Professional Documents
Culture Documents
Vinit RCCBL PDF
Vinit RCCBL PDF
On
At
Rajkot Commercial Co-operative Bank Ltd.
Submitted to
Institute Code: 789
Institute Name: Christ Institute of Management
Prepared by:
Parekh Vinit Kalpeshbhai
187890592016
MBA (Semester - III)
Month & Year: July, 2019
STUDENT DECLARATION
I
Institute Certificate
II
CERTIFICATE OF EXAMINER
This is to certify that project work embodied in this report entitled ‘COMPARATIVE
FINANCIAL ANALYSIS OF RAJKOT COMMERCIAL CO-OPERATIVE
BANK LTD AND THE CO-OPERATIVE BANK OF RAJKOT LTD’ was carried
out by Vinit Kalpeshbhai Parekh and Enrollment no. 187890592016 of Christ
Institute of Management and Code 789.
The report is approved / not approved.
Comments of External Examiner:
This report is for the partial fulfilment of the requirement of the award of the degree of
Master of Business Administration offered by Gujarat Technological University.
--------------------------
(Examiner’s Sign)
Name of Examiner:
External Examiner’s Institute Name:
External Examiner’s Institute Code:
Date: 16-7-2019
Place: Rajkot
III
Company/ Organization Certificate
IV
Plagiarism Report
V
PREFACE
Practical knowledge in a student’s life is very important. It helps to know real life
situation and problems of life. Same in the case with the corporate world. Theoretical
knowledge is very much needed but practical knowledge is equally important. This
practical knowledge to a student is given in a form of training and sometimes
theoretical knowledge too is being imparted as information or knowledge sharing.
M.B.A is concerned with the practical and theoretical knowledge of real business
world. When we learn about business management, then at that time practical
knowledge is more important. The aim of improving training is based on the innovative
learning methodological constant improvement, cultivation of practical skill and
unwavering commitment to academic quality. Training helps a student to interact with
the experienced people of the corporate world and hence learn more from them. Here,
the student learns how to apply the theoretical knowledge in practice. As per the
University, The Summer Internship Project subject for MBA SEM – III students it is
very important to carry out practical study in one organization.
The summer internship project has been done at Rajkot Commercial Cooperative Bank
LTD. The internship gave me more practical exposure towards the working of each
section of the bank like shares, gold loan and account division. The training did was
more of operational side. Various information related to each department have been
shared by the bank and the bank provided better cooperation towards the collecting of
data related to the project.
VI
ACKNOWLEDGEMENT
It gives me pleasure to acknowledge the training imparted by the different manager of
Rajkot Commercial Cooperative Bank Ltd. I would like to thank the Mr. Dhaval
Kakkad and Mr. Bhavesh Sheth for cooperating with me during each stage of my
training and giving me a real work-life exposure towards the working of banking
system.
I would like to thank the Manager of different dept. for his active support and
cooperation towards me during the training period. I would also like to thank the
administration and H.R. Dept. for giving me an opportunity for getting trained in this
esteemed organization.
The active support of other staff, sub-staff was also present during the entire training
section.
VII
LIST OF TABLES
Sr Particulars Page
No. No.
1. The financial highlights of bank during the year 2017-18 9.
2. Profile of Rajkot Commercial Cooperative Bank LTD 10.
3. Branch Details 11.
4. Our strength 12.
5. Table= 1. Table of NIM of RCCB 31.
6. Table= 2. Table of NIM of CBR 32.
7. Table= 3. Table of ROA of RCCB 33.
8. Table= 4. Table of ROA of CBR 34.
9. Table=5. Table of ROE of RCCB 35.
10. Table= 6. Table of ROE of CBR 36.
11. Table= 7. Table of LDR of RCCB 37.
12. Table= 8. Table of LDR of CBR 38.
13. Table= 9. Table of LAR of RCCB 39.
14. Table=10. Table of LAR of CBR 40.
15. Table= 11. Table of CR of RCCB 41.
16. Table= 12. Table of CR of CBR 42.
VIII
LIST OF CHARTS
Sr Particulars Page
No. No.
1. Organizational Structure 13.
2. Graph= 1. Graph of NIM of RCCB 31.
IX
INDEX
1. Introduction of banking 2.
2. Banking instrument 3.
5. Banking overview 8.
PART II 19.
X
18. Formation of Hypothesis 32.
XI
PART 1
1
Introduction of the Banking:
Historians are divided on the derivation of the word ‘bank’. One school of thought
believed that the word bank was derived from the word ‘babcus’ or ‘banque’ which
meant a bench. During the ancient period early bankers and Jews in Lombardy
transacted their business on banches in the market places. They were accepting deposits
and lending money. Whenever they failed in the business, people used to break the
banco. Thus the word bankrupt became popular. The second school of thought believed
that the word banker originated from the German word ‘back’, which meant a joint
stock fund.
