CHAPTER:1

INTRODUCTION TO BANKING SECTOR

Introduction to Banking in India:Finance is the life blood of trade, commerce and industry. Now-a-days, bank money acts as the back bone of modern business. Development of any country mainly depends upon the banking system. The term bank is derived from the French word Banco which means abench or money exchange table. In olden days, European money lenders or money changers used to display coins of different countries in big heaps on benches or tables for the purpose of lending or exchanging. A bank is a financial institution which deals with the deposits and advances and other related services. It receives money from those who want to save in the form of deposits and lends money to those who need it. In this modern world, bank has improved a lot in each and every aspects and services given by bank to their customers. Bank performs variety of functions such as primary functions and secondary functions. Under primary functions there are certain functions such as accepting deposits and granting loans to the needed persons. Bank accepts deposits in various forms like as saving deposit, current deposit, fixed deposit, recurring deposit. Bank grants advance in various ways viz overdraft, cash credit, loans, discounting bills. Bank performs secondary functions such as agency functions and utility functions. Now, under agency functions there are services like transfer of funds, portfolio management, collection of cheques. Utility functions viz drafts, lockers, underwriting projects, etc.Now-a-days bank is developing in the field of insurance also. Bank deals with big project. Bank provides loans on short term basis as well as long term basis. There are number of banks in India. The different banks like as Saraswat bank, Nav-Jeevan bank, Axis bank, Punjab national bank, Canada bank, HDFC bank, Union bank, State bank of India, and many more. The Reserve bank of India is bankers bank. The various differences in all the banks and RBI are - it prints notes, it does not deal with people; it deals with banks. It frames rules, regulations and policies for all the banks. All banks work under RBI.The nationalized banks initially concentrated on large cultivators and small farmers who were engaged in raising high yielding varieties of food grains. The government has extended the integrated rural development programmers to all development blocks in the country and has asked the commercial banks to finance the IRDP.
2

Definitions of bank:Oxford dictionary defines a bank as, An establishment for custody of money which it pays out on customers order. The Indian banking act 1949 defines banking company as, A company which transacts like business of banking has in India & the word banking has been defined as accepting for the purpose of lending or investments of the deposits of money from the public, repayable on demand or otherwise & withdraw able by cheque, draft, order or otherwise.

GLOBALIZATION
Strengthening financial systems has been one of the central issues facing emerging markets and developing economies. This is because sound financial systems serve as an Important channel for achieving economic growth through the mobilization of financial savings, putting them to productive use and transforming various risks. Many countries adopted a series of financial sector liberalization measures in the late1980s and early 1990sthat included interest rate liberalization, entry deregulations, reduction of reserve requirements and removal of credit allocation. In many cases, the timing of financial sector liberalization coincided with that of capital account liberalization. Domestic banks were given access to cheap loans from abroad and allocated those resources to domestic production sectors. The Main banking sector can be divided into five distinct sub-sectors: 1. Clearing 2. Private 3. Off- Retail 4. Savings
3

5. Trust Over the past 15 years the sector has grown by between 3% and 9% pa but has been in decline since 2002 and faces a further sharp reduction. Banking facilities on the range from basic current and deposit account facilities to complex wealth management structures. However, there is no genuinely uniqueness in Man banking products. In a global context, the Man banking sector offers a mainly retail, mass-affluent proposition targeting UK expatriates. Its chief revenue stream is derived from international personal client business referred from UK and International Group offices.

Characteristics:
In this modern world, there must be certain features of bank. Following are the characteristics of bank: Dealing in bank Individual firm or company Acceptance of deposits Giving advances Payment & withdrawal Agency & Utility services Profit and service orientation Ever increasing functions Connecting link Banking business Name identity Development role

Functions:
Bank performs certain functions such as primary functions and secondary functions.bank gives us various facilities such as accepting deposits, granting loans, drafts, locker facilities, underwriting projects, discounting of bills of exchange cash credit, periodic payments, periodic collections, etc.

CO OPERATIVE BANK History

The Bank was formed in 1872 as the Loan and Deposit Department of Manchester's Cooperative Wholesale Society, becoming the CWS Bank four years later. However, the bank didnot become a registered company until 1971. In 1975, the bank became the first new memberof the Committee of London Clearing Banks for 40 years, and thus able to issue its owncheques. Since 1974 the Co-operative Bank has consistently offered free banking for personalcustomers who remain in credit. It was also the first Clearing Bank to offer an interest bearingcheque account called Cheque & Save, in 1982. In 1991 the Bank shook the credit card marketwhen it introduced a guaranteed "free for life" Gold Visa card.The Co-operative banks in INDIA have a history of almost 100 years. The Co-operativebanks are an important constituent of the Indian Financial System, judging by the role assignedto them, the expectations they are supposed to fulfil, their number, and the number of officesthey operate. The co-operative movement originated in the West, but the importance that suchbanks have assumed in India is rarely paralleled anywhere else in the world. Their role in ruralfinancing continues to be important even today, and their business in the urban areas also hasincreased phenomenally in recent years mainly due to the sharp increase in the number of primary co-operative banks. Co operative Banks in India are registered under the Co-operativeSocieties Act. The cooperative bank is also regulated by the RBI. They are governed by theBanking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Introduction
Co-operative movement is quite well established in India. The first legislation on co- operation was passed in 1904. In 1914 the Maclagen committee envisaged a three tierstructure for cooperative banking viz. Primary Agricultural Credit Societies (PACs) at the grassroot level, Central Co-operative Banks at the district level and State Co-operative Banks at statelevel or Apex Level. The first urban co-operative bank in India was formed nearly 100 years backin Baroda.The co-operative banks arrived in India in the beginning of 20th Century as an officialeffort to create a new type of institution based on the principles of co-operative
6

organisationand management, suitable for problems peculiar to Indian conditions. These banks wereconceived as substitutes for money lenders, to provide timely and adequate short-term andlong-term institutional credit at reasonable rates of interest.In the formative stage Cooperative Banks were Urban Co-operative Societies run oncommunity basis and their lending activities were restricted to meeting the credit requirementsof their members. The concept of Urban Co-operative Bank was first spelt out by MehtaBhansali Committee in 1939 which defined on Urban Co-operative Bank. Provisions of Section 5(CCV) of Banking Regulation Act, 1949 (as applicable to Co-operative Societies) defined anUrban Co-operative Bank as a Primary Co-operative Bank other than a Primary Co-operativeSociety was made applicable in 1966.

DEFINITION OF CO-OPERATIVE BANKS

A co-operative bank is a financial entity which belongs to its members, who are at the sametime the owners and the customers of their bank. Co-operative banks are often created bypersons belonging to the same local or professional community or sharing a common interest.Cooperative banks generally provide their members with a wide range of banking and -operative banks differ from stockholder banksby their organization, their goals, their values and their governance. In most countries, they aresupervised and controlled by banking authorities and have to respect prudential bankingregulations, which put them at a level playing field with stockholder banks. Depending oncountries, this control and supervision can be implemented directly by state entities ordelegated to a co-operative federation or central body.

Features: Customer-owned entities

In a co-operative bank, the needs of the customers meet theneeds of the owners, as co-operative bank members are both. As a consequence, the first aimof a co-operative bank is not to maximise profit but to provide the best possible products andservices to its members. Some co-operative

banks only operate with their members but most of them also admit non-member clients to benefit from their banking and financial services.

Democratic member control

Co-operative banks are owned and controlled by theirmembers, who democratically elect the board of directors. Members usually have equal votingrights, according to the co-operative

Profit allocation
In a co-operative bank, a significant part of the yearly profit, benefits orsurplus is usually allocated to constitute reserves. A part of this profit can also be distributed tothe co-operative members, with legal or statutory limitations in most cases. Profit is usuallyallocated to members either through a patronage dividend, which is related to the use of theco-operati and services by each member, or through an interest or a dividend,which is related to the number of shares subscribed by each member.

Co-operative Banks are organized and managed on the principal of co-operation, self-help, and mutual help. -operative banks, as a principle, do not pursue the goalof profit maximization. Co-operative bank performs all the main banking functions of deposit mobilization, supply of credit and provision of remittance facilities. Co-operativeBanks provide limited banking products and are functionally specialists in agriculturerelated products. However, co-operative banks now provide housing loans also. Co-operative Banks belong to the money market as well as to the capital market.

