Bank

SERICULTURISTS CUM FARMERS CO-OPERATIVE BANK
CHAPTER 1
INDUSTRY PROFILE
1.1 ORIGIN OF THE INDUSTRY

CO-OPERATIVE BANK
Introduction
Co-operative banks are an important constituent of the Indian Financial System, judging by the role
assigned to them, the expectations they are supposed to fulfil, their number and the number of offices
they operate. The co-operative movement originated in the West, but the importance that such banks
have assumed in India is rarely paralleled anywhere else in the world. Their role in rural financing
continues to be important even today, and their business in the urban areas also has increased in
recent years mainly due to the sharp increase in the number of primary co-operative banks. Some of
the co-operative banks are quite forward looking and have developed sufficient core companies to
challenge state and private sector banks.
Co-operative movement in India
The co-operative movement in India has its origin in agriculture and allied sectors. The first Co-
operative Credit Societies Act was enacted in 1904 subsequently to more comprehensive legislation
called the Co-operative Societies Act was enacted. This Act provided for the creation of the post of
registrar of co-operative societies and registration of co-operative societies for various for various
purpose and audit. Under the Montague-Chelmsford Reforms of 1919 cooperation became provincial
subject and provinces were authorized to make their own cooperation laws. Under the Government of
India Act 1935 Co-operative were treated as a provincial subject. The ‘Co-operative Societies' is state
subject under entry No 32 of the state List of the Constitution of India.
In order to cover Co-operative Societies with membership from than one province, the Government
of India enacted the Multi-Unit Co-operative Societies Act 1942. This Act deals with incorporation
and winding up of co-operative societies having jurisdiction in more than one province. A need was
felt for a comprehensive Central Legislation to consolidate laws governing cooperative society. This
Dept. of MBA, Dr.AIT, Bangalore Page 1

led to the enactment of Multi-State Co-operative Societies Act 1984 by the Parliament under Entry
No 44 of the Union List of the Constitution of India.
After Independence, co-operative assumed a great significance in poverty removal and faster
socioeconomic growth. They became an integral part of the Five year plans. As a result they emerged
as a distinct segment in Indian economy. In the First Year Plan it was specifically stated that the
success of the plan would be judged among other things, by the extent it was implemented through
co-operative organizations.
Co-operative movement in Karnataka
Karnataka had build a traditional and culture for and effective network of co-operative in the state
the origin of co-operative credit movement in Karnataka can be traced pursuing of first Co-operative
act on 18th Oct 1904 in Shared was the first urban bank formed in Bombay Karnataka area. The
Bangalore city co-operative credit was registered on 18th Dec 1906. In Karnataka there were 302
primary co-operative urban banks and are the salary earners.
Type of bank and working in par with the nationalized, commercial banks, and their functioning by
and large, self supplying and not dependent on outside progress
Formation of a co-operative society
This society must be formed under the co-operative societies act, 1912 or under the relevant state co-
operative society law. It can be formed by at least 10 adult members. The members willing to form a
society must have common bond among them. They may be the residents of some locality,
employees of some organization, belonging to some group having affinity etc. The basic idea is that
all the persons intending to form a society should have some common objections to achieve.
Different types of co-operative society
Primary Agriculture Credit Societies:

 Operate in villages. A cooperative credit society can be formed by more than ten persons in
most of the states. Deposits are accepted by these societies from their members and they
provide them short term and medium term loans.
Central Cooperative Bank:

 These banks provide financial assistance and supervise the primary cooperative societies of a
district or any part of it.
State Cooperative Bank:
 There is main cooperative bank in every state that runs and lends money all the central
cooperative banks in that state.
Primary Cooperative Agriculture and Rural Development Bank:
 Provide long term loans by mortgaging immovable property of its debtors as security.
State Cooperative Agriculture and Rural Development Bank:
 Whole State comes under its jurisdiction and it advance loans to Primary Cooperative
Agriculture and Rural Development Banks.
Urban Cooperative Bank:
 These banks operate in urban areas and accept deposits from the public and also advance
loans to them.
 Supervised by the RBI and managed by the State governments.
Structure of co-operative banking in India
The structure of cooperative network in India can be dividing into 2 broad segments
1. Urban cooperative banks
2. Rural cooperative
Urban Cooperative bank:
It can be further divided into scheduled and non-scheduled. Both the Categories are further divided
into multi–state and single–state. Majority of these banks fall in the non-scheduled and single-state
category
 Banking activities of Urban Cooperative Banks are monitored by RBI.

 Registration and Management activities are managed by Registrar of cooperative Societies

(RCS). These RCS operate in single-state and Central RCS (CRCS) operate in multiple state.
Rural Cooperative bank:
These banks are further into short-term and long-term structure. The short-term cooperative banks are
three tiered operating in different states, there are
1. State Co-operative Banks- They operate at the apex level in state.
2. District Central Co-operative Banks- They operate at the district levels.
3. Primary Agricultural Credit Societies- They operate at the village and grass-root level
Likewise, the long-term structures are further divided into-
1. State Cooperative Agriculture and Rural Development Banks (SCARDS)-This
Operate at state level.
2. Primary Cooperative Agriculture and Rural Development Banks (PCARDBS) This
Operate at district/block level.
The rural banking cooperatives have a complex monitoring structure as they have a dual control
which has led to many problems. A Forum called State Level Task Force on Cooperative Urban
Banks (TAFCUB) has been set-up to look into issues related to duality in control.
 All banking activities are regulated by a shared arrangement between RBI and NABARD
 All management and registration activities are managed by RCS.

