Ankush 1
Ankush 1
Ankush 1
ON
SCHOOL OF MANAGEMENT
BAHRA UNIVERSITY WAKNAGHAT DISTRICT SOLAN H.P
1
DECLRATION
I undersigned Ankush Kashyap student of BBA 6th semester declare that I have done
the project on Loan and credit facility at “Baghat Urban Cooperative Bank Ltd.” has
been personally done by me under the guidance 0f Board of Directors of the Baghat
Urban Cooperative Bank Ltd Solan in patial fulfilment of BBA program .
I also declare that this project is my own preparation and not copied from anywhere
else.
Date:
Signature:
ACKNOWLEDGEMENT
I express my heartiest gratitude to the management of THE BAGHAT URBAN
COOPERATIVE BANK, Management, who provided me such a wonderful
2
opportunity to do Summer Training and provided their valuable suggestion in
understanding the work of project.
I convey my heartfelt affection to all those people who helped and supported me
during the course, for completion of my Project Report.
In the end I would like to thank many unknown individuals, whom I interacted with for
end number of my needs. All of them with their due cooperation and at times with
detachment taught me the real lessons of business world.
Date:
Place:
Signature:
TABLE OFCONTENTS
CONTENTS….
CHAPTER-1
Introduction
3
Meaning of Bank
Types of Banks
History of Urban Cooperative Banks in India
Profile of Baghat Bank Solan
Organizational Structure
Status of Baghat Bank Solan
Board of Directors of Baghat Urban
Cooperative Bank Solan
Vision of Bank
CHAPTER-2
Terminology
CHAPTER-3
TRAINING METHODOLOGY
Title of study
Duration of training
Objective and format of training
Source of data, scope of study
Limitation of study
4
CHAPTER-4
Loan and credit facilities
Personal loan
Loan for purchase or construction
Vehicle loan
Home loan
Education loan
Loan against property
Gold loan
CHAPTER-5
Analysis of the annual report
Key operational process
SWOT analysis
Interpretation
CHAPTER-6
Conclusion
Bibliography
References
MEANING OF BANK:-
Bank is derived from Latin word banco, bench or counter public or
promotes institution whose function, is to receive or deposit, to
employ it profitably and to facilitate its circulation in the form of notes,
bonds or bills of exchange. In the words of Kinley: “bank is an
establishment which makes to individuals such advances of money of
other mean of payment as may be required and safety made and to
5
which individuals entrust money or means of payment when not
required by them for use”.
BANKS
Co-operative banks are small-sized units organized in the co-operative sector which operate
both in urban and non-urban centres. In India, cooperative banks finance small borrowers in
industrial and trade sectors, besides professional and salary classes.
The Co-operative Banks has a history of almost 100 years. The Cooperative banks are an
important constituent of the Indian Financial System, judging by the role assigned to them, the
expectations they are supposed to fulfil, their number, and the number of offices they
operate. The co-operative movement originated in the West, but the importance that such
banks have assumed in India is rarely paralleled anywhere else in the world. Their role in rural
financing continues to be important even today, and their business in the urban areas also has
increased phenomenally in recent years mainly due to the sharp increase in the number of
Primary Co-operative Bank.
7
The co-operative banks in rural areas mainly finance agricultural based activities including
farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and
self-employment driven activities, the co-operative banks in urban areas mainly finance
various categories of people for self-employment, industries, small scale units, home finance,
consumer finance, personal finance, etc.
Central co-operative banks are the federations of primary credit societies in a district and are
of two types - those having a membership of primary societies only and those 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
finance member societies within the limits of the borrowing capacity of societies.
The co-operative banking structure in India is divided into four components: primary co-
operative credit society, central co-operative bank, state co-operative banks and land
development banks. Co-operative banks function on the basis of "no-profit no-loss". Co-
operative banks, as a principle, do not pursue the goal of profit maximization
STRUTCUTRE
OF
PRIVATE SECTOR BANKS
CO-OPERATIVE
BANKS
DEVELOPEMENT BANKS
9
1.6 BRIEF HISTORY OF URBAN COOPERATIVE BANKS IN INDIA
The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary
cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed
to lend money only for non-agricultural purposes. This distinction does not hold today. These
banks were traditionally centered on communities, localities work place groups. They
essentially lent to small borrowers and businesses. Today, their scope of operations has
widened considerably.
