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CHAPTER - 1 INTRODUCTION AND RESEARCH METHODOLOGY

1.1 Introduction The movement started in Europe in the nineteenth century, basically in Britain and . The first consumer cooperative was set in 1769, in Fenwick, East Ayrshire, when neighborhood weavers mauled a sack of oats into John Walker's whitewashed receiving area and began offering the substance at a rebate, framing the Fenwick Weavers' Society, by 1830, there were a few hundred co- operatives. Some were at first fruitful, yet most established in the mid nineteenth century had flopped by 1840. It was not until 1844 when the Rochdale Society of Equitable Pioneers set up the "" on which they ran their cooperative, that framed the reason for advancement and development of the modern cooperative movement . Robert Owen (1771– 1858) is considered as the father of the cooperative development. A Welshman who ended up noticeably fruitful in the cotton exchange, Owen put stock in giving his workers a decent situation with access to education for themselves and their kids. These thoughts were actualized effectively in the cotton factories of New Lanark, Scotland. It was here that the main co-operative store was opened. Owen's thought was of shaping "towns of co-operation" where laborers would drag themselves out of neediness by developing their own particular nourishment, making their own particular garments and eventually getting to be noticeably autonomous. He endeavored to frame such groups in Orbiston in Scotland and in New Congruity, Indiana in the United States of America, yet the two groups fizzled. Despite the fact that Owen propelled the co-operative movement, others –, for example, Dr. William King(1786– 1865) – took his thoughts and made them more workable and down to earth. He put stock in beginning little, and understood that the common laborers would need to set up co-operatives for themselves, so he saw his part as one of direction. He established a month to month periodical called The Co- operator, the main release of which showed up on 1 May 1828. This gave a blend of

1 co-operative logic and down to earth guidance about running a shop utilizing co- operative principles. Dr. William exhorted individuals not to cut themselves off from society, yet rather to shape a general public inside a general public, and to begin with a shop. The Rochdale Pioneers The Rochdale Society of Equitable Pioneers was a group of 10 weavers and 20 others in Rochdale, England, that was formed in 1844. As the mechanization of the Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food items they could not otherwise afford. With lessons from prior failed attempts at co-operation in mind, they designed the famous Rochdale Principles, and over a period of four months they struggled to pool one pound sterling per person for a total of 28 pounds of capital. On December 21, 1844, they opened their store with a very meager selection of butter, sugar, flour, oatmeal and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods. 1.2 Co-operative Movement in The Co-operative Movement in India was born out of the distress and turmoil that prevailed in the last quarter of the 19th century. The Industrial Revolution had given a death blow to village industries and driven people to agriculture, the only avenue of employment and livelihood. The consequent sub-division and fragmentation of holdings had made agriculture an uneconomic proposition.This, combined with the rigidity of land revenue collection, uncertainty of rainfall and, therefore, of crop production, compelled the agriculturist to knock at the door of the money-lender who advanced money cither by purchasing the crop at a throwaway price or by charging a sky-high rate of interest.The deteriorating condition of farmers under the heavy strain of increasing indebtedness and frequent famines not only proved the inadequacy of legal measures but also emphasized the need for the provision of cheap credit through an alternative agency. The primary objective of this movement was to relieve the peasants from the clutches of moneylenders and from the vicious circle of indebtedness through supply of credit at lower rate of interest. Co-operatives today cover the entire spectrum of activities in rural areas and serves as an alternative source to villagers who otherwise were dependent on moneylenders for supply of credit. The co-operative movement is

2 responsible for comprehensive development of primary agricultural credit societies to function as multi-purpose, viable units. Though co-operative movement in our nation began as a credit movement, ultimately non-credit activities were introduced in the co-operative structure. Even though, the credit activities still constitutes the most significant element of the co-operative movement. At present co-operatives are destined to emerge as dominant undertakings in vital sectors of the economy like agriculture, fisheries, industrial development, and handloom sector etc. 1.3 Early History of the Co-Operative Movement in India The prevalence of widespread distress in the country, the growing volume of rural debt and the machinations of the money-lender led to certain voluntary efforts in the field of rural credit. In the Madras Presidency were organised ‗Nidhis‘ or Mutual- Associations. Based on the Co-operative Principle, these associations achieved considerable success. By 1901, there were 200 nidhis with more than 36000 members and subscribed capital of more than 2 lakhs of rupees. In the Punjab, a society on co- operative lines was started as early as 1891 at Panjawar in Hoshiarpur district for controlling .The state of Mysore introduced Agricultural ‘ in 1894, while U.P. established village banks and set the beginnings of distributive co-operation. All these efforts were purely voluntary, strictly non-official, and, at best, en- joying only government patronage. The first official step was taken when Sir William Wedderburn made, after the Deccan riots, the proposal for the establishment of agricultural banks as a remedy against rural indebtedness. In 1881, some Bombay capitalists drew up a scheme for starting an agricultural in Poona. Even a bill to that effect was introduced in the Legislative Council by Mr. Mandlik. Meanwhile, Wedderburn tried but failed to enlist public support for his scheme and it could not take practical shape. The interest of the govt. now turned to voluntary mutual credit associations modeled on Raiffeisen co-operative societies of Germany. In 1892, the Madras Govt. deputed Fredrick Nicholson to Germany ―on special duty for the purpose of enquiring into the possibility of introducing into this Presidency system of Agricultural or other land banks.‖ In his Report, Nicholson stressed the point that ―the substitution of organized credit for that of the money-lender is a necessary development of civilization —the individual system must be eventually passed as general wealth, order, business confidence, and habits of business associations develop.‖

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He summed up his report in the two words: ―Find Raiffeisen‖. The Government, however, took no immediate action on the report which was submitted in 1895.While Nicholson‘s enquiries were in progress, Mr. Dupernex began ex- perimenting with ‗Peoples Banks‘ in U.P., Maclagan; and Crosthwaite started similar societies in Multan district of the Punjab and Mr. Lyon in Bengal. The interest shown by local agriculturists in these societies and the powerful support lent by the Indian Famine Commission (1901) induced the government. to set up a committee under the president ship of Sir Edward Law to report on the introduction of co-operative societies in India. The Committee reported favorably in 1903 and the first Co- operative Societies Act was passed in 1904. 1.4 Co-Operative Societies Act 1904 The main provisions of the Act were as follows 1) Any ten persons living in the same village or town or belonging to the same class or tribe could form a co-operative credit society ‗for the encouragement of thrift and self-help among the members‘. 2) Societies were classified as Rural and Urban. A society in which 80% of the total membership was agricultural was classed as rural, and the one in which 80% of the membership was non-agricultural, was classed as urban. 3) Rural society was to have unlimited liability but urban societies were free to opt for either limited or un-limited liability. 4) Rural society was not permitted to distribute profits, but in the case of urban societies, profits could be distributed after carrying 25% of the net profits to the Reserve Fund. 5) could be made only to members usually on personal security or on the security of some immovable property. 6) Loans could also be made by one credit society to another with the sanction of the Registrar. 7) No member could hold shares in a society for more than Rs. 1000. 8) The organization and control of the movement in each province was put under the charge of a Registrar of Cooperative Societies. 9) The societies were exempted from the payment of stamp and registration duties as well as the Income Tax. Even with the passing of the Act, the movement did not make the progress expected of it. By 1911, there were only 8177 credit societies all over the country

4 with a share capital of Rs.50.5 lakhs and a membership of a little over 4 lakhs. For this, the fault lay with the Act itself. In the first place, it permitted the registration of only credit societies but gave no legal protection to non-credit societies. Secondly the Act, unlike the Wedderburn‘s scheme of Agricultural Banks, made no provision for mobilising urban savings for financing agricultural operations. Institutions like central banks or unions could have been very useful in this respect but the act did not permit their establishment. That is why these societies suffered from a great paucity of funds, their entire working capital being ―less than the rural indebtedness of a single taluka in many parts of India.‖ Also, the classification of societies into urban and rural was found to be arbitrary, unscientific, and highly inconvenient. The prohibition regarding the distribution of profits in rural unlimited societies was a hardship especially in the Punjab and Madras where share capital had become important. Lastly, a good many provisions of the Act of 1904, as interpreted by the Courts, became a hindrance to the further spread of the movement. These drawbacks were removed by the passing of the second Co-operative Societies Act in 1912. 1.5 Co-operative Societies Act in 1912 The progress of co-operative societies was very poor as The Co-operative Act 1904 Act did not provide provision for formation of non-credit societies. Therefore the Act was amended in 1912. The amendment of the Act made a remarkable progress. The co-operation became provincial subject under the reform Act of 1919.The development of co-operative societies can be divided in to two stages; firstly during 1950-60, the membership of small co-operative societies were opened which increased the quantitative number of their societies. Secondly after Patel Committee Report in 1961, the co-operative societies were re-organized. In 1950-51 numbers of co-operative societies was 44.08 lakhs, in 1960-61 170.40 lakhs, in 1970- 71 309.63 lakhs and at present about 812.39 lakhs. The deposits of co-operatives are also increased from Rs.4.28 lakhs in 50-51 to Rs.26,600 lakhs in 80-81. Similarly co- operative advances are also increased from Rs.2290 lakhs in 50-51 to Rs.4200 lakhs in 88-89. Under this Act: 1) Any society, credit or otherwise, could be registered which had as its objective, the promotion of the economic interest of its members. 2) A federal society like the or union could be registered.

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3) Unless otherwise directed, the liability of central societies was to be limited and that of rural credit societies un-limited. 4) No member could have more than 1/5 of the total share capital or hold share exceeding Rs. 1,000 in such a society. 5) The societies were granted exemption from compulsory registration and from the payment of income tax and stamp duties. 6) 1/4 of the net profits of a society were to be carried to its reserve fund. 7) Co-operative Societies were given the first claim to enforce the recovery of certain dues. 8) Requirements of annual audit were retained, as were numerous other provisions of the Act of 1904. The enlargement of the functions infused fresh life into the movement and it did not ―take long to outgrow the dreams of its founders.‖ The number of co-operative societies rapidly grew to 15000 and their membership to 6,95,000 in 1914. A number of new societies sprang up for such purposes as the sale of agricultural produce, cattle , the purchase of seeds, manures and implements, and the promotion of irrigation projects. District unions of primary societies and central banks began to be established. Loan, policy was liberalised and, from 1914, co-operative societies were authorised to grant loans even for ‗domestic occasions.‘ Maclagan Committee These fast changes rapid growth obliged the govt. to take stock of the situation and, accordingly, a committee headed by Sir Edward Maclagan, was appointed in 1915, to study and report whether the movement was proceeding on economically and financially sound lines. The Maclagan Committee, in its report, emphasized the need for proper selection of members, knowledge of co-operative principles, honesty, proper audit, careful scrutiny of loan applications, one man, one vote, thorough audit to prevent bad management and prompt repayment of loans. Its report, submitted in 1915, resulted in reorganization and thorough overhauling of the whole administration of Co-operation. Attempt was made to eliminate societies which did not live up to the ideals of co-operation, and in particular, to insist upon prompt repayments. Under the Reforms Act of 1919, co-operation became a transferred subject with the result that the control and direction of the movement passed entirely into the hands of the new Provincial government. This gave the movement the advantage of greater flexibility since it could now be adapted in accordance with the needs of every province.

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Besides, advanced provinces could no longer be held back by the backward ones. Several provincial government, set Up special enquiry committees, important among them being the Oakden Committee of U.P., King committee of C.P., Townsend committee of Madras and the Calvert committee of Burma. Many provinces, realizing the inadequacy of the Act of 1912, decided to replace it with acts of their own. Bombay govt. was the first to have a separate Act in 1925 followed by Burma and Madras which enforced their separate acts in 1927 and 1932 respectively. The Royal commission on Agriculture also emphasized the need for strengthening the movement for, according to it, the best hope for progress and prosperity of the agriculturist in India lay in co-operation. ―If co-operation fails, there will fail the best hope of rural India‖. It was this deep and comprehensive realization of the difficulties of cooperative movement that led the govt. of India to establish an Agricultural Credit Department in the Reserve in 1935.The period between 1913-14 to 1927-28 was one of substantial progress in the field of cooperation. The number of societies increased from 14881 to 96091, membership from 6.96 lakhs to 37.80 lakhs and working capital from rupees 7.44 lakhs to rupees 76.70 lakhs. In other words, the growth was by over 6 times in the number of societies, more than 5 times in membership and by about 10 times in working capital. The period is also significant for the birth of the Land Mortgage , the first such bank having been established at Jhang in the Punjab in 1920.Heartening as the progress was, the movement was yet inadequate. It affected a small proportion of the rural population. Broadly, the movement made greater progress in the Rayatwari areas of Punjab, and Madras where the agriculturist had mortgage able rights in land than in the zamindari areas of U.P., and Orissa and Bengal where he had nothing to offer but his personal security. 1.6 The Depression and the Co-operative Movement in India The onset of the depression ‗imposed on the movement a much severe strain than it had ever had to face before‘. The sudden fall in the prices of agricultural commodities adversely affected the economic condition of the agriculturists. Their repaying capacity declined. The demand for loans increased while the proportion of overdues mounted up from 20% in 1927—28 to 40% in 1932—33. In Madras, more than 60% of the short-term loans fell in arrears. This threw the entire movement in a very precarious state with many societies and central banks winding up their affairs. An investigation by Sir Darling showed that up to the end of 1934, 24% of the total

7 number of societies started since the beginning of the movement had gone into liquidation—the percentage varying from 9 in Bengal to 49 in Berar. The timely help provided by some of the provincial government, considerably helped the movement to tide over the crisis created by the depression. 1.7 The Second World War With the rise in prices and the return of agricultural prosperity during World War II, a new chapter opened in the progress of the movement. Between 1938-39 and 1945-46, the number of societies rose from 1.22 lakhs to 1.72 lakhs; membership from 53.7 lakhs to 91.6 lakhs and working capital from rupees 106.45 lakhs to 164.0 lakhs. This amounted to a 41% rise in the number of societies, 70.6% in membership and 54% in working capital. The progress may also be judged from the fact that in 1945-46, there was one society for every 3.8 villages and 10.6% of their population as against only one society for 5.4 villages and 6.2% of their population in 1938— 39.The overdues were repaid and the demand for new loans fell with the result that many societies and central banks came to possess surplus funds for which they were keen to find profitable outlets of investment. The most notable contribution of the war was the shifting of emphasis from credit to non-credit aspect of the movement, the percentage of non-credit societies having increased from 17 in 1938—39 to 23 in 1945-46.The shortage of consumer articles like sugar, cloth, Kerosene and matches led to the establishment of a large number of consumer‘s Co-operative Stores. Similarly, many new types of producers‘ societies like weavers‘ co-operative societies marketing societies, Fruit grower and cane-Grower societies, Motor transport societies came to be formed. The war period also saw a growing trend towards the establishment of multipurpose co-operative societies. In short, the war broadened the functional range of the movement and brought about a shift from the lopsided emphasis on the credit aspect to the productive and distributive functions or to its multipurpose potentialities and thereby imparted that ‗richness and balance‘ which was so necessary for its proper development. 1.8 The Co-Operative Planning Committee In 1945, the govt. appointed the cooperative planning committee to draw up a plan of cooperative development in the country. The committee, which was presided over by R.G. Saraiya, fixed an overall target of bringing 50% of the villages and 30% of the rural population within the scope of the movement in a period of ten years.

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With the achievement of Independence and the advent of planning, the role of cooperatives underwent a radical change. Co-operation no longer signified a ‗series of activities organized on cooperative lines‘ but it was acknowledged as an organization that could play ‗a very useful role in the promotion of economic and social democracy and in the implementation of democratic planning in the country. In order to equip the movement for its new role, it was necessary to formulate a long term policy in regard to its structure and organization. It was in this context that the rural credit survey Committee was appointed in 1951. The committee put forward an integrated scheme of rural credit based on (a) State partnership at different levels (b) Full coordination between credit and other economic activities, especially marketing and processing (c) Administration through adequately trained and efficient personnel, responsive to the needs of the rural population. This scheme was approved and accepted as the basis for the future development to be incorporated into the second Five year plan. A notable shift in policy occurred in 1958 when the National Development Council passed a ‗drastic and sweeping‘ resolution‖ which in effect, led to the rejection of the old large-sized credit society and the emergence of small sized ‗Service Cooperatives. Over the period of the three Plans, the co-operative movement made rapid progress. The number of societies of all types increased from 1.8 lakhs to 3.47 lakhs; membership rose from 137 lakhs to 503 lakhs and their working capital expanded from Rupees 276 lakhs to rupees 2800 lakhs. In other words, there was a near-doubling of the number of societies, a more than 3½ times increase in membership and a more than 10 times rise in working capital. This growth was, however, not equally shared among all the states. The progress was more marked in the States of , Gujarat, , Punjab and . The movement was, however, weak in the eastern region comprising the states of , Bengal, Bihar, Orissa, Manipur and Tripura. The uneven progress was reflected in wide differences in the per capita loan distribution to rural population which ranged all the way from rupees 33 in Maharashtra to just two rupees in Bihar and Assam. A most welcome development during the plan period was the diversification of the movement. A major breakthrough was witnessed in the field of agricultural marketing and processing. The development of consumer‘s Stores and industrial co-operatives

9 was also significant. This can be judged from the fact that in 1965-66 the number of stores stood at 13077, membership at 33.32 lakhs and sales at 162.30 lakhs of rupees. In the sphere of industrial co-operatives, there were 78 sugar factories, 142 rice mills, 155 cotton ginning and pressing societies, 298 oil crushing and 329 Paddy husking societies in 1965-66.The co-operative movement, during a span of over six decades, had come a long way. From humble beginnings in 1904, it had expanded into an enormous organization covering 85% of villages and 33% of the rural population of the country. In 1961-62 it met 25.8% of the credit needs of the agriculturists as against 3.1% in 1951-52.The average Loan advanced per member had increased from rupees 44 in 1950-51 to rupees 137 in 1965-66. Apart from providing finance, the movement had diversified into such fields as agricultural production, marketing and processing, small and medium industries, housing, transport, and distribution of essential commodities. And yet it failed to ‗convulse‘ the country. More than 60% of the rural population was still outside its fold and for nearly 75% of his credit needs; the cultivator was dependent on agencies other than the co-operative society. The movement did not reduce the burden of the agricultural‘ debt nor their dependence on the money-lender. It failed to improve their self-reliance, resourcefulness, or capacity for concerted action. In the words of Dr. Gadgil, ―over large areas, was a sense of disillusion regarding the actual performance of the co- operatives.‖ What was the cause? Where had the movement gone wrong? 1.9 Causes of Slow Progress i. Lack of Knowledge Knowledge of the principles of co-operation is an essential condition for the success of the movement. In most cases, this condition was not fulfilled. Members did not understand the aims, objectives, and the possibilities of the movement. They joined a society only as ‗clients of convenience‘ and left it after their needs were met. There was no genuine urge and willingness to develop the movement. ii. Small Size Another reason for the poor performance of the movement was that ―a large number of primary agricultural credit societies were neither viable nor even poten- tially viable and must be regarded as inadequate and unsatisfactory agencies for dispensing production oriented credit.‖

10 iii. Rapid Growth The qualitative aspect of the movement suffered on account of the ‗waves of promotional enthusiasm‘ which superimposed co-operative societies by the thousands on villages where patient work had not laid the foundations for successful growth. This policy of hurried expansion led to the formation of a number of societies which were either newly born or were closed down at a initial stage. iv. Uninspiring Leadership A major factor responsible for the poor performance of the movement was the lack of competent leaders. The leadership of the movement was inadequate, incompetent, and who was lacking in knowledge, integrity, and dedication. The movement continued to be dominated by money-lenders and others who used its funds to promote their own financial or political and selfish objectives. v. Lack of Supervision, Audit and Inspection Another drawback of the movement was that the co-operative societies were neither strictly supervised nor properly audited. From non-existent or ineffective supervision arose many other weaknesses such as ‗book adjustment of debts, bogus loans, misutilisation of credit, and failure to affect recoveries‘ and window-dressing. Even where accounts were properly audited, audit objections were seldom attended to. vi. Lack of Spontaneity Since the beginning of co-operative movement, it remained government controlled ,financed and government directed. This rigid official control and interference did lot of harm in the sense that it provided few opportunities for the people to learn to do things for themselves, to develop a spirit of self-reliance and self-dependence and it never developed into a genuine people‘s movement. vii. Lack of Proper Atmosphere Co-operation is a democratic movement based on the principle of equality. But the socio-economic background of the Indian village was not conducive for its proper functioning and healthy growth. The caste system, inadequate spread of literacy, and types of land tenures prevailing in certain areas, prevented the co-operative institutions from operating strictly according to democratic principles. This was par- ticularly the case where there were large disparities between members not only in economic terms but also in respect of factors such as influence, authority and social status. The movement failed to take roots or grow rapidly due to unfavorable atmosphere.

11 viii. Piecemeal Approach According to Dr. Gyan Chand, the failure of the movement was largely due to co-operation having been conceived and worked in a ‗fragmentary way‘. Rural credit, marketing, small industries, better farming, production and distribution of milk, animal husbandry, irrigation, processing all were treated in isolation; the interrelations of these activities or their bearing on one another or on the rural economy as a whole were never considered. ix. Defective Loan Policies and Procedures Loan policies and procedures followed by co-operative institutions were not adopted in accordance with the much publicized crop-loan system. Loans were mostly given on the security of land and not on anticipated crop.The entire amount was given out in lump sum instead of being paid in installments; loans were generally given in cash and not in kind. In addition, there were inordinate delays in the disbursement of loans. These defective, cumbersome, and dilatory procedures and policies made the societies unpopular and became the hurdle in its development. x. Structural Obsolescence The co-operative organization was based on the principle of federalism under which local societies were federated into a secondary society which, in turn, federated into a tertiary and finally a national society. This system, in practice, became ‗self- defeating‘ in as much as the weaknesses of the local unit got pooled at the secondary society level with the result that the secondary institutions, instead of facilitating the working of the primaries, became a drag on them. Xi. Inefficient Management The main reason for failure of the movement was the lack of proper accounting, irregularities of loans, maintenance of records, were largely due to a lack of trained and qualified staff. In 1965-66, only 14% of the societies had full-time paid secretary—manager. Even the working of higher institutions suffered on account of the dearth of trained and qualified personnel. Despite the introduction of training programme, the quality of staff in the cooperative institutions had not attained a high standard of efficiency. Recruitment was not based on merit but on a candidate‘s capacity to pull wires. That is why there were complaints of inefficiency, graft, corruption and accumulation of over-dues.

12 xii. Absence of Self-Help One of the major failures of the movement was its inability to develop the habit of thrift and savings amongst its members. This may be seen from the fact that, in 1965-66 the share of borrowings in the working capital of credit societies was 66%, the percentage of owned funds to working capital being only 27%. xiii. Over-Dues Another very disquieting feature of the movement was the incidence of over- dues. From a small figure of rupees six lakhs in 1950-51, they mounted to rupees 125 lakhs in 1965-66, recording a more than 20 times increase. The proportion of over- dues to out standings also went up from 22% in 1950-51 to 29% in 1965-66.Even in an advanced state like Maharashtra, over dues constituted 21% of the outstanding loans in 1964-65. It was the failure in this respect (over dues) that mainly accounts for the stagnation in the movement. xiv. Vested Interests A more disturbing trend, however, was the domination of co-operative in- stitutions by group politics. Communalism and casteism were other factors eating into its vitals. The result was that either a society did not do much work or there was favoritism and nepotism in the grant of loans restricting the benefits to favored members. There were instances where members of rival faction persuaded people not to repay their dues. xv. Benefit to the Rich The gravest flaw of the movement was that it had become ‗a combination of the strong not for the week but against them.‘ It had been almost completely captured by the rich and middle farmers with the result that credit went beyond the reach of precisely those who needed it the most but whose assets were scanty. On the other hand, it was readily available to the few men of means. In the Yeotmal district of Maharashtra in 1965-66, only one percent of the total area covered by short term credit belonged to holders of five acres and less while 65.7% belonged to holders of 20 acres and above. Co-operative credit thus became an instrument for accentuating rather than mitigating inequalities. The most fundamental cause responsible for the failure of the movement was the basis of credit. While in theory, co-operative credit was personal-credit based upon the character and repaying capacity of the cultivator; in actual practice, a higher proportion of the advances in many cases were against the security of land. The landless peasants and agricultural

13 workers, who need credit the most but have no land to offer, received little benefit. They, therefore, turned to the moneylender. These imperfections and weaknesses notwithstanding, the co-operative movement in India still remains an excellent potential instrument for the economic and social emancipation of the poor and the weak. If the movement did not achieve the required degree of success, it was not because the principles of cooperation were not sound, but because ―these were honored more often in their neglect than in their execution.‖ 1.10 Co-operative Banking The co-operative structure is three tier comprises of primary societies at village level in the field of credit and non-credit activities, Central organization at district level and an apex organization at state level. The federation of all primary societies is called as Central Co-operative Bank. Central Banks were required to play role of balancing centers of co-operative finance, there by retaining the money at the disposal of co-operative institutions. At present there are 362 District Central Banks in India which are federations of primary credit societies normally working in a district. Therefore, they are called as District Central co-operative Banks. The main function of these banks is to lend to Village Primary Societies. They act as intermediaries between the State Co-operative Banks on one hand and Village Primary Credit Societies on the other. The State Co-operative Bank is a Central Institution at the State level which works as a final link between small primary societies on one hand and money market on the other. It takes off idle money in the slack season from the Central co-op. banks and supplies the same to them in the busy season. State Cooperative Bank form apex co-operative credit structure in each state and control the working of Central Co- operative Banks in the State. It serves as a link between NABARD ( Of Agriculture and Rural Development) on one hand and Central Co-op. Bank and Village primary Societies on the other i.e. it acts as a ‘s Bank to the Central Co-op. banks. There is only one Apex Bank in each State. But some states like Maharashtra, M.P. Punjab have more than one Apex banks. The membership of these banks is open to all Central co-operative Banks and some Societies are also allowed to have direct dealings. 1.11 Importance of Human Resource Management Human Resource Management is the crux of management which is more and more recognized in recent times not only in the developed economies but also in

14 developing countries. It is now globally recognized that managing human resource is the basic job of management. With the advent of globalization of business, Human Resource Management has now emerged as the most spectacular aspect of management, in India too. Neither general management nor any functional area would be able to successfully operate, if the management fails to manage the people to manage it. Hence the crux of managing a business is the capability to manage people. Human resources take active role in the modern economic scenario of any country. The abundant physical resources alone cannot benefit the growth of the country without human resource component, which transforms physical resources into productive resources. In fact, the differences in level of economic development of the countries are largely a reflection of the differences in the quality of their human resources. Out of the fundamental areas of management, human resource management is adjudged as the most important area. In management of money, men, materials and machines, management of men is fundamental, dynamic and challenging. Human Resource Management includes guiding human resource into a dynamic organization that attains its objectives with a high degree of morale and to the satisfaction of those concerned with it. It is often found that exploitation of natural resources, availability of physical and financial resources and international aid play a prominent role in the growth of modern economies, none of these factors is more significant than efficient and committed manpower. Actually all the development comes from human mind. Human resource with right attitude are solely responsible for making use of national resources and for transformation of traditional economies into the modern industrial and knowledge economies. Significance of Human Resource Management  Social Significance : Proper management of personnel enhances their dignity by satisfying their social needs, which can be done by: 1. Maintaining a balance between the jobs available and the job seekers according to the qualifications and needs; 2. Providing most suitable and most productive employment, which might bring them psychological satisfaction;

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3. Making maximum utilization of the resources in an effective manner and paying the employee a reasonable compensation in proportion to the contribution made by him; 4. Eliminating waste or improper use of human resources, through conservation of their normal energy and health and 5. By helping people make their own decisions that are in their interests.  Professional Significance : By providing a healthy working environment, it promotes team work in the employees, which can be done through: 1. Maintaining the dignity of the employee as a ‗human being‘; 2. Providing maximum opportunities for personal development ; 3. Providing healthy relationship between different work groups so that work is effectively performed: 4. Improving the employees‘ working skill and capacity; and 5. Correcting the errors of wrong postings and proper reallocation work.  Significance for individual enterprise : it can help the organization in accomplishing its goals by: 1. Creating right attitude among the employees through effective motivation; 2. Utilizing effectively the available human resources and 3. Securing willing co-operation of the employees for achieving goals of the enterprise and fulfilling their own social and other psychological needs of recognition, love, affection, belongingness, esteem and self-actualization. Satisfied human resource acts as an asset of any organization. The factors which help to retain the employees include the welfare measures, financial and non- financial motivational devices, chances of growth and advancement as well as financial soundness and support from the organization. The financial factor in this regard is very important and this financial help can be extended to the employees through banks established for providing banking services to their employees. Employees‘ Co-operative banks are established with the same objective. A lot of research is undertaken on co-operative banking, but employees‘ co-operative banks are the neglected area. Therefore researcher has focused her attention on some important employees‘ co-operative banks from district.

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1.12 Choice of the Topic with Reasoning In the field of banking lots of research has been carried on subjects like Women Co-operative Banks, District Central Co- operative Banks & such other research on another aspect of Co-operative Banking. The study undertaken by the researcher is of unique nature as it covers the financial and non-financial performance evaluation of Employees‘ Cooperative Bank, its organizational pattern, customer services and management. The ratios calculated to prove the financial soundness of the Bank are special ratios which are especially used only for such Employees‘ Banks. From this situation it can be seen that the area of Employees‘ Co-operative Bank has been neglected by the researchers, therefore this area of Co-operative Banking has been selected for the purpose of the study. 1.13 Statement of the Problem The cooperative sector in India has played an important role in economic development of the country. It has certainly made a significant contribution in sectors like farming, manufacturing, sugar, dairies, processing cooperatives, housing, textile, fisheries etc. one cannot think of rural credit without the cooperatives. But today the performance of cooperative sector is becoming poor and unsatisfactory and it is unable to compete with commercial Banks. Employees‘ Co-operative Banks come under category of urban co-operative Banks. It is financial organization of salaried employees under common institution. In order to encourage regular savings and granting small loans on easy terms of interest and repayment salaried employees came together and formed employee‘s co- operative banks. They are also called as salary earners co-operative banks, which are formed by salary earners to meet their common economic requirements. The features of these Banks include fixed salary income, periodic increments, no chance of sudden rise or fall in income, limited liability of member, monthly subscription from employees salary, loan against salary, membership to only permanent employees, mutual service and democratic management and lowest NPA‘s. The employees‘ co- operative Banks are a distinct form of organizations and they cannot be matched with any other banks either private or public. It has been very often heard that the performance of co-operatives has been by and large not satisfactory and they are not financially viable. The liberalized new economic policies have posed threat to the survival and growth of co-operatives. In this context, the employees‘ co-operative banking as one of the most significant segments of co-operatives attracts an

17 immediate attention. This changing operating environment in the banking sector necessitates to examine the working status of the employees‘ co-operative banks operating in the district. Keeping all the above factors in view, the present study has been taken up with an overall objective of evaluating the performance of employees‘ co-operative bank namely The Rayat Sevak Co-operative Bank operating in the . The present investigation aims to study the financial and non-financial performance of The Rayat Sevak Co-operative Bank in a limited geographical area and submit meaningful suggestions to enable these banks to face the future with confidence. Accordingly, the work has been titled as ―THE STUDY OF PERFORMANCE EVALUATION OF THE RAYAT SEVAK CO-OPERATIVE BANK LIMITED WITH SPECIAL REFERENCE TO SATARA DISTRICT‖ 1.16 Objectives of the study 1. To evaluate financial performance of The Rayat Sevak Co-Operative Bank. 2. To evaluate non-financial performance of The Rayat Sevak Co-Operative Bank. 3. To study the existing organizational pattern of The Rayat Sevak Co-Operative Bank. 4. To find out the problems of The Rayat Sevak Co-Operative Bank. 5. To suggest remedial measures to assist to solve the problems faced by The Rayat Sevak Co-Operative Bank and improve its performance. 1.14 Hypothesis The following hypothesis have been set by the researcher for the study. 1. The financial position of The Rayat Sevak Co-operative Bank is sound. 2. This bank provides timely and need based finance to its members and approval of loan depends upon the Bank. 1.15. Methodology The researcher is interested in analytical study of the said subject and related data is collected in the following manner. Survey Method In order to elicit relevant information pertaining to the performance in the sampled units, the survey method was adopted. The sampled units were visited and their responses were collected through a comprehensive structured interview schedule. The respondents include Branch managers, Employees and Customers of the bank.

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1. Primary Data The primary data was collected through questionnaires from The Rayat Sevak Co-operative Bank. A detail survey of non-financial data like the Human Resource Management – recruitment, selection and promotion policy, Compensation, Transfer, Performance Appraisal, Career Development, Employee involvement, training methods, welfare plans, and managerial functions like Controlling Techniques, Organizational Pattern, Leadership, Motivation, Modes of Communication was done with the help of questionnaire. The questionnaire designed for the branch manager covered the personal information regarding the managers like name, qualification, number of people working under him, his authorities and responsibilities etc. the questionnaire prepared for the study covers following aspects:  General information of the Bank  Nature of authority  Role of manager in designing the policies  Details of implementation of management functions like planning, organizing, directing, controlling  Details of communication process in the branch  Details of daily reports prepared  Details of decision making process  Role of subordinates in expressing their opinions  Details of incentive and welfare plans for employees  Details of expenses incurred in the branch and the controlling techniques used for controlling of the expenses  Details of preparation of budget  Details of recruitment, selection and training practices prevailing in the branch  Criterion for promotion  Methods of performance appraisal  Motivational devices provided for employees  Details of services provided The researcher circulated the questionnaire to the managers of all the 07 branches along with one head office by personally visiting the branch. It became possible to collect the primary data due to the co-operation of the General Manager, Manager and their staff. Also the customer satisfaction about the various services and

19 overall working of the bank was measured by collecting the data by circulating the questionnaire to customers. Employee‘s satisfaction about the HRM practices was measured by circulating the questionnaire to the bank employees. The financial data is also collected personally by visiting each and every branch of The Rayat Sevak Co- operative bank. All the Balance sheets and profit and loss accounts of above branches for the study period from 2010-11 to 2015-16 were collected personally. As the banking business being spread throughout Maharashtra, the annual reports contain the consolidated financial data of all the branches working in the state. Therefore annual reports are not used by the researcher for calculation of financial ratios and the data is collected from their financial statements prepared branch wise. 2. Secondary Data The researcher has collected required secondary data from following sources 1. Books, magazines etc. 2. Published & unpublished research works. 3. Other online sources e.g. internet etc.

The study is based on financial and non-financial parameters which includes the following 1. Financial parameters It includes study of Ratio Analysis, Capital Adequacy Ratio, Capital Deposit Ratio, profitability ratios, liquidity ratios and activity ratios etc. 2. Non-Financial parameters It includes study of Human Resource Management – recruitment, selection and promotion policy, training methods, welfare plans, compensation, transfer, performance appraisal, career development, employee involvement, and managerial functions like Controlling, Organizing, Leadership, Motivation, Modes of Communication etc. 1.16 Sampling Design The present study is designed to cover the The Rayat Sevak Co-operative Bank in Satara District. The list of Co-operative Banks in Satara District has been obtained from the District Deputy Registrar Office, Satara. While the number of urban, semi- urban, rural banks working in the district with the details of deposits, advances, business per branch up to 31st December 2016 has been obtained from the lead bank of the district i.e. The .

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Table No. 1.1 List of Banks in Satara District Position as of 31.12.2016 Rs. in lakhs Branch Network Per Sr. Total Name of Bank Semi Deposits Advances Branch No. Rural Urban Total Business Urban Business 1 0 1 0 1 616 964 1580 1580 2 0 0 2 2 375 548 923 462 3 10 5 1 16 34221 18598 52819 3301 4 Bank of India 16 4 2 22 108711 92259 200970 9135 Bank of 5 39 20 3 62 222136 128315 350451 5652 Maharashtra 6 3 5 2 10 16057 6910 22967 2297 Central Bank of 7 3 2 1 6 19837 6076 25913 4319 India 8 0 1 2 3 9317 11991 21308 7103 9 3 2 1 6 8021 4285 12306 2051 10 IDBI Bank 26 11 2 39 325500 106281 431781 11071 11 0 0 1 1 5096 1287 6383 6383 Indian Overseas 12 0 2 1 3 1988 1652 3640 1213 Bank Oriental Bank of 13 0 0 1 1 3098 4889 7987 7987 Commerce Punjab National 14 0 1 1 2 3845 1164 5009 2505 Bank State Bank of 15 0 0 1 1 742 1623 2365 2365 Hyderabad 16 14 15 6 35 262207 179705 441912 12626 17 4 1 1 6 8274 5886 14160 2360 18 UCO Bank 0 2 1 3 5585 1589 7174 2391 Union Bank of 19 2 5 1 8 23116 12321 35437 4430 India United Bank of 20 0 0 1 1 534 509 1043 1043 India 21 2 1 1 4 7215 4880 12095 3024 22 Sub Total PSBs 122 78 32 232 1066491 591732 1658223 7148 23 0 4 1 5 34675 11084 45759 9152 24 0 1 1 2 4385 4419 8804 4402 25 HDFC Bank 1 9 1 11 37722 53064 90786 8253 26 ICICI Bank 12 10 3 25 22958 21853 44811 1792 Kotak Mahindra 27 2 1 1 4 3515 1104 4619 1155 Bank Bank 28 0 0 1 1 4368 3853 8221 8221 Ltd. 29 Ratnakar Bank 0 1 0 1 4067 2653 6720 6720 Other Banks

Catholic Syrian 1 0 0 1 1 482 809 1291 1291 Bank State Bank of 2 0 0 1 1 416 4729 5145 5145 Patiala 3 0 0 1 1 216 126 342 342 Source – Bank of Maharashtra, Branch Satara.

