Professional Documents
Culture Documents
SUBMITTED BY
Mr. NANDAN DNYANESH KHANVILKAR
SPECIALISATION: - FINANCE.
THROUGH
A PROJECT SUBMITED TO
UNIVERSITY OF MUMBAI
CERTIFICATE BY THE GUIDE
Date:-
DECLERATION
Signature
Place: CHIPLUN
Date:25.12.2021
1
PREFACE
The main objective of practical knowledge in the form of industrial visit at the
Master of Management Studies level is to give the perspective knowledge
about the organization. To become sharper in the field of Management, one
needs both practical as was theoretical knowledge.
2
ACKNOWLEDGEMENT
Then I would like to thank Mr. D. S. Mirajkar, Director of our college and I
am heartily thankful to Mr. Laxman Renapure (faculty member) for his
constant Encouragement and assistance in preparing project report.
3
Table of content
Title Page No.
Declaration 1
Preface 2
Acknowledgement 3
Table of Content 4
Executive Summary 6
1. Introduction 7
a) Introduction to Banking 8
b) Banking In India 9
i) Socity Profile 21
Future plan 27
4
social contribution 28
Service Department 30
Finance Department 34
Swot Analysis 35
j) Research Topic 37
Meaning of research 37
2. Literature review 46
3. Research Methodology 50
a) Research Problem 51
b) Research Objective 51
c) Hypothesis/Hypotheses 52
d) Research Methodology 53
5. Result 67
6. Conclusion 68
7. Bilbography 69
5
EXECUTIVE SUMMRY
“Study of loan and advances of Shiral Gat PACS”. I have taken this topic
because now- a-days in this fast developing economics era, loan and
advances play a very important role like when a person or Farmer wants to
start a business then he can start his business by taking a loan from bank
and this is affected by the interest charged on loan.
The main purpose of this study is to know that how majority of farmers in
India avail their agricultural or other loans from Primary Agriculture Credit
Societies in enviornment of Co-operative Banking
6
Introduction
7
a) INTRODUCTION TO BANKING
Banks are among the main participants of the financial system. Banks also
deposits and lending. Since Banking involves dealing directly with money,
Banks have added new payment channels like Internet banking, Mobile
worth Individuals
In addition to this Banks are now moving towards Universal banking which
8
b) BANKING IN INDIA
The origin of banking in India can be traced back to almost the Vedic period.
have taken place before the times of Manu. Manu, a great Hindu jurist, has
devoted a section of his work explaining the deposits and advances and he
Throughout Mauryan period and later on, desi bankers played some role in
the economy of the country. However, it was during the Mogul period that
agency houses, namely Ferguson and Co. and Alexander and Co. set up the
first joint stock bank in 1786 in the name of General Bank of India. Later on
Bank of Hindustan also came into existence which carried on the business
till 1906.
East India Company established three banks; namely, The Bank of Bengal
in 1809, The Bank of Bombay in 1840, and Bank of Madras in 1843. They
independent units.
National Bank Ltd., Bank of India Ltd., Canara Bank Ltd, Indian Bank Ltd.
9
etc. were established.
The Reserve Bank of India was established as the Central bank of the
country in 1935under an act called Reserve bank of India Act. In 1955, the
Imperial Bank of India was nationalized and was given the name "State Bank
country.
In 1980, another six banks were nationalized, and thus raising the number of
the need
efficiency of the banking system, new private sector banks were allowed to
New delivery channels like ATM, Mobile banking and Internet banking and
becomes cheap.
10
c) INTRODUCTION TO CO-OPERATIVE BANK
Definition of Cooperation
H.CALVERT define
cooperation –
interest of themselves.”
2. Democratic control
11
d) HISTORY OF CO-OPERATIVE BANKING
Over the years, the difference between co-operative banks & commercial
banks has blurred as they all have come under a common law. All products
& services are offered by co-operative banks are on the par with commercial
co- operative movement started in India with a view to provide finance to the
agriculturist at a low rate of interest. The co-operative society has to take the
place of the money lenders & provide cheap loan to the farmers for
have been started particularly for the artisans & others, the most common
form of such societies deal in rural credits. And today co-operative banks
operation; There is no one who weak or strong among those who co-
Over a period of time, a strong co-operative network made its way into rural
areas with Gujarat, Maharashtra and Andhra Pradesh leading the way. The
original founders of the co- operative movement were people with integrity,
foresight and vision. However, with the passage of time, there has been
12
e) ROLE OF CO-OPERATIVE IN INDIAN ECONOMY
for the society. Also our nation is the agriculture based where 60% people
loan to farmers.
