GMCB

UNDERSTANDING of BANKING OPERATIONS & CREDIT CONTROL AT GANDHIDAM MERCENTILE CO-OPERATIVE BANK A PROJECT REPORT submitted by Jitendra Parmar
Shivang Suchday 2011-2013 11054 11079 To Director (PGDM) In partial fulfillment of the requirement of TOLANI INSTITUTE of MANAGEMENT STUDIES, ADIPUR For the award of the degree of Post Graduate Diploma in Management
Tolani Institute of Management Studies. Adipur 370205 (Kachchh). JUNE 2012.
ACKNOWLEDGEMENT
To achieve the success in any stage of life there needs to be proper guidance, cooperative and support by many individuals. Many people have contributed towards making this project a success We express our sincere Thanks to Mr. Suresh M. Kundliya and all staff members of GMC Bank for being the light & showing the path for the doing project since it was new to us.
We would like to express our gratitude for faculty members and mentor Mrs.Deepa Mishra and the director of PGDM, Mrs.Sampada Kapse, and all the faculty members who extended their helping hand whenever required.
Tolani Institute of Management Studies
EXECUTIVE SUMMARY
This study is attempted with an objective to get familiar with banking transactions and to get knowledge about operational banking at GMCB-Gandhidham. Banking is financial inter-mediation between the financial savers on one hand and the funds seeking business entrepreneurs on the other hand. A bank accepts deposits from customer and lends them to earn profit and in this way bank earns profit but at the same time it has to maintain liquidity. Our main objective was to know about banking operations which was very well explained by the employees of GMCB. The operations which we studied at GMCB includes Depository services, Transfer, Loans, Clearing, Safe Deposit vault , Inward and outward bills for collection. The demand draft or pay orders how it is made and useful, for this GMCB has a tie up with the HDFC & INDUSDIN. The loans or OD given to customers as advances, they are given in many ways. How the other bank cheques are cleared in the clearing house. The facilities given to shareholder and how can they avail these facilities. The other part of the project gives us knowledge about Credit control policies in Banks. How they manage cash .During receipt and payment of cash which points should be taken care of and how CRR and SLR is maintained in GMCB. The Primary data for banking operations is collected through the primary source from the employees of the GMCB. The secondary data was collected through the internet, books and the annual reports of the bank.
TABLE OF CONTENTS
Sr. No.
Description ACKNOWLEDGEMENT EXECUTIVE SUMMARY LIST OF TABLES LIST OF FIGURES LIST OF ABBREVIATIONS USED
Page. No. 2 3 5 6 7
INTRODUCTION 1.1 Introduction to Industry 1.2 History of GMC Bank 9 19 23 24 25 34 36 48 61 101 102
2 3
METHODOLOGY OPERATION OF GMCB 2.1 Deposits 2.2 Cash Department 2.3 Remittance 2.4 Ancillary
4 5 6 7
CREDIT CONTROL FINDINGS & RESULTS CONCLUSIONS & RECOMMENDATIONS APPENDIX 7.1 Balance Sheet 7.2 Profit & Loss Account 7.3 Bibliography
103 110 111
LIST OF TABLES
Sr. No. 1 2 3 4 5 6 7 8 9 Title of Table Minimum SLR holding Term Deposit Rate Daily cash register Instrument charges Difference between RTGS & NEFT Difference between Transfer & Clearing Different types of slips & their colour Codes in software for entries Necessary documents of individuals for opening account in the bank 10 Necessary documents of companies for opening account in the bank 11 Necessary documents of Partnership firm for opening account in the bank 12 Necessary documents of Trust & founders for opening account in the bank 13 14 15 16 17 18 19 20 21 22 23 24 25 Tier I & II capital Other reserves included in Tier I Risk Weighted Assets Other Advances less BDDR Provisions Provision for NPA CRR report maintained by Bank Monthly Statement of CRR to be sent to RBI Statement of valuation of SLR Securities Loan & their rate of interest Types of loan & their no.of accounts in the bank Difference between Overdraft & Loan Balance sheet as on 31st March,2012 Profit & Loss for the period form 1-04-11 to 31-03-12 64 64 65 65 68 71 74 76 93 94 94 103 110 58 57 57 Page. No. 18 32 35 37 38 41 42 42 56
LIST OF FIGURES
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Title of Table Banking Structure in India Co-operative Banks Types of Banks Hierarchy of GMC Bank Operation of GMC Bank Types of Deposits in the Bank Graph of Current Deposit Graph of Saving Deposit Graph of Saving, Current & Term Deposit Graph of Recurring Deposit Pie chart of Deposits Cheque Clearing Process Types of cheques Types of Banks Guarantee Types of Loan Loan Process
Page. No. 11 13 18 21 24 25 27 28 29 31 33 39 42 53 80 82
LIST OF ABBREVIATIONS
Acronym Full Forms
1. 2. 3.
RBI UCB CAMELSC
Reserve Bank of India Urban Cooperative Bank Capital adequacy, Asset quality, Management, Earnings, Liquidity, Systems and Control
4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.
CRAR NPA NDTL GMCB RTGS P.F BCCB DD PO SBI OBC IBC KYC SDR FDR CDR KDR LFD MSL CSL GHL SLR CRR EDL SOL
Capital to Risk Asset ratio Non -Performing Asset Net Demand and Time Liability Gandhidham Mercantile Cooperative Bank Real Time Gross Settlement Provident Fund Bhuj Commercial Cooperative Bank Demand Draft Pay Order State Bank of India Outward Bill Collection Inward Bill Collection Know Your Customer Saving Deposit Receipt Fixed Deposit Receipt Cumulative Deposit Receipt Kuber Deposit Receipt Loan Against Fixed Deposit Machinery Loan Consumer Loan General Housing Loan Statutory Liquidity Reserve Cash Reserve Ratio Educational Loan Social Loan
29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
SHL CCL VHL HYP BKD CCC FDO OGS SOD BDDR KDCC GSC
Staff Housing Loan Clean Cash Loan Vehicle Loan Hypothecation Books Debt Clean Cash Credit Overdraft Against Fixed Deposit Overdraft Against Government Securities Overdraft to Staff Bad & Doubtful Debt Reserve Kutch District Cooperative Bank Gujarat State Cooperative
INTRODUCTION TO INDUSTRY
Bank: A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets. A bank connects customers that have capital deficits to customers with capital surpluses. Standard Activities: Banks act as payment agents by conducting checking or current accounts for customers, paying checks drawn by customers on the bank, and collecting checks deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated teller machine (ATM). Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too
Channels: Banks offer many different channels to access their banking and other services: Mail: Most banks accept cheque deposits via mail and use mail to communicate to their customers, e.g. by sending out statements. Mobile banking is a method of using one's mobile phone to conduct banking transactions Online banking is a term used for performing transactions, payments etc. over the Internet Relationship Managers, mostly for private banking or business banking, often visiting customers at their homes or businesses Telephone banking is a service which allows its customers to perform transactions over the telephone with automated attendant or when requested with telephone operator Automated Teller Machines
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The beginning co-operative banking in India dates back to about 1904, when official efforts were made to create a new type of institution based on principles of cooperative organization & management, which were considered to be suitable for solving the problems peculiar to Indian conditions. Co-operative Banks in India are registered under the Co-operative Societies Act. The cooperative bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. The Co-operative Banks Act, of 2007 (the Act) defines a co-operative bank as a co-operative registered as a co-operative bank in terms of the Act whose members o are of similar occupation or profession or who are employed by a common employer or who are employed within the same business district; or o have common membership in an association or organization, including a business, religious, social, co-operative, labour or educational group; or o Reside within the same defined community or geographical area. o Co-operative bank, in a nutshell, provides financial assistance to the people with small means to protect them from the debt trap of the moneylenders. o It is a part of vast and powerful structure of co-operative institutions which are engaged in tasks of production, processing, marketing, distribution, servicing and banking in India. A co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. o Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. These banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts). Co-operative banks differ from stockholder banks by their organization, their goals, their Values and their governance.
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o The Co-operative Banking System in India is characterized by a relatively comprehensive network to the grass root level. This sector mainly focuses on the local population and micro- banking among middle and low income strata of the society. These banks operate mainly for the benefit of rural areas.
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Urban Banks Department The Urban Banks Department of the Reserve Bank of India is vested with the responsibility of regulating and supervising primary (urban) cooperative banks, which are popularly known as Urban Cooperative Banks (UCBs). The RBI defines Urban Co-operative banks as small sized co-operatively organized banking units which operate in metropolitan, urban and semi-urban centers to cater mainly to the needs of small borrowers, viz. owners of small scale industrial units, retail traders, and professional and salaries classes. Objectives and functions Urban Co-operative banks Primarily, to raise funds for lending money to its members. To attract deposits from members as well as non-members. To encourage thrift, self-help ad mutual aid among members. To draw, make, accept, discount, buy, sell, collect and deal in bills of exchange, drafts, certificates and other securities. To provide safe-deposit vaults. While overseeing the activities of 1926 primary (urban) cooperative banks, the Urban Banks Department performs three main functions: regulatory, supervisory and developmental. The Department performs these functions through its 17 regional offices.
I. Regulatory Functions (i) Licensing of New Primary (Urban) Cooperative Bank For commencing banking business, a primary (urban) cooperative bank, as in the case of commercial bank, is required to obtain a license from the Reserve Bank of India, under the provisions of Section 22 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies).
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(ii) Licensing of Existing Primary (Urban) Co-operative Banks In terms of sub-section (2) of Section 22 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies), the primary (urban) cooperative banks existing in the country as on March 1, 1966, (when some banking laws were applied to UCBs), were required to apply to the Reserve Bank of India. They were given three months to obtain a license to carry on banking business. Similarly, a primary credit society which becomes a primary (urban) cooperative bank by virtue of its share capital and reserves reaching ` 1,00,000 and above was to apply to the Reserve Bank of India for a license within three months from the date on which its share capital and reserves reach Rs. one lakh. The existing unlicensed primary (urban) cooperative banks can carry on banking business till they are refused a license by the Reserve Bank of India. (iii) Branch Licensing Under the provisions of Section 23 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies), primary (urban) cooperative banks are required to obtain permission from the Reserve Bank of India for opening branches. (iv) Statutory Provisions The regulatory functions of Urban Banks Department relate to monitoring compliance with the provisions of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) by urban cooperative banks. These provisions include: Minimum Share Capital Under the provisions of Section 11 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies), no primary (urban) cooperative bank can commence or carry on banking business if the real or exchangeable value of its paid-up capital and reserves is less than Rs.one lakh.
