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Introduction of Co-operative Banks History

The Co-operative banks have a history of almost 100 years. 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 important even today and their business in the urban areas also has increased phenomenally in recent years mainly due to the sharp increase in the number of primary Co-operative banks. While the co-operative banks in the rural areas mainly finance agricultural based activities including farming, cattle milk, hatchery, personal finance etc, along with some small scale industries and self employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for self-employment , industries, small scale units, home finance, consumer finance, personal finance etc. Some of the co-operative banks are quite forward looking and have developed sufficient core competencies to challenge state and private sector banks.

1892. Sir Fredrick Nicholson recommends the establishment of rural Cooperative credit societies on German pattern. 1902. The finance commission recommended the introduction of co-operative s. 1919. Under the Govt of India act, the subject of Co-operation transferred to provinces. 1939. Mehta Bhansali committee concept of urban Co-operative banks. 1984. Multi State Co-operative societies act. 1914. Maclagen committee recommended a three tier system on which present system of co-operative structure is based.

Types of Co-operative Banks

There are two main categories of co-operative Banks: a) Short term lending oriented co-operative banks within this category there are sub categories of banks vise-state co-operative banks, district co-operative banks and primary agricultural societies. b) Long term lending oriented Co-operative Banks within the second category there are land development banks at three state levels, district levels and village. The co-operative banking structure in India is divided into following main categories. They are as follows.

1. Primary Co-operative Credit Society

The Primary co-operative credit society is an association of borrowers and non-borrowers residing in a particular locality. The funds of the society are derived from the share capital o f members as well as the society is fixed. The loans are given to members for the purchase of cattle, fodder, fertilizers, pesticides, implements, etc.

2. Central Co-operative Banks

These are the federations of primary credit societies in a district and are of two types those having a membership of societies as well as individuals. The funds of the banks consist of share capital, deposits, loans and overdrafts from state co-operative banks and joint stocks. These banks finance member societies within the limits of the borrowing capacity of societies. They also conduct all the business of a joint bank.

3. State Co-operative Banks

The State Co-operative bank is a federation of central Co-operative bank and act as a watchdog of the co-operative banking structure in the state. Its funds are obtained from share capital, deposits, loans and overdrafts from the Reserve Bank of India. The State Co-operative banks lend money to central cooperative s and not directly to farmers.

4. Land Development Banks

The Land development banks are organized in 3 tiers namely: State, Central and Primary level and they meet the long-term credit requirements of the farmers for development purposes the state land development bank overseas the primary land development banks overseas the primary land development banks situated in the districts and in the state. They are governed both by the state government and the RBI. Recently, the supervision of land development banks has assumed by National Bank for Agricultural and Rural Development (NABARD). The sources of funds for these banks are the debentures subscribed by both central and state government. These banks do not accept deposits from the public.

IMPORTANCE OF BANKING IN INDIA

Banks play a significant role in the economic development of the country. They touch every aspect of the modern economy. Some of the important role played by the banks for the development of Indian economy is as follows: Though the supply of many (bank money and credit money) banks exert a powerful influence on the interest rates in the money market. Banks help trade and commerce, industry and agriculture by meeting their financial requirements. Banks direct the flow of funds into productive channels. While lending money, they discriminate in favor of essential activities.

 In the modem economy the people who save and the people who undertake investment are different hence there is a need for investments that should help the flow of funds from the investors. Banks mobilize the small, scattered and idle saving of the people, and make them available for the productive purpose, i.e.; they help in the process of capital formation By offering attractive interest on the savings of people deposited with them, Banks promote the habit of thrift and savings among them. Bank provide a convenient and economic means of payment and transfer of Funds i.e., Cheque, DD and bank drafts. Banks help the movement of funds from regions where they are not very useful to regions where they can be more usefully employed.

Growth of Co-operative Banks in India

The co-operative banks have a history of almost 100 years. These co-operative banks are an important constituent of the Indian financial system, judging by the role assigned to them, the expectation stay is supposed to fulfill their number, and the number of offices they operate. The co-operative movement originated in the west, but the important 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 phenomenally in recent years mainly due to the sharp; increase in the number of primarily co-operative banks. While the cooperative banks in rural areas mainly finance agricultural based activities small scale industries and self employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for selfemployment, industries, small scale units, home finance, consumer finance etc. Some of the co-operative banks are quite forward looking and have developed sufficient core competencies to challenge state and private sector banks.

Recent Developments
Over the years, primary (urban) co-operatives banks have registered a significant growth in number, size and volume of business handled. As on 31st March 2003 there were 2,104 UCBs of which 56 were scheduled banks. About 79 percent of these are located in five states, Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. Recently the problems faced by a few large UCBs have highlighted some of the difficulties these banks face and policy endeavours are geared to consolidating and strengthening this sector and improving governance.

Some Facts about Co-operatives Banks in India

Some co-operatives banks in India are more forward than many of the state and private sector banks. According to NAFCUB the total deposits & landings of Co-operatives Banks in India is much more than Old Private Sector Banks & also the New Private Sector Banks. This exponential growth of Co operative Banks in India is attributed mainly to their much better local reach, personal interaction with customers, and their ability to catch the nerve of the local clientele.

RESERVE BANK OF INDIA POLICIES

The RBI appointed a High Power committee in May 1999 under the chairman of Shri K. Madhave Rao. Ex-Chief Secretary of Government of Andhra Pradesh to review the performance Urban Co-operative Banks and to suggest necessary measures to strengthen this sector. With reference to the terms given to the committee identified five board objectives: To preserve the co-operative character of urban co-operative Banks. To protect the depositors interest. To reduce the systematic risks to the financial systems.
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 To put in place strong regulatory norms at the entry levels is as to sustain the operational efficiency of urban co-operatives banks in a competitive environment and revolve measures to strengthen the existing urban co-operative banks structure particularly in the context of ever increasing number of weak banks. To align urban banking sector with the segments of banking sector in the context of application of prudential norms in Toto and removing the irritants of dual control regime.

Main Provision Applicable to Co-operative Banks

The provisions of the Banking Regulation Act applicable to co-operative banks are laid down in part 1 of the act under section 56, the main provisions of the act applicable to co-operative bank are: Use of the word Banks and Banking Every co-operative bank governed by the Banking Regulating Act must use a part it name, any of the words, Banks, Banker or Banking.

Licensing
Every co-operative bank governed by the banking regulation act must hold a license from the RBI.

Cash Reserves
Even co-operative bank governed by the Banking Regulation Act in India must maintain a way of cash reserve with itself or in current account with at the RBI, or the eco-operative bank of the state concerned or with any other bank notified by the central co-operative bank of the district concerned or partly in cash itself and partying the above mentioned account or a cost of sum equivalent to at least 3% of the total of its time and demand liabilities in India.

RESTRICTIONS ON LOAN AND ADVANCES

Co-operatives on the security of own shares should grant no loan or advance. No unsecured loan or advance should be made by the co-operative bank to any of its directors, firms or private companies or individuals where any its directors is interested to interested to any of the company in which the chairman of the Board of the co-operative bank is interested.

Submission of Returns
Every co-operative bank is required to submit to the RBI before the 15th of every month, a return showing the amount of cash reserve held by it on Friday in each week of the preceding month with particulars of his time and demand liabilities. Every co-operatives is required to submit to the RBI a return showing all the unsecured loans and advances granted by it during a month to companies in which any of directors is interested, this return its be submitted before the closer of the month succeeding the month to which the return relates. NABARD has been identified as a principle agency for planning coordinating and monitoring the rural credit delivery system at the district level.

Membership
The member ship of an Urban Co-operative bank is limited to the persons residing in the city and town who are salaried employees, factory workers, small traders, artisans etc.

Management of Urban Co-operative Bank

Management or urban co-operative bank is vested in the Board of directors. The shareholders elect them. The final authority in all matters rests with the

General Body, but the day to day working of the bank are looked after by the Board of Directors and efficient staff.

Deposit mobilization
The growing public confidence in the working of Urban Co-operative Banks in India has succeeded in attracting deposits even from the non-members. An Urban bank generally accepts current deposits, savings deposits and fixed deposits. Major portion of the deposits of Urban Co-operative Banks if from the fixed deposits collected by it.

Resources
The sources of finance or Urban Co-operative Banks are from capital, borrowed fund and from deposits. Own funds consist of paid up share capital and accumulated profit or retained profit in various form of reserved created out of appropriation of profit.

Accounts and Audit

The profit and loss account and the Balanced Sheet of a Co-operative bank are required to prepare for the year ending 31st March. A qualified Chartered accountant must audit these accounts. Three copies of the audited profit and loss account and balance sheet of a co-operative bank required to be submitted to the RBI within a period of six months from 31march, which can be extended by another six months, by the RBI.

Co-operative Principle
Co-operatives banks are organized and managed on the Principle of Cooperation, Self-help, and mutual help. They function with the rule of one member, one vote, function on no profit, no loss basis. Co-operative banks,
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as a principle do not pursue the goal of profit maximization. Co-operative bank performs all the main banking function of deposit mobilization, supply of credit and provision of remittance facilities. Co-operative banks provide limited banking products and are functionally specialists in agriculture related products. However, co-operative banks now provide housing loans also.

Principle of Co-operative Banks

There are as follows, Voluntary and open membership Democratic Member Control Member Economies Participation Autonomy and Independence Education, Training and Information Co-operation among co-operatives Concern for Community

7 PRINCIPLES OF CO-OPERATIVE BANK

The co-operative principle are guidelines by which co-operative put their values into practice 1st principle = Voluntary and Open Membership Co-operative open to all person able to use their service and willing to accept the responsibility of membership without gender, social, racial, political or religious discrimination. 2nd principle = Democratic Member Control. Co-operative are democratic organization controlled by their member, who actively representative are accountable to the membership , in primary the Cooperative member have equal voting rights (one member, one vote )and cooperative at other are also organized in a democratic manner.
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3rd principle = Member Economic Participation Contribute equitable to and democratically control the capital of their co-operative. At least part the capital is usually the common property of the co-operative member, usually receive limited compensation subscribed, if any on capital subscribed as condition of membership member allocate surplus for any of the following purpose developing their co-operatives, possible by setting up reserve, part of which at least would be in divisible, benefiting members in proportion to their transaction with the co-operative, the cooperatives and supporting other activities approved by the membership. 4th principle = Autonomy an independence Co-operative provides education and training for the training for the member, elected representatives, managers if they enter into agreements with other organization, including government to raise capital from external sources they do so in terms that ensure democratic control by their member and maintain their co-operative autonomy. 5th principle = Education, Training and Information Co-operative provide education and training for their members elected representative, managers and employees, so the employee so that, they can contribute effectively to the development of their co-operative , they inform the general public-particularly young people and opinion leaders about the nature and benefit of co-operative. 6th principle = Co-operation among Co-operative Co-operative serve their member most effectively and strength the cooperative movement by working together through local, national, regional and international structure. 7th principle = Concern for Community Co-operative work for the sustainable development of their communities through policies approved by their member.