Section 5(3) of The Banking Regulation Act 1949 defines banking as the accepting, for
the purpose of lending or investment, of deposits of money from the public, repayable
on demand or otherwise, and withdraw able by cheque, draft or otherwise.
Customer in banking context was defined as a person who has some sort of an account,
either deposit or current account or some similar relation with banker.
The relationship with banker and customer begins with as soon as the first cheque is
paid in and accepted for collection. It is not necessary that the person should have
drawn any money or even that he should be in the position to draw the money.
Cooperative Banking:
Cooperative Banks, a component of the Indian Banking System, originated with the
enactment of the cooperative Credit Societies Act of 1904, which provided for the
formation of cooperative credit societies. Under the Act of 1904, a number of
cooperative credit societies were started. Owing to the increase demand of cooperative
credit, a new Act was passed in 1912, which provided for the establishment of
cooperative central banks by Union of primary credit societies and individuals.
2
It may be clear that under the Banking Regulation Act 1949, only Urban Cooperative
Banks, State Cooperative Banks, and District Cooperative Banks are qualified to be
called as Banks in the cooperative sector.
The structure of cooperative banking in India is complex. Credit need of diverse section
of the population, both in terms of location and tenor, are addressed by different
segments of the cooperative banking sector. While the urban areas are served by the
urban cooperative bank with single tier structure, the rural areas are served by two
distinct set of institution extending short term and long term loans.
Urban Cooperative banks are registered under cooperative society’s act of the
respective state government. Reserve Bank of India is the regulatory and supervisory
authority of UCB’s for their banking related operations. UCB’s with multistate presence
are regulated by the central government and are registered under Multi-State
Cooperative Societies Act.
Banking Instruments:
Cheque:
Bill of Exchange:
3
Promissory Notes:
Universal Banking refers to Financial Institution offering all types of financial services
under one roof.
Today the technology driven banks are finding various means to reduce costs and reach
out to as many customers as possible spread over a diverse area. This has led to using
multiple channels of delivery of their products. Some of the commonly and widely used
channels of delivery are mentioned as under:
Real Time Gross Settlement system, introduced in India since March 2004, is a system
through which electronics instructions can be given by banks to transfer funds from
their account to the account of another bank. The RTGS system is maintained and
operated by the RBI and provides a means of efficient and faster funds transfer among
banks facilitating their financial operations. As the name suggests, funds transfer
between banks takes place on a Real Time' basis. Therefore, money can reach the
beneficiary instantaneously and the beneficiary's bank has the responsibility to credit
the beneficiary's account within two hours. As per RBI, RTGS timing is till 3:30 pm.
RTGS is done above Rs 2 Lacs.
4
National Electronic Funds Transfer (NEFT):
National Electronic Funds Transfer (NEFT) is a system whereby anyone who wants to
make payment to another person/company etc. can approach his bank and make cash
payment or give instructions/authorization to transfer funds directly from his own
account to the bank account of the receiver/beneficiary. Complete details such as the
receiver's name, bank account number, account type (savings or current account), bank
name, city, branch name etc. should be furnished to the bank at the time of requesting
for such transfers so that the amount reaches the beneficiaries' account correctly and
faster. NEFT is done less than Rs 2 Lacs.
Automatic Teller Machine is the most popular devise in India, which enables the
customers to withdraw their money 24 hours a day 7 days a week. It is a device that
allows customer who has an ATM card to perform routine banking transactions without
interacting with a human teller. In addition to cash withdrawal, ATMs can be used for
payment of utility bills, funds transfer between accounts, deposit of cheques and cash
into accounts, balance enquiry etc.
Net Banking:
Net banking means carrying out banking transactions via the Internet. Thus, the need
for a branch is eliminated by technology. A customer can view his account details,
transaction history, order drafts, electronically make payments, transfer funds, check his
account position and electronically communicate with the bank through the Internet for
which he may have wanted to visit the bank branch. In addition, this helps in serving
the customer better and tailoring products better suited for the customer.
5
MAJOR BANKS IN RAJKOT:
Rajkot being a king for MSME has many commercial banks. Most of the banks here
offer all the necessary banking and financial service that is required. This banks include
leading commercial national banks and private banks along with some of cooperative
banks.
They are the major banks serving common public in the locality. Following banks
having branches in Rajkot:
4. Axis Bank.
5. Canara Bank.
6. HDFC Bank.
7. IndusInd Bank.
8. Bank of Baroda.
Cooperative Banks:
These are running by cooperative society to help the non- agriculturist sector people.