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Table No. 1.2 List of Co-Operative Banks in Satara district

Sr.No. Co-Operative Bank Address

1 The Janta Co-Operative Bank Karad Krishna Co-Operative Bank Ltd. Rethare Budruk Near Krishna Hospital, 2 Malkapur Karad 3 P. D. Patil Saheb Co-Operative Bank Ltd. Karad Karad

4 Koyna Co-Operative bank Ltd. Karad Karad 51612, Shaniwar Peth 5 The karad Urban Co-operative Bank Ltd. Karad Karad Priti Sangam Urban Co-operative Bank Ltd. 56 Shaniwar Peth, 6 Karad Karad Shrimant Malojiraje Co-operative Bank Ltd. 7 Phaltan Dr. Ambedkar Chouk, 8 Yashwant Nagari Co-operative Bank Ltd. Phaltan Raviwar Peth Phaltan 179, Bhavani Peth, 9 Janta Co-operative Bank Ltd. Satara Satara 346, Yadogopath Peth, 10 Mahila Co-operative Bank Ltd. Satara Satara 11 Ajinkyatara Co-operative Bank Ltd. Satara Powai Naka, Satara Col. R. D. Nikam Sainik Co-operative Bank Ltd. 178/B, RaviwarPeth, 12 Satara Satara 13 Rajeshwari Yuvak Co-operative Bank Ltd. Satara Kamani Houd, Satara Rajdhani Tower, 14 Jijamata Mahila Co-operative Bank Ltd., Satara , Satara Mahabaleshwer Urban Co-operative Bank Ltd., 15 Mahabaleshwer 16 Janta Urban Co-operative Bank Ltd. Wai Kisanveer Chouk, Wai

17 The Wai Urban Co-operative Bank Ltd. Wai 591, Ganpati Aali, Wai

989, Harihareshwer 18 Harihareshwer Co-operative Bank Ltd. Wai Plaza, Wai 884/1, Dharmapuri, 19 UdattaChaitnya Co-operative Bank Ltd. Wai Wai Maandeshi Mahila Co-operative Bank Ltd. 20 Mahaswad Mahaswad

21 Mayani Urban Co-operative Bank Ltd. Mayani Mayani, Taluka

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Sr.No. Co-Operative Bank Address

22 Rahitmatpur Co-operative Bank Ltd. Rahitmatpur, Koregaon

23 Co-operative Bank Ltd. Koregaon Koregaon

24 Shivdaoulat Co-operative Bank Ltd. Patan Malhar Peth, Patan

25 The Patan Urban Co-operative Bank Ltd. patan Zenda Chouk, Patan

Employees' Co-Operative Banks Prathamik Shikshak Co-operative Bank Ltd. 26 Powai Naka, Satara Satara 27 The Rayat Sevak Co-operative Bank Ltd. Satara Sadar Bazar Satara The State Transport Co-Operative Bank Ltd. 28 S. T. Stand Satara Mumbai Source- District Deputy Registrar Office Satara

1.16.1 Selection of Sample The universe mentioned above is large, the researcher has selected one employees‘ co-operative bank working in the district . The Rayat Sevak Co-operative Bank have following branches including head office. Table No.1.3 The Rayat Sevak Co-operative Bank‘s Branches in Satara District Sr.No. Name of the place No. of branches 1 Head Office, Satara 01 2 Karmaveer Samadhi Parisar, Satara 01 3 College campus, Satara 01 4 Sadar Bazar, Satara 01 5 Lonand 01 6 Dahiwadi 01 7 Karad 01 Total 07 Source - Annual Reports

All the above branches with their head offices are selected as sampling units for purpose of research. The total number of employees working in these 07 branches is 60 and the total number of customers/members of all these 07 branches is 3161.The samples are calculated at 95% confidence level at 5% confidence interval. The branch

23 wise samples are calculated proportionately on the basis of total population and total samples. Random sampling method is used to collect the samples from each branch. The stratification of samples is as follows : Table No 1.4 Stratification of Samples ( Customers) Sr. Name of Bank & Branch Population Samples No. The Rayat Sevak Co-operative Bank- Head - 1 Office 0 The Rayat Sevak Co-operative Bank - 750 2 Samadhi Parisar 16 The Rayat Sevak Co-operative Bank - Sadar 417 3 Bazar 9 The Rayat Sevak Co-operative Bank - 478 4 Shivaji College 10 The Rayat Sevak Co-operative Bank - 478 5 Dahiwadi 10 The Rayat Sevak Co-operative Bank - 694 6 Karad 15 The Rayat Sevak Co-operative Bank - 344 7 Lonand 7 Total 3161 67 Source: Compiled by Researcher Table No 1.5 Stratification of Samples (Employees) Sr. Name of Bank & Branch Population Samples No. 1 The Rayat Sevak Co-operative Bank - Head Office 24 15 The Rayat Sevak Co-operative Bank- - Samadhi 8 2 5 Parisar 3 The Rayat Sevak Co-operative Bank- - Sadar Bazar 7 4 The Rayat Sevak Co-operative Bank- - Shivaji 7 4 4 College 5 The Rayat Sevak Co-operative Bank- - Dahiwadi 5 3 6 The Rayat Sevak Co-operative Bank- - Karad 5 3 7 The Rayat Sevak Co-operative Bank- - Lonand 4 3 Total 60 37 Source: Compiled by Researcher

Reference Period The statistical data of last five years i.e. from 2010-11 to 2015-16 was considered for study period.

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1.17 Methods of Data Analysis and Research Design The statistical data collected from the sampled units was processed and tabulated to bring out the information about the financial and non-financial performance of the employees‘ co-operative banks. Also specific computer software Minitab was used for graphical presentation and statistical analysis. Statistical tools like graphs, ratio, and percentage are used for analysis of data. For data feeding and analysis excel sheet and Minitab software are used. The collected data is analysed using various statistical tools like, percentage, mean, standard deviation, Chi Square Test etc. 1.18 Testing of Hypothesis Statistical test like t-test and chi square test are applied to test hypotheses. 1.19 Scope of the Study Geographical scope: The geographical scope of the present study is confined to Satara district of Maharashtra state. There are three employees‘ co-operative banks in Satara district. Out of which one bank is selected for the study. This one bank have 07 branches in Satara district. These 07 branches are the sampling unit for this study. Analytical Scope: The data collected from respondents through questionnaire is processed with the help of computer software tools. For analyzing the collected data various statistical tools like, Percentage, mean, standard deviation, Chi- Square test, etc. are used. The Statistical Package Minitab is used to find out the satisfaction of bank employees about the HRM practices of the bank and customers satisfaction about the services provided by the bank. The collected and processed data has been demonstrated with the help of tables. For measuring the satisfaction of bank customers SERVQUAL model is used, where the difference between expected and actual score is calculated and the satisfaction is measured. Conceptual Scope: The conceptual scope of this study is confined to evaluation of the financial and non-financial performances of the banks under the study. Ratios are calculated for evaluating the financial performance. For purpose of evaluating the non-financial performance this study considers 05 variables namely tangibility, reliability, responsiveness, assurance and empathy to measure the satisfaction of customers, where every variable has 4 statements each to extract the satisfaction level of services provided by the bank. While for measuring the employees satisfaction about the prevailing Human Resource Management Practices 07 variables namely recruitment

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,selection, promotion, transfer, welfare plans, compensation, training, performance appraisal, employee involvement consisting of 4 statements each to extract the satisfaction level of HRM practices of the bank. 1.20 Limitations of the Study a. The study is limited to Satara district only. b. The period selected for the study is restricted to 6 years from 2010-11 to 2015-16. c. Managerial functions like planning, directing and co-ordination are not considered for study. 1.21 Chapter Scheme Chapter 1- Introduction and Research Methodology It consists of the history of Co-operative movement both at National and International level, Co-operative Societies Act 1904 and 1912, importance of Human Resource Management and other theoretical aspects about co-operation. It includes the reason why the topic is selected, the objectives of the study and its hypothesis. It also consists of research methodology showing how the data has collected and how it is analysed by using statistical tools. The parameters of the study, limitations and the tropical, analytical scope of the study are also mentioned in this topic. Chapter 2- Review of Literature It consists of various reviews taken by the researcher from various research articles, thesis, dissertations and books. It shows how the topic of the researcher is of unique nature and the research gap existing between the selected topic and reviewed literature. Chapter 3- Profile of Satara District This topic deals with the information of Satara district regarding its history, historical name, condition of the district before and after British rule , climate, population, transportation, soils, forest area covered, average rainfall, banking history and present status of banking industry in the district. It also give the details of number of Banks functioning in Satara District, their deposits, advances and business per branch as on 31st December 2016. It includes details of number of employees co- operative banks and co-operative banks functioning in the district.

Chapter 4- The Rayat Sevak Co-operative Bank Limited Satara – An Overview This topic deals with the information of the Bank under the study, about its history of establishment, area of operation, various deposit schemes, loan policies and its present financial condition.

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Chapter 5- Financial Performance of The Rayat Sevak Co-operative Bank Limited Satara This topic deals with the various ratios like capital adequacy ratio, CD ratio, NPA and other profitability and liquidity ratios showing the financial condition of these Banks and analysis of the data and testing of hypothesis. Chapter 6- Non-Financial Performance of The Rayat Sevak Co-operative Bank Limited Satara This topic explains the responsibilities shouldered by the Branch managers, recruitment, selection, promotion and training policy adopted by the Banks and various managerial functions like controlling, leadership, motivation, communication implemented in the bank. The topic also consists of the customer satisfaction about the services provided by the bank and employees satisfaction about the HRM practices of the bank. The non-financial data is measured by using Minitab software and excel sheet and the inferences are calculated. Chapter 7- Organizational pattern and problems of The Rayat Sevak Co- operative Bank Limited Satara This topic covers the organisational pattern of Bank under the study, their functions as per hierarchy. It also explains the various problems faced by these Banks. Chapter 8 - Findings and Suggestions This is the last topic which covers the findings and conclusions of the study and various suggestions given by the researcher for increasing the performance of these Banks. 1.22 Conclusion: This topic is divided into two parts, where the first part deals with the evolution of co-operative movement at international level considering the nature of movement in Europe, Britain and France. It focuses its attention on the significant role played by father of co-operative movement Robert Owen, his contribution in initiating the movement, his ideas to make the workers independent and of formation of villages of co-operation. Followed by Owen, the important role of Dr.William King , who further implemented the ideas of Owen, made them more workable by starting a periodical named ‗Co-operator‘ in which he played a role of advisor and gave instructions to the workers as to how to start a shop on co-operative basis and how to run it successfully. The topic also includes the contribution of Rochdale pioneers, who framed the co- operative principles and successfully handled the business on co-operative basis. Along with the international scenario of co-operative movement, the topic also covers the importance of co-operative movement in India, the reason of this movement and

27 its slow and gradual progress making this movement a successful event in the history of India. The movement began with the primary objective of rescuing the peasants from the clutches of moneylenders and to create an alternative source of credit at a cheaper rate of interest. Later on it describes the role of government in realizing the importance of co-operation, which led to the formation of Co-operative Societies Act 1904, it provision, its loop holes, which led to regulation of Co-operative Societies Act 1912. It also has discussed about the formation Maclagan Committee, its objective and the report submitted by the committee. The reasons of slow progress of the movement and the condition of co-operatives during the Second World War has also been focused. The later part of the topic deals with the progress of the movement, structure of co-operative banking, importance of human resource management in any of the organization. It gives clear idea about the researchers objective behind conducting this study, its scope, limitations, hypotheses, statement of problem, methodology adopted, sample size etc. It gives an exact idea about how the research work is presented in form of chapters and its contents. Therefore we can say that this topic is the mirror of the whole study undertaken by the researcher. References 1. Bedi. R.D. (n.d.). Theory, History and Practice of Co-operative Banking in India. Mumbai: Asia Publishing House. 2. Choubey. B.N. (n.d.). Principles and Practice of Co-operative Banking in India. Mumbai: Asia Publishing House. 3. Kamat. G.S. (n.d.). New Dimensions of Co-operative Movement. Mumbai: Himalaya Publishing House. 4. Kulkarni. S.K. (n.d.). Co-operative Development. : Phadake Prakashan 5. Michael V.P. (n.d.). Human Resource Management and Human Relations. Mumbai: Himalaya Publishing House. 6. Subba Rao.P(1997). Essentials of Human Resource Management and Industrial Relations Himalaya Publishing House 314-315 7. Suresh k, Molly Joseph (n.d). Co-operatives & Rural Development in India New : Ashish Publishing House 8. Tripathi S.N.. (n.d.). Co-operatives, its growth and new dimensions. New Delhi: Discovery Publishing House.

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CHAPTER 2 REVIEW OF LITERATURE

2.1 Introduction: This topic deals with the review of literature. In order to achieve the objectives of the present study, it was felt necessary to find out the objectives, hypothesis, methodology, findings, conclusion and suggestions given by the earlier researchers. An attempt is made to take a review of various research articles, thesis and dissertations to find the research gap and undertake the present study in the direction where earlier researchers have not focused their attention. Many of the researchers have focused their attention on various types of co-operatives, but more emphasis is given to the study of co-operative banking in different connotations. Researchers have studied on various aspects of co-operative banks; especially evaluation of financial performance of these banks is of interest among the researchers. Also some researchers have studied the role of human resource management in banks, fund management, loans and advances, recovery mechanism, operational efficiency, profitability etc. even co-operative societies have also been studied, while some of them have considered either one aspect of single bank or comparison of private and public banks. Since the inception of , there has been an increasing interest in performance study of these institutions. A number of studies related to performance of co-operative banking sector in India have been conducted. Here, an attempt is being made to provide an overview of various aspects and issues of this study through the review of existing literature. Many scholars, institutions and researchers have undertaken studies in this direction. This is an attempt to review those studies. Some of the main studies selected for review have been discussed below. 2.2 Reviews: 1) Gidde S. P. (1988) in his M.Phil. Dissertation titled ―A Study of the Human Relations in Workers‘ Co-operative Society with special reference to Shri. Warana Kamgar Vividha Karyakari Sahakari Mandal Ltd. Warnanagar‖ has studied various factors like recruitment process, training methods, salary structure, relationship between workers, interest of workers towards their jobs, recreation facilities provided to the employees etc. The findings of the research say that the recruitment of the Bank is based on recommendations of members, salary paid to employees is very less but workers are happy with their co-workers and they do have liking for their jobs. The

29 mode of communication in the Bank is satisfactory and for mental refreshment good recreational facilities are provided by the Bank. 2) Sivaprakasam P. (1991) in his Ph.D. Thesis titled ―An Appraisal of Personnel Management Policies and Practices in Central Co-operative Banks in Tamil Nadu‖ studied the organizational set-up, personnel policies and practices of Central Co- operative Banks in Tamil Nadu. The objective of the study was to review the personnel policies and practices relating to various functions like manpower planning, training, promotion, transfer, salary administration, welfare measures, performance appraisal, working conditions, grievance redressal etc. he has also identified the practical problems faced in implementing personnel policies .The principal suggestions made by majority of the employees include mutual understanding between the management and the unions, consideration of basic problems of the employees by the management for immediate action and periodical meeting of the employees with the management. None of the banks had scientific performance appraisal system. The performance of clerical cadre employees was assessed by going through their diary, periodical review of the work done and entries in the service register. The present system of appraisal was used as a punitive measure, mainly for transferring the employees. 3) M. Natarajan (1995) in his thesis of Ph.D. titled ―Collection of Loans by Primary Agricultural Co-Operative Banks a Repayment Performance of Member Borrowers in Salem District‖ studied the progress of co-operative credit in India, Tamil Nadu and Salem District, and repayment performance of the sample member borrowers. The study revealed that PACBs as agents of change have crucial role to play in rural development. They may, therefore, take active steps both in the matter of improving the quality of lending for rural development projects and recovery of loans which may lead to recycling of funds. The PACBs should be aggressive in rationalising their policies and procedures and building up effective organizational arrangements. Concerted measures are, therefore needed to widely disseminate the message of 'development through credit' with emphasis on repayment ethics in the right perspective in order to reverse the growing trend of disinformation among rural beneficiaries. Socio-economic and psychological factors are responsible in promoting repayment performance of member borrowers. Classification of member borrowers to defaulters and non-defaulters and further the defaulters into non-wilful and wilful defaulters will help the PACB in sanctioning loans to new member borrowers. 4) Biramane H. A. (1996) in his M.Phil. Dissertation titled as ―Financial Analysis of the Primary Teacher‘s Co-operative Bank Ltd., Satara‖ has studied liquidity position,

30 proprietary ratio, creditworthiness, Debt Equity Ratio, Fixed Assets Ratio etc. The Financial analysis is based on various ratios calculated to prove the soundness of the Bank. Researcher has also studied the functions of management like motivation, communication, leadership, controlling etc, also various controlling techniques like Budgetary control, Audit, Ratio Analysis etc of the Bank are studied in detail. The findings of researcher say that only 71% of teachers ‗in Satara District except Karad and Patan Taluka are regular members of Bank. The liquidity position of the Bank is neither very good nor very bad. The financial position of Bank is weak and Bank is dependent upon the external finance. The reserves of Bank are low, while the salary paid to employees is also not satisfactory. The Bank has not been successful in attracting deposits. But the profit earning capacity of Bank is good and it has been utilizing its funds efficiently and earning sufficient profits. 5) Padmini (1997) in her thesis titled ―Funds Management of District Co-Operative Banks in ‖ had a major objective to examine the trend and pattern in the sources and uses of funds of District Co-operative Banks in Kerala and to analyse their efficiency in funds management with respect to resource mobilization and utilization. The present study leads to the conclusion that though Funds mobilisation is done reasonably well in most DCBs, sufficient attention is not given for efficient utilization of these funds. Among the DCBs studied, a few DCBs like those of Ernakulam and Kottayam performed adequately well while the others lag behind. Lack of professionalization and poor management practices seems to be responsible for this situation. The researcher has suggested simplifying loan sanctioning process and provision of staff training to deal with foreign exchange process; also necessary steps may be taken to improve the reporting system for easy transfer of funds. In this context, the need for introducing Management Information System (MIS) may be explored. For avoiding delay in the deployment of funds, the power of sanction of loans up to a certain limit (for instance, Rs.2 lakh for the time being) and the power to grant temporary overdraft which are repayable within a fortnight may be given to the branch managers. DCBs consortium may be arranged for utilising surplus funds, so that idle funds in certain areas can be transferred to places where it is highly demanded. Regarding maintenance of accounts, to bring about uniformity, it is suggested that appropriate formats may be evolved and followed by DCBs in general. DCBs may also be allowed to enter into merchant banking for utilising surplus funds. Officers upto the rank of senior accountant may be given discretionary powers to decide upon matters particularly in the field of sanctioning of loans.

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6) K. Chandrasekharan Nair (1999) in his Ph.D. Thesis titled ―A Study on the Profitability of District Central Cooperative Banks in Kerala‖ has studied the profitability and its determinants of DCC Banks in Kerala. The findings say that the nationalization and the recent reforms in the financial sector in India have brought in a lot of changes in the banking sector. These reforms contain many opportunities along with the threat of severe competition. The intense competition from commercial banks has largely affected the operations of the cooperative banks in the rural sector. In many cases, it has resulted in declining profit margins of the DCCBs. Hence, the profitability is a greater concern for these banks. 7) E. Deepa (2002) in her M.Phil. Dissertation Titled ―Financial Management Of District Central Co-Operative Banks - A Case Study In Salem District Central Co- Operative Bank Limited‖ has studied the operations of central co-operative banks in India and Tamil Nadu, also she has made an attempt to study the role of Co- operatives in Agricultural credit, the performance of the Salem District Central Co- operative bank Limited and has tried to find out the financial position of the Salem District Central Cooperative Bank Limited, over a period of eleven years, with finding the short term solvency and profitability position of the bank. Her findings say that the Bank under study has worked fairly well and has to a considerable extent achieved the main objectives with which the bank was started, i.e., to mobilise finance and to make them available to the needy through the credit societies. 8) M. Tamilselvan (2002) in his M.Phil. Dissertation ―A Study Of Salem District Central Co – Operative Bank – Salem with Special Reference to Customer Service‖ has studied origin, growth of co-operative banks and SDCCB and their customer service. The period of study is from 1995 to 2001 and various statistical techniques like chi square test and bar and pie diagrams are used for the research purpose. The researcher analysed the relationship between age and attitude, male and female respondents and attitude. It was found that there is no relationship between age and attitude and also both male and female respondents responded uniformly. According to the income of the respondents, it is found by having applied tool that there is no relationship between income and attitudes of the respondents. By analyzing the literacy level towards the attitude it is observed that there is significant relationship between educational qualification and level of attitude. Highly educated people have high-level attitude then that of unqualified and under qualified people. As far as occupation of the respondents is concerned, all income groups have the same attitude. Hence it is found that occupation is not a constraint towards the attitude of the customer. Frequency of the customer's visits also has not had a major influence

32 towards attitudes. All customers have same attitude towards the service rendered by the bank even if they visit daily or weekly or fortnight or monthly. According to the age of the customers all age group they have similar awareness. It has been known through proper analysis and interpretation. Researcher suggested that the Bank should accept computerization and introduce other modern facilities like core banking, etc. To achieve the aim of the .co-operative bank, awareness must be created among the public. This should be done in co-operation with institutions, industries and universities. The banking service interims of employee customer relationship must also be modified to encourage uneducated people to enter the bank with confidence. The bank has to undertake a follow-up to identify the reasons for the failure of some of the loan schemes, which have ultimately been wiped off from service. 9) Mate S. D. (2004) in her research titled ―A Study of Human Resource Aspect of Urban Co-operative Banks in Wai Taluka‖ has made an attempt to find efficiency of management and factors regarding Human Resource like staffing, salary structure, and training programs etc. the scope of the study is only Wai Taluka. Researcher found that Satara District is one of the leading Districts in Co-operation and banking business in Maharashtra and The Urban Co-operative Bank in Satara has made rapid progress but the Bank business is suffering from inefficiency. The researcher has suggested that the Bank should reserve some seats for women and backward classes and be paid salary as per the Government rule. Also the Bank should depute its employees for training to update their knowledge. 10) Patel Rupal R. (2005) in Ph.D. thesis― Operational Efficiency of District Central Cooperative Banks in Gujarat-A Comparative Study‖ has made an attempt to study the overall working of DCCDB‘s in terms in deposit, lending, recovery and profitability etc., and customers view about these banks. It was found from the study that almost all the DCCBs are doing their routine business i.e. short term agricultural finance, medium term conversion loan, long term finance, and deposit mobilization and banking business. The ratio of short term agricultural finance is about 70% of total advances and the non-farm sector finance is only about 9%. Remaining 21% finance on re-financing basis. The non-fund banking business in most of the DCCBs is also not in practice. So far, as deposit mobilization is concerned, it was found that about 67%of deposits are high cost deposit in all the DCCBs which come from Urban Cooperative Banks and Cooperative Institutions for which DCCBs are not making any extra efforts. This is not a prudential banking because fixed deposit may be liquidated by depositors. The percentage of Low cost deposit is very low. As per RBI

33 directives for a viable banking industry the low cost deposit should be at least 60 percent of total deposits whereas the picture in cooperative banks is just a reverse. The study also found that, the Gujarat State Cooperative Bank is playing only intermediary role in the banking industry at Apex level. It has not expanded its banking business on a mass scale in the State. It is supporting to DCCBs by way of re- financing scheme of NABARD. In agricultural finance and by collecting surplus deposits from cooperative banks. Out of total advances, only 10% is in the non-farm sector. Remaining is short term agricultural and medium term. There is a serious thought to increase non-farm sector finance by way of introducing other new areas such as finance to agro-based industry, small scale industry, transportation industry, agricultural and food processing industry and such other areas. The study also revealed that DCCBs and GSCB have surplus funds with them to the tune of 15% for most part of the year. The researcher has suggested that the funds management in DCCBs and GSCB requires efficient handling. They are just keeping the surplus funds in some of the nationalized banks and government approved securities for earning higher rate of interest. The management of funds in DCCBs and GSCB should be more efficiently handled so that they can face stiff competition in open market. The cooperative structure should be revitalised or reorganised in the context where many a cooperative banks in the present study and elsewhere in the country have been suffering with heavy overdues. 11) V. Kanja Palani (2006) in his M.Phil. Dissertation ―A Study On Financial Performance In Salem District Central Co-Operative Bank, Salem‖ had an objective to study general working, deposit mobilization and disbursement of loans and advances of SDCCB. The analysis of the data indicated that the performance of the bank has improved during the study period as measured in terms of the lending borrowing and investment patterns of the bank. Salem District Central Co-operative Bank's performance is very much encouraging. It has been earning profit and persistently placed under 'A' class credit classification, yet it may take appropriate measures to enhance its sources. 12) Khosala Bhavna (2007) in her Ph.D. thesis entitled ―Causes and Cures of Job Stress in Bank Employees at Managerial and Non-Managerial Levels in Nationalized Banks‖ had the objective to find out the job stress level of Bank employees and its impact on psychology, causes of job dissatisfaction, motivational techniques used by nationalized Banks, employees involvement and Quality of work life. The population selected for this study is bank employees of nationalized banks from Dehradun place. 218 employees from 16 banks were selected for the study from Dehradun capital of

34

Uttrakhand. Data is collected by making use of both primary and secondary sources. Finding say that job stress and psychological well-being are the two factors which are dependent on job satisfaction. 13) Palanivelu V.R. (2007) Ph.D. thesis titled ―Customers' Opinion of the Co- Operative Banking Services with Special Reference to Primary Agricultural Co- Operative Banks Ltd. in Namakkal District‖. The objective of study was to study the working pattern and performance of PACB in general and in particular Namakkal District, to study the socio- economic status of the members of PACB and the style of cultivation, to study the level of awareness about the co-operative bank credit among the members of PACB, to analyse the factors that influence the utilization of the services of PACB by its customers and also by those who avail loans to ascertain the opinion of the members about the credit facilities and repayment of loans. To identify the various problems faced by the members in availing and repayment of loans. To suggest better ways and means to improve the performance of the PACBs in the study area. The study is confined to PACB in Tamil Nadu with special reference to Namakkal District. Among the 163 PACBs in Namakkal District, the researcher selected only 40 on the basis of random sampling technique method .In order to fulfil these objectives; a sample study was undertaken by using a well-framed interview schedule. The respondents were selected with varying backgrounds based on the important aspects of their land holding, irrigation, age, nature of allied business in the study area. The secondary data pertaining to the study was gathered from the records of PACB and Annual Reports of the Office of the Joint Registrar of Co-operatives. Internet Services of Namakkal Information Centre were utilized to get the latest information required for the study. Further, the secondary data was also collected from leading journals, such as Journal of Marketing, Co-operative Review, Journal of Co-operatives, National Institute of Bank Management Journal, etc. 14) Njavallil Chackochan J (2007) in Thesis titled ―Training and Development of Bank Employees: A Comparative Study between New Generation Banks and Public Sector Banks‖. The objectives of the study are to evaluate the training needs identification methods practiced by the Public Sector Banks and New Generation Banks, identify and compare the training policy, philosophy and objectives followed by the Public Sector Banks and New Generation Banks, evaluate and compare the adequacy of training and the training practices followed in the Public Sector Banks and New Generation Banks, evaluate and compare the post training follow up steps taken, and to suggest measures for improving the training and development practices of the Public Sector Banks and New Generation Banks. The methodologies adopted

35 for the study are the sample method, the data collection, a report about the methodology for analysis. Primary data was collected through interviews of employees and external trainers and experts were consulted for the purpose of verifying the information collected and to draw appropriate conclusions. The data collected from various sources were analysed by applying appropriate mathematical and statistical techniques. Along with mean and standard error analysis. Percentage analysis was extensive1 y used. Some of the statistical tests used with the help of SPSS 13.0 were rank correlation, chi-square, reliability testing, proportion testing, Student's t test, F test, one sample t test, independent sample t test, correspondence analysis, multidimensional scaling, analysis of variance [ANOVA], multivariate analysis of variance [MANOVA] and factor analysis. The study finds that there are significant differences between Public Sector Banks and New Generation Banks regarding sex composition, education level, the rural urban proportion of branches, age profile of the employees, banking experience, the clerical - officer composition of staff, availability of online training etc. So he suggests that Government should give more attention and support to the training staff employees in different kinds of organizations, and that system of training audits should be instituted. 15) Najaf Gharachourlou Aghjelou (2007) in Thesis Titled ―The Investigation of Risk Analysis and Risk Management in Selected Branches of Cooperative Banks in ―had the objective to verify the integrity of internal risk management systems, identifying and qualifying the significant risks. The results study indicates that that 20.2 percent of risk factors is not applied to cooperative banks and it shows that there is a big gap between theory and practice for reduction risk in cooperative banks in Pune. 97.3% of respondents find that risk factors are very important in general, but for reduction of risk facing in cooperative banks they do not apply risk management techniques. Although RBI has issued Basel guide line for reduction of risk problems. A properly structured risk identification, analysis, and mitigation process can moderate the risks associated with cooperative banks and it need to develop properly educational programs and workshops. The investigation represent that there is no enough data and useful data system for facing with risk management in cooperative bank and the risk management process should capture usable data and be kept as simple as possible. Documentation is critical, and properly recording the identification, analysis, and risk mitigation plans and results for each risk element allows for lessons to be learned and actions to be taken if necessary. Finally, the analysis shows that more bankers cover only credit risk by using simple methods, it

36 represent need of study to develop other kind of risk analysis methods in cooperative banks. 16) Thomas V. P. (2007) in his Ph.D. thesis ―A Study on the Deposits and Lending of Commercial Banks in Kerala - A Comparative Study with Co-Operative Banks.‖The study was undertaken to compare the performance efficiency of commercial banks with that of co- operative banks in the State by analysing the profitability and assess the role played by commercial and co-operative banks for the economic development of the State. It was found that the total deposits and total advances of both commercial banks and co-operative banks in the State showed an upward trend during the period under study. Throughout the period under study the Credit Deposit ratio of both Commercial and Co-Operative Banks in the State was remarkably low. Therefore, efforts should be made to increase the CD ratio. The researcher has suggested to take efforts to bring down NPA both in terms of percentage and monetary terms also Banks should provide ―May I help counters‖ to assist people who come into a bank. The management should initiate steps to burnout and ease stress among bank staff and should encourage and expand facilities. The procedural delay in providing various banking services should be avoided or minimized with the help of computerization. Computerization may help speedy services to customers thus avoiding much delay and paper work. Banks should initiate steps for increasing the cliental base. For this banks should introduce various newer deposit schemes, for example, fixed deposit accounts offering benefits of a savings or current account or no frill accounts, that is, accounts with nil balance etc. 17) R. Ayyasamy (2008) in his Ph.D. thesis titled ―A Study on Non-Performing Assets in Co-Operative Banks‖ (With Reference to Salem District Central Co- Operative Bank Ltd., Tamilnadu) has assessed the position of non-performing assets in Salem District Central Co-operative Bank and the effect of non-performing assets on the financial health of the bank and recovery of co-operative credit. The findings say that NPAs have reduced the interest spread, an indicator of profitability. Due to increasing burden of the bank there is loss in most of the years. All profitability ratios computed, shows a negative result. The solvency ratios show that the solvency of the bank needs to be strengthened. The already low level of net worth of the bank cannot be further strengthened since the bank is not operating profitably. 18) Kharade S.B. (2008) in her M.Phil. Dissertation titled as ―A Study of management and challenges of The Rayat Sevak Co-operative Bank Ltd, Satara‖ with special reference to and Vita Branch‖ has made an attempt to find out efficiency of bank transactions of these branches and NPA rate, financial position,

37 financial ratios, process of communication, training facilities provided to the employees of these banks etc. Her findings say that management functions like Planning, organizing, directing and controlling plays an important role in smooth and efficient functioning of Bank. The Financial Ratios show sound financial position of bank, also the NPA rate of Bank is low. Branches of Bank are computerized but the employees are overloaded with work and they are not provided with any type of training .Suggestions include the need of ATM in the Bank. 19) Dikole V. S. (2008) in her research ―A Study of Performance Evaluation of Sahayadri Sahakari Bank Limited Karad‖ has studied factors like salary structure, working conditions, fringe benefits, and facilities provided to employees working in Sahayadri Sahakari Bank Ltd. Karad. She has suggested remedial measures like modification of recruitment policy and salary structure, active participation of Board of Directors and employee, provision of modern facilities like core banking, net banking, , ATM, Debit/Credit Card facility. Researcher has suggested providing training to employees‘ so that their knowledge would be updated and they can perform their work more efficiently. It is suggested to adopt easy loan procedure and provide good working conditions to employees‘. 20) S. Vijayalakshmi (2009) in her Thesis ―Performance Evaluation Of The Thoothukudi District Central Co-Operative Banks Limited ―had a specific objective to analyse various problems of the study unit and also offer appropriate suggestions for improving the working of the study unit. The study has analysed the functioning of the bank with regard to deposit mobilisation, issue of loans and advances, recovery of loans, financial aspects and views of employees regarding the working performance of the Bank. The data required for this study was collected through primary and secondary sources. The functioning of the study unit has been quite impressive in terms of deposit mobilisation and credit deployment. But the bank has failed to arrest the overdue position and strengthen the share capital base. The bank has not effectively utilised its working capital and controlled costs. The study has revealed that the financial viability and profitability of the bank is declining. Hence, the success of the Thoothukudi District Central Co-operative Bank in the future will depend not only upon the development of primary societies but also on the extent to which it is able to mobilise rural savings and recover the outstanding loans. 21) Kadam Parag Pramod (2010) in his Ph.D. research titled ―Role of co-operative movement in sustaining rural economy in the context of economic reforms: a case study of District ―studied the role of co-operative movement in sustaining rural economy, in the context of economic reforms, especially in a

38 developing country like India. The scope of the study is wide. The present study is a case study based on in Maharashtra State. Main methodological thrust of the proposed study is on collection of authentic, relative secondary and primary data. The secondary data related to facts, figures and every related information on co-operative movement in the country. The sources that are used for the purpose of secondary data are the research reports, various committee reports, and the reports of study groups and proceedings of various conferences, seminars and symposia. Other methods of collection of secondary data are discussions and dialogues and informal interviews with the people who are academically expert and those who have the practical experience in the field of co-operation of various forms. Another method of cross tallying the work is also adopted for data collection. For this purpose an adequate number of respondents are selected and personally discussed. After the collection of secondary data the researcher has undertaken the exercise of tabulation, interpretation and analysis of the information where the report of the work has taken its final form. He found that planning of our co-operative sector has been given utmost attention and as a result has achieved spectacular progress. Above all the progress has experienced ups and downs and there is utmost need to identify the problems and their working may improve and they will do more progress in the context of economic reforms period without trouble. Various types of co-operatives have directed their energies towards the betterment of these rural masses by creation of the necessary infrastructure framework which is essential for the sustainable development of rural economy. 22) Rana Rajesh D. (2010) in his Ph.D. thesis ―Management of Performing and Non- Performing Assets – A study of selected Urban Co-operative Banks in South Gujrat‖ has studied PA and NPA characteristics and its effect on the financial position of the banks; also he studied the brief guidelines of (RBI) given by Narsimham Committee. His objective was to know the effectiveness of strategies adopted by the banks, to understand the NPA and to detect the discrepancies of the cooperative banks in order to minimize the events of defaults that lead to non – performing assets. Primary data have been collected through discussions with managerial personnel, executives and staffs of the selected UCBs. Secondary data was taken from annual reports (Balance Sheets, Profit & Loss Accounts) of the selected UCBs, internal circulated matter from RBI, RBI‘s guidelines, Trend & Progress reports of RBI, Co-operative journals, co-operative diary and from the web sites available on internet. He has studied the Problem Asset Ratio to find whether the Gross NPA can create problems for other assets. His findings show that the position

39 of the UCBs in South Gujarat is not very happy in this respect, as against the RBI norms of 4 to 5 percent; the average for the last 8 years is 6.53% which decreased to 5.61% in the year 2008-09. It seems that the management must give some attention to this ratio, so that other assets are not affected due to increasing gross NPAs. It is a good sign that the Problem Asset Ratio has decreased in the last five years. According to him NPA is a very big problem before the banks not only in Gujarat but everywhere in India. Hence it is essential to put in constant efforts to check NPA. Just as banks need Credit Management, NPA Management is also a very necessary aspect. It has to be remembered that Credit Management has to be performed in such a way that there will not be any need for NPA Management. It is a fact that Urban Co – Op – banks never pay heed to give need based advances. On the contrary the managements administer in such a way as if the institutions / banks are their own business firms. The study covers only those UCBs which are registered in South Gujarat. The accounting techniques like Comparative statement analysis, Common – size statement analysis, Ratio analysis, and Statistical techniques like Mean (x) ,Standard deviation (б) Coefficient of variation (C.V.) (percentage) Diagrammatic and graphic presentation of data is used by analyst. From all the ratios that we have studied in respect of NPAs, it can be concluded very safely that all the UCBs are managing their NPAs very satisfactorily, though there may be some weakness somewhere and they must be carefully looked after. 23) M. Sasi Bhushan (2010) in his thesis titled ― An Appraisal Of The Financial Performance of the District Central Co- Operative Banks in India‖ has examined the trends in the financial status, growth and overall performance of DCCBs in India and and appraised the financial performance of the Guntur District Central Co-operative Bank (GDCCB) with the help of CAMEL Analysis. Capital Adequacy, Asset Quality, Management Quality, Earnings and Liquidity Ratios (CAMEL Model) issued to analyse the financial performance of the GDCCB. It is observed from the opinion survey that one of the main reasons for non- repayment or less repayment of loans was the unwillingness of the borrowers to repay rather than their inability to pay and that wilful defaults were responsible for the pathetic state of Indian banking system. He suggests that proper steps should be taken to computerize GDCCB and Primary Agriculture Credit Societies (PACSs) within the district connected to the state co-operative bank. Monitoring loan accounts will be more effective and efficient due to this and GDCCB should create a database of their NPA portfolio to provide meaningful inferences,

40 which would help in evolving effective strategies as well as specific action plans for preventing slippage of performing assets to in NPA. 24) Kaur Rimpi (2010) in her thesis titled ―Indian Banking: Managing Transformation through Information Technology – Problems and Prospects‖ states that due to entry of new products it has a significant impact on domestic banking forcing banks to adjust the product mix and operations. IT Act, 2000 have also gained a new dimension in banking industry and created a transformation in the mind-set, business processes, capital structure and human resource development. The study empirically analyses the role of IT in banks‘ performance and clearly indicates that new private sector banks have used information technology effectively in taking away the customers from public sector banks with significant improvement in revenue, potential customer base, efficiency. Concludes that e-banking serves with better efficiency, reduced costs and have bright future with more satisfied customers and employees. Among e-channels, mobile banking and internet banking are contributing significantly to enrich the efficiency while others have mixed effect. The findings and recommendations of the study will be helpful for the banking industry, more particularly for partially IT-oriented banks to transform a number of services, delivery channels as per the customer requirements. 25) Bhakare Gajanan A. (2010) in his thesis ―A Critical Study of Non-Performing Assets of Commercial Banks in Maharashtra – An Intersectoral Comparison‖ has tried to examine the nature and the problem of the NPA position, value of security and has undertaken intrasectoral comparison of NPA and other variables in selected Banks. He concluded that Non-Performing Assets are universal problem for all banks irrespective of the sector. It is a loss and is inevitable for every business including banking. It originates from lethargy in sanction of loans and failure in a recovery. In the study undertaken it was found that the major loss on account of NPA is caused by cooperative sector as compared to private sector where lethargy is a common phenomenon. Though some of the cooperative banks have done better business in past suffered NPAs on account of mergers of few other banks which were financially weak and this affected on the financial position of the strong bank (taking over bank). There are common characteristics which are responsible for NPAs in selected banks due to diverted use of funds advanced, wilful defaulters, lack of supervision, political interference, weak legal support, outside pressures, internal and external economic causes, faults in determining quality of bank assets and fraudulent attitude of top management/officers. It is also observed that two banks are merged in other banks due to such practices. Thus NPA is a threat to the existence of bank. Default on account of

