CRITICAL ANALYSIS OF PROFIT & LOSS A/c.
4.1 Introduction
4.2 Groupwise analyses
4.2.1 The Cosmos Co-operative Bank Ltd.
4.2.2 Janata Sahakari Bank Ltd.
4.2.3 The Shree Suvarna Sahakari Bank Ltd.
4.2.4 Bhagini Nivedita Sahakari Bank Ltd.
4.2.5 Vidya Sahakari Bank Ltd.
4.^.6 Bharati Sahakari Bank Ltd.
4.2.7 Shivajirao Bhosale Sahakari Bank Ltd.
4.2.8 Sampada Sahakari Bank Ltd.
4.2.9 Jijamata Mahila Sahakari Bank Ltd.
4.2.10 Shree Laxmi Co-operative Bank Ltd.
4.2.11 Defence Accounts Co-operative Bank Ltd.
4.2.12 Pune Municipal Corporation Servants Co-operative Urban Bank Ltd. 4.2.13 Lokseva Sahakari Bank Ltd. CHAPTER -IV
CRITICAL ANALYSIS OF PROFIT & LOSS A/c.
4.1 INTRODUCTION:
The end on working results of banks are reflected in Profit and
Loss Account wherein are summarized various income and expenditure heads. Profitability of bank is primary concern to all to keep banking activity ongoing as profitable venture. The banks making more profits and distribution of it by way of dividend are preferred by investors. However restrictions on dividend distribution as per act as an impediment on co-operative banks, a profit makes more funds available to those banks for strengthening/widening its asset base. More profit leads attracting more business to bank.
Recovery of loans and iriterest on them also has vital impact on banks profitability. Therefore, Non-performing Assets {NPA} management also becomes an important part of prudent banking and banks are encouraging borrowers for one time settlement of these NPA’s. Banks cannot afford to keep its money blocked for longer time in such assets which have adverse bearing on banks* profitability.
Profit and loss account is an important financial statement as it represents snapshot of the organizational activities at the end of a year. In other words, profit and loss account reveal how the bank has prospered under the leadership of the then existing management. In short it is a statement which is the medium of evaluation of management performance. It is important for all those
7 0 who are concerned with the management of the bank. The profit and loss account shows net results of the bank’s operation during an accounting period. The basic purpose of preparation of profit and loss account is to ascertain the net profit earned or net loss incurred by the bank as a result of bank’s operations during an accounting period.
It IS prepared and presented with a view to recording, reporting and reviewing the progress made or the results achieved by the bank. It reflects or focuses the combination of facts and figures, which are based on the recording the business transaction, accounting principles and conventions, competence, integrating, honesty and sincerity of persons involved in the preparation and presentation of such statements. One can know the financial position and soundness of the bank business from these statements.
Profit and loss account takes into account those revenue and expenditure items which are related to management of the bank.
These expenses relate to conduct of the bank. The items which are taken into account in a Profit and Loss A/c. and which would increase or decrease the quantum of Net Profit or Net Loss, which are as under:
7 I DEBIT SIDE
1. Interest paid on Deposits & Borrowings
2. Salary and Allowances and other Welfare Expenses for the staff.
3. Director’s and Local Committee member’s Fees and Allowance
4. Rent, Taxes, Insurance and Lighting
5. Legal Charges
6. Postage, Telegram and Telephone Charges
7. Audit Fees
8. Depreciation 8s Repairs
9. Stationary, Printing 85 Advertisement
10. Loss from Sale or dealing with Non-banking Assets
11. Other Expenditure
12. Provisions
13. Net Profit transferred to Balance Sheet
CREDIT SIDE
L Interest 8& Discount on Loans & Investments.
2. Commission, Exchange and Brokerage
3. Subsidies and donations
4. Income from non banking Assets
5. Other Assets
6. Net Loss CLOSURE:
The profit and loss account is closed by transferring available balances to balance- sheet after appropriations.
4.2 GROUPWISE ANALYSIS:
In this chapter the researcher has tried to analyze the profit and loss account i.e. income statement of the selected urban co operative banks. There are 63 urban co-operative banks registered in Pune district during the study period. Out of these 63 banks for analysis, banks are grouped in following categories:
A. Urban Co-operative Banks having deposits more than Rs. 1,000 crores.
There are three urban co-operative banks in this group. Out of which following two banks are selected for detail analysis.
1. The Cosmos Co-operative Bank Ltd. 2. Janata Sahakari Bank Ltd.
B. Urban Co-operative Banks having deposits less than Rs. 1000/- crores but more than Rs. 100 crores.
There are fourteen urban co-operative banks in this group.
Out of which following four banks are selected.
1. The Shree Suvarna Sahakari Bank Ltd. 2. Bhagini Nivedita Sahakari Bank Ltd. 3- Vidya Sahakari Bank LTd. 4. Bharati Sahakari Bank LTd.
7'4 C. Urban Co-operative Banks having deposits less than Rs. 100 crores.
There are forty six urban co-operative banks in this group.
Out of v^^hich following seven Banks are selected,
1. Shivajirao Bhosale Sahakari Bank Ltd.
2. Sampada Sahakari Bank Ltd.
3. Jitamata Mahila Sahakari Bank Ltd.
4. Shree Laxmi Co-operative Bank Ltd.
5. Defence Accounts Co-operative Bank Ltd.
6. Pune Municipal Corporation Servants Co-operative Urban Bank Ltd.
7. Lokseva Sahakari Bank Ltd.
For the analysis following tools and techniques are used.
1. Trend analysis
2. Inter bank comparison
3. Ratio Analysis
4. Common size statement
Bank Profit and Loss A/c. is analyzed with the help of following ratios.
i) Net Profit to Total Income ii) Operating Profit to Working Fund iii) Operating Expenses to Total Income iv) Provisions to Total Income While analyzing the Profit and Loss A/c. in this chapter financial years are mentioned as per closing date i.e. for 2000-2001 = 2001, for 2001-2002=2002, for 2002-2003=2003.
4.2.1 THE COSMOS CO-OPERATIVE BANK LTD., PUNE
Bank was established on January 1906. Cosmos co operative bank is the oldest co-operative bank in Pune district and which has got Multi-State scheduled bank status. Bank has completed 97 years and reaching towards its century soon. The
Cosmos co-operative bank Ltd. is the second largest co-operative bank in Pune in the year 2001 having deposits of Rs. 171255.37 lakhs. The performance of the bank shows following picture in the last three years.
TABLE - 3
BANK PERFORMANCE - COSMOS CO-OP. BANK
Sr. Particular 2001 2002 2003 No. 1 Members 42685 32305 35910 2 Branches+Ext. Counter 35+6 38+4 41+5 3 Total Employees 1196 1244 1237 4 Audit Class A A ■k_ 5 Employee Productivity 228 259 279.40 (*Not applicable being Multi-State scheduled bank)
In the year 2002 bank stood first in Pune district so far deposits are concerned. The Total Deposits in 2002 was raised up to
Rs. 209193.44 lakhs and in the year 2003 bank maintains its first number in this context because deposits increased in the year up to
Rs. 226283 lakhs. The bank has maintained its audit class 'A' continuously. The bank has shown progress in branches as well as in deposits and employee’s productivity without increasing a number of employees.
TABLE - 4
Analytical table of Profit & Loss A/c.
Item 2001 2002 2003 A. Incom e i) Interest 86 Discount 21777 27701 32369 ii) Com m ission & Exchange 605 570 650 iii) Other Income 522 154 215 Total Incom e (i + ii + iii) 22904 28425 33234 B. Expenditure i) Interest Expended 15921 18030 19660 ii) Salary & Allowance 1936 2613 2579 iii) Other Expenses 1320 1554 2054 iv) Provisions & Contingencies 1260 3389 5935 Total Exp. (i+ii+iii+iv) 20437 25586 30228 Net Profit 2467 2823 3006 Operating Profit 3727 6212 8970 Operating Expenses 19177 22197 24293
4.2.1.A Total Income
TOTAL INCOME From the above statement and graph, it shows that the total income of the Cosmos co-operative bank is increased every year. Income graph shows that the total income in the year 2002 is increased by 24.10% and in the year 1 2 3 2003 it is increased by 45.10% S eriesi 22904 28425 33234 compare to the year 2001 and total mcome in the year 2003 is increased by 16.92% compare to the year 2002, The total income of the cosmos bank is increasing every year but bank couldn’t maintain the percentage of increase in the year 2003. But the decrease is marginal and by and large the bank shows progressive trend in its income.
INCOME DIVISION 2001 In the year 2001 graph shows that out of Total Income 95% income is income from interest and discount. 3% income from 95% commission and exchange and 2% is □ i) Interest & Discount other income. That means only 5% ■ ii) Commission & Exchange □ ill) other Income income is non-interest income.
In the year 2002 the income from interest and discount is 97% and income from commission and exchange is 2% and 1% is other income and position remains the same in the year 2003.
INCOME DIVISION 2003 ^2% / It is observed from above comparison that share of income from interest and 97% discount is more in the year 2002 and 2003 than 2001. There is no much □ 1) Luerest &Discouiu 1 B II) Commission AExchanjiC variation in other heads of income. j □ ui) Olher Income 4.2.l.B Total Expenses
TOTAL EXPENSES The above statement and graph shows that the total expenses of the Cosmos co-operative bank is increased every year. Expenses graph shows that the total expenses in the year 2002 are increased by 25.19% and in the year 2 I 3 i 1 2003 it is increased by 47,90% j Series 1j 20437 25586.00 1 30228 compare to the year 2001 and total expenses in the year 2003 increased by 18.14% compare to the year 2002.
The total expenses of the Cosmos co-operative bank are increasing every year but bank has controlled the total expenses in the year 2003 because the increase in the expenses in the year 2003 is just 18.14% compare to the year 2002.
