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INTRODUCTION

Finance is one of the major elements, which activates the overall growth of economy. Finance is lifeblood of economic activity. A well-knit financial system directly contributes to the growth of the economy. An efficient financial system calls for the effective performance of financial institutions, financial instruments, and financial markets.

MEANING OF FINANCE: Finance is concerned with resource allocation as well as resource management, acquisition and investment. Simply, finance deals with matters related to money and the markets. Finance can be defined as the art and science of managing money. All the individuals and organization earn or raise money and spend or invest money Finance is concerned with the process, institutions, markets and instruments involved in the transfer of money among and between individuals, businesses and government.

FUNCTIONS OF FINANCE: Financing Decision. Investment Decision. Dividend Decision. Financial Analysis and Planning. Financial decisions are related with raising of funds from different sources like equity share holders, preference share holders and debt sources Investment decisions are concerned with investment of financial resources into long term assets Dividends decisions of a company are crucial financial decisions dividend Policy of a company significantly affect the value of the stock of the company.

FINANCIAL MANAGEMENT:

Financial management is a universal phenomenon. Management is the process which involves planning, directing, organizing, staffing and controlling human efforts to achieve stated objectives in organization. Everyone should know the fundamental principles or proactive of Management with a special emphasis to business enterprise Management is an art of getting things down through or with the people in formally organized groups. It is a task of planning, coordinating, controlling and motivating the efforts for other towards a specific objective. Finance is a blood of business. Financial management helps in achieving group goals. IT reduces the cost and optimum utilization of funds and maximum results with the minimum efforts.

DEFINITION:

Financial management is concerned with the efficient use of an important economic


resource, namely, capital funds. Solomon Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation. J. L. Massie

Financial management is an area of financial decision making harmonizing individual motives & enterprise goals. Weston &Brigham Financial management is the application of the planning & control functions of the finance function. Howard & Upton

Financial management is the area of business management devoted to the judicious use of capital & careful selection of sources of capital in order to enable a spending unit to move in the direction of reaching its goals. J. F. Bradley PROCESS:

FINANCIAL MANAGEMENT

Anticipating financial needs

Acquiring financial resource

Allocating funds in business

Administrating the allocation of funds

Analyzing the performance of finance

Accounting and reporting management

OBJECTIVES OF FINANCIAL MANAGEMENT: Profit Maximization Wealth Maximization Implications of Wealth maximization Balanced asset structure Liquidity Judicious planning of funds Efficiency

1] PROFIT MAXIMIZATION:Earning profits by a corporate or a company is a social obligation. Profit is the only means through which the efficiency of an organization can be measured. As the business units are exploiting the resources of the country namely, land labour, capital and other resources. It has an obligation to make use of these resources to achieve profit. Profit maximization increases the confidence of management in expansion and diversification programs of the company.

2] WEALTH MAXIMISATION:-

Concept of wealth maximization refers to the gradual growth of the value of the assets of the firm in terms of benefits it can produce. Any financial action can judged in terms of the benefits it produces less cost of action. The wealth maximization attained by a company is reflected in the market value of shares. In other words, it is nothing but the process of creating wealth of an organization. This maximizes the wealth of shareholders wealth maximizations is the net present value of a financial decision. Net present value will be equal to the gross present value of the benefits of that action minus the amount invested to receive such benefits (NPV=GPV of benefits investments). The concept of wealth maximization is universally accepted because it takes care of interest of financial institutions, owners, employees and society at large. In India the co-operative has started officially in the year 1904 when the government of India passed the first co-operative act. The co-operative movement was introduced in India with the main objective of making a breakthrough in the provision of credit to the poor classes.

FINANCIAL SERVICES Financial services can be defined as the products and services offered by institutions like banks of various kinds for the facilitation of various financial transactions and other related activities in the world of finance like loans, insurance, credit cards, investment opportunities and money management as well as providing information on the stock market and other issues like market trends. Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companys consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises. . FUNCTIONS OF FINANCIAL SERVICES: 1. 2. 3. 4. 5. Facilitating transactions (exchange of goods and services) in the economy. Mobilizing savings (for which the outlets would otherwise be much more limited) Allocating capital funds (notably to finance productive investment). Monitoring managers (so that the funds allocated will be spent as envisaged). Transforming risk (reducing it through aggregation and enabling it to be carried by those more willing to bear it). FINANCIAL SYSTEM: Financial System can be defined at the global, regional or firm specific level. The Firms financial system is the set of implemented procedures that track the financial activities of the company. On a regional scale, the financial system that enables lenders and borrowers to exchange funds. The global financial system is basically a broader regional system that encompasses all financial institutions, borrowers and lenders within the global economy

An Overview of Financial Statements:

FINANCIAL SYSTEM

Financial Institutions

Financial Instruments

Financial Market

Financial Services

Commercial Banks

Long term Instruments

Short term Instruments

Capital Market

Development Banks

Money Market

Non Banking financial Company

BANKING:

A bank is a profit seeking business firm which deals with money and credit. It accepts deposits from the public and makes these funds available to those who need them. It helps in the remittance of money from one place to another. A banking company is defined as a company which transacts the business of banking in India. A banking company in India has been defined in the banking companies act 1949 as one which transacts the business of banking which means the purpose of lending or investment, of deposits of money from the public. Repayable on demand and withdraw able by cheque , draft, order or otherwise.

CO-OPERATIVE BANKS: Co-operative banks are an important constituent of the Indian financial system, judging by role assigned to them. The co- operative movement originated in the west, but the importance which such have assumed in India is rarely paralleled anywhere else in the world.

A credit co-operative is voluntary association of members for self-help, catering to the financial on a mutual basis. In India, the co-operative credit movement started with chief object of catering to the banking and credit requirements if urban middle class e.g., the small trader or businessman, the artisans, or factory worker, the salaries people with limited fixed income in urban or semi urban areas. Besides protecting the middle classes and men of modest means from the clutches of the moneylenders. The movement is also expected to indicate the habit of thrift and savings amongst the people. In India the co-operative has started officially in the year 1904 when the government of India passed the first co-operative act. The co-operative movement was introduced in India with the main objective of making a breakthrough in the provision of credit to the poor classes. Especially for the vast majority of agriculturists who were suffering under the heavy weight of indebtedness. With the over whelming importance assigned to food production in our successive five-year plans, the planners and pioneers of our conviction that co-operation is the most effective instrument for the economic growth and prosperity of our nation.

IMPORTANCE OF URBAN CO-OPERATIVE BANKS:

The co-operative movement has become a powerful instrument for rapid economic growth. It has resulted in several benefits. The expansion of co-operative banks has resulted in several benefits. a) They have provided cheap credit to farmers. They discourage un productive borrowing. b) They have reduced the importance of money lenders. More than 60% of credit needs for agriculturists are now met by co-operative banks. Thus co-operative banks have protected the rural population from the clutches of money lenders. c) Small and marginal formers are being assisted to increase the income.

d) They have promoted saving and banking habits, among the people, especially the rural people. Instead of hoarding money, the rural people lend deposit there saving in the cooperative or commercial banks. e) They are undertaken several welfare activities. They have also taken steps to improve the morals, polity and education. Values: Co-operatives are based on the values of self help, self-responsibility, democracy, equality and solidarity. In the tradition of their founders, co-operative members believe in the ethical value of honesty, openness, social responsibility and earning for others. Functions: a) The following are the functions of central co-operative banks b) They finance the primary credit societies. c) They accept deposits from the public. d) They provide remittance facilities. e) They grant credit to their customers on the security of first class securities, gold etc f) They act as balancing centers by shifting the excess funds of a surplus primary society to the defect society. g) They supervise, inspect and co-ordinate the activities of the primary co-operative societies. There are now 360 district central co-operative banks in India. They lend about rupees 14000 crores annually. The most distressing feature of the functioning of central co-operative banks is heavy and increasing over due loans.

NEED FOR THE STUDY:

For any firm it is important to achieve its business objectives and goals, in order to expand and to diversify the financial resources. Success of a firm depends on the availability of financial resources and also on how a firm is utilizing its financial resources. The management uses these tools to evaluate their own efficiency and performance during a particular year. In present scenario to judge the exact performance of the management in increasing their wealth A Study on Performance Analysis at KUCB is very much useful to evaluate the strength of bank. Keeping this in the view this study is undertaken to analyze the Performance Analysis in the Karimnagar Co-operative Urban Bank (KUCB), Karimnagar. The study is also beneficial to employees and offers motivation by sharing how they are contributing for the bank growth. The study on performance analysis of a bank is very essential for taking financial management decisions like how to manage the finances to achieve the strategic goals and how to increase the profitability. This study is also beneficial to top management of the bank by providing relevant

information regarding important aspects like liquidity, annual growth rate, activity and profitability.

