Description
W.r.t. 2 banks
Co-operative Banks
INDEX:
Sr. No.
Topics Theoretical Aspect:
Page No
1. 2. 3. 4.
Introduction Features Advantages Disadvantages and Future Scope Practical Aspect:
2 4 7 9
5. 6.
Saraswat Bank The Thane Janata Sahakari Bank
11 13
1
Co-operative Banks
Introduction:
? Co-operative Bank is a voluntary association formed for the purpose
of promoting and protecting the interest of its members.
? The main aim of the co-operative bank is to provide cheaper credit to
their members and not to maximize profits; they may access the money market to improve their income so as to remain viable.
? Co-operative banks are perhaps the first government sponsored,
government-supported, and government-subsidised financial agency in India.
? It is compulsory for co-operative banks in India to register under the
Co-operative Societies Act, of the concerned State. The cooperative bank is also regulated by the RBI.
? They are governed by the Banking Regulations Act 1949 & Banking
Laws (Co-operative Societies) Act, 1965.
? They provide funds to farmers, and even traders and small-scale
industrialists. They accept deposits from the members of the public.
? The Co-operative Banks operate on a three tier systems: 1.Primary Co-operative Societies: • Individual farmers and others from the village are enrolled as
members.
• These banks collect deposits from the members as well as nonmembers.
• These banks provide short term funds to the members for the purpose
of purchasing seeds, fertilizers, etc.
2
Co-operative Banks
• The loans are payable in installments. These banks are mostly
operating at village level.
2.Central Co-operative Banks: • Thee banks operate at the district level. • They are established to provide funds to the primary Co-operative
Societies who do not have sufficient resources to grant advances to their members.
• Primary co-operative societies and other individuals are enrolled as
members.
• They collect deposits from the public and provide loans and assistance
to primary co-operative societies and also to individual members.
3.State Co-operative Banks: • These banks operate at state level. • These banks collect funds from the public. • They provide financial assistance to central co-operative banks. • They conduct usual banking business of commercial banks.
3
Co-operative Banks
Features of Co-operative Banks:
? Following are the Features/ Characteristics of Co-operative banks: 1. Registration: • Co operative Banks in India are registered under the Co-operative
Societies Act, of the concerned State.
• The cooperative bank is also regulated by the RBI. They are governed
by the Banking Regulations Act 1949 & Banking Laws (Co-operative Societies) Act, 1965.
2. Objectives: • The main object is to accept deposits from the members and the public
for the purpose of providing loans to farmers and small businessmen.
• Flexibility and speed in the service and advisory services for all kinds
financing question.
• Competitive interest-rates in the deposits and low taxes in the loans
and the remaining banking work.
• Big output in dividend and surplus value from the investment in cooperative portions.
3. Funds Available: • Limited funds are available at the disposal of co-operative banks. • Co-operative banks are perhaps the first government sponsored,
government-supported, and government-subsidised financial agency in India.
4
Co-operative Banks
• They get financial and other help from the Reserve Bank of India
NABARD, central government and state governments.
4. Service Motive: • Co-operative Banks are organized and managed on the principal of
co-operation, self-help, and mutual help.
• They function with the rule of "one member, one vote" and also
function on "no profit, no loss" basis.
• Co-operative banks, as a principle, do not pursue the goal of profit
maximization.
5. Area of Operation: • The area of operation is confined mostly to State. They do not operate
at national level.
• Co-operative bank do banking business mainly in the agriculture and
rural sector.
• However, UCBs, SCBs, and CCBs operate in semi urban, urban, and
metropolitan areas also.
6. Nationalisation: • In India co-operative banks are not nationalised. • They constitute the "most favoured" banking sector with risk of
nationalisation.
7. Merchant Banking Services: • Earlier Co-operative Banks did not provided merchant banking
services like advising the companies regarding the public issue of shares.
5
Co-operative Banks
• Nowadays some co-operative banks do provide merchant banking
services.
8. Mutual Funds: • In the past, co-operative banks did not operate mutual funds. • But in present some co-operative banks do operate mutual funds. • Co-operative banks now provide housing loans also. • Co-operative bank performs all the main banking functions of deposit
mobilisation, supply of credit and provision of remittance facilities.