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FEATURES OF CO-OPERATIVE BANK

Some distinguishing characteristics of the co-operative bank are as follows: Co-operative bank belongs to the money market as well as to capital market. Co-operative bank do banking business mainly in the agriculture and rural sector. Co-operative bank performs all the main banking function on deposits, mobilization of funds. They function on no profit, no loss basis. They are organized and managed on the principles co-operation, self-help and mutual help. They function with the rule of 1 member, 1 vote. Co-operative bank perhaps the 1st government sponsored financial agency in India. Co-operative bank are subject to CRR and liquidity requirements as other scheduled and non-scheduled banks.

Characteristic of Co-operative Banks

The character features of Co-operative banks are given as follows: Self help and mutual help One man, one vote Motivated by service Mainly agricultural finance Government interference Regulation by dual masters Statutory audit Money market (financial market) Financial intermediaries Financial assistance by government Federal structure

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Problems of Co-operative Banks

The main problems of co-operative banks are as follows Weak and Dormant Banks Stiff competition by commercial banks Uneven growth Structural weakness Too much officialiisation and politicization Mounting over due and unprofessionalsied management

Finance is that business activity which is consent with the acquisition and conservation of the capital hinds in meeting the financial hinds in meeting the financial needs and overall objective of business enterprise. The word finance comes indirectly from Latin word FINIS under Roman law contract was not completed until there was a binding agreement for monetary or credit arrangements. Finances are defined as issuance of distribution and purchase of liabilities and equity claims issued for the purpose of generating review producing assets. Finance guides and regulates investment decision and expenditure and the expenditure decision by pertain to recurring expenditure or may relate to capital expenditure programmers or capital getting to get the best out of available funds is the tale of financial management thus finance objective of any corporate plan must be expressed in financial terms efficient management of its finance it is the basic foundation of all kinds of economic activities. Finance is the lifeblood of business: procuring and judicious of finance are the two important activities of financial managements. Adequate funds at disposal of business and funds of various types to carry out the business smoothly without the fear of losing funds.

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FINANCIAL MANAGEMENT
Financial management is managerial activity consent with planning controlling the firms financial resources, which is interest to acidification. As well as practicing managers to understand the theory of financial management is not merely accounting management. Besides accounting also involves, financial decision that is how to rise funds loans are retain profit investment decision utilization of funds is one activity are the other dividend decision quantum of retain to the investment The objective financial management is to find out the profitability and to information about financial position of the concern. Two principal statement of financial accounting are income and expenditure statement and balance sheet. Financial management is a measuring rod for success or failure of an organization financial management is an exclusive exercise in economic, which includes a) b) c) d) e) Funds management Control and reporting system Financial cost and management accounting Tax planning Budgets related disciplines

Importance of Financial Management

Financial management is applicable to every type of organization irrespective of its size, kind or nature. The core of financial policy is to maximize earnings in the long run and optimize then in the short run. The reason for placing the finance function in the hands of top management may be attributed to any of these following reasons. Finance is needed to promote or establish the business acquire fixed assets; make investigations such as market surveys, development of products. Financial decisions are crucial to the survival of the firm. At no cost can a firm affords threaten its solvency is affected by the flow of funds that is a result of various financial activities, top management being in position to co-ordinate
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those activates retains financial function in its control. It also deals with financial planning. Another important function of financial accounting is to make the information more useful and reliable. This is done

Functional Areas of Financial Management

Today, the changing business environment has widened the role of a financial manager. Some of the functional areas covered in financial management are

Determining Financial Needs

This is done to ensure the availability of adequate funds. Financial needs must be assessed for different purposes. Money may be required for initial promotional expenses, fixed capital and working capital needs. Financial accounting is useful to management as well as to external users such as potential owners creditors government agencies and other interested person making summaries, dealing with financial transaction, interpreting financial information, communicating results of its operation. It provides information regarding the status of the business and result of its operation. The financial accounting is concerned with the preparation of final accounts that is P&L account and balance sheet.

Determining sources of funds

The financial manager has to choose resources of funds. He may borrow from a number of financial institutions and the public. A firm is committed to the financial lenders and must meet the terms on which they offer credit.

Financial analysis
It is the evaluation and the interpretation of a firms financial position operations and involves comparison and interpretation of accounting data.
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 Optimal capital structure

The financial manager must establish an optimal capital structure and ensure the maximum rate of return on investment. The ratio between equity and other liabilities carrying fixed charges has to be defined. In the process, he has to consider the operating and financial leverages of the firm.

Cost volume profit analysis

Fixed cost, variable coat and semi-variable cost have to be analyzed. It must be ensured that the income of the firm will cover its variable cost. Moreover, a firm must generate an adequate income to cover its fixed costs.

NEED FOR FINANCE IN BUSINESS

Finance in business is needed to meet both long term and short term objectives of the organization. Following are some of the avenues where business finance is developed to meet the firms objectives. 1. Acquisition and management of current assets for managing day to day operations. 2. Managing merger, reorganization, expansion, and diversification. 3. To meet expectation of stake holders. 4. To find the establishment of an organization, this includes the acquisition of necessary assets for running the business

According to Guttmann and Doug all, business finance can be broadly defined as the activity concerned with planning, raising, controlling and administering of the funds used in the business. Finance is the processes of organizing the flow of funds so that a business can carry out in the most efficient manner and most its obligations as they fall due.
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TYPES OF FINANCE
Finance can be classified in to two types as follows 1. Public finance 2. Private finance

Public Finance: It deals with the requirement, receipts and disbursements of funds in the government institutions like states, local self-government and central Government. Private Finance: It is concerned with requirements, receipts and

disbursements of funds in case of individual, a profit seeking business organization and non-profit organization.

FUNCTIONS OF FINANCE
Although it is different to separate finance functions from other functions, yet the function them can be readily identified. The function of raising funds, investing them in assets and distributing returns earned from assets to shareholder are respectively known as financing, investment and dividend decisions. While performing these functions, the firm attempts to balance cash inflow and outflows. This is called liquidity decision and it is taken as one of the most important finance functions. In short, finance is concerned with Obtaining funds at the lowest cost making the optimal use of these funds

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PROBLEMS OF FINANCING
Every firm has its own goals aiming at a certain extent of profit generation. It is not necessary for a firm to have the goal or profit maximization as the only objective in the short as well a long run. The management might have its own limitations of efficiency and capacity, levels of satisfaction and appraisal of future, etc. The problems faced by an account dealing with finance functions are: Type of expenditure to which a firm should get itself involved in a commitment to spend The volume of funds that should be committed by a firm on various type of expenditure The financing pattern that is consider desirable. The ways and means by which the existing funds committed as well as noncommitted could be utilized forgetting maximum benefits for the firm. The course of action to be taken whenever the expectation does not materialize and a failure is to be averted.

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TITLE OF THE STUDY

A study on Financial Statement Analysis of Tumkur Grain Merchants cooperative bank ltd.

STATEMENT OF THE PROBLEM

Finance is regarded, as the lifeblood of the business world and one of the major sources to meet these requirements are financial institutions. Tumkur Grain Merchants Co-operative bank is also one of the institutions, which offers the financial solution to meet the requirements of the different business people. Lending of fund is the basic function of a Co-operative bank. It constitutes the main business of a bank. The major portion of banks funds is employed by way of advances. Loans and advances enable trade, commerce, industry and agricultures to meet their financial requirements. This project has been undertaken to study the procedures involved in process in financial performance pertaining to loan to different methods of Tumkur Grain Merchants Co-operative Bank. Analysis of financial performance is one of the major requirements for planning. Tumkur Grain Merchants Co-operative bank is a private sector bank and been analyzed its performance required by shareholders, management, creditors, prospective investors, employees and trade unions and other financial institutions as they are interested to know the financial soundness of the bank. The project analysis of the financial performance of Tumkur Grain Merchants co-operative bank by taking 5 years into consideration i.e., 2006-2010.
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OBJECTIVES OF STUDY
To understand the financial performance of the Tumkur Grain Merchants Co-operative bank. To study the trend of actual performance of various financial parameters with reference to estimated performance. To analysis financial statements through various ratios To bring out strengths and weakness.

SCOPE OF THE STUDY

It was taken up to know the financial activities in Tumkur Grain Merchants co-operative bank relating their business activities and performance of the corporation. The study is being done to know the financial activities of the corporation. Study is being done to ascertain the financial status of the firm. The study of financial performance comprise of ratio analysis, and comparative statement analysis. The study was made to analyze the financial performance with reference to financial statements like profit and loss account and balance sheet with help of tables, ratios, and graphs, providing suggestions for improving the methods and procedures followed by the firm.

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SOURCE OF DATA
The data collecting for the study is divided in to two ways. Primary data. Secondary data. Primary data Hence, the study is in financial management .Then the chance of primary data is less, but the interviews from the managers and the chief accountants will be made. Secondary data Secondary data is from published materials that is journals, news papers, annual report and magazines.

Method used in collecting data

The researcher has collected the data by way of reference. Researcher referred various books Time frame of the data: Information and data collected by researcher is a period of five financial year (2005-2006 to 2009-2010)

Tools used in analysis

The ratio analysis as used in the accounting includes at least two basic statements which are prepared by the concern at end of every financial year The income statements or profit and loss account The position statements or the balance sheet

METHODOLOGY
The study is based on the discussion conducted with the officials of the bank and guide the various data collected through annual reports, journals, magazines, data from internet.
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LIMITATIONS OF THE STUDY

This study on ratio analysis is for the period of the 5 years only Time factor is one the limitations of the study The data collected information is limited neither is because of the much data nor provided by the bank.