Our govt adopted LPG policy in 1991 so cooperative banks also need to
welfare of its members. This calls forcreation and development of new type
13
f) CHARACTERISTICS OF CO-OPERATIVE BANK
of the rural areas and small borrowers are concerned more with financing
agricultures.
They have to follow rate for investment laid down by the register of co-
operative societies.
14
g) Role of Primary Agricultural Credit Societies In
Co- Operative Banking and Agriculture
the ground-level co-operative society that helps on credit to the farmers for
Role
It is the basic unit organized at the village‟s grass-root level with the
who can resolve various issues of the members and the ultimate borrowers.
directly to the higher financial agencies for their problems, and thus, PACS
15
Features
Share of the societies is of small value so that poor persons can also
Objectives
The loan should be provided by the PACS only to its member, the
purpose and tenure for which the members take the loan. Also, the
The PACS area should be limited only to the village level to which it
For the deposits as well as the loan which are there on its account,
PACS is liable.
16
Organizational Structure
authority for any of the society and exercise the control overboard as
well as management.
perform the work as prescribed by the society‟s rules, acts, and by-
laws.
assigned to them.
Office Staff: These are the persons who are responsible for
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peons, and supportive staff.
Functions of PACS
Maintaining the supply of the hire light machinery for the agricultural
purpose.
proper prices.
18
h) HISTORY of Shiral Gat Primary Agriculture Credit
Socity.
Shiral Gat Primary Agriculture Credit Society ltd. has been a long & eventful
journey from 31st March 1960. From a small nominal rented building in a
Shiral Village to its new hi-tech & fully computerized building. It's working
area consists of seven villages viz. Shiral, Vaiji, Malghar, Pachad, Kondhe,
Maharashtra
Shiral Gat Primary Agriculture Credit Society ltd. was established on 31st
March 1960 with share of Rs. 5,000/- and membership of 500 member
Vaje with Shri. Tukaram Gangaram Bamane. This socity was named on its
main village Shiral. The socity has made tremendous and real progress with
Bamane.
Socity is successfully working for 61 years. This socity has started with the
working capital of Rs.5,000/- which kept on incasing till today and crossed
the limit of Rs.34,42,000/-. The socity sees a vision of current and future
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During past years socity has played leading role for the development of
example of how mass movement can be turned into the instrument for social
up-linemen. Today socity has more than 40 deposit accounts with deposits
facility of rs.2.40 Crs and advance socity has 69.66 Lacs of reserve fund.
Socity has establishes “sabhasad kalyannidhi fund” for T.B, cancer, Eye and
calamities such as earthquake and flood. Socity also promotes to the sports
activities.
Being in the service sector with a vision of current and future treats, Socity
branches as computerized. And the has paid regularly the dividend to share
20
i) SOCIETY PROFILE
Branches :5
No. of Employee :2
21
1) BOARD OF DIRECTOR
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2) ORGANIZATION STRUCTURE
Managemant
Committee
Chairman
Vice-
Chairman
Secretory
Staff
Peon
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3) VISION AND MISSION OF SOCITY
vision of bank
1. Operational excellence,
2. Customer focus,
3. Service leadership,
4. Welfare of Farmers,
services, giving the members a one-step window for all his/her requirement.
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→Mission of Socity
the bank. Bank always tries to give support to its members. The regular
sing of the implementation of the slogan “We always with you and for you”
Bank also provides loan facilities to its members for short term and medium
The bank is going to start new branch in near future for easy
accessibility.
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4) AWARDS AND ACHIEVEMENT
The bank got an award for 100% Loan recovery in Past 3 years.
5) FUTURE PLAN
bank is going to adopt new technologies for accounting and other activities.
soon the bank is going to provide KCC Card facility to its customer.