SCOPE OF THE STUDY:

The scope of the study is to collecting financial data published in annual reports and to analyze the various figures of balances sheets of different years and to compare the percentage change within those figures and finding the annual growth rate and compounded annual growth rate. The study is confined to evaluation of the last 5 years financial annual reports the first being a part report as the bank was established in the middle of the financial year.

OBJECTIVES OF THE STUDY: 1) To provide reliable information about changes in growth rates of a Bank that result from the activities. 2) To know the concept of performance analysis. 3) To analyze the financial performance of KCUB Ltd. using performance analysis. 4) To understand the concept performance analysis of the bank over 5 year period. 5) To draw conclusions and to suggest suitable measures to overcome problems, if any to improve its performance

RESEARCH METHODOLOGY:

Data is mainly two types they are Primary data Secondary data

PRIMARY DATA: Primary data has been collected by interacting with the accounting department and other concerned executives of the KCUB Ltd.

SECONDARY DATA: For the study the data is collected from secondary sources, the major part of data is contributed by 5 years annual reports of the company and other journals, magazines and manuals published by Co-Operative Bank. Some of the information related to topic was gathered from urban bank and regulatory body of Co-Operative bank. Secondary data is collected by the personal interaction with the employees of the bank and also the managers. It is published data and already available for use and it saves time. The secondary data for the project is collected from the profit and loss and balance sheets of the KCUB (Karimnagar Co-operative Urban Bank), it is collected from the internal sources of the organization and the study is dependent on secondary data to an extent.

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PERIOD OF STUDY: To study the ratio analysis of the Karimnagar Co-operative Urban Bank, the research had chosen five years period from 2006-07 to 2010-11 as period of study. In the report the financial conduction of the company in all five years of the study period, was analyzed and presented in the form of statements and tables, accomp anies by respective interpretations.

DATA METHODOLOGY OF STUDY:

The Karimangar Co-operative Urban Bank Limited [KCUB] has been collected mainly from primary and secondary sources like. 1. The administrative officer of the KCUB 2. The annual report and other reports 3. Discussion with CEO/Manager

LIMITATIONS OF THE STUDY:

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The study is mainly based on the secondary and primary data was used. While computing ratios, averages and percentages the figures are appropriated two decimal places. Therefore sometimes the total may not exactly tally.

The performance shown in the project is limited to the data provided by the bank. Hence, it is limited to information provided by them.

Only comparative, performance analysis has been taken for the study as a tool of financial and no other techniques is used.

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The study is restricted to financial position of the bank. The study is restricted to only five years i.e.,2006-2007 to 2010-2011

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SCHEME OF CHAPTERISATION:

Chapter I It deals with the introduction of finance, definitions of financial management, financial services, financial system, about banking and importance of co-operative banks, need of the study, objectives of the study, scope of the study, research methodology and limitations of the study. Chapter II It includes conceptual frame work and banking system in India, reserve bank of India, regional rural banks, and types of banks and the concept of performance analysis. Chapter III It deals with the introduction of the co-operative banks, profile of Karimnagar Co-operative Urban Bank and the organization history structure. Chapter IV Includes the data analysis and interpretation. Chapter V Includes the conclusions and suggestions and bibliography

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BANKING SYSTEM IN INDIA:

Banking system occupies an important place in nations economy. A banking institution is on dispensable in a modern bank. It plays a pivotal role in the economic development of a country and forms the core of the money markets in an advanced country.

In India, through the money market is still characterized by the existence of both organized and unorganized segments, institutions in the organized money.

Market has grown significantly and playing an increasingly important role. The unorganized sector, comparing to the money lenders and indigenous bankers, caters the needs of large number of persons especially in the country side. Among the institutions in organized sector of the money market, commercial banks and co-operative banks have been existence for the past few decades.

Banks and another financial institutions are a unique set of business firms whose assets and liabilities, regulatory restrictions, economic functions and operating make them an important subject of research, particularly in the conditions of the emerging financial sectors in the EU accession countries from Central and Eastern Europe (CEE). Banks' performance monitoring, analysis and control needs special analysis in respect to their operation and in respect to their operation and performance results from the viewpoint of different audiences, like investors/owners, regulators, customers/clients, and management themselves. Some historical notes on the development of the Estonian banking system and the capital structure of banks are presented in this article. Different versions of financial ratio analysis are used for the bank performance analysis using financial statement items as initial data sources. The usage of a modified version of DuPont financial ratio analyzes and a novel matrix approach is discussed in the article. Empirical results of the Estonian commercial banking system performance analysis are also presented in the article

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NATIONALISATION:

Banks Nationalization in India: Newspaper Clipping, Times of India, July, 20, 1969 Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The meeting received the paper with enthusiasm. Thereafter, her move was swift and sudden. The Government of India issued an ordinance and nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After

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this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

LIBERALISATION: In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this led to the retail boom in India. People not just demanded more from their banks but also received more. Currently (2010), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true.

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With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&A s, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. In recent years critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans. There are press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide. ADOPTION OF BANKING TECHNOLOGY: The IT revolution had a great impact in the Indian banking system. The use of computers had led to introduction of online banking in India. The use of the modern innovation and computerization of the banking sector of India has increased many folds after the economic liberalization of 1991 as the country's banking sector has been exposed to the world's market. The Indian banks were finding it difficult to compete with the international banks in terms of the customer service without the use of the information technology and computers.

Number of branches of scheduled banks of India as of March 2005

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The RBI in 1984 formed Committee on Mechanization in the Banking Industry (1984) whose chairman was Dr C Rangarajan, Deputy Governor, Reserve Bank of India. The major recommendations of this committee was introducing MICR Technology in the all the banks in the metropolis in India. This provided use of standardized cheque forms and encoders. In 1988, the RBI set up Committee on Computerization in Banks (1988) headed by Dr. C.R. Rangarajan which emphasized that settlement operation must be computerized in the clearing houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna and

Thiruvananthapuram.It further stated that there should be National Clearing of inter-city cheques at Kolkata,Mumbai,Delhi,Chennai and MICR should be made Operational.It also focused on computerisation of branches and increasing connectivity among branches through computers.It also suggested modalities for implementing on-line banking.The committee submitted its reports in 1989 and computerisation began form 1993 with the settlement between IBA and bank employees' association. IN 1994, Committee on Technology Issues relating to Payments System, Cheque Clearing and Securities Settlement in the Banking Industry (1994) was set up with chairman Shri WS Saraf, Executive Director, Reserve Bank of India. It emphasized on Electronic Funds Transfer (EFT) system, with the BANKNET communications network as its carrier. It also said that MICR clearing should be set up in all branches of all banks with more than 100 branches.

Committee for proposing Legislation on Electronic Funds Transfer and other Electronic Payments (1995) emphasized on EFT system. Electronic banking refers to DOING BANKING by using technologies like computers, internet and networking, MICR, EFT so as to increase efficiency, quick service,productivity and transparency in the transaction.

Number of ATMs of different Scheduled Commercial Banks of India as on end March 2005

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Apart from the above mentioned innovations the banks have been selling the third party products like Mutual Funds, insurances to its clients. Total numbers of ATMs installed in India by various banks as on end March 2005 is 17,642The New Private Sector Banks in India is having the largest numbers of ATMs which is followed by SBI Group, Nationalized banks, Old private banks and Foreign banks The total off site ATM is highest for the SBI and its subsidiaries and then it is followed by New Private Banks, Nationalized banks and Foreign banks. While on site is highest for the nationalized banks of India.

CURRENT INDIAN BANKING SYSTEM SCENARIO: It is true that banks in India are facing difficulty in getting deposits. There are many reasons behind this problem. Two points for what was happening in banking and investment sector in the last 5 years 1. Increased consumerism: If we look at the consumption pattern in last 5 years, people were moving from being savers to consumers, i.e., more emphasis on benefits gained today rather than gains received through savings in future, this changing attitude is one of the reasons for higher growth in lending compared to deposits. 2. Alternatives and risks: People were looking for more alternatives like mutual funds, different insurance schemes, stock market, etc. People were moving to these products with higher return expectations. These instruments also have higher risk and increased income level people who deposit high amounts of money into banks were ready to take these high-risk alternatives. But now the situation will be slightly better for banking system in India because investors are losing a lot of wealth in stock markets and mutual funds. People will realize the importance of safer investment vehicle and will start diversifying their portfolio with increased exposure to safer instruments like bank deposits.

