Introduction To The Study: Shivaji University Kolhapur

Shivaji University Kolhapur
CHAPTER 1
INTRODUCTION TO THE STUDY
1.1 Introduction
The investment management provides various information about banks current

investment avenues; with the help of this information researcher do the study on
investment management of the bank. There are different types of investment avenues are
available in the market, but which avenue we select for investment it is known with help
of this investment management study. With the help of this study we also knew the
investment management process. Investment is important decision for banks and other
investors also, for that purpose, comparison of investment avenues is important. This
study helps bank to compare different investment avenues and then take decision about
investment.
A investment can be defined as different investment tools namely stocks, shares,

mutual funds, cash all combine together depending specifically on the investors income.
Investment management to managing an individual’s investment in the form of bonds,
shares, cash, mutual funds, etc. so that he earn the maximum profit within the stipulated
time. It is the art of managing money of an individual under the expert guidance of
investment managers.
1.2. Statement of Management Problem
The bank collects their funds in the form of deposits. For the utilization of those
funds, Reserve Bank of India gives guidelines to banks. At the current stage, bank invests
their funds into other bank deposits, shares and Government securities. From these
investment bank cannot get proper return as compare to another avenues available in
market like mutual funds. The interest rate of mutual funds is 8% to 12% for one year and
11% for five year. Management wants to know different investment opportunities which
give more returns than existing investment segments. Which help the bank to increase the
revenue?
YSPM’s, Yashoda Technical Campus, Satara Page 1

1.3 Statement of Research Problem

From the collected fund, bank have right to invest 30% of amount in SLR and
Non-SLR investment. In this study, researcher found that banks current investment
avenues are earning fair returns to bank, but they won’t to increase more profitable
investment segments. For that purpose, this study aims to analyze current investment of
bank and find scope of improve investment returns. Hence the title of the study “A Study
on Investment Management with Reference to Satara District Central Co-operative Bank
Ltd., Satara.
1.4 Objectives of the Study

1. To study current investment policy of the bank.
2. To study the investment scenario of the bank.
3. To recommend some avenues to increase investment of the bank.
1.5 Scope of the Study
The scope of the study is divided into three parts which examines and identifies key
information and issues about Satara District Central Co-operative Bank Ltd., Satara.
A. Geographical scope
The geographical scope of the study is limited to Satara District Central Co-operative
Bank Ltd., Satara. Head Office Satara branch.
B. Conceptual scope
The study is based on the concept investment management, investment management
process, investment selection criteria and evaluation of investment criteria.
C. Analytical scope
The analytical scope of the study is restricted to use of percentages/average
1.6 Importance of the Study
This study will help the organization to know current investment position of the
bank which is profitable or not. With help of this study bank understand their investment
position in detailed. This study will help bank to know different avenues of investment in

different areas with evaluation criteria. This study help researcher to know about
investment avenues, investment criteria and types of investment, process of investment,
calculations of returns of investment.
This study is also useful to compare investment avenues with each other. As well
as bank also know the new avenues of investment available in market with more returns.
This study provides information to bank about investment avenues with calculation of
returns. The study is also useful to them who want to do study in that subject in future.
Investment is important decision to all investors, for that purpose, research on investment
management is continuous going on. Researcher can take help of this study to know
concept of investment management and how to calculate returns of investment? How
they compare with each other? This study gives answers to them.
1.7 Research Methodology
1.7.1. Type of research

The type of research is analytical in nature.
1.7.2. Data required-

Secondary data required
Balance-sheet, Profit and Loss Account, Organization Profile, Financial and Human
Resource Scenario of year 2015-16 to 2017-2018.
1.7.3. Data source-

Primary Data Resource
Discussion with bank managers about their investment avenues, return on
investment, investment policy of bank and information related to bank.
Secondary Data Resource
The data is collected through the financial records of the bank, books and internet,
financial statements.
1.7.4. Research Instrument

In this study used the financial statements of the bank as a research instrument.

1.7.5. Data Analysis

In order to get meaningful results, the researcher has analyzed the bank current
investment policy and banks investment criteria. For this analysis researcher use the
tables and charts. In data analysis, researcher does the study on collected deposited funds
of bank and their distribution in loans and investment. Understand the proportion of loans
and investment to total deposits is very important for study. This study researcher mainly
does the research on investment two broad categories which is SLR investment and Non-
SLR investment. To better understand of available information, information is presented
in the form of tables and charts.
1.8.Chapterization
The collected data has been presented in the following table:-
Sr. No Chapter Name Contents

1. Introduction of the Introduction, Management Problem, Research
Study Problem, Scope, Research Methodology and
Importance.
2. Conceptual Framework Introduction, Meaning and Definition, Investment
Criteria’s and Evaluation, Process.
3. Organization Profile Introduction and History, Product Profile, Vision,
Mission, Objective, Financial Scenario, HR
Scenario.
4. Data Analysis and Data, Table, Graphs and Interpretation
Interpretation
5. Findings, Suggestions Findings, Suggestions and Conclusion
and Conclusion

CHAPTER 2
CONCEPTUAL FRAMEWORK
2.1 Introduction
A Investment can be defined as different investment tools namely stock, shares, mutual
funds, cash all combine together depending specifically on the investor income.
Investment management to managing an individual’s investment in the form of bonds,
shares, cash, mutual funds, etc. So that he earn the maximum profit within the stipulated
time. It is the art of managing money of an individual under the expert guidance of
investment managers.
2.2. Meaning
Investment management is defined as the art and science of taking decisions about the
investment mix and policy, matching investment to objectives, assets allocations for
individuals and institutions and balancing risk against performance.
2.3. Objectives of the Investment Management

1. It is apply out as the customization of the investment needs created by portfolio
managers as per defined requirement.
2. Portfolio management help in providing the best options of investment to individual as
per their defined criterions of their income, budget, age, holding period and risk taking
capacity.
3. This is mainly done by the Portfolio managers who understand the investor’s financial
needs and accordingly suggest the investment policy that would have maximum risk
involved. Aptly put, it is risk reduction through diversification.
4. This is the method preferred by those who believe in having liquidity in investments so
that one can get the money back when needed
5. Some of the portfolio management schemes are also done for tax saving purposes.
6. It helps investors maintain the purchasing power.