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Maintenance of CRR and SLR As in the case of commercial banks, primary (urban) cooperative banks are also required to maintain certain amount of cash reserve and liquid assets. The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 4.75 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non-scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on day-to-day basis. For scheduled cooperative banks, CRR is required to be maintained in accounts with Reserve Bank of India, whereas for non-scheduled cooperative banks, it can be maintained by way of either cash with themselves or in the form of balances in a current account with the Reserve Bank of India or the state co-operative bank of the state concerned or the central cooperative bank of the district concerned or by way of net balances in current accounts with public sector banks. In addition to the cash reserve, every primary (urban) cooperative bank (scheduled/nonscheduled) is required to maintain liquid assets in the form of cash, gold or unencumbered approved securities which should not be less than 25 per cent of the total of its demand and time liabilities in accordance with the provisions of Section 24 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies). Out of the prescribed SLR, the UCBs have been advised to maintain a certain amount in the form of SLR Securities as under:
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Sr.No. Category bank
of Minimum SLR holding in Government approved and securities other as
percentage of Net Demand and Time Liabilities (NDTL) 1 Scheduled banks 2 Non-Scheduled banks : a)With NDTL 25% of Rs.25 crore & above b) With NDTL 25% of less than 24%
Rs.25 crore
II. Supervisory Functions To ensure that the UCBs conduct their affairs in the interests of the depositors and also comply with the regulatory framework prescribed by the Reserve Bank of India, the department undertakes on-site inspection of these banks with frequency ranging from one to two years depending upon the financial condition / status of banks. The thrust of supervision is to ensure that banks' affairs are not conducted in a manner detrimental to the depositors' interest and also to assess the solvency of the bank vis--vis its liabilities, besides examining the banks' compliance with the existing regulatory framework. The department also undertakes off-site surveillance of scheduled banks and non-scheduled banks with a deposit base of `100 crore and above based on a set of quarterly and annual returns.
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III. Developmental Functions With a view to extending institutional credit support to tiny and cottage units, the Reserve Bank of India grants refinance facilities to urban cooperative banks under the provisions of Section 17 of the Reserve Bank of India Act, 1934. The refinance is given at the Bank Rate. Training is imparted to the middle and top management of urban cooperative banks through College of Agricultural Banking, Pune.
Types of Banks
Types of banks
Commercial banks
Specialized banks
Central banks
Co-operative Banks
Public Sector Banks
Primary Credit Socities
Private Sector Banks
Central Cooperative Banks
Foreign Banks
State Coopeartive Banks
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History of GMC Bank

During the first half of the 90s, due to liberalization and removal of License Raaj policy, businessmen and traders of the Gandhidham complex were busy with their expansion plans. The mercantile community of the town was putting their sincere efforts and hard earned money in business to cope up with the boom and increased demands. This was the time when they strongly felt the need of a co-operative bank that can gear up their smooth financial dealings and uplift the morale of the mercantile community by standing along with them always. Need is the origin of creation. True. The Gandhidham Chamber of Commerce & Industries strongly backup the will of their members. Under the leadership of late Shri Bhomrajbhai Jagani, the chamber for this mammoth task selected total 15 promoters. After completion of all the formalities, in reward of their sincere efforts and long awaited passion, the bank was registered with District Registrar and was issued a license by Reserve Bank of India during 1994-95, under name & style of The Gandhidham Mercantile Co-Operative Bank Ltd. Finally, the bank started the operation on auspicious day of Raam Navmi, 09.04.1995, by former chief minister of Gujarat Shri Sureshchandra Mehta being the chief guest of the opening ceremony. The intention of sincere, long-term, clear and healthy vision of the promoters was made clear with the bank being the first co-operative bank in Gujarat, by then, fully computerized from its very first day of operation. The bank has not turned back s ince then. From zero in 1995, the bank has crossed commendable milestones in efficient banking and dedicated customer services. During these seventeen years, the banks fully satisfied customer-base has crossed the 32,400 mark. The Deposits have crossed `170 crores and Advances `119 crores mark. Net NPA of the bank has remained NIL till date. With paid up Share Capital of ` 11.35 crores and total Reserves above ` 33 crores, the bank is enjoying immense and exemplary solidarity and liquidity. Just to prove this, the banks CRAR has remained 21% as on 31st March 2012 a long way ahead of 9% prescribed by RBI. Not only this, with profit of ` 2.02 crores, the bank has been on top in Gandhidham complex for consecutive year in yearly profits. A sizable amount, every year, is utilized in charity works of the complex.
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Also, the bank staff has proved its admirable efficiency with per employee business has been ` 807.47 lacks, per employee profit ` 13.65 lacks during the last financial year. Whats more could be the word of applause, when Reserve Bank of India has itself praised the all-round progress, performance and financial soundness of the bank in its audit. The saga of success doesnt end here. The bank is committed to provide efficient, dedicated and high-tech services to its valued clients. The new building is completed and customers are being provided state of the art facilities. The banking will be an enjoyable experience with GMCB. The bank will always lead the banking of the Gandhidham complex.
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THE GANDHIDHAM MERCANTILE CO-OPERATIVE BANK LTD.
CHAIRMAN
VICE-CHAIRMAN
MANAGING DIRECTOR
General Manager
ADVANCE DEPT
Advance MANAGER
COMPUTER DEPT
EDP MANAGER
ACCOUNT DEPT
Account MANAGER
Loan Officer
Assistant Officer
Assistant Officer
Jr. Officer
Jr. Officer
Jr. Officer
Reliever
Reliever
Reliever
Sub Staff
Security Staff S.D.V
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Landmarks
Date 18.04.1994
Event Registered under The Gujarat State Co-Operative Societies Act, 1961, vide No. SA-1932.
16.02.1995
Granted License to commence and carry on banking business by Reserve Bank of India, vide No. UBD.GUJ.1120 P. Commenced operations from Neerav Chamers, Plot No. 13, Sector 9, Gandhidham Kachchh (Gujarat) 370 201. At the end of the first financial year from its operations, the bank crossed the remarkable Rs.10 crore Deposits mark.
09.04.1995
31.03.1996
31.03.1998
At the end of the financial year 1997-98 the bank crossed Rs. 1 crore Net Profit mark and ` 10 crore Advances mark.
12.04.2002
Granted Permission to accept Trust Deposits, by Legal Department, Sachivalaya, Gandhinagar, vide Notification No. BPT/APL/1099/03/305/E Shifted into its newly constructed state of the art building Bankers Arcade at Plot No. 12, Sector 9, Gandhidham - Kachchh (Gujarat) 370 201.
20.08.2003
20.08.2003
Started offering high-tech services like Tele Banking, Mobile Banking, Touch Screen etc.
20.08.2003
Launched the Web Site of the bank with Web Banking facility
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METHODOLOGY
Primary data source: The study was mainly done using discussions with the staff members, talking to General Manager and through observation.
Secondary data source Secondary data is mainly collected through different books and magazines as: Principles & Practices of Banking. UCB hand book cum diary. Annual Report, Websites of GMCB. The Indian bankers & banking frontier magazines. Website of Reserve Bank of India.
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Operations of GMCB
Deposits
Cash Departme nt
Remittance
Loans & Advances
Ancillary
Time Deposits
Demand Deposits
DD & Pay order
RTGS/NEFT
Bilty
ATM Clearing Transfer Franking Safe Deposit Vault
Term deposits SDR,CDR, FDR
Deposits in form of SA,CA
Cash
Payment
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Deposits
Deposits
Current Deposit
Saving Deposit
Term Deposit
unknown Deposits
safe Deposits Vault
SDR
CDR
FDR
RD
TYPES OF DEPOSITS SB CA RD SDR CDR FDR KDR
NO. OF A/Cs 19269 5233 367 121 4691 361 5
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A deposit account is a current account, savings account, or other type of bank account, at a banking institution that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the bank, and represents the amount owed by the bank to the customer. Some banks charge a fee for this service, while others may pay the customer interest on the funds deposited. Current Deposits A current account offers various flexible payment methods to allow customers to distribute money directly to others. Most current accounts come with a cheque book and offer the facility to arrange standing orders, direct debits and payment via a debit card. Its mainly for the business group of people. As there daily transactions are quite often. The bank provides the facility of withdrawing the amount through cheque and they provide they provide the statement once in a month free of charge. Current account can be opened by: Sole proprietorship concerns. Two or more persons in their joint names. Partnership concerns. Hindu Undivided Family. Limited Company. Clubs, Societies. Trusts, Executors, and Administrators. Other government and semi Government bodies, local authorities.
In GMC bank minimum balance of `1000/- who is not having a ATM card and minimum of `2000/- should be there else charges of `100 is charged.
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Current account 2008-2009 2009-2010 2010-2011 2011-2012
Amount ` 16,53,64,537/` 18,69,32,722/` 20,65,86,149/` 24,09,01,292/-
CURRENT DEPOSIT
300000000 250000000 200000000 AMOUNT 150000000 100000000 50000000 0 2008-2009 2009-2010 2010-2011 2011-2012 YEARS CURRENT DEPOSIT
Saving deposits Saving accounts are opened to encourage the people to save and collect their savings. In India, saving account can be opened by depositing `100 to `500. The saving account holder is allowed to withdraw money from the account two times or three times in a week. The interest which is given on saving accounts is sometime attractive, but often nominal. At present, the rate of interest is 4% p.a. in India. The interest rate varies as per amount of money deposited and its maturity range. It is also subject to current trend of banking policies in a country. There is no restriction on the number and amount of deposits.
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Withdrawals are allowed subject to certain restrictions The main objective of saving account is to promote savings. The money can be withdrawn either by cheque or withdrawal slip. The rate of interest payable is very nominal on saving accounts. At present it is about 3.50% p.a. in India. Saving account is of continuing nature. There is no maximum period. A minimum amount has to be kept on saving account. No loan facility is provided against saving account.
If a person wants to open saving account he/she has to keep minimum of `500 balance and if ATM is there than minimum of `1000 should be there. If amount is less than the said amount than charges upto `100
Saving Deposits 2008-2009 2009-2010 2010-2011 2011-2012
Amount ` 20,90,83,776/` 27,58,00,568/` 33,26,14,787/` 35,54,09,887/-
Saving Deposit
40,00,00,000 35,00,00,000 30,00,00,000 AMOUNT 25,00,00,000 20,00,00,000 15,00,00,000 10,00,00,000 5,00,00,000 0 2008-2009 2009-2010 YEARS 2010-2011 2011-2012
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Term deposits An investment product where a fixed sum of money is deposited into an account for a set period time with a interest paid over the term Term deposits is funds deposited in a saving account, the terms of which impose a financial penalty if funds are withdrawn before a specified date A separate time deposit receipt is issued every time The rate of interest for bank fixed deposits depends upon the maturity period and special rates for senior citizens. Time deposit is not a negotiable instrument so it cannot be transferred in favour of the other person. Interest is credited to the depositors account, every quarterly and if a person wants monthly than bank provides the interest accordingly.
400000000 350000000 300000000 AMOUNT 250000000 200000000 150000000 100000000 50000000 0 2008-2009 2009-2010 2010-2011 2011-2012 YEARS Saving Current Recurring
1. SDR( Short deposits receipt): Duration for SDR is minimum 15 days and maximum 365 days. Interest is calculated according to the number of days the deposit is kept.
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2. CDR(Cumulative deposits receipts): This term deposit is for more than a year. Here the interest is calculated on cumulative basis i.e. interest is calculated on face value plus the interest. The time period is from 13 months to 72 months.