Cooperative banks can be divided into two parts i.e. Urban Cooperative Banks and
Rural Cooperative Banks.
They are governed by “Banking Regulation Act 1949 and Banking Laws Act 1965.
6
Urban Cooperative Banks:
There are two classes of UCB are Scheduled and Non Scheduled Banks. In scheduled
banks again there is a classification of Single state and multi state Banks:
7
BANK OVERVIEW
RCCB is enjoying the scheduled bank status since 1989. In year 2001 Bank was
registered under ‘’Rajkot Karmchari Cooperative Bank Ltd’’ RCCB has opened a
branch in Rajkot and become Single State Cooperative Bank.
8
The financial highlights of bank during the year 2017-18 is shown
below:
Current Department
Savings Department
Fixed Deposit Department
Cash Credit Department
Loans and Advances Department
Cash Department
Share and Locker Department
Gold Loan Department
Human Resources Department
Finance Department
Marketing Department
Banking Department
9
Types of Services Provided:
ATM Facility
Locker Facility
Outward Bill Collection Facility
Bills Discounting Facility
Fixed Deposit Services
Share Facility
Free NEFT and RTGS Facility
10
Branch Details
Vision:
Rajkot Commercial Cooperative Bank’s aim is to provide a best service to the common
people.
Mission:
To provide Banking Facility to the people nearby at lesser rate and achieve brand
image.
11
OUR STRENGTH
12
ORGANIZATIONAL STRUCTURE
General Manager
Assistant General
Manager
Deputy Chief
Manager
Chief Manager
Manager
Senior Officer
Junior Officer
Senior Executive/
Junior Executive/
SS
13
OVERVIEW OF VARIOUS DEPARTMENTS IN
RCCBL
Loans and Advances section is present in each branch of RCBBL. Loans here are
provided against Fixed Deposits, Gold Ornaments, Land& Building, Vehicle, self-
surety, Stock in trade, Overdraft. Loans are only provided to the shareholders of the
bank. There are many types of loan provided by the bank but the priority sector is home
loans, car loans and education loans, Lien system is also available for advances of
Money Documents used for loan process are:
5. Estimated amount by the contractor in case of housing loans or estimate of the actual
amount needed.
6. Account opening form if the customer only want loan related relationship with the
bank.
7. Promissory Note.
8. Debit Note.
9. Vouchers.
Banking Section:
Banking section maintain the day to day records of the customer. The customer can
either be a Savings Account Holder, Current Account Holder; banking section have to
be ready with answers related to their queries. Banking section can be divided into
deposits section, savings account section, passbook section, fixed Deposit section. The
14
bank mostly handles the Small business class peoples who are not into agricultural
business. The bank provides overdraft facilities. There are around 25 Staff in Raiya
Road Branch including the manager and senior officers. The Raiya Road Branch is
having its own Gold Loan section which give easy loan to their savings account
customer.
– Proprietorship Business.
– Partnership Business.
15
– Pvt. Limited Company.
Shares Department:
A centralized share department is present at RCCBL Chandulal Buch Marg. The main
job here is to add new shareholders or to remove the shareholder who gave resigned.
The bank uses latest IT system for such process. The share section also sells shares,
they also pay dividend monthly i.e 9%. Share certificate is the unique instrument used
in this department.
Human resources specialists are responsible for recruiting, selecting, interviewing and
placing workers. They may also handle employee relations, payroll and benefits and
training. Human resources managers plan, direct and coordinate the administrative
functions of an organization. Human Resources (HR) is concerned with the issues of
16
managing people in the organisation. The Human Resources department is responsible
for many people related issues in an organisation..
IT department:
Information technology (IT) is the use of computers to store, retrieve, transmit, and
manipulate data, or information, often in the context of a business or other enterprise.
The bank is relied on its IT team for Real Time Data. The Bank uses an MIS system
called FINCORE the entire banking operation is depended on the software and each
employee is well versed and trained for their respective module. The system is
frequently updated and continuous improvement made continuously.
Marketing Department:
Marketing is based on thinking about the business in terms of customer needs and their
satisfaction. It is not concerned with the values that the exchange is all about. In other
words, marketing has less to do with getting customers to pay for your product as it
does developing a demand for that product and fulfilling the customer's needs.
The bank have a full-fledged marketing section recently started because the bank have
been facing tough competition by other cooperative banks. The marketing department
have gold loan, housing loan, car loans and shares in their portfolios. The bank is now
more dependent on marketing department because the competitors are offering better
financial products and with more flexibility.
