Loan and credit facility at jodhpur central cooperative bank

PREFACE

An employee when joins the organization is just a raw individual, who does not possess the desired level of skill and knowledge to produce the standard output. Also, the employees are required to be up to date according to the technological changes. To achieve these objectives some kind of training is required. In other words the organization need to maintain a viable and knowledgeable work force to meet the current and future challenges. For this training is the only medium/method/weapon by which organization can achieve the objectives. So training is a continuous process, which exist till the organization sustains. The 45 days training program has been introduced by the RTU for an elaborate and practical study on selected topics related to Management from the company . In this session I took training in THE JODHPUR CENTRAL COOPERATIVE BANK, in loan section of that bank in which I got the chance to know the procedure by which bank lends money to its members. Since it is a cooperative bank so it gives loan to its members only, hence an applicant has to become member of this bank before borrowing money from it. The project work about the survey is a small piece of research work in various aspects of the training. While carrying out I got opportunities to interact with employees at various levels and the people which enhanced my practical knowledge and experience in regard to the topic. In this report I have shown the loans provided by the bank and its recovery procedure .I also include current facts and figures related to the topic.

ACKNOWLEDGMENT
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Before we get into the thick of thing, I would like to say that it was a great pleasure & privilege for me to have the opportunity of undertaking the training at the Jodhpur central cooperative bank for a period of 45 days. I would like to thank the Bank for providing me such an opportunity. I express my sincere thanks to my project guide, Mr. Jitendra kumar sewag, Designation Asst. professor, Deptt. Finance for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge him for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support he/she/they had provided to me with all stages of this project. I would also thank my Institution and my faculty members without whom this project would have been a distant reality. I am sure that the knowledge & information that I have gained during this period would be of immense value for my growth in business world.

EXECUTIVE SUMMERY
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The report contains introduction to Banks, which includes past, present and future of banks and challenges for banking industry in future. Banks plays the most important role in providing various banking services. Earlier the banks were engaged in accepting and lending money. But in the recent past the scope of services provided by the banks has increased. The growing competition requires prompt and efficient services to the customers at reasonable cost. These days bank aim to provide maximum satisfaction to their customers. The next part of the report consist the knowledge about the cooperative banks in India. It includes history of cooperative bank in indianites features and service provided by it in rural and urban sector. The structure of cooperative bank in India is also includes in it. Then a brief introduction of Jodhpur central cooperative bank comes in next part of the report which consist the history, vision, mission, management team and objective made by Chairman Mrs. Leela maderna. The current financial position of the bank also includes in this part. Then the meaning of certain terminology includes in this report .these terms are related with the topic for ex. cash credit, lease, secured loan etc. the objective of this section is only to make aware about certain terminology used by bank regarding loan facility. The next section of report i.e. training methodology consist title of report, duration of training session, objective and limitation of study etc. this section basically giving the outline of the report. Next section consist the loan and credit facility provided by bank. This section consist various loans provided by bank the detail regarding those loans, procedure to recover it, actual position of bank in loan area, and recommendation and the various proposals that the Cooperative bank could apply for maintaining its position in the region and to face future challenges and the suggestions for the improvement. Final section of report consist conclusion and bibliography.

TABLE OF CONTENT
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S.NO.
1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4 4.1 4.2 4.3 4.4 5 5.1

TITLE OF CONTENT
Industry introduction What is banking Standard activities of bank Revenue generation by bank Risk and capital of bank Economic functions of bank Banking in India Structure of banking industry in India Current scenario Cooperative bank History Services provided by bank Facts about cooperative bank Structure of cooperative bank Jodhpur central cooperative bank Management team of bank History of bank Vision, Mission Achievement and products of bank Performance of bank Branches of bank Financial position of bank Terminology What is credit facility Types of credit, Cash credit LTR, term loan, lease Secured overdraft Training methodology Title of study 1

5.2 5.3 5.4 5.5 6 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9

Duration of training Objective and format of train Source of data, scope of study Limitation of study Loan and credit facility Personal loan Loan for purchase or construction Vehicle loan Home loan Education loan Loan for working capital Other loan

INDUSTRY INTRODUCTION
Loan given to women self employment group Loan outstanding Recovery of loan

7.1 7.2 7.3 7.4 7.5

Measures of recovery

Procedure of recovery Debt forgiven by bank

Difficulties faced by cooperative bank Recommendations Conclusion Bibliography

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INDUSTRY INTRODUCTION

WHAT IS BANKING?
Banking in a traditional sense is the business of accepting deposits of money from public For the purpose of lending and investment. These deposits can have a distinct feature like being withdrawn able by cheques, which no other financial institution can offer. In Addition, banks also offer financial services, which include: The Issue of demand draft & travelers cheque. Credit cards Collection of cheques, bill of exchange. Safe deposit lockers Custodian services. Investment and Insurance Services. The business of banking is highly regulated since banks deal with money offered to them by the public and ensuring the safety of this public money is one of the prime responsibilities of any bank. That is why banks are expected to be prudent in their leading and investment activities. Every bank has a compliance department, which is responsible to ensure that all the services offered by the bank, and the processes followed are in compliance with the local regulations and the Banks corporate policy. The major regulations and act govern the banking business are: Banking Regulation Act, 1949 Foreign Exchange Management Act, 1999 Indian Contract Act Negotiable Instruments Act, 1881 Bank lends money either for productive purposes to individual, firms, Corporate etc. for buying house property, cars and other consumer durables and for investment Purposes to individuals and the others. However, banks do not finance any Speculative activity. Lending is risk taking. The depositors of banks are also assured of safety of their money by deploying some percentage of deposit in statutory Reserves like SLR & CLR.
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STANDARD ACTIVITIES OF BANK

Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, and ATM. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too.

REVENUE GENERATION
A bank can generate revenue in a variety of different ways including interest, transaction fees and financial advice. The main method is via charging interest on the capital it lends out to customers. The bank profits from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle. Fees and financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on these revenue lines to smooth their financial performance.

RISK AND CAPITAL

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Banks face a number of risks in order to conduct their business, and how well these risks are managed and understood is a key driver behind profitability, and how much capital a bank is required to hold. Some of the main risks faced by banks include:

Credit risk: risk of loss arising from a borrower who does not make payments as promised. Liquidity risk: risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).

Market risk: risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors.

Operational risk: risk arising from execution of a company's business functions.

The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk weighted

ECONOMIC FUNCTIONS OF BANKS

The economic functions of banks include:

Issue of money, in the form of banknotes and current accounts subject to cheque or payment at the customer's order. These claims on banks can act as money because they are negotiable or repayable on demand, and hence valued at par. They are effectively transferable by mere delivery, in the case of banknotes, or by drawing a cheque that the payee may bank or cash.

Netting and settlement of payments banks act as both collection and paying agents for customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economies on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables the offsetting of payment flows between geographical areas, reducing the cost of settlement between them.

Credit intermediation banks borrow and lend back-to-back on their own account as middle men.

Credit quality improvement banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position.