3. FDR(Fixed deposits receipts): The deposit more than 365 days period specified by bank can be kept as fixed deposit. In fixed deposit the interest calculated is on face value of the receipt. From 15 days to 12 months are considered as SDR, while from 13 months and above it is treated as CRD Once the FD matures bank waits for 14 days and after that bank provides the interest rate of 4% if that particular person renews his FD else no interest. If the person withdraws within the specified time than the penalty would be charged i.e. 1% will be deducted from the interest. 4. Recurring deposits The Recurring deposit account is an account in the bank where an investor deposits a fixed amount of money every month for a fixed tenure (mostly ranging from one year to five years). This scheme is meant for investors who want to deposit a fixed amount every month, in order to get a lump sum after some years. The small monthly savings in the Recurring Deposit scheme enable the depositor to accumulate a handsome amount on maturity. Interest at term deposit rates is computable on quarterly compounded basis
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Recurring account is a deposit which is intended to inculcate the saving .If the person pays the first installment in one denomination then till last date he has to pay the same denomination of installments. And it must be in multiples of 100. For instance: if a person pays the installments of ` 5000 then till last date he has to make the payment of 5000 and his installment will be calculated accordingly.
Recurring deposits 2008-2009 2009-2010 2010-2011 2011-2012
Amount ` 1,27,88,269/` 1,17,04,907/` 1,00,07,146/` 1,19,45,001/-
Recurring deposit
14000000 12000000 10000000 AMOUNT 8000000 6000000 4000000 2000000 0 2008-2009 2009-2010 2010-2011 2011-2012 YEARS Recurring deposit
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Interest Rate % Period Previous General Senior citizen Trust, Associations & Societies 15 Days to 29 Days 30 Days to 90 Days 91 Days to 180 Days 181 Days to 12 Months 13 Months to 24 Months 25 Months and above 7.5% 9.5% 10% 10% 7.5% 11% 11.5% 11.5% 6.5% 7.5% 7.5% 7.5% 4% 5% 6% 3.5% 4.5% 6% 3.5% 4.5% 6% 3.5% 4.5% 6%
TERM DEPOSIT WILL BE ACCEPTED FOR MAXIMUM PERIOD OF 72 MONTHS Note: Our Bank has decided to waive 1% penalty if any Term Deposit is Premature and reinvested for better rate of interest till further revision in Term Deposit Rate of interest from 23/05/2011 Higher Interest Rate for Senior Citizens Higher Interest in Saving Bank Account Nominal Account Opening Amount for Saving And Current Account Quarterly Compounded Interest on Medium and Long Term Deposits Monthly / Quarterly / Half yearly interest payment facility available (NonCumulative)
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Smart kid: This scheme is especially for minor. The minor is a person who had not attained the age of 18. A guardian is to be appointed for such amount and the proof of guardian is required. A special amount is deposited every year by his parents and a deposits receipt is made every year and given as a gift on the minors birthday with a greeting card attached to it. The interest rate applicable is same as in other term deposits with bank. Unknown deposits: Bank keeps this type of account when the person has forgotten to enter the account number or has not written the name so all these type of transaction are added to this type of account. Amount in ` % of total deposits Saving deposits Current deposits Recurring deposits Term deposits Advance credit balance Total 355409887 259222271 11945001 1097918106 9367654 1733862919 20% 15% 1% 63% 1% 100%
1% 20%
Saving Account Current Account Recurring Account 15%
63% 1%
Term Account Advance credit balance
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Cash
Cash & payment department In order to take the benefit of the service like against clearing and late timing allowance for deposits most of the traders in Gandhidham are having their amount over here. At the end of the day GMC Bank is having the insurance up to ` 4 crore for keeping the cash as deposit with themselves any cash above Rs.4 crore will be deposited with SBI bank. Everyday a person with higher authority averagely bring amount for payment say ` 2 crore where they make a note of all the amount with denominations how much notes of `1000 or that of Rs.500. Payment department is divided into 2 parts below `40000 and above ` 40000. In above `40000 department instant check takes place of the cheques here one person verifies the sign at the back and amount and writes the scroll number and passes those cheque for the verification where a person verifies the signature from the computer and insert the scroll number, unless the person with authority inserts the scroll number the transaction will not proceed further after verification of the cheque amount is payable to the person. In case of department below Rs.40000 is quite different here that person has the whole authority where the person is having the responsibility of verifying the signature and amount to be payable. In the meantime the higher authority person in order to check the transaction verifies with the voucher in order to know if there is any mistake or not. In case of receipt department the person verifier the slip whether of saving or current account the name and the amount. While calculating the amount they see to it whether there is any forged note of `500 or 1000, they are also having a particular machine which helps to identify the forged notes.
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Many times it so happens that the payment exceeds the amount which they have kept in the morning of so in order avoid going back to locker room they internally manages the cash the receipt counter will provide the cash to the payment counter where receipt person makes the outward entry. Through this way they manage the payment counter.
OPENING BALANCE (+) RECEIVED TODAY TOTAL (-) PAID TODAY CLOSING BALANCE PARTICULAR OF COINS
NO. OF COINS DENOMINATION AMOUNT
PARTICULAR OF CURRENCY
NO. OF NOTE S DENOMINATION AMOUNT
500 np 200 np 100 np 50 np 25 np 20 np 10 np
`1000 ` 500 `100 `50 `20 `10 `5 `2 `1 COINS TOTAL
CLOSING BALANCE IN WORDS in `
CASHIER/ACCOUNTANT
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Remittance
Demand Drafts, RTGS & NEFT Demand drafts and Pay order both are used by individuals to make transfer payments from one bank account to another. The main difference between them is that while demand draft is the written order directing the payment to be made to the third party outside your city while pay order is drawn for the third party within your city. They both are quite different from cheques in that they dont require a signature in order to be cashed. Here GMCB bank has got the authority to issue the demand draft of HDFC bank and Indusind bank where the draft for HDFC is divided into 3 parts below 1 lakh of denomination above 1 lakh and transfer of balance Since GMC bank is not nationalized this bank in order to help its customers provide the facility of RTGS(Real time gross settlement) & NEFT(National electronic fund transfer). when the amount is Rs 2 lakh then the funds gets transferred through NEFT, while when amount exceeds Rs2 lakh than the funds gets transferred through RTGS. In RTGS, person have to fill the RTGS slip of GMCB and the cheque where his account number is taken note of .As this bank is not nationalized they provide this facility through Indusind bank, after filling the RTGS slip of GMCB bank the customer have to fill the form for the Indusind bank in which amount and account is being mentioned in the meantime the bank issues the bankers cheque in favour of the Indusind bank. The form along with the cheque is sent to Indusind bank where further process of the RTGS is done.
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Sr. no. 1.
Details
Proposed Charges Current Saving & OD A/C Unclear Balance Per `1000/Minimum Clear Balance all Gujarat & Mumbai as per Instrument Current Saving & OD A/C clear/unclear
Charges (`) 1.00
10.00 10.00
1.00
DEMAND DRAFT CHARGES
balance as per `1000/-(Places other than Gujarat & Mumbai) Minimum 10.00 DD by cash per `1000/Minimum Nationalised bank DD charges (Only of Indusind Bank) Payable at GIM per ` 1000/Other Station per ` 1000/Minimum Charges Cash Per ` 1000/Clear/Unclear balance per `1000/Minimum (Even if clear Balance) Maximum RTGS ` 2 LAKH TO ` 5 LAKH ` 5 LAKH AND ABOVE 0.50 P 1.50 35.00 1.50 1.00 10.00 100.00 1.50 10.00
2.
PAY- ORDER (Gandhidham) CHARGES
3.
RTGS CHARGES
25.00 50.00
4.
DD BY CASH
MAXIMUM (ADDRESS PROOF MUST) ONLY ONE DD ON THE ONE ADDRESS PROOF FOR THE SAME DATE NO ADDRESS PROOF REQUIRES ON DD up to ` 5000
49000
20000
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RTGS Basis Based on gross settlement Gross settlement is where a transaction is completed on a Criteria one-to-one basis without bunching with other transactions
NEFT Based on net settlement Deferred Net Basis (DNS), or net-settlement, this is where transactions are completed in batches at specific times NEFT settlement takes place 6 times a day during the week days
RTGS, transactions are processed continuously Timing throughout the RTGS business hours.
(9.30 am, 10.30 am, 12.00 noon. 1.00 pm, 3.00 pm and 4.00 pm) and 3 times during Saturdays (9.30 am, 10.30 am and 12.00 noon). Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time.
Amount limit
Above `2 lakhs then transfer is done through RTGS.
Up to `2lakhs transfer is done through NEFT.
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Clearing department
CHEQUE
Transfer
Local Clearing
OBC
Stamp & make entry in software
Stamp & make entry in software
Kotak
BCCB
Direct
Through other cooperative bank under MA scheme
Authorise by officer & pass the entry
present all cheques at SBI clearing house
make entry in OBC sending
make entry in OBC sendi ng
In return receive cheques from clearing house make entry of received cheques or return
print one advise
print one advise
print one advise
print one advise
fill kotak bank's IBC Slip & send it
pay slip & attach with cheques & send it for clearing
cheque & advice send to bank
cheque & advice send to bank
In second clearing present in SBI clearing house
Kotak bank a/c Dr. To party's a/c BCCB a/c Dr. To party's a/c
OBC Adjusment a/c Dr. To Party's a/c
GSC a/c Dr. To Party's a/c
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Bank receives all cheques for credit. As soon as cheques are being stamped the cheques which are of other banks are transferred to the clearing department where entry of those particular cheques is being done. As soon as entry is being made they print the report for the same in order to present in the clearing. Since all banks are having their own individual software so it becomes difficult for the SBI to deal with them so SBI have the particular software where all bank have to convert their file according to their formats and then they carry those file in pen drive to SBI at 1o clock if any bank comes late then on that particular day that bank cant receive any of their cheques. In clearing, all banks have been allotted particular place where regularly they have to conduct their transactions. Then they exchange the cheques with each other and on a particular sheet they write about the number of cheques received with the amount in order to know the amount which they have to pay or receive at the end of the day. Then all those cheques are brought in our bank and their entry is being passed (debited to parties account) 1. Before all cheques are taken to SBI clearing house.
