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FINANCIAL RATIO ANALYSIS OF CO-OPERATIVE BANKS IN UTTARAKHAND
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Journal of Kavikulaguru Kalidas Sanskrit University, Ramtek ISSN - 2277-7067
FINANCIAL RATIO ANALYSIS OF CO-OPERATIVE BANKS IN

UTTARAKHAND
Dr. Vijay Laxmi Sharma* Dr. Mayank Jindal**
*
Assistant Professor, Department of Commerce,M.B. Govt. P.G. College, Haldwani,
Uttarakhand, India.
**
Assistant Professor, School of Business Management,C.S.J.M. University, Kanpur, U.P.
India.
Abstract
All co-operative banks are commercial banks and provide services to the public as other
commercial banks but these banks have to register under the co-operative societies act. 1939
co-operative banks are working in India out of which 76 co-operative banks are scheduled
banks and others are the non-scheduled banks. In this research, the researcher has analyzed
the 20 financial ratios of the five co-operative banks of Uttarakhand state of India and these
five banks are Uttarakhand State Co-operative Bank, Nainital District Co-operative Bank,
Dehradun District Co-operative Bank, Kurmanchal Urban Co-operative Bank and Almora
Urban Co-operative Bank. These 20 financial ratios include liquidity ratios, capital structure
ratios, activity ratios, profitability ratios and other important financial ratios. Data has been
collected from the head offices of these banks. Results show that the Almora urban co-
operative bank has 11.94% owner’s capital, Dehradun district co-operative bank, Kurmanchal
urban co-operative bank, and Almora urban co-operative bank have more than 80% finance
from the deposits and earn 8.93%, 8.71% and 10.03% net profit respectively, on the other
hand, Uttarakhand state co-operative bank deposits are 53.07% in the total assets and earn
only 3.77% net profit. This study is useful for the understanding of the financial position,
financial structure, average employees in each branch, and business per employee of the co-
operative banks in Uttarakhand.
Keywords: Financial Ratios, Co-operative Banks, Banks in Uttarakhand.
Introduction
Co-operative banks in India are providing general banking services to the general people.
Two types of co-operative banks are working in India. Rural co-operative banks work mostly
in rural areas and urban co-operative banks are working in urban areas. Rural co-operative
banks are further sub-divided into state co-operative banks and district co-operative banks.
All co-operative banks are registered under the state co-operative societies act. According to
a compilation of many reports of RBI and other organizations, 1939 co-operative banks are
working in India.
Co-operative banks provide services as private and public sector banks in India but co-
operative banks have some unique features that made co-operative banks different.
Only co-operative banks can get registered under the related state co-operative societies act
and the word co-operative is mandated to use with their name. Related state means the state
in which co-operative bank has registered but multi-state co-operative banks have to register
under the central co-operative societies act. According to the Constitution of India, the states
have the right to make the laws regarding co-operative societies, so each state has its own co-
operative societies act and co-operative banks are registered by the state government under
'kks/klafgrk Peer Reviewed/Refereed & UGC Care Listed Journal Vol. IX – Issue II, July 2022
(969)
the state co-operative societies act. Major activities of state and district co-operative banks
are controlled by the state government.
Many types of banks are working in India. Some are dedicated to general work of the public
like private and public banks (like. SBI, HDFC), one bank is dedicated to Import Export
(like. EXIM bank), and some are dedicated to the improvement of industries (like. SIDBI,
HDFC), rural co-operative banks (like. Uttarakhand state co-operative bank, Nainital district
co-operative bank) are dedicated to the development of the agriculture sector and rural
economy and urban co-operative banks (like. Kurmanchal bank, Almora urban co-operative
bank) are dedicated to fulfilling the small business needs in the area approved by the RBI.
Most commercial banks are providing directly or indirectly the common types of banking
services but they give preference to their dedicated sector.
Co-operative banks in India have become an integral part of the success of Indian financial
inclusion story. They have achieved many landmarks since their creation and helped normal
rural Indian to feel empowered and secure. Co-operative banks in India have a history of
almost 100 years (Rani & Rani, 2018).