BANKING IN INDIA:Banking means accepting for the purpose of landing or investment of deposits of money from the public repayable on demand or otherwise one withdraw able by cheque, draft or otherwise. Banking in India has its origin as early as the Vedic period. It is believed that the transaction From money lending to money banking must have occurred even before Manu, the great Hindu Jurist, who has devoted a section of his work to deposits and advances and laid down
the rules relating to rate of interest , During Mugal Period, the native bankers played a very

important role in lending money and finance foreign trade and commerce. During the days of the east- India Company, it was the turn of the agency house to carry on the banking business the general bank of India was the first joint stock bank to be established in the year 1786. The others that followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime. In the first half of the 19th century the east-India company established three banks, the Bank of Bengal in 1809, the Bank of Bombay in 1840 and the banks of Madras in 1843. These three banks are also known as the presidency banks were amalgamated in 1920 and a new Bank the imperial bank of India established ion 27th January 1921. With the passing of the state bank act 1955 the under taking of the imperial Bank of India is taken over by the newly constituted the state bank of India.

NATIONALIZATION
The GOI issued an ordinance and nationalized 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.
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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 GOI 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 nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

LIBERALIZATION
In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation techsavvy 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 (2007), 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
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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. With the growth in the Indian economy expected to be strong for quite some time-especially 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 & As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pinups 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 the Indian Banking Industry some of the Private Sector Banks operating are IDBI Bank, ING Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank are some of the foreign banks operating in the Indian Banking Industry .

INDIAN BANKING INDUSTRY

ORGANISED BANKS
RBI COMMERCIAL BANKS NON SHEDULED COMM. BANKS SHEDULED COMM. BANKS STATE BANK GROUP NATIONALISED BANK INDIAN BANK FOREIGN BANK

UNORGANISED BANKS INDIGENOUS

MONEY LENDERS

UNREGULED NON BANKERS

COOPERATIVE BANK STATE COOPERATIVE BANK CENTERAL COOPERATIVE BANK

PRIMARY AGRICULTURE CREDIT SOCIETY

INDIAN BANKING INDUSTRY

The Indian Banking system has the Reserve Bank of India (RBI) as the apex body for all Matters relating to the banking system. It is the Combination of Banks of India and bankers to all others banks as well. The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled banks and scheduled banks.

1. Schedule Banks:These banks must have paid-up capital and reserve of mot less than Rs. 50, 00,000. They must satisfy the RBI than its affairs are mot conducted in a manner detrimental to the interests of its depositors. These are further classified as follow: State co-operative Banks Commercial Banks Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These banks have over 67,000 branches spread across the country in every city and villages of all nook and corners of the land.

2. Non-Schedule Banks:These are banks, which are not included in the second schedule of the Banking Regulations Act, 1965. It means they do not satisfy the conditions laid down by that schedule. They are further classified as back: Central co-operative banks and primary credit societies Commercial Banks COMMERCIAL BANKS Commercial Banks in India are broadly categorized into Scheduled Commercial Banks and Unscheduled Commercial Banks. The Scheduled Commercial Banks have been listed under the Second Schedule of the Reserve Bank of India Act, 1934. The selection measure for listing a bank under the Second Schedule was provided in section 42 (60 of the Reserve Bank

of India Act, 1934. The modern Commercial Banks in India cater to the financial needs of different sectors. The main functions of the commercial banks comprise:

transfer of funds acceptance of deposits offering those deposits as loans for the establishment of industries Purchase of houses, equipments, capital investment purposes etc. The banks are allowed to act as trustees. On account of the knowledge of the financial market of India the financial companies are attracted towards them to act as trustees to take the responsibility of the security for the financial instrument like a debenture.

The Indian Government presently hires the commercial banks for various purposes like tax collection and refunds, payment of pensions etc.

CURRENT SCENARIO
The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the Indian Banking system, are in the process of shedding their flab in terms of excessive manpower, excessive non Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. PSBs, which currently account for more than 78 percent of total banking industry assets are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from traditional sources, lack of modern technology and a massive workforce while the new private sector banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes. Private sector Banks have establish internet banking, phone banking, anywhere banking, and mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also, following Indias commitment to the W To agreement in respect of the services sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12
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branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches.

CO-OPERATIVE BANKS

CO-OPERATIVE BANKS:Co-operative banks are small-sized units organized in the co-operative sector which operate both in urban and non-urban centers. These banks are traditionally centered on communities, localities and work place groups and they essentially lend to small borrowers and businesses. 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, until 1996, could only lend for non-agricultural purposes. However, today this limitation is no longer prevalent. While the co-operative banks in rural areas mainly finance agricultural based activities including farming, cattle, milk, hatchery, personal finance, et cetera, along with some small scale industries and self-employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for self-employment, industries, small scale units and home finance. 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. These banks provide most services such as savings and current accounts, safe deposit lockers, loan or mortgages to private and business customers. For middle class users, for whom a bank is where they can save their money, facilities like Internet banking or phone banking is not very important. Co-operative banks function on the basis of 'no-profit no-loss'. Co-operative banks, as a principle, do not pursue the goal of profit maximization. Therefore, these banks do not focus on offering more than the basic banking services. So, co-operative banks finance small borrowers in industrial and trade sectors, besides professional and salary classes. Co-operative banks differ from stockholder banks by their organization, their goals, their values and their governance. In most countries, they are supervised and controlled by banking authorities and have to respect prudential banking regulations, which put them at a level playing field with stockholder banks. Depending on countries, this control and supervision can be implemented directly by state entities or delegated to a co-operative federation or central body.

Even if their organizational rules can vary according to their respective national legislations, co-operative banks share common features: Customer-owned entities: in a co-operative bank, the needs of the customers meet the needs of the owners, as co-operative bank members are both. As a consequence, the first aim of a co-operative bank is not to maximize profit but to provide the best possible products and services to its members. Some co-operative banks only operate with their members but most of them also admit non-member clients to benefit from their banking and financial services. Democratic member control: co-operative banks are owned and controlled by their members, who democratically elect the board of directors. Members usually have equal voting rights, according to the co-operative principle of one person, one vote. Profit allocation: in a co-operative bank, a significant part of the yearly profit, benefits or surplus is usually allocated to constitute reserves. A part of this profit can also be distributed to the co-operative members, with legal or statutory limitations in most cases. Profit is usually allocated to members either through a patronage dividend, which is related to the use of the co-operatives products and services by each member, or through an interest or a dividend, which is related to the number of shares subscribed by each member. Co-operative banks are deeply rooted inside local areas and communities. They are involved in local development and contribute to the sustainable development of their communities, as their members and management board usually belong to the communities in which they exercise their activities. By increasing banking access in areas or markets where other banks are less present SMEs, farmers in rural areas, middle or low income households in urban areas - co-operative banks reduce banking exclusion and foster the economic ability of millions of people. They play an influential role on the economic growth in the countries in which they work in and increase the efficiency of the international financial system. Their specific form of enterprise, relying on the above-mentioned principles of organization, has proven successful both in developed and developing countries. The Co operative banks in India started functioning almost 100 years ago. The Cooperative bank is an important constituent of the Indian financial system judging by the role assigned to co operative, the expectations the co operative is supposed to fulfill, their number, and the number of offices the cooperative bank operate Though the co operative movement originated
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in the West, but the importance of such banks have assumed in India is rarely paralleled anywhere else in the world. The cooperative banks in India play an important role even today in rural financing the Businesses of cooperative bank in the urban areas also have increased phenomenally in recent years due to the sharp increase in the number of primary co-operative banks. 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.

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

Some facts about Cooperative banks in India

Some cooperative banks in India are more forward than many of the state and private
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sector banks.

According to NAFCUB the total deposits & landings of Cooperative Banks in India is much

more than Old Private Sector Banks & also the New Private Sector Banks.

