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are at the same time the owners and the customers of their bank. Co-operative
banks are often created by persons belonging to the same local or professional
their members with a wide range of banking and financial services (loans,
deposits, banking accounts etc.) They differ from stockholder banks by their
authorities and have to respect prudential banking regulations, which put them
been defined by Devine as 'a mutual society formed, composes and governed by
working people themselves for encouraging regular savings and granting small
the basis of the securities they have, not from the rich or from the public, but by
factions are to borrow fund from members as well as non members. This fund
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OBJECTIVE OF THE STUDY
The main objectives of the study are to examine the lending pattern and main
The Pothukal Service Co-operative Bank Ltd is one of the well know
the Pothukal Panchayaths. The bank provides several types of loan facilities. So
SOURCES OF DATA
Mainly data are collected from the secondary sources they are:-
Annual report of the Bank
Loan scheme report of the bank
By laws
Journals
Policy and programs report standards
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The bank under study is the Pothukal Service Co-operative Bank Ltd secondary
data are used in this study for the interpretation of the data, percentage are used.
STATEMENT OF PROBLEMS
main factors are to borrow fund from members as well as non members. This
fund utilize for giving loans to the members for productive purpose.
REVIEW OF LITERATURES
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Lending is a very important activity of any type banks... considering it
importance many scholars have given their views on this subject. Some of the
variety of loans for both new and existing customers the most common sort of
loan is the overdraft facility that many current accounts have almost as a matter
of course."
In the words of Crowther, "A bank collects money from those who have it
to spare or who are saving it out of their incomes and lends this money to
but also wipes out equity holders and haircuts some creditors, analogous
stability, price stability and with an ear firmly to the ground on real sector
reforms."
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who you are. It is about the honesty and the willingness of the
Dr. Subbarao stated that, "The Reserve Bank has adjusted its policy
In particular, the aim of these measures was to augment domestic and fore
liquidity and to ensure that credit continues to flow to productive sectors of the
economy.
one of the problems created by property price booms. They also distort
result is not just too many houses and many building, but too many
part of bank deposits for funding its revenue expenses and subsidies
rather than long term investment that there's not enough left on the table
According to O.P. Bhatt, "Bank would need to raise capital as the onus of
funding drying up;, they would also have to take care of the write-offs on
be primary judged by their non performing asset levels with the banking
industry also facing the brunt of the recession and with the revelation of
big corporate frauds, the Indian commercial banks are now wary about
advancing credit and are closely monitoring the way their loans are
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Generally speaking the co-operative movement India started with the
was entirely different from that of western countries including England, In all
western countries the beneficiaries of the movement felt a need for organizing
such an institution in order to solve some of their economic problems. They had
in mind the objective through which the movement would successfully achieve
and the way and means for the same. This clear vision is the co-operative spirit.
The people with this co-operative spirit were the pioneers of the movement in
those countries. The Government or the well to do sections of the society or any
other agency did not influence them to organize such an institution. Without any
such influence the persons who had the co-operative spirit organized the co-
have special Acts were for governing these institutions. As a result, co-operative
But in all Asian countries the movement originated in the reverse order.
the result of a government policy. The government not only sponsored and
organized movement but also nurtured it. As a result of this, the movement
originated in the following order. First an Act was passed by the Government
with necessary provisions for the organization and management of the co-
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organized at the initiative of government officials and not at the initiative of co-
operators. The movement thereafter attempted to find out co- operators who had
co-operative spirit. This attempt has not succeeded completely so far in so many
Asian Countries.
operative movements was introduced in India as a state policy. As the first step
controlling the common land of the village for the benefit of co- shares and
functioned until 1922. Again agriculture bank were introduced in 1894 by the
not sufficient to rectify the conditions faced by the farmers at India 90% of the
India farmers lived in rural areas. India was under the control of the British
Government for a long period, and she was exploited by the British
Government. As a result the local industries had set of back and they gradually
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At this stage some relief measures was taken by the Government by
passing the decide Agriculture relief Act 1879, Land improvement Act of 1884.
"Taccavi Law ', By these Act the Agriculture could borrow public money
repayment of Taccavi loans had to be made after the main harvest. Thus since
the above movement was failure other plans were consideration in 1892 Mr.
the advisability of starting the system of lands banks in the province. in 1899 he
credit societies. After this was considered by the Government of India in 1900
basics and official endearment. It was quite simple and elastic. This gave wide
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CO-OPERATIVE LEGISLATIVE IN KERALA
states unified laws were not operative. The present Kerala State consists of old
Travancore State, Cochin State which were joined and formed Travancore
societies. So he took the initiative the first Act by the name Cochin Co-operative
Regulation was passed in the year 1914. The late C. Govindapillai was
November 1914. The first society was registered on 17th November 1914by the
name Trivandrum Central Co-operative Bank Ltd which is the present Kerala
State Co-operative Bank. In 1949 the Travancore and Cochin state were
integrated and thereby Travancore Cochin State was formed. At that time the
and Cochin Co-operative Societies Act was applicable to the Cochin State.
