Analysis of Financial Position of the Urban Co-operative Bank, Puri

INTRODUCTION
The

term

Urban

Co-operative

Banks(UCBS)

though not formally defined, refers to primary cooperative banks located in Urban and

Semi-Urban

areas. These bank till 1996, were allowed to land

money only for

non agricultural purposes. This

distinction does not hold today. These banks were

traditionally cantered around communities, localities,
work place groups. They essentially lent to small
borrowers and businesses. Today their scope of
operations has widened considerably.

The co-operative banking sector in India started

functioning almost

100 years age. The co-operative

banking sector may be viewed as consisting of Rural

Co-operative Banks and 2000 Primary (Urban) Cooperative Banks with deposits over Rs.60,000 crore
the first study of Urbana Co-operative Banks was
taken up by RBI

in the year 1958-59.The Report

published in 1961 acknowledged the wide spread and

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

financially bound frame work

Banks
Urban

Urban Co-operative

emphasized the need to establish primary

Co-operative

Banks

in

new

centers

and

suggested that state Government lend active support

to their development.

In1963, varde committee recommended that such

banks should be organized at all urban enters with a
population of 1 lakh or more and not by any single
community or caste

the committee. Introduced the

concept of minimum requirement and the criteria of

population for defining the Urban centers where UCBS
were in corporated.

The Urban Co-operative have evolved as to fulfill

a new to cater to lower income group of the urban and
semi-urban popular. Co-operative Banks are promoted
by a group of individuals to fulfill

their needs. The co-

operative Banks are owned by the customers or users.

Thus to borrow funds from co-operative bank one has

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

to be a shareholder of the bank. The shareholders in

turn

elect a managing

committee which runs the

bank.

Over the years, primary (Urban) cooperative bank

have registered a significant growth in number, size
and volume of business handled. As on 31 st March,
2003 there were 2104 UCBS of which 56 were
scheduled banks. About 79 percent (%) of these are
located in Five states:- Andhra Pradesh, Gujurat,
Karnataka, Maharastra, and Tamil Nadu. Recently the
problems faced by a few large UCBS have highlighted
some of difficulties
endeavours

are

these banks
geared

to

face and policy

consolidating

and

strengthening this sector and improving Governance.

OBJECTIVES
The primary objectives of this project report is to
understand and diagnous the information contained in
financial statement of Urban Co-operative Bank with a
view to judge the profitability and financial soundness
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Analysis of Financial Position of the Urban Co-operative Bank, Puri

of the Urban Co-operative Bank and to make forecast

about future prospects of Urban Co-operative Bank.
The following objectives of this project report may be
stated to bring out the significant of such analysis of
project
1. To depict real picture of the profitability of the
Urban Co-operative Bank
2. To identify the reasons for changes in profitability
and financial position of the Urban Co-operative
Bank
3. To identity

the short term as well as long term

solvency position of the bank.

4. To identify the progress of the bank over a period
of time

SCOPE OF STUDY
The enactment of cooperative Credit Societies Act,
1904,

however,

gave

the

real

impetus

to

the

movement. The first Urban Cooperative credit society

was registered in Canjeevaram (Kanjivaram) in the
erstwhile

Madras

province
4

in

October,

1904.the

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Cooperative Credit Societies Act, 1904 was amended

in 1912, with a view to broad basing it to enable
organisation of non-credit societies. In the present day
context, it is of interest to recall that during the
banking crisis of 1913-14, when no fewer than 57 joint
stock banks collapsed, there was a flight of deposits
from joint stock banks to Cooperative Urban Banks.

METHODOLOGY
This is qualitative study combining disk research
with field work and fact fining on selected the Urban
Co-operative Bank
included

review

published

of

research

documents,

documents,
website.

indirect sources of information

evaluation

including
Reports

reports,
books,
quit

relevant
project

reports

and

Direct sources of included check list based

interviews with General Managers of the Urban Cooperative Bank.

LIMITATIONS

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

This

analyses

mechanism

or

project

report

is

powerful

of determining financial strengths and

weakness of the Urban Co-operative Bank but the

report is based on the information available in
financial statement of Urban Co-operative Bank. Thus
the financial analysis or project report suffers from
serous inherent limitations such as
1. Changing in accounting procedure by the bank
may often make financial report misleading.
2. This project report is based upon only monetary
information

and

non-monetary

factors

are

ignored.
3. Reporter of

this project report has to make

interpretation and draw his own conclusion.

Different people may interpret the same analysis
in different ways.