Out of total Expenses in the year 2001, EXPENSES DIVISION 2001 79% expenditure is on interest paid and 21% expenditure is non-interest expenditure. In non-interest expenditure, 79% expenditure on salary and allowances is □ i) Interest Expended ■ li) Salary & Allowance 9%, other expenses 6% and provisions □ liil other Expenses and contingencies 6%. □ IV) Provisions & Contingencies
78 EXPENSES DIVISION 2002 13% 6%- In the year 2002 interest expenditure is
10% 71%, salary and allowances 10%, other expenses 6% and provisions and contingencies 13%. In the year 2003 71% interest expenditure is 64% salary and i □ II Interest Expended j ■ il) Salary & Allowance allowance 9%, other expenses 7% and I □ ill) Other Expenses O iv) Provisions & Contingencies provisions and contingencies 20%.
From the graph its reveal that bank has EXPENSES DIVISION 2003 20%
7 % controlled its expenditure on salary and allowances as well as other expenses, 9 % but there is a notable increase in provisions and contingencies. In the □ i) Interest Expended B ii) Salary & Allowance year 2001 it was 6%, in the year 2002
□ ill) Ottier Expenses
□ iv) Provisions & Contingencies 13% and in the year 2003 20% out of total expenditure. It indicates that share of provisions out of total expenditure is increased by 7% every year. The increase due to compulsory provisions to be made for Non performing Assets (hereinafter called NPA) as per RBI guidelines.
4.2.1. C. Ratio Analysis
TABLE - 5
COSMOS CO-OPERATIVE BANK LTD. 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 10.77 9.93 9.04
b) Operating Profit to Working fund 1.91 2.63 3.37 c) Operating Expenses to Total Income 83.72 78„08 73.09 d) Provisions to Total Income 5.50 11.92 17-85 1 j
79 a) Net Profit ratio shows the stability .in profit of the bank though it is marginally declining. The declining in the ratio is due to increase in provision ratio. Though the bank has controlled its operating expenses ratio still it could not maintain its profit ratio due to provisions. b) Operating Profit to working fund ratio increased steadily. c) Operating Expenses to total income ratio showing decreasing trend that means bank has kept good control on its operating expenses. d) Provisions to total income ratio is increasing veiy fast. This is due to RBI guide lines for making provisions for NPAs.
80 4.2.2 JANATA SAHAKARI BANK LTD.,PUNE
Bank was established on 18^^ October 1949. The Janata
Sahakari bank is active in urban co-operative banking sector in
Pune since last 54 years. This is one of the oldest co-operative bank in Pune district. The Janata Sahakari Bank Ltd. is the second largest co-operative bank in the year 2000-01 having deposits of Rs.
148758.15 lakhs. The performance of the bank shows following picture in last three years.
TABLE - 6
BANK PERFORMANCE - JANATA SAHAKARI BANK
Sr. Particular 2001 2002 2003 No. 1 Members 45305 48608 55599 2 Branches+Ext. Counter 38+3 38+3 38+3 3 Total Employees 1197 1186 1132 4 Audit Class C ---- 5 Employee Productivity 268.58 235 234.75 TABLE - 7 Analytical Table of Profit and Loss A/c.
(Rs. in Lakhs)
Item 2001 2002 2003 A. Incom e i) Interest & Discount 17745 17521 15824 ii) Commission & Exchange 241 271 193 iii) Other Income 1225 2922 2902 Total Incom e (i + ii + iii) 19211 20714 18919 B. Expenditure i) Interest Expended 13693 15400 14838 ii) Salary 8s Allowance 2477 2652 2513 iii) Other Expenses 1055 1212 1144 iv) Provisions & Contingencies 1059 6581 3480 ! Total Exp. (i+ii+iii+iv) 18284 25845 21975 Net Profit 927 5131 3056 Operating Profit 1986 1451 424 11------Operating Expenses 17225 19264 18495
Hi 4.2.2.A. Total Income
From the above statement and TOTAL INCOME graph, it shows that the total income of the Janata Sahakari Bank is increased in the year 2002 compare to the year 2001, but it is decreased in the year 2003 compare to previous year. Income graph shows that the total income in the year
Seriesl! 19211 I 20714 ; 18919 2002 is increased by 7.82% and in the year 2003 it is decreased by 8.67% compare to the previous year.
In the year 2001 graph shows that out of total income 93% income is income from interest and discount, 1% income from commission and exchange and 6% is other income. That means only 7% income is non-interest income.
INCO-ME DIVISION 2002 14% 1% - In the year 2002 the income from interest and discount is 85%, income from commission and exchange 1% and 14% is other income. □ i; Interest & D iscou tit
■ ii) Com mission &. RxchaiiKe
□ ill) Other Income
82 INCOME DIVISION 2003 ^ 15%
In the year 2003 the income from interest and discount is 84%, income
8 4 % from commission and exchange 1%, and □ i) Interest & D scount ■ II) Commission & Exchange 15% is other income.
□ ill) Other Income
The above inter-bank comparison shows that the other income due to profit on sale of securities is increasing more than seven times. That means bank has sold out securities in large numbers. But the income from interest and discount is decreasing eveiy year, which is serious thing so far as bank income performance is concerned. Decrease in interest income reveals that banking business is not satisfactory.
It is surprising that though advances of the bank are increased from Rs. 1090 crores in the year 2001 to Rs. 1136 crores in the year 2002, still the interest income is decreased from Rs. 177 crores in the year 2001 to Rs. 175 crores in the year 2002. So its shows, though the advances are increased by Rs. 46 crores but interest income is decreased by Rs. 2 crores. It shows that the recovery of interest income is not satisfactory in the year 2002. The same trend is continued in the year 2003, because interest income is reduced from Rs. 175 crores in the year 2002 to Rs. 158 crores in the year 2003. Here advances are also decreased from Rs 1136 crores in the year 2002 to Rs. 1088 crores in the year 2003. That means in the year 2003 business of the bank is also decreased along with decrease in interest income. So the year 2002 and 2003 are very crucial for this bank. Though the other income of the bank is increased during the year 2002 and 2003 as compare to the year 2001 but it is due to sale of securities. Therefore, bank has earned net profit in the year 2001 of Rs. 9 crores, but bank suffered a great net loss of Rs. 51 crores in the year 2002 and Rs. 31 crores in the year 2003. In both these years i.e. 2002 and 2003 there was operating profit but due to heavy provisions have to be made picture converted into net loss in these two years.
4.2.B TOTAL EXPENSES
From the above statement and graph, TOTAL EXPENSES it is clear that the total expenses of the Janata Sahakari Bank Ltd. are increased in the year 2002 but decreased in the year 2003 compare to previous year. Expenses graph shows that the total expenses in the year 2002 are increased by 41.35% and in the year 2003 are decreased iSeriesl! 18284 i 25845 ^ 21975 i by 14.97% compare to the previous year.
EXPENSES DIVISION 2001 Out of total expenses in the year -6% ^6% 14% - 2001, 74% is interest expenditure and 26% is non-interest expenditure. In non-interest expenditure, expenditure on salary and allowances is 14%, □ i) interest Expended ■ ii) Salary & Allowance other expenses 6% and provisions and □ ill) Other Expenses □ iv) Provisions & C o n tin g e n c ie s contingencies 6%.
g4 Out of total Expenses in the year EXPENSES DIVISION 2002 25% 2002, 60% expenditure is on interest paid and 40% expenditure is non 5% interest expenditure. In non-interest
10% expenditure, expenditure on salary
60% and allowances is 10%, other □ I) Interest Expended ■ lit Salar\'& Allowance j expenses 5% and provisions and □ 111) Other Expenses I
0 IV) Provisions &Contingcncics I contingencies 25%.
EXPENSES DIVISION 2003 In the year 2003 out of total , 16% expenditure, interest expenditure is 58% and non interest expenditure is 32%. Out of non-interest expenses 11% expenses for salary and allowances, 5%
□ i) Interest Expended 68% B ii) Salary&Allo\vance ' other expenses and 16% provisions and □ iii) Other Expenses □ IV) Provisions &Contingeiicies | contingencies.
Bank has reduced share of salary expenditure out of total expenditure from 14% in the 2001 to 10% and 11% in the year 2002 and 2003 respectively. Other expenditure of the bank is going up in the year 2002 “and coming down in the year 2003 compare to previous year. But there is a tremendous increase in provisions and contingencies from 6% (in the year 2001) to 25% (in the year 2002) and 16% (in the year 2003) out of total expenditure. So it indicates that share of provisions in total expenditure is increased in the year 2002 and decreased in the year 2003 as compare to the previous year’s share. So it shows that bank has kept good control on it’s over dues and bank was successful in itS recovery of dues during the year 2003 as compare to previous year. From this analysis one has to accept that the year 2002 is •bad patch for this bank in its life.
4.2.2. C Ratio Analysis
TABLE - 8
JANATA SAHAKARl BANK LTD. 2001 2002 2003 (in %) (in %) (in %) a) Net Profit/Net Loss to Total Income 4.82 -24.77 -16.15 b) Operating Profit to Working Fund 1.15 0.74 0.22 c) Operating Expenses to Total Income 89.67 93.00 97.75 d) Provisions to Total Income 5.51 31.77 18.39
a) In the year 2002 and 2003 there is a net loss. In the year 2001 net profit to total income is just 4.82% and in the next two years bank shows heavy losses. Particularly in the year 2002 the loss is 24.77% which is 1/4^^ of the total income. Needless to say that financial situation of the bank in these two years is serious. The loss percentage is declining is the only ray of favorable hopes.
b) Though there is an operating profit but it is declining continuously, which highlights unfavorable position of the bank. c) Operating expenses ratio is also increasing in all the years. This shows that bank is unable to keep control on its operating expenses. d) Provisions to total income ratio is showing tremendous hike in the year 2002 and 2003 compare to the year 2001 and it is cognizable.
86 4.2.3 THE SHREE SUVARNA SAHAKARI BANK LTD.,
Bank was established on 11^^ August 1959. Bank is working last 34 years. The bank is under the control of renowned industrialist Mr. Dnyaneshwar Agashe, of Pune. Bank has started its branches in Mumbai at Sion and Dadar. The Adarsha Janata
Q Sahakari Bank Ltd., Mumbai was merged in this bank from pt
November 2000. Bank has adopted the policy to strengthen the existing branches and not to expand new branches in near future
The performance of the bank shows the following picture in last three years.