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There arises necessity to have a common law for the entire Travancore, Cochin
In the year 1956 the Kerala State was formed. At this time two different
which was force in Travancore Cochin area Madras Co-operative societies Act
1932 was in Malabar area which was a part of the Madras province. It was felt
essential at that time to unify the laws related to the Co-operative Societies for
the Kerala Co-operative Societies Act of 1969 was enacted which came into
force on 15th May 1969 the rules framed under the Act came into force in July
1969.
The Kerala Co-operative Societies Act 1989 is the law relating to the co-
operative societies in the state. The Act has come into force on 15th May 1969.
This new legislation specifically repeals the Madras Co-operative Societies Act
1932 as in force in the Malabar area of the Madras state and the Travancore
Cochin Co-operative Societies Act. The Act has consolidated, amended and
unified the law relating to the co-operative societies in the state. As a result of
this legislation all the co-operative institutions in the state are governed by
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PRIVILEGES OF CO-OPERATIVE SOCIETIES
societies
Charge on land owned or held by members
Deduction from salary of debtors
Deduction from salary or wages
Charges and set-off in respect of shares
Shares or interest or reserve fund not liable to be attached
Exemption from stamp duty and registration fee
acts as a watchdog of the co-operative banking structure in the state. It funds are
obtained from share capital, deposits, loans and overdrafts from the Reserve
Bank of India. The state co-operative banks lend money to central co-operative
These are the federation of primary credit societies in a district and are of
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having a membership of societies as well as individuals. The funds of the bank
consist of share capital, deposits, loans and overdrafts from state co-operative
banks and joint stocks. These banks provide finance to member societies within
the limits of the borrowing capacity of societies. They also conduct all the
and non-borrowers residing in a particular locality. The funds of the society are
derived from the share capital and deposits of members and loans from central
co-operative banks. The loans are given to members for the purchase of cattle,
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Co-Operative Banks
Agriculture Non - Agriculture
Short and medium Long term credit
Employee Central Apex Central co-
term credit institutions
societies credit Govt. Industries operative
Societies Urban Banks house
Banks mortgage
banks
bank was registered on 17th January 1977 and started on 28th February 1977
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Area of operation
shall be confined to Pothukal Panchayaths. They have not any other branches in
this location.
Membership
The membership of Pothukal Service Co-operative Bank Ltd should be
open to all people living within the area of operation of the bank. Agriculturist
and non agriculturist are admitted as members.
Capital structure
The Pothukal Service Co-operative Bank Ltd raise share capital through
allotment of 'A' class share to the individual, 'B' class shares to the state
Government of the allot, 'c' class shares to gold loans and 'D' class shares to
consumption loans.
Authorized capital:
'A' class 100 20,00,000
'B' class 100 100,000
'C' class 5 50,00,000
'D' class 100 1,50,000
7,250,000
Employment pattern
including a secretary who is the Chief executive officer at the bank. Secretary is
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Figure: 3.1
Secretary
Assistant Secretary
Chief Accountant
Internal Auditor
Working capital
The amount of the capital required for a day affairs is working of the
Accountant
Pothukal Service Co-operative Bank Ltd raised from the following sources.
the bank
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To encourage cottage industries and provide self employment loans for it
To store agricultural product to members
To purchase and selling consumers goods
To provide locker facilities to customers
To procure modern agricultural tools and lend it to members and non
members
Deposit mobilization
Pothukal Service Co-operative Bank Ltd has been showing remarkable
Daily deposit 2%
Deposit thrift 6%
Providing Loans and Advances
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The Pothukal Service Co-operative Bank Ltd providing agricultural and
non agricultural loans to the members the bank considered the following points
Other functions
Other functions of the bank include agency services and general utility services
a. Agency services
The following are the important books and registers kept by the Pothukal
Cash Book
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Savings Bank Ledger
Recurring Deposit Ledger
Saving Bank Subsidiary Day Book
Fixed Deposit Ledger
Loan Ledger
Loan subsidiary Ledger
Main Day book
General Ledger
every kind of service they might need. Subject to the provisions in the Act,
Rules and Bye-laws, the final authority in all matters connected with the
management of a society will be the general body. The general body consists
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The day to day business of a society is conducted by Managing
of 7-15 members elected from among the members of general body. Two
seats should be reserve in the Managing Committee one for woman member
shall elect from among themselves a president, vice president and the other
office bearers.
operations. Co-operative banks offer loans to farmers so that they might utilize
the amount for increasing agricultural production and raising their standard of
who have small means and small lands, co-operative banking is most
used for providing loans to its members The Dictionary meaning of one word,
Loan is lending anything for interest. Loan should be granted only to the
eligible member who is having the repayment capacity. The Board of Directors
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can fix the maximum amount of loan with respect to the rules prescribed by the
registers. Short-term and medium term loans are usually allowed by the bank.