The origins of the urban cooperative banking movement in India can be traced to the close of
nineteenth century when, inspired by the success of the experiments related to the
cooperative movement in Britain and the cooperative credit movement in Germany such
societies were set up in India. Cooperative societies are based on the principles of cooperation,
- mutual help, democratic decision making and open membership. Cooperatives represented
a new and alternative approach to organization as against proprietary firms, partnership firms
and joint stock companies which represent the dominant form of commercial organization.
The first known mutual aid society in India was probably the 'AnyoyaSahakariMandali'
organized in the erstwhile princely State of Baroda in1889 under the guidance of VithalLaxman
also known as BhausahebKavthekar.
The first study of Urban Co-operative Banks was taken up by RBI in the year 1958-59. The
Report published in 1961 acknowledged the widespread and financially sound framework of
urban co-operative banks; emphasized the need to establish primary urban cooperative banks
in new centres and suggested that State Governments lend active support to their
development. In 1963, Verde Committee recommended that such banks should be organized
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at all Urban Centres with a population of 1 lakh or more and not by any single community or
caste.
SOLAN (H.P.):-
THE BAGHAT URBAN CO-OP BANK LTD. SOLAN is one of the most famous Bank in SolanDistt.
The Baghat Urban Co-op Bank Ltd. was registered on the 7th Day of September, 1970 vide
Registration No. 1 and was brought under the preview of the Banking Regulation Act, 1949 i.e.,
27th March, 1972 as per RBI Central Office Letter No. ACD –BR 994/E-2(20) -71-72 and
Registered permanently vide RBI License No. UBD HP 1410 P. dated 9th May 1997.
There are 21 founder members, whose wisdom to promote The Baghat Urban Co-Op
Bank Ltd. With blessing of the noble soul Late Raja Druga Singh Ji (Ruler of the Erstwhile Baghat
State) on 7th September 1970. They promoted the institution with a vision to provide
economic and social security to the people of Solan. The contribution of the former directors,
members dedicated staff members and patronage of customers has contributed to the steady
growth of the Bank.
The area of operation of the Bank Shall be entire SolanDistt. In Himachal Pradesh for any
revision in this regard prior approval of registering authority and RBI (except for extension of
area of operation within the Distt. of registration) as indicated in RBI Circular No. UBD. RBL
(RCS) 10.07.01.00/95-96 dated 10th October, 1995 shall be necessary.
First the registered office of Bank was at the Shiv Dayal Trust Building, Gunj Bazar, Solan, Then
it was shifted to Chowk Bazaar, Solan. Now the Bank has shifted head office from chowk
Bazaar to new own premises at Baghat Bank Parisar, Rajgarh Road Solan.
Bank is increasing its deposits, loans & advances continuously year by year. Bank is following
RBI’S instructions strictly and is not granting any new advances to the directors or their
relatives and also no renewing such advance. During the year RBI has deregulated the interest
rate on term deposits. The bank is paying higher interest to depositors beside it is paying
additional interest to the senior citizens under the “Baghat Bank Senior Citizen Scheme”.
There is tremendous increase in the Reserve fund of the Bank. Statutory reserve fund and
other reserves of the Bank, Paid-up Capital, Profits. Bank paid dividend to its members @ 15%
11
on the basis as per Co-operative Societies Act, after permission of the Asset. Registrar Co-
operative societies. The bank continued to maintain cash reserves and liquid assets are
required under section 18& 24 of the Banking Regulation Act, 1949 (as applicable to Co-
operative Societies). The investment by the bank is in accordance with the norms prescribed
by the RBI. The Bank has not made any default in submitting/ maintaining the statutory
statement to the RBI during the year.
The Bank is providing services to its customers through many branches i.eSolan, ChaBBAghat
and Parwanoo, nahan, una, saunjali, kunnihar,nalagarh.
Bank is providing Direct Draft facilities through H.P. State Co-operative Bank Ltd. HDFC Bank
Ltd. ICICI Bank Ltd. UTI Bank Ltd, Indus Ind Bank Shimla and Panchkula and on commission
share, facilities through other Nationalized Banks. Bank also reduced the draft charges to Rs,
10/- + service tax excluding draft issued by Public Sector Bank. Audit of the Bank is conducted
every year by the auditors, Inspector Grade I, of Co-op Societies Solan H.P.
The Bank is tide with ING-VYSYS now kotak Mahindra bank& IFFCO TOKIO insurance and
providing life and general insurance to its valuable customers.