Primary agricultural credit societies provide short term and medium term loans. LandDevelopment Banks (LDBs) provide long-term loans. SCBs and CCBs also provide bothshort term and term loans. Co-operative banks are financial intermediaries onlypartially. The sources of their funds (resources) are (a) central and state government, (b)the Reserve Bank of India and NABARD, (c) other co-operative institutions, (d)ownership funds and, (e) deposits or debenture issues. It is interesting to note thatintra-sectoral flows of funds are much greater in co8

operative banking than incommercial banking. Inter-bank deposits, borrowings, and credit from a significant partof assets and liabilities of co-operative banks. This means that intra-sectoral competitionis absent and intra-sectoral integration is high for co-operative bank.

MAIN FUNCTIONS OF CO-OPERATIVE BANKS

1.Co-operative Banks are organised and managed on the principal of co-operation, self-help,and mutual help. They function with the rule of "one member, one vote" function on "noprofit, no loss" basis. Co-operative banks, as a principle, do not pursue the goal of profitmaximisation. Cooperative bank performs all the main banking functions of depositmobilisation, supply of credit and provision of remittance facilities. Co-operative Banksprovide limited banking products and are functionally specialists in agriculture relatedproducts. However, co-operative banks now provide housing loans also. UCBs provideworking capital loans and term loan as well.

2. Co-operative bank do banking business mainly in the agriculture and rural sector. However,UCBs, SCBs, and CCBs operate in semi urban, urban, and metropolitan areas also. The urbanand non-agricultural business of these banks has grown over the years. The cooperativebanks demonstrate a shift from rural to urban, while the commercial banks, from urban torural. Co-operative Banks belong to the money market as well as to the capital market.Primary agricultural credit societies provide short term and medium term loans.

3. Cooperative banks in India finance rural areas under: Farming Cattle Milk Hatchery Personal finance

4.Cooperative banks in India finance urban areas under: Self-employment Industries

9

Small scale units Home finance Consumer finance

Types
There are two types of co-operative banks in INDIA.

1. The first is the short term lending oriented Co-operative Banks. In this category there areagain three sub categories of banks which are the State Co-operative banks, District Co-operative banks and the Primary Agricultural Co-operative societies.

2. The second is the long term lending oriented Co-operative banks. In this second categorythere are land developments banks which are at three levels. First is the state level, thesecond is district level, and the third is the village level.

Again the Co-operative banking structure in India is divided into five main categories and thesecategories are: 1. Primary Co-operative Credit Society .2. Central Co-operative Banks. 3. State Co-operative Banks. 4. Land Development Banks. 5.Urban Co-operative Banks. It is very much clear that co-operative banks have very much importance in nationaldevelopment. Without the help of co-operative banks, millions of people in INDIA would belacking the much needed financial support.

1.Primary Co-operative Credit Society : The primary co-operative credit society is an association of borrowers and nonborrowersresiding in a particular locality. The funds of the society are derived from the share capital anddeposits of members and loans from central co-operative banks. The borrowing
10

powers of themembers as well as of the society are fixed. The loans are given to members for the purchase of cattle, fodder, fertilizers, pesticides, etc.

2.Central co-operative banks : These are the federations of primary credit societies in a district and are of two types- those having a membership of primary societies only and those having a membership of societies aswell as individuals. The funds of the bank consist of share capital, deposits, loans and overdraftsfrom state co-operative banks and joint stocks. These banks provide finance to membersocieties within the limits of the borrowing capacity of societies. They also conduct all thebusiness of a joint stock bank.

3.State co-operative banks : The state co-operative bank is a federation of central co-operative bank and acts as a watchdogof the co-operative banking structure in the state. Its funds are obtained from share capital,deposits, loans and overdrafts from the Reserve Bank of India. The state cooperative banks lendmoney to central co-operative banks and primary societies and not directly to the farmer.

4.Land development banks: The Land development banks are organized in 3 tiers namely; state, central, and primary leveland they meet the long term credit requirements of the farmers for developmental purposes.The state land development banks oversee, the primary land development banks situated inthe districts and tehsil areas in the state. They are governed both by thestate government and Reserve Bank of India. Recently, the supervision of land developmentbanks has been assumed by National Bank for Agriculture and Rural development (NABARD).The sources of funds for these banks are the debentures 42subscribed by both central and stategovernment. These banks do not accept deposits from the general public.

5.Urban Co-operative Banks : The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed tolend money only for non-agricultural purposes. This distinction does not hold today. These
11

banks were traditionally centered on communities, localities, work place groups. Theyessentially lend to small borrowers and businesses. Today, their scope of operations haswidened considerably. The origins of the urban co-operative banking movement in India can betraced to the close of nineteenth century. Inspired by the success of the experiments relatedto the cooperative movement in Britain and the co-operative credit movement in Germany,such societies were set up in India. Co-operative societies are based on the principles of cooperation, mutual help, democratic decision making, and open membership. Cooperativesrepresented a new and alternative approach to organization as against proprietary firms,partnership firms, and joint stock companies which represent the dominant form of commercial organization. They mainly rely upon deposits from members and non-members andin case of need, they get finance from either the district central co-operative bank to whichthey are affiliated or from the apex cooperative bank if they work in big cities where the apexbank has its Head Office. They provide credit to small scale industrialists, salaried employees,and other urban and semi-urban residents.

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

1.The cooperative banks/credit institutions constitutes the second segment 2.of Indian banking system, comprising of about 14% of the total banking sector asset (March 2007). 3.Bulk of the cooperative banks operate in the rural regions with rural coop 4.banks accounting for 67% of the total asset and 67% of the total branches of all cooperative banks. 5.Share of rural cooperatives in total institutional credit was 62% in 1992-93, 34% in 2002-03 and 53% in 2006-07.
12

CHAPTER 2:

SARASWAT CO-OPERATIVE BANK

13

HISTORY OF SARASWAT CO-OPERATIVE BANK

The Bank has a very humble but a very inspiring beginning. On 14th September 1918, The Saraswat Co-operative Banking Society" was founded. Mr. J.K. Parulkar became its first

Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first Secretary and Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were the people with deep and abiding ideals, faith, vision, optimism and entrepreneurial skills. These dedicated men in charge of the Society had a commendable sense of service and duty imbibed in them. Even today, our honorable founders inspire a sense of awe and respect in the Bank and amongst the shareholders.

The Society was initially set up to help families in distress. Its objective was to provide temporary accommodation to its members in eventualities such as weddings of dependent members of the family, repayment of debt and expenses of medical treatment etc. The Society was converted into a full-fledged Urban Co-operative Bank in the year 1933.

The Bank has the unique distinction of being a witness to History. The Bank, which was originally founded in 1918, i.e. close on the heels of the Russian Revolution, also witnessed as a Society and as Bank-the First World War, the Second World War, India's freedom Movement and the glorious chapter of post-independence India. During this cataclysmic cavalcade of history, the Bank as a financial institution and its members could not of course remain unaffected by the economic consequences of the major events. The two wars in particular brought in their wake, paucities of all kinds and realities and stand by its members in distress as a solid bulwark of strength. The Founder Members and the later-day management's of the Bank continu demonstrate their unwavering faith in the destiny of the common man and the co-operative movement and they encouraged the shareholders to save despite all odds. Last two decades the Bank has witnessed a steady growth in the business and also taken several Strategic Business Initiatives like undertaking Business Process Reengineering initiative. Merging seven coop Banks and then consciously nurturing them. Bank tied up with VISA

international for issuance of Debit Card. The Bank has a network of 226 fully computerized branches as on 31st-Mar-2012 covering six states viz. Maharashtra, Gujarat, Madhya Pradesh,
14

Karnataka, Goa and Delhi. The Bank is providing 24- hour service through ATM at 147 locations. As on 31st March, 2012 Bank business had surpassed Rs 33000 Crores. Bank has retained its coveted position as ZERO NET NPA Bank for the eighth successive year. In 2011 Bank was granted permission for All India Area of Operation by Reserve Bank of India. Bank has an an ambitious business expansion plan in place to have a presence in all major cities of the country, reach a business level of Rs 50000 Crores by 2016 and Rs 100000 by 2018.

