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INDUSTRY PROFILE
2.1 INTRODUCTION:
Banking in India in the modern sense originated in the last decades of the 18th century. The first
banks were Bank of Hindustan (1770-1829) and The General Bank of India, established 1786
and since defunct.
The largest bank, and the oldest still in existence, 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.
The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's
independence, became the State Bank of India in 1955. For many years the presidency banks
acted as quasi-central banks, as did their successors, until the Reserve Bank of India was
established in 1935.
In 1969 the Indian government nationalized all the major banks that it did not already own and
these have remained under government ownership. They are run under a structure know as
'profit-making public sector undertaking' (PSU) and are allowed to compete and operate
as commercial banks. The Indian banking sector is made up of four types of banks, as well as the
PSUs and the state banks; they have been joined since the 1990s by new private commercial
banks and a number of foreign banks.
Banking in India was generally fairly mature in terms of supply, product range and reach-even
though reach in rural India and to the poor still remains a challenge. The government has
Developed initiatives to address this through the State Bank of India expanding its branch
network and through the National Bank for Agriculture and Rural Development with things like
microfinance.
Indian Banking Industry currently employees 1,175,149, employees and has a total of 109,811
branches in India and 171 branches abroad and manages an aggregate deposit of 67504.54
billion (US$1.1 trillion or 840 billion) and bank credit of 52604.59 billion (US$890 billion or
OVERVIEW
Co-operative movement quite well established in India. When Co-operative societies Act passed
in 1904 there was no provision for the formation of central bank. In 1914 the Maclagen
committee envisaged a three tier structure for Co-operative banking viz. primary agricultural
credit societies (PACs) at the gross level, Central Co-operative banks at the district level and
state Co-operative banks at state level or apex level. The first urban Co-operative bank in India
was formed nearly 100 years back in Baroda.
In beginning of 20th century, availability of credit in India more particularly in rural areas
was almost absent. Agricultural and related activities were starved of organized, institutional
credit. In the formative stage co- operative societies run on community basis and their lending
activities were restricted to meeting the credit requirement of their members. The concept of
urban co- operative bank was first spelt out by Mehta Bhansali committee in 1939 which on
urban co= operative bank. Provision of section 5(CCV) of banking regulation Act, 1949 defined
an urban Co-operative bank as a primary Co-operative bank other than a primary Co-operative
society was made applicable in 1966.
The Karnataka Co-operative societies Act and coming under the purview of banking regulation
Act 1949. The bank should have been functioning for a period of at least three years and should
be a member of the local clearinghouse and deserving cases, the Apex Bank may even consider
enrolling banks that have been functioning for one year as member. The bank should have
mentioned a current account with the head office branch of K.S.C. Apex Bank Ltd. All DCC
banks, urban Co-operative banks and their branches are eligible to become members of the
IMAS scheme, in which case the minimum working capital of the banks should be Rs.150 Lakh.
There should not be continuous defaults in the maintenance of the cash reserves ratio and liquid
assets as required under section of banking regulation Act 1949.
Main principles of Co-operative banks are Voluntary and Open membership.
Democratic Member Control.
Member Economic Participation.
Autonomy and Independence.
Education, Training and Information.
Co-operative among Co-operatives.
Concern for community.
Urban Co-operative
Banks (UCBs)
Rural Co-operative
State Co-operative
Banks (SCB)
Primary Agricultural
Credit societies
(PACS)
These credit institutions have a federal three tier structure. At the apex of the system is a state
Co-operative Banks (SCB) in each state. At the middle (or district) level, there are central Cooperative Banks (CCBs) also known as district central Co-operative Banks. At lowest (or village)
level are the primary Agriculture Co-operative societies (PACS). The smaller states and Union
Territories (UTs) have a two-tier structure with state Co-operative Banks directly meeting the
credit requirement of PACS.
The SCB is the highest agency of the three-tier co-operative credit structure in a state. It serves
as a link between RBI, CCBs and PACS. The RBI provides credit to lower level co-operatives
through the SCB. This function of the RBI has now been taking over by the NABARD. The SCB
also acts as a balancing center for CCBs. The exercises general control and supervision over
CCBs and PACS.