TABLE - 9
BANK PERFORMANCE - SHREE SUVARNA SAHAKARI BANK
Sr. Particular 2001 2002 2003 No. 1 Members 6048 5932 6617 2 Branches 12 13 13 3 Total Employees 385 399 401 4 Audit Class AA -- 5 Employee Productivity 224.41 272 308.13
TABLE -10
Analytical Table of Profit and Loss A/c.
(Rs. In Lakhs)
Item 2001 2002 2003 A. Incom e i) Interest & Discount 5828 7449 9059 ii) Commission & Exchange 96 159 66 iii) Other Income 80 395 547 i Total Incom e (i + ii + iii) 6004 8003 9672 if i I B. Expenditure i) Interest Expended 4712 6253 7254 ii) Salary & Allowance 450 504 508 iii) Other Expenses 352 465 425 iv) Provisions & Contingencies 114 567 1166 Total Exp. (i+ii+iii+iv) 5628 7789 9353 N et Profit 366 215 320 Operating Profit 489 782 1485 Operating Expenses 5514 7221 8187
4.2.3.A TOTAL INCOME
From the above statement and TOTAL INCOME graph, it shows that the total
income of The Shree Suvarna
Sahakari Bank Ltd. is increasing
every year. Income graph shows
that the total income in the year
2002 is increased by 33.29% and
in the year 2003 it is increased by
20.85% compare to the previous 8003 9672 year. It shows that increase of total income in the year 2002 is showing highly satisfactory position because total income in this year is increased near about 1/3'’'^ (i.e.
33.29%) compare to the year 2001. But same progress is not shown in the year 2003, though the total income graph shows increasing trend in all these three years. The total income in the year 2002 is increased by 1/3^^ due to heavy increase in the income from profit on sale of investments. It was just Rs. 52,68,691/- in the year 2001 and it has gone up to Rs. 3,60,77,250/- in the year 2002. INCOME DIVISION 2001 2% In the year 2001 graph shows that out of
total income 97% income is income from
97% -- interest and discount, 2% income from
commission and exchange and 1% is □ i) Interest & Discount ■ INCOME DIVISION 2002 -2% In the year 2002 the income from interest 93% and discount is 93% and income from commission and exchange is 2% and 5% □ ij Interest & Discount is other income. ■ ii) Commission &, Exchange □ lii! Other Income ' INCOME DIVISION 2003 In the year 2003 the income from interest and discount is 93% and income from 93% — commission and exchange 1% and 6% is □ i| Interest & Discount other income. B >i) Commission 8t Exchange I □ n il Other Income Comparison shows that income from interest and discount is increased in the year 2002 and 2003 compare to previous year. The percentage of other income shows tremendous increase in the year 2002 compare to the year 2001. This increasing trend in other income continued in the year 2003 too. Income from commission 89 and exchange is increased by 65.63% in the year 2002 compare to previous year but it has decreased by 58.49% in the year 2003 compare to the year 2002. 4.2.3.B TOTAL EXPENSES Graph shows that total expenses are increasing every year. In the year 2002 expenses are increased by 38.40% and in the year 2003 total expenses are increased by 20.08% compare to previous year. Expenses are increased in relation to income. Bank business is enhanced, therefore, expenses shows upward trend. EXPENSES DIVISION 2001 Out of total expenses 84% expenses are 6% \ t ) l 8 4 ° / for interest expended, 8% for Salary and allowances, 6% for other expenses and □ il Interest Expenaed 2% for Provisions & Contingencies for O il) Salary & Allowance the year 2000-0 1. □ liij OtJier Expenses □ iv) Provisions 86 Contingencies ------—------ EXPENSES DIVISION In the year 2002 graph shows 81% 200'^''^ expenses incurred for Interest expended out of total expenses. 6% for salary and 81%- allowances, 6% for other expenses and D i) intereM Hxpondcd ■ u) Salary &Allov.aiitc □ III) Other Lxpeiisoi. □ iv) Provisions ACotitinncncics i 90 7% for provisions and contingencies out of total expenses. EXPENSES DIVISION 2003 5% In the year 2003 graph shows that out of total expenses 78% expenses are on 78%^ 12% interest, 5% on salary and allowances, Oi) Interest Expended 5% for other expenses and 12% for ■ li) Salary & Allowance □ i») O th er E x pe n se s provisions and contingencies. □ IV) Provisions &('oiUingeiKicb Out of total expenditure, percentage of interest expenditure is decreasing every year. It has gone down from 84% to 81% and to 78% in the 2001-02-03 respectively. The percentage of expenditure on salary is also reducing every year i.e. from 8% to 6% and from 6% to 5% in the year 2001-02-03 respectively, though the number of employees is increased. It shows that bank has kept good control on the expenditure on salary and allowances, whereas there is no much change in other expenses. There is a sizable increase in the percentage of expenditure on provisions and contingencies. Out of total expenses in the year 2001 provisions made only 2% but in the year 2002 it have gone up to 7% and in the year 2003 it is reached to 12%. The provision expenditure is increasing due to NPA guidelines laid down by RBI. Therefore, it has affected on net profit adversely. The net profit of the bank is decreased from Rs. 3 crores 66 lakhs in the year 2001 to Rs. 2 crores 15 lakhs in the year 2002 and it has increased in the year 2003 to Rs. 3 crores 20 lakhs, but compare to year 2001 it is still less by 46 lakhs. 9 ), 4.2.3.C. Ratio Analysis TABLE -11 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 6.10 2.69 3.31 b) Operating Profit to Working fund 0.88 1.17 1.87 c) Operating Expenses to Total Income 92 90.22 84.64 d) Provisions to Total income 1.90 7.08 12.05 a) Net profit ratio shows tremendously decrease in the year 2002 compare to the year 2001 i.e. from 6.10% to 2.69%. It is due to heavy provisions were to be made for non-performing assets. Bank was successful in increasing in the net profit ratio in the year 2003 compare to previous year, but still ratio is not yet reached to the ratio of the year 2001. b) Operating Profit to working fund ratio is increasing every year. That means bank’s operating profit is increasing every year but due to heavy provisions for NPA net profit ratio is decreasing. c) Operating expenses to total income ratio shows declining trend due to good control on operating expenses, but this picture is visible due to decrease in expenditure on interest expended. This may be due to decrease rate of interest on deposits. d) Provision to total income ratio is showing upward trend. This picture is observed because of new norms of NPA provisions laid down by RBI. This bank is also not exception to this increased trend of NPA provisions. 4.2.4 BHAGINI NIVEDITA MAHILA SAHAKARI BANK LTD., PUNE This bank is established on February 1974. The bank has completed 30 years of its life. This is the first women co-operative bank in Pune district. Management of this bank is totally controlled by women only. All 18 directors are women directors. TABLE - 12 BANK PERFORMANCE BHAGINI NIVEDITA MAHILA SAHAKARI BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 22833 23532 23699 2 Branches 10+1 10+1 10+1 3 Total Employees 294 296 282 4 Audit Class A A A 5 Employee Productivity 146.07 149 149.65 I TABLE -13 Analytical Table of Profit and Loss A/c. (Rs. In Lakhs) Item 2001 2002 2003 A. Incom e i) Interest & Discount 3657 3866 3850 ii) Com m ission & Exchange 5 7 9 iii) Other Income 306 355 299 Total Income (i + ii + iii) 3968 4228 4158 B. Expenditure i) Interest Expended 2811 2836 2716 ii) Salary & Allowance 354 410 436 • iii) Other Expenses 174 184 209 iv) Provisions & Contingencies 125 167 284 Total Expo 3464 3598 3645 Net Profit 503 629 513 Operating Profit 628 796 797 Operating Expenses 3340 3432 3361 93 4.2.4.A. TOTAL INCOME TOTAL INCOME Graph shows that the total income of this bank is increased by 6.55% in the 4300 4250 year 2002 compare to the year 2001 4200 4150 but it is decreased by 1.66% in the 4100 4050 4000 year 2003 compare to the year 2002. 3950 3900 So the income graph shows up and 3850 3800 down position. The year 2002 can be 3 said as a successful year because iSerieslI 3968 i 4228 4158 total income of the bank is raised by Rs. 250 lakhs in this year compare to previous year but this position bank could not maintain in the year 2003. All income heads showing declining trend in the year 2003 except income from commission and exchange which is increased by Rs. 2 lakhs. INCOME DIVISION 2001 Out of total income 92% income is from i interest and discount and 8% is from 9 2 % other sources in the year 2001. Though there is an income from commission and □ i) Interest & Discount | ■ ii) Commission & Exchange| exchange but it is very negligible □ lii) o th e r Income compare to total income. It is less than 0.5% out of total income and hence graph does not recognize that income. 94 INCOME DIVISION 2002 -0% In the year 2002 out of total income 92% income is from interest and 92% discount and 8% from other sources. □ () Interest & Dscount That means situation remains the same ■ ii) C om m ission & E x ch a n ge I in this as per last year. □ lii) Other Income INCOME DIVISION 2003 In the year 2003 out of total income 93 %-- 93% income is from interest and •} discount and 7% from other sources. It O i| Interest & Discount ! has been observed that in the year 2003 I ii) Commission & Exchtmge out of total income, income from other □ iii) other Income sources is reduced by 1% but income from interest and discount is increased by 1% compare to last two years. That means income percentage from different sources in the total income remains more or less same. There are no much variations in this division of income. 