School of Commerce

A STUDY ON LEADING POLICIES
SCHOOL OF COMMERCE
A Project Report
On
A Study on Lending Policies at Sri Basaveshwara Credit Co-Operative Society
Ltd.
Submitted in fulfilment of the requirements for the award of the Degree of
Bachelor of Commerce
Submitted by
KRUTHIK N V
R18BC055
Under the guidance of

Prof NAGARAJU L.G
ASSISSTANT PROFESSOR
School of Commerce
APRIL 2021
Rukmini Knowledge Park, Kattigenahalli, Yelahanka, Bengaluru-560064

www.reva.edu.in
1
REVA UNIVERSITY SCHOOL OF COMMERCE
DECLARATION
I, MR. KRUTHIK N V student Bachelor of Commerce of belong in to School of
COMMERCE, REVA University, declare that this Project Report / Dissertation entitled “A
Study on At Sri Basaveshwara Credit Co-Operative Society Ltd” is the result the of project /
dissertation work done by me under the supervision of Prof. NAGARAJU L.G at REVA
University
I am submitting this Project Report / Dissertation in partial fulfilment of the requirements for
the award of the degree of Master of in Bachelor of Commerce in Industry Integrated by the
REVA University, Bangalore during the academic year 2018-21.
I declare that this project report has been tested for plagiarism, and has passed the plagiarism
test with the similarity score less than 25% and it satisfies the academic requirements in
respect of Project work prescribed for the said Degree.
I further declare that this project / dissertation report or any part of it has not been submitted
for award of any other Degree / Diploma of this University or any other University/
Institution.
(Signature of the candidate)
Signed by me on
Certified that this project work submitted by KRUTHIK N V has been carried out under my /
our guidance and the declaration made by the candidate is true to the best of my knowledge.
Signature of Guide
Date:
Signature of Director of School

Date
2
CONTENT PAGE
S.NO CONTENT PAGE.NO
CHAPTER-1
1.1 Introduction 6
1.2 Meaning of finance 6
1.3 Finance Instruments (Meaning) 6-7
1.4 Financial Instruments 7
1.5 Background study of lending policies 7-8
1.6 Lending policies of bank 9
1.7 Bank performance of lending policies 10
1.8 Regulation of lending 10-11
1.9 Steps in lending process 11
1.10 Credit Analysis 11
1.11 The six Basic of lending 11-12
1.12 Lending operations 12
1.13 Regular books of accounts 12
1.14 Methods of lending policies 12-15
CHAPTER-2 16
2.1 Literature Review 17-19
2.2 Statement of the problem 20
2.3 Types of data collections 20
2.4 Objectives of the study 20
2.5 Limitations of the study 21
2.6 Scope of the study 21
CHAPTER-3 22
3.1 Industry profile 23
3.2 Meaning 23
3.3 History 24
3.4 Introduction of co-operative bank 24-25
3.5 The growth of co-operative bank in India 25
3.6 Characteristics or principles of co-operative bank 26-27
3.7 Structure of co-operative organisation 27-28
3.8 Types of co-operative 28-30
3.9 Merits of co-operative/ Demerits of co-operative 30-31
3.10 Company profile 32
3.11 The mission 33
3.12 The values 34
3.13 Achievements 35
3.14 Aims and objectives 35
3.15 Board of directors 36
3.16 Saving account 36-37
3.17 Daily deposit schemes of Sri Basaweshwara credit co-operative 37-38
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society ltd
3.18 Fixed deposit schemes 38-39
3.19 Recuring deposit schemes 40-41
3.20 Current Account 42-44
3.21 List of books of Account 44-45
3.22 The co-operative bank will carry on with 45
CHAPTER-4 46
4.0 Data Analysis and Interpretation 47
4.1 Changes in the Deposits 48
4.2 Changes in Interest payable 49-50
4.3 Vehicle loan for the period 51
4.4 Surety loan for the period 52
4.5 Gold Loan 53
4.6 Staff Loan 54
4.7 Salary Secured loans 55
4.8 Loan against NSC/Deposit 56
4.9 Consumer Durable Loan 57
4.10 Property Loan 58
4.11 Construction Loan 59
4.12 Analysis 60
4.13 Term and conditions governing lending policies of the Bank 60-61
4.14 Balance Sheets of 2016-2019 62-64
CHAPTER-5 65
5.1 Findings 66
5.2 Suggestions 66
5.3 Conclusion 67
5.4 References/Bibliography 68-69
5.5 Books Referred 70
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CHAPTER I
INTRODUCTION
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1.1 INTRODUCTION
Finance is the study of funds and its management. Its general areas are business finance,
personal finance, and public finance. It also deals with the concepts of time, money, risk and
the interrelation between the given factors. Finance is one of the most important aspects
handling business. Finance is the lifeblood of any organization.
Financial capital is monetary resource allows business to purchase items that will create
goods for production and other services. The outline includes the objectives of the business,
the targets set, resulting cost, required investment, planned sales growth, financing source,
and the financial results. It can be directly on long term or on a short-term basis.
It has six main sections such as the beginning cash balance, cash collection, cash
disbursements, cash excess, cash deficiencies, financing, the ending cash balance, and the
management of current assets. The capital budget is mainly concerned with the proposed
fixed asset requirements. The income and expenditure are emphasized in finance and
differences can easily indicate.
1.2 MEANING OF FINANCE
Finance is the science that describes the management, creation, and study of money, banking,
credit, investment, assets, and liabilities. Finance consists of a financial system, which
includes the public, private and government spaces, and the study of finance and financial
instruments.
1.3 MEANING OF FINANCIAL MANAGEMENT
Financial management means planning to organize, directing and controlling the financial
activities such as procurement principles to financial resources of the enterprise. It means
applying general management principles to financial resources of the enterprise. There are
three forms of economic system namely, capitalism, socialism, and mixed economy under
capitalism, private organization. Yearly out production economic activity, keeping profit as
major objectives under the socialistic system the government carries out all the activity. If
private organization and government organization joins together and carries out the
production, it is called a mixed economy each of these forms has some drawbacks. To
overcome these drawbacks, the co-operative bank has come into extends. economic progress,
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people join together on the basis of equality and start a co-operative bank. Banks are formed
to the freely weaker section of the society from economic exploitation by a big business
operating for maximization of profit. Co-operation is not simply a form of ownership but a
movement for the uplift of people with small means. The cooperative movement was started
in India in 1904 with the passing of the cooperative society act. There were a few defects in
this act and in 1912 another act was passed and registration became necessary. In 1919 co-
operative were included in the state list. After independence under the five-year plan,
cooperative banks have been given a lot of importance when the first five-years began in the
year 1955. At that, there were 1.8lakhs co-operative banks and as per the recent report there
are above 8lakhs co-operative banks is vary essentially in India, especially for the
development of the rural area.
1.4 FINANCIAL INSTRUMENTS
 Financial instruments are assets that can be traded, or they can also be seen as
packages of capital that may be traded.
 Most types of financial instruments provide efficient flow and transfer of capital all
throughout the world's investors.
 These assets can be cash, a contractual right to deliver or receive cash or another type
of financial instrument, or evidence of one's ownership of an entity. The specific
services offered vary widely between different types of financial institutions.
 Banks and similar business entities, such as thrifts or credit unions, offer the most
commonly recognized and frequently used financial services: checking and savings
accounts, certificates of deposit home mortgages, and other types of loans for retail
and commercial customers.
 Banks also act as payment agents via credit cards, wire transfers, and currency
exchange.
1.5 BACKGROUND STUDY OF LENDING POLICIES
 Lending policies are the commercial banks set rules and regulations put in place to ensure
bank offers credit to retail and corporate parties.
 Credit policies revolve around a number of credit parameters. Customer affordability is
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one of such parameters, which is also termed as debt service ratio.
 The ratio aims to measure the customer’s income against the customer’s existing and
prospective liabilities to evaluate his ability to service any new debt he or she acquires
This ratio is determined by the central bank of a given country and it tends to be the same
across banks Credit scoring is another policy parameter is especially applied in a high-
volume retail lending environment. It is based on the concept that applicants will perform
in a similar way to existing customers with a similar demographic profile.
 Each commercial bank develops its own scorecard and this determines whether the
lending policy is Stringent or not. Verification is another important guide to banks credit
policies.
 The process may, depending on the local regulations market practices, a channel of
acquisition and discretions of the country ‘s credit policy, involve verification of the
applicant’s business and or residential address.
 Credit reference is an information that helps the financiers to know more about the
customer’s borrowing history and consequently will form a basis of a decision on whether
lend or not.
 Banks need to monitor carefully the risk-return profile of their lending portfolio to meet
capital adequacy guidelines and to ensure long-term survival. The objective of the bank is
to maximize profits thus maximize the shareholder’s wealth. If the primary objective of
all bank lending policy is to make trouble-free advances, the financial capacity and
previous borrowing experience of a loan applicant and their determination to repay their
debts is all-important indicated that applying stringent lending criteria to customer
borrowers may, in effect, lead to their exclusion from the financial system is not socially
acceptable or legitimate. At the same time, failure to provide for credit risk increases the
likelihood of loan default, which in the short term increases financial institution costs and
in the long term is passed on to other borrowers in the form of more expensive and or less
accessible retail credit. The consumer bankruptcy research emphasizes the need for
managers to balance the accessible image and social responsibilities of banks with vigilant
assessment and monitoring of the credit risk of individual borrowers.
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1.6 ENDING POLICIES OF BANK
A policy is a deliberate plan of action to guide decisions and achieve rational outcome(s) a
bank’s lending policy is a statement of philosophy, standards, and guidelines that its
employees must observe in granting or refusing a lending request. Minimum information
requirements are outlined as well as the verification process and have to be followed before
releasing any facility.
 There are also post lending policies which include monitoring and control of the existing
facilities as well as procedures on how to collect from delinquent loans.
 Types of policies tend to be similar across the commercial banks’ sector, however,
requirements under each individual policy are unique to each commercial bank.
 Credit loss recognition policy ensures timely identification of losses arising from credit
facilities.
 This policy also ensures non-accrual of income on delinquent loans, when to define credit
losses as well as when to write off a bad debt.
 New business policy outlines the minimum standards required for any facility to be
offered to a new bank customer.
 Mortgage lending policy outlines the minimum information requirements to be obtained,
the appraisal process, determining affordability, term of loan, the valuation of the
collateral as well as loan to value ratio. Personal unsecured loan policy outlines minimum
documentation to be availed and how it’s verified, method of assessment and credit
bureau search. Post approval policy procedures outline collection procedures as well as
delinquent customer management. Business lending policies are categorized as retail or
corporate. There are some commercial banks whose focus is corporate customers and
their policies are designed to suit the same customer segment, this applies for bank’s
whose main target customers are the mass market. Business policies will identify the
target market, business vintage, documentation, verification, credit bureau checks as well
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as debt management once a facility is granted. More customers prefer where minimum
documentation is sought and the process of appraisal is fast and lenient such that many
applicants are able to qualify. Where the process is too rigorous customers tend to move
away to other lenders and this may decrease a significant Amount of income that is
generated from interest on credit facilities.
1.7 BANK PERFORMANCE AND LENDING POLICIES
Prior research suggests that banks strongly influence economic development and the efficient
allocation of funds resulting in a lower cost of capital to firms, a boost in capital formations,
and an increase in productivity. The formulation of effective lending procedure and policies
heightened the importance of internal regulatory mechanisms of banks such as corporate
governance leading to better improve bank profitability. The economic relevance of banks
and lending framework within banks which has increase market credibility and subsequently
enables bank to collect funds at lower cost and lower risks. They find evidence that there is
higher valuation of firms in countries with better lending practices. Given the importance of
lending in commercial banks, the efficiency of a bank's lending policies is expected to
significantly influence its financial performance. An extensive body of literature argues that
effective lending policies influence better financial performance of banks. Lending
framework dictates that as long as the demand for liquidity from depositors and borrowers is
not too highly correlated, the intermediary should pool these two classes of customers
together to conserve on its need to hold costly liquid assets the buffer against unexpected
deposit withdrawals and loan take downs. Funding growth through core saving has become
largely a thing of the past. The advent of nonbank competition and the rise of third- party
funding, implies that community banks now operate in a dynamic funding market, which
requires the use of more sophisticated lending policies. Industry experts point to many
different underlying causes for the bank improvement in investment products; new delivery
systems such as the internet withstand the competition from other financial institutions.
1.8 REGULATION OF LENDING