This exponential growth of Co operative Banks in India is attributed mainly to their much

better local reach, personal interaction with customers, and their ability to catch the nerve of the local clientele. There are two main categories of the co-operative banks.

(a)Short term lending oriented co-operative Banks - within this category there are
three sub categories of banks viz state co-operative banks, District co-operative banks and Primary Agricultural co-operative societies.

(b) Long term lending oriented co-operative Banks - within the second category
there are land development banks at three levels state level, district level and village level.

The cooperation banking structure is divided into following five categories

1. Primary urban cooperative banks 2. Primary agriculture credit societies 3. District central cooperation bank 4. State cooperative bank 5. Land development bank

Primary urban cooperative 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 centered around communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably.

Primary agriculture credit societies: Agriculture continues to be the most vital sector of Indian economy, contributing a major share to our national income and also providing livelihood to the majority of our population. A strong base of agriculture growth is must for the overall economic development in a country like India. So to help the farmers and make the financial help for them these cooperative societies are established .these societies finance farmers not only for their short term requirements (use of improved seeds, fertilizers, insecticides, etc)but for medium and long term(irrigation and land development activities)activities also.

District central cooperation bank: These are the principal co-operative societies in the districts, in a state, the primary object of which is financing other co-operatives, particularly the PCAs in the district. The DCCBs came in to existence after the passing of Co-operative Societies Act1912. These institutions also undertake banking business. These institutions act as Balancing Centers of Finance at the district level. They provide the short term and medium term credit to the agriculturists. They also supervise the PCAs in the districts.

State cooperative bank: The state cooperative bank is the apex body of cooperative bank in any state. The long-term cooperative credit structure has two tiers in many states with Primary Cooperative Agriculture and Rural Development Banks (PCARDB) at the primary level and State Cooperative Agriculture and Rural Development Bank at the state level. under the Banking Regulation Act 1949, only State Cooperative Apex Banks, District Central Cooperative Banks and select Urban Credit Cooperatives are qualified to be called as banks in the cooperative sector .

Land development bank: The long term credit needs of the agricultural sector are met by another type of co-operative institutions known as Land Development Banks. The Land Development Banks meet the requirements of the farmers for developmental purposes viz., provision of equipment like pump-sets, tractors and machinery and land improvement in the form of leveling, bundling, reclamation of land, fencing, sinking of new wells and repairs to old wells, Loans are granted on the security of mortgage of immovable property of the farmers.

Credit cooperatives are the oldest and most numerous of all the types of cooperatives in India. The cooperative credit institutions in the country may be broadly classified into urban credit cooperatives and rural credit cooperatives. There are about 2090 urban credit cooperatives and these societies together constitute for about 10 percent of the aggregate banking business and therefore regarded as an important segment of the banking system. The urban credit cooperatives are also popularly known as Urban Cooperative Banks. The rural credit cooperatives may be further divided into short-term credit cooperatives and long-term credit cooperatives. With regard to short-term credit cooperatives, at the grass-root level there are around 92,000 Primary Agricultural Credit Societies (PACS) dealing directly with the individual borrowers. At the central level (district level) District Central Cooperative Banks (DCCB) function as a link between primary societies and State Cooperative Apex Banks (SCB).

THE JODHPUR CENTRAL COOPERATIVE BANK

MANAGEMENT TEAM OF JODHPUR CENTRAL COOPERATIVE BANK

NAME
MRS. LEELA MADERANA CHAIRMAN

POST

MR.SURENDRA SINGH RATHORE

MANAGING DIRECTOR

MR. DANKESHWAR SOLANKI

EXECUTIVE OFFICER

MR. BHARAT LAL MEENA

CHIEF MANAGER

MR. PRATAP SINGH CHOUDHRY

SENIOR MANAGER

MR. RAJKUMAR VYAS

MANAGER

MR. KANSINGH PARIHAR

MANAGER

MR. BALVEER SINGH GEHLOT

MANAGER

MRS. ANITA NIWAS

MANAGER

MR. JAGDEEP CHOUDHRY

MANAGER

MR. HARIRAM

ASST. MANAGER

MR. CHATUIRA RAM

ASST. MANAGER

MR. MERAMARAM CHOUDHRY

PERSONAL ASST. CHAIRMAN 1

HISTORY:The Jodhpur central cooperative bank is also a part of cooperative banks in India which started on 26th July 1951 and spent 42 glories year with mark able contribution in banking sector. According to the chairman MRS. LEELA MADERANA the main objective of the bank is to provide financial growth to town by providing credit to farmers, tradesman and common people by optimum utilization of human assets and funds. In the beginning it provided short term loans to the tradesman of Jodhpur division, by taking care of increasing banking activities it extended its branches to other districts. It also contributes in giving guidance in running banking business properly in different branches. At present it has 17 branches and 211 rural service cooperative societies with the help of them it provides loan to farmer as well as to tradesman also for cottage industry, agriculture production business etc. as a result for achieving the targets of progressive planning of NATIONAL AGRICULTURAL BANK FOR RURAL DEVELOPMENT, it has RS. 874.14 lakes as amount of capital, RS.326.85 lakes as deposit, RS. 238.61 lakes as loan, & RS. 456.02 As banking business. Due to timely recovery of loans banks N.P.A. is 642.05 lakes, which is only 2.69% of actual loan & very low as per the measures of RBI.

VISION:
1. Providing the loans to the co operative societies. 2. Starting the new schemes for the cooperative societies to recover the N.P.A (non Performing assets) 3. Opening the education center for cooperative societies to improve/increase the business through giving them proper training & suggestions. 4. Providing the loans for new schemas time to time. 5. Repairing the plans for encouraging & awarding the employees of the Bank.

MISSION:
Mission/Target of the bank is to help the self helped groups by providing those loans at low rate. Providing the education to the workers/employees of the cooperative societies and managing the financial status of the cooperative societies.
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1. Achieving the schedule status for the bank. 2. Providing the retail banking to the customers with the help of Information booth. 3. Providing the SAMAGRA banking facilities to the customers in one branch.

ACHIEVEMENT:
The Jodhpur central cooperative bank has been awarded two times on national level in NABRDs best working group awards as in 1997-98 & 2003-04.

PRODUCTS \ LINE OF ACTIVITIES:Jodhpur central cooperative Bank has various products for the customers like Deposits, and Loans. When we say about the deposits the Jodhpur central cooperative bank has the following accounts Current account, saving bank account, Term deposit, R.D., in term deposit bank further has the following schemes like fixed deposits. It includes different types of loan schemes. Currently the Jodhpur central cooperative bank has many loans schemes. Like personal loans, home loans, vehicles loans, Education loans, agriculture loan, Minor irrigation, self helped group scheme, self employed group scheme etc.

PERFORMANCE IN 2009 & 2010:

2009 PARTICULERS Cost of deposits Cost of credits Receive through investments Receive by loans Average income of fund Cost of fund Financial margin non fund Income TOTAL Cost of management Tax payable Risk cost TOTAL NET MARGIN NET PROFIT (in percentage) 6.61 5.40 9.17 8.22 7.61 5.31 2.30 0.11 2.41 1.22 0.16 0.43 1.81 0.60 228.04 lakes TARGET (in percentage) 6.10 5.25 8.45 8 7.58 5.17 2.41 0.12 2.53 1.36 0.33 0.31 2 0.53 225.25 lakes 2010 (in percentage) 6.58 5.10 7.99 8.67 7.49 5.48 2.01 0.15 2.16 1.34 0.06 0.21 1.61 0.55 230.16 lakes

CURRENT SCENARIO:When we talk about the size of the bank it has 17 branches all over the Rajasthan. The major competitors of the Jodhpur central Cooperative Bank and its alliance are S.B.B.J., S.B.I., RAJASTHAN STATE COOPERATIVE BANK and other banks. In case if the bank has shortage of money and bank needs the money for its various purposes then the main supplier/ lender of the money is the share holders or the RBI.