41 big borrowers is a problem in recovery for private sector but such borrowers are less in number in the sample cooperative banks. The quality of standard assets is important factor in determining NPA. In private sector this quality is purposefully maintained. This process starts from sanctioning of loans against proper securities , vigil on use of funds advanced, constant follow up on payments, visit of bank officers, efficient use of legal mechanism if required which strengthen recovery process and ultimately results in lower amount of NPA. In cooperative sector it is observed that a liberal view in the process of sanctioning loan, weak follow up and very limited use of legal mechanism gives very low results in the process of recovery and NPAs found at higher level indicating low profitability as compared to private sector. This indicates that the cooperative sector should adopt professional banking management and sacrifice liberal banking resulting into problems like NPA. In cooperative sector controlling is exercised by NABARD, Cooperative Department of the State Government and RBI. To large extent this causes overlapping directives. In private sector only RBI exercises the control and issues uniform directives. As the directives are coming from only one source it is possible for private sector banks to act upon. This is reflected in their performances and in sector wise comparison of the banks under study. The NPA performances of private sector banks are better than cooperative sector banks. The recovery management, legal mechanism found to be efficient in private sector banks as compared to cooperative sector banks. 26) Ujwala Dinkar Patil (2011) in her Ph.D. Work ―A Study Of Human Resource Development In Urban Co-Operative Banks In ‖ has Studied the role and relevance of Human Resource Development professionals in Banking Sector and has tried to explore the potential of HRD practices from point of view of Human Development in terms of the perceptions of the Managers, Officers, Cashiers, Clerks and Peons in the area of guidance, counselling, education and training. The findings say that gender status of female employees is only 10.57 % of the total respondents under study. There are 28.36 % employees who have ‗adequate knowledge‘ about the Banking Business ‗at present‘ which is just sufficient to start the job in banking sector. Management itself is the main hurdle in self development and growth of the employees. Maximum of them are fully satisfied with the job or the duties which they are doing in banks. Remaining 50.00 % employees are on ‗to some extent‘ side means that they are not satisfied so much with the existing selection criteria adopted by the banks. 27) Deshpande Neeta (2011) in thesis titled ―A Critical Study Of Recovery Problems Of Banks Working In Western Maharashtra: In The Light Of Sarfaesi Act 2002‖has

42 focused on overdue problems, causes of NPAs, techniques used by banks for reducing their NPAs, necessity of enacting various recovery mechanisms, trend of NPAs in selected districts, problems of recovery of dues of banks under SARFAESI Act 2002. The study has been undertaken to examine appropriate legal machinery available for recovery before SARFAESI Act, study the need and objectives of enacting SARFAESI Act 2002 and to examine the effectiveness of SARFAESI Act 2002. The study covers Sangli, Kolhapur and Satara districts while the researcher has selected a period of six years from 2003 to 2009.The deposits and advances of public sector and private sector banks are increasing sharply .As compared to the total gross NPA amount of the banks, the amount involved under SARFAESI track is very negligible. All properties acquired by the banks under SARFAESI Act are not sold due to non- response from the bidders or due to existence of encumbrances on the properties. Banks are incurring the heavy expenditure for the maintenance, protection and security of these properties. 28) Chander Ramesh and ChandelJai Kishan ( 2011 ) in their article― An Evaluation of Financial Performance and Viability of cooperative banks - a study of four DCCBS in Haryana (India)‖ has examined the financial performance, efficiency and financial viability of District Central Cooperative Banks operating in Hisar division in Haryana comprising of Hisar, Bhiwani, Fatehabad and Sirsa. For proper administration, the Haryana state was divided into four divisions, A) Ambala division, which covers six districts, B) Rohtak division, which covers five districts, C) Hisar division, which covers four districts and D) Gurgaon division, which covers four districts. In the present study four districts central cooperative banks (DCCBs) of Hisar division has been covered. The study encompasses twelve year period from the financial year 1997-98 to 2008-09. Here, an attempt is made to analyse five key financial areas (profitability, liquidity, solvency, efficiency and risk) considering the data from financial statements. Under each of these five categories of analysis four different ratios are calculated and analysed. After calculating the average of the ratio (Mean), Standard Deviation, t-value and f-value have also been calculated to deepen the study. In the present study the profitability of DCCBs is tested with four profitability ratios these are I) Net worth ratio (Net profit after tax to total shareholders‘ funds), II) Return on capital employed (Net profit after tax to total assets), III) Profit margin (Net profit to total income) and IV) Net interest margin (Interest margin to total assets).The liquidity of DCCBs is tested with four liquidity ratios these are I) Cash-assets ratio (Cash plus bank balance to total assets), II) Cash- deposit ratio (Cash to total deposit), III) Cash-demand ratio (Cash to )

43 and IV) Working funds to assets ratio. The present study has been an attempt to identify the financial performance and efficiency of District Central Cooperative Banks (DCCBs) operating in Hisar division in Haryana comprising of Hisar, Bhiwani, Fatehabad and Sirsa. The results reveal that DCCB Sirsa and Fatehabad scored first and second position respectively by performing well profitability, solvency, efficiency and risk parameters but critical on liquidity. Bhiwani performed best on liquidity, average on solvency and efficiency but critical on profitability and risk parameters. Hisar attained the lowest position and has been worst performer on all parameters except solvency. 29) Marvaniya Nilesh M. (2011) in his Ph.D. thesis titled ―A Comparative study of non-fund based income of selected public sector banks & selected private sector banks in India‖ has studied the non-fund based income of the selected banks and their contribution in the financial efficiency .This research study covered the data of last five years of the functioning of the selected banks. The main base of the study is to analysed non-fund based income of the selected banks. Verifying and testing this hypothesis, some techniques like average/mean, the standard deviation, t-test, f-test or annova (analysis of variances), two way annova have been used. Limitation of present research work is that scope of this study is wider but sample size is limited to only 20 banks. This research study is based on secondary data collected from annual reports of various banks and related websites. The study is limited to five years (2004 to 2008) only and only selected public and private sector banks are covered. Cooperative banks and foreign banks working in India are not covered. So, it is very difficult to come to proper conclusion regarding whole banking sector. By Appling ANOVA technique, for the Non-Fund Based Income of Public Sector Banks, the researcher has found that the calculated value of F (between column-various Profitability Ratios) (174.332) was greater than the table value(2.12) of F at 5% level of significance that means the null hypothesis was rejected. State Bank of India is the largest bank in India, with 7793.2900 crore average non-fund based income. In case of public sector banks the Non-Fund Based Income in some of them are increasing and some of them having a mix trend for year by year. He found out that Indian banks are moving towards modern banking changing a face of traditional banking of Indian economy .It is great change in banking industry. They are making use of information technology for banking business and are trying to provide technology based banking products and services to their customers. 30) Haridas Shailashree (2011) in her Ph.D. thesis titled ―Marketing Of Banking Services In Post Reforms Era‖ has tried to study an insight of the current practices

44 with regards to marketing strategies in the selected banks, has made comparative analysis of public and private sector banks marketing practices, innovation and performance. It has been observed that average time spending of private sector bank is more than public sector banks. The impact of change in the module has affected the HR issues of the bank. The requirement of the skills of the banks is entirely different than earlier. The gaps in the skill set are creating the slowdown in CRM implementation of PSBs. The researcher has analysed the data job satisfaction because of change in the role of branch manager by using ‗chi‘ square test. In terms of job satisfaction for branch managers the researcher has observed that there is no significant difference between the nationalized and the private banks. The P value is 0.231, indicates that there no difference between the job satisfaction level of private and public sector banks. This indicates that the employee does not find much difference between the private sector and public sector banks. 31) Bhosale S. T. (2012) in his Ph.D. thesis titled ―An Evaluation Of E-Banking Service Users In Nationalized And Private Sector Banks With Reference To Sangli District‖ studied conceptual framework of E-banking, the level of satisfaction of service users regarding E-banking services, evaluation of banking transaction by adopting E-banking services on service users and has evaluated the performance of E- banking in nationalized and private sector banks. It is found that the private sector banks customer relations are better for giving good treatment to account holder than the nationalized banks. It is observed that all E-banking services like ATM, Internet, Mobile banking are not available in all places in Sangli district. At the district, taluka or tahasil places such services are available and sometimes due to some technical problems services are not operating due to insufficient cash in ATMs or due to network fail. Very few places have internet and mobile services. Major cities like Sangli, , Palus, , Vita, and Islampur have more utilization and more e- service availability and usage as compared to other places like Ashta, Shirala, KavteMahankal, Jat and . It is found that the internet banking (IB) usage is very less as compared to ATM services. The majority of account holders are unaware about internet banking services. The usage of IB is more in private sector banks as compared to nationalized banks. It is found that mobile banking services are used less in semi-urban and rural areas.The majority of service users are in Sangli, Miraj, Tasgaon, followed by Islampur, Kavtemahankal. But in remaining semi-urban and rural areas mobile banking is not much popular and used. It is observed that responses for on-line help provided by bank on internet are less effective and majority of service users are unable to understand and use help provided by internet. It is found that many

45 service users having a problem of handling and maintaining ATM cards of different banks. The future of electronic banking will be a system where users will be able to interact with their banks ―worry-free‖ and banks are operated under one common standard. He also suggest that use of ATM and its withdrawal capacity should be increased, mobile banking and net banking should be preferred, banks should focus on customer relationship by providing support to queries and helping for operating e- services bank web site design should be attractive, easy to understand and related, relevant information should be easily accessible and useful. If banks provide information in local languages then it will be easier to use it. This helps to utilize more E-banking services. 32) Jagtap Manisha V. (2012) In her thesis titled ―A Critical Study of Financial Management of Rajarambapu Patil Group of Cooperatives‖ has made an attempt to study the Capital mix, cost of capital, and Investment Portfolio and SWOT analysis of co-operatives. The conclusion says that the financial management of all the cooperatives under study were found more traditional in nature. The application of principles of financial management remained more inadequate, due to the lack of systematic record to generate the required data. The concept like capital mix, fund flow &cash flow is also not used in the sample organisations. However, with the given data attempt is made to calculate the values which are less than satisfactory. In suggestion, it is made clear that the required records are necessary or required to maintain to generate the adequate database. In SWOT analysis, again the similar difficulty was faced while identifying Strengths, weaknesses, opportunities and threats of these organisations. The things can be improved upon if data and the information are made available from the records. Researcher feel that the cooperative organisations should maintain the records just like corporate organisations there is no inherent difficulty to do so. In the age of global competition, this has become very much essential. The corporatisation of the cooperatives without losing the cooperative spirit is the need of the day. Rajarambapu group of cooperatives seems to have taken a serious note of professionalisation of management of the organisations which will gradually be a kind of regular policy & practice in the years to come. The discussion with the top officials of the organisations under study reveals that they are ready to accept the requirement of professionalisation of management of the organizations 33) Soni Anil Kumarand Saluja Harjinder Pal Singh (2012) Research Scholar have studied ―Role of Cooperative Bank in Agricultural Credit: A Study Based On ‖. His objective was to study the performance of cooperative banking in respect of agricultural credit and rural development, role of cooperative bank in

46 agricultural credit & agricultural credit structure of the cooperative bank. His study area covers Chhattisgarh. The required primary data was collected from the members and actual own experience in the field and discussion with all concerns during the year 2011-2012.His study is based on the secondary data published by office of the Registrar of Cooperative societies, Chhattisgarh, Raipur. The required data and literature for the study purpose was collected from the number of reference books, Journals and Internet. He found that cooperative banks are serving in the field of agricultural credit and rural development. Maximum numbers of respondents are satisfied with functioning of cooperative bank. Cooperative banks are playing extraordinary role in rural development. In short Cooperative Banks are providing rural Chhattisgarh all round assistance and proved to be an institution where "Growth with Social Justice" exists. Cooperative Banks plays a major role in rural credit delivery of Chhattisgarh State. 34) Barot Mitesh (2012) opined in his thesis titled ―The Role of Co-operative Banks in the Development of Gujarat State‖ had a objective to find the rate of development of co-operative banks , their significant role among financial institutions & Financial and growth opportunities in the Kheda district cooperative banks. His findings say that nationalized banks are under the shelter of government, as a result it may make losses without worry, the public has to pay for such looser, foreign and private banks too have similar situation. Their money is through equity with low Prime Lending Rate (PLR). So it can make advances or provide loans at lower rate of interests and can recover its money through legal steps, without any difficulty. Hence its NPA is also very low. Their operations and banking activities are generally handled by machines, so manual employment is also low. The need for more staff is also reduced. Unemployment is at the increase in the banking sector. In Gujarat and in whole of India due to bank's local culture and small size they are facing difficulties in coping up with the existing environment. Over and above this, the loan policy, interest rates are not same. Minimum rates are also unequal. As a result many disorders have coped up. 35) Singh Akhilesh Kumar (2012) laid down in his Ph.D. thesis titled ―Problem of Overdues in District Central Co-operative Bank, Raipur of Chhattisgarh State: An Economic Analysis‖ where his objective was to find out the extent of credit granted, distributed in Raipur district and its repayment during the period 1991-92 to 2001-02 and to find out the causes of overdues in Raipur district .He noticed from the results that there was a basic contradiction between the factors influencing branch repayment rates, and the supply-side policies governing bank

47 behaviour and there were several areas where the government and the banks can work jointly to improve the quality of rural lending. He noticed that delays in loan repayment influenced the amount outstanding. In order to achieve national goal of uplifting rural population, apex bank, DCCB and PACSs have been assigned a significant role in their action plan because of their local knowledge, responsiveness to local needs and democratic management. The performance of DCCB, Raipur and PACSs Mandirhasaud, Arang and Dharsiwa branches during the period 1990-91 to 2001-02, has been critically examined in this study considering various parameters like amount granted, distributed, loan repayment and overdues etc. All parameters under study have shown positive trend and the compound growth rates of above 198, parameter was positive and highly significant over the period of study (1990 to 2001). 36) Nayak Ranjan Kumar (2012) studied on ―Financial Inclusion through Cooperative Banks: A Feasible Option for Inclusive growth.‖ His study is based on secondary data. He used the report trend and progress of banking in India by RBI, annual report by NABARD (National Bank for Agriculture and Rural Development), Economic Intelligence Unit, (EIU), and India state, Report of the Task Force to Study the Cooperative Credit System and has suggested measures for its strengthening by RBI. Compound growth rate and percentage change with graphical and tabular representation are used for the analysis for period from 1981-2011.The main objective of the paper is to understand how financial inclusion through cooperative banks can be a viable option for inclusive growth in India. From the above study he concluded that Indian growth is not an inclusive growth because the real GDP %change per annum, growth of real GDP per head per annum are increasing whereas consumption inequality in India is increasing rapidly after 2004-05.Cooperative banks are a feasible option for inclusive growth through rural development by creating opportunity for employment and income generation. 37) Kanchu Thirupathi (2012) in his research article ―Performance Evaluation of DCCBS in India - a Study‖ has examined the growth of the Banks, analysed the Deposits, Credits and C/D Ratios, of DCCBs in India. The financial performance of the District Central Co-operative Banks in India is analysed using different statistical techniques. From the analysis, it is concluded that the growth of number of DCCBs and their branches have negative trend up to certain period later there is negligible positive trend whereas the membership in cooperatives have been increasing. The capital, reserves, and borrowings increased almost double during the study period, with a nominal percentage of variation.

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38) Zulzule Gautam Sakharamm (2012) in his Ph.D. thesis titled ―Urban Co- operative bank during the Era of Globalisation‖ had an objective to study the growth, performance and financial analysis of urban cooperative banks in Sangli, Satara, and Hingoli districts. Sources used by him are Statistical statement relating to the Co-operative movement in India. The tools of analysis that are used include simple growth rates, Compound growth rate, Trend analysis, ratio analysis, percentages, averages, standard deviation, Regression analysis, coefficients of variation, Graphical methods etc. As per his findings, all banks under study have maintained the CRR and SLR norms within the limit fixed by Narsinmhan committee 1991 and RBI, all the bank shows declining trend of Gross NPAs as well as Net NPAs which is good sign. All banks under study provides various types of loans to the small scale industrialists, traders, self employed, transport companies, housing dairy farming, agro industries, though their proportion is different to the different banks. 39) Gupta Jyoti, Jain Suman (2012) in their article ―A study on Cooperative Banks in India with special reference to Lending Practices‖ has studied the lending practices of cooperative banks, and satisfaction level of the customers about Bank‘s lending policies. Primary Data is collected by Observation, Interview Method & Structured Questionnaire & Secondary Data by Annual reports, Manual of instructions on loans and advances, books, Articles and Research Papers & Internet. The study population includes the customers of bank. They found that simple loan procedure is followed by bank; most of the people prefer to take long term loan due to easy repayment, less formalities and satisfactory service provided by the staff. The financial performance of long term cooperatives was found to be even weaker than their short term counterparts. Also, it was observed that the branch network of cooperatives, though widespread across the country, continued to be concentrated in certain regions. Moreover, the network of cooperatives was not broad based in the north-eastern region of the country. This suggests that efforts need to be taken to improve banking penetration in the north-eastern part of the country along with improving the financial health of the ground level cooperative institutions. 40) Okoth Ignore Vincent and Kusa Gemechu Berhanu (2013) in their research article titled ―Determinants of Financial Performance of Commercial Banks in Kenya‖ has evaluated financial performance with the help of various financial ratios such as Return of Assets, Return on Equity etc. Their study is based on secondary data obtained from published statements of accounts of all commercial banks in Kenya, CBK, IMF and World Bank publications for ten years from 2001 to2010.The unit of analysis in this study was all the licensed domestic and foreign commercial

49 banks operating in Kenya. All the licensed commercial banks in the country are the target population of this study. Their findings presents the trend of the financial performance of commercial banks in Kenya from 2001to 2010. 41) Soyeliya Usha L. (2013) in her research article ―A study on Co-operative Banks in India‖ has made an attempt to know the lending practices, measures and has compared the efficiency of cooperative banks in India. Research Methodology used is descriptive, in order to identify the lending practices of bank and determining customer‘s level of satisfaction. The method used was questionnaire and interview of the experienced loan officers. For collection of Primary Data she used Observation, Interview Method & Structured Questionnaire & for secondary data she has referred Annual reports of the Bank , Books, Articles and Research Papers & Internet .She found from the study that majority of customers preferred housing loan from co- operative banks due to simple loan procedure, easy repayment procedure followed by bank for loan. 42) Raju V.P. (2014) Ph.D. Thesis titled ―Influence of Technology In Banking a Customer Centric Study With Special Reference To Kerala‖ .The present study is primarily intended to unearth the customers‘ perceptions in using Self Service Banking Technology (SSBT) services by the bank customers in Kerala. The study is conducted to understand the purpose, extent of use of SSBT and to study the level of customer satisfaction about SSBT services. The present study is a customer-centric study related to Self Service Banking Technology (SSBT) Services, which consists of ATM, Internet Banking (IB) and Mobile Banking (MB). The scope of the study is restricted to retail bank customers in Kerala who use at least two SSBT Services provided by the Public Sector Banks (PSB), Old Private Sector Banks (OPB) and New Generation Banks (NGB).The rationale for selecting the State of Kerala is due to the existence of good banking habits, high literacy rate, surge for e-literacy and passion for technology among people and also due to the existence of a good e- platform and large network of banks. The data required for the study was collected from both primary and secondary sources. The study mainly considers primary data, which was collected during the period from October 2012 to March 2013 from the respondents through a structured and pre-tested questionnaire. The secondary data were sourced from RBI reports, books, periodicals, journals and websites. 43) Linganna Sharanabasappa (2014) in his Ph.D. thesis entitled ―Financial Performance: A Comparative Study of Gulbarga District Central Cooperative Bank Limited And Bidar District Central Co-Operative Bank Limited‖ has studied the trends in financial status, growth and overall performance of DCCBs in India and

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Karnataka. For this study both primary and secondary data is used. His findings say that performance of BDCCB in respect of managerial efficiency and in maintaining the quality of assets is better than GDCCB. During the study period owned funds increased while deposit mobilization showed a positive sign. The amount of borrowings doubled during the study period which shows the dependency on borrowing. Amount of working fund showed an increasing trend of 11%.The CD ratio which shows the relationship between advances and deposits was found to be fluctuating during the study period. 44) George Jacob (2014) in his Ph.D. thesis entitled ―Member Satisfaction in Urban Co-operative Banks: Scale Determination and Measurement ―tried to find out member satisfaction of Urban Co-operative Banks and analyse the impact of member profile and bank profile on Member Satisfaction. An interesting phenomenon that was noticed is that member satisfaction displayed different patterns of rate of increase for productivity and profitability. With increasing levels of productivity the level of member satisfaction kept increasing. But for profitability, member satisfaction at first increased, then for banks with high level of profitability, it dropped drastically. In fact it dropped to a level even lower than for banks with low profitability. This is in tune with the co-operative approach to banking where profit optimization and not profit maximization is the desired goal. 45) Singh Dal (2014) in his thesis titled ―Productivity and Efficiency of District Central Co-operative Banks in Haryana: An Empirical Study‖ has studied the productivity of employees, and examined the efficiency of all DCCBs of Haryana and evaluated the financial performance of branches of all DCCBs of Haryana. Research Methodology used is collection and analysis of empirical evidence on the basis of observation and interaction with all stakeholders and beneficiaries enjoying the services of the bank. Simple statistical techniques were used, as per the requirement and nature of the data available, such as Mean, S.D., percentage, linear time series tabulation, graphical presentation, rank correlation etc. Also he used the technique of Data envelopment Analysis to determine their productivity and efficiency along parameters like deposit, credit, business and profit per bank as well as per employee in the bank. Apart from assessment of productivity of the selected DCCBs their efficiency level was also checked with the help of Data Envelopment Analysis along with potential improvement score based on the amount of deposits as well as advances. He suggests that Govt. must restructure the organizational frame and infrastructure outlooks of these banks on the pattern of other commercial and regional rural banks.

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46) Naqvi Samreen (2014) in thesis ―An Assessment Of Cooperative Banking In India With Special Reference to ‖ has examined the growth of business of cooperative banks in Uttar Pradesh in terms of deposits mobilization and credit advanced during the study period in particular and the overall growth and status of DCBs in general with respect to both India and Uttar Pradesh. An attempt is made to evaluate the overall performance of Co-operative Banks in Uttar Pradesh with the help of some selected ratios. His findings say that there is a declining trend in percentage of over dues to loans of DCBs in Uttar Pradesh during the period of study. There is negligible growth in number of DCBs over the years (0.17%) during 2002-03 to 2010-11. In case of share capital, the data of the selected sample districts of Uttar Pradesh for the period 2003-2011 shows that the share capital of DCBs in Uttar Pradesh is increasing over the years. In case of reserves and other funds, of the major selected sample districts of Uttar Pradesh for the period 2003-2011 shows an increasing trend over the years. In general, the district co-operative banks have succeeded in mobilizing deposits which is evident from the study. In general, the data of the selected sample districts of Uttar Pradesh and India for the period 2003-2011 shows that the total deposits is showing an increase over the years. These favourable trends may be attributed to the relatively better industrial activities of the districts coupled with the joint efforts of employees and management. All the banks in U.P showed an increasing trend with regard to different types of deposits during 2003 and 2011. Regarding borrowings, Ghaziabad DCB recorded the highest growth and Lucknow DCB the lowest. The CAGR of borrowings of Ghaziabad, Hamirpur Allahabad, Etawah and Jalaun DCBs were higher than the overall CAGR of Uttar Pradesh. It was observed an increasing trend for borrowings of Uttar Pradesh for the period 2003-2011. It has also been observed that the growth of Uttar Pradesh is greater than that of India. Although the growth rate of borrowings of few sample districts like Azamgarh, Etah, Lalitpur and Lucknow showed a decline but there is an overall increase in the borrowings of major sample DCBs of Uttar Pradesh over the years. The correlation coefficient between borrowings and profits is found to be negative and significant in case of Uttar Pradesh as well in case of major selected sample districts except for few such as Hamirpur, Jalaun and Lalitpur, where the correlation is found to be positive and significant. Although the overall growth of cash in hand and at bank in Uttar Pradesh has also shown a considerable increase over the years, yet it is lower than that of India. The correlation coefficient between loans and advances and profits shows that there exists a high degree of positive correlation between these indicators for six out of ten selected districts. However, in case of Uttar

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Pradesh as a whole and Azamgarh and Moradabad DCBs the correlation is found to be negative and significant. In general, data of the selected sample districts of Uttar Pradesh for the period 2003-2011 shows that the investments of DCBs in Uttar Pradesh is increasing over the years. 47) Trivedi Krupa R. (2014) in her research article titled, ‖A Camel Model Analysis of Scheduled Urban Co-operative Bank in Surat City–A case study of Surat People‘s Co-operative bank‖ has analysed the Capital Adequacy, Assets, Management Efficiency, Earning Capacity, Liquidity of Surat People‘s Co-operative Bank. The study is descriptive in nature and it is based on secondary data drawn from the annual reports of the SPCB. For the purpose of analysis, the evaluation is done by using CAMEL parameters, the latest model for financial analysis of banks. For applying this model, five main dimensions of the performance (Capital adequacy, Assets quality, Management capability, Earning capacity and Liquidity) are assessed using ratio analysis. As per his findings, the overall state of capital adequacy of SPCB was satisfactory in terms of capital adequacy ratio and debt equity ratio .Overall it can be said that the assets quality of SPCB was satisfactory in terms of Net NPA to Net Advances Ratio, Gross NPA to Net Advances Ratio and total investments to total assets ratio as not only the amount of gross NPA was low but also the amount of net NPA was nil. This indicates the active performance of recovery departments of SPCB. From the average operating expenditure to operating income ratio of 74.74%, it can be said that the depositors as well as lenders of these three banks can have clear view that these banks are being run efficiently. Ultimately it was concluded that the overall state of liquidity was not satisfactory. 48) Paul M.N. (2014) in his Ph.D. thesis on ―The Performance Evaluation of Urban Co-operative banks in Goa‖ has evaluated the growth and performance of urban co- operative banks. The present study intends to examine the working, growth and performance of the urban co-operative banks, in respect of both the physical and financial performance indicators. Geographically, the study confines itself only to the urban co-operative banks operating in the state of Goa. It is an empirical work at micro level based on secondary data relating to working of the urban co-operative banks in the state. The study that has been undertaken is based on the secondary data for the period from 1985-86 to 1996-97. However, in case of the Bicholim Urban Cooperative Bank, the study period is restricted to 10 years only from 1987-88 to 1996-97 as the bank completed only 10 years of its operation as on 31.03.1997, the ratio of non-performing assets (NPA) to the total advances could not be worked out in case of two banks viz., the Bichoim Urban Cooperative Bank and the Women Urban

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Cooperative Bank due to the non-availability of data relating to NPAs and even the information about NPAs was not disclosed in their yearly financial statements. One bank named The Goan People's Urban Cooperative Bank Ltd. was excluded from the present study as it has been in operation only for the last two years. Further, the study did not focus on the impact of the urban cooperative banks on the Goan economy in terms of creating an economic opportunity to the people of Goa. The present study is based on the secondary data for the period from1985-86 to 1996-97. 49) Chougule S. B. (2014) in his research titled ―A Study of Loans and Advances of Kolhapur Urban Co-operative Bank Limited Kolhapur‖ has studied lending policies, collection of over dues, loan sanctioning procedure, various types of loans and has suggested few measures like reduction in interest rates of loans, providing flexibility in instalment etc. it was found by researcher that the lending policy of the Bank is too time consuming and borrowers have to submit many documents for loan. Also the Bank has not taken much effort for collection of over dues. Bank has provided loan to un- productive sector, while the education sector is fully neglected. It was found that the Bank is working efficiently and is consistently getting audit class ‗A‘ grade since its establishment. The researcher has suggested adopting prompt procedure of disbursement of loan and should focus its attention on disbursing educational loan. 50) K. Ravichandran (2014) in his thesis entitled ―A Study on Funds and Investment Management Urban Co-Operative Banks in Karnataka‖ has analysed the strategies adopted, the investment pattern, and the pattern of deposit mix and credit deposit ratio maintained by the Urban Co-operative Banks. The overall objective of the study is to ascertain whether the sample banks are prudently managing their funds or not. The analysis of the study reveals that all the 32 sample banks are maintaining the CRR and the SLR investment more than the limit prescribed by the RBI. The urban co- operative banks in Karnataka have made good progress during the last one decade. These banks have made their existence felt in the area of operation. In terms of number of banks, Karnataka stands third in the entire country next to Gujarat and Maharashtra. The urban co-operative banks play a key role in the development process like credit delivery and deposit mobilization to the persons of small means. The services provided by the urban co-operative banks are very essential and important to bring qualitative improvement in the economic condition of poor in the urban area. The noble cause of serving the poor and conduct of banking business by the urban co-operative banks often pose a number of challenges. The urban co- operative banks have taken necessary initiatives to overcome the challenges and it includes measures to restore customer confidence. The urban cooperatives banks in

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Karnataka are having a lot of potential opportunity and this opportunity has not been taped properly. The one or two UCBs in the Gulbarga, Belgaum and Mysore divisions are under loss and they have reduced their accumulated loss within short period of time and won the customer confidence. In each division the Mahila Co-operative Banks are working well and they are maintaining very good credit deposit ratio. Providing more loans to women members gives room for economic empowerment of women. The credit deposit ratio of Grade I bank is less and their management of the NPA is very good. On the other hand the credit deposit ratio of the small banks in all the four divisions is good but they are poor in management of the NPA and it needs to be changed. Banks are not paying due attention in maintaining the Non-SLR investments in the as per the RBI norms. Profitability ratio of all the banks in Belgaum is less and not even a single bank in this division has achieved the profitability ratio as prescribed by the RBI. Reducing the excess investment in the SLR, increasing the credit deposit ratio and mobilizing more of low cost deposit will make the UCBs more viable, vibrant and financially sound. 2.3 Research Gap: The review of the above literature in the field points out that most of the studies pertaining to co-operative banks have covered one or two aspects of co-operative banks or some selected aspects of private and public banks. In the literature above referred, either one co-operative bank or one aspect of one co-operative bank is analysed by the researchers but this represents lack of in-depth analysis and study of other related problems of co-operative banks. The review shows that none of the researcher has studied employees co-operative banks in respect of its both financial and non-financial performance evaluation. The researcher has covered the financial and non-financial performance evaluation of existing employees‘ cooperative bank, its organizational pattern, customer services and management. The ratios calculated to prove the financial soundness of these Banks are special ratios which are especially used only for such employees‘ Banks. None of the above review has studied these special ratios as well as these special employees‘ co-operative banks collectively. While evaluating the non-financial performance customer satisfaction about the services provided by the bank and employees satisfaction about the HRM practices in the bank is also measured .After analyzing the reviews it is noted that more research work on Co-operative Credit Banks were studied in different connotations but none of the studies have focused on a study of Performance Evaluation of one Employees‘ Co-Operative Bank in Satara District. Hence the researcher finds that the selection of this topic is more suitable to bridge the gap. From the above review, it is clear that

55 both the aspects namely financial and non-financial evaluation of these banks in Co- operative banking is relatively neglected. The present study is an endeavor to fill this shortcoming. 2.4 Conclusion: Co-operation indeed plays a significant role in the development of economy, and India is not an exception. Co-operatives in various fields have contributed significantly in national development. Employees‘ co-operative banks indeed are an important part of co-operative banking, where the employees have come together to meet their financial needs. The reviews taken points out the various different aspects of co-operation. The main focus of researchers is on co-operative banking, its financial performance, study of its member‘s satisfaction or either comparative study of two co-operative banks. Some of the researchers have also studied case study of specific co-operative banks, some have studied all the co-operative banks in India, NPA of banks, customer opinion about the bank etc. Thus from the review it is understood that none of the researcher has studied both the financial and non-financial performance evaluation of employees co-operative banks. Actually employees co- operative bank is an neglected area by researchers, this research gap is mentioned in the research gap, showing the uniqueness of the study.

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CHAPTER - 3 PROFILE OF SATARA DISTRICT 3.1 Introduction: The following topic shows the profile of Satara district. The scope of the study is Satara District, so it was felt necessary to study in depth various factors of the district. The progress of any place depends upon various factors like its geographical conditions, its population, industrial development, etc. The topic consists of location map of Satara ,the number of talukas in the district. It consist of how the name Satara originated, its establishment history, the British rule in the district. The role of various social reformers who brought social awakening in the society and abolished various evil practices of the society. The topic also covers the role of various political leaders and their ideology during the British rule. The topic focus on geographical condition, its climatic conditions, forest area covered by the district, its weather conditions in various seasons, its average rainfall from 1991 to 2015, forest area covered, wild animals and their decrease in the decades due to increasing population ,its communication system transportation routes , hills, valleys, rivers, population details of all the eleven talukas and density of population per square kilometre, famous tourist places in the district and various characteristics of these places. The topic also focusses its attention on soil quality in the district and various types of soils, administrative set up and jurisdictional changes during the decade from 2001 to 2011 , industrial status of the district consisting of details of both number of service and manufacturing industries and manufacturing capacity of the industries, evolution of banks in the district ,its history of establishment, number of co-operative banks in Satara. As the scope of study is the whole district, all the aspects of the district are studied in detail.

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3.2 Satara District Map

3.3 Brief History of the District In fact Satara is not a name of City but it is name of . The names available of Satara fort are Manglai, Saptarshi, Satara, Ukabain, Ismatara, Shahgad, Ajimtara and Ajinkyatara. The shilatar king, second Bhoj had built the fort during the year 1190 named Ajinkyatara it had seventeen doors and Burujas and hence the fort named Satara. The second opinion is that in the south part of Satara, there is village state the village nearer to state is called Satdare thus the word Satdare was born formerly the Ajinkyatara as earlier said, was known as Saptarshi, the word Satara came in to existence. The word Satar means south east. The capital of king Bhojraj was Panhalgad it might be possible that in north east side of Panhalgad there must be

58 village named Satar and thus the word Satara must have been originated Aurangazebs son Azim Shah rounded Satara fort and hence the fort was also known as Azimtara. Inscriptions as old as 200 B.C. revel that probably the oldest known place in Satara District is Karad (mentioned as Karhakada). It is also believed that Wai in Satara District is the ‗Viratnagari‘ where Pandavas lived in the 13th year of their exile. The Mauryan empire in the Deccan was followed by the rules of ―Satvahans‖ for about two centuries (between 550 A.D. to 750 A.D.) Satara as also the southern Maharashtra, was ruled by Chalukyas of Badami and was later by Rastrakutas, Silaharas and Yadav of Devgiri, the Bahamanis, Adil Shahi, Muslim rule, Shivaji ( rule), Shahu Ram Raja and Shahu II Pratapsinh. The oldest place in Satara district is Karad. Karad derives its name from karada Brahmins found in large number in the place even today. This is confirmed by a group of Buddhist caves found at a distance of about three miles south- west of Karad. Caves at and Wai in Javali also indicate Buddhist settlements. Wai is also known as Viratnagari as the Pandavas had their stay in 13th year of their exile. Mahableshwar is known as a holy place as it is a source of river Krishna. It is true that the countries of the Deccan are mentioned in the Cylonese Chronicle Mahavamsa of the missions sent after the third Buddhist in 16th year of Ashoka's reign for the propagation of Dhamma in different countries. Here one Maharakkhita [The missionary who was sent to Maharashtra was called Mahadharmarakshita is reported to have been sent to the Maratha country (Dakshinapath) which can be safely inferred as forming a part of Ashokan empire. As ancient Buddhist caves at Karad are found, the Maratha country referred to above appears to have included Satara district in it. The first musalman invasion of the Deccan took place in 1296 but the power of Yadavas of Devgiri was not extinguished till 1318. From 1318 Maharashtra began to be ruled by governors appointed from Delhi and stationed at Devgiri. The Delhi emperor Muhammed Tughlaq (1325-51) made Devgiri his capital and changed its name to Daulatabad or the Abode of Wealth. Muslim ruled over Satara till 1707. In 1636 the Nizam Shahi dynasty came to an end. In 1637 ‘s sons Shivaji, the founder of the , had begun to establish himself in the hilly parts of Poona in the north where he had been put in possession of his father‘s estate at Pune and Supa. From 1349 Satara was directly under the British Government though the regulation were not introduced till 1863. As in other parts of the country so in Satara the

59 establishment of British rule, far from being looked upon as a curse, was welcomed by the people. In 1848, the districts Satara (earlier called as Satara province) comprised of eleven sub-divisions viz., Bijapur (now a part of Karnataka State), Jaoli, Karad, Khanapur, Khatav, Koregaon, Pandharpur, Satara, Targaon, Valva and Wai. In 1856, twelve new mahals were formed and these were Pimpoude in Koregaon, in Wai, Baamnoli in Jaoli, Koli in Karad, Shirala and Peth in Valva, Helvak in Targaon, Mayni in Khanapur, Natepute and Pusegaon in Khatav, Sangola and Bhalvani in Pandharpur. The sub-divisional boundaries were again overhauled in the year 1862 and then Satara district included the sub- division of Bijapur, Jaoli, Karad, Khanapur, Khatav, Koregaon, Malshiras, Man, Pandharpur, Patan, Satara, Targaon, Valva, Wai and Khandala Peta in Wai and Shirala Peta in Valva. In the same year Bijapur sub-division was transferred to Belgaum district (now in Karnataka state). Targaon taluka was transferred to Satara district from Belgaum in 1863 and Pandharpur was transferred to in 1864. Taragaon subdivision got abolished in 1867. Malshiras was transferred to Solapur in 1875 and Malcompeth Peta (later named as Mahabaleshwar) was formed in 1884. Khandala Peta was abolished in 1927 and was reconstituted in 1947. Consequent upon the merger of former Indian States, the district received parts of Phaltan, Jamkhandi, Akkalkot, , Aundh, Sangli and one village from . A new taluka Phaltan was created in 1949. In the same year the district was bifurcated into two; north Satara and south Satara. The south Satara with its headquarters at Sangli included four talukas viz., Khanapur, Tasgaon, Valva and Shirala Peta. The remaining portion of the district was called in north Satara district. In 1958, one village from Khanapur taluka of south Satara district were transferred to Karad Taluka of 1956, both the districts were included in Bombay State, since 1960 the name of the north Satara District was changed to Satara district and that of south Satara to Sangli district. At the time of 1961 Census, Satara district comprised of 9 talukas and 2 mahals which among themselves included 1160 inhabited villages (and 14 uninhabited) and ten towns. During 1961-71, the mahals were upgraded as talukas, raising their number to 11. At the time of 1971 Census, the district had 11 tahsils comprising 1,167 villages (including 25 uninhabited and 14 towns). In 1981 Census with the upgrading of hamlets/wadis in the district the number of villages has gone up to 1,437 (including 20 uninhabited). Consequent upon the declassification of five towns (created only in 1971) and with Koregaon qualifying for urban status the number of towns in the district has gone down from 14 in 1971 to 10

60 in 1981. In 1991 Census, Satara district has 11 tahsils and 1,547 inhabited villages. Total number of villages in the district are 1,573 including 26 uninhabited villages. The district has 11 towns including 3 Census Towns. As compared to 1,437 villages in 1981 Census. In 2001 Census Satara district had 11 tahsils, 15 towns and 1739 inhabited villages (including 23 uninhabited villages). In 2011 census the district has 11 tahsils, 22 towns and 1745 inhabited villages (including 26 uninhabited villages). 3.4 Satara during the British Rule And After Just like other parts of the country, in Satara too, the British rule was not welcomed by the people. Strict compliance to the rules and regulations, bureaucratic yet constitutional Government had a great influence on the of Satara too. The policy of constitutional agitation was followed by people to get their grievances redressed. Ganesh Vasudev Joshi who later became famous in Poona by the term " Sarvajanik Kaka', took the lead in establishing an arbitration (Lavad) court at Satara in 1876. In 1882, the famous pleader and leader of Satara, Raghunath Pandurang Karandikar gave a warm welcome to the local self-government reform introduced by Lord Ripon. The India National Congress was established in 1885. It was felt that whatever problems were faced by the tax payers, workers and poor peasants were to be presented to the government officials through the . Dr Athalye of Satara, was influenced by the Gandhian School of thought and participated in the famous Civil Disobedience Movement known as 'Shiroda Satyagriha" where the people asserted right of collecting salt from the backwaters of the sea. Mr. Shankarrao Javdekar from Islampur, new leader of political thought revealed to the people the importance of Gandhian thought. In 1899, ink manufacture was attempted at Vite in Satara district and Menthol and Soap production was started at Satara in 1905. late Annasaheb Chirmule started Western India Company at Satara in 1913 and it made sound progress till next half century recently acquired by Government and amalgamated in the Life Insurance Corporation during the post-Independence period. Also the Kirloskar Iron & Steel Manufacturing Company started in 1910, Glass Factory at Ogalevadi near Karad in 1916, manufactured hurricane lanterns were the pioneer industries started at the time. . Another industrial concern started in 1922 near Satara Railway Station is known as Cooper Engineering

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Ltd. It began by manufacturing iron ploughs in its initial stages and is now manufacturing diesel engines, which have a wide demand all over the country. Late Rao Bahadur, R. R. Kale, were the two leaders who brought social awakening during this period propagated movements as the uplift of women and the abolition of caste system. There was opposition coming from the Government officials of the Education department for starting school, so Government officials of the Education department Kale gave a substantial donation of more than a lakh of rupees and laid the foundation of the Gokhale School of Economics and Politics in the premises of the Servants of India Society's Home at Poona. He also donated a big house of his own to the Girls' High School at Satara which has been named after his wife Satyabhamabai and is now managed by Maharshi Kane's Hinge Mahilashram. The most important of them is The Rayat Shikshan Sanstha started in 1919 by the late Bhaurav Patil, who, it may be said without exaggeration, brought about a revolution in the field of education. The genesis of the ‗Patil movement' lies in giving education to the masses and breaking the conventional bonds of caste and creed. His main motive was to educate the masses under ―kamvashika Yojna‖, under which students would earn while taking education. The Rayat Shikshan Sanstha has now a network of a large number of boarding houses, high schools and colleges in a number of places in Satara district. Late Shri D.B. Parasnis who made a rich collection of rare historic documents and pictures and conducted a journal known as Itihas Sangriha ,general awakening was carried among the masses by the followers of Satya Shodhak Samaj . A leader Nana Patil of Satara, through his arguments contributed to a large extent in the Quit India' movement of 1942 . 3.5 Location & Area The district lies between 17.5 degree and 18.11 degree North latitude and between 73.33 degree and 7 4.54 degree East longitude. The district is completely landlocked being surrounded by on the West, Sangli district on the south, Solapur on the west, Pune on the north and Raigad on the North West. It covers 10,480 Sq. Kms. Most of the central Satara district‘s area falls in the river Krishna basin and limited area falls in the river Bhima basin.