These Banks act as a link between the SCB and PACS. The main task of CCBs is to lend money
to affiliated village primary societies. The CCBs are expected to attract deposits from the general
public.
These societies form the basic unit of the co-operative credit system in India. These voluntary
societies based on the principle of one man one vote have posed challenge to the exploitative
practices of the village money lenders. The farmers and other small time borrowers come on
direct contact with these societies. The success of the co-operative credit movement depends
largely on the strength of these villages level societies. These are more than one Lakh such
societies in the country at present. A major objective of PACS is to serve the needs of weaker
sections of society. For this purpose, the people with limited means, particularly scheduled castes
and scheduled tribes, are encouraged to become members of these societies. Government has
promoted multi-purpose societies in tribal areas for the benefit of people living there.
Generally, these Co-operative have two tiers, Viz., State Co-operative Agriculture and Rural
Development Banks (SCARDBs) at the state level and primary Co-operative Agriculture and
Rural Development Banks (PCARDBs) at the taluk level. However, some states have a unitary
structure with the state level banks operating through their own branches; three states have a
mixed structure incorporating both unitary and federal systems.
NABARD and Co-operative sector:
National Bank for Agriculture and Rural Development (NABARD) is an apex institution
accredited with all matters concerning policy, planning and operations in the field of credit for
Agriculture and other economic activities in rural areas in India. NABARD serves as an apex
refinancing agency for the institution providing investment and production credit in rural areas.
Other main activities of NABARD include:
Initiating measures towards institution building for improving absorptive capacity of the
credit delivery system, including monitoring, formulation of rehabilitation schemes,
restructuring of credit institution and training of personal.
Coordinating the rural financing activities of all institutions engaged in development work at
the field level.
which 56 scheduled banks. About 79 percent of these are located in five states, like Andhra
Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. Recently the problems faced by a
few co-operative banks have highlighted some of the difficulties these bank face and policy
endeavors are geared to consolidating and strengthening these sector and improving governance.
Future Prospects of Co-operative Banks
RBI has decided not to allow urban co-operative bank (UCBs) with less than Rs.50crore net
worth to spread their operation outside their state of jurisdiction. The
UCBs was not credit risk but interest rate risk, as interest rates paid by these banks, particularly
on deposits, were out of sync with the rest of the banking sector. The sheer number of weak
UCBs, which is well over 200, is a cause for concern for the RBI.
Rehabilitation of these banks may involve strategies such as the registrars directing co-operative
courts for speedy recovery process and execution of decrees, unviable branches being either
relocated or closed down, exploring avenues for getting additional capital and merger with a
well-managed bank.
The RBI shifted its policy focus gradually from crisis management to recovery management. On
the credit delivery front, now developments including the introduction of the base rate
mechanism and waiver of security/ margin norms for agricultural loans. Financial literacy and
financial inclusion have been the thrust areas. Among the important financial measures unveiled
has been the securities and insurance Laws (Amendment and validation) Bill, 2010, passed by
parliament to provide a joint mechanism to resolve inter-regulatory differences.
RBI is taking number of steps to improve IT infrastructure facilities and initiated steps for further
absorption of technology.
There are two major technological milestones are achieved they are:
1) Technological advancement with all public sector banks adopting or about to adopt
computerization. The number of PSBs adopting core banking solutions has been on the rise.
2) From the point of view of financial inclusion, there has been a steady increase in the
penetration of bank branches and ATMs, especially in rural areas.
Historical Achievements
The HDCC Bank is continuously increasing its self-potentiality through this it enlarges all over
the district and rapid increasing in their profit, which helps to farmers economic development.
1. With the co-operation of government it provides loan facilities at 4 % rate of interest to the
farmers for the period of one year.
2. It aims to achieve Rs.15000.00 lakhs loans to the farmers. Now it is the first bank in the
district which facilitates Loans of Rs.11600.00 lakhs to the farmers.