9. Basis of Operation: • The basis of operation is on co-operative lines, i.e. service to its
members and the society.
10. Rate of Interest: • The Co-operative Banks provide a little higher rate of interest on
deposits as compared to commercial banks.
11. Refinance: • They can obtain refinance from the Reserve Bank of India, NABARD,
central government and state governments.
6
Co-operative Banks
Advantages of Co-operative banks:
1.Stability: • The co-operative banks enjoy stability and continued existence. • The bank can continue its business or there affairs even if a member
dies or resigns from the bank.
2.Democratic Management: • A co-operative bank works on democratic principles. • There is equality in voting. The principle followed is "one member,
one vote" and also they function on "no profit, no loss" basis.
• Co-operative banks, as a principle, do not pursue the goal of profit
maximization.
3.Tax Concessions: • Co-operative Banks are exempt from income tax upto a certain
amount.
• This benefits the co-operatives to by way of higher profits as it has to
pay limited tax.
4.Socially Desirable: • The co-operative banks are socially desirable. • This is because the co-operatives protects and promotes the interests
of its members.
7
Co-operative Banks
• In the absence of co-operative banks, the members belonging to
weaker sections of the society are subject to exploitation by the commercial banks.
5.Services: • Services such as 24- hour service through ATM, Value Added
services for Customers, 24x 7 Cheque Depository machine, etc makes the bank flexible and also customer can rely on the bank for almost all kind of work.
• Co-operative Banks believe in service with quality is the essence of
success in winning the customer confidence.
6.Open Membership: • The Membership of a co-operative bank is open to all members of the
public belonging to different communities irrespective of caste, creed, religion, and so on.
7.Specialised in Agriculture Sector: • Co-operative bank do banking business mainly in the agriculture and
rural sector.
• The co-operative banks demonstrate a shift from rural to urban, while
the commercial banks, from urban to rural.
8
Co-operative Banks
Disadvantages of Co-operative banks:
1.Government Control: • The co-operative banks are subject to government controls. • They have to follow the provisions of the concerned State Cooperatives Societies Act.
• Often, the banks find it difficult to deal with government bureaucracy
(excessively complicated administrative procedure.).
2.Lack of Public Confidence: • The members of the public lack confidence in the co-operative bank. • They are not willing to become its members because of the failures of
many co-operatives.
3.Political Interference: • The co-operative organization acts as a platform for political interests • At the time of election of managing committee, some of the political
parties get involved. This may lead to corruption during election.
4.Competition: • The co-operative banks face a lot of competition from the private
banks, commercial banks, etc.
9
Co-operative Banks
• The co-operatives may find it difficult to compete with these banks. 5.Restriction of number: • The co-operative organisation cannot be formed with less than 10
members.
• This creates problems for those individuals who want to form a cooperative consisting of less than 10 members.
6.Delay in Decision Making: • There is often delay in decision making, especially when it requires
approval of the managing committee.
• Again, more time is wasted, if the matter requires approval of the
general body.
7. Lack of Business Secrecy: • There is a lack of business secrecy in a co-operative bank. • The accounts and record are made available to all the members and
also to the auditors and others.
Future Scope:
• Future of banking sector is promising. • Most of the Banks will adopt Core Banking Solution in a fully
networked environment.
• While brick and mortar branches would continue, the real cost cutting
will be done by the virtual branches viz. ATMs, Internet Banking, Mobile Banking, Kiosks etc.
10
Co-operative Banks
• Technology will bring fundamental shift in the functioning of the
banks and make flow of information much faster, more accurate and enable quicker analysis of data received.
This was a theoretical view about co-operative banks. Now let’s gain some practical knowledge too.
(PTO)
Mission Statement:
"To emerge as one of the premier and most preferred banks in the country by adopting highest standards of professionalism and excellence in all the areas of working !!!"
Objective: • The Society was initially set up to help families in distress. • Its objective was to provide temporary accommodation to its members
in eventualities such as weddings of dependent members of the family, repayment of debt and expenses of medical treatment etc.
11
Co-operative Banks
• The Society was converted into a full-fledged Urban Co-operative
Bank in the year 1933.
Services and Growth: • In last two decades the bank has witnessed a steady growth in the
business.