1.2 CURRENT STATUS / SCENARIO OF THE INDUSTRY

 Turnover 278 Crores at present
 Loan and Advances 39 Crores
 Deposits 48 Crores
 Interest free Agriculture loans 3.5 Crores
 Dividend paid 20%
 Profit After Tax 1.18 Crores
 NPA 14.59%

CHAPTER 2
ORGANIZATION PROFILE
2.1 BACKGROUND OF THE ORGANIZATION
S.C.F.S Co-operative bank limited is a premium private sector Indian bank with a heritage of 40
years and 3 million satisfied customers. Started in the date 13/09/1976 as the name "Sericulture's cum
farmer's service co Operative bank" in Hoskote town. The name bank derives from the Italian word
Banco desk or bench", used during the renaissance by Jewish Florentine banker, who used to make
their transition above a desk covered by a green table cloth. However, there are traces of banking
activity even in ancient Time. In fact, the word trace its origins back to the ancient Roman Empire,
were moneylenders would set up their stalls in the middle of enclosed courtyards called macula on a
long bench called a banco, from which the words banco and bank are derived. As a money changer,
the merchant at the banco did so much invest money as primer rely convert the foreign currency into
the only legal tender in Rome that of the imperial mint. The earliest evidence of money changing
activity in depicted on a silver drachma coin from ancient Hellenic colony trapezes on the black sea,
modern Trabzon, c.350-325 BC, presented in the British museum in London. The coin shows a
bankers table (trapeze) laden with coin pun on the name of the city. A bank is a financial Institution
that accepts deposits and changes those deposit into lending activities. Bank primarily provides
financial services to customers while enriching investors. Government restrictions on financial
activities by banks vary time and location Banks are important players in financial markets and offer
services such as investment funds and loans. In some countries such as Germany, banks have
historically owned major stakes in industrial corporations while in other countries such as the United
States banks are prohibited from owning non financial companies. In France bank assurance is
prevalent as most bank offer insurance services (and real estate services) to their clients. The level of
government regulation of the banking industry varies widely, with countries such as iceland. Having
relatively light regulation of the banking sector, and countries such as china having a wide variety of
regulation but no systematic process that can be followed typical of a communist system.

Background of co-operative bank:
Co-operative was introduced in Indian in the early years of the present century as a means of helping
the poor agriculture to face their economic conditions. It started as a movement for providing credit
to agriculturists and was further extended to other type of activities. It has become a part of our
national planning. It is recognized that, co-operation should progressively become the basis of
organization in many branches of economic life. Co-operative have played an important role in
promoting agricultural and rural development in India, particularly in the fields of credit, supply of
production inputs, processing and marketing of agriculture produce.
REGISTER NUMBER:
DRB R.G.N.S-113/76-77 on 13/09/1976
Hoskote is taluk in Bangalore rural district, India. Headquartered at the hoskote town, it
consists of five Hoblis - Anugondanahalli, Jadigenahalli, kasaba, nandhugudi and sulibele.

2.2 ACHIEVEMENTS/AWARDS
 Trade award from IFFICO.

 Administrative Best Institute in Bangalore Urban area .
 Only one computerized institution 3 district Kolar, Chikkaballapur, Banglaore Rural .
 For excelity award from APEX Bank 2018-19.
 Government of Karnataka graded in ‘A’ classification by Audit department.
 Providing agriculture loans at 3% interest.
 Donated Rs. 60000 towards north district of Karnataka flood relief fund and contributed Rs.
1lakhs to construct a house for flood affected families.
2.3 NATURE OF BUSINESS

Co-Operative Banks are small financial institutions that offer the lending facility to the small
businesses in both urban and non-urban regions. These are monitored and regulated by the Reserve
Bank of India (RBI) and come under the Banking Regulations Act, 1949 as well as the banking laws
act, 1965. The Co-Operative Banks have a huge significance for the small businesses as these have
around 67% penetration in villages and account for 46% of the net funding for the rural businesses
through support for processing, housing, warehousing, transport, dairy, etc.
Some middle class and lower-class people may form a society in order to achieve some goals
according to the rules of co-operative bank. These offer credit services in the urban and semi-urban
regions. Thus, they are not considered as agricultural credit societies. Primary Co-Operative Banks
receive concessional refinance service from RBI and IDBI from time to time for them to offer
housing loans and other types of loans that can be used by small businesses.
• Cash Trading:
Co-operative society conducting business on a cash basis and allow no credit. Cash trading does not
involve bad debts and credit collection expenses.
• Government Regulation and Control:
Society is regulated by the Bangladesh Co-operative Society Act 1984. A society can be registered
only if it satisfies the condition hair down by the status for this purpose.
• Elimination of middleman:
The key objective of Co-operative society is to eliminate middleman and to establish direct contract
between member and customers.

2.4 VISION MISSION, QUALITY POLICY

VISION:
 “Providing banking service with smiling face to our custom smile”.
 “ The bank shall contribute to building progressive and good standards of co-operative
societies in the service of farmers and rural mass”
MISSION:
“To mobilize deposits, disburse loan prudently and invest surplus wisely with involvement of
committee, dedicated and hardworking staff to achieve the best”.
QUALITY POLICY:
SCFS Co-operative society Ltd, are committed to be the Bank of the people by rendering all
innovative banking services at an affordable cost in a consistent, seamless manner and adaptable to
changes with utmost social commitment, and we share all our gains to the people of the locality.
2.5 PRODUCTS/SERVICES PROFILE

KCC (kissan credit card) loan
He should be living in bank service area. Crop wishes, the Kissan credit card was introduced in the
year 1997-98 aim at providing adequate and timely credit supports from the banking system to the
farmers for their cultivation needs in flexible and cost effective manner. The scheme enables farmers
to purchase agricultural inputs such as fertilizer, pesticides and draw cash for their production needs.
Gold loan