4.2.4.B. TOTAL EXPENSES: TOTAL EXPENSES The Expenses graph shows that the total 3700 3650 expenses of this bank is increased by 3600 3550 3.87% in the year 2002 and increased by 3500 3450 1.31% in the year 2003 compare to 3400 previous year. 3350 i Series 1 3464 3598 ; 3645 95 Graph shows that the out of total EXPENSES DIVISION 2001 iq % expenses 81% expenses incurred for interest expended, 10% on Salary and 81% wages, 5% are for other purposes and i □ i) Interest Expended ■ li) Salary 86 Allowance 4% for provisions and contingencies in □ iii) Other Expenses the year 2001. O iv) Provisions & Contingencies EXPENSES DIVISION In the year 2002 graph shows that out 11% 2002 ; y-5% of total expenses 79% expenses j 5 % incurred for interest expended, 11% on 7 9 %I \ . ^ y Salary and wages, 5% for other Q i) Interest Expended B ii) Salary & Allowance purposes and 5% for provisions and □ iii) Other Expenses contingencies. EXPENSES DIVISION 2003 In the year 2003 out of total expenses 12% 74% expenses are for interest paid and 74%-^ 12% for salary and allowances. Other expenses are 6% and provisions and □ i) Interest Expended ■ ii) Salary & Allowance contingencies 8%? It shows that bank □ iii) Other Expenses is successful in maintaining its □ iv) Provisions & Contingencies provisions within the limit. In the first two years provisions and contingency amount is less than 5% which indicates sound position of the assets, because provisions includes provision for non-performing assets. Bank has shown profit trend continuously. But in the year 2003 the total Q profit is decreased from Rs. 629 lacks to Rs. 513 lakhs. That means profit is decreased by Rs. 116 lakhs in the year 2003 than year 96 2002. This profit is decreased because provisions for non performing assets are increased by Rs. 117 lakhs. So bank has to take care of its non-performing assets though it does not show worried position. 4.2.4.C RATIO ANALYSIS TABLE - 14 BHAGINI NIVEDITA MAHILA SAHAKARI 2001 2002 2003 BANK LTD. (in %) (in %) (in %) a) Net Profit to Total Income 12.70 14.89 12.35 b) Operating Profit to Working fund 2.07 2.56 2.49 c) Operating Expenses to Total Income 97.47 81.17 80.83 d) Provisions to Total income 3.15 3.95 6.83 a) Net Profit ratio shows the up and down position in the profit earning capacity of the bank. Net Profit ratio is declining in the year 2003 due to increase in provisions ratio. Therefore, there is an adverse effect on net profit to total income ratio in the year 2003. b) Operating profit to working fund ratio is increased in the year 2002 compare to the year 2001 but decreased in the year 2003 compare to the year 2002. That means bank had kept control on operating expenses in the year 2003 compare to last year. c) Operating expenses ratio is decreasing every year. It has decreased from 97.77% m the year 2001 to 81.17% in the ^7 year 2002 and 80.83% in the year 2003. It shows a bank has kept good control on its operating expenses. d) Provisions to total income ratio is also increasing eveiy year. But in the year 2002 though provisions ratio is increased but still profit ratio is also increased. This situation bank could not maintain in the year 2003 due to heavy raise in provisions. 98 4.2.5 VIDYA SAHAKARI BANK LTD. This bank is established on 8*^1^ April 1974. The Bank has completed 30 years of its life. This is the first bank formed by college teachers in Pune city. Founder members of this bank were working as lecturers in the different colleges in Pune city. This bank was controlled and run by the teachers in the earlier period. Slowly the control of the bank went in the hands of some people outside the teaching profession, but still today there are some teachers working as the directors of this bank. TABLE -15 BANK PERFORMANCE - VIDYA SAHAKARI BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 22426 23564 25637 2 Branches 11 11 + 1 12 3 Total Employees 198 191 183 4 Audit Class A A A 5 Employee Productivity 150.72 178 197.80 TABLE -16 Analytical Table of Profit and Loss A/c. (Rs. In Lakhs) Item 2001 2002 2003 A. Incom e i) Interest & Discount 2543 2728 3074 ii) C om m ission 86 Exchange 40 53 43 iii) Other Income 30 120 53 Total Income (i + ii + iii) 2613 2902 3171 B. Expenditure i) Interest Expended 1935 2139 2293 ii) Salary & Allowance 321 365 297 iii) Other Expenses 145 207 202 iv) Provisions & Contingencies 67 96 254 Total Exp. 2468 2807 3046 Net Profit 144 95 124 Operatmg Profit 212 191 379 Operatmg Expenses 2401 2711 2793 99 4.2.5.A TOTAL INCOME Total income of the bank is increased by 11.06% in the year 2002 and in the year 2003 it is increased by 9.27% compare to previous year. Total income of the bank is showing increasing trend every year. The average rate of increase can be said 10%. o INCOME DIVISON 2001 Out of the total income, percentage of income from interest and discount is 97%, from commission and exchange 2% and other income is 1% at the end of the □ i) Interest & Dscount ■ ii) Commission & Exchange year2001. Thc^Gyo □ iii) Other Income INCOME DIVISION 2002 At the end of the year 2002 out of total income, the percentage of income from interest and discount is 94%, from 94% commission and exchange 2% and other income is 4%. In this year income from □ i) Interest & Discount B ii) Commission & Exchange other source is increased up to 4% due □ iii) Other Income i to profit on sale of Govt. Securities. INCOME DIVISION 2003 At the end of the year 2003 out of total 97%- income, the percentage of income from interest and discount is 97%, from commission and exchange 1% and other □ i) In te re st & D isco u n t ii) C om m ission & E xch a n g e income is 2%. That means there is no □ iii) O th er Incom e much change in the percentage of 100 income from different heads except other income. 4.2.5.B TOTAL EXPENSES TOTAL EXPENSES Total expenses of the bank are 3500 ever increasing. Graph shows that 3000 2500 the total expenses are increased by 2000 13.74% at the end of the year 2002 1500 1000 and 8.51% at the end of the year 2003 500 0 compare to previous year. Bank has 2 Series 1 i 2468 2807 3046 controlled its expenditure in the year 2003. The expenditure for provisions and contingencies is raised by 164,58% in the year 2003 and 43.28% in the year 2002 compare to previous year. Here increase percentage in the year 2003 is surprising and serious. TOTAL EXFCNSES 2001 , 13% Out of total expenses 78% expenses on 6% interest expended, 13% on Salary and allowance, 6% are other expenses, and 3% 3% are provision and contingencies at the □ i) Interest Expended ■ ii) Salary & A llow ance i end of the year 2001. □ ill) other Expenses O iv) Provisions & Contingencies EXPENSES DIVISION 2002 13% Out of total expenses 77% expenses on interest expended, 13% on Salary and allowance, 7% are other expenses and 3% 77% Q i) Interest Expended are provisions and contingencies at the ■ ii) Salary & Allow ance □ III) Other Expenses end of the year 2002. D IV) Provisions & Contingencies EXPENSES DIVISION 2003 10% Out of total expenses 75% expenses on 7 % interest expended, 10% on Salary and allowance, 7% are other expenses and □ i) Interest Expended 8% are provisions and contingencies at I ii) S alary & A llo w a n c e i the end of the year 2003. □ iil) O ther Expenses □ !v) Provisions & Contingencies- From the above graphs it is clear that out of total expenditure, expenditure for provisions and contingencies are increasing in the year 2003 by 5%. It was 3% during 2001 and 2002 but it is 8% in C the year 2003. This is the only notable change in tKe expenditure side due to NPA guidelines of the RBI. At the same time it is also clear that bank has controlled its salary expenditure in the year 2003. Expenditure on salary is reduced by 18.63% in the year 2003 compare to previous year. 4.2.5.C RATIO ANALYSIS TABLE - 17 VIDYA SAHAI^RI BANK LTD. 2001 2002 1 2003 (in %) (in %) (in %) a) Net Profit to Total Income 5.51 3.27 3.91 b) Operating Profit to Working fund 0.99 0.81 1.44 c) Operating Expenses to Total Income 91.88 93.41 88.04 d) Provisions to Total Income 2.56 3.30 8.01 102 a) Net profit ratio shows the declining trend in the profit earning capacity of the bank. Net Profit ratio is reduced from 5.51% in the year 2001 to 3.27% in the year 2002 and 3.91% in the year 2003. This ratio is declining due to increase in provisions. b) Operating profit to working fund ratio is decreased in the year 2002 compare to the year 2001 but increased in the year 2003 compare to the year 2002. That means bank had kept control on operating expenses in the year 2003 compare to last two years. c) Operating expenses ratio is showing down and up position. It has increased in the year 2002 and decreased in the year 2003 compare to previous year. From the above table it seems that bank has managed operating expenses efficiently in the year 2003. Taking into consideration increase in provisions, this is the right way bank has chosen to maintain its profitability. d) Provisions to total income ratio is also increasing eveiy year. Due to increase in provisions ratio there is an adverse effect on profit ratio of the bank. In the year 2003 bank has improved its position as far as net profit to total income is concern compare to previous year. 4.2.6 BHARATI SAHAKARI BANK LTD. Bharati Sahakari Bank Ltd. is registered on 8^^ September 1971 in Pune city. Bank has completed 33 years of his life. The bank was established by well-known political leader Dr. Patangrao Kadam who has remarkable work in educational field. He is also a founder of Bharati Vidyapeeth, which is recognized as a deemed university. This bank was awarded the status of a multi-state co operative bank in the month of April 1999. Bank has opened a branch at New Delhi in August 1999. The Reserve Bank of India vides their letter no. BR.861/16.05.00/2001-02 dated 17th May 2002 has considered the bank’s request of including bank’s name in the lind Schedule to the RBI Act 1934 w.e.f. 1®^ June 2002 and thus, this bank is now a multi-state scheduled co-operative bank. The bank could achieve the ‘scheduled status’ because of excellent co-operation it received from members, depositors and well wishers to management. Bank has its branches at Pune, Satara, Sangli, Solapur, Kolhapur, A’mad Nagr, Raigad, Thane and New Mumbai alongwith Delhi, "['he Total branches of the bank are 18 with two extension counters. Bank is still keeping aim to open new branches in future. Bank has awarded ‘A’ audit class last so many years. TABLE -18 BANK PERFORMANCE - BHARATI SAHAKARI BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 4547 4656 4638 2 Branches 18 18+1+2 18+2 3 Total Employees 181 182 187 4 Audit Ckiss AA * 5 Employee Productivity 130.12 150 156.02 1 (* Being Multi-state Scheduled Co-op. Bank not applicable) 104 TABLE - 19 Analytical Table of Profit and Loss A/c. (Rs. In Lakhs) Item 2001 2002 2003 A. Income i) Interest & Discount 2059 2099 2158 ii) Commission & Exchange 23 29 26 iii) Other Income 12 8 8 Total Income (i + ii + iii) 2094 2136 2192 B. Expenditure i) Interest Expended 1467 1502 1576 ii) Salary & Allowance 183 180 216 iii) Other Expenses 183 177 177 iv) Provisions & Contingencies 109 176 156 Total Exp. 1942 2035 2125 Net Profit 151 101 66 Operating Profit 301 277 222 Operating Expenses 1792 1859 1969 4.2.6.A TOTAL INCOME Total income graph showing continues increase in the income of the bank. Total income is increased by 2.01% in the year 2002 and 2.62% in the year 2003 compare to previous year. Out of total income, income from interest and discount showing steady increase trend. But income from commission and exchange is increasing by 26.09% in the year 2002 but decreased by 10.34% in the year 2003. Whereas other income decreased by 33.33% in the year 2002 and remained same in the year 2003 compare to previous year. 105 INCOME DIVISION 2001 Out of total income in the year 2001 98°/i. , income from interest and discount is 1% 98% and from commission and “ L l% exchange 1% and other income is also Q 1) Interest & Discount ■ ii) Commission & Exchange 1%. □ iii) other Income INCOME DIVISION 2002 & 2003 In the year 2002 and 2003 income 99% from interest and discount is 99% and I ^ 1 % from commission and exchange is 1%. ^ Lo% Other income is very negligible. □ 1) Interest & Discount ■ II) Commission & Exchange □ iii) Other Income 4.2.6.B TOTAL EXPENSES Total expenses of the bank has increased by 4.79% in the year 2002 and by 4.47% in the year 2003 compare to previous year. It shows that there is a continuous increase in the expenditure of the bank but increase percentage is reduced marginally in the year 2003 compare to previous year. Out of total expenses interest expenditure is increased by 2.39% in the year 2002 and 4.93% in the year 2003 compare to previous year. Where as salary expenditure is reduced by 1.64% in 106 the year 2002 and increased by 20% in the year 2003. So there is a heavy increase in salary expenditure in the year 2003 though there is no increase in the number of employees. Other expenditure is decreased by 3.83% in the year 2002 and its remains the same in the year 2003 compare to previous year. It is clear that bank has kept good control on other expenditure in the year 2003. Provisions are increased by 61.47% in the year 2002 and decreased by 11.36% in the year 2003 compare to previous year. Provision amount is reduced in the year 2003 because bank has not shown any provision for education fund and advance against salary in the year 2003 which was shown in the last two years. But provision for bad and doubtful debts is continuously increasing in the year 2002 and 2003 compare to the year 2001. EXPB4SES DIVISION 2001 ^ 9 % Out of total expenditure percentage of interest paid is 76% in the year 2001, 73% in □ i) Interest Expended ■ ii) Salary & AHowance the 2002 and 75% in the 2003. Expenditure □ iii) Other Expenses □ iv) Provisions & Contingencies on salary was 9% in the year 2001 and 2002 EXPENSES DIVISION 2002 ^9% and 10% in the year 2003. Other 9% 1 expenditure was 8%, 9% and 7% in these 9% three years respectively. □ I) Interest Expended ■ if) S ala ry & Allovv ance □ iii) Other Expenses a iv) FYovisions & Contingencies Provision trend is also stable, because TOTAL EXPB^SES 2003 provisions are made 8% in the year 2001 and 2002 and 7% in the year 2003. So far □ i) Interest Bcpended division of expenditure is concerned there is ■ ii) Saiary & Allowance □ ill) Other Expenses no much change in these three years. □ iv) FVovisions & Contingencies 107 4.2.6. C RATIO ANALYSIS TABLE - 20 1 BHARATI SAHAKARI BANK LTD. 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 7.21 4.82 3.15 b) Operating Profit to Working fund 1.95 1.53 1.15 c) Operating Expenses to Total Income 85.61 87.03 89.82 d) Provisions to Total Income 7.16 8.24 7.11 a) Net Profit ratio shows the downward trend in the profit earning capacity of the bank. Net profit ratio is declined from 7.21% in the year 2001 to 4.82% in the year 2002 and 3.15% in the year 2003. b) Operating profit to working fund ratio is decreased to 1.53% in the year 2002 and 1.15% in the year 2003 compare to 1.95% in the year 2001. This is reduced due to increase in the operating expenses of the bank though bank has kept good control on provisions. c) Operating expenses ratio is showing upward trend. It is increased in the year 2002 to 87.03% and 89.82% in the year 2003 compare to previous year. Due to increase in operating expenses to total income ratio there is an adverse effect on net profit to total income ratio. d) Provisions to total income ratio is increased to 8.24% in the year 2002 and decreased to 7.11% in the year 2003 compare to previous year. By and large this ratio is showing stable position. 108 4.2.7SHIVAJIRAO BHOSALE SAHAKARI BANK LTD.,PUNE Shivajirao Bhosale Sahakari Bank Ltd. is registered on 2"'^ March 1972 in Pune city. Bank has completed 32 years of its life. The bank was established by well-known political leader Late Mr. Shivajirao Bhosale who has remarkable work in Political and Social life. He was the member of the Pune Municipal Corporation and member of Maharashtra State Legislative Council for number of years. Bank is having 11 branches other than head office and 5296 members. Bank has awarded ‘A’ audit class last so many years. Bank is fully computerized having inter branch connectivity service. The Bank has given internet banking, tale banking and demat facility to its costumers. TABLE - 21 BANK PERFORMANCE - SHIVAJIRAO BHOSALE SAHAKARI BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 5301 5306 5296 2 Branches 10 11 11 3 Total Employees 75 138 138 4 Audit Class A A B 5 Employee Productivity 182.12 121 143.96 109 TABLE - 22 Analytical Table of Profit and Loss A/c. (Rs. In Lakhs) Item 2001 2002 2003 A.. Income i) Interest & Discount 1478 1899 1486 ii) Commission & Exchange 29 33 17 iii) Other Income 22 39 66 Total Income (i + ii + iii) 1529 1971 1569 B. Expenditure i) Interest Expended 1145 1545 1134 ii) Salary & Allowance 114 136 146 iii) Other Expenses 124 178 183 iv) Provisions & Contingencies 75 3 2 Total Exp. 1458 1863 1466 Net Profit 71.00 108 104 Operating Profit 146 111 106 Operating Expenses 1383 1860 1464 4.2.7.A TOTAL INCOME TOTAL INCOME Total income graph is showing that 28.91% increase in the year 2002 and the income is decreased by 20.40% in the year 2003 compare to previous year. In the year 2003 all heads of income except other income shows decreasing trend compare to Series 1 1529 1971 1569 previous year. 110 INCOME DIVISION 2001 97%- Out of total income, income from interest and discount is 97%, income from commission and exchange 2% and other income 1% in the year 2001. D i) Interest & D'scount III) Commission & Exchange D ill) Other Income INCOME DIVISION 2002 96% - y In the year 2002, out of total income, income from interest and discount is ' 2,. 96%, from commission and exchange □ i) Interest & Discount ■ 11) Commission & Exchange and other income is 2% each. □ ill) Other Income INCOME DIVISION 2003 In the year 2003 Income from interest and discount is 95%, Commission and 95% f : ^ 1 % ^ 4 % exchange 1% and other income is 4%. Graph shows that ratio of other income □ 1) Interest & Dscount is raised to 4% in the year 2003 due to ■ ii) Commission & Exchange □ ill) Other Income more sale of Government Securities. 4.2.7.B. TOTAL EXPENSES TOTAL EXPENSES Total expenses of the bank has increased by 27.78% in the year 2002 and decreased by 21.31% in the year 2003 compare to previous year. Seriesi 1458 1863 1466 I l l EXPENSES DIVISION 2001 8% Out of total expenses interest expended is 78%, Salary and allowances 8%, other " < 3 . expenses 9% and provisions are 5% in the □ i) Interest Expended ■ ii) Salary & Allow ance year 2001. □ ill) Other Expenses □ iv) Provisions & Contingencies EXPENSES DIVISION 2002 7% In the year 2002 out of total expenses, 10% interest paid 83%, salary and allowances 83% 7%, other expenses 10% and provisions are □ i) Interest Expended ■ ii) Salary & Allowance less than 1%. □ ill) Other Expenses □ iv) Provisions & Contingencies EXPENSES DIVISION 2003 ^ 10% In the year 2003 out of total expenses, 12% r ^ interest paid is 78%, salary and allowances 0% 10%, other expenses 12% and provisions □ i) Interest Expended ■ ii) Salary & Albw ance □ ill) other Expenses are less than 1%. □ iv) Provisions & Contingencies Expenditure on provisions is decreasing every year. It was Rs. 75 lacks in the year 2001 which is decreased to Rs. 3 lakhs in the year 2002 and Rs. 2 lakhs in the year 2003. Provisions are decreased in the year 2002 and in the year 2003 because bank has not shown any provision for non-performing assets in the profit and loss account. The provisions are shown in these two years only for standard assets. 