CHAPTER SCHEME
Following are the chapter schemes followed in the project work such as, Chapter-1 Introduction of banks, Types of Co-operative Banks, Importance of banking in India, Growth of Co-operative banks in India, Recent Developments, RBI polices, Main provision applicable to co-operative Banks,7 Principle of Cooperative Banks, Characteristic features of Co-operative Banks, financial management, Important of financial management, need for finance in Business, types of finance, functions of finance, problems of financing Chapter-2 Title of the study, Statement of the problem, Objectives of study, Scope of the study, Source of data, Tools used in analysis, Methodology, Limitation of the study, Chapter scheme. Chapter-3 Company profile- Original of TGMC Bank Ltd , Present Situation of the Bank, TGMC Banks Area of Operation, Branches, Board of Management, Strategic Alliance, Mekineseys 7s Model, Functions of TGMC Bank, Aims and Objectives of the Bank, Products of the Bank, Other special services. Chapter-4 Analysis and interpretation- The Table or data has to be analyzed and interpreted.
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Chapter-5 Findings and conclusion Chapter-6 Suggestions and recommendations Chapter-7 Conclusion Chapter-8 Bibliography

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Profile of Tumkur Grain Merchants Co-operative Bank Ltd., Original of TGMC Bank Ltd:Tumkur Grain merchants co-operative bank ltd., was registered on 16.09.1963 by register of co-operative societies, mysore state with a registration No.270. In 1950s and 60s Tumkur city has been developed as a major business centre of Karnataka State. In that period, the city has so many industries and merchant class. In this substantial growth time the merchants of the city were facing the lack of proper banking facilities and services, as in those days a few public sector banks were functioning in the city and that too having lot of imbalances in their service to customers. By observing this pathetic condition, the leading merchants of Tumkur Sri. A.K.A Paradhwanath, Sri. T.N. Kempahonnaiah, Sri. Gubbi Huchappa, Sri. D.S. Siddappa, Sri.P.G.Srinivasasetty, Sri.G.B.Chidanand, Sri H.N. Thammaiah, Sri. C.L. Shekarappa. Sri.Y.Chandfa Shekarappa and Sri. N.R. Jagadish and other leading merchants discussed and decided to open an Urban Co-operative Bank in the city. By an inspiration from Grain Merchants Co-operative Bank Ltd., Bangalore by the providing Banking facilities and service to the business people of the city. For this Sri. A.K.A.Pershwamath was elected as the Chief Promoter and the Bank was registered on 16.09.1963 and the bank was started its business on 13.12.1963.

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The financial position of the bank as on 30.6.1964 at the end of the First year was as under:

Particulars
No. of members Share Capital Deposits Borrowings Loans and Advances Investments Net Profit

Amount (In Rs.)

257 1,35,400 1,24,600 86,584 3,45,344 25,000 967

In the following years, the bank has marked its substantial growth in the Cooperative Banking Sector along with the objective. Since its inception, the bank has been recording its social obligation. In the year 1987 the bank has got its license from the reserve bank of India, Mumbai.

Present Situation of the Bank:The Tumkur Grain Merchants co-operative bank Ltd., Tumkur is one of the best managed co-operative Bank in the Karnataka State. Bank celebrated its Silver Jubilee on 31.10.1992 and 40th anniversary in the year 2003. The Bank has successfully completed 47 years of service in the banking. Sector, now serving in Tumkur Bangalore Urban, Bangalore Rural, Mysore and Chamarajanagar Districts. Bank started operating profit from the first year of functioning if growing to greater heights over since, gaming the glory of being
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adjudged the Best Managed urban co-operative Bank in the State for the year 2005-06.

TGMC Banks Area of Operation:1. Tumkur District 2. Bangalore Urban District 3. Bangalore Rural District 4. Mysore District 5. Chamarajanagar District

Planning to Extend the Area of Operation to the Following Neighbouring Districts:1. Chitradurga 2. Hassan 3. Chikkamagalur 4. Mandya and 5. Kolar

Network of TGMC Bank Ltd:Tumkur Grain Merchants co-operative bank head office B.H. Road
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Tumkur 572103 Phone no: 0816 2255905, 6541902, 6531903 Fax no: 0816 2257636 Email: tgmcb-no@hotmail.com A.B.I. License no. UBD; KA; P DT. 11.11.1987

Branches:1. J.C. Road Branch J.C. Road, Tumkur 572 101 Ph.No. 0816 2278244, 2273360, 6531905 R.B.I. License No. UBD: KA: 912: DT. 11.11.1987. 2. S.S Puram Branch, B.H. Road, Tumkur 572103 Ph.No. 0816-227439, 6531904 R.B.I. License No. UBD: KGL: 2155: DT. 16.05.1990. 3. Raghavendra Nagara Branch, S.I.T. Main road Tumkur 572103 Ph.Nos 08162272966, 6531907 R.B.I. License No. UBD: KGC: 50: DT. 28.03.1994. 4. Sira Road Branch, Sira Gate, Opp: S.B.M. Tumkur 572 101 Ph.No. 0816 2275090, 6531908 RBI License No. UBD: KGGL: 49 DT. 28.3.1994. 5. Tiptur Branch, Kamadhenu Complex, Police Lane Tiptur 572 201 Ph.No.08134 250 423 RBI License No. UBD KGGL: 183 DT. 13.4.1996. 6. Sira Branch Sri Hanuman complex, NH 4, Sira 572 137 Ph.No.08135 276072 RBI License No. UBD: KGGL: 259 DT. 31.7.1997. 7. APMC Yard Branch 1st cross, APMC yard Tumkur 572 103 Ph.No.0816 228315, 6531906, RBI License No. UBD: KGGL; 274 DT. 12.12.1997.

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8. Rajajinagar Brancy 999, 2nd cross ESI Road, 4th block, Rajajinagar, Bangalore. 560 010, Ph No. 080 23208229, 23506278, RBI License No. UBD: KBGBL: 333 DT. 24.3.1999. 9. Mysore branch D.Devaraj Urs road, Mysore 570001, Ph.no: 0821 2448728, 2430212. 10.Basaveswaranagar branch no. 322, 8th main, 3rd stage, 4th block, Basaveshwaranagar, Bangalore-560079, Ph.No: 0890-23286268, RBI License No. UBD: KBGBL 413 DT. 09.1.2002. 11.Jayanagar branch Nol. 232/19, Pavithra south avenue 9th main, 3rd block, jayanagar, Bangalore 560011, Ph.No: 080-265302 9, RBI License No. UBD KBGBL: 416, DT: 20.1.2002. 12.Indiranagar branch No. 421/n Krishna temple road, 1st stage, Indiranagar, Bangalore-560038, Ph.No: 0890-41269969, RBI License No. UBD: KBGBL: 493, DT: 1.4.2202.

Board of Management of the Bank

18 Board of Management

1-President

1-Vice President

16-Directors

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Organization Structure

The Bank has full-time Chief executive officer. All the Board of Directors including president and Vice-President of the bank are serving as honorary.
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Board of Management who provide necessary vision, Decision makers and policy formulation. C.E.O, and Assistant C.E.O. for team formulation and implementation of strategies.

Board of Management of TGMC Bank Ltd, for the Year 2007-2012

1. Sri N.R. Jagadeesh Industrialist President of the Bank. 2. Sri. K.Y. Shivanna Vice President 3. Sri R.J. Anantha rajaih DIRECTOR 4. Sri. H.M. Divyananda Murthy DIRECTOR 5. Sri. M.S. Jinesh Jain DIRECTOR 6. Sri. D.D. Basavaraju DIRECTOR 7. Sri. M.P. Mahesh DIRECTOR 8. Sri. K.V. Srinath DIRECTOR 9. D.S.Rudramuniyappa DIRECTOR 10.K.C. Srikantaiah DIRECTOR 11. T.S. Ravi Kumar DIRECTOR 12.C.R. Nataraj DIRECTOR 13.T.S.Guruprasad DIRECTOR 14.V.K. Rajashekariah DIRECTOR 15.S.R. Venkatarama Setty DIRECTOR
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16.G.V. Shanthish Jain DIRECTOR 17.Dr .G. Sachidananda DIRECTOR 18.G.V. Rohini DIRECTOR 19.Sudhir kumar Yaragatti CHIEF EXECUTIVE OFFICER

Various Committees of TGMC Bank Ltd:The following sub committees are formed to carry out administrative affairs of the bank. President N.R. Jagadish and Vice president K.Y. Shivanna are part of it. The bank has framed 3 sub-committees are as follows:1. Joint Loan / Hypothecation loan and pledge loan sub-committee 2. Loan on mortgage of property / machinery loan sub-committee 3. Branch control / Recruitment / Investment / audit Sub-committee

Vision Statement:
WORKING FOR YOUR GROWTH.

Mission Statement:YOUR TRUST IS OUR ASSET

Strategic Alliance:

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T.G.M.C. Bank has a strategic alliance with the Karnataka State Co-operative Apex Bank under Inland mutual arrangement scheme under the alliance providing DD & cheques collections facilities all over India with the help of ICICI bank, Bangalore.

Department/Section in TGMC Bank Ltd:The various Department and section at the branch level comprising of
1. Deposit Section 2. Loans and Advance Section 3. Bills/clearing/D.D./Pay order Section 4. Cash Section 5. Savings Bank / Current Account

At the level of Administrative Office:Administrative Section, Establishment Section Looks after conducting Board meeting Sub-committee meeting and staff meeting Shares Section Accounts Section Internal Control and Inspection Section M.I.S. & M.I.P.D. Section

34

 Planning and Development Recovery Section E.D.P. Section Stores Section Inward & outward section P.R.O Section Funds management section Treasury Section Human Resources management Section. Each departments/section function under the control of Chief executive Officer, who ensures effective functioning of their respective duly assisted by D.G.M.A.G.M. and H.O. Manager etc.,

35

Mekineseys 7s Model:
Every organization will have an expectation on its employees. Based on this expectation employees will have responsibilities. There expectation of the organization and employees responsibilities go hand for an organization to affair its objectives, according to Mekinesey the culture of any organization has fabric dimensions, which will become the core element of management.