The loan portfolio of any bank is influenced by regulation. For example, in the USA, real
estate loans cannot exceed the bank capital, or 70% of its total time and savings deposits.
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Also, a loan to a single customer cannot exceed 15 % of banks capital. The quality of a
bank’s loan portfolio and the soundness of its lending policies are the areas bank examiners
look at most closely when examining a bank. The loan portfolio of any bank is influenced by
regulation. For example, in the USA, real estate loans cannot exceed the bank capital, or 70%
of its total time and savings deposits. Also, a loan to a single customer cannot exceed 15 % of
banks capital. The quality of a bank’s loan portfolio and the soundness of its lending policies
are the areas bank examiners look at most closely when examining a bank.
The possible examiner ratings are:
1. Strong performance
2. Satisfactory performance
3. Fair performance
4. Marginal performance
5. Unsatisfactory performance
1.9 STEPS IN THE LENDING PROCESS
 The customer fills out a loan application.

 An interview with a loan officer usually follows right away if a business or mortgage loan
is applied for, a site visit is usually made by an officer of the bank to assess the property.
 The customer is asked to submit several crucial documents, such as financial statements.
 The credit analysis division of the bank analyses the application and prepares a brief
summary and recommendation.
 Recommendation goes to the loan committee for approval.
 If the loan is approved, the loan officer check on the property that is pledged as collateral
in order to ensure that the bank has immediate access to the collateral if the loan
agreement is defaulted. This is often referred to as perfecting the bank’s claim to
collateral.
1.10 CREDIT ANALYSIS
The division of the bank responsible for analysing and making recommendations about
loan applications is the credit department. This usually involves a detailed study of six
aspects of the loan application: character, capacity, cash, Collateral, conditions, and
control.
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1.11 THE SIX BASIC C’S OF LENDING
1. Character: Specific Purpose for Loan and Serious Intent to Repay Loan.
2. Capacity: Customer Has Legal Authority to Sign Binding Contract.
3. Cash: Does the Borrower Have the Ability to Generate Enough Cash to Repay the Loan.
4. Collateral: Does the Borrower Have Adequate Assets to Support the Loan.
5. Conditions: Must Look at the Industry and Changing Economic Conditions to Assess
Ability to Repay.
6. Control: Does Loan Meet Written Loan Policy and How Would Changing Law and
Regulations Affect Loan.
1.12 LENDING OPERATIONS:
1. The primary societies extend short-term and medium-term loan to their members.
2. Loans are given only to its member, who are not defaulters and who hold shares in the
banks in the prescribed proportions.
3. Generally, loans are given for a period of six months, one year and more loans are
normally given for productive purpose loans are ordinarily given against.
4. Co-operative banks help in granting loans and the interest becomes dividend among the
members.
1.13 REGULAR BOOK OF ACCOUNTS
1. Each and every co-operative bank shall maintain the following books of accounts.
All sums of money received and expended by the bank and of matters in respect of
which the receipt or expenditure takes place.
2. All sales and purchase of goods by the banks.
3. The assets and liabilities of the bank and shall maintain corrected up to date such
accounts books and subsidiary ledgers and in such as the registrar may direct.
1.14 METHODS OF LENDING POLICIES

1. LEVELS OF AUTHORITY
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The lending policy shall clearly identify the levels of lending authorities of each
department
and unit involved in lending transactions. The existing banking laws, expertise and
qualifications of employees shall be taken into account when assigning decision-making
and loan application assessment authorities to the bank's business units and individual
employees. In order to prevent any conflicts of interest, the credit risk evaluation as well
as loan classification function of the bank should be separate and independent from the
function responsible for overseeing the quality of the loan portfolio, as well as
compliance, prudential reporting, internal requirements and limits.
2. LENDING LIMITS AND LOAN CONCENTRATIONS
The bank's policy shall identify limits, regular monitoring and reporting requirements
with respect to all known loan concentrations (loan types, related parties, economic
sectors, geographic regions, etc.).
• Determination of limits should incorporate the required level of return on each type
of loan and the outcomes of sensitivity evaluation of the loan portfolio as well as
borrowed funds used to finance loans.
• The bank policy shall set, at a minimum, the following limits with respect to the
loan portfolio or the total capital, in compliance with the Central Bank's related prudential
requirements.
3. TYPES AND AREAS OF LENDING
Each bank shall develop and put in place individual lending, monitoring and control
policies for each type of loan, in consistency with the lending strategy and nature of
different types of loans. If a need arises for types of loans not covered by the bank's
existing lending strategy, appropriate procedures shall be developed to this effect. For
loans to non- residents and persons operating outside the country, the bank's policies shall
have risk assessment and monitoring procedures for the creditor's country of origin or
operation.
4. LOAN MATURITIES AND TERMS
The maturity/term of a loan (principal and interest) shall be predicated on the purpose,
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type, source of repayment of the loan, seasonal/periodic nature of the borrower's business
as well as realistic cash flow projections. The lending policy shall identify the criteria for
loan roll-overs and the bank's request for early repayment, which shall also be specified in
the underlying loan agreements
5. SETTING INTREST RATES ON LOAN
The lending policy shall identify the economic and market conditions as well as various
factors used to determine the interest rates for individual loans and different types thereof.
When setting interest rates to be applied to loans, banks shall consider loan service costs,
overall administrative costs, possible loan loss reserves and a sufficient margin of profit,
portfolio losses, as well as whether additional fees would be charged.
6. DISCOUNTS
Banks shall define relevant criteria for discounted loans. Clear and precise procedures
should be determined for discounted lending, i.e., for granting loans to borrowers at more
favourable conditions as compared to other borrowers who take loans of the same type,
and such procedures should not be in conflict with the bank's overall lending strategy as
well as the existing banking laws.
7. FINANCIAL INFORMATIONON BORROWERS
The bank's policy shall require borrowers to submit financial statements in order to enable
the bank to determine the borrower's ability to repay the loan both before and after the loan
is granted. For incorporated borrowers, this requirement shall include the audited financial
statements for the last financial year ended, tax returns, cash flow statement and other
reports. Individuals shall be required to present a statement of payroll/salary and/or other
officially ascertained sources of income.
8. LENDING TO A SINGLE BORROWER OR A GROUP OF

CONNECTED BORROWRES
When making a lending decision, the bank shall verify whether several borrowers
constitute a group of borrowers in the sense of finance and management. In addition, the
bank should define procedures for identification of loans grantable to a single borrower or
a group of connected borrowers for various activities.
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9. LENDING TO THE BANKS RELATED PARTIES AND PERSON