3. Facilitating Accident insurance for all the farmers who are got the agricultural loans from the
bank.
4. Providing the Yashaswini insurance facility to all the co-operative societies members.
5. Awareness programmed for the farmers regarding banking transactions by issuing the Kissan
credit cards.
6. Providing training facilities to the Administrative members of co-operative societies.
7. By establishing 10571 Swa-sahaya sangha in the district, bank contributing towards the
economic development of the agriculturist.
8. Providing more loan facility for the animal husbandry, floriculture and other non-agricultural
activities to the farmers under the Swarna Jayanthi Gram Swarojgar scheme.
9. Providing attractive interest on deposits for the customers and 1% extra for senior citizens.
ORGANISATION STRUCTURE
BOARD OF DIRECTOR
MANAGING DIRECTOR
DEPUTY MANAGING
DIRECTOR
ADMINISTRATION SECTION
ACCOUNT SECTION
ADMINISTRATION
MANAGER
ACCOUNT MANAGER
CLERK I
CASHIER
CLERK II
TYPIST
ATTENDERS
COMPUTER
OPERATOR
2.3 Promoter
(Rs. In Lakhs)
Sl.No. Particulars
At
the At
the At
the At
the At
the At
the
end
of end
of end
of end
of end
of end
of
31-331-331-331-331-331-32009
2010
2011
2012
2013
2014
Share Capital
988.48
1004.93
1071.07
1284.32
1607.47
1923.79
Reserves
4747.41
4700.27
5230.67
6138.31
7336.22
7758.1
Own Fund
2609.13
2750.14
3091.18
4197.83
5601.90
6287.61
Deposits
Borrowing
NABARD
Investments
9189.90
Loans issued
Farmer members
48000
Agriculture Loan
Non
Loan
9935.46
Loan Outstanding
Agriculture Loan
Non
Loan
Working Capital
10
% of Loan recovery
81.80%
76.67%
90.49%
95.24%
89.68%
94.29%
11
SHG Formation
11110
11890
12642
13327
13655
13925
from
Agriculture
Agriculture
8174.13
12
SHG/SGSY
outstanding
loan
13
JLG
Loan
Groups)
(119
14
1906.82
2226.35
2788.71
3060.91
3741.49
4474.38
243.31
230.73
198.08
Net Profit
145.03
172.02
238.38
313.16
406.22
436.82
15
Audit Classification
16
1322.07
2978.66
2554.02
1668.49
2165.18
2550.64
17
% of Gross NPA
4.88%
9.99%
7.71%
4.22%
4.84%
4.82%
18
Net NPA
378.07
2126.66
1302.02
277.39
40.52
200.6
19
% of Net NPA
1.45%
7.34%
4.08%
0.73%
0.10%
0.40%
20
CRAR
11.72
10.95
11.41
10.82
11.22
Mission
Promoting sustainable and equitable agriculture and rural development through effective credit
support, related services, institution building and other innovative initiatives.
In pursuing this mission, NABARD focuses its activities on:
Credit functions, involving preparation of potential-linked credit plans annually for all
districts of the country for identification of credit potential, monitoring the flow of
ground level rural credit, issuing policy and operational guidelines to rural financing
institutions and providing credit facilities to eligible institutions under various
programmers
Development functions, concerning reinforcement of the credit functions and making
credit more productive
Supervisory functions, ensuring the proper functioning of cooperative banks and
regional rural bank.
