A REPORT ON

VERAVAL MERCATILE CO OPERATIVE BANK

PREPARED BY :- PRANAV R CHAUHAN COLLEGE :- T.N.RAO COLLEGE OF MANAGEMENT ACADEMIC YEAR :- 2008-2009 CLASS :- S.Y.B.B.A ROLL NO :- 14 SEAT NO :-

SUBMITTED TO :- SAURASTRA UNIVERSITY GUIDED BY :- MS. ANVI KAKKAD

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GENERAL INFORMATION

INTRODUCTION
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It may be said that banking in its most simple form, is an old as authentic history as early as 2000 B.C.BADY LONIANS were the people to develop system of bank. In ancient GREECE and ROME we practice of granting credit was widely prevalent.

The word bank was originated from the BANCO or BANQUE. Both the words are of Italian language. During the early periods although the banking business was mostly done by private individuals, many countries established public bank either for the purpose of facilities.

Bank is institution that deals in money and also deals in those matters which are related to money. Just as a shopkeeper buy and sales money. Bank buys savings from the people. It accept or in other word creates money by accept the deposits. In this same way, it lands money to those who need it. When bank accept money, the bank pays interest and when it lands money it charger higher interest and there by bank creates its income. Therefore, workings of bank like, a shop in that it accepts money with interest and gives there money at higher rate of interest.

TYPE OF BANKING
The following is a type of banking
COMMERCIAL BANK INDUSTRIAL BANK EXCHANGE BANK AGRICULTURAL BANK CO-OPERATIVE BANK THE CENTAL BANK

FUNCTION OF MORDAN CO-OP. BANK

According to section 6th business may be under taken by a bank. 1 -1 -1

1.

The borrowing, raising or taking of money.

2. The lending or advancing of money either against security or without security. 3. The drawing, making, accepting, discounting, buying, selling, collecting & dealing in bills of exchange, handles promissory notes, coupons, drafts, bills of lending, railways receipts, warrants, debentures, certificates scripts & other instruments and securities whether transferable or not. 4. The granting and issuing the letter of credit, travelers cheques and circular notes. 5. The acquiring, holding on commission under writing and clearing in stock, funds, shares, debentures, bounds, obligation securities and investments of all kinds. 6. The purchasing and selling of bounds, scripts and other forms of securities on behalf of contribution or others. 7. The negotiation of loans and advances. 8. The collecting and transmitting of money and securities. 9. It may act as on agent of the government, local authority or person and curry on agency business but cannot act as security treasurer of a company. can

10. It may curry on and transact every kind of guarantee and indemnity business. 11. It may manager, sell and realize any property which may come into its possession. 12. It may undertake and execute trusts. 13. It may acquire, construct and maintain any building for its own. 14. It may do all such things are incidental or conductive to the promotion of advancement of the business of the company

HISTORY

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The VERAVAL MERCANTILE CO-OP. BANK LTD. In India started functioning almost 35years ago. The VERAVAL MERCANTILE CO-OP. BANK is an important constituent of the Indian financial system, judging by the role assigned to VERAVAL MERCANTILE CO-OP.BANK operates. Though the co-op. originated in the west, but the importance of such banks have assumed in India is rarely paralleled any where else in the world. The VERAVAL MERCANTILE CO-OP. BANK in India plays an important role even to day in rural financing. The businesses of VERAVAL MERCANTILE CO-OP. BANK urban areas also have increased phenomenally in the number of primary VERAVAL MERCANTILE CO-OP. BANK LTD.

VERAVAL MERCANTILE CO-OP. BANK LTD in India is registered under the bank act. The V.M.C. BANK also regulated by the RBI. These are governed by the banking regulated act 1949 and banking laws.

MISSION ;-

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Survive to the common man.

Enhance the value of share holders.

Emerge as a symbol of public trust & confidence by creating a positive image.

Maintain excellence in operation & management by bringing in transparency & integrity.

Develop & motivate human resource there by cultivating professional culture in the banking operation.

Ensure speedy & satisfactory customer services through continuous product innovation & aggressive marketing strategies.

And the last but not least that is

To assist the weaker section of the society Is the primary motto of the Raj Bank.

THE EXECUTIVE COMMITTEE

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1. DR.KUMUDCHANDRA PHICHADIYA 2. MUKESHKUMAR SHAH 3. NAVINBHAI SHAH 4. PRACIPBHAI SHAH 5. JITENDRAKUMAR HEMANI 6. ASHOKKUMAR MATHIYA 7. PRAKASHCHNDRA PAREKH 8. MANISHBHAI SHAH 9. KARSHANBHAI SOLANKI 10. KETANBHAI CHANDRANI 11. MAHENDRABHAI DOSHI 12. JITENDRAKUMAR PAREKH 13. JESHINGBHAI BARAD 14. NRENDRAKUMAR SAVSANI 15. VIRENBHAI KOTHARI 16. MAHENDRABHAI SHAH

CHAIR MAN MANAGING DIRECTOR JOINT MANAGING DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR PROFESSIONAL DIRECTOR PROFESSIONAL DIRECTOR

BRANCH NETWORK
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1. MAIN BRANCH
SUVIDHA, SUBHAS ROAD VERAVAL -362 265 PHONE;- (02876) 243388

2. REYON BRANCH
SUVAS, JUNAGADH ROAD VERAVAL PHONE ;- (02876) 220229

3. ADMINISTRATIVE OFFICE
SUVIDHA, SECOND FLOOR, SUBHASH ROAD VERAVAL-362 265 PHONE ;- (02876) 223427 FAX :- 243429

4. UNA BRANCH
RIDHI SIDHI COMPLEX, FIRST FLOOR OPPOSITE VEGETABLE MARKET UNA 362 960 PHONE :- (02875) 221725 FAX :- 221725

5. SUTRAPADA BRANCH
SUVAS, NEAR BUS STAND SUTRAPADA 362 275 PHONE :- (02876) 263354

6. JUNAGADH BRANCH
SUVIDHA, MAHERSHI ARVIND ROAD NEAR TALAV GATE JUNAGADH 362 001 PHONE :- (0285) 26522392

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7. RAJKOT BRANCH
KALAKRUTI, COMPLEX SAURASHTRA UNIVERSITY ROAD, RAJKOT -360 005 PHONE :- (0281) 2589235 FAX :- 2573067

8. KESHOD BRANCH
CHANDRA NIVAS, JALARAM TEMPLE ROAD AMBAVADI KESHOD 362 220 PHONE :- (02871) 234357

9. MANAVDAR BRANCH
SUVIDHA, FIRST FLOOR NEAR GIRL SCHOOL MANAVDAR 362 360 PHONE :- (02874) 222003 FAX :- 222003

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SERVICE DEPARTMENT

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SAVINGS ACCOUNT

MEANING:-

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As we know that saving means to save something same way word saving regarding bank means to sane money. In all bank the departmental is therefore providing this services of saving to our society, Saving deposit account is meant for the people of lower & middle class people who wish to save a par of their current incomes to meet their future needs and also intend to earn income from their savings. The banks therefore impose certain restrictions on their saving a\c and also offer reasonable rate of interest. The need of keeping cash reserves against such deposit is comparatively larger than fixed deposits but smaller as against the deposit, because of the restrictions on the number of with drawers.

