“TO STUDY THE FUNCTION OF COOPERATIVE BANK (TJSB BANK)”

Project report submitted to

UNIVERSITY OF MUMBAI OF PARTICAL COMLETION OF THE

DEGREE

BACHELORE OF BANKING AND INSURANCE

UNDER THE FACULITY OF COMMERCE

BY

I MISS Ashwini Shashikant Dhawale

CLASS: TYBBI, ROLL NO: BI2020006

UNDER THE GUIDANCES OF

ASST.PROF, Mr. Amin Memon
 SMT. JANAKIBAI RAMA SALVI,

DEGREE COLLEGE OF Arts, COMMERCE & SCIENCE

MANISH NAGAR, KALWA (W), THANE -400605

CERTIFICATE
This is to certify that, Miss Ashwini Shashikant Dhawale (T.Y. B.Com (Banking and
Insurance)

Semester VI Seat No: BI2020006 has undertaken & completed the project titled “TO
STUDY THE FUNCTION OF COOPERATIVE BANK (TJSB BANK)”

During the academic year 2022-23 under the guidance of Asst. Prof. Mr. Amin Memon
submitted of 2023 to this college in fulfilment of the curriculum of

BACHLOR OF BANKING AND INSURANCE, UNIVERSITY OF MUMBAI.

This is a bona fide project work & the information presented is true & original to the best
of our knowledge & belief.

PROJECT GUIDE EXTERNAL EXAMINER

 DECLARATION BY LEARNER

I the undersigned here by, Miss Ashwini Shashikant Dhawale declare that the work
embodied in this project work “TO STUDY THE FUNCTION OF COOPERATIVE
BANK (TJSB BANK)”

Forms my own contribution to the research work carried out under the guidance
of Mrs.Asst. Prof. Amin Memon is a result of my own research work and has not
been previously submitted to any other University for any other Degree/Diploma to this or
any other University.

Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the Webliography and bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

(Miss Ashwini Shashikant Dhawale)

Name and Signature of the Learner

Certified by

(ASST. PROF. Mr. BALKRISHNA

SHINGOLE) Project Guide
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, (ASST. PROF. Mr. BALKRISHNA SHINGOLE) for
providing the necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator Asst. Prof. Mr. Amin Memon for his
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide (ASST. PROF.
Mr. Amin Memon) whose guidance and care made the project successful.
I would like to thank my College Librarian, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly and indirectly helped me in
the completion of the project especially my Parents and Peers who supported me
throughout the project.
EXECUTIVE SUMMARY

● This project is entitled as “to study the functions of cooperative bank “This research is all about
cooperative banks in India. This involves every information about cooperative banks.

● In the first chapter we have added the introduction to our topic some information about
cooperative banks and its historical background.

● In the second chapter we have added some literature review of seven different writers to know
more about cooperative banks and different uses of cooperative bank

● In the third chapter we have added objectives hypothesis and scope and significance of study.
Limitation of study and methodology use in data collection.

● In chapter four, I analyse the data to know more about this study. For this Data is collected
through both primary and secondary sources. primary data is collected with the help of
questionnaire with sample size 54 and secondary data is collected through different websites.3

● In the last chapter we have recommended them some solution to improve the working of
cooperative bank sector. We have also added findings in it that what is the result of our survey
and what information we have get from the respondent in last we have added conclusion to our
overall project and our data analysis.

1
Sr No. Chapters Page No

CHAPTER1: INTRODUCTION 5 TO 24

1.1 Introduction 5 TO 7

1.2 Historical Background 8 TO 14

1.3 Pre-Profile of The Study 15 TO 23

Selection And Relevance of Topic with Banking and Insurance

1.4 24
Course

CHAPTER 2: LITERATURE REVIEW 26 - 41

2.1 Introduction To Literature Review 26 to 28

2.2 Literature Review of Past Research 29 to 40

2.3 Research Gap 41

CHAPTER3: RESEARCH
43
METHODOLOGY

3.1 Objective of the study 44

3.2 Hypothesis 45 To 50

3.3 Scope of the study 51

3.4 Limitation of the study 52

3.5 Data collection 53 to 54

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 CHAPTER 4: DATA ANALYSIS AND
56 TO78
INTERPRETATION

4.1 TJSB bank 56-59

4.2 Data Process 60

4.3 Data Analysis 61

4.4 Data Interpretation And Presentation 62 to 78

CHAPTER 5: FINDINGS AND

80 - 82
CONCLUSION

5.1 Findings 80

5.2 Suggestions 81

5.3 Conclusion 82

Bibliography 83

Annexure 84-88

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 CHAPTER 1

INTRODUCTION

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1.1 INTRODUCTION OF COOPERATIVE BANK

A co-operative bank is a financial entity which belongs to its members, who are at the same time the
owners and the customers of their bank. It is often established by people belonging to the same local
or professional community having a common interest. It is formed to promote the upliftment of
financially weaker sections of the society and to protect them from the clutches of money lenders
who provide loans at an unreasonably high-interest rate to the needy.

The co-operative structure is designed on the principles of cooperation, mutual help, democratic
decision making and open membership. It follows the principle of ‘one shareholder, one vote’ and
‘no profit, no losses.

Cooperatives Banks are registered under the Cooperative Societies Act, 1912. These are regulated
by the Reserve Bank of India and National Bank for Agriculture and Rural Development (NABARD)
under the Banking Regulation Act, 1949 and Banking Laws (Application to Cooperative Societies)
Act, 1965.

The co-operative structure is three tier comprises of primary societies at village level in the field of
credit and non-credit activities, Central organization at district level and an apex organization at state
level.

The federation of all primary societies is called as Central Co-operative Bank. Central Banks were
required to play role of balancing centres of co-operative finance, there by retaining the money at
the disposal of co-operative institutions.

At present there are 362 District Central Banks in India which are federations of primary credit
societies normally working in a district.

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Therefore, they are called as District Central co- operative Banks. The main function of these banks
is to lend to Village Primary Societies.

They act as intermediaries between the State Co-operative Banks on one hand and Village Primary
Credit Societies on the other.

The State Co-operative Bank is a Central Institution at the State level which works as a final link
between small primary societies on one hand and money market on the other. It takes off idle money
in the slack season from the Central co-op.

Banks and supplies the same to them in the busy season. State Cooperative Bank form apex co-
operative credit structure in each state and control the working of Central Cooperative Banks in the
State.

It serves as a link between NABARD (National Bank Of Agriculture and Rural Development) on
one hand and Central Co-op. Bank and Village primary Societies on the other i.e. it acts as a Banker
‘s Bank to the Central Co-op. banks.

There is only one Apex Bank in each State. But some states like Maharashtra, M.P. Punjab have
more than one Apex banks. The membership of these banks is open to all

Central co-operative Banks and some Societies are also allowed to have direct dealings

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Co-operative Movement in India
The Co-operative Movement in India was born out of the distress and turmoil that prevailed in the
last quarter of the 19th century. The Industrial Revolution had given a death blow to village industries
and driven people to agriculture, the only avenue of employment and livelihood. The consequent
sub-division and fragmentation of holdings had made agriculture an uneconomic proposition. This,
combined with the rigidity of land revenue collection, uncertainty of rainfall and, therefore, of crop
production, compelled the agriculturist to knock at the door of the money-lender who advanced
money cither by purchasing the crop at a throwaway price or by charging a sky-high rate of interest.
The deteriorating condition of farmers under the heavy strain of increasing indebtedness and frequent
famines not only proved the inadequacy of legal measures but also emphasized the need for the
provision of cheap credit through an alternative agency The primary objective of this movement was
to relieve the peasants from the clutches of moneylenders and from the vicious circle of indebtedness
through supply of credit at lower rate of interest. Co-operatives today cover the entire spectrum of
activities in rural areas and serves as an alternative source to villagers who otherwise were dependent
on moneylenders for supply of credit.
The co-operative movement is responsible for comprehensive development of primary agricultural
credit societies to function as multi-purpose, viable units. Though co- operative movement in our
nation began as a credit movement, ultimately non-credit activities were introduced in the co-
operative structure. Even though, the credit activities still constitute the most significant element of
the co-operative movement. At present cooperatives are destined to emerge as dominant
undertakings in vital sectors of the economy like agriculture, fisheries, industrial development, and
handloom sector etc.

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 1.2 HISTORICAL BACKGROUND

1.2.1 Global View

United States
The first cooperative credit union in the United States was founded in 1908, but the cooperative
movement had been gaining momentum in the United States since the late 1800s.
The early credit unions were formed by groups of people who had a common bond, such as working
for the same employer or belonging to the same church or fraternal organization. These groups came
together to pool their savings and make loans to each other at affordable rates.
The Federal Credit Union Act was signed into law in 1934, which established the National Credit
Union Administration (NCUA) to regulate and supervise credit unions. This provided a legal
framework for credit unions to operate and gave them access to federal insurance through the
National Credit Union Share Insurance Fund (NCUSIF), which protects members' deposits.
In the years following World War II, credit unions continued to grow in popularity and membership.
By the 1970s, there were over 15,000 credit unions serving more than 37 million members in the
United States.
In the 1980s and 1990s, credit unions faced increased competition from banks and other financial
institutions. To remain competitive, credit unions began to expand their product and service offerings
and to focus on technology and convenience for their members.
Today, credit unions continue to play an important role in the financial services industry in the United
States. According to the NCUA, there are currently over 5,000 credit unions serving more than 123
million members and holding over $1.8 trillion in assets

8
 France

The cooperative banking movement in France can be traced back to the early 19th century. One of
the earliest examples of cooperative banking in France was the creation of the "Caisses d'Epargne"
(Savings Banks) in 1818, which were initially established to provide financial services to workers
and small business owners.

In the 1860s, the "Credit Agricole Mutuel" (Mutual Agricultural Credit) was founded in response to
the needs of farmers, who were often excluded from traditional banking services. The cooperative
banking model proved to be particularly well-suited to the needs of farmers, who could pool their
resources and receive loans at more affordable rates than they would have been able to obtain
individually.

The cooperative banking movement continued to grow throughout the 20th century, with the
establishment of a number of regional and local cooperative banks. These banks were often linked
to specific industries or geographic regions, and were focused on meeting the needs of their local
communities.

In 1972, the French government passed a law that recognized and regulated cooperative banks,
providing them with legal status and establishing rules governing their operations. Today, there are a
number of large cooperative banks in France, including the Credit Agricole Group, which is the largest
banking group in the country and one of the largest in Europe. These banks continue to serve as important
sources of financing and financial services for individuals and businesses throughout France.

9
China
Cooperative banks in China have a long and complex history that dates back to the early 20th
century. The first cooperative banks in China were established in 1906 by the Chinese government,
as part of a broader effort to modernize the country's financial system and promote economic
development.

However, the cooperative bank movement in China gained momentum in the 1930s, when a
number of rural credit cooperatives were established in response to the need for small-scale
lending in rural areas. These cooperatives were often founded by local farmers or
entrepreneurs, and operated on a member-owned, non-profit basis. During the Mao era,
cooperative banks were reorganized and brought under state control. The government
established a national network of rural credit cooperatives in the 1950s, which provided small
loans to farmers and other rural residents. These cooperatives were seen as a key component of
the government's efforts to promote agricultural production and rural development.