CHAPTERISATION
Chapter-1

Introduction

Objectives,

Scope

Methodology, &
limitation.
Chapter-2

: Urban Co-operative Bank an overview.

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Chapter-3 :Analysis of financial position of the Urban

Cooperative Bank
Chapter-4 : Conclusion & Bibliography

ABOUT URBAN CO-OPERATIVE BANK

The Urban Co-operative Bank
functioning

in India started

almost 100 years ago. The

Urban Co-

operative Bank is an important constituent of the

Indian financial system judging by the role assigned
to Co-operative, The expectations the co-operative is
supposed to full fill, their number and the number of
offices the cooperative Bank operate

Co-operative

Banks in India are registered under the co-operative

Banks in India are registered under the co-operative
societies Act. The Co-operative Bank is also regulated
by the RBI. They are Governed by

the Banking

Regulations Act 1999 and Banking laws (Co-operative

Societies ) Act 1965 The business of Urban Co7

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

operative Bank has increased phenomenally in recent

years due to the sharp in crease in the number of
Primary Co-operative Banks.

OBJECTIVE OF

URBAN CO-OPERATIVE

BANK
The urban co-operative bank evolved as to fulfill
need to cater to lower income groups of

the urban

and semi urban populance. The Urban Co-operative

Bank

have an important role to play in Economic

construction. The following are the objectives of Urban

Co-operative Bank like:
1) The main objectives of Urban Co-operative Bank
is to help the small business and middle class
people.
2) It is Bank provide various deposits facilities
Saving Deposits
Current Deposits
Fixed Deposits
Recurring Deposits

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

3) This

Bank

Provide

Locker

and

Night

safe

Depository facilities at moderate rates.

4) This bank provide loans to small business and
middle class people at lower rate of interest.
5) To Receive all kind of bonds scripts valuable on
deposits or for safe custody or other wise.
6) To buy and sale foreign exchange including
foreign Bank notes.

BOARD OF DIRECTORS
The co-operative banks are owned by the customers
or users. Thus to borrow funds from co-operative
Bank, one has to be a shareholder of the bank. The
shareholders in turn elect

a managing committee

which runs the bank. The managing committee is

consist of two president and some director authorities.

HISTORY OF URBAN BANK (PURI)

The Urban Co-operative Bank was set up at Puri in
1944-45 and this bank was start business with 40

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

members and working capital with Rs. 3000/- and that

time, it was mergly worked with 14 joint Banks. The
main purpose of this bank is Economical development
of all members

and general people. Now it has

enhanced its business ability and also increasing with

working capital Rs. 4634.36 Lakh. This bank is
managed by the members of managing committee.
This managing committee has consist of two President
and some directors.

BRANCH ADMINISTRATION
The branch administration is headed by the Branch
Manager. Sri. Gopinath Mishra is working as Branch
Manager during the year.
As per job chart of Bank he will remain in charge of
branch office & shall be responsible for the executive
administration of Branch office, subject to control of
President & Secretary. During the

year the strong

room cash and gold almirah were

kept triple lock

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

system. The officers remained in charged of the triple

lock system were as follows:
1. Sri Gopinath Mishra, Branch Manager
2. Sri Biseswar prassed Mishra, Asst. Secretary
3. Sri Ram Prasad Mohapatra, Head Chair

MEMBERSHIP
The bank is regulating by RBI and its main motto
is satisfaction of customers or members. So, members
are very essential factor for the bank.
The following table exhibiting the members
position the Urban Co-operative Bank
Table-1
Name
of Item
General

2004

Number of years
2005
2006
2007

2008

30693

30967

31001

31,104

31,204

7838

7838

7838

7838

7838

38531

38805

38839

38942

39042

membe
rs
Nomina
l
membe
rs
total

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

The above table exhibiting the members of the Urban

Co-operative Bank is increasing from the year 2004 to
the year 2008.