MISSION STATEMENT
"To emerge as one of the premier and most preferred banks in the country by adopting highest standards of professionalism and excellence in all the areas of working !!!"

MILESTONES
Thanks to these sustained and assiduous efforts over 25 years after its inception, the Bank had gained Strong foundation in terms of its membership, resources, assets and profits. By 1942, the Bank was fulfilling all the banking needs of its customers. During the late fifties, the Bank grew from strength to strength. The Bank had established five branches within the city of Mumbai and one each at Pune and Belgaum. In its 50th year, the Bank chose a bee motif to symbolise the Bank's emblem - a fitting and appropriate characteristics of a Bank that believed in hard work, a search for all that is good, a team spirit to achieve its objectives and a selfless service to its members and customers. The Bank has grown in stature, progressed in its social and economic objectives and produced an image of what an ideal bank should be. Resultantly, in the year 1977-78, the Bank's gross income crossed the Rs.3.00 crore mark for the first time. Last two decades the Bank has witnessed a steady growth in the business. The bank has a network of 205 fully computerised branches covering six states viz. Maharashtra, Gujrat, Madhya Pradesh, Karnataka, Goa and Delhi. The Bank is providing 24- hour service through ATM at 101 locations. In 1988 the bank was conferred with "Scheduled" status by Reserve Bank of India.The Bank is the first co-operative bank to provide Merchant Banking services.The Bank got a permanent
15

license to deal in foreign exchange in 1978. Presently the Bank is having correspondent relationship in 45 countries covering 9 currencies with over 125 banks. In 1992 Bank completed 75 years. Platinum Jubilee Celeberations were inaugurated on 14th September,1992. Bank also crossed the business level of Rs 700 Crores The Beginning of the 21st Century has been a giant leap forward for the Bank. Bank chose a path of organic/inorganic growth and our pace of growth accelerated .Bank's total business which was around Rs 4000 Crore in 2000 almost tripled to Rs 15295 Crore in 2007. The Business of the Bank as on 31st March 2009 had crossed Rs 21000 Crores. Bank in the year 2008 launched the Branding Initiative .The purpose of such an exercise was to reconfirm the thrust of Bank on its core values ,which can be summed up as "Sense of Belonging ".The name of the Bank should always inspire the Sense of Belonging in all its stakeholders and that Bank continues to fulfill the changing needs and expectations of the customer with unflinching gusto and aplomb . As on 31 st March,2010 Bank had surpassed the business level of Rs 23000 crore business. Bank by 1st November,2010 has already surpassed the business level of Rs 25000 crore . It is a matter of immense pride for the Bank that Bank's new Corporate Office at Prabhadevi Mumbai has recently become operational.The office reverberates our strong presence in the financial capital of the country. The massive edifice in crystal glass in heart of Mumbai gently reminds everyone of the numero -uno position which the Bank holds in the Cooperative Sector. The usage of state of art technology coupled with personal ambience's to make everybody comfortable once again reiterates Bank's adherence to "Think Global, Act Local". Profile"Service to the Common Man" has been the motto of Saraswat Bank for the last 91 years. Bank inspite of its growth in size has been able to offer to the customers the dual advantage of "Ability of Big Banks and Agility of Small Banks" The Bank still continues to function with the glorious tradition in public services Besides being the largest Urban Co-operative Bank in India, Saraswat Bank has now become the largest in
16

Asia. Saraswat Bank has now 205 fully computerised branches, 12 Zonal Offices and 23 departments located across 6 States viz. Maharashtra, Goa, Gujarat, Madhya Pradesh, Karnataka and Delhi. Saraswat Bank attributes this success to its undying spirit to serve the common man and to the sharpening of its competitive edge by constantly upgrading technology to match international standards. The Bank is fully computerised and offers convenient working hours. Saraswat Bank has introduced a wide range of credit schemes at attractive interest rates, which has become very popular, especially among the middle-class in view of the easy repayment plans. Bank offers attractive interest rates on deposits and also various add on features at very market competitive rates .

SWOT ANALYSIS:
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960sand 1970s using data from Fortune 500 companies.

STRENGTH:
It specifies the attributes of the person or company that are helpful to achieve the objective(s). Saraswat Bank is No. 1 amongst the 1,700 UCBs in the Urban Cooperative Banking Sector in India with over 90 years of cumulative banking experience. High standard regulatory environment. Flexible work permit system and good quality staff offering personal client service. Bank has implemented Core Banking Solution (CBS) in the Bank. This solution primarily aims at having a unified customer approach.

17

 Bank is a member of the Credit Information Bureau India Ltd. (CIBIL). CIBIL is Indias first credit information bureau and is a repository of factual information on the credit history and repayment records of millions of commercial and individual borrowers.

OPPORTUNITY:
External conditions that are helpful to achieving the objective(s). Maharashtra State has a huge banking business market of around Rs. 17,00,000/- crore. Of these Rs. 17,00,000 crore, Saraswat Bank has a business stake of only Rs. 20,000 crore, which is a miniscule of merely 1.2% share in the total banking business in the State of Maharashtra. This provides a huge opportunity to the bank. Saraswat Bank does 0.3% to 0.4% of the nations banking business. In India today, 60%of the population do not have access to a banking product; 80% of the population do not have access to an insurance product and 98% of the population do not have access to a stock market product. Thus, there is tremendous untapped growth potential in the Indian subcontinent

WEAKNESS:
Refusal to dilute stake in PSU banks: The government has refused to dilute its stake in PSU banks below 51% thus choking the headroom available to these banks for raining equity capital. Lack of competitive differential with other offshore centres Rigid legislation that inhibits business development

THREAT:
Rise in inflation figures which would lead to increase in interest rates. Increase in the number of foreign players would pose a threat to the PSB as well as the private players. Anti-offshore regulations in foreign target markets restricting the development of products and new markets.
18

 Downsizing and reduction in banking operations in favour of rival jurisdictions. Outsourcing to cheaper jurisdictions Subsequent impact on rest of finance sector ecosystem

SERVICES AND PRODUCT OFFERED BY SARASWAT BANK

It is our earnest Endeavour to offer suite of new and competitive financial products and services. We have for this purpose tied up with various insurance companies. The details of tie-up and products offered are given below:

Life insurance:
We are the Corporate Agents for the distribution of Life Insurance products, of M/S HDFCS standard Life Insurance Co Ltd. Under this tie up arrangement, we offer following life insurance products:

Protection Plans:
Protection Plans help to shield your family from uncertainties in life due to financial losses in terms of loss of income that may dawn upon them in case of your untimely demise or critical illness. Protection Plans go a long way in ensuring your family financial independence in the event of your unfortunate demise or critical illness. They are all the more important if you are the chief wage earner in your family. No matter how much you have saved or invested over the years, sudden eventualities, such as death or critical illness, always tend to affect your family financially apart from the huge emotional loss.

Children Plans:
Children Plans help to save, so that you can fulfill your childs dreams and aspirations. These plans go a long way in securing your childs future by financing the key milestones in their lives even if you are no longer around to oversee them. Childrens Plans help you save steadily over the long term so that you can secure your childs future needs, be it higher education, marriage or anything else. A small sum invested by you regularly can help you build a decent corpus over a period of time and go a long way in providing your child a secured financial future alongwith.
19

Retirement Plans:
Retirement Plans provide you with financial security so that when your professional income starts to ebb, you can still live with pride without compromising on your living standards. By providing you a tool to accumulate and invest your savings, these plans give you a lump sum on retirement, which is then used to get regular income through an annuity plan. Given the high cost of living and rising inflation, employer pensions alone are not sufficient. Pension planning has therefore become critical in today's world.

Savings and Investment Plans:

You have always given your family the very best. And there is no reason why theyshouldnt get the very best in the future too. As a judicious family man, your priority is to secure the wellbeing of those who depend on you. Not just for today, but also in the long term. More importantly, you have to ensure that your familys future expenses are taken care, even if something unfortunate were to happen to you. Our Savings & Investment Plans provide you the assurance of lump sum funds for you and your familys future expenses. While providing an excellent savings tool for your short term and long term financial goals, these plans also assure your family a certain sum by way of an insurance .

