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Loan and credit facility at jodhpur central cooperative

An employee when joins the organization is just a raw individual, who does not possess the
desired level of skill and knowledge to produce the standard output. Also, the employees are
required to be up to date according to the technological changes. To achieve these objectives
some kind of training is required. n other words the organization need to maintain a viable
and knowledgeable work force to meet the current and future challenges. !or this training is
the only medium"method"weapon by which organization can achieve the objectives. #o
training is a continuous process, which e$ist till the organization sustains.
The 45 days training program has been introduced by the %T& for an elaborate and
practical study on selected topics related to 'anagement from the company.
n this session took training in T() *+,(-&% .)/T%AL .++-)%AT0) 1A/2, in loan
section of that bank in which got the chance to know the procedure by which bank lends
money to its members. #ince it is a cooperative bank so it gives loan to its members only,
hence an applicant has to become member of this bank before borrowing money from it.
The project work about the survey is a small piece of research work in various aspects of the
training. 3hile carrying out got opportunities to interact with employees at various levels and
the people which enhanced my practical knowledge and e$perience in regard to the topic.
n this report have shown the loans provided by the bank and its recovery procedure . also
include current facts and figures related to the topic.
1efore we get into the thick of thing, would like to say that it was a great pleasure 4 privilege
for me to have the opportunity of undertaking the training at th !odhp"r #ntra$
#ooprati% &an' for a period of 56 days. would like to thank the 1ank for providing me
such an opportunity.
e$press my sincere thanks to my project guide, 'r. *itendra kumar sewag, ,esignation Asst.
professor, ,eptt. !inance for guiding me right from the inception till the successful completion
of the project. sincerely acknowledge him for e$tending their valuable guidance, support for
literature, critical reviews of project and the report and above all the moral support he"she"they
had provided to me with all stages of this project.
would also thank my nstitution and my faculty members without whom this project would
have been a distant reality. am sure that the knowledge 4 information that have gained
during this period would be of immense value for my growth in business world.
The report contains introduction to 1anks, which includes past, present and future of banks
and challenges for banking industry in future. 1anks plays the most important role in providing
various banking services. )arlier the banks were engaged in accepting and lending money.
1ut in the recent past the scope of services provided by the banks has increased. The growing
competition requires prompt and efficient services to the customers at reasonable cost. These
days bank aim to provide ma$imum satisfaction to their customers.
The ne$t part of the report consist the knowledge about the cooperative banks in ndia. t
includes history of cooperative bank in indianite7s features and service provided by it in rural
and urban sector. The structure of cooperative bank in ndia is also includes in it.
Then a brief introduction of !odhp"r #ntra$ #ooprati% &an' comes in ne$t part of the
report which consist the history, vision, mission, management team and objective made by
.hairman Mrs. L$a madrna. The current financial position of the bank also includes in this
Then the meaning of certain terminology includes in this report .these terms are related with
the topic for e$. cash credit, lease, secured loan etc. the objective of this section is only to
make aware about certain terminology used by bank regarding loan facility.
The ne$t section of report i.e. training methodology consist title of report, duration of training
session, objective and limitation of study etc. this section basically giving the outline of the
/e$t section consist the loan and credit facility provided by bank. This section consist various
loans provided by bank the detail regarding those loans, procedure to recover it, actual
position of bank in loan area, and recommendation and the various proposals that the
.ooperative bank could apply for maintaining its position in the region and to face future
challenges and the suggestions for the improvement.
!inal section of report consist conclusion and bibliography.

#./+. TTL) +! .+/T)/T
0 *nd"stry introd"#tion
8.8 3hat is banking
8.9 #tandard activities of bank
8.: %evenue generation by bank
8.5 %isk and capital of bank
8.6 )conomic functions of bank
8.; 1anking in ndia
8.< #tructure of banking industry in ndia
8.= .urrent scenario
1 Cooprati% &an'
9.8 (istory
9.9 #ervices provided by bank
9.: !acts about cooperative bank
9.5 #tructure of cooperative bank
2 !odhp"r #ntra$ #ooprati% &an'
:.8 'anagement team of bank
:.9 (istory of bank
:.: 0ision, 'ission
:.5 Achievement and products of bank
:.6 -erformance of bank
:.; 1ranches of bank
:.< !inancial position of bank
4 Trmino$ogy
5.8 3hat is credit facility
5.9 Types of credit, .ash credit
5.: LT%, term loan, lease
5.5 #ecured overdraft
5 Training mthodo$ogy
6.8 Title of study
,uration of training
+bjective and format of train
#ource of data, scope of study
Limitation of study
Loan and #rdit 4a#i$ity
-ersonal loan
Loan for purchase or construction
0ehicle loan
(ome loan
)ducation loan
Loan for working capital
+ther loan
Loan given to women self employment group
Loan outstanding
R#o%ry o4 $oan
'easures of recovery
-rocedure of recovery
,ebt forgiven by bank
,ifficulties faced by cooperative bank
W8AT *, /ANK*NG9
1anking in a traditional sense is the business of accepting deposits of money from public !or
the purpose of lending and investment. These deposits can have a distinct feature like being
withdrawn able by cheques, which no other financial institution can offer. n Addition, banks
also offer financial services, which include?
The ssue of demand draft 4 traveler7s cheque.
.redit cards
.ollection of cheques, bill of e$change.
#afe deposit lockers
.ustodian services.
nvestment and nsurance #ervices.
The business of banking is highly regulated since banks deal with money offered to them by
the public and ensuring the safety of this public money is one of the prime responsibilities of
any bank. That is why banks are e$pected to be prudent in their leading and investment
activities. )very bank has a compliance department, which is responsible to ensure that all the
services offered by the bank, and the processes followed are in compliance with the local
regulations and the 1ank7s corporate policy.
The major regulations and act govern the banking business are?@
1anking %egulation Act, 8>5>
!oreign )$change 'anagement Act, 8>>>
ndian .ontract Act
/egotiable nstruments Act, 8==8
1ank lends money either for productive purposes to individual, firms, .orporate etc. for buying
house property, cars and other consumer durables and for investment -urposes to individuals
and the others. (owever, banks do not finance any #peculative activity. Lending is risk taking.
The depositors of banks are also assured of safety of their money by deploying some
percentage of deposit in statutory %eserves like #L% 4 .L%.
1anks act as payment agents by conducting checking or current accounts for customers,
paying cheques drawn by customers on the bank, and collecting cheques deposited to
customersA current accounts. 1anks also enable customer payments via other payment
methods such as telegraphic transfer, and AT'.
1anks borrow money by accepting funds deposited on current accounts, by accepting term
deposits, and by issuing debt securities such as banknotes and bonds. 1anks lend money by
making advances to customers on current accounts, by making installment loans, and by
investing in marketable debt securities and other forms of money lending.
1anks provide almost all payment services, and a bank account is considered indispensable
by most businesses, individuals and governments. /on@banks that provide payment services
such as remittance companies are not normally considered an adequate substitute for having
a bank account.
1anks borrow most funds from households and non@financial businesses, and lend most funds
to households and non@financial businesses, but non@bank lenders provide a significant and in
many cases adequate substitute for bank loans, and money market funds, cash management
trusts and other non@bank financial institutions in many cases provide an adequate substitute
to banks for lending savings too.
A bank can generate revenue in a variety of different ways including interest, transaction fees
and financial advice. The main method is via charging interest on the capital it lends out to
customers. The bank profits from the differential between the level of interest it pays for
deposits and other sources of funds, and the level of interest it charges in its lending activities.
This difference is referred to as the spread between the cost of funds and the loan interest
rate. (istorically, profitability from lending activities has been cyclical and dependent on the
needs and strengths of loan customers and the stage of the economic cycle. !ees and
financial advice constitute a more stable revenue stream and banks have therefore placed
more emphasis on these revenue lines to smooth their financial performance.
1anks face a number of risks in order to conduct their business, and how well these risks are
managed and understood is a key driver behind profitability, and how much capital a bank is
required to hold. #ome of the main risks faced by banks include?
.redit risk? risk of loss

arising from a borrower who does not make payments as
Liquidity risk? risk that a given security or asset cannot be traded quickly enough in the
market to prevent a loss Bor make the required profitC.
'arket risk? risk that the value of a portfolio, either an investment portfolio or a trading
portfolio, will decrease due to the change in value of the market risk factors.
+perational risk? risk arising from e$ecution of a companyAs business functions.
