PROJECT REPORT

ON

LOAN AND CREDIT FACILITY AT BAGHAT URBAN COOPERATIVE

BANK LTD

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF

BACHELOR OF BUSINESS ADMINISTRATION

SCHOOL OF MANAGEMENT
BAHRA UNIVERSITY WAKNAGHAT DISTRICT SOLAN H.P

Under the Supervision of Submitted By

School Of Management Ankush Kashyap
Dr. Vinod Negi BBA 6th Semester
Assistant Professor BU2016UGBB006

1
 DECLRATION
I undersigned Ankush Kashyap student of BBA 6th semester declare that I have done
the project on Loan and credit facility at “Baghat Urban Cooperative Bank Ltd.” has
been personally done by me under the guidance 0f Board of Directors of the Baghat
Urban Cooperative Bank Ltd Solan in patial fulfilment of BBA program .

I also declare that this project is my own preparation and not copied from anywhere
else.

Date:

Signature:

ACKNOWLEDGEMENT
I express my heartiest gratitude to the management of THE BAGHAT URBAN
COOPERATIVE BANK, Management, who provided me such a wonderful

2
opportunity to do Summer Training and provided their valuable suggestion in
understanding the work of project.

I convey my heartfelt affection to all those people who helped and supported me
during the course, for completion of my Project Report.

In the end I would like to thank many unknown individuals, whom I interacted with for
end number of my needs. All of them with their due cooperation and at times with
detachment taught me the real lessons of business world.
Date:
Place:
Signature:

TABLE OFCONTENTS

CONTENTS….

CHAPTER-1
 Introduction
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  Meaning of Bank
 Types of Banks
 History of Urban Cooperative Banks in India
 Profile of Baghat Bank Solan
 Organizational Structure
 Status of Baghat Bank Solan
 Board of Directors of Baghat Urban
Cooperative Bank Solan
 Vision of Bank
CHAPTER-2
 Terminology

 What is credit facility

 Types of credit, cash credit
 LTR, term loan, lease
 Secured overdraft

 Products of Baghat Urban Co-operative Bank

CHAPTER-3
 TRAINING METHODOLOGY

 Title of study
 Duration of training
 Objective and format of training
 Source of data, scope of study
 Limitation of study

4
CHAPTER-4
 Loan and credit facilities
 Personal loan
 Loan for purchase or construction
 Vehicle loan
 Home loan
 Education loan
 Loan against property
 Gold loan

CHAPTER-5
 Analysis of the annual report
 Key operational process
 SWOT analysis
 Interpretation

CHAPTER-6
 Conclusion
 Bibliography
 References

MEANING OF BANK:-
Bank is derived from Latin word banco, bench or counter public or
promotes institution whose function, is to receive or deposit, to
employ it profitably and to facilitate its circulation in the form of notes,
bonds or bills of exchange. In the words of Kinley: “bank is an
establishment which makes to individuals such advances of money of
other mean of payment as may be required and safety made and to

5
which individuals entrust money or means of payment when not
required by them for use”.

The banking regulation act 1949, defines banking to as a company

which transacts the business of banking in any state of India. The word
banking has been denied under the same act as: The accepting for the
purpose of lending or investment or deposits of money from the
public repayable or demand or otherwise and withdrawable by
cheque, draft, or otherwise. .

In simple words a bank refers to an institution which deals in money

and credit.

1.2 TYPES OF BANKS:-

BANKS

NATIONALISED PRIVATE CO-OPERATIVE

BANK BANK
6 BANK
  SBI  BAGHAT
 PNB  ICICI BANK BANK
 SBOP  HDFC BANK  PARWANOO
 UCO BANK  AXIS BANK URBAN
 CANARA  CITY BANK  CO-
BANK  SANTURIAN OPERATIVE
 ORIENTED BANK BANK
BANK

1.3 CO-OPERATIVE BANKS:-

Co-operative banks are small-sized units organized in the co-operative sector which operate
both in urban and non-urban centres. In India, cooperative banks finance small borrowers in
industrial and trade sectors, besides professional and salary classes.

The Co-operative Banks has a history of almost 100 years. The Cooperative banks are an
important constituent of the Indian Financial System, judging by the role assigned to them, the
expectations they are supposed to fulfil, their number, and the number of offices they
operate. The co-operative movement originated in the West, but the importance that such
banks have assumed in India is rarely paralleled anywhere else in the world. Their role in rural
financing continues to be important even today, and their business in the urban areas also has
increased phenomenally in recent years mainly due to the sharp increase in the number of
Primary Co-operative Bank.
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The co-operative banks in rural areas mainly finance agricultural based activities including
farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and
self-employment driven activities, the co-operative banks in urban areas mainly finance
various categories of people for self-employment, industries, small scale units, home finance,
consumer finance, personal finance, etc.

1.4 TYPES OF CO-OPERATIVE BANK:-

CO- OPERATIVE BANKS

STATE CENTRAL URBAN

CO- OPERATIVE CO- OPERATIVE CO- OPERATIVE
BANKS BANKS BANKS

 STATE CO-OPERATIVE BANKS:-

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State co-operative banks are a federation of central co-operative banks and act as a watchdog
of the co-operative banking structure in the state. It works as the apex bank of the state. Its
funds are obtained from share capital, deposits, loans and overdrafts from the Reserve Bank of
India. State co-operative banks lend money to central co-operative banks and primary
societies and not directly to farmers.

 CENTRAL CO-OPERATIVE BANKS:-

Central co-operative banks are the federations of primary credit societies in a district and are
of two types - those having a membership of primary societies only and those having a
membership of societies as well as individuals. The funds of the bank consist of share capital,
deposits, loans and overdrafts from state co-operative banks and joint stocks. These banks
finance member societies within the limits of the borrowing capacity of societies.

1.5 CO-OPERATIVE BANKING STRUCTURE IN INDIA:-

The co-operative banking structure in India is divided into four components: primary co-
operative credit society, central co-operative bank, state co-operative banks and land
development banks. Co-operative banks function on the basis of "no-profit no-loss". Co-
operative banks, as a principle, do not pursue the goal of profit maximization

APPIX RESERVE BANK OF INDIA

PUBLIC SECTOR BANKS

STRUTCUTRE
OF
PRIVATE SECTOR BANKS
CO-OPERATIVE
BANKS

CO- OPERATIVE SECTOR BANKS

DEVELOPEMENT BANKS

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 1.6 BRIEF HISTORY OF URBAN COOPERATIVE BANKS IN INDIA

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary
cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed
to lend money only for non-agricultural purposes. This distinction does not hold today. These
banks were traditionally centered on communities, localities work place groups. They
essentially lent to small borrowers and businesses. Today, their scope of operations has
widened considerably.

The origins of the urban cooperative banking movement in India can be traced to the close of
nineteenth century when, inspired by the success of the experiments related to the
cooperative movement in Britain and the cooperative credit movement in Germany such
societies were set up in India. Cooperative societies are based on the principles of cooperation,
- mutual help, democratic decision making and open membership. Cooperatives represented
a new and alternative approach to organization as against proprietary firms, partnership firms
and joint stock companies which represent the dominant form of commercial organization.

1.7 THE BEGINNINGS:-

The first known mutual aid society in India was probably the 'AnyoyaSahakariMandali'
organized in the erstwhile princely State of Baroda in1889 under the guidance of VithalLaxman
also known as BhausahebKavthekar.

Urban co-operative credit societies, in their formative phase came to be organized on a

community basis to meet the consumption oriented credit needs of their members. Salary
earners' societies inculcating habits of thrift and self help played a significant role in
popularizing the movement, especially amongst the middle class as well as organized labor.
From its origins then to today, the thrust of UCBs, historically, has been to mobilize savings
from the middle and low income urban groups and purvey credit to their members - many of
which belonged to weaker sections.

