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1. RESEARCH METHODOLOGY

1.1 Introduction

The project will help the bank in reducing the credit risk parameters and to improve its efficiencies. It will also help to reduce risk associated in providing any loans & advances or project finance in future and to overcome the loopholes.

1.2 Review of Literature

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

FINANCIAL MANAGEMENT Financial Management means raising of adequate fund at minimum cost and using them effectively in business. It is concerned with the financial problems of the business organization

1.3 History
Ratio analysis is a powerful tool of financial analysis. A ratio is defined as the indicated quotient of two mathematical expressions and the relationship between two or more things. In financial analysis, a ratio is used as a benchmark for evaluatio n the financial position and performance of a firm. The absolute accounting figures reported in the financial statements do not provide a meaningful understanding of the performance and financial position of a firm. An accounting figure conveys meaning when it is related to some other relevant information. For example, an Rs.5 core net profit may look

impressive, but the firms performance can be said to be good or bad only when the net profit figure is related to the firms Investment. The relationship between two accounting figures expressed mathematically, is known as a financial ratio (or simply as a ratio). Ratios help to summarize large quantities of financial data and to make qualitative judgment about the firms financial performance. For example, consider current ratio. It is calculated by dividing current assets by current liabilities; the ratio indicates a relationship- a quantified relationship between current assets and current liabilities. This relationship is an index or yardstick, which permits a quantitative judgment to be formed about the firms liquidity and vice versa. The point to note is that a ratio reflecting a quantitative relationship helps to form a qualitative judgment. Such is the nature of all financial ratios.

1.4 Research Design Objectives

The study has done Research on services of RNSB and objectives of this topic are: To know Services that is provided by Bank. To understand the reasons why bank is to be preferred for services. To know the purpose of customer for dealing with Bank. To find out the satisfaction level of customer of bank. Understand the impact of services over customer.

AREA
I have done my summer internship in RAJKOT NAGRIK SAHAKARI BANK so I have covered the area of RNSB.

Type of Research
I have done QUALITATIVE research in this project

Data collection
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Primary Data Informal interviews with Branch Manager and other staff members at RNSB bank. E-circulars of RNSB.

Secondary Data: Books and magazines Database at RNSB Internal reports of the banks Library research Websites

1.5 Limitation Of the study

The study was undertaken in the city of Bhuj, only, thus the scope study of this study is limited geographically region. The results are totally derived from the respondents answers and thus may be result of the personal bias. The result could also be affected by our ability to draw conclusions. here was also time constraint, which limited the sample size of the research to 60 people. Few of the figures were rounded for the easiness. Some question that are to be important but due to limitation of organization rules and regulation that cannot be included. Here in Bank, my survey has conducted by self selection of the sample.

This survey was conducted within the period of one and half month so it may be possible that it do not give the perfect reason of level of impact of the services over customer.

1.6 Significance of the study

RNSB Bank The project will help the bank in reducing the credit risk parameters and to improve its efficiencies. It will also help to reduce risk associated in providing any loans & advances or project finance in future and to overcome the loopholes.


ORGANISATIONAL DETAILS

 2.1 THE WORD BANK

The word Bank itself derived from the word bancus or banque that is a French. There were others of the opinion that the word Bank is originally derived from the German word back meaning joint for which was Italianised into banco.

Generally, banks do the business of money they take deposits of moneys from client and give loan to the person who has need of money. But in this age, for the convenience of customer, banks provides some other services to their customer such as bankers cheque, overdraft, internet banking, ATM facility, paying of bills, credit card, telegraphic transfer, insurance, demat etc.

For a people, it is difficult to keep a very big amount of money in his house
safely. So, people save their money to bank. Bank gives loan to the person who has need of money and gets higher interest on it than the interest of deposit. The margin between the interest of loan and interest of deposit is the income of bank.

2.2 EARLY HISTORY OF BANKING

As early as 2000 B.C., the Babylonians has developed a banking system. There is evidence to show the temples of Babylon were used as banks. After a period of time, there was a spread of irreligion, which soon destroyed the public sense of security in depositing money and valuable in temples. The priests were longer acting as financial 45 agents. The Romans did minute regulations, as to conduct private banking and to create confidence in it. Loan banks were also common in 7

Rome. From these the poor citizens received loans without paying interest, against security of land for 3 or 4 years.

During the early periods, although private individuals mostly did the banking business, many countries established public banks either for the purpose of facilitating commerce or to serve the government.

However, upon the revival of civilization, growing necessity forced the issued in the middle of the 12th century and banks were established at Venice and Genoa. The Bank of Venice established in 1157 is supposed to be the most ancient bank. Originally, it was not a bank in the modern sense, during simply an office for the transfer of the public debt.

Again the origin of modern banking may be traced to the money dealers in Florence, who received money on deposit, and were lenders of money in the 14 th century and also in 1349, the business of banking was carried on by drapers of Barcelona.

In India, as early as the Vedic Period, banking, in most crude from existed. The books of Manu contain references regarding deposits, pledges, policy of loans, and rate of interest. True, the banking in those days largely mint money lending and they did not know the complicated mechanism of modern banking.

Fact Files of Banks in India

The first, the oldest, the largest, the biggest, get all such types of informations about Banking in India in this section.

