOTAL: Electrical fittings and fixtures 14.15 17.1975. 47 . Fixed Assets 6.38 2014.78 2.36 17.41 1761. We know that the main source of the working capital of the bank is deposits. Because deposit is the main source of working capital.13 0.57 0.58 lacs in the amount o total deposit in the year 2012.69 2. From this we can say that there was growth in working capital of bank. By studding the balance sheet of bank the total deposit of branch is Rs.40 24.50 Interpretation: The statement which shows the financial position of business this is known as balance sheet.O.81 lacs as on 2011 and 2012 respectively there were growth of Rs. from this balance sheet we observed that the working capital of bank increased at every year.23 lacs and Rs. Mis.82 736. Depositors keeps faith that bank will return his deposit as and when he demands.32 42.2259.68 524. by observing the assets side and liabilities side we know the financial position of business.62 413.49 6.08 1.5. so balance sheet is also known as mirror of the business. So from this it is cleared that there were growth in working capital of the bank at every financial year.94 15. Contra Items 10. Other Assets 9. On the other hand we can say that the goodwill of branch has been increased. goodwill is the main intangible assets which is on assets side of balance sheet.Assets 7. 8.284.17 7.28 2313.63 14. In other words we can say that the trust of people on the bank has been increased.62 0.

position of profit shows growth continuously in all year as well as there are balanced position between income and expenditure like this we found that financial position of branch is very good. Financial position of branch: Analysis of the information about the financial position of the branch indicate that deposits. of depositors are shown the position of growth it is the best thing of the branch. Deposits: The deposits are the main source of working capital by studying the financial statements of bank we can observed that the amount of Fixed deposit‟s as well as the 48 . 4. 3. Movement in no. incomes. the most important thing is that total no. 2. Business performance of the branch: By making study of the business performance of the branch we understand that there are ups and downs in the type of fixed deposit and other deposit but the position of the saving deposit was show growth in whole period.FINDINGS 1. Net working capital of branch: The statement of working capital shows that there are ups and downs in the position of working capital the graph of net working capital shows that decreasing position up to some extent so there is need of proper working capital management at branch level. 5. of A/c’s in branch: By analyzing this statement we have been know that opening of new saving account‟s on the year ended 2012 are increased as well as the same thing is happened with the Current A/c‟s and other accounts also.

Bank should use latest technologies in banking activities. Try to make fast services. lending on profitable ventures. 49 . SUGGESTIONS 1. Since all the banks are providing loans with the same features. A continuous rise in the deposit‟s is a positive sign by view of working capital of the bank. Bank should follow guidelines towards priority sector and get benefits out of it. Attractive and competitive interest rates should be adopted since it is the main factor considered for taking loans by the customers. 8. 3. diversifying the business to cope with the competition. Offer best customer services. 6. 7. The bank should adopt attractive and competitive rate of interest in order to induce customers to take personal loans. It is recommended that bank should offer some unique features to the customers. 4. 5. Need of proper working capital management. 2.amount of Saving deposit‟s are increased. 9. A suggestion is made to the bank to expand the business globally and offer more and more services to the people abroad.

Working capital protects the bank from going bankrupt.CONCLUSION: 1. The working capital management classified in to gross working capital and net working capital. So in such a way working capital plays a vital role in the banking business. 2. Net working capital is more important because in long run view of working capital management have to concentrate on the net value of the current assets. 3. The working capital is essential for maintaining the financial position of the bank. natural calamities. 4. 50 . Working capital protects the bank perishing due to sudden break out of strikes.

    Financial Management by N.REFERENCES For the preparation of the project report following books and websites were referred.karadurbanbank. Vechalekar. www.inwestorwords.com www.com 51 . M.com www.investopedia.

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