PROSEDURE FOR OPENING OF AN ACCOUNT:-

The following items are required for opening of an a\c. 1. Two photographs. 2. Residential proof :a Reshan card b Electricity bills c Driving License d Issue any identity with any institution 3. Pan card 4. Identification of any person who open an a\c in bank. 5. youre a\c will be open with 500 rs. For simple and 1000rs with Cheques facility

DEPOSITING METHOD:In saving a\c only one method are used. This method is very simple. In this method you are fill up red color slip for deposited rupees in a\c. Then you give the slip to clerk for making scroll. Then you go to cash window and give the slip to cashier then give rupees. Then cashier accepting rupees and give to counter.

WITHDRAWAL METHOD:They are two method of withdrawal of cash. 1 -1 -1

(1)

Withdrawal forms:-

This is a first method of withdrawal of cash in our a\c. In this method you taking a withdrawal form and fill up this form and this form gives to clerk for the scrolling then you give this form to cashier for withdraw the cash then cashier accept this form and give cash what ever you written in withdrawal form. (2) CHEQUES:This is second method of withdrawal of cash in our a\c. In this method you issue a cheque book and written this cheque and give to clerk for making necessary entries and making a scroll .Then receive a token then receive cheque and go to cash counter and give both are give to cashier then cashier accept this both instrument and give the rupees to you .

PAYMENT OF INTEREST:In saving account the interest paid for six month on your account closing balance. In this account the interest rate is 3.5% on your account closing balance.

RESTRICTION ON WITHDRAWALS:They are two methods for restriction of withdrawals of cash. (1) Minimum balance:In this a\c the minimum balance maintain are require. The limit of this a\c is 500rs. and you issue the cheque book then the limit is 1000rs. you across this limit then the officer restricted for withdrawal of cash.

(2) Withdrawal without cheque:In this case you issue a cheque book then you are not withdrawal cash with withdrawal forms. You withdraw cash with withdrawal form then the office are restricted for withdrawal of cash.

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CLOSING OF ACCOUNT:You want to closing of an account then you collect the account closing forms and fill up this forms then this form give to officers then the officer making necessary procedure and you collect your rupees and your account will be closed.

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CURRENT ACCOUNT

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A current deposit account and which may be operated upon any number of times during a working day. As the banker is in the obligation to repay this deposit on demand they are called demand liability of the banker. To meet such liability the banker keeps sufficient cash reserves against such deposits. Current account suit the requirements if big businessman joint stock companies , institutions , public authorities and public corporation etc, whose banking transactions, happen to be numerous or on every working.

PROCEDURE OF OPENING OF AN ACCOUNT:EILIGIBILITY:A person who wants to open an account must be able for this. (1) Major can open the account. (2) Minors, insolvent i.e. incompetent persons are not allowed. (3) Company, partnership firm, body of government, corporations, trusts, clubs etc. can open the current bank account.

OPENING OF AN ACCOUNT:Any person may apply for opening of a current account in his name but the banker reserves the right to do on being satisfied about the identity of the customer. Any one who wants to open an account furnish. 1. Passport sized photo 2. Copy of the identifications of resident i.e. driving license 3. Pan card

APPLICATION FORM:Bank provides separate application form for opening this account for individual and companies. The application form contains name of applicant. (1)Full address of the applicant (2)Operational instructions. (3)Name & specimen signature of applicant. (4)Introducers details. (5)Particulars regarding first issue cheque book. (6)Initials of bank officials. (7) The limited companies are liable to fill up the back side of the form. 1 -1 -1

SPECIMAN SIGNATURE CARD:It contains following. (1) Name of applicant. (2) Account number. (3) Address & phone number. (4) Specimen signature of application/s (5) Operational instructions. (6) Name of introduce. (7) Number of account & type of account of introducer (8) Date & place (9) Officers signature. The other side of the card is made for firm/partnership firm/company. The applicant requires giving specimen signature on a prescribed form, generally a card for the purpose of the banks record. This signature card are preserved by the banker and the signature of the account holder on the instrument is compared with his specimen signature.

PAPER REQUIRED:(1) A copy of the partnership deed(in case of partnership) (2) Certification of incorporation, certificate of commencement of business, necessary resolution etc. should be obtained. (in case of company) (3) Copy of trust deed and copy of resolution (in case of corporation forms) (4)In case of government and semi government bodies/agencies necessary operational mandates are to be obtained. (5)In case of limited companies either pan or proof of application of pan is to be obtained.

OPENING OF ACCOUNT:-

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After the above formalities are over, the banker opens the account in the name of the applicant. Generally, the minimum to be deposited is rs.2500.the banker thereafter provides the customers with a pay in slip and a cheque book and he is authorized to operate the account.

OPERATING OF THE ACCOUNT:

The special features of banking business are that each and every transaction of money with customer is supported by a separated slip or document. The customer is therefore required to make use of pay in slips and cheques for depositing in and withdrawing money from the bank respectively

DEPOSITING METHOD:(1) The applicant should deposit rs.2500 minimum and the limit of minimum balance is rs.2500. (2) The deposited money will be credited in the depositors account. (3) Filling paying in slip. (4) Scrolling of the paying in slip. (5) Paying in slip with cash. a. The scrolled voucher should be presented with money to cashier. b. Then cashier will verify the slip and give the necessary entry in the computer. c. When all is right then he will take the money. d. After taking he will collect the token e. When the government currency notes are taking the total shall be checked. f. If form correct then cashier will receive the money. g. The counter foil shall be handed over the slip to the department to the depositor

(6) Paying in slip with cheque.

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a.When deposited cheque is of same bank and branch then transfer voucher to be prepared. b. Such vouchers should be scrolled c. Then first the debit effect is to be given. d. And as per the credit voucher beneficiarys account is to be credited. (7) Paying in slip with cheque of the other local bank. At here clearing procedure is to be done.

CHEQUE BOOK:It contains forms of chouse which are used as instrument to withdraw money from banks. In case of these accounts a cheque book is provided to those customers who undertake to maintain minimum balance of rs.3000 their credit.

CLOSING OF AN ACCOUNT:The right and obligations of a banker in regard of closing of his accounts are as follows. (1) If a customer directs give to the banker in writing to close his account the banker is bound to comply with such direction. (2) If an account remains in operated for a very long period the banker may request the customer to withdraw the money. (3) The banker is also competent to terminate his relationship with the customer. If he finds that the later is no more a desirable a customer. (4) On receipt of the notice of death of customer, the banker must stop operation of his account.

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RECURRING ACCOUNT

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To encourage regular saving habits in the depositing public the bank in the country provide an opportunity to them to save regularly. According to their capacity and need and earn more than what saving deposit accounts offers to them. The following are the main features of the recurring deposits.

The deposits are made every month of fixed amount say

Rs.

5,10,15,25 and so on. The deposit is made for fixed period say 6, 12,24,36,48,60,72,84, The account can be transfer from one bank to another in the country on This account can be opened by every one competent to enter in to A passbook is supplied to the customer and entry is made there in every The account attract higher rate of interest. The customer is allowed to raise loan against his recurring deposit months and so on. request by customer. contract including the minor one. month after every deposit.

account to the maximum limit of 75% of the deposit he has made till the date of raising the loan.

As far as concerned with recurring deposits at the VERAVAL MERCATILE COOPERATIVE BANK, than these are the features are the provided to the recurring deposit holders.

Easy and simple account opening procedure. Speedy and timely services. Account can be opened with any convenient amount, Attractive rate or interest and special rate for senior citizenship.