The first bank in India to be given an ISO Certification

Canara Bank

The first bank in Northern India to get ISO 9002 certification for Punjab their selected branches Bank

and

Sind

The first Indian bank to have been started solely with Indian Punjab capital Bank

National

The first among the private sector banks in Kerala to become a South Indian Bank scheduled bank in 1946 under the RBI Act

India's oldest, largest and most successful commercial bank, offering the widest possible range of domestic, international and State Bank of India NRI products and services, through its vast network in India and overseas

India's second largest private sector bank and is now the largest The Federal Bank scheduled commercial bank in India Limited

Bank which started as private shareholders banks, mostly Imperial Europeans shareholders India

Bank

of

The first Indian bank to open a branch outside India in London in Bank

of

India,

1946 and the first to open a branch in continental Europe at Paris founded in 1906 in in 1974 Mumbai

The oldest Public Sector Bank in India having branches all over Allahabad Bank India and serving the customers for the last 132 years

TYPES OF BANKS IN INDIA

OTHER

NATIONALIZED BANKS

STATE BANK OF INDIA GROUP

RESERVE BANK OF INDIA

FOREIGN & PRIVATE BANKS

(CENTRAL BANK)

COOPERATIVE BANKS

REGIONAL RURAL BANK

Figure1: Types of bank

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 Reserve Bank of India State Bank Group Other Nationalize Bank Foreign & Private Bank Regional Rural Bank Co-operative Bank

Reserve Bank of India

The Hilton-young commission, appointed in 1926 has recommended the necessity of centrally empowered institution to have effective control over currency and financial transaction in the country. Accordingly, the Government had then passed Reserve Bank of India Act, 1934 and established the Reserve Bank of India with effect from 1 st April 1935. The principal aim behind this was to organize proper control over the currency management in the interest of country benefits and to maintain financial stability. With this, the RBI mainly looks after the following important functions:

To keep effective control over creation of credits and currency supply To control the Banking transactions of Central and State Governments To act as Central administered Authority of all other Banks in the Country. To organize control over Foreign Currency Transaction To assist for improvement in financial aspects of the country

State Bank Group

The State Bank of India was established under the State Bank of India Act, 1955, the subsidiary banks under the State Bank of India (subsidiary Banks) Act, 1959. The Reserve Bank of India owns the State Bank of India, to a large extent, and rest of the part is some private ownership in the share capital of State Bank of India. The State Bank of India owns the subsidiary Banks.

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Other Nationalize Banks

The Banking Company Act establishes it in July 1969 by nationalization of 14 major banks of India. The sent percent ownership of the bank is of government of India.

Foreign & Private Banks

Foreign Bank means multi-countries bank. In case of India Foreign Banks are such Banks, which open its branch office in India and their head office is outside of India. These banks are registered under Company Act, 1956. Basic difference between cooperative banks and private banks is its aim. Co-operative banks work for its member and private banks work for earn profit. These banks lead the market of Indian banking business in very short period, because of its variety of services and approach to handle customer, also because of long working hours and speed of services. This is also registered under the Company Act, 1956.

Regional Rural Banks (RRB)

Regional Rural Banks are added in Indian Banking since October 1975. The Government of India in terms of the provision of the Regional Rural Bank Act 1976 has established these banks. The distinctive feature of Regional Rural Bank is that through it is a separate body corporate with the Commercial Bank, which has sponsored the proposal to establish it. The Central Government, while establishing a Regional Rural Bank at the request of a Commercial Bank, shall specify the local limits within which it shall operate. The Regional Rural Bank may establish its branches or agencies at any place within the notified area. State Bank of Saurashtra sponsors Regional Rural Banks in Saurashtra.

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Co-operative Banks
State Co-operative Banks

State Co-operative Bank means the principal Co-operative society in the state. The primary objective of which is the financing other co-operative societies in the state.

Central / District Co-operative Banks

Central / District co-operative Bank means the principal co-operative society in a district, the primary objective of which is the financing of other co-operative in that particular district.

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Structure of Indian Banking System

Figure 2: Structure of Indian Banking System

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Basic Information of Bank

Name of the Unit Date of Establishment Address

Rajkot Nagrik Sahakari Bank Ltd.

Established on 5th October 1953

Rajkot Nagrik Sahakari Bank Ltd. Nagrik bhavan, Para Bazaar Rajkot 360001 (Gujarat) Phone: (0281) 2233916-7-8Fax: (0281) 2223933

Classification Auditors Vision

Multi state Scheduled Co-op. Bank

M/s. P. R. Dholakia & Co.

Rajkot Nagrik Sahakari Banks aim is to provide a WORLD -CLASS Banking facility to the common people of the society at an economical rate. Mission To be a preferred provider of the banking services in the area where bank operates and to achieve a healthy growth in profit, which will be partly used for the benefit of society and for upliftment of masses & the general growth of co-operative movement. Business Philosophy Rajkot Nagrik Sahakari Banks business philosophy is based on following; Operational Excellence. Customer Focus. Upliftment through Co-Operation.

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Board of Director

Shri Kalpakbhai Maniar (Chairman) Shri Tapubhai Limbasia (Vice Chairman)

5.3 Milestone Of Bank 05 Oct 1953 Bank Was Started As A First Ever Co-Operative Institution In The Erstwhile State Of SAURASHTRA. With a Future Vision, A Unique Concept Of Mobile Branch Was Introduced. Bank Reaches Out To Public. Bank Achieves FIRST Position Among All 268 Co-Operative Banks Of GUJARAT STATE. BANK IS DECLARED AS A SCHEDULED BANK BY THE RESERVE BANK OF INDIA .(Ref. UBD.BR. 94/A 9/88/89) Administration Of SICK Bank "Vijay Commercial Co-Op Bank" Was 1989-90 Undertaken By the BANK On The Persuasion from RESERVE BANK INDIA & Co-Op Department Of Govt. Of Gujarat. 1991-92 2000-2001 No. Of Share Holder (Member) Crosses 1 Lac (100,000) No Share Holder Member Crosses 2 Laces (200,000+) BANK 17 Jan 2001 Was REGISTERED UNDER MULTI-STATE CO-

25 Oct 1974

1975-76

18Aug 1988

OPERATIVE SOCEITY ACT. Area of Operation Was Extended Outside The State Of Gujarat.