In the 1980s, China began to transition to a more market-oriented economy, and cooperative banks
were once again allowed to operate independently. Today, there are a variety of different types of
cooperative banks in China, including rural credit cooperatives, urban credit cooperatives, and
industrial and commercial cooperatives. These banks operate on a member-owned, non-profit
basis, and provide a range of financial services to their members, including loans, savings
accounts, and insurance products

10
Australia
Cooperative banks, also known as mutual banks, have a long history in Australia dating back to the
mid-19th century. The first cooperative bank in Australia was established in 1859 in the town of
Balmain, Sydney, and was called the Balmain Permanent Building and Investment Society. The
society was formed by a group of local residents who pooled their savings to buy land and build
homes, and it operated on the principles of mutual self-help and cooperation.
In the following years, other cooperative banks were established in various parts of Australia, often
by groups of working-class people seeking access to credit and banking services that were not
provided by traditional banks. By the early 20th century, there were dozens of cooperative banks
operating in Australia, serving both urban and rural communities.
In 1912, the Australian government passed the Commonwealth Bank Act, which established the
Commonwealth Bank of Australia as a government-owned bank to compete with private banks and
provide services to ordinary Australians. This marked a significant shift in the banking sector, as the
government took an active role in promoting competition and expanding access to financial services.
Over the years, the cooperative banking sector in Australia continued to grow and evolve. In the
1980s and 1990s, many cooperative banks merged with each other or with other financial institutions
to form larger mutual banks. Today, there are several mutual banks operating in Australia, including
the Teachers Mutual Bank, the Beyond Bank, and the Bank Australia, among others.

Sri Lanka
The cooperative movement in Sri Lanka began in 1906, with the establishment of the first
cooperative society in the country, the Bandirippuwa Agricultural Cooperative Society.
In 1912, the first cooperative credit society was established in Sri Lanka, with the aim of providing
credit to small farmers who had no access to traditional banking services. This credit society was
later converted into the Agricultural and Industrial Credit Society in 1924.
In 1930, the Cooperative Wholesale Establishment (CWE) was established as a government-owned
institution to purchase and distribute agricultural inputs and products on behalf of the cooperatives.
The CWE played a significant role in the development of cooperative banks by providing them with
a reliable market for their products and a source of affordable inputs.
In the 1950s, the government of Sri Lanka initiated a series of policies aimed at promoting the growth
of cooperative banks. In 1951, the Cooperative Development Department was established to provide
technical assistance to the cooperatives. In 1958, the Cooperative Rural Banks Ordinance was
passed, which provided a legal framework for the establishment and operation of cooperative rural
banks.

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1.2.2 Indian view

Cooperative banks in India have a long and rich history dating back to the early 20th century. The
roots of the cooperative banking movement in India can be traced back to the early 1900s, when the
British government established the Cooperative Credit Societies Act of 1904, which was aimed at
improving the credit facilities available to rural farmers and small-scale industries.

The first cooperative bank in India was established in 1904 in Kanjiramkulam, a village in the
southern state of Kerala. This bank was set up by the famous Indian social reformer and statesman,
Sir Sayed Ahmad Khan, with the aim of providing credit to poor farmers who were unable to access
credit from traditional sources.

The cooperative banking movement gained momentum in the years following the First World War,
as India's economy began to grow rapidly. By the 1920s, there were more than 1,000 cooperative
banks in the country, serving millions of people across rural and urban areas.

One of the key drivers of the cooperative banking movement was the Indian National Congress,
which saw the cooperative movement as a way of promoting economic development and
empowering the country's poor and marginalized communities. In 1935, the Indian government
passed the Reserve Bank of India Act, which recognized the role of cooperative banks in the
country's financial system and provided them with greater regulatory support.

During the Second World War, the cooperative banking movement in India experienced a period of
rapid expansion, as many banks were set up to provide credit to farmers and small businesses affected
by the war. By the end of the war, there were more than 2,000 cooperative banks in India.

In the years following independence in 1947, the Indian government took a more active role in
promoting the cooperative banking sector, recognizing its potential to support the country's economic
development goals. The government established a number of specialized agencies to provide
financial and technical support to cooperative banks, including the National Bank for Agriculture
and Rural Development (NABARD) and the Small Industries Development Bank of India (SIDBI).
The 1960s and 1970s were a period of significant growth for the cooperative banking sector in India,
as the country underwent a period of rapid industrialization and modernization.

12
Many new cooperative banks were set up to serve the needs of the growing urban middle class,
while existing banks expanded their operations to meet the needs of the changing economy.
However, the 1980s and 1990s were a period of significant upheaval for the cooperative banking
sector in India. A number of banks faced financial difficulties due to poor management, corruption,
and political interference, and many were forced to close down or merge with other banks.
In the early 2000s, the Indian government introduced a series of reforms aimed at strengthening the
cooperative banking sector and restoring public confidence in these institutions. These reforms
included the introduction of stricter regulations, the establishment of a deposit insurance scheme,
and the creation of a new regulatory body, the National Bank for Agriculture and Rural Development
(NABARD).

Today, cooperative banks continue to play an important role in India's financial system, providing
credit and other financial services to millions of people across the country. While the sector has faced
challenges in recent years, there are signs that it is recovering, with many banks adopting new
technologies and business models to stay competitive in an increasingly digital and globalized world.
The genesis of the cooperative movement and its implementation in a modern technical sense can be
traced after the Industrial Revolution in England during the period of 18th and 19th century. The
idea of Hermann Schulze and Friedrich Wilhelm Raiffeisen during the economic meltdown to
provide easy credit to small businesses and poor sections of the society took shape as cooperative
banks of today across the world.

Pre-independence period (prior to 1947)

British India replicated this model and based on the recommendations of Sir Frederick Nicholson
(1899) and Sir Edward Law (1901), the Co-operative Credit Societies Act, 1904 was passed. It tried
to deal with the problems of rural indebtedness and consequent conditions of farmers in the country.
The Act promoted the establishment of credit cooperative societies which led to the formation of
first urban cooperative credit society, registered on October 1904 at Kanjeepuram now in Tamil Nadu
State.

It marked the beginning of the institutionalization of the Cooperative Banking system in India. But
there were certain defects in the Act which restricted the reach of the expected benefits of
cooperatives. The Act only permitted the registration of credit societies, and there was no provision
for the protection of non-credit societies or federal societies.

13
These shortcomings were recognized by the Government and to remedy it; more comprehensive
legislation was introduced, known as the Cooperative Societies Act of 1912. It recognized the
formation and organization of non-credit societies and the central co-operative federations.
In 1919, after the end of the First World War under the Treaty of Versailles, 1919, the Montague
Chelmsford Reforms were introduced in India under which Cooperation becomes a transferred
subject which was to be administered by the States. The need for separate acts for effective
implementation and to widen the reach of the cooperative banks was felt by the States. The Bombay
Provincial Government was the first to pass its own act which was known as Bombay Provincial
Cooperative Societies Act, 1925. Other state governments like Madras, Bengal, Bihar and Punjab
followed the Bombay

Act and passed their own legislation in the following years. In 1942, the British Government enacted
the Multi-Unit Cooperative Societies Act, 1942, the ambit of which covered societies whose
operations are extended to more than one state. The Act provided for the regulation of affairs of such
society by the provisions of cooperative societies act of the state where the principal business of the
society is located.

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1.3 PRE-PROFILE OF THE STUDY AREA

✔ What are cooperative banks?

A cooperative bank is a type of financial institution that is owned and controlled by its members,
who are also its customers. The primary objective of a cooperative bank is to provide banking
services to its members at competitive rates, while also supporting the economic and social
development of its community.

Cooperative banks are typically organized as non-profit organizations and are governed by a board
of directors elected by the members. Members of a cooperative bank have equal voting rights,
regardless of the size of their account balances, and they share in the profits of the bank in proportion
to their use of its services.

Cooperative banks offer a range of financial products and services, including savings and checking
accounts, loans, mortgages, and investment services. They often focus on providing financial
services to small and medium-sized businesses, as well as to individuals who may have difficulty
obtaining credit from traditional banks.

In addition to providing financial services, cooperative banks also work to promote economic and
social development in their communities. They may provide education and training programs for
their members, support local businesses and industries, and engage in other community development
initiatives.

Overall, cooperative banks serve an important role in promoting financial inclusion, supporting
community development, and providing access to financial services for people who might not
otherwise have access to them.

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Characteristics of cooperative bank

1. Member-owned: Cooperative banks are owned and controlled by their members, who have
equal voting rights and share in the profits of the bank.

2. Democratic governance: Cooperative banks are democratically run, with members electing a
board of directors to oversee the bank's operations and make key decisions.

3. Social responsibility: Cooperative banks have a social responsibility to their members and
their communities. They aim to provide affordable and accessible financial services to people
who might otherwise be excluded from the financial system, and they often support local
businesses and industries.

4. Limited profit orientation: While cooperative banks aim to be financially sustainable, they
are not driven solely by profit. Instead, they aim to provide value to their members, while
ensuring the long-term stability of the bank.

5. Local focus: Cooperative banks often have a local focus, with a strong commitment to serving
their immediate community. This can help to promote economic development and create a
sense of community ownership and engagement.

6. Risk sharing: Cooperative banks often rely on the principle of risk sharing, where members
contribute to a common fund that is used to cover losses and ensure the stability of the bank.

Overall, these characteristics help to distinguish cooperative banks from other types of financial
institutions, and they reflect the cooperative ethos of working together for the benefit of all members.

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TYPES OF COOPERATIVE BANKS IN INDIA

The co-operative banking structure in India is divided into the following 5 categories:
1. Primary Co-operative Credit Society

● The Primary Co-operative Credit Society is an association of borrowers and non-borrowers

residing in a particular locality.
● The funds of the society are derived from the share capital and deposits of members and loans
from central co-operative banks.
● Borrowing constitutes the most important element of their working capital.
● The borrowing powers of the members as well as of the society are fixed but may differ from
state to state.
● The loans are given to members for the purchase of cattle, fodder, fertilizers and pesticides.

2. Central Co-operative Banks

● These are the federations of primary credit societies in a district and are of two types:
● Those having a membership of primary societies only.
● Those are having a membership of societies as well as individuals.
● The funds of the bank consist of share capital, deposits, loans and overdrafts from state co-
operative banks and joint stocks.
● These banks provide finance to member societies within the limits of the borrowing capacity
of societies.
● They also conduct all the business of a joint-stock bank
● 3. State Co-operative Banks
● The state co-operative bank is a federation of central co-operative bank and acts as a
watchdog of the co-operative banking structure in the state.
● It procures funds from share capital, deposits, loans and overdrafts from the Reserve Bank of
India.
● The state co-operative banks lend money to central co-operative banks and primary societies
and not directly to the farmers.

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4. Land Development Banks

● These are organized in 3 tiers, namely; state, central, and primary level with the objective to
meet the long-term credit requirements of the farmers for developmental purposes.
● National Bank for Agriculture and Rural Development (NABARD) supervises Land
development banks.
● The sources of funds for these banks are the debentures subscribed by both Central and State
government as these banks do not accept deposits from the general public.

5. Urban Co-operative Banks

● It refers to primary cooperative banks located in urban and semi-urban areas.
● Earlier the scope of these banks was restricted, which now has been considerably widened.
● They provide funds and services to small borrowers and small business.