The capital requirement is a bank regulation, which sets a framework on how banks and
depository institutions must handle their capital. The categorization of assets and capital is
highly standardized so that it can be risk weighted
The economic functions of banks include?
ssue of money, in the form of banknotes and current accounts subject to cheque or
payment at the customerAs order. These claims on banks can act as money because
they are negotiable or repayable on demand, and hence valued at par. They are
effectively transferable by mere delivery, in the case of banknotes, or by drawing a
cheque that the payee may bank or cash.
/etting and settlement of payments D banks act as both collection and paying agents
for customers, participating in interbank clearing and settlement systems to collect,
present, be presented with, and pay payment instruments. This enables banks to
economies on reserves held for settlement of payments, since inward and outward
payments offset each other. t also enables the offsetting of payment flows between
geographical areas, reducing the cost of settlement between them.
.redit intermediation D banks borrow and lend back@to@back on their own account as
middle men.
.redit quality improvement D banks lend money to ordinary commercial and personal
borrowers Bordinary credit qualityC, but are high quality borrowers. The improvement
comes from diversification of the bankAs assets and capital which provides a buffer to
absorb losses without defaulting on its obligations. (owever, banknotes and deposits
are generally unsecuredE if the bank gets into difficulty and pledges assets as security,
to raise the funding it needs to continue to operate, this puts the note holders and
depositors in an economically subordinated position.
/ANK*NG *N *ND*A:;
1anking means accepting for the purpose of landing or investment of deposits of money from
the public repayable on demand or otherwise one withdraw able by cheque, draft or
1anking in ndia has its origin as early as the 0edic period. t is believed that the transaction
!rom money lending to money banking must have occurred even before 'anu, the great
(indu *urist, who has devoted a section of his work to deposits and advances and laid down
the rules relating to rate of interest, ,uring 'ugal -eriod, the native bankers played a very
important role in lending money and finance foreign trade and commerce. ,uring the days of
the east@ ndia .ompany, it was the turn of the agency house to carry on the banking business
the general bank of ndia was the first joint stock bank to be established in the year 8<=;. The
others that followed were the 1ank of (industan and the 1engal 1ank. The 1ank of (industan
is reported to have continued till 8>F; while the other two failed in the meantime. n the first
half of the 8>th century the east@ndia company established three banks, the 1ank of 1engal in
8=F>, the 1ank of 1ombay in 8=5F and the banks of 'adras in 8=5:.
These three banks are also known as the presidency banks were amalgamated in 8>9F and a
new 1ank D the imperial bank of ndia established ion 9<th *anuary 8>98. 3ith the passing of
the state bank act 8>66 the under taking of the imperial 1ank of ndia is taken over by the
newly constituted the state bank of ndia.
The G+ issued an ordinance and nationalized the 85 largest commercial banks with effect
from the midnight of *uly 8>, 8>;>. *ayaprakash /arayan, a national leader of ndia,
described the step as a Hmasterstroke of political sagacity." 3ithin two weeks of the issue of
the ordinance, the -arliament passed the 1anking .ompanies BAcquisition and Transfer of
&ndertakingC 1ill, and it received the presidential approval on > August 8>;>.
A second dose of nationalization of ; more commercial banks followed in 8>=F. The stated
reason for the nationalization was to give the government more control of credit delivery. 3ith
the second dose of nationalization, the G+ controlled around >8I of the banking business of
ndia. Later on, in the year 8>>:, the government merged /ew 1ank of ndia with -unjab
/ational 1ank. t was the only merger between nationalized banks and resulted in the
reduction of the number of nationalized banks from 9F to 8>. After this, until the 8>>Fs, the
nationalized banks grew at a pace of around 5I, closer to the average growth rate of the
ndian economy.
n the early 8>>Fs, the then /arsimha %ao government embarked on a policy of liberalization,
licensing a small number of private banks. These came to be known as /ew Generation tech@
savvy banks, and included Global Trust 1ank Bthe first of such new generation banks to be set
upC, which later amalgamated with +riental 1ank of .ommerce, A$is 1ankBearlier as &T
1ankC, .. 1ank and (,!. 1ank. This move, along with the rapid growth in the economy of
ndia, revitalized the banking sector in ndia, which has seen rapid growth with strong
contribution from all the three sectors of banks, namely, government banks, private banks and
foreign banks.
The ne$t stage for the ndian banking has been set up with the proposed rela$ation in the
norms for !oreign ,irect nvestment, where all !oreign nvestors in banks may be given voting
rights which could e$ceed the present cap of 8FI, at present it has gone up to <5I with
some restrictions.
The new policy shook the 1anking sector in ndia completely. 1ankers, till this time, were used
to the 5@;@5 method B1orrow at 5IE Lend at ;IE Go home at 5C of functioning. The new wave
ushered in a modern outlook and tech@savvy methods of working for traditional banks. All this
led to the retail boom in ndia. -eople not just demanded more from their banks but also
received more.
.urrently B9FF<C, banking in ndia is generally fairly mature in terms of supply, product range
and reach@even though reach in rural ndia still remains a challenge for the private sector and
foreign banks. n terms of quality of assets and capital adequacy, ndian banks are considered
to have clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region. The %eserve 1ank of ndia is an autonomous body, with minimal
pressure from the government. The stated policy of the 1ank on the ndian %upee is to
manage volatility but without any fi$ed e$change rate@and this has mostly been true.
3ith the growth in the ndian economy e$pected to be strong for quite some time@especially in
its services sector@the demand for banking services, especially retail banking, mortgages and
investment services are e$pected to be strong. +ne may also e$pect ' 4 As, takeovers, and
asset sales.
n 'arch 9FF;, the %eserve 1ank of ndia allowed 3arburg -inups to increase its stake in
2otak 'ahindra 1ank Ba private sector bankC to 8FI. This is the first time an investor has
been allowed to hold more than 6I in a private sector bank since the %1 announced norms
in 9FF6 that any stake e$ceeding 6I in the private sector banks would need to be vetted by
n the ndian 1anking ndustry some of the -rivate #ector 1anks operating are ,1 1ank, /G
0yasa 1ank, #1 .ommercial and nternational 1ank Ltd, 1ank of %ajasthan Ltd. and banks
from the -ublic #ector include -unjab /ational bank, 0ijaya 1ank, &.+ 1ank, +riental 1ank,
Allahabad 1ank among others. A/J Grindlays 1ank, A1/@A'%+ 1ank, American )$press
1ank Ltd, .itibank are some of the foreign banks operating in the ndian 1anking ndustry.

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The ndian 1anking system has the %eserve 1ank of ndia B%1C as the ape$ body for all
'atters relating to the banking system. t is the .ombination of 1anks of ndia and bankers to
all others banks as well.
The ndian 1anking industry, which is governed by the 1anking %egulation Act of ndia, 8>5>
can be broadly classified into two major categories, non@scheduled banks and scheduled
0. ,#hd"$ /an's:;
These banks must have paid@up capital and reserve of mot less than %s. 6F, FF,FFF. They
must satisfy the %1 than its affairs are mot conducted in a manner detrimental to the interests
of its depositors. These are further classified as follow?
#tate co@operative 1anks
.ommercial 1anks
#cheduled banks comprise commercial banks and the co@operative banks. n terms of
ownership, commercial banks can be further grouped into nationalized banks, the #tate 1ank
of ndia and its group banks, regional rural banks and private sector banks Bthe old" new
domestic and foreignC. These banks have over ;<,FFF branches spread across the country in
every city and villages of all nook and corners of the land.
1. Non;,#hd"$ /an's:;
These are banks, which are not included in the second schedule of the 1anking %egulations
Act, 8>;6. t means they do not satisfy the conditions laid down by that schedule. They are
further classified as back?
.entral co@operative banks and primary credit societies
.ommercial 1anks
.ommercial 1anks in ndia are broadly categorized into #cheduled .ommercial 1anks and
&nscheduled .ommercial 1anks. The #cheduled .ommercial 1anks have been listed under
the #econd #chedule of the %eserve 1ank of ndia Act, 8>:5. The selection measure for
listing a bank under the #econd #chedule was provided in section 59 B;F of the %eserve 1ank
of ndia Act, 8>:5. The modern .ommercial 1anks in ndia cater to the financial needs of
different sectors. The main functions of the commercial banks comprise?
transfer of funds
acceptance of deposits
offering those deposits as loans for the establishment of industries
-urchase of houses, equipments, capital investment purposes etc.