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2006-2007

Bank has Awarded for largest member base by Gujarat Urban Co operative. Banks Federation.

2007-2008

Bank Awarded for a scheme "For total interest rebate to regular borrowers with limits below Rs. 25000/-

SERVICE DEPARTMENT

INTRODUCTION
RNSB is purely a service sector. So here, we can say that, them is no any production department but only Service Department. The work of a Service Department is to produce better services to the customers, which satisfy the human desire in a best manner. In banking, service department is concern with that process which converts the inputs in to outputs. Following is the chart to show the process of production of banking services.
INPUT Money Information Technology Employee Resources POSDCORB SERVICE FUNCTION OUTPUT Services Better Satisfaction Security Monetary Benefits

Service function

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In Banking Sector money is used as a raw material other resources, information technology, employees are used as an input. Then after there is need to perform all the service functions (Process). The output is satisfactory services, employees benefit, security etc. These above all factors become successful because of using the POSDCORB formula i.e. planning, organization, staffing, directing. Co-operation, reporting and budgeting.

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Different Services Provided By Bank

The Bank is providing different services to the society as well as the stakeholder of the Bank. The main motive of banks working is for social welfare and to work for the benefit of their shareholders.

Banking Deposits

Current Savings Recurring Cash Credit Fixed Deposits

Advances
o Domestic appliance Loan o Fixed Deposits Loan o Land & Building Loan o Education Loan o Self-Security Loan o Vehicle loan o Real estates loan o Industrial fixed assets loan 19 Purchased house loan Construction loan Repairing loan

o Stock in Trade Loan Cash credit loan Term loan

o Nagrik saral loan Cash credit loans Term loan

Banking Deposits facility

a) b) c) d) e) f) Current Savings Special savings Recurring Cash Credit Fixed Deposits

Locker Facility Mail Transfer & Telephonic Transfer OBC (Outward bill of collocation) services IBC (Inward bill of collocation) services R.T.G.S.(Real time gross settlement) Demat Account Facility Banking Deposits facility

Current Account
This is an Ideal Business Account for Business organization. This Account Can be Opened for any Business Establishment Like -Proprietorship Business -Partnership Business -Pvt. Limited Company -Limited Company -Any Other Institute / Trust / Co-Soc etc. 20

Savings account

Significant features of this account are: o Any Individual Can Open This Account o Maximum 3 Names Are Allowed In Joint Account o Minimum Balance is Rs. 300 o Institute / Co-Soc./ Mandli / Trust Can Open This Account o Account Can Open For Minors too. o Current Rate Of Interest is 4 % Subject to Change as per RBIS Rules. o No Chequebook Charge is charged for Regular Usage. o Extra Chequebooks are Chargeable. o Duplicate Passbook is Chargeable. o Nomination facility is Available.

Special Savings
Individual who are not literate and uses their thumb impression instead of signature can open this type of saving account. Significant Features Included in it:
o

o Any Individual Can Open This Account o Maximum 3 Names Are Allowed In Joint Account o Minimum Balance is Rs. 300 o Institute / Co-Soc./ Mandli / Trust Can Open This Account o Account Can Open For Minors too. o Maximum 3 Withdrawals ar o Current Rate Of Interest is 4%. Subject to Change as per RBIS Rules. o Duplicate Passbook is Chargeable. 21

o Nomination facility is Available.

Recurring Deposit Account Scheme

Ideal Saving Scheme for Salaried Class Investor.

Current Rate Of Interest

60 Months 12 Months 24 Months 36 Months

9.50%

9.00%

9.50%

9.50%

Significant Features Included in it:

o Any Individual Can Open Recurring Deposit Account o Maximum 3 Names Are Allowed In Joint Account o Minimum Amount of Monthly Installment is Rs. 100/o Institute / Co-Soc./ Mandli / Trust Can Open Recurring Account o Recurring Deposit is Accepted For Minors too. o Current Rate of Interest is Subject to Change. o Nomination facility is Available. o Payment exceed Rs. 20000 at the time of maturity will be paid to A/c / Pay Order Only or credit in their saving account. 22

o Select Maturity Period & Pay Installment Regularly. o Get Handsome Amount with Compounded Interest is paid on Maturity. o Penalty is applied at the time of payment for the account which are irregular in the deposit of installment Rules for F.D. OD loan: 90% amount of F.D. is providing as loan. +1% interest is taken as F.D.OD interest.

OB C (o ut wa r d bill of c olle c tio n)

The meaning of OBC is the outstation cheques which you deposit in your bank account. Whenever you deposit any cheque in your bank A/c, it will get cleared through the clearing house in which the branch of your bank falls. But if you deposit a cheque of a bank whose branch does not fall within the clearing house, then it is called OBC and it has to be sent to that branch through post/courier and it will get realized when the bank will honor the cheque.

R e a l T ime Gr ow t h Se ttle me nt (R . T . G. S)
"RTGS" stands for Real Time Gross Settlement. RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a "real time" and on "gross" basis. This is the fastest possible money transfer system through the banking channel. Settlement in "real time" means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. "Gross settlement" means the transaction is settled on one to one basis without bunching with any other transaction. Considering that money transfer takes place in the books of the Reserve Bank of India, the payment is taken as final and irrevocable.

23

Form for R.T.G.S.

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Locker Facility
To Provide Security for the valuables bank offers Locker Facility at very economical charges & nominal deposit. This Facility is available at all the Branches.