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FIXED DEPOSIT

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MEANING:All those deposit, which are deposited with the bank for a fixed period specified in advance, such deposits are called Fixed deposits or Term deposit . Foxed deposit or is repayable on the expiry of specified period, chosen by the depositer suit his purpose and enable him to get back the money as and when he needs it. As date of repayment of the fixed deposit is determined in advance the banker need not keep more profitable. The banker therefore, offers higher rates of interest on such deposit have grow in importance and popularity in India during recent years. These deposits constitue more than half of the total bank deposits.

OPENING OF AN ACCOUNT:For opening a fixed deposit account a depositer account a deposit is require to fill in an application form. Where he may to mention the period for which deposit to be made. He also give his specimen signature. Fixed deposit receipt is there after issued to depositor. The account holder should provide following to banker. A passport sized photograph A copy of the ration card or telephone bill or electric energy bill. Pan card or fill up form number 60 Introduction of the present account holder or account no.

OPERATING OF AN ACCOUNT:Acknowledging the receipt of the sum of money specified there in o be repaid at the expiry of the period mention there in along with interest at the rate mentioned. The specimen of fixed deposit receipt contains then name of depositors, period, amount, rate of interest, majority rate, amount of maturity, etc.

APPLICATION FORM: etc. It contains the following. Names of applicant/s in full Specimen signature Birth dates, in case of minor Full address of applicant Incase of company, trust, club, or association a copy of resolution/by law Operational instructions in case of joint accounts. 1 -1 -1

 Interest to be paid monthly/quarterly/yearly/by cash/by pay order, by crediting to saving bank account number/current number. Particulars regarding the introducer amount of deposit, T.D.S. code number on maturity time, sign of a clerk and office/manager. Information about nominee information about renewals. Space for photograph.

PROCEDURE FOR DEPOSITING: Paying in slip should be fill up Scrolling of paying in slip The minimum deposit of rs.1500 and maximum has no limit. Tendering of cash. Counting of cash. Opening of account. Preparing a fixed deposit receipt. Issuing a fixed deposit receipt to the account operator.

PAYMENT OF INTEREST:Though interest is payable at the stipulated rate the maturity of the fixed deposit receipt, banks usually pay interest quarterly or half yearly also at the request of the depositors who is required to present the receipt for the purpose of necessary entry regarding payment of interest on the back there of. Withdrawal interest or the principal amount is limited up to rs.20000 in cash. Otherwise by clearing or transfer in their account in the same bank.

RATE OF INEREST:1. 2. 3. 4. 5. 6. 7. FROM 15 DAYS TO 30 DAYS FROM 31 DAYS TO 45 DAYS FROM 46 DAYS TO 90 DAYS FROM 91 DAYS TO 180 DAYS FROM 181 DAYS TO 365 DAYS FROM 366 DAYS TO 2 YEARS 3 YEAR ABOVE TO 10 YEARS 3.00% 4.50% 8.25% 8.50% 9.00% 9.75% 9.50%

PAYMENT BEFORE DUE DATE:Bank also follows the practice of enchasing the fixed deposit receipt even before the due date, if the depositor desired. But according to the directive of the RBI, if any deposit is repaid before the expiry of such deposit agreed upon at time of deposit the interest payable on such deposit shall as follows.

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Where the deposit was made prior to 23rd July, 1974 at least 2% below the rate applicable, and In other cases for the entire period of deposit at least 1% less than the rate of interest for which the deposit has remain with the bank.

LOSS OF FIXED DEPOSIT:Sometime the depositor report to the bank for the loss of a fixed deposit receipt & request to issue a duplicate one. A fixed deposit receipt is not transferable and negotiable one. Therefore, any person cannot claim for the payment of the amount covered by the receipt. However, customers request to banker duly discharged must be surrendered for its repayment. The banker should take following steps in this regard. A letter signed by the informing banker about the loss of the receipt and requesting it to issue duplicate should be obtained. A duly stamped letter of indemnity must be obtained from the depositors to safe guard its own interest. A note to this effect should be made in the fix deposit ledger for future guidance.

PAYMENT OF F.D.R :o o Generally the payment of an FDR is done on after the due date. However, on case of a request form depositors the same may from a depositor the same may be prepaid at an applicable rate of interest less one per cent. For obtaining of an FDR the presenting of the FDR is a must, duly discharge operational instructions. However in case of prepayment all the joint account holders shall be required to discharge the FDR on the bank, as per specimen signature/s. As per RBI directives the payment of an FDR beyond Rs. 20000 shall be done by a crossed order cheque. FDR, being not transferable, shall not be paid to the third party on due date, unless there is a specific authority of the account holder. In case of payment to a blind depositor the cash shall be handed over to him/her in presence of a bank official and a representative of the account holder. 1 -1 -1

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CLEARING DPARTMENT

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INTRODUCTION:Clearing is process, by which bankers exchange cheque drawn against each other, which is received by them for collection or clearance from their customers. In other words, clearing means to get the cheques cleared and receive the payments. The book is in its normal business hour receives every day various cheque for collection drawn on other banks. The cheques of other banks brought over our clients cannot be directly credited to their account by they should first be cleared though the clearing house for which in bank clearing department should be maintained for overcoming such difficulty and also for over coming the work the work of internal clearing which would if it is handled on summing and tedious job. Therefore, to copy up with if it is handed separated by each banker and such clearing house facility provided. If clearing house facility were not applicable than each banker would obliged maintain a very large cash balance since all the cheque drawn upon it would be honored immediately. Clearing means to get cheque and receive then payment for the same clearing and is process by which banker exchanges the cheque drawn against each other which are received by him for collection of clearance from there receives the payments for the same.

WHY CLEARING IS NECESSARY:The clear the cheque of customer drawn on banks and remove the difficulty of going and presenting the cheque to one bank and to other bank and get its payment.

SET UP A CLEARING HOUSE: A clearing house is a selected is a place by the RBI or NYBANK /SBI/SBS etc. who functioning of a clearing house. The manager of the bank who conducts the house is nominated as the president of the house. All the participating banks are required to become the member of the clearing house. If any bank is not accepted as a direct member than such bank may become sub-member of bank.

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 The bank conducting the house needs to provide place and staff for running the house. For conducting the house the conducting bank meets with administrative as well as miscellaneous expenses which are required to be shared equally amongst member banks at regular interval

FUNCTION OF CLEARING HOUSE: All the banks met at the clearing house at a stipulated time in the morning. It is @ 12:45 to 1:15p.m. in the afternoon at Rajkot. This is known as first clearing. Here all member banks exchange their listed instrument with each other through their representatives/clerks. All the bank representatives bring their instruments duly summarized, which they have received. From the copy of the summery of each bank the bank which conducts the house, give effect of net debit/credit balance of each banks account with name. Again at noon the house meets to exchange those instruments of which payments could not be affected. This is known as second clearing. It is arranged at about 2:45 to 3:15p.m. Here also from the summery of each bank the difference of debit/credit is affected in the particular account by the bank that keeps accounts of all banks and conducts the house.

CLEARING HOUSE MEETING:o General body meeting should have been convened once in a year. o A working committee should have been formed amongst participating member banks. o A working committee meeting should have been convened once in quarter. o In case of exigencies the working committee should convened with short notice for immediate action to be taken for smooth running of the house. o The president who convenes the meeting shall preside over the meeting and shall advise the decision taken during the meeting to all the member bank vide circulars.

OUTWARD CLEARING:1 -1 -1

1.