Kisan Credit
card
Yashaswini
Health
Insurance
Housing Loan
and Salary
Earners Loan
Overdraft loan
to Traders and
other
industrial
Medium Term
Loan
(agriculture)
to formers
Product
and
Services
Vehicle Loan
to farmers at
less interest
Gold Loan
Deposit Loan
Consortia
Loan
Cash Credit
Loan to Cooperative
Societies
VIJAYANAGARA BRANCH
B.M.ROAD
08172-261104
08172-256200
KUVEMPUNAGAR BRANCH
HEMAVATHINAGAR BRANCH
KUVEMPUNAGAR HASSAN
HEMAVATHINAGAR HASSAN
08172-231132
08172- 250056
BUDDA MARGA
8172-252030
08176-252232
CITY BRANCH
LADIES BRANCH
BELUR BRANCH
K E B ROAD ARKALGUD
H.D.C.C.BANK
LTD,BELUR
BRNCH,TEMPLE ROAD,BELUR
08175-220238
08177-222236
HALEBEEDU BRANCH
ALUR BRANCH
HALEBEEDU
08177-273465
08170-218224
HANGRHALLY BRANCH
BANAVARA BRANCH
H N PURA ROAD
BANAVARA
08175-265027
08174-235528
JAVAGAL BRANCH
TEMPLE ROAD
08174-271575
08176-257568
ARSIKERE BRANCH
NUGGEHALLY BRANCH
TC ROAD NUGGEHALLY
08174-232205
08176 233397
KONANUR BRANCH
SAKALESHPURA BRANCH
KONANUR
NEAR
OLD
BUS
STAND
SAKALESHPURA
08175-226256
08173-244110
HOLENARASIPURA BRANCH
COURT ROAD
08175-273264
08176-252049
HIRISEVE BRANCH
08176-226051
08172-267381
SRINIVASPURA BRANCH
UDYAPURA BRANCH
B M ROAD
08176-270246
08176-272010
GANDASI BRANCH
GANDSI HAND POST
08174-220628
The HDCC Bank has its private transport vehicle for covering the branches of district.
It has well-furnished guest rooms, meeting hall, board hall and training center.
It has 60% to 70% of rented building and remaining its own buildings.
Commercial Banks like Canara Bank, State Bank of Mysore , State Bank of India etc.,
It is supported by Government.
Weakness
Staff recruitment is not done properly at HDCC bank too much political interference.
The process of computerization of HDCC is rather slow.
Though computers have been installed, trained staff is not available lack of skilled
employees.
Lack of professional management.
Lack of initiative and innovation among the staff and members.
Opportunities
Cooperative banks are pioneers in the field of micro finance it has huge potential in the
rural areas.
Setting up of Cooperative banks by the RBI as recognition of this sector as an important
part of the banking system in 1984.
Growing Indian banking sector especially the rural sector.
More number of branches is being set up as there are number of opportunities.
Threats
Huge competition in the market.
Increasing incidence of frauds and misappropriation.
Tightening of Income Recognition and Asset Classification Norms had a direct bearing on
the balance sheet of the HDCC.
Increasing litigation between management and employees.
External pressure to finance ineligible borrowers.
Loan waiver announcement of government then and there.
Departmental interference in financial matters in various forms.
Technological advancement with all branches adopting or about adopt computerization. The
number of branches adopting IT infrastructure solution has been on the rise. From the point
of view of financial inclusion, there has been a steady increase in the penetration of branches,
especially in rural areas
The program for formation of SHGs and merger of banks pioneered by NABARD has been
successful in providing financial services and support from the banking sector to extremely poor
and landless people. Now to help very small farmers, small farmers, tenanted farmers, produce
partners and sleeping partners, those engaged in business outside the agricultural sector,
NABARD has proposed the formation of Joint Liability Groups to develop comprehensive loan
schemes and disburse them.
Bank has implemented this plan by forming Joint Liability Groups and through this scheme
disburses loans for the purpose of animal husbandry.
Already for the period 2011-12, 161 groups have been formed through primary agricultural cooperative societies and among them 112 groups have been provided with loans of Rs. 241.00
lakhs.
For the year 2102-13, 145 groups have been formed and loan of Rs. 123.29 lakhs has been
extended to 79 Joint Liability Groups.
As on year ending 31-3-2013, total of 306 Joint Liability Groups have been formed and 189
groups have been provided with loan of Rs. 364.25 lakhs. As on year ending 31-3-2013, the
outstanding loan amount is Rs. 256.34 and the recovery rate is 100%.