The first study of Urban Co-operative Banks was taken up by RBI in the year 1958-59. The
Report published in 1961 acknowledged the widespread and financially sound framework of
urban co-operative banks; emphasized the need to establish primary urban cooperative banks
in new centres and suggested that State Governments lend active support to their
development. In 1963, Verde Committee recommended that such banks should be organized
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at all Urban Centres with a population of 1 lakh or more and not by any single community or
caste.

1.8 PROFILE OFBAGHAT URBAN CO-OPERATIVE BANK LTD.

SOLAN (H.P.):-

THE BAGHAT URBAN CO-OP BANK LTD. SOLAN is one of the most famous Bank in SolanDistt.
The Baghat Urban Co-op Bank Ltd. was registered on the 7th Day of September, 1970 vide
Registration No. 1 and was brought under the preview of the Banking Regulation Act, 1949 i.e.,
27th March, 1972 as per RBI Central Office Letter No. ACD –BR 994/E-2(20) -71-72 and
Registered permanently vide RBI License No. UBD HP 1410 P. dated 9th May 1997.

There are 21 founder members, whose wisdom to promote The Baghat Urban Co-Op
Bank Ltd. With blessing of the noble soul Late Raja Druga Singh Ji (Ruler of the Erstwhile Baghat
State) on 7th September 1970. They promoted the institution with a vision to provide
economic and social security to the people of Solan. The contribution of the former directors,
members dedicated staff members and patronage of customers has contributed to the steady
growth of the Bank.

The area of operation of the Bank Shall be entire SolanDistt. In Himachal Pradesh for any
revision in this regard prior approval of registering authority and RBI (except for extension of
area of operation within the Distt. of registration) as indicated in RBI Circular No. UBD. RBL
(RCS) 10.07.01.00/95-96 dated 10th October, 1995 shall be necessary.

First the registered office of Bank was at the Shiv Dayal Trust Building, Gunj Bazar, Solan, Then
it was shifted to Chowk Bazaar, Solan. Now the Bank has shifted head office from chowk
Bazaar to new own premises at Baghat Bank Parisar, Rajgarh Road Solan.

Bank is increasing its deposits, loans & advances continuously year by year. Bank is following
RBI’S instructions strictly and is not granting any new advances to the directors or their
relatives and also no renewing such advance. During the year RBI has deregulated the interest
rate on term deposits. The bank is paying higher interest to depositors beside it is paying
additional interest to the senior citizens under the “Baghat Bank Senior Citizen Scheme”.

There is tremendous increase in the Reserve fund of the Bank. Statutory reserve fund and
other reserves of the Bank, Paid-up Capital, Profits. Bank paid dividend to its members @ 15%

11
on the basis as per Co-operative Societies Act, after permission of the Asset. Registrar Co-
operative societies. The bank continued to maintain cash reserves and liquid assets are
required under section 18& 24 of the Banking Regulation Act, 1949 (as applicable to Co-
operative Societies). The investment by the bank is in accordance with the norms prescribed
by the RBI. The Bank has not made any default in submitting/ maintaining the statutory
statement to the RBI during the year.

The Bank is providing services to its customers through many branches i.eSolan, ChaBBAghat
and Parwanoo, nahan, una, saunjali, kunnihar,nalagarh.

Bank is providing Direct Draft facilities through H.P. State Co-operative Bank Ltd. HDFC Bank
Ltd. ICICI Bank Ltd. UTI Bank Ltd, Indus Ind Bank Shimla and Panchkula and on commission
share, facilities through other Nationalized Banks. Bank also reduced the draft charges to Rs,
10/- + service tax excluding draft issued by Public Sector Bank. Audit of the Bank is conducted
every year by the auditors, Inspector Grade I, of Co-op Societies Solan H.P.

The Bank is tide with ING-VYSYS now kotak Mahindra bank& IFFCO TOKIO insurance and
providing life and general insurance to its valuable customers.

There are very good, very talented, very educated and very experienced staffs in the bank.
Staff members are very cooperative to each other and also with the customers.

1.9 ORGANISATIONAL STRUCTURE OF BAGHAT URBAN CO-

OPERATIVE BANK:-

GENERAL
BODY

BOARD OF DIRECTORS

CHAIRMAN

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 CHIEF EXECUTVE OFFICER/ MD

Dy. MANAGER Dy. MANAGER

SECTION HEAD SECTION HEAD

STAFF STAFF

Status of Baghat Urban Bank Solan as on 31.03.2015:-

Registered on : 07.09.1970

No branches : 5

Membership : 6275

Share capital : 752.06

a) Govt. : -
b) Individuals : 309.31

Working capital : 43041.176

Turnover : 199144.31
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 Reserve and other fund : 2376.89

Deposits : 38877.48

Loan advanced : 27748.30

No of employees : 76

Profit & loss : (+) 307

BOARD OF DIRECTORS
PERSON DESIGNATION

Mr. Arunkumar Sharma Chairman

Mr. Mohinder Thakur Vice-Chairman

Mr. Pawan Kumar Gupta Director

Mr. Dharmender Thakur Director

Mr. Rakesh Aggarwal Director

Mr. Sardar Singh Thakur Director

Mr. Vijay Kumar Attri Director

Mr. BhupinderKashyap Appointed Director

Mrs.ParvatiTanwarAppointedDirector

Mr. Prem Singh Co-opted Director

Mr. B.R. Mehta Co-opted Director

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 Mr. Bhupender Kumar CEO/Managing Director

“PROMPT & EFFICIENT CUSTOMER SERVICE”

Salient features of the Baghat Urban Co-op Bank Ltd. Solan

 Bank is providing services through branches at Solan, ChaBBAghat&Parwanoo.

 Computerized Banking Services in all branches.

 Safe deposit Lockers are available in all branches.

 All the deposits are covered under D.I.C.G.C.

 Loans are provided to priority & weaker sections.

 Paying dividend @ 12%.

1.11VISION OF THE BANK:-

"A VISION IS NOT A PROJECT REPORT OR A PLAN TARGET. IT IS AN

ARTICULATION OF THE DESIRED END RESULTS IN

BROADER TERMS".
A.P.J ABDUL KALAM

Where the vision is one year, cultivate flowers.

Where the vision is ten years, cultivate trees.

Where the vision is eternity, cultivate people.

The bank vision is for eternity

Vision of the bank is to evolve in to a strong, sound and competitive financial system in order to provide integrated
services of all segments by adopting latest technology, best accounting and ethical practices with all services
contributing innovation, quality, personal touch and flexibilityin delivery. The growing expectations of the
customers, shareholders are the catalysts of the bank. The customer would continue to be the centre point of our
business strategy. In short we lose touch With the customer, we lose everything. The vision statement also set
goals for the bank to grow fast in largest competitive environment and value enhancement for all shareholders.

1.12MISSION:-

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Baghat Urban Co-operative Bank ltd. is just 42 years old bank. The board is represented by co-operative
department representative and professionals who are famous in their respective areas of specialization. The
founder of the bank is Mission of the bank is to have consistent growth and development with fare transparency
in its dealing with adoption of the best standards in all areas as per the guidelines issued by RBI, Registrar Co-
operative Society Himachal Pradesh. Constant and continual up gradation of technology arid skills of bank staff for
the benefits of customers and the bank continue to be the focus areas of the bank Bank's strategy is to interact
constantly with the customers, shareholders and initiate immediate action plan for better financial products.
Bank's mission is to have continuous best financial performance.
"Mission of bank is to prompt & provide efficient customer services”

CHAPTER-2
 Terminology

 What is credit facility

 Types of credit, cash credit
 LTR, term loan, lease
 Secured overdraft
 Products of Baghat Urban Co-operative
Bank

WHAT IS CREDIT FACILITY?