Staff

Style

Strategy

Mekineseys 7s Model

Skills

Structure Shared Values

System

1. Style:
The Board is the sole authority in taking decision in such as Loan Sanction Recruitment and Selection of Personnel

36

During the meeting every branch Managers and need to show their periodic performance of the Board. In trading, the workers work internally and externally.

2. Skills:
It refers to the ability or capacity to do a particular work or job. Every employee must possess required skill in order to perform the required job. The bank has its own way to improving the skills of the workers. It trains the employed by sending them to get train from their organization. College of agricultural Banking (CAB), Pune Regional Institute of Co-operative Management, Bangalore Karnataka state co-operative urban banks federation Ltd., Bangalore National Federation of urban co-operative banks and credit societies Ltd, New Delhi. National Institute of banking studies and corporate management, Noida (NCT) Vaikunt Metha Institute of Co-operative Management, Pune. And the bank conducts programs for its employees to enhance its efficiency in the area of: Customer relationship Public relationship Effective communication Leadership skills etc.,
37

3. System:
All the branches are fully computerized and the head office. Administrative office will collect all the informations from all the branches on daily basis the management information system works on the basis of WAN. All the branches of this bank inter connected with each other. After implementation of core banking solutions to all its Branches of the bank it will be easy to take out all the information at any movement.

4. Staff:
It refers to working personnel in the organization staff refers to total No. of employees in the organization. The size of the staff depends on the type and nature of operation of the organization. T.G.M.C. Bank has total of 111 employees.

5. Strategy:
It is nothing but set of action plans for future in order to complete with competition, building good image and to serve better quality of service.

Main Strategies of T.G.M.C.N. Bank Areas: Core Banking Solution (CBS)

The Banking is already entered MOU with M/s C- Edge Technologies Ltd., towards the upgrade the technology which is State of the art technology is called core Banking Solutions. C-Edge technology Enterprises Ltd., is jointly developed by M/s TCS and S.B.I Product name is called C-edge which is exclusively developed for Urban Co-operative Banks. TGMC Bank is the first urban Co-operative Bank in the Karnataka state to implement core banking
38

solutions among 297 UCBS. After implementation of the CBS to a Branch, the Bank is planning to provide the following services to its esteemed customers: ATM Facility Tele Banking Mobile Banking Retail Banking Internet Banking R.T.G.S. Facility E.F.T. Facility 7days Banking for all branches.

39

6. Structure:
The bank has typical organizational structure. The board of directors heads the organization. There are 18 directors which include one provider and one Vice President. The bank has total employees from all the 12 branches and corporate office.
President Vice President Board of Directors Sub - Committees

Joint Loan/ Hypothecation Loan/ Pledge Loan

Loan on Mortgage of Property & Machinery loan

Staff Recruitment, Audit, and Investment

GM/CEO

DGM/CEO

AGM/A.C.E.O

Manager

Deputy Manager

AST. Manager Senior Assistant

Junior Assistant Staff/ Attenders 40

7. Shared Values:
This is the vision statement, which determines the goal of the organization. The vision of the T.G.M.C. Bank is To become leader among 297 urban cooperative banks in the Karnataka State in terms of profitability, Innovation, Quality, better services to its customers and to obtain schedule status form the reserve bank of India, Mumbai

Statement of the Bank:

Invest your money with us for better safety, security, Identity and Profitability Awards to the Bank: The best managed urban co-operative bank in the Karnataka State for the year 2002-03. The best urban co-operative bank in the Karnataka state for the year 200506. Business Hours: Tumkur Tiptur/Sira Branches Monday to Friday:- Working hours 10.30 am to 5.30pm Transaction hours 10.30 am to 2.30 pm. On Saturday:- Working hours 10.30 am to 2.30 pm Transaction hours 10.30 am to 12.30 pm. SUNDAY HOLIDAY

41

Bangalore & Mysore Branches:Monday to Friday: - Working hours 10.00 am to 6.00 pm Transaction hours 10.00 am to 1.00 pm 3.00 pm to 5.00 pm On Saturday: - Working hours 10.00 am to 1.00 pm Transaction hours 10.00 am to 12.00 pm SUNDAY HOLIDAY In Tumkur, S.S. Puram and Raghavendra Nagar Branches, and in Bangalore, Rajajinagar Branch is working all the 7 days.

Functions of TGMC Bank Ltd:1. Accept the deposits from its members, Associate members, nominal members, and general public, for the purpose of the meeting the credit requirements of the banks members. 2. Provide credit facilities to its members, Associate members and nominal members as short term loans, Medium term loans and long term loans to various vital roles in finance. 3. Besides the above functions, they also carry an ordinary banking operations are collection of D.D./Bills/Cheque, issue of pay orders/ demand drafts. Issue of cuff cheques, safe deposit lockers, issue of bank Guarantee and an arrangement of letter of credit facilities from the H.D.F.C. BANK OF ITS CUSTOMERS.

42

Accounting System at T.G.M.C. Bank Ltd:Accounts are maintained under double entry system of book keeping. Ledger is maintained to record each transaction. The Bank is using PENTA BANK SOFTWARE Ailment Software and now they are implementing core banking solutions from M/s C- Edge enterprise technologies Ltd., which is jointly developed from urban co-operative Banks. This is the first Urban Co-operative Bank in the Karnataka State to implement state of the art technology is core banking solutions (CBS). Each Branch/ Department function under the control of Chief executive Officer who ensure effective functioning of their respective Branch/ Department duly assisted by the branch managers/ managers etc.,

Auditing System of the Bank:

The bank has good auditing control system. The bank has appointed 2 internal Auditors to check the internal discrepancies and to strengthen the internal affairs of the Bank accordance with Reserve bank of Indias circulars, guidelines, norms, directions and system and procedures. Agency, con current audit is done by external audit the EC who are professionally qualified as charted accountancy, CISA and system audit and control; they will issue a report as. Quarterly basis, whatever objections raised by auditors, concerned branch manager and will give compliance then and there itself. Statutory audit is done by charted accountants those who are enrolled as panel auditors in the Reserve Bank of India and statutory Auditors will be appointed by Director of Co-operative Audit, Department of co-operation, Bangalore.

43

Associated Institution of TGMC Bank Ltd:

Grain merchants Association parent body. Grain merchants charitable Trust G.M.A. Educational trust Sri. Mahalakshmi Temple Trust

Raising of funds of the bank:

The bank will raise its funds by the following ways, when there is need. They are as follows: Issue of Shares Accepting deposits of various kinds and by issue of cash certificates Entrances fees Any other means permitted under the act.

Salient Features of the Bank:1. Very attractive interest rates on all types of deposits. Which are more than commercial and nationalized banks. 2. Safe Deposit lockers facilities are available. 3. All Deposits up to Rs 1,00,000 is guaranteed by Deposits insurance scheme in DICGO. 4. Prompt Quick and efficient service.
44

5. Continuous increases in net profits. 6. Rapid development in the state of the art technology at a faster pace. 7. All deposits having nomination facilities. 8. Tailor made deposits schemes to all classes of people in the society. 9. Gold loan facility available. 10.NRO/NRE Accounts are accepted. 11.Quick cheque collection facility. 12.Easy procedure and documentation to avail loans. 13.Total banking transactions are fully computerized with core banking solutions. 14.All types of loans and advances given at competitive rate of interest. 15.Working hours extended for 7 days a week 16.One of the leading urban co-operative banks in the Karnataka state.

Aims and Objectives of the Bank: To reduce cost of deposits. To expand area of operation. To increase customer satisfaction. To provide A.T.M. Facilities to customers. To provide retail banking.
45

 To increase net profit. To maintain personal integrity. To prove versatile banking services. To focus on recovery. To focus on NPA.

Products of the Bank:The bank is offering its customers most of all the facilities of the banking industry The products or services of the bank can be classified into two broad ways 1. Deposit Accounts. 2. Loans and Advances Accounts. 3. Other special services.

Deposit Account:The deposits are the back bone of the bank. Any bank will sustain in the industry and comply in the market only up to that period, where the depositors having believe about the bank. If any bank losses believe in the minds of the depositors, if will not be having any more life in future, there are five types of deposit products, which are briefed below:

46

a. Current Accounts:An account to take care of all business requirements with Any branch Banking facility. These deposits contribute major portion of the bank circulating media of exchange. Bank does not pay any interest for these deposits. Rs 50 will be charged for those deposits as bank charges for every half year and also charge Rs 2/- for every cheque leaf. In this account, the customers should have to maintain a minimum balance of Rs 1,000/-

b. Savings Bank Accounts:People with steady monthly income and serve their earnings through this account. Bank pays interest at a nominal rate @ 3.5% and minimum balance is Rs 500/-

c. Fixed Deposit Account:Money is accepted for a fixed period. The rate of interest is higher than other accounts. Minimum period is 15 days and maximum period is 10 years. Interest can be withdrawn on monthly/ quarterly or half yearly, the longer the period the higher interest.

d. Mangala Cash Certificate:In this scheme the deposit will earn every quarterly on compounding interest. Interest will accumulate quarterly minimum period is 15 months and maximum period of deposit is 10 years. Only mature of date interest can be withdrawn on mature date. Interest can be withdrawn along with principal amount and accumulated compound interest.

47

e. Cumulative Term Deposit:All you need to do is to deposit a fixed amount every month, which will turn into handsome returns at the end of the tenure. Small fixed account of savings every month can be invested on C.T.D. Ideally suited for salaried officials, Retail traders, savings, needed Housewives etc., any time you need your money back, before the due date, will be paid with least formalities and in quick time. Minimum deposit period is months and maximum deposit period is 10 years.

f. Non Resident Accounts:Non Resident Indians can open Saving Bank Account, fixed deposit Account and Mangala cash certificate account at the designated Branches.

Attractive Interest Rates on Deposits:Sl.No 1 2 3 4 5 Period 15 days to 90days 91 days to 90 days 181 days to 1 year Above 1 year to 3 years Above 3 years Rate of Interest 6% 7% 8% 10% 9%

1% additional interest will be paid for Senior citizen, charitable trusts, widows, and physically handicapped persons for above one year deposits.