2.4. Investment Management Process
Investment management is a complex activity which may be broken down into following
steps:
2.4.1. Specification of Investment Objectives and Constrains

The typical objective sought by investors is current income, capital appreciation, and
safety of principal. The relative importance of these objectives should be specified.
Further, the constrains arising from liquidity, time horizon, tax and special circumstances
must be identified.
2.4.2. Choice of the assets mix

The most important decision in investment management is the assets mix decision. Very
broadly, this is concern with the proportions of stocks and bonds in the portfolio. The
appropriate stock bond mix depends mainly on the risk tolerance an investment horizon
of the investor.
2.4.3. Formulation of portfolio strategy

Once a certain asset mix is chosen, an appropriate portfolio strategy has to be hammered
out. Too broad choices are available; an activity portfolio strategy or a passive portfolio
strategy. An active portfolio strategy strives to earn superior risk adjusted returns by
restoring to market timing, or sector rotation, or security selection, or some combination
of these. A passive portfolio strategy on the other hand involves holding broadly diversify
portfolio and maintaining a predetermine level of risk exposure.
2.4.4. Selection of securities

Generally, investor pursue an active stance with respect to security selection. For stock
selection, investors commonly go by fundamental analysis and /or technical analysis. The

factors that are considered in selecting bonds ate yield to maturity, credit rating, term to
maturity, tax shelter and liquidity.
2.4.5. Portfolio execution

This is phase of portfolio management which is concern with implementing a portfolio
plan by buying and/or selling specified security in the given amount. Though often
glossed over in portfolio management discussions, this is an important practical step that
has a bearing on investment result.
2.4.6. Portfolio revision

The value of portfolio as well as its composition- the relative proportions of stocks and
bonds components- may change as prices is stocks and bonds fluctuated. Of course, the
fluctuation in stock prices is obtaining the dominant factor underlying this change. In
response to such changes, periodic rebalancing of the portfolio is required. This primarily
involves a shift from stocks to bond or vice versa. In addition, it may call for sector
rotation as well as security switches.
2.4.7. Performance Evaluation

The performance of the portfolio should be evaluated periodically. The key dimensions
of portfolio performance evaluation are risk and return and the key issue is whether return
is commensurate with its risk exposure. Such a review may provide useful feedback to
improve the quality of the portfolio management process on a continuing basis.
2.5. Investment Policy of DCC Bank, Satara
2.5.1 Investment Policy
Keeping in view the various regulatory/ statutory and the bank’s own internal
requirements, bank has framed, with the approval of the BOD’s the broad Investment
policy & objectives to be achieved while undertaking investment transactions.

2.5.2. Trading Guidelines
1. The board is required to authorize to do dematerialization, dematerialization and any

other way operate our constituent Subsidiary General Ledger Account with the Bank.
Authorized person and mode of operation to be specified.
2. A copy of the internal investment policy guidelines framed by the bank with the
approval of its Board should be forwarded to the Regional Office concerned of the
Reserve Bank, certifying that the policy is in accordance with the prescribed guidelines
and the same has been put in place. Subsequent changes, if any, in the Investment Policy
should also be advised to the Regional Office of the Reserve Bank.
3. Transactions can be undertaken only on banks Own Investment Account. Bank shall
not undertake any transaction on the Portfolio Management System (PMS) clients in their
fiduciary capacity and on behalf of their clients either as custodian of their Investment or
purely as their agents.
4. All transactions in Government securities for which SGL facility is available should be
put through SGL accounts only.
5. All transactions must be monitored to see that delivery takes place on settlement day.
The fund account and investment account should be reconciled on the same day before
the close of business.
6. The banks should keep a proper record of the SGL forms received / issued to facilitate
counter-checking by their internal control systems/Inspecting Officers of Reserve
Bank/other auditors. Balance as per the banks books in respect of SGL accounts should
be reconciled with the balances in the books of CSGL Account.
7. No transactions in Government Securities by a UCB should be undertaken in physical

form with any broker.
8. No sale transaction should be put through by banks without actually holding the
security in its investment account i.e. under no circumstances banks should hold an
oversold position in any security.

9. For every transaction entered into, a deal slip should be prepared which should contain
details relating to name of the counter-party, whether it is direct deal or through a broker,
and if through a broker, details of security, amount, price, contract date and time. For
each deal, there must be a system of issue of confirmation to the counterparty.
10. In order to avoid concentration of risk, the banks should have a fairly diversified
investment portfolio. Smaller investment portfolios should preferably be restricted to
securities with high safety and liquidity such as Government Securities.
13. Bank should exercise abundant caution to ensure adherence to these guidelines.
14. Bank should take advantage of non-competitive bidding facilities provided for
acquiring Government of India Securities in the primary auctions by RBI.
15. Bank should not undertake interbank ready forward deals in dated Government and
approved/trustee securities.
16. There should be a clear functional separation of (a) trading (b) settlement, monitoring
and control and (c) accounting. Similarly there should be functional separation of trading
and Back office functions relating to bank own investment accounts. Accordingly
Manager/ Officer at Head Office will look after settlement & accounting duly assisted by
the staff working under him/her, whereas dealings shall be done by General Manager in
consultation with Chairman/Vice-Chairman/Director. On the basis of vouchers passed
after verification of actual contract notes received from the broker/counter-party and
confirmation of the deal by the counter-party the Accounts Section should independently
write the books of accounts.
2.5.3. Investment Committee

The bank has formed the investment committee comprising of Chairman, Vice Chairman,
Directors, & General Manager of the bank.
The committee will review time to time
1) The portfolio position
2) Profit & Loss decision
3) Compliance with prudential limits for SLR & Non SLR investments
4) Shifting of securities etc.

2.5.4. Classification & Valuation of Investments

The bank should decide the category of the investment at the time of acquisition and the
decision should be recorded on the investment proposals. The bank are required to
classify their entire investment portfolio under following three categories:
a) Held to maturity (HTM)

Securities acquired by the bank with the intention to hold them up to maturity will be
classified under “Held to Maturity” category. The investments included under HTM
category should not exceed 21.5% of the bank’s total investments. However banks are
permitted to exceed the limit of 21.5% of their total investments under HTM category
provided
i) The excess comprises only of SLR securities
ii) The total SLR securities held in the HTM category need not be marked to market and
will be carried at acquisition cost unless it is more than the face value, in which case the
premium should be amortized over the period remaining to maturity.
b) Held for Trading (HFT)

Securities acquired by the bank with the intention to trade by taking advantage of the
short-term price/interest rate movements will be classified under HFT category.
The individual scrip in the HFT category will be marked to market at monthly or at more
frequent intervals. The book value of individual securities in this category would not
undergo any change after marking to market.
c) Available for Sale (AFS)