Unlike personal loans (where people borrowing the funds and collateral are
not likely to change), loan in the world of business require a additional

16
flexibility in order to meet the needs of the business as well as satisfy the
requirement of lender.
The term credit can be understood by giving light on following points:
CREDIT (LOANS AND ADVANCES)
The profit of a bank depends on the utilization of its fund. But bank cannot
lend its fund fully. As per banking company act 1991 every banking
company has to maintain a specified minimum (presently 25%) of the total
of its demand and time liabilities in the form of cash and approved
securities with RBI. This percentage or ratio is termed as statutory liquid
ratio. Banks allow different forms advance.
CREDIT DEPARTMENT
CD banking business involves accepting deposit from the public and
investing or lending the same and thereby making profit out of it. However,
lending money is not without risk and therefore banks make loans and
advances to farmer, traders, businessmen, and industrialist against either
tangible (land, building, stock etc.) or intangible securities. Even then, the
banks run the risk of default in repayment. Therefore, the banks follow
cautious measures while lending money to others. The core function of
bank is performed by the credit department of the bank. In this case, the
relationship of bank and customer is that of the creditor and debtor.

TYPES OF CREDIT OFFERED BY A BANK

Banks usually provides following types of credit:
1. Cash credit (hypo.)
2. Cash credit (pledge)
3. LTR
4. Term loan
5. Lease financing
6. Secured overdraft (SOD)
7. Others
 CASH CREDIT (HYPO.):- cash credit or continuing credit
are those form of continuous debit and credit up to a limit and have and
expiration date. A service charge that is effect an interest charge is
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 normally made as percentage of the value of purchase. This credit may
be of the nature of pledge and hypothecated and banks should report
these on separate heads incorporated under the main head cash credit.

2. CASH CREDIT (PLEDGE)-:

Under this arrangement a cash credit is sanctioned against pledge of goods or raw
materials. By signing the letter of pledge, the borrower surrenders the physical
possession of the goods under the Banks effective control as security for payment of
Bank dues. The ownership of thegoods, however, remains with the borrower. The
pledge creates an implied lien in favor of theBank on the underlying merchandise. In
the event of failure of the borrower to honor hiscommitment the Bank can sell the
goods for recovery of the advance. No collateral security isnormally asked for grant of
such credit.

3. LOAN AGAINST TRUST RECEIPTS (LTR)-:

This is a loan facility up to a satisfactory limit to the traders / customers by a Bank
againstsecurity of the value of the imported merchandise. This item also includes loan
against TrustReceipts.
4. TERM LOAN-:
ABank advance for a specific period repaid with interest under fixed schedules.
The termloans may be as follow:
Short Term: Up to and including 12 months.
Medium Term: More than 12 months up to and including 60 months.
Long Term: More than 60 months. [This item includes lease financing]

5. LEASE FINANCING-:
An entrepreneur, under this Scheme, may avail of the lease facilities to procure
industrialmachinery (without having to purchase it by down payment) with easy
repayment schedule.The clients also get special rebate in their income-tax
payment under the scheme.

6. SECURED OVERDRAFTS (SOD)-:

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 A loan facility on a customer’s current account at a Bank permitting him to
overdraw up to a certain agreed limit for an agreed period. The terms of the loan
are normally that it isrepayable on demand or at the expiration date of the
agreement.
THE BANK USE EIGHT ‘C’ S RULE WHILE
GIVING LOAN
1. Credit (must be god)
2. Capacity(ability to pay)
3. Capital(money that going into business)
4. Collateral(assets that secure the loan)
5. Character(the person)
6. Commitment(ability and willingness to succeed)
7. Cash flow (can it support business ‘debt and expense)
8. Conditions(economic, finance anything that effect the business)

 PRODUCTS OF BAGHAT
BANK…..
ACCOUNT & DEPOSITS SERVICE
Banking should be effortless. With Baghat Bank, the efforts are rewarding.
No matter what a customer's need and occupational status, we have a range
of solutions that are second to none. Whether you're employed in a
company and need a simple Savings account or run your own business and
require a robust banking partner, Baghat Bank not only has the perfect
solution for you, but also can recommend products that can augment your
planning for the future.

It includes these services: -

1. Saving accounts.
2. Current accounts.
3. Fix deposits.
1. Savings Accounts:
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These accounts are primarily meant to inculcate a sense of saving for the
future, accumulating funds over a period of time. Whatever person’s
occupation, bank have confident that person will find the perfect banking
solution. There some saving accounts like: -

Regular Saving

An easy-to-operate savings account that allows you to issue cheques, draw

Demand Drafts and withdraw cash. Check up on your balances from the
comfort of your home or office through Net Banking, Phone Banking and
Mobile Banking. If you need money urgently then you can take money
from the ATM machine.

Senior Citizen Account

Baghat Bank appreciates your needs and endeavours, which is why, they
present an account especially dedicated to customer, which like a dutiful
child will help you fulfil your needs in the best manner possible.

No frills Account

In an effort to make banking simpler and more accessible for customers,

bank has introduced the 'No Frills' Savings Account, which offers customer
all the basic banking facilities. Customer can even avail of services like Net
Banking, Mobile banking free of cost. In this customer can put Zero Initial
Pay-in and a Zero Balance account

Institutional saving accounts

A specially designed account that offers twin benefits of a savings as well

as a current account. Customer’s funds continue to earn you interest while
he enjoys hassle-free banking & a host of other features. All this and more
in a Zero Balance account.
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 2. Current accounts

Baght Bank Current Account gives the power of inter-city banking with a
single account and access to more than cities. From special cheques that get
treated at par with local ones in any city where branch, faster collection of
outstation cheques (payable at branch locations), free account to account
funds transfer between Baghat Bank accounts to Free inter-city clearing of
up to 100 lakhs per month, bank’s priority services have become the
benchmark for banking efficiency.

3. Fix deposits service

Long-term investments form the chunk of everybody's future plans. An
alternative to simply applying for loans, fixed deposits allow to borrow
from own funds for a limited period, thus fulfilling needs as well as
keeping savings secure.

People can invest his/her money into either in security market or gold or
mutual fund or into a fix deposits. People always go to that way where
he/she can get more benefits and minimum risks. So, for this purpose he
has a better chance to deposits money in to the fix deposit.

If people believe in long-term investments and wish to earn higher interests

on his/her savings, now is the time to invest money in Baghat bank Fixed
Deposit. Get up to 9.75% on Baghat Bank Fixed Deposit with an additional
0.50% for Senior Citizens. What's more NO PENALTY if withdraw part of
the FD in times of need. Flexibility, Security and High Returns all bundled
into one offering.

 Regular fix deposit

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As per the rules and regulation of the bank a person can deposit their
money in to a fix deposit in the bank and can get the benefits of these
facilities.

 Safe deposit locker

 A Safe Deposit Locker with Baghat Bank is the solution to person’s
fear. Located at select branches in cities all over the country, bank’s
lockers ensure the safe keeping of valuables.
 Eligibility
 An individual (not minor), firms, limited company, associations,
clubs, trusts, societies, etc may hire a locker.

Advantages of safe deposit locker in Baghat bank

 Wide Availability.
 Lockers available in various sizes. i.e. Small, Medium, Large and
Extra Large with varying rents.
 Lockers are rented out for a minimum period of one year. Rent is
payable in advance.
 No deposits are required to avail a locker. Just open an account and
get the locker facility.
 There is a nominal annual charge, which depends on the size of the
locker and the centre in which the branch is located.

 Nomination for Safe Deposit Locker

 The Lockers and their contents can be nominated to people near and
dear to you.
 Nomination facility is available to individual hirer of Safe Deposit
Locker.

22
 In the case of a sole hirer of a safe deposit locker, nomination can be
made in favor of only one individual.
 Where the safe deposit locker is hired in the name of a minor, the
nomination shall be made by a person lawfully entitled to act on
behalf of the minor.

 Terms & Conditions

 For obtaining a Locker at Baghat Bank you must be an account
holder with Bank.
 Lockers can be allotted individually as well as jointly.

CHAPTER-3

TRAINING METHODOLOGY

 Title of study
 Duration of training
 Objective and format of training
 Source of data, scope of study
 Limitation of study

23
TRAINING METHEDOLOGY

TITLE OF STUDY: -

Title of study is “loans and credit facility at BAGHAT URBAN

COOPERATIVE BANK´

The BAGHAT URBAN COOPERATIVE BANK´

Generally gives loan for short and medium term requirement in both rural and urban
sectors.