ADVANTAGES & DISADVANTAGES OF COOPERATIVE

BANKS:

✔ Advantages

1. Easy to form
Registration and legal requirements are comparatively easy compared to traditional banks. It
takes a group of ten adults to form a cooperative bank. It needs a base capital of 25 lakhs
only as compared to 100 crores of Small Finance Banks.
2. Alternative credit source
One of the objectives of the cooperative system is to provide easy accessibility to the rural
section of the country so as to protect them from the clutches of greedy money lenders. These
money lenders exploit the needy by providing credit facilities at higher rates and by
manipulating their accounts. It acts as an effective alternative to this traditional money
lending system.

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3. Cheap credit
It provides cheap credit to rural masses. It provides a high-interest rate to members for their
investments and low lending interest rate. This also protects the rural masses from the
exorbitant interest rate at which money lender provides credit, thus breaking their monopoly.

4. Encouragement of savings and investments

It has encouraged the habit of thrift among the masses. Instead of hoarding money or
spending unnecessarily, masses tend to invest and save their money.

5. Advancement in farming
Cooperative societies provide credit to agriculturalists at cheaper rates to buy inputs,
warehousing facilities, marketing assistance and other facilities. These banks often provide
assistance for buying cheap products and services and help them by introducing them to
modern technology and better farming methods to improve their output.

6. Equitable distribution of surplus

The surplus generated by the cooperative societies is distributed in an equitable manner
among members. Therefore all the members of the cooperative society are benefited. Further
the society is also benefited because a sum not exceeding 10 per cent of the surplus can be
utilized for promoting the welfare of the locality in which the cooperative is located.

7. Role in agricultural progress

Co-operative societies have aided the government’s efforts to increase agricultural
production. They have improved the life of the people in rural areas. They serve as a link
between the government and agriculturists. High yielding seeds, fertilizers, etc. are
distributed by the government through the cooperatives.

8. Own sources of finance

A cooperative society has to transfer at-least one-fourth of its profits to general reserve.
Therefore it need not depend on outsider’s funds to meet its future financial requirements. It
can utilize the funds available in the general reserve.

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Disadvantages

1. Limited funds
Co-operative societies have limited membership and are promoted by the weaker sections.
The membership fees collected is low. Therefore the funds available with the co-operatives
are limited. The principle of one-man one-vote and limited dividends also reduce the
enthusiasm of members. They cannot expand their activities beyond a particular level
because of the limited financial resources.

2. Over reliance on government funds

Co-operative societies are not able to raise their own resources. Their sources of financing
are limited and they depend on government funds. The funding and the amount of funds that
would be released by the government are uncertain. Therefore co-operatives are not able to
plan their activities in the right manner.

3. Imposed by government
In the Western countries, co-operative societies were voluntarily started by the weaker
sections. The objective is to improve their economic status and protect themselves from
exploitation by businessmen. But in India, the co-operative movement was initiated and
established by the government. Wide participation of people is lacking. Therefore the benefit
of the co-operatives has still not reached many poorer sections.

4. Benefit to rural rich

Co-operatives have benefited the rural rich and not the rural poor. The rich people elect
themselves to the managing committee and manage the affairs of the co-operatives for their
own benefit. The agricultural produce of the small farmers is just sufficient to fulfil the needs
of their family. They do not have any surplus to market. The rich farmers with vast tracts of
land, produce in surplus quantities and the services of co-operatives such as processing,
grading, correct weighment and fair prices actually benefit them.

5. Inadequate rural credit

Co-operative societies give loans only for productive purposes and not for personal or family
expenses. Therefore the rural poor continue to depend on the money lenders for meeting
expenses of marriage, medical care, social commitments etc. Co-operatives have not been
successful in freeing the rural poor from the clutches of the money lenders.

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6. Lack of managerial skills
Co-operative societies are managed by the managing committee elected by its members. The
members of the managing committee may not have the required qualification, skill or
experience. Since it has limited financial resources, its ability to compensate its employees
is also limited. Therefore it cannot employ the best talent. Lack of managerial skills results
in inefficient management, poor functioning and difficulty in achieving objectives.

7. Inefficiencies leading to losses

Co-operative societies operate with limited financial resources. Therefore they cannot recruit
the best talent, acquire latest technology or adopt modern management practices. They
operate in the traditional model which may not be suitable in the modern business
environment and therefore suffer losses.

8. Lack of secrecy
Maintenance of business secrets is the key for the competitiveness of any business
organization. But business secrets cannot be maintained in cooperatives because all members
are aware of the activities of the enterprise.

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FUNCTIONS OF COOPERATIVE BANK

Cooperative banks perform various functions that are aimed at meeting the financial needs of their
members and promoting the economic development of their communities. Some of the primary
functions of cooperative banks include:

1. Mobilizing Savings: Cooperative banks encourage their members to save money and provide
various savings schemes to meet their members' diverse financial needs.
2. Providing Credit: Cooperative banks provide credit facilities to their members at lower
interest rates than commercial banks. They may also provide credit to small and medium-
sized businesses that are often overlooked by larger financial institutions.
3. Providing Remittance Services: Cooperative banks provide remittance services to help
their members transfer funds to other parts of the country or abroad.
4. Providing Payment Services: Cooperative banks provide payment services such as issuing
cheques, bank drafts, and money orders.
5. Providing Insurance Services: Cooperative banks offer various types of insurance services,
including life insurance, health insurance, and property insurance.
6. Promoting Economic Development: Cooperative banks promote economic development
by providing financial support to small and medium-sized businesses, promoting agricultural
development, and supporting community- based initiatives.
7. Offering Advisory Services: Cooperative banks offer advisory services to their members to
help them make informed financial decisions and manage their finances effectively.
8. Providing Social Welfare Services: Cooperative banks may provide social welfare services
such as education, healthcare, and housing to their members.

Overall, cooperative banks play a crucial role in promoting financial inclusion, community-based
development, and social welfare.

22
Methods of cooperative bank
The methods used by cooperative banks to achieve these goals may vary depending on the specific
bank and its objectives, but some common methods include:

1. Mobilization of Savings: Cooperative banks encourage their members to save money and
deposit it with them. This is a way of mobilizing savings and making them available for
lending to other members who need them. Cooperative banks may also offer various types
of savings accounts to meet the diverse needs of their members.
2. Lending: Cooperative banks provide loans to their members at reasonable interest rates.
These loans can be used for various purposes, such as starting a business, purchasing a home,
or meeting personal expenses. Cooperative banks may also provide loans to members for
agricultural purposes.
3. Financial Education: Cooperative banks may offer financial education programs to their
members to help them manage their finances better. These programs can include topics such
as budgeting, saving, and investing.
4. Support for Small Businesses: Many cooperative banks focus on providing financial
services to small businesses. They may offer loans, credit lines, and other financial products
to help small businesses grow and thrive.
5. Community Development: Cooperative banks often play an important role in the economic
development of their communities. They may provide financial support to local community
projects or invest in local businesses to help stimulate economic growth.
6. Governance: Cooperative banks are owned and controlled by their members. Members elect
a board of directors to manage the bank's operations and make strategic decisions. This
democratic governance structure ensures that the bank operates in the best interests of its
members.
7. Profit Sharing: Cooperative banks may distribute profits to their members in the form of
dividends or other forms of profit sharing. This can be a way for members to earn a return on
their investment in the bank.

23
1.4 Selection and Relevance of Topic, With Our Stream

My name is Srishti nilekar I'm doing specialization in Banking and Insurance. Bachelor of Banking
& Insurance (BBI) is a three-year undergraduate course divided into six semesters. It is structured in
such a way that it provides training in the field of finance, banking, accounting, insurance law, and
insurance regulations, among others.

BBI not only covers the subjects from the banking field but also covers various subjects of
commerce, and communication skills. It also helps train candidates on how to efficiently handle the
technologies used in the field of banking and insurance. The main aim of the BB! Course is to provide
students with a deep insight into the real world of banking and insurance through theory and practical
sessions. Bachelor of Banking & Insurance is a great career choice for those who wish to pursue a
career in the banking field.

It not only provides you with theoretical knowledge but also helps in its practical application and to
provide ample exposure to students with market reforms, new banking policies and regulations.
Students are trained with the help of different presentations, projects and assignments to understand
the dynamics of finance in a better way.

In this last Semi we have six subject and one of the subject is black book project. For my black book
project I wanted to choose topic related to finance that's why I choose this topic which financial
performance analysis of cooperative bank to Art's, Commerce and science"

24
 CHAPTER 2
LITERATURE REVIEW

25
2.1 INTRODUCTION AND TYPES OF LITERATURE REVIEW

Introduction of literature review

A literature review is a compilation, classification, and evaluation of what other researchers have
written on a particular topic. A literature review normally forms part of a research thesis but it can
also stand alone as a self-contained review of writings on a subject. In either case, its purpose is to:
Place each work in the context of its contribution to the subject under review.
Describe the relationship of each work to the others under consideration.
Identify new ways to interpret, and shed light on any gaps in, previous research.
Resolve conflicts amongst seemingly contradictory previous studies.
Identify areas of prior scholarship to prevent duplication of effort.
Point the way forward for further research.
Place an original piece of research in the context of existing literature.
A literature review is an overview of the previously published works on a topic. The term can refer
to a full scholarly paper or a section of a scholarly work such as a book, or an article. Either way, a
literature review is supposed to provide the researcher/author and the audiences with a general image
of the existing knowledge on the topic under question. A good literature review can ensure that a
proper research question has been asked and a proper theoretical framework and/or research
methodology have been chosen.
To be precise, a literature review serves to situate the current study within the body of the relevant
literature and to provide context for the reader. In such case, the review usually precedes the
methodology and results sections of the work.
Producing a literature review is often a part of graduate and post-graduate student work, including
in the preparation of a thesis, dissertation, or a journal article. Literature reviews are also common
in a research proposal or prospectus (the document that is approved before a student formally begins
a dissertation or thesis).
A literature review can be a type of review article. In this sense, a literature review is a scholarly
paper that presents the current knowledge including substantive findings as well as theoretical and
methodological contributions to a particular topic. Literature reviews are secondary sources and do
not report new or original experimental work.

Most often associated with academic-oriented literature, such reviews are found
In academic journals and are not to be confused with book reviews, which may also appear in the
same publication. Literature reviews are a basis for research in nearly every academic field.

26
Types of literature review
It is important to think of knowledge in a given field as consisting of three layers.
First, there are the primary studies that researchers conduct and publish.
Second, are the reviews of those studies that summarize and offer new interpretations built
from and often extending beyond the original studies? Third, there are the perceptions,
conclusions, opinions, and interpretations that are shared informally that become part of the lore
of the field.
In composing a literature review, it is important to note that it is often this third layer of knowledge
that is cited as "true" even though it often has only a loose relationship to the primary studies and
secondary literature reviews.
Given this, while literature reviews are designed to provide an overview and synthesis of pertinent
sources you have explored, there are several approaches to how they can be done, depending upon
the type of analysis underpinning your study. Listed below are definitions of types of literature
reviews:

❖ Argumentative Review
This form examines literature selectively in order to support or refute an argument, deeply embedded
assumption, or philosophical problem already established in the literature. The purpose is to develop
a body of literature that establishes a contrarian viewpoint. Given the value-laden nature of some
social science research [e.g., educational reform; immigration control], argumentative approaches to
analysing the literature can be a legitimate and important form of discourse. However, note that they
can also introduce problems of bias when they are used to make summary claims of the sort found
in systematic reviews.