Securities which do not fall within the above two categories will be classified under AFS
category. The individual scrip in the AFS category will be marked to market at the
yearend or at more frequent intervals. The book value of the individual securities would
not undergo any change after the revaluation.
The provisions required to be created on account of depreciation in the AFS and HFT in
any year should be debited to the Profit & Loss Account and an equivalent amount or the

balance available in the Investment Fluctuation Reserve/ Investment Depreciation

Reserve Account to the Profit & Loss Account
2.5.5. Shifting of Securities
Bank may shift investments to/from „HTM category with the approval of the board of
Directors once in a year. Such shifting will normally be allowed at the beginning of the
accounting year. No further shifting to/from this category will be allowed during the
remaining part of that accounting year. Bank may shift investments from AFS category to
HFT category within the approval of their Board of Directors. In case of exigencies, such
shifting may be done with the approval of the Chief Executive of the Bank, but should be
ratified by the Board of Directors. Shifting of Investments from HTM to AFS category is
generally not allowed. However it will be permitted only under exceptional
circumstances as per guidelines issued by RBI. Transfer of scrips from one category to
another, under all circumstances, should be done at the acquisition cost/book
value/market value on the date of transfer, whichever is the least and the depreciation, if
any, on such transfer should be fully provided for.
2.5.6. Classification of Investment in the Balance Sheet
For the purpose of Balance Sheet, the investments should continue to be classified in the
following categories:
(i) Government securities
(ii) Other approved securities
(iii) Shares
(iv) Bonds of PSU
(v) Others
a) Broken Period Interest- Government and Other Approved Securities

1. With a view to bringing about uniformity in the accounting treatment of broken period
interest on Government Securities paid at the time of acquisition and to comply with the
Accounting Standards prescribed by the Institute of Chartered Accountants of India, the

banks should not capitalize the broken period interest paid to seller as part of cost, but
treat it as an item of expenditure under Profit & Loss Account.
2. It is to be noted that the above accounting treatment does not take into account taxation
implications and hence the bank should comply with the requirements of income tax
authorities in the manner prescribed by them.
b) Internal & Concurrent Audit

Purchase and sale of government securities etc should be separately subjected to audit by
internal auditors and the result of their audit should be placed before the BOD‟s once in
every half year.
Internal auditors are required to audit the Investment Port folio on quarterly bases & such
report is to be placed before the Board in every quarter there after the same should be
forwarded to Regional Office of RBI at half yearly interval on 30th September & 31st
March.
c) Review of Investments Portfolio

Bank should undertake a half yearly review of their investment portfolio, which should
apart from other operational aspects of investment portfolio, clearly indicate and certify
adherence to laid down internal investment policy and procedures and RBI guidelines put
up the same before their respective Boards within a month i.e. by end of April and end of
October.
d) Management Information System

Bank should put in place a system to report to the top management on a monthly basis the
details of transactions in securities, details of bouncing of SGL transfer forms issued by
other bank and review of investment transactions undertaken during the period.
e) Monitoring, Control and Supervision

The Board/ committee/ General Manager should actively oversee investment
transactions. All investment transactions should be pursued by the Board at every
meeting. Bank should undertake a half yearly review of their investment portfolio, which

should apart from other operational aspects of investment portfolio, clearly indicate and
certify adherence to laid down internal investment policy and procedures and RBI
guidelines and put up the same before their respective Boards within a month i.e. by end
of April and end of October. The bank may seek the guidance of Primary Dealers
Association of India/ Fixed Income and Money Market Dealers Association (FIMMDA)
on investment in Government Securities.
f) Empanelment of Brokers
Bank should have panel of brokers through whom transaction in Government Securities
can be undertaken. Role of Broker is to bring two parties together. Limit of 5% of total
sales/purchase transaction for each broker is to be adhered to. However if such limit
exceeds approval of the Board is to be taken with explanation for exceeding such limit. A
record of broker wise details of deals put through and brokerage paid, should be
maintained. The bank should prepare a panel of brokers with the approval of their Board
of Directors. Brokers should be empanelled after verifying their credentials e.g.
(a) SEBI registration
(b) Membership of BSE/NSE/OTCEI for debt market.
(c) Market turnover in the preceding year as certified by the Exchanges.
(d) Market reputation
The bank should check websites of SEBI/respective exchanges to ensure that the broker
has not been put in the banned list. Only SEBI registered brokers who are authorized by
the permitted exchange (NSE, BSE or OTCEI) to undertake transactions in government
securities can be used for placing buy/sell orders.
g) Broker Limits
Bank should fix aggregate contract limits for each of the approved brokers, and ensure
that these limits are not exceeded. A record of broker-wise details of details of deals put
through and brokerage paid should be maintained. A limit of 5% of total transactions
(both purchases and sales) entered into by the Bank during a year should be treated as the
aggregate upper contract limit This limit should cover both the business initiated by the
bank and the bank and the business offered/brought to the bank by a broker.

2.6 Investment Avenues of the Bank

As an investor you have a wide array of investment avenues available to you. Sacrificing
some rigor, they may be classified as follows;
2.6.1. Equity Shares

Equity shares represent ownership capital. As an equity shareholder, you have an
ownership stake in the company. This essentially means that you have a residual interest
in income and wealth. Perhaps the romantic among various investment avenues, equity
shares are classified into the following broad categories:
(i) Blue Chip Shares

‘Blue chip’ is a term used to describe the shares of a leading company which is know foe
its excellent management and strong financial structure. This term has become a generic
one for a quality security. They are usually high priced stock because the public has
confidential in the company’s long track record of steady earning such as BHP Billion
(BHP) and Telstra (TLS).
These types of companies are also considered to be strong names in the industry and their
products or services usually their respective market.
(ii) Growth Shares

Growth shares are the special class of shares created (usually) by unlisted companies to
provide equity incentives to management and key employees. They reward participants
for the growth in value of the company above a “threshold” or “hurdle” which is
specified on issue. Growth shares generally allow gains to be taxed as capital in the hands
of participant and used as a tax-efficient alternative to options.
(iii) Income Shares

A class of capital stock that is offered by a dual-purpose fund. The other class is capital
shares. Investors that own income shares receive dividends from the entire fund’s

performance. However, there is little room for capital appreciation in these shares. Those
who invest in this class stock are typically looking for steady income in the form of
dividends instead of capital gains.
(iv) Cyclical Shares

It can be argued that all shares are somehow cyclic because their profits will follows a
pattern of some description over long periods of time. But when investors talk about
cyclical shares they are referring specially to companies whose profits are tied the way
that an economy moves.
2.6.2. Bonds
Bonds and debentures represent long term debt instruments. The issuer of a promise to
pay a stipulated stream of cash flow. Bonds may be classified into the following
categories.
(i) Government Securities

A government security is a bond issued by a government authority with a promise of
repayment upon maturity. Government security such as saving bonds, treasury bills and
notes also promise periodic coupon or interest payments.
(ii) Saving bonds