ACTING ON BEHALF OF RELATED PARTIES
The bank's policy shall identify the terms and restrictions with respect to lending to the bank's
related parties and persons acting on behalf of related parties (hereinafter referred to as
related parties. Such terms and restrictions shall be in compliance with the Central Bank's
relevant regulations. The bank's policy shall stress that related parties shall not enjoy any
preferential treatment as far as lending is concerned compared to other borrowers of the same
creditworthiness.
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CHAPTER-2
LITERATURE REVIEW AND RESEARCH
METHODOLOGY
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2.1 LITERATURE REVIEW
John Yinger (1996) stated the existing literature reveals that lender behaviour has many
facets and that it occurs in a complex market setting. Although several excellent studies
address some aspects of lender discrimination, the complexity of the problem leads to a
number of methodological obstacles. Because mortgages are so important for minority access
to housing, much more research on these issues is needed.
Jacobson (1999) This article surveys the diverse research that examines racial disparities in
mortgage lending markets in the context of the fair housing legislation of recent decades. A
review of the theoretical models, data, and empirical methods reveals deficiencies in all three
areas. A new research agenda focusing on development of more complete models of
mortgage lending together with panel data tracking mortgage loan performance over time is
needed.
Goldberg (2000) Relationship lending: a survey of the literature Elyas Elyasiania, Lawrence
G. Goldberg the development of long-term relationships between lender and borrower. This
allows the lender to gather relevant information about the prospects and the creditworthiness
of the borrower over a considerable time period. The continuous contact between borrower
and lender in the provision of various ﬁnancial services can produce valuable input for the
lender in making decisions on whether to extend credit, how to price loans, and whether to
require collateral or attach other conditions to the loan.
Dwarka sing Steven Onega (2017) The authors relate these concepts to the existing
empirical literature and to the institutional differences among EU member states. In the
section “International Bank Lending Channels”, they define the notion of an international
17
bank lending channel of monetary policy more formally and summarize the recent empirical
literature on this topic. The section “Decomposition of Credit: The Bank Risk Taking
Channel” outlines research and findings on the bank risk-taking channel of monetary policy.
The section “Conclusion and Future Research” concludes and provides some suggestions for
future research.
R. Altieno (2001) This study assessed the role of institutional lending policies among formal
and informal credit institutions in determining the access of small-scale enterprises to credit
in Kenya. The results of the study show that the limited use of credit reflects lack of supply,
resulting from the rationing behaviour of both formal and informal lending institutions. The
study concludes that given the established network of formal credit institutions, improving
lending terms and conditions in favour of small-scale enterprises would provide an important
avenue for facilitating their access to credit.
RR. Suryono (2019) There is a growing Financial Technology (Fintech) business model,
such as Peer to Peer (P2P) Lending. P2P Lending allows individuals and businesses to
borrow and lend money to each other. In its development, China has become the market with
the most P2P lending platforms. However, there is a moral hazard that makes this business
need to be monitored. This threat begins with verification of the borrower’s data that is not
appropriate. Whereas in Indonesia Fintech P2P Lending has received special attention,
because its regulations and policies have not matured yet. Besides, P2P Lending is considered
as a new business to flourish. Consequently, it requires investigation on problems from the
implementation of the P2P Lending. This study aims to identify problems in P2P Lending
and present alternative technical and non-technical solutions to the problems. By
implementing the Kitchen ham Systematic.
Yujun Cui (2018) This study explores China’s green credit policy from a credit risk
perspective. Green finance has been growing rapidly in China since the government issued its
Green Credit Policy. The objective of this study is to explore whether green loans are less
risky than non-green loans. Based on a five-year dataset of 24 Chinese banks, we used panel
regression techniques, including two-stage least square regression analysis and random-effect
panel regression to examine whether a higher green credit ratio reduces a bank’s non-
performing loan ratio (NPL ratio). The results NPL ratio. We conclude that institutional
pressure by the Chinese Green Credit Policy has a positive effect on both the environmental
and the financial performance of banks. The study contributes to the literature on the
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correlation between green lending and credit risks, as well as to the literature on the impact of
institutional pressure on environmental and financial risks. View Full-Text suggest that
allocating more green loans to the total loan portfolio does reduce a bank.
P. Freeman (2001) The Disaster Management Facility (DMF) and the ProVention
Consortium commissioned this study in response to growing concerns for the potential
impact of climate variability and adaptation issues on international strategies and lending
programs for infrastructure projects. The Disaster Management Facility provides proactive
leadership in introducing disaster prevention and mitigation practices in development
activities at the World Bank. The ProVention Consortium is an international coalition of
public, private, non-governmental and academic organizations dedicated to increasing the
safety of vulnerable communities and to reducing the impact of disasters in developing
countries.
LaCour (1999) M This article surveys the diverse research that examines racial disparities in
mortgage lending markets in the context of the fair housing legislation of recent decades. A
review of the theoretical models, data, and empirical methods reveals deficiencies in all three
areas. A new research agenda focusing on development of more complete models of
mortgage lending together with panel data tracking mortgage loan performance over time is
needed.9
Y. Altunbas (2002) The dramatic increase in securitisation activity experienced in Europe in

the years following the introduction of the euro has altered the liquidity, credit and maturity
transformation role traditionally performed by banks. We claim that the changing role of
credit intermediaries due to securitisation has also modified the effectiveness of the bank
lending channel and banks’ ability to grant loans. We use a database of securitisation activity
and a large sample of European banks and find that the use of securitisation shelters banks’
loan supply from the effects of monetary policy. Securitisation activity has also strengthened
banks’ capacity to supply new loans. This capacity, however, depends on business cycle
conditions and, notably, on banks’ risks positions. The recent credit crisis is instructive in this
respect. novel .
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RESEARCH METHODOLOGY
2.2 STATEMENT OF THE PROBLEM

Loan is one of the major elements of finance to a common man. The banks advance money in
no of ways like Housing Loan, Education Loan, Property Loan, Personal Loan, Vehicle Loan,
Etc. Banks usually follow different procedure for advancing different types of loan and
advances. In order to know the different procedure in sanctioning different kinds of loans and
the rate of interest charged to different type of loan this study has been undertaken.
2.3TYPES OF DATA COLLECTIONS

1. PRIMARY DATA:
The primary sources are the original sources and first-hand information which is
collected at “SRI BASAVESHWARA CREDIT CO-OPERATIVE SOCIETY
LTD”. The primary data is that data were gathered by way of interview,
questionnaire, direct contact conduct to the member of the society.
2. SECONDARY DATA
Published data and the data collected in the past is called secondary data. It is collected
through company journals, magazines, annual reports of the company, company website,
etc.
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1. To make the role of lending policies in the improvement of cooperative bank.
2. To know the benefits enjoyed by the members.

3. To make suggestion based on findings.
2.4 OBJECTIVE OF THE STUDY

1. To understand the overview of lending policies in Cooperative societies.
2. To study the loans and Advances issued by BCCB from 2015-2020.
3. To give suggestion and recommendations for Lending and recovering of loans.
2.5 LIMITATIONS OF THE STUDY

1. The study conducted purely for academic purposes.
2. The period of project carried limited period of thirty days.
3. Analysis and interpretation / theoretical background is purely based on the data given
by the banker.
2.6 SCOPE OF THE STUDY
1. To analyse into the knowing the various types of lending methods.
2. The recovery pattern of the funds that are lent.

3. The structure of the interest rate.
21
CHAPTER -3
INDUSTRY AND COMPANY PROFILE
22
3.1 INDUSTRY PROFILE
A bank may be defined as an institution that accepts deposits, makes loans, pays checks, and
provides financial services. A bank is a financial intermediary for the safeguarding,
transferring, exchanging, or lending of money. A primary role of banks is connecting those
with funds, such as investors and depositors, to those seeking funds, such as individuals or
businesses needing loans. A bank is the connection between customers that have capital
deficits and customers with capital surpluses. Banks distribute the medium of exchange.
Banking is a business. Banks sell their services to earn money, and they must market and
manage those services in a competitive field. Banks are financial intermediaries that
safeguard, transfer, exchange, and lend money and like other businesses that must earn a
profit to survive. Understanding this fundamental idea helps you to understand how banking
systems work, and helps you understand many modern trends in banking and finance.
3.2 MEANING
A bank is a financial institution licensed to receive deposits and make loans. Banks may also
provide financial services, such as wealth management, currency exchange, and safe deposit
boxes.
There are two types of banks:
• commercial/retail banks
• Investment bank.
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1. COMMERCIAL BANK
A commercial bank is a type of financial institution that accepts deposits, offers checking
account services, makes various loans, and offers basic financial products like certificates of
deposit (CDs) and savings accounts to individuals and small businesses.
2. INVESTMENT BANK
Investment banking is a category of financial services that specializes primarily in selling.
Investment banking is different from commercial banking, which specializes in securities and
underwriting the issuance of new equity shares to help companies raise capital deposits and
commercial loans.
DEFINITION
According to Findlay Shiras “A banker of bank is a person, a firm, or a company having a

place of business where credits are opened by deposits or collection of money or currency or
where money is advanced and waned”
3.3 HISTORY
Banking in India is the modern sense originated in the last decades of the 18th century. The
first bank was Bank is Hindustan, which established in 1770 and liquidated in 1829-32 and
General Bank of India, established 1786 but failed in 1791. The oldest bank still in existence
is the State Bank of India. It originated as the Calcutta in June 1806. In 1809, it was renamed
as Bank of Bengal. This was one of the three banks funded by a presidency government. The
other two were the bank of Bombay and the Bank of Madras. The three banks were merged in
1921 to form the Imperial Bank of India, which upon India’s independence, became State
Bank of India in the 1955. For many years the presidency bank had acted as quasi-central
bank, as did their successors, until the RBI was established in 1935, under the Reserve Bank
of India Act, 1934.
3.4 INTRODUCTION OF CO-OPERATIVE BANK

Cooperative banking is a kind of banking that play very important role in our financial
24
system. It is also regulated and controlled by the Central bank as well as Commercial and
Private Banks. Cooperative means working together. The principle of cooperative is as old as
human society. It is purely the basic of domestic and social life. Cooperative efforts are
ultimately the group in man, which enables, him to live together, work together and help each
together.
• The co-operative movement in India was accepted as the most relevant, appropriate and
effective means for the achievement o' the goals of economic progress as early as in 1904
when the Primary Agricultural Credit Societies came into being under Cooperative Societies
Act, 1904.
• The Act of 1912 made provisions for registration of District Central Co-operative Banks
(DCCBs) which were established to finance the PACS and to act as their coordinator. But the
present three tier structure came into being in 1931 when the Central Banking Enquiry
Committee emphasized the need for creation of State Co-operative Banks to act as leaders of
the co-operative movement and lenders of last resort.
• Now these days, the cooperative credit system of India has the largest network in the world
and co-operatives have advanced more credit in the Indian agricultural sector than
commercial banks. The co societies in I-operative India in fact are playing multifunctional
role in both rural as well as urban areas the basic structure of cooperative societies is
organized on three tier bases.
• There are primary credits societies working at village level, above them are central Co-
operative Bank workings at the district level and then at the top, there are State Co-operative
banks, the apex co-operative institutions working at state level.
• In a developing and vast country like India, the co -operative is of great
importance because it is an organization established for the poor, illiterate and unskilled
people for their mutual help and sharing means of development and to overcome the
constraints of agricultural development because agriculture has its maximum contribution in
national income of the country.
3.5 THE GROWTH OF CO-OPERATIVE BANK IN INDIA
The Co-operative bank has a history of 100 years. Their Co-operative bank is an important
constituent of the Indian financial system, judging by the role assigned to them, the
expectation stay is supposed to full fill their number, and the number of offices they operated
in:
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 Their role assumed in India is rarely paralleled anywhere else in the world.
 Their role in rural financing continues to be important even today and their business in the
urban areas also has increased phenomenally in recent years mainly due to the shape;
increase in a number of primarily Co-operative banks.
 While the Co-operative bank in rural areas mainly finances agriculture-based activities
small-scale industries and self-employment driven activities.
 The Cooperative banks in urban areas mainly finance various category of people for self-
employment, industries, small-scale units, home, finance, comes finance etc.
 Some of the Co-operative banks is quite forward-looking and have developed sufficient
core competencies to challenge state and private sector banks
3.6 CHARACTERISTICS OR PRINCIPLES OF CO-OPERATIVE