Finance Department:
The objective of financial department here is to have smooth flow cash in the system
and assets management. The finance department of the bank tries to maintain
profitability and liquidity of the bank. Finance department also sees the accounting
activity and internal audit conducted by the bank. The main function of bank here is
fund management and make sure that the bank remain solvent. Finance department also
take care about the various financial documents used in the bank and stored in the bank.
Finance department here prepares budget and allocate money to different branches of
RCCBL. The department also make sure that appropriate action are taken whenever
there is a change in banking regulation by RBI.
17
SWOT Analysis
Strength:
1. The Reputation and the Brand Image the bank carry, they have tag line
“Customer always king”.
Weakness:
3. They are still not focussing on new financial services offered by other banks like
insurance policies and mutual funds.
Opportunity:
1. The bank have image so it show its presence in the own state.
Threats:
2. The banks nearby are offering similar services at less interest rate.
18
PART 2
19
RESEARCH METHODOLOGY
Research:
Research is the search of knowledge and investigation. The main aim of research is to
find out the truth. Research provides the knowledge and skill needed for the decision
making. Research is the process of finding solution to a problem after a through study
and analysis of the situational factors.
Methodology:
Research Methodology:
The process used to collect information and data for the purpose of making business
decisions. The research methodology enabled the team to organize their efforts into one
characterization and conceptual product idea generation task for us.
This study is based on secondary data. The financial data related banks is taken from
their various annual reports. The study is conducted on Single state cooperative banks;
here one bank have been studied together to know about the financial performance of
The Rajkot Commercial Cooperative Bank w.r.t The Cooperative Bank of Rajkot. The
study is conducted on the basis of last 4 years data .i.e 2015 to 2018. Net interest
margin, ROA, ROE, Loans to deposit ratio, Loans to assets ratio, Current ratio here is
mainly used to indicate the financial performance of these bank. Excel data analysis
software is used for t-Test: Two-Sample Assuming Unequal Variances testing of hypothesis.
The parameters used in the study are Net interest margin, ROA, ROE, Loans to deposit
ratio, Loans to assets ratio, Current ratio.
20
Research problem
Now a days, the competition are going in market. First of all, we have to see the
position and strength of our bank. The problem statement in this research study is to
find out the financial performance of The Rajkot Commercial Cooperative Bank w.r.t
The Cooperative Bank of Rajkot.
21
Literature Review
Analysed the performance of banking industry of India between two periods i.e 2002-
2009 when the nation is having high growth rate and 2009-2012 when the nation was
having high inflationary rate. The researcher performed financial performance analysis
using principal component analysis on various banking parameter and concluded that
the banks should be more dependent on the deposits than that of borrowed money for
working of the bank.
The study attempts to measure the relative performance of Indian Banks. Study is
conducted on P.S.B, Private sector bank, old private sector bank & foreign sector bank.
The parameter taken are number of bank offices, number of employees, business per
employee, deposits per employee, advances per employee, bank assets size, NPA, etc.
Overall analysis support that the foreign bank are average most efficient and the new
banks are more efficient than older bank. The paper also conclude that to increase
profitability improving productivity is a key factor.
The study brief us about the profile of Indian Banks by comparing different ratios by
taking annual reports of each as a secondary source of data for the period from 2006-
2013. The comparison is also done on the basis of CAGR (Compounded Annual
Growth Rate). The study gives us conclusion that the private bank surpasses other
category of banks like Public Sector and Foreign banks.
22
ISLAM, M. A. (2014). An Analysis of the Financial Performance of
National Bank Limited Using Financial Ratio. Journal of Behavioural
Economics, Finance, Entrepreneurship, Accounting and Transport,
121-129.
The study is done to measure the performance of National Bank limited with respect to
all other major banks in Bangladesh for period 2008-2013. The researcher has
conducted student t test using SPSS software for getting average of various financial
ratios of the bank. The study concluded with suggestions to the bank such that they can
improve performance.
The study releated that the private sector bank the percentage of other income in the
total income is higher than public sector bank. Public sector bank depend on intent
income for the efficiency and performance. The operational efficiency of private sector
banks is better than public sector banks. Private sector bank use their assets quality
better than public sector banks.
The review paper gives insight on the use of financial statement like income statement,
cash flow statement and balance sheet. The paper also depicts the use of financial
performance indicators like quality on earning indicators, solvency and liquidity
indicator, capital expenditure indicator, cash flow return indicator from the above
mentioned financial statement. The paper also shows how important the financial
reporting system for smooth flow of banking operation.
23
The researcher used descriptive and inferential technique for the research work. The
study also analysed other parameters like leverages, NIITA, etc. The research gives
conclusion that how the banks should maintain their assets and liability based on camel
ratings.