The first co-operative bank of India was established in Gujarat and now 1939 co-operative
banks are working in India. NABARD is responsible for regulating and supervising the credit
functions of rural co-operative banks. All co-operative banks are commercial banks providing
general banking services. Co-operative banks work at the district level, state level or country
level as per their structure with a small number of branches (In the co-operative banks of
India, Saraswat co-operative bank has the highest number of branches only 281 branches and
SBI (A public bank) has over 25000 branches across India). Three types of co-operative
banks are working in India. These are state co-operative banks (33), District central co-
operative banks (364), and urban co-operative banks (1542). State co-operative banks and
district co-operative banks are rural co-operative banks (RBI, 2020).
The shareholders’ funds to total assets ratio (proprietary ratio) has been calculated in the
percentage and it presents the percentage of shareholders' fund part in the total assets. It has
been calculated by total shareholders’ funds divided by the total assets and multiplied by 100.
This ratio presents the shareholders’ funds position on a particular date (balance sheet date).
The cash, balance with bank and money at call to total assets ratio has been calculated in the
percentage and it presents the cash, balance with bank and money at call part in the total
assets. It has been calculated by dividing total cash, balance with bank and money at call by
the total assets and multiplied by 100. This ratio presents the cash and liquid asset position on
a particular date.
Deposits to total assets ratio has been calculated in the percentage and it presents the
percentage of deposits part in the total assets. It has been calculated by dividing total deposits
by the total assets and multiplied by 100. This ratio presents the deposits position on a
particular date (balance sheet date).
Borrowings to total assets ratio has been calculated in the percentage and it presents the
percentage of borrowings part in the total assets. It has been calculated by dividing total
borrowings by the total assets and multiplied by 100. This ratio presents the borrowings
position on a particular date (balance sheet date).
The fixed assets to total assets ratio has been calculated in the percentage and presents the
fixed assets part in the total assets. It has been calculated by dividing total fixed assets by the
total assets and multiplied by 100. This ratio presents the fixed assets part in the total assets
on a particular date (balance sheet date).
(970)
The investment to advance ratio has been calculated in the percentage and it presents
investments position in the comparison of advances. This ratio presents the investment vs.
Advance position on a particular date (balance sheet date). This ratio has been included
because banks give advances but it depends on the demand of advances and remaining funds
banks generally invest to earn at least normal profit from the investments.
The advance to deposit ratio has been calculated in the percentage and it presents the
advances in the comparison of deposits. This ratio presents the advances vs deposit position
on a particular date (balance sheet date). This ratio has been included because banks accept
deposits and provide major advances out of accepted deposits. This ratio summarizes the
main business of a bank by presenting the advance generated in the comparison of deposits
received.
The return on assets ratio has been calculated in the percentage and it presents the net profit
earning from the total assets. It has been calculated by the net profit divided by the total
assets and multiplied by 100. This ratio presents the one-year profit performance from the
bank's total assets at the end of the year.
The return on equity ratio has been calculated as a percentage and it presents the net profit
percentage from the shareholder funds. It has been calculated as the net profit percentage to
the shareholder funds including reserve & surplus. This ratio presents an interest expenditure
position during a year or specified duration.
The interest income to total income ratio has been calculated as a percentage and presents the
interest income part in the total income. It has been calculated as interest income percentage
by the total income of the profit and loss statement. This ratio presents an interest income
position during a year or specified duration.
Review of Literature
Sapovadia, V., Patel, S. (2012). Taking cognizance of these developments and to provide a
legal basis for cooperative societies, Government of India under leadership of Lord Curzon
appointed Sir Edward Law Committee with Mr. Nicholson as one of the members in 1901 to
examine and recommend a course of action. The Cooperative Societies Bill, based on the
recommendations of this Committee, was enacted on 25th March, 1904. As its name
suggests, the Cooperative Credit Societies Act was restricted to credit cooperatives and
further SOYELIYA USHA L. (2013) specify that The government of India started the
cooperative movement of India in 1904. Then the government therefore decided to develop
the cooperatives as the institutional agency to tackle the problem of usury and rural
indebtedness, which has become a curse for population. In such a situation cooperative banks
operate as a balancing centre. According to Vavak, (1995) The first few cooperative societies
registered in India under the 1904 Act in the first 5-6 years are as follows: Rajahauli Village
Bank, Jorhat, Jorhat Cooperative Town Bank and Charigaon Village Bank, Jorhat, Assam
(1904), Tirur Primary Agricultural Cooperative Bank Ltd., Tamil Nadu (1904), Agriculture
Service Cooperative Society Ltd., Devgaon, Piparia, MP (1905), Bains Cooperative Thrift &
Credit Society Ltd., Punjab (1905), Bilipada Service Cooperative Society Ltd., Orissa (1905),
Government of India, Sectt. Cooperative Thrift & Credit Society (1905), Kanginhal Vyvasaya
Seva Sahakari Bank Ltd., Karnataka (1905), Kasabe Tadvale Cooperative Multi-Purpose
Society, Maharashtra (1905), Premier Urban Credit Society of Calcutta, West Bengal (1905),
Chittoor Cooperative Town Bank, Andhra Pradesh (1907), Rohika Union of Cooperative
Credit Societies Ltd., Bihar (1909).