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3.5.1 Sahyadris The physical setting of Satara shows a contrast of immense dimensions Sahyadrian range have height over 4,500 ft. above sea level to the subdued basin of the in Phaltan Sub-division with an average height of about 1,700 ft. above sea level. The Mahabaleshwar region has the heaviest rains on an average records well over 250 inches per year, as compared to the driest in the Man Taluka where the average annual rainfall is about 20 inches. Jowar &bajra are the main crops grown in the eastern region, while rice is the main crop grown in the eastern region. 3.5.2 The Koyna Valley River Koyna, one of the tributaries of river Krishna has acquired a new importance or has become a centre of attraction because of the Hydro electrical development that is taking place near Helvak. Due to the deep & narrow valley & the high plateau, river water can be used for generating electricity near Pophali below the ghats. The power generated is calculated to give a generous supply to the new industrial areas of Maharashtra as well as to the old centres like Bombay and Pune through an allover grid system. Below Helvak, the Koyna swings its course due east and on receiving the water of Kara from the north and Morna and Vang from the south, joins the Krishna at the sacred confluence on which is situated the growing town of Karad. The main Sahyadris and the adjoining steep valleys thus present a landscape of scenic beauty and human significance. Its forts remind us of its glorious past, created by the sturdy Maratha race having a fighting tradition, its ghat routes facilitating the much desired contact between the Desh and the , and the Koyna Hydel scheme reflecting the people's ambitions of the future. 3.5.3 Krishna Basin Below Wai, the valley widens out, and on the right bank, is joined by the leading tributaries Kudali, Vena, Urmodi and Tarli. The sides of these ridges are generally bare but carry poor grass and scrub, and are usually given to grazing, and some of the tops carry the ancient fortified sites like Vairatgad. Each of these valleys is connected by good roads to the Poona-Kolhapur highway running along the main Krishna valley and every valley has one or two local market centres like Kudal and Humgaon in the Kudali valley and Medha in the Vena valley. The Medha Ghat route to Mahabaleshwar also passes through the Vena valley. The historic town of Satara (population 41,070) is situated in the Vena valley below the Ajimtara Fort.

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3.5.4 The Maan Valley Maan valley is situated between the range and the main Mahadeo range. The landscape is drier and stonier especially along the base of the hill range. Jhir, Pather Bhojling hill, Tembi hill and Masari hill about four miles east of Dahiwadi, are features of the old Mahimangad plateau level, but now detached by erosion. The vegetation is scrub and poor grass, and cultivation typically of jirayat type with great scarcity. 3.5.5 The Nira Basin The northern strip of the district is bounded by the Nira River. The Nira valley has plateau surface that is at a much lower level than the upper Krishna plateau in the south. 3.5.6 Satara Hills The main hill in Satara is Ajinkyatara. The Satara hill, about 3,307 feet above the sea and 1,200 feet above theplain, stands immediately over the town of Satara. The hill is climbed by a path about one mile long. The fort includes a flat hill-top about 1,200 yards by 400. It is surrounded by a wall with an entrance in the north- west, and a second blocked entrance in the south-east. The Parli or Sajjan Fort, about 3,000 feet above the sea, stands alone about seven miles south-west of Satara. Tt is steep and may he climbed by three footpaths, all of which lead to the same point of entrance. The flat top, which is about 600 yards by 250, is surrounded by a wall. The fort is famous for the foot-prints of Ramdas Swami, the spiritual guide of Shivaji Maharaj. The foot-prints are visited every Thursday by a number of pilgrims, and a great fair or yatra is held in honor of Ramdas Swami on the ninth of January- February. Besides the foot-prints, the top contains several temples, two mosques with Persian inscriptions, five water reservoirs. 3.6 Geology Major portion of the district is covered by the basaltic and amygdule. Because of their tendency to form plateau and their basic composition, the lava flows are generally called " Plateau basalts.", The basaltic lava are termed as " Deccan basalts " or more commonly the "Deccan traps." because these basaltic lava flows cover almost the entire Deccan region. 3.7 Climate and Seasons The climate of this district is on the whole agreeable. The year may be divided broadly into four seasons. The cold season is from December to about the middle of

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February. The hot season, which follows lasts till the end of May. June to September is the southwest monsoon season and the two months October and November form the post-monsoon or the retreating monsoon season. 3.7.1 Humidity In the south-west monsoon months the air is highly humid but in the summer and the cold seasons the air is dry particularly in the afternoons. In the plains, the dryness is more marked than in the hills. 3.7.2 Cloudiness During the south-west monsoon season skies are heavily clouded and it rapidly decreases and skies are clear or lightly clouded in the winter and the summer months. Skies are clear in March and April. 3.7.3 Winds Winds are strong particularly on the hills in the south-west monsoon season. In the rest of the year they are light to moderate. South-westerly or westerly winds prevail in the south-west monsoon months. In the post monsoon months, they are predominantly north-easterly or easterly, but in the afternoon‘s northerly winds blow on some days. During the cold season, winds are from directions between north-east and south-east in the mornings and between south-west and north-west in the afternoons. Northerly or northeasterly winds are common in the mornings during the hot season, while in the afternoons winds are mainly north-westerly and sometimes westerly. 3.8 Boundaries The district has a compact shape, with an east-west stretch of about 90 miles and north-south about 75 miles. Administratively it is bordered by the Pune district on the whole of the northern side, by the Sholapur district on the east, by the Sangli district on the southeast and south, and by the Ratnagiri district on the west; only over a length of about 15 miles the Kolaba district borders on the northwest. Although the boundaries of the district are mainly administrative, along several lines these coincide with physical features, in that the Nira river practically forms a border over the entire north, the main Sahyadrian range on the west and south-west, and the Shikhar Shingnapur section of the Mahadeo hills on the east to demarcate to some extent the lands of the Sholapur district.

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3.9 Forests Out of the total area of the Satara revenue district (4,022.6 square miles), forests occupy 579.07 square miles. Of this, 471.88 square miles are in charge of the Forest Department and 108.19 square miles in charge of the Revenue Department. 3.9.1 Trees The forest types generally met with in this district are: i) Evergreen forests ii) Dry mixed deciduous forests iii) Wet mixed deciduous forests 3.9.2 Major Forest Produce The chief major forest produce in the district comprises timber, firewood and charcoal. 3.9.3 Minor Forest Produce The chief minor forest produce in the district comprises grass. Hirda, Shikekai, Apta and Tembhurni leaves and stones. 3.10 Rainfall The district has a good network of 15 rainguage stations. The rainfall in the belt roughly 15 to 20 miles wide, parallel to the crests of the Sahyadrian Range, is considerably higher than in the rest of the district. While Mahableshwar gets an average annual rainfall of 6,226 mm. (245.13") other stations in this belt get annual rainfall ranging between 1,723 and 1865 mm. (67.85" and 73.43"). The rainfall generally decreases first rapidly and then gradually from the towards the eastern boundary of the district. The main rainy season is from June to September, but some rainfall in the form of thundershowers occurs in May, The rainfall in the south-west monsoon months is about 71 per cent, of the annual total. July is the month with the heaviest rainfall. About 18 per cent, of the annual rainfall is received in the post-monsoon months of October and November. The annual rainfall at individual stations shows considerable variations from year to year. At Mahabaleshwar the highest rainfall in 24 hours ever recorded was 458.5 mm. (18.05") on June 3, 1882 and July 30, 1896. In the plains of the district, the highest rainfall in 24 hours at any station was 206.5 mm. (8.13") at on September 17, 1902

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3.10.1 Average Annual Rainfall In Satara District From 1991-2015 (in mm) Table 3.1 Average Annual Rainfall In Satara District

Source - Rainfall Recording - Department of Agriculture Maharashtra State on www.maharain.gov.in.Analysis &Compiled By Researcher 3.11 Wild Animals The wild life of Satara district although found in small number, is scattered all over the district. However, the big and the interesting animals are mainly confined to the hilly regions of the Sahyadris and its foot-hills. The western part of the district comprising parts of Mahabaleshwar, Satara, Patan and Dhebewadi forest ranges which have good forests, has a large number of animals. With the increase in population, peoples demand on forests increased, and so the animal population decreased. As the government has taken few steps for celebration of the Wild Life Weeks and propaganda carried out during the last few years, the people have, to some extent, realized the importance of preservation of wild life. 3.12 Soils The soils of the study region are generally fall under three main categories i) Medium black to deep Black, soil in the plains ii) Lighter soils on the slopes of the district iii) Late rite soils in hilly region of western part and small hillocks in the east.

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Medium Black soils found mainly along with Krishna, Koyana and Nira rivers. This soil usually characterized by a rich and fertile black soil contains high proportion of nitrogen and organic matter. Light soils locally called ‗Malran‘. These soils are hard, rocky, and brown in colour. They are rich in lime and potash content but shallow in depth. These soils has deficiency of nitrogen, organic compound and phosphorous. It can be productive after providing heavy fertilizer and irrigation facilities. Late rite soils are red in colour and are locally known as ‗Tambadimati‘ It is mainly found in Mahabaleshwar hills and mountain range along with entire Koyana valley. On the top of hills water cannot be confined. This soil used for ‗Kumri‘cultivation or would ash tillage on account of heavy rainfall. Laterite soils are subjected to heavy leaching and high degree of erosion. The reason for red colour is high proportion of iron oxide in the soil. 3.13 Administrative Set up There were Major changes in the administrative set-up of Maharashtra after the 1991 Census, resulting in increase of five districts. The number of districts rose from 30 in 1991 Census to 35 in 2001 Census. There are no changes in number of districts during the period of 2001 Census to 2011 Census. Greater Bombay districts of 1991 Census divided in to two forming Mumbai and Mumbai suburban districts. Similarly new districts Nandurbar, Washim, Hingoli and Gondiya districts were form bifurcating , , Parbhani and Bhandara districts respectively. At the time of 2001 Census included 6 districts, division had 5 districts, had 5 districts, and division had 8 districts, division had 5 districts and division had 6 districts. Satara district is included in Pune division. Thus for 2011 Census the State has 35 districts spread over 6 divisions in Maharashtra. In the district there are 22 towns, 11 tahsils with 1745 villages. Of these, 13 towns are Census Towns, 8 Municipal Council,1 N.P. The villages are spread over Mahabeleshwar (111), Wai (126), Khandala (66), Phaltan (125), Man (104), Khatav (143), Koregaon (138), Satara (211), Jaoli (161), Patan (343) and Karad (217) tahsils. In the district 13 new villages have been created after 2001 Census.

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3.13.1 Jurisdictional changes during 2001-2011 Table 3.2 Jurisdictional changes during decade

No. of villages as per No. of No. of Towns 2001 adjusted New Changes since Name of Sr. Census as per 2011 village 2001 2011 2001 & Govt. District / No. while in 2011 Censu s Censu Censu Notification Tahsil Satara Jurisdictio s Create s s No. District n d 1 2 3 4 5 6 7 8 11 New Villages created after 2001 Census 2 New villages after 2001 Census (Resettled Satara 1739 1739 1745 13 15 22 villages). 2 district Census Towns declassified. 8 New Census Town.1 village merged in Malkapur Nagar Parishad 56 villages transferred from Mahabale- JaoliTahsil. 1 55 111 111 - 2 2 shwar Noti. No. REN-22/2001- 654 Dt. 11/10/2001. 7 New Villages created after 2 Wai 120 120 126 7 1 2 2001 Census 1 New Census Town. 1 Census Towns 3 Khandala 66 66 66 - 1 1 declassified.1 New Census Town. 1 New Census Town. 3 New 4 Phaltan 123 123 125 3 1 2 Village created after 2001 Census

5 Man 104 104 104 - 1 1 -

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2 New Village created after 6 Khatav 141 141 143 2 - - 2001 Census (Resettled villages) 1 New Census 7 Koregaon 139 139 138 - 1 2 Town 1 New Village 8 Satara 210 210 211 1 5 5 created after 2001 Census 56 Villages transferred to Mahabaleshwa r Tahsil.Noti.No 9 Jaoli 218 162 161 - - 1 . REN-22/2001- 654 dt. 11/10/2001. 1 New Census Town. 10 Patan 343 343 343 - 1 1 - 1 Census Town declassified. 3 New Census 11 Karad 220 220 217 - 2 5 Town.1 village merged in Malkapur Nagar Parishad Source – Census of India, Satara district census handbook 2011 For administrative purposes the district is divided into four subdivisions viz., Satara, Wai, Phaltan and Karad with 11 tahsils. Satara sub-division includes Satara, Koregaon, and Jaolitahsils, Wai sub-division includes Wai, Mahabaleshwar and Khandala tahsils, Phaltan sub-division includes Phaltan, Man and Khatav tahsils and Karad sub-division includes Karad and Patan tahsils. The district collector along with the additional district Judge, Superintendent of Police, Chief Executive Officer of Zilla Parishad and other senior officers of the State Government look after the development and regulatory functions in the district. At the tahsil level Tahsildar, Block development Officer, Judicial Magistrate Deputy Engineer and other officers look after their respective departments for development and regulatory functions.

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Table 3.3 Details of Taluka area and population Sr.No. Division Name of Taluka Area in Sq. miles Population

1 (i) Satara 353.4 502049 Satara (ii) Koregaon 364.6 257500 (iii) Jawli 344.7 106506 2 (i) Wai 229.1 200269 Mahabaleshwar (ii) Mahabaleshwar 87.3 72830 3 (i) Patan 513.5 299509 Karad (ii) Karad 405.8 584085 4 (i) Phaltan 455.8 342667 (ii) Khatav 509.1 275274 Phaltan (iii) Man 556.0 225634 (iv) Khandala 203.3 137418 Total - 4,022.6 3003741 Source – Census of India, Satara district census handbook 2011 3.14 Industries In the year 1916, the first glass manufacturing factory was established at Ogalewadi, Karad. A groundnut decorticating factory was established in 1928. Increase in the area under sugarcane cultivation gave impetus to the starting of a sugar factory in 1933. The sugar factory was a landmark in the history of industrialization of the district. It gives employment to a large populace of sugarcane cultivators, skilled and unskilled workers in factories and a number of technicians. Two electricity generation plants were established in 1933 and 1940, respectively. The Cooper Engineering Works at Satara Road have established a countrywide reputation for the manufacture of engines, spare parts, machine tools, power looms and agricultural implements. In Maharashtra, just like other districts, Satara district was also industrially backward except a few crafts like gold, copper, brass and black-smithy, carpentry, stone quarrying, pottery, gull making, leather works etc. Of these gull making was a major industry. No machine propelled factory came into existence till 1916. During the inter-war period, seven new factories, one groundnut decorticating, one sugar manufacturing, two electricity generating and three printing presses were started in the district. A few other factories like edible oil, copper and brass rolling mill, etc., were established after 1947. Among the cottage industries, cotton weaving, carpentry, black-smithy, copper-smithy, basket making, pottery, leather works and tanning may

71 be mentioned as important ones. These are found in almost all big villages. Cotton weaving employed about 4,000 artisans. These industries have been in existence for a long time and are carried on in traditional ways. At present, there are ten sugar factories in the district. Out of them three in Karad and two in Phaltan tahsils and one each in Patan, Wai, Koregaon, Jaoli and Satara tahsil. The Krishna Sahakari sugar factory located at Rethare Budruk. In Karad tahsil is one of the biggest sugar factories in Maharashtra state. The major important industries in the district are Maharashtra Scooters Private Limited, Satara, Aristocrat Suitcase Company, Satara, Ayurvedic Medicine Factory Satara, MAFCO factory Koregaon, Kirloskar numetic and Neumatic Company Karad, Nimbkar Seeds establishment Phaltan etc. The Maharashtra Industrial Development Corporation which is located at Satara, had established two industrial co-operative estates at Satara and one each at Ogalewadi, Malkapur, Satara Road, Karad, Khatav, Lonand and Phaltan and Wai. At present, Out of registered 513 industries 79 industries are closed. Large and medium scale industries working in the industrial estate of M.I.D.C. at Satara. Besides this, there are more than 6700 small-scale industries and 29 medium scale industries working in the district. The District Industrial Centre at Satara was formed on 15th March 1979 and is progressing very well. 3.14.1 Industries at a Glance Table - 3.4 Industry details

Source - Brief industrial profile of Satara district http://dcmsme.gov.in

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3.15 Population The total population of Satara district according 2011 census is 30.04 lakh which is increased by 207094 during 2001 to 2011 (6.94 percent). The density of population in the year 2001 to was 267 persons per sq.km which is increased up to 287 persons per sq.km in the year 2011.Sex ratio was 995 female per thousand males but unfortunately decreased up to 986 females per thousand males in 2011. During the 2001 to 2011 sex ratio decreased by only 1 percent. Table - 3.5 Population Chart

Population Chart District - Satara Ref. Year - 2011 Population Density of Sr. No. of No. of No. of Population Taluka No. Villages Town Total Male Female Families Per Sq.Km. 1 M'hwar 110 2 72830 37600 35230 14841 138 2 Wai 126 2 200269 99865 100404 45050 280 3 Khandala 65 1 137418 70565 66853 30230 264 4 Phaltan 125 2 342667 176250 166417 71124 276 5 Man 104 1 225634 114202 111432 47741 146 6 Khatav 139 0 275274 136802 138472 60121 192 7 Koregaon 138 2 257500 128795 128705 55526 270 8 Satara 205 5 502049 254028 248021 122931 555 9 Jawli 153 1 106506 51504 55002 23729 204 10 Patan 228 1 299509 145074 154435 67517 206 11 Karad 216 5 584085 296157 287928 124925 513 Total 1609 22 3003741 1510842 1492899 663735 3044 Source - Population Census Abstract 2011 3.16 Transport and Communication The transport and communication plays very vital role in economic and social development of the region. In the Satara District the road network is well developed, Railway is also contributing in economic development of Satara district. The National highway (NH -4) Pune – stretches from to North to South along with the course of the about 137 Kms. Total length of the roads is 9707.24 kms out of which 5398.05km are tar roads and remaining are fare whether roads. The Satara - Pandharpur, Satara – Mahad - Pune_Mahabaleshwar, Mahad, Chiplun_Karad, Pandharpur, and Miraj Phaltan roads are the state highways occupied 939 km, in length. The District roads connect the taluka and important places of study areas.

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From the central part of study region, the Pune – Bangalore broad gauge railway route stretchesfrom north to south about 124 km. on this railway line, Lonand, Wathar, Satara, Koregaon, , Masur and Karad are the important railways stations. The Mahabaleshwar – Pandharpur, Phaltan Miraj and Bijapur – are the state highway accounts 939 km in length. 3.16.1 Satara District Transport Routes The communication system is also developed in the study area and link with important places of Maharashtra and Goa State. Different postal, telegram telephone, mobile, net services are providing all facility of communication to the people of study region. Total No. of post offices 643, No. of village having post facilities 628, Individual telephone connection holder in rural area 47327 and urban 89470in study region. 3.17 Tourism Satara is famous as two great rivers namely the Krishna and Koyna rivers. The city is ornate with nature's blessings, a calm and quite peaceful place. Tourism in Satara reveals its importance as an ancient centre of cultural heritage. Several temples, forts, lake as well as bird sanctuary make the place a wonderful place of visit. Following are the some of famous places. 1. Ajinkyatara Fort 2. & 3. Mahabaleshwer and Hill Station 4. KaasPathar& Lake 5. 6. Shri Bhavani Museum, Aundh 7. Karad - 3.18 Banking profile of Satara city In recent past it is witnessed some remarkable changes in the field of banking in Satara city including other part of Satara district also. In the old age money lending was the prominent source of credit, specially the farmers, but it is being replaced by the modern organised banking system. 3.19 Evolution of banking in Satara District The first bank established in Satara was Satara Swadeshi , Ltd. It was established on the 20th August, 1907 as Joint Stock Bank. Since that date there was a gradual development of banking organizations in the district. There were

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fourteen joint-stock banks in this district till 1957. Out of them eight were leaving the branch-offices which have got registered even outside the district. Till independence there were nine banks were started their business in the district 3.20 in Satara District Table 3.6 Details of Banks in Satara District Sr.No. Year of Name of the Bank. Location. Establishment. 1 Satara Swadeshi Commercial Bank, Ltd. Satara 1907 2 The Phaltan Bank, Ltd. Phaltan 1918 3 The United Western Bank of India, Ltd. Satara 1936 4 The Bank of Aundh, Ltd. Aundh 1938 5 The Bank of Karad Karad 1946 6 The Bank of Karad Satara 1951 7 The United Western Bank of India, Ltd. Lonand 1954 8 The State Bank of India Satara 1956 9 The United Western Bank of India, Ltd. Phaltan 1958 Source- Satara District Gazetteer http://www.maharashtra.gov.in/english/gazetteer/SATARA/bank_joint_stock.html

Table 3.7 List of Banks in Satara District

Position as of 31.12.2016 Rs. in lakhs

Branch Network Per Sr. Total Name of Bank Deposits Advances Branch No. Semi Business Rural Urban Total Business Urban 1 Allahabad Bank 0 1 0 1 616 964 1580 1580 2 Andhra Bank 0 0 2 2 375 548 923 462 3 Bank of Baroda 10 5 1 16 34221 18598 52819 3301 4 Bank of India 16 4 2 22 108711 92259 200970 9135 5 Bank of Maharashtra 39 20 3 62 222136 128315 350451 5652 6 Canara Bank 3 5 2 10 16057 6910 22967 2297 7 3 2 1 6 19837 6076 25913 4319 8 Corporation Bank 0 1 2 3 9317 11991 21308 7103 9 Dena Bank 3 2 1 6 8021 4285 12306 2051 10 IDBI Bank 26 11 2 39 325500 106281 431781 11071 11 Indian Bank 0 0 1 1 5096 1287 6383 6383 12 0 2 1 3 1988 1652 3640 1213 13 Oriental Bank of Commerce 0 0 1 1 3098 4889 7987 7987 14 0 1 1 2 3845 1164 5009 2505 15 0 0 1 1 742 1623 2365 2365

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16 State Bank of India 14 15 6 35 262207 179705 441912 12626 17 Syndicate Bank 4 1 1 6 8274 5886 14160 2360 18 UCO Bank 0 2 1 3 5585 1589 7174 2391 19 2 5 1 8 23116 12321 35437 4430 20 0 0 1 1 534 509 1043 1043 21 Vijaya Bank 2 1 1 4 7215 4880 12095 3024 22 Sub Total PSBs 122 78 32 232 1066491 591732 1658223 7148 23 Axis Bank 0 4 1 5 34675 11084 45759 9152 24 Federal Bank 0 1 1 2 4385 4419 8804 4402 25 HDFC Bank 1 9 1 11 37722 53064 90786 8253 26 ICICI Bank 12 10 3 25 22958 21853 44811 1792 27 2 1 1 4 3515 1104 4619 1155 28 Ltd. 0 0 1 1 4368 3853 8221 8221 29 Ratnakar Bank 0 1 0 1 4067 2653 6720 6720 Other Banks 1 Catholic Syrian Bank 0 0 1 1 482 809 1291 1291 2 0 0 1 1 416 4729 5145 5145 3 Bandhan Bank 0 0 1 1 216 126 342 342 Source – Bank of Maharashtra, Branch Satara. Table 3.8 List of Co-Operative Banks in Satara district

Sr.No. Co-Operative Bank Address

1 The Karad Janta Co-Operative Bank Karad Krishna Co-Operative Bank Ltd. Rethare 2 Near Krishna Hospital, Karad Budruk Malkapur P. D. Patil Saheb Co-Operative Bank Ltd. 3 Karad Karad 4 Koyna Co-Operative bank Ltd. Karad karad The karad Urban Co-operative Bank 5 51612, Shaniwar Peth Karad Ltd.Karad Priti Sangam Urban Co-operative Bank 6 56 Shaniwar Peth, Karad Ltd. Karad Shrimant Malojiraje Co-operative Bank 7 Phaltan Ltd. Phaltan Yashwant Nagari Co-operative Bank Ltd. Dr. Ambedkar Chouk, Raviwar 8 Phaltan Peth Phaltan 9 Janta Co-operative Bank Ltd. Satara 179, Bhavani Peth, Satara Ajinkyatara Mahila Co-operative Bank 10 346, Yadogopath Peth, Satara Ltd. Satara Ajinkyatara Co-operative Bank Ltd. 11 Powai Naka, Satara Satara

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Sr.No. Co-Operative Bank Address Col. R. D. NikamSainik Co-operative 12 178/B, Raviwar Peth, Satara Bank Ltd. Satara Rajeshwari Yuvak Co-operative Bank 13 Kamani Houd, Satara Ltd. Satara Jijamata Mahila Co-operative Bank Ltd., Rajdhani Tower, Rajwada, 14 Satara Satara Mahabaleshwer Urban Co-operative 15 Mahabaleshwer Bank Ltd., Mahabaleshwar 16 Janta Urban Co-operative Bank Ltd. Wai KisanveerChouk, Wai The Wai Urban Co-operative Bank Ltd. 17 591, GanpatiAali, Wai Wai Harihareshwer Co-operative Bank Ltd. 18 989, Harihareshwer Plaza, Wai Wai Udatta Chaitnya Co-operative Bank Ltd. 19 884/1, Dharmapuri, Wai Wai Maandeshi Mahila Co-operative Bank 20 Mahaswad Ltd. Mahaswad Mayani Urban Co-operative Bank Ltd. 21 Mayani, TalukaKhatav Mayani Rahitmatpur Co-operative Bank Ltd. 22 Rahitmatpur, Koregaon Koregaon Shivneri Co-operative Bank Ltd. 23 Koregaon Koregaon Shivdaoulat Co-operative Bank Ltd. 24 MalharPeth, Patan Patan The Patan Urban Co-operative Bank Ltd. 25 ZendaChouk, Patan patan Employees' Co-Operative Banks Prathamik Shikshak Co-operative Bank 26 Powai Naka, Satara Ltd. Satara The Rayat Sevak Co-operative Bank Ltd. 27 Sadar Bazar Satara Satara The State Transport Co-Operative Bank 28 S. T. Stand Satara Ltd. Mumbai Source- District Deputy Registrar Office, Satara

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3.21. Conclusion: The demographic characteristics of Satara city indicates that it is one of the developing cities and there is a scope for development of banking industry. The district level offices, colleges, industries are located in the city and it is one of the tourist places of Maharashtra. The banks in Satara city play a very important role in satisfying financial need of the people. The available information clarify that the history of organised banking services begins from 1907 with the establishment of Satara Swadeshi Commercial Bank, Ltd as a private sector bank. There are many other cooperative credit societies, urban cooperative banks which are providing banking facilities along with public and private banks in the city. However, the public and private sector commercial banks are providing various services by using banking technologies based on alternative banking services to their customers like core banking, EFT, RTGS, MICR clearing, Internet banking, Mobile banking, credit card, , ATM, SMS alert etc.

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CHAPTER - 4 THE RAYAT SEVAK CO-OPERATIVE BANK: AN OVERVIEW

4.1 Introduction: The topic focuses on the profile of The Rayat Sevak Co-operative Bank Limited Satara. The topic is divided in to two parts, where the first part deals with the evolution, origin and growth of banking, where it describes the history of establishment of the first bank in the world and in India. It also consists of growth of banking from goldsmith, moneylender to banker in India. Then the topic reveals the importance of co-operation in the development of economy and the traditional forms of co-operation in India i.e. the kula, grama etc. further it states the growth of co- operative movement, features of co-operation, history of co-operative movement which is divided into six stages is explained in detail. The second part of the topic deals with the introduction of employees‘ co-operative banks, their functions and features. Number of employees co-operative banks in Maharashtra and their year of establishment. It also deals with the profile of the bank under the study, which consists of its history and objective of establishment, its present economic condition, number of branches operating in Satara district, various deposit schemes, loan policies and its progress from its inception. 4.2 Evolution, Origin and Growth of Banking The word Bank is derived from the Latin word ‗Banko‘ which means ‗bench‘. In olden days the dealer in money were performing their money activities by sitting on bench. There was no such word as ‗banking‘ before 1640, although practice of safe keeping and savings flourished in the temple of Babylon as early as 2000 B.C. The first bank called the ‗The Bank of Venice‘ was established in Venice, Italy in 1157 to finance the monarch in his wars. The first bank in India was the ‗The Bank of Hindustani‘ started in 1770 by Alexander and co; which failed in 1782. It was the ‗Merchant Banker‘ who first evolved the system of banking by trading in commodities than money. Their trading activities required the remittances of money from one place to another. For this, they issued ‗hundis‘ to remit funds. In India such merchant bankers were known as ‗seths‘. The next stage in the growth of banking was goldsmith, who had to take precautions against theft of gold/jewellery. He started charging something for taking care of money. For evidence of receiving valuables, he issued a receipt. As the gold and silver coins had no marks of the owner, goldsmith

79 started lending them. The receipt issued by goldsmith became like which worked as a medium of exchange and means of payment. The next stage in the growth of banking is moneylender. Goldsmith started advancing coins on loan by charging it. Thus goldsmith moneylender became a banker who started performing two important functions of modern banking that of accepting deposits and advancing loans. 4.3 Definition of Bank ―An establishment authorized by a government to accept deposits, pay interest, clear cheques make loans, act as intermediary financial transactions, and provide other to its customers.‖ 4.4 Types of Banks 1.Commercial Banks These are those banks which performs all kinds of banking functions like accepting deposits, advancing loans, credit creation, and agency functions. In India 20 major commercial banks have been nationalized. 2. Exchange Banks They are those which deal in foreign exchange and specialize in financing foreign trade. They are also called as foreign exchange banks. In India, these banks have their head offices located outside India. These banks also render other services like collecting and supplying information about foreign customers etc. 3. Industrial Banks These are those banks which provide medium and long term finance to industries for purchase of land, machinery etc. They underwrite and subscribe debentures and shares of industries. IDBI,IFCI,ICIC etc. are some of the industrial banks functioning in India. Each state in India has its own SFC. These institutions are also known as Development Banks. 4. Agricultural Banks These are those banks which provide credit to farmers for short term and long term needs. In India, commercial banks, regional rural banks and Agricultural co- operative Banks provide short term loans to farmers. Land Development Banks give medium term loans to farmers on the mortgage of their land. The National Bank for Agriculture and Rural Development (NABARD) provides refinance facilities to all types of banks which give loans to agriculturists.

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5. Savings Banks These banks help to promote and mobilize small savings. In India, post offices act as . 6. Central Bank RBI is the central bank of India and is apex bank in the country which controls its monetary and banking structure and is owned by government. It regulates and issues currency, performs banking and agency services for the state, keeps cash reserves of commercial banks, manages international currency, acts as the lender of the last resort and acts as clearing house. 7. Co-operative banks These banks are financial institutions which are organized on the principal of co-operation, and provide short-term and medium term loans to their members. In rural areas, there are agricultural co-operative banks which accept deposits and give loans to agriculturists, rural artisans etc. In urban areas, co-operative banks perform functions of ordinary commercial banks and give loans only to its members. The structure of co-operative banks consists of state co-operative bank in every state which is an apex bank with its branches at the district level known as the central co- operative bank. It mobilizes financial resources from the richer sections of the urban population by accepting deposits and creating credit like commercial banks and borrowing from the money market. It also gets funds from the Reserve Bank of India. 4.5. Evolution of Co-operation ―Co-operation‖ is derived from the Latin word ‗co-operari‘ ―co‖ means with and ―operari‖ means to work. Co-operation means working together with others for a common purpose. It is the system of people voluntarily associated working together on terms of quality to eliminate their economic exploitation by middlemen. The principle of co-operation is as old as humanity. Throughout the world, people practice co-operation may be for some agricultural operations or for some social, economic or political activity. Co-operation is regarded as one of the ―economic miracles of the last century.‖ In India, the principles of co-operation have been in existence since centuries. The village communities throughout the ages worked together on an informal corporate basis with regard to their religious, social, economic and cultural life. The Rig-Veda realized the importance of co-operation among the people, when it exhorted them

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―May you all have a common purpose, may your hearts be in unison. May you all be of the same mind-so that you can do work efficiently well‖ People have always co-operated in some form and for some purpose. In early days people were dependent largely upon themselves for all the goods and services they needed and met these needs largely on a communal basis through clans, , castes, manors and villages etc. These units catered to the economic , social, educational, health, spiritual and cultural needs. As the time passed on, Industrial Revolution began with specialization as a dominant characteristic, with growth in factory system, trade and also developed it in mutual aid, self-help, co-operative arrangements. Co-operation as a communal way of life began to give way to several specialized and differentiated types of organizations for different purposes. Provident societies provided for savings, sickness and old age. The co-operative partnership and other forms were developed for business purposes. Labour unions provided protection to workers. Consumers organized co-operative stores. 4.6. Definition of Co-operation 1. According to Gordan and O‘Brien ―Co-operation is a special form of economic organization in which people work together for definite business purpose under certain definite business rules. The root of the co-operative idea is a relation between business and ethics which is greater than the necessary commercial honesty of our present industrial system‖ 2. According to Mr. Calvert ―A form of organization wherein the persons voluntarily associate together as human beings on a basis of equality, for the promotion of economic interests of themselves.‖ 4.7. Features of Co-operative Organization 1. It is a voluntary association of economically weak individuals, who have common economic needs which they try to satisfy through a common undertaking. No one is forced to join or to withdraw from this organization against his will. 2. It is neither a public nor a profit seeking organization. It eliminates economic exploitation and is democratically controlled by its members only. 3. A co-operative society is a business organization where persons associate not as contributors of capital but as persons having same economic need.

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4. A co-operative society serves not only the interests of its members but also serves the interest of the whole community. Members derive mutual benefit not only for themselves but also for the whole community. 5. Co-operation aims at providing economical services rather than earning profit. 6. The co-operative is controlled by all members and each of them takes part in its working. 7. Every member in the society enjoys one vote. 8. The motto of co-operation is ―Each for all and all for each.‖ 4.8. Traditional forms of Co-operation in India In ancient India, co-operation took four principal forms:- Kula, Grama, Sreni and Jati. 1. Kula: - It was a political and socio-economic organization in which friends and relatives worked co-operatively to promote their economic, social and political interest. Under this system the land is owned and cultivated in common. Family members live in a joint family in a common house and household expenses are met from the income of joint property. 2. Grama: - The gram sabha was a co-operative organization working for the economic and social progress of village which looked after the maintenance of village lands, roads, highways and the overall development of the village. 3. Shreni: - It worked as banker and as a charitable institution. It was a co-operative and economic organization of artisans, merchants, traders, bankers etc. 4. Jati: - Co-operation at this level was for social purposes as education, charity but when occupation became associated with a particular caste, the system evolved a pattern in which co-operation became an important aspect of economic activities of the community. Some of the other old systems of raising money in various parts of India included ‗chit funds‘ and ‗Nidhis‘ in South India, ‗bunda‘ in Vidharbha, ‗phad‘ system in Kolhapur and ‗gonchi‘ system in Andhra Pradesh. 4.9 Growth of the Modern Co-operative Movement The Co-operative movement in India has been a growth since primitive age and is largely dependent for its origin as well as development on the government. Before 1904 government was unaware of the difficulties faced by peasants, artisans, and farmers in borrowing funds. In 1882, Sir William Wedderburn and Justice Ranade prepared a scheme for establishing agricultural banks to provide loans to farmers.