SBI a/c Dr. To Customers/Parties A/c
2. After receiving our cheques Customers/Parties A/c Dr. SBI a/c Dr. (cheques return) To SBI a/c 3. Cheque return charges charged to accounts
Customers/Parties a/c Dr. To cheques return charges
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At 4o clock again all bank have to meet in order to know if cheques is returned due to insufficient balance or forged signature etc. Then bank passes the reverse entry all those cheques returned and bank collect charges for the cheque returned and then they stick the slip which specifies the reason for the cheque returned and bank calls those customers whose cheques are being returned. After second clearing process 1. Cheques returns from other banks
Customer a/c Dr. (cheques return from bank) To SBI a/c 2. Cheque return charges charged to accounts
Customer a/c Dr. To cheques return charges
Difference between transfer & clearing
Transfer Transfer means same banks instrument It is deposited into customer a/c within few minutes This is continuous or whole day process Withdrawal can be done same day Return of cheques is charged `50/-
Clearing Clearing instrument It is deposited once in a day. This process occurs once in a day Withdrawal can be done next day. Return of cheque is charged `100/means different banks
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Account Type Saving Current Loan/Overdraft Recurring Demand Draft Fixed Deposits Franking Machine
Colour Green White Pink Light Blue White with orange White with pink Yellow
Code 1 2 3 4 5 6 Credit Credit Credit Debit Debit Debit
Credit/Debit
Entries Cash Receipt Clearing Receipt Transfer Receipt Cash Receipt Clearing Receipt Transfer Receipt
Cheques
Transfer Clearing OBC
Bearer
Cheque
Open
Cheque
Stale
Cheque
Postdated
Cheque
Crossed
Cheque
Order Cheque
Anti-dated Cheque
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Bearer Cheque When the words "or bearer" appearing on the face of the cheque, the cheque is called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment. However, such cheques are risky; this is because if such cheques are lost, the finder of the cheque can collect payment from the bank. Generally bank takes the signature and contact detail of withdrawing person. In bearer cheques drawer 2 signatures is required because it indicate that drawer had given power to withdraw the bearer cheque amount to a cheque holder.
Order cheque The word "or order" is written on the face of the cheque, the cheque is called an order cheque. Such a cheque is payable to the person specified therein as the payee, or to any one else to whom it is endorsed (transferred).
Open cheque When a cheque is not crossed, it is known as an "Open Cheque" or an "Uncrossed Cheque". The payment of such a cheque can be obtained at the counter of the bank. An open cheque may be a bearer cheque or an order one. The particular name is written on a cheque and it is paid to particular person only.
Crossed cheque Crossing of cheque means drawing two parallel lines on the face of the cheque with or without additional words like "& CO." or "Account Payee" or "Not Negotiable".
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A crossed cheque cannot be enchased at the cash counter of a bank but it can only be credited to the payee's account.
Anti-dated cheque If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "anti-dated cheque". Such a cheque is valid up to six months from the date of the cheque.
Post-dated cheque If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A post-dated cheque cannot be honored earlier than the date on the cheque.
Stale cheque If a cheque is presented for payment after six months from the date of the cheque it is called stale cheque. A stale cheque is not honored by the bank.
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MASCODE (Mutual Arrangement Scheme) MASCODE is an agreement between co-operative banks in Gujarat that they will not collect commission from member banks. Membership is not compulsory for the banks. In this arrangement all the banks have to keep their accounts in Gujarat state co-operative (GSC) bank which is situated at Ahmadabad. All the Banks are given special account numbers for their recognition and transaction. This arrangement is specially done for collecting cheques of village area. Reason for return of cheques 1. Effects not yet cleared, please present again tomorrow 2. Not arranged for. 3. Drawers signature required. 4. Drawers joint signature required. 5. Refer to drawer. 6. Drawers signature differs. 7. Endorsements required banks guarantee. 8. Alteration requires full signatures of drawer. 9. Cheque is post-dated. 10. Cheque is out of date. 11. Amount in words and figures differs. 12. Crossed cheque is out of date. 13. Amount in words and figures differs. 14. Crossed cheque must be presented through a bank. 15. Advice not received, please present again. 16. Payment stopped by the drawer. 17. Payees separate discharge to the bank required. 18. Date incomplete. 19. Insufficient funds. 20. Account closed. 21. Today clearing stamp required. 22. Not drawn on us. 23. Exceeds arrangement
24. Fund expected, please present

again tomorrow 25. Cheque is incomplete. 26. Cheques are mutilated. 27. Thumb impression authentication required. 28. Account is frozen. 29. Cheque is crossed by two banks. 30. Any others.
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Inward bills collection (IBC) It is a facility given to customers to clear outside cheque in GMCB bank and it is bank to bank transactions. In the IBC process GMCB bank clears the cheque given by the local party to opposite Party. There is no branch of GMCB bank. For Ex: party A is in Gandhidham given the cheque of GMCB bank to party B in Ahmedabad .Party Bs account in AMCB bank then party B send this cheque for clearing to Gandhidham then its known as IBC for GMCB bank. When IBC received and entry made and when IBC realised the DD made and sent to respected bank accordingly. If the bank is in the MASCODE then we cant take commission charges for DD sent by bank. When IBC came its entry made manually in the IBC register.in the register details filled like IBC no. bills received date ,name of draw on(purchaser),bill no.name of bills sent by(written by), Place bill amount, bill realized date, details of draft is send, sign and remarks. When cheque is return it is written in the register. A charge for returning IBC is same as in the OBC.
Outward bills collection Once cheques are received and if it is not local then OBC stamped is on the cheque. Entries are made in the computer, details like: banks name, city name, banks code, commission charges, postage charges, document number, document amount etc. After entries are made then endorsement stamps are stamped behind the cheque. Authorization of cheques is done by officer. The GMCB is having tie up with Kotak Mahindra, Bhuj Mercantile Cooperative Bank, etc.
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OBC number is on the cheque and on the voucher so that whenever customer needs any information then with the help of that number information is provided.
According to the tie-up with banks, cheques and statement are sent. If cheques are passed then payments are made in 3 ways: Advised Account payee Demand Draft.
Gujarat state co-operative If cheque is of co-operative bank and having tie-up with Gujarat state cooperative (mutual arrangement scheme code) then advised is received from Gujarat state co-operative and no commission and postage is charged.
OBC cheque amount (`) UPTO `10,000/ABOVE `10,000/- AND UPTO `1,00,000/ABOVE `1,00,000
Postal Charges 50 100
150
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Billty It is a one kind of service provided by bank to its customers for safeguard in the transaction with outside party at different place(it just like guarantee) given to outside party on behalf of customers. Steps in BILLTY When BILLTY comes entry is made in the computer and details filled like party name, lorry no., transporters name, interest rate/discount, drawee name, sender part name, address, place and date etc. Bank given intimate to buyers. When buyer comes to bank and make the payment then BILLTY is realized. After payment is made all the documents given to them. As per suppliers convenience bank sends the payment. If payment is not made, within the period then BILLTY is send back to supplier. Charges for BILTY Up to ` 10,000 not exceeding ` 50 per instrument ` 10,000 to ` 1 lakh not exceeding ` 100 per instrument ` 1,00,000 and above not exceeding ` 150 per instrument The Payment and Settlement Systems Act, 2007 (the Act, in short)
Under
which has come into force with effect from August 2008. Under the said Act, RBI is required to provide regulations and supervision as stated in Section 10 of the Act. Further, under Section 18 of the Act, the RBI may, if it is satisfied that for the purpose of enabling it to regulate the payment systems or in the interest of management or operation of any of the payment systems or in public interest. RBI recently benchmarked the collection charges for outstation cheque. The allinclusive charges4 recommended by RBI are (as mentioned above in 2007 act): o o Up to ` 10,000 not exceeding ` 50 per instrument. ` 1,00,000 and above not exceeding ` 150 per instrument. o ` 10,000 to ` 1 lakh not exceeding ` 100 per instrument.
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Franking It is an ancillary service given by bank to its customers. It is process of stamping approved by government and bank works on behalf of government. It is used on an option of stamp paper. It is done on various documents such as special power of attorney, share transfer, various agreement, foreign bills, broker note, insurance notaries, customs, excise, affidavit etc. License of franking can be issued by state registrar from Gandhinagar & this service has been given by GMCB to its customer since last four years. Franking machine worth of `2,00,000 & the machine were purchased from Pitney Bowes company. For this facility bank have installed Hyperterminal software from Pitney Bowes Company. Recharge of franking is done in multiple of `20 lakhs. Every 2-3 week when bank recharges balance for franking, bank receives 1% as commission from recharge and it is received from treasury office situated at Bhuj. On an average expense of `25,000 is incurred for the purpose of franking (including ribbon charges, salary of clerk etc.) Franking required renewal at every year for this physical verification done at (deputy collector office) in Bhuj. After verification process whole detail is submitted to state register. If any customer required cancelling the franking after made franking to any document. He / She has to come to bank and bank given the cancellation letter on behalf of customer and customer has to submitted all the document including duly stamp receipt to the collector office at Bhuj. After submitting required document deputy office the 10% deducted from the original amount as a cancellation charges. Document on which franking is to be done must be blank i.e. it should not be signed. It is mandatory for the interest of customers and to prevent the fraud.
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Safe deposits vault A safe deposit box, also called a safety deposit box is an individually-secured container, usually held within a larger safe or bank vault. Safe deposit boxes are generally located in banks, post offices or other institutions. Safe deposit boxes are used to store valuable possessions, such as gemstones, precious metals, currency, marketable securities, important documents such as wills, property deeds, and birth certificates, or computer data storage that need protection from theft, fire, flood, tampering or other reasons. In the typical arrangement, a renter pays the bank a fee for the use of the box, which can be opened only with production of an assigned key, the bank's own guard key, the proper signature, and perhaps a code of some sort. Some banks additionally use biometric dual-control security to complement the conventional security procedures. Documents: In GMC bank there are 2209 lockers for verification they maintain register where signature of the particular person is there and his/her photograph is also attached with that document. When a person comes to open his locker they verify the signature with his/her photograph. Slabs of lockers: her-e person has to make a deposits of different denomination according his size of lockers as if for Small lockers: deposits of `7000/Semi medium size : `12000/Medium size: `15000/Large size: `20000/-
Closing of locker: when a person wants to close his particular locker than he has to fill the form for cancellation and the amount of the deposits will be deposited in his account
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About Share Capital 1. Authorized share capital: The number of stock units that a publicly traded company can issue as stated in its articles of incorporation, or as agreed upon by shareholder vote. Authorized share capital is often not fully used by management in order to leave room for future issuance of additional stock in case the company needs to raise capital quickly. Another reason to keep shares in the company treasury is to retain a controlling interest in the company. The Authorized capital of GMC bank is around `15 crore i.e. 15 lakh shares of `100/- each.
2. Paid up capital: The amount of a company's capital that has been funded by shareholders. Paid-up capital can be less than a company's total capital because a company may not issue all of the shares that it has been authorized to sell. Paid-up capital can also reflect how a company depends on equity financing. Paid up capital of GMC bank is around `11.298 crore.
3. Transfer of shares: Shares can be transferred from members to members only. There are overall 4988 members, while transferring the shares a person cant transfer all his shares he has to keep minimum single share with himself else he might lose his membership Death case transfer: Nominee is being given the shares if the death of the members accurse. Totally share transfer: If a person wants to leave his membership than he has to transfer all his share to other old members. Share transfer to blood relation: o If a person transfers his share within his blood relation than he has to Totally transfer all his shares.