Health Plans:
Health plans give you the financial security to meet health related contingencies. Due to changing lifestyles, health issues have acquired completely new dimensions becoming more complex in nature. It becomes imperative then to have a health plan in place, which will ensure that no matter how critical your illness is, it does not impact your financial independence.

20

21

Easy pay:

Here is one more exciting facility the Bank has offered to relieve its customers, our esteemed client, from spending your valuable time standing in a queue for routine utility bill payments. All you have to do is to walk into any of our branch and register yourself under : Easy Pay scheme for all your recurring utility bill payments such as Telephone, Electricity Bills, Cellular Phone Bills, Insurance Premium & many more. Once you are registered all your future bills will be paid automatically through the bank account with us.

MACRO ANALYSIS

22

Current trends and technologies

Technology plays a very important role in banks internal control mechanisms as well as services offered by them. It has in fact given new dimensions to the banks as well as services that they cater to and the banks are enthusiastically adopting new technological innovations for devising new products and services. The latest developments in terms of technology in computer and telecommunication have encouraged the bankers to change the concept of branch banking to anywhere banking. Use of ATMs and Internet banking has allowed anytime, anywhere banking facilities. Automatic voice recorders now answer simple queries; currency accounting machinesmake the jobs easier for the employees and ensure faster service to the customers. Creditcard facility has encouraged an era of cashless society. Today MasterCard and Visa cardare the two most popular cards used world over.The banks have now started issuing smartcards or debit cards to be used for making payments. These are also known as electronic purses. With increasing popularity of tele- banking and e-banking, banking has become a 24*7 activity. And a system like ElectronicClearing Service has made receiving dividends and interest easier and safer by making bulk transfers from one account to many accounts (or vice-versa) possible. Mobile banking too is growing rapidly and banks are using SMS as major tool of promotion, giving great utility to their customers. With such changes in technology, banks today have left behind their traditional role of accepting deposits and lending money and focus on providing premium services to their customers to retain their brand name and reputation in the market.

1) Internet banking :

Internet banking: Also referred to as E-banking, internet banking is changing the banking industry and is having the major effects on banking relationships. Almost every bank has a website today and provides for delivery of its products & services electronically. In true Internet banking, any inquiry or transaction is processed online without any reference to the branch at any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice to have" service, and it is soon to become a norm from an exception due to the fact that it is the cheapest way of providing banking services. Using e-banking a customer can view account balances & statements, transfer

funds between accounts, create FDs Online, request a DD, pay bills, order a cheque book,request stop payment on a cheque, apply for and access credit cards, apply for loans and most importantly gets easy
23

access to complete information about various products and offers.

2) Phone Banking :

It use an automated phone answering system with phone keypad response or voice recognition capability. This feature is known as Interactive Voice Response System (IVR). With the obvious exception of cash withdrawals and deposits, it offers virtually all the features of an automated teller machine: account balance information and list of latest transactions, electronic bill payments, funds transfers between a customer's accounts, etc. Some banks engage call centers to provide 24*7 services to their customers, via toll-free numbers. Others connect their customers to phone bankers, but in this case, the service is only available for particular hours for which phone bankers are available. Some make use of both i.e. toll-free numbers for some services, and phone bankers for the ones that require professional assistance. Telephone banking representatives are usually trained to do what was traditionally available only at the branch: loan applications, investment purchases and redemptions, cheque book orders, debit card replacements, change of address, etc. 3) Mobile Banking :

ICICI was the first bank in India to introduce complete mobile banking services in the year 2007. Since then, conducting banking operations using the mobile phone has been fast catching up in the country. It works through a set of text messages (SMS). With SMS a customer can perform a wide range of query-based transactions from his/her mobile phone, like funds transfer (within and outside the bank),enquiry services (Balance enquiry/ Mini statement), request services (cheque book request), bill payment (utility bills, credit cards Saraswat Bank has introduced Mobile Banking. Customers can now initiate the following transactions at their end by using SMS banking long code 9223810000" a)Account balance enquiry Type SMS like SBAL & send it to 9223810000. Sample SBAL SBPUB 10
24

b)Last three transactions Type SMS like LST3 & send it to 9223810000. Sample LST3 SBPUB 10

ATM facilities

25

VISA Debit Card

To add to your convenience , your Bank has tied up with VISA for issuing Debit Card. VISA has a long-standing name in the banking industry in India as well as abroad. Visa is a reliable, international brand. Debit Card is basically a convenience card which can be used at a POS for making purchases at Merchant Establishments. This card can also be used as an ATM card for

26

withdrawing cash at all the ATMs bearing VISA logo in India and aboard. Debit Cards

This card can be used as an ATM card for withdrawing cash at the following ATMs: Debit card can be used at Domestic as well as International ATMs, POS machines bearing the Visa logo at merchant establishment and for Purchases/Ticket Booking through Internet that use a secured e-Commerce Payment Gateway.

Debit card can be used up to the balance available in the account of cardholder. The maximum amount for transaction (Point of Sale + Online + ATM) is maintained at Rs 25000/- per day. Benefits a. Facilitates electronic transactions and saves the customer from carrying cash

b. Provides access to merchant establishments, eCommerce transactions and ATM access.

c. Extensive usage across a number of establishments as VISA is widely recognized in all leading departmental stores, ecommerce sites and retail outlets all over the world.

27

Registration

The form for Registration can be downloaded from the "forms" section in the website or visit nearest branch

Charges : CHARGES HEAD Annual Fee Additional Card CHARGE Rs 99/- p.a. plus taxes Rs 99/- per card plus taxes.

Replacement Of a Damaged NO CHARGE Debit Card Replacement Of A Lost Debit Rs 99/- per card plus taxes. Card Pin Replacement SARASWAT Cash BANK / Rs 25/ATMs FREE Balance

Withdrawal

Enquiry Other banks ATM for Savings Free for the first five* transactions in a calendar month. A/c a)Cash Enquiry From 6th transaction onwards cash withdrawal will be Withdrawal/Balance charged at Rs 20/- per transaction(inclusive of service tax) & balance enquiry will be charged at Rs 10/- per transaction(inclusive of service tax)

*Includes both financial (cash withdrawal) & nonfinancial (balance enquiry) transactions.

28

Other banks ATM for Current Charges of Rs 20/-(inclusive of tax) per cash withdrawal A/c holders and Overdraft A/c for holders a) Cash Withdrawal Free. every transaction.

b) Balance Enquiry ATM Cash Withdrawal Rs 120/- per transaction.

(Outside India) ATM Balance Enquiry Rs 15/- per enquiry.

(Outside India) Sales Slip Retrieval / Charge Rs 225/Back Processing Fee Combined per day limit for Rs 25,000/ATM Cash Withdrawal / POS Transaction / Online Transaction For usage at Merchant No charges

Establishments (POS) For Internet Payments For usage at Petrol Pumps No charges Surcharge @ 2.50% of transaction amount or Rs 10/(whichever is higher) For usage at Railway Stations or Surcharge @ 2.50% of transaction amount or Rs 10/booking train tickets through (whichever is higher) Internet

CURRENT POSITION OF THE COMPANY:

29

Total Business
(Rs in crores)
30000 25000 20000 15295.4 15000 10000 5000 0 2007 2008 2009 2010 2011 18879.13 23517.08 21029.26 27312.95

Working Funds Rs in crores

25000 20000 15000 10745.47 10000 5000 0 2007 2008 2009 2010 2011 13874.1 15622.82 19186.27 17071.06

30

Own Funds
1600 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011 1042.4 1130.95 1174.24 1270.37 1473.49

Deposits
18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2007 2008 2009 2010 2011 8924.94 11430.82 12918.85 14266.73 15800.96

31

Advances
14000 12000 10000 8000 6000 4000 2000 0 2007 2008 2009 2010 2011 7448.31 6370.46 8110.41 9250.35 11511.99

Following schemes and interests which bank provides:Saraswat Bank ups interest on savings accounts to 6.14% The country's largest urban cooperative Saraswat Bank today announced that it would offer 6% interest on savings deposits which will be payable every quarter and thus effectively paying 6.14% interest on an annual basis.