BANK
 VOLUNTARY ASSOCIATON
Co-operative organization is voluntary associations of person s, in the sense that people can
become its member and they can leave it at their own will and without any coercion. No one
is compelled to become or to continue its member. Persons having common interest and
desirous of pursuing a common objective can form themselves into a co- operative.
 OPEN MEMBERSHIP
The membership is open to all irrespective caste, creed, religion, race, sex and colour etc.,
Giving on equal opportunity to be one a member.
 DEMOCRATIC CONTROL
The management of co-operative bank is entrusted to a managing committee elected by
member on the basis of “one-member-one-vote” irrespective of the number of shares held by
any member. The board policy framework of the bank is lain down by the general body of
members and the managing as to function within this framework.
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 SERVICE MOTIVE
The basic aim of co-operative organization is to render service to its member in particular and
to the society in general service above self is the co-operative. However, a co-operative may
take reasonable profits.
 COMPULSORY REGISTRATION
No association of persons can use the word co-operative in its name without being registered
under the co-operative bank act.
 SEPARATE LEGAL ENTITY
After registration a co-operative enterprise becomes a body corporate independent of its

member. It is entirely distinct from its members. It can own property and make contract in its
own name. It can sue and be sued in its own name.
 FINANCE
Its member provides the capital of a co-operative enterprise by purchasing the shares. One
member cannot subscribe to more than ten percent of total share capital or 1000.RS
whichever is higher. Shares are not transferable but they can be surrendered to the
organization. Share from the apex co-operative institutions it may also receive grants and
assistance from the government.
 EQUITABLE DISPOSAL OF SURPLUS
A fixed rate of divided can be paid on capital. Out of the profit ¼ will be transferred to
general reserves as per law a portion of the surplus for the welfare of the locality in which the
society is functioning. Its surplus is left it will be distributed among the member as bonus.
 RBI CONTROL
The activities of a co-operative bank are regulated by government even though it us voluntary
in character. Government conducts periodic inspection of the audited accounts and affair of
the bank. A co-operative bank as to submit annual reports and accounts to the register of the
co-operative banks.
3.7 STRUCTURE OF CO-OPERATIVE ORGANISATION
27
There are different types of cooperative credit institutions working in India. These institutions
can be classified into two broad categories: agricultural and non- agricultural. Agricultural
credit institutions dominate the entire cooperative credit structure.
 Agricultural credit institutions are further divided into short-term agricultural credit
institutions and long-term agricultural credit institutions.
 The short-term agricultural credit institutions which cater to the short-term financial needs
of agriculturists have three-tier federal structure-
 at the apex, there is the state cooperative bank in each state;
 at the district level, there are central cooperative banks;
 at the village level, there are primary agricultural credit societies.
 Long-term agricultural credit is provided by the land development banks. The whole
structure of cooperative credit institutions is shown in the chart given.
3.8 TYPES OF CO OPERATIVE
The principles of co-operative have been adopted in innumerable fields of economic and
social activity. The main forms of business co-operative are as follow.
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 INDUSTRIAL CO-OPERATIVES
Such co-operative banks are formed by small artisans and craftsmen to secure the Benefits of
collective and large-scale production so that may survive against the completion of organized
large-scale production. Such societies seek to increased production; provide production
facilities (raw materials, tools, technical knowledge, etc.,) to members and to provide
opportunities for self-employment. They help to safeguard the interest of poor artisans. These
co-operatives are known as “producer’s co-operative”. They may have four types: -
• Manufacturing / Workshop co-operatives.
• Industrial service co-operatives.
• Common facility workshop co-operative.
• Co-operatives.
 MARKETING CO-OPERATIVES
Such co-operatives are formed for selling manufactured or agricultural products. Therefore,
marketing co-operatives classify into two categories:
 Agricultural marketing co-operatives.

 Industrial marketing co-operatives.
 CREDIT CO-OPERATIVES
Co-operative credit societies are set-up to pool the savings at favourable term. They
encourage the habit of thrift and saving among the member. Such societies are formed by
agriculturists, artisans, industrial workers, salary earners, etc., to provide short term financial
accommodation to the member.
They are of two types are.
• Primary credit co-operatives and
• Co-operative banks
 CO-OPERATIVE FORMING SOCIETIES
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It is also known as agricultural co-operatives; these are associations of small land owner who
pool their fragmented are sub-divided into land holdings and do farming on a collective basis
so has to secure the benefit of large scale and mechanized farming. These societies are of the
following types:
• Collective farming society.
• Better farming society.
• Tenant farming society.
• Processing co-operative society
 CONSUMER’S CO-OPERATIVES
These are retail stores owned and organized by people of small means to make available to
themselves their daily use from manufactures and whole society is divided among the
members in proportion of their purchases made by them after payment of dividend and
transfer to reserves and sell them to member and non- members at confessional rates.
 CO-OPERATIVE HOUSING SOCIETIES

People of limited means who are to construct organize such societies, their own houses
individually they are organized in big cities where housing in an accede problem. These
societies land from urban development authority at confessional rates and procure loans and
other facilities from public financial institution housing co-operatives are of the following
types:
• Tenant co-operative societies
• Flat ownership societies
• Co-venture societies
 MULTI-PURPOSE CO-OPERATIVES
Such societies are organized to provide miscellaneous services to members in order to
improve their standard of living therefore they are known as better living societies co-
operatives. Such societies provide medical educational sports and recreational facilities to
their member, skilled and un-skilled workers may organize a labour and construction society.
So, has to eliminate the contractor and secure an honourable economic occupation for the
member
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3.9 MERITS OF CO-OPERATIVES:
The different types of co-operatives are follows:

 Ease of formation: A co-operative society can be easily organized, as it is a voluntary
association. Any ten persons can voluntary form themselves into a co-operative. And get
it registered with the register of co-operatives no complicated and costly legal formalities
are involved.
 Limited liability: The liability of every member is limited to the extent of his Capital
contribution.
 Continuity / stability: Being a separate legal entity, a co-operative organization enjoys a
perpetual existence, which is not affected by the death insolvency, conviction, retirement,
etc., of members.
 Internal financing : Due to compulsory ploughing bank of at least 25% of profit and
strength limitation on the rate of dividend the financing can utilized for the modernization
and growth of the organization without raising loans at exorbitant rates of interest.
 Tax advantage: A co-operative society is exempt from income tax and surcharge on its
earning up to certain limit. It is also exempt from stamp duty and registration fee.
 State patronage: Government provides financial assistance to co-operative in the form of
loan and grants state has adopted a helpful policy towards co-operatives as an instrument
of socio-economic development of weaker sections of society.
 Low operating cost: the administration expenses of a co-operative society are usually low
and there is no need for advertising or publicity sales, if any generally on cash basis so
that bad debt losses are eliminated.
1.8 DEMERITS OF CO-OPERATIVES
 Incompetent management: At the primary level, a co-operative society generally cannot

afford to employ professional managers. It is having to depend on honorary managerial
service by member who obtain lack specialized training and experience in management,
Guaranteed market management lethargic.
 Limited financial resources: As member are drawn from a particular locality and they
usually have limited means, the capital, which a cooperative can raise, is very limited.
Restrictions on dividend and the principle of ‘one-vote’ discourage large investment by
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member.
 Lack of motivation: Absence of profit motive and limitation of dividend stifle incentive
and responsibility on the part of managing committee paid office- bearers of co-operative
do not feel adequately motivated to make their best efforts for the success of the
organization. In some cases, officials misappropriate funds and commit other frauds for
their personal gain at the cost of the member.
 Mutual rivalries: After an enthusiastic and dramatic starts, a co-operative society often
becomes lifeless and paralyzed with the passage of time. The spirit of mutual help and
selfless service give way to rift, factionalism and politicking in the part of members.
Bickering and intrigue take place between members over petty issues. Lack of unity and
cohesion paves the way for the doom of society.
 Lack of secrecy: As a corporate body, a co-operative society is required to submit its
reports and account with the registrar of co-operative societies full disclosure and
publicity of affair makes it very difficult to preserve the secret of business.
 Excessive state regulation: A co-operative society is undoing detailed control by the
government. Such over-administered interferences reduce the flexibility of day-to-day
operations.
3.10 COMPANY PROFILE
A BRIEF PROFILE ABOUT SRI BASAVESHWARA CREDIT CO-

OPERATIVE SOCIETY LTD
The co-operative society was established in the year 2002 and it was incorporated
under the law of 1959 and the got certificate of incorporation. they have its branch in
HIRIYUR(T) CHITRADURGA(D) KARNATAKA. The main objectives of this to
serve the needy people with lower interest and they have various schemes and it acts as
a mini bank and they help their members with the help of various schemes. The society
is backed with members from variety of backgrounds, community, social status and
age groups, making it one of the most versatile organizations currently functioning.
Apart from community service, the foundation is striving to promote National
Integrity, Communal Harmony and Human values among the compatriots. The doors
of Sri Basaveshwara credit co-operative society ltd are opened for all communities and
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faiths, which makes it a distinct Sri Basaveshwara which stands for true Indian spirit
and magnanimity.
They have various prime facilities and services of co-operative bank.
• 6% interest shall be given on saving account.

• 6% (6 months) attractive rate of interest on daily deposit (pigmy) account
• Attractive rates on term /fixed deposit.
• Small scale loans are easily available on submission of relevant documents.
• Account of various terms such as saving/current account/term/fixed/recurring
deposit/ pigmy account can be opened easily.
• Senior citizen/women are eligible for 1% extra rate of interest on their deposit.
• Monthly and annual special pension scheme.
3.11 THE MISSION
• To adopt Marginal and Micro Income holders as Stake Holders i.e., Customers
and organize them in the informal sector to promote sustainable saving practices. In the
process Sri Basaveshwara credit co-operative Society ltd is committed to economically
empower the Customers to become self –reliant.
• To create a conducive environment in the village to enable different sections of the
community to live in harmony. To create infrastructure through executive’s participation to
improve the living habitat.
• To Motivate the individual’s family to plan for self-development and assist them in
realizing their plans. To dare the poor to envision a dream and to work
together with them to make it possible.
• To work with the unreached the poor, the backward communities, the weaker
section and above all the Women to Empower them socially and Economically.
• To promote Entrepreneurial skills among the poor and escort them to implement their skills.
• To achieve progressive environment of tolerance and to spread the message in
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the community, that “Morality is not a liability but a virtue”. Were everybody having an
equal opportunity to sustain one’s dream.
• Our reputed Co-operative Society is targeting on extending the area of operations by
opening new branches in neighbouring states of Karnataka.
• The Mission of Sri Basaveshwara credit co-operative society ltd. is to eradicate poverty by
building a secure and transparent financial service to the underprivileged, especially Senior
Citizens, Women, Physically Challenged.
• The society has adopted a Co-operative approach in order to involve every
member in our mission with a spirit of co-operation and mutual confidence. The society has
instituted a working culture, which revolves around Efficiency, Professionalism and
Teamwork.
3.12 THE VALUES
Maturity payment – full details are mentioned in the cash certificate