FINANCIAL POSITION AT A GLANCE

Table
As on

31.3.0

31.3.0

31.3.0

31.3.0

31.3.0

Share

4
99.99

5
106.21

6
109.48

7
112.84

8
118.40

capital
Reserves
Deposits

75.08
3084.8

75.14
3083.9

85.30
3252.1

69.79
3436.0

69.79
3762.32

Working

1
3853.5

0
3910.1

6
4120.6

9
4321.3

4634.36

capital
Investm

5
1605.9

8
1593.5

4
1665.1

7
1819.6

1859.35

ent
Loans &

0
1879.7

7
1892.3

4
1902.0

0
2014.4

2167.81

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

advance

4YEARS EXPENDITURE & INCOME ACCOUNT

OF THE URBAN CO-OPERATIVE BANK, PURI
Expenditure
particulars

Number of years
2006
2007
2,51,39,33 2,05,71,13

Interest on

2005
2,60,85,75

2008
2,76,54,20

deposits
Salary &

5.54
73,33,690

1.87
7216891

6.53
7,93,709

3.61
80,40,464

allowances
Transportatio

425

5,903

29,893

n expenses
Rent & taxes

4,88,129.4

5,75,377

6,64,031.5

7,20,230.5

Legal

0
31,516

36,545

0
34,422.00

0
82,284

expenses

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Telephone

49,002

61,324

36,750

41,162

charges
Audit fees

81,900

1,30,500

1,08,000

1,06,800

Repairs

10,40,130.

5,90,818.5

4,06,050

6,49,369

Advertising

69
1,76,281.2

9
2,03,222.9

2,10,707.5

2,12,491.4

Other

0
15,74,721.

7
49,55,080.

8
56,41,716.

7
16,59,501.

Expenditures
provisions

18
-

67
-

30
-

23
-

Net profit

9,63,339.0

4,66,471.6

27,40,228.

56,29,945.

Total

5
3,78,24,89

1
3,93,75,56

55
3,76,12,65

5
4,48,26,34

0.06

2.71

4.46

4.31

Income
Particular
Interest
receive on

Number of years
2005
2006
2007
2008
3,72,63,781 3,63,23,650 3,38,67,963 3,79,31,147
.74

.67

.29

.65

41,243.50

74,115.93

1,10,183.76

2,14,111

loan
Commissio
n
Other

5,19,864.82 29,77,796.0 36,34,507.4 5,09,704.41

receipts
Standard

15,76,564

15,667

61,55,714.2

assets
provision
Balance of
loss

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Total

3,78,24,890 3,93,75,562 3,76,12,654 4,48,26,344

.06

.71

.46

.31

4YEARS BALANCE SHEETS OF THE URBAN COOPERATIVE BANK, PURI

Liabilities
Share capital
Reserve found &
others

31.3.2005
106,20,788

No of years
31.3.2006
31.3.2007
1,09,47,888
1,12,84,363

31.3.2008
1,18,40,713

75,13,756.68

85,30,029.38

69,79,409.68

69,90,861.91

1.Fixed deposits

23,31,26,840.80

24,64,25,924.80

25,92,90,374.80

2.Saving deposits

7,2395,691.12

7,59,10,785.39

7,77,81,318.35

28,73,30,177.
80
8,49,25,206.2
4

3. Current deposits

28,67,909.94

32,79,419.85

65,37,796.59

39,76,205.33

Bills payable

4,98,868.24

11,96,378

1,13,412.07

3,40,819

Over due interest

Reserve

1,51,42,969.00

1,47,83,654.36

2,09,22,152

3,01,28,414

Provision for Bad

debt & doubtful
debt

1,03,82,243.36

3,13,86,959

1,93,88,911.36

2,32,26,401.3
6

Interest payable

3,62,82,019

1,86,86,700

2,77,89,246

2,75,37,991

Deposits

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Other liabilities

57,83,856.85

51,44,044.91

20,54,568.56

24,27,196.82

Profit as per
Balance sheet
Less: Appropriation
profit
Year- 2007
27,40,228.5526,31,751.63
Year-2008
1,08,476.9227,119.27

1,08,476.72

81,357.69

Total

39,46,14,942.99

41,58,92,143.57

43,2,50,030.33

48,05,97,799.
69

Assets
Cash
Savings
Bank
deposits
Securities

Number of years
31.3.2005
31.3.2006
31.3.2007
1,23,90,496. 1,25,81,310. 1,48,35,603.
98
51
91
7,83,48,437. 9,13,00,759. 10,63,69,45
88
06
8.71

313.2008
35,72,92.72
6,72,17,927

8,10,25,525. 7,51,30,276. 7,56,07,492.