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Some of the features of the scheme were accepted while enacting the Land Improvement and Agriculturists Loans Act, under which agriculturists could borrow from the government for productive purposes at the rate of 6% p.a. Under this Act ‗takavi‘ loans on the security of mortgage of land were available for construction of wells, tanks, drainage, protection from floods etc. Takavi loans failed due to high rate of interest, rigidity in collection and due to complex terms regarding periods of payment and conditions relating to securities requirements. In 1892, Fredrick Nicholson was appointed by Madras government to report on the advisability of starting a system of Agricultural and Land Banks in the Presidency. He submitted a very exhaustive report summing up the situation as ―Find Raiffeisen‖ and suggested to establish small locally worked institutions for supply of rural credit as they can draw local capital, get local confidence, watch the utilization of loans, and influence the borrowers towards true use of credit. But this report was shelved because as per officials rural credit was not an urgent problem. In the meantime H.Dupernex submitted another scheme. The government committee after considering the schemes came to the conclusion that ―the best way of providing loans to farmers was to start co-operative societies on lines of Raiffeisen Societies.‖ The Famine commission of 1901 strongly recommended that to avoid further famines, it is necessary to provide credit to farmers to improve agriculture and for this mutual credit association should be started. This point was referred to a committee in Simla, which in 1901 drafted a Bill for the establishment of co-operative societies under the president ship of Sir Edward Law; a new Bill came in to existence in the form of Co-operative Societies Act of 1904. 4.10 History of the movement 1. Early stage of Development (1904-1912) 2. Period of Hurried Expansion (1912-1918) 3. Period of unplanned Expansion (1918-1929) 4. Period of Consolidation and Reorganization (1929-1939) 5. Period of Recovery (1939-1948) 6. Period of Planned Development (1951-to date) 4.10.1 Early Stage Of Development(1904-1912) The Co-operative Credit Societies Act was passed on 25th March 1904. It‘s essential features were

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1. Society should be formed by 10 persons living in the same village or belonging to the same class. 2. The organization and control of co-operative credit societies were under the charge of the Registrar of Co-operative Credit Societies. 3. The accounts of every society were to be audited by the Registrar or by a member of his staff free of charge. 4. Societies were classified into rural societies and urban societies where rural societies will have 4/5th of their members, agriculturists and urban societies will have 4/5th of non-agriculturists. 5. Liability of members of rural society was unlimited and that of urban society members might be either limited or unlimited. 6. No dividends were to be paid from the profits of a rural society but were to be carried to the reserve fund; a bonus can be distributed to the members when the fund grows beyond certain limit. 7. Loans should be given only to the members. 8. None of the member could hold shares of more than Rs. 1000/- 9. Societies registered/formed under the Act were exempt from fees payable under the stamp, registration and income tax. 4.10.2 Period of Hurried Expansion(1912-1918) The Act of 1904 provided for the registration of the primary credit societies only, which were insufficient to meet the growing needs of the market. The government realized these deficiencies and passed a comprehensive co-operative societies Act in 1912, whose features were as follows 1. Any society whose objective is to promote economic interests of its members as per co-operative principles may be registered. 2. Any society with the Registrar‘s sanction after carrying 1/4th of the annual net profits to reserve fund can contribute up to 10% of remaining net profits for charitable purposes. 3. A society has a charge upon the shares, deposits etc. of a member with the society in respect of any debt due from such a member. 5. Local governments were given freedom to make rules for the working of societies under the Act.

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4.10.3 The period of Unplanned Expansion (1919-1929) On the passing of the Act of 1919, co-operation became a provincial subject and was administered by provincial governments. Bombay was the first to pass the Co-operative Societies Act of 1925 which was followed by Madras 1932, Bihar and Orissa state adopted the Central Act of 1912. The 1919 Act gave great stimulus to the movement. The number and membership of agricultural credit societies increased between 1918 to 1928. Along with this expansion, over dues also increased steadily. This rapid growth of movement between 1919 and 1930 is characterized by Mr. Ramdas Pantulu as the period of ―unplanned expansion.‖ The depression in early thirties of this century and the collapse of the movement in some provinces, led to the appointment of special experts and enquiry committees in different provinces to examine the position of co-operative movement. 4.10.4 Period of Consolidation and Reorganization (1929-1939) This phase of the co-operative movement was marked by the great depression of the thirties. The extreme crisis resulted in a catastrophic fall in prices, particularly of agricultural commodities. The repaying capacity dwindled considerably. The demand for loans increased while overdues mounted up, the accumulation of heavy overdues and the freezing of the assets of societies resulted in clogging their business and paralyzed the working of the co-operative movement. Apart from its general effects, the depression also brought to light various defects in the organization and structure of co-operative system in India. The evils of over borrowing, of lending without full regard to the repaying capacity of the borrower, of disregard of real co-operative principles were source of the many defects which stalled the further progress of the movement. During this period of stress and strain rectification and rehabilitation rather than expansions became the chief duty of the co-operative departments. All attention was directed towards consolidation of the existing Societies by developing their resource and making them more co-operative. A significant highlight of this period was the establishment of the Reserve Bank of India in 1935 and its agriculture credit departments which was assigned with the duty of studying various problems relating to agricultural credit. In 1937, the Reserve Bank of India stressed the importance of organizing multi-purpose co-operative societies which could embrace the whole life of the agriculturists.

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4.10.5 Period of Recovery(1939-1946) The abnormal conditions created by World War II led to some far reaching development in the co-operative movement. The war stimulated the growth of consumer stores and marketing societies. Many new types of producer societies like Weavers‘ societies, Milk Supply Unions, Motor Transport Societies, Fruit Growers and Cane Growers Associations etc. were formed during the war period. Loan repayments were accelerated and working capital registered a substantial increase. An important development during this period was the appointment of the Co-operative Planning Committee in 1945 under the chairmanship of Shri. R.G. Sareiya which recommended that ― primary societies should be converted into multi-purpose societies and that efforts should be made to bring 30% of the rural population and 50% of the villages within the ambit of recognized societies within a period of 10 years and also RBI should provide greater assistance to co-operatives‖ 4.10.6 The Period Of Planned Development During this period the major development in co-operative field was the appointment of committee of Direction popularly known as Rural Credit Survey Committee in 1951 by RBI, who submitted its report in 1954. Following were the contents of the report 1. The co-operatives supplied only 3.5% of total borrowings of the cultivators while the major share was supplied by the rural moneylenders. 2. Co-operative credit reached only the wealthier members of villages and farmers were kept out of the reach. 3. Many parts of the country remained aloof from the reach of co-operative credit. All the above factors were analysed by the committee and concluded that ―Co- operation has failed but Co-operation must succeed‖. The reasons for the failure of co-operative movement was lack of trained personnel, mass illiteracy, deficiency in village communications etc. the committee recommended Integrated Scheme of Rural Credit involving three fundamental principles namely i) State participation at different levels ii) Co-ordination of credit with other economic activities. iii) Administration through trained and efficient personnel, responsible to the needs of rural population. iv) Introduction of ―Crop Loan System‖

87 v) To get best possible price for the product the producers should market their produce through co-operative marketing organizations. vi) Storage and warehousing facilities should be provided through the state partnership organization. vii) A Co-operative Development and Warehousing Board should be established at all India level. viii) Formation of National Stabilization Fund in RBI and at apex and central bank levels all over the county for converting short term loans into medium term loans when full repayment of short loans is not possible due to natural calamities. ix) Formation of Long Term Operations Fund in RBI, through loans should be given state government for participating in share capital of Co-operative credit institutions, for giving medium term loans and for purchasing debentures of land mortgage bank and for giving long term loans. x) Nationalization of The for undertaking the financing of co-operative marketing and processing societies when existing co-operative banks are unable to do so. xi) A Centrals Committee for Co-operative training and education at all India regional and state level should be set up to supervise training system. xii) Creation of Relief Guarantee Fund at national and state level to assist in writing off irrecoverable debts arising out of natural calamities. All the above recommendations generally approved and were made the basis for future plans for development. 4.11 Principles of Co operation Co-operative principles are those principles which are essential for achievement of co-operative enterprise. These principles of the characteristic feature which distinguish co-operation from other forms of organizations and are commonly described as principles of co-operation. These principles of co-operation are normally traced to Rochdale Pioneers and therefore called as ―Rochdale Principles‖, which are as fallows. 1. Principle of voluntary and open membership It means that nobody is forced to join the society; a person becomes the member on his own will and not by coercion. While open membership means, membership is open to all without any specific criteria. There is no artificial on the admission of

88 members which includes high entrance fee, membership on ground of caste, colour, community etc. 2. Principle of democratic control 1. The general meeting of the member of the co-operative society is the supreme authority in regard to the conduct of the affairs of the society. The supreme authority of a society is in the general meeting of its members. The members must remain in ultimate control of their undertaking. Such distribution of power to every member safe guards the freedom of the individuals. 2. The members of the primary society shall enjoy equal rights of voting and participation in decision affecting their society, each member having one vote, irrespective of the number of share held by him. Essential feature of democratic control are open membership, rule of ‗one member one vote‘, prohibition of use of proxy, participation of members in decision making process, distribution of responsibilities and majority rule. 3. Principle of Interest on Capital The Rochdale pioneers recognized that capital was necessary and also that it gave labour and added productivity. So they admitted the need to remunerate those who supplied this capital. The rejected claim of owners of capital for trading surplus and admitted their claim to interest at fair rate. The idea behind this was that capital should not be source of credit and there must be some limit for payment of interest, without a limit on the return of capital co-operative societies conditions would be same as like a company of paying higher dividend to shareholders. 4. Principle of Equitable distribution of surplus It is not obligatory to pay dividend out of surplus. Members can use of surplus for the benefit of their co-operation, but if they decide to distribute it among themselves, it should be distributed in proportion to their transactions with the co- operative. 5. The principle of co-operative education As per ICA (International Co Operative Alliance) all the co-operative societies should make provision for education of their member of their members, officers, employees and general public in the principles and techniques of co-operation. Co operative education is educating all citizens in the meaning and merits of co-operation

89 and education of administrators, managers, and other personnel in the skill of their respective jobs. 6. The principle of co-operation among co operatives Concentrated efforts are required on the part of co-operators and co-operatives to co-operate with one another both for preservation of their movement and for increasing their strength. Co-operatives must coordinate their activities; work on economic and technological integrations. The various forms of mutual co-operation includes inter co-operative investment; inter co-operative business, promotion of co- operative education, and joint co-operative enterprises. 7. Self-help and mutual help Co-operatives undertake self-financing and self-management. The members come together to promote economic interest of their own. They work together on the principle of ‗self-help through mutual help‘. It is an organization of people who come together for their mutual benefit and who are financially weak. Common welfare of the members is the aim of co-operative organization, where individual interests needs to be sacrificed. 8. A spirit of service A spirit of service is the real basis of co-operative organization. Co-operatives are organized not to earn profits but to undertake money lending business and save members of society from clutches of moneylenders, who charge exorbitant rates of interest. Societies pool the resources from people and enable them to borrow from society at a nominal rate of interest. Loans are advanced for productive purpose so that the members can repay them without feeling any kind of burden. The prime motive of co-operative organization is to render service to its members and not to carry out their work with profit motive. The main objective is to protect the members at the hands of middlemen and to improve their economic status. 9. Principle of Thrift The co-operative societies try to inculcate the habit of thrift among its members. Thrift is the basis of self-help and also part and parcel of co-operation and therefore the idea of making the members thrifty is in forefront. 10. Principle of publicity Mostly the members of co-operative organization are poor, illiterate and ignorant about principle of co-operation, due to which even though they become members of co-operative organization but are not much interested to participate in its working.

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Therefore society makes efforts to teach the members, for which wide publicity of principles of co-operation is undertaken. 11. Principle of honest trading It means that co-operation should always sell pure goods and give correct weight and measure. 4.12 Employees Co-Operative Banks Employee‘s co-operative Banks come under category of urban co-operative Banks. It is financial organization of salaried employees under common institution. In order to encourage regular savings and granting small loans on easy terms of interest and repayment salaried employees came together and formed employee‘s co- operative banks. They are also called as salary earners co-operative banks, which are formed by salary earners to meet their common economic requirements. 4.12.1 Features of Employees Co-Operative Banks a) Fixed salary income b) Periodic increments c) Provident Fund and Pension d) No chance of sudden rise or fall in income e) Limited liability of member f) Monthly subscription from employee‘s salary g) Loan against salary h) Membership to only permanent employees i) Mutual service and democratic management j) Lowest NPA‘s 4.12.2 Functions of Employees Co-Operative Banks a) To encourage self-help and co-operation among members b) To accept deposits of money from members and non-members c) To raise money d) To provide safe deposit lockers to customers e) To provide services to members and non-members such as accepting light bills, telephone bills etc. f) To lend money to salary earners at reasonable rate of interest g) To draw make, accept, collect discount, buy, and sell negotiable instruments h) To meet the financial needs of salary earners

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4.13 List of Employees Co-Operative Banks in Maharashtra Table 4.1 List of Employees Co-Operative Banks in Maharashtra Year of Sr. No Name of the Bank Establishment Defence Accountants Co-operative Banks Ltd. 1. 1906 Pune Pune Municipal Servants Co-operative Banks Ltd. 2. 1914 Pune The Government Servants Co-operative Banks 3. 1917 Ltd. Kolhapur Ahmednagar District Primary Teacher‘s Co- 4. 1919 operative Banks Ltd. The Nasik District Co-operative and Parishad 5. 1920 Employees Banks Ltd. Nasik Dhule and Government Co- 6. 1921 operative Banks Ltd. Dhule The IT Department Co-operative Banks Ltd. 7. 1926 Mumbai The Maharashtra Mantralaya and Allied Officers 8. 1929 Co-operative Banks Ltd. Mumbai 9. Novel Dockyard Co-operative Banks Ltd. Mumbai 1931 The Mumbai Municipality Employees Co- 10. 1932 operative Banks Ltd. Nagpur Nagpur Municipal Employees Co-operative Banks 11. 1934 Ltd. Nagpur 12. Shriram Cotton Co-operative Banks Ltd. Mumbai 1939 The Primary Teachers Co-operative Banks Ltd. 13. 1948 Kolhapur 14. The Rayat Sevak Co-operative Banks Ltd. Satara 1940 The Primary Teachers Co-operative Banks Ltd. 15. 1948 Satara Premier Automobile Employees Co-operative 16. 1949 Banks Ltd. Mumbai 17. The Municipal Co-operative Banks Ltd. Mumbai 1952 The Air Corporation Employees Co-operative 18. 1952 Banks Ltd. Sangli Sangli District Primary Teachers Co-operative 19. 1952 Banks Ltd. Sangli Walchandnagar Co-operative Workers Banks Ltd. 20. 1960 Walchandnagar District Pune 21. State Transport Co-operative Banks Ltd. Mumbai 1953 Insurance Workers Co-operative Banks Ltd. 22. 1960 Mumbai Wardha ZP Employees Co-operative Banks Ltd. 23. 1967 Wardha The Amravati ZP Teachers Co-operative Banks 24. 1976 Ltd. Amravati Source – District Deputy Registrar office, Satara

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4.14 Bank Selection The researcher has selected one Employees‘ Co-operative Bank from the above list namely 1. The Rayat Sevak Co-operative Bank Ltd. Satara 4.15 Employees‘ Co-Operative Bank under Study:The Rayat Sevak Co - Operative Bank Ltd, Satara 4.15.1 Establishment History of The Rayat Sevak Co -Operative Bank Ltd, Satara Padmabhushan Dr.Karmaveer Bhaurao Patil the great visionary established Rayat Shikshan Sanstha for providing quality education to the downtrodden and economically backward people. During that period education was not the responsibility of Government, salaries were not grantable. The teachers of the various schools established by Karmaveer Anna were getting very irregular salary. Karmaveer Anna had a deep attachment with his teachers and he shouldered all their family responsibilities as well. At the same time Anna used to get disturbed when he thought about teachers financial problems and their inability to meet the financial requirements of their family. The Rayat Shikshan Sanstha is established with the principle of self- help, hence Karmaveer Anna was against the thought of seeking others help to satisfy the financial needs of Rayat sevak. He believed that all Rayat sevak should help each other in times of need to seek financial help, therefore he thought about establishment of credit co-operative society and at last he took a consensus decision of establishing it. Finally after all the formalities on 16th August 1940 ―The Rayat Sevak Co-operative Society‖ was established. It was just the beginning where Anna had planted a sapling in the form of credit society which has now grown as a huge tree same like the trade mark of sanstha, being extended its banking business through its 20 branches all over the Maharashtra. The Bank has celebrated its Diamond jubilee year in 2015 and been a recipient of prestigious award― Banko‖ Award in the year 2014 , for its good contribution in Employees‘ Bank category. 4.15.2 Credit Society towards Bank The society at its inception year just had 198 members with share capital of just Rs.1549/-. It collected deposits of Rs.400/- in its inception year and sanctioned loans to the needy amounting to Rs.1800/-. From this very tiny beginning in thousands the society did a splendid progress in a very short period of time and at

93 present has expanded its banking business in lakhs and is still growing by leaps and bounds. The following chart shows the progress of the society since its inception to its silver jubilee year.

Table 4.2 Progress of the Bank Sr. Particulars 1940-41 1950-51 1960-61 1968-69 No. 1 No. of Members 198 869 535 1992 2 Share Capital Rs.1549 Rs.24,826 Rs.73,545 Rs.4,27,500 3 Deposits Rs.400 Rs.241 Rs.1,19,735 Rs.8,30,858 4 Loan Rs.1800 Rs.29716 Rs.2,17,196 Rs.7,23,076 5 Profit ---- Rs.1,445 Rs.6,152 Rs.25,809 Source - Annual Report The above table shows that there has been increase in number of members from 198 to 1992, also the share capital has been increased from Rs.1549 to Rs.4,27,500/- which shows good increase in four decades. The loan disbursement has also been considerably increased as also the profit. To make the society financially sound the profit of the society was not distributed for almost 13 years after its establishment and was transferred to reserve fund. For the first time society distributed its profit to its shareholders in the year 1951-52. To save the expenses of Board meetings Karmaveer Anna had instructed all the Directors to bear their own expenses for attending the Board meetings. The Bank was expanding its Banking transactions and was getting good response from the society as well; naturally a thought of conversion of society into Bank was put forward in the Board meeting and after its acceptance by Board members and other formalities and permission of RBI at last the society was converted into a Bank on 21/10/1969. As the transactions were increasing and number of members were also increasing day by day, despite of many difficulties faced by the Bank it decided to expand its business by opening its branches at various places like Ahmednagar, Sangli ,Pune, kopargaon, vashi, Vita, Baramati, Satara Camp, Pandharpur. At present the Bank is having 20 branches out of which four of them are in Satara itself and other places include Ahmednagar, Karjat, Shrirampur, Kopargaon, Dahiwadi, Vashi ,Pandarpur, Vita, Sangli, Kolhapur, Karad, , Aundgaon-Pune, Baramati, Aadgaon (Nasik), Lonand, Hadapsar-Pune with Head Office, functioning effectively all over the Maharashtra.

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4.15.3 Bank Progress Table 4.3 Progress of the Bank Sr. Particulars 1969-70 1980-81 1990-91 1999-2000 No. 1 Number of Members 2204 7114 12311 14954 2 Share Capital 5,43,571 58,59,495 4,05,26,300 7,10,97,100 3 Deposits 11,27,685 1,26,41,266 10,59,71,266 100,71,85,548 4 Loans 8,42,686 1,76,35,480 18,65,68,026 100,73,50,214 5 Profit 29,7887 7,02,042 74,00,440 1,66,73,015 Source - Annual Reports 4.15.4 Profile of The Rayat Sevak Co-operative Bank Ltd. Satara Table 4.4 Profile of the Bank Sr.No. Name of the Bank The Rayat Sevak Co-operative Bank Ltd. Satara 1 Head Office Address 455/2/20, F Peth, Sadar Bazar,Satara-415001 2 Date of Registration 16/08/1940 Date & No. of R.B.I. 3 UBD.MH.551-P Dated 12/09/1986 Licence 4 Jurisdiction Maharashtra State Source - Annual Reports 4.15.5 Present Position Table 4.5 Present position of the Bank as on 31/03/2015 Sr. Particulars Amount in Lacs No. 1 No. of Branches including H.O. 21

2 Membership a) Regular 12862 b)Nominal 790 3 Paid up Share Capital 4166.17

4 Total Reserves and Funds 3756.18

5 Deposits a) Saving 7349.35 b) Current 869.09 c) Fixed 68751.92 6 Advances a) Secured 57557.41 b) Unsecured ------7 Investments a) D.C.C. Bank 2563.05 b) M.S.C.Bank 54.50 c) Govt. Securities 17654.13 d) Others 4250.01 8 Overdues % 0.34%

9 Net NPA % 1.11%

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Sr. Particulars Amount in Lacs No. 10 CRAR 14.15%

11 M.I.S. of Urban Banks a) CD Ratio 69.38% b)Overdues 193.28% c)% of O/S 0.34% 12 Profit of the Year 583.23

13 Audit Classification ‗A‘

14 Total Staff 146

15 Working Capital 88125.66

Source - Annual Reports 4.15.6 Branches Operating in Satara District Table 4.6 Branches in Satara District Sr. No. Name of the place No. of branches 1 Head Office, Satara 01 2 Karmaveer Samadhi Parisar, Satara 01 3 Chhatrapati Shivaji College campus, Satara 01 4 Sadar Bazar, Satara 01 5 Lonand 01 6 Dahiwadi 01 7 Karad 01 Total 07 Source - Annual Reports 4.15.7 Bank Progress Table 4.7 Progress of the Bank for the last five years Progress Report - 1 Sr. 2014-15 Particulars 2010-11 2011-12 2012-13 2013-14 No. No. of 1 13790 13593 13415 13081 12862 Members 2 Share Capital 2772.44 3137.38 3397.87 3684.43 4166.17 Reserves & 3 2224.96 2835.54 3189.89 3481.82 3756.18 other Funds 4 Total Deposits 47543 53286.2 62718.7 69052.4 76970.36 5 Total Loans 41563.3 45277.1 46431.3 50324.5 57557.41 Source - Annual Report

The above table shows the condition of Bank in last five years. As seen in the table the numbers of members were 13790 in 2010-11 which decreased by 197 in 2011-12 by 178 in 2012-13, by 334 in 2013-14 and by 219 in 2014-15. Throughout the study period numbers of members are declining showing a consistent declining trend. As far as share capital is considered it shows an increasing trend throughout the study period. The share capital in 2010-11 was Rs.2772.44 lakhs which increased to,

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Rs.3137.38 lakhs in 2011-12, Rs.3397.87 lakhs in 2012-13 and Rs.3684.43 lakhs in2013-14 and Rs.4166.17 lakhs in 2014-15. The reserves and funds have increased consistently showing an increasing trend. It has increased by Rs.610.58 lakhs in 2011- 12, by Rs.354.35 lakhs in 2012-13 by Rs.291.93 lakhs in 2013-14 and by Rs.274.36 lakhs in 2014-15. Total deposits also shows an increasing trend with total deposits of Rs.47543 lakhs in 2010-11, Rs.53286.2 lakhs in 2011-12, Rs. 62718.7 lakhs in 2012- 13, Rs.69052.4 lakhs and Rs 76970.36 lakhs in 2014-15. The amount of loan also has increased during the study period by Rs.15994.11 lakhs. Progress Report - 2 Table 4.8 Progress of the Bank for the last five years -Progress Report - 2 Sr.No. Particulars 2010-11 2011-12 2012-13 2013-14 2014-15 1 Total Investments 13629.4 15694.7 21235.6 24076.3 24521.7 2 Net Worth 4401.28 5364.93 5897.99 6180.31 6821.27 3 Gross Profit 464.37 515.97 543.92 564.16 583.23 4 N.P.A%(Gross) 1.43 2.32 1.64 1 1.8 5 N.P.A%.(Net) 0.88 1.74 1.02 0.35 1.11 Source - Annual Report The amount of investments has increased from Rs.13629.4 lakhs in 2010-11 to Rs.24521.7 lakhs in 2014-15, showing a total increase of Rs.10892.3 lakhs in five years of study period. Net worth also shows an increasing trend. Gross Profit has increased by Rs.118.86 lakhs in five years of study period. Both Net Profit percentage gross and net shows ups and downs in five years of study period. Table 4.9 Progress of the Bank for the last five years -Progress Report - 3 Sr. 2010- 2011- 2012- 2013- 2014- Particulars No. 11 12 13 14 15 1 Audit Class B A A A A 2 Total Staff 161 159 158 152 146 3 CRAR% 11.33% 13.98% 15.35% 15.56% 14.15% 4 C.D. Ratio% 80.08% 70.63% 64.9% 66.8% 69.38% 5 Dividend% 12.5% 11% 11% 11.25% 11% Source - Annual Report Audit class in 2010-11 was B, otherwise for rest of four years it is A, which shows good performance of the Bank. The total staff in 2010-11 was 161 which has decreased to 159 in 2011-12, 158 in 2012-13, 152 in 2013-14 and to 146 in 2014-15. The CRAR percentage shows an increasing trend during the first four years with 11.33% in 2010-11, 13.98% in 2011-12, 15.35% in 2012-13 , 15.56 in 2013-14 and has decreased to 14.15% in 2014-15. The cash deposit ratio has decreased steeply

97 during first three years and then has increased by 1.9% and by 2.58% in 2013-14 and 2014-15 respectively. Table 4.10 Progress of the Bank for the last five years- Progress Report - 4 Sr.No. Particulars 2010-11 2011-12 2012-13 2013-14 2014-15 No No No No No 1 CRR/SLR Default Default Default Default Default 2 Branches 20+1 20+1 20+1 20+1 20+1 Business per 3 553.45 619.89 690.82 785.37 921.42 Employee Working 4 57868.8 65199.8 71867.5 79343 88125.7 Capital Source - Annual Report From the above table it can be seen that the Bank has regularly followed the rate of CLR and SLR as prescribed by the RBI throughout the study period. The numbers of branches are 21, there is no increase or decrease in the number of branches throughout the study period. As far as business per employee is concerned it shows a very satisfactory position with a continuous increasing trend throughout the study period. In 2010-11 it was Rs.553.45 lakhs in 2010-11 which increased by Rs.66.44 lakhs in 2011-12, by Rs.70.93 lakhs in 2012-13, by Rs.94.55 lakhs and by Rs.136.05 lakhs in 2013-14 and 2014-15 respectively. The working capital also shows an increasing trend with Rs.57868.8 lakhs in 2010-11, Rs.65199.8 lakhs in 2011-12, Rs.71867.5 lakhs in 2012-13, Rs.79343 lakhs in 2013-14 and Rs.88125.7 in 2014-15. 4.15.8 Deposit Schemes of the Bank Table 4.11 Deposit Schemes of the Bank Sr.No. Type of Deposit Interest Rate

1 Current Deposit ------

2 Savings Deposit 4.00% Term Deposit a)30 days to 45 days 6.50% b)46 to 90 days 7.50% c) 91 to 180 days 8.00% 3 d)181 days to 1 year 8.50% e) 1 year to 3 years 8.75% f) 3 years to 5 years 9.00% g)Above 5 years 8.50% Rayat Mauli Special Term Deposit Scheme 4 1501 days 9.50% Source - Annual Report

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As the above table shows the Bank do not pay any interest on current account , while on it pays 4% interest. The interest rates for term deposits vary and depends upon the number of days, the rates of term deposits start from 6.50% and grows up to 8.50%. the special deposit scheme Rayat Mauli Scheme has an additional benefit of 1% in interesti.e.9.50%. Extra 0.50% interest is paid to senior citizens (completed 60 years of age) .Retired teachers from Rayat Shikshan Sanstha (completed 58 years of age) are also paid an extra interest of 0.50% 4.15.9 Term Deposit Recurring Interest Scheme Table 4.12 Details of the scheme and its returns Sr.No. Term of Deposit Amount after Term 1.5 times the amount 1 4 years 6 months 20 days deposited Double the invested 2 8 years 3 months 0 days amount Source - Annual Report 1. Karmaveer Cash Certificate 2. Rayat Bachat 3. Shubh Mangal Thev Yogana 4. Pension Thev Yojana 5. ―Laxmi‘ Dhanvardhini Yojana 6. Rayat Lakhpati Yojana Above all are the various attractive schemes of Bank in which it is necessary to invest an amount in denomination of 100 and depositor can get good return on his investment after a certain period. 4.15.10 Loan Schemes of the Bank Table 4.13 Loan Schemes of the Bank No. of Rate of Sr.No. Type of Loan Loan Amount Instalments Interest Jaminki Loan No.1(E.M.I) 11.75% 1 Rs.12 Lacs 160 a) up to Rs.6 lacs 12.25% b) above Rs.6 lacs Jaminki Loan No.2 2 Rs. 3 lacs 60 11% (E.M.I) Jaminki Loan No.3 3 Rs. 1 lakh 15 10.50 (E.M.I)

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No. of Rate of Sr.No. Type of Loan Loan Amount Instalments Interest Special(Housing) Individual 40 Loan (E.M.I.) lacs 10.00 4 240 a)up to Rs. 12 lacs Husband-Wife 10.75 b)above 12 lacs Rs.80 lacs Housing Mortgage Loan (E.M.I) 10.50 5 Rs.25 lacs 120 a)up to Rs. 10 lacs 11.25 b)above Rs.12 lacs Educational

Loan(E.M.I.)

a)within the country Rs.10 lacs 60 10.50 6 b)within the country Rs.30 lacs 60 10.50 for medical education

c)out of country Rs.30 lacs 60 10.50 education Vehicle loan(E.M.I) 7 a)2 wheeler Rs.10 lacs 60 10.50 b)4 Wheeler 84 8 Gold Loan Rs. 3 lacs 12 12.00 Saving Deposit Maximum 9 overdraft Loan 12 12.00 Rs.1,00,000/- (E.M.I.) 2% more than Deposit Mortgage 85% of amount 10 - the deposit Loan of Deposit interest Source - Annual Report

This Bank is consistently introducing new schemes of deposits and is successful in attracting deposits from investors. Also the Bank participates in various training programs and deputes its employees for such programs and updates their knowledge. Also the Bank shoulders social responsibility by visiting various Hospitals in Satara and distributing fruits to the patients admitted in the Hospital and also extend financial help to the needy people from time to time.

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4.16 Progress of the Bank Table 4.14 Progress of The Rayat Sevak Co-operative Bank for the last five years (Figures in Lakhs)

The Rayat Sevak Co-operative Bank Ltd. Satara Sr.No. Year 2010-11 2011-12 2012-13 2013-14 2014-15 1 Loans 41563.27 45277.12 46431.34 50324.54 57557.41 2 Deposits 47543.02 53286.17 62718.74 69052.36 76970.36 3 Working Capital 57868.81 65199.79 71867.45 79342.95 88125.66 4 Total 146975.1 163763.08 181017.53 198719.85 222653.43 (Source - Annual Report) Graph No. 4.1Progress of the Bank for the last five years of The Rayat Sevak Co- operative Bank Ltd. Satara Yearly Progress of Bank 100000 90000

80000

70000 60000 50000 Loans 40000 Deposits

30000 AmountLacs in 20000 Working Capital 10000 0 2010-11 2011-12 2012-13 2013-14 2014-15 Years

The above chart and table shows the performance of The Rayat Sevak Co- operative Bank Ltd. Satara during the study period from 2010-11 to 2014-15. As seen in the table and its pictorial representation loans, deposits and working capital shows an increasing trend. The rise in working capital is much faster than the growth in deposits and working capital. The Bank should take rigorous steps to increase the loans and advances. But all the three aspects of comparison show an increasing trend, none of the aspect has a declining trend.

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4.17 Conclusion: Thus the topic reveals the history of evolution of banks, its types and importance of co-operation and co-operative movement in the banking sector. The bank under the study have been explained in detail regarding its history of establishment and the progress chart showing growth of members, deposits and loans. As shown in the graph the condition of the Bank is satisfactory showing a consistent increase in its loans, deposits and working capital. To conclude we can say that the condition of the Bank is good, where none of the aspect of the Bank shows a negative i.e. a declining trend which is indeed a good sign. But the Bank should take rigorous steps to increase the loans and advances. Thus the topic takes a review of performance of these banks since its inception.

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CHAPTER - 5 FINANCIAL EVALUATION OF THE RAYAT SEVAK CO- OPERATIVE BANK LTD. SATARA 5.1 Introduction: This chapter deals with the various financial ratios calculated to prove the financial soundness of the Bank. The ratios calculated are applicable for these special employees‘ co-operative banks. These ratios are different from the ratios calculated for other banks and are as per the guidelines of Institute of Chartered Accountants of India (ICAI). Any bank may be a Private, Public or a co-operative one has to be financially sound, which helps them to win trust of its members, customers, and other stakeholders. Financial soundness attracts deposits from the customers and creates good reputation in the market. Generally these employees co-operative banks are supposed to be financially sound and are considered as having low NPA rate, as the recovery of loans is not the issue with these banks. To prove the financial soundness of the banks certain liquidity, profitability and activity ratios are calculated and the mean values per ratio, per bank is calculated to find which bank is a good performer as far as its financial condition is considered. The topic is divided into two parts, where the first part deals with the liquidity and profitability ratios calculated for the period from 2010-11 to 2015-16. The ratios calculated do have certain standard requirements of minimum and maximum, accordingly they are compared with the actual and inferences are drawn. The second part of the topic deals with the testing of hypothesis, wherein those ratios that have standard values are considered for hypothesis testing and t-test is applied and a hypothesis is proved accordingly. The second hypothesis about the time required to sanction the loan is tested by using chi square test. 5.2 Liquidity Ratios: These are the ratios which depict the liquidity position of the bank. Liquidity at a bank is a measure of its ability to readily find the cash it may need to meet demands upon it. More commonly it comes from holding securities that can be sold quickly with minimal loss. This typically means highly creditworthy securities, including government bills, which have short-term maturities. Following are the six liquidity ratios calculated for each of the bank from the year 2010-11 to 2015-16, which is the study period. These ratios do have standards, which are compared with the actuals to find the actual financial position of the bank.

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5.2.1 Liquidity Ratio = Total Investments/Total Assets This is the first liquidity ratio showing the ratio of total investments and total assets. The ratio shows the amount of liquid assets hold by the bank out of its total assets. This ratio compares liquid assets being held by an organization against the total assets accumulated. The standard ratio required to be maintained by the bank is 20% of its total assets. If the bank is holding 20% of liquid assets out of its total assets, then it means that the bank is having sufficient amount of liquid assets. Following is the table which shows this ratio of all the three banks under the study. . Table No. 5.1 Values of Total Investments/Total Assets ratio in percentage Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 23.51 2 2011-12 24.06 3 2012-13 29.53 4 2013-14 30.32 5 2014-15 27.80 6 2015-16 27.02 Source: Compiled by Researcher The above table shows the values of liquidity ratio- total investments and total assets. As seen in the table all the Bank fulfil the criterion of minimum ratio required. As seen in the table the ratio shows an increasing trend from 2010-11 to 2013-14 and thereafter decline in 2014-15, and 2015-16, but it satisfies the standard ratio and fulfils the minimum requirement of 20%. This shows that the liquidity position of the Bank is satisfactory. The Bank is having an unsatisfactory liquidity position as far as this first liquidity ratio is concerned. To strengthen the liquidity position the bank can invest in highly credit worthy securities like government bills, which have short term maturity periods. Also the bank should invest in such assets where they can be liquidated easily and in times of need.

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Graph No. 5.1 Graphical Presentation of Total Investments/Total Assets ratio as per above table

The Rayat Sevak Co-operative Bank 35 30 25 20 15 The Rayat Sevak Co- operative Bank 10 5 0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

As seen in the graph Bank Investments have been rising consistently. The ratio is over and above the standard requirement of 20%. The ratio shows strong liquidity of the Bank. The Bank has taken good investment decision of investing the assets where more than 20% of the assets are liquid during the study period. This means that the bank is successful in meeting its time liabilities and the liquidity position of the bank is strong.

5.2. 2 Liquidity Ratio– CASA (Current Account and Savings Account) / Total Deposits

CASA stands for current and savings account. Different kinds of deposits — current account, savings account and term deposits — form the major source of funds for banks. The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit. A higher CASA ratio means higher portion of the deposits of the bank has come from current and savings deposit, which is generally a cheaper source of fund. Hence, higher the CASA ratio better is the net interest margin, which means better operating efficiency of the bank. Net interest margin is difference between total interest income and expenditure and is shown as a cost of this fund is relatively lower. The standard ratio is 15% which means that the bank must hold at least or minimum 15% of its deposits from its savings and current account. A higher CASA ratio indicates a lower cost of funds, because banks do not

105 usually give any interests on current account deposits and the interest on saving accounts is usually very low i.e. 3-4%.If a large part of a bank's deposits comes from these funds, it means that the bank is getting those funds at a relative lower cost. It is generally understood that a higher CASA ratio leads to higher net interest margin. In India, it is used as one of the metrics to assess the profitability of a bank. A CASA operates like a normal in which funds may be utilized at any time. Because of this flexibility, a CASA has a lower interest rate than a term deposit as the bank does not have a guarantee that all the funds are available to loan for a specific period of time. Demand deposits like a CASA exchange a higher rate of interest for higher liquidity and access to funds. The amount of money deposit into a CASA is an important metric to determine the profitability of a bank. Use of a CASA is only functional under the assumption that depositors will not withdraw all funds in the very near future. Likewise, because of the uncertainty relating to when a depositor will withdraw funds, a CASA is not to be utilized by a bank for long-term financing.

Table No. 5.2 Values of ratio CASA/Total Deposits in percentage Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 12.08 2 2011-12 10.96 3 2012-13 10.44 4 2013-14 9.62 5 2014-15 10.68 6 2015-16 14.32 Source: Compiled by Researcher

The above table shows decreasing trend in the CASA ratio. The Bank do not even fulfil the minimum criterion of 15%, which means that the operating efficiency of the bank need to be increased. The ratio has not even fulfilled the minimum criterion showing that the operational efficiency of these banks is in danger. This situation is been faced by all the banks under the study because these banks are unable to attract customers other than the members. The ratio can be increased if banks attract depositors by launching innovative schemes and also by automation the depositors can be attracted. Customers nowadays get attracted towards the private

106 banks due to their quick service and modern facilities of banking and an attractive ambience of these banks. As these banks under the study lack automation this may be the reason that these banks fail in attracting the depositors.

Graph No.5.2 Graphical Presentation of above table of CASA/Total Deposits Ratio

The Rayat Sevak Co-operative Bank 16 14 12 10 8 The Rayat Sevak Co- 6 operative Bank 4 2 0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

The above graph shows that the bank has a good percentage of CASA i.e. 12.08% in 2010-11 but has decreased over the years to 10.68% in 2014-15 and again has increased in 2015-16. So there is a need to increase CASA deposits by launching innovative schemes so as to improve the operating efficiency. Attractive schemes would increase the amount of deposits as also it increases the operating efficiency of the bank. Higher ratio would increase its net interest margin which enhances its operating efficiency.

5.2.3 NPA = Net NPA/ Total loans and advances * 100

This ratio is used as a measure of the overall quality of the Bank's advances. NPA are those assets for which interest or the principal amount is overdue for more than 90 days (or 3 months). Standard percentage of ratio is less than 5%. The bank having more than 5% of NPA reflects bad quality of loans.

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Table No. 5.3 Values of NPA in percentage

Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 1.43 2 2011-12 2.32 3 2012-13 1.64 4 2013-14 1.00 5 2014-15 1.80 6 2015-16 1.59 Source: Compiled by Researcher

Above table shows NPA percentage for the period of six years. As seen in the table in NPA shows ups and down, rigorous steps need to be taken for fast and timely recovery of loans. But NPA percentage is less than 5%, which means they are in a better position as far as their recovery of loans is concerned. The percentage has not crossed the standard value, which is indeed a good sign. Generally it is presumed that these employees co-operative banks do not have the problem of recovery of loans as the loan instalment is directly deducted from the employees salary by the employer itself, therefore timely payment of loan is possible for the banks. But in few cases due to sudden death of the member or transfer of member from one branch to another branch without quick transfer of his loan account from his existing branch to newly transferred branch. This delay in transferring of account may cause overdue of the principal or interest amount. Also in case of the death of the member it takes time for the legal formalities which takes time and meanwhile the asset gets transformed into NPA.

Graph No.5.3 Graphical presentation of NPA as per above table

The Rayat Sevak Co-operative Bank 2.5 2 1.5

1 The Rayat Sevak Co- operative Bank 0.5 0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

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The graph shows that there is an increase in NPA percentage in 2011-12 and decrease in 2012-13, and 2013-14 but again a sharp increase in 2014-15. The NPA percentage has increased by 30% over these 5 years. As the standard ratio of NPA is less than 5%, the Bank does fulfil the minimum criterion so we can say that these Banks have good recovery mechanism of loans. As the Bank is employees co- operative their NPA ratio has not crossed the minimum standard limit, the reason behind this is that the amount of instalment i.e. principal and interest is directly deducted from employee‘s salary and so there is no problem of recovery of loan. All the borrowers pay the interest on time.