❖ Integrative Review
Considered a form of research that reviews, critiques, and synthesizes representative literature on a
topic in an integrated way such that new frameworks and perspectives on the topic are generated.
The body of literature includes all studies that address related or identical hypotheses. A well-done
integrative review meets the same standards as primary research in regard to clarity, rigor, and
replication.

27
 ❖ Historical Review
Few things rest in isolation from historical precedent. Historical reviews are focused on examining
research throughout a period of time, often starting with the first time an issue, concept, theory, and
phenomenon emerged in the literature, then tracing its evolution within the scholarship of a
discipline. The purpose is to place research in a historical context to show familiarity with state-of-
the-art developments and to identify the likely directions for future research

❖ Methodological Review
A review does not always focus on what someone said [content], but how they said it [method of
analysis]. This approach provides a framework of understanding at different levels (i.e. those of
theory, substantive fields, research approaches, and data collection and analysis techniques), enables
researchers to draw on a wide variety of knowledge ranging from the conceptual level to practical
documents for use in fieldwork in the areas of ontological and epistemological consideration,
quantitative and qualitative integration, sampling, interviewing, data collection and data analysis,
and helps highlight many ethical issues which we should be aware of and consider as we go through
our study.

❖ Systematic Review
This form consists of an overview of existing evidence pertinent to a clearly formulated research
question, which uses pre-specified and standardized methods to identify and critically appraise
relevant research, and to collect, report, and analyse data from the studies that are included in the
review. Typically it focuses on a very specific empirical question, often posed in a cause-and-effect
form, such as "To what extent does A contribute to B?"

28
2.2 LITERATURE REVIEW OF PAST RESEARCH

1. NITHIN J (2019)
Title: A STUDY ON FUNCTIONS OF ANANDA COOPERATIVE BANK BANGLORE
Introduction:
Money related execution of an organization is generally identified with how well an organization
can utilize it resources, investor value and obligation, income and costs along these lines, not only
the introduction, but rather the nature of results accomplished alludes to the execution. Execution is
utilized to show company's prosperity, conditions, and consistence.
Budgetary consideration as the way toward guaranteeing access to money related administrations
and opportune and satisfactory credit where required by defenceless gatherings, for example, weaker
segments and low salary bunches at a reasonable cost. Co-agent banks assume a critical part to satisfy
this hole.

Co-agent banks perform business and different capacities identified with provincial advancement as
a rule and agrarian advancement specifically preparation of more stores change conceding advances,
quick recuperation of over duty, kept up of satisfactory and restricted assets keeping of sufficient
edge amongst acquiring and loaning rates in order to fabricate a solid hold find and making of
appropriate investigation and arrangement for awful and dicey stores are a portion of the changes
that were at that point reported and actualized by the co-agent banks the light of over this present
examination is completed to "Assess the money related execution of Ananda co-agent bank".
The word execution alludes to the achievement of a given assignment estimated against present
measures of precision, fulfilment, cost, and speed. At the end of the day, it alludes to how much an
accomplishment is being or has been expert.

Objectives of the study:

To study the financial performance of Ananda Cooperative Bank Ltd. Bangalore during 2013-17
To undertake comparative analysis of Ananda Cooperative bank Ltd. With Amanat Cooperative
Bank and Mahila Cooperative Bank Bangalore.

29
 Research Methodology:
The essential information is an information which are gathered by the examiner/specialist out of the
blue and along these lines happen to be unique in character. The essential information is new crude
information which is later changed over into data by the specialist/examiner to discover the correct data
from direct information. In the examination essential information is gathered by talk with strategy. The
optional information is an information which is now gathered by someone else, office, gathering and other
association and so on it is as of now gathered by other individuals, it is fundamentally second hand data
and which is now been gone through different factual process. It is the examination which has been
gathered from books, diaries, magazines, papers, sites, organization outline, and organization broachers
and from organization yearly report.
Conclusion:
A strong banking sector is important for flourishing economy the failure of banking sector will lead
to adverse impact on other sectors and economy as a whole over the year’s cooperative bank are
gaining importance with local branches selecting their own board of director and managing their own
banking operations. There is an increase in Ananda co-operative banks trend values of all assets and
liabilities. The as to improve on their deposits and shall reduce the borrowings so that there is an
improvement in profitability of the bank.
2. AYANA P.J (2021)
Title: A STUDY ON FUNCTIONS OF NATTIKA SERVICE CO-OPERATIVE
BANK
Introduction:
The term “financial performance analysis also known as analysis and interpretation of financial
statements”, refers to the process of determining financial strength and weakness of the firm by
establishing strategic relationship between the items of the balance sheet ,profit and loss account and other
operative data. Financial performance analysis is a process of evaluating the relationship between
component parts of a financial statement to obtain a better understanding of a firm’s position and
performance .The purpose of financial analysis to diagnose the information contained in financial
statements so as to judge the profitability and financial soundness of the firm. A financial analyst analyses
the statements with various tools of analysis before commenting upon the financial health or weaknesses
of an enterprise. The analysis an interpretation of financial statements is essential to bring out the mystery
behind the figures in financial statements.

30
 Objectives of the study:
To measure the performance of a bank.
To determine the profitability of the bank.
To study the long term and short term solvency of the bank

Research Methodology:
The study is based on secondary data. For this purpose secondary were collected from the Nattika
Service Co-operative Bank by a discussion with secretary, staff and other workers. Data were collected
from profit and loss account and balance sheet for the period of 5 years.

Conclusion:
The study deals with the financial performance of Nattika Service Cooperative bank. From this study
we are able to conclude that financial performance of the bank is not satisfactory in terms of liquidity,
proprietors fund and interest coverage. The ratio analysis reveals that the current ratio of the bank is
not favorable. Because of the cash balance is lying idle not efficiently used? The overall performance
of the bank is good.

3. AARATHI K. U, AARYA T. M, SHABU K. R (2022)

Title: TO STUDY THE FUNCTIONS OF BHARAT CO-OPERATIVE BANK

Introduction:
Cooperative bank is considered as a financial entity which fits to its members who are the owner’s
customers of the bank. The main aims of these banks are to serve its members and they have
completed 100 years of existence over India. Cooperative banks started in India in the year 1904,
called the cooperative credit society act. This act led to the formation of both urban area and rural
area. This action was introduced by Sir
Frederick Nicholson (1899) and Sir Edward Law (1901).Later 1912, non-credit civilizations and
central cooperative organization were formed. In self- governing India with the single set of plans, the
cooperative organizations extend more added leverage and part with the continuous government
provision.

31
 Objectives of the study:
To study the profitability of Bharat cooperative bank.
To study the liquidity of Bharat cooperative bank.
To study the solvency position of Bharat cooperative bank.
To study the efficiency of Bharat cooperative bank.

Research Methodology:
The research primarily depends on the secondary data – the data’s are being assorted from the banks
official website. The sources of data collection are annual reports, financial statement, cash flow
statement etc.
The statistical and accounting tools which are used for financial analysis are CAMEL model.
All the methods proposed in this research are to evaluate the financial performance of Bharat
Cooperative Bank, Mumbai.

Conclusion:
The study makes an effort to inspect and evaluate the financial performance of Bharat Cooperative
Bank, Mumbai. The scrutiny is done based on CAMEL Model for a period from 2014-18. From the
analysis we can conclude that the overall state of Capital Adequacy was satisfactory but the Asset
quality ratio was not so satisfiable.

4. BHOOMI BHAKTA (2020)

Title: TO STUDY THE FUNCTIONS OF SURAT DISTRICT COOPERATIVE BANK

Introduction:
An efficient banking system is recognized as basic requirement for the economic development of
any economy. Banks mobilize the savings of community into productive channels. The banking
system of India is featured by a large network of bank branches, serving many kinds of financial
needs of the people.

32
AFS refers to the process of critical examination of the financial information contained in the
financial statement in order to understand and make decision regarding the operation of the bank.
The AFS is basically a study of the relationship among various financial facts and figures as given
in a set of financial statements.

The basic financial statements i.e. The BS and IS. It is very important to analyse the financial
statement to know the different factors in order to see behind the change in the figures of financial
statement. Analysis of financial statement contains comparison between different figures of different
periods, comparison.
Comparative analysis is to measure the financial relationships between variables over two or more
reporting periods.

A common size income statement is an income statement in which each account is expressed as a
percentage of the value of sales. It is used for vertical analysis, in which each line item in a financial
statement is listed as a percentage of a base figure within the statement, to make comparisons easier.
Trend analysis refers to the study of movement of figures over a period.

Objectives of the study:

To analyse the financial statement of bank.
To find out the financial stability and soundness of the bank.
To analyse financial performance of bank by using various method like, comparative financial
statement, common size financial statement, trend percentage financial statement.

33
 Research Methodology:
Research Design used in this study was descriptive design, secondary data used for the study. Three
years from 1st April 2017 to 31st March 2019 the data is used in which the data is collected form bank.
A balance sheet or statement of financial position reports on company’s assets, liabilities, and owners’
equity at a given point in time. Surat district cooperative bank were taken. Three types of data analysis
method were used Comparative financial statement, Common size financial statement, Trend percentage
analysis.

Conclusion:
The present study on financial analysis through the comparative analysis, common size analysis and
trend analysis in Surat district cooperative bank for the period of three year (2017 to 2019). The bank
has performed well on the sources of growth rate and financial efficiency during the study period.
Results showed that the profitability of the bank was strongly and negatively influenced by the
deposits and advances. It concludes that the financial position of the bank i.e. profitability, solvency
and liquidity position was so impressively growing. Its financial position was also good. Thus, the
overall performance of the bank was remarkably good which indicate a future growth of financial
position as well as its profitability. The financial information of this study will also help the
management in setting up plans and financial strategies. From an academic point of view, this
research provides a new perspective in evaluating the financial performance of leading banks as well
as the finding of this study can be added to the present literature and it can help researchers in their
future studies.

34
5. K. Keerthi and S. Eswari(2020)
Title: TO STUDY THE FUNCTIONS OF KUMBAKONAM CENTRAL CO- OPERATIVE
BANK

Introduction:
Ratio analysis is the process of determining and interpreting the various aspects of financial
statements. Financial statements are generally insufficient to provide information to investors on
their own, the numbers contained in those documents need to be put into context so that investors
can better understand different aspects of the company’s operations.

Ratio analysis is one of the methods an investor can use to gain that understanding. Ratio analysis is
a foundation for evaluating and pricing credit risk and for doing fundamental company valuation.
Ratio analysis helps to evaluate the performance of the firm in terms of profitability, efficiency and
risk.

Financial ratios allow big and small companies to evaluate and improve their financial position
A financial ratio, or accounting ratio, is derived from a company’s financial statements and is a
calculation showing the relative magnitude of selected numerical values taken from those financial
statements.

Financial ratios may be used internally by managers within a firm, by current and potential
shareholders and creditors of a firm, and other audiences interested in understanding the strengths
and weaknesses of a company, especially compared to the company over time or compared to other
companies.