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The banks in India generate their funds from two types of sources: Long-Term Sources: 1. Tier one and Tier two Capitals in the form of equity/subordinate

debts/debentures/preference shares. 2. Internal accrual generated out of profits. 3. Long-term fixed deposits generated from public and corporate clients, financial institutions, and mutual funds, etc. 4. Long-term borrowings from financial institutions like NABARD/SIDBI. Short-Term Sources: 1. Call money market, i.e., funds generated among interbanking transactions where there is online trading of money between bankers. 2. Fixed deposits generated from public and corporate clients, FIs, and MFs, etc. 3. Market-linked borrowings from RBI. 4. Sale of liquid certificate deposits in the open market. 5. Borrowing from RBI under Repo (Repurchase option). 6. Short and medium-term fixed deposits generated from public and corporate clients, mutual funds, and financial institutions, etc. 7. Floating in current and saving accounts. 8. Short-term borrowings from FIs by way of rated papers placed, etc.

RESERVE BANK OF INDIA:

The central bank plays a key role in the modern banking system. The reserve bank of India acts as a central bank in our country. It helps in formulating and implementing the financial policies and acts as an effective string puller of the commercial banks in licensing, controlling, directing, assisting them. The RBI was established on 1st April 1935 under the

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reserve bank of India act 1934 and it has been acting as central bank of our country. The RBI was nationalized in 1948. About reserve bank of India:

On this occasion we have a need to know something about reserve bank of India. As the central bank of the country the reserve bank of India performs both the traditional functions of a central bank and a verity of development and promotional functions. The reserve bank of India act 1934 confers upon it the power to act as note issuing authority, bankers bank and bankers to the government. 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. Bank of India act, government puts into circulation one rupee and notes through reserve bank only. The reserve bank has the sole right to issue bank notes in India. The notes issued by the reserve bank and the one rupee notes and coins issued by the government are unlimited legal tender. Reserve bank also bears the responsibility of exchange notes and coins to those of other denominations required by the public . Banker to government:

The reserve bank of India acts as banker to the central and state governments. According to section 20, it is obligatory for the bank transact government business including the management of the public debt of the union section 21 requires the central government on entrust the bank all its money remittance, exchange and banking transaction in India and in particular deposit free of interest all is cash balance with the bank. In terms of section 21(A) the reserve bank performs similar function on behalf of the state governments the bank entered into agreements with central and state governments fore carrying on the functions. To conduct ordinary banking business of the central government, the bank is not entitled to an remuneration, it holds cash balances of the government free of interest. For the management 20

of the public debt, the bank is entitled to change a commission. 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 reserve bank is also authorized to make to the central and state government, ways and means advances which are repayable within 3 months for the date of making the advance. The bank also acts as advised to the government

RBI plays a role of regulator apart from money provider in specific cases: Right now this seems to be a short-term crisis unless the production figures of the next month also shows negative trend like it has shown in the month of August @ 1.30% (very low compared to the previous figures of between a band of 5 to 9%). If IIP figure goes down continuously for the next 2 to 3 months, we have to assume, there is a recession in the country. As the service industry may not grow at the volumes shown previously. The industrial growth is a big hope for the future sustenance of the growth in India. Now let us analyze the situation of all these sources in the present scenario for the banks:

A) This is not the right time to generate the funds from long-term sources due to the bad market scenario, so let us focus on the short-term sources.

B) Call money market is very tight. RBI borrowings and placing short term papers is not the best way to generate funds as the mutual funds and FIs are facing acute pressure due to withdrawals from the foreign investors including NRIs. Hence pressure is on retail deposits and now every bank wants to concentrate on these as a source. The rates are increasing. This is a very good time to keep money in a 2- to 3-year lock deposit with nationalized banks. You may be offered 10.50 to 10.75%. It would be 0.25-0.50% higher in case of the private/foreign and co-operative banks. I would like to give all credit to the regulatory system in India, which has withstood to the acute pressure on banking sector. You would remember the co-operative bank fiasco 3 years back and now foreign and private banks are under scanner. Thanks to the mature regulatory system, we are relatively safe as far as banking in India is concerned.

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TYPES OF BANKS:

Commercial banks: Commercial banks perform all kinds of banking business. Its primary function is to accept deposits from the public and makes the funds available to those who need them. These banks usually give short term loans and advances. They also render services such as collection of cheques, safe custody of valuables, remittance facilities etc.

Industrial banks: Industrial banks are also investment banks. They are primarily meant to cater to the financial needs of industrial undertakings. They provide medium-term and long term credit to the industries for the purchase of fixed assets.

Central bank: A central bank is the apex financial institution in the banking and financial system of a country. It is regarded as the highest monetary authority in the country. It acts as the leader in the money market. It supervises controls and regulates the activities of the commercial banks.

Savings bank: Savings bank collects the small savings of the people. They pool together the scattered savings of these banks is to encourage the habit of thrift among the people. Hence these banks impose many restrictions on the withdrawals.

Exchange banks: Exchange banks mainly deal in foreign exchange. They purchase and sell foreign currencies and discount foreign bills. They finance foreign trade.

Co-operative banks: These are a group of financial institutions organized under the provisions of the cooperative societys act of the states. The main object of these banks is to provide cheap credit to their members.

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Private Banks: In every country there are large numbers of private banks. Individuals and firms do banking business such private banks are also known as indigenous banks in India. Private Banks also carry trading a part from the banking business.

Regional rural banks: Regional rural banks were established under regional rural banks act 1975. Rural banks may be defined as primary banking institutions. It was established to perform the banking functions with the objective of developing the village areas.

Lead bank: This bank adopts a district and integrates its schemes with district plans for an effective distribution of credit along with the expanded banking facilities as per the local needs. RBI introduced the lead bank scheme in December 1969. The lead bank co-ordinates the activities of all the credit institutions, co-operative banks, commercial banks and other in its allotted districts.

REGIONAL RURAL BANKS:

Regional rural banks were established under the regional rural banks act 1975. Regional rural banks may be defined as primary banking institution. It established to serve a compact group of villages by performing banking functions with the object of developing village areas. Regional rural banks operate in a limited area specified by a notification. Each RRB is sponsored by a public sector bank. It also helps in recruitment and training of personnel in the initial phase of the functioning of regional rural bank. Presently a number of rural banks have gone up to 196 covering 350 districts of 23 states in India.

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Objectives of RRB:

To meet the needs of the medium and small farmers, agriculture laborers for the overall development of the villagers. To liberalize the rural people the clutches of money lenders. To work for the people who are economically and socially backward in their status. To work for the development of agriculture as well as promotion of trade, commerce and industry.

Functions of RRB:

According to the banking commission the rural banks should perform the following functions. Accepting deposits from the customers. Granting loans and advances to the needy rural people. Providing ancillary banking services on par with the commercial banks. Supplying the equipment and inputs to farmers. Helping for the overall development of villages in its area of operation. Providing assistance in the marketing of their products. To provide employment opportunities and encouraging the setting up rural industries.

The regional rural banks came into existence since the middle of seventies. Thus, with the phenomenal geographical expansion banks and the setting up of the regional rural banks during the recent past, the organized sector of money market has penetrated into rural areas as well as to facilitate the banking business and to foster the growth of banking habit, two other institutions have been set up. The deposit insurance and credit guarantee corporation of India undertakes the twin functions of extending the insurance cover to the depositors in bank and projects the interest of banks by providing guarantee in respect of advances granted by them to the small scale industries. 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. In the field of industrial finance, the Industrial Development Bank of India (IDBI), setup in 1964 is the apex bank, which undertakes besides direct financing of big industrial 24

project, refinancing of term long granted by other financial institutions including the commercial bank. There are two prominent all-infuse institutions in the field, namely. The Industrial Finance Corporation of India (IFCI), and the Industrial Credit and Investment Corporation of India (ICICI). Besides the State Financial Corporations (SFC) and state industrial development corporations (SID) have been setup to meet the requirements of small and medium scale industries in the respect state industrial reconstruction bank of India (IRBI) has been setup to bring back normalcy the industrial units which fall sick. All these institutions, engaged as they are in the task of development are now designated as development banks which are distinct from the traditional commercial banks. Development banking has its genesis in post independence period in India has contributed significantly to the industrial growth of the country during the period. For financing agriculture and allied activities in the rural areas, through 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. Long a medium term credit to the agriculturists in being provided by another specialized institution, namely the land development banks at the district level and state land development banks at the state level. National Bank for Agriculture and Rural Development (NABARD) is the full-fledged apex institution in the field of agriculture and rural development. With the establishment of export import bank of India (EXIM) on January 1, 1982, a new APEX BANK has come into existence in the field of financing the foreign trade of the country. Beside, the institutions which are mainly engaged in meeting the credit needs of various segments of the economy, there are few other institutions, which are essentially engaged in the business of investing in the corporate and government and semi-corporation of India (LIC) general insurance corporation of India (GIC) and the unit trust of India channels them into desirable securities. Hence they are called the investing institutions or institutional investors. To facilitate the banking business and to foster the growth of banking habit, two other institutions have been setup. The deposit insurance and credit guarantee corporation (ECGC) provide protection to the banks in respect of risks inherent in financing the export trade. With the financial system may be claimed to have finest setup comparable to any advanced country.