Advances for R.N.S.B. staff member

Staff surety loan

Purpose Limit

Personal use Rs. 15,000 maximum

Rate of interest 15 % Repayable Security Documents Equated monthly installments Personal guarantee of two staff members of the bank application form, letter of sanction, DP note, letter of guarantee

Staff vehicle loan

Purpose Limit

to purchase a new / old two wheeler for personal use 80% of quotation

Rate of interest 0 % Repayable Security equated monthly installments Rs. 15 / thousand hypothecation of vehicle to be purchased

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Documents

DP note, letter of guarantee, hypothecation of vehicle, insurance policy

Staff domestic appliances loan

Purpose

For purchasing consumer durables articles viz. freeze, washing machine,

flourmill, T.V., VCD, room conditioner, etc. Limit Rate of interest for initial 20,000 bank rate for rest amount bench mark rate (current rate) Repayable equated monthly installments of Rs. 20 / thousand for first 20,000 then afterward Rs. 23 / thousand Security Documents hypothecation of vehicle to be purchased DP note, letter of guarantee, hypothecation of vehicle, insurance policy

Staff housing loan

Purpose Limit

To construct / purchase residential building for officers and other upper cadre : Rs. 5,00, 000 For clerk For peon and others : Rs. 4,00,000 : Rs. 3,00,000

Period

20 years

Rate of interest 6.5 %

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Repayable Security Documents

equated monthly installments of Rs. 7 / thousand equitable mortgage of property, two staff members guarantee DP note, letter of guarantee, letter of sanction, insurance policy, equitable mortgage of property

Advances

HNI group (High Net worth Individual) >350% sec.

Sp. Platinum Group >250% sec.

Platinum Group >150% sec.

Gold Group >100% sec

Silver Group Less than 100% sec. 15% 15%

1. 2.

INDUSTRIAL Cash credit 12% Term loan I. Machinery/vehicle/ 12% Home appliance II. Saral dhiran -

12.50% 12.50% 13.50%

13% 13% 14%

14% 14%

14.50% (Upto Rs.500000)

Other Advances (Specified group) 1. 2. Education loan NSC/KVP/LIC/ Pledgable Gov. bond/gold loan Loan against Dmat shares/OD/staff OD Surity loan Loan against bank deposit

Interest Rate 11% 12%

3.

12.50%

4. 5.

15% Deposit rate+ 1%

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SWOT ANALYSIS
Strength of Bank It is leading not only in Rajkot but also in all Saurashtra co-operative banks. Social welfare Activities of it Excellent Credit Rating of Bank Enough Investment in Government securities by Bank Obedient to laws of Nation Weakness of Bank Very little knowledge about computerized banking among old staff. It is very small unit of industry it is very difficult to Compete with giant private Sector banks, nationalized banks, and multinational banks. Lack of competent staff on several important department such as legal, loan, recovery etc. Lack of A.T.M. facility and Core banking facility Lack of live contact with share holders, depositors, regular customers through correspondence. Opportunities in Banking Industry Developing of banking industry will give it more business opportunities. Co-operative banks can reach easily to rural are, which is difficult for private Banks. Converting co-operative bank into private Bank. It can increase its strength. More states can also be covered. And get Benefit of multi state status Expand horizons of services Threats in Banking Industry Co-operative sector is neglected by government constantly. Private Bank can be big competitors and even if we compare it with schedules bank than also its competitors are in very sound condition. Increasing competition in this business number of competitors is come in recent time. Cutthroat competition by local player in terms of service charges. Lack of technological vision. 28

Future Plans of Bank

As far as business is concerned, the organization aims at corporate excellence and profit maximization with central focus on customer delight. So as to maintain its premier position in the state of Gujarat by means of excellence in services, product development, improvement in technology, growth in alignment with national objectives in a planned manner. So as to emerge as a strong bank with social orientation in future.

Following are the future plans of RNSB. There is one branch of RNSB in Maharashtra state. So, the bank try to cover Maharashtra states city like Pune, Nagpur, Satara. And also try to open branch of bank in Madras, Calcutta, and Delhi. And try to become Sampurna Rastras Bank Banks new future plan is to deal in Stamp Paper. Enter in to insurance field. Marketing for new things. Provided ATM facilities to customer.

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Financial Information
The liberalization of the financial sector is the key for the over all liberalization process. Gradually, the structure of financial market its has begun to change, in the changing financial market. The RNSB has market progress and profitability is following situation.

Years

Member

Share Capital

Reserve

Deposits

Advance

Profit

Dividend

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

136492 152229 167262 181359 187657 192923 207579 210724 214540 215556 215888 216274 218006 223063 224254 228203 236573

42547 46560 51996 59814 62761 72729 76375 76606 76823 87154 92277 98146 195487 184802 257838 295840 333096

592316 717346 856210 984465 1139975 1329535 1638134 2091130 2252051 2454473 2567001 2630563 2512634 2617967 3171948 3176218 3259565

2347795 2882997 3236843 3790222 4616510 5701400 7053544 6842202 7117233 7981260 8371989 8554541 8640920 9839567 11416033 13441227 15830966

1821981 2489901 2444557 2682943 2914626 4026602 4874265 4926075 4853329 4215461 4289891 4309082 5049418 6293788 7604200 9136904 11121760

18864 22509 24003 32774 43503 60600 73354 91211 130931 140078 81272 83115 83555 121700 171660 180288 283246

15% 15% 15% 15% 15% 15% 15% 15% 25% 15% 15% 15% 15% 15% 15% 15% 20%

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PROGRESS AT GLANCE

Growth of Members

Year 1999 2002 2005 2008 2011

MEMBERS 187657 210724 215888 223063 223063

250000

200000

150000

100000

50000

0 1999 2002 2005 2008 2011

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Share Capital ( Rupees in thousands)

YEARS 1999 2002 2005 2008 2011 Share capital ( IN thousands) 62761 766061 92277 184802 333096

350000 300000 250000 200000 150000 100000 50000 0 1999 2002 2005 2008 2011

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Growth in Deposit

Years 1999 2002 2005 2008 2011

Deposit ( IN thousands) 46165101 6842202 8371980 9839567 15830966

Deposits( Amount in Thousand

12000000 10000000 8000000 6000000 4000000 2000000 0 1999 2002 2005 2008 2011

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Growth in Advances
Years 1999 2002 2005 2008 2011 Deposit ( IN thousands) 2914626 4926075 4289891 6293788 11121760