1 1 2 4.2.7.C RATIO ANALYSIS TABLE - 23 ■ SHIVAJI RAO BHOSALE SAHAKARI BANK 2001 2002 2003 LTD. (in %) (in %) (in %) a) Net Profit to Total Income 4.64 5.48 6.62 b) Operating Profit to Working fund 1.62 0.18 0.79 c) Operating Expenses to Total Income 90.45 94.36 93.24 d) Provisions to Total Income 4.90 0.15 0.12 a) Net profit ratio shows the upward trend in the next two years. Net profit ratio is increased from 4.64% in the year 2001 to 5.48% in the year 2002 and 6.62% in the year 2003. b) Operating profit to working fund ratio is decreased to 0.18% in the year 2002 and increased to 0.79% in the year 2003 compare to previous year. This is reduced due to proportionate increase in the operating expenses of the bank in the next two years. c) Operating expenses to total income ratio is increased to 94.36% in the year 2002 and decreased to 93.24% in the year 2003 compare to previous year. d) Provisions to total income ratio is decreased in next two years because bank has not shown provisions for non performing assets in the year 2002 and 2003. It is decreased to 0.15% in 113 the year 2002 and 0.12% in the year 2003 compare to previous year. 4.2.8 SAMPADA SAHAKARI BANK LTD., PUNE Sampada Shakar Bank Ltd. Pune, registered on 31®^ j^^y 1974. Bank has completed almost 29 years of working. Today bank is having 4 branches other than head office. The total members of the bank as on 3 P ‘ march 2003 are 9782 and total staff of the bank is 62. The bank is run by devoted directors and employees. This bank has faced lot of problems in the past due to some irregularities and illegal operations by its past officers. Bank was under strict control of RBI and the Co-operative Dept, of the State for some years. There after some new-devoted directors, brought the bank in sound position due to their sincere efforts. Bank is in a position to pay dividend up to 10% to its members. Since 2001 bank has earned operating profit. TABLE - 24 BANK PERFORMANCE - SAMPADA SAHAKARI BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 9694 9860 9782 2 Branches 4+1 4+1 4 3 Total Employees 48 68 62 4 Audit Class ACC 5 Employee Productivity 229.49 188 246.04 114 TAB LE - 25 Analytical Table of Profit and Loss A/c. (Rs. In Lakhs Item 2001 2002 2003 A. Income i) Interest & Discount 1184 1234 1014 ii) Commission & Exchange 2 3 2 iii) Other Income 21 40 230 Total Income (i + ii + iii) 1207 1277 1246 B. Expenditure i) Interest Expended 842 911 791 ii) Salary & Allowance 74 86 79 iii) Other Expenses 120 118 99 iv) Provisions & Contingencies 49 162 258 Total Exp. 1085 1277 1227 Net Profit 122 0.63 20 Operating Profit 171 162.63 278 Operating Expenses 1036 1115 969 4.2.8.A. TOTAL INCOME TOTAL INCOME Total income graph shows up and down position. Total income of the bank is increased by 5.8% in the year 2002 and decreased by 2.43%in the year 2003 compare to previous year. INCOME DIVISION 2001 rO % Out of total income, income from 9 8 % - - / — ______J interest and discount is 98% f -2 % commission and exchange and other □ 1) Interest & Discount income is just 2% in the year 2001. ■ 11) Corrmlssion & Bcchange D ill) O ther Income 115 INCOME DIVISION 2002 In the year 2002 income from interest and discount is 97%, commission and 97% exchange is less than 1% and other income is 3%. □ I) Interest & ascount ■ ii) Oamrrission & Exchange □ iii) Other Income INCOME DIVISION 2003 In the year 2003 income from interest and discounnt is 82%, other income is 18% 82% 18% and commission and exchange is O i) Interest & Discount negligible. Other income is increased in ■ II) Commission & Exchange this year due to profit on sale of □ iii) Other Income Government Securities. 4.2.8.B. TOTAL EXPENSES SAMPADA SAHAKARI BANK LTD. Total expenses graph of the bank 1300 showing up and dow?n situation as well as 12S0 total income graph. Total expenses are increased by 17.70% in the year 2002 and decreased by 3.92% in the year 2003 O TOTAL m 1085 1277 1227 EXPENSES compare to previous year. EXPENSES Df>/ISION2001 7% Out of total expenses, expenses for 11% interest paid are 77%, salary and 5% allowances 7%, other expenses are 11% O i) interest Expended and provisions were made 5% at the end ■ ii) Salary & Allow ance □ iii) other Expenses of the year 2001. □ iv) Provisions & Contingencies 116 EXPENSES DIVISION 2 0 ^ ^ 7 % -9 % At the end of the year 2002 out of total expenses, the percentage of interest paid V13% is 71%, salary and allowances 7%, other □ i) Interest Expended ■ ii) Salary & Allow ance expenses 9% and provisions and □ iii) other Expenses □ iv) Provisions & Contingencies contingencies 13%. EXPENSES DIVISION 2003 The position at the end of the year 2003 is 65% interest paid 65%, salary and allowances 6%, other expenses 8% and provisions □ i) Interest Bcpended ■ li) Salary & Albw ance and contingencies are made 21% out of □ iii) Other Expenses □ iv) Provisions & Contingencies total expenses. From the above division of total expenses it is clear that share of provisions is increasing every year. Where as share of salary and allowance remains stable but share of other expenses is reduced. 4.2.8. C RATIO ANALYSIS TABLE - 26 1 SAMPADA SAHAKARl BANK 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 10 0.05 1.6 b) Operating Profit to Working fund 2.08 1.74 2.86 c) Operating Expenses to Total Income 85.83 87.31 77.71 1 d) Provisions to Total Income 4.05 12.69 20.69 117 a) Net profit to total income ratio shows downward and upward trend in the next two years. Net profit ratio is decreased from 10% in the year 2001 to 0.05% in the year 2002 and increased to 1.6% in the year 2003. This ratio indicates that the year 2002 was critical in the life of the bank. This adverse position is observed due to heavy increase in the provisions. The situation is little bit improved in the year 2003 apart from increase amount of provisions and decrease amount of income. This has been possible due to control on all other expenses of the bank during this year. b) Operating profit to working fund ratio is decreased to 1.74% in the year 2002 and increased to 2.86% in the year 2003 compare to previous year. c) Operating expenses to total income ratio is increased to 87.31% in the year 2002 and decreased to 77.71% in the year 2003 compare to previous year. It is increased due to increase in operating expenses in the year 2002 and decreased in the year 2003 due to decrease in operating expenses in this year. d) Provisions to total income ratio is increased in next two years due to increase in provisions. It is increased to 12.69% in the year 2002 and 20.69% in the year 2003 compare to previous year. 118 4.2.9JIJAMATA MAHILA SAHAKARI BANK LTD. PUNE Jijamata Mahila Sahakari Bank Ltd. Pune, is registered on 25th April 1974. Bank is having 9 branches along with head office. Bank was established by Late Mrs. Malatibai Shirole. She was the political and social leader in those days. Her husband Late Mr. Madhavrao Shirole also helped her for formation of this bank. Both have worked as founder directors of this bank. Then Mr. Anandrao Salunke has taken active interest for the development of this bank who has worked as a Managing Director of this bank for many years. Bank was started in Shaniwar peth at the beginning and then it was shifted to big premises at Shivaji Nagar from April 1987. Bank has started its branches in rural areas also. The status of the bank is urban as well as rural. There are 12138 members as on 31®’^ March 2003 and bank has acquired audit class ‘A’ in the last five years. At present 117 employees are working in the bank. TABLE - 27 BANK PERFORMANCE - JIJAMATA MAHILA SAHAKARI BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 10979 11650 12138 2 Branches 6 6+1 9 3 Total Employees 84 97 117 4 Audit Class AAA 5 Employee Productivity 119.38 122 77.12 119 TABLE - 28 Analytical Table of Profit and Loss A/c. (Rs. In Lakhs) Item 2001 2002 2003 A. Income i) Interest 86 Discount 827 960 1026 ii) Commission & Exchange 7 7 9 iii) Other Income 14 137 59 Total Income (i + ii + iii) 848 1104 1094 B. Expenditure i) Interest Expended 577 742 696 ii) Salary & Allowance 89 105 131 iii) Other Expenses 75 84 123 iv) Provisions & Contingencies 37 79 98 Total Exp. 779 1010 1047 Net Profit 69 93 48 Operating Profit 107 173 146 Operating Expenses 741 931 949 4.2.9.A TOTAL INCOME TOTAL INCOME Total income of the bank is increased by 30.19% in the year 2001 and decreased by 0.91 in the year 2003 compare to previous year. Total income is decreased in the year 2003 due to reduction in Series 1 848 1104 1094 other income. INCOME DIVISION 2001 Out of total income, income from 97% interest and discount is 97%, from commission and exchange is 1% and 2% is other income. □ I) Interest & Discount ■ II) Commissfon & Exchange □ iii) Other Income 1 2 0 INCOME DIVISION 2002 ^1% Whereas in the year 2002 income from 87% ------1 ______Y interest and discount is 87%, 1% M 2% commission and exchange and other □ i) Interest & Discount income are 12%. ■ 11) Commission & Exchange □ Hi) Other Income INCOME DIVISION 2003 In the year 2003 out of total income, 1% income from interest and discount is 9 4% ----- { 94%, commission and exchange is 1% ^\^5 % and other income is 5%. There is a D i) Interest & Discount sizable increase in other income due to ■ ii) Commission & Exchange □ iii) Other Income sale of Government Securities in the year 2002. 4.2.9.B. TOTAL EXPENSES Total expenses of the bank increased by 29.65% in the year 2002 and 3.66% in the year 2003 compare to previous year. The expenses were increased in the year 2002 more; due to more amounts spend on interest paid. In the year 2003 actually interest expended amount is less than the year 2002 but still total expenses are increased by 3.66% due to increase in other expenses. 