The banks are allowed to act as trustees. +n account of the knowledge of the financial
market of ndia the financial companies are attracted towards them to act as trustees to
take the responsibility of the security for the financial instrument like a debenture.
The ndian Government presently hires the commercial banks for various purposes like
ta$ collection and refunds, payment of pensions etc.
The industry is currently in a transition phase. +n the one hand, the -#1s, which are the
mainstay of the ndian 1anking system, are in the process of shedding their flab in terms of
e$cessive manpower, e$cessive non -erforming Assets B/-AsC and e$cessive governmental
equity, while on the other hand the private sector banks are consolidating themselves through
mergers and acquisitions.
-#1s, which currently account for more than <= percent of total banking industry assets are
saddled with /-As Ba mind@boggling %s =:F billion in 9FFFC, falling revenues from traditional
sources, lack of modern technology and a massive workforce while the new private sector
banks are forging ahead and rewriting the traditional banking business model by way of their
sheer innovation and service. The -#1s are of course currently working out challenging
strategies even as 9F percent of their massive employee strength has dwindled in the wake of
the successful 0oluntary %etirement #chemes B0%#C schemes.
-rivate sector 1anks have establish internet banking, phone banking, anywhere banking, and
mobile banking, debit cards, Automatic Teller 'achines BAT'sC and combined various other
services and integrated them into the mainstream banking arena, while the -#1s are still
grappling with disgruntled employees in the aftermath of successful 0%# schemes. Also,
following ndia7s commitment to the 3 To agreement in respect of the services sector, foreign
banks, including both new and the e$isting ones, have been permitted to open up to 89
branches a year with effect from 8>>=@>> as against the earlier stipulation of = branches.
.o@operative banks are small@sized units organized in the co@operative sector which operate
both in urban and non@urban centers. These banks are traditionally centered on communities,
localities and work place groups and they essentially lend to small borrowers and businesses.
The term &rban .o@operative 1anks B&.1sC, though not formally defined, refers to primary
cooperative banks located in urban and semi@urban areas. These banks, until 8>>;, could
only lend for non@agricultural purposes.
(owever, today this limitation is no longer prevalent. 3hile the co@operative banks in rural
areas mainly finance agricultural based activities including farming, cattle, milk, hatchery,
personal finance, et cetera, 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 and home finance.
.o operative 1anks in ndia are registered under the .o@operative #ocieties Act. The
cooperative bank is also regulated by the %1. They are governed by the 1anking %egulations
Act 8>5> and 1anking Laws B.o@operative #ocietiesC Act, 8>;6.
These banks provide most services such as savings and current accounts, safe deposit
lockers, loan or mortgages to private and business customers. !or middle class users, for
whom a bank is where they can save their money, facilities like nternet banking or phone
banking is not very important.
.o@operative banks function on the basis of Ano@profit no@lossA. .o@operative banks, as a
principle, do not pursue the goal of profit ma$imization. Therefore, these banks do not focus
on offering more than the basic banking services. #o, co@operative banks finance small
borrowers in industrial and trade sectors, besides professional and salary classes.
.o@operative banks differ from stockholder banks by their organization, their goals, their
values and their governance. n most countries, they are supervised and controlled by banking
authorities and have to respect prudential banking regulations, which put them at a level
playing field with stockholder banks. ,epending on countries, this control and supervision can
be implemented directly by state entities or delegated to a co@operative federation or central
)ven if their organizational rules can vary according to their respective national legislations,
co@operative banks share common features?
L C"stomr;o=nd ntitis: in a co@operative bank, the needs of the customers meet the
needs of the owners, as co@operative bank members are both. As a consequence, the first aim
of a co@operative bank is not to ma$imize profit but to provide the best possible products and
services to its members. #ome co@operative banks only operate with their members but most
of them also admit non@member clients to benefit from their banking and financial services.
L Dmo#rati# mm&r #ontro$: co@operative banks are owned and controlled by their
members, who democratically elect the board of directors. 'embers usually have equal voting
rights, according to the co@operative principle of Mone person, one voteN.
L Pro4it a$$o#ation: in a co@operative bank, a significant part of the yearly profit, benefits or
surplus is usually allocated to constitute reserves. A part of this profit can also be distributed to
the co@operative members, with legal or statutory limitations in most cases. -rofit is usually
allocated to members either through a patronage dividend, which is related to the use of the
co@operatives products and services by each member, or through an interest or a dividend,
which is related to the number of shares subscribed by each member.
.o@operative banks are deeply rooted inside local areas and communities. They are involved
in local development and contribute to the sustainable development of their communities, as
their members and management board usually belong to the communities in which they
e$ercise their activities. 1y increasing banking access in areas or markets where other banks
are less present D #')s, farmers in rural areas, middle or low income households in urban
areas @ co@operative banks reduce banking e$clusion and foster the economic ability of
millions of people. They play an influential role on the economic growth in the countries in
which they work in and increase the efficiency of the international financial system. Their
specific form of enterprise, relying on the above@mentioned principles of organization, has
proven successful both in developed and developing countries.
The .o operative banks in ndia started functioning almost 8FF years ago. The .ooperative
bank is an important constituent of the ndian financial system judging by the role assigned to
co operative, the e$pectations the co operative is supposed to fulfill, their number, and the
number of offices the cooperative bank operate Though the co operative movement originated
in the 3est, but the importance of such banks have assumed in ndia is rarely paralleled
anywhere else in the world.
The cooperative banks in ndia play an important role even today in rural financing the
1usinesses o f cooperative bank in the urban areas also have increased phenomenally in
recent years due to the sharp increase in the number of primary co@operative banks.
.o operative 1anks in ndia are registered under the .o@operative #ocieties Act. The
cooperative bank is also regulated by the %1. They are governed by the 1anking %egulations
Act 8>5> and 1anking Laws B.o@operative #ocietiesC Act, 8>;6.
Cooprati% &an's in *ndia 4inan# r"ra$ aras "ndr:
-ersonal finance
Cooprati% &an's in *ndia 4inan# "r&an aras "ndr:
#mall scale units
(ome finance
.onsumer finance
-ersonal finance
,om 4a#ts a&o"t Cooprati% &an's in *ndia
#ome cooperative banks in ndia are more forward than many of the state and private
sector banks.
According to /A!.&1 the total deposits 4 landings of .ooperative 1anks in ndia is much
more than +ld -rivate #ector 1anks 4 also the /ew -rivate #ector 1anks.
This e$ponential growth of .o operative 1anks in ndia is attributed mainly to their much
better local reach, personal interaction with customers, and their ability to catch the nerve of
the local clientele.
There are two main categories of the co@operative banks.
>a?,hort trm $nding orintd #o;oprati% /an's @ within this category there are
three sub categories of banks viz state co@operative banks, ,istrict co@operative banks and
-rimary Agricultural co@operative societies.
>&? Long trm $nding orintd #o;oprati% /an's @ within the second category
there are land development banks at three levels state level, district level and village level.
Th #oopration &an'ing str"#t"r is di%idd into 4o$$o=ing 4i% #atgoris
8. -rimary urban cooperative banks
9. -rimary agriculture credit societies
:. ,istrict central cooperation bank
5. #tate cooperative bank
6. Land development bank
Primary "r&an #ooprati% &an':
The term &rban .o@operative 1anks B&.1sC, though not formally defined, refers to primary
cooperative banks located in urban and semi@urban areas. These banks, till 8>>;, were
allowed to lend money only for non@agricultural purposes. This distinction does not hold today.
These banks were traditionally centered around communities, localities work place groups.
They essentially lent to small borrowers and businesses. Today, their scope of operations has
widened considerably.
Primary agri#"$t"r #rdit so#itis:
Agriculture continues to be the most vital sector of ndian economy, contributing a major share
to our national income and also providing livelihood to the majority of our population. A strong
base of agriculture growth is must for the overall economic development in a country like
ndia. #o to help the farmers and make the financial help for them these cooperative societies
are established .these societies finance farmers not only for their short term requirements Buse
of improved seeds, fertilizers, insecticides, etcCbut for medium and long termBirrigation and
land development activitiesCactivities also.
Distri#t #ntra$ #oopration &an':
These are the principal co@operative societies in the districts, in a state, the primary object of
which is financing other co@operatives, particularly the -.As in the district. The ,..1s came
in to e$istence after the passing of .o@operative #ocieties Act8>89. These institutions also
undertake banking business.