5.2.4 Credit-Deposit Ratio = Total Loans and Advances /Total Deposits It is the ratio which shows how much a bank lends out of the deposits it has mobilized. It indicates how much of a bank's core funds are being used for lending, the main banking activity A higher ratio indicates more reliance on deposits for lending and vice-versa. If the ratio is lower than 1, the bank relied on its own deposits to make loans to its customers, without any outside borrowing. If, on the other hand, the ratio is greater than 1, the bank borrowed money which it re-loaned at higher rates, rather than relying entirely on its own deposits Banks may not be earning an optimal return if the ratio is too low. If the ratio is too high, the banks might not have enough liquidity to cover any unforeseen funding requirements or economic crises. Standard – 65% to 70%. Above 75% means financial stability is at risk and less than 65% means less loans are sanctioned.

Table No. 5.4 Values of Credit-Deposit Ratio in percentage

Sr.No. The Rayat Sevak Co- Year operative Bank 1 2010-11 87.42 2 2011-12 84.97 3 2012-13 74.03 4 2013-14 72.88 5 2014-15 74.78 6 2015-16 78.78 Source: Compiled by Researcher

When compared with the standard upper and lower limit, none of the bank is below 65%, which means all the banks sanction a sufficient amount of loan. The ratio

109 is high during first two years, and then has declined to 74.03% and 72.88% in next two years. Again it has increased in next year which of course is not a good indicator.

Graph No.5.4 Graphical presentation of Credit-Deposit Ratio as per above table

The Rayat Sevak Co-operative Bank 90

85

80

75 The Rayat Sevak Co- operative Bank 70

65 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

The CD ratio is less than 1 which shows that bank has given loans out of its own deposits. The percentage of lending is decreased from 87.42%in 2011 to 74.78% in 2014-15.The bank should take efforts to increase its advances. The Bank have above 75% ratio they do not have enough liquidity to cover any unforeseen funding requirements. The Bank is not having less than 65% of ratio, which means the Bank lend sufficient amount for loan purpose. It depicts that the demand for loan is good where members frequently borrow and have acceptance of the rate of interest charged by the bank. The present condition of the bank shows that the members are aware that the bank is capable of fulfilling their economic needs in times of need and have faith in the bank.

5.2.5 Capital Adequacy Ratio = Capital/Total Assets

It is the Ratio which determines the bank's capacity to meet the time liabilities and other risks such as credit risk, market risk, operational risk etc. CRAR- it is used to protect depositors and promote the stability and efficiency of financial systems around the world. Two types of capital are measured: Tier One Capital-which can absorb losses without a bank being required to cease trading and Tier Two Capital- which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors. As per RBI Norms, Indian SBC's are required to have CAR of 9% i.e. 1% more than stipulated BASEL norms. This ratio safeguards the

110 banks against excess leverage, bankruptcy and keeps them out of trouble. Capital adequacy ratio (CAR) is one of the measures which guarantee the monetary soundness of banks in retaining .It is defined as the ratio of bank‘s capital in relation to its current liabilities and risk weighted assets. Risk weighted assets are a measure of amount of bank assets, adjusted for risks. An minimum 9% of capital adequacy ensures that the bank has sufficient amount of capital to expand its business, while its net worth is enough to absorb any financial downturns without becoming bankrupt. Table No. 5. 5 Values of Capital Adequacy Ratio in percentage

Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 4.78 2 2011-12 4.81 3 2012-13 4.72 4 2013-14 4.64 5 2014-15 4.72 6 2015-16 4.71 Source: Compiled by Researcher

Graph No. 5.5 Graphical Presentation of Capital Adequacy Ratio as per above table

The Rayat Sevak Co-operative Bank 4.85

4.8

4.75

4.7 The Rayat Sevak Co- 4.65 operative Bank

4.6

4.55 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

The table shows that the ratio is declining consistently throughout the study period .As it can be seen from the table that the CAR is declining consistently throughout the study period. The ratio was 4.78 in 2010-11, which has increased to

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4.81 in 2011-12, has further declined to 4.72, and 4.64 in 2012-13 and 2013-14. In 2014-15 it has again increased and declined again in 2015-16. The minimum percentage of 9% which is considered as the standard ratio is also not fulfilled by the bank. This condition of the bank shows that the bank is unable to meet its time liabilities and do not maintain sufficient liquidity. This shows that the financial stability of the bank is in danger.

Capital Adequacy Ratio is much less than the required ratio of 9% , it has been declined from 4.78% in 2011 to 4.72% in 2014-15, hence financial stability of is at risk. The Bank do not fulfil minimum requirement of 9% which shows that the Banks do not have capacity to meet the time liabilities and other risks such as credit risk, market risk, operational risk. In case of arrival of any of the risk these banks won‘t be able to sustain and their survival may come in danger.

2.2.6 Business per Employee = Loans and Advances + Deposits/Number of Employees This ratio shows the business done by employees under the study period. It has no standard ratio. Higher ratio is a sign that the bank is utilizing its human resource to its fullest. This ratio is helpful in comparing with other industries. Table No. 5. 6 Values of Business per Employee in Rs.

Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 55345000 2 2011-12 61989000 3 2012-13 69082000 4 2013-14 78537000 5 2014-15 92142000 6 2015-16 71419001 Source: Compiled by Researcher

The table reveals that business per employee has been consistently showing an increasing trend, which shows that the employees‘ are efficient. The efficiency of the bank depends upon the efficiency of its staff or the human resource. Employees are ready to do their work efficiently if they are fully satisfied with the job. The job satisfaction depends upon the various kinds of financial, non-financial motivational

112 devices, various HRM practices prevailing in the bank like welfare plans, career development, transfer, promotion, compensation etc. the efficiency of staff depends upon on the morale of the staff i.e. their attitude towards the bank and the affinity attached with the bank. If the employees are getting respectful treatment in the bank, if they are participated in decision making process, then they get the feeling that they are the important part of the bank and so always try to give their best and work with full concentration and devotion and make use of his own potential for the benefit of the bank. Above ratio has shown an increasing trend throughout the study period which means that the bank under the study do provide with good motivational devices where the employees are inspired to work hard and give their best. This is the important strong point of these banks and should be maintained thoroughly.

Graph No. 5.6 Graphical Presentation of Business per Employee as per above table

The Rayat Sevak Co-operative Bank 100000000 90000000 80000000 70000000 60000000 50000000 40000000 30000000 The Rayat Sevak Co- 20000000 operative Bank 10000000

0

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

Business per Employee has increased by 66% which shows that the performance of employees is good. This shows that the employees have good motivational devices in the Bank and employees perform very well and work hard to achieve the objectives of the Bank.

5.3 Profitability Ratios 5.3.1 Return on Capital- Before NPA = Net Profit before NPA Provision/Capital This ratio shows the return earned by Bank on its capital before making the provision of NPA. It does not have any standard ratio.

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Table No.5.7 Values of Return on Capital- Before NPA ratio in percentage

Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 16.83 2 2011-12 16.53 3 2012-13 16.09 4 2013-14 15.40 5 2014-15 14.10 6 2015-16 15.80 Source: Compiled by Researcher

Above table shows a declining trend throughout the study period , except in 2015-16.

Graph No. 5.7 Graphical Presentation of Return on Capital- Before NPA ratio as per above table The Rayat Sevak Co-operative Bank 18 17 16 15 The Rayat Sevak Co- 14 operative Bank 13 12 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

Return on Capital before NPA has declined consistently from 16.83% in 2010- 11 to 14.10% in 2014-15. 5.3.2 Return on Capital- After NPA = Net Profit after NPA Provision/Capital Table No. 5.8 Values of Return on Capital- After NPA ratio in percentage Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 16.75 2 2011-12 16.45 3 2012-13 16.01 4 2013-14 15.31 5 2014-15 14.00 6 2015-16 15.68 Source: Compiled by Researcher

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This ratio shows the return on capital after the NPA provision. Its standard ratio is that it must be above10%.Above table shows the percentage of return on capital after NPA provision. It shows a consistent declining trend during the study period, except in 2015-16. It means that Bank is a poor performer as it could not earn good return on its capital.

Graph No. 5.8 Graphical Presentation of Return on Capital- After NPA ratio as per above table

The Rayat Sevak Co-operative Bank 17 16.5 16 15.5 15 14.5 The Rayat Sevak Co-operative 14 Bank 13.5 13 12.5 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

Return on Capital after NPA provision has decreased consistently from 16.75% in 2011to 14% in 2015 . 5.4 Return on Assets Ratios 1(a) Return on Assets=Net Profit/Working Funds * 100 Table No 5.9 Values of Return on Assets=Net Profit/Working Funds * 100 ratio in percentage

Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 0.80 2 2011-12 0.79 3 2012-13 0.76 4 2013-14 0.71 5 2014-15 0.66 6 2015-16 0.72 Source: Compiled by Researcher

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From the above table it is found that the ratio of the Bank has declined all over the study period. It means the Bank is poor in managing its assets efficiently to produce profits. It measures how efficiently bank can manage its assets to produce profits during a period. A higher ratio is more favourable to investors because it shows that the bank is more effectively managing its assets to produce greater amounts of net income. A positive ROA ratio usually indicates a upward profit trend as well. It has no standard ratio. Graph No. 5.9 Graphical Presentation of Return on Assets 1(a) ratio as per above table The Rayat Sevak Co-op Bank 0.9 0.8 0.7 0.6 0.5 0.4 0.3 The Rayat Sevak Co-op Bank 0.2 0.1 0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

The ROA is positive but has decreased consecutively since 2011 0.80% to 0.66% in 2015. . 1(b)Return on Assets = Interest on Loans/Total Loans The ratio shows the average rate of interest on loans and advances received by the Bank to total loans of the Bank. Standard ratio - not less than 3%. Table No. 5.10 Values of ROA 1(b)Interest on Loans/Total Loans in percentage

Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 9.54 2 2011-12 11.34 3 2012-13 12.78 4 2013-14 11.95 5 2014-15 11.30 6 2015-16 11.37 Source: Compiled by Researcher

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As found in the table there are ups and downs in this ratio percentage. But the good thing is that the Bank does not have less than standard ratio.

Graph No. 5.10 Graphical Presentation of ROA 1(b) ratio Interest on Loans / Total Loans as per above table

The Rayat Sevak Co-operative Bank 14 12 10 8 6 The Rayat Sevak Co- operative Bank 4 2 0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

The average rate of interest on loans has increased from 9.54% to 11.30% over these 5 yrs..

1(c) Return on Assets= Interest on Deposits / Total Deposits

Table No. 5.11 Values of ROA 1(c) ratio in percentage Sr.No. The Rayat Sevak Year Co-operative Bank 1 2010-11 7.27 2 2011-12 7.78 3 2012-13 8.90 4 2013-14 8.70 5 2014-15 8.28 6 2015-16 8.15 Source: Compiled by Researcher

The ratio shows the average rate of interest on deposit of the bank. Standard ratio is less than 10%. The table shows average rate of interest on deposits to total deposits, where it is seen that there are slight ups and downs in the percentage

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Graph No.5.11 Graphical Presentation of ROA 1(c) ratio -Interest on Deposits / Total Deposits

The Rayat Sevak Co-operative Bank 10 9 8 7 6 5 4 The Rayat Sevak Co- 3 operative Bank 2 1 0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 1 2 3 4 5 6

It is found that the Deposit interest rate of has increased from 7.27% to 8.28% over these 5 years .

5.5 Hypothesis Testing Hypothesis No. 1 - The financial position of employees‘ Co-Operative banks is sound. To prove this hypothesis t-test is used. T-test is used when the sample size is 30 or less and the population standard deviation is unknown. To compare means of all the three banks under study t-test is used .T- value is calculated at 5% level of significance. Following formula is used to calculate the t value.

To test H0:µ=µ0 against H1:µ ≠ µ0

µ0=Specified Value of population mean Test Statistic:

n (x   0) t  ,  t   s 2 xi  x where, s   fori 1,2,....n n 1 n = Sample Size ̅= Sample Mean s = Sample Standard Deviation

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Test Procedure:

1. H0 is rejected if calculated | | tabulated tn-1,α ;otherwise accept it.

2. If alternative hypothesis is H1:µ>µ0 then H0 is rejected if calculated | | tabulated

tn-1,α .

3. If alternative hypothesis is H1:µ<µ0 then H0 is rejected if calculated | | tabulated

- tn-1,α . 1) Liquidity Ratio= Total Investment /Total Assets: for this first liquidity ratio the minimum standard value for liquidity ratio is 20%. Thus we test hypothesis as follows.

Ho : Liquidity ratio is 20%

H1 : Liquidity ratio is more than 20% Table No. 5.12 Hypothesis Testing of Liquidity ratio- Total Investment / Total Assets Standar Calculate Table t- Sr. d d t-value value at Ratio Name of the Bank Mean Decision No. Deviatio at 5% 5% n l.o.s. l.o.s. Liquidity Ratio= Total The Rayat Sevak Reject 1 27.044 3.1175 5.052 2.7764 Investment Co-operative Bank Ho /Total Assets Source: Compiled by Researcher From the above analysis it is found that the liquidity ratio of the bank is above

20%, also the tabulated value is less than the calculated value hence we reject H0. In the above table mean value and standard deviation of the bank is calculated, also calculated and tabulated t-values are calculated on basis of which the hypotheses is

tested and acceptance and rejection of H0 is taken. The mean value of bank is 27.044 while its standard deviation is 3.11, the calculated value is greater than the tabulated

value hence we reject H0 .i.e. liquidity ratio is equal to 20%. This means that the ratio the bank is greater than the required standard ratio .So it is found that the bank fulfil the minimum criterion of the standard which shows strong liquidity of the bank. 2) Liquidity Ratio=CASA/Total Deposits: The minimum standard value for liquidity ratio is 15%. Thus we test hypothesis as

Ho : Liquidity ratio is equal to 15%

H1 : Liquidity ratio is not equal to 15%

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Table No. 5.13 Hypotheses Testing of Liquidity ratio- CASA/Total Deposits Table t- Calculated Sr. Standard value Ratio Name of the Bank Mean t-value at Decision No. Deviation at 5% l.o.s. 5% l.o.s.

Liquidity Ratio= The Rayat Sevak 2.776 Accept 2 11.356 2.1409 -3.8059 CASA/Tot Co-operative Bank 4 H0 al Deposits

Source: Compiled by Researcher The above table reveals that the bank have less than standard ratio so we

accept Ho. Also the tabulated value is more than the calculated value hence we accept

H0 3) Liquidity Ratio - NPA= Net NPA/ Total Loans and Advances: The minimum standard value for liquidity ratio is less than 5%. Thus we test hypothesis as

Ho : Liquidity ratio is equal to 5%

H1 : Liquidity ratio is less than 5% Table No. 5.14 Hypothesis Testing of Liquidity ratio - NPA= Net NPA/ Total Loans and Advances Calculate Table Sr. Standard d t-value t-value Ratio Name of the Bank Mean Decision No. Deviation at 5% at 5% l.o.s. l.o.s.

The Rayat Sevak Co- Reject 3 NPA 1.638 0.4851 -15.4971 -2.7764 operative Bank Ho

Source: Compiled by Researcher The above table shows that the NPA ratio mean value of the Bank is less than

5% so we accept H1. As the calculated value is more than the tabular value we reject

H0. 4) Liquidity Ratio-Capital Adequacy Ratio = Capital/Total Assets :The minimum standard value for liquidity ratio is 9%. Thus we test hypothesis as

Ho : Liquidity ratio is equal to 9%

H1 : Liquidity ratio is less than 9%

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Table No. 5.15 Hypothesis Testing of Liquidity ratio Capital Adequacy Ratio = Capital/Total Assets Calculate Table Sr. Standard d t-value t-value Ratio Name of the Bank Mean Decision No. Deviation at 5% at 5% l.o.s. l.o.s.

Capital The Rayat Sevak Co- Reject 4 Adequacy 4.734 0.0651 -146.526 2.7764 operative Bank H Ratio o

Source: Compiled by Researcher From the above table it is observed that the Capital Adequacy ratios mean value of

the Bank is less than 9% so we accept H1. As the calculated value is more than the

tabular value we reject H0. Testing of Profitability Ratios 1)Profitability Ratio= Return on Capital-After NPA= Net Profit after NPA provision/ Capital : The minimum standard value for profitability ratio is above 10%. Thus we test hypothesis as

Ho : Liquidity ratio is equal to 10%

H1 : Liquidity ratio is greater than 10% Table No. 5.16 Hypothesis Testing of Profitability Ratio- Return on Capital- After NPA= Net Profit after NPA provision/ Capital Table Calculated t- Sr. Profitability Name of the Standard Mean t-value at value Decision No. Ratio Bank Deviation 5% l.o.s. at 5% l.o.s. Return on The Rayat Sevak Reject 1 Capital-After Co-operative 15.704 1.0957 11.6405 2.7764 H NPA Bank o Source: Compiled by Researcher From the above table it is proved that the mean of The Rayat Sevak Co-

operative Bank is above 10% ,so we reject H0. Also calculated value is more than the

tabular value so we reject H0 . 2) Profitability Ratio- Return on Assets= Interest on Loan/Total Loans : The minimum standard value for profitability ratio is not less than 3%. Thus we test hypothesis as

Ho : Liquidity ratio is exactly 3%

H1 : Liquidity ratio is more than 3%

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Table No. 5.17 Hypothesis Testing of Profitability Ratio Return on Assets= Interest on Loan/Total Loans Table Calculated Sr. Profitability Standard t-value Name of the Bank Mean t-value at Decision No. Ratio Deviation at 5% 5% l.o.s. l.o.s. Interest on The Rayat Sevak Co- Reject 2 11.382 1.191 15.7369 2.7764 loans operative Bank H0 Source: Compiled by Researcher From the above table it is found that the Bank have mean value above 3% , so

we accept H1means we reject H0. As the calculated value is more than the tabular

value we reject H0. 3) Profitability Ratio-Return on Assets= Interest on Deposits/Total Deposits : The minimum standard value for profitability ratio is less than 10%. Thus we test hypothesis as

Ho : Liquidity ratio is exactly 10% H1 : Liquidity ratio is less than 10% Table No. 5.18 Hypotheses Testing of Profitability Ratio Return on Assets= Interest on Deposits/Total Deposits Table Calculated Profitability Name of the Standard t-value Sr.No. Mean t-value at Decision Ratio Bank Deviation at 5% 5% l.o.s. l.o.s. Interest on The Rayat Deposits/ - Reject 3 Sevak Co- 8.186 0.6682 -6.0703 Total 2.7764 H operative Bank 0 Deposits Source: Compiled by Researcher From the table it is observed that all the mean value is less than 10% so we

reject H0. Also the calculated value is more than the tabular value so we reject H0. Hypothesis No.2 - This Bank provide timely and need based finance to its members and time taken to approve loans depend upon the Bank. Time required to approve loan in days: Table No. 5.19 Time required to approve loan (in days) Sr.No. The Rayat Sevak Co- Type of Loan operative Bank 1 Home loan 8 days 2 Other loan 0.0174 days 3 Total 8.0174 Source: Annual Report

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Test for Independence 1) Time required for sanctioning the loan and Bank: In this section we test whether there is any relationship between time required for sanctioning the loan and bank. To find the relationship between two variables chi square test is being used. The data is classified with respect to these two characters and reported in the following table. Table No. 5.20 Test for Independence

Loan The Rayat Sevak Co-operative Bank Sr.No. 1 4 Home Loan (2.5804) 2 0.0174 Other Loan (1.4369) Source: Annual Report Note: Figures in bracket represent the expected frequencies.

H0: Time required for sanctioning the loan and banks are independent

H1: Time required for sanctioning the loan and banks are dependent Here, we test the hypothesis: Expected frequencies are calculated by calculating the horizontal and vertical additions of the values of above table. Then the difference between expected and observed values is calculated. Test Statistic;

2 =∑∑ (Oij- Eij) /Eij =9.2387

Tabulated = (m-1)(n-1)d.f. = (2-1)(3-1)d.f =5.9914 Therefore, calculated > Tabulated .

Hence, we reject H0 at 5% l.o.s. i.e. Time required for sanctioning the loan and banks are dependent. The satisfaction of customers depends on how fast the loan is sanctioned and loan is sanctioned immediately whenever needed. Therefore time period of sanctioning of loan plays a very important role in satisfaction of customers. As the above table show The Rayat Sevak Co-operative Bank is quick in loan sanctioning .Only home loan is sanctioned in few days while other loans are disbursed only in few minutes. This shows that the management satisfies the need of the customers in short period, but only home loan sanctioning period should also be reduced to increase the satisfaction of the customers.

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5.6 Conclusion: Thus the profitability and Liquidity ratios calculated to prove the financial soundness of the Banks. For the ratios there is standard value, which is compared with the actual ratio and inferences are drawn. For testing the hypothesis t test was used and it was proved that these Banks are financially sound. Total eleven ratios are calculated and those ratios having standard values are only considered for hypothesis testing. For proving the second hypothesis chi square test is used to find if there is any relationship between time required for sanctioning the loan and bank, and it is found that time required for sanctioning the loan and banks are dependent. This topic deals only with the financial performance evaluation of the banks under the study. The topic is divided into two parts, where the first part deals with the various financial ratios, their values during the study period, their graphical presentation , analysis and interpretation. While the second part of the topic deals with the testing of two hypothesis by using t-test and chi square test. Thus this topic shows that these banks are financially sound and the financial performance of these banks is good.

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CHAPTER - 6 NON – FINANCIAL EVALUATION OF THE RAYAT SEVAK CO- OPERATIVE BANK LTD. SATARA 6.1 Introduction: This chapter deals with the replies given by Bank managers of various branches of the Bank under the study and employee‘s replies about the HRM Practices of the bank, also the chapter deals with the replies of customers of the bank about the services provided by the banks. A bank branch manager is someone who is responsible for the operation, administration, marketing, training, lending and security of a local bank branch. At the end of the day, the manager must be able to lead his or her team of tellers, product specialists and other bank officers to provide superior service and profits within the branch. They bear the responsibility for the overall success or failure of the branch, as seen by the bank‘s corporate officers in comparison to its other branches and to branches of other banks. The managers were asked about the various HRM practices prevailing in the bank and the managerial functions implementation in the bank. The topic is divided into three parts where the first part deals with the replies of the manager about the responsibilities, authority, his participation in budget preparation, communication methods in the bank, his role in designing policies and controlling techniques used in the bank. The second part of the topic deals with the measurement of satisfaction of employees about the HRM practices prevailing in the bank. The questionnaire was framed by using Likert‘s five point scale, where the questions based on recruitment, selection, performance appraisal, career development, promotion, transfer, compensation and welfare plans were asked and the employees were supposed to remark their opinion on five point scale. The responses of all the three banks under the study shows that the employees are satisfied about the HRM practices prevailing in the banks. The replies of the employees are presented in tabular form where their frequencies are measured , on basis of which the satisfaction is counted. The third part of the topic deals with the measurement of customer satisfaction . SERVQUAL model has been used to measure the satisfaction of the customers about the services provided by the banks. As per the model the customer is supposed to mark his opinion on the seven point scale and has to mention his expected score and actual score for the five aspects under the study. On basis of these responses the average weighted score is being calculated from which it is found that the customers are not satisfied with the services provided by the banks.

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6.2 Responsibilities of Branch Manager Point- Branch manager was asked about the responsibilities shouldered by him, the answers given by the Branch Managers can be put in to point form as follows 1. Bank branch managers have many tasks that they are responsible for during the course of a day. They are responsible, of course, for all the other employees within that branch. This includes making sure they are adequately trained and prepared to deliver superior service once hired. This would include both initial hiring training as well as periodic training on new products or offerings rolled out by the bank across all regions. 2. The branch manager must ensure that the branch is ready to open for the day, in terms of ensuring there is adequate cash for each of the tellers. 3. They must make sure that during the day, the branch is adequately staffed and meeting customers‘ needs. 4. They must make sure that the tellers and officers are performing their jobs optimally, while balancing out continued product training, absences, and the ebb and flow of customer traffic within the safe branch environment. 5. The bank branch manager is responsible for passing on information from higher- ups to personnel within the branch, but is also responsible for anything reported upwards to other parts of the bank. This would include deposit information, sales and lending goals, service scoring and feedback, errors and discrepancies in deposit or account reconciliations, and success in marketing or selling various products. For all of these various metrics, the bank branch manager is graded and evaluated to determine the effectiveness of the branch. They provide a window to evaluate just how smoothly the branch operates underneath his or her management. 6. They are responsible for the overall reconciliation and security of accounts touched during the day by the bank. All cash must be tallied to ensure that there are no discrepancies within the tellers‘ rolls, with the cash forwarded to the bank‘s vaults if necessary. All checks must be bundled and sent for processing within regional check processing centers or clearing houses, in order to debit the accounts on which they are drawn. When all records have been matched up, the manager must secure the facility to ensure account safety – both physical and electronic – while the branch is closed.

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7. To check the transactions which are above Rs.9,00,000/- 8. To prepare the Day Book 9. To solve the difficulties of the customers, if any and guide them for ease in banking transactions. 10. To maintain required registers, Profit & Loss Account, Balance sheet and other books of accounts. 11. To correspond and provide necessary information on behalf of branch. 12. To get the work done through salaried employees of the branch. 13. To supervise, control and guide the employees and prepare their confidential report. 14. To keep in custody all the documents of branch 15. To do all necessary marketing for increasing the business of the branch. 16. To motivate the employees to do their work with full concentration, devotion and with efficiency. 17. To guide the employees of the branch and solve their difficulties. 18. To sanction leaves to the employees, to distribute work among employees and report the Head Office about performance of each and every employee. 19. To communicate to the Head Office vacancies created in the branch. 20. To take guidance from Head Office whenever needed. 21. To carry out all the work assigned by the Board. 22. To take efforts to increase deposits of the branch 23. To take efforts for recovery of loan. From the above, it is clear that the manager is expected to shoulder the following responsibilities Personnel Matters: The manager of the branch of the Bank is expected to get the work done through employees of the branch. For this purpose he has to distribute work among them, supervise their work, exercise control over their work, guide employees in their work, sanction their leaves, report about their work to Head Office. Day To Day Transactions: The manager has to look after the day – Today transactions like clearing, accepting deposits, accepting the loan proposals, preparing day book, bank reconciliation statement, maintaining the liquidity etc. Custody of Important Documents: The manager is responsible for the safe custody of various important documents related to its Branch.

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Responsibility towards Members: The manager is expected to guide the members of the Bank, solve their difficulties. He is expected to prepare schemes for development of business and to execute such schemes. Audit Arrangements: The manager is responsible for proper maintenance of books of accounts, also he has to arrange for its audit as well .After the audit a Bank reconciliation statement is prepared and sent to the Head office. Attending the Meetings: To attend the meetings at Head Office and approve the Balance sheet, Profit & Loss account and various expenses in the meeting. From the foregoing discussion, it is clear that the Manager is responsible for personnel matters (except recruitment, selection and training), financial matters, accounts and audit, preparation and maintenance of important documents, consideration of difficulties of members and guidance to them, preparation and execution of development schemes etc. This shows that Manager has whole and sole responsibility for managing the affairs of the branch according to provisions contained in Act, rules and bye-laws. 6.3 Authority and Responsibility Point- The nature of authority as explained by the manager . Following table shows the nature of authority of three banks. Table No. 6.1 Authority to take decisions of branch Sr. Name of Bank Authority to take No. decisions of branch 1 The Rayat Sevak Co-operative Bank Ltd. Satara B - 07 Source: Compiled by Researcher NA = No Authority , B = Full Authority, C = Full Authority with reporting action to Board D = Authority, subject to approval by Board/H.O , E = Special emergency powers The analysis of the answers to the question reveals that managers of ‗The Rayat Sevak Co-operative Bank Ltd.‘ have full authority to take all the major and minor decisions regarding the branch, but approval of Head Office has to be taken for every decision.. All the 07 managers do have full authority to take all the decisions of the branch.. This shows that 07 managers from are given freedom to take the decisions, which is indeed a good sign because the manager is the higher authority in the branch and so he knows what is good and what is bad for his organization, accordingly if he is given authority to take the decisions of the branch, he tries to give his best while taking the decision. Giving full authority shows that the management has full faith in the ability

128 of the manager and they trust him that whatever decision will be taken by him will be for the benefit of the branch. This confidence of management for the manager increases the morale of manager and he works with more confidence and zeal. Table No. 6.2 Role in designing of policies Sr. Name of Bank Role in designing No. of policies 1 The Rayat Sevak Co-operative Bank Ltd. Satara NA-07 Source: Compiled by Researcher NA = No Authority , B = Full Authority, C = Full Authority with reporting action to Board D = Authority, subject to approval by Board/H.O , E = Special emergency powers

The above table shows the role of managers in designing the policies. As seen in the table ,managers do not play any role in designing the policies, all the policies are designed by the Board. Actually managers are the implementers of the policies and they very well know the difficulties in implementation. Therefore the managers should be included in policy designing so that they can give good contribution, which will be beneficial for the progress of the bank. Table No. 6.3 Authority regarding expenditure, both operating and capital expenditure Expenditure Sr. Name of Bank No. Operating Capital Expenditure Expenditure 1 The Rayat Sevak Co-operative FA-07 NA-07 Bank Ltd. Satara Source: Compiled by Researcher NA = No Authority , B = Full Authority, C = Full Authority with reporting action to Board D = Authority, subject to approval by Board , E = Special emergency powers

The manager has no authority to take any decision regarding capital expenditure, it is a decision taken by the Board, while manager has full authority in case of operating expenses but with the approval of Board of Directors. The above reveals that less freedom is given to the managers of The Rayat Sevak Co-operative bank, where it is found that no authority regarding capital expenditure is given to the manager, every time the manager has to take the permission and approval of the board for any of the operating and capital expenditure. In case of The Rayat Sevak Co- operative Bank the manager is at least given authority to take the decision regarding operating expenditure.

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Point: Extent of Managers Authority in designing the methods and procedures and in Personnel matters Table No. 6.4 Extent of Managers Authority in designing the methods and procedures and in Personnel matters Sr. Personnel Name of Bank Policy Matters No. matters The Rayat Sevak Co-operative Bank Ltd. 1 NA-07 NA-07 Satara Total 07 07 Source: Compiled by Researcher NA = No Authority , B = Full Authority, C = Full Authority with reporting action to Board D = Authority, subject to approval by Board , E = Special emergency powers

The bank manager is not involved in designing the methods and procedures of the Bank as well. Actually managers are the implementers of the plans and policies decided by the Board, so they should be involved in the designing of plans and policies because implementers actually know the problems of implementation, so can suggest and share good ideas. It is suggested that full authority should be given to the manager of a branch, as success or failure of branch is his responsibility, so for successful banking he should be given full authority of taking decisions regarding branch. In case of personnel matters like creation of posts (temporary and permanent) , selection, training, transfer, promotion, demotion, compensation, termination, appointment of key persons etc. all decisions are taken by the Head Office with the prior approval of Board of Directors.. The managers only have a right to sanction casual leave of the employees of their branch, also they report to the Head Office about the employees performance. The Head Office on the basis of these reports of the managers takes action against the employee whose performance is not up to the mark and decision regarding such employees termination or otherwise is taken by the Board. Such decision taken by the Board is then communicated to the concerned manager who takes action against such employee as directed by the Head Office. Decision regarding selection of personnel for purpose of training, promotion, transfer is also taken by the Head Office approved by the Board. Generally promotions are based on the basis of seniority and performance of the employee.

6.4 Communication Point –Communication process in the organization The table below shows the method of communication used by the banks to communicate the circulars, notices etc. to its employees.

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Table No. 6.5 Communication Methods Sr. Name of Bank Orally Written Mutual No. Form understanding 1 The Rayat Sevak Co-operative Bank Ltd. 0 07 07 Satara Total 07 07 0 Source: Compiled by Researcher

As seen in the table the communication of any circulars from Head Office are through issue of notice and other general communication like issuing of orders, instructions, guidance, showing direction etc. are orally done. If employees do not obey the oral order, then they are issued with written order. Actually communication plays a very important role in any organization and bank is no exception for it. Generally written communication is preferred so as to it acts an evidence and for further reference it can be stored. All the important notices, circulars are communicated through written form to avoid further complications. If in future any reference is needed then written communication proves to be beneficial. Oral communication is also important in the bank, actually oral communication makes it possible to understand the reaction of the front person and helps in developing good and healthy relationship which again contributes to healthy environment. The table below shows the type of communication used .The bank use two way communication which shows that healthy work environment exists in the bank, where employees feel free to express themselves. Table No. 6.6 Communication Type Sr. Name of Bank One Way Two Way No. 1 The Rayat Sevak Co-operative Bank Ltd. 0 07 Satara Total 0 07 Source: Compiled by Researcher

From the above table it is clear that there is no one way communication, which is a good sign. An effective leader never go for one way communication, he always gives importance to the opinion of his subordinates and ask them to share good and innovative ideas. One way communication is used by the dominating managers, while participative leaders use two way communication. The table reveals that in all the 07 branches under study two way communication is used where the staff is given

131 freedom to communicate openly with the manager. This creates a healthy environment in the organization. Point –Involvement of subordinates in decision making process It is found that the Bank is positive and all the managers were very contented that they considered the opinion of subordinates in the decision making process, which makes employees feel as an important part of Bank. Every employee feels as if been given importance by sharing his own ideas and suggestions in making a decision. Table No. 6.7 Involvement of subordinates in decision making process Sr. Name of Bank Involvement of subordinates No. in decision making process Yes No

1 The Rayat Sevak Co-operative Bank Ltd. 07 0 Satara Total 07 0 Source: Compiled by Researcher

The above table reveals that all the employees of 07 branches are involved in the decision making process of the bank. This gives a good feeling to the employee as his opinion is considered while taking any of the minor or major decision. This is the sign that the bank under the study consider their employees as an important part of the bank and want to satisfy them and increase their morale. Whether the decision is major or minor is not important, how the staff is included in the process of decision making is very important. Point - Freedom given to the subordinates in expression of their opinion Table No. 6.8 Freedom of expression of opinion Sr. Name of Bank Freedom given to the No. subordinates in expression of their opinion Yes No 1 The Rayat Sevak Co-operative Bank Ltd. 07 0 Satara Total 07 0 Source: Compiled by Researcher

In the Bank, subordinates are given a chance to express their opinion and they feel free to express their opinion. Actually healthier atmosphere creates a tension free environment where subordinates do not have any burden, so they can freely express their views and contribute new ideas. Asking a subordinate for contributing a new

132 idea is like giving importance to an individual, which gives a good feeling to the person. It is a motivation given to an individual where he is considered as an important and integral part of Bank, where his ideas, suggestions are given due importance. Creation of healthy and tension free atmosphere is the responsibility of manager, who due to his friendly and co-operative nature creates hormonal relations with his subordinates. Point -Special and regular reports received by the Manager The special and regular reports prepared by the Branch includes: monthly reports of NPA statement, Defaulter list, Trail Balance, P&L statement, Reconciliation Statement, Liability Report it means as per RBI guidelines 4% of the amount of deposit should remain with the branch, excess cash report(branch can maintain up to 3 lakh cash above that requires permission of H.O, List of Loan recoveries, Receipt and Payment, Day Book, Daily Report, Balance sheet, Loan and Deposit increase – decrease Report. Point –Communication to the Board members between two meetings The managers meet Board during monthly loan sub-committee meet in The Rayat Sevak Co-operative Bank, Ltd ,also Board members personally visit the branch, monitors the work and takes feedback. 6.5 Controlling 6.5.1 Role of Control in Delegation Once the responsibility, authority and accountability of top management is clearly defined and soundness of top management is assured, the atmosphere for delegating authority to subordinates is created and under such an atmosphere delegation becomes easier. For effective delegation managers should establish controls to ensure that delegates make proper use of the authority. The good managers delegate and keep controls in their hands and thus enhance their contribution to firm‘s objectives. For enhancing contributions, managers are required to delegate their authority to subordinates. But delegation without or insufficient controls is of no use or is dangerous. Managers should delegate authority for enhancing their contributions but at the same time they should ensure that subordinates make proper use of authority. The study reveals that, almost all the managers do not have authority over the important matters such as policy making, incurring expenses, personnel matters and

133 establishing methods and procedures. Thus most of the authority rests with the Board of Directors. 6.5.2 Nature and Purpose of Control Henry Fayol identified control as one of the five functions of management. To him ―control consists of verifying whether everything occurs in conformity with the plan adopted, the instructions issued and principles established. It has its purpose to point out weaknesses and errors in order to rectify and prevent recurrence‖. Control refers to the task of ensuring that the activities are producing the desired results. In this sense, control is to monitor the outcome of activities, reviewing the feedback information about this outcome, and if required taking corrective action. Point–Procedure for exercising control over expenses/ costs The summary of the answers given regarding exercising control over expenses/ costs is that one for routine / normal expenses norms are fixed and other expense are paid after judging its necessity .i.e. whenever manager feels that a particular expenditure is a must, then only he approves its incurrence. Budget is used as a measure of cost control by some managers. For exercising control over different items of expenses, following procedure is adopted. In this study an attempt is made to study the existing control procedure, in connection with following time consuming activities: A) Control over costs, B) Control over capital expenditure, C) Control over policies, D) Control over personnel matters such as recruitment, selection, promotion etc. E) Control over overall performance.

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A) Control over Costs Point- The main items of expenses in the branch Table No. 6.9 Expenses in the branch Sr. Name of Bank Expenses Controlling No. Technique 1 The Rayat Sevak Co-operative Bank Ltd. Budget 07 Satara Total 07 Source: Compiled by Researcher

The managers of all branches replied that the main items of expenditure in the Branch are salary of employees, light bill, phone bill, conveyance, snacks and tea expenses, postage and telegram, printing and stationary, TDS Return charges, water bill, maintenance of computer charges, interest on deposits, rent of the building, sweeper salary. Following are the main items of expenses: a) Stationary and Printing: The Banks use different types of forms, registers, ledgers, pins, files etc. the stationary is supplied by the Head Office. To control the printing and stationary expenses, majority of correspondence is done through mails and through the electronic media. Wherever soft copy can be used, hard copy is not used. b) Telephone and Postage: in case of telephone, in order to prevent its misuse, phone is kept under strict control of manager. In case of postage, outward register is maintained and all outgoing correspondence of Branch is recorded with the postage charges paid for. Thus, ensuring postage charges for the branch only. c) Building Rent: to save the expenses of rent Banks should own their infrastructure. But unfortunately all these three banks are having its maximum number of branches on rental basis. This increases its costs, so to control this cost these banks should think about building their own buildings. d) Salaries, T.A. and D.A. expenditure: The expenditure on salaries of employees, being fixed in nature, cannot be controlled. However by increasing the productivity of salaried employees, its burden can be kept under control .Employees are asked to travel whenever it is necessary. Under such circumstances, they are paid travelling expenses and daily allowance. For travelling only S.T. charges are allowed and amount of daily allowance is fixed

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after considering the salary of employees and city visited. After the T.A. bill is sanctioned, the amount is disbursed to that employee. In this way T.A. and D.A. expenses are controlled. The important tool/ technique of cost control used by all the Banks under study is the Budget. A monthly statement of income and expenditure account is prepared and is sent to Head Office through the manager. In monthly meetings the Board considers all the items of income and expenditure and necessary action is taken. Monthly budget is not prepared and therefore actual cannot be compared and so action for control purpose cannot be taken. At the end of the year, variances are calculated and in annual general meeting excess expenditure is approved, generally with very little discussion on it. In light of the above, it is suggested that the budget should be split in to monthly budgets and whenever monthly income and expenditure account is prepared, budgeted figures should also be included in it and monthly variances should be calculated. If the variances with proper, are reported to Board monthly, Board through manager, can direct activities of Branch on proper lines and necessary corrective action, in time, can be taken. Besides, such a system will enable delegation and control over delegated power at ease. B) Control over Capital Expenditure An organization comes in to existence for achieving some objectives. In due course of time, its activities go on increasing. Growth is a natural tendency. As the time passes, the organizations grow. One of the factors on which growth of the organization is judged, is the increase in its assets. Every organization has to increase its own assets. Naturally, for acquiring assets organization is required to spend/ invest its capital/ funds. Such expenditure is called capital expenditure. Every organization small or large has to spend amount for acquiring assets. An attempt has been made, in the study, to find out information about capital expenditure. In this connection following questions were asked to the Banks under the study. Point-Role of manager in preparation of capital expenditure budget for the Branch, authority responsible for preparing and approval of budget and the time period covered under budget.