35
Objectives of the study:
To study the financial performance of the Kumbakonam central Co-operative bank using ratio
analysis.
To identify the profitability and liquidity position of the bank.
To analyse the financial strengths and weaknesses of the firm.

Research Methodology:
Secondary Data: It refers to the data collected by someone other than the user i.e. the data is already
available and analysed by someone else. Common sources of secondary data includes books,
magazines, newspapers, journals etc. In this study, secondary data collection was used.

Conclusion:
The study was conducted in Kumbakonam Central Cooperative Bank Ltd, to find out the financial
performance of the bank using ratio analysis. After analysing the bank’s five years financial reports
it is concluded that the overall financial performance of the bank is good. Based on the findings it is
clear that the bank’s investment on government securities increases and the bank has to take some
necessary actions to improve its cash position and profitability.

However, the bank utilizing and managing its money in a proper way. This paper was very useful to
analyse the financial performance of the bank using its financial statements. The results indicates
that the financial performance has been improving every year but the bank has to put some more
effort to make it more effective.

36
6. G.Prakash
Title:- TO STUDY THE FUNCTIONS OF SHEVAPET URBAN CO-OPERATIVE BANK

Introduction:
The financial statements are the results of the accounting process which begins with regarding of
transactions. The ac- counting process involves recording, classifying and summarizing business
transactions in a systematic way.

The term ‘Financial Analysis’ is also known as analysis and in- perpetration of financial statements.
It refers to the process of determining the financial strengths and weakness of a firm by establishing
strategic relationship between the items of the balance sheet, profit &loss account and other operative
data.

Objectives of the study;-

• To study about the overall performance of the Shevapet Urban co-operative Bank Ltd • To find out
the profitability, liquidity position of Shevapet Urban Co-operative Bank
Ltd
• To analyses the Net Profit earned during the study period.
• To suggest measures for the improvement of the Shevapet Urban co-operative Bank
Ltd

Research Methodology:-
This study is based on secondary data collected from the Annual Reports, Published Articles, and
Bye – law of co-operative Bank etc. For easy analysis, the table of flow Charts was drawn whether
needed.

37
Conclusion:-
The study was undertaken to analyse the financial performance of urban co-operative bank ltd.
selected profitability and liquidity ratio’s. Over all the analysis if the share capital is decreasing year
by year. So, proper steps to be taken in concerned quarters. Though the co-operative bank for service
motive, they must earn some profit.

Keeping in view of the challenges being by the co-operative in India, they are various initiations to
strengthen their co-operative edge in the market. These initiatives include total quality control
initiatives, management initiatives and cost reduction initiatives.

It is now increasingly recognized that the operative system in India has the capacity and potentiality
to neutralize the adverse emerging from the process of globalization and liberalization. The co-
operative are aiming at capitalization on the sympathy of the general masses towards the co-operative
sector and are determined to move into the high pedestal of efficiency, productivity, competitiveness
and transparency in new millennium.

38
7. Bharati R. Hiremath (2020)
Title: - TO STUDY THE FUNCTIONS OF CO-OPERATIVE BANKS IN BIJAPUR DISTRICT

Introduction:
A co-operative bank is a financial entity which belongs to its members, who are at the same time the
owners and the customers of their bank. Co-operative banks are often created by persons belonging
to the same local or professional community or sharing a common interest. Co-operative banks
generally provide their members with a wide range of banking and financial services (loans, deposits,
banking accounts etc.).

Co- operative banks differ from stockholder banks by their organization, their goals, their values
and their governance. In most countries, they are supervised and controlled by banking authorities
and have to respect prudential banking regulations, which put them at a level playing field with
stockholder banks. Depending on countries, this control and supervision can be implemented directly
by state entities or delegated to a co- operative federation or central body.

Objectives of the study:-

1. To examine the financial efficiency of co-operative banks in Bijapur district.
2. To suggest to improve efficiency of Co-operative Banks of Bijapur district.

Research Methodology:-
The study is based on secondary data. The secondary data consists of the annual reports of co-
operative banks in Bijapur district. Various other reports like cooperative journals, co-operative diary
and from the web sites available on net.

39
Conclusion:-
On the basis of findings emanated from the present micro level research study on CBs in North
Karnataka, Bijapur district it is found that the CBs are facing problems of high cost of business
operations, low capital base, inadequate loan appraisal and credit planning, poor recovery
performance, dual control, mounting overdue, high level of nonperforming assets, political
influence, lack of professional skills and relatively low level of customer satisfaction, etc.

But some of the new challenges are external; for example, the phenomenal growth in volume of
financial institution. These are big hurdle in the development of the CBs. Therefore a modest attempt
has been made in this section to suggest a good number of feasible ways and means in order to
improve the financial strength as well as the overall efficiency in both administration and operational
management and to overcome the existing deficiency and irregularities of the selected CBs in Bijapur
district

40
2.4 RESEARCH GAP

● A research gap is a question or a problem that has not been answered by any of the existing
studies or research within your field.

● Sometimes, a research gap exists when there is a concept or new idea that hasn't been studied
at all.

● Previous research includes information or study of particular area or schemes and not
mentioned overall insurance sector.

● Insurance components are not mentioned in above research also not mentioned about
historical background of other countries.

● Above research paper also not mentioned category of below 18.

● They also not mentioned about number of people who surrendered their policies and received
benefits from insurance policies.

41
 CHAPTER – 3
RESEARCH METHODOLOGY

42
 ❖ Research methodology

Research methodology simply refers to the practical aspect of any given piece of research. More
specifically, it’s about how a researcher systematically designs a study to ensure valid and reliable
results that address the research aims and objectives.
For example how did the researcher go about deciding?
1. What data to collect (and what data to ignore)
2. Who to collect it from (in research, this is called sampling design ;)
3. How to collect it (this is called data collection methods)
4. How to analyses it (this is called data analysis methods)
In a dissertation, thesis, academic journal article (or pretty much any formal piece of research), you’ll
find a research methodology chapter (or section) which covers the aspects mentioned above.
Importantly, a good methodology chapter in a dissertation or thesis explains not just what
methodological choices were made, but also explains why they were made.
In other words, the methodology chapter should justify the design choices, by showing that the
chosen methods and techniques are the best fit for the research aims and objectives and will provide
valid and reliable results. A good research methodology provides scientifically sound findings,
whereas a poor methodology doesn’t.

❖ Research Design

1. Descriptive Research
The research was an exploratory followed by descriptive one because the entire project was based
on questionnaire and analysis which is of exploratory nature followed by the detailed description and
analysis so the project is of descriptive design also. After the descriptive analysis the Regression
Coefficients were worked out by using SPSS to see the causative relationship between the various
factors influencing credit card usage. Significant factors were identified and suggestions given for
increasing the Plastic Card usage. The nature of the study was statistical pertaining actual field
conditions .The reason for choosing this type of data is, qualitative research provides insights and
understanding of problem setting while quantitative research seeks to quantify the data and typically
applies some form of statistical analysis.

43
3.1 OBJECTIVE OF THE STUDY:

• To study the working and growth of Co-operative Banks in India

• To evaluate financial performance of Co-operative Banks in India

• To assess the Capital Adequacy, Reserves, Borrowings, Liabilities and levels of

Non- performing Assets of Urban as well as Rural Co-operative Banks in India • To evaluate
the efficiency and effectiveness of Co-operative Banks in India in mobilizing the deposits,
lending advances, investments and recovery performance of Cooperative banks

• To assess the Operating Profit/Net Profit of the selected Co-operative Banks in India

• To suggest policy measures for improving the working of Co-operative Banks.

44
3.2 HYPOTHESIS

MEANING
The first step in your scientific endeavour, a hypothesis, is a strong, concise statement that forms the
basis of your research. It is not the same as a thesis statement, which is a brief summary of your
research paper.

The sole purpose of a hypothesis is to predict your paper’s findings, data, and conclusion. It comes
from a place of curiosity and intuition. When you write a hypothesis, you’re essentially making an
educated guess based on scientific prejudices and evidence, which is further proven or disproven
through the scientific method.

The reason for undertaking research is to observe a specific phenomenon. A hypothesis, therefore,
lays out what they said phenomenon is. And it does so through two variables, an independent and
dependent variable.

The independent variable is the cause behind the observation, while the dependent variable is the
effect of the cause.

A good example of this is “mixing red and blue forms purple.” In this hypothesis, mixing red and
blue is the independent variable as you’re combining the two colours at your own will.

The formation of purple is the dependent variable as, in this case, it is conditional to the independent
variable.

45
TYPES OF HYPOTHESIS

1. Null hypothesis
A null hypothesis proposes no relationship between two variables. Denoted by H 0 , it is a negative
statement like “Attending physiotherapy sessions does not affect athletes ‘on-field performance.”
Here, the author claims physiotherapy sessions have no effect on on-field performances. Even if
there is, it’s only a coincidence.

2. Alternative hypothesis
Considered to be the opposite of a null hypothesis, an alternative hypothesis is donated as
H1 or Ha. It explicitly states that the dependent variable affects the independent variable. A good
alternative hypothesis example is “Attending physiotherapy sessions improves athletes ‘on-field
performance.” Or “Water evaporates at 100°C.”
The alternative hypothesis further branches into directional and non-directional.

● Directional hypothesis: A hypothesis that states the result would be either positive or
negative is called directional hypothesis. It accompanies H1 with either the < or > sign.

● Non-directional hypothesis: A non-directional hypothesis only claims an effect on the

dependent variable. It does not clarify whether the result would be positive or negative. The
sign for a non-directional hypothesis is ‘≠’

3. Simple hypothesis
A simple hypothesis is a statement made to reflect the relation between exactly two variables. One
independent and one dependent. Consider the example, “Smoking is a prominent cause of lung
cancer, the dependent variable, lung cancer, is dependent on the independent variable, smoking.

46
4. Complex hypothesis
In contrast to a simple hypothesis, a complex hypothesis implies the relationship between multiple
independent and dependent variables. For instance, “Individuals who eat more fruits tend to have
higher immunity, lesser cholesterol, and high metabolism.” The independent variable is eating more
fruits, while the dependent variables are higher immunity, lesser cholesterol, and high metabolism.

5. Associative and casual hypothesis

Associative and casual hypotheses don’t exhibit how many variables there will be. They define the
relationship between the variables. In an associative hypothesis, changing any one variable,
dependent or independent, affects others. In a casual hypothesis, the independent variable directly
affects the dependent.

6. Empirical hypothesis
Also referred to as the working hypothesis, an empirical hypothesis claims a theory’s validation via
experiments and observation. This way, the statement appears justifiable and different from a wild
guess.
Say, the hypothesis is “Women who take iron tablets face a lesser risk of anemia than those who
take vitamin B12.” This is an example of an empirical hypothesis where the researcher the statement
after assessing a group of women who take iron tablets and charting the findings.

7. Statistical hypothesis
The point of a statistical hypothesis is to test an already existing hypothesis by studying a population
sample. Hypothesis like “44% of the Indian population belong in the age group of 22-27.” Leverage
evidence to prove or disprove a particular statement.