These institutions act as 1alancing .enters of !inance at the district level. They provide the
short term and medium term credit to the agriculturists. They also supervise the -.As in the
,tat #ooprati% &an':
The state cooperative bank is the ape$ body of cooperative bank in any state. The long@term
cooperative credit structure has two tiers in many states with -rimary .ooperative Agriculture
and %ural ,evelopment 1anks B-.A%,1C at the primary level and #tate .ooperative
Agriculture and %ural ,evelopment 1ank at the state level. under the 1anking %egulation Act
8>5>, only #tate .ooperative Ape$ 1anks, ,istrict .entral .ooperative 1anks and select
&rban .redit .ooperatives are qualified to be called as banks in the cooperative sector.
Land d%$opmnt &an':
The long term credit needs of the agricultural sector are met by another type of co@operative
institutions known as Land ,evelopment 1anks. The Land ,evelopment 1anks meet the
requirements of the farmers for developmental purposes viz., provision of equipment like
pump@sets, tractors and machinery and land improvement in the form of leveling, bundling,
reclamation of land, fencing, sinking of new wells and repairs to old wells, Loans are granted
on the security of mortgage of immovable property of the farmers.
.redit cooperatives are the oldest and most numerous of all the types of cooperatives in ndia.
The cooperative credit institutions in the country may be broadly classified into urban credit
cooperatives and rural credit cooperatives. There are about 9F>F urban credit cooperatives
and these societies together constitute for about 8F percent of the aggregate banking
business and therefore regarded as an important segment of the banking system. The urban
credit cooperatives are also popularly known as &rban .ooperative 1anks. The rural credit
cooperatives may be further divided into short@term credit cooperatives and long@term credit
cooperatives. 3ith regard to short@term credit cooperatives, at the grass@root level there are
around >9,FFF -rimary Agricultural .redit #ocieties B-A.#C dealing directly with the individual
borrowers. At the central level Bdistrict levelC ,istrict .entral .ooperative 1anks B,..1C
function as a link between primary societies and #tate .ooperative Ape$ 1anks B#.1C.

The *odhpur central cooperative bank is also a part of cooperative banks in ndia which
started on 9;
*uly 8>68 and spent 59 glories year with mark able contribution in banking

According to the chairman '%#. L))LA 'A,)%A/A Mthe main objective of the bank is to
provide financial growth to town by providing credit to farmers, tradesman and
common people by optimum utilization of human assets and funds.
n the beginning it provided short term loans to the tradesman of *odhpur division, by taking
care of increasing banking activities it e$tended its branches to other districts. t also
contributes in giving guidance in running banking business properly in different branches. At
present it has 8< branches and 988 rural service cooperative societies with the help of them it
provides loan to farmer as well as to tradesman also for cottage industry, agriculture
production business etc. as a result for achieving the targets of progressive planning of
/AT+/AL AG%.&LT&%AL 1A/2 !+% %&%AL ,)0)L+-')/T, it has %#. =<5.85 lakes as
amount of capital, %#.:9;.=6 lakes as deposit, %#. 9:=.;8 lakes as loan, 4 %#. 56;.F9 As
banking business.
,ue to timely recovery of loans bank7s /.-.A. is ;59.F6 lakes, which is only 9.;>I of actual
loan 4 very low as per the measures of %1.

8. -roviding the loans to the co operative societies.
9. #tarting the new schemes for the cooperative societies to recover the /.-.A
Bnon -erforming assetsC
:. +pening the education center for cooperative societies to improve"increase the business
through giving them proper training 4 suggestions.
5. -roviding the loans for new schemas time to time.
6. %epairing the plans for encouraging 4 awarding the employees of the 1ank.
'ission"Target of the bank is to help the self helped groups by providing those loans at low
rate. -roviding the education to the workers"employees of the cooperative societies and
managing the financial status of the cooperative societies.
8. Achieving the schedule status for the bank.
9. -roviding the retail banking to the customers with the help of nformation booth.
:. -roviding the #A'AG%A banking facilities to the customers in one branch.
The *odhpur central cooperative bank has been a=ardd t=o tims on nationa$ $%$ in
/A1%,7s best working group awards as in 8>><@>= 4 9FF:@F5.
*odhpur central cooperative 1ank has various products for the customers like ,eposits, and
3hen we say about the deposits the *odhpur central cooperative bank has the following
accounts .urrent account, saving bank account, Term deposit, %.,., in term deposit bank
further has the following schemes like fi$ed deposits. t includes different types of loan
schemes. .urrently the *odhpur central cooperative bank has many loans schemes. Like
personal loans, home loans, vehicles loans, )ducation loans, agriculture loan, 'inor irrigation,
self helped group scheme, self employed group scheme etc.
PERFORMANCE IN 2009 & 2010:
>in pr#ntag?
>in pr#ntag?
>in pr#ntag?
.ost of deposits ;.;8 ;.8F ;.6=
.ost of credits 6.5F 6.96 6.8F
%eceive through investments >.8< =.56 <.>>
%eceive by loans =.99 = =.;<
Average income of fund <.;8 <.6= <.5>
.ost of fund 6.:8 6.8< 6.5=
!inancial margin 9.:F 9.58 9.F8
non fund ncome F.88 F.89 F.86
TOTAL 1.40 1.52 1.03
.ost of management 8.99 8.:; 8.:5
Ta$ payable F.8; F.:: F.F;
%isk cost F.5: F.:8 F.98
TOTAL 0.60 1 0.30
NET MARG*N A.3A A.52 A.55
NET PROF*T 116.A4 $a's 115.15 $a's 12A.03 $a's
3hen we talk about the size of the bank it has 8< branches all over the %ajasthan. The major
competitors of the *odhpur central .ooperative 1ank and its alliance are #.1.1.*., #.1..,
%A*A#T(A/ #TAT) .++-)%AT0) 1A/2 and other banks. n case if the bank has
shortage of money and bank needs the money for its various purposes then the main supplier"
lender of the money is the share holders or the %1.
NA* ,ADAK B!OD8P)R '%#. #&,(A %AT(
PAOTAB!OD8P)R '%. *))0%A* -A/3A%
,O!T* GATE B !OD8P)R '%.'+(,. A'/ '+,
/*LARA '%.1%A*)#( 1##A
P*PAD C*T- '%.KA#(-AL A%KA
AO,*A '%. 1(A3A/ #(A/2A% '))/A
/8OPAL GARD8 '%. %A'-%A#A, '))/A
/A+D* '%.*AK%A' -%A*A-AT
/ALE,AR '%.A#(+2 2&'A% 2(/,)L3AL
,8ER GARD8 '%.+'-%A2A#( *A-AL
/AAP '%.*)TA%A' 0#(/+
L)N* '%.#(0 #/G( %A*-&%+(T
T*NWAR* '%.1AL2%#(/A G+KAL
MAT8AN*A '%.%A')#( .(+&A(/
DEC8) '%.#(A%A, T%-AT(
AO) '%.%A,()#(KA' #(A%'A
1AA4;A5 1AA5;A3 1AA3;A5 1AA5;A6 1AA6;A7
0. #hare capital ;<:.=5 <5F.8= <<>.88 <<=.68 <<:.F8
1. ,eposits 856F>.;5 86:==.6= 8<699.89 9F=F<.:F 9;;:5.F=
2. Loan ad%an#mnt
BaC#.T. ==>5.;< 88868.;: 8:<9>.:: 8<>6=.;9 8;5FF.69
BbC diversified
i. !arm
8;9.98 99>.;9 98>.>F 9:5.F; 5F9.<:
ii. /on
;>8.:; >6:.96 >56.=< <8<.89 =F5.F6
BcC #.T. other
=85.9= 8F:=.9< 8F9:.== 8F5;.<5 ==9.9>
Tota$ 0A531.51 024A1.55 05706.76 07753.54 06467.57
4. %ecovery
aCdemand 8F;F;.>8 8:8:>.6; 8;5<9.59 9FF=;.;; 99;F;.8>
bCrecovery 8F:F<.;6 89:=:.>; 86>=>.:; 86F;>.F8 9F:;5.::
.Cpercentage >6.:= >5.96 ><.F< <6.F9 >F.F=
5. 1orrowing from
ape$ bank
5;:>.99 ;8<;.:> >6:8.F= 8F;5:.5= >;=;.;=
3. Loan
88>86.F> 856::.9; 85=8;.;> 8><6<.F8 9F6;:.F6
5. 3orking capital 99:== 96655.<< :86=5.>= :6<=8.5; 585:8.5F
6. .ost of
::6.=6 :=<.:8 558.6; 555.F8 5;6.:8
7. Pro4itC$oss 230.15 262.A1 122.A1 153.05 116.A4
This bank is working for improve the financial position of cooperative banks, it also helps to
achieve the goals made by /A1A%, and tries to fulfill all the targets planned by /A1A%,
under its cooperative banks development programs. And the result of its successful working
is that it has =<5.85 lakes as capital, :9;.=6 lakes as deposits, 9:=.;8 lakes as loan business.