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Table No. 6.10 Capital Expenditure Budget Sr. Name of the Bank Managers role Approving Time No. in budget authority period of preparation budget 1 The Rayat Sevak Co-operative Board of Directors 01Year 0 Bank Ltd. Satara and members Total 0 01 Source: Compiled by Researcher

The managers replied that this budget is not prepared by the branch but by the Head Office. Such a budget is prepared in the month of March in one Bank, while in April/ May in other Banks. The responsibility of preparing this budget is with the Accounts section of Head Office. This budget requires approval of the Board of Directors and also approval of members in the Annual General Meeting. On the basis of plans and estimates the Banks provide for capital expense in their annual budgets. In case of building construction plan – estimates are asked for and in case of erection of machinery quotations are asked for. The budget is approved in annual general meeting. While preparing the budget last year‘s expenses, present condition and next year‘s circumstances are considered. After the approval, the budget is put into practice i.e. Board is authorized to spend within budgeted limits. Whenever capital expenditure is being incurred, an effective control over it is required to be exercised. Some managers say that control over capital expenditure is exercised as per Board directions, while some say that by comparing actual capital expenditure with budgeted, control is exercised. The authority to incur capital expenditure is with the manager provided it is delegated by Board. In the Banks studied, the manager is authorized by Board to execute capital expenditure budget. Manager in the monthly meetings reports about the progress made by in capital investment. Capital investment / expenditure projects are launched on contract basis and in the contract, generally the time limit in which the work is to be completed, is included. In short, in the Banks studied, with respect to capital expense, we observe that there is no budget committee to prepare and execute the capital expense budget. While preparing such a budget plan estimates and / or quotations are considered. By comparing actual expenditure with the budgeted and according to Board directions, control is exercised over such expenditure. It is suggested that Banks should have a ‗Budget Committee‘ consisting of managers and personnel from Accounts section, in addition to the Chairman.

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C) Control Over Policies Every organization pursues some policies because policies are the guiding principles concerning future action. In this connection Dinkar Pagare states that policies are as guides to thinking and action of those who have to make decisions in the course of accomplishment of enterprise objectives. They provide ready answers to all questions faced in the running of an enterprise. While managing the day to day affairs of an organization , managers take a number of decisions . Policies help in deciding routine matters .Policies include some principles and rules of action. In this connection Davis and Filley say that policy is a statement of a principle or group of principles with their supporting rules of action that conditions and governs the achievement of certain objectives to which a business is directed. They say that policy is a principle or a group of related principles alone with their consequent rules of action that provide for successful achievement of organisations objectives. Thus policy includes guiding principles and rules of action which helps managers to decide and achieve organizational objectives. Principle is a fundamental truth while rule of action is a restricted statement of the principle for a given situation. Policies are formulated in broad terms and provide a comprehensive and flexible course of action to be persuade to attain the given objectives. Policies lay down the limits within which decisions have to be taken. Action can be achieved by fixed and definite policies. So policies should be carefully determined, communicated and enforced. Point–Authority responsible for taking policy decisions, the channel of communication used for communicating policies to the employees and use of suggestion scheme in taking policy decisions. Table No. 6.11 Policy Decisions Authority to Existence of Channel used for Sr.No. Name of the Bank take Policy Suggestion Communication decisions Scheme The Rayat Sevak Co- Board of Circulars and staff 1 07 operative Bank Ltd. Satara Directors meetings Total - - 07 Source: Compiled by Researcher

It is found that the final policies are approved by the Board of Directors and are communicated to the employees through circular letters, through staff meetings or sometimes by communicating orally. Management expects compliance after communicating the policies to the employees.

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The modern tendency of today‘s management is to encourage employees participation in the decision making process. An easy way of participating employees in decision making process is to adopt suggestion scheme. The Bank has a scheme of suggestion box for the employees .From the above discussion it is clear that Board of Directors take policy decisions and the role played by the employees and the managers is negligible. D) Control over Personnel An organization may be it is a manufacturing concern, a business unit, an insurance company, a Government agency, a University, a religious trust; small or large, simple or complex organization without human efforts organization cannot accomplish its objectives. Rensis Likert rightly observes, ―All the activities of any enterprise are initiated and determined by the persons who make up that institution, plants, offices, computers, and all else that make a modern firm uses are unproductive except for human effort and direction of all the tasks of management, managing the human component is the central and most important task, because all else depends on how well it is done.‖ It shows that for achieving organizational objectives human element combined with monetary and material resources is important. For ensuring success of an organization, it should be manned with qualified persons. Delegation of authority becomes effective when qualified and competent persons are appointed. ―Right man on the right job‖ should be the motto of every organization. Human asset is important asset of any organization and ―getting maximum efficiency from assets is the essence of control‖. Hence human asset is also required to be controlled. For which the control over the following should be instituted: 1. Selection and appointment 2. Training 3. Appraisal of performance and promotion to higher jobs 4. Demotion/ dismissal 1. Selection and appointment ―Good men are hard to find ―because ―a key constraint on the growth of most organizations is shortage of personnel‖. Naturally, the question arises as to how the key positions in the Bank are filled in? in all the cases studied the appointment is made by Board of Directors. The managers do not have any authority of appointment of personnel; all the appointments are handled over by the Head Office. Generally it is expected that immediate superior should be given the authority to select and appoint his subordinates. The Board has been given authority in this respect. The Chairman plays a very important role in selection and appointment of personnel in the Banks.

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For studying the selection and appointment procedure the following questions were asked: Point – Adoption of method for selection of key personnel and practices followed for recruitment out of the following i) Job specification and requirements specifying post requirements , ii) Consideration of qualified candidates from the same department for higher post, iii) Consideration of qualified candidates from the other department for higher post, iv) Creation of ‗assistant to‘ etc jobs for training purposes v) Maintaining qualified surplus persons in same or other departments It is revealed that majority of the manager‘s follow promotion method for selecting key persons in the banks. Thus bank give more importance to promotion method for selecting key persons. Such seniority based promotions require approval of Board of Directors. Actually there is need for plan of controls over appointments. Such a plan should take into consideration the following points: 1. That there should be an organization manual giving jobs specification and requirements. 2. Selection should be objective i.e. it should take into consideration qualification of candidates to meet the job requirements. 3. The immediate boss should have authority of final approval of appointments. 4. The candidates available for higher jobs should be properly considered. 2. Training Training is the act of increasing the knowledge and skill of an employee for doing a particular job. It is a specialized function and one of the fundamental operative functions of human resource management. Training improves changes, moulds, the employee‘s knowledge, skill, behavior, aptitude, attitude towards requirements of job and organization. it refers to teaching and learning activities carried on for primary purpose of helping members of an organization, to acquire and apply the knowledge, skills , abilities and attitudes needed by particular job and organization. No organization can get a candidate who exactly matches with the job and organizational requirements. Hence, training is important to develop the employee and make him suitable to the job. Job and organizational requirements are not static; they are changed from time to time as per the technological advancement. Trained employees would be valuable asset to an organization, organizational efficiency, productivity; progress and development to an greater extent depend on

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training. Trained employees bring organizational change and are ready to take up any challenge. The success of any organization depends upon qualitative and timely training provided by organization. Training is not something which is done once to new employees; it is used continuously in every well run establishment. Further, technological changes, automation, require updating the skills and knowledge as such an organization has to retrain the old employees. Training is widely accepted problem solving device. Changed demands rapid individual adjustments. The challenges of change can be met by manpower training and development. Under training skill is imparted. Through it, people are given an awareness what rules and procedures they have to follow to perform their operations. Development covers not only these activities which improve job performance but also those which bring about growth of personality and actualization of their potential capacities. From the above, it is clear that every organization should train its employees to keep the organization fit in the ever changing conditions; to develop the capacities of the existing employees; to increase employee morale, loyalty, satisfaction, effectiveness etc. from this point of view, in order to understand what type of and to what extent aspect is taken care by banks, the following question was asked. Point- The ways or methods followed for giving training to key personnel in bank out of the following. i) Training ‗on the job‘. ii) Creation of ‗assistant to‘ position. iii) Appointment as trainees. iv) Sending to refresher courses v) Deputation to management training courses. vi) Participation in management seminars and workshops Table No. 6.12 Training methods Refresher Seminars Sr. On the Assistant courses and and Name of the Bank Trainees No. job to training workshops courses. The Rayat Sevak Co- 1 operative Bank Ltd. 0 0 0 07 07 Satara Total 0 0 02 07 07 Source: Compiled by Researcher

It is observed that the Bank follows the other two methods of training namely deputation to management training courses and participation in management

141 workshops and seminars are applied. From the study it reveals that the Bank under the study do not make use of ―on the job training‖ method. Managers do not have formal managerial education. It is observed that Bank is not successful in developing their own managers. The Bank should develop their own persons by creating ‗assistant to‘ positions and training efficient personnel on the job and also utilizing other methods of management development. 3. Appraisal of Performance and Promotions to Higher positions Appraising the performance of individuals, groups and organisations is a common practice of all societies. Actually performance appraisal is a method of evaluating the behavior of employees at the work place, including both qualitative and quantitative aspects of job performance. Performance means degree of accomplishment of the tasks. In performance appraisal not only the performance of worker is judged but also his potential for development. Appraisal systems are crucial to efficient hiring and promotion policies. Appraisal system is a must in all the organisations for hiring and promoting the right person, is a major key to managing itself. It should be the basis of determining who is promotable to a higher position. It is important for management development because if manager‘s strengths and weaknesses are not known, it would be difficult to know whether development efforts are in a right direction. The only way to assure that those occupying managerial positions are actually managing effectively is to know how well a manager plans, organizes, directs and controls. For achieving the goals of an organization effectively and efficiently, the ways of accurately measuring management performance must be found out and implemented effectively. Knootz and O‘Donnel mention i) traditional trait appraisal method ii) appraising managers against verifiable objectives and iii) appraising managers as managers – methods of appraisal. Under the first method managers are evaluated against the standards of personal traits and work characteristics. Under the second method manager‘s performance is evaluated against the setting and accomplishing of verifiable objectives i.e. to see how competently managers set objectives and how well they performed against them. In the third method the authors have suggested that basic techniques and principles of management should be used as standards. Such standards are more specific and more applicable than evaluations based on broad standards such as work habits, integrity, loyalty, co-operation, intelligence etc. such a program of appraisal involves classification of functions of managers vi. Planning, organizing, directing, controlling etc. and then a series of questions, designed to reflect the most important fundamentals of managing in each area, are asked.

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In the light of the above, to the Banks, in connection with the appraisal and promotion, following question was asked: Point– Use of following employee‘s performance appraisal methods a)Preparation of confidential reports b) Comparison with job requirements Table No. 6.13 Performance appraisal methods Sr. Name of the Bank Confidential Comparison with No. reports job requirements 1 The Rayat Sevak Co-operative 07 0 Bank Ltd. Satara Total 07 0 Source: Compiled by Researcher

It is revealed that there is a practice of appraising the performance of the employee through preparation of confidential reports . Such reports contain factors like integrity, co-operation, behavior, loyalty, obedience etc. the Bank under the study do not make use of second option of appraising the performance i.e. the comparison with job requirements. It is observed that this method is not used as the job requirements are not fixed by management. Therefore it is suggested that the performance of employees should be appraised against job requirements and managers‘ performance should be appraised as managers i.e. to what extent they are successful in executing the managerial functions. Existence of performance appraisal method acts as a check on the behavior of the employees, all the time the employees are aware of the fact that their performance is evaluated and monitored by the top authority, this makes him work sincerely so that no negative remarks are recorded in his confidential report. 4. Demotion / Dismissal Demotion is the reassignment of a lower level job to an employee with delegation of responsibilities and authority required to perform that lower level job and normally with lower pay. Organisations use demotion policy less frequently as it affects employee career prospects and morale. It is a punitive measure and management tries it before dismissal. The reasons for demotions are, serious breaches of duty, failure to meet the job requirements after promotion, inability to adjust with the changed techniques/methods/ technology, inability to perform the duty due to ill health and personal reasons etc. the main purpose of demotion is to keep employee

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alert on their duties. Though demotion seems to be simple it adversely affects the employee morale, job satisfaction etc. as it reduces status not only in the organization but also in the society in addition to reduction responsibility, authority and pay. Hence there should be a systematic demotion policy. The policy should be impartial, clear and carefully designed and made known to the employees. When services of an employee are terminated by the company, it is called as dismissal. It is a last step taken by the management, which must be taken with lot of care. An employee is dismissed when all the efforts to fit him in the organization has been failed. The reasons for dismissal are continuous failure of an employee on the job, misconduct i.e. willful violation of rules of the organization such as insubordination, dishonesty etc. and want of qualifications for the job. One of the way to avoid dismissal is to re-train the employee, which is possible at all the levels of management. All that is needed is that the employee must be mentally and physically fit for such type of re-training. A regular appraisal system helps to locate the possible cases to whom re-training is required. When re-training is not possible it is better to relocate him rather than to break his services. In light of the above, in order to know the policy of the Banks under the study following question was asked. Point – Policy of the Bank and action taken by the Bank ,if as employee fails on one job, and is tried on another job and even if he fails on the another job . Table No. 6.14 Demotion Policy Sr. Name of the Bank Use of Demotion No. Policy 1 The Rayat Sevak Co-operative Bank Ltd. Satara 0 Total 0 Source: Compiled by Researcher

It is found that the Bank under the study do not make use of demotion policy. All the branches replied that if an employee fails on one job, he/she is provided with proper guidance, or is tried on another job, give him training to fit on the job, but they do not remove/ dismiss such failed employees. From humanitarian approach, it is suggested to train, re-train and try to retain, instead of removing, the employee if he fails on one or the other job. This is as per the universal rule that nothing is useless in the world. But if after lot of trials if an

144 employee still fails, he should be dismissed but for dismissal a definite list of rules, violation of which will lead to dismissal, should be prepared and made known to the employees in the organization. Due to the humanitarian approach of the banks some employees may take undue advantage of it as he knows that even if he do not work as per the expectation he is not going to be fired. Efficiency of Employees: an efficient employee is an asset of an organization, so every organization must motivate to increase the efficiency of the employees. Accordingly Following question was asked. Point – Availability of Incentive Scheme for increasing the efficiency of the employees It is observed that the Banks do have the incentive scheme, where branch doing good business is rewarded with a cash prize or with shield and certificate as a part of motivation. Instead of giving individual prize the branch is given the credit as a whole. This shows that team building and team spirit plays an important role in increasing the efficiency of the employee. E) Control over Overall Performance Budgetary Control The study reveals that the ‗budget‘ is being used by all the Banks under the study for exercising control over the overall performance of the Banks. Budgeting is the formulation of plans for a given future period in numerical terms. Budget is planning as well as controlling technique. If properly prepared, budgets correlate planning and allow delegation of authority at ease without losing control. For effective control there should be quick reporting system under which deviations from budgeted performance should be immediately reported to with reasons thereof. Secondly, top management should execute it seriously and the persons responsible for its execution should be given sufficient authority. Thirdly, a system of recognition of good performance and punishment for unsatisfactory performance should be in vogue. Lastly there should be an element of flexibility in the execution of budgets. Along with budget in some banks the amount of working capital and balance sheet act as a controlling measure, from which the overall performance of the Bank can be measured.

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Preparation of Budgets Banks under study do not encourage their employees to participate in budget preparation. For making budgets a success, participation of people who implement it is must. Focusing on this point Koontz and O‘Donnell observed ―real participation in budget making is necessary to budget success.‖ Another observation is that all the banks do not hold the persons preparing budgets responsible for its execution. Due to lack of participation in budget preparation and no responsibility for executing the budgets, seriousness in budget preparation and its execution is not found. This results in weakling of budgetary control technique. For making budgetary control system effective, following course of action is suggested: i) Executives should participate in preparation of budgets and should be held responsible for its execution. ii) Budget committee consisting of Chairman and Branch Managers should be formed to look after budgetary control. iii) System of flexible budgets should be used; iv) Budgets should be breaking up month wise v) Generally there is tendency to give reasons for unfavorable variances, but favorable variances should be explained; vi) System of rewarding for performance within budgeted limits and punishing for unsatisfactory performance should be evolved. Control through Annual Reports All the Banks prepare Annual Reports to be submitted to the members. As the name suggests these reports are prepared once in a year i. e. at the end of the year. The report consist of various activities organized by the Bank throughout the year viz. detail information about various deposit schemes, loan policies, Balance sheet, Auditors Report showing the financial condition of the Bank, comparative chart of the Bank of last five years showing the growth in deposits, loans, members, share capital, different projects undertaken or otherwise etc. this method of exercising control over the overall performance is in vogue. Members in the annual general meeting ask the questions and get the doubts cleared. If the members are studied, well versed with the working of the Bank and alert, they can use this method with profit.

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6.6 Welfare Plans Employee welfare is a term including various services, benefits and facilities offered to employees by the employers. The welfare measures need not be monetary but in any kind/forms. This includes items such as allowances, housing, transportation, medical insurance and food. Employee welfare also includes monitoring of working conditions, creation of industrial harmony through infrastructure for health, industrial relations and insurance against disease, accident and unemployment for the workers and their families. Through such generous benefits the employer makes life worth living for employees. Importance of Employee Welfare As a business, you have to provide various benefits to ensure your employees' welfare. While this may increase your business expense and negatively affect your bottom line, looking after your employees will benefit you in other ways. Compliance As an owner, you are required by law to provide certain benefits for the welfare of your employees. You may have to match the Social Security taxes your employees pay and obtain a worker's compensation . If you terminate an employee, you may have to funds to extend his . Hiring and Retention The benefits an employee receives from his employer for his welfare are often a significant reason why he decides to accept a job offer. As such, providing employee benefits allow you to compete with other businesses to recruit and retain qualify employees. If other employers offer better benefits, good employees may choose to go there. Employees Motivation By providing a plan that's good for employees' welfare, you show them that you value them. This can help make them feel welcome and happy in your company, motivating them to work harder. If your health plan has wellness coverage and preventative care, employees are more likely to stay healthy, cutting down on absenteeism and sick days. Employees' Well-Being For companies that have a large base of employees working under stressful conditions or living away from family, it is important to look at fostering personal

147 happiness and professional growth. Investing in employees pays dividends in terms of higher productivity and greater loyalty Company Image: Providing a good employee welfare plan reflects well on your business, building a good company image. It may even earn you some press coverage, giving you free publicity to improve awareness among potential customers. This may boost your sales and increase your profits. Features of Employee Welfare 1. Employee welfare is a comprehensive term including various services, facilities and amenities provided to employees for their betterment. 2. Welfare measures are in addition to regular wages and other economic benefits available to employees under legal provisions and collective bargaining. 3. The basic purpose of employee welfare is to improve the lot of the working class and thereby make a worker a good employee and a happy citizen. 4. Employee welfare is an essential part of social welfare. It involves adjustment of an employee's work life and family life to the community or social life. 5. Welfare measures may be both voluntary and statutory. How to Develop an Effective Employee Welfare Program 1. Conduct employee surveys to understand their needs and expectations 2. Identify key areas of building skills and engagement and facilitating trainings for the same 3. Propose solutions for personal upkeep, family uplifting and future security 4. Create opportunities for greater synergies between the management and employees 5. Conduct impact assessments and feedback surveys Welfare and recreational facilities: these benefits include i) Canteens ii) Consumer Societies iii) Credit Societies iv) Housing v) Legal Aid vi) Employee Counseling vii) Welfare Organisations viii) Holiday Homes

148 ix) Educational Facilities x) Transportation xi) Parties and Picnics xii) Miscellaneous. Old age and retirement benefits: the saving capacity of the employees is very low due to lower wages, high living cost and increasing aspirations of the employees and his family members. As such, employers provide some benefits to the employees, after retirement and during old age, with a view to create a feeling of security about the old age. These benefits are called as retirement and old age benefits, which include: a) Provident Fund: This benefit is meant for economic welfare of the employees. The Employee‘s Provident Fund provides for monetary assistance to the employees and/ or their dependents during post- retirement life. Thus this facility provides security against social risks and enables the employees to lead a better life. Both employees and employer contribute to the fund. b) Pension: The government of India introduced a scheme of Employees Pension Scheme for the purpose of providing Family Pension benefit to the employees of various establishments. c) Gratuity: this is another type of retirement benefit to be provided to an employee either on retirement or at the time of physical disability and to the dependents of the deceased employee. Gratuity is the reward to an employee for his long service with his present employer. The Payment of Gratuity Act, 1972 is applicable to the establishment in the entire country. The Act provides for a scheme of compulsory payment of gratuity by employing 10 or more persons. In light of the above, following question was asked Point– Provision for any welfare plans for the employees and its nature. Table No. 6.15 Welfare Plans Sr. Name of the Bank Pension Provident No. Fund 1 The Rayat Sevak Co-operative Bank Ltd. Satara 07 07 Total 07 07 Source: Compiled by Researcher

It is observed that the Bank under the study provide with the pension facility which is paid as per the Factories Act. Also provident fund is contributed , 12% of Basic pay and Dearness allowance is transferred to Provident Fund , where the Bank

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contributes an equal amount.Welfare plans motivate the employees and labour turnover is decreased. These plans give employees an assurance about their stability after the retirement and make them mentally relaxed. The future uncertainty is covered by these plans which makes employees future secured. 6.7 Employees‘ Redressal Mechanism Efficient grievance management is an important and integral part of the human resource management. There are many aspects of HRM and human relations practices which generate feelings of discontent on the part of individual. If an individual‘s grievances are unattended and unresolved they will become collective disputes. Hence there is necessity of providing a procedure for the redressal of individual grievances. A grievance is a sign of employee‘s discontent with job and its nature. The employee has got certain aspirations of expectations which he thinks must be fulfilled by the organisations where he is working. When the organization fails to satisfy the employee‘s needs, he develops a feeling of discontent. Thus grievance is caused due to the difference between the employee expectation and management practice. Beach defines a grievance as ―any dissatisfaction or feeling of injustice in connection with one‘s employment situation that is brought to the notice of management.‖When an employee presents a problem, the grievance redressing authority, has to analyze the problem, find out the root cause of the problem rather than viewing it from legal aspects and solve it based on humanitarian approach. Hence a grievance may be viewed as complex psychological phenomenon calling for human rather than any procedural or legal action in its analysis and solution. In light of the above, in order to know the policy of the Banks under the study following question was asked: Point – Existence of employees ‗redressal mechanism and its nature of machinery to solve the matter Table No.6.16 Existence of employees Redressal Mechanism Sr. Name of the Bank Redressal No. mechanism 1 The Rayat Sevak Co-operative Bank Ltd. Satara 07 Source: Compiled by Researcher

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It is found that the Bank under the study does have redressal mechanism where in every branch a complaint register and suggestion boxes are maintained. This box is opened in the presence of Chairman/General Manager/Auditor and the complaint is recorded in the audit report and forwarded to the Head Office, where action is initiated by Chairman/General Manager while in another Bank an employee forwards his written complaint to the Head Office, where action is taken and report is forwarded to the Board of Directors. Also in the monthly meetings held in the branch the complaints of employees are discussed orally and are redressed in a proper manner. Customers are satisfied only due to the kind of service being provided to them and the efficiency of the service. In service sector quality and efficiency of the service plays very important role. As far as Bank under the study is concerned they have to face tough competition from commercial banks, hence to survive in the competition these banks have to provide all the required and necessary services promptly to the customers. To find out the efficiency and services provided by the Bank following question was asked, Point -The services provided by the Bank The bank provide the services of accepting deposits, lending of loans, and facility of issuing of Demand Draft and also provide modern facilities like ATM, RTGS, Core Banking, CTS clearing of cheque.. Time taken for sanctioning the loans is also an important aspect of the bank; every customer thinks that the Bank which provides him with timely and needy finance is the efficient Bank. In respect of this Bank under the study were asked question, Point - Time period required by the Bank for sanctioning of loan Table No. 6.17 Time period required by the Bank for sanctioning of loan Sr.No. The Rayat Sevak Type of Loan Co-op Bank 1 Home loan 8 days 2 Other loan 0.0174 days

3 Total 8.0174 Source: Compiled by Researcher

The bank takes 10 to 20 minutes for sanctioning Jaminki loans No. 1, 2 and 3, while for sanctioning of gold loan it takes 30 minutes. All these loans are sanctioned

151 by the Branch manager. Housing loan, Education loan and vehicle loan needs permission of Head Office, so it requires 8-10 days for sanctioning. Time required for sanctioning of loan is an important part or an important satisfying factor for the customers. Today‘s customer is expecting quick service and of course bank being an important part of service sector, he expects prompt service in all the respects. In case of employees co-operative banks, these banks have been established with the sole purpose of satisfying the common economic needs of its members. So only the members consider these banks as their own banks where they have a right to get the loan whenever the need arises. If the loan process becomes time consuming and if it consists of lot of documents then the customer gets irritated and approach another bank for quick loan. Point- kind of security measures undertaken for movement of cash by the Bank The Bank move the cash without any security. Generally employees two wheeler is used or if the amount is much larger then auto is used for movement of cash. It is suggested that the Bank should purchase their own security vehicle and safely make the movement of cash. 6.8 Analysis of employee‘s satisfaction about HRM practices prevailing in the banks under the study: To measure the satisfaction of employees‘ of banks about the HRM practices prevailing in the banks 37 employee‘s from bank under the study were supplied with a questionnaire consisting of seven aspects of HRM namely, recruitment and selection, training, promotion and transfer, performance appraisal and career development, compensation and employee involvement consisting of four questions each. The responses were collected on five point scale, whose analysis and interpretation is as follows. 1. The Rayat Sevak Co-operative Bank : Employees from all the seven branches , and head office are selected as samples and the sample size of employees is 37 , where the employees i.e the selected samples responses were collected. The following table shows the frequencies of all the seven aspects.

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Table No. 6.18 Frequencies of HRM aspects of The Rayat Sevak Co-operative Bank Ltd.Satara Sr.No. Particulars SD D N A SA 1 Recruitment and Selection 1a Recruitment procedure is fair 0 0 6 20 11 1b The selection system followed in bank is 0 0 7 25 5 highly scientific and rigorous 1c Valid and standardized tests are used when 0 0 10 22 5 required in the selection process. 1d Bank selects people having the desired 0 0 3 26 8 knowledge, skills and attitudes 2 Promotion & Transfer 2a This bank prefers an internal employee 0 0 2 18 17 whenever a vacancy exists 2b Promotion decisions are based on the suitability of the promotee rather than any 1 1 5 17 13 favoritism 2c The transfer policy is fair 0 1 7 22 7 2d Transfer is as per convenience of employee 0 3 9 20 5 3 Training 3a This bank organizes a formal induction 1 1 7 19 9 program for new- comers very effectively 3b This bank regularly conducts extensive 0 0 1 21 15 training programs for Its employees 3c Employees in each job normally go through training programs periodically, updating their 0 0 2 26 9 knowledge and skills 3d There are formal training programs to teach new employees the skills they need to perform 0 1 4 26 6 their jobs. 4 Welfare Plans 4a Work Environment of the Bank is healthy 1 0 9 17 10 4b Working Hours of the Bank are convenient 1 1 6 19 10 4c Sitting arrangement of the Bank is comfortable 8 6 6 14 3 4d Leave policy of the Bank is fair 0 3 0 28 6 5 Performance Appraisal and Career

Development 5a Performance appraisal reports are based on quantifiable assessment and adequate 0 0 12 17 8 information and not on favouritism 5b I have faith in the performance appraisal 0 0 10 18 9 system 5c The seniors sees employees development as 0 0 2 22 13 important part of their job 5d I have growth and development chances in this 0 3 1 24 9 Bank

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6 Compensation 6a Employees compensation is decided on the 1 1 4 28 3 basis of individuals competence or ability 6b Employees are offered an extremely flexible 1 5 11 17 3 compensation and benefits package 6c Performance-based incentives and bonuses are 2 14 8 8 5 available to all employees 6d The bank provides salary and other benefits 5 3 11 15 3 equivalent to other Banks 7 Employee Involvement 7a Employees actively participate in decision 2 5 9 18 3 making process 7b Employees have open communications with 1 4 1 20 11 our superiors in the bank 7c Employees are included in a formal 0 2 2 27 6 information sharing programme. 7d Employees are provided opportunity to 0 5 6 19 7 suggest improvements in the way things are done. Source: Compiled by Researcher In case of this bank for all the aspects and their sub questions the frequency for A is the highest showing that maximum number of employees do agree with the HR practices, showing that the employees are satisfied about the HR practices. Frequency of D and SD is very negligible , which shows that very few employees are dissatisfied or disagreed with the practices. This is a good sign which shows that good motivational devices are provided in the bank and employees have a good morale . the responses and the frequencies show that the employees do have a sense of attachment towards the bank. The bank should maintain and try to enhance the level of satisfaction and retain the employees. 6.9 Analysis of customer satisfaction about the services provided by the banks under the Study based on SERVQUAL model: Customer satisfaction is measured with the help of questionnaire designed on the basis of SERVQUAL model, consisting of questions where the customer was supposed to remark the expected score and the actual score starting from rating scale 1 to 7. The questions were based on five aspects namely, tangibility, reliability, responsiveness, assurance and empathy consisting of total 22 questions. As per this model, average weighed score for each of the bank under the study is calculated and conclusions are drawn accordingly. SERVQUAL Model : If the experience does not match the expectation, there arises a gap. Customer satisfaction is an indirect measure of service quality. The expected service and the perceived service sometimes may not be equal, thus leaving a gap. The service quality model or the ‗GAP model‘ developed in 1985, highlights the main

154 requirements for delivering high service quality. It identifies five ‗gaps‘ based on five aspects consisting of 22 questions that cause unsuccessful delivery of service. Customers generally have a tendency to compare the service they 'experience' with the service they 'expect' . If the experience does not match the expectation, there arises a gap. SERVQUAL (service quality gap model) is a gap method in service quality measurement, a tool that can be used by Product Manager in all industries. The aim of this model is to identify the gaps between customer expectation and the actual services provided at different stages of service delivery. This model will help banks to identify reasons of poor quality of service in its bank. As per this model 100 points are to allocated to five dimensions in the following way: Table No. 6.19 Allocation of Points to five dimensions Features Points 1. The appearance of the banks physical facilities, equipment, 0.11 personnel and communication materials. 2. The bank's ability to perform the promised service dependably 0.32 and accurately 3. The banks willingness to help customers and provide prompt 0.22 service. 4. The knowledge and courtesy of the bank's employees and their 0.19 ability to convey trust and confidence. 5. The caring individual attention the bank provides its 0.16 customers. Total: 100 Source: Compiled by Researcher The points in the table are allocated as per the priorities, accordingly second dimension of promised service is given top priority and accordingly is given a highest score. Prompt service dimension is considered as second important aspect and accordingly it is scored the second highest. Third score of 0.19 is being allocated to knowledge and courtesy of bank employees and their ability to convey trust and confidence. While the individual attention to customers is being allocated with 0.16 points. At the end last priority is given to appearance of the banks physical facilities, equipment, personnel and communication materials and accordingly. Now let us calculate the unweighted average SERVQUAL score and Average Weighted score for each of the bank under the study.

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1.The Rayat Sevak Co-operative Bank Ltd. Satara: Table No. 6.20 Calculation of Gap Score of The Rayat Sevak Co-op bank Ltd. Satara Sr. Average Expectation Perception Gap No. Dimension Statement for Score Score Score Dimension 1. Tangibles 1 6.58 4.55 -2.03 2 6.35 4.33 -2.01 3 6.16 4.16 -2.00 4 6.39 4.67 -1.72 -1.94 2. Reliability 5 6.54 5.28 -1.26 6 6.45 5.17 -1.28 7 6.51 4.99 -1.52 8 6.49 4.87 -1.62 9 6.48 5.68 -0.80 -1.30 3. Responsiveness 10 6.64 5.41 -1.23 11 6.62 5.30 -1.32 12 6.43 4.94 -1.49 13 6.39 5.10 -1.29 -1.33 4. Assurance 14 6.39 4.99 -1.41 15 6.39 5.12 -1.28 16 6.52 5.12 -1.41 17 6.35 4.97 -1.38 -1.37 5. Empathy 18 6.46 4.88 -1.58 19 6.38 4.87 -1.51 20 6.43 5.04 -1.39 21 6.48 4.99 -1.49 22 6.58 4.99 -1.59 -1.51

Unweighted Average SERVQUAL score: -1.49 Source: Compiled by Researcher

The above table shows the difference between the expectation and actual score, which is termed as gap score. Aspect wise responses of all the 22 questions were considered to calculate the gap score. The table consists of all the five dimensions and questions of each dimension. The difference between the expected score and perception score is calculated, which is called as gap score. The last column shows the average dimension of each aspect. On basis of this average dimension unweighted average SERVQUAL score is calculated.

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Table No. 6.21 Calculation of Average Weighted Score of The Rayat Sevak Co-op Bank Ltd. Satara SERVQUAL Average per Allocated Weighted Score Sr.No. Dimension dimension Points 1 Tangibility -1.94203 0.11 -0.21 2 Reliability -1.29565 0.32 -0.41 3 Responsiveness -1.33333 0.22 -0.29 4 Assurance -1.36594 0.19 -0.26 5 Empathy -1.51304 0.16 -0.24

Average Weighted score: -0.28

Source: Compiled by Researcher

The above table shows the weighted score of all the dimensions and also shows the average weighted score of all the dimensions together. The score is -0.28. The Rayat Sevak Co-operative Bank is high for Responsiveness (-1.33), Assurance (-1.37) and Empathy (-1.51) factor that reflects less customer satisfaction about these factors. Overall the bank should improve its performance to meet customer‘s satisfaction. 6.10 Conclusion The above topic depicts the responses of questionnaire regarding the non- financial performance of the Banks under the study. It includes the various reports prepared by the Bank, the human resource management practices in the bank, including the recruitment, selection, promotion, performance appraisal, communication, welfare plans and controlling techniques of the Bank. Thus the non- financial performance of the bank under the study is presented in this topic , considering the various aspects like managerial practices and managerial functions existing in the banks. Also the satisfaction level of customers and employees is also measured by calculating its mean values. Where it is found that employees of the bank are satisfied regarding the HR practices prevailing in the banks. In case of customer satisfaction measured with the help of SERVQUAL Model it can concluded that the bank under the study should improve their performance to meet customers satisfaction.

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References 1. Choudhari, J. (2010) Principles of Business Management Kolhapur: Phadke Prakashan, 158-159 2. Fayol H, (1949) General and Industrial Management London: Pitman, 107 3. Filley, D. a. (1973). Principles of Management. New York: Alexander Hamilton Institute 4. O'Donnel, K. a. (n.d.). Essentials of Management. New Delhi: Tata Mc Graw Hill. 5. Pagare, D. (n.d.). Principles of Management. New Delhi: Sultan Chand and Sons 6. Rao, P. (1997). Essentials of Human Resource Management and Industrial Relations. Himalaya Publishing House. 7. Theirauf . (n.d.). Management Principles and Practices New York: John Wiley and Sons, 637

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CHAPTER 7 ORGANIZATION PATTERN AND PROBLEMS OF THE RAYAT SEVAK CO-OPERATIVE BANK LTD. SATARA

7.1 Introduction: Every organization is established to achieve some objectives. For achieving these objectives the promoters / Directors appoint managers whose main functions are planning, organizing, Directing and controlling. For achieving the organizational objectives the manager has to plan the activities, organize human and non-human elements, direct these elements and exercise control over these elements. Organizing is such an important function of management and of manager as well. In this chapter it is discussed to show how the Employees‘ Co-operative Banks in Satara District have been organized and the various problems faced by them. 7.2 Organisational Structures: 7.2.1 The Rayat Sevak Co-operative Bank Ltd. Satara Chart – 7.1

The above chart shows the organizational structure of The Rayat Sevak Co- operative Bank Ltd. It consists of the Chairman, at the top of the hierarchy, vice- chairman, Board of Directors, General manager, Assistant General Manager and Heads of Audit, Account, computer, administrative and Loan Dept. as per the chart the Board of Directors through Chairman and Vice- Chairman transact the business of the Bank. All the Heads of various departments work under the guidance of General Manager, who works as per the directions given by the Ex-officio, Board of Directors and Chairman and Vice – chairman. The Board of Directors at its first Meeting after the election of the Board shall elect a Chairman and Vice-Chairman from amongst the elected Directors for the period of five years. This period of five years start from the

159 date of election of the society. This meeting shall be presided over by the Returning Officer appointed by the SCEA as provided in the MCS Act, 1960 and Rules there under. The Chairman shall preside over all meetings of the Board. In the absence of the Chairman , Vice-Chairman shall preside over the meetings and in the absence of both the Chairman and the Vice-Chairman, the Directors shall elect the Chairman for that meeting from amongst those present in the meeting of the Board. The Chairman presiding over the meeting shall have a casting vote in case there is equality of votes. The co-opted Expert directors and Ex-officio director shall not have a right to vote in election of Chairman and Vice- Chairman. Following is the structure at Branch Level: Chart – 7.2

The Branch Manager is the head of the branch, which controls all the activities of the Bank as per the directions of the Head Office. Assistant Accountant works under the Branch Manager, who is responsible to handle all the accounts of the branch, and clerical staff carries out the banking transactions. 7.3 Problems of The Rayat Sevak Co-operative Bank Ltd.Satara All organizations face problems and therefore The Rayat Sevak Co-operative Bank are also no exception for it. The important problems faced by these banks are as follows: 1) Authority and Responsibility: The Branch Manager of Rayat Sevak Co- operative Bank is overburdened with number of responsibilities, but they are not handed over sufficient authority of decision making. Almost all major and minor decisions are taken by the Head office itself. As per Henry Fayol‘s principle of management ‗Authority and Responsibility‘, should go hand in hand. Every employee must be given equal authority and responsibility which results in good work and the person can contribute in achieving the objectives of the organization.

