CHAPTER 1

INTRODUCTION:-
Finance is the life blood of trade, commerce and industry. Now-a-days, bank money acts as
the backbone of modern business. Development of any country mainly depends upon the
banking system.

The term bank is derived from the French word Banco which means a Bench or Money
exchange table. In olden days, European money lenders or money changers used to display
(show) coins of different countries in big heaps (quantity) on benches or tables for the
purpose of lending or exchanging.

A bank is a financial institution which deals with deposits and advances and other related
services. It receives money from those who want to save in the form of deposits and it
lends money to those who need it.

It is generally said that the word "BANK" has been originated in Italy. In the middle of
12th century there was a great financial crisis in Italy due to war. To meet the war
expenses, the government of that period a forced subscribed loan on citizens of the country
at the interest of 5% per annum. Such loans were known as 'Compare', 'minto' etc. The
most common name was "Monte'. In Germany the word 'Monte was named as 'Bank' or
'Banke'. According to some writers, the word 'Bank' has been derived from the word bank.

It is also said that the word 'bank' has been derived from the word 'Banco' which means a
banch. The Jews money lenders in Italy used to transact their business sitting on banches at
different market places. When any of them used to fail to meet his obligations, his 'Banco'
or banch or banch would be broken by the angry creditors. The word 'Bankrupt' seems to
be originated from broken Banco. Since, the banking system has been originated from
money leading business; it is rightly argued that the word 'Bank' has been originated from
the word "Banco'.

Today the word bank is used as a comprehensive term for a number of institutions carrying

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 on certain kinds of financial business. In practice, the word 'Bank' means which borrows
money from one class of people and again lends money to another class of people for
interest or profit.

Bank is a place where the people deposits their money nd withdraws when needed

A bank or banker means an intitution or a person transacting the business of accepting for
the purpose of leanding or investment, of deposit of money from the customers, payable on
demand or otherwise and withrable by cheque, draft, payorder or otherwise.

Meaning of bank:
A bank is the place where they accept deposits from people and lend loans and charge
interest on them and performs agency functions,and provide certain facilities like providing
lockers facilities and perform certain on the basis of its motive ...eg:IDBI BANK in india
used to provide financial facilities to industrial sector.. Anonymous

Definition of bank:

An establishment authorized by a government to accept deposits, pay interest, clear checks,

make loans, act as an intermediary in financial transactions, and provide other financial
services to its customers

What is a Retail Loan?

A retail loan is similar to a mortgage loan acquired to buy a real estate property.
The primary difference is that mortgage loan secures a residence, whereas a retail
loan secures a commercial retail property. Banks and private investors can supply
funding for a retail location, such as a stand-alone retail store or a strip mall.
Various details play a role in the approval process, and lenders use numerous
factors to determine the interest rate on a commercial retail loan.

HISTORY OF BANK:-
Banking in India originated in the last decades of the 18th century. The first banks were The
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General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790;
both are now defunct. The oldest bank in existence in India is the State Bank of India, which
originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank
of Bengal. This was one of the three presidency banks, the other two being the Bank of
Bombay and the Bank of Madras, all three of which were established under charters from the
British East India Company. For many years the Presidency banks acted as quasi-central banks,
as did their successors. The three banks merged in 1921 to form the Imperial Bank of India,
which, upon India's independence, became the State Bank of India.
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a
consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and
still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company
that issues stock and requires shareholders to be held liable for the company's debt) It was not
the first though. That honor belongs to the Bank of Upper India, which was established in
1863, and which survived until 1913, when it failed, with some of its assets and liabilities
being transferred to the Alliance Bank of Simla.

When the American Civil War stopped the supply of cotton to Lancashire from the
Confederate States, promoters opened banks to finance trading in Indian cotton. With large
exposure to speculative ventures, most of the banks opened in India during that period failed.
The depositors lost money and lost interest in keeping deposits with banks. Subsequently,
banking in India remained the exclusive domain of Europeans for next several decades until
the beginning of the 20th century.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire
d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself
in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of
the British Empire, and so became a banking center.
The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881
in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in
1895, which has survived to the present and is now one of the largest banks in India.

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 Around the turn of the 20th Century, the Indian economy was passing through a relative
period of stability. Around five decades had elapsed since the Indian Mutiny, and the
social, industrial and other infrastructure had improved. Indians had established small
banks, most of which served particular ethnic and religious communities.

The presidency banks dominated banking in India but there were also some exchange
banks and a number of Indian joint stock banks. All these banks operated in different
segments of the economy. The exchange banks, mostly owned by Europeans, concentrated
on financing foreign trade. Indian joint stock banks were generally under capitalized and
lacked the experience and maturity to compete with the presidency and exchange banks.
This segmentation let Lord Curzon to observe, "In respect of banking it seems we are
behind the times. W e are like some old fashioned sailing ship, divided by solid wooden
bulkheads into separate and cumbersome compartments."

The period between 1906 and 1911, saw the establishment of banks inspired by the
Swadeshi movement. The Swadeshi movement inspired local businessmen and political
figures to found banks of and for the Indian community. A number of banks established
then have survived to the present such as Bank of India, Corporation Bank, Indian Bank,
Bank of Baroda, Canara Bank and Central Bank of India.

The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South
Canara ( South Kanara ) district. Four nationalised banks started in this district and also a
leading private sector bank. Hence undivided Dakshina Kannada district is known as
"Cradle of Indian Banking".

During the First World War (1914–1918) through the end of the Second World War
(1939–1945), and two years thereafter until the independence of India were challenging for
Indian banking. The years of the First World War were turbulent, and it took its toll with
banks simply collapsing despite the Indian economy gaining indirect boost due to war-
related economic activities. At least 94 banks in India failed between 1913 and 1918

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 Functions Of Bank:

In modern time, the functions of a modem commercial bank are manifold. The functions of
a bank may broadly be divided into two parts.

Basic or primary functions.

Secondary functions.

PRIMARY FUNCTIONS OF BANK:

Basic or primary functions of a commercial bank are very important in nature. These
functions provide t base of the whole operation of the bank. The basic functions of a
commercial bank are as

A. Accepting deposits B. Advancing loans

(A) ACCEPTING DEPOSITS:

Accepting deposits is the most important function of all commercial banks. Deposit is the
basis of commercial banks' activities. In order to attract The general public to deposit their
surplus money in the bank, the bank offers to deposit money in any of the following accounts:

(i) Current or Demand Account:

Current or demand account is one where the amount can be withdrawn at any time by the
depositor.

(ii) Saving account:

Saving account is suitable for non-trading and small income earners. Saving account helps
in mobilization of the saving of low income people. The commercial banks pay interest on
this type cf deposits.

(iii) Fixed deposit account or term deposit account:

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 Fixed deposit account is the account in which amounts are deposited for a certain fixed
period of time. The deposits cannot be withdrawn before the expiry of this fixed period.
The longer the period of deposits, the higher is the rate of profit.

(iv) Foreign Currency Account:

Foreign currency account is opened only in authorized branches. A foreign currency

account may be a foreign currency saving account or foreign currency term deposit
account. Foreign currency account in Pakistan can be opened in USA Dollar, UK Pound,
German Mark, Japanese Yen, etc. This account is exempted from all taxes and deduction.
No income tax or Zakat is deducted from this account.

(B) ADVANCING LOANS:

The second important function of commercial bank is advancing loans to the individuals,
businessmen and government bodies. The loans are granted out of deposited money.
Generally, a commercial bank grants short-term loans.

Banks grant loan in any of the following forms:

(i) Overdraft:

Overdraft is a short-term loan granted by commercial banks to their account holders.

Under this type of loan, the customers are allowed to draw more than what they have in
their current account up to a certain limit. The excess amount overdrawn is called
overdraft.

(ii) Cash Credit:

Cash credit is a very common form of loan granted by commercial banks to businessmen
and industrial units against the security of goods. The loan granted under this head is
credited to current account opened in the name of borrower. The borrower can withdraw
money through cheques according to his requirement. The interest is charged on the
amount actually withdrawn by the borrower.

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 (iii) Loans:

Commercial banks grant loans for short and medium-term to individuals and traders against
the security of movable and immovable property. The amount of loan is credited to the
borrower's
account. Interest is charged on the entire loan sanctioned.
(iv) Discounting bills of exchange:

Banks provide short term lean to the businessmen by discounting bills of exchange.
Discounting the bills of exchange means the arrangements of making payments before
maturity of bills of exchange. The payment made by the bank to the holder of bill of
exchange before its maturity is the amount of loan. The discount charged is the earning of
the bank.

SECONDARY FUNCTIONS OF A COMMERCIAL BANK:

The secondary functions of commercial bank can be classified under the following heads.

(A) Agency functions

(B) General utility functions

(C) Miscellaneous functions

A.AGENCY FUNCTIONS

The banks render important services as agent on behalf of their customers in return for a
small commission. When banks act as agent, law of agency applies. The agency functions
or services of bank are as follows:

(i) Collection of Cheques:

Commercial banks collect the cheques, bills of exchange, etc, on behalf of their customers.
Banks collect local and outstation cheques and bills of exchange through clearing house

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 facilities provided by the central bank,

(ii) Collection of Income:

The commercial banks collect dividends, interest on investment, pension and rent of
property due to the customers. When any income is collected by the bank, a credit voucher
is sent to the customer for information.