Advances (in thousand Rs)

12000000 10000000 8000000 6000000 4000000 2000000

0
1999 2002 2005 2008 2011

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Growth in Profit
Years 1999 2002 2005 2008 2011 Profit ( IN thousands) 43503 91211 81272 121700 283246

Profit
300000 250000 200000 150000 100000

50000
0 1999 2002 2005 2008 2011

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DATA ANALYSIS AND INTERPRETATION

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RATIO ANALYSIS
Its a tool which enables the banker or lender to arrive at the following factors : Liquidity position Profitability Solvency Financial Stability Quality of the Management Safety & Security of the loans & advances to be or already been provided. How Ratio is Expressed? As Percentage - such as 25% or 50% . For example if net profit is Rs.25,000/and the sales is Rs.1,00,000/- then the net profit can be said to be 25% of the sales. As Proportion - The above figures may be expressed in terms of the

relationship between net profit to sales as 1 : 4. As Pure Number /Times - The same can also be expressed in an alternatively way such as the sale is 4 times of the net profit or profit is 1/4th of the sales.

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Classification of Ratio:
Balance Sheet Ratio P&L Ratio or Income/Revenue Statement Ratio Balance Sheet and Profit & Loss Ratio

Financial Ratio Current Ratio Quick Asset Ratio Proprietary Ratio Debt Equity Ratio

Operating Ratio Gross Profit Ratio Operating Ratio Expense Ratio Net profit Ratio Stock Turnover Ratio

Composite Ratio Fixed Asset Turnover Ratio, Return on Total Resources Ratio, Return on Own Funds Ratio, Earning per Share Ratio, Debtors Turnover Ratio,

LIABILITIES NET WORTH/EQUITY/OWNED FUNDS Share Capital/Partners Capital/Paid up Capital/ Owners Funds Reserves ( General, Capital,

ASSETS FIXED ASSETS : LAND & BUILDING, PLANT & MACHINERIES Original Value Less Depreciation Net Value or Book Value or Written down value

Revaluation & Other Reserves) Credit Balance in P&L A/c LONG TERM LIABILITIES/BORROWED FUNDS : Term Loans (Banks & Institutions)

NON CURRENT ASSETS Investments in quoted shares & securities

Debentures/Bonds, Unsecured Loans, Old stocks or old/disputed book debts Fixed Deposits, Other Long Term Long Term Security Deposits 38

Liabilities

Other Misc. assets which are not current or fixed in nature

CURRENT LIABILTIES Bank Working Capital Limits such as CC/OD/Bills/Export Credit Sundry /Trade Creditors/Creditors/Bills Payable, Short duration loans or deposits Expenses payable & provisions against various items

CURRENT ASSETS : Cash & Bank Balance, Marketable/quoted Govt. or other securities, Book Debts/Sundry Debtors, Bills Receivables, Stocks & inventory (RM,SIP,FG) Stores &

Spares, Advance Payment of Taxes, Prepaid expenses, Loans and Advances recoverable within 12 months INTANGIBLE ASSETS Patent, Goodwill, Debit balance in P&L A/c, Preliminary or Preoperative expenses

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Current Ratio It is the relationship between the current assets and current liabilities of a concern. Current Ratio = Current Assets/Current Liabilities 1 Current Ratio

2009

= 2363708064.86 / 40162699.08 = 5.88

2010

= 22202649809.94 / 357501246 = 6.16

2011

= 2352098726.31 / 304358655.31 = 7.73

year 2009 2010 2011

Current assets

Current liability 2363708064.86 40162699.08 2202649809.94 357501246 2352098726.31 304358655.31

Ratio 5.88 6.16 7.73

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CURRENT RATIO
8
7 6 5 4 3 2 1 0 2009 2010 2011

Interpretation: Here, we can see that correlation coefficient of current assets and
current liabilities are 5.88 , it indicates high correlation between it. A positive correlation coefficient indicates that increase in first variable would correspond to an increase in the second variable, thus implying a direct relationship between the variables. Correlation of coefficient of current assets and current liabilities are positive and it indicates direct relation between them. Net Working Capital: This is worked out as surplus of Long Term Sources over Long Tern Uses; alternatively it is the difference of Current Assets and Current Liabilities. NWC = Current Assets Current Liabilities

2009

= 2363708064.86 - 40162699.08 = 2323545365.78

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2010

= 22202649809.94 - 357501246
= 2202649810

2011

= 2352098726.31 - 304358655.31
= 2352098726

Interpretation:
Net working capital in 2009 was 2323545365.78 which is decreased in 2010 by 2323545366 and in 2011 it is again increased..

ACID TEST or QUICK RATIO: It is the ratio between Quick Current Assets and Current Liabilities. Acid Test or Quick Ratio = Quick Current Assets/Current Liabilities 2009 = 635234921.42 / 401642699.08 = 1.58 2010 = 872300766.25 / 590057815.14 = 1.48 2011 = 1117785493 / 357501246 = 3.12

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ACID TEST RATIO

3.5 3 2.5 2 1.5 1 0.5 0 2009 2010 2011

year 2009 2010 2011

Quick Current Assets 635234921.42 872300766.25 1117785493

Quick Current liability 4016426921.42 590057815.14 357501246

Ratio 1.58 1.48 3.12

Interpretation:
The standard deviation of Quick assets and current liabilities were Rs. 635234921.42 and Rs. 4016426921.42respectively. The coefficient of variation in case of Current liabilities was higher-being 1.58 % in comparison to Quick assets being 1.58 which indicates that variation in Current liabilities was higher than Quick assets. The coefficient of correlation and coefficient of determination between the Quick assets and Current liabilities was 1.58 and 1.48 respectively, which indicates highly positive relationship between these two variables.