A registered, non-callable, non-transferable bond issues by the U.S. Government, and
baked by its full faith and credit. Savings bonds differ from other Treasury securities in
several ways. Saving bonds are non-marketable, meaning that they can’t be bought and
sold after they are purchased from the government; therefore, there is no secondary
market for savings bonds. The tax benefits associated with saving bonds are significant.
Like all treasury securities, they are exempt from state and local taxes, but in specific
case of saving bonds, all federal taxes may be deferred until the bond is redeemed.
(iii) Government Agency Securities

Agency securities. “Agencies” is a term used to describe two types of bonds: (1)bonds
issued or guaranteed by U.S. federal government agencies; and (2) bonds issued by
government sponsored enterprises (GSEs) –corporations created by Congress to foster a
public purpose, such as affordable housing.
(iv) PSU Bonds

Public Sector Undertaking Bond (PUS Bonds) : these are Medium or long term debt
Instrument issued by Public Sector Undertaking (PSUs). The term usually denotes bonds
issued by the central PSUs (ie. PSUs funded by under the administrative control of the
Government of India).
(v) Debentures of Private Sector Companies

Generally, in Indian context, you find out the word debenture bond being used
interchangeably.
A debenture is a debt instrument which is not backed by any specific security; instead the
credit of the company issuing the sane is the underlying security. Bonds, however, in
Indian are typically issued by financial institutions, government undertakings and large
companies. The interest is assured and is paid at a fixed interval, i.e. on-annual basis. On
maturity, the principal is repaid. Bond is a form of loan. The holder of the bond is the
lender and the issuer of the bond is the borrower.
2.6.3. Money Market Instruments

Debt instruments which have a maturity of less than one year at the time issue are called
money market instrument. The important money market instrument arte:
(i) Treasury Bills

These are issued by the Reserve Bank usually a period of 91 days. The Reserve Bank
uses these bills to take money out of the market. This will reduce a bank’s ability to lend

to its clients leading to a concentration of the money supply. The bill consist of an
obligation to pay the bearer the face value of the bill upon a given date.
(ii) Negotiable Certificates of Deposit

NDC’s are like fixed deposits except they are bearer documents. They offer a market
related rate of interest and are completely liquid because they can be negotiated during
the term of the deposit. Most NDC’s have a term of the less than one year. They usually
offer a rate of return slightly higher than bankers acceptances which makes them
extremely popular instruments.
(iii) Certificates of Deposits

Money in a CD is tied up from a few months to six years or more depending on the terms
of the specific CD you buy. A notice of withdrawal is required and a penalty imposed if
you withdraw money before the CD matures. Interest earned is higher than paid on
insured savings accounts. The longer you tie up money in a CD, the higher the interest
rate earned.
2.6.4. Precious Object

Precious object are items that are generally small in size but highly valuable in moniotory
terms. The important precious objects are:
(i) Gold and Silver
(ii) Precious Stones
(iii) Art Objects
2.7 Criteria for Evaluation

For evaluating an investment avenue, the following criteria are relevant.
(i) Rate of Return

The rate of return on investment for a period (which is usually a period of one year) is
defined as follows:

Rate of Return= Annual income + (Ending price – Beginning price)

Beginning price
It is helpful to split the rate of return into two components, viz., current yield and capital
gains/losses yield as follows:
Annual income + Ending – Beginning price

Beginning price Beginning price
Current year Capital gains/ Losses yield
(ii) Risk
The rate of return from investment like equity shares, real estate, silver and gold can very
rather widely. The risk of an investment refers to the variability of its rate of return. How
much do individual outcomes deviate from the expected value? A simple measure if
dispersion is the range if values, which is simply the difference between the highest and
the lowest values.
(iii) Marketability
An investment is highly marketable or liquid if: (a) it can transact quickly, (b) the
transaction cost is low, (c) the price change between two successive transactions is
negligible. The liquidity of the market may by judge in term of its depth, breadth and
resilience.
(iv) Tax Shelter

Some investments provide tax benefits; other does not. Tax benefits are following three
kinds:
1. Initial Tax Benefit- An initial tax benefit refers to the relief enjoyed at the time of
making the investment
2. Continuing Tax Benefit- A terminal tax benefits represents the tax shield associate
with the periodic returns from the investment

3. Terminal Tax Benefit- A terminal tax benefits refer to relief from the taxation when an
investment is realized or liquidated
(v) Convenience
Convenience broadly refers to the ease with which the investment can be made and look
after. Put differently, the question that we asked to judge convenience is:
1. Can the investment be made readily? And
2. Can the investment be looked after easily?
2.8. Types of Deposits

The bank collected the following types of deposits
1. Current Deposits
2. Saving Deposits
3. Fixed Deposits
4. Recurring Deposits
They are normally classified into two groups. Demand deposits and Fixed deposits.
Demand deposits are those which can be withdraw on transferred by the customer at any
time without previous notice to bank. These deposits are maintain to need liquidity and
transaction need. Demand deposits classified into four types, these types are as follows:
2.8.1. Current Deposits

This deposit meant purely to meet the need of the customer and hence is not entitled to
any interest from the bank. In additional to do this bank may also certain changes for
maintaining the customer balance to be maintain for the purpose of transaction. There is
no restriction on the number of transacting in the amount of in the type of customer
eligible to open these account.
2.8.2. Saving Deposits

These deposits are mean to create the habit of their and to develop the banking habit. Do
these deposits carry a specific amount of interest in addition to withdraw facilities?
However the number of per quarter by each bank and a minimum balance is stipulated.

As per the present R.B.I. stipulation interest are 4% per annum is paid on the balance in
the account between the 10 and last working day at each month. Saving account meant to
encourage the saving habit.
2.8.3. Fixed Deposits

These are also called Time Deposits or Term Deposits. These are repayable after the
expiry of a specific period working from the 30 days 120 months. The period is fixed at
the time deposit is made. The rate of interest is customer will pay a penalty in terms of
reduction in interest.
2.8.4. Recurring Deposits