• Application processing – work getting done by our executives.
• Enrolment form verification – by giving designation in Sri Basaveshwara Society.
• Executives’ education – For achieving improvements in the field.
• Customers visit – For avoiding fraud and authenticate.
• Compensation system – Accidental death
• Complaint and suggestion system – For avoiding risk in the future.
• Cross functional representation – To become great leader.
• Financial Management – To bring modern technology system to customers.
• Fraud detection – For avoiding unauthorized authentication
• Management information system – For clearing doubts and questions.
• Market research – Survey work to achieve more business.
• Operational audits – To bring perfect and honest work.
• Savings collections – Daily accounting report to be produced to head office.
34
• Product champion – We have many products on savings and investments for

gaining profit.
• Board of Directors – To look after the success in every project.
• Report to change – Timely informing through circulars.
• Regular educating the staff to work under discipline.
• Maintaining excellent portfolio.
• Society recommends and rewards the Field Associates for their successive
Enrolment of Customers.
3.13 ACHIEVEMENTS
• Vision/dreams/goal: We would have many dreams, however as you grow older your dreams
tend to get smaller.
• Commitment: Please be honest to yourself and take care of your sub-ordinate executives
and you will become successful.
• List of names: This is your treasurer’s chest, your powerful asset. Once you have created a
list then please categorize them in to A, B and C.
• Make the call and invite them: Explain everything about saving plans, when you meet in
person, not on the phone.
• Check with leaders: Always keep in touch with your senior leaders.
• Follow up/Teach: A key factor for success in business is to be able to follow what you do
and to teach your junior executives to do the same.
3.14 AIMS AND OBJECTIVES
 To Establish and organize
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Develop, maintain & grant aid in cash or kind to hospitals, medical schools, medical colleges,
nursing institutions, dispensaries, maternity homes, child welfare centres & / or such other
similar charitable institutions in India for the benefit & use of the former & general public.
 To Education & Knowledge Transfer
Facilitate study courses conferences, seminars, lecturers and research a matter relating to the
different field of Agricultural Science & Farmers.
 To Promote Understanding & Amity
Co-operate with an approved institution and interested bodies for the purpose of helping the
cause of agricultural education in particular farmers and education in general.
 Facilitate Processing & Marketing Activities
Help farmers with sectors intuitions and private investment for infrastructure development
private institution have taken lead the farmers to deliver good services, expand project funds,
maintaining revolving accounts entire into contract and agreements, etc.
3.15 THE BOARD OF DIRECTORS OF SRI BASAVESHWARA CREDIT

CO-OPERATIVE SOCIETY LTD
SL.NO Board of Directors
1 Y.S Umashankar
2 S.R Veeresh
3 N.B Vageesh
4 C.M Swamy
5 R.T Prashanth
6 H.S Mahesh
7 Hemalatha Basavaraj
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8 Geetha Himachalesh
9 V. Manjunath
10 B.M Rangaswamy
3.16 SAVING ACCOUNT
• Scheme named as Savings a/c.

• One can open savings a/c with the minimum deposit of Rs.1000.
• Minimum balance of Rs.1000 has to be maintained
• Frequency of deposit – Anytime & Any amount.
• On savings a/c one can avail 6% Rate of Interest per annum.
• No TDS deduction on interest earned.
• Free Cheque book facility along with Savings a/c passbook.
• One can operate their savings a/c from any other branch of Sri Basaveshwara credit Co-
operative Society.
• Customer can deposit any amount to our branch.
• Withdrawal Limit from home branch – any amount and from non-home branch – Rs.
20,000.
• Customer can withdraw any amount by using Cheque & withdrawal slip one can withdraw
Rs. 20,000 as maximum.
• Customer can use cheques to transfer or to deposit amount to other member’s a/c of Sri
Basaveshwara credit co-operative society ltd.
 Salient Features
 SWEEP A/C FACILITY – sweep a/c facility allows us to take care of your idle money by
moving it into high interest savings account earning.
 With Sweep a/c Facility you can avail special FD rate of interest on your Saving a/c.
 To avail this special FD rate of interest facility one should maintain a minimum balance
of Rs.5000 in Savings a/c
3.17 DAILY DEPOSITE SCHEMES OF SRI BASAVESHWARA CREDIT

CO-OPERATIVE SOCIETY Ltd.
With Daily deposit scheme, you can save daily a very small amount of money in our daily
37
deposit scheme. This scheme is featured by a daily saving plan. In this scheme an investor
can save minimum of 10/- or plus on daily basis. We have authorized agents or field associate
to collect amount from investors from their resident or their business places on daily basis.
And will make entry in the passbook. Investor’s passbook will be examined every month at
their nearest branch. Investors are assured of risks against fraud.
Who can open Daily Deposit account:

 A single Member adult or two Member adults jointly.
 A guardian on behalf of a minor or a person of unsound mind.
Where can be opened:
 Walk-in to Branch office or with the help of Field Associates
Tenure of Monthly Income Scheme:
 3 Months / 6 Months / 12 Months / 24 Months / 60 Months
Deposit Limit:
 Minimum: Single or Jointly – Rs.50
 Maximum: No Limit
Defaults in Payments:
 Grace period of paying premium is 7 days.
 The delay payments will be liable for 2% penal fees. Accounts can be regularized
after paying the penal fee.
Renewal Facility:
 Renewal facility provides the continuation of Daily Deposit scheme after maturity in
that you have an option to increase the tenure and can avail prevailing interest of that
time. Wherein you get the higher rate of interest benefits.
Passbook in Monthly Income Scheme:
 Depositor is provided with a pass book with entries of the deposited amount and other
particulars duly stamped by the Branch Office.
Interest & Repayment on Maturity:
 On maturity of the accounts the Amount repayable inclusive of Interest, with interest
less penal charges (if applicable.
38
Nomination Facility:
 The depositor may at the time of opening the account under these rules, nominate a
person or persons who, in the event of death of the depositor, shall become entitled to
payment due on the account.
Income Tax Relief under Fixed Deposit Scheme:
 No TDS deduction on Interest earned.
3.18 FIXED DEPOSITE SCHEMES
Give your portfolio stability of returns and safety and liquidity. Invest in fixed deposit. We
offer attractive returns on fixed deposits and investing in them is really simple and
convenient. In a fixed deposit Scheme a certain sum of money is deposited in the Society for
a specified time period with a fixed rate of interest. When you want to invest your hard-
earned money for a longer period of time and get a regular income, fixed deposit Scheme is
ideal. it is safe, liquid and fetches high returns.
• Plan named as Fixed Deposit scheme.
• Minimum tenure 12 & Maximum 240 Months.
• Frequency of Deposit – One-time fixed amount for fixed tenure.
• Minimum amount in FD is with the deposit of Rs. 10000 or in multiple of Rs. 10000.
• No TDS interest deduction on interest earned.
• FD Certificate will be provided to the member.
• To avail FD facility with society one has to become member of a society.
Who can open Fixed Deposit account:

 A single Member adult or two Member adults jointly.
 A guardian on behalf of a minor or a person of unsound mind.
 Walk-in to Branch office or with the help of Field Associates.
Tenure of Fixed Deposit Account:
 12 Months / 24 months / 36 Months / 48 Months.
Deposit Limit:
 Minimum amount in FD is of Rs. 10000.
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 Maximum: No Limit
Renewal Facility:
 Renewal facility provides the continuation of Fixed Deposit, after maturity in that you
have an option to increase the tenure and can avail prevailing interest of that time.
Wherein you get the higher rate of interest benefits.
Special Interest Rate for Special Category:
 Members age above 50 Years, Ladies, Military officer, Retired Military officer,
Government employees, Bank & Insurance Employees, Semi government employees,
Employee of cooperative society, Trust and Single deposit above 5 Lakhs.
 After maturity, if investor opts to renew the FD amount for 6 to 9 months, then will
offer them 0.10% extra interest benefit & if they renew it for 1 year or more than 1
year, than Investor can earn 0.25% extra interest on their FD.
 You can avail this facility for each & every account that you open with us i.e.,
nominate different persons for different fixed deposits accounts. You can
choose to change the nominee through a declaration in the appropriate form to
revise the nomination during the term of the deposit.
Income Tax Relief under Recurring Deposit Scheme:
 No TDS deduction on Interest earned.
3.19 RECURRING DEPOSITE SCHEME
Under Recurring Deposit scheme, investors invest a specific amount in this scheme on
monthly basis for a fixed rate of return. The deposit has a fixed tenure, at the end of which
investor will get principal sum as well as the interest earned during that period. Recurring
Deposit will provide you the element of compulsion to save at attractive rate of interest
applicable from time
to time.
• Plan named as Recurring Deposit scheme.
• Minimum tenure 12 months to 72 months.
• Frequency of Deposit – Monthly, Quarterly, Half Yearly & Yearly.
• Minimum amount of RD is with the deposit of Rs. 100 or in multiple of Rs. 100.
• RD Certificate will be provided to the member.
• Authorized Society advisor, collect the amount from investors of their residents &
40
Business place.
• To open recurring deposit a/c with society one has to become member of a society. Terms
& Conditions of Recurring Deposit Scheme
• No Prematurity allowed.
• Grace period for deposit RD premium for Quarterly, Half Yearly & Yearly is of 30 days,
& for Monthly instalment there is a grace period of 15 days.
• After grace period, 2% flat monthly penalty will be charged on instalment lapsed as per
follow structure: More than 5 years plan – 12 Months.
• If RD instalment discontinued than maturity will be done as per mentioned structure as
follow: More than 60 Month (Deposit Amount +6% Interest payable), at the time of
completion of the tenure of scheme.
• Loan Eligibility as follow –
o Available on 5 years and above RD plans.
o Applicant can apply only after completing 3 years in plan.
o LTV (Loan to Value Ratio) – 40% of loan on total deposit amount.
Who can open Recurring Deposit account:
• A single member adult or two member adults jointly.
• A guardian on behalf of a minor or a person of unsound mind.
• Walk-in to Branch office or with the help of Field Associates.
Tenure of Recurring Deposit Account:
• 12 Months
• 24 Months
• 60 Months
Deposit Limit:
• Minimum amount in multiple of Rs. 100.
• Maximum: No Limit
Renewal Facility:
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• Renewal facility provides the continuation of Recurring Deposit, after maturity in that you
have an option to increase the tenure and can avail prevailing interest of that time. Wherein
you get the higher rate of interest benefits.
• Grace period of paying premium is 15 days.
• The delay payments will be liable for 2 % penal fees. Accounts can be regularized after
paying the penal fee.
• On maturity of the accounts the Amount repayable inclusive of Interest, with interest less
penal charges (if applicable).
• You can avail this facility for each & every account that you open with us i.e. nominate
different persons for different recurring deposits accounts. You can choose to change the
nominee through a declaration in the appropriate form to revise the nomination during the
term of the deposit.
Passbook in Recurring Deposit Account:
• Depositor is provided with a passbook with entries of the deposited amount and other
particulars daily stamped by the Branch Office.
• No TDS deduction on Interest earned.
3.20 CURRENT ACCOUNT
• Scheme named as Current A/C.
• One can open current a/c with the minimum deposit of Rs.3000.
• Minimum balance of Rs.3000 has to be maintained
• Frequency of deposit – Anytime & Any amount.
• No TDS deduction on interest earned.
• Free Cheque book facility along with current a/c passbook.
• Customer can deposit any amount to our branch.
• Withdrawal Limit from home branch – any amount and from non-home branch – Rs.
20,000.
• Customer can withdraw any amount by using Cheque & withdrawal slip one can
withdraw Rs. 20,000 as maximum.
• Customer can use cheques to transfer or to deposit amount to other member’s a/c of Sri
42
Basaveshwara credit co-operative society ltd. Under Recurring Deposit scheme, investors
invest a specific amount in this scheme on monthly basis for a fixed rate of return. The
deposit has a fixed tenure, at the end of which investor will get principal sum as well as
the interest earned during that period. Recurring Deposit will provide you the element of
compulsion to save at attractive rate of interest applicable from time to time.
• Plan named as Recurring Deposit scheme.
• Minimum tenure 12 months to 72 months.
• Frequency of Deposit – Monthly, Quarterly, Half Yearly & Yearly.
• Minimum amount of RD is with the deposit of Rs. 100 or in multiple of Rs. 100.
• RD Certificate will be provided to the member.
• Authorized Society advisor, collect the amount from investors of their residents &
Business place.
• To open recurring deposit a/c with society one has to become member of a society. Terms
& Conditions of Recurring Deposit Scheme
• No Prematurity allowed.
• Grace period for deposit RD premium for Quarterly, Half Yearly & Yearly is of 30 days,
& for Monthly instalment there is a grace period of 15 days.
• After grace period, 2% flat monthly penalty will be charged on instalment lapsed as per
follow structure: More than 5 years plan – 12 Months.
• If RD instalment discontinued than maturity will be done as per mentioned structure as
follow: More than 60 Month (Deposit Amount +6% Interest payable), at the time of
completion of the tenure of scheme.
• Loan Eligibility as follow –
 Available on 5 years and above RD plans.
 Applicant can apply only after completing 3 years in plan.
 LTV (Loan to Value Ratio) – 40% of loan on total deposit amount.
Who can open Recurring Deposit account:
• A single member adult or two member adults jointly.
• A guardian on behalf of a minor or a person of unsound mind.
43
• Walk-in to Branch office or with the help of Field Associates.