Nivedita, (2018).Cooperative was started in India in 1904. We have seen many successful
cooperative organizations in India like Amul. And not only these but these days we can see
(971)
that cooperatives are successful in banking also. The Himachal Pradesh State Cooperative
Bank is a live example of this fact.
Co-operative Credit societies Act was implemented in 1904 and it was amended in 1912 by
passing THE CO-OPERATIVE SOCIETIES ACT, 1912 and THE CO-OPERATIVE
SOCIETIES ACT, 1912, section 49 says that the Every society now existing which has been
registered under the Co-operative Credit Societies Act, 1904 (10 of 1904), shall be deemed to
be registered under this Act. And According to RBI (Brief History of Urban Cooperative
Banks in India), The Cooperative Credit Societies Act, 1904 was amended in 1912, with a
view to broad basing it to enable organisation of non-credit societies.The Co-operative
societies Act, 1912 was implemented because of (Sri. T.H. JAHFARALI, 2011 specify
that) The Co-operative Credit Societies Act 1904 was found insufficient to cope with the
expanding movement. The Act was an improvement over the Co-operative Credit Societies
Act 1904. Under this Act any society creditor otherwise may be registered which has its
objects, the promotion of the economic interests of its members in accordance with the co-
operative principles. Further Accordinzg to RBI (Brief History of Urban Cooperative
Banks in India), specify that The Maclagan Committee of 1915, was appointed to review
their performance and suggest measures for strengthening them. The committee observed that
such institutions were eminently suited to cater to the needs of the lower and middle income
strata of society and would inculcate the principles of banking amongst the middle classes.
The committee also felt that the urban cooperative credit movement was more viable than
agricultural credit societies. The recommendations of the Committee went a long way in
establishing the urban cooperative credit movement in its own right.
First Multi State Co-operative Act was passed in 1942, Vavak, (1995) Multi-Unit
Cooperative Societies Act, 1942, With the emergence of cooperatives having a membership
from more than one state such as the Central Government sponsored salary earners credit
societies, a need was felt for an enabling cooperative law for such multi-unit or multi-state
cooperatives. Accordingly, the Multi-Unit Cooperative Societies Act was passed in 1942,
which delegated the power of the Central Registrar of Cooperatives to the State Registrars for
all practical purposes. Multi-Unit Cooperative Societies Act, 1942, Section 2, Sub-section
2 specify that Where any such Co-operative Society has established before the
commencement of this Act or establishes after the commencement of this Act a branch or
place of business in a State other than that in which it is actually registered, it shall, within six
months from the commencement of this Act or the date of establishment of the branch or
place of business, as the case may be, furnish to the Registrar of Co-operative Societies of the
State in which such branch or place of business is situated a copy of its registered bye-laws,
and shall at any time it is required to do so by the said Registrar submit any returns and
supply any information which the said Registrar might required to be submitted or supplied to
him by a co-operative society actually registered in that State.
Chadha Neha (2017). In 1949, 2 major actions were taken with a view of structural reforms
in the banking sector. Banking regulation Act, which provided extensive power to RBI over
the commercial banks and another was the nationalization of RBI. Banking regulation act
provided excessive power the RBI. In a free enterprise economy, commercial banks operate
like any other business entity and gain private profit so at the time of independence it was
viewed that the freedom of commercial bank was not in the harmony of the socialistic pattern
of society, so they were nationalized in 1969 to establish the control over these banks. This
study attempts to study the banking reforms in India and their impact on Indian Banking
System.