DURATION OF TRAINING:-
Duration of project is 8 weeks Training . Though the time available for the study is
too less but efforts to the fullest capacity have been put into this result for efficient and
effective analysis of the data.

OBJECTIVE OF TRAINING:-

The objective of research is as follows:

1. First objective is to find out various loan schemes provided by the bank.
2. To learn various aspects of loan provided by bank.
3. To know the problem faced by customers when obtaining the loan.

FORMAT OF PROJECT REPORT:-

The report is exploratory and descriptive in nature.This report is going to describe

various loans provided by Jodhpur central cooperative bankhence it is a descriptive in
nature but it suggests some important points to improve theservices of the bank so it is
exploratory in nature also.
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SOURCE OF PRIMARY AND SECONDRY DATA

For the purpose of project data is very much required which works as a food for
process whichwill ultimately give output in the form of information. So before
mentioning the source of datafor the project I would like to mention that what type of
data I have collected for the purpose of project and what it is exactly.

PRIMARY DATA:-
Primary data is basically the live data which I collected on field while talking with
theEmployees. In some cases I got no response from their side and then on the basis
of myprevious Experiences I filled those fields.

SOURCE:
Main source for the primary data for the project was my face-to-face conversation
which I gotby the employees or sometimes filled myself on the basis of discussion
with the employees.

SECONDRY DATA:-
Secondary data is already published data. It is the data which is funded or collected
bysomeone else before and presently used by further research work. Secondary data
for thebase of the project I collected from annual report of bank, bank pamphlets and
internet etc.
SCOPE OF THE STUDY:-
Each and every project study along with its certain objectives also has scope for
future.
Andthis scope in future gives to new researches a new need to research a new project
with a newscope. Scope of the study not only consist one or two future business plan
but sometime italso gives idea about a new business which becomes much more
profitable for the researchesthen the older one.The scope of this research is as follows:

1. Research study could give an idea of network expansion for capturing more
market andcustomer with better services and lower cost without compromising
with quality.

2.In future customer requirement could add with the product and services for getting
the edgeover competitors.

25
3.Different parameters could be used for the purpose of new products with extra
benefitswhich are required by the customers.

4.Factors which are responsible for the performance of the bank can also be used for
themodification of the strategy and product for being more profitable.

LIMITATIONS:-
 The rate of interest may vary according to market environment.
 These figures are according to publish in annual report and according to
employees of Jodhpur central cooperative bank.
 The report is according to my perception only and can’t be taken as final
decision.
 This study only relates to one organization, so conclusions drawn may not be
finding itsutility in all the other banks.
 Even the employees of the bank hesitated to give the complete & accurate data

26
 CHAPTER-4
 Loan and credit facilities …
 Personal loan
 Loan for purchase or construction
 Vehicle loan
 Home loan
 Education loan
 Loan against property
 AGRICULTURE LOAN

Personal LoanThe Bank offers Personal Loan for various purposes

such as meeting medical expenses, renovation of residential
accommodation, traveling, marriage, Education etc.

Eligibility

Individuals who are competent to contract as per Indian Contract Act.

Income

Net income of the person should not be less than Rs.5,000/- p.m. in case of
salaried persons and Annual Income of not be less than Rs.60,000/- in case
of others.

Loan Amount

The maximum amount of loan is restricted to Rs. 1,00,000/- only.

27
Security

Since it is a clean loan, security is not insisted upon. Collateral security in

the form of Liquid security may be insisted upon depending on the merit of
each case.

Guarantee

Personal guarantee of two solvent third parties is insisted upon.

Interest Rates
The Baghat Urban Co-operative Bank Ltd., is offering the
following interest for the various loans and advances schemes -

Type of Loan Amount Limit Int. Rate

Consumption Loan Any Loan of such Kind 12.50%

Up to Rs.1.0 Lac 13.50%

Above Rs. 1.0 Lac to Rs. 2.0 Lac 13.50%

Loan against Salary Any amount as per repayment capacity. The

Personal Loan Installment should be deducted from salary bill. In
case installment not deducted from salary bill the
interest shall be applicable 1% higher than normal
rate.
For New Customer i.e. whose a/c is opened within
six months 14.00%

Loan against NSC/KVP/LIC Any Loan of such Kind 12.50%

Loan against Banks Own Against own deposit 1.00% above deposit rate
Terms Deposit Against third party deposit 2.00% above deposit rate
On clean Overdraft 21.00%

Letter of Credit Any Limit 12.00%

Minimum Charges against Govt. Cheques Rs.100.00 or

Paisa .35 per 1000.00 for First 7
Days after 7 days int. @ 18 % p.a.
Bills/cheques purchase/
discounted
For other Cheques Rs.100.00 or
Paisa 35 per 1000.00 for First 7
Days after 7 days int. @ 21 % p.a.
1 Day but less than 45 days 15.00%

Temporary Limit 45 Days but less than 3 months 15.25%

3 months but less than 6 months 16.00%

Mortgage Loan against Non-encumbered residential house/ flat or

property (on submission of commercial or industrial property (In the shape of
income proof in form of building/industrial shed) - self occupied or vacant. 12.00% p.a.
ITR)

28
Commercial Building Loan

Industrialists and small entrepreneurs need finance for setting up plant &
machineries, equipments, other movables such as furniture and fixtures,
office equipments, etc.TheBaghat Urban Co-operative Bank Ltd. is eager
to help them in their dream activities.

Eligibility

Any persons such as individuals, professionals, self employed and

businessmen and industrialists They may be individuals, proprietary
Concerns, Partnership Firms, Joint Stock Companies, etc.

Income of Applicant

The income of the person should such that he is in a position to repay the
amount within the stipulated period.

Loan Amount

The loan amount covers the cost of the plant & machinery or movables as
per invoice in case of new vehicle ones and agreement value or market
value whichever is lower in case of second hand machineries after
maintaining the prescribed margin.

Margin

30% (on agreement Value + Stamp Duty + Registration Fees + Amenities

in Flat if agreement for the same is registered )

Security

Hypothecation of plant & machinery or movables to be purchased.

29
Guarantee

One or two solvent third parties guarantors.

Period of Loan

Maximum period of loan is 60 months in case of new plant & machinery or

movables and 3 years in case of second hand. It should be repaid in EMI.

Commercial Building Loan

Up to Rs. 10.0 Lac 11.75%
Any Commercial Building Laon Above Rs. 10.0 Lac but upto 25.0 Lac 11.75%
Above 25.0 Lac 12.50%
14.00%
Real Estate For any Loan
+ Rating

Vehicle Loan

In the past, owning a car or two wheeler was matter of prestige and symbol
of ones standard of living. Due to economic development and availability
of variety of vehicles in the market, it has become a way of life. It leads to
comfort of life and helps a person in his profession and vocation. It
increases ones efficiency and income generation capacity. Realising this
need of the person, the Bank has designed a loan scheme called “Car Loan
Scheme".

Eligibility

Any persons such as individuals, professionals, self employed and

businessmen. They may be individuals, proprietary Concerns, Partnership
Firms, Joint Stock Companies, etc.

Income

The income of the person should such that he is in a position to repay the
amount within the stipulated period.

Loan Amount

The loan amount covers the cost of the plant & machinery or movables as
per invoice in case of new vehicle ones and agreement value or market
value whichever is lower in case of second hand machineries after
maintaining the prescribed margin.

30
Security

Hypothecation of the vehicle to be purchased.

Guarantee

One or two solvent third parties depending on Loan amount.

Period of Loan

The prepayment period may be ranging from 60 months.

Education Loan

Education loan is granted for higher studies in colleges in India and abroad
in any educational field in college affiliated with recognized universities,
medical colleges, technical institutions, pharmaceutical colleges,
Information Technology etc, so that students from poor & middle classes
as well as brilliant and needy students can take advantages of the scheme.
[The scheme will not cover any correspondence course].

Eligibility

Any persons such as individuals, professionals, self employed,

industrialists, traders and businessmen and industrialists.