C"rrnt 4inan#ia$ position o4 &an'
The /-A of bank is ;59.F6 lacks which is only 9.;> I of total given loan
,ue to its proper management the bank is able to maintain its profits, which can be seen as
-EAR, PROF*T>in $a's?
1AAA;A0 005.42
1AA0;A1 054.2A
1AA1;A2 146.66
1AA2;A4 2A0.43
1AA4;A5 230.15
1AA5;A3 262.A1
1AA3;A5 122.A1
1AA5;A6 153.05
1AA6;A7 116.4A
1AA7;0A 12A.03
As we can see that the bank has perform average on the basis of profits but as we know that
the objective of the bank is to provide financial growth to town as well as farmers, it can be
say that bank perform well and tries moving toward accomplish its objective.
The bank always tries to financially help the people hence people devotes their faith toward it
which results the growth in its working capital. The increments in the working capital of bank
can be seen as follows?
>in $a's?
9FFF@F8 89>F8.:F
9FF8@F9 85695.6:
9FF9@F: 8<8=F.>6
9FF:@F5 8>:59.;8
9FF5@F6 99:==.FF
9FF6@F; 96655.<<
9FF;@F< :86=5.>=
9FF<@9F= :6<=8.5;
9FF=@F> 585:8.5F
9FF>@8F 56;F9.95
The increase in working capital shows the good management and employee as well as
customer7s trust toward bank.
&nlike personal loans Bwhere people borrowing the funds and the collateral are not likely to
changeC, loans in the world of business require additional fle$ibility in order to meet the needs
of the business as well as satisfy the requirement of the lender. Accomplishing this seemingly
difficult task is done by using a credit facility which is an overall credit line that can be broken
into multiple credit lines and collateral.
The term credit can be understood by giving light on following points?
The profit of a bank depends primarily on the utilization of its fund. 1ut 1ank cannot lend its
fund fully. As per 1anking .ompany Act 8>>8 every banking company has to maintain a
specified minimum Bpresently 96IC of the total of its demand and time liabilities in the form of
cash and approved securities with %1. This percentage or ratio is termed #tatutory Liquid
%atio. !urther every scheduled bank has to maintain with %1 an average daily balance, the
amount of which has not to be less than a particular percentage Bpresently ;IC of the total of
its demand and time liabilities. As such 1ank generally goes for short@term finance although a
small portion of its total deposit is invested as long term lending. 1anks allow different forms
., 1anking business primarily involves accepting deposits from the public and investing or
lending the same and thereby making profit out of it. (owever, lending money is not without
risk and therefore banks make loans and advances to farmers, traders, businessmen and
industrialist against either tangible Bland, building, stock etc.C or intangible security. )ven then,
the banks run the risk of default in repayment. Therefore, the banks follow cautious measures
while lending money to others. This core function of a bank is performed by the .redit
,epartment of the bank. n this case, the relationship of bank and customer is that of the
creditor and debtor.
&nlike personal loans where the person borrowing the funds and the collateral are not likely to
change, loans in the world of business require additional fle$ibility in order to meet the needs
of the business as well as satisfy the requirement of the lender. Accomplishing this seemingly
difficult task is done by using a credit facility which is an overall credit line that can be broken
into multiple credit lines and collateral.
1anks usually provides following types of credit?
8. .A#( .%),T Bhypo.C
9. .A#( .%),TBpledgeC
:. LT%
5. T)%' L+A/
6. L)A#) !/)/./G
;. #).&%), +0)%,%A!T B#+,C
<. +T()%#
0. CA,8 CRED*T >8-PO.?;:
.ash .redit or continuing credits are those that form continuous debits and credits up to a
limit and have and e$piration date. A service charge that is effect an interest charge is
normally made as a percentage of the value of purchases. These credits may be of the nature
of pledged and "or hypothecated and banks should report these in separate heads
incorporated under the main head cash credit.
&nder this arrangement a credit is sanctioned against hypothecation of the raw materials or
finished goods. The letter of hypothecation creates a charge against the goods in favor of the
1ank but neither the ownership nor its possession is passed on to itE only a right or interest in
the goods is created in favor of the 1ank and the borrower binds himself to give possession of
the goods to the bank when called upon to do so. 3hen the possession is handed over, the
charge is converted into pledge. This type of facility is generally given to the reputed
borrowers of undoubted integrity.
&nder this arrangement a cash credit is sanctioned against pledge of goods or raw materials.
1y signing the letter of pledge, the borrower surrenders the physical possession of the goods
under the 1anks effective control as security for payment of 1ank dues. The ownership of the
goods, however, remains with the borrower. The pledge creates an implied lien in favor of the
1ank on the underlying merchandise. n the event of failure of the borrower to honor his
commitment the 1ank can sell the goods for recovery of the advance. /o collateral security is
normally asked for grant of such credit.
This is a loan facility up to a satisfactory limit to the traders " customers by a 1ank against
security of the value of the imported merchandise. This item also includes loan against Trust
A 1ank advance for a specific period repaid with interest under fi$ed schedules. The term
loans may be as follow?
#hort Term? &p to and including 89 months.
'edium Term? 'ore than 89 months up to and including ;F months.
Long Term? 'ore than ;F months. OThis item includes lease financingP
An entrepreneur, under this #cheme, may avail of the lease facilities to procure industrial
machinery Bwithout having to purchase it by down paymentC with easy repayment schedule.
The clients also get special rebate in their income@ta$ payment under the scheme.
A loan facility on a customer7s current account at a 1ank permitting him to overdraw up to a
certain agreed limit for an agreed period. The terms of the loan are normally that it is
repayable on demand or at the e$piration date of the agreement.
5. OT8ER,;:
Any loan that does not fall in any of the above facilities is considered as MotherN. 1locked "
#egregated continuing credits B-ledge, (ypothecation or +verdraftC when re@scheduled by the
1anks for payments over a number of periods should also be reported against the head
8. .redit Bmust be godC
9. .apacityBability to payC
:. .apitalBmoney that going into businessC
5. .ollateralBassets that secure the loanC
6. .haracterBthe personC
;. .ommitmentBability and willingness to succeedC
<. .ash flowBcan it support business7 debt and e$penseC
=. .onditionsBeconomic, finance anything that effect the businessC
T*TLE OF ,T)D-: ;
Title of study is M$oans and #rdit 4a#i$ity at !odhp"r #ntra$ #ooprati% &an'F
The jodhpur central cooperative bank generally gives loan for short and medium term
requirement in both rural and urban sectors.
,uration of project is 56 days from 8>
*une to 5
august. 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.
The objective of research is as follows?
8. !irst objective is to find out various loan schemes provided by the bank.
9. To learn various aspects of loan provided by bank.
:. To know the problem faced by customers when obtaining the loan.
The report is e$ploratory and descriptive in nature.
This report is going to describe various loans provided by *odhpur central cooperative bank
hence it is a descriptive in nature but it suggests some important points to improve the
services of the bank so it is e$ploratory in nature also.
!or the purpose of project data is very much required which works as a food for process which
will ultimately give output in the form of information. #o before mentioning the source of data
for the project would like to mention that what type of data have collected for the purpose of
project and what it is e$actly.
-rimary data is basically the live data which collected on field while talking with the
)mployees. n some cases got no response from their side and then on the basis of my
previous )$periences filled those fields.
'ain source for the primary data for the project was my face@to@face conversation which got
by the employees or sometimes filled myself on the basis of discussion with the employees.
#econdary data is already published data. t is the data which is funded or collected by
someone else before and presently used by further research work. #econdary data for the
base of the project collected from annual report of bank, bank pamphlets and internet etc.
,COPE OF T8E ,T)D-:;
)ach and every project study along with its certain objectives also has scope for future. And
this scope in future gives to new researches a new need to research a new project with a new
scope. #cope of the study not only consist one or two future business plan but sometime it
also gives idea about a new business which becomes much more profitable for the
researches then the older one.
The scope of this research is as follows?
0. %esearch study could give an idea of network e$pansion for capturing more market and
customer with better services and lower cost without compromising with quality.