(972)
According to RBI, The Urban Cooperative Banks (UCBs), along with other cooperative
banks, were brought under the regulatory ambit of RBI by extending certain provisions of
Banking Regulation Act, 1949, (B.R.Act) effective from March 1, 1966. Since then, the
urban banking sector has witnessed phenomenal growth in terms of reach, size, volume of
operations and the quantum of public deposits held by it. In the past, two Expert Committees
had examined the role assigned to UCBs and the regulatory issues related to them. Report of
the Committee on Urban Cooperative Banks, 1978 (Madhava Das Committee) provided a
well-documented study of urban banking sector in India and set standards of viability for
sustained growth of urban banks. The last Committee on UCBs (Marathe Committee) which
submitted its Report in 1992, had come out with far reaching recommendations, and it had,
primarily aimed at removal of 'fetters' on UCBs’ freedom. RBI has accepted most of these
recommendations and implemented them.
According to NABARD, The Committee was formed on 30 March 1979, under the
Chairmanship of Shri B. Sivaraman, former member of Planning Commission,
Government of India. Sivaraman Committee’s outlined the need for a new organisational
device for providing undivided attention, forceful direction and pointed focus to credit related
issues linked with rural development. Its recommendation was formation of a unique
development financial institution which would address these aspirations and formation of
National Bank for Agriculture and Rural Development (NABARD) was approved by the
Parliament through Act 61 of 1981. NABARD came into existence on 12 July 1982 by
transferring the agricultural credit functions of RBI and refinance functions of the then
Agricultural Refinance and Development Corporation (ARDC). It was dedicated to the
service of the nation by the late Prime Minister Smt. Indira Gandhi on 05 November 1982
and Set up with an initial capital of Rs.100 crore, its’ paid up capital stood at Rs.14,080 crore
as on 31 March 2020. Consequent to the revision in the composition of share capital between
Government of India and RBI, NABARD today is fully owned by Government of India.
Government of India Annual Publication Economic Survey 2013-14 (2014).Government
of India, in its annual publication Economic Survey 2013-14 has pointed out that the
agriculture sector was disbursed Rs. 6,07,375.62 crore in 2012-13. According to this report,
Commercial banks, Regional rural banks (RRBs), and Co-operative banks extended credit to
152.77 lakh new farmers, increasing the total number of agriculture loan accounts financed as
of March 2013 to Rs. 7.04 crore. As per the provisional figures available, as against the farm
credit target of Rs.7,00,000 crore for the year 2013-14, an amount of Rs. 7,30,766 crore was
disbursed during the year.
Adhikari Hema, dr. Joshi Kamal, (2018). District co-operative banks are two folds, on the
one hand they are supposed to provide cheap and timely credit to rural masses and on the
other hand have to ensure their profitability and viability in turbulent interest regime. To be
able to create a balance between their social objective and economics compulsion these banks
were needed to change working strategy. In conclusion, it can be pointed out that the
financing of agricultural development as a part of rural development, through the concerned
District co-operative bank has been partially effective. Ravindran, R., (2011). Co-operative
bank's success depends on successful financial management, human resources management
and customer relation management. TDCC Bank should not cancel the loan amount for
agriculture loans. Bank can reduce interest rate on loan for the borrowers who have problems
on repayment. Cancellation of loan affects profitability and liquidity of the bank. Even
survival of bank will be questionable.
(973)
2.2 Research Methodology

Objectives of the Study
1. To study about the co-operative banks in Uttarakhand.
2. To study about the financial statement of co-operative banks in Uttarakhand.
Banks Selection for the Study
Number of
Bank type Bank name
Branches
State Co-operative Bank 1. Uttarakhand State Co-operative Bank 15
District Central Co- 2. Nainital District Co-operative Bank 33

operative Bank 3. Dehradun District Co-operative Bank 23
4. Kurmanchal Urban Co-operative Bank 41
Urban Co-operative Bank
5. Almora Urban Co-operative Bank 51
Total 163
Source: Annual Reports of Banks

Uttarakhand state co-operative bank, Nainital district co-operative bank, Dehradun district
co-operative bank, Kurmanchal urban co-operative bank and Almora urban co-operative bank
have been selected for study because Uttarakhand state co-operative bank is the apex state
rural co-operative bank in the Uttarakhand state. Nainital district co-operative bank is the
biggest district co-operative bank of the Kumaun region of Uttarakhand and Dehradun district
co-operative bank is the biggest district co-operative bank of the Garhwal region of
Uttarakhand. Urban co-operative banks are the state level co-operative banks according to the
number of branches Almora urban co-operative bank and Kurmanchal urban co-operative
bank are the two biggest urban co-operative banks in Uttarakhand.