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4. Dividend: A cash payment financed by profits that is designed by a companys board of directors to be distributed among shareholders. GMC bank provides the dividend at the rate of 15% to their shareholders and provides gift to the share-holders according to the shares Few benefits enjoyed by the members: Bank is having a tie up with ALL NEW INDIA INSURANCE for accidental insurance of share members. Bank provides the sum of Rs1 Lakh to his nominee if a person dies during accident for this post-mortem report, FIR, Death certificate are required. Shradha Suman: If a person dies than bank provides a sum of Rs10,000 is being given to his nominee, if not claimed within six months than he will not be entitled for the claim. If a shareholders children secures 1st,2nd or 3rd rank in 10th ,12th, graduation, post-graduation or sports in national or state level than he will be awarded with the certificate ,shield or trophy. They are having a tie-up with sterling hospital where free health check-ups for share-holders of age 50 or above are validate. Members are provided with the dividend at the rate of 15%, while gifts are also distributed among the share holders. Charges: Duplicate share certificate charges: `10/- per certificate Share transfer fee: `1/- per share Membership fees: `10/- is taken at the time of allotment of shares. `10/- for new membership fees. Stamp-paper charges of `100/`25 for issuing share certificate.
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Bank Guarantee: A bank guarantee is a guarantee made by a bank on behalf of a customer (usually an established corporate customer) should it fail to deliver the payment, essentially making the bank a co-signer for one of its customer's purchases. Guarantees are important instruments used to minimize the risks that are involved in commercial contracts. For the enforcement of ordinary guarantees, as construed dependence of the guarantee on the main contract may lead to unnecessary disputes and litigation, arising from the main contract. These disputes may have a material effect on the guarantee, thereby blocking funds in litigation. Hence, there was a need for an innovative instrument which would enable the guarantee to serve its original purpose; namely, providing a form of security. The bank guarantee is one such innovative financial instrument whereby, if the beneficiary perceives that there has been a breach of contract by the other party, he can encash the guarantee and avail of the amount immediately, without having to undergo the hassles of litigation. Thus, the relevance of a bank guarantee achieves relevance.
financial
Bank Gurantee
Non-Financial
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Financial Guarantee: its a contingent liability. Here bank pays the third party if a customer of GMCB is defaulter; bank takes 100% security in form of fixed deposits from the customer. They charge 0.65% for the transaction. Non-financial Guarantee: here bank just assures the credit worthiness of the customer to the third party here they are not liable to the third party.
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Know your customer (KYC) KYC is typically a policy and process implemented to conform to a customer identification program mandated under the Bank Secrecy Act. Know your customer policies are becoming increasingly important globally to prevent identity theft, financial fraud, money laundering and terrorist financing. Objectives: The objective of know your company guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Know your company procedures also enable banks to know/understand their customers and their financial dealings better which in turn help them manage their risks prudently. Banks should frame their KYC policies incorporating the following four key elements: Customer Acceptance Policy; Customer Identification Procedures; Monitoring of Transactions; and Risk management.
For the purpose of KYC policy, a Customer may be defined as : a person or entity that maintains an account and/or has a business relationship with the bank; one on whose behalf the account is maintained (i.e. the beneficial owner); beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the law, and Any person or entity connected with a financial transaction which can pose significant reputational or other risks to the bank, say, a wire transfer or issue of a high value demand draft as a single transaction. Customer identification:
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The objective of the KYC framework should be two fold (a) to ensure customer identification and (b) to monitor transaction of the suspicious nature. Banks should obtain all information necessary to establish the identity/legal existences of each new customer themselves. Typically easy means of establishing identify would be documents are not available. Documents: 1. For Individuals. Documents Accepted as a proof of identity 1 2 3 4 5 6 7 8 9 Passport Voter ID Card Pan Card Government/Defence ID Card ID cards of reputed employers Driving License Pension Payment Orders (Govt/PSUs) Photo ID cards issued by Post Office Photo identity cards issued to bonafide students of universities/institutes approved by UGC/AICTE 10 11 12 Pension Payment Orders (Govt/PSUs) Voters ID cards Copies of Registered Leave and License agreement/sale deed/lease agreement (ANY ONE OF THE ABOVE) (ANY ONE OF THE ABOVE) 1 2 3 4 5 6 7 8 9 Documents accepted as proof of residence Credit Card Statement Salary Slip Income/Wealth tax assessment Electricity Bill Telephone Bill Bank account statement Letter from reputed employer Ration card Letter from any recognized public authority
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For Companies
Name of the company
Certificate of incorporation and Memorandum & Articles of Association
Principal places of business
Resolution of the Board of Directors to open an account and identification of those who have authority to operate the account
Mailing address of the company
Power of Attorney granted to its managers, officers or employees to transact business on its behalf
4 5
Telephone/Fax Number
4 5
Copy of PAN allotment letter Copy of the telephone bill
For Partnership
1 2 3
Legal Name Address Names of all partners and their address
1 2 3
Registration certificate, if registered Partnership deed Power of Attorney granted to a partner or an employee of the firm to transact business on its behalf
Telephone numbers of the firm and partners
Any officially valid document identifying the partners and the persons holding the Power of Attorney and their addresses
Telephone bill in the name of firm/partners
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For Trust and founders
Names of trustees, settlers, beneficiaries and signatories
Certificate of registration, if registered
Name and addresses of the founder, the managers/directors and the beneficiaries
Power of Attorney granted to transact business on its behalf
Telephone/fax numbers
Any officially valid document to identify the trustees, settlers, beneficiaries and their addresses
Resolution of the managing body of the foundation/association
Telephone bill of directors
DICGC (Deposits insurance and credit Guarantee Corporation)
Deposit Insurance and Credit Guarantee Corporation Act 1961 DICGC is a wholly owned subsidiary of the Reserve Bank of India. Since 1962, it is engaged in providing deposit insurance for depositors of banks against loss of part or all of their deposits arising from bank failures. Deposit Insurance is compulsory as well as automatic for the bank and thus no bank can remain uninsured by the DICGC except those cooperative banks where the concerned State Governments are yet to pass the required legislation.
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Types of Deposit Covers The Corporation insures all bank deposits, such as savings, fixed, current, recurring, etc. except the deposits of Foreign Governments; Central/ State Governments; State Land development Banks with the State co-operative banks; as also Inter-bank deposits Deposits received outside India and Deposit specifically exempted by the Corporation with the previous approval of The Reserve Bank. Banks insured under DICGC Bank failures are rare, but not unknown. But what happens to the depositors money if banks gets liquidate. The comforting part is that deposits are insured. An organisation by the name Deposit Insurance and Credit Guarantee Corporation (DICGC) administers this insurance scheme
As of now, all commercial banks, branches of foreign banks, regional rural banks and co-operative banks are covered by the DICGC. The coverage is expansive as most banks we normally deal with in our day-to-day life are covered. Bank deposits savings, fixed, current, recurring, etc, are all covered. However, the DICGC only covers deposits payable in India.
The deposit insurance premium is borne by the bank. It is important to note though that registration of an insured bank with the DICGC can be cancelled if the bank fails to pay the premium for three consecutive half periods. In such a case, if the DICGC withdraws the cover, it notifies the public through newspapers. Watch out for the limit the most important thing is that the deposits of each depositor are insured up to a maximum amount of Rs 1 lakh. This limit includes both the principal and accrued interest. But, if they together add up to more than the specified amount, a maximum of Rs 1 lakh will be paid.
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Same bank, different accounts doesnt help the scheme details clearly point out that deposits kept by one person in different branches of one bank are aggregated and only a cumulative amount of Rs 1 lakh is payable. So, it might not help if you have more than Rs 1 lakh in your own individual name in different branches.
This also means that your savings account and all your FD accounts in one bank are aggregated as they are, in bank jargon, held in same right and capacity. But, if you hold an individual account and a joint account in the same bank, they are considered to be in different right and capacity and are separately covered.
Spread over different banks - Thus, with what has been mentioned above, if you are going to have more than Rs 1 lakh cumulatively in your name, it may be better to spread it over different banks. Deposit insurance coverage applies separately to deposits in each bank.
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CREDIT CONTROL Credit Control is an important tool used by the Reserve Bank of India, a major weapon of the monetary policy used to control the demand and supply of money (liquidity) in the economy. Central Bank administers control over the credit that the commercial banks grant. Such a method is used by RBI to bring Economic Development with Stability. It means that banks will not only control inflationary trends in the economy but also boost economic growth which would ultimately lead to increase in real national income with stability. In view of its functions such as issuing notes and custodian of cash reserves, credit not being controlled by RBI would lead to Social and Economic instability in the country. Objectives of Credit Control Credit control policy is just an arm of Economic Policy which comes under the purview of Reserve Bank of India, hence, its main objective being attainment of high growth rate while maintaining reasonable stability of the internal purchasing power of money. The broad objectives of Credit Control Policy in India have been to Ensure an adequate level of liquidity enough to attain high economic growth rate along with maximum utilization of resource but without generating high inflationary pressure. Attain stability in exchange rate and money market of the country. Meeting the financial requirement during slump in the economy and in the normal times as well. Control business cycle and meet business needs.
The four letters comprising of the word RISK define its features. R = Rare (unexpected) I = Incident (outcome) S = Selection (identification) K = Knocking (measuring, monitoring, controlling)
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Credit risk It is an investor's risk of loss arising from a borrower who does not make payments as promised. Such an event is called a default. Investor losses include lost principal and interest, decreased cash flow, and increased collection costs, which arise in a number of circumstances. Market risk It is the risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors. The four standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices. The associated market risks are: Interest Rate Risk Its the potential loss from the unexpected changes in the interest rate which can significantly alter the profitability of the bank Operational risk The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events This definition includes legal risk, but excludes strategic and reputational risk. Operational risk indicators attempt to identify potential losses before they happen. Some indicators are applicable to specific organizational units (for example, transaction volumes and processing errors)
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CRAR: BASEL 2 mandates capital to risk weighted assets ratio(CRAR) of 8% and TIER 1 capital of 6%. The RBI has stated that Indian banks must have a CRAR of minimum 9%, effective march 31, 2009. All private sector banks are already in compliance with BASEL 2 guidelines as regards their CRAR as well as TIER 1 capital. Further, the government of India has stated that public sector banks must have a capital cushion with a CRAR of at least 12% higher than the threshold of 9% prescribed by RBI. Capital to risk weighted assets ratio (CRAR) is also known as capital adequacy ratio which indicates a banks risk taking ability. The RBI uses CRAR to track whether a bank is meeting its statuary capital requirements and is capable of absorbing a reasonable amount of loss. CRAR= (TIER 1 Capital +TIER 2 Capital)/Risk Weighted Assets. Capital funds are broadly classified as TIER1 and TIER2 capital. Two types of capital are measured: tire 1 capital, which absorbs losses without a bank required to cease trading, and TIER 2 capital, which absorbs losses in the event of winding up and so provides a lesser degree of protection to depositors. TIER 1 capital is the most reliable form of capital the major components of TIER 1 capital are paid up equity share capital and disclosed reserves viz. statuary reserves, general reserves, capital reserves(other than revaluation reserve) and any other type of instruments notified by the RBI as and when for inclusion in TIER 1 capital. Example of TIRE1 capital is common stock, preferred stock that is irredeemable and noncumulative, retained earnings. Tire2 capital is a major of banks financial strength with regards to second most reliable forms of financial capital. It consists mainly of undisclosed reserves, revaluation reserves, general provision, subordinated debt, and hybrid instruments. This capital is less permanent in nature.