The country's largest urban cooperative Saraswat Bank today announced that it would offer 6% interest on savings deposits which will be payable every quarter and thus effectively paying 6.14% interest on an annual basis "We have decided to offer 6% interest on savings deposits, effective December 1.

32

In fact, since we will be making the payout every quarter, the effective rate will be 6.14% on an annual basis," bank chairman Ekanath Thakur told reporters here. Giving the rationale for effecting the change, Thakur said, "We feel that in today's banking, the depositor is short-changed. And we, being the largest in the segment, wanted to change that and reward our depositors and also set the tone for the rest." It was on October 25, the Reserve Bank had deregulated the yield on savings accounts and let the banks to set the pricing. However, so far only three mainstream banks, that too mid-size ones Yes Bank, Kotak Bank and IndusInd Bank-- have followed suit. Thakur said, on the day (November 25) the Reserve Bank issued the guidelines deregulating savings bank deposit rates, their asset liability committee met and decided to reprice the SB assets. On the impact of this on his margins, the chairman said it will be about 40-45 basis points. The bank's current net interest margin, which is a key measure of a bank's profitability, stands at 3.78%, he added. But Thakur sounded confident about absorbing the higher outgo by better cost rationalisation and other overhead expenses. On expansion plan, Thakur said, the bank will have 300 branches by the end of this fiscal and 500 by 2014. Currently, the bank, set up in 1918, has 223 branches and 141 ATMs. Thakur said the bank has CASA of 28% with savings deposit accounting for 22% of its deposits while current deposits are 6%. The overall asset of the bank stood at Rs 29,500 crore as of the September quarter out of which deposit stood at Rs 17,000 crore and the rest were advances. Saraswat Co-operative Bank offers various loans to its customers. Bank takes care of its customers by offering comprehensive loan packages at extremely competitive rates, without any hidden costs. Our personalised service coupled with state of the art technology at absolutely market competitive rates shall make your Banking experience a truly memorable one.

33

Different services provided by bank :

RTGS/NEFT Cash Pick Up Nomination of Deposits Death Claim Settlement Standing Instructions Lockers

Various deposit schemes :-

Saraswat Bank provides information of it's various Investment & Insurance products which customers can avail of with the bank.

I.

Savings Deposit

A Savings Account for everyone to inculcate the habit of saving and avoid thrift. Bank offers you a host of convenient features and banking channels to transact through. Personalized service coupled with technology enabled products is the hallmark of our service. We offer you a saving account with host of products like SMS Banking, Mobile Banking and allow you to operate your account in the confines of your home /office through internet . Bank offers you a VISA debit card. All the services are offered to you with very simple terms and conditions and minimal charges. The salient features of the saving account are given as under

Bank conveniently with facilities like Net Banking and mobile banking- Check your Account Balance. Take advantage of Easy Pay, an instant solution to all your frequent

34

utility bill payments

Never overspend. Shop using your international Visa Debit Card depending on the balance in your saving account

Wide ATM coverage and get connected to ATM across the world through VISA Debit Card

Free Personalized Cheque Book with name printed on each cheque leaf for enhanced security.

Avail of facilities like Safe Deposit Locker . Free Passbook facility available at home branch for account holders (individuals).

II. Term Interest

Fixed Deposit Schemes Deposit Monthly, - Interest Quarterly, Payout Half Schemes Yearly

Eligibility Individual Minor by guardian, Organizations, Co-op. Societies Features TDS applicable Form 15H/15G required to be submitted for exemption of TDS. Nominal member of the bank will also be exempted from TDS. If you are exempt from paying tax, you need to present Form 15H when you open a Fixed Deposit and subsequently at the begin

Penalty In case of payment before maturity Interest upto 15 days will be Nil

Above 15 days : 1% less than applicable rate of Interest for the actual period for which deposit is

35

kept with the Bank.

III.

Current Deposit

36

Fasten your pace with a current account which offers you out of the world service experience by combining personalized service with many appropriately priced features. Our customer friendly staff will not leave any stone unturned to make your experience a memorable one. Internet Banking, SMS Banking all will allow you to Bank from the comfortable confines of your home and office. All our branches are on Core Banking which allows you free transfer of funds from one account to another at any branch. We also have a tie up with VISA and offer a VISA debit card.

Bank conveniently with facilities like free Net Banking and SMS Banking - Check your account balance.

Never overspend. Shop using your international Visa Debit Card depending on the balance in your saving account.

Wide ATM usage and get access to ATMs all over the world through our VISA tie-up. Avail of Safe Deposit Locker facilities(subject to availability) . Free monthly statement. Avail Personalized chequebook for enhanced security at nominal prices . Take advantage of Easy Pay. An instant solution to all your frequent utility bill payments.

Free Cash Deposit/withdrawal from any branch of Saraswat Bankup to Rs 25000. Free transfer to any account in any branch of Saraswat Bank through Any Branch Banking.

Essential for small & Medium Enterprises (SMEs) For a business on the growth phase with a wide range of opportunities to explore, timely availability of credit is essential to scale new heights. At Saraswat Bank we see ourselves as partners to Clients business enabling them to focus on their business needs.

37

a. Working Capital We are a Bank with a team of technically qualified competent customer driven relationship managers possessing wide industry experience in various segments

Our Bank has taken lot of efforts to understand customers & empathizing with their needs.

We can offer you working capital finance by way of cash credit or loans suitably structured to your need and risk profile in consortium or as a lead banker. Our working capital solutions are based on financial , quantitative & qualitative evaluation of your business through our technically qualified experts. b. Import Finance Bank is providing import finance to its valuable customers by providing letter of credit facility for its customers to purchase their raw materials . These are generally provided for days . Our Bank provides term finance/term loans for business expansion, upgradation of existing facilities etc to ease the pressures on margins of the company.The Bank is providing structured term loans to meet your short term as well as long term funding requirements . We offer specific solution so as to match repayment with your cash flows to repay the debt thereby enhancing your profitability c. Export -Credit: If you are a eligible exporter Sarswat Bank offers you Pre Shipment Credit facilities and Post Shipment Credit Facilities d. Pre-Shipment-Credit-facilities: We offer Pre-shipment credit by way of Packing Credit enabling you to finance purchase/import of raw materials, processing and packing of the goods meant for exports Post shipment Credit facilities Post shipment credit facility is offered to an exporter to finance export sales receivables after the date of shipment of goods till the date of realization of export 90 to 180

38

proceeds . We offer our client a choice of the following services :

1) Negotiation /Payment /Acceptance of documents under letter of credit. 2) Purchase/ discount of export document under letter of credit. 3) Advance against export bills sent on collection basis. 4) Advance against exports on consignment basis. 5) Advance against undrawn balance on exports. e. Bill Discounting We are offering facility which are customized to suit your requirement for short term finance from the date of sale to date of receipt of payment thereof. Our processes are simple, allowing you to establish single window contact with competent dedicated personnel at any of our branches as per your convenience.

f. Bank Guarantees Bank issues various types of guarantees - performance, financial, for its customers. Our guarantees are well accepted by all government agencies including Customs, Excise, Insurance Companies, Shipping Companies and all major corporates.

Different types of loans a) Property Loan Saraswat Bank offers loan faciltiy for acquiring another asset / property based on the following conditions:-

Eligibility :

39

Salaried employees with minimum net salary of Rs. 10000 pm (Income of spouse may be added) Professionals, self - employed and others who are income tax assessee having net annual taxable income of Rs. 150000/- for atleast 3 years continuously.

operation for

last

years

making

cash

profit

for

last

years.

Limit-of-Loan Minimum-Rs.2-lakhs Maximum - Rs. 50 Lakhs Security Equitable Mortgage of Residential, commercial or industrial property. Guarantor: Need not be obtained however in case of firms, companies, guarantee of partners, directors to be obtained.

Share-Holding 2.5% of the loan amount, Maximum 2500 shares, Guarantors as nominal members.