Income

It depends on the capacity to service the debt and also on limit of advance.

Loan Amount

Depends on the business turnover and also per party limit fixed by the
Bank from time to time.

House Loan
Purpose

 Purchase of Residential accommodation like flats, bungalows, row houses, etc.

 Construction of flat / house, bungalows, etc.
 Addition / Alteration to the existing Residential accommodation.

31
Eligibility

Housing Loan can be availed by individuals, self employed, business man and professionals
who desire to purchase house/flat and has regular income to repay the loan.

Disbursement of Loan Amount

Loan amount will be disbursed to the seller / builder of the house/flat. In case of flat/house
under construction from reputed Builders, amount will be disbursed in stages depending on
the progress of construction.

Loan Amount

The loan amount depends on the repaying capacity of the person and as per the
banks exposer limit.

Margin

30% (on agreement Value + Stamp Duty + Registration Fees + Amenities in Flat if
agreement for the same is registered )

Consumer Durable Loan

“Life is where the home is”, it is said. House is the most sacred, peaceful, and loving place one can
think of. Apart from owning a house, equip with all the comforts and modern gadgets is dream of all of
us. The Bank helps in realizing our dream by financing the purchase of consumer durables and utility
articles such as fridge, washing machine, cooking range, computers, etc. under the head “Consumer
Loan”

Eligibility

Individuals, professionals, self employed and businessmen.

Income

Net income of the person should not be less than Rs.5,000/ p.m. in case of salaried
persons and Annual Income of not be less than Rs. 60,000/ in case of others.

Loan Amount

Cost or invoice value of the articles to be purchased subject to the maintenance

of prescribed margin and subject to a maximum of Rs. 2.00 Lac..

Margin

If the loan amount is more than Rs. 50,000/- - Margin 25 %

Security

Hypothecation of the articles to be purchased.

Guarantee

One or two solvent third parties depending on Loan amount.

32
Period of Loan

Maximum period of loan is 60 months. It should be paid in EMI.

Interest Rates
The Baghat Urban Co-operative Bank Ltd., is offering the following interest for the various
loans and advances schemes -

Type of Loan Amount Limit Int. Rate

Consumption Loan Any Loan of such Kind 12.50%

Up to Rs.1.0 Lac 13.50%

Above Rs. 1.0 Lac to Rs. 2.0 Lac 13.50%

Loan against Salary Any amount as per repayment capacity. The

Personal Loan Installment should be deducted from salary bill. In
case installment not deducted from salary bill the
interest shall be applicable 1% higher than normal
rate.
For New Customer i.e. whose a/c is opened within
six months 14.00%

Loan against NSC/KVP/LIC Any Loan of such Kind 12.50%

Loan against Banks Own Against own deposit 1.00% above deposit rate
Terms Deposit Against third party deposit 2.00% above deposit rate
On clean Overdraft 21.00%

Letter of Credit Any Limit 12.00%

Minimum Charges against Govt. Cheques Rs.100.00 or

Paisa .35 per 1000.00 for First 7
Days after 7 days int. @ 18 % p.a.
Bills/cheques purchase/
discounted
For other Cheques Rs.100.00 or
Paisa 35 per 1000.00 for First 7
Days after 7 days int. @ 21 % p.a.
1 Day but less than 45 days 15.00%

Temporary Limit 45 Days but less than 3 months 15.25%

3 months but less than 6 months 16.00%

Mortgage Loan against Non-encumbered residential house/ flat or

property (on submission of commercial or industrial property (In the shape of
income proof in form of building/industrial shed) - self occupied or vacant. 12.00% p.a.
ITR)

33
Loan against Liquid Securities
In order to meet the unforeseen and urgent commitment, a loan against liquid
security is sought for. Liquid security such as NSCs, Life Policies, etc. invested
ether for taxation or for any other purpose can be offered as security and avail
the loan.

Eligibility

The applicant should be an individual pursuing any profession.

Income

Applicant should have sufficient income to repay the Loan with Interest.

Loan Amount

In case of other securities such as NSCs, Life policies, etc. there is limit for
advance

Margin

Against All the Securities – 75% of Surrender Value

Security

Pledge / Assignment of the Liquid Securities.

Guarantee

Not Applicable.

Period of Loan

Till the maturity of security or maximum period of 5 years in case of Term Loans
whichever is lowest.

34
Interest Rates
The Baghat Urban Co-operative Bank Ltd., is offering the following interest for the various
loans and advances schemes -

Type of Loan Amount Limit Int. Rate

Consumption Loan Any Loan of such Kind 12.50%

Up to Rs.1.0 Lac 13.50%

Above Rs. 1.0 Lac to Rs. 2.0 Lac 13.50%

Loan against Salary Any amount as per repayment capacity. The

Personal Loan Installment should be deducted from salary bill. In
case installment not deducted from salary bill the
interest shall be applicable 1% higher than normal
rate.
For New Customer i.e. whose a/c is opened within
six months 14.00%

Loan against NSC/KVP/LIC Any Loan of such Kind 12.50%

Loan against Banks Own Against own deposit 1.00% above deposit rate
Terms Deposit Against third party deposit 2.00% above deposit rate
On clean Overdraft 21.00%

Letter of Credit Any Limit 12.00%

Minimum Charges against Govt. Cheques Rs.100.00 or

Paisa .35 per 1000.00 for First 7
Days after 7 days int. @ 18 % p.a.
Bills/cheques purchase/
discounted
For other Cheques Rs.100.00 or
Paisa 35 per 1000.00 for First 7
Days after 7 days int. @ 21 % p.a.
1 Day but less than 45 days 15.00%

Temporary Limit 45 Days but less than 3 months 15.25%

3 months but less than 6 months 16.00%

Mortgage Loan against Non-encumbered residential house/ flat or

property (on submission of commercial or industrial property (In the shape of
income proof in form of building/industrial shed) - self occupied or vacant. 12.00% p.a.
ITR)

Working Capital Finance

35
BUCB offers working capital finance to meet the entire range of
short-term fund requirements that arise within a corporate’s day-
to-day operational cycle.

The BCUB working capital loans can help your company in

financing inventories, managing internal cash flows, supporting
supply chains, funding production and marketing operations,
providing cash support to business expansion and carrying current
assets.

BUCB’s working finance products comprise a spectrum of funded

and non-funded facilities ranging from cash credit to structured
loans, to meet the different demands from all segments of
industry, trade and the services sector. Funded facilities include
cash credit, demand loan and bill discounting.

Quantum of Assistance

75% of the working capital requirement of business for one cycle of

operation.

Promoters’ Contribution: 25%

Interest Rate

PLR + weightage of risk.

Adjustment or Renewal Period

Maximum 1 years (renewable subject to bank approval)

The borrower shall approach commercial banks for meeting its

normal working capital requirement at any time during currency of
the loan.

Loan against Liquid Securities

In order to meet the unforeseen and urgent commitment, a

loan against liquid security is sought for. Liquid security
such as NSCs, Life Policies, etc. invested ether for taxation
or for any other purpose can be offered as security and
avail the loan.

36
Eligibility

The applicant should be an individual pursuing any profession.

Income

Applicant should have sufficient income to repay the Loan with

Interest.

Loan Amount

In case of other securities such as NSCs, Life policies, etc.

there is limit for advance

Margin

Against All the Securities – 75% of Surrender Value

Security

Pledge / Assignment of the Liquid Securities.

Guarantee

Not Applicable

Period of Loan

Till the maturity of security or maximum period of 5 years

in case of Term Loans whichever is lowest.

37
 CHAPTER-5
 Analysis of the annual report
 Key operational process
 SWOT analysis
 Interpretation

5.1 INTRODUCTION:-

The need of financial analysis is required to run the day-to-day business

activities of the every organization. Financial analysis is the lifeblood of every
organization. Every organization who wants to maximize the wealth of
shareholders should adopt such type of policies, which utilize t heir financial
analysis in an optimum manner.
It may be emphasized that both gross & net concept of financial analysis
are equally important for the efficient management of financial analysis.
Financial analysis requirement mainly depend on the organizatio n's operation
cycle. Operating cycle is the time taken by the firm to manufacture and sell the
product and finally collection of cash. Longer the operating cycle of any
company, larger will be the investment needs of the company in its current
assets.
The proposed case study is mainly circulated around the financial analysis of
Baghat Urban Corporative Bank, Solan and the consequential impacts of its
Operating Cycle to fulfill the financial requirement. To company our
requirements, I will mainly use the company's financial reporting and data
analysis as the base for my project.