In the modern era, the banking sector has proved its striking eminence, for it holds a
big support to the economy of any nation chiefly because of the transactions of huge,
ever-proliferating wherewithal in faith of the investors as well as the government or
owners. Banks cycle funds into different sectors for further fructifications to enrich and
fortify all round economy. Banking however, is acomplex system undoubtedly wherein
the vested interest of any researcher may lie profusely. Therefore this study examines
and evaluates the concurrent performance of chosen few major Indian banks during
2009-2013 following the global financial slump of 2008. In order to judge their
performance, the present study compares the financial position of various indigenous
and foreign Scheduled Commercial Banks(SCBs). And to prove his viability, he has
used the parameters─ Return on Asset, Return on Equity and Net Interest Margin.
Furthermore, his study ascertains through quantitative research using Analysis of
Variance (ANOVA) if any significant difference of profitability means among different
banking groups reallyexists. The result indicates that there is no significant means in
difference of profitability among various banking groups in respect to ROA and NIM,
yet a significant means of difference is seen among the peer groups in terms of ROE.the
case study clearly depicts the financial performance of the Scheduled Bank of India
based on the data from 2009-2013 annual report of various banks. The researcher have
done quantitative analysis ‘ANOVA’ to know the significant variance of parameter like
Return on Assets, Return on Equity and Net Interest Margin between different banks.
The results from the study show that there is no significant difference of return on
equity between banks but there is a significant difference between return on assets and
net interest margin.
24
Ally, Z. (2013). Comparative Analysis of Financial Performance of
Commercial banks in Tanzania. Research Journal of Finance and
Accounting .
The study was conducted on 6 public sector banks which have performed well for a
decade i.e 2001-2010. The objective of the study to analyse the financial position of
these banks and to provide suggestions for improvement of their current financial
situation. Ratio analysis is used to study the financial performance of the firm the ratio
used were ratio of advances to assets, Capital to assets, capital to working funds,
demand deposits to total deposits, credit to deposit ratio. Correlation and regression
analysis is done between these parameters. Suggestions like introduction of modern
marketing strategies, improving credit to deposit ratio, generating non-interest income.
The study done on financial performance of IDBI Bank with the industry averages on
the basis of financial ratios for the period 2011-12 to 2015-16. It was found that the
solvency position of IDBI Bank and the employment of assets are in tune with the
25
industry averages. The employment of shareholders’ funds and the CASA which is
relatively lower than the bellwether suggests that the bank should improve its deposits
that provide cheaper funds which can translate in strong financial performance. E.
Gordon and K. Natrajan (2014).
The study was conducted on 6 public sector banks which have performed well for a
decade i.e 2001-2010. The objective of the study to analyse the financial position of
these banks and to provide suggestions for improvement of their current financial
situation. Ratio analysis is used to study the financial performance of the firm the ratio
used were ratio of advances to assets, Capital to assets, capital to working funds,
demand deposits to total deposits, credit to deposit ratio. Correlation and regression
analysis is done between these parameters. Suggestions like introduction of modern
marketing strategies, improving credit to deposit ratio, generating non-interest income.
26
Research objective
The research work focuses on comparative financial analysis of RCCB and CBR. . It
clearly aims the following objectives:
Scope of Study
The study is basically done on the basis of the data from period 2014-15 to
2017-18.
The data used is Net Interest Margin, Return On Assets, Return On Equity,
Loans to Deposit ratio, Loans to Assets ratio, current ratio.
27
Research Design
Exploratory Research
Descriptive Research
Cause and Effect Research
1.Exploratory Research:
The research conducted for a problem that has not been studied more clearly, intended
to establish priorities, develop operational definitions and improve the final research
design is known as exploratory research.
2. Descriptive Research:
Here, we will use descriptive research because to describe with comparison of both
the banks as per annual report.
28
Sources of data:
Here, we will use secondary data because it decreases cost and efforts required to
collect primary data.
Sampling techniques:
Sample of Study:
Here, we will compare two banks .i.e. The Rajkot Commercial Cooperative
Bank and The Cooperative Bank of Rajkot.
Here, we will compare four years .i.e. 2014-15 to 2017-18.
29
Tools and Techniques:
In this tools and techniques we will compare both bank .i.e. The Rajkot Commercial
Cooperative Bank and The Cooperative bank of Rajkot by using t-Test: Two-Sample
Assuming Unequal Variances for testing hypothesis and we will use six ratios. The
following ratios that will use are as follows:
The difference between the interest income generated by banks or other institutions
and the amount of interest paid out to their lenders, relative to the amount of their
assets is known as Net interest Margin. It indicates that higher the NIM, higher the
value of bank.
Formula:
2. Return On Assets:
The financial ratio that shows the percentage of profit a company earns in relation to
its overall resources is known as Return On Asset. It indicates that the ROA over
5% are generally considered good.