26
6) SOCIAL CONTRIBUTION
operates and achieve a healthy growth in profit, which will be partly used for
the benefit of society and for up-linemen of masses and general growth of
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7) MILE STONE OF Shiral Gat PACS ltd.
Building
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8) SERVICE DEPARTMENT
INTRODUCTION
1. Current
2. Savings
3. Special savings
4. Loan Compulsory
5. Nominal Compulsory
6. Pigmy
7. Fixed
8. Recurring
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Current Account
Savings Account
These deposits too are used for transactions purpose. For example
if you want to pay electricity bill, telephone bill etc. you can give a
cheque from your savings a/c rather than giving hard cash. Other
things such as paying fees, paying dues etc. can be done from this
a/c.
Note that trust and association can hold current as well as savings
account.
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Special savings
This concept and deposit was prevalent earlier, but now it is not in use.
In this deposit a customer can withdraw the money only3 times (less
than savings i.e. 5times). However, this deposit gives an interest at
the rate which is higher than the savings account. Earlier, when it
was in use these deposits gave a return of 0.5%higher than that of
savings deposits.
Loan Compulsory
Nominal Compulsory
Pigmy
Pigmy has different names at different banks. Some banks give „daily
saving‟ name to this service.
Very few banks offer this service. Here, the customer is required to
deposit the installment on daily basis. The interest rate offered is
same as Fixed Deposits. Fixed Deposits (FD)
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It is a deposit which offers the highest interest rate than any other
above mention deposits. So it is mainly used for long-term saving
purposes. For example: a couple having a child of the age of 10
keeps an FD account so as to use the matured amount for the child‟s
college fees in future.
These deposits and its interest rates are explained in detail in the
future sections that are to come.
Recurring
It is a type of FD with deposits kept for 12 or more months. Here the
deposits are given at installment by the customer. The interest rate
for these deposits is same as FD.
Recurring Example
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9) F i n a n c e D e p a r tment
INTRODUCTION
The term Business Finance mainly involves, rising of funds and their
effective utilization keeping in view the overall objective of the firm. The
management makes use of various financial techniques for administrating
the financial affairs of the firm in most efficient and effective way. Financial
therefore means the entire gamut of managerial effort devoted to the
management of finance-both its sources and - of the enterprise.
In Shiral Gat PACS ltd, separate finance department is there under which
various financial activities are carried out. The bifuregation of activities that
are carried in finance department of Shiral Gat PACS ltd are as follow:
33
10) Swot Analysis
External environment consists of out sides of the firm such as Other credit
societies, bank competitors etc. such environment analysis is necessary
because it affects the firm or an organization.
STRENGTH
34
WEAKNESS
OPPORTUNITES:
THREATS:
35
j) Research To p i c
1) Meaning of Research
In essence term, Research refers to a search for knowledge. One can also
define Research as a scientific and systematic search for pertinent
information on a specific topic. In fact, Research is art of scientific
investigation and careful investigation especially through search for new
fact in any branch of knowledge. Research is an academic activity because
it comprises defining and redefining problems, formulating hypothesis,
collecting, evaluating data, Making deductions and conclusion. Thus,
Research is an original contribution to existing stock of knowledge making
for its advancement.
36
2) Introduction of Research topic
Loan is a method of lending under which bank gives credit to a borrower for
a fixed period and for a specific purpose. Loan are promises for future
payment, they have to be repaid in periods beyond a year and are, therefore
long term liabilities.
In other words "when a banker makes an advance in a lump sum which can
not be paid wholly or partly and which the customer has permission to
withdraw subsequently, it is called a loan."
Profit is the pivot on which the entire business activity rotates. Banking is
essentially a business dealing with money and credit. Like every other
business activity. Banks are profit oriented. A bank invests its funds in many
ways to earn income. The bulk of its income is derived from loans and
advances.
37
Many a time a borrower needs funds for fixed assets or non-respective type
of activities and thus seeks money from the bank that is withdrawn in one
lump sum. The loan amount is normally repaid in installments. Loan may be
short- term, medium-term or long-term.