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Capital Tire 1 Capital Statuary reserve Other reserves Surplus(profit & loss) Total Tire 2 Investment fluctuation fund Provision against risk (total risk 1.25%) Revaluation Reserve Total Add: Guarantee issued 240.24 Less: FD Lien 240.20 Total
AMT
Risk Weightage
Amt(in lakhs)
1129.85 900.45 358.65 50.62 2439.67
34.50
160.84
277.02 472.36
2912.03
Particulars Other reserves Charity reserve Building reserve fund Staff Reserve fund Member welfare fund General reserve fund Total
Amount in lakh
8.32 323 6.57 12.09 8.67 358.65
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Risk
Amt (in ` lakh)
Risk weightage (in %)
Amt (in ` lakh)
Cash in hand Current A/C balance Govt. security Other deposits Non SLR Bonds Other investments Staff loan General housing loan Other advanceBDDR provision Premises Furniture Other assets Total
281.91 457.69
0.00 20
0.00 91.54
4411.43 3173.82 503.55 0 60.79 77.34
2.50 20 102.5 20 20 50
110.28 634.76 516.14 0 12.16 38.67
10557.48
100
10576.82
785.35 82.35 19.19
100 100 100
785.35 82.35 19.19 12867.26
Particulars Total advances Less BRRD FDO KDO OGS LFD LGS GHL Staff Total
Amount (`) 1203999968
30752825 86496974 864 114904 16786549 281604 5800986 6083532 1057681731
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Statement submitted to State & District registrar Monthly & Quarterly Loan and Advances given to the director(section 115-c to j) About investment done by bank( in any other banks and government securities section 115-c to j) Statement showing security under Securitization Act under Section 159160 Statement of NPA Account Statement showing recovery done by recovery officer Details regarding recovery under one time settlement scheme Details about deposit set off Golden Goal Statement showing the filling of case to the police for any fraud in the bank Target particular Statement showing details regarding insurance paid on deposit.
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Non-Performing Assets Non-performing assets: Non-performing assets can be identified as a loan where the lender has some or is experiencing difficulties in obtaining repayment irrespective of time frame. The outcome could be the loss of the capital. In other terms NPA is defined as: Interest and or installments of principal remains overdue for a period of more than 90 days in respect of term loan. The account remains out of order in respect of an overdraft/cash credit. The bill remains overdue for a period of more than 90 days in the bills purchased and discounted. Impact of NPA: They require provision. Borrowing cost of resources locked in NPAs Enhance administrative, legal, and recovery cost. Reduces profitability substantially Affects the morale of the employees and decision making for fresh loan suffer. Types of assets and their provision: 1. Standard assets: these are the assets which do not have any problem are less risky. 2. Sub-standard assets: These are the assets which come under the category of NPA for the period of les 3. Less than 12 months. 4. Doubtful assets: these are NPA exceeding 12 months.
5. Loss Assets: these NPA which are identified as unreliable by internal inspectors of bank or by the RBI and chances of recovery are NIL.
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Standard assets: the assets which can be realized to its full value and does not disclose any problem and do not carry more than the normal risk attached to the business. o Sub-standard assets: With effect from March 31, 2005 an asset would be classified as sub-standard if it remained NPA for a period less than or equal to 12 months. In such cases, the current net worth of the borrowers/ guarantors or the current market value of the security charged is not enough to ensure recovery of the dues regularly to the banks. In other words, such assets will have well defined credit weaknesses that jeopardise the liquidation of the debt and are characterized by the distinct possibility that the banks may sustain some loss, if deficiencies are not corrected.
An asset where the terms of the loan agreement regarding interest and principal have been re-negotiated or rescheduled after commencement of production, should be Satisfactory performance under the re-negotiated or rescheduled terms. In other words, the classification of an asset should not be upgraded merely as a result of rescheduling, unless there is satisfactory compliance of this condition Provision for NPA: Assets classification Standard Assets Sub Standard assets Doubtful assets 1. On liability covered by ECGS 2. On second liability Doubtful up to 1 year Doubtful for above 1 year but less than 3 year Doubtful above 3 years 50% 100% 20% 30% NIL. % of provision to be made 0.40% 10%
3. On unsecured liability
Loss
100%
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Doubtful Assets With effect from 31.03.2004, an Assets is required to be classified as doubtful, if it remains in the sub-standard category for 18 months. As in the case of substandard assets, rescheduling does not entitle the bank to upgrade the quality of an advance automatically A loan classified as doubtful has all the weakness inherent as that classified as sub-standard, with the added characteristics that the weakness make collection or liquidation in full, on the basis of currently knows n facts, condition and values, highly questionable and improbable Note: with the effects from 31 march 2005, an assets would be classified as doubtful if it remained in the sub-standard category for 12 months. Banks are permitted to phase the consequent additional provisioning over a four-year period commencing from the year ended 31 march 2005, with a minimum of 20 per cent each year. Loss Assets A loss assets is one where loss has been identified by the bank or internal or external auditors or by the co-operative department or by the Reserve Bank of India inspection but the amount has not been written off, wholly or partly. In other words, such an assets is considered un-collectible and of such little value that its continuous as a bankable assets is not warranted although there may be some salvage or recovery value.
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CRR (Cash Reserve Ratio) Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks dont hold these as cash with themselves, but deposit with Reserve Bank of India (RBI), which is considered as equivalent to holding cash with RBI. This minimum ratio (that is the part of the total deposits to be held as cash) is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Thus, when a banks deposits increase by Rs100, and if the cash reserve ratio is 6%, the banks will have to hold additional Rs.6 with RBI and Bank will be able to use only Rs.94 for investments and lending / credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount that banks will be able to use for lending and investment. This power of RBI to reduce the lendable amount by increasing the CRR makes it an instrument in the hands of a central bank through which it can control the amount that banks lend. Thus, it is a tool used by RBI to control liquidity in the banking system. The main purpose to maintain CRR is to protect the depositors. Every co-operative bank has to maintain CRR as a percentage (as mentioned by RBI) of Net demand & Time liability of last Friday of the second preceding fortnight and SLR. Currently, Co-operative banks have to hold 3% of Net demand & Time liabilities as on last Friday of the second preceding fortnight. So, every urban co-operative bank is required to maintain daily and if such Friday is a public holiday then calculate NDTL (Net Demand & Time Liabilities) for preceding d ay. Non-scheduled banks should ensure to maintain the required cash reserve and submit the prescribed return along with Appendix I within the stipulated time to the concerned Regional Offices. Failure to submit the Return in time attracts the provisions of section 46(4) of the BR Act, 1949 (AACS), and the banks are liable to imposition of penalties as indicated therein. The banks should, therefore, in their own interest ensure that the stipulations of the section 18 of the BR Act, 1949 (AACS) referred to above are strictly adhered to.
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Demand Liabilities: It include all liabilities which are payable on demand and they include current deposits, demand liabilities portion of savings bank deposits, margins held against letters of credit/guarantees, balances in overdue fixed deposits, cash certificates and cumulative/recurring deposits, outstanding Telegraphic Transfers (TTs), Mail Transfer (MTs), Demand Drafts (DDs), unclaimed deposits, credit balances in the Cash Credit account and deposits held as security for advances which are payable on demand. Money at Call and Short Notice from outside the Banking system should be shown against liability to others. Time Liabilities: Time Liabilities are those which are payable otherwise than on demand and they include fixed deposits, cash certificates, cumulative and recurring deposits, time liabilities portion of savings bank deposits, staff security deposits, margin held against letters of credit if not payable on demand, deposits held as securities for advances which are not payable on demand. Bank calculates & manages CRR reports as per following. LIABILITIES (a)Demand liabilities I. II. III. IV. Total (b)Time liabilities V. VI. VII. VIII. Total Total Liabilities ASSETS Current deposits Saving deposits (40%) Borrowings Other demand liabilities Current deposits Saving deposits (60%) Borrowings Other demand liabilities
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(a)Total of credit balances in current accounts maintained with SBI, Subsidiary bank, & new banks. (b) total of other assets with the banking system I. Balances in all accounts other than those included in total assets II. III. IV. Money at call and short notices Advances Any other assets
Total Assets Total of demand and time liabilities for the purpose of section 18 & 24.
Cash in hand. Balance in current A/C (a) RBI (b) State co-op bank of India (c) District central co-op Bank Total (vii) Balances of all other bank of state. (a) state Co-op bank of the state (b) District central co-op of bank Total of (vii) (viii) Net balance in current account(iiia-i.a.i)
Part B and C (IX) CRR required to be maintained (prescribed % of iv as on last Friday of the preceding fortnight) (X) Cash reserve actually maintained (XI) SLR required to be maintained (prescribed % of iv as on last Friday of the preceding fortnight)
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(XII) SLR Actually Maintained (a)cash and other balance maintained(x-ix+vii) (b)Gold (c)unencumbered approved securities Total (XII)
Cash reserve to be maintained Cash in hand (a)Balances in accounts I. II. III. RBI SBI Central cooperative bank
Total of credit balances in current accounts maintained with SBI, Subsidiary bank, & new banks SLR to be maintained Gold Cash and other balances maintained in India Approved securities
Notes: Demand Deposits:
Current deposits: current deposits + advances credit balance. Borrowings: it does not include those borrowings against which any fixed deposits is kept. Saving Deposits: 60% of saving deposits. Time deposits:
Fixed deposits: it includes all the deposits related to SDR, CDR, KUBER DEPOSITS, and FDR. Other time liabilities: includes interest payable for SDR. Saving deposits: 40% of saving deposits.
Gold: since they are not having gold so they take the amount of government securities. Cash and other balance: Amount with bank + the balance of CDR.
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Appendix 1 Monthly statement showing the daily position of maintenance of Cash Reserve under Section 18 of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) during the Month of _________ [Applicable to Non-Scheduled Primary (Urban) Co-operative Banks] [Vide paragraph 4.3] Name of the Bank :
(Rupees rounded off to the nearest Thousand) Amount of Cash Reserve Date Required to be maintained 1 1 2 3 4 . .. 27 28 29 30 31 Signature of CEO : Name : Designation : 2 3 Actually maintained 4 5 6 7 Deficit Surplus Remarks
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Statutory Liquidity Ratio (SLR) Every Bank has to maintain, at the end of the day, minimum portion of their net demand & Time liabilities as liquid assets in form of a) Cash maintained in India, b) Gold or government securities & c) Unencumbered approved securities. The ratio of liquid assets to demand & time liabilities is called statutory liquidity ratio. The ratio should not be less than 25 percent of NDTL & greater than 40 percent of NDTL. Cash maintained in India includes any excess balance maintained over and above CRR requirement, any cash or balances maintained in India by a co-operative bank, with itself or with the state co-operative bank of the state concerned, or by way of net balance in the current accounts and, also any balances maintained with central cooperative bank of the district concerned. As per RBI rules banks have to submit following statement every fortnight.