88
55
91
Loan &
18,92,37,42 19,02,02,30 20,17,44,43 21,67,80,79
advances
3.20
5.47
3.37
0.97
Interest
2,69,13,023. 3,63,71,257. 2,84,24,924. 4,96,00,979.
Receivable
33
22
97
48
Bills
4,98,868.24
11,96,738
1,13,413.07
3,40,819
collections
Fixed
assets
Land
1,23,012
35,00,000
35,00,000
35,00,000
Building

1,24,900

12,410

1,01,169

9,40,052

furniture

14,23,099.4
2
30,98,223.2
4

11,77,165

8,33,280

16,29,299

15,88,170.1
7

10,20,255.1
1

9,88,911.73

Others

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Loss:
Year-2005
Less of
Before
years
30,98,223.
25466471.61
Total

26,31,751.6
3

26,31,751.6
3

61,55,714.2
5

39,46,14,94
9.99

41,58,92,14
3.57

43,22,50,03
0.33

48,05,97,79
9.64

ANALYSIS
The balance sheet of the Puri Urban Co-operative
Bank has contained various item of

assets and

liabilities and some important items of assets and

liabilities is discussed below:

(i) Share Capital

The capital of the bank known as share capital.
Capital is divided into different units with definite
value called shares. Holders of these shares are called

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

share holders or members of the bank. The following

table are presents that the value of share capital of
the Puri Urban Co-operative Bank.
Table
Number of
Years
Name of Item

2004

2005

2006

2007

2008

99.99

106.21

109.18

112.84

119.40

Share Capital

The paid up share capital of the bank stood at Rs.

106.21 lakhs as on Rs 3.2005 and

in the year 31.3

2006 is Rs. 109.48 lakhs. The growth of last year and

in the year 2007 the value of paid up share capacity
is 112.84 lakhs and in the year 2008 is 118.40. Here
the value of share capital increase in trend from one
year to another.

(ii) Working Capital

The working capital of the bank as arrives at Rs.
3910.18 lakhs as on 31.3.2005 and the working capital
of the bank as arrived at Rs. 4120.64 lakhs. There is
growth of RS. 2104.58 lakh in

18

the working capital

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

which come to 5.38%. last years growth is 1.47% in

the year 2007 its value is 4321.37 lakh and in 2008 its
value is 4639.36 lakh.

(iii) Deposit
The

deposits

325216,130.40

as

of

the

bank

on

31.3.2006

stood
as

at

Rs.

against

Rs.

308390441.86 of the previous year (2004-2005) in the

year 2007 deposits of the bank is Rs 343609489.74
and it increased in the year 2008 is Rs 3762.32 lakhs.
The bank should tap more deposit along with its
proper deployment with around margin to ensure
profitability .
Above table present that now a day the share
capital position of the Puri Urban Co-operative Bank is
move in increasingly and

it increase its capital

efficiency. In 2004 position or value of share capital

was Rs. 99.99 lakh and now it has increased its value
of share capital is Rs. 118.40 Lakh.
(iv)

Investment and Utilization of Fund

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

A statement exhibiting the investment position of

various funds outside the business of the bank as on
31.3.08 is annexed with

this report. However the

following tabular figures prepared for ready reference

Table
Sl. No.

1.
2.

3.
4.
5.

Particular
s

Fund
Available

Amount
Balance
Invested
Excess
as on
Invested
31.03.20
08
21,39,683. 25,61,038. 421354.4
98
40
2
181144.84 265,560.0 84,415.16
0

Reserved
Fund
Bad &
doubt ful
debt
Reserve
Investment 35,555.05 446163.00 8907.45
Deposition
fund
Investment 21917.50 23678.00
1760.50
Depreciati
on Reserve
Bad Debt 336,158.0 463,280.0 127,121.9
fund
8
0
2
total
27,14,459. 3358019.4 643,559.9
45
0
5

It is present that the Bank has invested 123.7% of

its fund outside its business. Earmark for investment
of funds under building fund common good funds and

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

divided

equalisation funds have not yet been made

despite previous years.

(v) Loan & Advances

Loan and advances are the most profitable and
the least liquid assets of the bank. The Urban Cooperative Bank provide loans and advances to the
business

men either through. Overdraft or by

discounting bills of Exchange. The following tabular

figures represented that the loan and advances of the
Urban Co-operative Bank.
Table
Name

Number of years

of item

2004

Loan &

1819.7

Advanc

2005

2006

2007

2008

1892.37 1902.02 2014.44 2167.81

es

Above table is presenting that the bank has

increased its loan and advances effacing and in the
year 2004 its loan & advances was Rs. 1819.71 Lakh.

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Now it has increased upto Rs. 2167.81 Lakh in the

year 2008,
(vi)

Lost of Management
The cost of management of the bank in the year

2005-06 93,67348.25 as against Rs.9671566.67 of

previous year (2004-05) and in the year 2006-07. The
cost of management

of the bank comes. Rs.