38
3) List of various Loan of Shiral Gat PACS ltd
1. Agricultural Loans
2. Hypothecation-cash credit
3. Overdraft
4. Pledge
5. Consumption
6. Staff Consumption
7. Commercial loan
8. Vehicle loan
9. Building loan
10. Consumable loan
11. Machinery loan
12. Gold loan
39
1. Agricultural Loans
Agricultural loans consists of following types :-
2. Hypothecation-cash credit:
This loan is basically given to business people on their trading stock. JCC
gives loan up to 70% of the value of the stock. If here the customer provides
additional property for mortgaging, then extra 50% of the value of property
can be added to the loan amount.
40
3. Overdraft (OD):
For the businesses like brokerage firms and trading firms, where there is no
record of the stock, but has to keep large amount of funds to felicitate trade,
hypothecation and industrial loans cannot be given. So for the liberation of
these firms, OD loans can be given. Here these firms are given loans on the
basis of their record of balance sheet and PNL (Profit and Loss) account.
These loans are of 2 type‟s viz. FOD and SOD. FOD is the loan given
against fixed deposit whereas SOD means Secured OD and is given on the
Overdraft
Unsecured 12%
Secured for others 2% more than FD interest Rate
4. Pledge:
Here stock is under the control of bank. For example the key of the
warehouse in which the goods are kept is with the bank. Example of a fridge
stock. Suppose a warehouse of fridge is under the control of bank. Now,
bank will give the keys to the stockholder only if he pays a part of loan which
he has taken on the stock of fridge. This loan is not prevalent now at Shiral
Gat PACS ltd.
5. Consumption:
This is called self-mortgaging loan where the people usually comes for
taking loans on their personal income. It is the only type of loan where the
purpose of the loan is not mentioned. At Shiral Gat PACS ltd, this loan has
one of the larger shares among all types of loans. Majority of the loan takers
of these loans are the farmers
41
6. Staff Consumption:
7. Commercial loan:
This loan is provided to the small vendors, who are in need of money for
running their business. This is usually given to the people running small
provision stores, pan shops and others.
8. Vehicle loan:
As the name implies the bank gives loan on the purchase of vehicle. Here a
customer may want an old vehicle or a new vehicle. In the former case the
valuation of the vehicle is must. This valuation can be done by the bank or
the customer himself. In the later case of new vehicle the bill quotation is
used for considering vehicle‟s value and 75% of the value can be given as
loan. However, in case of old vehicle 50% of the value of vehicle is given as
loan.
Vehicle loan
For Personal Use 12%
For Commercial Vehicle 14%
42
9. House Reparing / Building loan:
This loan is given for consumable such as fridge, TV, AC, etc. This is a type of
personal loan wherein it is necessary to define the purpose of the loan.
Consumption loan
Up to 75,00,000 12%
This is a loan given to industries on the purchase of the machinery. Here in,
if it is a new machinery then bill quotation is used as valuation. On the other
hand if it is old machinery then a value of bank is a asked to give valuation
report, based on which loan is sanctioned.
Machinery loan
Up to 75,00,000 15%
More than 75,00,000 14%
Here the loan is given on the purchase of gold. This loan is a rarity now.
44
4.) LITERATURE REVIEW
Observed that the use of funds from banks by the private corporate sector
had exceeded its inventory formation. Gupta, has argued that a small
portion of such finance should have gone to meet fixed investment. Further,
he found the growth rate of physical assets to be more directly and closely
related to security issues than bank credit. Hence, he argued that the fast
growing firms relied heavily on security issues than the use of bank credit.
Arnbegeokar found that the rate of rise in bank credit exceeded that of
inventory, sales and output. Further he observed that its dependence on
banks for working capital had increased, accompanied by a decline in
reliance on other financial institutions.
SHETTY:
Assessed the dimensional changes in credit deployment during the first five
years of nationalization in relation to changes in output and prices. The
rationale for his analysis was the fact that, in any accepted model of demand
for money, one common variable is the gross national product or some other
variant of it in real terms. Consequently, he hypothesized that credit for any
sector or industry over a period has to have some relationship with its
performance in real terms, particularly output. He observed a declining
trend in the credit extended by banks to industries since nationalization,
though it was higher than other sectors. On finding that the share of
manufacturing sector in bank credit is higher than its share in Net Domestic
Product (NDP) he concludes that increase in bank credit has occurred far in
excess of increase in output during the years 1968/69 to 1973/74.