(iii) Payment of expenses:

The banks make payment of insurance premiums, rent, trade subscription, school fee and
other obligation of the customers. When any expense is paid by the bank, a debit voucher is
sent to the customer for information.

(iv) Dealer in securities:

The banks carry out purchase and sale of securities on behalf of their customers. Banks do
it well because they are aware of the market conditions.

(V) Acts as trustee:

The banks act as trustee to manage trust property as per instructions of property owners.
Banks are required to follow the terms and conditions of trust deed.

(vi) Acts as an agent:

Commercial bank sometimes acts as an agent on behalf of its customers at home or abroad
in dealing with other banks or financial institutions.

(vii) Obeys standing instructions:

Sometimes, customer may order his bank to do something on his behalf regarding the
conduct of his account. This written order is called standing instruction. The bank being the
agent of its customer obeys the standing instructions.

(viii) Acts as tax consultant:

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 Commercial bank acts as tax consultant to its client. The commercial bank prepares general
sales tax return, income tax return, etc. Tiles the same with tax authorities.

B.GENERAL UTILITY FUNCTIONS:

Commercial bank performs different utility functions for their customers. When bank
performs utility functions, it does not act as an agent of the customers. The general utility
functions are as follows:

(i) Provides lockers facilities:

Commercial banks provide lockers facilities to its customers for safe custody of Jewelery,
shares, securities and other valuables. This has minimized the risk of losing due to theft.

(ii) Issue of traveler's cheque:

Bank issues traveler's cheques to the customers for traveling in and outside the country.

(iii) Foreign exchange:

Commercial banks deal in foreign exchange. This enables the individuals and businessmen
to obtain foreign currency in exchange of their home currency. For dealing in foreign
exchange, commercial banks have to obtain permission from the central bank.

(iv) Transfer of money:

Commercial banks provide facilities for the transfer of money to any place within and
outside the country. The funds are transferred by means of draft, telephonic transfer,
electronic transfer etc.

(v) Finances foreign trade:

A commercial bank finances foreign trade by accepting foreign bills of exchange. Bank
also issues letter of credit on behalf of its customers to facilitate foreign trade. According to
Sir John Poget:

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 "The issuing of letters of credit is the basic function of a bank."

(vi) Trade information:

Commercial banks collect and provide trade information and tender advice to its customers
about financial mafters. Issues credit cards: Banks issue credit cards to their trustworthy
and valued customers. This facilitates the customers to pay for their necessities of life.

(vii) Modaraba Company:

The commercial banks act as Modaraba and leasing companies under the provisions of
Modaraba Companies Ordinance, 1980.

(viii) Purchase PTCs:

Commercial banks underwrite or purchase Participation Term Certificate (PTCs), Term

Finance Certificates (TFCs) and Modaraba Certificates. This helps the companies to raise
their capital.

(ix) Financial standing:

Commercial banks answer reference letters regarding the financial standing and business
reputation of customers. Banks provide this information with great care and utmost
secrecy.

C.MISCELLANEOUS FUNCTIONS:

Commercial banks perform the following miscellaneous functions:

(i) Collection of utility bills:

Commercial banks provide facilities for the collection of utility bills from general public on
behalf of government bodies. This facilitates the public to pay utility bills in time.

(ii) Zakat Collection:

Commercial banks collect Zakat from their account holders and deposit the same into

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 Central Zakat Fund, according to Zakat and Usher ordinance - 1980.

(iii) Hajj services:

The commercial banks provide free Hajj sendees to the intending pilgrims. Banks receive
Hajj applications. Banks also facilitate to form Hajj groups. Banks make necessary
arrangements for the training of intending pilgrims,

(iv) Qarz-e-Hasna:
The commercial banks provide Qarz-e-Hasna to deserving patients for medical treatment
and to students for higher studies within the country and abroad. The Qarz-e-Hasna is
refund Ale in easy installments,

(v) Electronic banking and E-banking:

Electronic banking is offering improved services to the customers as fellows:

ATM Cards
Credit Cards
Electronic transfer of money.

What is co.op bank:

According to the International Co-operative Alliance Statement of co-operative identity,

a co-operative is an autonomous association of persons united voluntarily to meet their
common economic, social, and cultural needs and aspirations through a jointly-owned and
democratically-controlled enterprise. Co-operatives are based on the values of self-help,
self-responsibility, democracy, equality, equity and solidarity. In the tradition of their
founders, co-operative members believe in the ethical values of honesty, openness, social
responsibility and caring for others

STRUCTURE OF CO-OPERATIVE BANKS IN INDIA:

Credit cooperatives are the oldest and most numerous of all the types of cooperatives in
India. The cooperative credit institutions in the country may be broadly classified into
urban credit cooperatives and rural credit cooperatives. There are about 2090 urban credit
cooperatives and these societies together constitute for about 10 percent of the aggregate

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 banking business and therefore regarded as an important segment of the banking system.
The urban credit cooperatives are also popularly known as Urban Cooperative Banks. The
rural credit cooperatives may be further divided into short-term credit cooperatives and
long-term credit cooperatives. With regard to short-term credit cooperatives, at the grass-
root level there are around 92,000 Primary Agricultural Credit Societies (PACS) dealing
directly with the individual borrowers. At the central level (district level) District Central
Cooperative Banks (DCCB) function as a link between primary societies and State
Cooperative Apex Banks (SCB). It may be mentioned that DCCB and SCB are the federal
cooperatives and thus the objective is to serve the member cooperatives. As against three-
tier structure of short-term credit cooperatives, the long-term cooperative credit structure
has two tiers in many states with Primary Cooperative Agriculture and Rural Development
Banks (PCARDB) at the primary level and State Cooperative Agriculture and Rural
Development Bank at the state level. However, some states in the country have unitary
structure with state level cooperative operating with through their own branches and in one
state an integrated structure prevails. The organizational structure of the credit cooperatives
in India is illustrated in chart I. Interestingly, under the Banking Regulation Act 1949, only
State Cooperative Apex Banks, District Central Cooperative Banks and select Urban Credit
Cooperatives are qualified to be called as banks in the cooperative sector. In other words,
only these banks are licensed to conduct full-fledged banking business.

The Co-operative Banks function in India on State Levels. Most of the Rural Co-operative
banks function on Three-Tier and the Urban banks function on Two-Tier. At the National
Level there is NABARD to organise the Agricultural Co-operatives. Also there is National
Co-operative Union of India, as an apex instituion at National Level.

The Reserve Bank of India controls the Co-operative Banks that falls under the Banking
Regulation Act of 1949
The 7 co-operative principles are :

1.Voluntary and open membership

2.Democratic member control

3.Member economic participation

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 4.Autonomy and independence

5.Education, training and information

6.Co-operation among Co-operatives

7.Concern for Community

A co-operative bank is a financial entity which belongs to its members, who are at the
same time the owners and the customers of their bank. Co-operative banks are often created
by persons belonging to the same local or professional community or sharing a common
interest. Co-operative banks generally provide their members with a wide range of banking
and financial services (loans, deposits, banking accounts...).

Co-operative banks differ from stockholder banks by their organization, their goals, their
values and their governance. In most countries, they are supervised and controlled by
banking authorities and have to respect prudential banking regulations, which put them at a
level playing field with stockholder banks. Depending on countries, this control and
supervision can be implemented directly by state entities or delegated to a co-operative
federation or central body.

Even if their organizational rules can vary according to their respective nation legislations
co.operative banks share common features :

1.Customer's owned entities : In a co-operative bank, the needs of the customers meet the
needs of the owners, as co-operative bank members are both. As a consequence, the first
aim of a co-
operative bank is not to maximise profit but to provide the best possible products and
services to its members. Some co-operative banks only operate with their members but
most of them admit non-member clients to benefit from their banking and financial services

2.Democratic member control : Co-operative banks are owned and controlled by their
members,who democratically elect the board of directors. Members usually have equal
voting rights, according to the co-operative principle of "one person, one vote".

3.Profil allocation : In a co-operative bank, a significant part of the yearly profit, benefits

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 or surplus is usually allocated to constitute reserves. A part of this profit can also be
distributed to the co-operative members, with legal or statutory limitations in most cases.
Profit is usually allocated to members either through a patronage dividend, which is related
to the use of the co-operative's products and services by each member, or through an
interest or a dividend, which is related to the number of shares subscribed by each member.

Co-operative banks are deeply rooted inside local areas and communities. They are
involved in local development and contribute to the sustainable development of their
communities, as their members and management board usually belong to the communities
in which they exercise their activities. By increasing banking access in areas or markets
where other banks are less present - SMEs, farmers in rural areas, middle or low income
households in urban areas - co-operative banks reduce banking exclusion and foster the
economic ability of millions of people. They play an influential role on the economic
growth in the countries in which they work in and increase the efficiency of the
international financial system. Their specific form of enterprise, relying on the above-
mentioned principles of organization, has proven successful both in developed and
developing

1.2 RESEARCH METHODOLOGY:

The information has been collected from following two sources:

PRIMARY SOURCE: Primary data means first hand information. I have meet bank
manager and able to get first hand information regarding services provided by the bank,
loan and deposit
schemes and loan & interest rate on these schemes. Growth rate of bank etc.