Market value of the gold on 70% of loan authorized apparel recommended amount.
Personal loan
On the basis of salary on percentage 5%, 10%.
Medium term loan
 Dairy loan (purchase of cross bid cow)
 13 years encumbrance certificate
 Trip agreement with borrower consult dairy and bank (for supply of milk and loan repayment
purpose)
 Insurance coverage
Tractor loan
 Minimum 5 acres land should be there

 Hypothecation to the bank in RC book
 Insurance coverage
Pledge loan
KVP-80%

MSC (national service crops)
SHG & SSHG
 Members limit from 10-20 maximum

 UN registered group
 Loan in the basis of capital of SHG i.e. 1:5
 Limit 30000-600000
 Self-employment
SCFSC Bank personal loan
The accelerated growth in the customer market has bought in number of competitors with packages
and much liberalized financial assistance to the individual while the growing economy has played a
pivoted role in strengthening the buying powers of millions of Indian nationals. The various financial
scheming are only uncreative and useful to there the financiers have found and an immense potential
in there are of lending with yield and scatted risk.
1) Facility purpose
2) Financial for personals needs
3) Facility type
4) Unsecured loans

Eligibility
 Salaried individuals including SCFSC group member
 Self-employed professionals
 Self-employed individuals/proprietorship
Loan range
Minimum Rs 20000 and minimum Rs 25000 in case of gold credit card holders program maximum
Rs 10000
Program range
 Income proof program
 Surrogate income program
 Corporate tie-up
 Loans to SCFSC group employees
Tenure
 Minimum tenor of 12 months for individuals under income program and 6 months in case of
track record program
 Minimum tenor of 60 months for individuals under income program
 36 months under track record program
 48 months for SCFSS group employee

Fees
Processing fee 2% for individuals 1% for corporate tie-ups.Predominates fee 2% of principle

outstanding. Fee structure will be announced by retail from time to time. To salaries and self
employed professional.
Age
21 years as on the date Personal loans of application 55 years as on the date of application or 60 years
or less as on maturing of the loan.
Interest rate
 13% for salaries customers and self-employed professionals
 13% for existing SCFCS Bank customers
 13% for self employed non-professionals

2.6 OWNERSHIP PATTERN

Members of Co-Operative society are the true owners.

2.7 COMPETITORS INFORMATION

 Urban Co-Operative bank:- The term Urban Co-operative Banks (UCBs), though not
formally defined, refers to primary cooperative banks located in urban and semi-urban areas.
These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This
distinction does not hold today. These banks were traditionally centered around communities,
localities work place groups. They essentially lent to small borrowers and businesses. Today,
their scope of operations has widened considerably.
 Multipurpose Co-Operative bank: - it is the only movement in the cooperative sector that is
run by sex workers, making it a torchbearer in the history of workers cooperatives. Sex
workers of this cooperative have achieved economic and financial independence through the
hard work, dedication, and solidarity of its members.
Low interest loans and high interest rates on savings have allowed sex workers to realize
wider horizons and pursue previously unimaginable goals and dreams for themselves, their
families and colleagues.
 Registers Credit Co-Operative bank:- Credit cooperative society registration is basically

registering credit cooperative society according to the legal documentation and with a group
of people who have the same motive. Society Registration is very important for credit co-
operative society The credit cooperative society is one of the types of cooperative
society and is a part of a multi-state co-operative society.
 State bank of Mysore:- State Bank of Mysore is a nationalised public sector bank founded
on 2 October 1913. It is head-quartered in Bangalore and is one of the associate banks of the
State Bank of India. It provides deposits, personal banking products and the services provided
includes loans, mobile services etc. The bank has a total of 976 branches employing more
than 10627 employees
 State bank of India

 HDFC bank
 Karnataka bank
 Syndicate bank

2.8 INFRASTRUCTURE DETAILS
SCFS bank has following infrastructure facilities
1. ATM’s
2. Internet facility
3. Data warehousing and mining
4. Treasury and Investment
5. Credit and Debit card
6. Security arrangement
7. communication facility with cash van during cash remittance
8. Installation of Hotline with currency chest
9. Strong and safe room for currency chest
10. Burglar alarm system in all branch
11. Automatic fire alarm system in all branches
12. Fire proof cabinet in all branches
2.9 FUTURE GROWTH AND PROSPECTS

 All the branches should become computerised with ATM facility
 Undertaking commercial activities
 Increasing sales
 Becoming a RBI clearing member
 Turnover 350 Crores for next year
 Loan and Advances 45 Crores for next year
 Deposits 60 Crores in 2020
 Interest free Agriculture loans 5 Crores in next year
 Dividend paid 25% in 2020
 Profit After Tax 1.50 Crores in 2020
 NPA 8.5% in 2020

CHAPTER 3
MCKINSEY’S 7S MODEL FRAMEWORK AND PORTER’S FIVE

FORCE MODEL
3.1 7S MODEL FRAMEWORK
The 7-s framework of McKenzie’s is a value based management (VBM) model that describes how
one can holistically and effectively organize a company. The model indicates the interrelationship
between the major aspects of the company and the way in which they are coordinated.
McKinney 7S framework development in the early 1980s by Tom Peters and Robert waterman, two
consultants working at the McKinney and company consulting firm, the basic premise of the model is
the model is that there are seven internal aspects of an organization that need to be aligned if it is to
be successful.
The 7S model can be used in a wide variety of situations where an alignment perspective is useful,
for example to help you:
 Improve the performance of a company.

 Examine the likely effects of future changes within a company
Determine how best to implement to proposed strategy
The Seven Elements
The McKinney’s 7S model involves seven interdependent factors which are categorized as either
“hard” or “soft” elements:
“Hard” elements are easier to define or identify and management can directly influence them: These
are strategy statements; organization charts and reporting lines: and formal processes and IT systems.
“Soft” elements, on the other hand, can be more difficult to describe, and are less tangible and more
influenced by culture. However, these soft elements are as important as the hard elements if the
organization is going to be successful.

