CHAPTER II

ORGANIZATIONAL PROFILE
2.1 INDUSTRY PROFILE

CO-OPERATIVE BANK HISTORY

Co-operative moment as an economic system and as best instrument to eradicate the

poverty of the people and to protect them for the economic exploitation from the ‘haves’
was introduced for the first time in the world with the organization of consumers’ Co-
operative society in 1844 at London. Later on the Co-operative movement was introduced
in Germany with an organization of Agricultural Credit Co-operative Societies (Urban Co-
operative Banks) in towns and cities. Hence, if the England is the motherland for the whole
Co-operative movement, the Germany is the cradle for the Co-operative credit and Banks
organizations.

The co-operative movement in India was introduced with the organization on of

Primary Agricultural Co-operative Credit Societies (PACS) in villages and Urban Co-
operative banks in town and cities offer passing the Co-operative Credit societies act 1904
with an objective to emancipate the poor people in the rural and urban areas from the
clutches of money lenders and middlemen in the market and also to accelerate the pace of
agriculture and industrial developments in these areas. With the passing of second Act,
viz, Co-operative Societies Act, 1912: the Co-operative movement in India entered into
all sphere of economic activities besides organizing District Central Co-operative banks
and State Co-operative Apex Banks. Profiteering (at more prices) and usury (more interest)
are the greatest evils constantly grinding the poor people down and hang them till their
death. To do way profiteering, consumers marketing, processing industrial and other Co-
operatives were organized and to minimize the usury the Co-operative credit and banking
organizations were organized to protect the poor people from the exploitation by middle
men in the market and to eschew them from the clutches of unbridled money lenders.
There are many types of cooperative credit institutions in India. These institutions fall into
two categories: 1. Agricultural organizations and 2. Non-agricultural organizations.
Agricultural credit institutions dominate the overall cooperative credit structure.
2.1.1 REGIONAL

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to
primary cooperative banks located in urban and semi-urban areas. These banks, till 1996,
were allowed to lend money only for non-agricultural purposes. This distinction does not
hold today. These banks were traditionally centered around communities, localities work
place groups. They essentially lent to small borrowers and businesses. Today, their scope
of operations has widened considerably.

The origins of the urban cooperative banking movement in India can be traced to the
close of nineteenth century when, inspired by the success of the experiments related to
the cooperative movement in Britain and the cooperative credit movement in Germany
such societies were set up in India. Cooperative societies are based on the principles of
cooperation, - mutual help, democratic decision making and open membership.
Cooperatives represented a new and alternative approach to organisation as against
proprietary firms, partnership firms and joint stock companies which represent the
dominant form of commercial organisation.

2.1.2 COMPANY PROFILE

Name : The Mettupalayam Co-Operative Urban Bank Ltd

Address : 273-A, Ooty Main Road, Mettupalayam 641 301,

Coimbatore

Year of Establishment : 1923

Date of Formation : 24-01-1923

Registration Number : 8052

Head Office : Mettupalayam

Type of Bank : Non – Scheduled Urban Co-Operative Bank

Status : Co-Operative Society

Ward : ACIT Circle / Ooty

Branches : 4

Members : 14149

Share Capital : 2,58,24,000

Contact Number : 04254 – 222545

Chairman : Mr. S. Abdul Wahid

Working Time : 10:00 AM - 02:00 PM

03:00 PM - 04:00 PM

Working Day : Monday to Friday

1st and 3rd Saturday

Week Off : 2nd and 4th Saturday

Sundays and Public Holidays

Awards : Shield for Best Society at District Level, 60th All

India Cooperative Week 2013.

Maximum TAMCO loan providers at District

Level, 66th All India Cooperative Week 2019.
2.2 ORIGIN OF THE COMPANY

The Mettupalayam Co-Operative Urban Bank Limited (MCUB) was established

and registered on 24th January, 1923 with the registration number 8052 as a principal
financing institution. It has 4 branches.

The Mettupalayam Co-Operative Urban Bank has been in service for 99 years from
1923, with the spirit of cooperation, the Bank is growing day by day from its formation,
gain trust of their depositors by providing safety and security to their funds deposited in
the Bank and lending to lower- and middle-class people to provide financial assistance for
their development. If we look at the development path of the bank in the last 99 years, it
is not an exaggeration to say that it has achieved excellent growth in almost 30 years since
1991.

The members own equity as the borrowing power of the bank and it is calculated
on the basis of share capital paid up by the members. The Bank has a share capital limit of
Rs. 3 crores. The Bank operates on sound principles of cooperation and has successfully
completed 99 years of financial services. Since its creation, the bank has been paying
dividends to its members when the RBI declares and continues to generate profits after
audit category "A". The bank has earned a net profit of Rs. 31,82,831.31 in the year 2020
– 2021.