I have also collected primary data through questionnaire which I have collected through
customers survey.

Questionnaire methods define the technique of data collection through properly drafted
question and request customers to fill the questionnaire properly.

SECONDARY SOURCE: These Secondary sources has played a vital role. A good
amount of data has been collected from various books, newspaper, articles, and pamphlets
of banks a vital role has been played by the internet and companies own website.

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1.3 Objectives of the study:

To study about co-operative bank

To analyse the customer expectation

To know about abhyudaya bank

To study the market & customer demand.

1.4 SAMPLE:

Abhyudaya Bank’s Perspectives & Projections for Growth up to the year 2014

A significiant & an integral part of a Vision Document is to set targets under different s
segments of business for the assigned years in future. These have to be evolved by adopting
certain indicators & criteria, including the past performance, say over a period of last five
years or so. This provides a trigger process are the heightened expectations yet coupled
with earnestness & vigorous efforts to realize them to a large extent.

As we look back upon our previous performance, as is evident from the following table, it
reinforces our belief in our own ability to cope with the future tasks & challenges Looking
to the future, we wish to chalk out a Roadmap for resurgence & rejuvenation of the
Abhyudaya Bank by setting out the targets under various segments of business on year to
year basis up to March 31,2014. As a prelude to this, we seek to adopt certain parameters

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Loans& Advances: 25% growth on year to year bas
Branch Network : Addition of 47 more branches, including those through an
inorgani

growth route, i. e. through Mergers & Acquisitions, taking the total to 100. The Bank
could also hope to assume the character of an all India institution by the year 2014.

Membership : 110000(approx)

Gross NPAs : Bringing down the level of 5%

Net NPAs : Nil

Net Profit : To consistently grow, on an average, @ 15% per annum, notwith standing
unforseen additional financial burden due to mergers/acquisitions & tax burden

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 Chapter 2

2.1 CONCEPTUAL FRAMWORK

LOANS:

Highlights of Loans and advances:

Individual exposure of Rs 60 crore and group exposure of Rs 190 crore 


Repayment in Equated monthly installments. 

No pre-payment charges applicable.

Interest is charged on daily reducing balance on outstanding amount. 


Credit rating facility for large borrowal accounts and application of interest as per
gradation. 
Holiday period allowed for various Project loans ,Educational loans ,Commercial loans etc. 

Top up loan facility allowed for all types of loans and advances. 
Take over proposals on easy term

ATTRECTIVE DEPOSITE SCHEMES:

interest rate applicable for term deposit and deposit is continued for agreed period.

MID: Monthly interest plan wherein interest is paid on monthly basis at discounted rate
applicable for term deposit and deposit is continued for agreed period.

RECCURING DEPOSIT: Monthly installment is fixed and deposited for agreed period
and interest is calculated on quarterly basis applicable for term deposit paid on maturity.
TDS is not applicable for the interest paid on deposit amount. Deposit of Rs910 /- p . m for
84 months can make your child a lakhpati under this scheme.

FDR: Fixed Deposit Receipt is issued for deposit of short term period i .e for 15 days up to
365 days. Interest rate applied as applicable for term deposit.

FLXDP: Quarterly reinvestment plan having benefit of availing instant cash credit upto

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 90% of the deposit amount.

ATSS: Special tax saving scheme to avail benefit upto Rs1 lakh U/S 80 C of Income Tax
act with an attraction of more interest compared to term deposits of our bank & various tax
saving scheme available in the market.

A) Loan Scheme :

1.PERSONAL LOAN

Purpose :

1. Purchase of Consumer Durables / Furniture / Fixtures /Computers

2. Repairs / Renovations of Flat / House
3. Purchase of 2 wheeers
4. Purchase of Gold Ornaments
5. Marriage & other religious ceremonies
6. Domestic / Foreign Tours & Travels
7. Repayment of existing debt
8. Takeover of personal loan from other banks
9. Medical expenses for self / family members etc.

Maximum Amount : Rs. 2.00 Lakh

Eligibility :

Salaried Persons :

(A)Maximum Amount Rs. 3.00 Lakh

Repayment :

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 Upto 60 installments

Sureties :

(A)Employeed of Limited companies / Large organizations / Govt. Employees :

With SDL /ECS facility :

Upto Rs. 1.00 Lakh One Surety with Net Salary of Rs. 7,000/- and above Above Rs. 1.00
Lakh to Rs. 3.00 Lakh Two Sureties with Net Salary of Rs. 6,000/- and above

Upto Rs. 50,000/- one surety with net salary of Rs. 7,000/- and above

Above Rs. 50,000/- to Rs. 2,00,000/- Two Sureties with net salary of Rs. 6,000/- and
above.

(A) Persons employed in reputed companies / organizations:

Upto Rs. 25,000/- One surety with net salary of Rs 7000/- and above

Aboe Rs. 25,000/- upto Rs. 2,00,000/- Two Surety with net salary of Rs. 6000/- and above.

(B) If the borrower is a businessman and employees of other organization with good
repaying capacity and owning a house :

Two sureties with net salary of Rs. 6,000/- and above.

Service Charges : 1.2% of amount sanctioned

Share Amount : 1% of the amount sanctioned subject to min. Rs. 1,000/-

2.HOUSING LOAN

Purpose :

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 Purchase of new flat and construction of house or purchase of old flat / house including
extension to existing flat / house.

Maximum Amount :

“Loans upto Rs. 15.00 Lakh –90%

Above Rs. 15 to Rs. 00 Lakh up 20.00 Lakh –85%

Above Rs. 20.00 Lakh up to Rs. 70.00 Lakh –80%

Of the Agreement Value + Stampduty + Registration Charges or Market Value whichever

is less”
.

Repayment :

Upto 180 installments for all (maximum)

Sureties :

1. For loans upto Rs. 20.00 Lakh :- One surety with net Income / Salary above Rs. 10,000/-
per month.
2. For loans above Rs. 20.00 Lakh : Two Sureties, with Net Income / Salary above Rs.
10,000/- or per month.
3. One Surety with Net Income / Salary above Rs. 20,000/- per month.

Purchase of Flats in Building more than 15 years old :

For purchase of flat in Building which is more than 15 years old, loan will be considered
only if it is certified by the Structural Engineer that the residual life of the building is more
than 20 years and the building is in good condition.

Service Charges : Service charges 0.60% of the loan amt.

Share Amount :
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 Upto Rs. 20.00 Lakh : 1% of the Loan amount sanctioned or Rs. 2,500/-

Above Rs. 20.00 Lakh : Rs. 5,000/-

3.EDUCATIONAL LOAN

Purpose : For education in India and abroad

Maximum Amount :

1.Unsecured Loan : Rs. 4.00 Lakh

2.Secured for studies in India : Rs. 10.00 Lakh

3.For studies in abroad : Rs. 20.00 Lakh

Students Eligibility : An Indian National, who has secured admission to eligible course. The
loan will be sanctioned to the parents of the student and the student will be Co-Borrowe

ELIGIBILITY COURSE:
A.Studies in India : Diploma / Graduation / Post-Graduation / Medical / Technical /
Professional courses in various disciplines.

Computer Certificate courses in reputed institute accredited to the Department of Electronics

and for Pilot Training.

B.Studies Abroad :

For job oriented Professional / Technical / Medical courses offered by reputed Universities.
MCA, MBA, MS etc. Courses conducted by CIMA, London, CPA in USA etc.

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 Expenses considered for Loan :

Fees / Exam fees / Cost of Books / Equipments / Uniform etc. / hostel Expenses / Caution
Deposit and Travel Expenses / Passage for student studying abroad will also be considered.

Eligibility :

Upto 100% of total course fees.

Repayment :

Moratorium period : Duration of the course + 6 months.

EMI : Maximum 60 months after Moratorium period

Sureties :

Unsecured Loans upto Rs. 4.00 Lakh : Two sureties net salary / income above Rs. 10,000/-
p.m.

Secured Loans above Rs. 4.00 Lakh : One surety net salary / income above Rs. 10,000/-
p.m. and Collateral security 100% of the sanction limit in the form of Equitable Mortgage
of residential flat and / or pledge of tangible securities such as NSC / LIP / FDR / RBI
Bonds equivalent to at least 100% of the sanctioned limit.

Share Amount :

1% of the Loan amount sanctioned, subject to min. Rs. 1,000/- & Max.Rs. 2,500/-

Service Charges :

1.2% of amount sanctioned

4.MORTAGE LOAN

Purpose : The loan amount can be used for prohibited by law. The property should be in
member
22 | P a g e
any purpose but shall not be used for purposes the name of Applicant or -applicant of family

Maximum Amount : Rs. 20,00 Lakh for Personal use Rs. 100.00 Lakh to business enterprises
and self employed and professional for use in business.

Repayment : Upto 84 months

Eligibility :

Amount of loan will depend on repaying capacity / DSCR / Loan to the extent of 60% of
the present value of the property.

Sureties :

One surety of good means acceptable to the bank.