In order to calculate the saving habits on the regular basis the schemes of recurring
deposits have been started by bank in recent years. A depositor opening recurring deposit
account has to deposit a fixed number of an amount every month for period selected by
him. In these case deposit interest depend upon the period for which amount of the
amount from the account. The depositor has to pay installment regularly before the last
working pay of each month.
2.9. Non-SLR Deposits
2.9.1. Introduction
Under monetary policy, central bank of the country i.e. RBI makes it mandatory for
commercial banks to hold a portion of their deposits in liquid form viz. cash, gold or
govt. securities. The ratio of mandatory liquid assets to total deposit is termed as statutory
liquidity ratio and investment made to meet stipulated SLR is called SLR investment.
SLR is occasionally changed to meet the objective of monetary policy. Apart from
leading to individuals and businesses and banks has also been allowed to invest in capital
market, mutual funds, public and private sector, units and commercial papers. So, the
non-Statutory Liquidity Ratio investments are those where the returns is based on the
prospect of the commercial market. The banks are not liable to invest in these forms of

investments. So, investors not enjoy a secured risk-free return unlike the SLR
investments.
2.9.2. Non SLR Tools
1. Bonds
There are various types of bonds. While government bonds are SLR bonds, Public Sector
Undertaking Bonds (PSU Bonds) and Corporate Bonds are usually non SLR investments.
These are high risk bonds. These bonds offer high interest rates than the government
securities and government bonds. The non SLR bonds are sold on Private Placement
Basis.
2. Derivatives
Bank also allows trading in derivatives. Derivatives is a financial instrument that offers
‘futures’ or ‘options’ agreement between two parties. Here, the value of stock depends on
the price of another object, known as underlying. One common example of derivatives
option as a non-SLR investment is the ability to buy bulk of shares in smaller amount
than actual price.
2.10 CRR
Banks in India are required to hold a certain proportion of their deposits in the form of
cash. However banks don’t hold these as cash with themselves, they deposit some cash
with Reserve Bank of India, which is considered as equivalent to holding cash with
themselves. This minimum ratio (that is part of total deposit to be held as cash) is
stipulated by RBI and is known as CRR or Cash Reserve Ratio.
When a bank deposits increase by Rs.100, and if the cash reserve ratio is 9%, the banks
will have to hold Rs.9 with RBI and the bank will be able to use only Rs.91 for
investment and lending, credit purpose. Therefore, higher the ratio of the lower the
amount that banks will be able to use for lending and investment. This power of Reserve
Bank of India to reduce the lendable amount by increasing the CRR, makes it an

instrument in hand of a Central Bank through which it can control the amount that bank
lend. Thus, it is a tool used by RBI to control the liquidity in the banking system.
2.11. SLR
Every bank is required to maintain at the close of business every day, a minimum
proportion of their Net Demand and Time Liabilities as liquid assets in the form of cash,
gold and unencumbered approved securities. The ratio of liquid assets to demand and
time liabilities is known as Statutory Liquidity Ratio (SLR). RBI is empowered to
increase in SLR also restrict the bank leverage position to pump more money into the
economy.
Net Demand Liabilities

Bank accounts from which you can withdraw your money at any time like tour saving
account and current account.
Time Liabilities
Bank account where you can’t immediately withdraw your money but have to wait for
certain period. e. g. fixed deposit accounts.

SATARA DISRICT CENTRAL CO-OPERATIVE BANK

LTD.SATARA
3.1 Introduction
The Satara district has historical background. The district had been very active in
the freedom struggle, A number of individuals were involved in the freedom movement.
Thereafter some leaders initiated their struggle to achieve ECONOMIC FREEDOM for
the rural/ordinary people in the district, enabling them to achieve over all development.
Today, it has emerged as a leading name in Co-operative banking.
Highlights of the Bank
 The Bank has achieved ISO 9001:2008 certificate by giving better services to customers
and by making continuous up-gradation in customer service to satisfy them.
 Bank is having 272 branches and 45 extension counters along with 10 divisional offices
(as on 30th September 2017).
 The bank has launched innovative deposit schemes offering attractive interest rates as
compared with other banks in the market. The maximum 8.50 % rate of interest is offered
for fixed deposit. One percent more rate of interest is given than normal fixed deposit rate
for senior citizens. The existing interest rate on savings deposit is 4 % and interest is
calculated on daily basis.
 Account opening facility for the students for purpose of scholarship.
 Bank provides the overdraft facility to Government salary earner employees as like
primary/high school teachers.
 Bank has been awarded by NABARD'S "Best Performance Award" continuously for last
six years. Moreover, bank has won Maharashtra State co-op Banks Association's first
prize as a "Best District Central Co-operative Bank", for the last ten years. Recently bank
has honored for the "Best Overall Performance" for the year 2013-14 by NAFSCOB
3.2 Historical Background of Bank

“The Satara District Central Co-Operative Bank Ltd., Satara" being the economic
power house of the Satara district; we always engaged in the work of the socio economic
upliftment of the farmers since 1950.The Satara district has historical background. The

district had been very active in the freedom struggle; a number of individuals were
involved in the freedom movement. Thereafter some leaders initiated their struggle to
achieve ECONOMIC FREEDOM for the rural/ordinary people in the district, enabling
them to achieve over all development.
Today, it has emerged as a leading name in Co-operative banking. Core credit
for this due must go to the great visionary minds of Ex- Deputy Prime Minister of India
Hon’ble late Y. B. Chavan, Hon’ble late Balasaheb Desai & Hon’ble late Kisan Veer
who with their dedication, hard work and team spirit have turned it into a success story in
62 years. We are glad to celebrate the "JanmaShatabdiVarsh" of Hon’ble late Y. B.
Chavan so, this year Also we celebrated the year 2012 as the "International Year of
Cooperatives 2012" by organizing the Programmes/Events.
The Satara District Central Co-operative Bank is the nucleus of a flourishing
movement that is bringing prosperity, wellbeing and better standard of living to the rural
atomic scenario (areas) in the district. Aiming full utilization of their hard-earned
resources.
Location
Name of the Bank The Satara District Central Co-operative Bank
Ltd., Satara
Address New Administrative Building, Satara Pandharpur
Road, 'KisanBhavan', C.T.S.No.523 A/1, Plot No. 5 &
6, Sadarbazar, Camp, P.O. Box No.6, Satara - 415 001
Telegraphic Address "KRUSHIBANK"
E-mail Address sdccbank@rediffmail.com
Phone Numbers (02162) 227636 to 227643
Fax Number (02162) 227645
Registration Number 13179/1961 Dated 15th August 1949
License Number RPCD Bombay 53 C Dated 06th September
1994 License renewed on 20th December
2011

3.2 Strategic Intent of Company

3.2.1 Objective
1) Bank has to start Net Banking transaction in next two years.
2) Bank has to start Mobile Banking.
3.2.2 Mission
1) To ensure quick and efficient response to customer expectations.
2) To adopt latest technology on a continuous basis.
3) To build proactive, professional and involved workforce.
4) To innovate products and services to cater to diverse section of society.
3.2.3 Vision
It has vision to reach business level 1792000 customer to increase ATM up to
1000& to introduce micro ATM net banking mobile banking.
3.3Current Business
The Satara District Central Cooperative Bank Ltd Satara
Inter Customer Profile
Number of customers- 1792000
Service Customer
TM 3,81,000
Mobile Banking 250
Check Books 91,000
Loan’s 67,000
Micro ATM 2,000
Services
A) Short Term Loan Policy
 Kisan credit card
 Short term loan for Strawberry growers