47
 SOURCES OF HYPOTHESIS
1. Previous Study
Previous study is also a source of developing a concrete hypothesis. If a researcher uses previous
knowledge about a phenomenon for a particular place, then another researcher followed his
techniques and formulates his own. For example increase in fertilizers and irrigation leads to higher
production in agriculture in District Mardan. Now another researcher studies his work and applies it
to another District Nowhere.

2. Personal Experience
On the basis of his personal experience he uses his mind and suggests some points for the eradication
of a social problem through developing a good hypothesis. Greater the researcher experience lead to
higher degree of formation.

3. Imagination & Thinking

Creative thinking and imagination of a researcher sometimes help in formulating a good hypothesis.
Personal ideas and the thinking capabilities of a researcher would lead to greater number of
hypothesis formulation as well as control over the problem.
4. Observation
In consideration and undertaking a research problem, observation is necessary. The collection of
previous facts and current facts related to the problem lead to the formulation of a good hypothesis.
5. Scientific Theory
Theory is capable in explaining all the facts relating to the problem. Scientific theory is a fertile
source of hypothesis formulation. The theory which is used by a researcher may satisfy the needs of
making it, because theory explains the known facts.

6. Culture
Culture is the accumulation of ways of behaving and adoption in a particular place and time. While
formulating a hypothesis for a problem, culture should be studied. If we want to study trends towards
female education in a particular area, for this purpose we will study, traditions, family system, Norms,
Values, region and education system of that area.

48
❖ Here are some of the current scenarios and challenges of cooperative
banks:
1. Competition from Commercial Banks: One of the significant challenges faced by
cooperative banks is competition from commercial banks. Commercial banks have a broader
customer base, more significant financial resources, and a more extensive network. They can
offer better interest rates and financial products, which is a challenge for cooperative banks
to compete with.

2. Limited Financial Resources: Cooperative banks have limited financial resources as they
primarily depend on their members' deposits. Unlike commercial banks, they cannot raise
capital from the market or issue shares to the public. This limited financial resource can
restrict the bank's lending capacity and hamper their growth.

3. Weak Governance and Management: Some cooperative banks suffer from weak
governance and management, which can lead to poor decision-making, lack of transparency,
and mismanagement of funds. This can result in non- performing assets, loan defaults, and
financial instability.

4. Compliance and Regulatory Issues: Cooperative banks have to comply with various
regulatory requirements set by the central bank and other government authorities.
Compliance with these regulations can be challenging for small and medium-sized
cooperative banks, which may not have adequate resources and expertise.

5. Digitalization: The shift towards digitalization in the banking sector is a significant

challenge for cooperative banks. They may lack the resources and expertise to invest in
digital technology and provide online banking services, which can put them at a disadvantage
compared to larger banks.

6. Political Interference: In some countries, cooperative banks face political interference,

which can lead to mismanagement and financial instability. Political interference can also
affect the bank's decision-making process, jeopardizing the interests of its members.

49
 ❖ To study the benefits available in cooperative bank

1. Higher interest rates on savings and deposits:

Cooperative banks may offer higher interest rates on savings and deposits
Compared to traditional banks

2. Lower interest rates on loans:

Cooperative banks may offer lower interest rates on loans, such as personal loans, car loans,
and home loans.

3. Profit-sharing:
Cooperative banks distribute a portion of their profits among their members/customers in the
form of dividends or interest.

4. No or low fees:
Cooperative banks may charge little to no fees for their services, such as ATM usage,
account maintenance, and online banking.

5. Community involvement:
Cooperative banks are often deeply involved in the local community and may offer services
and support to local businesses and organizations. +

6. Democratic ownership:
Members of a cooperative bank have a say in how the bank is run and are able to vote on
important decisions, such as the election of the board of directors.

7. Financial education:
Cooperative banks may offer financial education programs and resources to help their
members/customers manage their money effectively

50
3.3 SCOPE OF THE STUDY:

● History and evolution of cooperative banks: A study on cooperative banks may begin with
an overview of the history and evolution of these institutions, tracing their origins and
development in different parts of the world.

● Legal and regulatory framework: A study on cooperative banks may also examine the legal
and regulatory framework that governs these institutions, including the various laws and
regulations that apply to their establishment, management, and operations.

● Organizational structure and governance: Another key area of focus may be the
organizational structure and governance of cooperative banks, including their membership,
board of directors, management, and decision-making processes.

● Financial performance and sustainability: A study on cooperative banks may also evaluate
the financial performance and sustainability of these institutions, looking at their profitability,
asset quality, capitalization, and ability to withstand economic shocks.

● Role in promoting financial inclusion: A key objective of many cooperative banks is to

promote financial inclusion by providing banking services to underserved and marginalized
communities. Therefore, a study may also explore the role of cooperative banks in promoting
financial inclusion and social development.

51
3.4 LIMITATION OF THE STUDY:

● Limited availability of data: Cooperative banks may not be required to disclose as much
financial information as other types of banks, making it difficult to conduct a comprehensive
analysis.
● Geographic and institutional diversity: Cooperative banks operate in different regions with
different legal frameworks and regulatory environments, which may limit the generalizability
of findings from one study to another.
● Small sample size: Cooperative banks may be relatively small in size, limiting the ability to
draw statistically significant conclusions.
● Non-standardized accounting practices: Cooperative banks may use accounting practices that
differ from those used by other types of banks, making it difficult to compare their financial
performance.
● Limited research: Compared to commercial banks, there is limited research available on
cooperative banks, making it challenging to draw definitive conclusions.
● Limited resources: Cooperative banks may have limited resources to invest in research and
data collection, making it difficult to conduct a thorough analysis.
● Bias: Researchers may have preconceived notions about cooperative banks that could bias
their research findings.

3.5 Data Collection

Data collection is a process of gathering information from all the relevant sources to find a solution
to the research problem. It helps to evaluate the outcome of the problem. The data collection methods
allow a person to conclude an answer to the relevant question. Most of the organizations use data
collection methods to make assumptions about future probabilities and trends. Once the data is
collected, it is necessary to undergo the data organization process.
Data can be classified into two types, namely primary data and secondary data.
1. Primary Data Collection methods
2. Secondary Data Collection methods

52
 ✔ Primary Data Collection Method

Data which has not been previously published i.e. the data is derived from a new or original research
study &amp; collected directly from first hand sources by means of surveys observation or
experimentation is known as Primary Data.
Primary data or raw data is a type of information that is obtained directly from the first- hand source
through experiments, surveys or observations. The primary data collection method is further
classified into two types. They are Quantitative Data Collection Methods, Qualitative Data
Collection Methods.
Let us discuss the different methods performed to collect the data under these two data collection
methods.

a) Quantitative Data Collection Methods.

It is based on mathematical calculations using various formats like close-ended questions, correlation
and regression methods, mean, median or mode measures. This method is cheaper than qualitative
data collection methods and it can be applied in a short duration of time.

b) Qualitative Data Collection Methods.

It does not involve any mathematical calculations. This method is closely associated with elements
that are not quantifiable. This qualitative data collection method includes interviews, questionnaires,
observations, case studies, etc. There are several methods to collect this type of data. They are-
1. Observation Method
2. Interview Method
3. Questionnaire Method

✔ Secondary Data Collection Method

Data, which has already been collected, by someone or an organization for some other purpose or
research study is known as Secondary Data. Secondary data is data collected by someone other than the
actual user. It means that the information is already available, and someone analyses it. The secondary
data includes magazines, newspapers, books, journals, etc. It may Published data or unpublished data.

53
Published data are available in various resources including:
1. Government publications
2. Public records
3. Historical and statistical documents be either published data or unpublished data.
4. Business documents
5. Technical and trade

Unpublished data includes:

1. Diaries
2. Letters 3. Unpublished biographies, etc.

54
 CHAPTER – 4
DATA ANALYSIS AND
INTERPRETATION

55
4.1. COMPANY INTRODUCTION

In this research I take Thane Janta Sahakari Bank (TJSB bank) to know more about cooperative bank
sector.

TJSB BANK

Full Name: Thane janta sahakari bank (TJSB)

Type: Public
Founded: 1972
Headquarters: Mumbai, Maharashtra, India
Owner: Shri. Sharad Narhar Gangal
Industry: cooperative bank

TJSB Sahakari Bank Ltd. (TJSB Bank) is a cooperative bank based in Thane, Maharashtra, India.
The bank was founded in 1972, and it currently operates over 140 branches across Maharashtra,
Gujarat, Karnataka, and Goa.
TJSB Bank offers a range of banking products and services to its customers, including savings
accounts, current accounts, fixed deposits, recurring deposits, loans, credit cards, and online banking
services. The bank also provides specialized services such as insurance, mutual funds, and demat
services.

56
TJSB Bank is regulated by the Reserve Bank of India (RBI) and is a member of the
Deposit Insurance and Credit Guarantee Corporation (DICGC), which provides
Insurance coverage to depositors in the event of the bank's failure. The bank has received various
awards and recognitions for its performance and customer service, including the 'Best Urban Co-
operative Bank' award by the Brihanmumbai Nagari Sahakari Banks Association in 2018 and the
'Best Co-operative Bank' award by the Maharashtra Urban Co-operative Banks Federation in 2019.
Overall, TJSB Bank is a reputable and reliable banking institution in India, offering a range of
products and services to its customers with a focus on customer service and satisfaction.

History

TJSB Sahakari Bank Ltd. (TJSB Bank) was founded in 1972 as a cooperative bank in the city of
Thane, Maharashtra, India. The bank was established with the objective of promoting thrift,
providing credit facilities, and fostering financial inclusion among its members and customers.

In its early years, TJSB Bank operated as a small cooperative bank with a few branches in the Thane
district. However, over the years, the bank grew steadily, expanding its operations and customer
base. By the early 2000s, the bank had over 50 branches across Maharashtra.

In 2007, TJSB Bank became a scheduled bank, which meant that it was included in the Second
Schedule of the Reserve Bank of India (RBI) Act, 1934. This gave the bank greater recognition and
credibility in the banking sector.

In the years that followed, TJSB Bank continued to expand its operations, opening branches in other
states such as Gujarat, Karnataka, and Goa. The bank also introduced new products and services to
cater to the changing needs of its customers, including online banking services and specialized
financial products such as insurance and mutual funds.

Today, TJSB Bank is one of the leading cooperative banks in India, with over 140 branches across
four states and a large customer base. The bank has received various awards and recognitions for its
performance and customer service, and it remains committed to its founding principles of promoting
thrift and financial inclusion among its members and customers.

57
Mission

● Providing customer-centric services: TJSB Bank is committed to providing customer-centric

services that are tailored to the needs of its customers. The bank believes in understanding
its customers' financial goals and providing them with appropriate financial solutions that
help them achieve their objectives.

● Ensuring financial inclusion: TJSB Bank aims to promote financial inclusion by providing
access to banking services to all segments of society, including the underserved and
underprivileged. The bank is committed to reaching out to remote and rural areas to provide
banking services to those who have limited access to financial services.

● Embracing technology: TJSB Bank recognizes the importance of technology in delivering

efficient and effective banking services. The bank invests in the latest technologies to provide
its customers with convenient and secure banking solutions.

● Maintaining high ethical standards: TJSB Bank is committed to maintaining high ethical
standards in all its business dealings. The bank believes in transparency and fairness in its
operations and strives to build trust and credibility with its customers.