Service Charges :

% of the sanctioned amount

Share Amount :

2.5 % of the sanctioned amount

5.VEHICLES LOAN

Purpose : Purchase of Private / Commerical Vehicles (New or Used)

Maximum amount, Eligibility

For Private Vehicles (New)

a) Max Rs. 30.00 Lakh

Eligibility : Salary after loan EMI amount 40% of the Net Income subject to minimum

23 | P a g e
 5000/- & Max 20,000/-

For Private Vehicles (Used)

(a)Max Rs. 30.00 Lakh

Eligibility : Salary after loan EMI amount 40% of the Net Income subject to minimum
5000/- & Max 20,000/-

For Commercial Vehicles (New)

(a)Max Rs. 50.00 Lakh

For Commercial Vehicles (Used)

(a)Rs. 10.00 Lakh not more than 3 years.

(b) Rs. 15.00 Lakh for Buses not more than 5 years old

Repayment : upto 60 installments

Sureties :

(A) For Private Four Wheelers / Two Wheelers :

One Surety (salaried family member to be considered) with Net Salary / Income of Rs.
10,000/-and above.

(B) For Commercial Vehicles :

Two sureties with Net Salary / Income of Rs. 10,000/- and above

Service Charges :

1.2% of the sanctioned amount

24 | P a g e
 Share Amount :

Private Vehicle : Rs. 1,000/-

Other Vehicles : 1.5% of the sanctioned amount.

6.LOAN AGAINST GOLD ORNAMENTS :

Purpose : The loan amount can be used for any purpose but shall not be used for the
purposes prohibited by law.

Maximum Amount : Rs. 15.00 Lakh

Repayment : 6/12/24 months

Sureties : NIL

Service Charges : @0.6% of loan amount subject minimum Rs. 100/-, Maximum Rs.
500/-

Other Charges :

Nominal Membership

Gold Appraisal Charges

Document Stamp Charges

Designated Branches : Now Gold Loan facility is available in almost all Branches.

7.LOAN / SECURED OVERDRAFT AGAINST GOVT. SECURITIES :

Purpose :

The Loan / Overdraft amount can be used for any purpose but shall not used for purposes

25 | P a g e
 prohibited by law.

Maximum Amount :

(A)Against NSC / KVP / & RBI Bonds (Own) :

Upto 2 years old : 70% of accured value

Above 2 years to 4 years old : 75% of accured value.

Above 4 years : 85% of accrued value

(B)Loan Against KVP : 90% of Accrued value

(C)SOD Against NSC / KVP / RBI Bonds :

80% of Accrued value.

(D)Loan/SOD against LIC Policy (Own) : 90% of surrender value.

Repayment :

Max. 60 installments

3 years & Pledge of NSC / KVP / RBI Bonds or of LIC Policies (Own).

Sureties : NIL

Service Charges :

(a)Loans –Nil

(b)Secured Overdraft –Rs. 100/-

Deposit Scheme :

26 | P a g e
 1.SAVING BANK DEPOSIT ACCOUNT :

WHO CAN OPEN AN ACCOUNT :

An Individual in his/her name

More than one person jointly (maximum 4 persons)

An illiterate person

A blind / visually Impaired / Incapacitated Person.

A guardian on behalf of minor in the minor’sname

Charitable / Religious institutions

Trust, Clubs, Association, NGO

Local bodies, all types of Co-operative societies or any other body

Staff members

Student who has completed 14 year of Age.

Initial Deposit for opening Saving Bank Account & minimum balance to be maintained in
the account.

With Cheque Book Facility –Rs. 1,000/-

Without Cheque Book Facility –Rs. 3

INTEREST :

27 | P a g e
 Interest will be calculated @ 4% p.a. on the basis of Daily Product and will be credited to
the account at half yearly.

Intervals in March and September.

PASS BOOK :

Pass book will be supplied to every savings bank depositor showing the number of his
account name and address and transactions with date, amount and particulars.

INCIDENTAL CHARGES :

If a minimum balance of Rs. 1000/- (with cheque book facility) or Rs. 300/- (without
cheque book facility ) is not kept, the bank will charge incidental charges at the rates as in
force from time to time

REQUIREMENTS FOR OPENING ACCOUNT :

1) Two copies of latest photographs

2) Proof of residence to the satisfaction of the Bank (passport, Driving License, Ratio Card,

Voters Card, Electricity Bill,etc.)

3) Photo Identity Proof.
4) Introduction by person known and acceptable to the Bank.

5) Permanent Account Number (PAN) with original for vertification or declaration in Form
60/61.
6) Initial deposit in cash

7) GENERAL :

1) Penalty at the rate prescribed will be debited to the account on quarterly basis for non
maintenance of prescribed minimum balance.
2) Bank reserves the right to close any account, if cheques drawn are returned unpaid

28 | P a g e
 frequently for want of funds or the account is considered as irregular / non –satisfactory.
3) Account not in operation for more than two years will be treated as inoperative / dormant
account.
4) Bank reserves the right to alter, amend , rescind the rules from time to time.

Bank has introduced following New Products under Saving scheme with added features :-

SBZROBA
1 L Abhyudaya Zero Balance Accounts for Salaried Persons

2 SBYOUTH Abhyudaya Zero Balance Student Accounts

3 SBPREFER
. A Abhyudaya Preferred Savings Bank Account

2.CURRENT DEPOSIT ACCOUNT :

Wo Can Open an Account :

Individual

Two or More individuals

Sole Proprietary Firm

Partnership Firm

Hindu Undivided Family

29 | P a g e
 Private Limited Companies

Public Limited Companies

Non Governmental Organization

Public Corporations

Registered Societies / Associations / Clubs, etc.

Trust

Government /Semi-Government Bodies / Departments.

Initial Deposit for opening Savings Bank Account & minimum balance to be maintained in
the account : Rs. 3000

Interest : No Interest will be paid on the balance in Current Account.

Statement of Account :

Bank will issue statement of account to the accountholder once in a month.

Benefits :

(1) Any Branch Banking (ABB), Inter connectivity

(2) ATM Facility
(3) Remittances –Pay Order, Demand Draft on any location in India
(4) Collection of outstation cheques
(5) Telebanking Facility
(6) RTGS/NEFT Facility
(7) SMS Banking Facility

Free ATM Card : E ATM Card :

30 | P a g e
 For the facility of cash withdrawal upto Rs. 15,000/- in a day from account with our any
branch at anytime of the day through our 35 ATMs.
ATM card is issued free of charge at present, No. ATM card is however issued to Cash
Credit
A/c holder

MINIMUM REQUIREMENTS FOR OPENING ACCOUNT :

1) Introduction by person known and acceptable to the Bank

2)Two copies of latest photographs

3) Business Proof (2)

4) Copy of PAN Card of individual , firm, company, society etc.

5) Photo Ientity Proof

6) Copy of certificate of Incorporation

7)Copy of Certificate for commencement of business (this is required for Public Limited
Company)

8)Partnership Deed

9)Trust Deed

10)Approved copy of Bye-laws of the society as the case may be.

Bank has introduced following New Product under Current Deposit scheme with added
features & Benefits :-

General Remarks :

31 | P a g e
(1) Original documents should be produced for verification at the time of opening Account.

(2) Penalty at the rate prescribed will be levied every month for non-maintenance of minimum
balance.
(3) Statement of Account will be provided every month.
(4) Bank reserves the right to alter, amend, rescind the rules from time to time.

3.Abhyudaya preferred savings Bank Account [SB PREFER ]

Who can open an account ?

Resident individual with min. age of 18 ,years(singly or jointly ), co-op.

societies,clubs,Association ,huf etc.
Applicable for New as well as Existing A/c holders
Minimum Balance
Minimum balance Rs.25000/-

Penalty for not keeping Minimum balance will be Rs.250/-on quarterly basis R.o.l.4%p.a.

Charges:

Option to transfer the account in any other eligible scheme of SB account at any moment
without any charges
All other charges are applicable as per regular SB accounts

Benefits:

Monthly 1 Cheaque Book of 20 leaves free ( except for issuance of post Dated Cheques )
Free RTGS/NEFT facility for any amount (Max.25 instuctions p.a.)
Free issuance of our banks pay order ( maximum 25 pay orders free per annum) No
collection charges for outstation cheques except postage

32 | P a g e
 Immediate credit for outstation cheque up to Rs20 Lakh)
50%concession on service charges on Education loan for children ,loan private car &
Housing loan (loan up to Rs.20 Lakh)
No charges for signature verification

While opening New Locker A/c ,50%concession in service charges. Free access to locker (
max 50 times in a year)
Any Branch Banking allowed up to Rs.1,00,000/-per day

Free ATM Card ,ECS Facility, Standing Intsruction Facility,Speed Clearing Facility, SMS
Banking,Tele Banking,Any Branch Banking & Net Banking Facility

4.Abhyudaya Preferred Current Deposit Account [ CD PREFER]

Who can open an account ?