Tenure of Recurring Deposit Account:
• 12 Months
• 24 Months
• 60 Months
Deposit Limit:
• Minimum amount in multiple of Rs. 100.
• Maximum: No Limit
Renewal Facility:
• Renewal facility provides the continuation of Recurring Deposit, after maturity in that you
have an option to increase the tenure and can avail prevailing interest of that time.
Wherein you get the higher rate of interest benefits.
• Grace period of paying premium is 15 days.
• The delay payments will be liable for 2 % penal fees. Accounts can be regularized after
paying the penal fee.
• On maturity of the accounts the Amount repayable inclusive of Interest, with interest less
penal charges (if applicable).
• You can avail this facility for each & every account that you open with us i.e. nominate
different persons for different recurring deposits accounts. You can choose to change the
nominee through a declaration in the appropriate form to revise the nomination during the
term of the deposit.
Passbook in Recurring Deposit Account:
• Depositor is provided with a passbook with entries of the deposited amount and other
particulars daily stamped by the Branch Office.
• No TDS deduction on Interest earned.
3.21 LIST OF BOOKS OF ACCOUNTS TO BE MAINTAINED BY THE
44
CO-OPERATIVE BANKS AS APPLICABLE
1. Day books
2. Payments book for loans and advances
3. Sundry payments book (other than loan)
4. Receipts and payments book for fixed deposit receipts
5. Sundry receipts book
6. Dividend payments book
7. Member register
8. Share ledger form (rule 32and 65) under sec 38(1) of Act, 1960.
9. Fixed deposit personal ledger
10. Balance book F.D.R
11. Due register for F.D.R
12. Unpaid dividend register
13. Recoveries register for advances
14. F.D.R due interest register
15. Summary book for recoveries
16. Suspense register
17. Sundry creditors register
18. Surety liability register
19. Journal
20. Surety deposit account book
21. Bank reconciliation book
22. Trail balance book
23. Demand and time liability register
24. Yearly balance book for loans and shares
25. Particular for loans, after payment
26. Head office- for loan applications register
27. Branches-for loans applications register
28. Registers or Cheques, drafts, payment order inward
29. Sanction registers for loan, for membership, for refund
30. Inward register for postage So, they study has been undertaken to know the working
of the co-operative banks. Mainly the study is emphasized on reviewing the lending structure
of the bank and the customer satisfaction as a whole.
45
3.22 THE CO-OPERATIVE BANK WILL CARRY ON WITH

1. Honesty and trustworthiness in all alternation.
2. Collaboration and teamwork.
3. A pioneering spirit and excellence in action.
4. Understanding the member need and the desire to satisfy them.
5. Highest service standard
46
CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
4.0 DATA ANALYSIS AND INTERPRETATION
Analysing the data collected through direct interviews with the bank manager and other staff,
it is founded that the bank is carrying out its lending activity more effectively. The main
concept of co-operatives bank or societies is deal with in the term “mutual help”. This
concept of mutual benefit is emphasized in a broader perspective, concerned with bank.
The banking activity is motivated with the mobilization of funds from the public in the form
of deposits. The co-operative banks have moved forward in this direction of mobilizing the
funds and building up the habit of banking with the common people. This point is realized by
taking into consideration the change in deposit amount with the bank. This is to say the
deposits of the bank. This is to say the deposits of the bank is decreased by Rs 1195.03lakh. It
is noticed that the deposits of the bank had a decreased of 8.39 % compare to previous year
47
The bank accepted deposit in the form of various titles namely:
1. Saving bank account.
2. Current account.
3. Fixed deposit account.
4. Recurring deposit account.
This point of conclusion is put up taking into the questionnaire prepaid. The bank accepts
deposit in the name of deposit in the name of Sri Basaveshwara cumulative deposit, which is
for a fixed period of time. This deposit carries accumulated interest till the final withdrawal
of the deposit. The customer can also avail loan upon this Sri Basaveshwara cumulative
deposit account. The saving bank a /c carries an interest rate of 3.5% per annum. To upon a
current deposit a/c a minimum balance of Rs1000 is requires added to this fixed deposit a/c
and recurring deposit a/c also exits in the bank. The interest rate for depositary services is
shown in the following table.
48
GRAPH4.1 CHANGES IN THE DEPOSITS
14400
14240.19
14200
14000
13800
13600
13400
13215.04
13200
13045.16
13000
12800
12600
12400
2016-17 2017-18 2018-19
INTERPRETATION: The bank was able to mobilize deposit amounting in Rs 13215.04 in

the year 2016-17, Rs 14240.19 in the year 2017-18 and Rs 13045.16 in the of 2018-19 By
this we can find the active performance of the bank in mobilizing less deposits. Any bank for
that matter has to possess adequate funds (deposits) so as to perform its lending activity.
Deposit are the primary source for the banker to lend loans and advances. The bank first
utilizes the funds with it and goes for other sources in the later stages. So, this has to be taken
into consideration before analysing the lending policies of the bank, as deposits that are
directly related with lending activity it gains equal importance in this context.
49
4.2 INTEREST PROVIDED FOR DEPOSITARY SERVICES
PERIOD OF DEPOSIT Existing rate of interest Revised rate of interest

p. a p. a
Above 30 days to 180 4.00% 4.00%
days
Above 180 days to 3 6.50% 6.50%

years
Above 3 years to 5 7.00% 8.00%

year
INTERPRETATION: The bank has provided for 0.5% additional interest rate for all the
above-mentioned deposit slabs for senior citizens. These factors are stated to give a backup
for studying the lending policy of the bank. There by deposit are directly related with the
bank lending services. Any person who is in need of loan facility has to full fill the below
requirements. To avail loan facility, one has to possess an account with the bank by which
the bank by which he is called the member of the bank, surety, salary slip and various other
documents calls him the member of the bank. The bank is liable for interest payable worth
Rs.4772880.11 lakh in the year 2016- 17 and Rs.4851891.98 lakh in the year 2017-18 and
Rs 340648.37 in 2018-19
50
GRAPH 4.2 CHANGES IN INTEREST PAYABLE

6000000
5000000 4772880.11 4851891.98
4000000
3406480.37
3000000
2000000
1000000
0
2016-17 2017-18 2018-19
INTERPRETATION: The bank has witnessed an added liability compared with previous
accounting balances in respect of interest payable. Ultimately it is the certain responsibility of
the bank to pay off interest on its accepted deposits. To combine with the act of analyzing the
data collected, here is an insight into the lending policy of the bank, while executing its most
significant function the bank has carried advancing service in a most efficient manner it has
provided, facilities like overdraft, cash, cheques discounted and discounting of bills.
The various loans granted by the bank are as follows.