Accepting of instruments

The banks accept/collects all the negotiable instruments from our clients who have either deposit accounts or loan accounts or want to purchase demand drafts. Such collected instruments are required to be separated into two divisions. (i) Drawn on local bank branches and (ii) Drawn on outstation bank branches.

2.

Instruments drawn on local banks:-

Only those instruments which are drawn on local bank branches shall be taken for exchange in the house as outward clearing. The instrument drawn on outstation bank branches shall be sent as outward bills for collection.

3.

computerizing of instrument:-

Instruments drawn on local bank branches shall be computerized along with the vouchers/paying in slip etc. The particulars of the instruments and the particulars on the vouchers i.e. name of the payee, amount in words and figures etc. must tally. Stamping of instruments:-

4.

All the instruments to be presented in outward clearing are to be stamped with banks clearing stamps of the instrument. All the vouchers/paying slips also shall be stamp stamped with clearing stamp on the front side. Wherever necessary the bank shall give suitable certificates on the back of the instruments. 5.

Sorting of instruments:-

The computerized instrument shall be sorted out bank wise, first. For this a box with many small boxes is utilized for sorting instruments. Each small box is given a banks name. The instruments are then sorted and kept in the bank wise boxes. Such bank wise instruments are sorted out branches wise of that bank

6.

Listing of instruments:1 -1 -1

 prepared.

Sorted out instruments are listed first as branch wise on computer. Such branch wise listing is totaled and a bank wise listing is

7.

Preparing of house summery:-

From the bank wise listing the house summery is prepared for outward clearing. The vouchers are arranged department wise and when the total of the vouchers gets tallied with the total of the summery the outward clearing is considered all right arithmetically.

8.

Presenting of instruments in the houses:-

The clerk shall carry with him all outward clearing instruments and attend the house in time. He shall start putting bank wise instruments in the individual boxes arranged for each bank in the house.

OUTWARD CLEARING REGISTER:A list/register of all vouchers of outward clearing in document is taken out, head wise and vouchers shall be called out for being checked before releasing or effecting credits. An outward clearing final summery is prepared.

INWARD CLEARING:1. Accepting instrument in house:-

Each bank in the house shall put in the individual boxes the instruments drawn on each one with listings. The representatives of each bank shall take out such instruments, presented to them, from boxes and write down them in the summery boxes.

2. House summary first clearing:The bank representative shall prepare bank wise listing and then strike out the difference of the outward clearing and inward clearing. The original top of the summary shall be handed over to the officer in- charge of the house as per the rule of the house. 1 -1 -1

The account of each bank shall debited/credited as per the differences arrived at by each banks representative as per days summery.

3. Sorting of inward clearing:Instruments drawn on bank and received in inward clearing are brought to the bank. All the instrument are computerized bank wise branch wise and department wise. The total of all the instruments is tallied with summary/inward clearing register. The instruments of each department are rebased for being debiting.

4. Debiting of accounts:On receipt of instruments each department starts punching for debiting the accounts as appearing on the instruments on computer. Care is taken that each instrument is in order i.e.(The all reasons regarding returning of cheque.) Those instruments which could be debited are then passed b the head of the concern department and the particulars are verified on the computer. Those instruments which could not be returned for want of sufficient balances the accounts shall be debited with returning charges per instrument. It is rs.20 debited by VMCB at present. An inward clearing final summary is prepared in document.

SECOND CLEARING RETURN CLEARING:1. Return outward :Each bank again prepares summary on strength of instruments which were received in first clearing but are required to be returned along with returning memos duly noted in out ward return register. Each bank representative then puts the returned instruments in the small boxes at pertaining to the concerned bank.

2. Use summary :Thus instrument are exchanged by each member bank. Each bank representative shall take out the instruments return by other banks from the small boxes shall write down the figures in the summery book for second clearing.

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The difference shall be stricken out and copy of the summery shall be handed over to the officer in charge of the house for affecting the difference for credit /debit in the banks account.

3. Return inward: Some of the instruments presented to other bank in first clearing may be returned along with returning memo in second clearing.

Such returned instruments brought from the house shall be returned to the clients/account holders debiting their accounts with the amounts of instruments, under advise to the clients. All such return instruments are noted in the cheque return register with full particulars and the reasons for returning. Where phone numbers are available with the bank the information of such return are advised to them immediately on phone. All such instruments received as returned instruments are noted in a pen delivery book and handed over to the presenter/client against their sign/acknowledgement.

RETURN ON REGISTER: Sometimes it happens that an instrument through received in first clearing could not be returned in second clearing. Such an instrument can be returned on computer with due counter with due consultation of bank branch to whom it is to be returned. The receiving bank branch shall issue a pay order of the same amount to the presenting banker. In case the receiving banker advises to include the same in next days first clearing then there is no need to return the instrument on the counter.

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LOANS & ADVANCES DEPARTMENT

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MEANING:Lending of funds to the constituents, mainly traders, business, industrial enterprise, constitutes the main business of a banking company. The major portion of a banks fund employed by the way of loans and advances, which is the most profitable employment of its fund. The major apart of a banks income is earned from interest and discounts on the funds so lend. The business of lending never the less is not without certain inherent risk. Largely depending on the borrowed funds a banker cannot afford take undue risk in lending.

FORMS OF ADVANCES:The following are the main forms of advances granted by commercial banks. a. Loans b. Overdraft c. Cash Credit. d. Pledge e. Hypothecation

(a)

LOANS:-

In this form of advance, the fixed sum is granted to a borrower. The advance is given in lump some and in certain the loan amount is paid in installments. The amount of loan may be repaid at one time or in agreed installment. No cheque book is issued to the borrower. A loan is ordinarily granted against any of the following types of securities. Banks own deposit receipts Government securities and shares of companies. Life insurance policy. Silver bullion and gold. Goods and machinery. Immovable properties.

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(b)

OVERDRAFT:-

Under and overdraft facility, bank permits the customer to over drew this current account to the certain limit. The borrower is allowed to drew in excess of the amount he deposits by specified amount. In case of the loan account, credit entries normally represent repayment of advance and once the account in to credit, it does not run in to debit. But in respect of an overdraft account credit entries generally represent he sale proceeds or business incomes of the borrower and the balance in the fluctuates according to the amount withdrawn and deposited. An overdraft is grant against any or more of securities mentioned under loan except against good and immovable properties.

(c)

CASH CREDIT:-

Cash credit is a form of advance to meet the demand of trade, industry, agriculture and commerce. Operation cash credit is conducted similar to the overdraft. Te difference is that in the case of overdraft existence of a current account is implied. A limit is stipulated funds granting this type of advance and the borrower are permitted to draw funds up to this amount. Cash credit is granted against security of god or produce. Cash credit limit is renewed for every year. In cash credit there is pledge and hypothecation.

(d)

PLEDGE:-

Pledge is the bailment of goods as security for payment of a dept or performance of a promise. Bailment is the delivery of good by one person to another for some purpose. In other words pledge is delivery of goods by person to another with an intention of creating security for payment of a debt, or performance of a premise. The transfer of possession is the essence of and the banker to whom these are delivered is called pledge. Goods, shares, government securities and documents of title to goods can be pledged to the bank. In case of default, the banker can either file a suit on the borrower the pledge good or sell the security after giving proper notice to the borrower.