Formula:
30
3. Return On Equity:
The measurement of the date of return that the owners of common stock of a company
receive on their shareholdings. It indicates that ROE of 15-20% are generally
considered good.
Formula:
The ratio between the banks total loans and total deposits is known as Loans to Deposit
ratio. It indicates that LDR of 80-90% are generally considered good.
Formula:
Formula:
Loans to Assets ratio= Loans/Assets.
6. Current ratio:
The ratio that measures whether a firm has enough resources to meet its short term
obligations is known as Current ratio. It indicates that CR of 2:1 is generally considered
good.
Formula:
31
Formation of hypothesis
2. H0= There is no significant difference between return on assets of RCCB and CBR
over the period of 4 years.
H1= There is significant difference between return on assets of RCCB and CBR
over the period of 4 years.
3. H0= There is no significant difference between return on equity of RCCB and CBR
over the period of 4 years.
H1= There is significant difference between return on equity of RCCB and CBR
over the period of 4 years.
4. H0= There is no significant difference between loans to deposit ratio of RCCB and
CBR over the period of 4 years.
H1= There is significant difference between loans to deposit ratio of RCCB and
CBR over the period of 4 years.
5. H0= There is no significant difference between loans to assets ratio of RCCB and
CBR over the period of 4 years.
H1= There is significant difference between loans to assets ratio of RCCB and
CBR over the period of 4 years.
6. H0= There is no significant difference between current ratio of RCCB and CBR
over the period of 4 years.
H1= There is significant difference between current ratio of RCCB and CBR over
the period of 4 years.
32
DATA ANALYSIS AND INTERPRETATION
2017-18
2016-17
2015-16
2014-15
0 20 40 60 80
33
Table: 2. NIM of CBR
2017-18
2016-17
2015-16
2014-15
0 20 40 60 80 100
In this graph we can see that in the year 2014-15 the NIM is 57.38%. If we see year
2017-18 the NIM is 80.93%. But if we see the year 2016-17 the NIM is 93.78%. If we
compare the year 2014-15 with 2017-18 it increases. But in the year 2016-17 and 17-18
it decreases by 12.85% (80.93%-93.78%). It is bad sign for bank.
34
Table: 3. ROA of RCCB
Particulars 2014-15 2015-16 2016-17 2017-18
Return On Assets 41.38639039 56.52480357 51.05702988 53.50578134
Return On Assets
2017-18
2016-17
Return On Assets
2015-16
2014-15
0 10 20 30 40 50 60
In this graph we can see that in the year 2014-15 the ROA is 41.39% and in the year
2017-18 the ROA is 53.51% it increases. But in the year 2015-16 the ROA is
56.52% and in the year 2016-17 the ROA is 51.06% it declines. But after 2016-17 it
increases by 2.45% (53.51%- 51.06%). It is good sign for bank.
35
Table: 4. ROA of CBR
Return On Assets
2017-18
2016-17
Return On Assets
2015-16
2014-15
0 5 10 15 20 25
In this graph we can see that in the year 2014-15 the ROA is 18.94% and in the year
2015-16 the ROA is 22.92% it increases. But in the year 2016-17 the ROA is 19.53%
and in the year 2017-18 the ROA is 18.35% it declines. But after 2016-17 it decreases
by 1.18% (18.35%-19.53%). It is bad sign for bank.
36
Table: 5. ROE of RCCB
Return On Equity
2017-18
2016-17
Return On Equity
2015-16
2014-15
34 35 36 37 38 39 40 41
In this graph we can see that in the year 2014-15 the ROE is 36.15%. In the
year 2015-16 the ROE is 37.80%. If we compare both year the ROE increases
by 1.65% (37.80-36.15). In the year 2016-17 the ROE is 39.90%. In the year
2017-18 the ROE is 38.78%. If we compare this both years it declines by 1.12%
(38.78%-39.90%). It is good sign for the bank.
37
Table: 6. ROE of CBR
Return On Equity
2017-18
2016-17
Return On Equity
2015-16
2014-15
0 5 10 15 20 25 30
In this graph we can see that in the year 2014-15 the ROE is 25.50%. In the year 2015-
16 the ROE is 21.30%. If we compare both year the ROE decreases by 4.2% (21.30-
25.50). In the year 2016-17 the ROE is 17.69%. In the year 2017-18 the ROE is
14.42%. If we compare this both years it declines by 3.27% (14.42%-17.69%). It is
good sign for the bank.