• The bank has a network of 127fully computerised branches, 13
Extention Counters, 7 Zonal Offices and 23 departments located covering five states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka and Goa.
• The Bank is providing 24- hour service through ATM at 41 locations. • In 1988 the bank was conferred with "Scheduled" status by Reserve
Bank of India. They provide services such as savings and loans to non-members as well as to members.
• The bank is the first co-operative bank to provide Merchant Banking
services. The bank got a permanent licence to deal in foreign exchange in 1978.
• Presently the Bank is having correspondent relationship in 45
countries covering 9 currencies with over 125 banks.
• The bank is fully computerised and offers convenient working hours. • Saraswat bank has introduced a wide range of schemes at attractive
interest rates, which has become very popular, especially among the middle-class in view of the easy repayment plans.
12
Co-operative Banks
Prosperity and Success of bank: • The bank still continues to function with the glorious tradition in
public services. Besides being the largest Urban Co-operative Bank in India, Saraswat Bank has now become the largest in Asia.
• Saraswat Bank attributes this success to its undying spirit to serve the
common man and to the sharpening of its competitive edge by constantly upgrading technology to match international standards.
• Prosperity to customer relationship has been the motto of Saraswat
Bank for the last 90 years. The Bank has grown in stature (reputation), progressed in its social and economic objectives and produced an image of what an ideal bank should be.
Goals and Motives:
• Corporate objective EPOCH, which stands for Efficiency, profitability and productivity, organizational effectiveness, customer centric and Hi-tech Banking was accomplished to a fair measure for Financial Year 2005-06. EPOCH continues to be goal during the current year as well with a renewed vigor to attain higher peaks. • TJSB believes that "customer delight" is the ultimate goal and has a strong belief that Customers & all Stakeholders wholehearted support, absolute faith and their patronage has largely been responsible for its enviable growth.
13
Co-operative Banks
• TJSB is committed to provide banking with speed, comfort and convenience. • With its distinctive culture, as the most trusted bank, TJSB has become the Most Preferred Bank too.
Achievements:
• Awarded by The Maharashtra Urban Co-operative Bank's Federation for 'Best Urban Co-operative Bank' in Maharashtra For The Year 2004-05 amongst the Urban Co-operative banks having Deposits over Rs. 500 crores. • The Thane Janata Sahakari Bank has won the award by 'Banking Frontiers' for e-security implementation and best website in the category of big co-operative banks having business mix of more than 500 crores.
Services and Growth:
• TJSB presently is catering to the needs of society through a close network of 20 Branches and 5 Extension Counters spread all over the city of Thane, Mumbai, Navi Mumbai, Nashik & Pune. • TJSB has experienced Consistent profit and growth for last 34 Years and Equilibrium in Growth and profits. TJSB has recognized the opportunity for its expansion through the Merger and Takeover of the other Banks.
14
Co-operative Banks
• Services such as Anywhere Any Branch Banking facility in all Branches, 28 ATM’s installed in Branches at Thane, Mumbai, Pune and Nashik, 24x 7 Cheque Issuance Machine at e-Lobby at Naupada Branch, 24x 7 Cheque Depository machine at 16 branches, Value Added services for Customers, First Co-op Bank to offer Banc assurance (the selling of life assurance and other insurance products by banking institutions) Product in association with Max New York, etc makes the bank flexible and also customer focused. • To step forward it has recently completed Due Diligence of two Cooperative Banks and is in process of acquiring Banks in Pune Region.
Prosperity and Success of bank:
• With the modest beginning in 1972 in the co-operative field, The Thane Janata Sahakari Bank Ltd. (TJSB) has emerged as one of the leading scheduled co-operative Bank in the country. • TJSB feels proud to acknowledge the growth of large number of successful industrialists, traders and professionals who have grown leaps & bound due to timely assistance and support of the Bank. • Bank featured significant progress under major business parameters, improvement in asset quality, progressive application of Infotech advancements and above all, customer orientation of a much higher order. • Right from its establishment, the bank has always been donating some portion of its net profit to charitable institutions like Chief Minister's Relief Fund for Tsunami Victims.
15
Co-operative Banks
• Service with quality is the essence of success in winning the customer confidence. TJSB has been continuing its endeavours (trying hard to achieve something) to provide the best of the services to its clients.