Hard Elements Soft Elements

Strategy Staff
Systems Skills
Structure Style
Shared values
The model starts on the premise that an organization is not just structure, but consists of seven
elements:
The 7-s model is represented by seven inter-connected circles arranged with six spaced around
the seventh (Shared Values) in the centre. This networked ‘Atomium-like’ image illustrates
well, the network nature of these dimensions and their inter-relatedness. The Seven S are:

3.1 1. Shared Values:-

Altogether the industry is very important for the whole economy and is one of the industries on
which the economic growth of the country is dependent. Shared value is satisfying the farmers and
small and medium scale industries first. Mission of apex bank is committed to continuously nurture,
develop and service the small sector through the need based products and services. The values that
the bank upholds most are “Farmers Satisfaction”. This bank focuses over their farmers and industrial
demands and wants. They also come up with various schemes like housing loans, vehicle loans,
instalment loans and mortgage loans. These are the purpose of attracting the farmers and industries
and feel satisfactions by the banks.
1. To remove Superstition and ignorance.
2. To spread education among all to sub-serve the first principle.
3. To inculcate the habit of thrift and savings.
4. To transform the financial institution not only as the financial heart of the community but the
social heart as well.
5. To assist the needy.
2. Skill:-
The blend of management skills with employee orientation and employee skills with organizational
loyalty is unique to SCFS cooperative Bank. Having introduced successfully the SCFS cooperative
bank with an entire in house team of I.T. and Non –I.T. officers itself is a proof and track record for
the skills of the prudent banker with the focus of migration of another 1500 branches to the CBS is a
big leap in this direction.
Training policies and programmers are suitably designed, modified and updated on a continuous
basis to upgrade the knowledge levels and skills of its Executives, Officers, and Workmen on par
with the best in the industry. While several new programmers are introduced in tune with the
Corporate Goals, the existing programmers are made more interactive and learner –friendly. Risk
Management and Basel II are the focal areas of their training programmers to ensure Bank’s

readliness to move over to the new Basel II regime and extra care is taken to sensitize the workforce
to these issues.
The bank has taken its first step in e –learning initiative with the uploading of reading materials on
Export Finance, Agricultural Lending and Financing SSI on its Intranet. During the year, emphasis
was given to train executives / officers in the areas of Risk Management, Risk Based Supervision,
Basel II, Agricultural Lending, Credit Management, Corporate & Retail Credit, Recovery
Management, Marketing & Relationship Banking, Foreign Exchange business and CBS.
3. Strategy:–
 To provide low cost loan and advances to farmer sectors

 Agriculture allied loan facilities for A class members
 Educating members regarding savings
 Providing agriculture inputs thought sales counters
Strategy means actions a company plans in response to or in anticipation of challenges in the external
environment. today lots of changes are taking place in the banking environment of our country. The
Union Bank of India, in order to respond to the changes, has formed following action plans with
specific reference to pricing and people.
Action plans-Pricing:
Increasing emphasis on fee based, commission based activities such as selling insurance products,
introduction of money transfer, Collection of utility bills and other fee based services like Mutual
Fund distribution which helps the Bank to be more competitive.
Action plans-People or Employees:
-Training employees on marketing of products like schematic loans, insurance, money transfer etc.
-Giving incentives to employees for group performance in are as such as liking other income,
contribution to substantial recovery of advances, procurement of additional SB and current accounts
and deposits etc.

4. Style:-
Consequently, The industry is able to attract the very best staff, and is very demanding of them. This
is exactly the view of the highly efficient and effective management team. The decisions relating to
department matters are taken by the departmental heads. The bank follows a participative leadership
style which allows the ideas, suggestions etc. for the betterment of the bank. The team members are
cooperative rather than being competitive.
All organizations have their own distinct culture and management style. It includes the Dominant
values, beliefs and norms which develop over time and become relatively Enduring features of the
organizational life. The bank has democratic style of leadership, Unlike autocratic leadership style, it
allows its employees in decision making and they Are free to given suggestions in interest of the
bank.
5. Staff:–
There is a huge number of new employees every year in the industry. All the staff employed are
highly professional as they are employed after a serious of rigorous training and a number of
interviews. The workforce is a highly motivated one as the overall turnover proves this fact. As a
whole team member’s opinions are held with high regard.
6. System:-
Every organization has some systems or internal processes to support and implement The strategy
and run day-to-day affairs. These processes are normally strictly followed And are designed to
achieve maximum effectiveness The kind of systems used by the Bank are
 Computer systems:
The bank has got all the best facilities to meet there quirements of their customers, keeping in mind
the booming of business sector and the very much urge of meeting the Fast transactions. The bank
has launched the SCFS cooperative bank by using Finale which makes the customer using his
account not only in his branch but any Branch of the bank.
 Risk management systems:
It means managing the risk, the objective of the bank is to maximize its profit by making Investments
in profitable channel. Thus by minimizing the risk bank tries to gain Investors confidence and
enhances its profitability.