121 EXPENSES DIVISION 2001 Out of total expenses, expenses for interest expended is 74%, for salary and □ I) Interest Expended allowances 11%, other expenses 10% ■ ii) Salary & Allow ance □ ill) Other Expenses and provisions are 5% in the year 2001. □ iv) Provisions & Contingencies In the year 2002 out of total expenses, expenditure on interest paid is 74%, 10% for salary and allowances, other □ i) Interest Expended expenses 8% and provisions and ■ ii) Salary & Allowance □ ill) Other Expenses contingencies are 8%. EXPB4SES DIVISION 2003 ^ 13% -12% In the year 2003 amount spend on interest paid is 66%, 13% on salary and ^ 9 % □ i) Interest Expended allowances, 13% other expenses and ■ ii) Salary & Allowance □ lii) Other Expenses provisions are 9%. □ iv) FVovisions & Contingencies 4.2.9.C RATIO ANALYSIS TABLE - 29 SAMPADA SAHAKARl BANK 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 8.14 8.51 4.38 b) Operating Profit to Working fund 1.56 2.19 1.58 c) Operating Expenses to Total Income 87.38 84.33 86.67 d) Provisions to Total Income 4.48 7.15 8.95 122 a) Net Profit to total income ratio shows up and down trend in the next two years. Net profit ratio is increased from 8.14% in the year 2001 to 8.51% in the year 2002 and decreased to s 4.38% in the year 2003. b) Operating profit to working fund ratio is increased to 2.19% in the year 2002 and decreased to 1.58% in the year 2003 compare to previous year. c) Operating expenses to total income ratio is decreased to 84.33% in the year 2002 and increased to 86.67% in the year 2003 compare to previous year. d) Provisions to total income ratio is increased in next two years due to increase in the provisions made by the bank. It is increased to 7.15% in the year 2002 and 8.95% in the year 2003 compare to previous year. In the year 2003 provisions are increased by 24.29% but total income is decreased by 0.91%. Hence profit is reduced in this year compare to last year. 123 4.2.10 SHREE LAXMI CO-OP. BANK LTD. PUNE Shree Laxmi Co-Operative Bank is established on 2'^'^ Sept. 1972 in Pune city and completed 32 years of its life. The jurisdiction of the bank is Pune district. Bank is having 4 branches with 7412 members as on 31®‘ March 2003. Total employees of the bank are 49. Bank has allotted ‘A’ audit grade and declared 12% dividend since 1998. The directors of the bank are majority from trading field, and therefore, majority advances given by the bank for trading activities only. TABLE - 30 BANK PERFORMANCE - SHREE LAXMI CO-OPERATIVE BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 7323 7322 7412 2 Branches 4 4 4 3 Total Employees 51 49 49 4 Audit Class A A A 5 Employee Productivity 119.33 156 108.78 TABLE - 31 Analytical Table of Profit and Loss A/c. Item 2001 2002 2003 A. Income i) Interest & Discount 492 626 744 ii) Commission & Exchange 10 9 10 iii) Other Income 7 38 30 Total Income (i + ii + iii) 509 673 784 B. Expenditure i) Interest Expended 353 472 598 ii) Salary & Allowance 33 40 42 iii) Other Expenses 70 72 74 124 iv) Provisions & Contingencies 25 60 40 Total Exp. 481 644 754 Net Profit 28 29 30 Operating Profit 53 89 40 Operating Expenses 456 584 750 4.2.10.A. TOTAL INCOME Total income of the bank is showing increasing trend. Total income is increased by 32.22% in the year 2002 and 28% in the year 2003 compare to previous year. INCOME DIV ISDN 2001 In the year 2001 out of total income, 97% income from interest and discount is 97%, income from commission and □ I) Interest & Dscount exchange is 2% and other income is 1% INCOME DIVISION 2002 whereas in the year 2002 income from 93% interest and discount is 93%, from commission and exchange 1%, and other □ i) Interest & Discount ■ II) Commission & Exchange income is 6%. In the year 2003 income □ ill) other Income from interest and discount is 95%, from INCOME DIV ISDN 2003 commission and exchange and other 95%- y \ income is 4%. There is a heavy increase I in the other income in the year 2002 ■^4% □ i) interest & Discount which is 442.86%. ■ 11) Comrrission & Exchange □ ill) other Income 125 4.2.10.B. TOTAL EXPENSES Total Expenses are increased by 33.89% in the year 2002 and 17.08% in the year 2003 compare to previous year. Out of total expenses, share of interest expended is more in the year 2002 and 2003 compare to the year 2001. It is raised by 59% in the year 2003 and 33.71% in the year 2002 compare to previous year. Whereas salary expenditure is just increased by 5% in the year 2003 but provisions were decreased by 33.33% in the year 2003 compare to previous year. EXPENSES Dfy iS IO N ^ O^ Out of total expenses interest expended is 73%, salaiy and allowance 7%, □ i) hterest Expended other expenses 15% and provisions and ■ ii) Salary & A Ibw ance □ iii) Other Expenses contingencies 5% in the year 2001 and in □ iv) FVovisbns & Contingencies the year 2002 interest expended is 74%, salary and allowance 6%, other expenses 11% and provisions are 9%. □ i) Interest Expended ■ ii) Salary & A Ibw ance In the year 2003 graph shows that □ iii) Other Expenses interest expended is 79%, 6% salary and □ iv) Provisions & Contingencies EXPENSES DIVISI allowances, 10% other expenses and 5% provisions out of total expenses. Provisions are reduce in the year 2003 due to □ i) Interest Expended ■ ii) Salary & Allow ance decreased in provisions for NPA. □ iii) Other Expenses □ iv) Provisions & Contingencies 126 4.2.10. C RATIO ANALYSIS TABLE -32 SHREE LAXMl COOP.BANK 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 5.50 4.30 3.83 b) Operating Profit to Working fund 1.36 1.72 0.75 c) Operating Expenses to Total Income 89.58 86.77 95.66 I d) Provisions to Total Income 4.91 8.91 5.10 1 a) Net Profit to total income ratio shows the down trend in profit earning capacity of the bank. Net profit ratio is declined from 5.50% in the year 2001 to 4.30% in the year 2002 and 3.83% in the year 2003. It shows profit is not increased in relation to increase in total income. b) Operating profit to working fund ratio is increased to 1.72% in the year 2002 and decreased 0.75% in the year 2003. This is reduced in the year 2003 due to increase in operating expenses of the bank though bank has kept good control on provisions. c) Operating expenses ratio is showing down and up trend. It is decreased in the year 2002 to 86.77% and increased to 95.66% in the year 2003 compare to previous year. Due to increase in ratio of operating expenses to total income, there is an adverse effect on net profit to total income ratio. d) Provisions to total income ratio is showing up and down trend. It has increased to 8.91% in the year 2002 compare to the year 2001 and decreased to 5.10% in the year 2003 compare to the year 2002. 127 4.2.11DEFENCE ACCOUNTS CO-OPERATIVE BANK LTD., This bank was registered on 9^^ January 1906. This is the oldest co-operative bank in Pune. It has completed 97 years working in the banking business. Bank will complete its 100 years soon i.e. in the year 2005-06. The total members of the bank were 3726 as on 31®’^ March 2003 and 28 employees. Bank is having 3 branches including head office. Bank has maintained Audit class ‘A’ and declared 15% dividends in last 5 years. Employees of Defence Accounts Department of the central government formed the bank. The directors of the bank are mostly from this department. Bank is having trained staff and bank has tried to give training to its employees taking into consideration the changes in banking field. This bank is specially known as salary earner’s co-operative bank in Maharashtra. This is the oldest salary earner’s co-operative bank in Maharashtra. TABLE - 33 BANK PERFORMANCE DEFENCE ACCOUNTS CO-OPERATIVE BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 3735 3751 3726 2 Branches 3 3 3 3 Total Employees 30 30 28 4 Audit Class A A A 5 Employee Productivity 87.57 89 106.54 1 128 TABLE - 34 Analytical Table of Profit and Loss A/c. Item 2001 2002 2003 A. Income i) Interest & Discount 274 255 255 ii) Commission & Exchange 0.08 0.02 0.01 iii) Other Income 1 4 16 Total Income (i + ii + iii) 275 259 272 B. Expenditure i) Interest Expended 193 170 163 ii) Salary & Allowance 36 38 44 iii) Other Expenses 12 16 12 iv) Provisions & Contingencies 12 11 23 Total Exp. 253 235 242 Net Profit 23 24 29 Operating Profit 34 35 41 Operating Expenses 241 224 260 4.2.11.A. TOTAL INCOME TO T A L INCOIVE Total income of the bank is decreased by 2 80 2 75 5.84% in the year 2002 and increased by 2 70 5.01% in the year 2003 compare to 2 6 5 - 2 6 0 - previous year. 2 5 5 - 250 M 1 2 3 ISeriesI 275 259 272 INCOME DIVISION 2001 INCOME DW ISDN 2002 INCOME DIVISION 2003 98% 0% 94% 0% □ i) Interest & Discount □ i) Interest & Qscount □ i) Interest & Dscount ■ I!) Comnission & Exchange ii) Commission & Exchange ■ II) Conmission & Exchange □ iii) other Income □ ill) Other Income □ iii) Other Income 129 Out of the total income, interest income is 99% in the year 2001, 98% in the year 2002 and 94% in the year 2003. Commission and exchange in all these three years is just less than 1%. And Provisions are less than 1% in the year 2001, 2% in the year 2002 and 6% in the year 2003. 4.2.11.B. TOTAL EXPENSES: TOTAL EXPANSES Total expenses graph shows up and down trend. It has decreased by 7.11% in the year 2002 and increased by 2.98% in the year 2003 compare to previous year. Series 1 253 235 242 EXPENSESlOL-O DIVISIONL-»IV lOIWI'l 2001 I ^ , 14% 1^ /0 Out of total expenses, interest expended 76% is 76%, Salary and allowances are 14%, other expenses 5% and provisions are □ i) Interest Expended ■ ii) Salary & Allow ance 5% in the year 2001. □ ill) Other Expenses □ iv) Provisions & Contingencies In the year 2002, interest expended is 72%, 16% salary and allowances, 7% other expenses and 5% provisions and □ i) Interest Expended I ii) Salary & Allowance □ iii) Other Expenses contingencies, out of total expenses. □ iv) Provisions & Contingencies 130 EXPENSES DIVISION 2003 Out of total expenses, interest expended 67%. 10% is 71%, Salary and allowances 19%, other □ i) Interest Expended income and provisions are 5% in the year ■ II) Salary & Allow ance □ ili) Other Expenses D iv) Provisions & Contingencies 2003. 