B) Medium Term Loans

 Primary Agriculture Credit Societies-
 To purchase milk cattle, sheep, goats and for poultry purpose
 Loan for purchase of chaff cutter and thresher
 Sprinkler and drip irrigation system including electric miters and pipe lines
 Lift irrigation schemes
 S.L.P.P and S.G.S.Y
 Capital fund for Dairy and Poultry
 Medium term open to SHM and SGSY
C) Long Term Loans
1) To built up Shetakari Niwas, KrushiParyatan Niwas, Green House Project
2) To Purchase Land for Agriculture Purpose, to develop the waste land
3) To built up Onion Storage Sheds
4) To built up Cold Storage & Pre-Cooling Unit
5) Agro-Clinics
6) Marketing Credit
7) Sugarcane harvesting machine
8) Rural Godowns to Societies and Individuals
D) Individual Loan
a)Housing Loan
b) Computer Loan
c) Education Loan Scheme
d) Loan scheme to purchase sugarcane harvesting machine
e) Loan facility purchase the JCB Machine, Bulldozer, Pocklain Machine, Road roller etc

3.4 Human Resource Scenario

In the increasing positions and profit of the organizations the human resource of the
organization play important role.
Sr. No Grade Number of Employee
1 Special Grade (CEO & MD) 15
2 First Grade (Managers) 44
3 Second Grade (Accountant) 441
4 Third Grade (Cashier & Clark) 611
5 Fourth Grade (Peon) 382
Total 1693
Above table show grade wise employee of bank. The total number of employee is 1693.
In that 15 members are in special grade. 44 employees are in the first grade, 441
employees are in second grade, 661 employees are in third grade, 382 employees are in
fourth grade.
3.5 Finance Scenario

The comparative financial position of the bank for the three years as under.
Sr. Particular 2015-16 2016-17 2017-18
No.
1 Share Capital 14524.71 15957.75 16601.84
2 Total Deposits 524682.20 590014.62 656576.07

3 Total Borrowing 86515.10 76892.00 111781.82
4 Investment 226774.47 290469.78 332668.20
5 Loans issued 354577.74 351438.32 365754.31
6 Working profit 3300.00 4000.00 3500.00

3.6 Production Scenario

Following are the various products of the company
1) Loan Facilities
2) Deposit Schemes
Bank has different attractive deposit. These are as follows:
Sr. No Types Of Deposits

1 Saving Deposits
2 Current Deposits
3 Fixed Deposits
4 Recurring Deposits
5 Dam Did Pat Deposits
6 Dam Duppat Deposits Dam Duppat Deposits
3.Scheme of Deposits
Under the scheme following deposits schemes as to the bank. These are the follow:
Sr. No Types Of Loans
1 Dhanvardhini Deposits Scheme
2 Lakshadhish Deposits Schemes
3 Cash Deposits Certificate Scheme
4 Savli Deposits Schemes
5 Pension Deposits Schemes
6 Lakhpati Deposits Schemes
7 Amrutvel Deposits Schemes

4) Other Services:
Bank also provides services for convenience of customer. These are as follows
1) Financial support
2) Crop Insurance
3) RTGS & NEFT
4) Micro ATM
3.7 Achievements of Bank

Sr. No. Awards Year
1 Best Performance Award 1996-97 to 2004-03
2 Best District Central Co-op. Bank 2001 to 2007

3 Special prize 2008
4 “Late Vaikunthbhai Mehta Best District 2007-08, 2010-11 &
Co-op. Bank” 2011-12
5 Overall Best Performance 2010-11
6 “Yashwantrao Chavan Puraskar” 2011-12
7 “Banking Frontier in Cooperative Banking 2011-12 & 2012-13
Award 2011”
8 Best Data Security 2018
3.8 Future plane of the Bank
o Rural Development
o Computerization of all the branches
o To appoint agriculture expert at every block level
o Agro processing units at the size of production
o Dry land Horticulture

3.9 Organization Chart
Board of Directors
Executive Employee Building Investment Planning and

Commitee Sub Sub Sub Development
committee committee Committee
Chairman
Vice-Chairman
General Manager
CEO
Manager Manager Loans and

Administration Development
Dy. Manager Administration Dy. Manager Agri

AAAAAAAAdministration
Dy. Manager
Dy. Manager Non-Agriculture
Inspectioninspection
Dy. Manager Law
Dy. Manager Individual
Dy. Manager Vigilance finance
Cell Dy. Manager Hi Tech
Dy. Manager Account Aagree
Dy. Manager Bank Group
Dy. Manager Property

CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
4.1. Introduction
Analysis of data involves a number of closely related operations that are performed
with the purpose of summarizing the collected data and organizing these in such manners
that they will yield answered to the research questions or suggest hypothesis had initiated
the study.
Analysis of the data is the most skilled task of all the stages of the research. It is
task calling for the researchers own judgment and skill proper analysis requires a
familiarity with background of survey and with all its stages. Hence it should be done by
the researcher himself and should not be entrusted to any other person. The analysis may
be quantitative or qualitative as well.
4.2 Interpretation of data

Analysis and interpretation are the two closely inter-connected activities. Hence the
interpretation should be considered as ultimate objective or final phase of analysis. In
fact, interpretation is the process of establishing a relationship between the variable
revealed by the analysis and explaining those relationship.
The task of drawing inference from the collected facts after and analytical and
experimental study is called as interpretation. Interpretation is the device through which
the factors that seem to explain what has been observe by researcher in the course of the
study can be better understood. Interpretation provides a theoretical conception which can
serve as a guide for further research. It is a basic component of research process.

4.3. Comparative Analysis of Deposits
Bank has a four type of deposits i.e. Fixed deposit, Current deposit, Saving deposit and
Recurring deposit.
Following table shows the year wise states of deposits of bank for three years (2015-16 to
2017-18)
4.3.1 Year wise Deposits (in Lacks)
Sr. Types of Deposits 2015-16 2016-17 2017-18
No.
1 Fixed Deposits 286687.28 338977.98 369762.64
(54.64) (57.45) (56.31)
2 Current Deposits 44228.18 35580.02 42603.60
(8.42) (6.03) (6.48)
3 Saving Deposits 191810.10 213095.44 241601.88
(36.55) (36.11) (36.79)
4 Recurring Deposits 1956.62 2361.16 2607.9
(0.37) (0.40) (0.39)
5 Total 524682.19 590014.62 656576.07
(100) (100) (100)
[Source:- Financial statement of Bank]
Above tables reveals the different types of deposits of bank for the financial year 2015-16
to 2017-18. Deposits in fixed deposits are increased constantly. In case of current
deposits ups and downs. Saving deposits are increased every year. In case of recurring
deposits the deposits are increased.