Individuals / Proprietorship/Partnership Firms ,Pvt./Public Ltd.Companies,HUF,Clubs,

Societies ,association & Trusts
Applicable for New as well as Existing A/c holders

Minimum Balance:

Minimum balance Rs 50,000/-

Penalty for not maintaining Minimum balance will be Rs 250/- on monthly basis

Charges:

Option to transfer the account to regular CD account at any moment without any charges
All other charges are applicable as per regular CD accounts

Benefits:

Issue of free cheque book facility ( Max 100 leaves p.m) No folio charges.
Free RTGS / NEFT facility for any amount (Max.50 instructions p. a)
Free issuance of our banks Pay Order(Maximum 50 Pay Orders free per annum) Free

33 | P a g e
 collection of outstation cheques except postages
Immediate credit of outstation cheques up to Rs7500/-
Preferential Service by Br. Head Cashier for cast Receipt/Cash Payment
50% concession on service charges for education loan for children ,loan for private car
,Housing loan by Prop . /Partner /Director(Loans up to Rs 20 Lakh )
While opening new locker 50% concession in service chargers .Free access to locker
(Max.50 times in a year )
No charges for signature verification
Any Branch Banking allowed up to Rs 200000/- per day

Free ATM card ,ECS facility ,standing instruction facility ,speed clearing facility SMS
banking ,tele banking ,any branch banking & net banking facility

5.Zero balance accounts for students:

Who can open an account

Type 1:

Any school going / college going students can open an account

Students who has not completed 14 years of age ,can open his/her a/c along with his/her
natural guardian
On attaining the age of 14 year student will be allowed to shift his /her account under type
2

Type 2:

Studentswho have completed 14 years of his /her age and is able to sign uniformly, may be
allowed to open saving bank accopunt in his /her own name or along with their natural
guardian

Minimum Balance:

34 | P a g e
 Minimum Balance zero
The account will cease Zero Balance student A/c on completion of 21 years KYC norms
are to be complied as per rbi directives

Scheme details & benefits:

Facility will be provided for Type- 1 A/Cc for collection of cash deposit in school /college
premises if allowed on predetermined date & time concvenient to branch /educational
institution /Students subject to opening of minimum 100 studwent account per school
/college.
Individual students account can be opened at branches & collection of cash deposit will be
made at branches only
No cheque book /ATM card to be issued
Transfer of fund from minor ac to term deposit A/c in the name minor is allowed

Other Benefits :

On regular operation of account , 50% concession may be allowed in service charges ,while
sanction of education loan in the name of parent for higher education studies in India &
abroad subject to fulfillment of all other terms & conditions of education loan scheme .
50% concession on issuance of pay order towards payment of fees(Min.Rs 10/-)

On completion of age of 21, accouint will be transferred to any of the other schemes of SB
account aas per choice

Types of bank:

Type 1. Saving Banks

Saving banks are established to create saving habit among the people. These banks are
helpful for salaried people and low income groups. The deposits collected from customers
are invested in bonds, securities, etc. At present most of the commercial banks carry the
functions of savings banks. Postal department also performs the functions of saving bank.

Type 2. Commercial Banks

35 | P a g e
 Commercial banks are established with an objective to help businessmen. These banks
collect money from general public and give short-term loans to businessmen by way of
cash credits, overdrafts, etc. Commercial banks provide various services like collecting
cheques, bill of exchange, remittance money from one place to another place.

In India, commercial banks are established under Companies Act, 1956. In 1969, 14
commercial banks were nationalised by Government of India. The policies regarding
deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank.

Type 3. Industrial Banks / Development Banks

Industrial / Development banks collect cash by issuing shares & debentures and providing
long-term loans to industries. The main objective of these banks is to provide long-term
loans for expansion and modernisation of industries.

In India such banks are established on a large scale after independence. They are Industrial
Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India
( ICICI) and Industrial Development Bank of India (IDBI).

Type 4. Land Mortgage / Land Development Banks

Land Mortgage or Land Development banks are also known as Agricultural Banks
because these are formed to finance agricultural sector. They also help in land
development.

In India, Government has come forward to assist these banks. The Government has
guaranteed the debentures issued by such banks. There is a great risk involved in the
financing of agriculture and generally commercial banks do not take much interest in
financing agricultural sector Type 5. Indigenous Banks

Indigenous banks means Money Lenders and Sahukars. They collect deposits from general
public and grant loans to the needy persons out of their own funds as well as from deposits.
These indigenous banks are popular in villages and small towns. They perform combined
functions of trading and banking activities. Certain well-known indian communities like
36 | P a g e
 Marwaries and Multani even today run specialised indigenous banks.

Type 6. Central / Federal / National Bank

Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A,
Federal Reserve and in U.K, Bank of England. These central banks are the bankers of the
other banks. They provide specialised functions i.e. issue of paper currency, working as
bankers of government, supervising and controlling foreign exchange. A central bank is a
non-profit making institution. It does not deal with the public but it deals with other banks.
The principal responsibility of Central Bank is thorough control on currency of a country.

Type 7. Co-operative Banks

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912.
They generally give credit facilities to small farmers, salaried employees, small-scale
industries, etc. Co-operative Banks are available in rural as well as in urban areas. The
functions of these banks are just similar to commercial banks.

Type 8. Exchange Banks

Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks
working in India. These banks are mainly concerned with financing foreign trade.

Following are the various functions of Exchange Banks :-

1. Remitting money from one country to another country,

2. Discounting of foreign bills,

3. Buying and Selling Gold and Silver

Type 9. Consumers Banks

Consumers bank is a new addition to the existing type of banks. Such banks are usually
found only in advanced countries like U.S.A. and Germany. The main objective of this

37 | P a g e
 bank is to give loans to consumers for purchase of the durables like Motor car, television
set, washing machine, furniture, etc. The consumers have to repay the loans in easy
installments.

Importance of banks:
Bankers play very important role in the economic life of the nation. The health of the
economy is
closely related to the soundness of its banking system. Although banks create no new
wealth but their borrowing, lending and related activities facilitate the process of
production, distribution, exchange and consumption of wealth. In this way they become
very effective partners in the process of economic development. Today modern banks are
very useful for the utilization of the resources of the country. The banks are mobilizing the
savings of the people for the investment purposes. If there would be no banks then a great
portion of a capital of the country would remain idle.

A bank as a matter of fact is just like a heart in the economic structure and the Capital
provided by it is like blood in it. As long as blood is in circulation the organs will remain
sound and healthy. If the blood is not supplied to any organ then that part would become
useless, so if the finance is not provided to Agricultural sector or industrial sector, it will be
destroyed. Loan facility provided by banks works as an incentive to the producer to
increase the production. Many difficulties in the international payments have been over
come and volume of transactions has been increased. Cheques, drafts bills of exchange and
letters of credit are very important instruments of the banks. The banks collect these
instruments drawn on banks in other cities or countries and proceeds according to the
accounts of the customer's

38 | P a g e
 Characteristics / Features of a Bank:

1. Dealing in Money

Bank is a financial institution which deals with other people's money i.e. money given by
depositors.

2. Individual / Firm / Company

A bank may be a person, firm or a company. A banking company means a company which
is in the business of banking.

3. Acceptance of Deposit

A bank accepts money from the people in the form of deposits which are usually repayable
on demand or after the expiry of a fixed period. It gives safety to the deposits of its
customers. It also acts as a custodian of funds of its customers.

4. Giving Advances

A bank lends out money in the form of loans to those who require it for different purposes.

5. Payment and Withdrawal

A bank provides easy payment and withdrawal facility to its customers in the form of
cheques and drafts, It also brings bank money in circulation. This money is in the form of
cheques, drafts, etc.

6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility
services and agency services.

39 | P a g e
 7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

8. Ever increasing Functions

Banking is an evolutionary concept. There is continuous expansion and diversification as

regards the functions, services and activities of a bank.

9. Connecting Link

A bank acts as a connecting link between borrowers and lenders of money. Banks collect
money from those who have surplus money and give the same to those who are in need of
money.

10. Banking Business

A bank's main activity should be to do business of banking which should not be subsidiary
to any other business.

11. Name Identity

A bank should always add the word "bank" to its name to enable people to know that it is a
bank and that it is dealing in money.

40 | P a g e
 CHAPTER 3
BANK PROFILE
Bank profile:
Abhyudaya Co-op. Bank Ltd., one of the leading Urban Co-operative Banks in India, in
its outlook and approach, has the objective of progress and prosperity of all. From a humble
beginning in January 1964 as a Co-operative Credit society with a share capital of a merely
Rs.5,000/- held by 83 members, today Abhyudaya Co-op Bank has become one of the large
Urban Co-operative Banks with a "Scheduled Bank" status. The Bank has been converted
into a ”

Multi-State Scheduled Urban Co-op. Bank " w.e.f. 11th January, 2007. The area of
operation which was restricted to the State of Maharashtra has now been extended to
Karnataka & Gujarat State. Currently, the capital base of the bank stands at Rs. 72 Crore
and Reserves at Rs.735.11
The bank has 1,38,000 members and more than 14 lakh depositors. The Bank has seen a
tremendous growth in deposits. The deposits of the bank are over Rs. 5260.63 Crore as on
31.03.2011, which were Rs. 4170.62 Crore as at the end of the financial year 2009-2010.
The loans and advances stood at Rs. 3452.66 Crore as on 31.03.2011. The bank had
posted a “Net Profit of Rs. 77.96 Crore as on 31.03.2011”.The growth rate of the bank
compares well with that of others in the sector. The Bank has maintained a steady growth.
The bank has been paying dividend @ 15% to its members. The Bank has launched
different loan schemes tailor-made to suit the needs of various customers. The schemes aim
at providing loans for purchase or construction of residential premises, repair/renovation of
house property, purchase of car, seeking higher education and for purchase of household
consumer durable. One of the loan schemes, viz. "Udyog Vikas Yojana" is specially
designed for the benefit of small entrepreneurs and businessmen. The procedure for
sanctioning of loans under the schemes has been simplified and relaxed with a view to
benefit the customers and facilitating speedy sanction of loans. The Bank has total 105
branches including a Mobile Bank at Navi Mumbai. Bank is committed to spread network
of branches throughout the State and provide much needed banking services to the
population, which has been deprived of the banking facilities.
Innovative Banking is another area of operation that Abhyudaya is currently focusing on