BRANCHES OF JODHPUR CENTRAL COOPERATIVE BANK

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BRANCH NAME
NAI SADAK ,JODHPUR PAOTA,JODHPUR SOJTI GATE , JODHPUR BILARA PIPAD CITY FALODI AOSIA BHOPAL GARDH BAVDI BALESAR SHER GARDH BAAP LUNI TINWARI MATHANIA DECHU AOU

BRANCH MANAGER
MRS. SUDHA RATHI MR. JEEVRAJ PANWAR MR.MOHD. AMIN MODI MR.BRAJESH BISSA MR.YASHPAL ARYA MR.BATTILAL MEENA MR. BHAWANI SHANKAR MEENA MR. RAMPRASAD MEENA MR.JAYRAM PRAJAPAT MR.ASHOK KUMAR KHNDELWAL MR.OMPRAKASH JAIPAL MR.JETARAM VISHNOI MR.SHIV SINGH RAJPUROHIT MR.BALKRISHNA GOYAL MR.RAMESH CHOUAHN MR.SHARAD TRIPATHI MR.RADHESHYAM SHARMA

COMPARATIVE FINANCIAL POSITION OF BANK

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s. no
1. 2. 3.

PARTICULARS

2004-05 2005-06 2006-07 2007-08 2008-09

Share capital Deposits

673.84 14509.64

740.18 15388.58

779.11 17522.12

778.51 20807.30

773.01 26634.08

Loan advancement (a)S.T. (b) diversified loan i. ii. Farm sec. Non Farm sec. 162.21 691.36 229.62 953.25 219.90 945.87 234.06 717.12 402.73 804.05 8894.67 11151.63 13729.33 17958.62 16400.52

(c) S.T. other (C.C.W.C.)etc. Total 4. a)demand b)recovery C)percentage 5. 6. 7. 8. 9. Borrowing from apex bank Loan outstanding Working capital Cost of management Profit/loss

814.28 10562.52

1038.27 13402.77

1023.88 15918.98

1046.74 19956.54

882.29 18489.59

Recovery 10606.91 10307.65 95.38 4639.22 11915.09 22388 335.85 361.27 13139.56 12383.96 94.25 6176.39 14533.26 25544.77 387.31 383.02 16472.42 15989.36 97.07 9531.08 14816.69 31584.98 441.56 233.02 20086.66 15069.01 75.02 10643.48 19757.01 35781.46 444.01 256.17 22606.19 20364.33 90.08 9686.68 20563.05 41431.40 465.31 228.04

This bank is working for improve the financial position of cooperative banks, it also helps to achieve the goals made by NABARD and tries to fulfill all the targets planned by NABARD

under its cooperative banks development programs. And the result of its successful working is that it has 874.14 lakes as capital, 326.85 lakes as deposits, 238.61 lakes as loan business.

Current financial position of bank

NOTE:
The NPA of bank is 642.05 lacks which is only 2.69 % of total given loan

Due to its proper management the bank is able to maintain its profits, which can be seen as under,
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YEARS 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

PROFIT(in lakes) 117.43 154.30 248.88 301.46 361.27 383.02 233.02 256.17 228.40 230.16

As we can see that the bank has perform average on the basis of profits but as we know that the objective of the bank is to provide financial growth to town as well as farmers, it can be say that bank perform well and tries moving toward accomplish its objective.

The bank always tries to financially help the people hence people devotes their faith toward it which results the growth in its working capital. The increments in the working capital of bank can be seen as follows: YEARS WORKING CAPITAL
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(in lakes) 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-208 2008-09 2009-10 12901.30 14524.53 17180.95 19342.61 22388.00 25544.77 31584.98 35781.46 41431.40 45602.24

The increase in working capital shows the good management and employee as well as customers trust toward bank.

TERMINOLOGY

WHAT IS CREDIT FACILITY?

Unlike personal loans (where people borrowing the funds and the collateral are not likely to change), loans in the world of business require additional flexibility in order to meet the needs of the business as well as satisfy the requirement of the lender. Accomplishing this seemingly difficult task is done by using a credit facility which is an overall credit line that can be broken into multiple credit lines and collateral. The term credit can be understood by giving light on following points:

CREDIT (LOANS AND ADVANCES)

The profit of a bank depends primarily on the utilization of its fund. But Bank cannot lend its fund fully. As per Banking Company Act 1991 every banking company has to maintain a specified minimum (presently 25%) of the total of its demand and time liabilities in the form of cash and approved securities with RBI. This percentage or ratio is termed Statutory Liquid Ratio. Further every scheduled bank has to maintain with RBI an average daily balance, the amount of which has not to be less than a particular percentage (presently 6%) of the total of its demand and time liabilities. As such Bank generally goes for short-term finance although a small portion of its total deposit is invested as long term lending. Banks allow different forms advance.

CREDIT DEPARTMENT
CD Banking business primarily involves accepting deposits from the public and investing or lending the same and thereby making profit out of it. However, lending money is not without risk and therefore banks make loans and advances to farmers, traders, businessmen and industrialist against either tangible (land, building, stock etc.) or intangible security. Even then, the banks run the risk of default in repayment. Therefore, the banks follow cautious measures while lending money to others. This core function of a bank is performed by the Credit Department of the bank. In this case, the relationship of bank and customer is that of the creditor and debtor. Unlike personal loans where the person borrowing the funds and the collateral are not likely to change, loans in the world of business require additional flexibility in order to meet the needs of the business as well as satisfy the requirement of the lender. Accomplishing this seemingly

difficult task is done by using a credit facility which is an overall credit line that can be broken into multiple credit lines and collateral.

TYPES OF CREDITS OFFERED BY A BANK

Banks usually provides following types of credit: 1. CASH CREDIT (hypo.) 2. CASH CREDIT(pledge) 3. LTR 4. TERM LOAN 5. LEASE FINENCING 6. SECURED OVERDRAFT (SOD) 7. OTHERS

1. CASH CREDIT (HYPO.)-:

Cash Credit or continuing credits are those that form continuous debits and credits up to a limit and have and expiration date. A service charge that is effect an interest charge is normally made as a percentage of the value of purchases. These credits may be of the nature of pledged and /or hypothecated and banks should report these in separate heads incorporated under the main head cash credit. Under this arrangement a credit is sanctioned against hypothecation of the raw materials or finished goods. The letter of hypothecation creates a charge against the goods in favor of the Bank but neither the ownership nor its possession is passed on to it; only a right or interest in the goods is created in favor of the Bank and the borrower binds himself to give possession of the goods to the bank when called upon to do so. When the possession is handed over, the charge is converted into pledge. This type of facility is generally given to the reputed borrowers of undoubted integrity.

2. CASH CREDIT (PLEDGE)-:

Under this arrangement a cash credit is sanctioned against pledge of goods or raw materials. By signing the letter of pledge, the borrower surrenders the physical possession of the goods under the Banks effective control as security for payment of Bank dues. The ownership of the goods, however, remains with the borrower. The pledge creates an implied lien in favor of the Bank on the underlying merchandise. In the event of failure of the borrower to honor his commitment the Bank can sell the goods for recovery of the advance. No collateral security is normally asked for grant of such credit.