For more details the table graphically presented as under.

Graph No. 4.3.1. Year wise Deposits (in percentage)
100% 0.37% 0.40% 0.39%
90%
80% 36.55% 36.11% 36.79%
70%
60% 8.42% 6.03% 6.48% Recurring Deposits
50% Saving Deposits
40% Current Deposits
30% 54.64% 57.45% 56.31% Fixed Deposits
20%
10%
0%
2015-16 2016-17 2017-18
From the above graph It has been concluded that fixed deposits are increased in year
2016-17 and again decreased in year 2017-18 by 1.14%. In case of current deposits are
decreased in year 2016-17 and that are increased in 2017-18. In case of saving deposits,
the deposits are ups and downs. In case of recurring deposits its increased and again
decreased by minor point

4.4. Comparative analysis of investments

Bank has four types of investments i.e. MSC Bank deposits, Nationalize Bank deposits,
Government Securities, and Treasury Bills investment.
Following table shows the year wise states of investments of bank for three years (2015-
16 to 2017-18)
Table No. 4.4.1. Year wise status of Investments

Sr. Particulars 2015-16 2016-17 2017-18
No.
1 MSC Bank 1,40,66,97,000 1,33,74,15,000 1,20,68,37,000
Deposits
2 Nationalize 10,26,80,74000 11,76,19,05,000 11,75,15,32,000
Bank
Deposits
3 Govt. 91,62,75,000 1,27,77,36,000 1,47,21,50,000
Securities
4 Treasury 2,99,42,75,000 8,25,19,88,000 11,29,54,97,000
Bills
Investments
[Source:- Financial Statement of Bank]
Above table reveals that, the bank invest their funds into MSC Bank deposits which is
decreased in 2015-16 to 2017-18. In case of Nationalize Bank deposits are ups and downs
in2016-17 and 2017-18. In case of Government Securities, the deposits amount is
increased year by year. Treasury Bills deposits increased in year 2015-16 to 2017-18.


Graph No.4.4.1. Year wise Investment
140000
120000 2016-17 2017-18 2017-18

2015-16
100000
2016-17 2015-16
80000
2016-17
60000 2017-18
Column1
40000 2015-16
20000 2016-17 2016-17 2017-18

2017-18 2015-16
2015-16
0
MSC Bank Natinalize Bank Govt. Securities Treasury Bills
From the above graph it has been included that the investment of the bank in MSC bank
is decreased year by year. In case of Nationalize Bank the investment is increased every
year. Govt. Securities investment is increased in year 2015-16 to 2017-18. In the
investment in Treasury Bills the investment in bank is increased in every year. Here
observed that the bank is interested to invest in Nationalize Bank and Treasury Bill.

4.4.2. MSC Bank Deposits status
Following table shows year wise status of MSC Bank deposits in three years (2015-16 to
2017-18)
Table No. 4.4.2. Year wise status of MSC Bank deposits (amount in lacks)
Year Amount Returns
2015-16 14066.97 984.69
2016-17 13374.15 869.31
2017-18 12068.37 844.96
[Source:- Financial Statements of Bank]
Above table reveals that, bank investment in MSC Bank deposits in 2015-16 to 2017-18
year. And returns of bank are minimized year by year with rate of returns in percentage
7.00%, 6.50%, 7.00% respectively. Here we can say that investment in MSC Bank was
goes down, bank not interested to invest more funds in MSC Bank.

Graph No. 4.4.2. MSC Bank deposits
Amount
14500
14066.97
14000
13500 13374.15
13000
12500
12068.37
12000
11500
11000
2015-16 2016-17 2017-18
Graph No. 4.4.2. MSC Bank Returns
Returns
1000 984.69
950
900
869.31
844.96 Returns
850
800
750
2015-16 2016-17 2017-18
From the above graph it has been conclude that their fluctuating trend in MSC Bank
deposits whereas investment in MSC Bank deposits decreased. And returns comes from
MSC Bank deposited is falls down every year in year 2015-16 the returns is high but after
that it’s minimized.

4.4.3. Nationalized Bank Deposits status
Following table shows year wise status of Nationalized Bank deposits in three years
(2015-16 to 2017-18)
Table No. 4.4.3. Year wise status of Nationalized Bank deposits (amount in lacks)
Year Amount Returns

2015-16 102680.74 8817.86
2016-17 117619.05 8821.42
2017-18 117515.32 8837.15
[Source:- Financial Statement of Bank]
Bank invested its funds in Nationalize Bank in year 2016-17 the bank investment is
increased 3.56 lacks with rate of returns 7.50%.also in year 2017-18 investment is
increased by 15.73 lacks with rate of returns 7.52%

For more details the table graphically presented as under
Graph No. 4.4.3. Nationalized Bank deposits
Amount
120000 117619.05 117515.32
115000
110000
Amount
105000 102680.74
100000
95000
2015-16 2016-17 2017-18
Graph No. 4.4.3. Nationalized Bank Returns
Returns
8840
8837.15
8835
8830
8825
8821.42
8820 8817.86 Returns
8815
8810
8805
2015-16 2016-17 2017-18
From the above graph it has been concluded that there is bank increased investment in
Nationalize Bank in year 2017-18. Here we conclude that the investment in Nationalize
bank in year 2015-16 to 2015-17 is increased year by year.

4.4.4. Government Securities status
Following table shows year wise status of Government Securities in years (2013-14 to
2015-16)
Table No. 4.4.4. Year wise status of Government Securities (amount in lacks)
Year Amount Returns
2015-16 9162.75 578.40
2016-17 12777.36 798.58
2017-18 14721.5 909.78
[Source:- Financial Statement of Bank
Banks investment in Government Securities is increased in the year of 2015-16 to 2017-

18 with rate of return is 6.31%, 6.25%, 6.18% respectively. In year 2016-17 the
investment is increased by 220.18 lacks with rate of returns 6.25% and again increased by
111.2 lacks with rate of return 6.18% in year 2017-18.