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A banking company is defined as a company which transacts the business of banking in India. A banking company in India has been defined in the banking companies act 1949 as one which transacts the business of banking which means the purpose of lending or investment, of deposits of money from the public. Repayable on demand and withdraw able by cheque, draft, order or otherwise.

PERFORMANCE ANALYSIS: A serious definition goes like this: Performance analysis involves gathering formal and informal data to help customers and sponsors define and achieve their goals. Performance analysis uncovers several perspectives on a problem or opportunity, determining any and all drivers towards or barriers to successful performance, and proposing a solution system based on what is discovered. A lighter definition is: Performance analysis is the front end of the front end. It's what we do to figure out what to do. Some synonyms are planning, scoping, auditing, and diagnostics.

CONCEPT:

Banking is a highly leveraged business requiring regulators to dictate minimal capital levels to help ensure the solvency of each bank and the banking system. In the U.S., a bank's primary regulator could be the Federal Reserve Board, the Office of the Comptroller of the Currency, the Office of Thrift Supervision or any one of 50 state regulatory bodies, depending on the charter of the bank. Within the Federal Reserve Board, there are 12 districts with 12 different regulatory staffing groups. These regulators focus on compliance with certain requirements, restrictions and guidelines, aiming to uphold the soundness and integrity of the banking system. (To read more about leverage, see When Companies Borrow Money.)

When analyzing a bank you should also consider how interest rate risk may act jointly with other risks facing the bank. For example, in a rising rate environment, loan customers may not be able to meet interest payments because of the increase in the size of the 26

payment or a reduction in earnings. The result will be a higher level of problem loans. An increase in interest rates exposes a bank with a significant concentration in adjustable rate loans to credit risk. For a bank that is predominately funded with short-term liabilities, a rise in rates may decrease net interest income at the same time credit quality problems are on the increase.

DEFINITION OF 'COMPOUND ANNUAL GROWTH RATE - CAGR' The year-over-year growth rate of an investment over a specified period of time.

The compound annual growth rate is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered.

This can be written as follows:

Credit Risk:

Credit risk is most simply defined as the potential that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms. When this happens, the bank will experience a loss of some or all of the credit it provided to its customer. To absorb these losses, banks maintain an allowance for loan and lease losses.

In essence, this allowance can be viewed as a pool of capital specifically set aside to absorb estimated loan losses. This allowance should be maintained at a level that is adequate to absorb the estimated amount of probable losses in the institution's loan portfolio.

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CONCLUSION:

A careful review of a bank's financial statements can highlight the key factors that should be considered before making a trading or investing decision. Investors need to have a good understanding of the business cycle and the yield curve - both have a major impact on the economic performance of banks. Interest rate risk and credit risk are the primary factors to consider as a bank's financial performance follows the yield curve. When it flattens or becomes inverted a bank's net interest revenue is put under greater pressure. When the yield curve returns to a more traditional shape, a bank's net interest revenue usually improves. Credit risk can be the largest contributor to the negative performance of a bank, even causing it to lose money.

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INTRODUCTION TO URBAN CO-OPERATIVE BANKS:

The urban co-operative banking movement in the country has witnessed a fillip rate of growth soon after the implementation of the provisions of banking regulation act 1949 to cooperative I the year 1996. From over 400 banks from 1st March, 1990. The deposit of these banks have marked to Rs.50,00,00,000.00 cores, Bangalore city co-operative bank limited is considered to be the first urban co-operative banks in India. Urban co-operative Banks have their own specialized clients I the Indian banking systems. The evaluation of this sector could not be done on the basis of resources mobilized and advances made but it should be properly judged from the angle has to how many customers and clients which have been brought in the main banking.

ROLE OF URBAN CO-OPERATIVE BANK: The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally cantered around communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably. The origins of the urban cooperative banking movement in India can be traced to the close of nineteenth century when, 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. Cooperative societies are based on the principles of cooperation, - mutual help, democratic decision making and open membership. Cooperatives represented a new and alternative approach to organization as against proprietary firms, partnership firms and joint stock companies which represent the dominant form of commercial organization.

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The Beginnings: The first known mutual aid society in India was probably the Anyonya Sahakari Mandali organized in the erstwhile princely State of Baroda in 1889 under the guidance of Vital Laxman also known as Bhausaheb Kavthekar. Urban co-operative credit societies, in their formative phase came to be organised on a community basis to meet the consumption oriented credit needs of their members. Salary earners societies inculcating habits of thrift and self help played a significant role in popularising the movement, especially amongst the middle class as well as organized labour. From its origins then to today, the thrust of UCBs, historically, has been to mobilize savings from the middle and low income urban groups and purvey credit to their members - many of which belonged to weaker sections. The enactment of Cooperative Credit Societies Act, 1904, however, gave the real impetus to the movement. The first urban cooperative credit society was registered in Canjeevaram (Kanjivaram) in the erstwhile Madras province in October, 1904. Amongst the prominent credit societies were the Pioneer Urban in Bombay (November 11, 1905), the No.1 Military Accounts Mutual Help Co-operative Credit Society in Poona (January 9, 1906). Cosmos in Poona (January 18, 1906), Gokak Urban (February 15, 1906) and Belgaum Pioneer (February 23, 1906) in the Belgaum district, the Kanakavli-Math Co-operative Credit Society and the Varavade Weavers Urban Credit Society (March 13, 1906) in the South Ratnagiri (now Sindhudurg) district. The most prominent amongst the early credit societies was the Bombay Urban Co-operative Credit Society, sponsored by Vithaldas Thackersey and Lallubhai Samaldas established on January 23, 1906. The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to broad basing it to enable organization of non-credit societies. The Mac lagan Committee of 1915 was appointed to review their performance and suggest measures for strengthening them. 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. The committee also felt that the urban cooperative credit movement was more viable than agricultural credit societies. The recommendations of the Committee went a long way in establishing the urban cooperative credit movement in its own right.

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In the present day context, 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. Mac lagan Committee chronicled this event thus: As a matter of fact, the crisis had a contrary effect, and in most provinces, there was a movement to withdraw deposits from non-cooperatives and place them in cooperative institutions, 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, we think, to the connection of Government with Cooperative movement. 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. 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, self help and mutual aid. Other States followed. This marked the beginning of the second phase in the history of Cooperative Credit Institutions. There was the general realization that urban banks have an important role to play in economic construction. 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. The Mehta-Bhansali Committee (1939), 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. The Co-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. The Rural Banking Enquiry Committee (1950), impressed by the low cost of establishment and operations recommended the establishment of such banks even in places smaller than taluka towns. The first study of Urban Co-operative Banks was taken up by RBI in the year 195859. The Report published in 1961 acknowledged the widespread and financially sound 31

framework of urban co-operative banks; emphasized the need to establish primary urban cooperative banks in new centers and suggested that State Governments lend active support to their development. In 1963, Varde Committee recommended that such banks should be organized at all Urban Centers with a population of 1 lakh or more and not by any single community or caste. The committee introduced the concept of minimum capital requirement and the criteria of population for defining the urban centre where UCBs were incorporated. Duality of Control: However, concerns regarding the professionalism of urban cooperative banks gave rise to the view that they should be better regulated. Large cooperative banks with paid-up share capital and reserves of Rs.1 lakh were brought under the preview of the Banking Regulation Act 1949 with effect from 1st March, 1966 and within the ambit of the Reserve Banks supervision. This marked the beginning of an era of duality of control over these banks. Banking related functions (viz. licensing, area of operations, interest rates etc.) were to be governed by RBI and registration, management, audit and liquidation, etc. governed by State Governments as per the provisions of respective State Acts. In 1968, UCBS were extended the benefits of Deposit Insurance. Towards the late 1960s there was much debate regarding the promotion of the small scale industries. UCBs came to be seen as important players in this context. The Working Group on Industrial Financing through Co-operative Banks, (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. This was reiterated by the Banking Commission (1969). 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. The Hate Working Group (1981) desired better utilization 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, in a phased manner. While the Marathe Committee (1992) redefined the viability norms and ushered in the era of 32

liberalization, the Madhava Rao Committee (1999) focused on consolidation, control of sickness, better professional standards in urban co-operative banks and sought to align the urban banking movement with commercial banks. 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, Karnataka, Maharashtra, and Tamil Nadu. While most banks are unit banks without any branch network, some of the large banks have established their presence in many states when at their behest multi-state banking was allowed in 1985. Some of these banks are also Authorized Dealers in Foreign Exchange Recent Developments: Over the years, primary (urban) cooperative banks have registered a significant growth in number, size and volume of business handled. As on 31st March, 2003 there were 2,104 UCBs of which 56 were scheduled banks. About 79 percent of these are located in five states, - Andhra Pradesh, Gujarat, Karnataka, 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. Co operative Banks in India are registered under the Co-operative Societies Act. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. SERVICES OF URBAN CO-OPERATIVE BANKS:

The Urban co-operative banks rendering the following services. Acceptance of deposits. Sophisticated lending for the promotion of industrial growth worth. Particular references to small-scale industries, trade and professions. Discounting and collecting of cheques and hundies. Provision of safe deposit locket facilities and bank guarantees etc. A few of urban banks have been licensed to deal in foreign exchange.