3. LOAN AGAINST TRUST RECEIPTS (LTR)-:

This is a loan facility up to a satisfactory limit to the traders / customers by a Bank against security of the value of the imported merchandise. This item also includes loan against Trust Receipts.

4. TERM LOAN-:
A Bank advance for a specific period repaid with interest under fixed schedules. The term loans may be as follow: Short Term: Up to and including 12 months. Medium Term: More than 12 months up to and including 60 months. Long Term: More than 60 months. [This item includes lease financing]

5. LEASE FINENCING-:
An entrepreneur, under this Scheme, may avail of the lease facilities to procure industrial machinery (without having to purchase it by down payment) with easy repayment schedule. The clients also get special rebate in their income-tax payment under the scheme.

6.

SECURED OVERDRAFTS (SOD)-:

A loan facility on a customers current account at a Bank permitting him to overdraw up to a certain agreed limit for an agreed period. The terms of the loan are normally that it is repayable on demand or at the expiration date of the agreement.

7. OTHERS-:
Any loan that does not fall in any of the above facilities is considered as other. Blocked / Segregated continuing credits (Pledge, Hypothecation or Overdraft) when re-scheduled by the Banks for payments over a number of periods should also be reported against the head other.

THE BANK USE EIGHT CS RULE WHILE GIVING LOAN

1. Credit (must be god) 2. Capacity(ability to pay) 3. Capital(money that going into business) 4. Collateral(assets that secure the loan) 5. Character(the person) 6. Commitment(ability and willingness to succeed) 7. Cash flow(can it support business debt and expense) 8. Conditions(economic, finance anything that effect the business)

TRAINING METHODOLOGY

TRAINING METHEDOLOGY
TITLE OF STUDY: Title of study is loans and credit facility at Jodhpur central cooperative bank The jodhpur central cooperative bank generally gives loan for short and medium term requirement in both rural and urban sectors.

DURATION OF TRAINING:Duration of project is 45 days from 19 th June to 4th august. Though the time available for the study is too less but efforts to the fullest capacity have been put into this result for efficient and effective analysis of the data.

OBJECTIVE OF TRAINING:The objective of research is as follows:

1. First objective is to find out various loan schemes provided by the bank. 2. To learn various aspects of loan provided by bank.

3. To know the problem faced by customers when obtaining the loan.

FORMAT OF PROJECT REPORT:The report is exploratory and descriptive in nature. This report is going to describe various loans provided by Jodhpur central cooperative bank hence it is a descriptive in nature but it suggests some important points to improve the services of the bank so it is exploratory in nature also.

SOURCE OF PRIMARY AND SECONDRY DATA

For the purpose of project data is very much required which works as a food for process which will ultimately give output in the form of information. So before mentioning the source of data for the project I would like to mention that what type of data I have collected for the purpose of project and what it is exactly.

PRIMARY DATA:Primary data is basically the live data which I collected on field while talking with the Employees. In some cases I got no response from their side and then on the basis of my previous Experiences I filled those fields.

SOURCE:
Main source for the primary data for the project was my face-to-face conversation which I got by the employees or sometimes filled myself on the basis of discussion with the employees.

SECONDRY DATA:Secondary data is already published data. It is the data which is funded or collected by someone else before and presently used by further research work. Secondary data for the base of the project I collected from annual report of bank, bank pamphlets and internet etc.

SCOPE OF THE STUDY:Each and every project study along with its certain objectives also has scope for future. And this scope in future gives to new researches a new need to research a new project with a new scope. Scope of the study not only consist one or two future business plan but sometime it
1

also gives idea about a new business which becomes much more profitable for the researches then the older one. The scope of this research is as follows: 1. Research study could give an idea of network expansion for capturing more market and customer with better services and lower cost without compromising with quality. 2. In future customer requirement could add with the product and services for getting the edge over competitors. 3. Different parameters could be used for the purpose of new products with extra benefits which are required by the customers. 4. Factores which are responsible for the performance of the bank can also be used for the modification of the strategy and product for being more profitable.

LIMITATIONS: The rate of interest may vary according to market environment. These figures are according to publish in annual report and according to employees of Jodhpur central cooperative bank. The report is according to my perception only and cant be taken as final decision. This study only relates to one organization, so conclusions drawn may not be finding its utility in all the other banks. Even the employees of the bank hesitated to give the complete & accurate data.

LOAN AND CREDIT FACILITY

LOAN AND CREDIT FACILITY

The Jodhpur central cooperative bank provided following loan and credit facilities

PERSONAL LOAN SCHEME:-

Under this scheme the loan is provided for fulfillment of personal and family needs by taking care of refund capacity of applicant. The applicant can enjoy this facility by following two types Term loan for maximum 5 years. Renewal of Credit limit each year according to last years transactions.

ELIGIBILITY: Domicile of Jodhpur city whose age is between 21to 55 years. Employee of Government/ self governed, semi government, leading banks, urban cooperative bank/court, financial institution, education institutes etc. The self employed person who earns fixed income and files income tax return also having PAN card. Organizer of standing committee.

LOAN/ CREDIT LIMIT: Maximum loan amount is 2 lacks. 8 times of Gross Monthly salary or rs.2 lacks whichever is less. In the case of businessman/ professionals the calculation of average monthly salary is to be done according to the IT return of past three years. 15 times of monthly salary of manager of selection committee or 2 lacks Whichever is less
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INTEREST RATE:According to the decision taken by bank the rate of interest is 16%.

RECOVERY OF LOAN: Maximum 5ve years, in the case of employee 5ve years or date of retirement whichever is earlier. The advance cheque is taken according to EMI installments of other banks.

FOR SECURITY OF LOAN: The bank requires the guaranty of 2 persons having creditability of loan amount who are recognized by bank. The collateral security is also accepted by bank in the case of non remunerated and employer who having loan of more than 50000 and lake of contract of direct recovery.

DOCUMENTS REQUIRED FROM APPLICANT: Photo of applicant Residential proof Two guarantors Income certificate of applicant and guarantor In the case of salaried employee the guarantee certificate passes by his employer. In case of loan amount which is more than 50 lacks the evaluated rate of fixed assets for mortgage. The nominal membership fee and deposit amount.

EXECUTION OF DOCUMENTS AFTER SENCTION OF LOAN: Promissory note. Loan contract. Deed of security papers. Mortgage letter (in the case of mortgage of fixed assets) Advanced cheque (according to the installments) Other documents.

LOAN FOR PURCHASE OR CONSTRUCTION:Under this scheme an applicant may apply for loan related to purchase of a plot, construction of a building, purchase and repairs of building.

ELIGIBILITY: Domicile of Jodhpur city whose age is between 21to 55 years. Employee of Government/ self governed, semi government, leading banks, urban cooperative bank/court, financial institution, education institutes etc. The self employed person who earns fixed income and files income tax return also having PAN card. Standing committee admin

LOAN/ CREDIT LIMIT:Maximum loan amount is 15 lacks for loan related to purchase of a plot, construction of a building, purchase and repairs of building.

INTEREST RATE:The interest rate is 10.50% in the case of normal purchase or repairs of plot and in the case of purchase or repairs of commercial building, shops the rate of interest is 14%.

TIME PERIOD OF LOAN:This loan can be taken Maximum for 15 years.