According to the above-selected banks, Uttarakhand state co-operative bank, Nainital district
co-operative bank, Dehradun district co-operative bank, Kurmanchal Urban Co-operative
bank and Almora urban co-operative bank have their head offices in Nainital, Dehradun,
Almora. Haridwar district is the biggest district of Uttarakhand according to population and
all state-level co-operative banks have their branches in Haridwar. Hence Dehradun,
Haridwar, Nainital and Almora districts have been selected for the purpose of sample
collection.
Sample Design and Data Collection
1939 co-operative banks are working in India, 16 co-operative banks are working in
Uttarakhand and out of which 5 banks have been selected for the purpose of the study. Five
annual reports of these banks have been collected from the head offices of these banks
situated in Haldwani, Nainital, Almora and Dehradun and secondary data have also been
collected from the RBI, NABARD and other websites, Journals, Magazines, Books, Annual
reports of banks, and previous thesis.
Table 1. Financial Statement Analysis of Co-operative Banks in Uttarakhand
Nainital
Uttarakhand Dehradun Kurmanchal Almora
District
State Co- District Co- Urban Co- Urban Co-
Financial Ratios Co-
operative operative operative operative
operative
Bank Bank Bank Bank
Bank
(974)
F1 Share Holders Funds 5.79% 8.12% 5.71% 9.03% 11.94%

to Total Assets Ratio
F2 Cash, Balance with 25.47% 4.77% 5.79% 17.81% 12.13%
Bank and Money at
Call to Total Assets
Ratio
F3 Deposits to Total 53.07% 75.63% 83.54% 86.40% 84.72%
Assets Ratio
F4 Borrowings to Total 40.23% 13.87% 8.44% 0.00% 0.00%
Assets Ratio
F5 Fixed Assets to Total 0.24% 0.30% 0.30% 0.39% 0.50%
Assets Ratio
F6 Investment to 28.80% 187.56% 153.97% 76.81% 128.03%
Advance Ratio
F7 Advance to Deposit 106.29% 41.97% 43.13% 52.26% 43.53%
Ratio
F8 Return on Assets 0.29% 0.46% 0.71% 0.74% 0.91%
Ratio
F9 Return on Equity 4.97% 5.39% 12.51% 8.24% 7.67%
Ratio
F10 Interest Income to 97.46% 96.60% 97.58% 91.17% 90.85%
Total Income Ratio
F11 Non-Interest Income 2.54% 3.40% 2.42% 8.83% 9.15%
to Total Income Ratio
F12 Interest Expenditure 86.52% 71.64% 75.34% 67.20% 61.36%
to Total Expenditure
Ratio
F13 Non-Interest 13.48% 28.36% 24.66% 32.80% 38.64%
Expenditure to Total
Expenditure Ratio
F14 Total Expenditure to 96.23% 94.32% 91.07% 91.29% 89.97%
Total Income Ratio
F15 Net Profit to Total 3.77% 5.68% 8.93% 8.71% 10.03%
Income Ratio
F16. Cash Deposit Ratio 48.13% 6.26% 6.86% 21.31% 14.27%
F17 Net Interest Margin to 1.05% 4.66% 2.30% 2.55% 3.19%
Total Assets Ratio
F18 Monthly Expenses to 48.37 78.47 59.30 57.47 66.04
per Employee Ratio
(Rs. In Thousands)
F19 Average Employees 7.43 5.18 6.21 7.85 7.08
per Branch Ratio
F20 Business per 276051.75 67722.41 92608.11 79331.53 98404.15
Employee Ratio (Rs.