5.2 CONCEPTS OF FINANCIAL ANALYSIS:-

There are Two Concepts of financial analysis:-

38
1) TREND ANALYSIS

 RATIO ANALYSIS
TREND ANALYSIS:-

trend analysis of interest earned

 GROSS FINANCIAL ANALYSIS

It refers to the firm's investment in current assets. The asset which
can be converted into cash within an accounting year are termed as
current assets e.g. Cash, Debtors, Stock, and Bill Receivables etc.

 NET FINANCIAL ANALYSIS;-

It refers to the difference between current assets and current
liabilities. Current Liabilities are those claims of outsiders, which are
expected to mature for payment within an accounting year e.g. Creditors,
Bills Payable, and Outstanding Expenses etc.

 SOURCES OF FINANCIALLY ANALYSIS:-

1) Short Term Sources.

2) Long Term Sources.

 Short Term Sources:-

i) Trade Credit
ii) Bank Credit
iii) Public Deposits
iv) Inter Corporate Deposits
v) Commercial Paper

39
  Long Term Sources

i) Fixed Deposits
ii) Permanent Working Capital
iii) Temporary Working Capital
iv) Long Term Borrowing from Banks.

To carry out a business, minimum level of financially is necessary for

continuous and uninterrupted basis. This requirement has to be met
permanently as it done for fixes assets. This requirement is referred to as
permanent or fixed.
Any amount over and above the permanent level of finance is temporary,
fluctuating or variable.

5.3 Other graphs/charts indicators:-

There are some charts/graphs which shows the progress report of the past
few years i.e.

 Progress graph of deposits , Advances & working capital since 2000

 Growth chart of share capital, reserve fund & profit since 2000

 Chart showing income of 2010-2011

 Chart showing Expenditure of 2010-2011

5.4 LIQUIDITY RATIO:-

Liquidity ratio are used to measure the short term liquidity and solvency position of a firm. It measures
the relationship between current assets and liabilities. These ratio predict the capacity of business to
meet its short term obligation out of its short term resources.The liquidity refer to the maintenance of cash,
bank balance and those assets which could be easily convertible in to cash without any loss in order to meet
current liabilities as and when arise. So liquidity ratio studies the firm short term solvency and its ability to pay
of the current liabilities and reveals the short term financial strength or weakness.

40
 Current Ratio: Current Ratio is the ratio of total current assets to current liabilities.
Rule of Thumb: 2:1

Current Ratio = Current assets /current liability.

Current Ratio of Baghat bank are shown as follows:

YEARS BAGHAT BANK

2011 0.69
2012 0.69
2013 0.57
2014 0.52
2015 0.47

BAGHAT BANK
0.8

0.7

0.6

0.5
Baghat Bank
0.4
BAGHAT BANK
0.3

0.2

0.1

0
2011 2012 2013 2014 2015

Line graph of baghat bank

INTERPRETATIONS

Baghat bank current ratio was constant in 2011 & 2012 but since 2012 it was continuously decline but the current
assets position of baghat bank is relatively better.However as a rule of thumb current ratio should be 2:1 so that any
company can comfortably meet out its current obligation.

ANALYSIS;-
41
Analysis of bagat bank that the position of current assets to current liabilities in any year is not according to rule o
thumb is 2:1 which shows decrease in the financial position of the company. But as shown in the line graph current
Ratio of Baghatbankis they do not have adequate funds to meet its current liabilities which results adverse effect on
business.

5.5QUICK RATIO:-

Quick ratio is also called acid test ratio. Quick ratio means the ratio which compares liquid assets current liabilities.

Quick assets=liquid assets/current liabilities

Rule of thumb=1:1

Quick ratio of baghat bank are shown as follows:

Years BAGHAT BANK

2011 0.39
2012 0.37
2013 0.35
2014 0.30
2015 0.24

Series 1
0.45

0.4

0.35

0.3

0.25

0.2 Series 1

0.15

0.1

0.05

0
Years 2011 2012 2013 2014 2015

Line graph of baghat bank.

INTERPRETATION

42
As shown in the graph quick ratio of baghat bank in 2015 is very less that is 0.24 but in the previous year
2011,2012,2013,2014 it is improved. but yet not satisfactory. Quick ratio should be 1:1 so that the companies can
meet out their current obligations with available liquids the companies are suffering with inadequate liquidity.

ANALYSIS

Analysis of baghat bank:-

As per analysis the baqnk’ reveals that liquid assets of the firm are not 100% of its current liabilities. As shown in
the diagram it is not according to rule of thumb that is 1:1 which shows that the company cannot be prosperous &
cannot pay its current liabilities in time.

As per the analysis as shown by the line graph we comes to knows that quick ratio of Baghatbankisis more.

5.6 CASH RATIO:-

It is also called Absolute liquid ratio. An acceptable norm of this ratio is 50% of current liabilities.

Absolute liquid ratio=Absolute liquid assets/current liability Rule of thumb=0.50:1

Cash ratio of baghat bank are shown as follows:

YEARS BAGHAT BANK

2011 0.14
2012 0.08
2013 0.13
2014 0.08
2015 0.06

Series 1
0.16

0.14

0.12

0.1

0.08
Series 1
0.06

0.04

0.02

0
Years 2011 2012 2013 2014 2015

43
 Line graph of baghatbanK

INTERPRETATION:-

As shown in the line graph Absolute liquid ratio in 2014, 2015 is same & very low that is 0.06 from rule of thumb
that is 0.50:1.

In 2011, 2012 & 2013 is improved but yet not satisfactory.

ANALYSIS OF THE BAGHAT BANK:-

As per analysis the absolute liquid ratio of baghat bank is low & not satisfactory which shows that the company will
not have satisfactory liquid position & will not be able to pay its debts in short run. absolute liquid ratio is very less
than the rule of thumb that is 0.50:1

As per analysis & shown by the line graph we comes to know that Absolute liquid ratio of Baghat bank.

5.7FINANCIAL ANALYSIS TURNOVER RATIOS:-

This ratio establishes the relationship between cost of sales & net working capital.

It can be calculated as:

Working capital turnover ratio: Cost of goods sold/Average working capital

Financial analysis turnover ratios of baghat bank are shown as follows:

YEARS BAGHAT BANK

2011 0.65
2012 0.67
2013 0.46
2014 0.42
2015 0.37

44
 Series 1
0.8

0.7

0.6

0.5

0.4
Series 1
0.3

0.2

0.1

0
Years 2011 2012 2013 2014 2015

Line graph of baghat bank:

INTERPRETATION:-

This graph shows that in 2011 financial analysis turnover ratio of baghat bank is high but in the subsequent year it is
decline and not satisfactory which shows that amount of financially is not efficiently & effectively utilized.

ANALYSIS OF THE BAGHAT BANK:-

As per the analysis and as shown in the line graph financial anlysis turnover ratio of baghat bank is low which
shows that the amount of finance is not efficiently & effectively utilized. It also shows that the business requires
additional funds to supports its financial structure.

5.8INVENTORY TURNOVER RATIO:-

This ratio is expressed as number of times the avarage stock has been turned over during the year.Rule
of thumb :-higher the ratio ,higher the efficiency.

Inventory turnover ratio:-cost of good sold/average stock.