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FOR SECURITY OF LOAN:The bank requires the guaranty of 2 persons having creditability of loan amount who are recognized by bank.

DOCUMENTS REQUIRED FROM APPLICANT: Photo of applicant Populated area plot strap which is on the name of applicant Cost estimate and construction cost map which is approved by official engineer Income certificate of applicant. Two guarantors and their income statement with photo. The nominal membership fee and deposit amount.

VEHICLE LOAN (for personal use):Under this scheme the loan is to be given for four wheeler (car, jeep etc.) for personal use only.

ELIGIBILITY: Domicile of Jodhpur city. Employee of Government/ self governed, semi government, leading banks, urban cooperative bank/court, financial institution, education institutes etc. The self employed person who earns fixed income and files income tax return also having PAN card. Standing committee admin

LOAN/ CREDIT LIMIT:The loan provides up to 5 lacks for purchasing of four wheeler for personal use.

INTEREST RATE:The rate of interest for four wheeler is 14%.

TIME PERIOD OF THE LOAN:The time limit set by the bank authority for this kind of loan is maximum 7 years.

FOR SECURITY OF LOAN:-

The bank requires the guaranty of 2 persons having creditability of loan amount who are recognized by bank.

DOCUMENTS REQUIRED FROM APPLICANT: Photo of applicant and his legal license. Vehicle quotation and income statement of applicant. Fixed assets for mortgage. Two guarantors with their income statement and photo. The nominal membership fee and deposit amount.

VEHICLE LOAN (for commercial use):Under this scheme the loan is provide for purchase vehicle for commercial use.

ELIGIBILITY: Domicile of Jodhpur city. Employee of Government/ self governed, semi government, leading banks, urban cooperative bank/court, financial institution, education institutes etc. The self employed person who earns fixed income and files income tax return also having PAN card. Standing committee admin

LOAN/ CREDIT LIMIT:The loan provides up to 10 lacks for purchasing of four wheeler for commercial use.

INTEREST RATE:The rate of interest for four wheeler is 14%.

TIME PERIOD OF THE LOAN:The time limit set by the bank authority for this kind of loan is maximum 7 years.

FOR SECURITY OF LOAN:The bank requires the guaranty of 2 persons having creditability of loan amount who are recognized by bank.

DOCUMENTS REQUIRED FROM APPLICANT: Photo of applicant and his legal license. Vehicle quotation and income statement of applicant. Fixed assets for mortgage. Two guarantors with their income statement and photo. The nominal membership fee and deposit amount.

HOME LOAN:This loan scheme is for: Purchase or construction of plot/building for the persons having regular income and loan for take over the current loan account for different financial institutes. Construction or purchase of building for Commercial use, business use, shops, showrooms, warehouse etc. Repairing, expansion, and renovation of Home/ commercial building.

ELIGIBILITY: Domicile of Jodhpur who wants to purchase/ construct the building or house within the district. Employee of Government/ self governed, semi government, leading banks, urban cooperative bank/court, financial institution, education institutes etc. Business man who fills income tax return for last 3 years. Normally the age limit for applicant is 50 years but it can be extent up to 55 years in certain special cases.

LOAN/ CREDIT LIMIT: The loan limit is up to 15 lakes Rs. 2 lakes in the case of repairs The margin would be 20% up to 2 lakes and 25% in the case of above 2 lakes There should be no margin in fee cost in the case of plot replacement and tere should be repayment in 3 installments after fully utilization of his contribution of loan in the case of construction.

INTEREST RATE:FIXED RATE OF INTEREST: Up to 5 years From 5 to 10 years Above 10 years FLEXIBLE RATE OF INTEREST: Up to 5 years From 5 to 10 years Above 10 years 9.50% 10% 10.50% 10% 10.50% 11%

TIME PERIOD OF THE LOAN:The time period for loan is maximum 15 years or date of retirement whichever is earlier,

DOCUMENTS REQUIRED FROM APPLICANT: Loan application form. Photo of applicant and co applicant. Copy of document of plot which is to be purchased or constructed.
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Construction approval from office in the case of construction. The cost estimation and approved map of building going to be constructed. Salary statement in case of salaried applicant and income tax return of last 3 years in case of non salaried applicant.

Domicile certificate of applicant. Income statement and identity card of two gaunter etc.

EXECUTION OF DOCUMENTS AFTER SENCTION OF LOAN: Promissory note. Loan contract. Grantee deed of two grunters. Mortgage letter of fixed assets Advance cheque Acknowledgment according to selected interest rate. Prescribed document from bank advocate. Other related documents.

EDUCATION LOAN:
This loan is for pursuing higher studies by their children.

ELIGIBILITY:Students who have got admission to some professional or other courses and whose prospects of getting employment are very good.

LOAN/ CREDIT LIMIT:The maximum limit of loan is Rs. 3.00 lakes per borrower. 50 times of the gross monthly salary of the applicant or Rs. 10.00 lakes whichever is less ensuring 35% take home salary by the loanee after payment of installment of loan.

INTEREST RATE:The rate of interest on such loan is 12%.

TIME PERIOD:5 years after the borrower gets employment or one year after completion of course whichever is earlier.

DOCUMENTS REQUIRED FROM APPLICANT: Attested copies of documents for proof of age/date of birth and proof of residential address. Passport size photo of the applicant, co-obligates and guarantors. Copy of mark sheets/degree certificates of previous academic qualifications. Income proof/latest income tax return of parents/co-obligates, guarantors. (if any) Details of collateral security along with valuation certificate of Govt. approved valuer (if any). Details/statements of Bank accounts held by the student applicant/coobligate(s)/guarantors (if any) for the last six months. Copy of Passport/Visa, cost of air fare (documentary detail) in case of studies abroad.

COMMERCIAL/WORKING CAPITAL MORTGAGE/CREDIT ON PLEDGE ELIGIBILITY:The eligible candidates who can apply for such loan are private firm, commercial, partnership firm.

AMOUNT OF LOAN:The amount of loan that can apply by eligible candidates is maximum 25 lacks.

RATE OF INTEREST:The rate of interest which is charge by bank is 13%.

TIME PERIOD:The time period for loan is not fix but renewal of time period can held according to transaction made in between the month of July to June of previous year.

Margin:On mortgage =40% On pledge =25% DOCUMENT REQUIRED: passport size photo Previous years account of firm. TIN NO. Of firm. Partnership deed of partnership firms. Rent agreement in case of industry on rent. Document of 2 assets on mortgage
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Two guarantors.

OTHER LOAN FACILITY All the loan schemes we have been seen above shows that cooperative bank provided all kind of loans at nominal rate of interest. The cooperative bank provides loan only to hits members hence if a person wants loan from that bank he has to The Jodhpur central cooperative bank provides some other kind of loans also like Loan for Self employment (@14%). Loan for farm sector (@13%), Loan for cooperative society/marketing society (@14%), Computer loan (@8%), Loan for farm sector (@13%) Loan for non farm sector (@14%) Krishak mitra cooperative credit (@7%) Cooperative society/marketing society credit limit (@ 14%) National saving certificate/ kisaan vikas patra (@ 12%) National saving certificate/ kisaan vikas patra (for staff)(@8%) Loan to bank staff for computer (@12%) Agriculture loan (up to 50000/-) (@12%) Non agriculture loan (up to 50000/-) (@13%) etc.