Documents-Required Others: 1)I.T.Returns. 2) For salaried employees income proof such as Form No.16 along with salary certificate from employer 3)Original Title Deeds of the property offered for mortgage.

4) Other documents as per Vastu Siddhi Loan Scheme

b) Rental Loans

40

Maximum amount or 65 % of the total net rent (i.e. rent after taxes such as property tax, TDS) to be received whichever is lower. Margin : 35 % Repayment Period: 5 years maximum or till the remaining period of the lease which is earlier. Security: Equitable mortgage of the property given on rent or any other acceptable property of value of 35% more than the loan amount, subject to valuation certificate from Banks approved valuer.

Processing Fees. - .0.5 % of the loan amount. Guarantors : In case the borrower is a partnership firm or a limited company, personal guarantee of the partners/directors .

41

FINANCIAL ANALYSIS AND STRATEGIES: Financial Accounting is a process of systematic recording of business transactions in the various books accounts maintained by organization with the ultimate intention of preparing financial statements there from. Financial accounting ultimately aims at preparing financial statements which are basically in two forms: Profit and loss statement is a period statement and related to curtained period, usually one year. This tells about the results of operations, either profit or loss, arising out of the conduct of business operations during that period Balance sheet which is a potion statement and relates to a particular point of time. This tells about the various properties held by the business (termed as Assets) and obligations accepted by the business (termed as Liabilities) as on particular date. Balance Sheet: The purpose of preparing the balance sheet is to disclose financial status of an organization in the form of assets and liabilities at a given point of time. Liabilities: Credits balances in all the personal and real accounts appear on liabilities side. The following items may appear on the liabilities side: Capital: Capital Indicates the amount of funds contributes by the owner of business to requirement of fund of business. Similarly, any amount of profit earned in past which is not distributed to the owner also belongs to owner and become a part of the business. Long term liabilities: This indicates the liabilities which are to be paid off over long period of span of time say 5 to 10 years. In practical circumstances, it may consists of long-term loan borrowed from a bank and financial institutes. Currents liabilities: This indicates the liabilities which are suppose to be paid off which a very short span of time say one year. In practical circumstances, it consist Sundry creditors, Advances received from customer, Outstanding expenses, Income received in advanced, Liability taxes.

42

Assets: Debit balances in all the personal and real accounts appear on assets side. Following items may appear on assets side: Fixed assets: Fixed assets indicate the value of infrastructure properties acquired by the business where the benefit received over long period of time. Fixed assets are land, building, machinery, furniture vehicles, and computer. Investments: This indicates the amounts of funds invested by the organization outside the business. Current assets: Current assets are the assets which are likely to be converted in the form of cash of likely to be consumed during the normal operating cycle of a business within a very short span time say one year. Current assets are stocks, sundry debtors, cash & bank balances, prepaid expenses.

BALANCE SHEET AS AT MARCH 31, 2011

(Amount in Rs) CAPITAL & LIABILITIES 1) CAPITAL 2) RESERVE FUND & OTHER RESERVES 3) DEPOSITS & OTHER ACCOUNTS 4) BORROWINGS 5) BILLS FOR COLLECTION 6) BRANCH ADJUSTMENTS 7) OVERDUE INTEREST RESERVE I. II. ON INVESTMENTS ON LOANS & ADVANCES 8) INTEREST PAYABLE 9) OTHER LIABILITIES 5 86,56,644.00 1,35,32,79,974.37 46,47,62,566.51 8,48,72,72,442.32 86,56,644 1,51,26,21,884 49,93,00,234 7,51,27,72,392 3 4 1,58,00,96,07,293.84 8,45,61,53,945.78 15,05,61,88,896.43 4,64,05,350.95 1,42,66,72,86,137 5,62,00,09,609 14,40,59,01,784 11,48,47,457 Schedule 1 2 31.03.2011 1,02,83,24,160.00 16,46,43,74,616.70 31.03.2010 86,23,11,100 15,52,67,03,382

43

10) PROFIT & LOSS GRAND TOTAL Contingent Liabilities

2,12,59,98,810.80 211,50,10,24,701.70

1,21,73,25,875 189,94,77,36,498 15,50,03,29,595

13

15,63,74,41,052

(Amount in Rs) PROPERTY & ASSETS 1) CASH 2) BALANCES WITH OTHER BANKS 3) MONEY AT CALL & SHORT NOTICE 4) INVESTMENTS 5) ADVANCES 6) INTEREST RECEIVABLE 7) BILLS RECEIVABLE 8) FIXED ASSETS 9) OTHER ASSETS 10) COMPUTER SOFTWARE 11) DEFERRED AMORTISATION OF INVESTMENTS 12) NON-BANKING ASSETS ACQUIRED IN SATISFACTION OF CLAIMS TOTAL 211,50,10,24,701.70 189,94,77,36,49 22,78,400.00 22,78,400 11 12 9 10 52,53,76,68,612.60 1,15,11,99,23,393.74 1,35,32,79,974.37 15,05,61,88,896.43 5,45,73,77,098.58 8,29,64,60,223.62 62,000.02 3,10,14,176.42 53,21,39,11,321 92,50,35,46,892 1,51,26,21,884 14,40,59,01,784 5,51,06,28,226 7,05,70,97,868 1,90,000 3,90,19,314 34,64,22,562.00 1,31,84,56,314 Schedule 7 8 31.03.2011 11,03,74,27,758.63 2,26,29,21,605.29 31.03.2010 10,00,16,55,468 4,38,24,29,025

44

Profit and Loss accounts: A profit and Loss account is prepared to disclose the results of operation of the business transaction during certain duration of time. Accounts may have following four components: Manufacturing accounts: This part of profit and loss accounts discloses the results of manufacturing operations carried out by the organization. The final result in terms of manufacturing accounts is a cost of production incurred by the organization. Trading accounts: This part of profit and loss accounts discloses the results of trading operations carried by organization. The final results in terms of Gross Profit earned by the organization. Profit and Loss accounts: This part of profit and loss accounts discloses the final results of business transactions of the organization. The final results in terms of Net profit earned by organization. Profit and Loss appropriation accounts: This part of profit and loss accounts which mainly applicable to company form of organization, discloses the manner in which the net profit earned by the organization is appropriated. The amounts of profit not appropriated or retained transferred to reserves and surplus in balances sheet.

45

PERFORMANCE HIGHLIGHTS Table A (`in Crore) Particulars FOR THE YEAR ENDED 31-Mar-10 31-Mar-11 Total Income 1,458.20 1,690.86 Total Expenditure 1,242.36 1,332.67 Gross Profit 215.84 358.19 Less: Provisions 36.68 63.39 Net Profit Before Tax and Exceptional Items 179.16 294.80 Less: Income 40.00 81.23 Net Profit After Tax and Exceptional Items 139.16 213.57 Less: Exceptional Items 19.49 1.30 Net Profit 119.67 212.27 AT THE YEAR END Own Funds 1,270.37 1,473.49 Share Capital 86.23 102.83 Reserves and Surplus 1,184.14 1,370.66 Deposits 14,266.73 15,800.96 Current 1,244.30 1,050.94 Savings 3,003.37 3,513.15 Term 10,019.06 11,236.87 Advances 9,250.35 11,511.99 Secured 9,151.61 11,433.19 Unsecured 98.74 78.80 Priority Sector 5,300.48 5,765.90 % to Advances 57.30% 50.09% Small Scale Industries 2,946.54 2,443.75 Small Businessmen and Traders 689.47 526.94 Other Priority Sectors 1,664.47 2,795.21 Working Capital 17,071.06 19,186.27 Investments 5,321.39 5,253.77 Borrowing And Refinance 562.00 845.62 Net NPAs (%) 0.00 0.00 Capital Adequacy (%) 14.63 12.74 Number of Members Regular * 1,34,417 1,62,560 Nominal 4,94,292 5,26,331 Number of Branch Licences/Branches 200 216 Number of Employees 2,911 3,338 Productivity per Employees 8.08 8.18 Profit Per Employes (in laces) 4.11 6.36 % Change 15.96% 7.27% 65.95% 72.82% 64.55% 103.08% 53.47% -93.33% 77.38% 15.99% 19.25% 15.75% 10.75% -15.54% 16.97% 12.15% 24.45% 24.93% -20.19% 8.78% -17.06% -23.57% 67.93% 12.39% -1.27% 50.47% 0.00