There are very good, very talented, very educated and very experienced staffs in the bank.
Staff members are very cooperative to each other and also with the customers.
GENERAL
BODY
BOARD OF DIRECTORS
CHAIRMAN
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CHIEF EXECUTVE OFFICER/ MD
STAFF STAFF
Registered on : 07.09.1970
No branches : 5
Membership : 6275
a) Govt. : -
b) Individuals : 309.31
Turnover : 199144.31
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Reserve and other fund : 2376.89
Deposits : 38877.48
No of employees : 76
BOARD OF DIRECTORS
PERSON DESIGNATION
Mrs.ParvatiTanwarAppointedDirector
14
Mr. Bhupender Kumar CEO/Managing Director
BROADER TERMS".
A.P.J ABDUL KALAM
Vision of the bank is to evolve in to a strong, sound and competitive financial system in order to provide integrated
services of all segments by adopting latest technology, best accounting and ethical practices with all services
contributing innovation, quality, personal touch and flexibilityin delivery. The growing expectations of the
customers, shareholders are the catalysts of the bank. The customer would continue to be the centre point of our
business strategy. In short we lose touch With the customer, we lose everything. The vision statement also set
goals for the bank to grow fast in largest competitive environment and value enhancement for all shareholders.
1.12MISSION:-
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Baghat Urban Co-operative Bank ltd. is just 42 years old bank. The board is represented by co-operative
department representative and professionals who are famous in their respective areas of specialization. The
founder of the bank is Mission of the bank is to have consistent growth and development with fare transparency
in its dealing with adoption of the best standards in all areas as per the guidelines issued by RBI, Registrar Co-
operative Society Himachal Pradesh. Constant and continual up gradation of technology arid skills of bank staff for
the benefits of customers and the bank continue to be the focus areas of the bank Bank's strategy is to interact
constantly with the customers, shareholders and initiate immediate action plan for better financial products.
Bank's mission is to have continuous best financial performance.
"Mission of bank is to prompt & provide efficient customer services”
CHAPTER-2
Terminology
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flexibility in order to meet the needs of the business as well as satisfy the
requirement of lender.
The term credit can be understood by giving light on following points:
CREDIT (LOANS AND ADVANCES)
The profit of a bank depends on the utilization of its fund. But bank cannot
lend its fund fully. As per banking company act 1991 every banking
company has to maintain a specified minimum (presently 25%) of the total
of its demand and time liabilities in the form of cash and approved
securities with RBI. This percentage or ratio is termed as statutory liquid
ratio. Banks allow different forms advance.
CREDIT DEPARTMENT
CD banking business involves accepting deposit from the public and
investing or lending the same and thereby making profit out of it. However,
lending money is not without risk and therefore banks make loans and
advances to farmer, traders, businessmen, and industrialist against either
tangible (land, building, stock etc.) or intangible securities. Even then, the
banks run the risk of default in repayment. Therefore, the banks follow
cautious measures while lending money to others. The core function of
bank is performed by the credit department of the bank. In this case, the
relationship of bank and customer is that of the creditor and debtor.
5. LEASE FINANCING-:
An entrepreneur, under this Scheme, may avail of the lease facilities to procure
industrialmachinery (without having to purchase it by down payment) with easy
repayment schedule.The clients also get special rebate in their income-tax
payment under the scheme.
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A loan facility on a customer’s current account at a Bank permitting him to
overdraw up to a certain agreed limit for an agreed period. The terms of the loan
are normally that it isrepayable on demand or at the expiration date of the
agreement.
THE BANK USE EIGHT ‘C’ S RULE WHILE
GIVING LOAN
1. Credit (must be god)
2. Capacity(ability to pay)
3. Capital(money that going into business)
4. Collateral(assets that secure the loan)
5. Character(the person)
6. Commitment(ability and willingness to succeed)
7. Cash flow (can it support business ‘debt and expense)
8. Conditions(economic, finance anything that effect the business)
PRODUCTS OF BAGHAT
BANK…..
ACCOUNT & DEPOSITS SERVICE
Banking should be effortless. With Baghat Bank, the efforts are rewarding.
No matter what a customer's need and occupational status, we have a range
of solutions that are second to none. Whether you're employed in a
company and need a simple Savings account or run your own business and
require a robust banking partner, Baghat Bank not only has the perfect
solution for you, but also can recommend products that can augment your
planning for the future.