 Control system:
The bank has very good control systems in all areas of its operations, its make Continuous review
from time to time, And has adopted very strict measures to maintain Its work standards, and the bank
also under goes audit inspection to measure its Performance to meet the customer complaints and to
settle down the routine problems.
7. Structure:–
Moving for advances and modern banking transactions to the newly contracted Areas with attractive
counters and self workers facilities to the members.
The banking in India is well organised with the work being divided accordingly and systematically
through the lower level, middle level and the top-level. The overall working or functioning of the
banking sector is monitored by the RBI( Reserve Bank of India).
PRESIDENT
VICE-PRESIDENT
BOARD OF DIRECTOR
GENERAL MANAGER
ACCOUNTANT
ASSISTANT ACCOUNTANT
SENIOR ASSISTANT
EMPLOYEES

MEMBERS OF THE BANK

 SHRI. K.KRISHNAMURTHY - PRESIDENT
 SMT.PUTTSLSKSHMI CHANDRAPPA - VICE PRESIDENT
 SHRI.M.MUNIYAPPA-DIRECTOR
 SHRI. K.SATISH- DIRECTOR
 SHRI VENKATESH MURTHY- DIRECTOR
 SHRI. C.V.GANESH-DIRECTOR
 SHRI.K.B.KRISHAPPA- DIRECTOR
 SMT.R.SUJATHAG.K.NARAYANASWAMY-DIRECTOR
 SHRI.RAMACHANDRA-DIRECTOR
 SHRI. RAJANNA
 SHRI.T.NARAYANASWAMI- CEO
3.2 PORTER’S FIVE MODEL
The focused structure of an industry is an alternate critical segment of recognizing variables
that are a danger to lessen benefit. A standout amongst the most proficient approaches to
evaluate aggressive issues is to consider Michael Porter's five-power examination. He has
highlighted five such components:
 Rivalry between existing competitors,

 Threat of entry by new competitors,
 Price pressure from substitute or complementary products.
 Bargaining power of buyers, and
 Bargaining power of suppliers.

1. Threat of New Entrants
Threat of new entrants refers to the possibility that the profits of established firms in the industry may
be eroded by new competitors. The extent of the threat depends on existing barriers to entry and the
combined reactions from existing competitors. The fewer the entry barriers, the higher the threat of
new entrants. If a new firm can launch its business with a low capital investment and operate
efficiently despite its small scale of operation, it is likely to be a threat. The major barriers to new
entries are many including patents and brand identification, high capital requirements also create
barrier to entry due to the need to invest large financial resources to compete or risky or
unrecoverable advertising and research (Bateman & Snell, 2004). Another factor is the switching

costs in cases where a barrier to entry is created by the existence of one-time costs that the buyer
faces when switching from one supplier's product or service to another. Access to Distribution
Channels also deters the new entrants due to the need to secure a distribution channel for its products.
There are also cost disadvantages independent of size or economies of scale that bars new entrants.
The already established industries may have advantages independent of economies of scale through a
proprietary
Government Policy - Competition between firms is restrained by the local government policies and
laws, and government plays an indirect role to affect entry barriers. The forms of restraints are many
and varied, such as national standards, license requirements, safety regulations, and limitation on
access to raw material (Porter, 1998). In different industries the major governmental and legal
barriers are different (Grant 2010). Nowadays governments withdraw from business areas. The
outcome is an increasing deregulation. Deregulation describes the removal of controls raised by the
government on the operation of industries. During the process of liberalization, residual risk is
dissolved and thus allows a restructuring of the affected areas.
2. Bargaining Power of Buyers
The more open the transactions are, the greater the force of the buyers is, partly because this reduces
their costs to seek for and select producers. In the banking industry, the bargaining power of buyers is
strong, because there are many firms in this industry; it is very easy to find other supplier in the
industry. The power of customers can be described as the “flip side of powerful suppliers”. If the
buyers have a high market power they are able to push prices downward, prevail better quality or
they can force expanded services. These also reduce the profitability of the industry. The Bargaining
Power of Buyer is high if the buyers are large, they are ably to switch easily to another supplier who
maybe are in numbers.

3. Bargaining Power of Suppliers

Generally, this entails assess of how easy it is for suppliers to drive up prices. This is often driven by
the quantity of suppliers of each key input, the distinctiveness of their product or service, their
strength and control over you, the cost of switching from one product or service to a different, and so
on. The less the supplier choices you have, the more powerful your suppliers are. Supplier bargaining
power is likely to be high when: the market is dominated by a few large suppliers rather than a
fragmented source of supply, there are no substitutes for the particular input; the suppliers customers
are fragmented, so their bargaining power is low; the switching costs from one supplier to another are
high; there is the possibility of the supplier integrating forwards in order to obtain higher prices and
margins. This threat is especially high when; the buying industry has a higher profitability than the
supplying industry; Forward integration provides economies of scale for the supplier; the buying
industry hinders the supplying industry in their development (reluctance to accept new releases of
products); and the buying industry has low barriers to entry.
4. Threats of Substitute Products / Services
All firms within an industry compete with industries producing substitute products and services
because substitutes reduce the potential returns of an industry by placing a ceiling on the prices that
firms in that industry can profitably charge. Identifying substitute products involves searching for
other products or services that can perform the same function as the industry‟s products. A threat
from substitutes exists if there are alternative products with lower prices of better performance
parameters for the same purpose. They could potentially attract a significant proportion of market
volume and hence reduce the potential sales volume for existing players. By Porter’s definition,
threat of substitute products is the availability of a commodity or a service that the buyer can buy in
place of the industry’s product or service.
The availability of a substitute goods and services threat influences the profitability of a
sector because buyers can decide to pay for the substitute commodity or service as an alternative to
the business‟ commodity or service.