(e)

HYPOTHECATION:1 -1 -1

In the case of hypothecation both the possession and the ownership of the goods continue to be with the borrower. It is an equitable charge created in favor of the banker. Document that is normally executed convert this facility in to pledge. Goods machinery, commercial vehicles, standing crops, etc. are hypothecated to the bank.

LOAN AGAINST F.D.R.:-

The bank, at its description, grant loan or an over draft to the tune of maximum 95% of the principal amount of an FDR. On strength of an application of loan/overdraft duly sanction and the FDR duly discharged the department shall verify the account and or the back of the FDR. On due date of the FDR department shall pass necessary entries.

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BILLS DEPARTMENT

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MEANING:Outstanding demand bill department mean outward demand bills for collection. Which are going outside the bank for collection. These cheque are known as OBC. The relationship between banker and customer in case of OBC is that of the customer only. Bank receives various cheque drawn on other bank situated in different cities. Such cheque cant be cleared in local clearing house, such chouse are sent to the branches and are there is no branch, in that particular town or city then they are directly sent to the particular bank for collection. Generally there are two types of bills of exchange. Inward bills for collection Outward bills for collection

OUTWARD BILLS FOR COLLECTION:Procedure for collection of OBC:First of all bank receive the cheque with pay in slip, then we have to stamp put ward bills for collection number on the cheque is and we have also to put banks cosign stamp. If the cheque is in order then it should be stamped with payees account will be credit on realization. All the cheque are given outward bill for collection number strictly they are entered in outward register as under. Date of voucher, number of OBC, number of cheque, from who received, where drawn, name of the drawee, to whom sent for collection. OBC register is very important for us to keep full details of the cheque sent for collection and it will be useful when the cheque are realized. This is one type of service of the bank rendered to the customer. Therefore bank charges commission. The rate of commission is generally 15%. In short the procedure of the OBC is as follows. o o o o o o Tendering with paying in slip. Computerizing particulars. Stamping the instruments. Separating the instruments. Forwarding the schedules. Dispatching the schedules.

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Realization of bills:o Bills when realize shall be noted in OBC register. When the proceeds of the OBC are realized the bank receives drafts from the drawees/drawee banks generally drawn/payable on local branches. o The department takes out the concern vouchers from the files and the same is attached with the draft etc received towards realization. o The draft along with the voucher is then sent to the clearing department for being presented to the drawee bank branch. o On realization the parties account shall be collection charges shall be debited. o A pair of transfer voucher shall be prepaid credited OBC and debiting OBC with the days total of realized OBC. o The pairs of voucher then shall be scrolled and released for the days book writing.

Delayed realization:o As per the RBI directives the proceeds of the outstation collection should be got collected and credited to the partys account with in 14 days from the date of receipt of the collection. o In case the realization gets delayed for more then 14 days, for whatsoever reason, the bank has to pay interest not than saving bank account rate of interest from the 15th days till the day before the date of realization/crediting to partys account. o Therefore, the department has to remain very vigilant & follow-up action should be taken to get the realization in time. Reminders in from should have been sent periodically, followed by personal letter of there is no response. Return of bills:o It may be that a bill may be returned to us for any financial or technical reason by the outstation bank branch/agency. o The returned bill shall be along with the returning memo stating the reason thereof. o The department shall therefore, be required to the concerned collection to the payee. And the same shall be done after nothing in the return inward register. o Such instrument shall be returned along with clear acknowledgement, duly nothing in the peon book. o The department is authorized to charge nominal commission and postage charge, incurred by the bank, to the payees account with the bank under advises to him. o However, if the collection is received bank is not authorized it charge any thing ethically towards returning charges or commission. On the country the bank shall be liable to pay over due interest, if demanded. 1 -1 -1

INWARD BILLS FOR COLLECTION:MEANING:Documentary bill and clean bills, cheque are received by this dept. Documentary bill are accompanied by railway receipt, lorry receipt, motor transport receipt and bill of landing is known as documentary bills. Documentary bills first of all are entered in the register. Customers are intimated by intimation card. This card contains all the terms and condition decided by drawee i.e. rate of interest, commission, etc. payment can be made either by cash or by cheque. All necessary documents are stamped which are handed to the party and the receiving branch precedes the amount of bill for issuing branch. Thus, transaction is completed. If customer retired bill after expiry of time commission as interest charged by bank as decided by the drawee. In short the procedure of IBC is as the follows. o Receiving of bills o Bills drawn on us o Bills drawn on other drawees Realization of bills:o Bills drawn on us o Bills drawn on other local bank branches o Bills drawn on other drawees

Remaining of proceeds:o Proceeds shall be remitted either demand drafts or cheque drawn by the bank on other banks with whom mutual arrangements have been maintains sufficient balance in the current accounts o Along with each remittance a forwarding letter shall be sent advising the reference number towards which proceeds are being sent.

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o Such proceeds shall be sent either by registered posts or by prominent courier services.

DEMAND DRAFT DEPARTMENT

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MEANING:For remitting money from once place to another, banks issues Bank Draft or Demand Draft on their branches at the place of destination. The purchaser sends the draft to the payee at destination for the purpose of encashment at the drawees branches of the bank. The issuing banker charges a commission for rendering such services, the amount to be remitted. Rate of commission are given bellow. It is to be noted that bank extend this service to public in general. It is not necessary that purchaser of the draft must be a customer of the bank.

STOP PAYMENT OF DEMAND DRAFT:The banker should not comply with stop payment instruction of the purchaser of draft as readily as that of the drawer of cheque. If the demand draft is passed on to the payee, the latter acquires a right in the instrument, which cannot be set aside by the stop payment order issued by the purchaser. If the payee has endorsed the draft in good faith and for value to a third party the latter acquires rights enforceable against the banker.

LOSS OF DRAFT:In case the draft is lost by the purchaser before it is handed over to the payee. If the purchaser reports to the issuing banker the loss of the draft without any endorsements, the banker may safely refuse for payment of the same because any endorsement and the title of the holder would not be a considered good. The drawees branch should note the loss. If the draft presented by someone, the banker should return the draft with remark draft reported to be lost, payees endorsement require verification.

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MAIL TRANSFER:Mail transfer is an additional facility by aback to its customer. Particularly, when the parties are having by accounts with once and the same bank but the bank different branches, they can avail of this facility, the customer instructs the bank to transfer from his/her account, a specific and credit the same to a specific account of another branch, bank accordingly transfer amount from once account to another. With this the risk arising out of each transfers or but of potable misdelivered for misappropriation of the draft sent, is avoided. Thus this facility provided for more security and convenience. Of course, this is possible for branches of one and the same bank.

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CASH DEPARTMENT

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MEANING:Cash transaction i.e. cash receipts and cash payments of all the department of the bank is to be enrooted for proper control and calculations. The manager, cashiers and cash peons are responsible in running the department smoothly.

RECIEPT OF CASH:I. Paying in slip/voucher:-

Any one who is the bank and wants to deposit money in his a\c shall come to the bank and fill in the necessary voucher of the department. The duly filled in voucher \paying in slip shall be tendered for getting scrolled.

II.

Scrolling the voucher:-

The scroll department shall feed in the computer as stated in the voucher \paying in slip and finds that particulars in the voucher are tallying with the computerized data. On tallying the particulars the scroll department shall give scroll number to each voucher/paying in slip, chronologically.

III.

Tendering cash:-

The customer shall now approach the receiving cashier along with the scrolled voucher /paying in slip. The receiving cashier shall check all the particulars of the voucher/paying in slip in the computer and then accept the cash.