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Statement of Valuation of SLR Securities (Fortnight ended Friday ________) [Vide paragraph 5.7] Name of the Bank :________________________________________________ ( ` in Lakhs up to two Decimals) Depreciation Held 3. Net Value for SLR Purpose (23) 4.
Particulars
Face Value Book Value
Part I Government Securities Opening Balance Addition during the fortnight (+) Deduction during the fortnight (-) Closing Balance (a) Part II Other Approved Securities Opening Balance Addition during the fortnight (+) Deduction during the fortnight (-) Closing balance (b) Total (a+b)
1.
2.
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Loan Department
What is Loan? It is an arrangement in which a lender gives money or property to a borrower and the borrower agrees to return the property or repay the money, usually along with interest, at some future point in time. Bank is the main source to provide loan to their customers but in case of co-operative banks, they provide loans to only their members (Shareholders) Following are the documents that members have to present along with application form to bank to get a loan. 1. Application form a. Copies of registration Certificate of Firm & Partnership Deed b. Audited Balance sheets of last three years c. Income Tax Assessment orders of last year with copy of individual income tax return d. In case of private limited company or limited company, Memorandum of Association or Articles & Registration Certificate e. Certificate of immovable properties of Individual partners & Directors f. Stock Statements / List of Debtors / List of machineries g. Copies of Small Scale Industries Certificate h. Particular of firms business place (License etc. ) i. Share Certificates j. Passport size photographs k. Copy of Pan Card / Ration Card / Driving License Types of OD 1. Cash Credit against Hypothecation: 2. Cash Credit against Book Debts 3. OD against fixed deposit 4. OD against general housing
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5. OD to staff 6. Clean cash credit 7. OD against Real Estate Types of Loan 1. Loan against Fixed Deposit (LFD) 2. Machinery Loan 3. Consumer Loan 4. Social Loan 5. Clean cash loan 6. Vehicle loan 7. Staff housing Loan 8. General Housing Loan Application form contains information regarding a firm or a company who has borrowed loan & also purpose for borrowing loan, nature of advance, information about collateral security (if loan amount is above Rs.2 lakh), guarantors. If a member has taken a loan from any other bank then he/she has to declare in application form from where & of what amount of loan has been granted to him. In case of hypothecation loan, a member has mention complete detail of purchase & sales. To cheque the credit worthiness of customers bank has verifies 7 C Character: You must be comfortable with the borrower's integrity and confidence in his willingness to repay you. Have you met the customer? What is his reputation in the community? Is he an upstanding guy or is he a dead beat? You may consider checking references with other business-owners with which the customer does business. 9. Real Estate Loan 10. Education Loan 11. Festival Advances
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Credit History: No financial institution would ever loan money to an applicant without first checking his or her credit history. As a potential creditor, you also have the legal right to obtain the borrower's credit report and examine it in determining whether or not you can risk extending the credit. Always tell the customer you will be checking his credit report and get written permission before actually doing so. Career History: Ask about the borrower's business. Is it a successful business venture? Has he been in it for a while? Has he had failed business ventures in the past? His past successes or failures may be determinative of his future business success. Capacity: In what capacity is your credit going to be used in his business? Is it part of his inventory? Will the use of your goods enable him to generate sufficient funds to repay you and any other creditors? You may consider going over his inventory records with him. The faster he moves his inventory, the more likely his business is a success. And the more likely he will be coming back to order from you again soon. Capital: What is the borrower's financial net worth? A customer with a positive net worth can survive low cash flow times in his business and still pay your invoices. Collateral: You may consider extending only "secured credit." This usually means having the customer pledge real estate or his inventory on a UCC in exchange for your providing the credit. If he defaults on the loan, you get the pledged property. Just make sure the property hasn't been pledged before, or you'll have to get in line if the customer defaults. Conditions: Always make sure the conditions of the sale are clear and in writing, signed by the borrower.
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Types of Loan
Unsecured Loans & Advances
Secured Loans & Advances
SOL
LOAN
OVERDRAFT & CASH CREDIT
COM
EDL
SOD
TOD
LFD
HYP
CCL
GHL
BKD
CSL
LGS
FDO
EDL
REL
CCC
VHL
GHO
MSL
REO
SHL
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This includes payment dates and amounts. If he defaults on any of the conditions, your collection efforts will go much more smoothly if the conditions of the credit are clear. Collections. Bear in mind your own receivables. If your cash flow isn't what it needs to be, you may not be able to afford extending more credit at this time. Remember that your customers' overdue accounts with you significantly impact your own company's creditworthiness.
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Loan Application
Below upto 10 lakh
Above 10 Lakh
Present to commitee
Present to BOD
Proposal form
Proposal form
Sanction loan
Sanction the loan
Get credit in his account
Get credit in his accounta
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Here loan department is mainly divided into two parts 10 lakh and above when a person applies for the loan below 10 lakh then the application for the loan will be submitted to the loan committee and if the amount of the loan exceeds 10 lakhs than the form will be submitted to the board of directors. If the board or the loan committee gets satisfied with the application then committee sanction the loan & does the further process of filling the proposal form where the terms and conditions is being mentioned, where the person signs the promissory note i.e. person is liable to pay all said amount along with the interest & the person will be liable to tell to bank any changes being made either in the partnership firm or any changes made within the company or firm. Here a party or the person has to mention about the amount of loan or money borrowed from different financial institute and the security mortgage for the same, bank also verifies the persons credit worthiness and defaults of loan through CIBIL(credit information bureau India Ltd). After sectioning loan, Member has to fill following types of documents. Types of Documents Demand Promissory Notes: A promissory note is a negotiable instrument, wherein one party makes an unconditional promise in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. Bank takes a signature from its customer for assurance that he will pay the amount within a specified period. Letter of Lien & Set off: This letter at a time of sanctioning loan.By this letter bank can recover the amount by selling lien property, book debt, F.D, stock etc. Bank can recover from other a/c or a/c having in other bank. Bank sends application and can recover. This letter is taken from all types of loan & advances.
Agreement for Hypothecation: In case of loan or advances hypothecation of stocks/book debts/ hypothecation is taken
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Letter of Guarantee: Over here the signature of guarantor is taken. Here it is written that of what amount the person is himself liable and they have to pay to bank as soon as the customer defaults.
Form DD: This form states that the person has not taken Loan from any other financial institute (sharif mandli) nor they are the members of any of these financial institutes. The person has to take the NOC from continuing bank.
Letter of Continuing Security: For the renewal of the OD continuing form is filled every year again the process starts from the beginning here if the guarantor or if some changes made can be altered. Moreover if the guarantor wants to withdraw his name than first he has to submit the same application to the bank.
Bearer DD Letter: On this document customer agree upon particular amount of loan, he confess agreement for the amount Sanction Letter: the letter is given by bank to customer showing sanction & one letter is kept with bank also. Charge from ROC. For limited and private limited company charges from ROC (Registration of companies) is compulsory which is executed by advocate by ROC. By executing ROC registration bank gets SEARCH REPORT from advocate or at ROC. Under search report, each & every details regarding loan taken by companies is available.
Documents are required to know following information: Purpose of Loan Nature of Loan Eligibility Quantum of Loan Margin by borrower Rate of Interest Description of Security/charges Maximum Limit of Advances
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Periodicity of Loan/Advances Mode of Repayment Conditions regarding renewal Access of goods / Property for Inspection Circumstances as to coercive actions Other Special conditions
1. Cash Credit against Hypothecation (HYP): Over here stocks are being kept for security and if the bank requires than they can also ask for call for security which can be property against which 60% of loan is being provided. The goods have to be insured by the customer and the insurance paper are under the mark of the bank lein. The inspection of the stock is done quite frequently Moreover every month the company has to send the balance to the bank showing that they are keeping the stock with themselves The stock is valued at cost price or market price whichever is lower for the sake of the security purpose. Balance Sheet of three years is asked to be submitted and the income tax returns is also to be submitted. 3 month stock is not treated as good stock Hypothecation is renewed every year. Here bank goes for voluntary inspection of goods and if they found any sort of misconduct of laws than they can change the limits of HYP
2. Cash Credit against Book debts: Sales are made on credit or service is provided on credit basis. Maximum 50% of loan is being provided against and customer has to send monthly report to bank. Debtors above 90 days are not considered in book debt. Its renewed every year.
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3. Cash Credit Clean: It is type of overdraft which is given to the professionals like doctors, CA, Lawyers, professionals etc. The maximum amount of OD given in this is ` 50000 The customer requires submitting certain proof which specifies his assurance of monthly income of ` 5000. The repayment has to be done within 3 years Copy of income tax return file & certificate of professionals degree is required
4. Overdraft against fixed deposits This OD is given against fixed deposits so its not necessary to be shareholder also for this purpose. It is generally granted to the fixed deposits holder. In the case of the minors deposits a declaration from the guardian may be obtained that the amount is utilized for the benefits of the minor When the overdraft is granted to the third party other than the deposits holder the application from along the third party form-signed by deposit holder & third party would be submitted to the bank. The receipt of the deposit is transferred to bank 90% amount is granted as overdraft against the deposits amount
5. Overdraft against General Housing (GHO): The overdraft is granted against the value of the property of the customers For this purpose valuation is done by valuation authority. This committee is decided by the bank which includes government approved engineers. The valuation document is prepared by the engineer and the legal document of the mortgaged is prepared by advocate. The customer has to issue documents sanctioned by SRC & KPT, property be in their names & possessions only The customer should also submit a declaration that the same property is not given as mortgage to any other bank.
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The bank grants 50% of the value of property as overdraft After one year during the time of the renewal again the valuation is done and if the value is increased the customers overdraft limit can be increased by the bank
6. Real estate overdraft (REO) This loan is provided for speculative business such as purchase of land, building, agricultural land etc. This loan is provided to investors, who have good creditability. This overdraft and loan facility should not exceed 10% of the exposure limit. There is high risk in this type of overdraft facility. 0.25% stamp duty is to be paid for mortgage of property as security. Every year it is renewed.
Types of loans: 1. Loan against fixed (LFD): This loan is provided against fixed deposits. Bank lien that F.D and provide 90% loan against that F.D. If customer gives loan to third party he has filled application form along with surety of FD holder signature on the form to avoid the default risk in case of non-payment of loan. If this type of loan is taken with mortgage then 50% of total amount is provided as loan.
2. Machinery loan This loan is provided against purchase of new machinery for the factory purpose. Customer has to submit details about the machinery and the quotation of that machinery. 75% loan is provided & 25% down payment is to be done. This loan is medium & long term loan. This loan is provided only to shareholders only.