46

Return on Average Assets (%) Net Interest Margin (%) Maximizing CASA deposits:

0.74 2.61

1.16 3.52

A sharp focus on reduction in costs has become priority No. 1 in your Bank. On the liability side, the cost advantage will be available to your Bank, only if the Bank makes rapid strides in mobilization of Current Accounts and Savings Accounts (CASA). Major banks in the country have around 35% to 45% CASA deposits, while your bank has been hitting only the 22% to 30% range in CASA deposits. As CASA deposits carry an average low level of interest, the average cost of funds (i.e. CASA Deposits + Term Deposits)comes down. We have repeatedly impressed on our staff the need to mobilize CASA deposits aggressively. Reduction in NPA: To bring down the Gross NPA level as also to ensure that substantial new NPAs are notadded, branches were asked to speed up efforts for recovery in respect of overdue accounts with them. The drive for reduction in NPAs has been hugely successful under the leadership of Sheri P. G. Kamath, Chief General Manager. Marketing: Business Process Reengineering (BPR) initiative primary objective of this initiative is to convert the branches into sales and service outfits. India is a huge banking market but The penetration of Indian Banking is thus one of the lowest in the world. Also a large number of our branches are functional in Maharashtra State, which has a huge banking business market of around Rs. 17,00,000/- crore (with aggregate bank deposits of Rs. 8,57,771 croreand gross credit of Rs. 8,34,701 crore in September 2008). Of these Rs. 17,00,000 crore,we at Saraswat Bank have a business stake of only Rs. 20,000 crore, which is a minisculeof merely 1.2% share in the total banking business in the State of Maharashtra. This provides a huge opportunity to banks including your Bank. In fact, it is on the basis of these statistics that we have planned to do a business of Rs.1,00,000 crore by 2021 under Dr. Adarkar Mission IV of your Bank. All the employees in the branches are being trained, equipped and instructed to take extra efforts for marketing all the products and services of your Bank
47

4 Ps OF MARKETING: Basically, the concept of Marketing is given by McCarthy who has classified Marketing Mix tools of four broad kinds called 4 P's and they are as follows Product Price Promotion Place These marketing mix tools are used by the marketers to influence their trade channels and final consumers. The Saraswat co-operative banks 4P's criteria is followed below 1) Product Sarswat co-operative bank is No. 1 amongst the 1,700 UCBs in the Urban Co-operative Banking Sector in India. The fact remains that we do 0.3% to 0.4% to nation's banking business. A Sarswat Co-operative Bank has special Product Development Department which is been seen by Sheri M.S.Vaidya, Dy.General Manager. The product Development department has initiated into all these areas Products and their attributes. Unique Selling Propositions of our Products. Marketing positions of our products. Promotional imperatives. Value addition ingredients of our products and their enrichment.

This helps the bank to process of redefining and refashioning our existing products and creating new products.
48

 This helps to maintain relationships i.e. helps to maintain CMR

2) Place The bank has adopted the policies of inorganic growth since 2006 for increasing its branch outlets From 2009 the bank has been pursuing a mix of inorganic and organic growth for branch expansion purposes. The bank has adopted the cluster based approach . Instead of having an isolated branch, they have 4-5 branches in a far off area. This approach has enabled the bank to cluster presence in western Maharashtra, Goa and Karnataka. The bank has planned under Dr.Adarkar Mission 2, to open 70 more branches by 31stMarch,2011 The is following the mantra of one branch in every 15 days in programme called 'Ashwamedh' 3) Promotion Promotion of any brand is very necessary; this helps the marketer as well as customer to understand each other well. The Sarswat Co-operative bank has appointed Sheri Dilip Prabhavalkar, veteran artist as their Brand Ambassador This has heed the bank to achieve and promote heights of success in their business To attract the young generation the bank has appointed a junior brand ambassador to Ms.Shalmali Sukthankar, budding artist. From last five years the bank has encapsulated and expressed our uniqueness to the customers that the bank is having the "Ability of the Big and Agility of the Small" 4) Pricing

49

 In any service industry, cost leadership is critical to the long term success of the organization. The bank has to compete with other banks on the basis of total reduction of all economic and unwarranted expenditures and also to control costs in all areas The bank initiatives are as follows Optimum utilization of the available resources of he bank. Streamlining/Re-engineering various procedures in the bank, thus improving customer service. The bank has sustained work of the income and cost council, which helps the bank to offer services to the customers with lower intermediations costs. HR POLICY AND ORGANIZATIONAL STRUCTURE: Internal Capability Building Measures (ICBMs): The bank pursued the recruitment and promotional policy during the year 2008-2009 as per Internal Capability Building Measures (ICBM).

Promotional Exercise The Bank had undertaken promotional exercise in the year 2002 when organizational restructuring was done as per the recommendations of M/s Seven S Associates. The Bank has been undertaking expansion of branch network and has been implementing BPR exercise too, which is resulting in transforming the organization. In order to cater to the growing expanse of the Bank and the need for managerial positions in the wake of the same, a promotional exercise to various cadres was conducted. A total of 385 employees were promoted to various cadres. All promoted personnel have been suitably deployed at various branches (including the branches of the merged banks) and/or departments.

50

Training During the FY 2008-09, a total of 2,225 employees, consisting of 1,058 from management and 1,167 from non-management cadre attended 98 training programmes conducted at the Staff Learning Centre at Vashi, Navi Mumbai, as well as at various branch locations. A special emphasis was given on training of new recruits and employees of erstwhile banks merged with this Bank at their respective locations as well as at the Staff Learning Centre at Vashi, where the focus was on validation process, know the Bank, the internal software package OMNI and the retail products of the bank.

Customer Service The bank has adopted the following codes based on the Standard codes documented byIndian Banks Association: Customer Fair Practice Code Cheque Collection Code Bankers Lender Liability Code Compensation Policy Saraswat Bank has become a member of the Banking Codes and Standards Board of India. This board ensures that the Codes so defined by the Bank are implemented in letter and spirit. For measuring customer satisfaction, a bank- wide Customer Service Audit has been planned to be commissioned by the Board in the ensuing year. Industrial Relation:

The Banks human resources have been organized under the two representative bodies viz. the Officers Association and the Employees Union. The industrial relations with both these organizations have been very cordial with joint discussions being held with the Association/the Union for redressing employee issues in an amicable way. Voluntary Retirement Scheme (VRS):

51

This year, the Bank launched the VRS for its employees. Around 236 employees from your Bank (excluding those of merged banks) opted for VRS under the said scheme. Besides, 83employees of the erstwhile Nasik Peoples Cooperative Bank Ltd., 43 employees of erstwhile Annasaheb Karale Janata Sahakari Bank Ltd. and at around 100 employees of the erstwhile Murgharajendra Sahakari Bank Ltd. (i.e. in all 462 employees) opted for VRSand have been relieved under the Schemes. The Bank acknowledges with gratitude the sincerity and hard work put in by all these employees during their tenure with the Bank and wishes the retired employees an eventful and healthy post retirement life.

CSR (CORPORATE SOCIAL RESPONSIBILITIES): Corporate Social Responsibility (CSR) is not a new fashion but it is an old creed for this organization. The founders and their successors understood and underscored the principle that a cooperative institution must always stay connected with the needs and aspirations of the society at large and hence CSR constitutes the umbilical cord that connects this bank to the society. The laudable gesture of late Wamanrao Varde and his associates on the Board then in spontaneously responding to the grave scarcity of foodgrains during the Second World War and in starting on behalf of your Bank a ration shop at Girgaum in Mumbai to make available food grains to all, is a resplendent example of the early awareness of CSR in this Bank. This was so because all members of the community always understood that a co-operative institution must always have a social purpose. Bank thereafter also started scholarships and apprenticeships for deserving students and through that process built the careers of several young men. Your Bank has been providing financial assistance to many social, educational and medical institutions by way of grants every year from its funds. From time to time the Board of Directors responded to national and natural calamities like flood, famine, earthquake etc.

