A STUDY ON LOANS AND ADVANCES

OF
SUCO CO-OPERATIVE BANK
BY
PRAVEEN KUMAR P
USN: 1CR17MBA61
SUBMITTED TO,
VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELAGAVI

In partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION
Under the Guidance of
INTERNAL GUIDE EXTERNAL GUIDE
Mrs. PIYALI ROY CHOWDHURY Mr. SHRIDHAR B
Assistant Professor Loans Department
Department of MBA SUCO BANK

Department of Management Studies and Research Centre

CMR Institute of Technology,
#132, AECS Layout, IT Park Road, Bangalore-560037.
2017-19 Batch
1. INTRODUCTION OF CO-OPERATIVE BANK

Definition:

“A Co-operative bank, as its name indicates is an institution consisting of a number

of individuals who join together to pool their surplus savings for the purpose of eliminating the
profits of the bankers or moneylenders with a view to distributing the same amongst the depositors
and borrowers.” The Co-operative Banks Act, of 2007 (the Act) defines a co-operative bank as a
co-operative registered as a co-operative bank in terms of the Act whose members:

1. Are of similar occupation or profession or who are employed by a common employer or who
are employed within the same business district; or

2. Have common membership in an association or organization, including a business, religious,

social, co-operative, labor or educational group; or

3. Reside within the same defined community or geographical area.

4. Reside within the same defined community or geographical area.

Co-operative Banking – an Introduction:

Co-operative bank, in a nutshell, provides financial assistance to the people with small means to
protect them from the debt trap of the moneylenders. It is a part of vast and powerful structure of
co-operative institutions which are engaged in tasks of production, processing, marketing,
distribution, servicing and banking in India. 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. These 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. The Co-operative Banking System in India is characterized by a relatively
comprehensive network to the grass root level. This sector mainly focuses on the local population
and micro- banking among middle and low income strata of the society. These banks operate
mainly for the benefit of rural areas, particularly the agricultural sector.
FUNCTIONS OF BANKING:

A. Primary Functions of Banks

B. Secondary Functions of Banks

A. Primary Functions of Banks:

 Accepting Deposits
 Granting of Loans and Advances

B. Secondary Functions of Banks:

 Agency Functions
 General Utility Functions

Need of the study:

Banking is one of the important financial services in the economy and today business and
commercial activities as well as individual financial needs are supported by a versatile banking
products and service. Granting of loans and advance is the primary function of banking productive
or unproductive. Banks prefer to give loans only for productive purpose. The bank sanctions long
term loans required by business people for purpose of capita equipments. It helps for farmers,
individual and others. There are numerous aspects of loans and advance and its effective growth.
2. ORGANISATION PROFILE

SUCO Souharda Co-Operative Bank was established in 1993 the founder and chairman of Sri
Manohar Maski. The bank started started talulk center of Raichur district, Sindhanur was
establisdhed in 1995 as Sindhanur Urban co-operative bank under the leadership of Mr.Manohar
Maski. The bank became popular as SUCO Bank; hence bank changed its registerd name its self
to SUCO Bank. The theme SUCO Bank draws the motivation to start the bank from the success
of Janatha Bazar, Sindhanur, SUCO Bank started in computerized and air conditioned environment
from day one . The Bank is one of the best Souharda Sahakari Act (KSSA) 1997. The Bank is the
present is functioning with of branches in the year of 2015-16 and in 2017-18 the bank opened 10
branches and has total 28 branches today. It has sent proposal to RBI seeking premision for
opening 8 new branches in Karnataka.

OBJECTIVES:-

 To provide funds to coutmers and public

 To provide funds for agriculture and agriculture related activities
 To provide loans for non- agriculture activities such as purchasing of vehicles, housing
loans etc.
 To provide loans to costumers for business activites
 BOARD OF DIRECTORS

Manohar maski Founder and director

Mohit maski Chairman

P S Agnihotri CEO

Venkataktishnna Director

Chandu Sab Director

Naganagouda Director

Satya Narayana Director

Venkantesh Rao Director

Venkata Reddy Director

Jagadishappa Director
3. LITERATURE REVIWES

A number of studies related to performance of co-operative banking sector in India have

been conducted. Here, an attempt is being made to provide an overview of various aspects and
issues of this study through the review of existing literature. Some of the main studies selected for
review have been discussed below.