48

2. Loans and Advances:The borrowers are the Heart of every Bank. The key persons to generate the profit of the bank are the borrowers. Today banks are not completing for attracting the depositors, but they are competing for attracting the prompt borrowers. Non performing asset (NPA) norms of Reserve Bank of India is the main cause for todays healthy competition. This is helpful in throughout the dusty loan accounts. The bank is offering different types of loans and advances on its members. The bank has classified its loans and advances in 3 broad categories, on the basis of tenure of the loan. They are as follows: Sl.no. 1 2 3 Particulars Short term loans and advances Medium term loans and advances Long term loans and advances Tenure Below 1 year 1 year to 5 year Above 5 years

1. Short Term Loans and Advances:a. Joint loan and Installment joint loan:Joint loan is given to member of the bank who is having the voting right with a surety of another member. A member can get this loan only up to Rs 25,000\share amount margin should be maintained 5% on sanctioned loan amount. Maximum loan limit of Rs 25,000/- and the tenure of this loan is 5 months. The instalment joint loan is also is also same like joint, but here the borrower has to repay the loan amount in 10 equal instalments.

49

b. Over Draft/ Cash credit facilities:The bank is also giving advances traders, businessmen, industries etc in the form of over draft. Cash credit facilities to their remaining account maintained with the bank. This loan will be given to meet the working capital need of the traders, businessmen, industries, on security of stocks and the immovable property, this facility will be sanctioned after considering the working capital requirement and the security and also the transactions made in their accounts. The tenure of this facility will be given for a period of 1 year, if the transactions are satisfactory to the bank and the reserve bank of India norms. As per the RBI s norms transactions should be made at least 6 times of sanctioned OD. / C.C. limit amount. The account for every day and charged on every month. c. Gold Loan:To avail this Lon, the borrower has to pledge his/her gold ornaments to the bank. They will give the loan only after its valuation by its authorized gold smith appraiser sanction of loan only up to 50% of its market value and tenure of the loan will be maximum 1 year. d. Pledge Loan:This loan can be availed by the traders, merchants, business men, industrialists etc., this loan will be given by pledging the goods and stocks of the borrowers, which are related to their trade/business. Goods will be stored in their own go downs, under the custody of the bank and goods will be stored at central/ Karnataka state ware housing go downs. Proper lien will be noted form the concerned authorities then only loan will be sanctioned. The loan will be sanctioned by 70% of the value of the stock, after its inspecting the quality and

50

quantity of the stock. This loan will be sanctioned for a period from 3 months to maximum 6 months. e. Bills discounting:Bank is discounting the cheques issued by the reported

corporate/organizations in favour of the account holders of the bank. This facility is given only to the required customers of the bank. To avail this facility, the customers should have to get prior sanction from the bank for a limited amount. In this case, the bank is discounting the cheques presented in the clearing, by charging the interest at the rate of 18% p.a. up to the period of the realization of the cheques. f. Loan on NSC and LIC bonds:Any person holding NSC and LIC Bonds can be availed this loan, by pledging certificates and Bonds, loan will be sanctioned against LIC Bonds only on surrender value certificate loan will be sanctioned. From 70% to 80% on the face value of the certificates loan tenure will be given maximum of 1 year. g. Deposit Loans:Deposit loans can be availed by any depositor of the Bank, by its lien in the bank, a depositor can avail the loan up to 90% of this deposit, and interest will be charged 1% of interest more than their deposit interest rates.

51

2. Medium Term Loans and Advances:a. Loan on mortgage of property:This loan will be given for the purpose of the business by mortgaging the immovable property of the Borrower, after considering lot of legal aspects, security repayment capacity, credit worthiness and fulfilling required documentation procedures. Normally, this loan will be given 50-60% of the value of the property. Valuation should be done by the banks approved panel valuator only. In this loan the borrower should have to repay the loan in equal instalments. b. Hypothecation loan for vehicles:Hypothecation loan will be sanctioned to purchase a new or an old (old not more than 3 years) vehicle, by hypothecating the same and register the hypothecation in the R.T.O. Normally, this loan will be sanctioned for new vehicles from 70% to 75% on Invoice price and for the old vehicles depends upon the vehicle condition, engine condition, age of the vehicle etc., for old vehicles loan will be should be done by the authorized valuators and for old vehicles, loan will be sanctioned form 50% to 60% of the valuation report. In this loan the borrower should has to repay the loan in equal instalments. Tenure of the loan form new vehicles will be 36 months to 60 months and for old vehicles will be 36 months only; collateral security will be insisted by the bank for better security. c. Machinery Loans:The bank is promising the small scale industries. Medium scale industries and large scale industries also, by sanctioning loan for purchase of new or old machineries. Additional collateral security is rendered for this loan. 75% on the
52

invoice value of the new machinery and 50% on the valuation of the old machinery loan will be sanctioned. Loan tenure will be given from 36 months to 60 months. In this loan the borrower should has to repay the loan in equal instalments. d. Consumable article Loan:The bank is promoting the small businessmen, salary earning persons and low income group persons for purchase of consumable articles like, television refrigerator, washing machine, computer laptop, and other electronic equipments Normally 60 to 75% on the value of the invoice loan will be sanctioned. Loan tenure will be from 1 year to 3 years. e. Housing Loan:The bank is also interested in promoting the housing sector, by granting the loans for purchase or builds a house for the purpose of reliance; normally this loan will be sanctioned from 50% to 60% on the project cost/estimated cost. In this loan the borrower should has to repay the loan in equal instalments. Loan tenure will be 60 months. f. Staff Advances:To encourage the work interest of the employees, the bank is grating loans to the staff for different purpose viz: purchase / build the house purchase of vehicles, consumable articles, education, and marriage and or for other personal necessities. Normally, this loan will be given form 1 year and 3 years and loan will be repaid by equal instalments.

53

Instalments will be deducted from the salary of the employees. For this loan the rate of interest will be charged at the maximum deposit rate of the bank. I.e. now it is 10% P.A. Apartment from this the employees are eligible to get festival advance, up to maximum for Rs 2,000/- to meet the expenses on the occasion of festivals, only. This advance is free of interest with repayment in 10 equal instalments. Sl.No 1 2 3 4 Particulars Pledge loan Gold Loan and Housing loan Joint Loan, term loan and machinery Hypothecation loan (commercial) New vehicle Old vehicle 5 Hypothecation loan (personal/private New vehicle Old vehicle 6 Loan on mortgage of 12.50% 13.00% property 13.00% 13.50% Rate of interest 11.0% 12.50% 12.50

consumable articles loan, over draft, cash credit loan, NSC/LIC Bonds/shares/ Bonds and other loans

3. Other special services:

Apart from the above products, bank is also offering other services which may attracts some bank charges. They are as follows:
54

a. Issue of pay orders and demand drafts b. Issue if gift cheques c. Cheques collection facility d. Safe deposit lockers e. Bank guarantees and letter of credit

55

56

Computation of Trend Percentages of Tumkur Grain merchants Cooperative bank ltd Objective: 1 To understand the financial performance of the Tumkur Grain merchants Co-operative bank.

TABLE-1 Table shows the share capital from the year 2006 to 2010

(In Lakhs) year 2005-06 2006-07 2007-08 2008-09 2009-10 Amount 822 1034 1144 889 1050 Percentage 100% 125.7% 139% 108.1% 127.7%

Analysis
From the above table, the status of share capital on 2006 was Rs. 822 07317 which is 100% than in 2007 it was Rs.103479250 which indicate that there was a increase 25.7% (125.7-100) of than in 2008 it was Rs.114480650 there is increase in 39% in share capital and in 2009 was Rs. 88924900 that is 8% (108.1-100) can be increase, and then in 2010 share capital was Rs.105024650 again it was increased 27.7% (127.7-100) for from the above.
57

GRAPH-1 Graph showing share capital of Tumkur Grain Merchants Co-operative Bank from the year 2006 to 2010
139% 140% 120% 100% 80% 60% 40% 20% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 2009-10 100% 125.70% 108.10% 127.70%

Inference
Above graph indicates, Share capital issued by Tumkur Grain merchants Cooperative bank ltd has by 100% in 2006 and it increased by 25.7% (125.7-100) from the 2007 to 2008 there was some percent as increased by 39% (139-100) and again it was increased by 27.7% (127.7-100) in the year 2010.

58

TABLE-2 Table showing Reserves funds from the year 2006 to 2010

(In Lakhs) year 2006 2007 2008 2009 2010 Amount 822 1034 1144 6609 7098 Percentage 100% 125.7% 135% 804% 863.5%

Analysis
From the above table, the status of Reserves and funds on 2006 was Rs.82207317 which is 100% than in 2007 was Rs.103479250 it indicates, that there is increased by 25.7%(125.7-100) it was increase to than in 2008 it was Rs.114480650 that is there is increase in 35% (120 -100) in reserves and funds and in 2009 was Rs. 660942765 that is 704%(804-100) and than in 2010 it was Rs.709824138 be increase by 763.5% (863.5-100) from the above.

59

GRAPH-2 Graph showing the Reserves and funds Tumkur Grain Merchants Co-operative Bank from the year 2006 to 2010

900% 800% 700% 600% 500% 400% 300% 200% 100% 0%

804%

863.50%

100%

125.70%

135%

2005-06

2006-07

2007-08 Percentage

2008-09

2009-10

Inference
Above graph indicates, Reserves and funds issued by Tumkur Grain merchants Co-operative bank ltd has 100% in 2006 and it increased by 25.7% (125.7-100) from the 2006 to 2007 than it increased by 35%(135-100) from the 2007 to 2008 and again it increased by 704% (804-100) in the year 2008 to 2009 and again there is increase by 763%(863-100) from the year2009to 2010.

60

TABLE-3 Table showing the Deposits from the year 2007 to 2009 (In Lakhs) year 2006 2007 2008 2009 2010 Analysis
From the above table, the status of Deposits on 2006 was Rs.1861749425 which is 100% than in 2007 was Rs.2022361139.67 it indicates, that there is increased by 8.6%(108.6-100) it was increase to than in 2008 it was Rs.2507213913 that is there is increase in 34.6% (134.6 -100) in Deposits and in 2009 was Rs.3521158627 that is 89.1%(189.1-100) and than in 2010 it was Rs. 4222475305 be increase by 126.8% (226.8-100) from the above.