5. Rivalry among exiting competitors

Rivalry is the competitive struggle between firms in an industry to gain market share from each other.
Intensity of rivalry is the competitive struggle between firms in an industry to gain market share from
each other. This force describes the intensity of competition between existing companies in an
industry. High competitive pressure results in pressure on prices, margins and profitability for every
single company in the industry. This is determined by the number of players of about the same size,
number of players with similar strategies, differentiation between players and their products, price
competition, market growth rates and barriers for exit.
In pursuing an advantage over its rivals, a firm can choose from several
competitive moves: Changing prices - raising or lowering prices to gain a temporary advantage;
improving product differentiation - improving features, implementing innovations in the
manufacturing process and in the product itself. The firms can equally reposition themselves from the
„old way‟ as the customers perceived them to be. The firms within the industry that will differentiate
their products from others will have a unique opportunity to attract customers at a premium price. A
good example for this is the way Standard Chartered have sections secluded for their premium
customers who do not queue for services.

CHAPTER 4
ANALYSIS OF FINANCIAL STATEMENT AND SWOT ANALYSIS
FINANCIAL STATEMENT
Financial statement are prepared for the purpose of the presenting a periodical review of a report and
progress by the management and summary of the significance of accounting policies and other
exploratory information.
A periodic review of the report by the management and deals with status of the investment in the
business and result achieved during the period under review they reflect a combination of recorded
facts.
FINANCIAL STATEMENT ANALYSIS
Financial Statement Analysis is prepared at the end of the financial year. They are called as financial
reports or final accounts prepared for the purpose of indicating the financial health of the business in
terms of earnings and financial status or condition as a particular period. They are the end products of
the accounting system; serve as a language for communicating the results of business operations to
owners, creditors and the general public.
Methods of Financial Statement Analysis are as follows
1. Comparative Statement.
2. Common Size Statements.
3. Trend Ratios or Trend Analysis.
4. Average Analysis.
5. Statement of Changes in Working Capital.
6. Fund Flow Analysis.
7. Cash Flow Analysis.
8. Ratio Analysis.
9. Cost Volume Profit Analysis

4.1 RATIO ANALYSIS

This chapter mainly concentrates as analysis of financial statement and interpreting the results. The
balance sheets and the profit and loss accounts of the company are analysed and a ratio analysis for
the same has to be done and the results are to be interpreted. Balance sheet and profit and loss
accounts also compare and a ratio analysis has to be done.
The fallowing ratios are calculated
1. Current ratio
2. Quick ratio
3. Gross profit ratio
4. Debt equity ratio
5. Proprietary ratio
The formula for each ratio are as fallows

1) Current ratio= current assets/current liabilities
2) Quick ratio= (current asset-inventory)/current liability
3) Gross profit ratio= gross profit/net sales*100
4) Debt equity ratio = Share capital / total liabilities
5) Proprietary ratio= shareholders fund/ total assets

CURRENT RATIO
Years Current assets Current liabilities Ratio
2017 54,84,43,187 50,46,54,699 1.0867
2018 54,79,06,965 49,67,82,138 1.1029
2019 58,58,41,279 52,76,25,825 1.1103
Current Ratio= Current Asset / Current Liabilities
1.2E+09
1.1103
1.0867 1.1029
1E+09
52,76,25,855
800000000 50,46,54,699 49,67,82,138
600000000
400000000
54,84,43,187 54,79,06,965 58,58,41,279

200000000
0
2017 2018 2019
Current asstests Current liabilities Ratio
In 2017 current ratio was 1.086 and it increases to 1.102 and it increases to 1.110 in 2019 year

QUICK RATIO
Years Current Asset Current Liabilities Inventories Ratio
2017 54,84,43,187 50,46,54,699 25,44,633 0.1087
2018 54,79,06,965 49,67,82,138 24,34,302 1.0980
2019 58,58,41,279 52,76,25,825 25,44,633 1.1055
Quick Ratio = Current Asset - Inventories / Current Liabilities
1.2E+09 0.1087 1.098

2544633
1E+09 2434302
504654699
800000000 496782138
1.1055
600000000
2544633
400000000
548443187
547906965 527625825
200000000
0
58581279
2017
2018
2019
Current Assets Current Liabilities inventories Ratio

PROPERITORY RATIO
Years Shareholders fund Total assets Ratio
2017 1,82,38,320 54,84,43,187 0.0332
2018 1,94,64,898 54,79,06,965 0.0355
2019 2,08,78,598 58,58,41,279 0.0356
Proprietary ratio= shareholders fund/ total assets
700000000
0.0356
600000000 0.0332 0.0355
500000000
400000000
300000000 58,58,41,279
54,84,43,187 54,79,06,956
200000000
100000000
0 1,82,38,320 1,94,64,898 2,08,78,598

2017 2018 2019
Shareholders fund Total Assets Ratio

DEBT TO EQUITY RATIO

Years Share capital Total Liabilities Ratio
2017 1,82,38,320 54,84,43,187 0.0332
2018 1,94,64,898 54,79,06,965 0.0355
2019 2,08,78,598 58,58,41,279 0.0356
Debt to equity ratio = Share capital/ total liabilities
700000000
0.0356
600000000 0.0332 0.0355
500000000
400000000
300000000 58,58,41,279
54,84,43,187 54,79,06,965
200000000
100000000
0 1,82,38,320 1,94,64,898 2,08,78,598

2017 2018 2019
Share capital Total liabilities Ratio

GROSS PROFIT RATIO
Years Gross profit Net sales Ratio
2017
2018
2019
Gross profit ratio = Gross profit / Net sales ×100

4.2 SWOT ANALYSIS

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate
a company's competitive position and to develop strategic planning. SWOT analysis assesses internal
and external factors, as well as current and future potential.
A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths and
weaknesses of an organization, its initiatives, or an industry. The organization needs to keep the
analysis accurate by avoiding pre-conceived beliefs or gray areas and instead focusing on real-life
contexts. Companies should use it as a guide and not necessarily as a prescription
Strengths:
 The participation of members is in big values.