For the year 2013-14, we have set a goal of forming a total of 1000 groups and extending loans
to 500 more groups.
(A) Facilities
Any Branch Banking
Any Branch Banking (ABB) is a facility for our customers to operate their account from any of
our networked branches. The branch where the customer maintains his account is the base
branch and the branch from where he carries out his transactions is referred as the remote
branches. Any Branch Banking facility is available in all branches of HDCC Bank.
Eligible Customers
All adult individual customers and proprietary concerns having an SB, Current account, Corp 4in-1 Current a/c, Overdraft a/c .
As a part of extension of more and more facilities to our customers, Core banking facility is also
being introduced in our Bank.
ATM Facilities
We provide all kind of loans for the common people from automobile loans to home loans...
Interest Rates
SI
TYPES OF LOAN
RATE OF INTEREST
14%
17%
17%
GOLD LOAN
12.5%
BUSINESS LOAN
17%
13.50%
14%
OVERDRAFT LOAN
17%
13%
13%
10
UP TO 1 LAKH
0%
1 TO 3 LAKH
1%
ABOVE 3
10.75%
UP TO 5 LAKH
14%
NO
11
HOUSING LOAN
LAKH
LAKH
TO
10 14.25%
10 LAKH
TO 20 15%
LAKH
ABOVE 20 LAKH
12
15.50%
10
LAKH
TO
15%
20 15.50%
LAKH
ABOVE 20 LAKH
16%
Rs.
Income
Rs.
Interest on Deposits
209,602,891.50
Interest on loans
430,750,548.30
Interest on Borrowings
98,519,622.00
Interest on Investments
124,003,565.05
Staff Salaries
86,188,435.17
Bank
commission
Misc.Income
Administrative
expenditure
24,718,796.80
Provisions
97,000,000.00
Depreciation
11,933,641.26
Total
527,963,386.73
65,478,766.88
Provisions on
Income Tax
& 38,688,039.95
Advance 22,000,000.00
2,696,250.00
40,622,206.57
Total
593,442,153.30
Total
593,442,153.30
As on 31 As on 31-03- Assets
03 2012
2013
Government
share
As on 31 As on 31-0303 2012
2013
Cash Balance
58927300.00 54001988.00
Coop. Share
128431871.0 160,746,960.0
0
0
Bank balance
149876422.3 226853068.29
0
Reserves
216083424.1 245,502,916.0
7
5
Share
investments
75190000.00 88,990,000.00
Provisions
394947107.2 485,317,911.2
4
4
SLR
Investments
730825392.6 1,022,000,000.
4
00
S
A
O 1376654000. 1,511,012,000. Non-SLR
Borrowings
00
00
investments
272402043.0 844,790,528.0
0
0
MT
Sch. 204744460.0 379,877,500.0
Borrowings
0
0
Agriculture
loans
2271482710. 2,615,898,783.
07
07
1681738653. 1,854,177,309.
87
32
Deposits
Branch
Adj. 14536990.55 39,214,780.69
Cr. Balance
Cash
loans
DD Payable
11920749.90 5,794,486.00
Discounting of 199848.00
bills/cheques
2,744,222.00
Other
liabilities
93126095.70 77,949,960.46
DD
Recoverable
2517887.00
2,864,870.00
Audit
Objection
2800929.00
2,800,929.00
Fixed assets
102047532.2 101,018,783.0
6
0
Misappropriati 4048942.00
on Belur
4,048,942.00
Other Assets
29157025.76 65,099,253.95
Hassan Tq Br 373835.00
Mis-app
&
Recoveries
2007 08
373,835.00
Audit
objection
2800929.00
2,800,929.00
Misappropriati 4048942.00
on Belur Br
as
per
68
4,048,942.00
Net Profit
31315640.88 40,622,206.57
credit 2525765.01
4,003,312.01
Order
Hsn Tq Br Mis 373835.00
app
&
Recoveries 07
08
Recoverable
Total
Contingent
Liabilities
598036.00
600556.00
373,835.00
5384114285. 6,889,665,823.
91
64