Amount 18617 20223 25072 35211 42224

Percentage 100% 108.6% 134.6% 189.1% 226.8%

61

GRAPH-3 Graph showing the Deposits of Tumkur Grain merchants Co-operative bank from the year 2007 to 2009

250% 189.10% 200% 150% 100% 50% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 134.60% 100% 108.60%

226.80%

2009-10

Inference
Above graph indicates, Deposits issued by Tumkur Grain merchants Cooperative bank ltd has 100% in 2006 and it increased by 8.6% (108.6-100) from the 2006 to 2007 than it increased by 34.6%(134.6-100) from the 2007 to 2008 and again it increased by 89.1% (189.1-100) in the year 2008 to 2009 and again there is increase by 126.8%(226.8-100) for the year 2009 to 2010.

62

TABLE: 4 Table showing the Branch Adjustments as per contra from the year 2006 to 2010

(In Lakhs) year 2006 2007 2008 2009 2010 Amount 1.80 7.50 2.27 2.87 0.96 Percentage 100% 416.6% 126% 159.4% 53.3%

Analysis
From the above table, the status of Bills receivable as per contra on 2006 was Rs.287670 than in which is 100% than in 2007 was Rs.750000 that is

indicates, there was increase by 316.6%(416.6-100) than in 2008 it was Rs.273750 and increase in 26% (126-100) and in 2009 was Rs. 280734 there is increase that is 59.4%(159.4-100) and in the year 2010 in Branch Adjustments was Rs.96056 decrease by 47.7% (53.3-100) from the above.

63

GRAPH-4 Graph showing the Branch Adjustments of Tumkur Grain merchants Co-operative Bank from the year 2006 to 2010

450% 400% 350% 300% 250% 200% 150% 100% 50% 0%

416.60%

100%

126%

159.40% 53.30%

2005-06

2006-07

2007-08 Percentage

2008-09

2009-10

Inference
Above graph indicates, Branch Adjustments issued by Tumkur Grain merchants Co-operative bank ltd has in the year 2006 was 100% and then in 2007 was 416.6% and in 2008 and again it increased by 26%(126-100) in the year 2009 again in was increase to 59.4%(159.4-100) and in the year 2010 the bank as deceased it branch adjustment to 46.7(53.3-100) and in 2010.

64

TABLE: 5 Table showing the Interest payables from the year 2006to 2010 (In Lakhs) year 2006 2007 2008 2009 2010 Amount 1512 1638 2085 3167 3584 Percentage 100% 108.3% 137.8% 209.4% 237%

Analysis
From the above table, the status of Interest payables on 2006 was Rs. 151827005 which is 100% than in year 2007 was Rs.163838174 that indicates, there is increase by 8.3%(108.3-100) in year 2008 it was Rs.208562771 there is increase by 37.8% (137.8-100) in interest payables and than in 2009 was Rs.316714388 that is increase by 109.4%(209.4-100) in 2010 it was Rs.358488719 there was increase by 137%(237-100).

65

GRAPH-5 Graph showing the Interest payables of Tumkur Grain merchants Co-operative Bank from the year 2006 to 2010

250% 200% 137.80% 150% 100% 50% 0% 2005-06 2006-07 2007-08 Percentage 100% 108.30%

237% 209.40%

2008-09

2009-10

Inference
Above graph indicates, Interest payables issued by Tumkur Grain merchants Co-operative bank ltd has in the year 2006 it was 100%, and it increase by 8.3% (108.3-100) from the 2006 to 2007 than again there was increase by 37.8%(137.8-100) from the 2007 to 2008 than in it increase by 109.4% (209.4100) and increased by 137% (237-100) in the year 2009 to 2010

66

TABLE-6 Table showing the Other Liabilities from the year 2006 to 2010

(In Lakhs) year 2006 2007 2008 2009 2010 Amount 161 421 264 3543 4411 Percentage 100% 261% 163.9% 2200% 2739.7%

Analysis
From the above table, the status of Other Liabilities on 2006 was Rs.16180552 which is 100% than in 2007 was Rs.4212979.27 that is indicates there was increase by 161%(261-100), 2008 it was Rs.26415752 there is increase in 63.9% (163.9-100) in Other Liabilities and in 2009 was Rs.354372110 that is 2100% (2200-100) can be increase and in 2010 the other liabilities was Rs.441128101 means there was increase by 2639.7%(2739.7-100) from the above.

67

GRAPH-6 Graph showing the Other Liabilities of Tumkur Grain merchants Cooperative Bank from the year 2006 to 2010

3000% 2500% 2000% 1500% 1000% 500% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 100% 261% 163.90% 2200%

2739.70%

2009-10

Inference
Above graph indicates, Other Liabilities issued by Tumkur Grain merchants Cooperative bank ltd has 100% in 2006, and it was decreased by 161% (261-100) from the 2007 and then in 2008 was by 63.9% (163.9-100) it increase by 2100% (2200-100) in the year 2009 and again by 2639%(2739-100) increased in the year of 2010.

68

TABLE: 7 Table showing the Total Liabilities from the year 2006 to 2010

(In Lakhs) year

2006 2007 2008 2009 2010

Amount
20275 21146 27267 46901 55347

Percentage
100% 104.2% 134.4% 231.3% 272.9%

Analysis
From the above table, the status of Total Liabilities on 2006 was Rs. 2027512894 which is 100% than in 2007 was Rs. 2114618094 that is indicates, there is increase by 4.2%(104.2-100) in 2008 it was Rs. 2726756204 it was increased by 34%(134-100) and in 2009 was Rs. 4690143536 that is 131.3% (231.3-100) in total liabilities and in 2010 was Rs. 5534761570 it was 172.9(272.9-100) can be increase from the above.

69

GRAPH-7 Graph showing the Total Liabilities of Tumkur Grain merchants Cooperative Bank from the year 2006 to 2010

300% 250% 200% 150% 100% 50% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 134.40% 100% 104.20% 231.30%

272.90%

2009-10

Inference
Above graph indicates, Total Liabilities issued by Tumkur Grain merchants Cooperative bank ltd has in the year 2006 it was 100%, and it increase by 4.2% (104.2-100) from the 2006 to 2007 and there was increase in by 34.4%(134.4100) from 2007 to 2008 and again it increased by 131.3% (231.3-100) in the year 2008 to 2009 and there was increased by 172.9%(272.9-100) from the year 2009 to 2010.

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TABLE-8 Table showing Net Profit after Tax for the year 2006 to 2010

(In Lakhs) Year 2006 2007 2008 2009 2010 Amount 916 630 773 647 563 Percentage 100% 68.7% 84.3% 70.6% 61.4%

Analysis
From the above table, the status of Net Profit After Tax on 2006 was Rs.9164568 which is 100% than in 2007 was Rs.63078857 that is indicates there is decrease in 31.3%(68.7-100) than in 2008 it was Rs.77364098 there was decrease by 15.7% (84.3-100) and in 2009 was Rs.64745133 that indicate there more decrease by 29.4% (70.6-100) in Net Profit After Tax , and again there was decrease that is 38.6% (61.4-100) in 2010 was Rs.56309375 from the above.

71

GRAPH-8 Graph showing the Net Profit after Tax of Tumkur Grain merchants Co-operative bank from the year 2006 to 2010

100% 100% 80% 60% 40% 20% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 2009-10 68.70% 84.30% 70.60% 61.40%

Inference
Above graph indicates, Net profit after issued by Tumkur Grain merchants Cooperative bank ltd has in the year 2006 it was 100%, and in the year 2007,2008,2009,2010 the bank facing the decrease in the Net profit by 31.3%, 25.7% 29.4%, and 38.6%.

72

Computation of Trend Percentages of Assets of Tumkur Grain merchants Co-operative bank Ltd TABLE: 9 Table Showing the Cash from the year 2006 to 2010 (In Lakhs) years 2006 2007 2008 2009 2010 Amount 618 980 1066 1643 2386 Percentage 100% 158.5% 172.4% 265.8% 386%

Analysis
From the above table, the status of Cash on 2006 was Rs.61838637 which is 100% than in 2007 was Rs.98064201 that is indicates there was decrease by 58.5%(158.5-100), 2008 it was Rs.106668704 there is increase in 72.4% (172.4100) in Cash and in 2009 was Rs.164397411 that is 165.8% (265.8-100) can be increase and again in 2010 the Cash was Rs.238646786 means there was increase by 286%(386-100) from the above.

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GRAPH-9 Graph showing the Cash of Co-operative from the year 2006 to 2010

386% 400% 350% 300% 250% 200% 150% 100% 50% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 2009-10 100% 158.50% 172.40% 265.80%

Inference
Above graph indicates, Cash issued by Tumkur Grain merchants Co-operative bank ltd has 100% in 2006, and it was increased by 58.5% (158.5-100) from the 2007 and then in 2008 was by 72.4% (172.4-100) it increase by 165.8% (265.8100) in the year 2009 and again by 286%(386-100) increased in the year of 2010.

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TABLE-10 Table Showing the Fixed Deposits from the year 2006 to 2010

(In Lakhs) Year 2006 2007 2008 2009 2010 Amount 18617 20223 25072 48202 35632 Percentage 100% 108.6% 134.6% 258.9% 191.3%

Analysis
From the above table, the status of Fixed Deposits on 2006 was Rs.1861749425 which is 100% than in 2007 was Rs.2022361139 it indicates, that there is increased by 8.6%(108.6-100) than in 2008 it was Rs.2507213913 that there is increase in 34.6% (134.6 -100) in Fixed Deposits and in 2009 was Rs.48720223314 that is 158.9%(258.9-100) and than in 2010 it was Rs.3563224758 be increase by 91.3% (191.3-100) from the above.

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GRAPH-10 Graph showing the Fixed Deposit of Tumkur Grain merchants cooperative Bank from the year 2006 to 2010

300% 250% 200% 150% 100% 50% 0% 2005-06 2006-07 2007-08 Percentage 134.60% 100% 108.60%

258.90% 191.30%

2008-09

2009-10

Inference
Above graph indicates, Fixed deposit issued by Tumkur Grain merchants Cooperative bank ltd has in the year 2006 it was 100%, and it increase by 8.6% (108.6-100) from the 2006 to 2007 and there was increase in by 34.6%(134.6100) from 2007 to 2008 and again it increased by 158.9% (258.9-100) in the year 2008 to 2009 and there was increased by 91.3%(191.3-100) from the year 2009 to 2010.