YEARS BAGHAT BANK

2011 0.63
2012 0.33
2013 0.42
2014 0.39
2015 0.83

45
 Series 1
0.9

0.8

0.7

0.6

0.5

0.4 Series 1

0.3

0.2

0.1

0
YEARS 2011 2012 2013 2014 2015

Line graph of baghat bank:

INTERORETATION:-
As shown by the line graph the inventory turnover ratio is

In baghatbank.the ratio in the susequent year is 0.63,0.33,0.42,0.39,0.83.it is drcreasing in the

previous year and it is the signal of inefficiency. It also implies the poor sale or excess inventory.it also
indicate poor liquidity means overstocking.

5.9INVENTORY CONVERSION PERIOD:-

It refers to the period within which average stock should be turned over or disposed off.

Inventory conversion period =days in a year/stock turnover ratio

BAGHAT BANK
2011 579.36
2012 1106.06
2013 869.04
2014 935.89
2015 439.75

46
 Series 1
1200

1000

800

600
Series 1

400

200

0
2011 2012 2013 2014 2015

Line graph of baghat bank:

As shown by the line graph the inventory conversion ratio is

Average collection period baghat bank is less than. It means the average speed of conversion of stock
in to sale in 5years is more than 3 times.

The conversion of stock of baghat bank was reduced in 2015 as. But however it was increased in
subsequent year. In 2015 the movements of stock was very low. It means a major part of financly was
haulted in to stock

5.10SOLVENCY RATIO: Theseratios are used to measure the ability of the firm to serve long
term obligation with regard to principal amount along with intrest.in short these ratio show the
relationship between debt and equity in funding the capital structure of the firm.The long term
solvency ratios are also called stability ratios. These ratios help in ascertaining the long term solvency
of a firm which depends on firm’s adequate resources to meet its long term funds requirement.

Solvency ratio = outsiders funds / total assets

outsiders fund to total

assets ratio

2011 4.9

2012 6.46

2013 6.5

2014 6.42

47
 2015 6.12

Series 1
7

Series 1
3

1 2007 2008 2009 2010 2011

0
2011 2012 2013 2014 2015

INTERPRETATION:-

In this table shows the outsiders fund to total assets ratio has
been stable. In 2011 it has been 4.9 percent. In the year 2012
it increasesd to 6.46 percent. In 2013 it has been 6.5 percent.
In 2014 it has been 6.42 percent. At last in the year 2015 it
reaches to 6.12 percent.

5.11PROFITABILITY RATIO:-

These ratios measure the relationship between operating profit to sales. Such ratios highlight the end
result of business activities. Profitability can be measured either on the basis of sales or cost of goods
sold. Basically these ratios measure the rate of return on overall capital employed in the business. The
main objective of any business undertaking is to earn profits. Profitability is the overall measure of the
companies with regard to efficient and effective utilization of resources. The profitability of the firm
can be easily measured by its profitability ratios. Profitability ratio are of utmost importance concern
because these ratios are calculated to enlighten the end result of business activities. Various parties like
owners, creditors, financial institutions, govt, etc. are interested in analyzing profitability ratio of the

48
business because profitability is the sole criterion of the overall efficiency of a business. Profitability
ratio are expressed in terms of percentage.

 RETURN ON SHAREHOLDER’S FUND:-

Return on investment is the relationship between net

profit (after interest & tax) / shareholder’s funds. This ratio
tells about the rate at which net profit have been earned on
shareholder’s fund.

years Return on shareholders

fund

2011 2.35

2012 2.47

2013 2.12

2014 2.02

2015 2.22

#REF!
3

2.5

1.5
#REF!

0.5 2007 2008 2009 2010 2011

0
years 2011 2012 2013 2014 2015

49
INTERPRETATION:-

In this table shows the return on shareholders fund has been

stable in the year 2011 it has been 2.35 percent. In the year
2012 it increases to 2.47 percent but in the year 2013 it can
decreases to 2.12 percent. In the year 2014 it further reduced
2.02 percent and at the last year 2015 it improves up to 2.22
percent.

 EARNING PER SHARE:-

This ratio measures profit after tax and preference dividend

per equity share. EPS indicate whether or not the firm earning
powers on per share basis has changed over that period.

EPS= net profit after tax - preference dividend / no. of equity

share

Years earning per share

(rs)

2011 41.79

2012 44.72

2013 45.65

2014 48.84

2015 64.98

50
 Earning per share
70

60

50

40

Series 1
30

20

10

0
Years 2011 2012 2013 2014 2015

INTERPRETATION:-

In this table show the earning per share ratio of baghat bank
has been relatively constant. Earning per share ratio show the
rate of return on investment to equity share capital holders. In
the year 2011 it shows earning per share at 41.79 percent. It
increases in the year 2012 to 44.72 percent. In the year 2013 it
has been 45.65 percent. In the year 2015 it reaches 64.98
percent.

5.12 GROWTH table & Chart OF THE BAGHAT URBAN CO-OP BANK LTD.
SOLAN

W.E.F. 2000-2011 (IN % AGE):-

YEARS SHARE CAPITAL RESERVE FUND PROFIT

2000 57.32 176.35 53.8
2001 62.86 214.76 72.81
2002 70.6 219.53 78.46
51
 2003 80.62 340.35 100.28
2004 100.77 477.03 140.33
2005 113.56 666.84 183.79
2006 130.6 711.02 191.27
2007 147.49 1107.01 185.44
2008 156.5 1149.6 341.06
2009 161.17 1291.85 270.95
2010 187.79 1518.13 317.63
2011 309.31 1769.42 264.86

2012 333.26 1998.14 268.00

2013 393.66 2094.16 253.73

2014 520.19 2244.74 134.88

2015 752.05 2376.89 307.10

2500

2000

1500
Series 1
Series 2
1000
Series 3

500

52
INTERPRETATION:-

In this diagram shown the share capital, reserve fund and

profit of the bank. In the year 2000 to 2008 share capital,
reserve fund and profit are increases in an increasing rate. In
the year 2009 share capital, reserve fund are increases but
profit are decreases.in the year 2010 share capital, reserve fund
are increases and profit are also increases. In the year 2015
reserve fund and share capital is increases but profits are
decreases.

5.13 PROGRESS TABLE & CHART OF THE BAGHAT URBAN CO-OP

BANK LTD. SOLAN

W.E.F. 2000-2011 (IN % AGE)

YEARS DEPOSITS W.E. ADVANCES

2004 2826.32 3211.99 1306.04
2005 3650.58 4180.03 1921.8
2006 4596.77 5371.87 2663.36
2007 5092.59 5963.74 3362.65
2008 5785.41 6871.95 3913.77
2009 6496.61 7598.69 4566.48
2010 7938.39 9225.44 5633.72
2011 10586.65 12097.84 7838.31
2012 13231.32 15165.05 9349.71
2013 16714.78 18981.05 10834.27
2014 18164.50 20489.03 11506.26
2015 19937.72 22731.46 11061.48

53
 25000

20000

15000
Series 1
Series 2
10000
Series 3

5000

INTERPRETATION:-

In this diagram, shows the deposits, W.E. and advances. In the

years 2004 to 2014 deposits are increases2826.32 to 18164.50, W.E. are
increases 3211.99 to 20489.03, and advances are increases 1306.04 to 11506.26. In the year

2015 deposits and W.E. are increases but the advances are decreases.

54
5.14 INCOME 2014-2015:-

Intt. On Deposits 300.88

Intt. On Advances 1442.8
Locker Rent 1.7
Intt. On Govt. Sec 311.71
Commission 14.95
Other 23.36

14.95 23.36
300.88
311.71

1.7 Intt. On Deposits

Intt. On Advances
Locker Rent
Intt. On Govt. Sec
Commission
other

1442.8

INTERPRETATION:-

In this diagram, show the intrest on deposits are 300.88, intrest

on advances are 1442.8, locker rent are 1.7, intrest on govt.
sector 311.71, commission are 14.95, other are 23.36

55
5.15 EXPENDITURE 2014-2015:-
Intt. On Dep. 1378.7
Salaries & Allow 236.11
Rent, Light, Ins. Tax 28.51
Print, Sty. & Adv. 142.45
Net Profit 264.86
Law, Audit, Postage, Telephone Etc
Depriciation 31.55
NPA & Contingent Provision 75
Brokerage 6.07
Other Expense 30

30
756.07
31.55
0
Intt. On Dep.
264.86
Salaries & Allow

142.45 Rent, Light, Ins. Tax

28.51 Print, Sty. & Adv.

236.11 1378.67 Net Profit

Law, Audit, Postage,

Telephone Etc

INTERPRETATION:-

In this diagram, shows the intrest on deposit are 1378.67, salaries and allow236.11, rent, light, intrest
on tax are 28.51, print, sty. & advances 142.45, net profit 264.86, law, audit, postage, telephone
etc31.55

56
57
 SWOT ANALYSIS

SWOT Analysis is a powerful technique for understanding your Strengths

and Weaknesses, and for looking at the Opportunities and Threats you face.
Used in a business context, it helps you carve a sustainable niche in your
market. Used in apersonal context, it helps you develop your career in a
way that takes best advantage of your talents, abilities and opportunities.