16
doc_170408944.doc
W.r.t. 2 banks
Co-operative Banks
INDEX:
Sr. No.
Topics Theoretical Aspect:
Page No
1. 2. 3. 4.
Introduction Features Advantages Disadvantages and Future Scope Practical Aspect:
2 4 7 9
5. 6.
Saraswat Bank The Thane Janata Sahakari Bank
11 13
1
Co-operative Banks
Introduction:
? Co-operative Bank is a voluntary association formed for the purpose
of promoting and protecting the interest of its members.
? The main aim of the co-operative bank is to provide cheaper credit to
their members and not to maximize profits; they may access the money market to improve their income so as to remain viable.
? Co-operative banks are perhaps the first government sponsored,
government-supported, and government-subsidised financial agency in India.
? It is compulsory for co-operative banks in India to register under the
Co-operative Societies Act, of the concerned State. The cooperative bank is also regulated by the RBI.
? They are governed by the Banking Regulations Act 1949 & Banking
Laws (Co-operative Societies) Act, 1965.
? They provide funds to farmers, and even traders and small-scale
industrialists. They accept deposits from the members of the public.
? The Co-operative Banks operate on a three tier systems: 1.Primary Co-operative Societies: • Individual farmers and others from the village are enrolled as
members.
• These banks collect deposits from the members as well as nonmembers.
• These banks provide short term funds to the members for the purpose
of purchasing seeds, fertilizers, etc.
2
Co-operative Banks
• The loans are payable in installments. These banks are mostly
operating at village level.
2.Central Co-operative Banks: • Thee banks operate at the district level. • They are established to provide funds to the primary Co-operative
Societies who do not have sufficient resources to grant advances to their members.
• Primary co-operative societies and other individuals are enrolled as
members.
• They collect deposits from the public and provide loans and assistance
to primary co-operative societies and also to individual members.
3.State Co-operative Banks: • These banks operate at state level. • These banks collect funds from the public. • They provide financial assistance to central co-operative banks. • They conduct usual banking business of commercial banks.
3
Co-operative Banks
Features of Co-operative Banks:
? Following are the Features/ Characteristics of Co-operative banks: 1. Registration: • Co operative Banks in India are registered under the Co-operative
Societies Act, of the concerned State.
• The cooperative bank is also regulated by the RBI. They are governed
by the Banking Regulations Act 1949 & Banking Laws (Co-operative Societies) Act, 1965.
2. Objectives: • The main object is to accept deposits from the members and the public
for the purpose of providing loans to farmers and small businessmen.
• Flexibility and speed in the service and advisory services for all kinds
financing question.
• Competitive interest-rates in the deposits and low taxes in the loans
and the remaining banking work.
• Big output in dividend and surplus value from the investment in cooperative portions.
3. Funds Available: • Limited funds are available at the disposal of co-operative banks. • Co-operative banks are perhaps the first government sponsored,
government-supported, and government-subsidised financial agency in India.
4
Co-operative Banks
• They get financial and other help from the Reserve Bank of India
NABARD, central government and state governments.
4. Service Motive: • Co-operative Banks are organized and managed on the principal of
co-operation, self-help, and mutual help.
• They function with the rule of "one member, one vote" and also
function on "no profit, no loss" basis.
• Co-operative banks, as a principle, do not pursue the goal of profit
maximization.
5. Area of Operation: • The area of operation is confined mostly to State. They do not operate
at national level.
• Co-operative bank do banking business mainly in the agriculture and
rural sector.
• However, UCBs, SCBs, and CCBs operate in semi urban, urban, and
metropolitan areas also.
6. Nationalisation: • In India co-operative banks are not nationalised. • They constitute the "most favoured" banking sector with risk of
nationalisation.
7. Merchant Banking Services: • Earlier Co-operative Banks did not provided merchant banking
services like advising the companies regarding the public issue of shares.
5
Co-operative Banks
• Nowadays some co-operative banks do provide merchant banking
services.
8. Mutual Funds: • In the past, co-operative banks did not operate mutual funds. • But in present some co-operative banks do operate mutual funds. • Co-operative banks now provide housing loans also. • Co-operative bank performs all the main banking functions of deposit
mobilisation, supply of credit and provision of remittance facilities.