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OBJECTIVES OF URBAN CO-OPERATIVE THE BANK:

The objectives of the Co-operative urban bank are as follows. To extend financial help to weaker sections in the society. To encourage small-scale industries. To encourage Self-employment schemes. To encourage small trading people in urban areas. To help the management of the bank for effective management and flow of co-operative credit in the district. To help the management of the bank to augment its internal resource. Mobilization of deposits and internal resources for development and diversification of its business activities into various sectors. To help the bank to take necessary steps for solving various types of problems associated with utilization of loans. Analysis for taking corrective measure in time. To help the bank to evolve and implement system of receiving the work. To guarantee the loans and advances made to the member societies. To buy, sell or deal with securities, debentures or bonds or scripts. To maintain a library of co-operative and banking literature. To open regional offices, branches or sub- offices with the prior permission of the registrar both for banking purposes and also the issue and recovery of short term, medium term and long term loans. ADVANTAGES OF COOPERATIVES: Advocates of producer cooperatives claim numerous comparative advantages over what is generally referred to as a classical firm (CF). The proposed advantages extend to a host of theoretical issues. Many overlap the separate disciplines of labor economics, industrial management and organization theory, investment and finance, and property rights theory. Academicians have devoted significant amounts of research and analysis to such issues as: (1) The absence of "shirking" by workers in producer cooperatives; 34

(2) Superior productivity rates that result from the extension of democratic principles into the cooperative workplace; (3) The lack of unnecessary supervision due to the "horizontal monitoring" performed by cooperative members; (4) The pursuit of cooperative employment and output strategies that is less sensitive to business cycle fluctuations. Still other cooperative advocates simply emphasize the overall psychological and social influence exerted by the set of worker-control parameters. These are thought to have a transformational quality that converts adversarial relationships common to most CFs into an atmosphere of cooperation. The logic of cooperative theory unfolds thusly: once worker members begin to identify their individual and collective efforts with their firm's enhanced performance, an atmosphere of cooperative problem solving takes root. As a result of this more communicative workplace, improvements in production methods result from an upward or horizontal flow of information originating from the shop floor. With heightened satisfaction spreading throughout its membership, lower worker turnover and absenteeism result and members build task-specific expertise. DISADVANTAGES OF COOPERATIVES:

Compared to CFs, producer cooperatives suffer from two interrelated investment disadvantages. Both are readily acknowledged by most cooperative proponents. The first concerns the problem of intra-firm finance or underinvestment. This tendency arises when the disparity between a worker member's expected profit share of income and what they could earn by investing outside the firm (say, at a bank rate of interest) becomes problematic. A second, and related, underinvestment point concerns the apprehension of nonmember financiers to lend to cooperatives. Since they must risk their funds within an organizational form where they have little control, outside financiers are reluctant to lend except on terms unfavorable to cooperatives. At the same time cooperative members are reluctant to borrow on terms exceeding the going interest rate and wary of relinquishing management control to outside parties who might not share a similar commitment to cooperative forms of organization.

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COOPERATIVE BANKS IN INDIA FINANCE RURAL AREAS UNDER: Farming Cattle Milk Hatchery Personal finance

COOPERATIVE BANKS IN INDIA FINANCE URBAN AREAS UNDER: Self-employment Industries Small scale units Home finance Consumer finance Personal finance

Private Banks: In every country there are large numbers of private banks. Individuals and firms do banking business such private banks are also known as indigenous banks in India. Private Banks also carry trading a part from the banking business. Regional rural banks: Regional rural banks were established under regional rural banks act 1975. Rural banks may be defined as primary banking institutions. It was established to perform the banking functions with the objective of developing the village areas. Lead bank:

This bank adopts a district and integrates its schemes with district plans for an effective distribution of credit along with the expanded banking facilities as per the local needs. RBI introduced the lead bank scheme in December 1969. The lead bank co-ordinates the activities of all the credit institutions, co-operative banks, commercial banks and other in its allotted districts.

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THE KARIMNAGAR CO-OPERATIVE URBAN BANK LTD.

HISTORY OF ORGANIZATION: Location: General location can be defined as a firm located at a place where the inhabitants are interested in its success of the product can be sold profitably and the operation costs are minimum. Roper and well-planned location of a firm is an important managerial decision. The performance of an enterprise is considerably affected by its location. Unscientific and unplanned location is harmful to the organization .location of the store at a convenient lace really achieves the customer satisfaction .thus location of a firm is an important factor for any organization as it has its effect on sales and profitability of particular firm the KCUB is situated in Karimnagar and is established in the year 1980.

REGISTRATION AND SHARE CAPITAL:

The Karimnagar co-operative urban bank ltd. was registered in 1980 at Karimnagar. The area of operation of this co-operative is spread over Karimnagar district.

It was registered as primary credit society under Hyderabad co-operative societal Act XVI of 1952. It was started with a paid up capital of Rs 478295 and authorized share capital. According to data given by KUUB it is having 10287 members up to 31st march 1995 and also it has share capital of Rs2654110 up to 31st march 1995 and in the current year i.e. 31st March, 2011 it is having 19357 members and also it has share capital of Rs.12887749 The bank is functioning in its own building from 27-12-1981. KCUB is situated in Karimnagar district itself and its area of operation is revenue district of Karimnagar. KCUB is located at behind Municipal Corporation near venkateshwara temple Karimnagar. The Karimnagar co-operative urban bank limited was organized and registered during the tenure of Sri K.S. Sharma (M.A., M.Sc., I.A.S.,) District Collector, Karimnagar, who was its founder president. The bank was registered with Regd. No.1123/TD/ on 16-12-1980, with a membership of 1950 at the time of registration and with a paid up share capital of Rs.4,74,070/-. The bank has started functioning from 7th May, 1981. Ever since its inception

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of the bank, its membership has increased to 11,102 and with the mere deposits of Rs.5.00 lakhs, and the present deposits position has been increased to Rs.990.00 lakhs. The bank has constructed its own building at a total cost of Rs.11.79 lakhs in the land of municipality which was provided by the Govt. The bank is functioning in its own building from 4-9-1991. The bank has opened a branch at Jagtial, in the year 6-11-1986 and proposals for opening another three branches at Godhavarikhani, Metpally and Mankammathota of Karimnagar town were also submitted to the Reserve Bank of India, during the VII plan period and the permission is awaited. It believes in the concept of ONE FOR ALL AND ALL FOR ONE and its logo (symbol) as HANDSHAKE and it symbolize this.

A HANDSHAKE SYMBOLIZES PROGRESS: A handshake is all it takes to bring home in the lives of the enthusiastic and ambitious entrepreneur to bring that ray of hope from behind dark clouds. A handshake that promises a careful and secure future KCUB ltd. works towards making that handshake possible. The KCUB ltd. is like mother to a new entrepreneur who encourages the child to take the first step firmly that is what it does to the new business entrepreneur. Few institutions can claim the success KCUB ltd. has achieved through is scheme the works on the principle of brotherhood and humanity; it contributes in realizing he dreams of its members for a quality life. It shares the problem of shareholders and assists to solve it, be it or marriage in the family. Every aspect of life is taken care of by the KCUB ltd

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MEMBERSHIP: The membership of the Karimnagar co-operative urban bank ltd., is limited to the persons residing in Karimnagar town be they salaried employees, factory workers small traders, professionals etc. The area of operations of the bank extends to Karimnagar Municipal Limits and village, within a radius of 10 KM and all other mandal head quarters, except 9 mandals of old Sircilla taluk.

ORGANISATION STRUCTURE:

BOARD OF DIRECTORS

CHAIRMAN

CHIEF EXECUTIVE OFFICER

MANAGERS

ASST. ACCOUNT OFFICERS

OTHER STAFF

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SHARE CAPITAL: The bank has sources for its funds viz.,s own funds and borrowed funds. Own funds consists of paid up share capital and accumulated profit or retained profit, various forms of resources created of appropriation of profits. Borrowed funds consist of different types of deposits accepted from members and non-members. Normally face value of shares issued by the Bank is Rs.10/- and Rs.5/- for A class share and B class shares respectively. So that, poor people also can become members of the bank with rights to attend participates, vote in general body meetings and special body meetings and to contest for elections.

STATEMENT SHOWING THE MEMBERSHIP FOR LAST FIVE YEARS:

SL. NO 1 2 3 4 5

PERIOD 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

MEMBERS 16019 16327 16801 17050 19357

SHARECAPITAL 9599803 11180670 12389558 13131622 12887749

Deposits: The Bank had different types of deposits accepted from the members and nonmembers. The deposits are as follows.