SWOT ANALAYSIS OF BAGHAT URBAN COOPERATIVE BANK

SOLAN:

STRENGTH

 Right strategy for the right products.

 Superior customer service vs. competitors.
 Great Brand Image
 Products have required accreditations.
 High degree of customer satisfaction.
 Good place to work
 Lower response time with efficient and effective service.
 Dedicated workforce aiming at making a long-term career in the
field.

58
 WEAKNESSES

 Some gaps in range for certain sectors.

 Customer service staff need training.
 Processes and systems, etc
 Management cover insufficient.
 Sectoral growth is constrained by low unemployment levels
and competition for staff

OPPORTUNITIES

 Profit margins will be good.

 Could extend to overseas broadly.
 New specialist applications.
 Could seek better customer deals.
 Fast-track career development opportunities on an industry-wide
basis.
 An applied research centre to create opportunities for developing
techniques to provide added-value services.
THREATS

 Legislation could impact.

 Great risk involved
 Very high competition prevailing in the industry.
 Vulnerable to reactive
 attack by major competitors
59
  Lack of infrastructure in rural areas could constrain investment.
 High volume/low cost market is intensely competitive.
KEY POINT

SWOT Analysis is a simple but powerful framework for analyzing

company's Strengths and Weaknesses, and the Opportunities and Threats
you face. This helps you to focus on your strengths, minimize threats, and
take the greatest possible advantage of opportunities available to you.

60
 CHAPTER -6
CONCLUSION & SGGESTIONS
SUGGESTION:-

Based on the study conducted and conclusion derived, the following

suggestion can be provided which can be more useful to bank to increasing
its profitability and to maintain sound short-term and long-term financial
position as well as to the interested customer who can be benefited through
the various schemes by the bank.

 Bank should try to increase its operational base by increasing number

of branches to increase revenue of the bank.
 Bank should provide more ATM facility in all branches.
 Bank should try to open the branches in rural areas.
 Bank should try to tap deposits from corporate world and educational
institution to increases its profitability.
 Obsolete machinery should be replaced with new machinery for
controlling increasing cost of good sold

61
CONCLUSION:-
Bank’s motto is to provide better and efficient banking services
to its members and customers. The bank started its computerization in
the year 1992 and brought on LAN with all banking facilities w.e.f
1994. Keeping in view the working and progress made by the bank, the
Reserve Bank of India permitted to expend its business to entire
District now to whole state. The RBI also granted licenses to open
branches at ChaBBAghat and Parwanoo in the year 2000, which are
running in profit with good working. Bank is providing higher rate of
interest on Fix Deposits than the other banks. It also gives the extra rate
of interest to the senior citizens. The Baghat Urban Co-operative Bank
Ltd. Solan’s mission, vision, strategy and objective are same as Central
and State Co-operative Banks. Performance of the bank is shown by
Balance sheet, Profit & Loss account, progress table since 2004.
Growth table since 2000, growth chart since 2000 and all activities/
workings of the bank also shows the performance of the bank.Bank’s
progress chart shows that the no. of Depositors & no. of share holders
are increasing rapidly year by year.Balance sheet and profit & loss
account shows that progress of the bank is increasing year by year
rapidly.

62
BIBLIOGRAPHY:-
INTERNAL SOURCES:

 Manuals and Journals of the Bank

 Annual reports of the bank (Profit & Loss statements and balance Sheet).

EXTERNAL SOURCES:

INTERNET

 WEBSITE: www.baghatbank.com

 Email: baghatbank@yahoo.com, info@baghatbank.com

Books:

AUTHORPublisher

 Management control techniques of Monika goyal&Kalyani

 Basic of AccountingSofaf&Hiro and V.K publication

 Budgeting Profit planning &T.R.Jain&V.K, publication

 Basic statistics of Aggarwal&Kalyani

 Financial management byN.N Sharma

63
 ANNEXURE

BALANCE SHEET OF BAGHAT BANK

Sources of fund:
Total share capital 293.62 282.95 272.62 239.07 238.03
Equity share capital 293.62 282.95 272.62 239.07 238.03
Share application money 33.97 8.01 0.00 0.00 0.00
Preference share capital 0.00 0.00 0.00 0.00 0.00
Reserves 9974.62 7,527.60 4,959.26 4,098.53 3,302.01
Revaluation reserves 11.18 11.67 12.09 12.47 12.86
Net worth 10,313.39 7,830.23 5,243.97 4,350.07 3,552.90
Secured loans 407.23 602.45 981.00 617.26 106.65
Unsecured loans 1998.06 2,277.70 3,071.76 1,969.80 1,529.35
Total debts 2,405.29 2,880.15 4,052.76 2,587.06 1,636.00
Total liabilities 12718.68 10,710.38 9,296.73 6,937.13 5,188.90
Application of funds:
Gross block: 5,849.27 4,866.18 4,653.66 3,552.64 3,180.57
Less: depreciation 2,841.73 2.537.77 2,326.29 1,841.68 1,639.12
Net Block 3007.54 2,328.41 2,327.37 1,710.96 1,541.45
Capital work in progress 1,364.31 1,374.31 886.96 649.94 329.72
Investment 9,325.29 6,378.02 5,786.41 4,215.06 2,237.46
Inventories 1,694.21 1188.78 1,060.67 1,084.11 878.48
Sundry debtors 1,354.72 1,258.08 1,043.65 1,004.88 700.89
Cash and bank balance 447.62 475.17 635.61 310.58 415.89
Total current assets 3,496.55 2,922.03 2,739.93 2,399.57 1,995.26
Loans and advances 2,653.52 2,034.47 1,402.45 866.19 1,011.50
Fixed deposits 167.02 1,268.06 938.82 550.65 910.18
Total current assets, loans &advances 6,317.09 6,224.56 5,081.20 3,816.41 3,916.94
Deferred credit 0.00 0.00 0.00 0.00 0.00
Current liabilities 5,289.67 3,822.50 3,520.20 2,525.31 2,138.77
Provisions 2,005.88 1,796.54 1,277.56 943.46 715.43
Total current liabilities & provisions 7,295.55 5,619.04 4,797.76 3,468.77 2,854.20
Net current assets -978.40 605.52 283.44 347.64 1,062.74
Miscellaneous expenses 0.00 4.12 12.55 13.53 17.55
Total assets 12,718.68 10,710.38 9,296.73 6,937.13 5188.92

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PROFIT AND LOSS A/C OF BAGHAT BANK

March 2018 2017 2016 2015 2014

Income:
Sale turnover 4,965.50 4,483.80 4,357.80 3,604.70 2,753.22
Excise duty 0.00 0.00 0.00 0.00 0.00
Net sales 4,965.50 4,483.80 4,357.80 3,604.70 2,753.22
Other income 0.00 0.00 0.00 0.00 0.00
Total income 4,993.10 4,519.40 4,376.60 3,614.70 2,768.15
Expenditure:
Manufacturing expenses 1,435.90 1,176.00 966.10 729.50 574.69
Material consumed 0.00 0.00 0.00 0.00 0.00
Personal expenses 1,943.80 1,598.70 1,419.70 1,222.40 840.41

65