38
Table: 7. LDR of RCCB
2017-18
2016-17
2014-15
0 20 40 60 80
In this graph we can see that in the year 2014-15 the LDR is 56.40%. In the year
2015-16 the LDR is 50.47%. If we compare this both years it declines by 5.93%
(50.47-56.40). In the year 2016-17 the LDR is 43.52%. In the year 2017-18 the
LDR is 57.50%. If we compare this both years it increases by 13.98% (57.50%-
43.52%). It is good sign for bank.
39
Table: 8. LDR of CBR
2017-18
2016-17
2015-16
2014-15
0 20 40 60 80
In this graph we can see that in the year 2014-15 the LDR is 60.55%. In the year
2015-16 the LDR is 51.71%. If we compare this both years it declines by 8.84%
(51.71-60.55). In the year 2016-17 the LDR is 47.27%. In the year 2017-18 the
LDR is 24.70%. If we compare this both years it decreases by 22.57% (24.70%-
47.27%). It is bad sign for bank.
40
Table: 9. LAR of RCCB
Particulars 2014-15 2015-16 2016-17 2017-18
Loans to Assets Ratio 36.23748528 32.41226228 29.87935082 37.19843363
Source: Annual report
2017-18
2016-17
2014-15
0 10 20 30 40
In this graph we can see that in the year 2014-15 the LAR is 36.24% . In the year
2015-16 the LAR is 32.41% it is reduced. In the year 2016-17 the LAR is 29.88%.
In the year 2017-18 the LAR is 37.20%. If we compare this two years we see that
the LAR increases by 9.32% (37.20%-29.88%). It is good sign for bank.
41
Table: 10. LAR of CBR
Particulars 2014-15 2015-16 2016-17 2017-18
Loans to Assets Ratio 50.08936644 42.95998129 39.41118264 20.00439574
Source: Annual report
2017-18
2016-17
2014-15
0 10 20 30 40 50 60
In this graph we can see that in the year 2014-15 the LAR is 50.09% . In the year
2015-16 the LAR is 42.96% it is reduced. In the year 2016-17 the LAR is 39.41%.
In the year 2017-18 the LAR is 20.00%. If we compare this two years we see that
the LAR decreases by 19.41% (20.00%-39.41%). It is bad sign for bank.
42
Table: 11. CR of RCCB
Current Ratio
2017-18
2016-17
Current Ratio
2015-16
2014-15
0 10 20 30 40 50
In this graph we can see that in the year 2014-15 the Current ratio is 40.81%. In the
year 2015-16 the current ratio is 38.33% it reduces. In the year 2016-17 the current
ratio is 42.12%. In the year 2017-18 the current ratio is 21.10%. If we compare this
both years the current ratio reduces by 21.02% (21.10%- 42.12%).It is bad sign for
bank.
43
Table: 12. CR of CBR
Current Ratio
2017-18
2016-17
Current Ratio
2015-16
2014-15
0 10 20 30 40
In this graph we can see that in the year 2014-15 the Current ratio is 36.55%. In the
year 2015-16 the current ratio is 19.09% it reduces. In the year 2016-17 the current
ratio is 14.95%. In the year 2017-18 the current ratio is 29.93%. If we compare this
both years the current ratio increases by 14.98% (29.93%- 14.95%).It is good sign
for bank.
44
TESTING OF HYPOTHESIS
Null hypothesis
Alternative hypothesis
1. Null hypothesis:
The hypothesis that there is no significant difference between specified
populations, any observed difference being due to sampling error is known as
null hypothesis.
2. Alternative hypothesis:
The hypothesis is that there is significant difference between specified
populations, any observed difference beingdue to sampling error is known as
alternative hypothesis.
45
1. Net interest margin:
RCCB CBR
Mean 48.27239 79.91962
Variance 133.7781 253.3595
Observations 4 4
Hypothesized Mean0Difference
df 5
t Stat -3.21687
P(T<=t) one-tail
0.011774
t Critical one-tail
2.015048
P(T<=t) two-tail
0.023548
t Critical two-tail
2.570582
Here we can see that the p- value is 0.023548 which is less compared to the significance
level that is set at 0.05 and the T value is less than T critical. There is significant
difference between net interest margin of RCCB and CBR. So, the null hypothesis is
rejected in this case.
46
2. Return on assets:
RCCB CBR
Mean 50.6185 19.93474
Variance 42.88166 4.185964
Observations 4 4
Hypothesized Mean0Difference
df 4
t Stat 8.94494
P(T<=t) one-tail
0.000432
t Critical one-tail
2.131847
P(T<=t) two-tail
0.000864
t Critical two-tail
2.776445
Here we can see that the p- value is 0.000864 which is less compared to the
significance level that is set at 0.05 and the T value is more than T critical. There is
significant difference between return on assets of RCCB and CBR. So, the null
hypothesis is rejected in this case.