4.2.11. C RATIO ANALYSIS TABLE - 35 DEFENCE 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 8.36 9.26 10.66 b) Operating Profit to Working fund 1.58 1.70 1.83 c) Operating Expenses to Total Income 87.63 86.48 85.94 d) Provisions to Total Income 4.36 4.24 4.41 a) Net Profit ratio shows the upward trend in the profit earning capacity of the bank. Net profit ratio is increased from 8.36% in the year 2001 to 9.26% in the year 2002 and 10.66% in the year 2003. b) Operating profit to working fund ratio is increased to 1.70% in the year 2002 and 1.83% in the year 2003 compare to previous year. c) Operating expenses ratio is showing up and down trend. It is decreased in the year 2002 to 86.48% and increased to 95.94% in the year 2003 compare to previous year. d) Provisions to total income ratio is decreased to 4.24% in the year 2002 and increased to 4.41% in the year 2003 compare to previous year. 131 4.2.12 PUNE MUNICIPAL CORPORATION SERVANTS CO-OP. URBAN BANK LTD., PUNE. The bank was registered on 13^^ February 1914. The bank is 90 years old. There is no any branch of this bank. This is also salary earner’s urban co-operative bank. Bank is run by Pune Municipal Corporation employees. The total members of the bank as on 31®‘ March 2003 are 7484 and total employees are 49. All members are servants of Pune Municipal Corporation and allied body of Pune Municipal Corporation. (Such as education board and transport service). If employee is retired or transfer out of Pune municipal service then such member is loosing his/her membership. Bank has secured ‘A’ audit class continuously in last 5 years. In last two year i.e. 2002 and 2003 bank declared 15% dividend to its members. It is surprising that bank has not opened any new branch in last 90 years. Most of the advances are good advances that means all advances of the bank are performing assets. The over due percentage of the bank is just 0.23% which is appreciable. TABLE - 36 BANK PERFORMANCE PMC SERVANTS CO-OPERATIVE URBAN BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 8097 7426 7484 2 Branches 1 1 1 3 Total Employees 50 50 49 4 Audit Class A A A 5 Employee Productivity 42.5 64 6.68 132 TABLE - 37 Analytical Table of Profit and Loss A/c. (Rs. In Lakhs) Item 2001 2002 2003 A. Income i) Interest & Discount 226 297 323 ii) Commission &, Exchange 0.28 0.13 0.32 iii) Other Income 5 4 4 Total Income (i + ii + iii) 259 301 327 B. Expenditure i) Interest Expended 141 169 184 ii) Salary & Allowance 58 61 64 iii) Other Expenses 29 33 32 iv) Provisions & Contingencies 3 3 4 Total Exp. 231 266 284 Net Profit 27 35 44 Operating Profit 30 38 48 Operating Expenses 228 263 280 4.2.12.A. TOTAL INCOME: TOTAL INCOME Total income graph shows upward trend every year. It has increased by 16.22% and 8.64% in the year 2002 and 2003 respectively compare to previous year. S eries 1 259 301 327 rCOME DIVISION 2001 INCOME DIVISION 2002 INCOME DIVISION 2003 \ 0% 9 8 % W y - 0 % -0% 1/ \-2% 1% 0 1) Interest & Discount □ i) Interest & Dscount □ i) Interest & Discount ■ II) Commission & Exchange ■ ii) Comnission & Exchange ■ ii) Commission & Exchange □ Hi) aher ticome □ ill) other Income □ iii) Other Income 133 Out of total income, interest and discount is 98% in the year 2001, 99% in the year 2002 and 2003. Income from commission and exchange and other income is near about 2% in the year 2001 and 1% in the year 2002 and 2003. This division graph shows bank has not used other sources of income for doing its business. 4.2.12.B. TOTAL EXPENSES: Total expenses graph showing upward trend every year. It has increased by 15.15% in the year 2002 and 6.77% in the year 2003 compare to previous year. EXPENSES DIVEigN 2001 ^25% EXPENSES DIVISION 2002 EXPeJSES DIVISDN 2003 23% 13% 11% 64% 12% 1% 1% 1% □ I) Interest Expended O i) Interest Expended □ i) Interest Expended i ■ ii) Salary & Allow ance ■ ii) Salary & Allowance ■ ii) Salary & Allowance □ ill) Other Expenses □ iii) Other Expenses □ iii) Other Expenses □ iv) FVovisions & Contingencies □ iv) FYovisions & Contingencies Q iv) FVovisions & Contingencies Out of total expenses, interest expended is 61%, 64% and 65% in the year 2001, 02 and 03 respectively. Salaiy and allowances are 25% in the year 2001 and 23% in the next two years i.e. 2002 and 2003. Other expenses are 13%, 12% and 11% in the year 2001, 2002 and 2003 respectively. Provisions are just 1% in all these three years. 134 4.2.12. C RATIO ANALYSIS TABLE -38 PUNE CORPORATION BANK LTD. 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 10.42 11.62 13.45 b) Operating Profit to Working fund 1.50 1.82 2.07 c) Operating Expenses to Total Income 88.03 87.37 85.62 d) Provisions to Total Income 1.15 0.99 1.22 a) Net profit ratio to total income shows the upward trend. Net profit ratio is increased from 10.42% in the year 2001 to 11.62% in the year 2002 and 13.45% in the year 2003. b) Operating profit to working fund ratio is increased every year. It is raised to 1.82% in the year 2002 and 2.07% in the year 2003 compare to previous year. c) Operating expenses ratio is showing downward trend. It is decreased in the year 2002 to 87.37% and 85.62% in the year 2003 compare to previous year. d) Provisions to total income ratio is decreased to 0.99% in the year 2002 and increased to 1.22% in the year 2003 compare to previous year. By and large this ratio is showing stable position. This ratio is very much satisfactory for the depositors as well as members of the bank. Recovery position of the bank is absolutely strong. Taking into consideration all above ratios, it is clear that bank is working efficiently and well managed. 135 4.2.13 LOKSEVA SAHAKARI BANK LTD. PUNE The Bank is registered on 28^^ August 1997. The area of operation of the bank is Pune district. Bank has established by political leader and member of the Legislative Assembly Mr. Deepak Paygude. Bank has completed 6 years of its life. Total members of the bank as on 31®*^ March 2003 are 3488. Bank has award ‘A’ audit class grade last three years continuously. The total business of the bank managed by 11 staff members and bank has also declared dividend in the last three years. The bank is trying to open its new branch in coming years. The bank is progressing satisfactorily apart from tough competition from private banks and other co-operative banks. TABLE - 39 BANK PERFORMANCE - LOKSEVA SAHAKARI BANK SR. PARTICULAR 2001 2002 2003 NO. 1 Members 2598 2659 3488 2 Branches 1 1 1 3 Total Employees 11 11 11 4 Audit Class AAA 5 Employee Productivity 94.55 128 173.27 136 TABLE - 40 Analytical Table of Profit and Loss A/c. (Rs. in Lakhs) Item 2001 2002 2003 A. Income i) Interest & Discount 74 107 122 ii) Commission Exchange 2 2 2 iii) Other Income 8 5 8 Total Income (i + ii + iii) 84 114 132 B. Expenditure i) Interest Expended 43 67 75 ii) Salary & Allowance 6 8 10 iii) Other Expenses 16 17 20 iv) Provisions & Contingencies 2 5 3 Total Exp. 67 97 108 Net Profit 17 17 25 Operating Profit 19 22 28 Operating Expenses 65 92 105 4.2.13.A TOTAL INCOME TOTAL INCOME Total income graph showing increasing 140 120 trend every year. It has increased by 100 35.71% in the year 2002 and 15.79% in 80 60 the year 2003 compare to previous year. 40 20 Increase in the total income for the year 2002 and 2003 is more due to interest Series 1 84 114 132 income. INCOME DIVISION 2001 INCOME DIVISION 2002 INCOME DIV ISDN 2003 2% 94% j ' 88% 92% 10% r ^ 4 % □ I) Interest & Discount □ i) Interest & Discount 1 □ i) Interest & Discount ■ II) Commission & Exchange ■ ii) Comrrission & Exchangej ■ ii) Comrrission & Exchange □ iii) other Income □ iii) other Income j □ iii) other Income 137 Out of total income, income from interest and discount is 88%, 2% commission and exchange and 10% is other income in the year 2001. Income division graph for the year 2002 is showing 94% income from interest and discount, 2% from Commission and exchange and 4% other income. In the year 2003 out of total income, interest and discount income is 92%, 2% from commission and exchange and 6% other income. Bank is working satisfactorily and showing progressive trend. 4.2.13. B TOTAL EXPENSES: Total expenses graph showing increasing trend every year. Total expenses increased by 44.78% in the year 2002 and 11.34% in the year 2003 compare to previous year. EXPENSES DIVISION 2001 EXPENSES DIVISION 2002 EXPENSES DIV ISDN 2003 8% 64%. 6 9 % ^ ^ ^ 1 8 “/ 69%- --5% Q i) Interest Expended □ I) Interest Expended O i) Interest Expended ■ Ii) Salary & Allowance ■ il) Salary & Allow ance ■ ii) Salary & Allowance □ iii) other Expenses □ iii) other Expenses □ iii) Ottier Expenses □ Iv) Provisions & Contingencies □ iv) Provisions & Contingencies □ iv) Provisions & Contingencies Out of total expenses, expenses for interest expended is 64%, 9% for salary and allowances, 24% other expenses and 3% are provisions in the year 2001. Expenses division graph for the year 2002 shows that 69% expenses for interest expended, 8% for salary and allowances, 18% other expenses and 5% are provisions. In the 138 year 2003 out of total expenses, interest expended 69%, 9% salary and allowances, 19% other expenses and 3% are provisions. From the above comparison it is clear that provisions made by the bank are very much within the limit. 4.2.13. C RATIO ANALYSIS TABLE-4 1 LOKSEVA SAHAKARl BANK 2001 2002 2003 (in %) (in %) (in %) a) Net Profit to Total Income 20.23 14.91 18.93 b) Operating Profit to Working fund 2.73 2.32 2.55 c) Operating Expenses to Total Income 77.38 80.70 79.54 d) Provisions to Total Income 2.38 4.38 2.27 a) Net profit ratio to total income shows the up and down trend. Net profit ratio is decreased from 20.23% in the year 2001 to 14.91% in the year 2002 and increased to 18.93% in the year 2003 compare to previous year. Net profit to total income ratio is satisfactory. b) Operating profit to working fund ratio is decreased from 2.73% in the year 2001 to 2.32% in the year 2002. It is raised from 2.32% in the year 2002 to 2.55% in the year 2003. c) Operating expenses to total income ratio is showing up and down trend. It is increased in the year 2002 to 80.70% and 139 decreased to 79.54% in the year 2003 compare to previous year. Bank has kept good control on operating expenses. d) Provisions to total income ratio is increased to 4.38% in the year 2002 and decreased to 2.27% in the year 2003 compare to previous year. The provision ratio is decreased in the year 2003 due to reduced in NPA provisions in sizable amount. Though the bank is small but its results are quite satisfactory and its shows that bank is well managed since beginning. One has to appreciate the controlled NPA provisions of this bank which is a rare picture in co-operative field. 140