Vision

The vision of TJSB Sahakari Bank Ltd. (TJSB Bank) is to be a leading cooperative bank in India,
recognized for its customer-centric approach, innovative solutions, and commitment to social
responsibility.

58
Objectives of TJSB bank:

● To provide a wide range of banking products and services: TJSB Bank aims to provide its
customers with a wide range of banking products and services that meet their diverse
financial needs. This includes savings accounts, current accounts, loans, credit cards, and
online banking services.

● To promote financial inclusion: TJSB Bank is committed to promoting financial inclusion by

providing banking services to all segments of society, including
The underserved and underprivileged. The bank aims to reach out to remote and rural areas
to provide banking services to those who have limited access to financial services.

● To maintain a high level of customer service: TJSB Bank believes in providing its customers
with a high level of customer service. The bank aims to understand its customers' financial
goals and provide them with appropriate financial solutions that help them achieve their
objectives.

● To embrace technology: TJSB Bank recognizes the importance of technology in delivering

efficient and effective banking services. The bank aims to invest in the latest technologies to
provide its customers with convenient and secure banking solutions.

● To maintain high ethical standards: TJSB Bank is committed to maintaining high ethical
standards in all its business dealings. The bank believes in transparency and fairness in its
operations and strives to build trust and credibility with its customers.

59
4.2 DATA PROCESS OF DATA ANALYSIS

Analysis refers to dividing a whole into its separate components for individual examination. Data
analysis, is a process for obtaining raw data, and subsequently converting it into information useful
for decision-making by users. Data, is collected and analysed to answer questions, test hypotheses,
or disprove theories.

The process of data analysis consists of:

1. Data Requirement Gathering: Ask yourself why you’re doing this analysis, what type
of data you want to use, and what data you plan to analyse.

2. Data Collection: Guided by your identified requirements, it’s time to collect the data
from your sources. Sources include case studies, surveys, interviews, questionnaires,
direct observation, and focus groups. Make sure to organize the collected data for
analysis.

3. Data Cleaning: Not all of the data you collect will be useful, so it’s time to clean it up.
This process is where you remove white spaces, duplicate records, and basic errors. Data
cleaning is mandatory before sending the information on for analysis.

b
4. Data Analysis: Here is where you use data analysis software and other tools to help you
interpret and understand the data and arrive at conclusions. Data analysis tools include
Excel, Python, R, Looker, Rapid Miner, Chartio, Metabases, Redash, and Microsoft
Power BI.
c
5. Data Interpretation: Now that you have your results, you need to interpret them and
come up with the best courses of action based on your findings.
d
6. Data Visualization: Data visualization is a fancy way of saying, “graphically show your
information in a way that people can read and understand it.” You can use charts, graphs,
maps, bullet points, or a host of other methods. Visualization helps you derive valuable
insights by helping you compare datasets and observe relationships.

60
 4.3 WHAT IS DATA ANALYSIS?

Data analysis is a process of inspecting, cleansing, transforming, and modelling data with the goal
of discovering useful information, informing conclusions, and supporting decision-making. Data
analysis has multiple facets and approaches, encompassing diverse techniques under a variety of
names, and is used in different business, science, and social science domains.

In today's business world, data analysis plays a role in making decisions more scientific and helping
businesses operate more effectively.

Data mining is a particular data analysis technique that focuses on statistical modelling and
knowledge discovery for predictive rather than purely descriptive purposes, while business
intelligence covers data analysis that relies heavily on aggregation, focusing mainly on business
information.

In statistical applications, data analysis can be divided into descriptive statistics, exploratory data
analysis (EDA), and confirmatory data analysis (CDA). EDA focuses on discovering new features
in the data while CDA focuses on confirming or falsifying existing hypotheses.

Predictive analytics focuses on the application of statistical models for predictive forecasting or
classification, while text analytics applies statistical, linguistic, and structural techniques to extract
and classify information from textual sources, a species of unstructured data.

All of the above are varieties of data analysis. Data integration is a precursor to data analysis, and
data analysis is closely linked to data visualization and data dissemination.

61
 4.4 DATA INTERPRETATION

What is data interpretation?

Data interpretation is the process of reviewing data and drawing meaningful conclusions using a
variety of analytical approaches. Data interpretation aids researchers in categorizing, manipulating,
and summarizing data in order to make sound business decisions. The end goal for a data
interpretation project is to develop a good marketing strategy or to expand its client user base. Take
up a free online data interpretation course and learn more to enhance your career.

There are certain steps followed to conduct data interpretation:

● Putting together the data you’ll need (neglecting irrelevant data) ● Developing the initial
research or identifying the most important inputs; ● Sorting and filtering of data.
● Forming conclusions on the data. ● Developing recommendations or practical solutions.

People should really be aware of the various problems in this procedure in order to interpret data
correctly. When two things happen at the same time, it does not mean that one of them caused the
other.

Finally, data interpretation aids in the improvement of processes and the identification of issues.
Without at least some data gathering and analysis, it is difficult to expand and make consistent
changes.

62
 ❖ INTERPRETATION AND PRESENTATION

The primary data was collected by conducting a survey by circulating an E-for

m/ questionnaire among a number of people. In which 105 individuals have responded.

Q 1. Do you have an account in any cooperative bank?

● Yes
● No

INTERPRETATION:
As per the above table among 54 Respondents, 37 do have an account in a cooperative
-
Bank while 17 don’t. i.e., 68.5% of the respondents are having an account in cooperative
Banks and 31.5% are not having.

31.5

68.5

Yes / No

63
Q.2 What is the minimum balance requirement of your bank?
● 500
● 1000 ● 5000
● More than 5000

INTERPRETATION:
Minimum balance requirement amount is the amount which an account holder is
Supposed to maintain in order to sustain that account, if you don’t maintain it banks may charge
penalties. For urban branches the requirement is usually higher than the
500 rural branches. Minimum balance requirement amount differs from bank to bank and 1000

branch to branch. As per the respondents most of the cooperatives bank’s minimum 5000 balance
requirement is Rs 1000 as 50% of the responses are that. As per 5 respondents Morethan5000
Rs 5000 is their minimum balance which shows there are mostly less than 5000 minimum required
balance.

9.3

24.1
16.7

50

64
 Q.3 Are you satisfied with the returns you get in your cooperative bank?
● Very much
● Fair enough
● Not satisfied at all

INTERPRETATION:
Return on investment (ROI) is a performance measure used to evaluate the efficiency
Or profitability of an investment or compare the efficiency of a number of different investments
ROI tries to directly measure the amount of return on a particular
Investment, relative to the investment’s cost. Most of the respondents i.e., 72.2% are
Not highly satisfies as they feel their returns to be fair enough. 22.2% are not satisfied
At all while 5.6% are highly satisfied. Hence it shows that returns on cooperative banks
Are not super satisfying. RBI should look after the satisfaction of the cooperative banks
Properly.

5.6

22.2

Very
Much Fair
Enough
72.2

65
 Q.4 How do you think the lending rate of your bank?

● Very high
● High
● Moderate
● Low

5.6 3.7

25.9
Very high
High
Moderate
Low
64.8

INTERPRETATION:

Lending rate or interest rate is the amount charged by lenders for a certain period as a percentage of the amount
lent or deposited. The total interest on the amount or the principal sum is determined by the duration of time
over which the amount is deposited or lent. As per 64.8% of respondents the lending rate of their respective
cooperative banks is moderate. According to 25.9% of the respondents the lending rate seems to be high. 3.7%
respondents says rates are very high while 5.6% respondents say its low.

66
 Q.5 Are the Financial services and facilities provided by your bank up to the mark?

● Yes
● No
● Maybe

33.3

Yes
No
53.7 Maybe

13

INTERPRETATION: Some of the financial services and facilities are providing credit facilities like rural
financing and micro financing, offering credit to the common man at moderate interest rates, and eliminating
the dominance of private money lenders. Helping the poor and the low-income groups get loans at low interest
rates for cottage industries, agriculture, farming, and small business and so on. According to most of the
respondents the financial services and facilities are not that up to the mark. 33.3% says that the facilities are
good enough. 13% of the respondents are not content with the facilities provided by their cooperative banks.

67
 Q.6 What are the problems you’re facing in your bank?

● Falling short in resolving problems

● Slow service
● Funds bouncing
● Loan issue
● Other problems

1.9

1.9 9.3
Falling short in resolving
25.9 Problems
Slow service

Funds bouncing

Loan issue

Other problems

61.1

INTERPRETATION:

As per the responses, most of the responders i.e., 61.1% are facing the problem of slow service by their
respective cooperative banks. The second most faced trouble is that the cooperative banks are falling short in
resolving customer’s issues. Loan issues and fund bouncing are also some of the obstacles.

68
 Q.7 Does your bank perform cooperate social responsibility?

● Yes
● No
● I’m not aware

46.3 Yes
48.1
No
I'm not aware

5.6

INTERPRETATION:

Co-operative banks foster self-help, responsibility and solidarity. Co-operative banks take part in a range of
schemes, such as microfinance and financial education of long-term unemployed personnel. They also
traditionally foster the development of their communities through cultural sponsorship and responsible
citizenship. Co-operative banks are among the market leaders for Socially Responsible Investment (SRI)
products such as funds and savings accounts. Nowadays, green finance is gaining an increasing importance;
customers can contribute to the preservation of the environment through a variety of investment solutions.
46.3% says their bank perform corporate social responsibilities while 5.6% says their bank does not perform
CSR. Major chunk of people i.e., 48.1% are not aware whether their bank performs CSR or not.

69
 Q.8 Which factors of cooperative banks attracts you more over commercial banks?

● Cheap credit
● Relatively higher returns
● Reliability
● Service motive
● Others

1.9

33.3 37

Cheap credit
Relatively higher returns
Reliability
Service motive
Others
37
50

INTERPRETATION: -

There are many factors that are attractive in cooperative banks over commercial banks. The major factor as
per the respondents i.e.,50% is Reliability. Cheap credit, relatively higher return than commercial banks and
service motive are also important factors in attracting customers towards cooperative banks. Zero balance
savings account is also an additional plus point in cooperative banks.

70
 Q.9 As per you what are the major limitations of cooperative bank?

● Mismanagement & Manipulations

● Functional weaknesses
● Limited coverage
● Lack of professionalism
● Others

1.9

18.5 Mismanagement &

24 Manipulations
Functional weaknesses

Limited coverage
16.6
Lack of professionalism

Others

38.8

INTERPRETATION:

Limited coverage is the major limitation as per 38.8% of the responders. Many people do feel that
Mismanagement & Manipulation, Functional weaknesses and lack of professionalism are also the considerable
drawbacks of cooperative banks. Due to increasing scams and corruptions many people fear that their
cooperative bank may shut down. Also lack of infrastructure is a down point.

71
 Q.10 How do you check the Financial health of your bank?

● NPA
● Provision covering Ratio
● Capital adequacy ratio
● Return on assets
● Others

1.8

22.2

NPA
37.1
Provision covering Ratio
Capital adequacy ratio
Return on assets
20.3 Others

18.5

INTERPRETATION:

Checking financial health of your bank is extremely important to avoid losses and to get updated. There are
various things to consider while checking financial health of your bank. Return on assets is major factor as per
37.1% of the respondents. Also checking Nonperforming assets of the bank is crucial along with Provision
covering ratio and Capital adequacy ratio. As more than 30% of the responders think the abovementioned
point.