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2) Budget: Budget is the controlling factor in the Bank , while the Branch Manager is the person who implements the budget even though he is not considered in the budget making process so it becomes rather difficult for implementers to execute it as they do not know how it is prepared. 3) Infrastructure: The infrastructure of this Bank is not up to the mark. The facilities are not adequate, also this Bank do not hire any good infrastructure but compromise with the existing one. The buildings which are already constructed, not as per the need of the Bank but are used for some other purpose are used by these Banks. 4) Location of bank: All the branches of these Banks are located in some hidden areas, where non-members cannot easily find the address of the Bank. So it becomes difficult for an easy access of the Bank. 5) Marketing Strategies: This Bank is happy and contended with the present customers i.e. members of the Bank, so no special efforts are taken to attract the non-members. The various deposit schemes are not given any wide publicity nor are they rigorously marketed. The members are only informed about new schemes and not the non-members. Rigorous marketing would generate good income from the source of deposits, only the need is to take steps to attract the non-members. 6) Security: None of the branches of this Bank have appointed a watchman. For security purpose a watchman is needed, at least in those branches having locker facility must appoint a watchman. 7) Schemes for women and children: There are no special schemes for female members, nor for children of members. Also there are no schemes especially for women and children which may attract non-members. 8) Competitiveness: As this Bank is having no problem of survival, they are not interested in competing with other commercial Banks. 9) Non- Interest Income: No facility of acceptance of electricity, phone bills etc. which restricts the access of non-members/ customers in the Bank. 10) Motivation: The credit of good work is given to the branch as a whole, an individual‘s good work is not rewarded and his individual credit goes to the branch itself. 11) Identification: Employees of this Bank are not supplied with identity card are not supplied with dress code due which it becomes difficult to identify them easily by the customers. 12) Security measures: Lack of close circuit cameras in the Banks increases the

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risk factor. 13) Risk factor: This Bank does not own security vehicles, and the heavy amount of cash is being moved by the employees on their own private vehicles, which increases the risk of theft. 14) Training Centre: Bank does not have their own training centre. This shows dependency of the Bank on other training institutes. 16) Operating Efficiency: The CASA (current and savings account) ratio which shows how much deposit a bank has in the form of savings and current account deposits in total deposit is not satisfactory which shows poor operating efficiency . 17) NPA: The NPA has increased by 45% and 30% respectively which shows the poor quality of advances of Bank. 18) Financial Ratios: a) The Credit Deposit ratio is less than 1 but the percentage of lending is decreased during the study period. b) The Capital Adequacy Ratio is less than required ratio of 9% of the Bank which shows that financial stability of this Bank is at risk. c) In case of profitability ratio of return on capital before NPA provision it is observed that it has been declined during the last two years of study. d) The second profitability ratio of return on capital after NPA provision has declined consistently during the study period. e) The ratio return on assets has decreased consistently which depicts the inefficiency of these Banks to manage its assets to produce profits during the year. f) The ratio of interest margin to interest on deposits, loans and advances shows a steep decline which means that Bank should take rigorous steps to strengthen the ratio by increasing the interest on loans or decrease the interest on deposits. 7.4 Conclusion: Thus this topic covers the organizational pattern of bank under the study, showing the superior subordinate relationships. The organizational structure helps to achieve the objectives, so it must not be much complicated. The structure should be designed in such a way that one can easily identify the relations. The banks under the study do have simple structures. Also the topic has focused its attention on the various problems faced by the bank in its day to day working.

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CHAPTER 8

FINDINGS AND SUGGESTIONS

8.1 Introduction: This is the last and concluding chapter of the present study highlighting the findings and suggestions for the development of The Rayat Sevak Co-operative Bank. These are the findings of all the topics consisting of the evaluation of the financial performance, where the financial ratios which are calculated , what they say about the financial performance of the bank under the study. All the ratios do have standard values against which the actual values are compared and then the findings about the financial position of the bank are put forth. The next finding is about the non-financial performance of the bank, which include the HRM practices of the bank in existence , employees satisfaction about the prevailing HRM practices of the bank and findings about the customer satisfaction about the services provided by the bank. A close look into the financial and non-financial evaluation leads to the following findings: 8.2 Findings: 1) It is observed that the Liquidity Ratio = Total Investments/Total Assets which compares liquid assets being held by an organization against the total assets accumulated is over and above the standard requirement of 20%, which shows strong liquidity of bank. The ratio is over and above the standard requirement of 20% but there is a decrease of 3% in 2015. The ratio shows strong liquidity of the Bank. The ratio is over and above the standard requirement of 20% and shows strong liquidity of the bank. (Table No.5.1) (Graph No.5.1) 2) Liquidity Ratio – CASA (Current Account and Savings Account) / Total Deposits shows how much deposit a bank has in the form of current and saving account deposits in the total deposit. Graphical Presentation of this ratio shows that the bank has a good percentage of CASA i.e. 12.08% in 2010-11 but has decreased over the years to 10.68% in 2014-15. So in the bank there is a need to increase CASA deposits by launching innovative schemes so as to improve the operating efficiency. (Table No.5.2) (Graph No.5.2) 3) The graphical and tabular presentation of NPA ratio shows that NPA percentage of The Rayat Sevak Co-Operative Bank NPA has increased in 2011-12 and 2014-15 and decreased in 2012-13 and 2013-14. As the standard ratio of NPA is

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less than 5%, the Bank do fulfil the criterion showing that this Bank have good recovery mechanism of loans.(Table No.5.3)(Graph No.5.3) 4) The CD ratio is less than 1which shows that bank has given loans out of own deposits. The percentage of lending is decreased from 87.42%in 2011 to 74.78% in 2015.The bank should take efforts to increase its advances..(Table No.5.4) (Graph No.5.4) 5) Capital Adequacy Ratio is much less than the required ratio of 9% the ratio of has been declined from 4.78% in 2011 to 4.72% in 2015 and hence financial stability of the bank is at risk.(Table No. 5.5 and Graph No. 5.5) 6) Business Per Employee of the Bank has increased by 66% over these 5years which shows that the performance of employees is good.(Table No.5.6 and Graph No.5.6) 7) Capital before NPA has declined consistently from 16.83% in 2011 to 14.10% in 2015. (Table No.5.7) 8) Return on Capital after NPA provision of has decreased consistently from 16.75% in 2011to 14% in 2015.(Table No.5.8) 9) Return On Assets(ROA) no.1(a) of The Rayat Sevak Co-Operative Bank ROA is positive but has decreased consecutively since 2011 0.80% to 0.66% in 2015.(Table No.5.9) 10) Return on Assets ratio no.1 (b) is calculated by the formula Interest on Loans/Total Loans. None of the Bank has less than standard ratio(not less than 3%). But the Bank need to take steps to increase the ratio. The average rate of interest on loans of The Rayat Sevak Co-Operative Bank has risen from 9.54% to 11.30% over these 5 yrs. (Table No.5.10) 11) Return on Assets no.1 (c) is calculated by the formula Interest on Deposits / Total Deposits which shows the average rate of interest on deposit of the bank. Standard- less than 10%. Average interest rate on deposits of has increased from 7.27% to 8.28% over these 5 years..(Table No.5.11) 12) Responsibility of the Manager : It is observed that the Branch Manager is responsible for personnel matters (except recruitment, selection and training), financial matters, accounts and audit, preparation and maintenance of important documents, consideration of difficulties of members and guidance to them, preparation and execution of development schemes etc. This shows that Manager has whole and sole

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responsibility for managing the affairs of the branch according to provisions contained in Act, rules and bye-laws. 13) Authority of the Manager: It is found that the managers of The Rayat Sevak Co-operative Bank Ltd have full authority to take all the major and minor decisions regarding the branch, but approval of Head Office has to be taken for every decision. (Table No.6.1) 14) Role of managers in designing the policies of the Bank: Managers do not play any role in designing the policies, all the policies are designed by the Board. (Table No.6.2) 15) Authority of the Manager regarding operating and capital expenditure: In case of authority regarding expenditure , both operating and capital expenditure it is seen that the manager has no authority to take any decision regarding capital expenditure, it is a decision taken by the Board, while manager has full authority in case of operating expenses but with the approval of Board of Directors. (Table No.6.3) 16) Role of the Manager in designing the methods and procedures of the Bank: it is observed that manager is not involved in designing the methods and procedures of the Bank as well. Actually managers are the implementers of the plans and policies decided by the Board, so they should be involved in the designing of plans and policies because implementers actually know the problems of implementation, so can suggest and share good ideas. 17) Authority of the Manager regarding personnel matters: In case of personnel matters like creation of posts (temporary and permanent) , selection, training, transfer, promotion, demotion, compensation, termination, appointment of key persons etc. it is noted that all decisions are taken by the Head Office with the prior approval of Board of Directors .The managers only have a right to sanction casual leave of the employees of their branch, also they report to the Head Office about the employee‘s performance. The Head Office on the basis of these reports of the managers takes action against the employee whose performance is not up to the mark and decision regarding such employee‘s termination or otherwise is taken by the Board. Such decision taken by the Board is then communicated to the concerned manager who takes action against such employee as directed by the Head Office. Decision regarding selection of personnel for purpose of training, promotion, transfer is also taken

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by the Head Office approved by the Board. Generally promotions are based on the basis of seniority and performance of the employee. Managers do not have a right to select his subordinate. (Table No.6.4) 18) Method of Communication: it is seen that the communication of any circulars from Head Office are through issue of notice and other general communication like issuing of orders, instructions, guidance, showing direction etc. are orally done. If employees do not obey the oral order, then he is issued with written order. (Table No.6.5) 19) Involvement of subordinates in decision making process and the kind of communication : It is found that the Bank is positive and all the managers are very contented that they considered the opinion of subordinates in the decision making process, which makes employees feel as an important part of Bank. Also the communication is two way and not one way, where employee is also allowed to express his views which creates a healthy atmosphere. (Table No.6.6 and 6.7) 20) Freedom given to the subordinates in expression of their opinion : It is found that subordinates are given an equal chance to express their opinion and they feel free to express their opinion. (Table No.6.8) 21) Special and regular reports received by the Manager : The special and regular reports prepared by the Branch includes: monthly reports of NPA statement, Defaulter list, Trail Balance, P&L statement, Reconciliation Statement, Time Deposit Liability Report it means as per RBI guidelines 4% of the amount of deposit should remain with the branch, excess cash report(branch can maintain up to 3 lakh cash above that requires permission of H.O, List of Loan recoveries, Receipt and Payment, Day Book, Daily Report, Balance sheet, Loan and Deposit increase – decrease Report. 22) Communication to the Board members between two meetings : In case of communication to the Board members between two meetings it is found that the managers meet Board during monthly loan sub-committee meet , , also Board members personally visit the branch, monitors the work and takes feedback.

23) Procedure for exercising control over expenses/ costs:

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It is found that for routine / normal expenses norms are fixed and other expense are paid after judging its necessity .i.e. whenever manager feels that a particular expenditure is a must, then only he approves its incurrence. Budget is used as a measure of cost control by some managers. For exercising control over different items of expenses, following procedure is adopted. 24) The main items of expenses in the branch: It is found that the main items of expenditure in the Branch are salary of employees, light bill, phone bill, conveyance, snacks and tea expenses, postage and telegram, printing and stationary, TDS Return charges, water bill, maintenance of computer charges, interest on deposits, rent of the building, sweeper salary. (Table No.6.9) 25) Budget as a cost controlling tool: It is observed that a monthly statement of income and expenditure account is prepared and is sent to Head Office through the manager. In monthly meetings the Board considers all the items of income and expenditure and necessary action is taken. Monthly budget is not prepared and therefore actual cannot be compared and so action for control purpose cannot be taken. At the end of the year, variances are calculated and in annual general meeting excess expenditure is approved, generally with very little discussion on it. 26) Role of manager in preparation of capital expenditure budget for the Branch, authority responsible for preparing and approval of budget and the time period covered under budget: It is seen that in all the three Banks budget is not prepared by the branch but by the Head Office. Such a budget is prepared in the month of March in one Bank, while in April/ May in other Banks. The responsibility of preparing this budget is with the Accounts section of Head Office. This budget requires approval of the Board of Directors and also approval of members in the Annual General Meeting. On the basis of plans and estimates the Banks provide for capital expense in their annual budgets. In case of building construction plan – estimates are asked for and in case of erection of machinery quotations are asked for. The budget is approved in annual general meeting. While preparing the budget last year‘s expenses, present condition and next year‘s circumstances are considered. (Table No.6.10)

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27) Authority responsible for taking policy decisions, the channel of communication used for communicating policies to the employees and use of suggestion scheme in taking policy decisions: It is seen that the final policies of all the Banks are approved by the Board of Directors and are communicated to the employees through circular letters, through staff meetings or sometimes by communicating orally. Management expects compliance after communicating the policies to the employees. The modern tendency of today‘s management is to encourage employees participation in the decision making process. An easy way of participating employees in decision making process is to adopt suggestion scheme. The Bank has a scheme of suggestion box for the employees. (Table No.6.11) 28) Policy for selection of key personnel: It is revealed that majority of the manager‘s follow promotion method for selecting key persons in the banks. The key persons are selected through promotions based on seniority. Thus bank give more importance to promotion method for selecting key persons. Such seniority based promotions require approval of Board of Directors. Actually there is need for plan of control over appointments. 29) Training Methods used by the Banks: It is observed the Bank uses the two methods of training namely deputation to management training courses and participation in management workshops and seminars .From the study it reveals that the Bank under the study do not make use of ―on the job training‖ method. Managers do not have formal managerial education. It is observed that Bank is not successful in developing their own managers. (Table No.6.12) 30) Employee‘s performance appraisal methods used by the Banks: It is revealed that there is a practice of appraising the performance of the employee through preparation of confidential reports . Such reports contain factors like integrity, co-operation, behavior, loyalty, obedience etc.. (Table No.6.13) 31) Demotion / Dismissal Policy: It is found the Bank under the study do not make use of demotion policy. All the branches replied that if an employee fails on one job, he/she is provided with

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proper guidance, or is tried on another job, give him training to fit on the job, but they do not remove/ dismiss such failed employees. (Table No.6.14) 32) Incentive Scheme for increasing the efficiency of the employees: It is observed that the Bank do have the incentive scheme, where branch doing good business is rewarded with a cash prize or with shield and certificate as a part of motivation. Instead of giving individual prize the branch is given the credit as a whole. This shows that team building and team spirit plays an important role in increasing the efficiency of the employee. 33) Preparation of Budgets: Bank under study do not encourage their employees to participate in budget preparation. For making budgets a success, participation of people who implement it is must. Another observation is that the bank do not hold the persons preparing budgets responsible for its execution. Due to lack of participation in budget preparation and no responsibility for executing the budgets, seriousness in budget preparation and its execution is not found. This results in weakening of budgetary control technique. 34) Control through Annual Reports: It is seen that the Bank under the study prepare Annual Reports to be submitted to the members. The report consist of various activities organized by the Bank throughout the year viz. detail information about various deposit schemes, loan policies, Balance sheet, Auditors Report showing the financial condition of the Bank, comparative chart of the Bank of last five years showing the growth in deposits, loans, members, share capital, different projects undertaken or otherwise etc. this method of exercising control over the overall performance is in vogue. Members in the annual general meeting ask the questions and get the doubts cleared. 35)Provision for welfare plans for the employees: It is observed that the Bank under the study provide with the pension facility which is paid as per the Factories Act. Also provident fund is contributed , 12% of Basic pay and Dearness allowance is transferred to Provident Fund , where the Bank contributes an equal amount. (Table No.6.15)

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36) Existence of employees ‗redressal mechanism and its nature of machinery to solve the matter: It is found that all the Bank under the study do have redressal mechanism where in every branch a complaint register and suggestion boxes are maintained. This box is opened in the presence of Chairman/General Manager/Auditor and the complaint is recorded in the audit report and forwarded to the Head Office, where action is initiated by Chairman/General Manager while in another Bank an employee forwards his written complaint to the Head Office, where action is taken and report is forwarded to the Board of Directors. Also in the monthly meetings held in the branch the complaints of employees are discussed orally and are redressed in a proper manner. (Table No.6.16) 37) The services provided by the Bank: The bank provide the services of accepting deposits, lending of loans, and facility of issuing of Demand Draft and also provide modern facilities like ATM, RTGS , Core Banking, CTS clearing of cheque. 38) Time period required by the Bank for sanctioning of loan: It takes 10 to 20 minutes for sanctioning Jaminki loans No. 1, 2 and 3, while for sanctioning of gold loan it takes 30 minutes. All these loans are sanctioned by the Branch manager. Housing loan, Education loan and vehicle loan needs permission of Head Office, so it requires 8-10 days for sanctioning. (Table No.6.17) 39) Security measures undertaken for movement of cash by the Bank: The Bank move the cash without any security. Generally employees two wheeler is used or if the amount is much larger then auto is used for movement of cash 40) The Banks are facing the following problems :  Problem of good infrastructure  Problem of unsatisfactory CASA Ratio  Problem of increasing NPA  Problem of declining Credit- Deposit Ratio  Problem of decreasing profitability

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41) Employees Satisfaction about HRM : In respect of the employees satisfaction about the prevailing HR practices of the bank, it is found that SA and A(Strongly Agree and Agree) have highest frequencies, which depicts that the employees of bank under the study are satisfied with the all the seven aspects of HRM namely recruitment – selection, training, promotion- transfer, welfare plans, performance appraisal- career development, compensation and employee involvement. (Table No.6.18) 42) Customers Satisfaction about the services provided by the bank (SERVQUAL Model) In case of customers satisfaction about the services provided by the bank measured by using the SERVQUAL model, it is found that SERVQUAL gap score is high for Responsiveness (-1.33), Assurance (-1.37) and Empathy (- 1.51) factor that reflects less customer satisfaction about these factors. (Table No.6.19 to 6.21 ) 8.3 Suggestions: Following are the suggestions made to strengthen and benefit the management of Employees co-operative Banks. 1) Liquidity Position: It is observed that the Liquidity Ratio = Total Investments/Total Assets which compares liquid assets being held by an organization against the total assets accumulated is over and above the standard requirement of 20%, which shows strong liquidity of bank. Therefore it is suggested to maintain the ratio in future by holding more liquid assets against total assets. 2) Operating efficiency: To enhance the operating efficiency, the bank under the study should try to increase its CASA ratio by launching innovative schemes. Attractive schemes should be launched and heavy marketing of such schemes would increase the current and saving deposits. 3) NPA: The NPA is very poor and is increasing consistently over the years. It is suggested that rigorous steps should be taken to decrease this ratio and a definite policy for recovery of loans must be chalked. 4) Credit Deposit Ratio : The Credit Deposit ratio is less than 1 which shows that bank has given loans out of own deposits. The lending percentage shows a decrease during the study period, which shows that necessary steps should be taken to make lending policy attractive, so that members would get attracted for

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seeking loans. Reduction in rate of interest on loans would help to attract the borrowers, also time period required for sanctioning of loan should be reduced to attract the members. 5) Ability to meet time liabilities: Necessary steps should be taken by the Bank to increase its Capital Adequacy Ratio, at least it must be increased up to minimum requirement of 9% and make its financial stability strong. Bank should make themselves financially strong . 6) Business per Employee: The bank do provide good motivational devices due to which the business per employee is good, it is suggested to maintain and enhance the motivational devices to still further increase this ratio, by introducing financial and non-financial motivational devices. 7) Profitability ratio: Return on capital after and before NPA provision need to be increased . 8) Investment: It is suggested that concrete steps should be taken to earn profits from its assets and manage them properly in order to increase the ratio of Return on Assets. Good investment options can be selected by seeking an expert advice from financial planner or advisor . 9) Expenses: As the ratio operating expenses /working capital shows an increasing trend it is suggested that the Bank should try to cut down its operating expenses 10) As the liquidity ratio loans and advances to Working capital and interest income to working capital ratio shows a declining trend throughout the study period it is suggested that rate of interest on loans and time required for sanctioning of loan should be reduced to increase the demand for loans and advances. . 11) Training: It is found that the managers do not have any formal managerial education, also it is observed that Bank is not successful in developing their own managers. Therefore it is suggested that the Bank should develop their own persons by creating ‗assistant to‘ positions and training efficient personnel on the job and also utilizing other methods of management development. The Bank for training of their employees are dependent on professional training centers. The researcher would like to suggest that Bank should open their own training centers, so that they can run rigorous and frequent training programs for its employees, directors, members etc. 12) Performance Appraisal: It is suggested that the performance of employees should be appraised against job requirements and managers‘ performance should

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be appraised as managers i.e. to what extent they are successful in executing the managerial functions. This would help in proper evaluation of performance of the employees and help in giving suggestions to improve the performance, if it is not up to the mark. 13) Demotion Policy: It is suggested to train, re-train and try to retain, instead of removing, the employee if he fails on one or the other job. This is as per the universal rule that nothing is useless in the world. As the bank under study do not make use of demotion policy it is suggested that if after lot of trials if an employee still fails, he should be dismissed but for dismissal a definite list of rules, violation of which will lead to dismissal, should be prepared and made known to the employees in the organization. 14) To make budgetary system effective it is suggested that: i) Executives should participate in preparation of budgets and should be held responsible for its execution. ii) Budget committee consisting of Chairman and Branch Managers should be formed to look after budgetary control. iii) System of flexible budgets should be used; iv) Budgets should be breaking up month wise vi) System of rewarding for performance within budgeted limits and punishing for unsatisfactory performance should be evolved. 15) Security Measures: The Bank move the cash without any security. Generally employees two wheeler is used or if the amount is much larger then auto rickshaw is used for movement of cash. It is suggested that the Bank should purchase their own security vehicle and safely make the movement of cash. For the security purpose these Banks should install close circuit cameras, so that any mishap takes place, the footage will help to detect the crime. Also close circuit cameras acts as a controlling measure on employee‘s behavior. Employees will do their work more sincerely even in absence of Branch Manager as they will be aware that their behavior is captured in the cameras. Every bank should necessarily appoint a security in order to avoid any mishaps. 16) Automation: The Bank should give more importance to fully automation in order to attract the outside customers. Customers nowadays do not have much time to visit the bank for every small transaction and expect from bank services

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like mobile banking, RTGS/ NEFT etc. and other modern services, so that much of the time is saved and at a click of a button the transaction is completed. 17) Infrastructure: The Buildings of the Bank are in the internal regions so they are not easily assessable to the outside customers. Maximum branches of these banks are located in hidden areas, where they are not easily assessable for non- members and so these people do not get attracted towards these banks. 18) Rigorous Marketing: In order to attract the non-members the bank should go for wide publicity and heavy marketing and chalk out a strategy regarding it. Rigorous marketing about new deposit schemes and its rate of interest should be done on a large scale in order to attract the non-members towards the bank. Loan schemes of bank like gold loan, loan against fixed deposit etc. should also be given wide publicity. Hoardings, boards, flex can be displayed in busy areas in order to attract people; also radio advertising can also prove to be effective. One or more advertisement mediums can be used for heavy marketing and publicity. Even pamphlets of new schemes can also be distributed door to door, which is again a cheapest way of advertisement and easy way to approach large number of people. 19) Competitiveness: The Bank even though is not having any problem of survival but even though they should consider the commercial Banks as their competitors and try to compete with them. A competitive spirit needs to be developed among the bank and they should become ready in all respects to compete with the commercial banks. Right from its infrastructure to its prompt service, automation, ambience etc. need to be considered as areas for further improvement. Unless and until these banks provide all the services which commercial banks provide, non-members would never get attracted towards it. 20) Deposit Schemes : It is suggested that the Bank should introduce certain deposit schemes especially for women and children, which will attract women from the society and also increase the deposits. 21) Motivation: Bank should consider the good work of their individual employees and along with the Branch; an individual should also be given credit in the form of rewards, cash prize or in any other way in order to motivate the individuals, which will increase the business per employee ratio. Bank should reward its employees for sharing good ideas, so that individuals will get motivation and

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more and more employees will willingly come forward to share their innovative ideas. 22) Extent of Authority: It is suggested that full authority regarding capital and operating expenditure, recruitment of staff etc. should be given to the manager of a branch, as success or failure of branch is his responsibility, so for successful banking he should be given full authority of taking decisions regarding branch. 23) Employees Satisfaction about HRM: As it is found that employees are satisfied about the HR practices in the bank, it is suggested that the bank under study should maintain this level of satisfaction and also try to enhance it by improving the existing practices. It is found that in case of training aspect employees of the bank are more satisfied as compared to other aspects, so it is suggested to make improvements in other six aspects of HR, so that employees will be strongly satisfied about other aspects as well. 24) Customers satisfaction about the services provided by the bank: It is suggested that to chalk out a definite policy about three dimensions namely responsiveness, assurance and empathy and try to increase customer satisfaction about these factors. 8.4 Conclusion: Thus this topic deals with the findings of the study and suggestions given by the researcher. It consists of various findings of financial evaluation done with the help of various ratios and also includes findings of the non-financial performance evaluation done on the basis of responses of Branch Managers, employees and customers. After undertaking this study in depth whatever suggestions the researcher felt are necessary for the improvement of the functioning of these banks are also mentioned in this topic.

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39. R. Ayyasamy (2008) Ph.D. thesis ―A Study On Non-Performing Assets In Co- Operative Banks‖(With Reference to Salem District Central Co-Operative Bank Ltd., Tamilnadu) 40. Mr. S. T. Bhosale (2012) Ph.D. thesis ―An Evaluation Of E-Banking Service Users In Nationalized And Private Sector Banks With Reference To Sangli District‖ 41. Manisha V. Jagtap (2012) thesis ―A Critical Study of Financial Management of Rajarambapu Patil Group of Cooperatives‖ 42. .Gajanan A. Bhakare (2010) thesis ―A Critical Study of Non-Performing Assets of Commercial Banks in Maharashtra – An Inter sectorial Comparison‖ 43. Ujwala Dinkar Patil(2011) Ph.D. ―A Study of Human Resource Development In Urban Co-Operative Banks In Sangli District‖ 44. Neeta Deshpande (2011) thesis ―A Critical Study of Recovery Problems of Banks Working in Western Maharashtra: In The Light Of Sarfaesi Act 2002‖ 45. K. Ravichandran thesis ―A Study on Funds and Investment Management Urban Co-Operative Banks in Karnataka‖ 46. M. Sasi Bhushan (2010) thesis ―An Appraisal ofThe Financial Performance of the District Central Co- Operative Banks in India‖ 47. Rimpi Kaur (2010) thesis ―Indian Banking: Managing Transformation through Information Technology – Problems and Prospects‖ 48. Dal Singh (2014) thesis ―Productivity and Efficiency of District Central Co- operative Banks in Haryana: An Empirical Study‖ 49. Chackochan J Njavallil (2007) Thesis ―Training and Development of Bank Employees: A Comparative Study Between New Generation Banks and Public Sector Banks‖ 50. Rupal R. Patel (2005) Ph.D. ―Operational Efficiency of District Central Cooperative Banks in Gujarat-A Comparative Study‖ 51. Padmini (1997) thesis ―Funds Management of District Co-Operative Banks in Kerala‖ 52. Samreen Naqvi (2014) Ph.D. thesis ―An Assessment of Cooperative Banking in India with Special Reference to Uttar Pradesh‖ 53. Najaf Gharachourlou Aghjelou (2007) In Thesis ―The Investigation of Risk Analysis And Risk Management In Selected Branches Of Cooperative Banks In Pune‖

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54. Thomas V. P.(2007) Ph.D. thesis ― A Study On The Deposits And Lending Of Commercial Banks In Kerala - A Comparative Study With Co-Operative Banks.‖ 55. S. Vijayalakshmi (2009) Thesis ―Performance Evaluation of The Thoothukudi District Central Co-Operative Banks Limited‖

56. Kurkute A.D (1988) Thesis ―A Study of Management Practices of Diary Co- operatives in Satara District (Maharashtra)‖ Books : 1. Dr. J. S. Choudhari – ― Principles of Business Management‖ Phadke Prakashan, Kolhapur 2010, p. 158-159 2. Henry Fayol ― General and Industrial Management‖ Pitman, London 1949 p.107 3. Theirauf and others – ― Management Principles and Practices‖ John Wiley and Sons, New York p.637 4. Koontz and O‘Donnel ―Essentials of Management ― IInd Ed., Tata Mc-Graw- Hill Publishing Co. New Delhi p.468 5. Pagare, Dinkar ―Principles of Management ― Sultan Chand and Sons, New Delhi p.213 6. Davis and Filley ― Principles of Management ― Alexander Hamilton Institute, New York 1973 Ed. P. 49 7. P. Subba Rao – ―Essentials of Human Resource Management and Industrial Relations‖ Himalaya Publishing House 1997, p. 314-315 8. K. Suresh, Molly Joseph ―Co-operatives & Rural Development in India‖ – published by Ashish Publishing House New Delhi. 9. S. K. Kulkarni ― Co-operative Development‖ Phadake Prakashan, Kolhapur 10. S. N. Tripathi ―Co-operatives, its growth and new dimensions‖ Discovery Publishing House, New Delhi. 11. R.D. Bedi ―Theory, History and Practice of Co-operative Banking in India‖ Asia Publishing House, Mumbai. 12. G.S. kamat ―New Dimensions of Co-operative Movement‖ Himalaya publishing house Mumbai. 13. B.N. Choubey― Principles& Practice of Co-operative Banking in India‖ Asia Publishing House Mumbai.

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14. V.P. Michael ―Human Resource Management & Human Relations‖- Himalaya Publishing House, Mumbai

Annual Reports: 1. ―The Rayat Sevak Co-operative Bank Ltd. Satara‖ : Annual Reports: 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15

Websites: 1. www.maharain.gov.in. 2. http://dcmsme.gov.in 3. http://www.maharashtra.gov.in/english/gazetteer/SATARA/bank_joint_stock.html

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Questionnaire

(To Manager)

1. Name and address of the Bank: 2. Name of the Manager: 3. Qualification: 4. Your Position / designation in the Bank: 5. To whom do you report? 6. Name the persons / positions which report to you? 7. Enlist the responsibilities shouldered by you: 8. What is the nature of your authority? (tick mark the appropriate extent of authority a = partial authority b = full authority c = full authority, with reporting action to Board e = special emergency powers) i) What is your role in designing the policies : a,b,c,d,e ii) incurring expenses: 1. Capital expenses : a,b,c,d,e 2. Operating expenses : a,b,c,d,e iii) designing the methods and procedures : a,b,c,d,e iv) Personnel matters : A. Creation of posts 1. Temporary : a,b,c,d,e 2. Permanent : a,b,c,d,e B. Selection, training,transfer,promotion,demotion,compensation,additionalincrements,te rmination etc. 1. Daily wages staff : a,b,c,d,e 2. Monthly wages/salaried staff : a,b,c,d,e C. Appointment of key persons/officers : a,b,c,d,e 9 . How do you communicate with your subordinates? : Orally/written form/ mutual understanding 10. Is there involvement of subordinates in the decision making process?Yes/no 11. How is the communication in the Bank ? : One way / two way 12. Are the subordinates given a chance to express their opinion? Yes/no

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13. Do the subordinates feel free to express his creative ideas/suggestions/difficulties/opinion? Yes/no 14. Name the special and regular reports you receive. (Please support specimen copy of such report) Type of report Title of report from whom received periodicity (daily, weekly, monthly) I. Regular Reports i)………………….. ……………………………… ………………………. ii)…………………. ……………………………… ………………………… iii)………………… ………………………………. …………………………. II. Special Reports i)………………... ………………………………… …………………………. ii)………………… ………………………………. …………………………. iii)……………….. ………………………………. …………………………… 15. Name regular and special reports you prepare. ( Please support attach specimen copy of each report) Type of report Title of report To whom sent periodicity I. Regular Reports ………………….… ………………… ………………….. …………………. II. Special Reports ………………….… ………………… ………………….. …………………. 16. How do you communicate to Board members between two meetings ? 17. Your suggestions/comments about i) your position ii) your problems iii) overall organization structure 18. Name the main items of expenses in your Bank branch 19. How do you control these expenses? 20. Do you prepare capital expenditure budget? Yes/no 21. Who prepares this budget? 22. When is it prepared? 23. Who approves this budget?

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24. Who takes policy decisions? 25. How are policy decisions communicated to employees? a) by orders b) by circulars c) orally d) staff meetings etc. 25.1 Is the suggestion scheme implemented in the Bank? 25.2 Do you ask for some suggestions from employees before taking policy decisions?

26. Which method is adopted for key persons selection? i) promotions ii) direct recruitment iii) other (specify) 27 Which of the following practices do you follow? (Tick mark the appropriate practice) i) Job specification and requirements specifying post requirements , ii) Consideration of qualified candidates from the same department for higher post, iii) Consideration of qualified candidates from the other department for higher post, iv) Creation of ‗assistant to‘ etc jobs for training purposes v) Maintaining qualified surplus persons in same or other departments 28. How is employees performance appraised? a) preparation of confidential reports b) comparison with job requirements 29. Which of the following methods are used in training of personnel? i) on-the-job training ii) appointment as ‗trainees‘ iii) participation in Refresher Courses iv) deputation to management training courses v) participation in seminars/workshops 30. How is overall performance of the bank branch is measured?( tick mark) a) by comparing actuals with budgeted targets b) by preparing annual budgets c) other 31. If as employee fails to one job, is he tried on another job ? Yes/no: if yes , if he fails on another job also, what action is taken against such employee?

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______

32. Do employees participate in preparation of budget? Yes/no 33. Do you have any employee‘s redressal mechanism? Yes/no 34. If yes, what is the nature of machinery to solve the matter?

______35. Do you have any Welfare Plans for the employees? Yes/no 36. If yes what is the nature of the scheme? ______37. Do you have any Incentive Scheme for increasing the efficiency of the employee‘s? a) Promotional Scheme b) Financial Incentives c) Non-Financial Incentives d) Awards, recognition or appreciation benefits e) Recreational Facilities 38. What are your incentive plans for attracting investors deposits? ______

39. Any special schemes for senior citizens, Women employee‘s?

______

40. What kind of Retirement benefits are provided to the members? ______

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41. How much time period is required by the Bank for sanctioning of loan ? 42. Which kind of security measures are undertaken for movement of cash ?

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Questionnaire – Employee Satisfaction about Services Provided by Bank

THE STUDY OF PERFORMANCE EVALUATION OF THE RAYAT SEVAK CO-OPERATIVE BANK LIMITED WITH SPECIAL REFERENCE TO SATARA DISTRICT Part A) Rate Your Satisfaction about HRM Practices (Just Tick in the respective column) Using the scale shown below, rate your level of satisfaction with the following services.

SD- Strongly D – N - SA - Strongly A - Agree(4) Disagree(1) Disagree(2) Neutral(3) Agree(5)

Sr. Facilities SD D N A SA No. 1 Recruitment & Selection SD D N S SA 1a Recruitment procedure is fair 1 2 3 4 5 The selection system followed in bank is SD D N S SA 1b highly scientific and rigorous. 1 2 3 4 5 Valid and standardized tests are used when SD D N S SA 1c required in the selection process. 1 2 3 4 5 Bank selects people having the desired SD D N S SA 1d knowledge, skills and attitudes. 1 2 3 4 5 2 Promotion & Transfer This bank prefers an internal employee SD D N S SA 2a whenever a vacancy exists. 1 2 3 4 5 Promotion decisions are based on the SD D SA N S 2b suitability of the promote rather than any 1 2 5 3 4 favouritism. SD D N S SA 2c The transfer policy is fair 1 2 3 4 5 SD D N S SA 2d Transfer is as per convenience of employee 1 2 3 4 5 3 Training This bank organizes a formal induction SD D N S SA 3a program for new- comers very effectively. 1 2 3 4 5 This bank regularly conducts extensive SD D N S SA 3b training programs for Its employees. 1 2 3 4 5 Employees in each job normally go through SD D N S SA 3c training programs periodically, updating 1 2 3 4 5 their knowledge and skills

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There are formal training programs to teach SD D N S SA 3d new employees the skills they need to 1 2 3 4 5 perform their jobs. 4 Welfare Plans SD D N S SA 4a Work Environment of the Bank is healthy 1 2 3 4 5 SD D N S SA 4b Working Hours of the Bank are convenient 1 2 3 4 5 Sitting arrangement of the Bank is SD D N S SA 4c comfortable 1 2 3 4 5 SD D N S SA 4d Leave policy of the Bank is fair 1 2 3 4 5 5 Performance Appraisal & Career Development Performance appraisal reports are based on SD D N S SA 5a quantifiable assessment and adequate 1 2 3 4 5 information and not on favouritism I have faith in the performance appraisal SD D N S SA 5b system. 1 2 3 4 5 The seniors sees employees development SD D N S SA 5c as important part of their job 1 2 3 4 5 I have growth and development chances in SD D N S SA 5d this Bank 1 2 3 4 5 6 Compensation Employees compensation is decided on the SD D N S SA 6a basis of individuals competence or ability 1 2 3 4 5 Employees are offered an extremely SD D N S SA 6b flexible compensation and benefits package 1 2 3 4 5 Performance-based incentives and bonuses SD D N S SA 6c are available to all employees. 1 2 3 4 5 The bank provides salary and other SD D N S SA 6d benefits equivalent to other Banks 1 2 3 4 5 7 Employee Involvement Employees actively participate in decision SD D N S SA 7a making process 1 2 3 4 5 Employees have open communications SD D N S SA 7b with our superiors in the bank 1 2 3 4 5 Employees are included in a formal SD D N S SA 7c information sharing programme. 1 2 3 4 5 Employees are provided opportunity to SD D N S SA 7d suggest 1 2 3 4 5 improvements in the way things are done. .

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Questionnaire – Customer Satisfaction about Services Provided by Bank

THE STUDY OF PERFORMANCE EVALUATION OF THE RAYAT SEVAK CO- OPERATIVE BANK LIMITED WITH SPECIAL REFERENCE TO SATARA DISTRICT

Part A) Expectations - Please show the extent to which you think banks should possess the following features and extent to which you believe this bank has the feature described in the statement.

You should rank each statement as follows:

Strongly Strongly Disagree Agree 1 2 3 4 5 6 7

Sr. Facilities Score Score No. Expectations Perception Aspect 1 - Tangibility Excellent banking companies will have 1 modern looking equipment. The physical facilities at excellent banks will 2 be visually appealing. Employees at excellent banks will be neat in 3 their appearance. Materials associated with the service 4 (pamphlets or statements) will be visually appealing at an excellent bank. Aspect 2 - Reliability When excellent banks promise to do 5 something by a certain time, they do. When a customer has a problem, excellent 6 banks will show a sincere interest in solving it. Excellent banks will perform the service right 7 the first time. Excellent banks will provide the service at 8 the time they promise to do so. Excellent banks will insist on error free 9 records. Aspect 3 - Responsiveness Employees of excellent banks will tell 10 customers exactly when services will be

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performed. Employees of excellent banks will give 11 prompt service to customers. Employees of excellent banks will always be 12 willing to help customers. Employees of excellent banks will never be 13 too busy to respond to customers' requests. Aspect 4 - Assurance Score The behaviour of employees in excellent 14 banks will instil confidence in customers Customers of excellent banks will feel safe in 15 transactions. Employees of excellent banks will be 16 consistently courteous with customers. Employees of excellent banks will have the 17 knowledge to answer customers' questions. Aspect 5 - Empathy Excellent banks will give customers 18 individual attention. Excellent banks will have operating hours 19 convenient to all their customers. Excellent banks will have employees who 20 give customers personal service. Excellent banks will have their customers' 21 best interest at heart. The employees of excellent banks will 22 understand the specific needs of their customers.

Date: Place: Signature

Thank you for sharing your views and giving your valuable time. With Regards

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