Founders
K. Krishnaswamy
K. Jagadeesan
M. Madhaiyan
H.N. Lingaiya Gowder
Veeraswamy Chettiyar
Poraiya Gowder
C. R. Kuppusamy Naidu
2.3 ORGANIZATIONAL STRUCTURE
 BOARD OF DIRECTORS

Name Designation
Mr. S. Abdul Wahid Chairman
Mr. S. Palanisamy Vice Chairman
Mr. R. Madhu Managing Director
Mr. V. Manoharan Managing Director
Mrs. S. Lakshmi Director
Mr. P. Arumugam Director
Mrs. S. Nabeesha Director
Mr. M. S. Manickam Director
Mr. N. Balan Director
Mrs.V. Dhanalakshmi Director
Mr. K. Nagaraj Director
Mr. R. Jeganathan Director
Mr. R. Venkatachala Murthy Director
Mr. R. Murthy Executive Director
Mr. R. R. Rajkumar Executive Director

2.4 FUNCTIONAL AREAS OF THE COMPANY

The Mettupalayam Co-Operative Urban Bank has opened offices in key areas of
Mettupalayam and surrounding rural areas. This is done to serve a large number of customers
and maintain good relationships with customers. The head office is located in Mettupalayam.
There are 4 branches in and around Mettupalayam.

S.No. Branches
1 Head Office Branch, Mettupalayam
2 Sirumugai Naal Road
3 Sudhanthirapuram
4 Jothipuram
5 Annur
2.4.1 HUMAN RESOURCES

Employees hold a key place in business. No business enterprise can exist and function
without employees. The success of business enterprise depends to a large extent on the quality
of its human resources. Human resources management is the key to the whole organization.
The concept of personnel management is application not only to bank, but it is equally
important in office, sales department, laboratories where the management must win the
cooperation of their subordinates. The plan of business may be logically sound and structure
of organization may be perfect, but if the requirement and training of human resources are
unscientific business can ability of its employees. Therefore, it is necessary to direct motive,
develop and manage their activity.

This bank has a good management and department of manager and employees.

In this bank, promotion is given on the basis of seniority basis. At lower level also
promotion is made from operative level to supervisory level and from that to office clerk. The
employee is selected for promotion keeping in view his work performance, regularity and
seniority.

2.4.2 MARKETING

Marketing is the process of planning and executing the concept of pricing, promotion
and distribution of ideas, goods and services to create exchange that satisfy individual and
organizational objective. The origin of marketing can be traced to the early system of barter
system. Various difficulties of barter gave way to introducing of money and the pricing became
the main mechanism of marketing. Then the marketing era after the World War 2. Competition
became very intense, there was more supply of goods then was actually needed by market.
Therefore, marketing research became vital to undertake the social responsibility in connection
with manufacturing of goods. Efforts are made to balance consumer satisfaction + profit +
public welfare. The Mettupalayam Co-Operative Urban Bank Ltd.. is service sector firm
providing satisfactory services to its customers since a decade. The main objective of bank is
to give the loan to middle and lower class of people. By the name itself people doesn’t ask any
other question and willingly are ready to do transactions with the bank.

The bank did some local marketing such as:

 ▪ Advertising in local newspapers
▪ Distribution of pamphlets
▪ Advertisement in business fair

2.4.3 FINANCE

The term Business Finance mainly involves, raising 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. Finance therefore means the entire gamut of managerial effort devoted to
the management of finance both its sources and of the enterprise. Its detailed analysis includes
financial analysis, risk analysis, capital structure, measurement of cost of capital, mergers,
acquisitions, working capital financing, and management of cash and market securities.

In The Mettupalayam Co-Operative Urban Bank Ltd.., separate finance department is

there under which various financial activities are carried out. The division of activities that are
carried in finance department of The Mettupalayam Co-Operative Urban Bank Ltd.. are as
follows:

▪ Preparation of annual account

▪ Reconciliation of branch account with head office
▪ Government securities back-office work
▪ Dealing with other banks
▪ Licensing with RBI
▪ Auditing
▪ To decide accounting policy
▪ Management Information System
▪ Periodical returns of RBI
▪ To decide accounting policy

2.4.4 SERVICE DEPARTMENT

The Mettupalayam Co-Operative Urban Bank Ltd. is purely a service sector. So here
instead of production department there is only “Service Department”. The work of a Service
Department is to produce better services to the customers, which satisfy the human desire in a
best manner. In banking, service department is concerned with that process which converts the
inputs in to outputs. Money is used as a raw material instead of other resources, information
technology, employees are used as an input. Then after, there is a need to perform all the service
functions (Process). The output is satisfactory services, employee’s benefit, security etc.