91,99888.38.
From above discussion it is clear that the bank is
suffering middle increasing trend and its is quit
favoirable fro the growth of the bank.

PROFITABILITY ANALYSIS
During the year under report that is 2007-08 the
bank has substained net loss of Rs.61,5571.25. This is
due to provisioning only. Drastic steps need be taken
by the Bank for realisation

of overdue loans to

decrease the quantum of N.P.A to a desirable limit.

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Comparative

ratio

analysis

of

income

&

expenditure of the bank is given here under.

Head of incomes

2006-07 2007- Less/Exces

08
s
on 226.77
214.21 (-)12.56

Interest received
loan & advance
Interest on investment
Commission
&
exchanges
Misc. Receipt
Total
Standard
Assets
provision with drawn
Loss
Grand total
Expenditure
Interest
paid
on
deposit
Salary allowance
Rent & taxes
Law charges
Postage & telephones
Depreciations
&
Repaired
Advertisement
Contingent & misc. Exp
Total
Provision
Net profit
Ground total

Percentage(
%)
(-) 5.54%

111.91
1.10

165.10 (+)53.19
1.74
+ 0.64

(+) 47.53%
(+) 58.18%

20.58
360.36
15.76

5.50
-15.08
386.55 26.19
0.16
-15.60

(-) 13.28%
7.27%
-

376.11

61.55
448.26 -

199.87

268.94 69.07

34.56%

71.94
6.64
0.34
0.37
4.06

80.40
7.20
0.82
0.41
6.49

8.48
0.56
0.48
0.04
2.43

11.76%
8.43%
141.18%
10.81%
59.85%

2.11
17.13
345.08
46.05
4.66
376.12

2.12
25.58
391.96
56.30
448.26

0.01
8.45
46.88
10.25
-

0.47%
49.33%
13.58
-

It is observed from the comparative analysis of the

income & expenditure items of the bank are as
follows:

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

1. The total income increased by 26.19 Lakhs and

the total expenditure is also increased by 46.88
lakhs as compared to last year.
2. The percentage of the cost of management to
the total income as calculated to 28.64% as
against 24.48% of the last years.
3. The provision made during the year is 56.30 lakh
of the previous year.
4. The losses of the bank

for the year 2007-08 is

arrived at Rs. 61.55 lakhs.

5. As compare to the previous year both the income
and expenditure are in increasing trend. As
regards income is concerned the increasing trend
is good but in expenditure side the increasing
trend is not good sign. So a good banker should
try its very best to increase the income of

the

bank as well as to minimise Expenditure side.

CONCLUSION & SUMMARY

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Analysis of Financial Position of the Urban Co-operative Bank, Puri

Puri Urban co-operative Bank, sponsored by reserve

bank of India
it was established on 1945.as per section 33 of O.C.A
Act1962, the R.C.F Orissa is only competent to fix pay
and allowance to staff and this power is not delegated
to any other functionary. On the illegal approval of
D.R.C.S , Puri division

the staff are allowed Special

allowance, Cycle allowance, Washing allowance, Cash

allowance. The bank as maintained surplus cash
reserve and liquidity

throughout year. This indicate

imprudent fund management of the Bank. Due care

need be taken to ensure profitability through judicious
funds management. Due to very conservative loaning
policy and orthodox deposit schemes people are not
attracted to become members. Despite rapid growth
of population of Puri and market expansion, the
membership position is not increasing. Borrowed
capital is within the maximum borrowing power limit
as per recent amended bye-laws. Net worth during the
year was positive and the cost of management is

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S.C.S (A) College,

Puri

Analysis of Financial Position of the Urban Co-operative Bank, Puri

within real income. Bank could achieve break even

point in business to meet cost of management.

Out

of total working fund of Rs. 76.34 crores investment in

loan advance is only Rs. 21.63 crores . fixed deposit
with other banks is Rs. 11.42 crores investment in
Govt. and other securities is 7.65 crores in the total
investment in income generating purpose is thus
comes 40.7 crores. So borrowed capital is fully utilized
in profitable business.

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S.C.S (A) College,

Puri

Analysis of Financial Position of the Urban Co-operative Bank, Puri

BIBLIOGRAPHY
Audit Report of Puri Urban Cooperative bank,
2007-08
Annual Report of Puri Urban Cooperative bank.
www.google.com

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S.C.S (A) College,

Puri