52

Following are the few initiatives both at macro and micro level, which spell out the banks vision of Corporate Social Responsibility (CSR): As a macro level expression of CSR, we in association with Maharashtra Times created an intellectual platform entitled "Shikhar Maharashtra" .with the objective of researching into, debating and finding ways and means to deal with the many stubborn economic and social issues that Maharashtra faces today. A gala opening of Shikhar Maharashtra was held on27th July 2007 at Ravindra Natya Mandir, Mumbai. The programmes went on for two days wherein the social and political leaders from Centre and State participated. The inauguration of this forum of 'Shikhar Maharashtra" will pave the way for bringing to the table the daunting problems that our State faces today. It is proposed that at an interval of every three months, a major issue facing Maharashtra such as farmers' suicides, malnutrition, scarcity of drinking water, famine and hunger, etc. is discussed threadbare on this nonpartisan platform by soliciting the participation of intellectuals and social workers who are active in the field and thereafter recommendations are made to the Government on the remedies that may ameliorate the situation and pursued thereafter. As part of CSR, at the macro-level the Board of Directors took serious cognizance of the plight of farming community and continuing suicides of farmers and with a view to instilling hope among farmers, they supported the 'Project Hope' of late Baba Amte'sMaharogi Sewa Samiti at village Mulgavan, Taluka - Jhari Jamini, Distt. Yeotmal. A substantial donation of Rs. 1.00 crore was made towards this project, where experts and volunteers are engaged in offering hope and succor to thousands of farmers by building check dams and initiating farmers into newer cultivation practices enabling them to bolster income generation and income supplementation. At the macro-level, the third major issue that the Board of Directors took was one belonging to the home turf viz. the 5,90,619 small depositors losing their hard earned money which they had kept in deposits in urban co-operative banks. It is here that the bank stepped in, assimilated five ailing UCBs in our Bank, resurrected all the deposits of all the depositors and even restored those banks back to pristine health. Along with such macro issues, the Bank has extended support in specific cases by way of action at micro-level, which would prove inspirational for others. Some of these commendable acts in CSR are as under:

53

Bank's contribution towards protecting cultural lineage of Maharashtra: The bank sanctioned a sponsorship grant of Rs. 25 lakh for the RSS volunteers working for the project "Shilpkaar Charitra Kosh". This project deals with the publication "Vivek", engaged in bringing out chronicles on the lives of great men of all walks of life who have contributed to make Maharashtra what it is today Late Annabhau Sathe was a peoples' poet-singer of Maharashtra. Some nine months ago, the pitiable plight of his entire family living in indigence was depicted in newspapers. The Bank's representative rushed to Sangli and in order to provide sustenance to the family.

Employment to deserving kith and kin of deprived section of society: Sheri Nitin RajhansBagwe - son of a mill-worker was born as a dwarf and after reaching manhood reached a height of barely three feet. It was with the help of surgeries that his height was artificially pulled up to four and half feet. With sheer determination he completed his education in commerce and also cultivated the hobby of photography. Recognition of sheer Grit and Bravery: Sheri Gorakh Newale, a Municipal worker at Chinchwad in Pune was injured while saving the lives of many people from a tiger, which had entered human habitat. Sheri Mohan Pandurang Redkar an engineer by profession hailing from Malwan taluka wasin Mumbai for his mother's treatment. While in Mumbai, he was going by the Bandraseashore to a medical shop to bring medicines for his mother. At the seashore, he happened to see two couples drowning in the sea and he leapt to their rescue. While he saved all the four lives, unfortunately he was drowned in the process. The news reports appearing next day saddened every one. His family at Malvan in Sindhudurg District was drowned in sorrow Bank salutes the Martyrs: In the recent terrorists attack on Mumbai , the first and hopefully the last of its kind, many brave soldiers laid their life for the security of the country.Amongst them were Sheri Tukaram Ombale, Shri.Balasaheb Bhosale, Shri Arun Chitte,ShriMurlidhar Choudhari and Shri Ambadas Ramchandra Pawar. In recognition of their services Saraswat Bank appointed Next of Kin of these brave soldiers in the services of the Bank. Shri Ajit Gawkar , brave Indian soldier died while fighting intruders/enemies on the Jammu and Kashmir Border. In recognition of his services to the country, Saraswat
54

Bank appointed his wife in the services of the Bank on the occasion of 61st Independence Day. Ms Krishna Patil the third woman to successfully complete the Mt. Everest Expedition, was granted loan waiver for Rs 30 lakhs in recognition of her bravery, grit, determination and never die enthusiasm

55

56

AWARDS AND RECOGNITIONS: Bank participated in the study conducted jointly by the Great Places to Work Institute India and the Economic Times, to distinguish a good work place from a great one. Based on the study of over 373 participants spanning a multitude of sectors, the top 50 best workplaces were elected. We are happy to announce that your Bank has been adjudged and included in Indias Best Companies to work for - Year 2009" and in the banking industry vertical, your Bank is placed fourth after American Express, Kotak Mahindra Bank and HDFC Ltd. The citation reads as under: The Saraswat Co-operative Bank Ltd. Ranked 4th in Banking& Credit Services for inspiring trust among your people, for instilling pride in them, for creating an Environment within the workplace that promotes camaraderie and for many other reasons that makes your organization one of the Indias.

57

CONCLUSION The market is seeing discontinuous growth driven by new products and services that include opportunities in credit cards, consumer finance and wealth management on there tail side, and in fee-based income and investment banking on the wholesale banking side. Given the demographic shifts resulting from changes in age profile and household income, consumers will increasingly demand enhanced institutional capabilities and service levels from banks. With the growth in the Indian economy expected to be strong for quite sometimeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be on rise. Reserve Bank of India (RBI) has approved a proposal from the government to amend the Banking Regulation Act to permit banks to trade in commodities and commodity derivatives.

58

SUGGESIONS In wake of this, old private sector banks also have the need to fundamentally strengthen skill levels. However, even more imperative is their need to examine their participation in the Indian banking sector and their ability to remain independent in the light of the discontinuities in the sector. Accelerate the creation of world class supporting infrastructure (e.g., payments, asset reconstruction companies (ARCs), credit bureaus, back-office utilities) to help the banking sector focus on core activities. Slower growth in retail credit and narrow spreads spells better fortune for banks that have higher concentration of corporate assets and low cost deposits along with good asset quality. Saraswat Bank perfectly fits into this matrix. Sustenance of a healthy current and savings account mix and little deterioration in asset quality also reiterates the operating efficiency of the bank. Being the largest Urban Co-operative bank, Saraswat Bank is also one of the lead contenders to initiate the process of building up scalability by acquiring smaller banks in the PSU and private sectors. Besides offering the opportunity to cater to borrowing needs of some of the largest corporate in the country, the consolidation process will also brings about economies of scale for the bank . The banking today is re-defined Andre-engineered with the use of Information Technology and it is sure that the future of banking will offer more sophisticated services to the customers with the continuous product and process innovations . Thus, there is a paradigm shift from the sellers market to buyers market in the industry and finally it affected at the bankers level to change their approach from conventional banking to convenience banking and mass banking to class banking. The shift has also
59

increased the degree of accessibility of a common man to bank for his variety of needs and requirements. Also, the banks healthy ROA (Return of Average Asset) and CRAR (Capital to Risk Asset Ratio) is a matter of comfort. Having said that, the banks market share of merely 1.2% in the total banking business in the State of Maharashtra is our lingering concern. We have a positive view on the bank with respect to its future growth prospects

60

BIBLIOGRAPHY 1.History of Banking in India: http://finance.indiamart.com/investment_in_india/banking_in_india.htmlhttp://www.bsein dia.com/downloads/BankingSector.pdf

2.Banking terminology: http://www.meridianadvantagemember.com/fileuploads/Bank_Terminology.pdf

3.Mergers and Acquisitions:http://www.economywatch.com/mergersacquisitions/international/banking-sector.htmlhttp://finance.mapsofworld.com/mergeracquisition/india.html

4.Current position and financial analysis of the bank: Saraswat Banks Annual Report for the year 2008 , 2009 , 2010 ,2011

5.History of the banks and Corporate Social Responsibilities:http://www.saraswatbank.com

61