1. n future customer requirement could add with the product and services for getting the edge
over competitors.
2. ,ifferent parameters could be used for the purpose of new products with e$tra benefits
which are required by the customers.
4. !actores which are responsible for the performance of the bank can also be used for the
modification of the strategy and product for being more profitable.
The rate of interest may vary according to market environment.
These figures are according to publish in annual report and according to employees of
*odhpur central cooperative bank.
The report is according to my perception only and can7t be taken as final decision.
This study only relates to one organization, so conclusions drawn may not be finding its
utility in all the other banks.
)ven the employees of the bank hesitated to give the complete 4 accurate data.

The *odhpur central cooperative bank provided following loan and credit facilities
&nder this scheme the loan is provided for fulfillment of personal and family needs by taking
care of refund capacity of applicant. The applicant can enjoy this facility by following two
Term loan for ma$imum 6 years.
%enewal of .redit limit each year according to last year7s transactions.
,omicile of *odhpur city whose age is between 98to 66 years.
)mployee of Government" self governed, semi government, leading banks, urban
cooperative bank"court, financial institution, education institutes etc.
The self employed person who earns fi$ed income and files income ta$ return also
having -A/ card.
+rganizer of standing committee.
'a$imum loan amount is 9 lacks.
= times of Gross 'onthly salary or rs.9 lacks whichever is less.
n the case of businessman" professionals the calculation of average monthly salary
is to be done according to the T return of past three years.
86 times of monthly salary of manager of selection committee or 9 lacks
3hichever is less
According to the decision taken by bank the rate of interest is 8;I.
'a$imum 6
years, in the case of employee 6

or date of retirement whichever
is earlier.
The advance cheque is taken according to )' installments of other banks.
The bank requires the guaranty of 9 persons having creditability of loan amount who
are recognized by bank.
The collateral security is also accepted by bank in the case of non remunerated and
employer who having loan of more than 6FFFF and lake of contract of direct recovery.
-hoto of applicant
%esidential proof
Two guarantors
ncome certificate of applicant and guarantor
n the case of salaried employee the guarantee certificate passes by his employer.
n case of loan amount which is more than 6F lacks the evaluated rate of fi$ed assets
for mortgage.
The nominal membership fee and deposit amount.
-romissory note.
Loan contract.
,eed of security papers.
'ortgage letter Bin the case of mortgage of fi$ed assetsC
Advanced cheque Baccording to the installmentsC
+ther documents.
&nder this scheme an applicant may apply for loan related to purchase of a plot, construction
of a building, purchase and repairs of building.
,omicile of *odhpur city whose age is between 98to 66 years.
)mployee of Government" self governed, semi government, leading banks, urban
cooperative bank"court, financial institution, education institutes etc.
The self employed person who earns fi$ed income and files income ta$ return also
having -A/ card.
#tanding committee admin
'a$imum loan amount is 86 lacks for loan related to purchase of a plot, construction of a
building, purchase and repairs of building.
The interest rate is 8F.6FI in the case of normal purchase or repairs of plot and in the case of
purchase or repairs of commercial building, shops the rate of interest is 85I.
This loan can be taken 'a$imum for 86 years.
The bank requires the guaranty of 9 persons having creditability of loan amount who are
recognized by bank.
-hoto of applicant
-opulated area plot strap which is on the name of applicant
.ost estimate and construction cost map which is approved by official engineer
ncome certificate of applicant.
Two guarantors and their income statement with photo.
The nominal membership fee and deposit amount.
+E8*CLE LOAN >4or prsona$ "s?:;
&nder this scheme the loan is to be given for four wheeler Bcar, jeep etc.C for personal use
,omicile of *odhpur city.
)mployee of Government" self governed, semi government, leading banks, urban
cooperative bank"court, financial institution, education institutes etc.
The self employed person who earns fi$ed income and files income ta$ return also
having -A/ card.
#tanding committee admin
The loan provides up to 6 lacks for purchasing of four wheeler for personal use.
The rate of interest for four wheeler is 85I.
The time limit set by the bank authority for this kind of loan is ma$imum < years.
The bank requires the guaranty of 9 persons having creditability of loan amount who are
recognized by bank.
-hoto of applicant and his legal license.
0ehicle quotation and income statement of applicant.
!i$ed assets for mortgage.
Two guarantors with their income statement and photo.
The nominal membership fee and deposit amount.
+E8*CLE LOAN >4or #ommr#ia$ "s?:;
&nder this scheme the loan is provide for purchase vehicle for commercial use.
,omicile of *odhpur city.
)mployee of Government" self governed, semi government, leading banks, urban
cooperative bank"court, financial institution, education institutes etc.
The self employed person who earns fi$ed income and files income ta$ return also
having -A/ card.
#tanding committee admin


The loan provides up to 8F lacks for purchasing of four wheeler for commercial use.
The rate of interest for four wheeler is 85I.
The time limit set by the bank authority for this kind of loan is ma$imum < years.
The bank requires the guaranty of 9 persons having creditability of loan amount who are
recognized by bank.
-hoto of applicant and his legal license.
0ehicle quotation and income statement of applicant.
!i$ed assets for mortgage.
Two guarantors with their income statement and photo.
The nominal membership fee and deposit amount.
This loan scheme is for?
-urchase or construction of plot"building for the persons having regular income and
loan for take over the current loan account for different financial institutes.
.onstruction or purchase of building for .ommercial use, business use, shops,
showrooms, warehouse etc.
%epairing, e$pansion, and renovation of (ome" commercial building.
,omicile of *odhpur who wants to purchase" construct the building or house within
the district.
)mployee of Government" self governed, semi government, leading banks, urban
cooperative bank"court, financial institution, education institutes etc.
1usiness man who fills income ta$ return for last : years.
/ormally the age limit for applicant is 6F years but it can be e$tent up to 66 years in
certain special cases.
The loan limit is up to 86 lakes
%s. 9 lakes in the case of repairs
The margin would be 9FI up to 9 lakes and 96I in the case of above 9 lakes
There should be no margin in fee cost in the case of plot replacement and tere
should be repayment in : installments after fully utilization of his contribution of loan
in the case of construction.
&p to 6 years 8FI
!rom 6 to 8F years 8F.6FI
Above 8F years 88I
&p to 6 years >.6FI
!rom 6 to 8F years 8FI
Above 8F years 8F.6FI

The time period for loan is ma$imum 86 years or date of retirement whichever is earlier,
Loan application form.
-hoto of applicant and co applicant.
.opy of document of plot which is to be purchased or constructed.
.onstruction approval from office in the case of construction.
The cost estimation and approved map of building going to be constructed.
#alary statement in case of salaried applicant and income ta$ return of last : years in
case of non salaried applicant.
,omicile certificate of applicant.
ncome statement and identity card of two gaunter etc.
-romissory note.
Loan contract.
Grantee deed of two grunters.
'ortgage letter of fi$ed assets
Advance cheque
Acknowledgment according to selected interest rate.
-rescribed document from bank advocate.
+ther related documents.
This loan is for pursuing higher studies by their children.
#tudents who have got admission to some professional or other courses and whose prospects
of getting employment are very good.
The ma$imum limit of loan is %s. :.FF lakes per borrower. 6F times of the gross monthly
salary of the applicant or %s. 8F.FF lakes whichever is less ensuring :6I take home salary by
the loanee after payment of installment of loan.
The rate of interest on such loan is 89I.
6 years after the borrower gets employment or one year after completion of course whichever
is earlier.
Attested copies of documents for proof of age"date of birth and proof of residential
-assport size photo of the applicant, co@obligates and guarantors.
.opy of mark sheets"degree certificates of previous academic qualifications.
ncome proof"latest income ta$ return of parents"co@obligates, guarantors. Bif anyC
,etails of collateral security along with valuation certificate of Govt. approved valuer Bif
,etails"statements of 1ank accounts held by the student applicant"co@
obligateBsC"guarantors Bif anyC for the last si$ months.
.opy of -assport"0isa, cost of air fare Bdocumentary detailC in case of studies abroad.
The eligible candidates who can apply for such loan are private firm, commercial, partnership
The amount of loan that can apply by eligible candidates is ma$imum 96 lacks.
The rate of interest which is charge by bank is 8:I.
The time period for loan is not fi$ but renewal of time period can held according to transaction
made in between the month of *uly to *une of previous year.
+n mortgage Q5FI
+n pledge Q96I
passport size photo
-revious year7s account of firm.
T/ /+. +f firm.