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TABLE-11 Table showing Loans and Advances from the year 2006 to 2010

(In Lakhs) year 2006 2007 2008 2009 2010 Amount 19678 12348 12966 27951 30362 Percentage 100% 62.7% 65.8% 142% 154.2%

Analysis
From the above table, the status of Loans and Advances on 2006 was Rs. 1967829999 which is 100% than in 2007 was Rs. 1234820894 it indicates, that there is decreased by 38.3%(62.7-100) than in 2008 it was Rs.1296652487 there is decrease by 34.2% (65.8 -100) in Loans and Advances and in 2009 was Rs.2795185702 that is 42%(142-100) and than in 2010 it was Rs.3036270152 be increase by 54.2% (154.2-100) from the above.

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GRAPH-11 Graph showing the Loans and Advances of Co-operative from the year 2006 to 2010

154.20% 160% 140% 120% 100% 80% 60% 40% 20% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 2009-10 62.70% 65.80% 100% 142%

Inference
Above graph indicates, Fixed deposit issued by Tumkur Grain merchants Cooperative bank ltd has in the year 2006 it was 100%, and it decrease by 37.3% (62.7-100) from the 2006 to 2007 and there was decrease in by 34.2%(65.8100) from 2007 to 2008 and again it increased by 142% (142-100) in the year 2008 to 2009 and there was increased by 54.2%(154.2-100) from the year 2009 to 2010.

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TABLE-12 Table showing Investments from the year 2006 to 2010

(In Lakhs) Years 2006 2007 2008 2009 2010 Amount 1046 990 1390 7730 12446 Percentage 100% 94.6% 132.8% 739% 1189.%

Analysis
From the above table, the status of Investments on 2006 was Rs. 104660000 which is 100% than in 2007 was Rs.99050000 it indicates, there is decreased by 5.4%(94.6-100) than in 2008 it was Rs.139050000 there is increase by 32.8%(132.8-100) in Investments and in 2009 was Rs.773075620 that is 639%(739-100) and than in 2010 it was Rs.1244600214 be increase by 1089% (1189-100) from the above.

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GRAPH-12 Graph showing the Investments of Tumkur Grain Merchants Cooperative from the year 2006 to 2010

1189.00% 1200% 1000% 800% 600% 400% 200% 0% 2005-06 2006-07 2007-08 Percentage 2008-09 2009-10 100% 94.60% 132.80% 739%

Inference
Above graph indicates, Investments issued by Tumkur Grain merchants Cooperative bank ltd has in the year 2006 it was 100%, and it increase by 5.4% (94.6-100) from the 2006 to 2007 and there was increase in by 32.8%(132.8100) from 2007 to 2008 and then there is increased by 639% (739-100) in the year 2008 to 2009 and there was increased by 1089%(1189-100) from the year 2009 to 2010.

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TABLE-13 Table showing Interest Receivable from the year 2006 to 2010

(In Lakhs) year 2006 2007 2008 2009 2010 Amount 2604 2999 3668 4597 4905 Percentage 100% 115.1% 140.8% 175.4% 188.3%

Analysis
From the above table, the status of Interest receivable on 2006 was Rs. 260427659 which is 100% than in 2007 was Rs.299943422 it indicates, that there is increased by 15.1%(115.1-100) than in 2008 it was Rs.366846855 that there is increase in 40.8% (140.8 -100) in Interest Receivable and in 2009 was Rs.4597751319 that is 75.4%(175.4-100) and than in 2010 it was Rs.490579400 be increase by 88.3% (188.3-100) from the above.

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GRAPH-13 Graph showing the Interest Receivables of Tumkur Grain Merchants Co-operative from the year 2006 to 2010

200% 140.80% 150% 100% 100% 50% 0% 2005-06 2006-07 2007-08 Percentage 115.10%

175.40%

188.30%

2008-09

2009-10

Inference
Above graph indicates, Interest Receivables issued by Tumkur Grain merchants Co-operative bank ltd has 100% in 2006 and it increased by 15.1% (115.1-100) from the 2006 to 2007 than it increased by 40.8%(140.8-100) from the 2007 to 2008 and again it increased by 75.4% (175.4-100) in the year 2008 to 2009 and again there is increase by 88.3%(188.3-100) from the year 2009 to 201

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TABLE-14 Table showing Furnitures and Fixtures from the year 2006 to 2010

(In Lakhs) year 2006 2007 2008 2009 2010 Amount 118 148 178 124 189 Percentage 100% 125.4% 150.8% 105% 160.1%

Analysis
From the above table, the status of Furnitures and Fixtures on 2006 was Rs. 11836745 which is 100% than in 2007 was Rs. 1487564 that is indicates there was increase by 25.4%(125.4-100), 2008 it was Rs. 1785021 there is increase in 50.8%(150.8-100) in furnitures and Fixtures and in 2009 was Rs. 1248796that is 5% (105-100) can be increase and again in 2010 the Furnitures and Fixtures was Rs.1892541 means there was increase by 60.1% (160.0-100) from the above.

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GRAPH-14 Graph showing the Furnitures and Fixtures of Tumkur Grain Merchants Co-operative from the year 2006 to 2010

180% 160% 140% 120% 100% 80% 60% 40% 20% 0%

150.80% 125.40% 100% 105%

160.10%

2005-06

2006-07

2007-08 Percentage

2008-09

2009-10

Inference
Above graph indicates, Furnitures and Fixtures issued by Tumkur Grain merchants Co-operative bank ltd has 100% in 2006, and it was increased by 25.4% (125.4-100) from the 2007 and then in 2008 was by 50.8% (150.8-100) it increase by 5% (105 -100) in the year 2009 and again by 60.1%(160.1-100) increased in the year of 2010.

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TABLE-15 Table showing other assets from the year 2006 to 2010

(In Lakhs) year 2006 2007 2008 2009 2010 Amount 110 118 945 2226 1384 Percentage 100% 107.2% 859% 2023.6% 1258.1

Analysis
From the above table, the status of Other assets on 2006 was Rs. 11019567 which is 100% than in 2007 was Rs. 11852245 that is indicates there was increase by 7.2%(107.2-100), 2008 it was Rs. 9457870 there is increase in 759% (859-100) in Other assets and in 2009 was Rs.222685534that is 1923.6% (2023.6-100) can be increase and than in 2010 the Other assets was Rs. 138449446there is increase by 1158.1%(1258.1-100) from the above.

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GRAPH-15 Graph showing the other assets of Tumkur Grain Merchants Co-operative from the year2006 to 2010

2500% 2000% 1500% 1000% 500% 0% 2005-06 2006-07 2007-08 Percentage 100% 107.20% 859%

2023.60%

1258.10%

2008-09

2009-10

Inference
Above graph indicates, Furnitures and Fixtures issued by Tumkur Grain merchants Co-operative bank ltd has 100% in 2006, and it was increased by 7.2% (107.2-100) from the 2007 and again in 2008 was increased by 759% (859-100) and by 1923% (2023-100) in the year 2009 and then there was increase by 1158%(1258-100)in the year of 2010.

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 Objective: 2
To study the trend of actual performance of various financial

parameters with reference to estimated performance. Table-16 Table shows The Tumkur Grain merchants Co-operative bank as estimation on the deposit from the year 2006 to 2010

(InLakhs) Year 2005-06 2006-07 2007-08 2008-09 2009-10 Estimated 20000 22500 25000 30000 40000 Achieved 18617 20223 25072 35211 42224

Analysis
From the above table, the status of deposits on the year 2006 there estimation was 20000 lakhs the bank as achieved more than estimation. On the year 2007 the estimation was 22500 lakhs but bank as achieved less than estimated deposit. And in the year 2008 as 25000 also the bank achieved the estimated deposit and again in the year 2009 the bank as achieved more than the estimation 30000 lakhs and again in the year 2010 bank as achieved their 40000 lakhs estimation.

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GRAPH-16 Graph shows The Tumkur Grain merchants Co-operative bank as estimation on the deposit from the year 2006 to 2010

45000 40000 35000 30000 25000 20000 15000 10000 5000 0 2005-06 2006-07 2007-08 2008-09 22500 20000 18617 20223 25000 25072 30000 35211

40000

42224

2009-10

Estimated

Achieved

Interpretation
Above graph indicates, loan and Advance that aim by the Tumkur Grain merchants Co-operative Bank ltd in year 2006 and 2007 was not successful in achieving it. In year 2008, 2009 and 2010 the bank as achieved its estimation.

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Table-17
Table shows The Tumkur Grain merchants Co-operative bank as estimation on the loan and Advance from the year 2006 to 2010

(In Lakhs) Year 2005-06 2006-07 2007-08 2008-09 2009-10 Estimated 18000 20000 22500 25000 30000 Achieved 19678 12348 12966 27951 30362

Analysis
From the above table, the status of Loans and Advance on the year 2006 there estimation was 18000 lakhs the bank as achieved the estimation. On the year 2007 the estimation was 20000 lakhs bank as not achieved the estimated on Loans and Advance. And in the year 2008 the bank as not successful in achieving the estimated of 22500. But in the year 2009 the bank as achieved the estimation 25000 lakhs and again in the year 2009 bank as achieved their 30000 lakhs estimation.

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Graph-17 Graph shows The Tumkur Grain merchants Co-operative bank as estimation on the loan and Advance from the year 2006 to 2010

35000 30000 30000 25000 25000 20000 15000 10000 5000 0 2005-06 2006-07 2007-08 2008-09 2009-10 18000 19678 20000 22500 27951 30362

12348

12966

Estimated

Achieved

Interpretation
Above graph indicates, loan and Advance that aim by the Tumkur Grain merchants Co-operative Bank ltd has 1800 in 2006 was achieved and in year 2007, 2008 the bank as not achieved that. In the year 2009 and 2010 the bank as successful in achieving the estimation.

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Table 18 Table shows The Tumkur Grain merchants Co-operative bank as estimation on the Net Profit from the year 2006 to 2010

(In Lakhs) Year 2005-06 2006-07 2007-08 2008-09 2009-10 Estimated 750 950 900 900 900 Achieved 916 630 773 647 563

Analysis
From the above table, the status of Net profit on the year 2006 there estimation was 750 lakhs bank as achieve it. In the year 2007 there estimation was 950 lakhs but bank is not success in achieving it. In the year 2008, 2009, 2010 the bank was not able to achieve it is Net Profit estimation due to many reasons.