THE REPORT OF PROGRESS IN LOAN AMOUNT AND FINANCIAL SUPPORT TO WOMEN SELF EMPLOYMENT

YEAR

GROUP

MEMBERS

AMOUNT (lacks) 2.80 50.21 29.97 52.87 85.45 158.76 130.39 157 166.50 178.25

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

18 79 155 161 238 320 184 212 185 191

189 796 1598 1757 2585 3427 1940 2215 1950 1992

The Bank has variety of credit schemes specially suitable to individuals based on the Needs and personal repayment capacity. The chart shows the increments in loan amount given by bank to women self employment groups. The amount of loan increases and the no. of groups also increase due to fait and reasonable rate of interest on loan provided by bank.

The recovery following table shows the total amount of loan outstanding:
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YEAR

LOAN OUTSTANDING (amount in thousands)

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

6335.15 6309.14 8192.45 9275.02 11915.09 14533.26 14816.09 19757.01 20563.05 23861.38

The chart shows the total amount of loan which will have recovere by bank,the increament shows the that trend to take loan from cooperative bank increses ,it was a little bit constant in year 2005 and 2006 but then increase which shows the interest of individual in taking loan from cooperative bank. The loan amount provided by bank increase as compare to last 4 years, the interest of different sectors in taking loan from cooperative bank can be seen in following table:

Sectors

2004-05 (amount in lakes)

2009-10 (amount in lakes) 470.98 809.77 1029.50

Agriculture Non agriculture other

162.21 691.36 814.28

The chart shows the increment in the loans provided by banks and it is clear that the bank not only focus on agriculture loan but on other loan also which includes loans for Self employment, commercial/working capital mortgage etc. it shows cooperative bank is not bounded in providing loan in agriculture area only and can be a good source of fulfill short and medium term requirement of finance in rural area.

RECOVERY OF LOAN

RECOVERY OF LOAN:
The banks have introduced various deposits schemes which induce the common man to save more money. The Urban Co-op. Banks accept deposits for the purpose of lending. It is the primary duty and function of the Urban Co-op. Banks to safeguard the interest of depositors. Whenever deposits are accepted, the bank agrees and undertakes to repay the amount of deposits with interest to the depositor on maturity. The ownership of the deposit amount vests with the customer and the custody of the deposit amount are with the Banker. So whenever Advances and Loans are sanctioned to shareholders / members of the Bank, the Banker has to take extreme care to see that the Borrower repays the amount of loan with interest so as to enable the Banker to repay the amount of deposit with interest to the customer. Points which are to be taken care by bank while giving loan: This is necessary to ensure that every borrower has a proper repaying capacity for repayment of the amount of loans and advances that would be sanctioned. Securities are also taken to ensure that in case the borrower fails to repay the amount of loan, the securities can be attached and sold out and the debts can be liquidated. Even with this background, though there is a detailed scrutiny of loan application, it is observed that there are very few cases, where the judgment of the bankers fails. In such 'Fail Cases' the borrowers are not ready and willing to repay the amount of loan, the securities can be attached and sold out and the debts can be liquidated. Following are some points which bank takes care while lending money:

Date of sanction of loan. Amount of loan sanctioned. Rate of Interest that would be charged. Last date of repayment of loan. Period for which loan is granted. Details regarding securities offered.

Normal measures to be adopted by bank officials for recovery of dues

Whenever, a borrower commits breach of agreement in respect of repayment of schedule of the amount of loans with interest etc., we safely say that there are 'OVERDUES ' in the Loan Account. Once the Loan A/c is an overdue A/c i.e. the borrower has committed default in repayment of loan amount as per the dates specified in the Agreement, then the Banker has necessarily to adopt measures which will result into recovery of overdue amounts. Whenever the borrower commits default in repayment of loan amount, immediately the bank should serve ' Preliminary Notices' on the principal borrower and the sureties advising them to repay the amount of overdue with interest etc. Such Preliminary Notices should invariably mention information which is of factual nature relating to (i) Amount of loan sanctioned. (ii) Date of sanction of loan. (iii) Names of the sureties. (iv) Amount of the loan sanctioned. (v) Amount of over dues with interest etc. on a particular date. Addition to the above it must also be communicated the bank shall proceed to take further action against the principal borrower and sureties in case of failure to repay the amount of loan/over dues. It has been often said 'A' stitch in time saves nine'. Thus, the banker must be vigilant, right from the disbursement of loan amount till the recovery of the entire loan amount. There should be effective supervision over the amount of loan sanctioned . Recovery through salary / wages After issue of such preliminary notices, there may be a positive response from the principal borrower and he may repay the amount of defaulted loan installment, or the principal borrower and the surety may approach the authorities of the bank and may explain their genuine difficulties regarding repayment of loan amount or there may offer to repay the dues partially. There may be cases where there is no response from the borrower / sureties.
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With this background, the bank should precede further to devise such steps which will result in recovery of dues. Under various State Cooperative Acts (e.g. Section 49 of M.C.S. Act 1960) it has been provided that if a member of a society. /Bank authorizes his Employer to make deduction from his salary/wages, in order to satisfy the claims of the society/Bank, and then on receipt of requisition letter from the concerned Bank, the Employer shall proceed to make deduction from the salary/wages from the concerned employee/member to meet the claims of the Bank. The Employer must remit the amount so deducted immediately to the Bank concerned. Non-compliance of these provisions under the State Cooperative Act shall be constructed as 'offence' and further Civil and Criminal action can be instituted against such Erring Employer. In addition to the above, there are provisions under the Indian Payment of Wages Act 1936 (vide Section 7(2) and Section 7(2) (j) which stipulates that the Employer shall make deduction from the salary/wages of an Employee to satisfy the claims of the Cooperative Society / Banks. Settlement of Disputes Based on the noting of the Management, the Board of Directors may pass a Resolution authorizing the Manager/or such other officer to file "Dispute Application in the Co-op. Court against the defaulting principal borrower and his sureties. Section 91 of the MCS Act empowers the co-operative courts to decide on Disputes and Section 95 further empowers the court to direct attachment of property before announcement of the award which is called Attachment before award or order and interlocutory order if it is satisfied that the parties to the dispute are likely to remove/ dispose of whole or part of his property. Section 95 similarly empowers the Registrar / Officer authorized by him to take the above measures in case of disputes referred to him. The prayer clause normally consists of following important points

The opponents may be held responsible to repay the entire amount of loan with interest. If the opponents fail to pay the amount of loan, the disputant may be entitled to attach the movable and immovable property of the opponents.

The disputant may be entitled to sell the attached property and recover the amount due from the opponents.

Any other orders to meet the ends of justice.

PROCEDURE TO BE FOLLOWED: Under Section 13(2) of the Act, a 60 days notice has to be served by the bank on the borrower with a request to discharge the loan liability The notice must contain details of:

amount payable by the borrower; Security interest intended to be enforced. On receipt of notice, if the borrower makes a representation or raises an objection, the secured creditor must consider such representation or objection.

If the secured creditor comes to the conclusion that the said representation or objection is not acceptable or tenable, he must communicate the reasons for non-acceptance of representation or objection within one week of receipt of the above.

Modes of recovery available (s.13(4))

If borrower fails to discharge the liability, secured creditor has the following options

Take possession of secured asset Take over the management of the business of the borrower including The right to transfer by way of lease, sale, assignment, etc. The said rights must be exercised only where substantial part of business of borrower is held as security for the debt.

Appoint a manager to manage the security asset taken over. Issue notice to persons who acquired the secured asset from the borrower or from whom money is due.