1. Saving accounts.
2. Current accounts.
3. Fix deposits.
1. Savings Accounts:
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These accounts are primarily meant to inculcate a sense of saving for the
future, accumulating funds over a period of time. Whatever person’s
occupation, bank have confident that person will find the perfect banking
solution. There some saving accounts like: -
Regular Saving
Baghat Bank appreciates your needs and endeavours, which is why, they
present an account especially dedicated to customer, which like a dutiful
child will help you fulfil your needs in the best manner possible.
No frills Account
Baght Bank Current Account gives the power of inter-city banking with a
single account and access to more than cities. From special cheques that get
treated at par with local ones in any city where branch, faster collection of
outstation cheques (payable at branch locations), free account to account
funds transfer between Baghat Bank accounts to Free inter-city clearing of
up to 100 lakhs per month, bank’s priority services have become the
benchmark for banking efficiency.
People can invest his/her money into either in security market or gold or
mutual fund or into a fix deposits. People always go to that way where
he/she can get more benefits and minimum risks. So, for this purpose he
has a better chance to deposits money in to the fix deposit.
Wide Availability.
Lockers available in various sizes. i.e. Small, Medium, Large and
Extra Large with varying rents.
Lockers are rented out for a minimum period of one year. Rent is
payable in advance.
No deposits are required to avail a locker. Just open an account and
get the locker facility.
There is a nominal annual charge, which depends on the size of the
locker and the centre in which the branch is located.
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In the case of a sole hirer of a safe deposit locker, nomination can be
made in favor of only one individual.
Where the safe deposit locker is hired in the name of a minor, the
nomination shall be made by a person lawfully entitled to act on
behalf of the minor.
CHAPTER-3
TRAINING METHODOLOGY
Title of study
Duration of training
Objective and format of training
Source of data, scope of study
Limitation of study
23
TRAINING METHEDOLOGY
TITLE OF STUDY: -
DURATION OF TRAINING:-
Duration of project is 8 weeks Training . Though the time available for the study is
too less but efforts to the fullest capacity have been put into this result for efficient and
effective analysis of the data.
OBJECTIVE OF TRAINING:-
For the purpose of project data is very much required which works as a food for
process whichwill ultimately give output in the form of information. So before
mentioning the source of datafor the project I would like to mention that what type of
data I have collected for the purpose of project and what it is exactly.
PRIMARY DATA:-
Primary data is basically the live data which I collected on field while talking with
theEmployees. In some cases I got no response from their side and then on the basis
of myprevious Experiences I filled those fields.
SOURCE:
Main source for the primary data for the project was my face-to-face conversation
which I gotby the employees or sometimes filled myself on the basis of discussion
with the employees.
SECONDRY DATA:-
Secondary data is already published data. It is the data which is funded or collected
bysomeone else before and presently used by further research work. Secondary data
for thebase of the project I collected from annual report of bank, bank pamphlets and
internet etc.
SCOPE OF THE STUDY:-
Each and every project study along with its certain objectives also has scope for
future.
Andthis scope in future gives to new researches a new need to research a new project
with a newscope. Scope of the study not only consist one or two future business plan
but sometime italso gives idea about a new business which becomes much more
profitable for the researchesthen the older one.The scope of this research is as follows:
1. Research study could give an idea of network expansion for capturing more
market andcustomer with better services and lower cost without compromising
with quality.
2.In future customer requirement could add with the product and services for getting
the edgeover competitors.
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3.Different parameters could be used for the purpose of new products with extra
benefitswhich are required by the customers.
4.Factors which are responsible for the performance of the bank can also be used for
themodification of the strategy and product for being more profitable.
LIMITATIONS:-
The rate of interest may vary according to market environment.
These figures are according to publish in annual report and according to
employees of Jodhpur central cooperative bank.
The report is according to my perception only and can’t be taken as final
decision.
This study only relates to one organization, so conclusions drawn may not be
finding itsutility in all the other banks.
Even the employees of the bank hesitated to give the complete & accurate data
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CHAPTER-4
Loan and credit facilities …
Personal loan
Loan for purchase or construction
Vehicle loan
Home loan
Education loan
Loan against property
AGRICULTURE LOAN
Eligibility
Income
Net income of the person should not be less than Rs.5,000/- p.m. in case of
salaried persons and Annual Income of not be less than Rs.60,000/- in case
of others.