▪ Current
▪ Savings
▪ Jewel Loan
▪ Loan Compulsory
▪ Cheque Clearance
▪ Fixed
▪ Recurring
▪ Locker

2.5 RECENT DEVELOPMENTS OF THE COMPANY

The Mettupalayam Co-Operative Urban Bank Limited has been growing over the last 30
years and here are some of their future plans.

▪ Home mortgage loan has been increased from Rs. 7.50 lakhs to Rs. 10 lakhs.
▪ Housing Loan has been increased to Rs. 30 lakhs.
▪ From 08.02.2019, the management of the bank is running under the new management
team and all the bank employees are doing well.

2.6 FUTURE PLAN

The Mettupalayam Co-Operative Urban Bank Ltd. should provide the best performance
in the field of partner organizations. The bank is leading the way with great vision and here
are some of their future plans.

▪ Installation of additional branches.

▪ Implement advanced banking activities.
▪ Improve customer service by adopting the latest technology and smooth banking.
▪ Establishing new branches at urban and semi-urban areas including rural areas.
▪ To adopt new technologies for accounting and other activities.
 ▪ To provide online banking services.
▪ To provide ATM facility to its customer.
▪ Steps are being taken to update inter branch reconciliation in future.
▪ The bank is partially computerized and core banking system will be implemented;
related works are going on.

2.7 SERVICE DETAILS

DEPOSIT SCHEMES

Period Rate of Interest For Senior Citizens

Savings Account 4.00%
15 to 90 days 4.25%
91 to 180 days 4.75%
181 to 364 days 5.50% 5.75%
1 year to 2 years 6.25% 6.50%
2 years and above 6.00% 6.25%

LOANS

Loan Annual Interest Rate

Gold Loan 9.00%
Secured Loan 12.50%
Home Mortgage Loan 12.00%
Housing Loan 11.50%
Small Road Transport Operators Loan 14.20%
Petty Traders Loan 12.00%
Loans to Working Women 12.00%
Loans to Women Entrepreneur 12.00%
Unsecured Loan 14.00%
Loans for BC & MBC / DNC’s 6.00%
(TABCEDCO) Loan
Loan for Minority Community Peoples 6.00%
(TAMCO) Loan
Differently Abled People Loan 0%
LOCKER

It is necessary to deposit some amount in the bank if a customer wants to have a safe-
locker facility. The bank offers Safety Lockers to ensure safety of your valuables & documents
safe. Lockers are available in all Branches of the Bank with minimum Security Deposit. The
Bank follows strict KYC NORMS as per Reserve Bank of India guide lines while opening of
Safe Deposit Lockers. Rental charges are collected annually.

2.7.1 SECTIONS

Loan Section

Loan Section is responsible for managing the loan operation department of the co-
operative. This section manages the daily operation in an efficient and effective manner. It is
responsible to approve loans within specified limits and refer loan application s outside those
limits to Management for approval. Timely interacting with the concerned loan advancing staff
personnel at the branch to improve accuracies and efficiencies is one of the most important
duties. Also analyzing applicant’s financial status and property evaluations to determine
feasibility of granting loans.

Accounts Section

Account section performs the functioning of implementing and maintaining a system

of internal controls which will ensure that the co-operative‘s assets are adequately safeguarded.
Accounts section is like a central processing unit which handles monitors and controls the funds
inflow by an effective tool of fund management. It also performs periodical and audits and
inspection to ensure smooth functioning of the branches.

Jewel Loan Section

In the jewel loan section, customers can get instant loan against gold with safe and
secure loan processing on the spot. Gold loans can be pledged for upto 20 lakhs.

Savings Deposit Section

In savings deposit section, the savings deposit accounts are designed to help the
individuals (personal customer) to inculcate the habit of saving money and meet their future
requirement. Amount can be deposited / withdrawn from these accounts by way of withdrawal
slips. It helps the customers to keep minimum cash at home besides earning interest.

These accounts can be opened by eligible persons and certain organizations / agencies
(as approved by the Reserve Bank of India {RBI}). As required by law, while opening Saving
account, the Co-operative will satisfy itself about the identity including verification of address,
of a personal seeking to open an account, to assist in protecting the prospective customers,
members of the public and ourselves against fraud and other misuses in the field of Co-
operative banking.

Fixed Deposit Section

In fixed deposit section, the fixed deposit accounts are designed to help the customers
to invest money which provides investors with a higher rate of interest than a regular savings
account, until the given maturity date.