Current deposits Saving deposits Fixed deposits Pavani deposits Recurring deposits Maruthi Cash certificates. The bank has started with mere deposits of Rs.5.00 Lakhs and the percentage of present position has been increased to Rs.990 Lakhs.

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Investments: The Karimnagar co-operative urban bank ltd., had invested an amount of Rs.188.10 lakhs in Karimnagar District co-operative Central Bank and Commercial banks in Andhra Pradesh State Co-operative Bank, Hyderabad is Rs.28.37 lakhs and in their co-operative Bank Rs.28.37 and in other co-operative Banks Rs.2.65 lakhs. The bank has total deposits in various banks in Rs.219.12 Lashes. Loans and advances: Loans and advantages in the form of cash in current account may be granted to members on security or without security as prescribed by the board and RBI from time to time. The bank has made advances under various types of loans such as Personal Loans Under Govt. Sponsored schemes House mortgage loans Gold Loans Normal loans (against the deposits) Staff Loans Cash credit to D.D.C. Store.

Values of KCUB: 1. Self help. 2. Self-responsibility. 3. Democracy. 4. Equality. Solidity

KCUB believes in ethical values Honesty Openness Social Responsibility Care for its members

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Functions of KCUB: They finance the primary credit societies. They accept the deposits from the public. They provide remittance facilities. They grant credit to their customers on the security of first securities, gold etc. They act as balancing centers by shifting the excess funds of a surplus primary society to the defect society. They supervise, inspect and coordinate the activities of primary co-operative societies.

There are now 360 District Co-operative banks in India. They lend about 64000 Crores annually. The most distressing feature of the functioning of the Co-operative Bank is heavy and increasing over due loans.

FINANCE: The bank derives its working capital from the following sources1. Share capital 2. Deposits 3. Government loans and subsidies 4. Borrowing from the bank

The major part of the working capital is affected by the bank. Till 1969-70 the Karimnagar dist co-operative central bank was the financier at which time the reserve bank of India decided to enlist the finance of commercial banks for the co-operative sector. Since, then the state bank of Hyderabad has been the financial to the bank The bank has issuing demand drafts all over India with tie up arrangements with the axis bank and increased income under non-fund business. Presently the bank is advancing loans by pledging gold ornaments for commercial as well as agriculture purpose through 10 branches in the district.

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Principles: 1. Voluntary and open membership. 2. Democratic and member control. 3. Member economic participation. 4. Autonomy and independence. 5. Education, training and information. 6. Co-operative among co-operatives. 7. Concern for community.

Facilities provided in district: 1. Urban co-operative bank.. 2. District co-operative central bank branches -29 3. Primary agriculture co-operative bank. 4. Joint agriculture co-operative bank. 5. Weavers co-operative bank. 6. Milk producers co-operative bank. 7. Fishers co-operative bank. 8. Labour contract co-operative bank. 9. District co-operative marketing bank district co-operative central bank-12.

The Urban co-operative banks rendering the following services. Acceptance of deposits. Sophisticated lending for the promotion of industrial growth worth. Particular references to small-scale industries, trade and professions. Discounting and collecting of Cheques and Hundies. Provision of safe deposit locket facilities and bank guarantees etc. A few of urban banks have been licensed to deal in foreign exchange.

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Rate of Interest for Deposits:

Types and period of Deposits Saving Deposits Current Deposits 36-46 days below 46 days less than 90 days 91 days to 179 days 180days and above but less than 1 years 1 years and above but less than 2 years 2 years and above but less than 3 years 3 years and above F.D. Senior

Rate of Interest period 3.5% 0.5% 4.0% 5.25% 6.00% 7.5% 8.0% 8.5% 8.8.0% 0.50%(more)

Rate of interest for loans:

Types Loans All types of Loan Gold jewelry Loan

Rate of interest 18.00% 14.00%

The above table comprises the information of rates of interest being offered customs on various depositing in urban cooperative Bank, Karimnagar. The data presented in the able shows that the rate of interest would be highs as the period of deposing are longer the date in the table also reveal that the bank is offering high rate of interest i.e. 14% compares to public sector banks i.e. 12.5%. The increased rates provide by the Karimnagar Cooperative Urban Bank ltd. is to increasing the deposits of Urban Bank.

Investments in others: The Karimnagar Co-operative Urban Bank Limited thus invested an amount of Rs.316.22 lakhs in Government of India and securities. The bank has invested an amount of Rs.5.10 lakhs in Government of India Securities up to 2018 at rate of interest @ 6.25%.

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BANK MEMBERS:

1) Sri Karra rajashekar garu 2) Sri MD. Samiyoddin garu 3) Sri E. Laxman garu 4) Smt 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. rajireddy garu 13) Sri K. venkateswar garu 14) Sri GT. Venkatreddy garu

President Vice president Director Director Director Director Director Director Director Director Director Co-option member Co-option member CEO

Senior Advocate Charted Accountant Valuation Engineer Valuation Engineer Gold Checker

Sri CH. Mutyam rao garu (BA,LLB) Sri E. Rajeswar rao garu (CA) Sri Kola Annareddy garu (BE) Sri S. Baravi sharma garu (BE. civil) Sri T. Kanakachari

And accountant 01, assistant accountants 02, cashiers 03, counter clerks 11, typists 01, attainders 04, watchmens 02, security guards 01, callboy 01.

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Table 4.1 PAID-UP SHARE CAPITAL


PAID UP SHARE CAPITAL (in Rs.) 9599803.00 11180670.00 12389557.00 13131622.00 12887749.00 ANNUAL GROWTH RATE (in %) 16.47 10.81 5.99 -1.86 6.07

YEAR 2006-07 2007-08 2008-09 2009-10 2010-11

COMPOUNDED ANNUAL GROWTH RATE (in %)

PAID- UP SHARE CAPITAL


Paid up- share capital (in Rs.) 14000000.00 12000000.00 10000000.00 8000000.00 6000000.00 4000000.00 2000000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: The annual growth rate of the paid-up share capital for five year period i.e., from 2006-07 to 2010-11 of KCUB continuously decreasing. During the period 2010-2011 the annual growth as became negative i.e., -1.86% From the study it is observed that in the year 2007-08 the annual growth rate is high i.e., 16.47%. The absolute value of the paid up share capital is decreased in the year 2010-2011 It is observed that the compounded annual growth rate is of paid-up share capital of KCUB is 6.07%. 46

Table 4.2 FIXED DEPOSITS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 FIXED DEPOSITS (in Rs.) 49466020.65 69658463.65 80919372.65 97993808.65 89420778.74 ANNUAL GROWTH RATE (in %) 40.82 16.17 21.1 -8.75 12.57

COMPOUNDED ANNUAL GROWTH RATE (in %)

FIXED DEPOSITS
Fixed Deposits (inRs.) 120000000 100000000 80000000 60000000 40000000 20000000 0 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION:

While analyzing the annual growth rate of fixed deposits of KCUB the growth rate is in fluctuating trend i.e., increasing trend and decreasing trend. In the financial year 2010-2011 the annual growth rate of fixed deposits is in negative i.e.,-8.74% In the financial year 2007-08 the annual growth rate is very high i.e.,40.82% -And the compounded growth rate of fixed deposits for five year period is 12.57%

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Table 4.3 SAVINGS DEPOSITS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 SAVINGS DEPOSITS (in Rs.) 31055700.78 39662259.33 42211992.29 49480182.17 56025257.04 ANNUAL GROWTH RATE (In %) 27.71 6.43 17.22 13.23 12.52

COMPOUNDED ANNUAL GROWTH RATE (in %)

SAVINGS DEPOSITS 60000000 50000000 40000000 30000000 20000000 10000000 0 2006-07 2007-08 2008-09 Years 2009-10 2010-11 Savings Deposits (in Rs.)

INTREPRETATION:

In evaluating the performance of the savings deposits in KCUB of last five years (2006-07 to 2010-11) the annual growth rate is in fluctuating trend. In the year 2008-09 the growth rate is very less when compared to other years i.e., 6.43% and in the year 2007-08 the growth rate is 27.71%. The absolute value of the savings deposits is continuously increasing shown in the graph clearly. The compounded annual growth rate of savings deposits for five year period is 12.52%

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Table 4.4 RECURRING DEPOSITS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 RECURRING DEPOSITS (in Rs.) 2129173.60 2383157.60 2300460.60 2870689.61 3192806.00 ANNUAL GROWTH RATE (In %) 11.93 -3.47 24.79 11.22 8.44

COMPOUNDED ANNUAL GROWTH RATE (in %)

RECURRING DEPOSITS 3500000.00 3000000.00 2500000.00 2000000.00 1500000.00 1000000.00 500000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11 Recurring deposits (in Rs.)