Loan Amount
Guarantee
Interest Rates
The Baghat Urban Co-operative Bank Ltd., is offering the
following interest for the various loans and advances schemes -
Loan against Banks Own Against own deposit 1.00% above deposit rate
Terms Deposit Against third party deposit 2.00% above deposit rate
On clean Overdraft 21.00%
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Commercial Building Loan
Industrialists and small entrepreneurs need finance for setting up plant &
machineries, equipments, other movables such as furniture and fixtures,
office equipments, etc.TheBaghat Urban Co-operative Bank Ltd. is eager
to help them in their dream activities.
Eligibility
Income of Applicant
The income of the person should such that he is in a position to repay the
amount within the stipulated period.
Loan Amount
The loan amount covers the cost of the plant & machinery or movables as
per invoice in case of new vehicle ones and agreement value or market
value whichever is lower in case of second hand machineries after
maintaining the prescribed margin.
Margin
Security
Period of Loan
Vehicle Loan
In the past, owning a car or two wheeler was matter of prestige and symbol
of ones standard of living. Due to economic development and availability
of variety of vehicles in the market, it has become a way of life. It leads to
comfort of life and helps a person in his profession and vocation. It
increases ones efficiency and income generation capacity. Realising this
need of the person, the Bank has designed a loan scheme called “Car Loan
Scheme".
Eligibility
Income
The income of the person should such that he is in a position to repay the
amount within the stipulated period.
Loan Amount
The loan amount covers the cost of the plant & machinery or movables as
per invoice in case of new vehicle ones and agreement value or market
value whichever is lower in case of second hand machineries after
maintaining the prescribed margin.
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Security
Guarantee
Period of Loan
Education Loan
Education loan is granted for higher studies in colleges in India and abroad
in any educational field in college affiliated with recognized universities,
medical colleges, technical institutions, pharmaceutical colleges,
Information Technology etc, so that students from poor & middle classes
as well as brilliant and needy students can take advantages of the scheme.
[The scheme will not cover any correspondence course].
Eligibility
Income
It depends on the capacity to service the debt and also on limit of advance.
Loan Amount
Depends on the business turnover and also per party limit fixed by the
Bank from time to time.
House Loan
Purpose
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Eligibility
Housing Loan can be availed by individuals, self employed, business man and professionals
who desire to purchase house/flat and has regular income to repay the loan.
Loan amount will be disbursed to the seller / builder of the house/flat. In case of flat/house
under construction from reputed Builders, amount will be disbursed in stages depending on
the progress of construction.
Loan Amount
The loan amount depends on the repaying capacity of the person and as per the
banks exposer limit.
Margin
30% (on agreement Value + Stamp Duty + Registration Fees + Amenities in Flat if
agreement for the same is registered )
Eligibility
Income
Net income of the person should not be less than Rs.5,000/ p.m. in case of salaried
persons and Annual Income of not be less than Rs. 60,000/ in case of others.
Loan Amount
Margin
Security
Guarantee
32
Period of Loan
Interest Rates
The Baghat Urban Co-operative Bank Ltd., is offering the following interest for the various
loans and advances schemes -
Loan against Banks Own Against own deposit 1.00% above deposit rate
Terms Deposit Against third party deposit 2.00% above deposit rate
On clean Overdraft 21.00%
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Loan against Liquid Securities
In order to meet the unforeseen and urgent commitment, a loan against liquid
security is sought for. Liquid security such as NSCs, Life Policies, etc. invested
ether for taxation or for any other purpose can be offered as security and avail
the loan.
Eligibility
Income
Applicant should have sufficient income to repay the Loan with Interest.
Loan Amount
In case of other securities such as NSCs, Life policies, etc. there is limit for
advance
Margin
Security
Guarantee
Not Applicable.
Period of Loan
Till the maturity of security or maximum period of 5 years in case of Term Loans
whichever is lowest.
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Interest Rates
The Baghat Urban Co-operative Bank Ltd., is offering the following interest for the various
loans and advances schemes -
Loan against Banks Own Against own deposit 1.00% above deposit rate
Terms Deposit Against third party deposit 2.00% above deposit rate
On clean Overdraft 21.00%
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BUCB offers working capital finance to meet the entire range of
short-term fund requirements that arise within a corporate’s day-
to-day operational cycle.