41 | P a g e
 for a sustainable long term growth. The Bank has always endeavored for providing
excellent customer service with the help of the latest technology. The Bank has provided
fully computerized services to its valued clients. Bank is offering 11 hours fully
computerized services and 7 days
working at 18 branches and 24 hours ATM service at 85 branches

HISTORY OF THE BANK:-

Abhyudaya co.op bank established in the year 1964in the form of credit society which is
converted into co-operative bank in 1965 Then in the month of September 1988 bank had
been given a schedule bank category by Reserve Bank Of India (RBI) .On 11 th of January
2007 bank became multinational schedule co .op bank registered with central cooperative
Registrar New Delhi
The main objective of bank is to collect money from public and to give various types of
loans and advances to its members and simultaneously providing various types of services
such as :

Atm facility

Locker facility

Money transfer

Issue D.D/P.O

L.I.C

42 | P a g e
 The main aims and objectives of the Bank defined in the Bank Bye Law
No. III are given below:

To serve as a State Co-operative Bank and as a balancing center in the State of Karnataka
for registered co-operative societies

To raise funds by way of deposits, loans, grants, donations, subscriptions, subsidies etc. for
financing the members by way of loans, cash credits, over-drafts and advances

To develop, assist and co-ordinate the member DCCBs and other Co-operative Societies
and secure financial assistance for them

To arrange/hold periodical Co-operative Conferences of the DCCBs and other members of

the bank and to take action for the growth & development of the Co-operative Credit
Movement.

To participate in financing Co-operative and other institutions who are members of the
bank, directly or through consortium of Bankers

To participate in the schematic lending and to provide loans for which refinance facility is
available with term lending institutions.

To arrange for the inspection and supervision of the affiliated DCCBs and other Co-
operative Societies and guide them in their working

To buy and sell securities for the legitimate investment of surplus funds and act as agents
for buyers and sellers of securities of Central/State

43 | P a g e
 To carry on general business of Banking and other banking activities to the members and
customers

To purchase, acquire or raise or otherwise obtain moveable or immoveable property for the
own use of the Bank and also to dispose them of when not required
take memo help Co-operative Education

To promote and undertake Co-operative Research and Co-operative Development

To manage, sell or release any property which may come into the possession of the bank in
satisfaction of or part satisfaction of any of its claims

To promote economic interest of the members of the Bank in accordance with the
principles of Cooperation.

To do such other things as are incidental or conducive to the promotion and advancement
of the business of the Bank;

Our special features:

1. Attractive interest rate on deposit

2.0.50% additional intrest on deposit for co operative society.

3.1.00% additional intrest on deposits for senior citizens & co.op socities having deposits
of 12 months and above.

4.Various loan facilitiesto fulfill your needs

5.We have cheque drawing and cheque collection on major cities all over India

6.Electricity bills of B .E.S.T, M.S.E.B etc accepted

7.No TDSfor deposits of members (shareholders) and for deposit under Recurring Deposit

44 | P a g e
 8.lockers available at lowest rates

9.Instant Loan /Cash credit against term deposit.

10.Nomination facility available

11.Personalised customer friendly service.

12.Deposits up to Rs 1 lakh are insured under DICGC.

Services provided by the bank:

o Tele banking
o Franking
o Lockers

o Foreign exchange service

o Xpress money global transfer service
o Bank policy on collection of cheques/instruments
o Demat service
o Pancard service
o Credit card
o Debit card

45 | P a g e
 VISSION & MISSION:

Mission Statement:

A “Mission”to continuously strive for synergybetweentechnology, systems and human

resource so as to provide products and services that meet the quality, performance and

aspiration of its vast clientele. For this, we maintain highest standards of ethics and societal

responsibilities constantly innovate products and processes and develop teams that keep the

momentum going to take the Bank toexcellence in the new millennium.

Vision Statement:

A “vision”of relentlessly pursuing our aim and objective of making the bank emerge as a
luminous stand in the tapestry of India’sBanking System. We will strive to mould the
Abhyudaya Bank intoagile and resilient Organisation by adopting the fine-tuned customer
relationship, management strategies, operations based on asset-liabilityand risk
management systems, upgradation of required technology capabilities and developing the
human resource to meet the challenges of the paradigm shift. Our vision seeks to serve, as
our Chairman has aptlyput it, as a reference point for making strategic decisions, conveying
benefits to stakeholder, articulating competitive advantage and underscoring the driving
principles of Organisation

STRATEGIES TO ACHIEVE THE PROJECTED GROWTH & TARGETS:

1. Expansion of Business

The Bank would , inter alia, resort to the following measures to expand and improve its
business :

To periodically undertake special Deposit Mobilisation Campaigns to mobilize additional

deposits from the public.
To relocate / merge loss –making branches with the profitable ones.

46 | P a g e
 To embark on new avenues of business and introduce innovative products. The Bank has
already received Authorised Dealer’sCategory I License from the RBI to conduct forex
business. A Foreign Exchange Department is, accordingly, being set up with necessary
complement of staff who have been given orientation training . To begin with, it is
proposed to open one ‘A’category branch and four ‘B’caregory branches in different
locations specialized in forex business , ciz., Dadar, Andheri (East), Ghatkopar, Vashi and
Deccan Gymkhana Pune. The Bank is entering into a tie-up arrangement with bank of
India, inter alia, for opening Nostro Accounts exposure limits, providing training and
dealing room support, and with American Bank for selling / encashing Travellers cheques,
and with Thomas Cook for acquiring and disposing of various types of currency notes.
Among business plans include resort to trade finance and remittances, setting up of Bank’ s
own dealing room, and undertaking all types of forex business with turn-over exceeding
Rs. 1000 crores and may even outpace normal commercial banking business.
That apart, the Bank could make forays into the business of distribution / marketing of
units of the Mutual Funds and Shares under initial Public offerings (IPOs) / Public Issues of
Corporates. The Bank could also consider providing depository services to customers for
opening of Demat account wherein shares, securities etc. of account holders may be held in
electronic form. Further, special drives may be launched to sanction loans without any
hassles to women entrepreneurs and those engaged in business in addition to professionals
like lawyers, engineers, architects, etc.

Ensuring optimum utilization of safe deposit lockers to fetch higher income.

Exploring the possibility of opening a Currency Chest, in consultation with the Reserve
Bank, which can facilitate pursuing ‘Clean Note Policy’.The facility will enable our Bank
of avail various benefits of having a currency chest, such as relief from approaching other
currency chests for deposit / withdrawal of cash having accounts of other banks with our
Bank to extend them currency chest facility etc.

47 | P a g e
 II.Branch Expansion including thorugh Merers & Acquisitions

The latest tred of consolidation of the Urban Banking Sector through the process of Merger
& Amalgamations has gathered momentum over the past one year since the stronger banks
have found this as an inorganic growth route. The RBI has also announced n the Annual
Policy Statement for the year 2007-08 relaxation in the Branch Licensing Policy for UCBs.
The RBI has followed up this by prescribing the eligibility criteria for opening additional
branches / extension counters not exceeding 10% of their existing branch network. In the
light of this, the Abhyudaya Bank has formulated a Merger & Acquisition Policy, with the
approval of the Board, the salient features of which are as under :

1) Capital Adequacy Ratio :

As on March 31, 2006, the CRAR of the Bank stood at 39% which declined to 22% due to
among other things, merger of the Pune based citizen co-operative Bank during the year
2006-07 and absorption of its liabilities. With the proposed merger of the Karnataka –based
Janatha Co-op. Bank and the Gujarat based Shree Krishna Sahakari Bank Ltd., the CRAR
is likely to decline further to around 15%. As a prudent policy, it would not be advisable to
let the CRAR decine below 12% (the prescribed minimum being 9%) and hence, the Bank
may be inclined to consider a few more proposals for merger.

As for the cost of merger, , which the Bank could sustain, without making a significant dent
on its profits, the following limits may be set, vix., @ Rs. 1 crore per Metropolitan Branch
@ Rs. 75 lakhs per urban co-operative Bank and @ Rs. 50 lakhs for Semi-urban bank in
the form of negative networth.

2)Branch Expansion :

In pursuance of the RBI’sliberalized branch licensing policy, the Abhyudaya Bank may
get licenses for five additional branches during the next two years or so. With the merger of

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 the Janatha Coop. Bank with 6 branches and the Shree Krishna Coop. Bank with single
branch, the total branch network of the Abhyudaya Bank may augment to 65 branches till
the middle of 2008. This should be followed up by the policy of Consolidation of the
existing branches, including shifting / relocation of some of the branches, for some time.
This Policy may come up for a review in 2009, paving the way for further expansion, say
additional 34 branches up to the year 2014, taking the total number to 100. In this context,
the Bank could go in for all India status expanding its coverage to other nearby states like
Goa, Madhya Pradesh, in addition to entering into other areas in Karnataka and Gujrat
infested predominantly with people hailing from Maharashtra or their close relations.