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REVISED BY SHETTY:
Observed that the share of medium and large industry in total bank credit
had declined due to priority sector lending. Another observation in line with
his earlier finding was that growth in bank credit had always been
disproportionate to growth of their physical output, especially in industries
like cotton textiles. His observation particularly for the years 1975-76 and
1976-77 revealed:
(a) Increase in average bank credit had been higher than the growth of NDP
originating in registered manufacturing sector even at current prices
K.S.R.ROA:
46
DIVATIA AND SHANKAR:
In their paper discussed the role of internal and external sources of funds
and their components in financing capital formation of the private corporate
sector. The study was based on the RBI company finance studies relating to
medium and large public and private limited companies and Covered the
period 1961-
76. They also discussed the trends and patterns of financing for four
individual industries, viz, cotton textiles, jute, sugar and cement.
S. ADVE.:
47
L.S.GUPTA:
The extensive study viewed that the growth of institutional finance emerged
in lndia due to structural change for industrial financing system with wide
change of socio-political situations in lndia. He attempted to measure overall
impact of financial institutions on capital formation in the organized private
sector as also the allocate efficiency of financial system. He observed that
during the first plan financial assistance rendered by special institutions
represented only
4.1 per cent of gross fixed investment in private industry, which rose to 7.9
per cent in the second plan and further to 18.1% in the third plan period. He
also found that commercial banks remained the most important single
agency for financing the private corporate industry and LIC was the single
largest purchaser of industrial securities and the underwriter of new issues of
large and established companies.
M.S.JOSHI:
48
3) Research
Methodology
49
3.1) RESEARCH PROBLEM
Research Problem
The research is that the income level affected to borrower to take
a loan.
50
3.4) HYPOTHESIS
1. Ho: µ=µ1
2. Ha: μ≠μ
3. Ha: µ<µ
4. Ha: µ>µ
Primary data:
1. Primary data are those which are collected for the first time. I have taken
some information about Shiral Gat PASC Ltd. by discussing with Loans and
Advances department of the bank. I have done data analysis through
filling questionnaire from customer and employee.
Secondary data:
Secondary data are those which are already been collected for some other
purposes. I have taken the secondary data from internet and from a book
"Guidance note on audit of books.” I have also done data analysis on the
basis of this secondary data. I have compared the interest rates of various
banks with Shiral Gat PASC Ltd to fulfill my objectives.
51
3.6) SAMPLING PLAN
Population Size-
Sample Size
Sampling
Procedure Non-
probability
52
4) Data analysis
and interpretation
53
a) Occupation of Loan Borrower
. What is your the occupation?
□ Business man □ Employee
□ Profession □ Retired person
Type of occupation No. of customer
Agri. Businessman 27
Farmers 42
Profession 19
Retired person 12
Total 100
45
40
35
30
No. of Customer
25
20
15
10
0
Agri. Businessman Farmers Profession Retired person
Type Of Occupation
In this question, we know that, in different class of occupation who take more
loan in these group. in above chart we can see that the Farmers are 42%
means the employees are more take a loan as compare to other group of
like Agri. businessmen ,Profession and Retied Person are as 27%, 19% and
12%.
54
b) Age group of loan borrower
60
50
40
No. of Customer
30
20
10
0
18-35 year 35-60 year 60-90 year
Year
In this research on loan and advances, classified the different age group and
knowing that who take a more loan. In above chart we can see that the 48%
people are those who age is 35 to 60. 30% people are those who age is 18
to 35 year and 22% are those who age group is 60 to 90 years.
55
c) Income Level of Loan Borrower
. What is your the income level per annum?
□ more than 10 laces. □ Between 5 & 10 laces.
□ Between 2 & 5 laces. □ Up to 2 laces.
35
30
25
20
15
10
5
0
Up to 2 Lacs 2 to 5 lacs 5 to 10 Lacs Above 10 Lacs
Income Level Of Borrower
56
d) Behavior of Staff Member
What is the behavior of staff members?