Quantum of Assistance
Interest Rate
36
Eligibility
Income
Loan Amount
Margin
Security
Guarantee
Not Applicable
Period of Loan
37
CHAPTER-5
Analysis of the annual report
Key operational process
SWOT analysis
Interpretation
5.1 INTRODUCTION:-
38
1) TREND ANALYSIS
RATIO ANALYSIS
TREND ANALYSIS:-
i) Trade Credit
ii) Bank Credit
iii) Public Deposits
iv) Inter Corporate Deposits
v) Commercial Paper
39
Long Term Sources
i) Fixed Deposits
ii) Permanent Working Capital
iii) Temporary Working Capital
iv) Long Term Borrowing from Banks.
There are some charts/graphs which shows the progress report of the past
few years i.e.
Growth chart of share capital, reserve fund & profit since 2000
Liquidity ratio are used to measure the short term liquidity and solvency position of a firm. It measures
the relationship between current assets and liabilities. These ratio predict the capacity of business to
meet its short term obligation out of its short term resources.The liquidity refer to the maintenance of cash,
bank balance and those assets which could be easily convertible in to cash without any loss in order to meet
current liabilities as and when arise. So liquidity ratio studies the firm short term solvency and its ability to pay
of the current liabilities and reveals the short term financial strength or weakness.
40
Current Ratio: Current Ratio is the ratio of total current assets to current liabilities.
Rule of Thumb: 2:1
BAGHAT BANK
0.8
0.7
0.6
0.5
Baghat Bank
0.4
BAGHAT BANK
0.3
0.2
0.1
0
2011 2012 2013 2014 2015
INTERPRETATIONS
Baghat bank current ratio was constant in 2011 & 2012 but since 2012 it was continuously decline but the current
assets position of baghat bank is relatively better.However as a rule of thumb current ratio should be 2:1 so that any
company can comfortably meet out its current obligation.
ANALYSIS;-
41
Analysis of bagat bank that the position of current assets to current liabilities in any year is not according to rule o
thumb is 2:1 which shows decrease in the financial position of the company. But as shown in the line graph current
Ratio of Baghatbankis they do not have adequate funds to meet its current liabilities which results adverse effect on
business.
5.5QUICK RATIO:-
Quick ratio is also called acid test ratio. Quick ratio means the ratio which compares liquid assets current liabilities.
Rule of thumb=1:1
Series 1
0.45
0.4
0.35
0.3
0.25
0.2 Series 1
0.15
0.1
0.05
0
Years 2011 2012 2013 2014 2015
INTERPRETATION
42
As shown in the graph quick ratio of baghat bank in 2015 is very less that is 0.24 but in the previous year
2011,2012,2013,2014 it is improved. but yet not satisfactory. Quick ratio should be 1:1 so that the companies can
meet out their current obligations with available liquids the companies are suffering with inadequate liquidity.
ANALYSIS
As per analysis the baqnk’ reveals that liquid assets of the firm are not 100% of its current liabilities. As shown in
the diagram it is not according to rule of thumb that is 1:1 which shows that the company cannot be prosperous &
cannot pay its current liabilities in time.
As per the analysis as shown by the line graph we comes to knows that quick ratio of Baghatbankisis more.
It is also called Absolute liquid ratio. An acceptable norm of this ratio is 50% of current liabilities.
Series 1
0.16
0.14
0.12
0.1
0.08
Series 1
0.06
0.04
0.02
0
Years 2011 2012 2013 2014 2015
43
Line graph of baghatbanK
INTERPRETATION:-
As shown in the line graph Absolute liquid ratio in 2014, 2015 is same & very low that is 0.06 from rule of thumb
that is 0.50:1.
As per analysis the absolute liquid ratio of baghat bank is low & not satisfactory which shows that the company will
not have satisfactory liquid position & will not be able to pay its debts in short run. absolute liquid ratio is very less
than the rule of thumb that is 0.50:1
As per analysis & shown by the line graph we comes to know that Absolute liquid ratio of Baghat bank.
This ratio establishes the relationship between cost of sales & net working capital.
44
Series 1
0.8
0.7
0.6
0.5
0.4
Series 1
0.3
0.2
0.1
0
Years 2011 2012 2013 2014 2015
INTERPRETATION:-
This graph shows that in 2011 financial analysis turnover ratio of baghat bank is high but in the subsequent year it is
decline and not satisfactory which shows that amount of financially is not efficiently & effectively utilized.
As per the analysis and as shown in the line graph financial anlysis turnover ratio of baghat bank is low which
shows that the amount of finance is not efficiently & effectively utilized. It also shows that the business requires
additional funds to supports its financial structure.