The Mergers & Acquisitions can become a real success and profitable , if there is a meeting
of minds and souls between the staff of the Abhyudaya Bank and of the bank merged. This
process can be hastened by intensive training both in functional and behavioral science
area.

Sub-Committee: It is only appropriate that mergers & acquisitions proposals are examined
by a
Sub Committee.

III.Human Resources Development

The Human Resources Systems deal with attracting, engaging, developing and keeping
skilled individuals . These systems define how an organization recruits, involves, trains,
challenges and rewards ts employees in the pursuit of its strategic intent. The ability to
manage its human resources effectively is consistently identified as a critical element to an
organisation’ssuccess . There is recognition that the workforce can be a source of
competitive advantage. Indeed, many regard human capital as the only true differentiator.
The real challenge before the HRD Departments is to motivate the employees to put in their
best performance and contribute meaningfully and optimally to improve the efficiency and
effectiveness of the organsiation.

. IV. Focus on Information TechnologyIf it was the onset of reforms in early 90s, that
initiated changes in banking scene, it is the use of advanced information Technology (IT)

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 that has almost completely changed the look and feel of banking. The most important, yet
not so visible, impact of IT on banking has been in reducing the back office routine and
making the accounting function of the banks more efficient.

A Significant development in this regard is the adoption of Core Banking Solution (CBS)
by banks, including the Abhydaya, Bank, which has made operations in the account
possible from wherever the customer wants as against the previous compulsion to go to the
branch where the account was opened . As a consequence of adoption of IT and CBS,
banks have been able to offer a number of new services and produces, including ATM. A
prima facie view of the IT strategies of banks seem to be to indicate that smaller customers
will be handled through technology and branches will spend more time on high net worth
individuals and businessmen. The impact of technology on the financial sector has been
profound. Starting from Mainframe computers for facilitating inter-office reconciliation ,
the technology transformation journey has taken us through automated ledger posting
Machines, back office automation, full branch computerization and now to core banking .
Centralised online Realtime Environment Banking enables Anywhere banking Core
Banking has brought in a paradigm shift in the way we have been doing banking
operations. It is a great leap forward in the technological transformation process at the
Abhyudaya Bank, have to put in place roubust disaster recovery plan and business
continuity plan in order to manage the risk arising out of the architecture of core banking
system. To leverage core banking to bring in the desired level of efficiency in operations,
key process have to be aligened with the needs of the core banking application and its
architecture. Two of the main issues, arising in this context are extensive training to the
staff to make use of the new equipment, and familiarizing the customers with the new
facilities offered by the core banking solution . Unless customers are educated to make use
of anywhere banking, ATMs and internet banking, we cannot hope to reduce the
transaction cost to the desired extent and their return on the technology investment will
remain sub-optimal. Successful handling of these issues will be a win-win situation for us
as well as our customers. The Abhyudaya Bank could considerably reduce its cost of
operations and customer will have more convenience, time saving and better control over
their accounts.

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 Against the backgroup of increasing resort to Mergers & Amalgamation one critical area
that needs careful consideration at the time of mergers is integration of different technology
platforms and software which not only have process and control implications but may
involve substantial costs in terms of money and time and retraining of personnel.
Technological infusion in the Abhyudaya Bank will be focused towards meeting the
following business challenges of being able to :

Offer a broader range of complex products and services as soon as possible viz., banking
insurance mutual funds, etc.

Deliver these products and services to the customers in the quickest possible way through
multiple channel options.

Identify, quantify and manage risks.

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 Anticipate and meet customer demands through massive Data Warehousing and CRM.

Manager a multi-cultural customer base.

Manage security

Meet Compliance Needs

Set benchmarks and standards for implementation of new technologies processes and best
management practices.

Be a leader rather than a follower.

The new environment will require a complete paradigm shift –new sstyles of conducting
business with technology, people and processes, with wafer-thin margins, increasing
competition, disloyal customer base and an uncertain future –the management of risk will
be of primary concern while carrying out Bank’sbusiness plans.

Agenda more specifically for the IT Department.

Create a satisfied customer base using latest technology thereby propelling business
growth.

Fully computerize all the branches to serve the customer better.

Provide, wherever feasible, the select remaining branches with ATM facility.

To have off-site ATMs at important locations visited by a majority of public including our
customers, eg. Railway Stations, Malls, Markets, etc.

To connect our ATM network with those of other banks to have a shared network of
ATMs.

Provide value added services like payment of electricity bills, telephone bills, booking of

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 reservation tickets etc. at these ATMs.

Provide fund transfer through delivery channels like ATM, Kiosks and other delivery
channels.

Adopt and latest technology delivery channels like ATM, Kiosks and other delivery
channels.
Adopt the latest technology which suits easy and better customer service and growth of the
Bank.

V. Improvement in Customer Service

In the context of growing competition among banks to attract and retain customers, the
quality and promptness of customer service with utmost courtesy has assumed critical
importance. The Bank proposes to undertake a Survey among its first top 100 customers to
ascertain feedback from them about the quality of service, the area whether they seek
further improvements, including simplication and refinements of systems and procedures
etc., In the light of the findings of the Survey, appropriate measures will be taken to bring
about the necessary changes, so as to improve the Bank’simage and ensure customer
delight. Such Surveys will be conducted at periodical intervals to keep up the quality of
service in tune with the changing times.

VI Creation of a special Cell

The Bank is yet to derive the optimum benefits of the introduction of the Core Banking
Solutions and the IT in the Bank. The cell should be adequately manned and should
function like a Call

Centre and should attend to clients enquiries, besides monitoring loan accounts. They
should contact defaulting loanees immediately before the relative account is slipped to
NPA.

VI. Strengthening of the internal Audit and Inspection Machinery

The role of the internal Audit & Inspection Machinery in ensuring smooth running of the
Bank and its branches on sound lines cannot be overemphasized. There is considerable

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 scope to improve the efficiency of the inspection & audit by giving greater weightage to the
areas where risk is higher, e.g. risk to Bank’sreputation, fraud-prone areas and other
sensitive areas of Bank’ s functioning. New and evolving techniques of inspection and audit
considering the technological advances may have to be adopted . The banks being trustees
of public funds. Vigilance, too, has assumed lot of importance as a matter of public policy.

VII. Strengthening Security Arrangements in the Bank

Security climate throughout the country has undergone a sea change due to terrorist attacks
involving loss of precious human lives and public property. The banks are also more prone to
thefts, dacoities, etc. due to the treasures handled by them. This highlights the critical need for
paying utmost attention to guarding Bank’s treasure and premises by tightening security
arrangements and increasing security awareness, checks, etc. The Bank has been keeping the
subject of security constantly under its review and for this purpose, has appointed a special
officer (security) to advise the Bank on various security measures. Training is being arranged
for the security staff on a priority basis. All the staff have also been issued identity Cards
which they are expected to wear on their person and produce for inspection when ever needed

Roles and Responsibilities of other departments in Bank’s quest towards
achievement of various tasks / targets envisioned under Bank’svision

Treasury Department
To be the backbone for deployment of funds profitably.

Treasuries have and will continue to be the heart of banking activity in tomorrow’s
environment. The Integrated Treasury will look after resource planning, allocation of
funds, capital charge, risk capital charge, transfer pricing etc. in a dynamic environment,
constantly identifying market and interest rate risks and preparing strategies to mitigate
them. Those who can afford could have separate set-up for research risk identification and
risk management purposes Role of the Treasury Department

- To play seminal role in Brand Building

- Contribute substantially to the profitability of the Bank.
- Optimise liquidity costs
- Deal in wholesale and retail markets for debt, derivatives to hedge balance sheet risks.
- To deal in Forex Markets and undertake foreign exchange transactions

- - Assess and manage balance- sheet risk (market, interest rate) as support activity to ALCO
- Undertake pricing and allocation of resources

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 LOANS & ADVANCES DEPARTMENT

It is customary for the Bank to draw up an Annual performance Budget at the beginning of
the year to set targets for business development by indicating goals for deposit
mobilization, expansin of loans and advances, regulation of NPAs and recovery of NPAs
and finally, to achieve optimum profitability. Profitability being the key determinant for
assessing the success of an enterprise and lending being the principal business of a bank,
the volume and quality of loan assets determines the success of the bank. In order, therefore
to achieve the goals set for maximizing profits, it is essentialthat a clear-cut Credit Policy
or Loan Policy is laid down, which inter alia, highlights the objectives, priorities of
exposure and ceilings on lending to various categories of borrowers / industries / business
etc., appraisal standards norms and procedures security considerations and margins to be
observed for the facilities granted, disbursement procedures, documentation and repayment
conditions, renewal procedurs, etc. The Board, accordingly finalises a Credit Policy
annually based on the review of performance of the previous year, policy objectives and
goals adopted for the current year, the regulatory stipulations, directions and advice issued
by the RBI, prevailing market realities and trends in the banking industry in general . The
Board has since approved the credit policy for 2007-08 formualted by the Loans &
advances department and circulated among all concerned for implementation. It has been
emphasized that more specific attention should be given to the achievement of policy
objectives of increasing priority sector lending, improving the quality of appraisa, securing
more and more non-traditional and fee-based business, efficient monitoring credit quality
and controlling gross NPAs and consequently achieving better profitability as envisaged in
the performance Budget for the year.