Bhatia (1978), in his study titled, “Banking Structure and Performance − A Case Study of the
Indian Banking System” attempted to analyze the economic performance of Indian banking system
as reflected by its output, price and profitability during the period 1950-68. He found that profit of
the Indian banking system during the said period had an upward trend. The study suggested
deregulation of interest rates to enhance the profitability of financial institutions and to ensure a
competitive banking environment which would ultimately result in better services.

Kulkarni (1979), in his study titled, “Development Responsibility and Profitability of Banks”
stressed upon social responsibilities of banking sector. He was of the view that looking for profit
maximization only was not true profitability of banks as social benefits arising out of bank
operations cannot be ignored. He observed that while fulfilling the social responsibility, banks
should try to make the basic banking business as successful as possible, reduce cost, improve
banking system and increase the overall profitability.

Markand (1979), in his book titled, “Social Priority Index of Public Sector Banks” evaluated the
performance of public sector banks. With the help of performance index consisting six quantitative
indicators such as branch expansion, priority sector credit, 24 and wage cost, he concluded that the
priority sector financing was essential, and necessary. For better performance in this sector he
suggested that lending power should be delegated to the branch managers.
Kalyankar (1983) in his study titled, “Wilful Default in Loans of Co-operatives” examined the
trends in deposits, share capital, working capital, loans outstanding, advances, overdues and
recoveries at the district level financing institutes. Socio economic factors responsible in projecting
and promoting future development in the operations and approaches of the co-operative credit
organizations were also considered to examine the specific progress made by Central Co-operative
Bank of Parbhani District. The study revealed that the cropping intensity, irrigation facility and
working capital of the societies were the major factors for explaining overdues at primary
agricultural credit societies’ level. The socio-economic factors were not responsible for increasing
overdues at the borrowers’ level, but overdues were mainly mounted due to the non-economic
factors in case of wilful defaulters.

Kurulkar (1983), in his published work on agricultural finance in backward region, reported
glaring defects in the set-up of co-operative credit system. He pointed that out of the ten sample
owners who obtained long- term credit from the co-operative banks, 30% could not secure short-
term credit. Lack of short- term or production credit to the farmers who availed long-term credit
resulted in lower output per acre, thereby resulting in overdues.

Reddy (1985), in his study titled, “Overdues Appraisal and Management in Banking” analysed
the relationship between the lending and recovery of an apex bank. His findings suggested that the
lending and recovery of the apex bank had not 25 been proportionate, i.e., either the apex bank
could not meet the entire credit needs of the primary banks or the latter could not borrow the funds
from the apex bank. The primary banks were constituted by people not for co-operative services
but for their vested interests. With the help of Coefficient of Variation technique, he proved that
there was a wide dispersion in lending followed by recovery. He finally concluded with the help
of t-test that the association between lending and recovery was not satisfactory.

Chopra (1987), in her book, studied operational efficiency of some selected public sectors banks.
She found the lack of professionalism in banking industry and stressed for the introduction of
scientific management practices to enhance profits and profitability of public sector banks. She
recommended comprehensive management of costs as well as earning of the banks.

Devadas (1987), in his book titled, “Co-operative Banking and Economic Development” studied
the role of Assam Co-operative Apex Bank Ltd. in economy of the State. He found that apart from
working as a commercial bank it had to discharge three other functions, i.e., to finance primary
credit societies, to act as banking centre for primary societies, and to undertake supervision of
primary societies. He found that bank had not been able to achieve much in these three fields due
to lack of adequate support from government of the state.
 WEEKLY REPORT

S.NO DATE / WEEK ACTIVITY

01 FIRST WEEK Started study of Understanding structure, culture and

functions of the organization. Also observed banking
activities of loans and advances. And collected organization
profile with discussion with external guide

02 SECOND WEEK Prepared research instruments for collection of primary and

secondary data through discussion and referring annual
reports of the SUCO BANK.

03 THIRD WEEK The collected data analyzed based on using charts, graphs,
AND Observed competitors in market and SWOT of the
SUCO BANK.

04 FOURTH WEEK Meeting conducted with guide and collected Literature

reviews.

05 FIFTH WEEK Collected information like rate of interest list of the loans,
periods, categories.

06 SIXTH WEEK Preparation of findings, suggestions