IV.

Counting the cash:-

The cash shall be counted, denomination wise, as stated in the voucher. On finding OK the receiving cashier shall affix the stamp received cash of the date with green ink on both the parts of the paying in slip.

V.

Receipt of cash:-

The counter foil of the paying in slip shall be signed and returned to the cash tendered. While the main part of the paying in slip shall be signed and released for routine dealings after computerizing necessary particulars. The receiving cashier shall be held responsible for take notes or 1 -1 -1

excess or shortage of cash in the receipts found and could not be traced out, at the end of the day.

VI.

Tallying cash:-

After cash hours the receiving cashier shall tally the total receipts with the total cash. On finding OK it shall be tallied with scroll. And thereafter it shall be handed over to the head cashier under joint signatures. All packets prepared by the receiving cashier are to be checked by the other cashier or the accountant and both of them have to out their initials on such packets. At the end of the day cash receipt scroll shall be taken out in doc. No. (R CH 04)

PAYMENT OF CASH:-

I.

Scrolling of vouchers:-

Every cash payment vouchers are first require to be scrolled as per scrolling vouchers procedures. Such duly scrolled payments or vouchers shall be dated with the concerned departments, and shall be passed for payments duly authenticated by the heads of the concerned departments.

II.

Issuing tokens:-

Such passed payments shall bear token nos. issued by the concerned departments. The payments shall be no written in voucher transit book and brought to the head of the department for being verified the specimen signatures of the drawers of the cheque and withdrawal forms.

III.

Passing of vouchers:-

The head of the departments shall pass the vouchers for payment duly authenticating the vouchers and voucher transit books. Voucher transit books with the voucher shall be brought to the paying cashier, who shall verify the scroll with the vouchers and release the scroll by putting initials against each entry in the voucher transit book.

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IV.

Payment of cash:-

The paying cashier shall now call one by one as per serial of tokens issued as stated on the back of each voucher. The paying cashier shall ask to return the token and verify the token number as per cash payment voucher. He shall ask the cash receiver to sign once again on the back of the voucher, as it was done while accepting the token. On satisfying that the person who obtained the token and who returns the token are and the same, on strength of both the signatures, the payment of the voucher shall be released. The cash receiver has to get satisfied about the cash received by counting the same immediately and discrepancy, if any, is found the same should be brought before the paying cashier before leaving cash window. Because once the paying cashiers window is left the cahier shall not be held responsible for any shortage found afterwards. At the end of the day cash payment scroll be taken out in doc. no. (R CH 05)

REMITANCE OF CASH:As far as possible every remittance should accompany either with a watchman or a peon or a clerk along with the cashier. To minimize the risk the same Rickshaw /taxi should not be hired every time. While remitting the cash, inward or outward, the bag should have been locked properly and the bag should be tied with a chair with some sturdy bar of the vehicle. The bank should arrange for transit insurance.

CASH VERIFICATION:Before keeping the cash in the cash safe on hand cash and cash in safe shall be checked by the HOD on daily basis. However, a surprised verification shall be done once in a month by an officer, other than hooding rotation. The officer who does surprise cash verification shall sign with date on the cash in the morning as opening balance or in the evening as closing balance. A report shall be submitted in doc. No. (F CH 01) incorporating full details of any discrepancy are found.

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MISCELLANEOUS SERVICES.

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The bank also provides some additional small services which are as follows.

Bank can stop the payment of cheque of any type of account on the request of the account holder. Banks also provide the facility of traveling cheque. On the request of the account holder of the saving department banker can also provide the duplicate pass-book. Bank also collects the electrics bills and also of telephones. Bank gives monthly statement of the transaction done by the customer for their convenience. Bank also provides the required information to their customer to which is useful for their business. Thus, bank has to perform number of miscellaneous services to their customers.

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ANCILEARY SERVICES

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SAFE DEPOSIT VAULTS:Lending banks provided safe vaults to the public at their selected branches. For this purpose the banks arrange strong room. Preferable under the ground floor, equipped with the safe deposit locker. These lockers of different size and are hired to the public at reasonable rent, e.g. rs. 20, 25, 50, or 100p.a. the procedure followed as regards safe deposit vaults transaction is as follows. A locker may be hired by anybody, but banks insist that the intending hirer must have a saving account with the where in a minimum balance, say R s. 100 are always maintained. The person intending to hire a locker is required to execute a lease agreement which contents all the terms and condition on which the locker is hired. In fact, the relationship between the banker and customer is that f a lesser and lessee. The lessee promises to pay the annual rental charges in advances and authorizes the banker to debit his saving account with such rental charges. A locker may be hired in the joint name of two or more persons. In such cases, the banker must take clear instruction from all the hires and subsequent modification in same, if may, must be made with the consent of all of them. The banker maintain a safe deposit register, where in record of all dealing in respect of locker hired to particular customer is made a separate page. The banker takes a specimen signature of the hirer with his full name and address. The hirer is also required to choose and communication to bank a code word or password. As this code word is not only to the hirer, it acts as an additional safe guard identifying the hirer and his signature.

Each locker can be opened by the application if double key. One of hirer and the other of the banker it self as a master key. The banker does not known the content in the locker. He maintains the records of the visits of the hirer for the opening his locker and the lotteries every time he/she visits the bank for this purposes.

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H.R.DEPARTMENT

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INTRODUCTION

Human resources in any organization, be it public private of Co-Operative constitute perhaps the most vital assets of that organization. An organization will fail if its human resources are not competent to execute the work assigned to them. There is no getting away from fact that human resources represent a subsystem which dominates all other sub system to the organization.

Moreover, people are the only assets of an organization that appreciate over a period of time while all the other assets depreciate. The more an organization is investing in human resources, the greater the return from the investment is likely to be and it has been rightly pointed to in one of the books of inter national Co-Operative alliance The gains accruing out of structural reforms can be best capitalized only it the personnel maintained by the Co-Operative institution are in a position to execute the policies effectively. This implies the need and necessity of proficient and capable human resources which is on of the primary aims of human resource management.

According to national institute of personnel management of india Personnel management is that part of management concerned with people at work and with their relationship within the organization it seeks to bring together men and women who make u an enterprise enabling each to make his own best contribution to its success both as an individual as a working group.

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H. R. POLICY AND PROGRAMMES

A sound foundation for selection of the right kind of human resources is laid with the formulation of sound human resources policies. According to William R. Spiegel a human resources policy can be defined as, A body of principles and rules of conduct that governs the enterprises in its relationship with its employees. Thus the sound personnel policies set the tome for proper administration of the personnel programmers, So as to achieve the objective of the organization.

As THE VERAVAL MERCANTILE CO-OP BANK LTD .is one of the leading Co-Operative bank in the Co-Operative sector, though its performance is very good but than also such policies for human resources they can not make by their own. It has to follow the rules of policies given by the government and RBI so in the matter of the personnel policies THE VERAVAL MERCANTILE COOPBANK LTD is restricted to some level. Than also the bank have adopted a policy of recruiting only CA and MBA for their management level for better management. So, by this way where they get chance they are making or improving personnel policies at THE VERAVAL MERCANTILE CO-OP BANK LTD. The next important stage in the selection process is the human resource planning. Planning applied in the field of personnel it is the comprehensive and on going process. Broadly conceive human resource planning as Thomas H Patten Jr. states, Human resource planning is process by which an organization ensures that it has right no. and kinds of people in the right place at the right time doing the things which they are economically most useful.