In Thousands)
In the five selected co-operative banks in Uttarakhand, Almora urban co-operative bank has
the highest shareholders funds in total assets and it presents high stability of the capital
structure of the Almora urban co-operative bank and more secure deposits in this bank in
(975)
terms of more shareholders funds are available in this bank and Almora urban co-operative
bank has 11.94% owner’s capital, Kurmanchal urban co-operative bank has 9.03% owner’s
capital in the total assets of the bank, Nainital district co-operative bank has 8.12% owner’s
capital in the total assets of the bank, Uttarakhand state co-operative bank has 5.79% owner’s
capital in the total assets of the bank, and Dehradun district co-operative bank has 5.71%
owner’s capital in the total assets of the bank.
Cash, balance with bank and money at call to total assets ratio presents the cash and liquid
asset position in total assets on a particular date and Uttarakhand state co-operative bank has
the highest cash, balance with bank and money at call funds and this fund has generally
maintained for the repayment of deposits & loans and these funds has also maintained for the
cash reserve ratio purpose but very high these funds indicate the over cash available without
earning or very low earning assets of a bank. The maintenance of this ratio mostly depends
on the bank's business strategy, needs, future plans, banking laws and current needs of the
funds but Uttarakhand state co-operative bank has huge funds in cash and high liquid asset
and this bank may invest some cash in the investments or may increase some advances.
Kurmanchal urban co-operative bank has also some high cash, balance with the bank and
money at call funds.
A bank is a financial institution different from the other organizations because the main
sources of finance of a bank are the deposits & borrowings and deposits are the chipset
source of finance to a bank and if the balance sheet is reflecting the percentage of the high
deposit in the total assets there will be high chance to earn the profit by the bank because of a
cheap source of finance. Dehradun district co-operative bank, Kurmanchal urban co-operative
bank, and Almora urban co-operative bank have more than 80% finance from the deposits
and earn 8.93%, 8.71% and 10.03% net profit respectively on the other hand Uttarakhand
state co-operative bank deposits are 53.07% in the total assets and earn only 3.77% net profit.
The high deposit ratio in the total assets has a positive impact on the profit and it also shows
the bank's trust in the society to make deposits and Almora urban co-operative bank deposit
to total asset ratio is good.
Borrowings to total assets ratio presents the borrowings part in the total assets and the good
or bad position of this ratio depends on the borrowing's interest rate, fund needs for advances
and investments. Uttarakhand state co-operative bank has taken 40.23% loan in the total
assets and maintains 25.47% cash and high liquid assets in the total assets and it is directly
presenting the over borrowings of the Uttarakhand state co-operative bank. Nainital district
co-operative bank and Dehradun district co-operative bank have 13.87% and 8.44%
borrowing funds and they do not have very high cash and liquid assets it is presenting a well
borrowing structure in the comparison to Uttarakhand state co-operative bank. Kurmanchal
urban co-operative bank and Almora urban co-operative bank have not any borrowing funds
and they are doing business on the capital and deposit finance of the bank but they have an
opportunity to extend banking business by took borrowing finances but at present both banks
has not in any problem without took loans because these banks have a high investment in
place of advances and both are earning better profits on total assets.
The fixed assets to total assets ratio presents the fixed assets part in the total assets and this
ratio should not high because banks need to make advances & investments and maintain
some funds for future advances and investments. Uttarakhand state co-operative bank,
Nainital district co-operative bank, Dehradun district co-operative bank, Kurmanchal urban
co-operative bank and Almora urban co-operative bank have less than 0.505% fixed assets in
the total assets, it is presenting that all these banks have a good fixed asset to total assets
ratio.
(976)
The investment to advance ratio presents the investment percentage in the comparison of
advances of the bank and high investment to advance ratio is not good because it presents the
low capacity of the lending advance of the bank. The main business of banks is the accept
deposit and make advances but very often banks make investments in many types of
securities. Uttarakhand state co-operative bank has a good position in the investment to
advance ratio and Kurmanchal urban co-operative bank has a normal position in this ratio in
the comparison to other banks but Nainital district co-operative bank, Dehradun district co-
operative bank and Almora urban co-operative bank are in the hazardous situation because
investments are exceeding the amounts of the advance and it is presenting the weak making
advance capacity of Nainital district co-operative bank, Dehradun district co-operative bank
and Almora urban co-operative bank.