PROPRIETARY RATIO: This ratio indicates the extent to which Tangible Assets are financed by Owners Fund. 43

Proprietary Ratio = (Proprietors fund /Total Tangible Assets) x 100 The ratio will be 100% when there is no Borrowing for purchasing of Assets. 2009 = 27081207013.17 / 14947422185.89 = 18.12 2010 = 3472058010.01 / 1751050780.31 = 19.82 2011 = 3373607570.31 / 27389104734 = 12.31

year 2009 2010 2011

Proprietors fund 3429785292.92 3472058010.01 3373607570.31

Total Tangible Assets 15269445464.7 1751050780.31 27389104734

Ratio 22.46 19.82 12.31

PROPRITORS' RATIO
25 20 15 10 5 0 2009 2010 2011

44

Interpretation:
This ratio indicates the extent to which Tangible Assets are financed by Owners Fund. This ratio is b 5. Debt Equity Ratio = Debt Equity Ratio = (Long term liabilities/owned fund) 2009 = 40164299.08 / 3429785292.92 = 0.12 2010 = 590057815.14 / 3472058010.01 = 0.16 2011 = 357501246.83 / 3373607570.51 = 0.11

year 2009 2010 2011

Long term liabilities 40164299.08 590057815.14 357501246.83

owned

fund Ratio

3429785292.92 0.12 3472058010.01 0.16 3373607570.51 0.11

45

DEBT EQUITY RATIO

0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2009 2010 2011

Interpretation:
It must be realize that if debt-equity ratio is greater than 1, the majority of assets are finance through debt. If it is smaller than 1, assets are primarily finance through equity. In this case the entire year ratio is greater than 1, so assets are finance through debt. This can result in volatile earnings as a result of the additional interest expense. If a lot of debt is used to finance increased operations (high debt to equity), the company could generate more earnings than it would have without outside financing.

Long term funds to fixed assets = (Long term fund /Total fixed Assets) 2009 = 14855818765.6 / 666017145 = 22.29 2010 = 16913284965.1 / 673851923 = 25.10 2011 = 19204573533.1 / 964137658 = 19.91 46

year 2009 2010 2011

Long term fund 14855818765.6 16913284965.1 19204573533.1

Total fixed Assets 666017145 673851923 964137658

Ratio 22.29 25.10 19.91

LONG TERM FUND TO FIXED ASSETS

30 25 20 15

10
5 0 2009 2010 2011

Interpretation:
From the above ratio it seems that the companies long term funds copmaring to fixed assets dont remain in the same manners as in 2010 it incrased to 25.10 as comparing to 2009 . And in 2011 it again go down to 19.91 for the year 2011

47

Return on Capital Employed

= (EBIT /Capital Employed) X 100

2009

= 17186000 / 14845818765.6 = 1.16

2010

= 180288000 / 16913284965.1 = 1.06

2011

= 283246000 / 19204573533.1 = 0.15

year 2009 2010 2011

EBIT 17186000 180288000 283246000

Capital Employed 14845818765.6 16913284965.1 19204573533.1

Ratio 1.16 1.06 0.15

RETURN OF CAPITAL EMPLOYED

1.2 1 0.8 0.6 0.4 0.2 0 2009 2010 2011

48

Interpretation: The higher return on assets is, the better, because the company is earning more money on its assets. A low return on assets compared with the industry average indicates inefficient use of company's assets. So in the above case, return on assets is decrease year by year. In the year 2007 it 11.72% after this year it goes down. So company cannot earn more money on its assets and it also interprets that inefficient use of assets.

8. Assets Ratio = (Fixed Assets /Current Assets) 2009 = 666017145 / 6641524936 = 0.10 2010 = 673851923 / 7213979695.6 = 0.09 2011 = 964137658 / 7536381722.24 = 0.13

year 2009 2010 2011

Fixed Assets 666017145 673851923 964137658

Current Assets 6641524936 7213979695.6 7536381722.24

Ratio 0.10 0.09 0.13

Interpretation:
The current assets of the bank for the year 2010 decreases by 0.1% in comparing to the year 2009 and it grows to 0.13 for the year 2011 as bank have done many transactation during this year

49

ASSETS RATIO
0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2009 2010 2011

Reserve & Capital Ratio = (Reserve /Share Capital)

2009

= 3171947672.92 / 257837620 = 12.30

2010

= 3176217850.01 / 295840160 = 10.74

2011

= 3040511310.51 /333096260 = 9.12

50

year 2009 2010 2011

Reserve 3171947672.92 3176217850.01 3040511310.51

Share Capital 257837620 295840160 333096260

Ratio 12.30 10.74 9.12

RESERVE AND CAPITAL RATIO

14 12 10 8 6 4 2 0 2009 2010 2011

Interpretation: Bank reduces its reserve against the total share capital as it was 12.30% in the year 2009 and bank reduce the reserve for the year 2010 to 10.74 and 9.12 for the year 2011 respectly.