In the coming years, the Credit Policy is bound to get much sharper focus and attention
against the backdrop of changes in the economy, the policy directives and guidelines of the
Reserve Bank and avenues for business promotion keeping in view our capacity and
strength and area where we are strong.

Accounts Department

“To help out Bank emerge as a strong and sound urban co-operative bank complying with

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 all regulatory and statutory requirements to the satisfaction of the Reserve Bank and the
Central Registrar of Cooperative Societies etc.

To ensure that the accounting policies followed by the Bank are in conformity with the
directives / guidelines of the statutory authorities including the institute of Chartered
Accountants of India and also in line with best international practices.
To develop a comprehensive compliance document, covering key issues like Capital
Adequacy, Liquidity, Asset Quality, Risk Management and Systems and Control which
should be reviewed periodically.
Submitting various statutory and other returns to the RBI and other authorities promptly
and accurately.
To develop a comprehensive information system by collecting data to measure, monitor,
control and report liquidity risk / interest rate risk from ALM angle.

INDUSTRIAL FINANCE DEPARTMENT

The industrial Finance Department function at Head Office and its activities are supervised
by Senior Manager . Their role and responsibilities in respects of the reporting and
monitoring of loans and advances are, briefly narrated below :

Determination of working capital of SSI and other manufacturing units –New proposals
with limits above Rs. 25 lakhs and renewal / enhancement above Rs. 50 lakhs.
Verify in respect of loans for purchase of machineries aboe Rs. 15 lachs ht
genuineness of quotations, competitive rates and available better alternate machinery at
cheaper rates as well as of better quality. The Dept. to keep apprised of the supplies of
machinery / equipments, pricelist, etc.
Monitor loans and advances above Rs. 1 crore independently by visit on half yearly basis
and to submit a detailed report.
Determine moratorium period, rescheduling of Term loan in consultation with the
borrower, Branch In-charge and Zonal

Recovery Department

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 Spearheading Bank’sRecovery Measures by gearing up machinery and adopting innovative
steps to attain the avowed objective of ‘Nil NPAs’

Prompt and swift action to effectively deal with such accounts.

Developing Management information system in respect of these account and preparing
Action taken reports thereon, progress of which should be reviewed from time to time.
Rescheduling the recovery keeping in view the Policy guidelines. Safeguarding securities
to serve Bank’sinterest.
Resorting to recovery proceedings / due legal process wherever necessary.

Development Department

Develop extensive network of branches to market Bank’s products and ensuring

Bank’sgrowth.

Undertaking extensive image- building exercise.

Converting existing loss-making branches into viable and profitable entities by helping
them in development of banking business.
To open extension counters at a few sites where there is potential for business. Maintaining
liaison with the media for better marketing of our products and giving publicity to the
Bank’sachievements

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MARKETING DEPARTMENT:
“A satisfied customer brings business and growth. Believing in this saying –developing ideal
value added products; canvass business, paving the way for growth”

Analysing potential of existing products and developing new products to suit customer
needs.
Disseminating information / literature about Bank’s products and services among
customer/s members of public.
Undertaking advertisement campaigns to promote Banks business.
Developing customer relationship assistants to approach high net-worth customers and high
potential corporate houses for business promotion

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 CHAPTER 4

DATA ANALYSIS

1.How satisfied are you with the

service

Table:

Very satisfied 10

Satisfied 55

Somewhat satisfied 25

Dissatisfied 10

GRAPH:

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FINDINGS: According to above graph 10% customers are very satisfied, 55% are satisfied,
25% are somewhat satisfied and 10% are dissatisfied with the service provided by the bank.
Overall performance of the bank is good but according to me there is need of little
improvement in order to satisfy the customer completely.

2.Do you feel that the procedure to open an account with the bank was difficult?

Table:

Yes 10

Yes to certain extent 20

No, it was easy 70

Graph:

Findings: According to above graph 10% customers feel that procedure to open an account is
difficult, 20% feel that it is difficult to certain extent and 70% customer feel that the procedure

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is easy to open an account with the bank.

3.Do you always get prompt service whenever you visit the branch?

Table:

Always 45

Often 25

Sometimes 20

Rarely 6

Never 4

Graph

Findings: According to above diagram 45% customer are say that they always get prompt
service whereas, 25% are in often category, 20% are in sometime category, 6% say that they

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rarely get prompt service and 4% say that they never get prompt service

4.DO you agree that minimum account limit is not high & easy to maintain ?

Table:

Strongly agree 60

Agree 25

Somewhat agree 10

Disagree 5
Graph:

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Findings: According to above graph, 60% strongly agree, 25% agree, 10% somewhat agree, that
minimum account limit is not high & easy to maintain, whereas 5% customers are disagree with the
statement

5.Are you satisfied with your financial transaction with the bank?

Table:

Very satisfied 20

Satisfied 45

Somewhat satisfied 25
Graph:
Dissatisfied 10

Findings: According to above diagram 20% customers are very satisfied, 45% are satisfied 25%
are somewhat satisfied with the financial transaction with the bank and 8% are dissatisfie

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6.Are you satisfied with the Loan & Deposit interest rate provided by bank?

Table:

Loan Deposit(
(%) %)

Highly satisfied 10 15

Satisfied 60 58

Dissatisfied 30 27

Graph:

Findings: According to above graph 10% with loan and 15% with deposits interest rate are
highly satisfied, 60% with loan and 58% with deposits are satisfied whereas, 30% and 27%
customers are dissatisfied with loan and deposit interest rates.

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 7.Does the bank staff communicate effectively with its customer? Are you satisfied with
the staff communication skill

Table:

Very satisfied 15

Satisfied 45

Somewhat satisfied 25

Unsatisfied 15

Graph:

Findings: According to above diagram 15% customers are very satisfied, 45% are satisfied 25%
are somewhat satisfied with staff communication skill of the bank and 15% are unsatisfied.

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8. Does the bank create awareness among the customer about its new services & policies ?

Table:

Yes 75

No 25

Pie-diagram:

Findings: The above pie diagram shows that 75% say that ‘YES’bank create awareness among
customers about its new services and policies and 25 % are disagree.

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9.According to you which service provided by the bank is best ?

Table:

Loan service 10

Deposit service 10

ATM service 40

Credit card 20

Internet banking 15

Mobile banking 5

Pie-diagram:

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Findings: The above customers survey 10% loan service, 10% deposit service, 40% ATM service,
20% credit card service, 15% internet banking and 5% mobile banking are the best services
provided by the bank.

10.Compared to other bank how satisfied are you with the overall performance of Abhyudaya
bank?

Table:

Very satisfied 10

Satisfied 50

Somewhat satisfied 20

Dissatisfied 20

Pie-diagram

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Findings: According to above diagram10% customers are very satisfied, 50% are satisfied
20% are somewhat satisfied with with overall performance of the bank compared to other
banks and 20% are dissatisfied. According to my survey there is need for improvement to
satisfy the customers completely.

11.Overall , how satisfied are you with our banking service ?

Table:

Very Satisfied 14

Satisfied 54

Neutral 20

Unsatisfied 12

Pie-diaram

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Findings: According to above diagram 14% customers are very satisfied, 54% are satisfied
20% are neutral and 12% are unsatisfied with overall banking service.

CHAPTER 5

5.1 CONCLUSION

CONCLUSION:
The bank provides attractive schemes to their customers and it has improved its overall
performance according to my research. The bank has shown growth in all departments. It
also provides various services to its customers such as internet banking, tale banking,
ATM, credit cards, LIC, lockers facility & so on. The bank has trained staff to serve the
customers its treats customers as the king of market & provide prompt service to them The
bank conducts its business ethically & It also serves the need of its shareholders, members.

5.2 SUGGESTION:

The bank should provide effective services to its customers and employees.

The procedure to open an account with the bank should not be difficult. It should offer
convenience to customers.

The customer should always get prompt service whenever they visit the bank.

The minimum account limit should not be high and it should be easy to maintain.

The staff should be well trained so customer should not wait for their transaction.

The bank should offer lower interest rate on loan scheme to attract more customers.

The bank should offer higher interest rate on deposit to retain more customers.

The bank should provide proper publicity of its new services

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 QUESTIONAIRE:

1.How satisfied are you with the service

2.Do you feel that the procedure to open an account with the bank was difficult

3.Do you always get prompt service whenever you visit the branch?

4.DO you agree that minimum account limit is not high & easy to maintain ?

5.Are you satisfied with your financial transaction with the bank?

6.Are you satisfied with the Loan & Deposit interest rate provided by bank?

7.Does the bank staff communicate effectively with its customer? Are you satisfied with the
staff communication skills

8. Does the bank create awareness among the customer about its new services & policies ?

9.According to you which service provided by the bank is best ?

10.Compared to other bank how satisfied are you with the overall performance of Abhyudaya
bank?

11.Overall , how satisfied are you with our banking service ?

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