INTERPRETATION: In analyzing the performance of recurring deposits the annual growth rate for the five year period (2006-2007 to 2010-2011) the rate is in fluctuating trend i.e., in increasing and decreasing trend. During the period 2008-09 the growth rate of recurring deposits are in negative mode i.e., -3.47% and in the year 2009-10 the growth rate is high i.e., 24.79%. The absolute value of recurring deposits in the current year (2010-11) is increased when compared to the previous year. The compounded annual growth rate of recurring deposits of KCUB is -8.44%

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Table 4.5 PAVANI DEPOSITS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 PAVANI DEPOSITS (in Rs.) 114323691.38 132294511.38 166090328.38 210900078.40 212802565.46 ANNUAL GROWTH RATE (in %) 15.72 25.55 26.98 0.90 13.23

COMPOUNDED ANNUAL GROWTH RATE (in %)

PAVANI DEPOSITS 250000000.00 200000000.00 150000000.00 100000000.00 50000000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11 Pavani Deposits (in Rs.)

INTERPRETATION: In evaluating the performance of pavani deposits of KCUB for five year period (200607 to 2010-2011) the annual growth rate is in increasing and decreasing trend. During the period 2007-08 there is a great growth rate is 25.55% but in the period 2010-2011 the growth rate is 0.90%. Pavani deposits in KCUB have been gradually increasing but the growth rate is not satisfactory.

The compounded annual growth rate of pavani deposits of KCUB for five year period
is 13.23%

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Table 4.6 SUNDRY CREDITORS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 SUNDRY CREDITORS (in Rs.) 3752559.95 3207588.45 3670993.95 3885342.25 3501255.75 ANNUAL GROWTH RATE (in %) -14.52 14.45 5.84 -9.89 -1.38

COMPOUNDED ANNUAL GROWTH RATE (in %)

SUNDRY CREDITORS Sundry Creditors (in Rs.)

5000000.00 4000000.00 3000000.00


2000000.00 1000000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: In analyzing the performance of sundry creditors of KCUB the annual growth rate for five year period i.e., from2006-2007 to 2010-2011 the rate is in increasing and decreasing trend. During the period 2008-2009 the growth rate is increased to an extent i.e., 14.45% and in the period 2010-2011 it has become negative i.e.,-9.89% which is a quite satisfactory performance. The absolute value of the sundry creditors is decreased when compared to previous year. The compounded annual growth rate of sundry creditors for a five year period is 1.38%.

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Table 4.7 DEPRECIATION


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 DEPRECIATION (in Rs.) 1408313.24 1531704.14 1667685.14 2039078.13 2424674.33 ANNUAL GROWTH RATE (in %) 8.76 8.88 22.27 18.91 11.48

COMPOUNDED ANNUAL GROWTH RATE (in %)

DEPRECIATION 3000000.00 2500000.00 2000000.00 1500000.00 1000000.00 500000.00 0.00 Depreciation (in Rs.)

2006-07

2007-08

2008-09 Years

2009-10

2010-11

INTERPRETATION: It is observed that the annual growth rate of depreciation for a five year period i.e., from2006-2007 to 2010-2011 is increased to an extent and decreased later. The amount of the depreciation of KCUB for a five year period is increasing continuously which is shown in the graph clearly. The annual growth rate of depreciation is high in the year 2009-10 i.e.,22.27% and less in the year 2008-09 is 8.88% The compounded growth rate of depreciation for a five year period is 11.48%

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Table 4.8 RESERVE FUND


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 RESERVES FUND (in Rs.) 2949417.76 2976497.61 2976497.61 2976497.61 6390860.28 ANNUAL GROWTH RATE (in %) 0.92 0.00 0.00 114.71 16.67

COMPOUNDED ANNUAL GROWTH RATE (in %)

RESERVES FUND 8000000.00 Reserve Fund (in Rs.) 6000000.00 4000000.00 2000000.00 0.00

2006-07

2007-08

2008-09 Years

2009-10

2010-11

INTERPRETATION:

It is observed that the annual growth rate of the reserve fund for a five year period i.e.,
from2006-2007 to 2010-2011 of KCUB is increased to a great extent i.e.,114.71% even there is zero growth rate in the previous year.

By observing the graph which is shown above, the value of the reserve fund of KCUB
is increased to a great level. The compounded annual growth rate of reserve fund for a five year period of KCUB is 16.67%.

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Table 4.9 RESERVE ON NON-PERFORMING ASSETS


RESERVE FOR NON-PERFORMING ASSETS (in Rs.) 9693000.00 12603620.00 19668000.00 26166505.00 31837105.00 ANNUAL GROWTH RATE (in %) 30.03 56.05 33.04 21.67 26.85

YEAR 2006-07 2007-08 2008-09 2009-10 2010-11

COMPOUNDED ANNUAL GROWTH RATE (in %)

RESERVE FOR NON-PERFORMING ASSETS


Reserve for non-performing assets (inRs.)

35000000.00 30000000.00 25000000.00 20000000.00 15000000.00 10000000.00 5000000.00 0.00 2006-07 2007-08 2008-09
Years

2009-10

2010-11

INTERPRETATION: By analyzing the performance of reserve for non-performing assets of KCUB for a five year period (2006-2007 to 2010-2011) it is observed that the annual growth rate is in fluctuating trend. The annual growth rate of reserve for non- performing assets is high in the year 200809 is56.05% and less in the year2010-11 i.e.,21.67% By observing the graph the value of reserve for non-performing assets of KCUB it is increasing continuously. The compounded annual growth rate of reserve for non-performing assets is 26.85%

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Table 4.10 DIVIDEND ON SHARES

YEAR 2006-07 2007-08 2008-09 2009-10 2010-11

DIVIDEND ON SHARES (in Rs.) 184024.00 184024.00 185124.00 185124.00 184797.00

ANNUAL GROWTH RATE (in %) 0.00 0.60 0.00 -0.18 0.084

COMPOUNDED ANNUAL GROWTH RATE (in %)

DIVIDEND ON SHARES Dividend on ahares (in Rs.) 185500.00 185000.00 184500.00 184000.00 183500.00 183000.00 2006-07 2007-08 2008-09 2009-10 2010-11

INTERPRETATION: The performance of the dividend on shares of the bank for a five year period from 2006-2007to 2010-2011 the annual growth rate is in fluctuating trend. The growth rate of dividend on shares is high in the year 2008-09 is0.60% and less in the year 2010-11 i.e.-0.18%, By observing the graph which is shown above the current year 2010-2011 is decreased when compared to the last financial years. The compounded annual growth rate of the divided on shares of the KCUB is 0.084%

55

Table 4.11 CASH ON HAND


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 CASH ON HAND (in Rs.) 2874623.94 2846093.69 7784943.52 4631508.11 5253268.00 ANNUAL GROWTH RATE (in %) -0.99 173.53 -40.51 13.42 12.82

COMPOUNDED ANNUAL GROWTH RATE (in %)

CASH ON HAND 10000000.00 Cash on hand (in Rs.) 8000000.00 6000000.00 4000000.00 2000000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: The annual growth rate of the cash on hand for five years i.e., from 2006-2007 to 2010-2011 of KCUB is fluctuating trend. In the year 2008-2009 the absolute value and the growth rate is increased to a great extent respectively. The compounded annual growth rate of cash on hand for five years is 12.82%. In the current financial year the value of cash on hand is decreased shown in the graph.

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Table 4.12 INVESTMENTS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 INVESTMENTS (in Rs.) 48624476.61 66218329.61 81698353.61 146359766.61 208736589.39 ANNUAL GROWTH RATE (in %) 36.18 23.38 79.15 42.62 33.83

COMPOUNDED ANNUAL GROWTH RATE (in %)

INVESTMENTS Investments (in Rs.) 250000000.00 200000000.00 150000000.00 100000000.00 50000000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: The performance of investments of KCUB for five year period is from 2006-07 to 2010-11 is healthy; the annual growth rate is in fluctuating trend i.e., increasing and decreasing trend. The absolute value of the investments is continuously increasing and in the current financial year i.e., 2010-2011it is registered as highest which is clearly shown in the graph above. From the study it is observed that that the growth rate of investments in the year 200910 is registered as very high i.e., 79.15% The compounded annual growth rate of investments of KCUB for five year period (2006-07 to 2010-11) is 33.83%. 57

Table 4.13 BALANCE WITH BANKS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 BALANCE WITH BANKS (in Rs.) 7686969.48 13879573.51 26415088.05 34255644.10 23670307.15 ANNUAL GROWTH RATE (in %) 80.56 90.32 29.68 -30.90 25.22

COMPOUNDED ANNUAL GROWTH RATE (in %)

BALANCE WITH BANKS 40000000.00 35000000.00 30000000.00 25000000.00 20000000.00 15000000.00 10000000.00 5000000.00 0.00 2006-07 2007-08 2008-09 2009-10 ABalance with banks (in Rs.)