□ Excellence □ Good
□ Adequate □ Average
□ Unsatisfactory
40
35
30
25
No. of Customer
20
15
10
0
Excellence Good Adequate Average Unsatisfactory
Behavior
57
e) Time Period of Loan
Time period of loan No. of customer
1 to 3 year 74
3 to 8 year 26
8 to 15 year 0
15 to 25 year 0
Total 100
70
60
Number of People
50
40
30
20
10
0
1 to 3 year 3 to 8 year 8 to 15 year 15 to 25 year
Income Level Of Borrower
The customer whose take a loan in the bank is mostly time period 3 to 8
years. In the above chart, clarified that the person whose take a loan for 3 to
8 year is 100%. And then after the person who takes a loan of 8 to 15 year
are 0%. The people who take a loan of 15 to 25 years are 0% and the last
the person who take a loan of 1 to 3 years are 74%.
58
f) Another Loan from Rival
Bank
Which is another bank from you borrowed other loans?
□ UBI □ ICICI □ HDFC
□ AXIS □ BOB □ OTHER
□ NO ANOTHER LOAN
UBI, 12
ICICI, 8
NO ANOTHER LOAN, 38
HDFC, 14
AXIS, 6
ANOTHER LOAN, 7
DCC Bank, 15
In these chart we seen that the 38% are those not take a loan from another
bank then after 15% are those whose take a loan in DCC Bank. in theses
way the borrower are also take a loan to different bank. In these 7% are
those who take a loan from other bank.
59
g) Qualification of Customer
What is your education qualification?
□ Up to HSC □ Up to Graduation
□ Up to Post Graduation □ More than post graduation
50
40
30
20
10
0
Up to HSC Up to Graduation Up to Post More than post
Graduation graduation
Educational Level Of Borrower
60
h) Maximum Extent to Take
Loan
What is your maximum extent to take loans?
□ Less than 100000 □ between 100000 & 500000
□ Between 500000 & 1000000 □ More than 1000000
Extent of Loan
90
80
70
Number of People
60
50
40
30
20
10
0
Less Than 100000 Between 100000 to Between 500000 & More than 1000000
500000 1000000
Extent Level Of Borrower
In these chart, the amount of loan is given. In these, the loan amount of
Rs.1,00,000 to 5,00,000 is more means the 78% customer are those whose
take a loan of amount 1 to s laces. Then after 18% customer are those
whose take a loan of amount of Rs. 1,00,000 to 5,00,000.then 4% are take a
loan of more than 10,00,000. then 0% are those whose take a loan of less
than Rs.1,00,000.
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i) HYPOTHESIS TESTING
Step-1 hypothesis
Level of income
Extent amount to Up to 2 Between Between More Total
take loan laces. 2 & 5 5 & 10 than 10
laces. laces. laces.
Less than 100000 44 3 1 0 12
between 100000 & 10 16 4 1 31
500000
Between 500000 & 5 15 13 5 38
1000000
More than 1000000 0 10 3 6 19
Total 23 44 21 12 100
62
Expected Frequency (Row total*column total)/n
Extent amount to Up to 2 Between Between More
take loan laces. 2 & 5 5 & 10 than 10
laces. laces. laces.
Less than 100000 2.76 5.28 2.52 1.44
between 100000 & 7.13 13.64 6.51 3.72
500000
Between 500000 & 8.74 16.72 7.98 4.56
1000000
More than 1000000 4.37 8.36 3.99 2.28
Chi-square calculation
63
Step-3: Degree of freedom
Level of significance 5%
Step-5: conclusion
H0 is rejected.
64
4.10) SUGGESTION
► The bank can introduce advance technology for banking and should give
attention to Manpower time to time.
► The bank can promote confidence and commitment among the staff
members, to address the expectations of the customers efficiently and
handle technology banking with simplicity.
► The bank can take steps to forecast the changing financial need of
customer of different type of group and banking accordingly.
► The bank can identify the reason of few unsatisfied group of customer and
should take steps to eliminate their problems and grievances.
► The bank can put together all it hard work to bring more responsiveness
and awareness to customers.
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5) Result
it is easily available.
the customer ratio of urban & rural area are 2:3 means 40%
customers are
66
6) CONCLUSION
So, at last we can conclude that the Shiral Gat PACS Ltd. is
being leader in the market & bank is getting great goodwill in the market and
also great goodwill of the other director helps to the bank in creating good
image in the field of the co-operative societies
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7) BIBILIOGRAPHY
1. BOOKS &JOURNALS:
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Thank You...!
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