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Graph 18 Graph shows The Tumkur Grain merchants Co-operative bank as estimation on the Net Profit from the year 2006 to 2010

1000 900 800 700 600 500 400 300 200 100 0 2005-06 750

916

950

900 773 630

900

900

647 563

2006-07

2007-08

2008-09

2009-10

Estimated

Achieved

Interpretation:
Above graph indicates Net Profit that aim by the Tumkur Grain Merchants Cooperative Bank ltd has achieved its estimation (Amid) in the year 2006 but after that in the year 2007,2008,2009 and in the year 2010 bank was not successful in achieving it.

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 Objective: 3 To analysis financial statements through various ratios Ratio analysis

Ratio analysis is a process of establishing mathematical relationship between two accounts or items; on the other hand it is a simple arithmetical expression of the relationship of one number to another. Ratio analysis is a technique of the calculation of a number of accounting rations from the figures found in the financial statements. The comparison of accounting ratio with those of the previous year or with those of other similar concerns or with those of standard ratios and interpretation of comparison just as a physician, diagnoses the disease of a patient through symptoms like the blood pressure, pulsate, the temperature etc., a financial analysis can diagnose the financial condition of an enterprise through ratio analysis.

Types of ratios
1. 2. 3. 4. 5. Current ratio Liquidity ratio Debt equity ratio Proprietary ratio Capital gearing ratio

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1. Current ratio
Current ratio may be defined as the relationship between the current assets and current liabilities. This ratio is also known as working capital ratio. It is a measure of general liquidity ad is most widely used to make the analysis of a short term financial position or liquidity of a firm.

Current Ratio= Current assets Current Liabilities

Table 19 Table showing Current Ratio

YEAR

2005-06 2006-07 2007-08 2008-09 2009-10

CURRENT ASSESTS (Amounts) 109885787 72852804 117419674 878024752 377096232

CURRENT LIABILITESES (Amounts) 16180552 42121979 26415752 354372110 44128101

RATIO

6.79 1.72 0.65 2.47 8.5

CA = drs, cash balance, bank balance, B/R, A/C receivables, Stock CL = Crs, B/P, BOD, A/Cs Payable

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Graph 19 Graph showing the current Ratio

9 8 7 6 5 4 3 2 1 0 2005-06 2006-07 2007-08 RATIO 2008-09 1.72 0.65 2.47 6.79

8.5

2009-10

Interpretation:
In the year 2006, current ratio of the bank was 6.79. it has decreased to 1.72 in 2007. In the year 2008, it has decreased gradually to 0.65. in the year 2009 it was 2.47. In the year it increased too gradually to 8.5. When current ratio is compared among all the 5 years, it has increased by1.71 points overall.

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Debt-equity ratio
Debt-equity ratio also known as external-internal equity ratio is calculated to measure the relative claims of outsiders and the owners against the firms assets. Debt equity ratio= Long Term debts__ Long Term Funds

Table 20

Table showing Debt-equity ratio

YEAR

LONG TERM DEBT (IN LAKHS)

16180552 42121979 26415752 354372110 44128101

LONG TERM FUNDS (IN LAKHS)

82207317 103429250 114480650 749867665 814858788

RATIO

2005-06 2006-07 2007-08 2008-09 2009-10

0.19 0.40 0.23 0.47 0.054

Long term Debt = Debentures + Long term Borrowings Share Holders Funds = Eq share capital+Pref Share +Reveres&Surplues+ undistributed Profit (Differed Exp Accumulated cost)

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Graph 20

Graph showing the Debt-equity ratio

0.5 0.4 0.3 0.19 0.2 0.1 0 2005-06

0.47 0.4

0.23

0.054

2006-07

2007-08 RATIO

2008-09

2009-10

Interpretation:
From the above table we come to know that in the year 2006, debt of the bank was 0.19. It has increased to 0.40 in 2007. In the year 2008, it has decreased to 0.23. In the year 2009 it was 0.47. In the year it decreased too gradually to 0.054. It can also be said that the company fund comprises a low level of equity.

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Capital Gearing Ratio: Meaning:

It is the ratio, which express the relationship between equity capital (share holders fund) and fixed interest bearing security and interest bearing shares. A company is highly geared if this ratio is more than 1. If it is less than 1, it is low geared. If the ratio is exactly 1, it is evenly geared. A highly geared company has the advantage of trading equity. Capital Gearing Ratio = Shareholders fund

Preference capital + long term debt

Table 21 Table showing the Capital Gearing Ratio

YEAR 2005-06 2006-07 2007-08 2008-09 2009-10

EQUITY 82207317 103429250 114480650 749867665 814858788

DEBT 1861749425 2022361137 2507213913 3521158627 4222475305

RATIO 0.04 0.05 0.04 0.02 0.19

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Graph 21 Graph showing the Capital Gearing Ratio

0.2 0.15 0.1 0.05 0 2005-06 2006-07 2007-08 RATIO 2008-09 0.04 0.05 0.04 0.02

0.19

2009-10

Interpretation:
From the above table we come to know that in the year 2006, the gearing ratio of TGMC bank is 0.4. It has increased to 0.5 in 2007. In the year 2008, it has decreased to 0.4. In the year 2009 it was 0.2. In the year 2010 it increased too gradually to 0.19. It can also be said that the company fund comprises a high level of equity.

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Fixed Assets Ratio: Meaning:

This ratio explains whether the firm has raised adequate long term funds to meet its fixed assets requirements. This ratio gives an idea as to what part of the capital employed has been used in purchasing the fixed assets for the concern. If the ratio is less than one it is good for the concern. The ideal ratio is 0.67. Fixed assets Ratio = Fixed Assets Capital Employed

Table 22 Table showing the Fixed Assets Ratio:

YEAR 2005-06 2006-07 2007-08 2008-09 2009-10

FIXED ASSETS 11836745 12657389 15645839 21171928 20387972

CAPITAL EMPLOYED 82207317 103429250 114480650 749867665 814858788

RATIO 0.14 0.12 0.13 0.02 0.02

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Graph 22 Graph showing the Fixed Assets Ratio

0.14 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2005-06 2006-07 0.12

0.13

0.02

0.02

2007-08 RATIO

2008-09

2009-10

Interpretation:
From the above table we come to know that in the year 2006, fixed asset ratio of the bank was 0.14. It has decreased to 0.12 in 2007. In the year 2008, it has increased to 0.13. In the year 2009 it was 0.2. In the year it same in the year 2010 fixed asset ratio 0.2

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Liquidity ratio
The liquidity ratios indicate the liquidity position of a company. They, infect, measure the ability of a company to meets its current liabilities as they fall due. if the company has insufficient current assets in relation to its current liabilities it might be unable to meet its commitments and be forced into liquidation.

Liquid ratio=

Liquid Asset __ Current Liabilities

Table 23 Graph showing the Liquidity ratio

YEAR

LIQUID ASSETS

2005-06 2006-07 2007-08 2008-09 2009-10

61838637 98064201 106668704 16439411 238646786

CURRENT LIABILITISES (Amounts) 16180552 42121979 26415752 354372110 44128101

RATIO

3.82 2.3 4.0 0.46 5.40

Liquid assets = Current assets Stock, P exp. CL = Crs, BOD, B/P, O/s Exp.

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Graph 23
Graph showing the Liquidity ratio

6 5 4 3 2 1 0 2005-06 2006-07 2007-08 RATIO 2008-09 0.46 2.3 3.82 4

5.4

2009-10

Interpretation
From the above graph, we can understand that there is gradual increase in Liquid ratio. The year 2006, Liquid ratio of the bank was 3.82. It has decreased to 2.3 in 2007. In the year 2008, it has increased gradually to 4. And in the year 2009 Liquid ratio was 0.46. In the year 2010 it increased too gradually to 5.4.

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 Object: 4 To bring out the strengths and weakness of Tumkur Grain Merchants Co-operative Bank.

Strengths
The share capital of the Tumkur Grain Merchants Co-operative bank is increasing year by year. The Tumkur Grain Merchants Co-operative bank has good progress in reserve funds. The Tumkur Grain Merchants Co-operative bank has branches in south Karnataka also. The Tumkur Grain Merchants Co-operative bank has good and effective management. The communication system and response for customer problem of Tumkur Grain Merchants Co-operative bank is nice comparing to other banks. The Tumkur Grain Merchants Co-operative bank is competing with national banks. The interest rate is high for deposit compare to nationalized banks.

Weakness
The Tumkur Grain Merchants Co-operative banks Net profit is decreasing year by year. The Tumkur Grain Merchants Co-operative bank has less concentrated on loans and advances.

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SUMMARY OF FINDINGS

The net profit is decreasing year by year. The bank is not concentrated on leading loans and advances , and Deposits. In the year 2010 the bank has managed the financial analysis efficiently than in any other years. The Tumkur Grain Merchants Co-operative bank shows an increase profit in 2007 and decreased profit in 2009. The bank has made investment in many banks and financial areas. The bank has started from long back and in present it has improved a lot. The bank interest level will fluctuates according to economy level and RBI Decision. The bank share capital amount was increasing so from this we can know the bank is running in a meaningful manner which implies profit.

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Suggestions
The capital gearing ratio of the bank is lesser than 1 which makes it low gearing. It would be better if the bank evens it to 1.

The bank needs to utilize its assets efficiently.

There should be better utilization of the working capital by bank.

The bank should have a better liquidity position to maintain day to day operations.

The bank should have effective management.

Conclusion
The banks are one of the major participants of the Indian financial system. The banking sector is filled with umpteen numbers of opportunities and challenges arising from retail base, customer expectations and growing competition. These banks have concentrated on technology and providing customer friendly services and products. On analyzing the financial performance of Tumkur Grain Merchants Cooperative Bank Ltd. For the year 2005-2006 & 2009-2010, it can be said that the bank has the potential of becoming one of the leading banks in Karnataka. It needs to utilize it assets and improve the working capital efficiency.

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Bibliography

For the study conducted, the required information has been collected from the following sources. Books S.M. Shukla, Financial Accounting Dr. S.N. Maheshwari, Elements of Financial Management

Websites: www.google.com www.wikipedia.com www.TGMCBANK.com

Other Books Bank annual report of Tumkur Grain Merchants Co-operative Bank Ltd.

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