INTERPRETATION: The annual growth rate of balance with banks is continuously decreasing of KCUB for five years (2006-07 to 2010-11) and in the current year it as became negative i.e., 30.90%. The annual growth rate of balance with banks is high in the year 2008-09 is 90.32% The absolute value of the balance with banks is increasing continuously which is shown in the graph clearly The compounded annual growth rate for a five year period of KCUB is 25.22%

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Table 4.14 LOANS DUE FROM MEMBERS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 LOANS DUE FROM MEMBERS (in Rs.) 157945185.20 202966215.20 244125461.20 272684819.20 225167697.20 ANNUAL GROWTH RATE (in %) 28.50 20.28 11.70 -17.43 7.35

COMPOUNDED ANNUAL GROWTH RATE (in %)

LOANS DUE FROM MEMBERS Loans due from members (in Rs.) 300000000.00 250000000.00 200000000.00 150000000.00 100000000.00 50000000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: It is observed that annual growth rate of loans due from members is continuously decreasing of KCUB for five years (2006-07 to 2010-11) and in the current year it as became negative i.e., -17.43% The absolute value of the balance with banks is increasing for a period and in the current year it has been decreased shown in the graph clearly It is observed that the compounded annual growth rate of the loans due from banks for five year period is 7.35%.

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Table 4.15 NON-BANKING ASSETS PLOT VALUE


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 NON-BANKNG ASSETS PLOT VALUE (in Rs.) 9720.00 9720.00 9720.00 9720.00 9720.00 ANNUAL GROWTH RATE %) 0.00 0.00 0.00 0.00 0.00 (in

COMPOUNDED ANNUAL GROWTH RATE (in %)

NON-BANKNG ASSETS PLOT VALUE


Non-banking assets plot value (in Rs.)

12000.00 10000.00 8000.00 6000.00 4000.00 2000.00 0.00


2006-07 2007-08 2008-09 2009-10 2010-11 Years

INTERPRETATION: The annual growth rate of the non-banking assets plot value is zero continuously for five years (2006-07 to 2010-11). The absolute value of the non-banking assets plot value is equal for five years shown in the graph clearly. It is observed that the compounded annual growth rate of the non-banking assets plot value for five year period is zero

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Table 4.16 ACCRUED INTEREST ON LOANS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 ACCRUED INTEREST ON LOANS (in Rs.) 14553602.00 20930193.00 22597760.00 16624016.00 24985611.00 ANNUAL GROWTH RATE (in %) 43.81 7.97 -26.44 50.30

COMPOUNDED ANNUAL GROWTH RATE (in %)

11.42

ACCRUED INTEREST ON LOANS Accrued Interest on Loans (in Rs.) 30000000.00 25000000.00 20000000.00 15000000.00 10000000.00 5000000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: The annual growth rate of accrued interest on loans of the bank for a five year period I.e.,(2006-2007 to 2010-2011)is in fluctuating trend and in the year2009-10 it is decreased and became negative i.e.,-26.44% The absolute value is also in fluctuating mode and in the current year it is increased shown in the graph clearly. The compounded annual growth rate for a five year period of KCUB is 11.42%

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Table 4.17 OTHER DEPOSITS INVESTED


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 OTHER DEPOSITS INVESTED (in Rs.) 8459.65 8459.65 10519.65 11747.65 11757.65 ANNUAL GROWTH RATE (in %) 0.00 24.35 11.67 0.09 6.81

COMPOUNDED ANNUAL GROWTH RATE (in %)

OTHER DEPOSITS INVESTED


Other Deposits Invested (in Rs.) 14000.00 12000.00 10000.00 8000.00 6000.00 4000.00 2000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: The performance of other deposits invested annual growth rate of the KCUB is also in the fluctuating trend and the growth rate in the current year is 0.09% and in the year 2008-09 the rate is high i.e.,24.35% The absolute value of the other deposits invested is in increasing trend but in the current year there is no change which is clearly shown in the graph. The compounded annual growth rate for a five year period is 6.81%

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Table 4.18 SUSPENSE ASSETS


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 SUSPENSE ASSETS (in Rs.) 1017544.71 799909.71 818309.00 1131714.21 1204833.21 ANNUAL GROWTH RATE (in %) -21.39 2.30 38.30 6.46 3.45

COMPOUNDED ANNUAL GROWTH RATE (in %)

SUSPENSE ASSETS 1400000.00 1200000.00 1000000.00 800000.00 600000.00 400000.00 200000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11 Suspense Assets (in Rs.)

INTERPRETATION: By observing the performance of the suspense assets of KCUB for five years (200607 to 2010-11) is in the fluctuating trend and in the current financial year it has been decreased to a great extent. The growth rate is high in the year 2009-10 i.e.,38.30% and less in the year 2007-08 The absolute value of the suspense assets is decreased for a period and then increased and we can clearly see in the graph above. It is observed that the compounded annual growth rate of the suspense assets for five year period is 3.45%

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Table 4.19 WORKING CAPITAL


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 WORKING CAPITAL (in Rs.) 2115.04 2676.45 3185.59 3796.92 3863.41 ANNUAL GROWTH RATE (in %) 26.54 19.02 19.19 1.75 12.81

COMPOUNDED ANNUAL GROWTH RATE (in %)

WORKING CAPITAL Working Capital ( in Rs.) 5000.00 4000.00 3000.00 2000.00 1000.00 0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: The annual growth rate of working capital is continuously decreasing of KCUB for five years (2006-07 to 2010-11) and in the current year it as decreased to a great extent i.e., 1.75% when compared to previous years. The absolute value of the working capital is increasing continuously which is shown in the graph clearly. It is observed that the compounded annual growth rate of working capital for five years is 12.81%

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Table 4.20 TOTAL RESERVES


YEAR 2006-07 2007-08 2008-09 2009-10 2010-11 TOTAL RESERVES (in Rs.) 9159671.64 9280076.95 10842479.00 10433913.20 13459383.20 ANNUAL GROWTH RATE (in %) 1.31 16.84 -3.77 29.00 8.00

COMPOUNDED ANNUAL GROWTH RATE (in %)

TOTAL RESERVES 15000000.00 Total Reserves (in Rs.) 10000000.00

5000000.00
0.00 2006-07 2007-08 2008-09 Years 2009-10 2010-11

INTERPRETATION: The performance annual growth rate of total reserves of KCUB for five year period i.e., from 2006-07 to 2010-11 is in increasing and decreasing trend and in the current year 2010-11 the growth rate is increased when compared to previous year. The absolute value of the total reserves is in fluctuating trend and in the current year it has been increased which is shown in the graph. The compounded annual growth rate of total reserves for five years is 8%

65

CONCLUSIONS AND SUGGESTIONS:

After analyzing one of the regional rural banks that is The Karimnagar Cooperative Urban Banks performance the following conclusions and suggestions are drawn.

CONCLUSIONS: It is concluded that, in the financial year 2010-2011 the annual growth rate of fixed deposits is in negative i.e.,-8.74%. The absolute value of the total reserves in the current year i.e., 2010-2011 has been increased to a great extent when compared to last year as the reserves are source of long term finance. It can meet its long term obligations. From the study it is concluded that the customers have been very much successful in mobilizing the deposits; it has been following positive policies by giving its member various options of depositing. It can be concluded from the study that the fixed assets has considerably improved which indicates that the investment in the fixed assets has increased. The absolute value of the balance with banks is increasing continuously but the growth rate in the current year i.e., 2010-2011 is in negative i.e.,-30.90% which is not satisfactory. During the period 2008-2009 the growth rate is increased to an extent i.e., 14.45% and in the period 2010-2011 it has become negative i.e.,-9.89% which is a quite satisfactory performance. The absolute value of the investments is continuously increasing and in the current financial year i.e., 2010-2011it is increased but the growth is registered very less when compared to previous years. In the year 2008-2009 the absolute value of cash in hand and the growth rate is increased 2 times greater than the previous year. The overall performance and financial position of the bank is good.

66

SUGGESTIONS: In this chapter an attempt is made to offer some suitable suggestions to improve the financial performance of The Karimnagar Co-operative Urban Bank Ltd. They are as follows: KCUB is suggested to use active and effective methods for recovery of the bank is suggested to fix out the various reasons for inefficiency of the performance. The overall efficiency is needed to be improved. Bank should attract the borrowers, by offering less interest rate as for the nature of the depositors. Karimnagar Urban Cooperative Bank is suggested to reduce its contingent charges so that their net profit can be increased. It should understand the current financial position of its at the end of the year and it could take necessary to control NPAs as these are productive. It is suggested to maintain more cash balance. The bank has to introduce new schemes for deposits for the purpose of increase deposits.

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