The advance to deposit ratio presents the advances in comparison to deposits and this ratio is
useful because banks accept deposits at low rates and make advances at high rates.
Uttarakhand state co-operative bank is in a good position according to this ratio because
Uttarakhand state co-operative bank has advanced more than the deposits but other banks
have approx one-half advances of deposits and these banks should try to increase the
advances.
The return on assets ratio presents the overall profit performance of the bank on the total
assets available for business. All selected banks have less than 1% return on total assets of the
bank during the average five years 2015-16 to 2019-20. We cannot say it is a good return but
all banks are making a profit from the total assets and Almora urban co-operative bank is
making a better profit in comparison to other banks.
Return on equity ratio presents the percentage of profit on the shareholder funds and selected
co-operative sector banks of Uttarakhand have earned at least 4.97% profit on equity during
the average five years 2015-16 to 2019-20. Dehradun district co-operative bank has earned a
better profit on equity with 12.51% profit earning.
The interest income to total income ratio presents the interest income percentage in the total
income earned by the bank. This ratio generally exceeds 90% because interest income is the
main source of income for the banks and all selected co-operative banks in Uttarakhand have
earned more than 90% income from the interest income. The high-interest income to total
income ratio presents the low service charge, low processing fees and low other charges of
the bank.
Non-interest income to total income ratio presents the non-interest income percentage in the
total income and non-interest income sources of a bank mostly are processing fees, charges,
fines and other fesses which should not be high for the customer benefits and high non-
interest income to total income ratio present the high charges policy of the banks, therefore, it
should not be high. This ratio is presenting the high charges policy of Kurmanchal urban co-
operative bank and Almora urban co-operative bank in the comparison of Uttarakhand state
co-operative bank, Nainital district co-operative bank and Dehradun district co-operative
bank.
Interest expenditure to total expenditure ratio presents the interest expenditure percentage in
the total expenditure and high value of this ratio presents the high expenditure on interest of
deposits and borrowings and low operating expenditure of the bank and Uttarakhand state co-
operative bank is expending high expenditure to the interest expenditure in the comparison of
other selected co-operative banks in Uttarakhand.
Non-Interest Expenditure to Total Expenditure Ratio presents the non-interest expenditure
percentage in the total expenditure and it includes the rent, repair, GST, professional charges,
(977)
salaries, donations, sundry expenditures and all other non-interest expenditures. Non-interest
expenditure is a part of the expenditure policy of the bank but it should not very high due to
maintain the profit of a bank if a bank is earning profit by providing quality services with
high non-interest expenditure it may show a good position even if non-interest expenditure to
total expenditure ratio is high.
Total expenditure to total income ratio presents the expenditure part in the total income. All
selected co-operative sector banks of Uttarakhand have less than the 96.24% expenditure in
the total income and Almora urban co-operative bank has the least total expenditure ratio and
this bank has earned a high profit.
Net profit to total income ratio presents the net profit in the total income and it is the most
popular to measure the profit in the total income. All selected co-operative banks in
Uttarakhand have earned at least 3.77% profit of the total income and Almora urban co-
operative bank has earned 10.03% profit in the total income.
Cash deposit ratio presents the cash and highly liquid assets percentage from the deposits
received. Bank has to pay demand deposits at any time and fixed deposits after a specified
time therefore the bank has to maintain some cash for the payment but not very high cash
because a bank has to give advance or invest these deposits to earn profit and to pay interest
on these deposits and earn profit. Uttarakhand state co-operative bank has 48.13% cash to
deposit ratio and it is very high and presenting this bank has maintained 48.13% cash in the
comparison of deposits. Nainital district co-operative bank and Dehradun district co-
operative bank maintain only 6.26% and 6.86% cash for payment of deposits and
maintenance the cash depends on the bank policy but these banks should increase some cash
for the current payments. Kurmanchal urban co-operative bank and Almora urban co-
operative bank maintain 21.31% and 14.27% cash for payment of deposits.
The net interest margin to total assets ratio presents the bank profit from the main business in
the percentage of the total assets. The bank's main business is earning interest income and
expending interest expenditure, therefore, this ratio presents the net interest difference
between the interest expended and interest earned to the total assets. Nainital district co-
operative bank has earned 4.66% net interest margin and it is a good performance of this
bank and it’s a better net interest margin in the comparison of other selected co-operative
banks of Uttarakhand.