-artnership deed of partnership firms.
%ent agreement in case of industry on rent.
,ocument of 9 assets on mortgage
Two guarantors.
All the loan schemes we have been seen above shows that cooperative bank provided all kind
of loans at nominal rate of interest. The cooperative bank provides loan only to hit7s members
hence if a person wants loan from that bank he has to
The *odhpur central cooperative bank provides some other kind of loans also like
Loan for #elf employment BR85IC.
Loan for farm sector BR8:IC,
Loan for cooperative society"marketing society BR85IC,
.omputer loan BR=IC,
Loan for farm sector BR8:IC
Loan for non farm sector BR85IC
2rishak mitra cooperative credit BR<IC
.ooperative society"marketing society credit limit BR 85IC
/ational saving certificate" kisaan vikas patra BR 89IC
/ational saving certificate" kisaan vikas patra Bfor staffCBR=IC
Loan to bank staff for computer BR89IC
Agriculture loan Bup to 6FFFF"@C BR89IC
/on agriculture loan Bup to 6FFFF"@C BR8:IC etc.
2000-01 1% 1%9 2&%0
2001-02 '9 '9( )0&21
2002-03 1)) 1)9% 29&9'
2003-0 1(1 1')' )2&%'
200-0! 2*% 2)%) %)&+)
200!-0" *20 *+2' 1)%&'(
200"-07 1%+ 19+0 1*0&*9
2007-0# 212 221) 1)'
200#-0$ 1%) 19)0 1((&)0
200$-10 191 1992 1'%&2)

The 1ank has variety of credit schemes specially suitable to individuals based on the /eeds
and personal repayment capacity. The chart shows the increments in loan amount given by
bank to women self employment groups. The amount of loan increases and the no. of groups
also increase due to fait and reasonable rate of interest on loan provided by bank.
The recovery following table shows the total amount of loan outstanding?
>amo"nt in tho"sands?
9FFF@F8 ;::6.86
9FF8@F9 ;:F>.85
9FF9@F: =8>9.56
9FF:@F5 >9<6.F9
9FF5@F6 88>86.F>
9FF6@F; 856::.9;
9FF;@F< 85=8;.F>
9FF<@F= 8><6<.F8
9FF=@F> 9F6;:.F6
9FF>@8F 9:=;8.:=
The chart shows the total amount of loan which will have recovere by bank,the increament
shows the that trend to take loan from cooperative bank increses ,it was a little bit constant in
year 9FF6 and 9FF; but then increase which shows the interest of individual in taking loan
from cooperative bank.
The loan amount provided by bank increase as compare to last 5 years, the interest of
different sectors in taking loan from cooperative bank can be seen in following table?
,#tors 1AA4;A5
>amo"nt in $a's?
>amo"nt in $a's?
Agriculture 8;9.98 5<F.>=
/on agriculture ;>8.:; =F>.<<
other =85.9= 8F9>.6F
The chart shows the increment in the loans provided by banks and it is clear that the bank not
only focus on agriculture loan but on other loan also which includes loans for #elf
employment, commercial"working capital mortgage etc. it shows cooperative bank is not
bounded in providing loan in agriculture area only and can be a good source of fulfill short and
medium term requirement of finance in rural area.

The banks have introduced various deposits schemes which induce the common man to save
more money. The &rban .o@op. 1anks accept deposits for the purpose of lending. t is the
primary duty and function of the &rban .o@op. 1anks to safeguard the interest of depositors.
3henever deposits are accepted, the bank agrees and undertakes to repay the amount of
deposits with interest to the depositor on maturity. The ownership of the deposit amount vests
with the customer and the custody of the deposit amount are with the 1anker. #o whenever
Advances and Loans are sanctioned to shareholders " members of the 1ank, the 1anker has
to take e$treme care to see that the 1orrower repays the amount of loan with interest so as to
enable the 1anker to repay the amount of deposit with interest to the customer.
-oints which are to be taken care by bank while giving loan?
This is necessary to ensure that every borrower has a proper repaying capacity for repayment
of the amount of loans and advances that would be sanctioned. #ecurities are also taken to
ensure that in case the borrower fails to repay the amount of loan, the securities can be
attached and sold out and the debts can be liquidated.
)ven with this background, though there is a detailed scrutiny of loan application, it is
observed that there are very few cases, where the judgment of the bankers fails. n such A!ail
.asesA the borrowers are not ready and willing to repay the amount of loan, the securities can
be attached and sold out and the debts can be liquidated.
!ollowing are some points which bank takes care while lending money?
,ate of sanction of loan.
Amount of loan sanctioned.
%ate of nterest that would be charged.
Last date of repayment of loan.
-eriod for which loan is granted.
,etails regarding securities offered.
Norma$ mas"rs to & adoptd &y &an' o44i#ia$s 4or r#o%ry o4 d"s
3henever, a borrower commits breach of agreement in respect of repayment of schedule of
the amount of loans with interest etc., we safely say that there are A+0)%,&)# A in the Loan
Account. +nce the Loan A"c is an overdue A"c i.e. the borrower has committed default in
repayment of loan amount as per the dates specified in the Agreement, then the 1anker has
necessarily to adopt measures which will result into recovery of overdue amounts.
3henever the borrower commits default in repayment of loan amount, immediately the bank
should serve A -reliminary /oticesA on the principal borrower and the sureties advising them to
repay the amount of overdue with interest etc. #uch -reliminary /otices should invariably
mention information which is of factual nature relating to
BiC Amount of loan sanctioned.
BiiC ,ate of sanction of loan.
BiiiC /ames of the sureties.
BivC Amount of the loan sanctioned.
BvC Amount of over dues with interest etc. on a particular date.
Addition to the above it must also be communicated the bank shall proceed to take further
action against the principal borrower and sureties in case of failure to repay the amount of
loan"over dues. t has been often said AAA stitch in time saves nineA. Thus, the banker must be
vigilant, right from the disbursement of loan amount till the recovery of the entire loan amount.
There should be effective supervision over the amount of loan sanctioned.
R#o%ry thro"gh sa$ary C =ags
After issue of such preliminary notices, there may be a positive response from the principal
borrower and he may repay the amount of defaulted loan installment, or the principal borrower
and the surety may approach the authorities of the bank and may e$plain their genuine
difficulties regarding repayment of loan amount or there may offer to repay the dues partially.
There may be cases where there is no response from the borrower " sureties.
3ith this background, the bank should precede further to devise such steps which will result in
recovery of dues. &nder various #tate .ooperative Acts Be.g. #ection 5> of '...#. Act 8>;FC
it has been provided that if a member of a society. "1ank authorizes his )mployer to make
deduction from his salary"wages, in order to satisfy the claims of the society"1ank, and then
on receipt of requisition letter from the concerned 1ank, the )mployer shall proceed to make
deduction from the salary"wages from the concerned employee"member to meet the claims of
the 1ank. The )mployer must remit the amount so deducted immediately to the 1ank
/on@compliance of these provisions under the #tate .ooperative Act shall be constructed as
AoffenceA and further .ivil and .riminal action can be instituted against such )rring )mployer.
n addition to the above, there are provisions under the ndian -ayment of 3ages Act 8>:;
Bvide #ection <B9C and #ection <B9C BjC which stipulates that the )mployer shall make
deduction from the salary"wages of an )mployee to satisfy the claims of the .ooperative
#ociety " 1anks.
,tt$mnt o4 Disp"ts
1ased on the noting of the 'anagement, the 1oard of ,irectors may pass a %esolution
authorizing the 'anager"or such other officer to file H,ispute ApplicationN in the .o@op. .ourt
against the defaulting principal borrower and his sureties. #ection >8 of the '.# Act
empowers the co@operative courts to decide on S,isputes7 and #ection >6 further empowers
the court to direct attachment of property before announcement of the award which is called
Attachment before award or order and interlocutory order if it is satisfied that the parties to the
dispute are likely to remove" dispose of whole or part of his property. #ection >6 similarly
empowers the %egistrar " +fficer authorized by him to take the above measures in case of
disputes referred to him.
The prayer clause normally consists of following important points @
The opponents may be held responsible to repay the entire amount of loan with
f the opponents fail to pay the amount of loan, the disputant may be entitled to attach
the movable and immovable property of the opponents.
The disputant may be entitled to sell the attached property and recover the amount due
from the opponents.
Any other orders to meet the ends of justice.