9. Basis of Operation: • The basis of operation is on co-operative lines, i.e. service to its
members and the society.
10. Rate of Interest: • The Co-operative Banks provide a little higher rate of interest on
deposits as compared to commercial banks.
11. Refinance: • They can obtain refinance from the Reserve Bank of India, NABARD,
central government and state governments.
6
Co-operative Banks
Advantages of Co-operative banks:
1.Stability: • The co-operative banks enjoy stability and continued existence. • The bank can continue its business or there affairs even if a member
dies or resigns from the bank.
2.Democratic Management: • A co-operative bank works on democratic principles. • There is equality in voting. The principle followed is "one member,
one vote" and also they function on "no profit, no loss" basis.
• Co-operative banks, as a principle, do not pursue the goal of profit
maximization.
3.Tax Concessions: • Co-operative Banks are exempt from income tax upto a certain
amount.
• This benefits the co-operatives to by way of higher profits as it has to
pay limited tax.
4.Socially Desirable: • The co-operative banks are socially desirable. • This is because the co-operatives protects and promotes the interests
of its members.
7
Co-operative Banks
• In the absence of co-operative banks, the members belonging to
weaker sections of the society are subject to exploitation by the commercial banks.
5.Services: • Services such as 24- hour service through ATM, Value Added
services for Customers, 24x 7 Cheque Depository machine, etc makes the bank flexible and also customer can rely on the bank for almost all kind of work.
• Co-operative Banks believe in service with quality is the essence of
success in winning the customer confidence.
6.Open Membership: • The Membership of a co-operative bank is open to all members of the
public belonging to different communities irrespective of caste, creed, religion, and so on.
7.Specialised in Agriculture Sector: • Co-operative bank do banking business mainly in the agriculture and
rural sector.
• The co-operative banks demonstrate a shift from rural to urban, while
the commercial banks, from urban to rural.
8
Co-operative Banks
Disadvantages of Co-operative banks:
1.Government Control: • The co-operative banks are subject to government controls. • They have to follow the provisions of the concerned State Cooperatives Societies Act.
• Often, the banks find it difficult to deal with government bureaucracy
(excessively complicated administrative procedure.).
2.Lack of Public Confidence: • The members of the public lack confidence in the co-operative bank. • They are not willing to become its members because of the failures of
many co-operatives.
3.Political Interference: • The co-operative organization acts as a platform for political interests • At the time of election of managing committee, some of the political
parties get involved. This may lead to corruption during election.
4.Competition: • The co-operative banks face a lot of competition from the private
banks, commercial banks, etc.
9
Co-operative Banks
• The co-operatives may find it difficult to compete with these banks. 5.Restriction of number: • The co-operative organisation cannot be formed with less than 10
members.
• This creates problems for those individuals who want to form a cooperative consisting of less than 10 members.
6.Delay in Decision Making: • There is often delay in decision making, especially when it requires
approval of the managing committee.
• Again, more time is wasted, if the matter requires approval of the
general body.
7. Lack of Business Secrecy: • There is a lack of business secrecy in a co-operative bank. • The accounts and record are made available to all the members and
also to the auditors and others.
Future Scope:
• Future of banking sector is promising. • Most of the Banks will adopt Core Banking Solution in a fully
networked environment.
• While brick and mortar branches would continue, the real cost cutting
will be done by the virtual branches viz. ATMs, Internet Banking, Mobile Banking, Kiosks etc.
10
Co-operative Banks
• Technology will bring fundamental shift in the functioning of the
banks and make flow of information much faster, more accurate and enable quicker analysis of data received.
This was a theoretical view about co-operative banks. Now let’s gain some practical knowledge too.
(PTO)
Mission Statement:
"To emerge as one of the premier and most preferred banks in the country by adopting highest standards of professionalism and excellence in all the areas of working !!!"
Objective: • The Society was initially set up to help families in distress. • Its objective was to provide temporary accommodation to its members
in eventualities such as weddings of dependent members of the family, repayment of debt and expenses of medical treatment etc.
11
Co-operative Banks
• The Society was converted into a full-fledged Urban Co-operative
Bank in the year 1933.
Services and Growth: • In last two decades the bank has witnessed a steady growth in the
business.