 The institution provides trendy business to the members to village level.
 The establishment management will elect by members of the society.
 Right to potent staff with required equalization
 Strengths and weaknesses are essentially internal to the organization and relate to matters
concerning resources, programmers and organization in key areas.
 Separate from state government on subscribed / interest free loans
 The institution have a facilities to take government AIDS for contrition and for farmers.

Weaknesses:
 Non participation of the members of the institutions.

 Politically interfaces
 Lack of modern technology information
 Unable to provide agriculture allied loans at right time
 Inefficiency of unskilled / semi skilled staff
 Loss making or advance conspectus announced by state government
Opportunities:
 Good financial position creating a good reputation for future bank loans and borrowings
 Skilled workforce means that they can be moved and trained into other areas of the business
 Competitor going bankrupt (Takeover opportunity)
 Broadband technology has been installed in the area(useful for Internet users)
 Increased spending power in the Local/National economy
 Moving a product into a new market sector.
Threats:
 The main threat to SCFS Co-operative Bank is increasing steps/roots of the public banks.
 Easy policies of the public banks.
 Less documentation of the public banks for different types of loans.
 Instant/one minute service provided by some banks.
 Online banking and mobile banking facilities of other nationalized and public banks.
 Increasing market share of the other banks threaten SCFS Co-operative Bank lose its position
in the market.
 More significant brand image in public acceptance of product and services of public and
nationalized banks as compared to cooperative banks.

CHAPTER 5
CONCLUSIONS
5.1 FINDINGS
SCFCS Co-operative Bank has played a vital role in lending loans and advances to customers. It has
given loans to all types of purposes Like vehicle loan, personal loan, dairy loan etc, which has
attracted to large number of customers as the loans were given in attractive rate of interest.
 It is observed the loans are increasing in Non farmer sector loan, vehicle loan, SHG group
loan.
 It is observed that there is no increase or decrease in the agriculture loan.
 It is observed that there is decrease in kissan credit card loan, salary secured loan and gold
loan dairy loan.
 In the recurring deposit it shows that fluctuation in their deposits.
 In the savings deposit it shows decrease in their deposits The SCFCS Co-operative Bank
Interest rate is 13% of overall loans except kissan credit loan.
 The bank operates mostly to customers of middle class and low class and for farmers.
 Bank doesn’t have website.
 SCFS co-operative bank has introduced various facilities online banking and SMS alert.
 During the project process I found that bank officially and staff members were co operative
while dealing with customers.
 Economic problems are the main problem to repay the loan from the borrower.
 The respondents review was that SCFSC bank service is expensive
 The major impact on credit appraisal system of bank loan and customers are satisfied with
availing loans with low rate of interest and easy repayment facility
 The finding was based on repayment of the availed loan and the review was yes by 88% of
the respondents
 Mortgage loan are increase year by year
 The gold loan shows the increasing value in the year 2018 and the year 2019 the
percentage(%) of gold loan is have a smaller decreasing value compare to 2018
 The bank net profit is increased year by year
 The fixed deposits is increased in the year 2018 and in the year 2019 the fixed deposits shows
the smaller reduction compare to 2018
 The loans on deposits have been decreased from one year to another year this shows that
popularity of bank is coming down and there is no proper stability of bank finance.
 The coordination between members of the bank and the organization is good. Which helps for
smooth functioning of the organization.
 It can also be seen that there is a fluctuation in liquidity position of the bank or the society.
 Earnings per share of the bank or organisaton have been increased from one year to another
year.
 The banks have several scheme of advancing more to the small scale industries. However the
producer to advancing more to small scale industries very complicated, time consuming and
also it is a lengthy procedure.
 The banks have been increased the loan amount from one year to another, which is
understood that there is a high financial transactions in the bank.
 The net profit in the year 2016 and 2017 has been increased which tells about stabilized bank
activity.

5.2 SUGGESTIONS
With reference to the analysis and findings of the study and my personal experiences.
The following suggestions are made for the effective performance of the SCFS Cooperative bank
 The bank should not satisfy with the existing customers. It should try to attract new
customers by more publicity and charging low rate of interest to loans and advances when
compared to other.
 Banks must collect proper information regarding the assets mortgaged against the loan by
the customer before lending to the customers.
 The bank staff should follow the strict rules and they should be well trained for recover
the loans and advances.
 The lending should be made known to public with wide spread communication as many
number of people are not aware about the lending's with the bank is offering
 Proper monitoring must be done before and after lending of loans many times the funds
are diverted from economic to uneconomic usage and this steps must be taken to change
the mindset of the borrowers.
 Bank has to introduce new loans schemes to encourage more and more different classes of
people
 Information technology must be used by the bank for forecasting the potential loan
aspect.
 The SCFSC bank is want to concentrate about the deposits like recurring deposits and
fixed deposits by providing a good services to the customers compare to other banks
 The bank should provide subsidy on the loans specially on agriculture loans which will
helps to create good reputation and enhance economic growth in the society
 The bank should provide the customer advanced services such as E-commerce, tele
banking services etc…to the customers it helps to attract the more and more customers
and it helps to increase the profitability of the bank
 The bank should increase the short term loans to maximum extent, so the bank have more
possibility to get the profit
 The bank should extend its branches in through out of the state it helps to growth and
recognition in the economy

 The bank should provide concentrate on availing new and attractive schemes
to the backward sector.
 Bank should expand its operations to other parts of Bangalore district, and then the Karnataka
state, to increase the customer base.
 The bank should provide ATM facilities for their customers for making their day to day
transactions easier.
 Bank must make use of information technology and have website and offer online facilities
 Number of customers taking loans is very less. The bank can come up with attractive
specialized schemes for people to increase the number of customers
 The bank has a very good trust among the people and can therefore encourage the people with
special, customized banking program to accumulate more deposits.
 The bank should also concentrate on the development of the infrastructure facilities in the
bank
 The bank should start generating token facilities to their customers in order to facilitate
customized the services.