1. Surety loan
2. Salary loan
3. Vehicle loan
4. Gold loan
5. Loan against NSC/Deposit
6. Staff loan
7. consumer durable loan
8. property loan
9. construction loan
51
TABLE 4.3: VEHICLE LOAN FOR THE PERIOD
Year Total loans and Vehicle loan % of total

advances (in lakhs) (in lakhs)
(in lakhs)
2016-17 7155.92 2611.04 36.48
2017-18 6158.72 1074.78 17.45
2018-19 5416.67 2162.10 39.91
INTERPRETATION: The above table gives the information about the total loans and
advances from the base year 2016 to current year 2020. The total percentage of the vehicle
loan is been decreasing from 36.38% to 17.45%in the year 2017-18, and it’s been increasing
to 39.91%in the year 2018-19.
GRAPH 4.3 VEHICLE LOAN

The above table shows the vehicle loan fluctuating year from year. It was 36.48% of total
loans lend by bank but it is decreased to 17.45% in 2017-18. And increased to 39.91 in 2018-
19 compared to last year
45
39.91
40
36.48
35
30
25
20
17.45
15
10
0
2016-17 2017-18 2018-19
52
TABLE 4.4: SURETY LOAN FOR THE PERIOD

Total loans Surety loan % of total
Year and (in lakhs) (in total)
advances
2016-17 7155.92 3617.67 50.55
2017-18 6158.72 3994.87 64.86
2018-19 5416.67 3035.92 67.25
INTERPRETATION: The above table gives the information about the total surety and
advances from the base year 2016 to current year 2020. The total percentage of the surety
to 67.25%in the year 2018-19.
GRAPH 4.4: SURETY LOAN

80
70 67.25
64.84
60
50.55
50
40
30
20
10
0
2016-17 2017-18 2018-19
INTERPRETATION: The above table and chart show the surety loan position is increasing
year by year. It was 50.55% of total loans lend by bank. It increased to 64.86% in 2017-18
and then it raised to 67.25 in 2018-19. The total surety loan Is differing from year to hear
we can know that there is increase in all 3 years.
53
TABLE 4.5: GOLD LOAN
Year Total loans and Gold loan % of total

advances (in lakhs) (in lakhs)
2016-17 7155.92 3167.35 44.26
2017-18 6158.72 2752.22 44.68
2018-19 5416.67 2932.36 54.13
advances from the base year 2016 to current year 2020. The total percentage of the gold loan
is been decreasing from 44.26 to 44.68 in the year 2017-18, and it’s been increasing to
54.13% in the year 2018-19.
Graph 4.5: Gold loan

80
70 67.25
64.86
60
50.55
50
40
30
20
10
0
2016-17 2017-18 2018-19
INTERPRETATION: The above table and chart show the gold loan position is increasing by
year to year. 2016-17 it was 44.26% but it was increased in 2017-18 by 44.86% and 54.13%
in 2018-19. The total gold loan differs from year to year here it is seen that in the year 2016-
17 has decreased to 2752.22 from last year and increased in 2018-19 by 2932.36
54
Table 4.6: Staff loan

Total loans and STAFF loan (in % of total
Year advances (in lakhs) lakhs) (in lakhs)
2016-17 7155.92 1840.77 25.72
2017-18 6158.72 2048.36 33.25
2018-19 5416.67 2132.02 39.36
advances from the base year 2016 to current year 2020. The total percentage of the staff loan
is been decreasing from 25.72% to 33.25%in the year 2017-18, and it’s been increasing to
39.36%in the year 2018-19.
Graph 4.6: Staff loan

45
40 39.36
35 33.25
30
25.72
25
20
15
10
0
2016-17 2017-18 2018-19
INTERPRETATION: The above table chart shows the amount on staff loan is increasing
year by year.2016-17 it was 25.72% and it was increased to 33.25% in 2017-18 and further
increased to 39.36% in 2018-19 the total staff loan fluctuating from year to year here it is
seen that in the year
55
Table 4.7: Salary Secured loan

Year Total loans and Salary secured % of total (in
advances (in loan (in lakhs) lakhs)
lakhs)
2016-17 7155.92 5406.08 75.54
2017-18 6158.72 4940.25 80.21
2018-19 5416.67 4458.15 82.30
advances from the base year 2016 to current year 2020. The total percentage of the salary
to 82.30%in the year 2018-19.
Graph 4.7: Salary Secured loan
84
82.3
82
80.21
80
78
76 75.54
74
72
2016-17 2017-18 2018-19
INTERPRETATION: The above table chart shows the amount on salary secured loan is
increasing year by year.201516 it was 75.54% and it was increased to 80.21% in 2016-17 and
further increased to 82.30% in 2017-18 The total salary secured loan differ from year to year
here it is seen that in the year.
56
Table 4.8: Loan against NSC/Deposit

Total loans and loan (in lakhs) % of total (In
Year advances lakhs)
(in lakhs)
2016-17 7155.92 6422.31 89.74
2017-18 6158.72 4042.76 65.64
2018-19 5416.67 1625.67 30.01
advances from the base year 2016 to current year 2020. The total percentage of the
NSC/DEPOSITE loan is been increased from 89.74% to 65.64%in the year 2017-18, and it’s
been decreeing to 30.01%in the year 2018-19.
Graph 4.8: NSC/Deposit

100
89.74
90
80
70 65.64
60
50
40
30.01
30
20
10
0
2016-17 2017-18 2018-19
INTERPRETATION: Above table and charts shows the NSC loan position is fluctuating
from year to year.it was 89.74% of total loans lend by bank. But it decreased to 65.64 in
2016-17 and it raised to 30.01 in 2018-19 compared to last year. The total NSC loan if differs
from year to year here we can know that there is decrease in 2017-18 by 4042.76 but
increased in 2018-19 by 1625.67
57
Table 4.9: Consumer Durable loan

Total loans and Consumer durable % of total
Year advances (in lakhs) loan (in lakhs) (In lakhs)
2016-17 7155.92 1932.97 27.01

2017-18 6158.72 1649.58 26.78
2018-19 5416.67 1649.58 30.45
advances from the base year 2016 to current year 2020. The total percentage of the consumer
durable loan is been decreasing from 27.01% to 26.78%in the year 2017-18, and it’s been
increasing to 30.45%in the year 2018-19.
Graph 4.9: Consumer Durable loan

31
30.45
30
29
28
27.01
27 26.78
26
25
24
2016-17 2017-18 2018-19
INTERPRETATION: Above chart table and chart shows total amount is

fluctuating from year to year.2016-17 it was 27.01% but it was decreased in 2016-
17 by 26.78%, and then increased to 30.45% in 2017-18. The total profit differs
from year to year here it is seen that in the year 1649.58 in 2018-19 compared to
1649.58 in 2017-18.
58
Table 4.10: Property loan

Total loans and property loan (in % of total (In
Year advances (in lakhs) lakhs) lakhs)
2016-17 7155.92 6167.98 86.19
2017-18 6158.72 1534.78 24.92
2018-19 5416.67 1430.76 26.41
advances from the base year 2016 to current year 2020. The total percentage of the property
loan is been increasing from 86.19% to 24.92%in the year 2017-18, and it’s been decreasing
to 26.41%in the year 2018- 19.
Graph 4.10: Property loan

100
90 86.19
80
70
60
50
40 34.92
30 26.41
20
10
0
2016-17 2017-18 2018-19
INTERPRETATION: Above table and charts shows the property loan position is fluctuating
from year to year.it was 89.74% of total loans lend by bank. But it decreased to 24.92 in
2017-18 and it raised to 26.41 in 2018-19 compared to last year. The total property loan if
differs from year to year here we can know that there is decrease in 2017-18 by 1534.78 but
increased in 2018-19 by 1430.76.
59
Table 4.11: Construction loan

Year Total loans and Construction loan % of total (In
advances (in lakhs) (in lakhs) lakhs)
2016-17 7155.92 1068.52 14.93
2017-18 6158.72 8544.59 13.87
2018-19 5416.67 6450.10 11.90
advances from the base year 2016 to current year 2020. The total percentage of the
construction loan is been increasing from 14.93% to 13.87%in the year 2017-18, and it’s
been decreasing to 11.90% in the year 2018-19.
Graph 4.11: Construction loan

16
14.93
13.87
14
11.9
12
10
0
2016-17 2017-18 2018-19
INTERPRETATION: Above table and charts shows the property loan position is
fluctuating from year to year.it was 14.93% of total loans lend by bank. But it decreased
to 13.87 in 2016-17 and it decreased to11.90 in 2018-19 compared to last year. The total
property loan if differs from year to year here we can know that there is decrease in 2017-
18 by 8544.59 but decreased in 2018-19 by 6450.10.
60
 4.12 ANALYSIS
The overdraft t were Rs. 10,94,0399.55 during 2016, which reduced to Rs. 10,01,4405.87 in
the financial year 2017. Cash credit was 0.00 in the 2016 year, Rs. 0.00 in the 2017. The bank
carried out the discounting of the cheques particularly in this financial year2018-19, were in
this activity was completely excluded in previous year 2017-18. The deposit loans amounted
to Rs.22720188.00as at 31st march 2016, which drastically decreased to Rs. 21243875.00 as
at 31st march 2017. The deposit loans had a decreased of Rs. 1476331 from that of previous
year. This is to say that 6.50% approx. decreased in deposit loan granted by the bank. The
entire short-term lending amounted to Rs. 3,36,60,587.5 in previous year, which decreased to
Rs.3,12,58,280. The medium-term loans amounted to Rs.14,64,08,701 in the previous year
which came down to Rs. 13,27,44,555. The declining changes was 13664146 compared to the
previous year.
 4.13 TERM AND CONDITIONS GOVERNING LENDING POLICIES OF THE

BANK
First and foremost, regulation for lending lies with the identity of the customer. It is to say
that an individual applying for loan as to be a member of the bank. Unlike other commercial
bank co-operative banks are not lineal to function in a broader area. It has been restricted to
transact only with its member. This slope of lending activity is quite stringed. Therefore, the
bulk of lending process is comparatively less. The member availing loan facility as to
forward two surety this is the mandatory aspect of lending policy. And the surety extended
should be out of member alone. The member standing as surety and the person availing loan
called be the member of the bank should possess minimum 40 shares in the bank. It is a
simple fact at the person availing loan as to be employed one.In the process of lending or
advancing a bank asks for various document the persons eligibility to grant loan. This
documentation requires.
• Age proof
• Address proof
• Salary slip
With the fulfilment the above terms and condition, an individual is granted with the desired
61
loan. Rest of the responsibility holds with the individual in market the best utilization of the
loan availed. The stream of granting loans or availing loans does not come to an and with the
above stated related facts. The most important impact will arise right after this.
 This to mean, after securing loans the individual is known liable for repayments of the
loans amount with in the stipulated time along with prescribe interest rate. The loan
amount is equally divided into several instalments, added with interest amount. These
instalments have to be paid or a before the specified date. Payments of instalment
immediately after one month of availing loan amount. An individual who fails to pay
back the loan.
 Amount instalments with in the date specified will be penalized with 2% extra charges for
such delay or non-payment of instalments.
 The bank has adopted several strict measures to collect the bank loan amount from the
customers. If the customer fails to repay the loan amount sufficient notice is extended for
non- payments of instalments or principal amount, over and above the sufficient notices
given to the customers. If he fails the amount this becomes an arbitration case as the first
the amount this becomes an arbitration case as the first action followed by sale office
executing the customer assets. The amount recovered out of the customer assets will be
the only source of recovering the loan amount by the bank. This will be usually less than
the actual loan amount.
 Thus, a bank follows several measures like from the granting of loans and until its
recovery.
62
4.14 BALANCE SHEETS OF 2016-2019