72
 Q.11 Do you think the minimum capital required to form a cooperative bank i.e.
15 lakh is enough?

● Yes
● No
● Maybe

1.4

18.5
Yes
No
Maybe

29.6

INTERPRETATION:

A cooperative bank can be set up with a minimum capital of Rs 15 lakh, which will now be increased to Rs
50 lakh for banks in the backward areas and Rs 3 crore for urban areas which already have banking
infrastructure. 18.5% of the respondents feel that 15 lakh minimum requirement to form a cooperative bank is
enough while 29.6 think that it is not enough. 51.9% of the respondents are not sure whether the capital
required id suitable or not.

73
 Q.12 How much do you think the minimum capital requirement should be mandatory to
form a cooperative bank?

● 15 lakh is enough
● 50 lakh – 1 crore
● 2 crore – 4 crore
● 5 crore or more

7.4

31.5
18.5
15 lakh is enough
50 lakh – 1 crore
2 crore – 4 crore
5 crore or more

42.6

INTERPRETATION:

42.6% of the respondents feel that minimum capital required to form a cooperative bank should be between
50 lakh – 1 crore. 31.5% think 15 lakh is enough. While 18.5% respondents say the minimum capital required
should be between 2 crore – 4 crore. Few of people think that the minimum capital required should be 5 crore
or more than that.

74
 Q.13 Are you aware of the last year’s amendment that said cooperative banks have been
brought under RBI’s supervision?

● Totally aware
● Partially aware
● Not aware

27.8 25.9

Totally aware
Partially aware
Not aware

46.3

INTERPRETATION:

The Banking Regulations (Amendment) Bill, 2020 replaces an ordinance promulgated on June 26 to bring
cooperative banks under RBI's supervision. According to the survey only 25.9% of the responders are aware
of the above-mentioned amendment. 27.8% are not aware of the same. While a major chunk i.e., 46.3% are
partially aware of the amendment in the cooperative bank.

75
 Q.14 Due to the above mentioned amendment, the frauds will reduce in cooperative banks. Do
you agree?

● Yes
● No
● Maybe

42.6 Yes
46.3
No
Maybe

11.1

INTERPRETATION:

Calling the situation at cooperative banks "grave", the finance minister said in response to the debate on the
Bill that the government was compelled to bring out this ordinance even though the lockdown was in effect.
She had further said that the Bill is aimed at improving governance at cooperative banks and protect depositors'
money. 46.3% of the responders agree that the amendment will reduce frauds. While 42.6% are not sure about
it. 11.1% think that the amendment is of no use.

76
According to you what changes or improvements could be done for the development of
cooperative banks in India?

Answers

Supervision

The Indian financial system's regulatory architecture is complex - both in terms of the sheer number
of regulating bodies and also because of their overlapping spheres of concern and influence. Post the
PMC Bank scam, there is a need to bring in some changes in co-operative banks through regulations
and risk-based pricing, says a research note from State Bank of India.

Every situation depends and every problem has various solutions!

Better services. Reliability,

Could be quicker in service 1) Investment in infrastructure. 2) Better personnel employment. 3)

Technological implementation in banking services.

More transparency

Service should have fast

RBI's control should be as much as possible in cooperative banks to avoid mismanagement by state
govt. Other improvements should also be done to avoid frauds such as increasing the minimum
required capital to form a cooperative bank. Also, the professionalism should be proper. Online
transactions should be smoother

77
Cooperative Banks could improve their customer service

Rate of interest should be less n interest is also should be less

Nothing

Can introduce various new reforms or provisions that could prove the reliability of the bank
More stability

More knowledge and advertisement maybe

Security and stability

Strict rules should be bought so that RBI has more control on them.

Just don't send useless SMS They can make their

services friendly.

And increases the interest rate for saving accounts.

I do not have much idea in this regard.

We can do many changes but

Improving Credit Policy

Good service provides

Fraud cooperative banks should be restricted and returns must be increase

78
 CHAPTER 5

FINDINGS AND CONCLUSION

79
5.1 FINDINGS

The purpose of the research was to study on functions of cooperative bank. The cooperative bank
model is based on the principles of cooperation, mutual help, and democratic control. Cooperative
banks are typically focused on serving a particular community or region and are often involved in
promoting local economic development, after analysing the responses of 54 respondents I conclude
that:-

1. Most of the respondents approx. (68.5%) have their account in cooperative bank.
2. As per the respondents most of the cooperatives bank’s minimum balance requirement is Rs
1000 as 50% of the responses are that. As per 5 respondents Rs 5000 is their minimum
balance which shows
3. Most of the respondents i.e., 72.2% are not highly satisfies as they feel their returns to be fair
enough. 22.2% are not satisfied at all while 5.6% are highly satisfied. Hence it shows that
returns on cooperative banks are not super satisfying. RBI should look after the satisfaction
of the cooperative banks properly.
4. As per 64.8% of respondents the lending rate of their respective cooperative banks is
moderate.
5. 46.3% says their bank perform corporate social responsibilities while 5.6% says their bank
does not perform CSR.
6. There are many factors that are attractive in cooperative banks over commercial banks. The
major factor as per the respondents i.e.,50% is Reliability.
7. Checking financial health of your bank is extremely important to avoid losses and to get
updated. There are various things to consider while checking financial health of your bank.
Return on assets is major factor as per 51.9% of the respondents.
8. 42.6% of the respondents feel that minimum capital required to form a cooperative bank
should be between 50 lakh – 1 crore. 31.5% think 15 lakh is enough.
9. 46.3% of the responders agree that the amendment will reduce frauds. While
42.6% are not sure about 11.1% think that the amendment is of no use.

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5.2 SUGGESTIONS AND RECOMMENDATION:

If you're looking for a cooperative bank to join or to open an account with, there are a few factors
you should consider before making a decision. Here are some suggestions to help you choose the
right cooperative bank for your needs: 1. Look for a bank that aligns with your values:

One of the key benefits of cooperative banks is that they are community-oriented and often have a
strong focus on social responsibility. If this is important to you, look for a bank that shares your
values and is committed to making a positive impact in your local area. 2. Consider the bank's size
and scope:

Cooperative banks come in all shapes and sizes, from small, local credit unions to larger institutions
that operate across multiple states or regions. Consider what level of personal attention and support
you require, and whether a smaller or larger bank would be a better fit for your needs. 3. Evaluate
the bank's products and services:

Cooperative banks offer a range of financial products and services, from basic savings accounts to
more complex investment options. Take the time to evaluate the bank's offerings and ensure that
they meet your needs and are competitive with other banks in the area.

4. Assess the bank's fees and rates

Like any financial institution, cooperative banks charge fees and interest rates for their products and
services. Be sure to compare these fees and rates with other banks in the area to ensure that you're
getting the best deal.

5. Look at the bank's technology and online banking capabilities

In today's digital age, it's important to choose a bank that has a robust online banking platform and
other digital tools that make it easy to manage your finances from anywhere. Make sure the bank
you choose offers these services, and that they are user- friendly and easy to access.
6. Check the bank's financial stability and reputation

Finally, it's important to choose a bank that is financially stable and has a good reputation in the
community. Look for a bank that is well-capitalized, has a strong credit rating, and has a history of
responsible lending and good customer service

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 5.3 CONCLUSION:

Cooperative banks play an integral part in the implementation of development plans and are
important for the effective functioning of the banking system in India.

India is termed as an under banked country, and after so many scams, it is need of the hour to take
necessary measures to remedy the issue and to boost the confidence and trust of the public in the
banking system.

Early indicators suggest that co-operative banks weathered the first wave of the pandemic well.
Structural reforms that address deep-seated fault lines are expected to catalyse change in their
operations. UCBs are increasingly adopting technology to address competitive pressures from other
niche banking segments such as SFBs.

Matters of inadequate governance are being addressed through regulatory as well as enforcement
actions. Going forward, with a turnaround in economic activity, it is expected that the sector may
build on its resilience and leverage on recent financial improvements to expand its footprint in order
to reach finance to grassroots levels.

However, like any financial institution, cooperative banks also have their challenges. They may have
limited resources compared to larger banks, which can affect their ability to provide certain services
or compete with larger institutions. They may also face regulatory and legal challenges, particularly
in the areas of governance and risk management.

Overall, cooperative banks play an important role in providing financial services to their members
and supporting their local communities. Their focus on member ownership, customer service, and
community involvement make them a unique and valuable alternative to traditional banks.

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BIBLIOGRAPHY

❖ https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=Trend%20and
%20Progress%20of%20Banking%20in%20India

❖ http://shodh.inflibnet.ac.in:8080/jspui/bitstream/123456789/2036/1/nrc-com- synopsis.pdf

❖ https://blog.ipleaders.in/cooperative-banking-system-in-india/

❖ https://www.livemint.com/industry/banking/cooperative-banks-to-build-on- resilience-leverage-
financial-position-to-expand-footprint-rbi-
11640707246603.html

❖ http://www.researchmanuscripts.com/PapersVol1N1/IJCBR-9.pdf/

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 APPENDIX

QUESTIONNAIRE

Q1. Age

o 18 – 25 o 25 – 35 o 35 – 50 o 50 –

above Q2. Profession.

o Student
O Government Employee
O Business
O Service
o Others

Q3. Do you have an account in any Co-operative bank?

o Yes
O No

Q4. What is the minimum balance requirement of your bank?

o 500

o 1000

o 5000

o More than 5000

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 Q5. Are you satisfied with the
returns you get in your co-
operative bank?

o Very much
o Fair enough
o Not satisfied at all

Q6. How do you think the lending rate of your bank is?

o Very high
o High
o Moderate
o Low

Q7. Are the Financial services and facilities provided by your bank up to the
mark?

o Yes o No
o Maybe

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Q8. What are the problems you're facing in your bank?

o Falling short in resolving problems

o Slow service
o Funds bouncing
o Loan issue
o Other problems

Q19. Does your bank perform corporate social responsibility?

o Yes o No o I’m not aware Q10.

Which factors of co-operative
banks attracts you more over
commercial banks?

o Cheap credit o Relatively higher

returns o Reliability o Service
motive
o Others

Q11. As per you what are the major limitations of co-operative bank?

o Mismanagement & Manipulations

o Functional weaknesses
o Limited coverage
o Lack of professionalism
o o Others

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Q12.How do you check the financial health of your bank?

o NPA
o Provision covering ratio o Capital
adequacy ratio o Return on assets
o Others

Q13. Do you think the minimum capital required to form a co- operative bank
i.e., 15 lakh is enough?

o Yes o No o Maybe Q14. How much

do you feel the minimum capital
requirement should be mandatory
to form a co-operative bank?

o 15 lakh is enough o 50 lakh - 1

crores o 2 crore – 4 crores
o 5 crore or more

Q15. Are you aware of the last year's amendment that said co- operative banks
have been brought under RBI's supervision?

o Totally aware o Partially aware

o Not aware

Q16. Due to the above-mentioned amendment, the frauds will reduce in co-
operative banks. Do you agree?

o Yes o No
o Maybe

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Q17. According to you what changes or improvements could be done for the
development of cooperative banks in India?

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