Average employees per branch is exceed 7 employees in Uttarakhand state co-operative bank
branches, Kurmanchal urban co-operative bank branches, and Almora urban co-operative
bank branches.
Business per employee ratio presents the average business (Deposits and Advances)
generated by average each employee. The main business of the bank is to accept deposits &
give advances and this ratio presents the average workload on each employee from the accept
deposits & give advances. Uttarakhand state co-operative bank business per employee ratio
presents a high workload on the employees of this bank. All selected co-operative sector
banks in Uttarakhand employees are doing at least 67722.41 thousand rupees business during
the average five years 2015-16 to 2019-20. Uttarakhand state co-operative bank employees
have more than the double workload of the other selected banks but employees performance
of this bank is not very low in comparison of other banks.
In the above mentioned five selected co-operative banks of Uttarakhand, Almora urban co-
operative bank has the highest shareholders funds in total assets of their bank and it presents
high stability and more secure deposits in this bank. Deposits and borrowings are the main
sources of finance in any bank and in all selected co-operative banks in Uttarakhand have
(978)
more than 84.72% finance from deposits and borrowings. Bank's capital, deposit and
borrowings are the source of finance and making good advances are the main and highest
source of profit for the banking business and extra funds generally banks invest in many
types of securities but securities generally earn less profit to the bank in the comparison of
advances.
Conclusion
This research was started with the objective of study about the co-operative banks in
Uttarakhand and to study about the financial statement of co-operative banks in Uttarakhand.
20 financial ratios of the five co-operative banks of Uttarakhand state of India and these five
banks are Uttarakhand State Co-operative Bank, Nainital District Co-operative Bank,
Dehradun District Co-operative Bank, Kurmanchal Urban Co-operative Bank and Almora
Urban Co-operative Bank. These 20 financial ratios include liquidity ratios, capital structure
ratios, activity ratios, profitability ratios and other important financial ratios. Data has been
collected from the head offices of these banks. Results show that the Almora urban co-
operative bank has 11.94% owner’s capital, Dehradun district co-operative bank, Kurmanchal
urban co-operative bank, and Almora urban co-operative bank have more than 80% finance
from the deposits and earn 8.93%, 8.71% and 10.03% net profit respectively, on the other
hand, Uttarakhand state co-operative bank deposits are 53.07% in the total assets and earn
3.77% net profit. Uttarakhand state co-operative bank has taken 40.23% loan in the total
assets and maintains 25.47% cash and high liquid assets in the total assets and it is directly
presenting the over borrowings of the Uttarakhand state co-operative bank. Nainital district
co-operative bank and Dehradun district co-operative bank have 13.87% and 8.44%
borrowing funds and they do not have very high cash and liquid assets it is presenting a good
borrowing structure in comparison to Uttarakhand state co-operative bank. Kurmanchal urban
co-operative bank and Almora urban co-operative bank have not any borrowing funds and
they are doing business on the capital and deposit finance of the bank but they have an
opportunity to extend banking business by taking borrowing finances. Uttarakhand state co-
operative bank, Nainital district co-operative bank, Dehradun district co-operative bank,
Kurmanchal urban co-operative bank and Almora urban co-operative bank have less than
0.505% fixed assets in the total assets, it is presenting that all these banks have a good fixed
asset to total assets ratio. All selected banks have less than 1% return on total assets of the
bank during the average five years 2015-16 to 2019-20. We cannot say it is a good return but
all banks are making a profit from the total assets. The average number of employees per
branch is exceeding 7 employees in Uttarakhand state co-operative bank branches,
Kurmanchal urban co-operative bank branches, and Almora urban co-operative bank
branches. All selected co-operative sector banks in Uttarakhand employees are doing at least
67722.41 thousand rupees business during the average five years 2015-16 to 2019-20. This
study is useful for the understanding of the financial position, financial structure, average
employees in each branch, and business per employee of the co-operative banks in
Uttarakhand.
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FINANCIAL RATIO ANALYSIS OF CO-OPERATIVE BANKS IN UTTARAKHAND

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FINANCIAL RATIO ANALYSIS OF CO-OPERATIVE BANKS IN

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District Central Co- 2. Nainital District Co-operative Bank 33

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