The Bank provides Agricultural and non agricultural loans to its members.
Agricultural loans are loans for various agricultural activities; non agricultural
The member shall have no over dues towards the bank at the time of
TYPES OF LOANS
the following:-
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Medium Term Milch cattle Loan
Medium Term Integrated Rural Development Programme Loan
Medium Term Own Fund Loan
Non Agriculture Short Term Loan
Own Fund Loan
Provident fund Loan
Swarnajayanti Gram Swarojgar Yojana Loan
Short Term agriculture Loan
Secured Loan
Managalya Soothra Loan
CLASSIFICATION OF LOAN
Loan can be classified into period wise, purpose wise and security wise.
loan is classified as short term, medium term and long term loan. According to
the purpose, the loan is classified as production loans and consumption loans
maintenance needs of the farmers and the family. Short term loans are generally
according to the nature of cultivation. Such loans are given for purchasing
seeds, manure, fertilizer, insecticides and meeting labour charges etc. the loans
are repaid with interest soon after the harvest. This short term loan is also
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known as production loan. Non agricultural short term loans are given to
members for tiding over seasonal difficulties, purchase of raw materials etc.
Medium term Loan
Medium term loans are given for a periods ranging from 18 months to 60
bunds, purchase of live stock, small machinery and implements, sinking and
repair of well and tanks for irrigation purpose etc. Medium term loans have to
be repaid with interest in installments fixed by thus societies. This Loan is also
Long term loans are given for a period ranging from 7 years and
redemption of mortgage of land, liquidation of prior debts, etc such loans are
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AN ANALISIS OF THE LENDING PERFORMANCE OF THE
POTHUAKL SERVICE CO-OPERATIVE BANK
Short term loans of Pothukal Service Co-operative
Table: 4.2
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1800
1600
1400
1200
1000
800
600
400
200
0
1 2 3 4 5
Interpretation
The table 4.2 and figure 4.1 show the amount of Short term loans. During the
year 2008-09 Short term loans amount was Rs.1183.38 lakhs, increased
1322.23, 1356.74, 1517.23 and 1774.13 lakhs respectively in the year of 2009-
10,2010-11, 2011-12, 2012-13. There was 11% increase in the year 2009-10.
14% increase in the year 2010-11. 28% increase in the year 2011-12 and 90%
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Medium term loans of Pothukal Service Co-Operative Bank
Table: 4.3
Year Trend % Increase / decrease
Medium term loans (in
lakhs)
2011-12 24.34 100%
2012-13 12.15 49% 51%
2013-14 9.57 39% 61%
201415 12.56 51% 49%
2015-16 24.92 102% 2%
Figure 4.2
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25
20
15
Medium term loans
year
10
0
1 2 3 4 5
Interpretation
The table 4.3 and figure 4.2 show the amount of Medium term loans. During the
year 2008-09 Medium term loans were Rs.24.34 lakhs, decrease 2009 to 2012
and increasing 2012-13 24.92 lakhs respectively. There was 51% decrease in the
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Figure: 4.3
90
80
70
60
50
Long term loans
40 Year
30
20
10
0
1 2 3 4 5
Interpretation
The table 4.4 and figure 4.3 show the amount of Long term loans. During the
year 2008-09 Long term loans was Rs.49.44 lakhs, decrease 2009-2012 and
increasing 2012-13 80.23 lakhs respectively. There was 64% decrease in the
FINDINGS
provides loans members. From the analysis with special references to "Loans
From the year 2013 to 2008 the issue of Short term loans is higher than
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Bank charges high rate of interest as compared to the interest rate of
deposits.
Total loans and advances of the bank were increasing year by year
RECOMMENDATION
1. Bank should conduct a detailed study for find out good customers to take
loans
2. Make sure that there is through and clear utilization of loans for the purpose
comfort of customers.
customer.
ATM.
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CONCLUSION
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well as members and gives loans to them on personal securities and
The functioning of the bank depends upon the repayment rate of loans
by its members. The bank having a great role the overall development
satisfactory.
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