5.3 CONCLUSION
From the study conducted by me on S.C.F.S co-operative bank limited is a premier sector Indian
bank formerly known as the town co-operative bank limited with a heritage of over 36 years and over
3 million satisfied customers. Started in the date 13/09/1976 as the name of sericulture’s cum
farmer’s service co-operative bank, Hoskote town in the date of 26/02/1998.
An average annual growth of operational net profit per share of at least 12% due to the economic
Downturn and the losses from claims relating to the attacks on the world trade centre.SCFSC
recorded an increase of 3% in operational net profit per share, which is considerably below the target.
However on a longer term basis, SCFSC continues to meet this target since its creation in 1991 the
annual growth rate in profit per share has been 13%.
Customers are the biggest assets of bank and the way of success Bank should better attract customers.
Though the bank is providing better loans and advances to customers it should provide still better
schemes of loans advances so as to compete with the other banks in attracting customers.
Majority of borrowers of SCFSC bank are aware of the procedure laid down by bank In order to get
loans and advances. The bank is concentrating to be customer oriented.
The bank is providing different kinds of loans and advances, according to the changes taken place in
the social and economical environment.
Not only the loans and advances, but also all relevant concepts like deposits, service, remittance of
collection and other services shows a good sign for future growth as everything is process of high
levels.

5.4 LEARING EXPERIENCE
It was a wonderful experience in "SCFS COOPERATIVE BANK" a great opportunity to learn about
the organization under the guidance of the Accountant S. Narayana. The finance of the department
provided the best of the knowledge and information of the SCFS cooperative bank and made me
more confident and The office staff also assisted me in how things work in a bank and the necessary
documents that needed to be prepared and maintained and developed a good relationship. The
research made on cooperative agricultural advances at SCFS cooperative Bank has helped me to
know about different types of loans and advances that bank offers to the customer, I also understood
about the procedure of granting loans and advances. it made me to know about interest rates that
bank will take with the borrowers. SCFS cooperative bank provides low rate of interest to the farmers
which help them to borrow loan and repay it back.

BIBLIOGRAPHY
 Banking theory and practice, Reddy and Appannaiah, Annual reports and publications.
 Banking theory and practice, B.S. Ramahan, Annual reports and publications.
 Cost and management accounting, Jain and Narayan, Annual reports and publications.
Websites
o www.karnatakaapex.com
o www.SCFC cooperative bank.org
o www.Cooperative bank.com
o www.google.com
o www.rbi.org
o www.bankingindia.com
o www.bankersindia.com
o www.wikipedia.com

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SERICULTURISTS CUM FARMERS CO-OPERATIVE BANK

1.1 ORIGIN OF THE INDUSTRY

Co-operative movement in India

Dept. of MBA, Dr.AIT, Bangalore Page 1

Co-operative movement in Karnataka

Formation of a co-operative society

Different types of co-operative society

Primary Agriculture Credit Societies:

Central Cooperative Bank:

Dept. of MBA, Dr.AIT, Bangalore Page 2

State Cooperative Bank:

Primary Cooperative Agriculture and Rural Development Bank:

State Cooperative Agriculture and Rural Development Bank:

Urban Cooperative Bank:

Structure of co-operative banking in India

1. Urban cooperative banks

Urban Cooperative bank:

 Banking activities of Urban Cooperative Banks are monitored by RBI.

Dept. of MBA, Dr.AIT, Bangalore Page 3

 Registration and Management activities are managed by Registrar of cooperative Societies

Rural Cooperative bank:

1. State Co-operative Banks- They operate at the apex level in state.

2. District Central Co-operative Banks- They operate at the district levels.

Likewise, the long-term structures are further divided into-

1. State Cooperative Agriculture and Rural Development Banks (SCARDS)-This

Operate at state level.

2. Primary Cooperative Agriculture and Rural Development Banks (PCARDBS) This

Operate at district/block level.

Dept. of MBA, Dr.AIT, Bangalore Page 4

1.2 CURRENT STATUS / SCENARIO OF THE INDUSTRY

Dept. of MBA, Dr.AIT, Bangalore Page 5

Dept. of MBA, Dr.AIT, Bangalore Page 6

Background of co-operative bank:

DRB R.G.N.S-113/76-77 on 13/09/1976

consists of five Hoblis - Anugondanahalli, Jadigenahalli, kasaba, nandhugudi and sulibele.

Dept. of MBA, Dr.AIT, Bangalore Page 7

 Trade award from IFFICO.

2.3 NATURE OF BUSINESS

• Government Regulation and Control:

Dept. of MBA, Dr.AIT, Bangalore Page 8

2.4 VISION MISSION, QUALITY POLICY

2.5 PRODUCTS/SERVICES PROFILE

Dept. of MBA, Dr.AIT, Bangalore Page 9

 Minimum 5 acres land should be there

Dept. of MBA, Dr.AIT, Bangalore Page 10

MSC (national service crops)

SHG & SSHG

 Members limit from 10-20 maximum

SCFSC Bank personal loan

2) Financial for personals needs

Dept. of MBA, Dr.AIT, Bangalore Page 11

 Salaried individuals including SCFSC group member

 Income proof program

 Surrogate income program

 Loans to SCFSC group employees

 Minimum tenor of 60 months for individuals under income program

 36 months under track record program

 48 months for SCFSS group employee

Dept. of MBA, Dr.AIT, Bangalore Page 12

Processing fee 2% for individuals 1% for corporate tie-ups.Predominates fee 2% of principle

 13% for salaries customers and self-employed professionals

 13% for existing SCFCS Bank customers

 13% for self employed non-professionals