“SRI BASAVESHWARA CREDIT CO-OPERATIVE SOCIETY LTD”
BALANCE SHEET AS ON 2016-2017
LIABILITIES AMOUNT ASSETS AMOUNT

capital 37990300 Assets Amount
reserves & other funds
162231283187 Cash on hand 12547294.00
deposit 1291826592.79 Current account 70694949.67
borrowings - Savings banks a/c 1345340.00

interest payable on
3154721.38 Investment & FDS 307974823
deposit
Government securities
other liabilities 9676209.96 283375999
(HTM)
overdue interest Government securities (AFS)
45990334.00 9857000
receivable
CH. Received for
1735036.34 Other investment -
collection
Staff P.F collected A/C
311908 Short term loan 42963778.67
Net profit 6154693.43 Medium term loan 142457743

Long term loan 581958367
Interest receivable 7770597.00
Acquired interest
2150980.00
receivable
Interest Received of NPA
45990334.00
A/C
branch adjustments 000
Property 6683527
Other asset 2729041
Cheques sent for
1735036
collection
TOTAL 1511679719.55 TOTAL 1511679719.55
63


capital 39079100.00 Assets Amount
129064460.85 Cash on hand 8346726.00

borrowings 2137609.31 Savings banks a/c 2057389.00
interest payable on
4772880.11 Investment & FDS 367985797
deposit
other liabilities 8166385.83 224765487.00
(HTM)
overdue interest Government securities (AFS)
50896409.09 95029250.00
receivable
ch. received 5869373.13 Other investment 10000
net profit 828137.62 Short term loan 33660587,55
Medium term loan 146408701
Long term loan 715592393.55
Acquired interest
1688206.02
receivable
50896409.09
A/C
branch adjustments 2076698.45
property 6167998.00
Other asset 6760280.89
Cheques sent for
5869373.13
collection
TOTAL 1562318784.22 TOTAL 1562318784.22
64


capital 38418450 Assets Amount
140623623.47 Cash on hand 8302674.00

borrowings - Savings banks a/c 2566345.00
interest payable on 4851891.98
Investment & FDS 209258504
deposit
other liabilities 4773855 1235579226
(HTM)
over due interest Government securities
58992679.15 91241000
receivable (AFS)
CH. Received for
4682711.65 Other investment 130010000
collection
Staff P.F collected A/C
- Short term loan 31258280.87
Net profit 4358510.69 Medium term loan 132744555

Long term loan 451869420
Acquired interest
4227817.00
receivable
58992679.15
A/C
branch adjustments 6935756.83
Property 15343078
Other asset 6320139.94
Cheques sent for
4682711.65
collection
TOTAL 16887616416.79 TOTAL 16887616146.79
65
CHAPTER 5
SUMMARY OF FINDINGS,
RECOMMENDATIONS AND CONCLUSION
66
SUMMARY OF FINDING, CONCLUSION AND

SUGGESTIONS
5.1 FINDINGS
 Allocation of loans has been increased in 2016-2017, when compared to the
financial year 2017-18 & 2018-2019.
 Profit position is increased by the year comparing to year 2017-2018 and 2018-2019.
 The deposit position of the bank is increased in 2017-2018. When compared to
2016- 2017 and 2018-2019.
 The bank repeat loans when previous loans are refunded.
 Small enterprises are provided loans under business loan.
 Bank operates mostly to customers of middle class and lower middleclass people.
 Bank lacks in ATM centre.
 Bank does not have online banking.
 The bank operations are fluctuating year by year.
5.2 SUGGESTIONS:
 The profit position can be improved by reducing the interest rates on loans.
 The providing of loans must be increased so it will help raising the income.
 Online banking should be adopted so that customers can transact easily.
 The bank should include English and Hindi with Kannada which helps to
different communities. It helps to gain more customers.
 The bank has to open the branches throughout state and cities so that they meet
needs of all customers.
 Bank has to introduce new loan schemes to encourage more and more different
classes of people.
67
5.3 CONCLUSION
The bank as loan carried out the lending activity with a view to satisfy its customer
though there is a demand for the various loan and advance the collected data show a
decreased figure in many cases, this is because of the new regulation formulated by
the RBI and Apex bank to the co-operative banking sector. We can find the short-term
loan, medium term loan and long-term loan undergoing a detrimental figure compared
in that of a previous year. But this cannot be the ultimate conclusion to say the bank is
not performing up to the satisfaction. In the field of finance there is a continuous
change over a period of time. Today’s decreased will certainly pave way for future
growth. This is stated while in study conducted by taking into consideration by
various financial statement of different accounting dates. Though the deposits of the
bank have increased the loans and advance granted in the financial year state a
declining figure. This fact may be due to the massive computerization of the branches
taken by the bank. The fixed asset as the bank has also increased. This might be the
other reason for the decreased in lending activity. The funds with the bank are not
only directly used for lending purposes rather it is also made right usage for
developing the bank as a whole.
68
5.4 REFERENCES
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variability: How does this affect infrastructure lending policies?. The World
Bank. https://scholar.google.com/scholar?
d=gs_qabs&u=%23p%3DwHxTWUWgWzEJ
9 LaCour-Little, M. (1999). Discrimination in mortgage lending: A critical review
of the literature. Journal of Real Estate Literature, 7(1), 15-49.
https://scholar.google.com/scholar?
10 Altunbas, Y., Fazylov, O., & Molyneux, P. (2002). Evidence on the bank lending
channel in Europe. Journal of Banking & Finance, 26(11), 2093-2110.
http://scholar.google.com/citations?user=1P1wHBoAAAAJ&hl=en
5.4 BIBLIOGRAPHY
Reference material used obtained from:
1. https://scholar.google.co.in/scholar?
q=lending+literature+review&hl=en&as_sdt=0&as_vis=1&oi=scholart -
d=gs_qabs&u=%23p%3DHb-wn3DZcJAJ
2. https://scholar.google.co.in/scholar?
q=lending+policy+literature&hl=en&as_sdt=0&as_vis=1&oi=scholart -
3. https://doi.org/10.1016/j.jeconbus.2004.03.003
4. https://link.springer.com/chapter/10.1057/978-1-137-52144-6_15
5. https://scholar.google.com/scholar?
d=gs_qabs&u=%23p%3Dzlj-oGcIzcsJ
6. http://scholar.google.co.id/citations?user=9EkYs-gAAAAJ&hl=id
70
d=gs_qabs&u=%23p%3Dqf7GsFnE04oJ
d=gs_qabs&u=%23p%3DwHxTWUWgWzEJ
10. http://scholar.google.com/citations?user=1P1wHBoAAAAJ&hl=en
5.5 BOOKS REFERRED:
1. Baskaran and Josh
2. Jain (2001)
3. Singh and Singh
4. Mavaluri, Bopanna and Nagarjuna
5. Pal and Malik
6. Campbell
7. Singla
8. Dutta and Basak
9. Chander and Chandel
10. Owino, M. O
11. Munyiri, M
12. Sri Basaveshwara credit co-operative society ltd
13. Staff of the above said bank
71
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A STUDY ON LEADING POLICIES

Under the guidance of

Rukmini Knowledge Park, Kattigenahalli, Yelahanka, Bengaluru-560064

(Signature of the candidate)

Signature of Director of School

1.2 MEANING OF FINANCE

1.3 MEANING OF FINANCIAL MANAGEMENT

1.4 FINANCIAL INSTRUMENTS

1.5 BACKGROUND STUDY OF LENDING POLICIES

one of such parameters, which is also termed as debt service ratio.

1.6 ENDING POLICIES OF BANK

1.7 BANK PERFORMANCE AND LENDING POLICIES

1.8 REGULATION OF LENDING

1.9 STEPS IN THE LENDING PROCESS

 The customer fills out a loan application.

1.10 CREDIT ANALYSIS

1.11 THE SIX BASIC C’S OF LENDING

2. Capacity: Customer Has Legal Authority to Sign Binding Contract.

1.12 LENDING OPERATIONS:

1.13 REGULAR BOOK OF ACCOUNTS

1.14 METHODS OF LENDING POLICIES

3. TYPES AND AREAS OF LENDING

4. LOAN MATURITIES AND TERMS

5. SETTING INTREST RATES ON LOAN

7. FINANCIAL INFORMATIONON BORROWERS

8. LENDING TO A SINGLE BORROWER OR A GROUP OF

9. LENDING TO THE BANKS RELATED PARTIES AND PERSON

2.1 LITERATURE REVIEW

Y. Altunbas (2002) The dramatic increase in securitisation activity experienced in Europe in

2.2 STATEMENT OF THE PROBLEM

2.3TYPES OF DATA COLLECTIONS

1. To make the role of lending policies in the improvement of cooperative bank.

2. To know the benefits enjoyed by the members.

2.4 OBJECTIVE OF THE STUDY

2.5 LIMITATIONS OF THE STUDY

2.6 SCOPE OF THE STUDY

1. To analyse into the knowing the various types of lending methods.

2. The recovery pattern of the funds that are lent.

INDUSTRY AND COMPANY PROFILE

3.1 INDUSTRY PROFILE

According to Findlay Shiras “A banker of bank is a person, a firm, or a company having a

3.4 INTRODUCTION OF CO-OPERATIVE BANK

3.5 THE GROWTH OF CO-OPERATIVE BANK IN INDIA

3.6 CHARACTERISTICS OR PRINCIPLES OF CO-OPERATIVE

 SEPARATE LEGAL ENTITY

After registration a co-operative enterprise becomes a body corporate independent of its

 EQUITABLE DISPOSAL OF SURPLUS

3.7 STRUCTURE OF CO-OPERATIVE ORGANISATION

3.8 TYPES OF CO OPERATIVE

 Agricultural marketing co-operatives.

They are of two types are.

• Primary credit co-operatives and

 CO-OPERATIVE FORMING SOCIETIES

• Collective farming society.

• Better farming society.

• Tenant farming society.

• Processing co-operative society

 CO-OPERATIVE HOUSING SOCIETIES

• Tenant co-operative societies

• Flat ownership societies

3.9 MERITS OF CO-OPERATIVES:

The different types of co-operatives are follows: