A LENDING POLICY at The BCCB Ltd

A LENDING POLICY at The BCCB Ltd FINANCE
INTRODUCTION Finance is the life blood and nerve centre of a business. Just Circulation of blood is essential in the human body for maintaining life, blood is very essential for smooth running of business. It has been rightly termed as universal lubricant which keeps the enterprise dynamic. Finance is about bottom line of business activities. It is the branch of economics that deals with management of money and assets involving banking, investment, credits, and so on. As a verb, lets look at the activities that happened around us. One needs a proper planning, or estimation in a business management, like arranging funds, assessing the profit or loss factor, etc. In the personal front arranging ones finance may be his or her saving ability or investment in various instruments available. A Nation needs to have a budget to run the economy, have to plan accordingly regarding the general welfare based on the revenue generated from the tax payers, or foreign exchanges earned over a period whether its private, public front the common manthra here is proper planning, understanding of income and expenditure, and risk factors involved. Now, where do we find these entire activities taking place, or in common mans term wheres the market place? Its everywhere around us, but happens in every organized form, so we will call them in different names, like stock (equity) markets, Forex market, etc. The foreign Exchange or the Forex market is regarded to be the largest financial market place based on the volume of transaction every day. It involves regulatory banking bodies, government, MNCs, and other financial institutions. Finance market place is basically the exchange of trading place for one currency with other. There isnt any particular institutional body where this trading happens, but usually an overthe-counter practice, where different currency instruments are exchanged. Even the rate varies from place to place, that is why you will find different values for one dollar in other countries.
Page 1
A LENDING POLICY at The BCCB Ltd
MEANING OF FINANCE Finance may be defined as the provision of money at the time when it is required. Finance refers to managing the flow money through an organisation. It concerns with application of skills in the manipulation, use and control of money. Different authorities have interpreted the Finance differently. DEFNITION OF FINANCE Finance is that part of business activity which is concerned with organisation and conservation of capital funds in meeting the financial needs and overall of business enterprise. SCOPE OF FINANCE The main objective of financial management is to arrange sufficient finance for meeting short-term and long term needs. These funds are procured at minimum costs so that profitability of business is maximized. With these things in mind, a financial manager will have to concentrate on the following areas of finance functions. .It helps in decision making for investment It helps in solving their problems and attaining wealth maximisation goals. It helps in allocation of earnings between payments to shareholders and retain earnings. It helps the management in choosing the most viable projects with maximum returns. Global Banking Scenario The term bank was derived from Italian word BANCO the Latin word Banque And the French term Banque which means Bench. An office for monetary transaction taken over on the bench and desk used as counters then the German word Bank which means joint stock fund or a common fund raised from large number of public. By Wheeler
Page 2
Banking is an old as the Indian civilization. Banking lending money existing in the Babylonians period earlier a.s 2000BC the Babylonians had developed a system if banking. Under which the temples of lending policy and they lend money against the gold: silver, which left with them as a safe custody. In india money lending existed in the ancient period. The ancient Hindu sculpture referred to the existence of money lending activity in vedic period. Vaishyas mainly did the business of Banking. These vaishyas were money lenders or traders. An ancient epic Hindu Law written by Manu and Kautilyas Arthashastra we can find banking. Banking is a familiar term used in day to day activities it is commonly known to all banking function its basic functions are borrowing and lending money. Presently it is even known for its miscellaneous service like to pay phone boll, electricity etc. MEANING OF THE TERM BANK According to some English word Bank is derived from Latin word banco the Latin word bancus and French word banque which means a bench. They are the opinions that medieval European banker translated activities engaging in the another currency and money lending one currency for another and money lending by displaying coins of different denominations in big heaos of benches in market places as such the world bank should be associated with the Italian and banco according to the term bank is derived from German word banck which means joint stock fund or a common fund raised from large number of public. They contended that the early European bank has raised common funds or heaps of money from public. For the purpose of financing needy. As bank should be traced to the German word bank of these to view, the later views sums to be more convenience because the term bank is generally associate with an institute dealing with heaps of money raised from public.
DEFNITION OF BANKING According to Indian banking regulation act of 1949 sec5(1) (c) defines bank as banking as accepting for the purpose of lending or investments of deposits of money from the public repayable on demand or otherwise withdrawal cheque, draft, order or otherwise.
Page 3
IMPORTANCE OF BANKING IN INDIA Banking plays a very important role in the Economic development of a country. They touch every aspect of modern banking. Some of the important roles played by banking for the development of Indian economy are as follows. Banking mobilizes the small, scattered and ideal saving of the people and make available for the productive purpose they help in the process of capital formation. By offering interests banks depositors and promote the habits of thrift and savings among people. Bank is convenient and economic means of payment and transfer of funds cheques, DD, bank drafts. Bank helps the movement of funds from regions where they are not very useful to regions where they can be more usefully employed. Though the supply of money (bank money and credit money) bank exert powerful influence on the interest rates in the money market. Bank helps in trade, Industry, commerce, and agriculture by meeting their financial needs. Bank directs flow of funds into productive channel. While lending money discriminate in favour of essential activities and against. ESSENTIAL CHARECTERISTICS OF BANK Acceptance of the deposits from the public on fixed, current or saving bank account. Allowing of withdrawal of such deposits by cheques, drafts. Orders or otherwise. Utilisation of deposits in hand for the purpose of lending or investment. Performance of other activities called subsidiary services, in addition to the principal activities. Co-operative Banking in In INTRODUCTION: In 1904, the co-operative movement was started in india.
Page 4
KINDS OR TYPES OF BANKS Economic conditions, financial conditions and other aspects vary from nation to nation. Hence rigid classification is not possible, general classification of banks can be made as follows. Commercial banks Industrial banks Foreign banks Agricultural banks Land and development banks Savings banks Central banks
TYPES OF BANK ADVANCES Bank advances are of many types. The various types of bank advances are: 1. Loans: A loan is financial arrangement under which an advance is granted by the bank to a borrower and a separate account called loan account. When a loan is sanctioned to a borrower, the entire amount of loan is debited to the loan account of the borrower and it is paid to the borrower at once in lump sum either in cash or by the transfer to the credit of his current account.
2. OVERDRAFTS An overdraft is a financial agreement under which a current account holder is permitted by the banker to draw more than the amount of to his credit up to an agreed or specified limit. So, an overdraft implies an existence of a current account. By nature, an overdraft is a temporary financial accommodation to be made used by customer vocationally.
Page 5
A LENDING POLICY at The BCCB Ltd 3. CASH CREDIT A cash credit is a financial arrangement under which a borrower is allowed an advance under a separate account called cash credit account up to specified limit
called cash credit limit. The cash credit limit fixed on annual basis. As it is a separate account by itself, it does not require the opening of current account. 4.DISCOUNTING OF BILLS AND PURCHASING OF BILLS OF EXCHANGE Discounting of bills is an arrangement under which a banker takes a bill of exchange maturing within a short period, says 60 or 90 days from an approved customer and pays him or places to the credit of his current account immediately.
CO-OPERATIVE BANK Co-operative banks are distinct entities by themselves with separate jurisdiction and independent board of directors the co-operative banks are organized on the co-operative basis and are governed by their members by according to the corporate law.
They are under the control of their respective state government certain provisions of the banking regulation act also apply to co-operative banks in India are federal in their structure. At the lower ladder, there are primary co-operative societies and on the top, there is the state co-operative bank.
DEFINITION AND MEANING OF CO-OPERATIVE BANK DEVINE defined a Co-operative bank as a mutual society formed, composed and governed by the proper working of employees that encourages regular saving and granting small loans on easy terms of interest and easy payments. IN THE WORD OF HENRY WARE Co-operative banking is an agency which is in a position to deal with the small man his own forms accepting the security. He has without drawing on the protecting of the rich.
Page 6
A LENDING POLICY at The BCCB Ltd INTERNATIONAL CO-OPERATIVE BANKS ASSOCIATION A co-operative bank is a financial entity which belongs to its members who are at the same time the owners and customers of the bank
CHARACTERISTICS OF CO-OPERATIVE BANK: Co-operative banking perform all the banking functions viz deposits mobilisations, supply of credit and provision of remittance facilities. Co-operative banks accept all types of deposits including current, savings fixed or time deposits from the individual, both members and non members. Co-operative banks are intermediaries. Personalized service is the special feature of co-operative banking i.e in co-operative banking greater emphasis is laid on the credit worthiness of the borrowing capacity of borrower. Co-operative banking is generally federal in nature.
FEATURES OF CO-OPERATIVE BANK The distinct features of co-operative banks can be summed up as follows Co-operative banks are a part of the vast and power full super structured of cooperative institution, which are engaged in the task of production, processing, marketing, servicing and banking in India. Co-operative banks are made on the integral part of the institutional frame work of the community, for development and extension of services, which was assigned the important role of delivering the fruits of economic planning (that had begun in India) from the grass root levels. Formulation and implementation, for the purpose of rural development in general, agricultural and rural development as fluctuated during 1950-1990. The co-operative and the important constituent on the Indian financial system, judging by the role assigned to co-operative the expectation the co-operative is supposed to fulfil; their number of offices, the co-operative bank operates.
Page 7
STRUCTURE OF CO-OPERATIVE BANKS IN INDIA
RBI
NABAR
SCBS
SLDS
UCBS
CCBS
CLDBS
PACS
PLDBS SLDBS
Page 8
NABARD: National Bank for Agriculture and Rural Development SCBS SLDBS DCCBS PACS CLDBS PLDBS UCBS : State co-operative Bank : State Land Development Bank : District Central Co-operative Bank : Primary Agriculture Credit societies : Central Land Development Bank : Primary Land Development Bank : Urban Co-operative Bank
Co-operative Banks in India to finance rural areas under: Farming Cattle Milk Hatchery Personal finance
Co-operative Banks in India to Finance urban areas under: Self employment Industries Small scale industries Home finance Consumer finance
Some facts about co-operative banks in India Some co-operative banks in India are forward than many of the state private sector banks.
Page 9
A LENDING POLICY at The BCCB Ltd According to NAPCUB the total deposits and lending of co-operative banks in India is much more than old private sector banks and also the new private sector banks. This exponential growth of co-operative banks in India is attributed mainly to their much better local reach, personal interaction with the customers, and their ability to catch the nerve of the local client.
LENDING POLICY Meaning of lending policy Lending policy an institutions statement of its basic lending policy, including standards, guidelines, and limitations that are to be observed and adhered to in the process of deciding whether to grant a loan. The policy must adhere to applicable laws and regulations. One of the primary functions of the commercial bank is lending this activity is taken up by the commercial bank with objective of making profit although commercial banks are general by status. It can be considered as one of the business organisation. They cannot keep the deposits, collected from the public idle. In fact it is collected with the primary objective of lending and making profit out of the interest received and paid. Their main business is to deal in primary and provide finance to needy people. As we know that the deposits are collected in two forms.. 1. Primary Deposits 2. Derivative Deposits These deposited have to be employed profitably but the banker is not having free hand in employing funds, he has to do the job of lending well within the frame work of status governing the banking business, the government policy and guidelines issued by the monitory authority of the country (RBI India). In the process he may not make the good profit, take for example; the banks which have to serve the segments where economic conditions are very poor. Particularly in case of nationalized banks, it is the policy of the government to lend to the priority sector like debt. In these segments of bank operations, the bank cannot make a profit they have to employ funds in the business and industrial sector. This they have to strike a balance.
Page 10
As observed employment of funds is not an easy task. They have to strike a balance between profitability and the accepted social objectives of the country. The basic object of nationalizing the commercial banks was to provide the funds to neither be neglected. Sectors like agriculture, tiny industries and other weaker section of the society. Today nearly 40% of the total commercial banks advance in the priority sector. One may say that this has come in the way of profitability of the commercial banks, but it is the social obligation on the part of the government to develop economy in every front and hence it is an inevitable lending to be making to these sectors. But still, it cannot ignore the profitability concept as the organisation has to service for long, as major source of banks funds is the public deposits and the interest on their money deposited with the bank on this backdrop, let us discuss how commercial bank employ their funds and what principles they follow while lending their funds.
HOW TO COUSTOMER
ACCESS
THE
CREDIT
WORTHINESS
OF
THE
Banker cannot entertain all loan applications without enquiring the financial background of the applicants because the loan sanctioned and availed by the customer should be repaid to the banker promptly this facilitates the banker to operate the loan accounts smoothly and effectively. Therefore before granting the loan, the banker should assess the creditworthiness of the customer. The banker should examine three points. 1. Capital 2. Character 3. Capacity These are popularly known as 3c of the credit. The 3 aspects are described by certain authors as..... 1. Reliability 2. Responsibility 3. Resources
Page 11
A LENDING POLICY at The BCCB Ltd 1. Capital The level of credit should be sanctioned depends upon the personal capital (implicit cost) employed in the trade or industry. If applicant has sufficient personal funds in the business determines the quantum of loan to be sanctioned. 2. Capacity Capacity here refers to the personal creative power of the person and ability to run the business; the banker can feel that these funds will be safe in the hands of such able business man. The banker can also be assured of the prompt repayment of his loan sanctioned to that unit therefore; the banker should be exploring the technical knowledge, creativity, farsightedness, and outlook of the borrower and find out whether he is eligible for such loans. 3. Character Character here refers to the honesty and sincerity of the customer the banker should examine whether he is eligible for loans. Besides these three specific points the banker should also find out whether the proposed loan will have additional security and the loan so obtained is used for manufacture of products which are useful to the society. The general economic conditions prevailing in the country should also be considered while assessing the credit worthiness of the traders.
TOOLS WHICH AID LENDING POLICY 1. In case of business loan a) Membership document b) Marketability and liquidity of the security offering c) Interaction with the borrower d) Collateral security and stock statement e) Audited balance sheet of the company f) Project profitability and balance sheet g) Current years working result h) Registration certificate i) Memorandum articles of association and certificate of incorporation j) IT returns and assessment
Page 12
A LENDING POLICY at The BCCB Ltd k) l) m) n) Legal reports, Valuation reports, Search reports SWOT analysis Quality standards Pre-sanction inspection
2. In case of property loan a) Membership documents b) Marketability and liquidity of security offering c) Income certificate of applicant issued by local authority d) Salary certificate e) Legal opinion f) Pre- sanction inspection
3.In case of purchase loan(house) a) b) c) d) e) f) g) Membership document Marketability and liquidity of security offering Income certificate of applicant issued by local authority Salary certificate Legal opinion Pre- sanction inspection Valuation report
4.In case of vehicle loan a) b) c) d) e) f) g) h) Membership document Marketability and liquidity of the security offering Salary certificate Down payments receipt Invoice issued by distributors Valuation report Legal opinion Pre-sanction inspection
Page 13
5.In case of surety/salary a) Membership document b) Two sureties or guarantor c) Sureties of membership document d) Salary certificate (for additional security) e) Undertaking letter f) Valuation report g) Legal opinion 6.In case of Gold loan a) b) c) d) Applicant need to be a member Marketability and liquidity of security offering Valuation report Legal opinion
7.In case of cash credit or overdraft loan a) b) c) d) e) f) Membership document Details of loan pending to reimburse Details of current document Income certificate of the applicant issued by local authority Valuation report Legal opinion
8.In case of NSC loan a) Applicant need to be a member b) National saving certificate c) Postmaster report d) Valuation report e) Legal opinion PRINCIPLES OF GOOD LENDING:
Page 14
A LENDING POLICY at The BCCB Ltd 1. LIQUIDITY: By liquidity, we mean the ready convertibility of advances into cash to meet the customer demands across the counter. This doesnt mean that they should hold all the deposits they receive in the form of cash. Only a position is held to meet the demand and major portion is lent. While making such loans, the banker should bear in mind that it is easily convertible into cash without loss. Hence should make loans only of short term nature. 2. Safety Safety has been the most important principal of sound lending, because the very existence of a bank depends upon the safety of its funds. Therefore, while his funds, a bank has to see that the funds lent out by him are safe, i.e would come back. Further, he has to ensure that his advance comeback in a normal course, without being forced to resort to legal action or sale of securities to recover the advances. In order to ensure that his advances not only come back, but come back in normal course, the banker should see that his advances go to the right type of borrowers, borrowers who are men of unquestionable integrity and repaying capacity. 3. Profitability Profitability means earning profits on assets. Acquired assets were referring to the bank loan and advances. Whenever the banker obtains the deposits, they have to pay interest to share holders. A commercial bank is essentially a profit making institution so; it required to employ its funds profitable so as to earn sufficient profits to meet its expenses and to pay dividends to its shareholders. 4. Object The object of advance is also another principal to be born in mind by the banker while making advances. If he advances for unproductive purposes like consumer credit, speculation etc, The repayment of loan may be delayed and recovery will slow. 5.Diversification Another important principal to be followed by banker is to see that the loans and advances are spread to different categories. This means that advances should not be concentrated in only one sector. Every advance is a risky advance and this can be distributed
Page 15
if advances are made in different categories to large number of people scattered in a wide area.
6.Security Another guiding factor in society advance is security he will run the risk of losing money. If the loaner is prompt in repayment, then there will be no worry. But it is essential that the banker should have substantial security for its advances. This thinking is gradually changing. The purpose of advances and not the security offered is assuming importance. However traditional thinking prevails.
Page 16
REVIEW OF LITERATURE
REASEARCH DESIGHN
Page 17
A LENDING POLICY at The BCCB Ltd The formulation problem that follows the task of the research problem is the preparation of the design of the research project, popularly known as the Research Design. A research design is the arrangement of condition for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. In brief, research design must at least contain: A clear statement of the research problem; Procedure and techniques used for gathering information; The population to be studied; Methods to be used in processing and analyzing data.
STATEMENT OF THE PROBLEM The success of every bank depends upon the proper lending policy and its effective collection. The lending function of every co-operative bank is crucial because of its cooperative principle, and hence it is necessary to study the lending policy to know how the lending policy is effective and to study the profitability and overall financial operations at Bangalore city co-operative Bank ltd.
OBJECTIVES OF THE STUDY 1. To study the lending policy of the bank. 2. To study the liquidity position of the bank. 3. To study the evaluation and efficiency of the credit system of the co-operative bank ltd. 4. To analyze the financial statement of Bangalore city co-operative bank ltd with special emphasis on the assets and liabilities in respect of lending policy. 5. To study the operating system or efficiency of the co-operative bank.
SCOPE OF THE STUDY

Page 18
A LENDING POLICY at The BCCB Ltd This study was a very comprehensive study of the lending policy at the Bangalore city co operative Bank ltd to know its fact, financial status regarding the management of lending money. This study gives a clear picture about the lending policy in the previous, present and future years. This study pertains to the lending policy for the period 2010-2013. METHODOLOGY OF THE STUDY An exploratory research design is used for the above mentioned objectives and comparative analysis has been used to analyse the lending policy of Bangalore city co-operative bank from the past year data. This type of research design is identified as applicable for the study while keeping in mind:
Title of the study Purpose of the study The statement of the problem Aims and objectives of the study
Research plan for the study broadly included: Understanding Bangalore city co-operative Bank ltd. (BCCB) operations of normal, new and emerging activities. A thorough review of literature available in this line, a combination of classical text books, receipts and payment account and balance sheet has been under taken in order to develop on understanding of previous years information. Influences were drawn for almost every objective mentioned in the study and research was included in analysis part of the project.
Finally, a certain recommendation were drawn and presented to the bank by researcher. It hoped in all good faith that these recommendations would be beneficial to the sponsoring cooperative bank.
DATA NEED AND COLLECTION

Page 19
A LENDING POLICY at The BCCB Ltd This study makes extensive use of secondary data collected in the form of annual report and co-operative manuals. There was also use of primary data in the case of financing proper work and discussion help with their concern society official from various departments.
SOURCE OF DATA COLLECTION The nature of data collected was both qualitative and quantitative. Considering the above plan, researchers plan for the studies essentially a combination of qualitative aspects.
1. Primary data collection This primary data was collected mainly from assistant manager, office manager and senior executive. 2. Secondary data collection Annual report of Bangalore city co-operative Bank ltd.
LIMITATIONS OF THE STUDY This study ignores qualitative items and study was extensively based on annual report provided by the co-operative bank. If there are any changes made by societies, the findings may become misleading.
1. Secrets of the bank were maintained with the precaution, to not to disclose the confidential information to others. 2. Data collected were based on the annual reports of the bank, and information obtained during consideration with the officials of the bank. 3. The study is limited to BCCB only. 4. The analysis is on the last three years only due to lack of information.
Page 20
COMPANY PROFILE
OVERVIEW:
Page 21
A LENDING POLICY at The BCCB Ltd The Bangalore city co-operative bank was started in the year 1905 as a credit cooperative society later it was converted into a first co-operative bank in the country. The bank has 13 branches in the state along with one administration office and all the branches have been computerized under the jurisdiction of Bangalore city Cooperative Corporation, Bangalore development authority in Bangalore urban and peripheral areas. History of Bangalore city co-operative bank The bank has been making study and constituent progress on all spears having consistence on all spheres having established as on 06-01-1907 The Bangalore city co-operative bank is the most top earned co-operative bank in the country. The bank was honoured as best co-operative bank in the period of 1926, 1927 and 1928 by the Mysore province. During the year 2002 and 2004 Karnataka state government has honoured the bank as the best urban co-operative bank. The bank has been extending its credit facilities and also inculcating the habit of savings among the small traders, footpath vendors, vegetable vendors, hawkers coming under priority sectors. The bank has made advances for large number of 3 wheelers it has also provided selfemployment opportunities for large number of people with small means.
The bank provides higher rate of interest compared to other nationalized banks with respect to fixed deposits for the purpose of promoting savings habits in the minds of public and members. Various types of loan facilities are provided to members and associate members to help and encourage government employees to work efficiently by providing loan at
the lower rate of interest. The bank has raised deposits for more than 400 crores and there is new branch which is commenced in HBR layout.
Page 22
A LENDING POLICY at The BCCB Ltd The operation of the bank is throughout Bangalore co-operative ltd. Sec3(F) of the Multistate co-operative societies Act 1984 which defines co-operative principles as: Voluntary and open members: Co-operatives are voluntary organizations open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discriminations. Democratic member control: co-operative is democratic organizations controlled by their members, who actively participate in setting their policies and making decisions, me and women serving as elected representatives are accountable to the membership. Member economic participation: members contribute equitably to and democratically control their co-operative members. Usually receive limited compensation, if any on capital subscribed as condition of membership. Autonomy and independence: Co-operatives are autonomous self help organisations controlled by their members. They work independent.
Education training and information: co-operatives provide education and training for their members, elected representatives, and managers, employees so that, they can effectively contribute to the development of their cooperatives. They inform the general public particularly young people about BCCl and opinion needs about the nature and benefit of co-operation.
VISION STATEMENT OF BANGALORE CITY CO- OPERATIVE BANK Accepting deposits for the purpose of promoting saving habits in the minds of public and members. Providing various types of loans facilities to members and associate members. To help and encourage government employees to work efficiently by providing loan at loan interest rate. MISSION STATEMENT OF BANGALOR CITY
Page 23
A LENDING POLICY at The BCCB Ltd CO- OPERATIVE BANK To promote the effectiveness of credit and to reduce the risk in granting credit, through careful and continuous supervision of the operations, of the borrowing members. To reduce the cost of the management through the honorary services of members and thereby keep the cost of credit as low as possible. To make the co-operative banks credit worthy and to enable them to raise sufficient funds to finance other co-operative enterprise. To undertake banking transaction on co-operative systems as per direction of RBI, central government and state government.
Objectives of Bangalore city co-operative Bank Accepting deposits for the purpose of promoting saving habits in the minds of public and the member. Providing various types of loan facilities to members and associate members. To open new branches with permission from RBI and register of co-operative societies. To provide short term and medium term loans to credit worthy farmers. To carry out banking business. To serve as balancing centre in state. To function as leader of co-operative in kerala.
FUNCTIONS Provision of short term loans to carry out seasonal agricultural products. Accepting of deposits. Provision of remittance and payments facilities. Collection of cheques, drafts etc from the custody. Acceptance of valuables for safe custody
Page 24
BOARD OF DIRECTORS
President - Dr Devearaj TM Vice president - Sri Anjanappa Director Director Director Director Director Director Director Director Director Director Director Director Director - Smt Bhagyalakshmamma CM Sri Krishnappa K Sri Govindaraju C Sri Basavaraju Sri chikkanniah K C Sri Hanumiah Dr TP Toga Sri suresh KP Smt Vijaya GS Sri UP puranik
- Sri K Krishnamurthy Sri Doddaiah P Sri S Manjunath
Page 25
ORGANIZATIONAL STRUCTURE OF THE BANGALORE CITY CO-OPERATIVE BANK LTD.
General Manager
Deputy general manager Assistant manager
Managers
Accounting managers
HR
managers
Marketing managers
Sales managers
Accounting Maanger
Seniour Accountant
Juniour
accountant
Assistant
Attenders
COMPITITORS INFORMATION The Bangalore city co-operative bank is one of the leading co-operative banks in Bangalore city operating its activities with several branches in and around Bangalore it is facing many competitors in the market. The lists of competitors are. Apex Bank State Bank Of India State Bank of Mysore Canara Bank Karnataka Bank Syndicate Bank.
Page 26
A LENDING POLICY at The BCCB Ltd INFRASTRUCTURAL FECILITIES The bank has 160x134 sq. feet site. The building is built in 1000x100 sq. feet of the site. A ground floor and first floor is built to carry out the banking activities. It is built for own use. In ground floor, there is a head office branch of the bank and in the first floor, there is an administrative office. The head office of the bank is located in chamrajpet. It has 13 other branches. All the branches have computer facilities. Each branch has its own department which are fully furnished and well equipped for smooth functioning of the banking activities. Proper lighting, ventilation, drinking water facilities are arranged.
AWARD AND ACHIEVEMENT: The city co-operative bank has got Best urban co-operative bank in the state award at the time of Shriman Maharaja Shri Kanteerava Narasimharaja odeyar and it also got Good Cooperative Bank in state in the year 2003 and 2004. The bank for its excellent series in the year 1926, 1927, 1928 in the year 2002 and 2004 the bank got the Best urban co-operative bank from state government. YEARS 2002 2004 2007 2008 AWARDS The best urban co-operative bank in karnataka The best co-operative bank 100 years completed co-operative bank in karnataka The best rural co-operative bank.
BANK GROWTH- A BIRD VIEW Paid up capital Reserves and surplus Deposits Working capital 28, 7112,907.00 54, 7716,457.56 597, 62, 10,335.29 681, 10, 39,699.85
Page 27
A LENDING POLICY at The BCCB Ltd Loans and advances Investment Net profit Number of members Net NPA C.R.A.R% RBI classification Audit classification 444, 12, 12,211.50 299, 13, 05,825.19 50,639 1.08% 13.88% Grade 1 A
INTEREST RATES ON DEPOSITS
Particulars 30-40 days 16-96 days 91-180 days 181-364 days 365-3 years 3-5 years 5 years above
Depositors(normal) 4.50% 5.50% 6.50% 7.25% 9.00% 9.25% 8.50%
Senior citizens 5.00% 6.00% 7.00% 7.75% 9.50% 9.75% 9.00%
LOANS PROVIDE BY THE BANKS
SL.NO 1
LOANS Housing loans up to 5 lakhs Above 15 lakhs Fixed assets up to 5 lakhs
REPAYMENT PRIOD (MONTHS) 120 120 120 120
INTEREST RATE 13.58% 14.50% 15.50% 15.75%

Page 28
A LENDING POLICY at The BCCB Ltd 3 4 5 6 7 Above 15 lakhs Vehicle loan Jewellery TwowheelerVehicle loan Small-scale industries IVP/NSC/LIC BONDS 60 60 36 50 13.00% 12.50% 13.00% 16.00% 14.00%
MCKINSEY S 7S FRAME WORK The 7s model is better as Mc kinsey 7S this is because the two individual who developed this model, Tom peters and Robert waterman, had been consultants at Mc Kinsey & co during that time. They published their 7s model article structure is not organisation 1980, in their books The art of Japanese Management (1981) and In search of excellence (1982). The model starts on premise that an organization is not just structure, but consists of seven elements; The strategy, structure, systems are feasible and easy to identify. They can be found in strategy statements, corporate plans, organization charts and other documents.
Page 29
STRATEGY
STAFF
SHAREDVALUES
STRUCTURE
SKILL
SYSTEM
STYLE
STRATEGY A strategy is a long term plan chosen deliberately and consciously after a thorough analysis of internal and external environment of the organization.
Strategy indicates a specific program of action for achieving the organization objectives by efficiently employing the firms resources. It involves preparing oneself for unforeseen activities. BCCB in spite of being incepted in a competitive environment at Bangalore has achieved the best monthly sales (loans and advance) volume throughout the periods.
STRUCTURE The design of organization structure is a downward communication of information in bank. The information flows top down, from top level to lower levels. The president has the sole authority in the organization. They give instructions to the executive directors and the general manager who in turn give instructions to the lower level managers. The middle level management consists of general manager. Among these departments the the general manager division is very large. It consists of many sections and subsections. All
Page 30
A LENDING POLICY at The BCCB Ltd sectional heads will communicate or report their sectional performance regularly to general manager.
SYSTEM Training system: the bank under various categories was imported training in diverse functional areas such as assets liability management, consumer credit, housing finance, retail finance recovery. The bank adopts its own training system with the help of their training centre. Training mainly helps with updating skills, knowledge improvement. Technology system: the bank has initiated business process re-engineering with an effort to stay at the top in the compensation. It has to be enabled core banking services and ATM in head office branch.
Recruitment and selection system: the sources of recruitment at the organization in the form of both external and internal. The bank follows the recruitment and selection process that are commonly followed by the instructions of Registrar of co-operative societies (RCS). Staff: The bank is motivated to harness the unique assets of the human resources for growth of the institution and to imbibe team spirit for self and mutual development among banks staff. The bank has made inroads towards establishment of quality circle concept among its employees. BCCB does concentrate in managing the people in the organisation. The compensation packages and the career development prospects are meeting the best in the industry.
Skills: The most important software for the success of any organization is skills of the employees and of the management. The BCCB is having highly skilled employees. The skills of the organization are: Credit skills: they face the challenges in improving the asset quality suitable training programmes for updating the appraisal and credit monitoring skills, pre-sanction and postsanction supervision, including monitoring of stocks, financial statements etc, will be provided. The rigor of NPA discipline and provisioning will only increase in the days to come and they have to equip themselves for this task.
Page 31
A LENDING POLICY at The BCCB Ltd Technology skills: BCCB having a very good brand equity and loyalty of customers. It has celebrated the 100th year of service to the customers; bank has introduced ATM. Cross selling of other financial services like insurance, Non fund income, trade finance in order to improve the profitability and to make growth in business volumes more sustainable.
Operating skills: Bank has to increase non-fund income, personal segment advances & trade finance in order to improve the profitability and to make growth in business volumes more sustainable. Importance has also been given to area like low cost deposits, reduction in operating expenses taken sufficient measures to identify measure, monitor and manage various risks associated with the Banking business in the areas of credit, interest rate and liquidity. STYLE: The style of an organization becomes evident from the pattern of actions taken by top management over a period of time and the reporting relationship. It is reflected in the traditions, norms, rituals and actions of an organization. BCCB follows an entrepreneurial, innovative and centralized style of management. SHARED VALUES: Increased number of performing branches. To develop competent and vibrant human work force. To develop the competencies and skills of the employees through training (internal, external) and HRD measures. To encourage employees to share knowledge and information about the various activities in the bank through the House Magazine and other publications. To improve the work environment in the bank through welfare measures and healthy industrial relations.
Page 32
A LENDING POLICY at The BCCB Ltd SWOT ANALYSIS SWOT analysis is done for a company to find out overall strength, weakness, threats, and opportunities, lending to gauging the comparative potential of the company. The SWOT analysis enables a company to recognize its market standing and adopt strategies accordingly. Here SWOT analysis of the Bangalore city co-operative bank ltd is made to understand the positioning of the bank better.
STRENGTHS: 1. BRAND NAME: The Bangalore city co-operative bank has earned a reputation in the market for extending quality services to the market vis--vis is competitors. It has earned a strong brand name in co-operative banking. 2. VAST EXPERIENCE: The Bangalore city co-operative bank has a vast experience of hundred years in banking business. 3. DIVERSIFIED PORTFOLIO: The Bangalore city co-operative bank has the entire product under its belt, which helps it to extend the relationship with existing customer. The bank has umbrella of product to offer their customers, if once customer has relationship with the bank. Some product which bank offers are: Retail banking Business banking Merchant establishment services Personal loan and car loans. Insurance Housing loans
4. AGGRESSIVE MARKETING: The bank is known for aggressive marketing of its products. Recent strategy to push its product is, it the sole sponsored of a Kannada music show which is telecasted in ETV Kannada channel. 5. FOCUS ON ALL KINDS OF CUSTOMERS: The bank targets not only the top bracket clients but even cater to the needs of small customers. Due to this reason the bank may retain good clients effectively. 6. AGGRESSIVE APPROACH IN LENDING: Bank has an aggressive approach in lending. Because of this policy companies prefer this bank than other nationalized bank.
Page 33
WEAKNESS 1. TECHNOLOGY: From its inception, bank has not adopted a policy of selecting internationally proven and specialized packaged systems for its technology. Banks technology platform has not been acknowledged globally which as a competitive advantage for any bank. 2. NO PRESENCE OUTSIDE INDIA: Bank is having no presence outside India, because of which companies prefer MNC bank, mainly city bank. SO, if the bank tries to emerge outside India then it has a huge potential of customers. 3. POOR CUSTOMER CARE SERVICE: With its aggressive marketing this bank is rapidly increasing its customer base. They are not however increasing the manpower accordingly. This is leading to deterioration of the standard number of employees accordingly. This is causing unhealthy customer services. 4. MARKET SHARE: Bank has not got market share in the industry in according to our survey, This is great drawback for a business.
OPPURTUNITIES: 1. NEW IT AND ITES COMPANIES: IT & ITES sector is on boom in Indian market context, with new companies mushrooming in the market; it opens the door for bank to capture the huge untapped market. 2. DISSATISFIED CUSTOMERS OF THE BANK: The groups from its survey and analysis of companies have found out that there are many companies which are not satisfied with bank, so the bank with its superior service long working hours can capture those customers. 3. BUSINESS ADVISING FOR SMALL PLAYERS: The analysis has also indicated that the concept of business through very popular with the higher end players is virtually nonexistent in the lower end of the market. It should take this opportunity to provide business advising to smaller companies at competitive rate and try to take the first mover advantage.
THREATS 1. ADVENT OF MNC BANK: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can
Page 34
A LENDING POLICY at The BCCB Ltd increase the level of competition and prove a potential threat to the market share of the bank. 2. EVER IMPROVING NATIONALIZED BANKS: With PSU banks like SBI going all out to complete with the private banks and government giving them a free hand to do so, it can prove to be serious threat for the bank like the Bangalore city cooperative bank.
DATA ANALYSIS & INTERPRETATION
Page 35
TYPES OF LOANS LONGTERM LOANS MEDIUM TERM LOANS SHORT TERM LOANS LOAN TO ITS STAFF
LONG TERM LOAN House Construction loan Vehicle Loan Industrial Loan MEDIUM LOAN Surety loan Business loan Gold loan IVP/NSC/LIC Bond loan
SHORT TERM LOAN Overdraft on current account Overdraft on Deposits
LOAN TO ITS STAFF Festival Advance Staff vehicle loan Special salary Advance Staff House Building Loans
Page 36
LONG TERM LOANS HOUSE CONSTRUCTION LOAN QUANTUM OF LOAN Up to 4, 99,999 13% of interest 5, 00,000 to 14, 99,999- 13.50% of interest More than 15, 00,000 14.50% of interest PURPOSE: For the construction of house. PERIOD OF LOAN The period of loan is 180/120 months
Objective: To provide financial assistance to the middle class people to build and own house.
RELEASE OF LOANS IN 4 INSTALLEMENTS AS FOLLOWS: 1st loan installement of 25% amount are given after the completion of foundation site. 2nd installement of 25% amount is released during the ceiling of the house. 3rd installement of 25% amount is released after the ceiling during plastering time. 4th instalment of 25% amount is released for painting.
THE TOTAL LOAN AMOUNT FOR LAST FIVE FINANCIAL YEARS IS AS FOLLOWS:
Page 37
A LENDING POLICY at The BCCB Ltd YEAR 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 LOANS (amount in crores) 38.40 51.45 54.23 62.85 73.72
ANALYSIS: From the Bangalore city co-operative bank statement it is clearly analyzed that the house construction loan financial position of last five years: 2007-2008 (19.43CRORES) 2008-2009 (38.40CRORES) 2009-2010 (51.45CRORES)
2010-2011 (54.23CRORES) 2011-2012 (62.85CRORES)
Graph:
Page 38

70
62.85
60
51.45
50 40 30 20 10 0 2007-2008 2008-2009 2009-2010
54.23
38.4
19.43
2010-2011
2011-2012
INTERPRETATION: The above chart shows the house construction loan position of the last five years of the Bangalore city co-operative Bank. The comparison of has been made between 2007-08 to 2011-12. The house construction loan shows a study Increase from 19.43 crores to 62.85 crores. This shows the bank has growth towards sanction of house construction loan.
VEHICLE LOAN (Three wheeler, Cars, Trucks, Buses) Quantum of Loan: 70% of amount of loan is given on full amount of vehicles. Rate of interest: The rate of interest of vehicle loan is 13% per year. Period:
Page 39
A LENDING POLICY at The BCCB Ltd The repayment of loan is 60 months. Objectives: To hire purpose for anyone To provide loan to their business purpose for vehicles like auto rickshaws, trucks, cars, buses. To become self employed and which gradually reduces unemployment The total loan amount for last five financial years is as. YEAR LOANS (Amount in lakhs) 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 12.88 13.88 12.94 30.23 38.49 ANALY SIS:
From the Bangalore city co-operative bank statement it is clearly analyzed that the vehicle loan financial position of last five years: 2007-2008 (12.88 lakhs) 2008-2009 (13.88 lakhs) 2009-2010 (12.94 lakhs) 2010-2011 (30.23 lakhs) 2011-2012 (40.57 lakhs)
Graph:
Page 40
VEHICLE LOAN
50 45 40 35 30 25 20 15 10 5 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
45.62 35.4 28.9 33.8
15.4
INTERPRETATION: The above chart shows the vehicle loan position of the five financial year of Bangalore city co-operative Bank. The table helped to analyze the total vehicle loan differing from year to year. In the year 2008-2009 the loan amount given by the bank decreases. And the in the year 2010-2011 and 2011-2012 the loan amount increases. INDUSTRIAL LOAN: Purpose: For starting the industry. For purchase of machinery/building and other implements. Rate of interest: Rate of interest is according to the amount of loan taken by the borrower. The total loan amount for last five financial years is as follows: YEAR LOANS (Amounts in lakhs)
Page 41
A LENDING POLICY at The BCCB Ltd 2007-2008 2008-2009 22009-2010 2010-2011 2011-2012 158.4 472 472 400 400
ANALYSIS: From the Bangalore city co-operative Bank statement it is clearly analyzed that the industrial loan financial position bank as follows: 2007-2008 (158.4 lakhs) 2008-2009 (472 lakhs) 2009-2010 (472 lakhs) 2010-2011 (400 lakhs) 2011-2012 (400 lakhs)
Page 42
Series 1
500 450 400 350 300 250 200 150 100 50 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
472
472
400 400
158.4
INTERPRETATION: The above chart shows the industrial financial position of the five financial year of Bangalore city co-operative Bank. The loan amount is decreased year by year due to the slowdown in economy. MEDIUM TERM LOAN: SURETY LOAN: QUANTUM OF LOAN: Maximum amount up to 1, 00,000 Rate of interest: The rate of interest of surety loan is 16.50% Period: The period of loan is 50 months. Purpose:
Page 43
A LENDING POLICY at The BCCB Ltd To meet personal causes of people personal is taken on behalf of other persons. Features: The surety loan means if original benefit or does not pays the loan then the surety holders has to pay the amount back. The instalment must not exceed the 40% of actual salary. One person can give surety to only one borrower. The total loan amount for last five financial years is as follows: YEAR 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 LOANS (Amounts in crores) 4.54 3.74 2.73 2.12 1.67
ANALYSIS: From the Bangalore city co-operative Bank statement it is clearly analyzed that the surety loan financial position of the last five years: 2007-2008 (4.54 crores) 2008-2009 (3.74 crores) 2009-2010 (2.73 crores) 2010-2011 (2.12 crores) 2011-2012 (1.67 crores)
Graph:
Page 44
Series 1
250 200 150
214.71 157.23 89.92
100 50 0
49.75
66.74
2007-2008
2008-2009
2009-1010
2010-2011
2011-2012
INTERPRETATION:
The above chart shows the surety loan position of the last five financial year of Bangalore city co-operative Bank. The loan amount given by the bank is decreased year by year from 4.54 crores to 1.67 crores. Due to the customers delay in repaying the loan properly. Even they fail to fulfil the obligation. So the bank has decreased the disbursement of surety loan.
BUSINESS LOAN: Quantum of loan: Maximum amount up to 1, 00,000 Rate of interest: The rate of interest of surety loan is 16.50% Period:
Page 45
A LENDING POLICY at The BCCB Ltd The period of loan is 50 months. Purpose: Bank provides loans to its membership customer for their business transactions improvements. Features: This loan is provided to small scale business. This loan helps in self employment of people.
The total loan amount for the last five financial years: YEAR LOANS (Amounts in lakhs) 49.75 66.74 89.92 157.23 214.71
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
ANALYSIS: From the Bangalore city co-operative bank statement it is clearly analyzed that the business loan financial position of the last five year is: 2007-2008 (49.75 lakhs) 2008-2009 (66.74 lakhs) 2009-2010 (89.92 lakhs) 2010-2011 (1575.23 lakhs)
Page 46
A LENDING POLICY at The BCCB Ltd 2011-2012 (214.71 lakhs) Graph:
Series 1
250 200 150 100
214.71 157.23 89.92 49.75 66.74
50 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
INTERPRETATION: The above chart shows the business loan position of last five year of Bangalore city cooperative Bank. The comparison has been made between 2007-2008 to 2011-2012 the business loan shows a steady increase from 49.75 lakhs to 214.71 lakhs.
GOLD LOAN: Quantum of loan: Maximum amount up to 10, 00, 000 on gold ornaments and 1 gram gold amounts to Rs.1500. Rate of interest: The rate of interest of gold loan is 12.50% per annum.
Page 47
Period: The period of loan is 60 months. Features: This loan is especially given only in these types of co-operative banks. There is no much of security is needed.
The total loan amount for last five financial years is as follows: YEAR LOANS (Amount in crores) 7.54 11.29 15.70 22.58 34.23
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
ANALYSIS: From the Bangalore city co-operative bank statement it is clearly analyzed that the gold loan financial position of the last five year is: 2007-2008 (7.54 crores) 2008-2009 (11.29 crores) 2009-2010 (15.70crores) 2010-2011 (22.58crores) 2011-2012 (34.23 crores)
Graph:
Page 48
Series 1
250 200 150 100 50 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
242.72
162.06 119.74 85.91 37.2
INTERPRETATION: The above chart shows the gold loan position of the last five financial year of the Bangalore city co-operative Bank. The loan amount is increased year by year from 7.54 crores to 34.23 crores. So the earnings of the bank are better as for as the gold loan concerned.
IVP/NSC/LIC BOND LOANS: Quantum of loan: Maximum 70% on premium paid on IVP/NSC/LIC Bonds.
Page 49
A LENDING POLICY at The BCCB Ltd Rate of interest: The rate of interest is 14%. Interest amount rate may change from period to period as per the directions of reserve bank and Administrative board. The total loan amount for last five financial years is as follows:
YEAR
LOANS (Amount in Thousands)
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
16.74 10 10 26.10 21.711
ANALYSIS: From the Bangalore city co-operative Bank statement it is clearly analyzed that the IVP/NSC/LIC Bond loan financial position of the last five year is: 2007-2008 (14.6 thousands) 2008-2009 (167.4 thousands) 2009-2010 (10 thousands) 2010-2011 (10 thousands) 2011-2012 (21.711 thousands)
Graph:
Page 50
IVP/NSC/LIC BOND LOANS

250 200 150 100 50 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
242.72
162.06
119.74 85.91 37.2
INTERPRETATION: The above chart shows the IVP/NSC/LIC bond position of the last five financial year of the Bangalore city co-operative bank. The table helped to analyze the requirement of loan by the different citizens. The loan amount has been decreased by 99,619.
SHORT TERM LOANS: OVERDRAFT ON CURRENT ACCOUNT: Quantum of loan: Up to 4, 99,999-13.50% of interest 5, 00,000 to 14, 99,999- 14.50% of interest More than 15, 00,000- 14.75%
Page 51
A LENDING POLICY at The BCCB Ltd Purpose: For urgent need of money for business. To enhance the relationship between customers and bank. It is helpful for business person. Eligibility: The account holder should have maximum amount and maximum times of transactions. The account holder has to be person who has holding from many years. The person in past should have maintained good balance. Permission: The account holder can get this privilege by consulting respective manager. Manager has to clarify with his senior authority.
The total loan amount for last five financial years is as follows: YEAR LOAN (Amount in lakhs)
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
29.07 31.83 66.12 62.11 90.65
ANALYSIS:
Page 52
A LENDING POLICY at The BCCB Ltd From the Bangalore city co-operative bank statement it is clearly analyzed that the overdraft on current account financial position of the last five year is: 2007-2008 (29.07) 2008-2009 (31.83) 2009-2010 (66.12) 2010-2011 (62.11) 2011-2012 (90.65)
OVERDRAFT ON CURRENT ACCOUNT

100 90 80 70 60 50 40 30 20 10 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
90.65 66.12
62.11
29.07
31.83
INTERPRETATION:
Page 53
A LENDING POLICY at The BCCB Ltd The above chart shows the overdraft on current account position of the last five financial years of Bangalore city co-operative bank. This is due to the variation in requirement of customers. OVERDRAFT ON DEPOSITS: Amount of overdraft: It is purely given on deposits basis; up to 85% of loan is eligible. Rate of interest: Deposit rate +1%
Purpose: To meet the personal needs of the customer. To develop a good relationship between the bank and customer. Eligibility: An account holder should submit the original deposit bond. He should have record of transaction and maintain the good balance. Permission: Account holder should approach the manager in respective department. The management will decide to allow or not. The total loan amount for last five financial years is as follows:
YEAR
LOANS (AMOUNTS IN LAKHS) 37.20

Page 54
2008-2007
A LENDING POLICY at The BCCB Ltd 2008-2009 2009-2010 2010-2011 2011-2012 85.91 162.06 119.74 242.72
ANALYSIS: From the Bangalore city co-operative bank statement it is clearly analyzed that the overdraft on current account financial position of the last five year is:
Graph
2007-2008 (37.20 lakhs) 2008-2009 (85.91 lakhs) 2009-2010 (162.06 lakhs) 2010-2011 (119.74 lakhs) 2011-2012 (242.72 lakhs)
OVERDRAFT ON DEPOSIT
300 250 200 150 100 50 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
242.72
162.06 119.74 85.91 37.2
Page 55
A LENDING POLICY at The BCCB Ltd INTERPRETATION: The above chart shows the overdraft on deposit position of the last five financial year of the Bangalore city co-operative Bank. The table helped to analyze the requirement of loans by different customers.
LOAN TO ITS STAFF: FESTIVAL ADVANCE: Quantum of advance: Maximum amount is 3000 Period: The period of loan is 10 months. Purpose: To meet the expenses of the festival. To celebrate the festival and maintain the culture of different religion. Repayment: The amount is processed in their salaries. The total advance amount for last five financial years is as follows: YEAR LOANS (AMOUNTS IN THOUSANDS)
2007-2008 2008-2009 2009-2010
127.8 180 140.7

Page 56
A LENDING POLICY at The BCCB Ltd 2010-2011 2011-2012 150.3 153.3
ANALYSIS: From the Bangalore city co-operative city statement it is clearly analyzed that festival advance financial position of the last five year is: 2007-2008 (127.8 thousands) 2008-2009 (180 thousands) 2009-2010 (140.7 thousands) 2010-2011 (150.3 thousands) 2011-2012 (153.3 thousands)
Graph:
FESTIVAL ADVANCE
180
180 160 140 120 100 80 60 40 20 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
127.8
140.7
150.3
153.3
Page 57
INTERPRETATION: The above chart shows the festival advance position of the last five financial years of the Bangalore city co-operative bank. The advance amount varies mainly due to the services rule.
STAFF VEHICLE LOAN: Quantum of loan: 70% of amount is given on full amount of the two wheeler vehicle the Maximum amount up to 50, 000. 70 % of amount is given on full amount of the four wheeler vehicle the maximum is up to 3, 00,000. Rate of interest: The rate of interest for two wheeler and four wheeler is 8%. Period: Two wheeler Four wheeler 72 months 84 months
Purpose: For the transportation of its staff. For their personal use. Repayment: The loan amount is in their salary with a very low interest rate than other.
Page 58
A LENDING POLICY at The BCCB Ltd The total loan amount for the last five financial year is as follows:
YEAR
LOANS (AMOUNTS IN LAKHS)
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
6.45 15.26 25.67 34.27 36.43
ANALYSIS: From the Bangalore city co-operative bank statement it is clearly analyzed that the staff vehicle loan financial position of the last five year is as follows: 2007-2008 (6.45 lakhs) 2008-2009 (15.26 lakhs) 2009-2010 (25.67 lakhs) 2010-2011 (34.27 lakhs) 2011-2012 (36.43 lakhs)
Page 59
STAFF VEHICLE LOAN

40 35 30 25 20 15 10 5 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
34.27 25.67 15.26 6.45
36.43
INTERPRETATION: The chart shows the staff vehicle loan position of the last five financial year of the Bangalore city co-operative Bank. In all the year the loan amount is increased continuously.
SPECIAL SALARY ADVANCE: Quantum of loan: Maximum amount up to 1, 00,000 Rate of interest: The rate of interest of special salary advance is 8%.
Period: The period of advance is 120 months.

Page 60
A LENDING POLICY at The BCCB Ltd Purpose: For personal purpose of staff. To expense before the salary date. Repayment: The advance amount is deducted in future salaries. The total advance amount for last five financial years is as follows. YEAR LOANS (AMOUNT IN LAKHS) 87.4 84.6 100.35 92.69 89.28
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
ANALYSIS: From the above Bangalore city co-operative Bank statement it is clearly analyzed that the special salary advances financial position of the last five year is: 2007-2008 (87.4 lakhs) 2008-2009 (84.6 lakhs) 2009-2010 (100.35 lakhs) 2010-2011 (92.69 lakhs) 2011-2012 (89.28 lakhs) Graph:
Page 61
SPECIAL SALARY ADVANCE

105 100 92.69 95 90 85 80 75 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 87.4 84.6 89.28 100.35
INTERPRETATION: The above chart shows the special salary advance position of last five financial year of the Bangalore city co-operative Bank. The advance amount varies due to the service rule. STAFF HOUSE BUILDING LOAN: The loan taken from the bank employee, he/she have to clear the loan before one year of his retirement period of time.
Rate of interest: The rate of interest is 6% of EMI. Purpose: Staff to own their house. To secure themselves. Repayment:
Page 62
A LENDING POLICY at The BCCB Ltd The loan amount is deducted in their salaries. The total loan amount for last five financial years is as follows:
YEAR
LOANS (AMOUNT IN CRORES)
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
1.65 2.20 2.53 2.81 2.81
ANALYSIS: From the Bangalore city co-operative Bank statement it is clearly analyzed that the staff house building loan financial position of the last five year is: 2007-2008 (1.65 crores) 2008-2009 (2.20 crores) 2009-2010 (2.53 crores) 2010-2011 (2.81 crores) 2011-2012 (2.81 crores) Graph:
Page 63
STAFF HOUSE BUILDING LOAN

3 2.5 2 1.5 1 0.5 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
2.53 2.2 1.65
2.81
2.81
INTERPRETATION: The above chart shows the staff house building loan position of the last five financial year of the Bangalore city co-operative Bank. The table helped to analyze the loan differing from year to year. The loan amount is increased year by year between 1.65 crores to 2.81 crores.
LOANS AND ADANCES
YEAR
LOANS (AMOUNT IN CRORES)
2007-2008
150.17
Page 64
A LENDING POLICY at The BCCB Ltd 2008-2009 2009-2010 2010-2011 2011-2012 233.67 294.84 352.98 444.12
ANALYSIS: From the Bangalore city co-operative Bank statement it is clearly analyzed that the Loans and Advances made during the last five financial years. 2007-2008 (150.17 crores) 2008-2009 (233.67 crores) 2009-2010 (294.84 crores) 2010-2011 (352.98 crores) 2011-2012 (444.12 crores)
Graph:
LOANS AND ADVANCES

10% 30% 16% 2007-2008 2008-2009 2009-2010 2010-2011 20% 24% 2011-2012
Page 65
A LENDING POLICY at The BCCB Ltd INTERPRETATION: The above chart shows the loans and advances position of the last five financial years of the Bangalore city co-operative Bank. The table helped to analyze the total loans and advances differing from year to year. The loan amount is increased by year to year. So the profit of the bank is gradually increasing.
CHAPTER 05 SUMMERY OF FINDINGS CONCLUSIONS AND SUGGESTIONS
Page 66
It is found that, lending on loans and advances are increasing by year which Favourable signals of lending policy. Loan on NSC shows slight decrease in the 2011 and increased in the year 2012 and there was a decrease in the year 2013. The Bangalore city co-operative bank has been decreasing its clearing of
is
Debts from past three years, since it is not a favourable indication to the bank; the bank has to the take immediate action to improve lending on clearing of debts. In the last three years lending against gold and jewellery is in increasing trend, which is favourable indication of good lending as it is a secured lending. Loan on vehicle is fluctuating from the past years. it has ones increased and again decreased in the years 2012 and 2013. Loan on surety is decreasing from last three years, which is not a favourable Indication of good lending as it is a secured lending. From the past three years the bank has increased its long term loans. Simple loan shows a slight increase in the year 2012 and decreed in the year 2013 which is fluctuating year to year. In the past three years, the current liabilities position of the co-operative bank is in increasing trend, but the bank is in a good position to repay the debts.
Page 67
Page 68

A LENDING POLICY at The BCCB Ltd

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

A LENDING POLICY at The BCCB Ltd

Hochgeladen von

Copyright:

Verfügbare Formate

A LENDING POLICY at The BCCB Ltd FINANCE