This ratio is expressed as number of times the avarage stock has been turned over during the year.Rule
of thumb :-higher the ratio ,higher the efficiency.
45
Series 1
0.9
0.8
0.7
0.6
0.5
0.4 Series 1
0.3
0.2
0.1
0
YEARS 2011 2012 2013 2014 2015
INTERORETATION:-
As shown by the line graph the inventory turnover ratio is
It refers to the period within which average stock should be turned over or disposed off.
BAGHAT BANK
2011 579.36
2012 1106.06
2013 869.04
2014 935.89
2015 439.75
46
Series 1
1200
1000
800
600
Series 1
400
200
0
2011 2012 2013 2014 2015
Average collection period baghat bank is less than. It means the average speed of conversion of stock
in to sale in 5years is more than 3 times.
The conversion of stock of baghat bank was reduced in 2015 as. But however it was increased in
subsequent year. In 2015 the movements of stock was very low. It means a major part of financly was
haulted in to stock
5.10SOLVENCY RATIO: Theseratios are used to measure the ability of the firm to serve long
term obligation with regard to principal amount along with intrest.in short these ratio show the
relationship between debt and equity in funding the capital structure of the firm.The long term
solvency ratios are also called stability ratios. These ratios help in ascertaining the long term solvency
of a firm which depends on firm’s adequate resources to meet its long term funds requirement.
2011 4.9
2012 6.46
2013 6.5
2014 6.42
47
2015 6.12
Series 1
7
Series 1
3
0
2011 2012 2013 2014 2015
INTERPRETATION:-
In this table shows the outsiders fund to total assets ratio has
been stable. In 2011 it has been 4.9 percent. In the year 2012
it increasesd to 6.46 percent. In 2013 it has been 6.5 percent.
In 2014 it has been 6.42 percent. At last in the year 2015 it
reaches to 6.12 percent.
5.11PROFITABILITY RATIO:-
These ratios measure the relationship between operating profit to sales. Such ratios highlight the end
result of business activities. Profitability can be measured either on the basis of sales or cost of goods
sold. Basically these ratios measure the rate of return on overall capital employed in the business. The
main objective of any business undertaking is to earn profits. Profitability is the overall measure of the
companies with regard to efficient and effective utilization of resources. The profitability of the firm
can be easily measured by its profitability ratios. Profitability ratio are of utmost importance concern
because these ratios are calculated to enlighten the end result of business activities. Various parties like
owners, creditors, financial institutions, govt, etc. are interested in analyzing profitability ratio of the
48
business because profitability is the sole criterion of the overall efficiency of a business. Profitability
ratio are expressed in terms of percentage.
2011 2.35
2012 2.47
2013 2.12
2014 2.02
2015 2.22
#REF!
3
2.5
1.5
#REF!
0
years 2011 2012 2013 2014 2015
49
INTERPRETATION:-
2011 41.79
2012 44.72
2013 45.65
2014 48.84
2015 64.98
50
Earning per share
70
60
50
40
Series 1
30
20
10
0
Years 2011 2012 2013 2014 2015
INTERPRETATION:-
In this table show the earning per share ratio of baghat bank
has been relatively constant. Earning per share ratio show the
rate of return on investment to equity share capital holders. In
the year 2011 it shows earning per share at 41.79 percent. It
increases in the year 2012 to 44.72 percent. In the year 2013 it
has been 45.65 percent. In the year 2015 it reaches 64.98
percent.
5.12 GROWTH table & Chart OF THE BAGHAT URBAN CO-OP BANK LTD.
SOLAN
2500
2000
1500
Series 1
Series 2
1000
Series 3
500
52
INTERPRETATION:-
53
25000
20000
15000
Series 1
Series 2
10000
Series 3
5000
INTERPRETATION:-
2015 deposits and W.E. are increases but the advances are decreases.
54
5.14 INCOME 2014-2015:-
14.95 23.36
300.88
311.71
1442.8
INTERPRETATION:-
55
5.15 EXPENDITURE 2014-2015:-
Intt. On Dep. 1378.7
Salaries & Allow 236.11
Rent, Light, Ins. Tax 28.51
Print, Sty. & Adv. 142.45
Net Profit 264.86
Law, Audit, Postage, Telephone Etc
Depriciation 31.55
NPA & Contingent Provision 75
Brokerage 6.07
Other Expense 30
30
756.07
31.55
0
Intt. On Dep.