• The bank has a network of 127fully computerised branches, 13
Extention Counters, 7 Zonal Offices and 23 departments located covering five states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka and Goa.
• The Bank is providing 24- hour service through ATM at 41 locations. • In 1988 the bank was conferred with "Scheduled" status by Reserve
Bank of India. They provide services such as savings and loans to non-members as well as to members.
• The bank is the first co-operative bank to provide Merchant Banking
services. The bank got a permanent licence to deal in foreign exchange in 1978.
• Presently the Bank is having correspondent relationship in 45
countries covering 9 currencies with over 125 banks.
• The bank is fully computerised and offers convenient working hours. • Saraswat bank has introduced a wide range of schemes at attractive
interest rates, which has become very popular, especially among the middle-class in view of the easy repayment plans.
12
Co-operative Banks
Prosperity and Success of bank: • The bank still continues to function with the glorious tradition in
public services. Besides being the largest Urban Co-operative Bank in India, Saraswat Bank has now become the largest in Asia.
• Saraswat Bank attributes this success to its undying spirit to serve the
common man and to the sharpening of its competitive edge by constantly upgrading technology to match international standards.
• Prosperity to customer relationship has been the motto of Saraswat
Bank for the last 90 years. The Bank has grown in stature (reputation), progressed in its social and economic objectives and produced an image of what an ideal bank should be.
Goals and Motives:
• Corporate objective EPOCH, which stands for Efficiency, profitability and productivity, organizational effectiveness, customer centric and Hi-tech Banking was accomplished to a fair measure for Financial Year 2005-06. EPOCH continues to be goal during the current year as well with a renewed vigor to attain higher peaks. • TJSB believes that "customer delight" is the ultimate goal and has a strong belief that Customers & all Stakeholders wholehearted support, absolute faith and their patronage has largely been responsible for its enviable growth.
13
Co-operative Banks
• TJSB is committed to provide banking with speed, comfort and convenience. • With its distinctive culture, as the most trusted bank, TJSB has become the Most Preferred Bank too.
Achievements:
• Awarded by The Maharashtra Urban Co-operative Bank's Federation for 'Best Urban Co-operative Bank' in Maharashtra For The Year 2004-05 amongst the Urban Co-operative banks having Deposits over Rs. 500 crores. • The Thane Janata Sahakari Bank has won the award by 'Banking Frontiers' for e-security implementation and best website in the category of big co-operative banks having business mix of more than 500 crores.
Services and Growth:
• TJSB presently is catering to the needs of society through a close network of 20 Branches and 5 Extension Counters spread all over the city of Thane, Mumbai, Navi Mumbai, Nashik & Pune. • TJSB has experienced Consistent profit and growth for last 34 Years and Equilibrium in Growth and profits. TJSB has recognized the opportunity for its expansion through the Merger and Takeover of the other Banks.
14
Co-operative Banks
• Services such as Anywhere Any Branch Banking facility in all Branches, 28 ATM’s installed in Branches at Thane, Mumbai, Pune and Nashik, 24x 7 Cheque Issuance Machine at e-Lobby at Naupada Branch, 24x 7 Cheque Depository machine at 16 branches, Value Added services for Customers, First Co-op Bank to offer Banc assurance (the selling of life assurance and other insurance products by banking institutions) Product in association with Max New York, etc makes the bank flexible and also customer focused. • To step forward it has recently completed Due Diligence of two Cooperative Banks and is in process of acquiring Banks in Pune Region.
Prosperity and Success of bank:
• With the modest beginning in 1972 in the co-operative field, The Thane Janata Sahakari Bank Ltd. (TJSB) has emerged as one of the leading scheduled co-operative Bank in the country. • TJSB feels proud to acknowledge the growth of large number of successful industrialists, traders and professionals who have grown leaps & bound due to timely assistance and support of the Bank. • Bank featured significant progress under major business parameters, improvement in asset quality, progressive application of Infotech advancements and above all, customer orientation of a much higher order. • Right from its establishment, the bank has always been donating some portion of its net profit to charitable institutions like Chief Minister's Relief Fund for Tsunami Victims.
15
Co-operative Banks
• Service with quality is the essence of success in winning the customer confidence. TJSB has been continuing its endeavours (trying hard to achieve something) to provide the best of the services to its clients.
16
doc_170408944.doc