The CMM( chief metropolitan magistrate)or DM

(District magistrate) is empowered even to use force necessary for taking steps towards securing compliance RIGHT TO APPEAL: Under the Act, the borrower can appeal before DRT by paying the fee within 45 days (S.17). The appeal can be entertained only when the borrower deposits fifty per cent of the amounts claimed in the notice. DRT can consider the legality of action taken by the bank. If it finds it wrongful, it can restore the business or management to the borrower. If, however, the DRT finds that the action taken by the bank is as per the provisions of the law, then the bank/ secured creditor can proceed to take action under Section 13(4) of the Act. The application has to be disposed of by the DRT within 60 days and if its pending for four months, either the bank or the borrower can appeal to the Appellate Tribunal for expeditious Tribunal. An application for recovery of balance amount, if any, by secured creditor can be presented to the debt recovery tribunal by the authorized officer (AO)of the bank or can be sent by registered post addressed to the registrar of debt recovery tribunal. Appeal to the appellate tribunal under Section 18: Persons aggrieved by the order of DRT to prefer an application before the appellate tribunal within 30 days. The appellate tribunal is vested with power to reduce the deposit amount to not less than 25 percent.

Following table shows the comparative analysis of recovered and overdue loan of bank: year 2008-09 2009-10 Total claim(in lakes) 22540.20 17427.05 recovery (in lakes) 19179.32 9884.09 Recovery in percentage 85.08 56.72

The table shows that recovery of loan reduces as compare to last year. Hence the bank needs to try to recover the very old and overdue loans. For the recovery of over dues bank formed a flying squad which starts working from 8-03-2010.

DEBT FORGIVEN BY BANK

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Agriculture remains the predominant sector in terms of employment and livelihood with more than half of Indias workforce engaged in it as the principal occupation. However, Agriculture remains the predominant sector in terms of employment and livelihood with more than half of Indias workforce engaged in it as the principal occupation In addition, the rural poverty is getting concentrated in agricultural labor and artisanal households which account for over 40% of the rural poor. Recent trends that have raised concern regarding food security, farmers income, and poverty include : (i) widening economic disparities between irrigated and rain-fed areas, (ii) increased vulnerability to world commodity price volatility, (iii) inefficient use of available technology and inputs with low crop productivity, (iv) degradation of natural resource base, (v) rapid decline in groundwater, with particularly adverse impact on small and marginal farmers, and (vi) Increased non-agricultural demand for land and water. Aggravation in social distress as a cumulative impact of the above reflected in an upsurge in farmers suicides. With taken above factors in consideration Jodhpur central cooperative bank and 207 rural services cooperative committees (work under this bank) forgone debt amount of some members which can be seen as follows: Types of members marginal farmers Small farmers others No. of members 1484 3543 19805 Amount (in lakes) 185.77 415.79 2552.51

From the above claim an amount of RS. 610.56 lakes received from marginal and small farmers and RS. 1922.52 lakes from others have been received on 6-04-2010.

DIFFICULTIES FACED BY COOPERATIVE BANK IN RURAL AREAS 1) Slow progress: The progress of co-operative banks is not up to the expectation and is slow when comparing other type of banks because of many restrictions on their operations. 2) Limited scope of investment: The main objective of co-operative banks is to provide credit facilities to the poor people i.e., to small and marginal farmers and other weaker sections. They were originally having limited scope to invest their surplus funds freely. 3) Delay in decision making: The co-operative banks directly or indirectly by various agencies i.e., NABARD, RBI. Thus it takes long time to take decision on some important issues. This, in turn affects the progress of co-operative banks.

4) Lack of training facilities: Generally the staff of co-operative banks is urban oriented and they may not know the problems and conditions of rural areas. Lack of training facility concerning these areas also affects the growth of co-operative banks. 5) Poor recovery rate: The recovery performance of the co-operative banks is not up to the mark. the reason for poor recovery of loans and mounting overdue are; inadequate supervision and follow up action to assess the end use of credit by co-operative banks due to inadequate staff in banks, poor Identification of beneficiaries, inadequate generation of output and income by the beneficiaries, poor marketing facilities. 6) Lack of local participation: Rural co-operative banks have not received sufficient local participation. The cooperative banks have been thrust upon the rural people from above without involving local people in its operation and management. In this connection, it is suggested that knowledgeable persons in the rural areas need be associated with the management of co-operative banks. 7) Lack of co-ordination: There is lack of proper co-ordination between co-operative banks and other institutional financing agencies like commercial banks and RRBs. Also, there is inadequate co-ordination between co-operative banks and other developmental agencies operating in rural areas. This has hampered the progress of co-operative banks. 8) Poor development of rural areas: In spite of several efforts made during the course o development plans to promote the development of rural areas, it has not taken place in a significant way. The areas, at present lack economic infra- structures like; facilities of marketing storage and distribution of inputs. Besides, social infrastructure like; schools, medical facilities. As a result, co-operative banks find it extremely difficult to operate in such areas.

RECOMMENDATION AND SUGGESTIONS: 1. More mass awareness campaigns should be organized in order to enhance market share of bank. So Bank should concentrate on its advertisement itself.

2. Bank should refocus on its interest rate as responded by people. Periodic review of the interest rate should be done.

3. There should be computerized system in the bank as it will reduce the time wastage of manual work and will lead to the better performance of the bank.

4. Training of the employees should be there to meet the needs of the time.

5. Proper posting of the staff should be done. 6. Customers satisfaction must be the top priority of the bank.
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7. Maximum practical exposure should be provided to the job trainees so that they may handle the various enquiries of customer effectively. 8. Communication gap within the bank and with the head-office should be reduced.

9. Infrastructure facilities should be provided to the branch of Cooperative Bank, as it is catering to the 5-6 nearby villages.

10. Banks is also advised to have proper internal control measures for monitoring its functions and transactions.

CONCLUSION
The study concludes that Cooperative Bank, which was established for mainly for the service of rural sector, still is not on the line to its goal. It is lacking at various elements, particularly at the branch levels, which reveals the edge of other public and private sector banks over the Cooperative bank, the lines at which the bank is lacking behind. Indiscipline and lack of commitment in these banks make peoples trust in the cooperative sector a casualty. Some of the co-operative banks are quite forward looking and have developed sufficient core competencies to challenge state and private sector banks. But there is shortage of staff in this bank and the traditional manual banking which is affecting the business and customer services. People are still unaware of the services provided by the Cooperative Banks due to lack of advertisement. There is a need to analyze and pick up early warning signals. A change is needed today in the cooperative banks which is built on confidence in human capital - the most important of all resources - in commitment, creativity and innovation brought about by
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proactive management, membership and employees. The ability to capture knowledge and wisdom gives cooperative banks their competitive advantage. A prerequisite is that participants from all parts of a cooperative organization know and understand its purpose, core values and visions. In this way, by keeping in mind the certain shortcomings, appropriate measures to overcome them should be adopted. So that the real purpose of the Cooperative bank must be realized with a competitive advantage and the gap between the customer perception of the Cooperative Bank and the other private and public sector bank, can be reduced .

BIBLIOGRAPHY
Annual report of the Jodhpur central cooperative bank. Documents provided by bank. Various circulars issue by the bank. Ccb.jodhpur@gmail.com www.wikipedia.com www.docstoc.com www.cooperativebank.co.uk www.cab.org.in> knowledge bank www.citeman.com www.ehow.com
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www.nabard.com www.rbi.org.in