&nder #ection 8:B9C of the Act, a ;F days7 notice has to be served by the bank on the
borrower with a request to discharge the loan liability The notice must contain details of?
amount payable by the borrowerE
#ecurity interest intended to be enforced.
+n receipt of notice, if the borrower makes a representation or raises an
objection, the secured creditor must consider such representation or objection.
f the secured creditor comes to the conclusion that the said
representation or objection is not acceptable or tenable, he must communicate the reasons
for non@acceptance of representation or objection within one week of receipt of the above.
'odes of recovery available Bs.8:B5CC
f borrower fails to discharge the liability, secured creditor has the following options
Take possession of secured asset
Take over the management of the business of the borrower including
The right to transfer by way of lease, sale, assignment, etc.
The said rights must be e$ercised only where substantial part of business
of borrower is held as security for the debt.
Appoint a manager to manage the security asset taken over.
ssue notice to persons who acquired the secured asset from the
borrower or from whom money is due.
The .''B chief metropolitan magistrateCor ,'
B,istrict magistrateC is empowered even to use force necessary for taking steps towards
securing compliance
&nder the Act, the borrower can appeal before ,%T by paying the fee within 56 days B#.8<C.
The appeal can be entertained only when the borrower deposits fifty per cent of the amounts
claimed in the notice.
,%T can consider the legality of action taken by the bank. f it finds it wrongful, it can restore
the business or management to the borrower. f, however, the ,%T finds that the action taken
by the bank is as per the provisions of the law, then the bank" secured creditor can proceed to
take action under #ection 8:B5C of the Act. The application has to be disposed of by the ,%T
within ;F days and if it7s pending for four months, either the bank or the borrower can appeal
to the Appellate Tribunal for e$peditious Tribunal.
An application for recovery of balance amount, if any, by secured creditor can be presented to
the debt recovery tribunal by the authorized officer BA+Cof the bank or can be sent by
registered post addressed to the registrar of debt recovery tribunal.
Appeal to the appellate tribunal under #ection 8=?
-ersons aggrieved by the order of ,%T to prefer an application before the appellate
tribunal within :F days.
The appellate tribunal is vested with power to reduce the deposit amount to not less than
96 percent.
!ollowing table shows the comparative analysis of recovered and overdue loan of bank?
yar Tota$ #$aim>in
>in $a's?
R#o%ry in
9FF=@F> 9965F.9F 8>8<>.:9 =6.F=
9FF>@8F 8<59<.F6 >==5.F> 6;.<9
The table shows that recovery of loan reduces as compare to last year. (ence the bank
needs to try to recover the very old and overdue loans. !or the recovery of over dues bank
formed a flying squad which starts working from =@F:@9F8F.
Agriculture remains the predominant sector in terms of employment and livelihood with more
than half of ndia7s workforce engaged in it as the principal occupation. (owever, Agriculture
remains the predominant sector in terms of employment and livelihood with more than half of
ndia7s workforce engaged in it as the principal occupation n addition, the rural poverty is
getting concentrated in agricultural labor and artisanal households which account for over
5FI of the rural poor. %ecent trends that have raised concern regarding food security,
farmers7 income, and poverty include ?
BiC widening economic disparities between irrigated and rain@fed areas,
BiiC increased vulnerability to world commodity price volatility,
BiiiC inefficient use of available technology and inputs with low crop productivity,
BivC degradation of natural resource base,
BvC rapid decline in groundwater, with particularly adverse impact on small and marginal
farmers, and
BviC ncreased non@agricultural demand for land and water. Aggravation in social distress as a
cumulative impact of the above reflected in an upsurge in farmers7 suicides.
3ith taken above factors in consideration *odhpur central cooperative bank and 9F< rural
services cooperative committees Bwork under this bankC forgone debt amount of some
members which can be seen as follows?
Typs o4 mm&rs No. o4 mm&rs Amo"nt >in $a's?
marginal farmers 85=5 8=6.<<
#mall farmers :65: 586.<>
others 8>=F6 9669.68
!rom the above claim an amount of %#. ;8F.6; lakes received from marginal and small
farmers and %#. 8>99.69 lakes from others have been received on ;@F5@9F8F.
0? ,$o= progrss: The progress of co@operative banks is not up to the e$pectation and is
slow when comparing other type of banks because of many restrictions on their operations.
1? Limitd s#op o4 in%stmnt: The main objective of co@operative banks is to provide
credit facilities to the poor people i.e., to small and marginal farmers and other weaker
sections. They were originally having limited scope to invest their surplus funds freely.
2? D$ay in d#ision ma'ing: The co@operative banks directly or indirectly by various
agencies i.e., /A1A%,, %1. Thus it takes long time to take decision on some important
issues. This, in turn affects the progress of co@operative banks.
4? La#' o4 training 4a#i$itis: Generally the staff of co@operative banks is urban oriented and
they may not know the problems and conditions of rural areas. Lack of training facility
concerning these areas also affects the growth of co@operative banks.
5? Poor r#o%ry rat: The recovery performance of the co@operative banks is not up to the
mark. the reason for poor recovery of loans and mounting overdue areE inadequate
supervision and follow up action to assess the end use of credit by co@operative banks due to
inadequate staff in banks, poor dentification of beneficiaries, inadequate generation of output
and income by the beneficiaries, poor marketing facilities.
3? La#' o4 $o#a$ parti#ipation: %ural co@operative banks have not received sufficient local
participation. The cooperative banks have been thrust upon the rural people from above
without involving local people in its operation and management. n this connection, it is
suggested that knowledgeable persons in the rural areas need be associated with the
management of co@operative banks.
5? La#' o4 #o;ordination: There is lack of proper co@ordination between co@operative banks
and other institutional financing agencies like commercial banks and %%1s. Also, there is
inadequate co@ordination between co@operative banks and other developmental agencies
operating in rural areas. This has hampered the progress of co@operative banks.
6? Poor d%$opmnt o4 r"ra$ aras: n spite of several efforts made during the course o
development plans to promote the development of rural areas, it has not taken place in a
significant way. The areas, at present lack economic infra@ structures likeE facilities of
marketing storage and distribution of inputs. 1esides, social infrastructure likeE schools,
medical facilities. As a result, co@operative banks find it e$tremely difficult to operate in such
8. 'ore mass awareness campaigns should be organized in order to enhance market share
of bank. #o 1ank should concentrate on its advertisement itself.
9. 1ank should refocus on its interest rate as responded by people. -eriodic review of the
interest rate should be done.
:. There should be computerized system in the bank as it will reduce the time wastage of
manual work and will lead to the better performance of the bank.
5. Training of the employees should be there to meet the needs of the time.
6. -roper posting of the staff should be done.
;. .ustomer7s satisfaction must be the top priority of the bank.
<. 'a$imum practical e$posure should be provided to the job trainees so that they may
handle the various enquiries of customer effectively.
=. .ommunication gap within the bank and with the head@office should be reduced.
>. nfrastructure facilities should be provided to the branch of .ooperative 1ank, as it is
catering to the 6@; nearby villages.
8F. 1anks is also advised to have proper internal control measures for monitoring its functions
and transactions.
The study concludes that .ooperative 1ank, which was established for mainly for the
service of rural sector, still is not on the line to its goal. t is lacking at various elements,
particularly at the branch levels, which reveals the edge of other public and private sector
banks over the .ooperative bank, the lines at which the bank is lacking behind. ndiscipline
and lack of commitment in these banks make people7s trust in the cooperative sector a
#ome of the co@operative banks are quite forward looking and have developed
sufficient core competencies to challenge state and private sector banks. 1ut there is shortage
of staff in this bank and the traditional manual banking which is affecting the business and
customer services. -eople are still unaware of the services provided by the .ooperative
1anks due to lack of advertisement.
There is a need to analyze and pick up early warning signals. A change is needed
today in the cooperative banks which is built on confidence in human capital @ the most
important of all resources @ in commitment, creativity and innovation brought about by
proactive management, membership and employees. The ability to capture knowledge and
wisdom gives cooperative banks their competitive advantage. A prerequisite is that
participants from all parts of a cooperative organization know and understand its purpose,
core values and visions.
n this way, by keeping in mind the certain shortcomings, appropriate measures to
overcome them should be adopted. #o that the real purpose of the .ooperative bank must be
realized with a competitive advantage and the gap between the customer perception of the
.ooperative 1ank and the other private and public sector bank, can be reduced.
Annual report of the *odhpur central cooperative bank.
,ocuments provided by bank.
0arious circulars issue by the bank.
www.cab.org.inT knowledge bank