51

COMPARATIVE STATEMENT ANALYSIS OF BALANCESHEET FOR THE YEAR 2009 AND 2010 PARTICULARS 2009 2010 INCREASE OR INCREASE OR

DECREASE DECREASE I N AM T
CAPITAL LIABILITIES &

IN %

Capital Reserve & Surplus Deposits Borrowings Other liabilities and provision TOTAL

257837620 3171947672 11416033473 21984000 401642699.1 15269445465

295840160 3176217850 13441226955 7168000 590057815.1

38002540 4270178.01 2025193482 -14816000 188415116.1

14.74 0.13 17.74 -67.39 46.91 14.68

17510510780 2241065316

Assets Cash and Balance with RBI Balance with Banks and money at call and short notice Investments Advances Fixed assets Other assets TOTAL

635234921.4 1370770201

872300766.3 84573535.35

237065844.8 -1286196665

37.32 -93.83

4635519814 7604200441 666017145 357702942 15269445465

5497105394 9136903653 673851923 485775508.3 17510510780

861585580 1532703213 7834778 128072566.3 2241065316

18.58 20.15 1.17 35.80 14.68

52

COMPARATIVE STATEMENT ANALYSIS OF BALANCESHEET FOR THE YEAR 2009 AND 2011

PARTICULARS

2009

2011

INCREASE OR DECREASE IN AMT

INCREASE OR DECREASE IN %

CAPITAL LIABILITIES

&

Capital Reserve & Surplus Deposits Borrowings Other liabilities and provision Branch adjustment Overdue Interest Reserve Interest Payable TOTAL

257837620 3171947672 11416033473 21984000 401642699.1 ---------------------15269445465

333096260 3040511311 15830965963 3064000 357501246.8 6742463.86 7411835005

75258640 -131436361.5 4414932490 -18920000 -44141452.25 6742463.86 7411835005

29.19 -4.14 38.67 -86.06 -10.99 100 100 100 77.51

106016994.6 106016994.6 27105858735 11836413270

Assets Cash and Balance with RBI Balance with Banks and money at call and short notice Investments Advances Fixed assets Other assets TOTAL

635234921.4 1370770201

872300766.3 84573535.35

237065844.8 -1286196665

37.32 -93.83

4635519814 7604200441 666017145 357702942 15269445465

5493147879 9136903653 964137658 338864883.1 27105858735

857628065 1532703213 298120513 -18838059.79 11836413270

18.50 20.15 44.76 -5.26 77.52

53

COMPARATIVE STATEMENT ANALYSIS OF PROFIT AND LOSS ACCOUNT FOR THE YEAR 2009 AND 2010

PARTICULARS

2009

2010

INCREASE OR DECREASE IN AMT

INCREASE OR DECREASE IN %

INCOME INTEREST INCOME OTHER INCOME TOTAL 1186803386 91617402 1278420788 1350397625 78419791 1428817416 163594239 -13197611 150396628 13.78 -14.40 11.76

EXPENDITURE INTEREST OPERATING EXPENCES PROVISIONS AND CONTIGENCIES TOTAL PROFIT 765510116 225581009 115469663.6 916084421 252726156 79718838 150574305 27145147 -35750825.58 19.67 12.03 -30.96

1106560789 171860000

1248529415 180288000

141968626.4 13.44315

12.82 12.62

54

COMPARATIVE STATEMENT ANALYSIS OF PROFIT AND LOSS ACCOUNT FOR THE YEAR 2009 AND 2011

PARTICULARS

2009

2011

INCREASE OR DECREASE IN AMT

INCREASE OR DECREASE IN %

INCOME INTEREST INCOME OTHER INCOME 1186803386 91617402 1574536413 98769101 387733027 7151699 32.67 7.80

TOTAL

1278420788

1674651780

396230992

30.99

EXPENDITURE INTEREST OPERATING EXPENCES PROVISIONS AND CONTIGENCIES TOTAL PROFIT 765510116 225581009 115469663.6 932454474 166944358 21.81

139841898

24372234.42

21.10

1106560789 171860000

1480421882 180288000

373861093 111386000

33.78 64.81

55

COMMON-SIZE ANALYSIS OF THE BANK UNDER STUDY

(Rupees) Year Operating Incomes Interest & Discount Commission,Exchange & Brokerage Other Revenue Incomes 2009

CONDENSED 2010

COMMON SIZE 2009 92.84 2010 94.51

1186803386 1350397625

140.01 91617402

237.49 78419791

2.21 7.16

1.25 5.49

1278420788 1428817416 (A) Total Operating Income Operating Expenses 765510116 Interest On Deposits & Borrows 225581009 Other General Expenses 1106560789 1248529415 (B) Total Operating Expenses 171860000 (C ) Operating Profit (A-B) 115469664 Provisions 79718838 9.03 5.58 180288000 13.44 12.62 86.56 87.38 252726156 17.65 17.69 916084421 100 59.88 100 64.11

56

(Rupees) Year Operating Incomes Interest & Discount

CONDENSED COMMON SIZE 2011 1574536414 77642787 2011 94.02 4.636354 1.341925

Commission,Exchange & Brokerage 22472579 Other Revenue Incomes 1674651780 (A) Total Operating Income Operating Expenses 932963138 Interest On Deposits & Borrows 81147547 Other General Expenses (B) Total Operating Expenses 283246000 (C ) Operating Profit (A-B) 139841898 Provisions 8.35 16.91373 4.85 100 55.71

57

CONDENSED Year Share Capital Reserves & Surplus Deposits Borrowings Other liabilities and provision Total Liabilities 666017145 Net Fixed Assets 4635519814 Investments 7604200441 Advances Current Assets & Other Assets Miscellaneous Assets Total Assets 2363710158 9136903653 11121759975 2202822256 9808038406 5497105394 5493147879 673851923 964137658 2009 2010 2011 2009 257837620 257837620 333096260 3171947672 3176217850 3040511311

COMMON SIZE 2010 1.69 20.77 74.76 0.14 1.47 18.14 76.76 0.04 3.37 2011 1.21 11.10 57.80 0.01 29.87

11416033473 13441226955 15830965963 21984000 7168000 3064000

401642699.

590057815.1

8181125584

2.63 100 4.36 30.36 49.80 15.48 0.00 100

15269445465 17510510780 27389104735

100 100 3.85 31.39 52.18 12.58 3.52 20.06 40.61 35.81

0.00 0.00 0.00 15269445465 17510510780 27389104735

0.00 0.00 100 100

58

COMMENTS

Each and every beginning has an end in the same way. Each and every introduction has a conclusion. I am thankful and express my gratitude to all those who has directly or indirectly Co-Operated me in preparation of my project report mid suggested some new ideas.