In the VERAVAL MERCANTILE CO-OPBANK LTD there is a very educated staff as it is concerned with the human resource planning recently they has adopted policy of selection only C.A. & M.B.A. For their human resource has as far as concerned with the human resource planning. There is no long term planning but at a time or requirement of staff they used to recruit staff either out side or from with in the firm through transfer or promotion

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RECRUITMENT

Among the function of human resource manager, one man function is to procure best people for their organization, means search of prospective employees to suit the job recruitment. A firm has to pass through well and good recruitment process for having best human resource this recruitment can be possible through many sources. A firm can recruit proper candidate mainly through two success recruitment sources these are as under.

Recruitment Sources
Internal sources 1) Transfer 2) Promotion 3) Relative & friends External sources 1) Advertisement 2) Education institutes 3) Placement agencies 4) Labours contractor

In case of THE VERAVAL MERCANTILE CO-OPBANK LTD, the main source or recruitment is daily news paper advertisement. They also recruit employees by transfer and promotion. Generally as per the recruitment of the job they give advertisement in newspaper and collect the pool of application.

SELECTION

Managing people is not easy but it can be made easier if you make sure that you have selected the right people in the first place. And also it said that selection of people is easy but selection of right people is difficult task. The selection procedure is concerned with securing relevant information about an applicant is secured. The objective of selection process is to determine whether the applicant meets the qualification for a specific job and to choose the applicant who is most likely to perform well in that job.

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Thus an effective selection program is a non random process because those selected had been choose on the basis of the assumption that they are likely to be better employees then those who have been rejected. Selection process or activities typically follow a standard pattern being with an initial screening of applicant, interview and concluding with final employment decision. The selection procedure of THE VERAVAL MERCANTILE COOPBANK LTD is quit simple. The stages of including in the selection process are as follows.

New paper advertisement Receipt of application Screening Arrangement and interview Selection Placement and confirmation

ORIENTATION
After the selection of employee, management of the firm has to pass through such process. So new employee can be aware of the atmosphere of the firm and also can be familiar with the other employee. This process is called orientation or induction. In any organization this process performs very vital role because this is the only process which can create better environment in the organization and a new comer can be aware about his working condition, his area of responsibility and everything about organization. Proper orientation process can be beneficial to both, a new comer as well as organization.

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PLACEMENT

Once an employee has been selected he should be placed on a suitable job. Putting the right man at the right job is as important as hiring the right person. Placement is a process of assigning a specific job to each one of the selected candidates. It involves assigning a specific rank of and responsibilities of an individual. It implies matching requirement of a job with the qualification of a candidate.

In other words, placement is the determination of the job which an accepted candidate is to be assigned and his assignment to the job. As THE VERAVAL MERCANTILE CO-OPBANK LTD is very careful about this process. And one thing is that, at the time of requirement only they hire new employees. So hire it is specified that for which job they are recruiting. After the final selection, they have been marking the job of the new employee.

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MARKETING DEPARTMENT

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INTRODUCTION

Today, marketing is spread in every field of like hospitals, services, goods even politics and many more. In banking sector too the importance of marketing also can not measurable, still it has not developed in public sector it is only limited to foreign banks and private sector. The reason for success of foreign in India is only best marketing efforts. Today in banking sector there is a cutthroat competition among public sector, private sector and foreign bank.

Marketing is a human activity directs at satisfying the needs and wants of customers, there are five stages of bank marketing firstly marketing g is advertising, sales promotion and publicity, secondly marketing is smiling and Co-friendly atmosphere, thirdly marketing is innovation like the ATMs or cheques with drawls on fixed deposits, fourthly marketing is positioning. When all banks advertise and innovate, they look alike so, they should try to position themselves differently, even through symbols, logos or aggressive advertising so that the customer can distinguee between one bank and another and finally marketing is analyzing, planning and control.

At THE VERAVAL MERCANTILE CO-OPBANK LTD though there is no specific marketing department. for marketing of different services but providing vest services to their customers and getting good customer satisfaction, and doing such efforts of marketing like promotion activities they are in directly getting benefits of the marketing. Today they are also planning for such continuous marketing efforts. And with in the few years they will have aggressive marketing department.

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PROMOTIONAL ACTIVITIES

Promotion tools are also essential in the banks marketing mix. We need personal selling in customer contact, development, personal service. And so on. Similarly, bank marketing program need advertising as mass communication tool. The bank is a sponsor. It sends a message to prospective buyers (the audience) by means of a medium (The carrier of the message). An advertisement in bank marketing is a promise a promise of satisfaction to prospects who buy or use the service offered by the bank or who are willing to patronize the bank. Banks are using all media of advertisement such as newspaper, radio television, magazines etc., for advertising their services and for getting the business. Bank marketing also uses sales promotion devices such as point of purchase materials, advertising specialties (ball pens, calendars, diaries, notes pads etc.) brochures and booklets describing bank services, etc. a bank has also to use public relation as mode of promotion to build up and maintain its bright image in the community.

As far as it is concerned with promotion activity than THE VERAVAL MERCANTILE CO-OPBANK LTD is not doing any personal selling but bank is believe in very strong goodwill and also best customer satisfaction they are using advertising they are giving their advertisement in news paper like Sandesh, Gujarat samachar etc.

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MARKETING RESEARCH AND INFORMATION

Good marketing decisions are not made in a vacuum. Hence, even in bank marketing. We need marketing research and information to enable bank executive to make sound decisions. The increase in the use of marketing research in bank marketing is due to two forces:

competition pressures to be right, and Customer orientation in marketing planning and program. Banks are now establishing a separate marketing organization. Conduction marketing research, setting up sales training program and adopting sales promotion divides promotion devices to attach customer we have special bank advertisement through radio. T.V. and newspapers. Marketing research may be defines as The scientific and controlled process of gathering of none routing, marketing information, helping management to solve marketing problems.

As far as it concerned with the marketing research process at THE VERAVAL MERCANTILE CO-OPBANK LTD. They have been continuously doing such research from beginning. But one positive point for marketing research is that they not doing any big expenses for marketing research and for executives. Banks staff member themselves goes to market and gathers requited information or data. Such information or data they are collection from direct RBI or other banks. So, by this way they are getting benefits by using marketing research process.

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FINANCE DEPARTMENT

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INTRODUCTION

Finance is the fuel of administration. Without adequate financing no business enterprise can raise its potentials for growth and success. And it would be worthwhile to recall what Henry Ford once remarked Money is an arm or leg. You either use it or lose it. This statement though apparently simple and quite meaningful, it brings home the significance of money or finance. In the modern money oriented economy finance is one of the basic foundations of all kind of economic activities.

Finance management is indeed the key to successful business operations. Without proper administration and effective utilization of finance, no business enterprise can utilize its potentials for growth and expansion. Organization and control of these function is important for all types of business units. Specially in public undertaking massive investment has so far been much less productive, it is necessary to organize the finance functioning such a manner that should help the business in achieving its basic objective with minimum cost.

According to Hoagland Financial management is concerned mainly with such matter as how of business corporation raises its finance and how it make use of that.

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FINANCIAL PLANNING

. Planning means deciding in advance what is to be done for each functional area of management. The planning of each area should link to the objectives of the organization. Financial planning means Planning is very necessary for the smooth running of the business can not be carried on without planning deciding in advance the financial activities to be carried on to organization. So, the basic purpose of financial planning is to make sure that adequate funds are raised at minimum cost and they are used widely. A proper planning of the business on one hand and to allow a fair return to their contribution on the other.