Cheque Clearance Section

In cheque clearance section, the cheques obtained on the repayment of loans are
cleared, which is the process of moving cash from the bank on which a cheque is drawn to
the bank in which it was deposited, usually accompanied by the movement of cheque to the
paying bank.

2.8 SWOT ANALYSIS

SWOT analysis means overall evaluation of a firm’s strengths, weakness, opportunities

and threats. Swot analysis consists of making analysis of the external environment and internal
environment.

→External environment analysis:

External environment consists of out sides of the firm such as government competitors
etc. such environment analysis is necessary because it affects the firm or an organization.

→Internal environment analysis:

Internal environment consists of inner sides of the firm such as personnel, finance, etc.
such environmental analysis is necessary because it affects the firm or an organization.
 SWOT analysis advises to know the Strengths, Opportunity of the bank and also to
know the Weakness and Threats of The Mettupalayam Co-Operative Urban Bank. SWOT
Analysis helps to improve the activities of the bank.

Strength and weakness are the internal factors of the organization and which are
controllable. Opportunities and threats are external factors of the organization and which are
uncontrollable.

SWOT ANALAYSIS OF THE METTUPALAYAM CO-OPERATIVE URBAN BANK

LTD. BANK

STRENGTHS (+) WEAKNESS (-)

OPPORTUNITIES (+) THREATS (-)

STRENGTHS

The strength of The Mettupalayam Co-operative Urban Bank Ltd depends on their
external and internal environments which are:

• The bank operates only in Mettupalayam due to its limited area and it is easy to monitor
minor requirements of the customers which may be ignored by other banks.
• The bank has excellent service facilities when compared to other nationalised banks,
since every challan is filled by the employee of the bank itself.
• The bank provides the easiest way to open a new account into any of its branch as the
customers has to fill minimum requirements.
• The bank has the branches in the remote areas where the branches of other banks are
not yet opened which give the bank edge over the other banks.
• As the bank is a co-operative bank thus bank gets the advantage of getting priority by
the different cooperative societies for transactions and loans.
• Due to the co-operative bank nature of the bank, people have faith in the bank.
• Co-operative staff is the main strength of the bank.
• Adherence to cooperative values and principles.
• The Mettupalayam Co-operative Urban Bank Ltd has deep roots in the community.
• The Mettupalayam Co-operative Urban Bank Ltd considers the users of funds not only
the customers but also the members of the bank.
• It has great amount cooperation with other district cooperative banks.
• The Mettupalayam Co-operative Urban Bank Ltd focuses on the person of limited
means and the poorer section of the society.
• The main priority of The Mettupalayam Co-operative Urban Bank Ltd is member
services rather than profit.
• The Mettupalayam Co-operative Urban Bank Ltd has the capacity to thrive in crisis.

WEAKNESS

• Bank is not performing marketing activity because of lack of marketing expertise.

• There is some sort of government control over the working of the bank.
• Political pressures on the employees of the bank as compared the other banks.
• Due to the restricted area the total capital of The Mettupalayam Urban Co-operative
Bank Ltd is limited.
• No internet banking and mobile banking.
• Lack of modern management concepts and sometimes communication gap can be found
which indicates lack of professionalism.
• Bank is not providing ATM facility in the recent developed area and bank is not fully
developed in modern areas.
• Lower volume of advances due to higher rate of interest may affect the expansion of
the organization.
• The bank is not reputed at national level and has lesser number of branches.
• Sectoral growth is constrained by low unemployment levels and competition for staff.
 OPPORTUNITIES

• The bank is easily accessible by the uneducated people in the society because of their
service.
• Being a Co-operative bank, it has the opportunity to finance government projects.
• Being Co-operative bank, this bank gets priority over the other banks for Co-operative
societies.
• Bank may take the advantage of being Co-operative bank by promoting itself.
• Bank can introduce new services like NRI loan, ATM.
• Bank can perform marketing activities actively through media.

THREATS

• Non – Performing Assets are the major threat to the bank.

• Entry of commercial bank to rural area.
• Legislation could impact the bank.
• Very high competition prevailing in the industry.
• Attack by major competitors
• Lack of infrastructure in rural areas could constrain investment.
• High volume / low-cost market is intensely competitive.
• Changes in government policies and in rules and regulation regarding the bank can
disturb the regular service of bank.
• Crises in the co-operative banking sector can disturb the bank progress.
• Growth in capital markets and the emergence of mutual funds are threatening the
increase in deposits with banks.
• Many nationalized and private banks are in fierce competition with local cooperative
banks.

2.9 COMPETITORS:

Coimbatore City Cooperative Bank Limited

Avanashi Co-Operative Land Development Bank Limited

SVC Co-operative Bank Limited