264.86
Salaries & Allow
INTERPRETATION:-
In this diagram, shows the intrest on deposit are 1378.67, salaries and allow236.11, rent, light, intrest
on tax are 28.51, print, sty. & advances 142.45, net profit 264.86, law, audit, postage, telephone
etc31.55
56
57
SWOT ANALYSIS
STRENGTH
58
WEAKNESSES
OPPORTUNITIES
60
CHAPTER -6
CONCLUSION & SGGESTIONS
SUGGESTION:-
61
CONCLUSION:-
Bank’s motto is to provide better and efficient banking services
to its members and customers. The bank started its computerization in
the year 1992 and brought on LAN with all banking facilities w.e.f
1994. Keeping in view the working and progress made by the bank, the
Reserve Bank of India permitted to expend its business to entire
District now to whole state. The RBI also granted licenses to open
branches at ChaBBAghat and Parwanoo in the year 2000, which are
running in profit with good working. Bank is providing higher rate of
interest on Fix Deposits than the other banks. It also gives the extra rate
of interest to the senior citizens. The Baghat Urban Co-operative Bank
Ltd. Solan’s mission, vision, strategy and objective are same as Central
and State Co-operative Banks. Performance of the bank is shown by
Balance sheet, Profit & Loss account, progress table since 2004.
Growth table since 2000, growth chart since 2000 and all activities/
workings of the bank also shows the performance of the bank.Bank’s
progress chart shows that the no. of Depositors & no. of share holders
are increasing rapidly year by year.Balance sheet and profit & loss
account shows that progress of the bank is increasing year by year
rapidly.
62
BIBLIOGRAPHY:-
INTERNAL SOURCES:
Annual reports of the bank (Profit & Loss statements and balance Sheet).
EXTERNAL SOURCES:
INTERNET
WEBSITE: www.baghatbank.com
Books:
AUTHORPublisher
63
ANNEXURE
Sources of fund:
Total share capital 293.62 282.95 272.62 239.07 238.03
Equity share capital 293.62 282.95 272.62 239.07 238.03
Share application money 33.97 8.01 0.00 0.00 0.00
Preference share capital 0.00 0.00 0.00 0.00 0.00
Reserves 9974.62 7,527.60 4,959.26 4,098.53 3,302.01
Revaluation reserves 11.18 11.67 12.09 12.47 12.86
Net worth 10,313.39 7,830.23 5,243.97 4,350.07 3,552.90
Secured loans 407.23 602.45 981.00 617.26 106.65
Unsecured loans 1998.06 2,277.70 3,071.76 1,969.80 1,529.35
Total debts 2,405.29 2,880.15 4,052.76 2,587.06 1,636.00
Total liabilities 12718.68 10,710.38 9,296.73 6,937.13 5,188.90
Application of funds:
Gross block: 5,849.27 4,866.18 4,653.66 3,552.64 3,180.57
Less: depreciation 2,841.73 2.537.77 2,326.29 1,841.68 1,639.12
Net Block 3007.54 2,328.41 2,327.37 1,710.96 1,541.45
Capital work in progress 1,364.31 1,374.31 886.96 649.94 329.72
Investment 9,325.29 6,378.02 5,786.41 4,215.06 2,237.46
Inventories 1,694.21 1188.78 1,060.67 1,084.11 878.48
Sundry debtors 1,354.72 1,258.08 1,043.65 1,004.88 700.89
Cash and bank balance 447.62 475.17 635.61 310.58 415.89
Total current assets 3,496.55 2,922.03 2,739.93 2,399.57 1,995.26
Loans and advances 2,653.52 2,034.47 1,402.45 866.19 1,011.50
Fixed deposits 167.02 1,268.06 938.82 550.65 910.18
Total current assets, loans &advances 6,317.09 6,224.56 5,081.20 3,816.41 3,916.94
Deferred credit 0.00 0.00 0.00 0.00 0.00
Current liabilities 5,289.67 3,822.50 3,520.20 2,525.31 2,138.77
Provisions 2,005.88 1,796.54 1,277.56 943.46 715.43
Total current liabilities & provisions 7,295.55 5,619.04 4,797.76 3,468.77 2,854.20
Net current assets -978.40 605.52 283.44 347.64 1,062.74
Miscellaneous expenses 0.00 4.12 12.55 13.53 17.55
Total assets 12,718.68 10,710.38 9,296.73 6,937.13 5188.92
64
PROFIT AND LOSS A/C OF BAGHAT BANK
65