Rajkot Nagarik Sahakari Bank is well and truly set on the path of becoming a Sampurna Rastra. The Bank has undertaken bolder initiatives that would help it, achieve its wide aspirations. In Co-Operative sector, the opportunities are enormous and to capitalize on these opportunities. It is important to have a wide network, strong stricture, strong knowledge base excellence official skills, sound regulatory policy with its passion for innovations, commitment for the new services and corporate philosophy to build healthier communication. The bank plans to guide its efforts in creating a Sampurna Rastra Bank.

Finally, I can say that under the guidance of efficient management and extremely dedicated human resources. I wish and predict all great success in its endeavours to Rajkot Nagarik Sahakari Bank. R Responsibility to keep safe customers money N Never break trust of customers S Satisfaction of all customers B Best banking Small Mans Big Bank

59


FINDINGS, SUGGESTIONS AND CONCLUSION

60

4.1 FINDINGS

Most of the customer are so much satisfied with bank service. They are willing to recommend bank to other. Bank provided accurate service to customer in time. More customers have joined the bank since last decade. Banks services have very positive impact over customer . Many people are operating various accounts and get the other services. From the statically analysis of we found out that the people who deal with bank for more time duration they are more satisfied and recommend the bank to other. Due to the very hard and fast NPA recovery process, there is no change in the customer Satisfaction level because of the best facility provided by bank.

61

4.2 SUGGESTIONS

The bank should have to focus over the ATM services which provided the more smooth working system to bank. As other private nationalized bank have a core-banking facility, RNSB should also have to start the core-banking facility to compete with other co-operative banks. The bank can also use the E-banking to attract more customers. The bank have 12 branches in Rajkot city and more than 13 branch in out of the city so bank can take advantage of it by doing advertisement and marketing. Share member vice it is the highest co operative bank so live contact with share member are give more power to bank Bank has to take customer satisfaction review periodically like some private banks so they can self judge them self and can better perform. Loans should be granted to the peoples after checking the capacity of repayment. In case of a/c becomes NPA,bank should try to recover its money from mortgage papers or ay other such properties.

62

4.3 CONCLUSION

It was indeed a memorable and everlasting experience for me to get summer training at this organization. I learned how to implement the theoretical knowledge to the practical and real industrial environment. Here to conclude my research project on impact of bank services over customer at Rajkot Nagrik Sahakari bank, I found that the customers are somewhat or strongly satisfied with the services of bank and they are dealing with bank from more than decade,

The communication pattern, behavior of bank staff with customers, services within time is the base of the progress of Rajkot Nagrik Sahakari Bank. But Customers are expected new technology base services from bank.

Thus, for more improvement in the customer satisfaction level of the bank, Nagrik Sahakari bank have to focus on the factors in which the customer are dissatisfied and make the improvement in that services and frame policies regarding that. So it will helpful to get the more market share of satisfied customers of co operative bank and improving productivity of the organization.

63

BIBLIOGRAPHY

1. Files provided by branch manager for the information of facility provided by RNSB. 2. Financial Management by B.S,Shah Prakashan Edition : 2010-11

3. Advanced

Accountancy-5,(Management

accounting

&

Auditing)

by

SudhirPrakashan. Edition :2009-10.

Websites
1) http://rnsbindia.com/Main/?q=node/46 2) http://www.rbi.org.in 3) http://www.sendmoneyindia.org/banks-in-india.php 4) http://. www.en.wikipedia.org 5) http:// www.banknetindia.com 6) http://www.banknetindia.com/banking/nproduct.htm 7) http://www.scribd.com/26556623-Customer-satisfaction-in-Banks

Newspaper and magazines

1) Monthly news paper Nagrik samanvay by RNSB for rate of intrest on fixed deposit and on any kind of loan.

64

65

BALANCE SHEET FOR THE YEAR 2009 AND 2010

PARTICULARS CAPITAL & LIABILITIES Capital Reserve & Surplus Deposits Borrowings Other liabilities and provision TOTAL Assets Cash and Balance with RBI Balance with Banks and money at call and short notice Investments

As on 31/3/2010

AS on 31/3/2009

295840160.00 3176217850.01 13441226955.16 7168000 590057815.14 17510510780.31

257837620.00 3171947672 11416033472.70 21984000 401642699.08 15269445464.70

872300766.25

635234921.42

84573535.35

1370770200.58

5497105394.00

4635519814.00

66

Advances Fixed assets Other assets TOTAL Contingent liabilities Bills for Collection 12

9136903653.37 673851923.00 485775508.34 17510510780.31 392236564.00 25070785.27

7604200440.84 666017145 357702942.86 15269445464.70 242802672.00 29176401.29

BALANCE SHEET FOR THE YEAR 2011

PARTICULARS CAPITAL & LIABILITIES Capital Reserjve & Surplus Deposits Borrowings

SCHEDULE

As on 31/3/2011

1 2 3 4

333096260.00 3040511310.51 15830965962.63 3064000 16125491.57

Bills for collection Other liabilities and provision Branch adjustment Overdue Interest Reserve Interest Payable Profit and Loss Account 5

357501246.83 6742463.86 7411835004.64 106016994.56 283246000

TOTAL 67

27389104734.60

Assets

Cash and Balance Balance with other Banks Investments Advances Fixed assets Other assets Bills Receivable Interest Receivable Money at Call &short Notice TOTAL

6 7 8 9 10 11

1117785493 895448350.24 5493147879.00 11121759975.08 964137658.00 338864883.07 16125491.57 338864883.07 30000000 27389104734.60

68