Graph No.4.4.4. Government Securities
Amount
16000
14721.5
14000 12777.36
12000
10000 9162.75
8000
Amount
6000
4000
2000
0
2015-16 2016-17 2017-18
Graph No. 4.4.4. Government Securities Returns
Returns
900
798.58
800
700
578.4 578.4
600
500
400 Returns
300
200
100
0
2015-16 2016-17 2017-18
From the above graph it is concluded that, the investment in Government Securities is
increased in year by year. But in returns there are fluctuations; it is ups and downs there
is no consistent improvement or decrease in returns.

4.4.5. Treasury Bills Investment status
Following table shows year wise status of Treasury Bills in three years (2013-14 to 2015-
16)
Table No. 4.4.5. Year wise status of Treasury Bills (amount in lacks)
Year Amount Returns
2015-16 29942.75 2123.16
2016-17 82519.88 6180.73
2017-18 112954.97 7961.5
[Source:- Financial Statements of Bank]
Bank invested its funds in Treasury Bills in year 2016-17 the bank investment is
increased 4057.57 lacks with rate of returns 7.48%. In year 2017-18 this investment is
again increased by 1780.77 lacks with rate of returns 7.04%.

Graph No. 4.4.5. Treasury Bills
Amount
120000 112954.97
100000
82519.88
80000
60000
Amount
40000 29942.75
20000
0
2015-16 2016-17 2017-18
Graph No. 4.4.5 Treasury Bills Returns
Returns
9000
8000 7961.5
7000
6180.73
6000
5000
4000 Returns
3000 2123.16
2000
1000
0
2015-16 2016-17 2018-19
From the above graph we conclude that, the investment in Treasury Bills is increased in
year by year. In treasury bills increased with rate of return 7.09%, 7.48%, and 7.04%
respectively.

CHAPTER 5
FINDINGS AND SUGGETIONS
5.1. Introduction
While doing study of Satara District Co-operative Bank, Satara observed there ups and
downs in investment and returns. It means investments are not constant or stable, which
is not good for bank as per profit.
After doing study of investment of findings, conclusions and suggestions how to do all
this we will see it in this topic or research.
5.2. Findings
1. The deposits in MSC Bank are decreased in three years. The rate of returns of this
investment is also falls down year by year, which is 7.00%, 6.50%, and 6.00%
respectively. Here it is observed that, the investment in MSC Bank deposit and rate of
returns are not consistent is observed.
2. In case of investment in Nationalize Bank deposits the investment is increased in

financial year. The rate of returns is also increased year by year. Here it is observed that
the return rate on this investment is increase, so the bank interested to investment in
Nationalize Bank.
3. The investment in Government Securities is increased in every year. The rate of returns
on this investment is ups and downs, which is 6.31%, 6.25% and 6.18 % respectively.
4. The investment in Treasury Bills is increased in every year.. The rate of return on this
investment is increased and by minor percentage, which is 7.09%, 7.48% and 7.04 %
respectively.

5.3. Suggestions
1. Bank should transfer funds from MSC Bank into Nationalize Bank investment viz.,
mutual funds (Kotak Medium Fund 10.79%, UTI Medium Fund 10.65%, HDFC Medium
Fund 10.55%, etc.) debentures of private companies (Reliance Industry 12.29%, Infosys
Ltd. 12.70%, etc.) Preference shares because it gives more returns as compare to current
investment avenues.
2. Bank should provide Credit Card facility to customer, with analyzing their past
transactions and their income proportion. It helps banks to increase in customer
satisfactions as well as revenues.
5.4. Conclusion
After the study, researcher comes to conclusion that investment of bank and their returns
amount is not constant; there is fluctuation in investment and return rate. Here researcher
is observed that bank invest their major investment in Nationalize Bank with rate of
return on that investment is greater than other investment.
There are number of avenues are available in the market like Debentures of the private
companies, commercial paper, mutual fund and so on. They give maximum returns on
investment. Bank should also focus on increase in deposits because proportion of loans
and investment are managed properly.

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Shivaji University Kolhapur

The investment management provides various information about banks current

A investment can be defined as different investment tools namely stocks, shares,

1.2. Statement of Management Problem

YSPM’s, Yashoda Technical Campus, Satara Page 1

1.3 Statement of Research Problem

1.4 Objectives of the Study

1.5 Scope of the Study

1.6 Importance of the Study

YSPM’s, Yashoda Technical Campus, Satara Page 2

1.7 Research Methodology

1.7.1. Type of research

1.7.2. Data required-

1.7.3. Data source-

1.7.4. Research Instrument

YSPM’s, Yashoda Technical Campus, Satara Page 3

1.7.5. Data Analysis

The collected data has been presented in the following table:-

Sr. No Chapter Name Contents

YSPM’s, Yashoda Technical Campus, Satara Page 4

2.3. Objectives of the Investment Management

YSPM’s, Yashoda Technical Campus, Satara Page 5

2.4. Investment Management Process

2.4.1. Specification of Investment Objectives and Constrains

2.4.2. Choice of the assets mix

2.4.3. Formulation of portfolio strategy

2.4.4. Selection of securities

YSPM’s, Yashoda Technical Campus, Satara Page 6

2.4.5. Portfolio execution

2.4.6. Portfolio revision

2.4.7. Performance Evaluation

2.5. Investment Policy of DCC Bank, Satara

2.5.1 Investment Policy

YSPM’s, Yashoda Technical Campus, Satara Page 7

2.5.2. Trading Guidelines

1. The board is required to authorize to do dematerialization, dematerialization and any

7. No transactions in Government Securities by a UCB should be undertaken in physical

YSPM’s, Yashoda Technical Campus, Satara Page 8

2.5.3. Investment Committee

YSPM’s, Yashoda Technical Campus, Satara Page 9

2.5.4. Classification & Valuation of Investments

a) Held to maturity (HTM)

b) Held for Trading (HFT)

c) Available for Sale (AFS)

YSPM’s, Yashoda Technical Campus, Satara Page 10

balance available in the Investment Fluctuation Reserve/ Investment Depreciation

2.5.5. Shifting of Securities

2.5.6. Classification of Investment in the Balance Sheet

a) Broken Period Interest- Government and Other Approved Securities

YSPM’s, Yashoda Technical Campus, Satara Page 11

b) Internal & Concurrent Audit

c) Review of Investments Portfolio

d) Management Information System

e) Monitoring, Control and Supervision

YSPM’s, Yashoda Technical Campus, Satara Page 12

YSPM’s, Yashoda Technical Campus, Satara Page 13

2.6 Investment Avenues of the Bank

2.6.1. Equity Shares

(i) Blue Chip Shares

(ii) Growth Shares

(iii) Income Shares

YSPM’s, Yashoda Technical Campus, Satara Page 14

(iv) Cyclical Shares