47
3. Return on equity:
RCCB CBR
Mean 38.15845 19.72339
Variance 2.527831 22.70218
Observations 4 4
Hypothesized Mean0Difference
df 4
t Stat 7.340334
P(T<=t) one-tail
0.000917
t Critical one-tail
2.131847
P(T<=t) two-tail
0.001834
t Critical two-tail
2.776445
Here we can see that the p- value is 0.001834 which is less compared to the
significance level that is set at 0.05 and the T value is more than T critical. There is
significant difference between return on equity of RCCB and CBR. So, the null
hypothesis is rejected in this case.
48
4. Loans to deposit ratio:
RCCB CBR
Mean 51.97057 46.05863
Variance 41.28681 233.109
Observations 4 4
Hypothesized Mean0Difference
df 4
t Stat 0.713791
P(T<=t) one-tail
0.257397
t Critical one-tail
2.131847
P(T<=t) two-tail
0.514794
t Critical two-tail
2.776445
Here we can see that the p- value is 0.514794 which is more compared to the
significance level that is set at 0.05 and the T value is less than T critical. There is no
significant difference between loans to deposit ratio of RCCB and CBR. So, the null
hypothesis is accepted in this case.
49
5. Loans to assets ratio:
RCCB CBR
Mean 33.93188 38.11623
Variance 11.57281 165.5111
Observations 4 4
Hypothesized Mean0Difference
df 3
t Stat -0.62888
P(T<=t) one-tail
0.287026
t Critical one-tail
2.353363
P(T<=t) two-tail
0.574052
t Critical two-tail
3.182446
Here we can see that the p- value is 0.574052 which is more compared to the
significance level that is set at 0.05 and the T value is less than T critical. There is no
significant difference between loans to assets ratio of RCCB and CBR. So, the null
hypothesis is accepted in this case.
50
6. Current ratio:
RCCB CBR
Mean 35.58977 25.1306
Variance 95.77092 97.89502
Observations 4 4
Hypothesized Mean0Difference
df 6
t Stat 1.503145
P(T<=t) one-tail
0.091746
t Critical one-tail
1.94318
P(T<=t) two-tail
0.183493
t Critical two-tail
2.446912
Here we can see that the p- value is 0.183493 which is more compared to the
significance level that is set at 0.05 and the T value is less than T critical. There is no
significant difference between current ratio of RCCB and CBR. So, the null hypothesis
is accepted in this case.
51
Findings
The ratio implies NIM, ROA, ROE, LDR, LAR, Current ratio.
Net Interest Margin of RCCB is better than CBR from last 4 years.
Return On Asset of RCCB is better than CBR from last 4 years.
Return On Equity of RCCB is better than CBR from last 4 years.
A loans to Deposit ratio of RCCB is better than CBR from last 4 years.
A loan to Assets ratio of RCCB is better than CBR from last 4 years.
Current Ratio of RCCB is bad than CBR from last 4 years.
There is a significant difference between Net Interest Margin of RCCB and
CBR over the period of 4 years.
There is a significant difference between Return On Assets of RCCB and CBR
over the period of 4 years.
52
Limitation
The research is limited to following financial indicators NIM, ROA, ROE, LDR,
LAR, CR.
The research is based on last 4 years data .i.e. 2015-16 to 2017-18.
The researcher uses secondary data because it has less reliable.
The study is more focusing on single state urban cooperative banks.
The research is based on two banks .i.e. The Rajkot Commercial Cooperative
Bank Ltd and The Cooperative Bank of Rajkot Ltd.
53
Suggestions
The bank has to increase job for youngster because to work effectively and
efficiency.
The bank has to improve services to satisfy consumer.
Different department must be there so to decrease work load.
The bank should provide different scheme to customer.
The bank should decrease the rate of interest on different types of loans.
Work rotation should be there so to get experience of different work.
The bank should expand more in urban areas so increase more customer.
The bank should improve services to increase customer.
Conclusion
The researcher has seen that the data is more changing due to deflation and
government’s new policies. The bank has to increase speed because of competition in
the market. The bank has to expand its branch to increase more customer. Lastly, it is
seen that The Rajkot Commercial Cooperative Bank overall position is better than The
Cooperative Bank of Rajkot.
54
Bibliography
K.p. Venugopal Rao, F. I. (2017). Financial perfomance analysis of Banks -IDBI case
Study. International Journal of research in IT and Management, 64-72.
Co-Operative Bank of Rajkot Ltd. Retrieved from Co-Operative Bank of Rajkot Ltd.
web site: http://www.rajbank.net
55
kothari, C. R. (1985). Research Methodology. Jaipur: NEW AGE INTERNATIONAL
(P) LIMITED PUBLISHERS .
56