Thus financial planning includes the following 1) 2) 3) Determination of financial objectives. Formation of financial policy. Development of financial procedure.

In THE VERAVAL MERCANTILE CO-OP. BANK LTD, the financial planning has been done through proper management in various areas like liquidity planning, investment planning, profit planning, cash management etc.

CAPITAL STRUCTURE

Capital structure decision is yet another important area under financial management. Capital structure refers to the mix or proportion of firms permanent long term financing represented by debt preference must ensure the maximization of wealth of shareholders so even the capital structure decision must be taken in the light of wealth maximization objectives. That particular mix of debt and equity which maximizes the value of the firm is known as optimum capital structure in simple word capital structure refers to the composition of capital. Capital structure = Long term debts + Preference share capital + Equity share capital + Reserves.

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CAPITALIZATION
Capital plays an important role in any business at the time of corporation of the business, it is the first problem before promotes to decide how much capital is to be required and in what form. It is not an easy task. A financial plan is to be prepared form the purpose of explaining the abort term and long term needs of finance to the company. Sever consideration would be kept in mind such as cost of capital fair return to the contributors of capita risk involved flexibility etc. while taking decision in this regard it required proper capitalization. Proper capitalization reveres to the total amount of capital required in the long run to run the business smoothly capitalization uses in its quantities aspect and reveres to the amount at which a companys business can be valued most of the traditional authors define the terms in this sense the sum total of the par value of all share. After definition of capitalization are being reproduces below in order to understand the term well. E.F. Lincoin, The amount of capital at any time should not excepted none should it be less than the amount required in both situation it there firm will be loser. These conditions are called under capitalization and for capitalization. In case the amount is hiring than it is required the company his have to pay more interest on the surplus capital are they rescuing the proper of the concern of the total capitalize not sufficient to discharge the function of the business the concern with not be in a position of even reasonable profits due to lack of funds it is there fore, necessary to have proper capitalization.

CASH MANAGEMENT
Cash is the medium of exchange which allows management to carry on the various activities of the business on day to day basis. And management of cash is one of the most important answers of over all working capital management due to the fare there cash is the most liquid type of current assets. As such it is the responsibility of the finance function to see that the various functional areas of the business have sufficient cash were ever they require the same at the same time if has also it be ensured that funds are not blocked in the form of idle cash as the cash remaining idle also involves cost in the form of interest cost and opportunity cost as such the management of cash have to kind a mean between these two extremes of shortage of cash as well as idle cash. The basic objectives of cash management of are to reduce the operating cash balance requirement to maintain possible extent without affecting the routine transaction. For the management of cash flow statement is the most important tool cash low statement provided information about the cash ratio and payment of a firm for again period. It provides important information that compliments the profit and loss account and balance sheet.

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RATIO ANALYSES

Financial analyses of an organization depend to a large extent on the use of ratios. The technique is commonly known as financial ratio analyses. Ratio analyses is a very powerful analytical tool useful for measuring performance of an organization the ratio analysis helps the management to analyses the past performance of the firm and to make further projection. Ratio analysis is a process of comparison of on figure against the calculation of ratio relatively easy and simple task but the proper analyses and interpretation of the ratio can be made only be the skilled analysis.

The ratio of THE VERAVAL MERCANTILE CO-OP. BANK LTD of the last year is as under.

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FINANCIAL INFORMATION

The liberalization of the financial sector is the key for the over all liberalization process. Gradually, the structure of the financial market itself has begun to change, in the changing Financial Market THE VERAVAL MERCANTILE COOP. BANK LTD. has market the progressive growth and profitability both the financial year 2006-2007 which is reflected in the following Financing since inception:

(Rs. In Lacs)

Particulars Members Share Capital Deposit Advances Net Profit Working Capital

31-3-06 15,276 Rs. 219.74 Rs. 8526.14 Rs. 4330.86 Rs. 33.00 Rs. 10807.54

31-03-07 15,868 Rs. 247.91 Rs. 9176.46 Rs. 5261.44 Rs. 36.00 Rs12469.60

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FUTURE PLANS
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To maintain excellence in operation & management by bringing I transparency & integrity.

To emerge as symbol of public trust & confidence by creating a positive image.

To ensure speedy & satisfactory customer services through continuous product innovation & aggressive, marketing strategies.

To adopt policy for technological up gradation& advancement to boost up total computerization & inter branch connectivity for all the branches.

To develop & motivate human resources there by cultivating processional culture in the banking operations.

To strive for continuous growth & profitability through branch expansion & modernization.

To introduce more ATM centers & various plastic products for better customer services. 1 -1 -1

To maintain the asset quality at the optimum level by continuous efforts for credit risk management.

To provide multi dimensional services to customers by incorporating various modern service areas like insurance, bill collection and providing one door service to clients

To explore more non-fund based business like latter of credit, bank guarantee, custodial services to increase banks non interest income.

To continue to maintain the NET NPA at ZERO level.

To plan Banks balance sheet with judicious ALM.

SUGGESTIONS
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As improvement is a constant requirement for every one and if we try to learn from a little things also. Than every minute we will improve ourselves. And for constant improvement in organization management should keep their eye on every concern, during my visit at bank I have tried to cover everything and according to my knowledge I am trying to give suggestion to THE VERAVAL MERCANTILE CO-OPERATIVE BANK and I am sure that it surely will be helpful in progress of the bank.

First and foremost suggestion for THE VERAVAL MERCANTILE COOPERATIVE BANK is that, yet they are not using such marketing tools in the area of cutthroat competition in banking sector. Each bank should try for better and different marketing. THE VERAVAL MERCANTILE CO-OPERATIVE BANK should make one group of executive, who can help to the management and can provide different services like collection from home only and they should use such slogan for innovative products like only one call can make your life better. This slogan can be sued for assets product. So by using not only simple advertisement but also strategic marketing tool bank can improve a lot in the market.

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CONCLUSION
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After having all the required information for preparing my report, I have tried to analyze each and every function of THE VERAVAL MERCATILE COOPERATIVE BANK. During my report all the staff member of the THE VERAVAL MERCATILE CO-OPERATIVE BANK had well co-operate me. And also I have found that the, there is a very good level of commitment in all the staff members. During my report I have tried to cover each functional area of the bank and after having clear idea about everything in the bank, I can conclude that THE VERAVAL MERCATILE CO-OPERATIVE BANK is one of the leading firm in the bank, I can conclude that THE VERAVAL MERCATILE CO-OPERATIVE BANK is one of the leading firm in the co-operative sector, and with advanced technologies and educated staff to trying to positioning in the banking market. But than also due to such weaknesses of co-operative sector THE VERAVAL MERCATILE CO-OPERATIVE BANK is also suffering from such limits.

For, better future a great success my all good wishes always with THE VERAVAL MERCATILE CO-OPERATIVE BANK. I wish them for better achievement

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BIBLIOGRAPHY
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Personnel Management By :- K. Aswatthappa

Books ::Human Resource Management &

Publication :- Tata Mc-Graw Hill

By :- S. A. Sherlekar

Marketing Management

Publication :- Himalaya Publication House

Finance Management
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By :- B. S. Shah Publication :- S. B. Shah on Behalf of B. S. Shah

co-operarive bank

Annual Report Of The Veraval mercantile

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