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Bank provides DD of full amount to the company from where machinery is purchased. All necessary documents should be in favor of bank until loan is not fully paid. Consumer loan:
3. Consumer loan (CSL) This was loan provided to customer for purchasing air condition, washing machine, fridge etc. Customer has to submit details about the machinery and the quotation of that machinery 25 % down payment was to be done i.e. 75% margin is to be given. Limit was `50,000/Only bill required as document. This loan may complete within 3 to 4 years. Now bank doesnt provide such loan but some a/c exist there.
4. General housing loan (GHL): It is provided to required customers who want to construct house for personal purpose. It is medium term loan. Every year it gets renewed because generally house construction takes maximum 2years. Property or house that is constructed is to be mortgaged with bank. There can be withdrawal of two types:o At a time whole amount is withdrawal. In this whole amount is withdrawal at time of construction or it may be withdrawal at time of completion of construction. o Partial amount is withdrawal. There is withdrawal in parts as construction work gets completed.
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5. Educational loan (EDL) This scheme is for students who want to pursue higher studies in India or abroad. Bank provides 75% as amount as loan of the total amount of the tuition fees. Student has to submit letter of their college or institute and detail about their fees structure. When the study is completed the bank gives the student time of 6 months to search for the job and then he has to repay this amount within 3 to 5 years. The interest is calculated monthly and it has to be paid by the guardian of the student even at the time when the student is pursuing his studies. This loan comes under secured and unsecured because of following reasons:o Up to ` 2,00,000/- nothing is given as security. o Above ` 2,00,000/- security is provided. This scheme is provided for only shareholders children for his/her education. Up to ` 2,00,000 Interest rate 12% p.a.
Above ` 2,00,000 Interest rate 13% p.a.
75% loan is provided, but the DD is issued is of full amount.
6.
Social loan: Social loan is given to share holder only for the purpose of marriages, festivals etc. This is short term loan. It is given for any festival, occasion or medical purpose. Its limit of giving loan is ` 50,000/ The main objective is to fulfill the social objective of the bank.
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7. Computer loan (COM) This was loan provided by UBC federation. This is short term loan. This loan was provided to only members of bank. Negotiation was done with companies. It was interest free loan. Bank got commission @13% p.a. for each installment paid. Bank earned ` 100/- for sanction of loan. At a time 30 % down payment was to be done & 70% was loan granted. Now this facility is not provided at bank.
8. Clean cash loan (CCL) This loan facility is provided to only professionals such as doctor, lawyer etc. The limit of providing loan is `50,000/Certificate of degree is to be provided as an occupation proof.
9. Vehicle loan (VHL) This is provided against purchase of vehicle to customer. It is medium term loan. Vehicle is lien in name of bank. 75% loan is provided against the quotation price i.e. 25% of amount is down payment done. All the documents related to vehicle are provided to bank. Bank provides the facility of refinancing. Refinancing means to purchase the second hand vehicle. For refinance of loan vehicles should be 5 years old and it should be paid within 3 years. In case of heavy and big vehicles the second hand vehicle becomes cheaper as context to purchase new vehicle.
New vehicle Refinance Staff
Interest @ 12% p.a. check Interest @18 % p.a. Interest @6 % p.a.
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10. Staff overdraft facility: GMCB provides facility of loan to their staff on the basis of following limits: a) service of 3 years & above but less than 5 years Officer Clerk-cum- cashier Sub staff `1, 00,000/`75,000/`35,000/`2, 00,000/`1, 50,000/`75,000/-
b) Service of 5 years & above Officer Clerk-cum-cahier Sub staff
Interest will be charged and recovered monthly @ 10% p.a. The salary will be credited in the said clean overdraft account. It will be mandatory for the employee to designate the overdraft account for credit of his/ her monthly salary. Being a facility to staff member, there will not be any incidence of service charge, cheque book charge etc. however, if the account remains overdrawn for any reason, panel interest @ 2% p.a. would be levied on the irregular portion for the period applicable.
11. Staff housing loan (SHL/SHO) This loan is given for staff members of bank to construct house. Eligibility: 3 years of continuous service in bank. There is two category in this loan are: o If staff renovates old house then 80% loan is granted against the value of house o If staff purchases the new house or construct it then 80 % of loan is granted against full estimated amount given to bank. 6% simple interest is charged on loan for staff only.
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Loan given to staff members Officers Clerk Peon
Amount of loan ` 10,00,000 ` 6,00,000 ` 4,00,000
Staffs are provided loan/ overdraft for a various purpose and can be received as & when required. Loan & advances are provided to staff and installment is deducted from monthly salary. Against OD staffs P.F, gratuity fund is kept as mortgage. Staff cannot withdraw above 60% from mentioned funds.
12. Staff Consumer Loan (SCL -Vehicle Loan) The bank will provide housing loan to employees who have completed 5 years of confirmed service. The vehicle loan will be given to staff for New/ Second Hand (not more than 5 years old) four wheelers. Maximum limit for the same is `2,50,000/- or 80% of the cost of fourwheeler- whichever is less. The repayment of vehicle loan will be made maximum in 60 equal installments towards principal amount and maximum 24 equal monthly installments towards interest amount. The vehicle should be insured comprehensively. This loan will carry 7% p.a. (simple) interest. 13. Festival loan The festival advance equivalent to one month salary will be given to employees upon their written request once in a year. The festival advance will be recovered in 10 equal monthly installments, without interest.
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14. Real estate loan (REL) Real estate means to trade in property or in agriculture land by investor in city. As by RBI norms any bank cannot provide more than 10% of its exposure limit. If the excess is provided then there is violation of rules and penalty is to be paid. Exposure limit is total capital fund mentioned in CRAR. It is risky endeavor to provide loan to this type of customer because if the rate of property goes down due to various reasons then the loan provided for the purpose fails and sometimes recovery is not possible.
Particulars Education loan Up to 200,000 Above 200,000 Up to 25,000 25,000 to 200,000 Above 200,000 REO REL Vehicle loan Vehicle refinance loan
Rate of Interest
12% 13% 13.5% 14% 14.5% 14.5% 14.5% 12.5% 18%
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TYPES OF LOAN / NO OD SOL CCL CSL EDL LFD GHL REL LGS VHL MSL SHL SOD HYP BKD FDO OGS CCC GHO REO
OF
ACCOUNTS 20 1 5 8 71 9 5 3 184 44 21 24 153 103 321 5 4 64
16 OVERDRAFT LOAN
Meaning
Overdraft is a facility to over draw the Loan is a borrowed amount amount from current a/c. from bank.
Usage
This facility can be availed from It has its separate a/c. current a/c.
Sanction limit
of Full or partial limit can be utilized
Full amount is withdrawal at a time.
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Security
Property or stock or book debt is kept Particulars is kept lien with mortgage. bank. For e.g. Vehicle is purchased on loan then that vehicle is kept under banks name.
Purpose
Requirement of working capital, high To acquire fixed assets. rate investment
Period
It may be medium term or short term
It may be medium or long term
Interest rate
Interest rate can be changed at a time Interest rate remains same of renewal or prior notice. during the period of loan. There is no renewal. the amount is
Renewal Issuance
It is renewed every year
of Cheque book is issued because there is Once continuous transaction by customer
cheque book
withdrawn then there is only need of repayment.
Particulars Deposits Total Deposits Advances Cr. Bal. Total Loans & Advances Loans Advances Total
Amount (`)
17101.48 93.67 17195.15
2281.6 9758.4 12040
C.D Ratio = Total of Credit / Total Deposits = (12040 / 17195.15) x 100 = 70.01%
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Recovery process From the next day due date of instalment bank starts recovery process. In case of NPA bank has to undergo proper channel. Two notices are to be send after 90 days. If these notices doesnt affect customer then FIR is to be done. Then notice is to be send with FIR copy. Then case is done in court. Court sends the notices, if it fails then for acquiring the assets notice is send and date is mentioned of auction. Then one time settlement can be done if customer is unable to pay debt. In case of liquidation bank can call off its liability to set off deposit.
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Functions of RBI
The Reserve Bank of India Act of 1934 entrust all the important functions of a central bank the Reserve Bank of India. Bank of Issue Under section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all denominations. The reserve bank has a separate Issue Department which entrusted with the issue of currency notes. The assets and liabilities of the Issue Department are kept separate from those of banking department. Originally, the assets of the Issue Department were to consist of not less than two fifths of gold coin, Gold bullion or sterling securities provided the amount of gold was not less than Rs.40 crores in value. The remaining three fifths of the assets might be held in rupee coins, Government of India is required to maintain Gold & Foreign exchange reserves of Rs.200 crores, of which at least Rs.115 crores should be in gold. The system as it exist today is known as the minimum reserve system. Banker to Government The second important function of the reserve bank of India is to act as government banker, agent and advisor. The Reserve Bank of India is act as Government banker, agent and adviser. The Reserve bank is agent of Central Government in India excepting that of Jammu & Kashmir. The Reserve Bank has the obligation to transact Government business, via. to keep the cash balances as deposits free of interest, to receive and to make payments on behalf of the Government and to carry their exchange remittances and other banking operations. The reserve bank of India helps the Government both the union & the states to float new loans and to manage public debt. It makes loans & advances to the states and local authorities. It acts as adviser to the government on all monetary and banking matters.
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Bankers Bank and Lender of the Last Resort The Reserve Bank of India acts as a bankers bank. According to provision of the Banking Companies Act 1949, every schedule bank was required to maintain with the reserve bank a cash equivalent to 5% of its demand liabilities and 2% of its time liabilities in India. By and amendment of 1962, the distinction between demand and time liabilities was abolished and bank have been asked to keep cash reserve equal to 3 per cent of their aggregate deposit liabilities. The minimum cash requirements can be changed by the Reserve Bank of India. The Reserve Bank can borrow from reserve bank of India on the basis of eligible securities or get financial accommodation in times of need or stringency by rediscounting bills of exchange. Since commercial banks can always expect the Reserve Bank of India to come to their help in times of banking crisis the Reserve Bank becomes not only the bankers bank but also the lender of the last resort. Controller of Credit The Reserve Bank of India is the controller of credit i.e. it has the power to influence the volume of credit created by banks in India. It can do so through changing the bank rate through open market operations. According to banking regulation act of 1949, the Reserve Bank of India can ask any particular bank or the whole banking system not to lend to particular groups or persons on the basis of certain types of securities. Since 1956, selective controls of credit are increasingly being used by the Reserve Bank. The Reserve Bank of India is armed with many more powers to control Indian money market. Every Bank has to get a license from Reserve Bank of India to do banking business within India; the license can be cancelled by the Reserve Bank of India if certain stipulated conditions are not fulfilled. Every Bank will have to get the permission of the Reserve Bank before it can open new branch. Each schedule bank must send a weekly return to the reserve bank showing, in detail, its assets and liabilities. This power of the bank to call for information is also intended to give it effective control of the credit system. The Reserve Bank has also the power to inspect the accounts of any commercial bank. As supreme banking authority in the country, the Reserve Bank of India, therefor, has
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the following powers. It holds the cash reserves of all the scheduled banks. It controls the credit operations of banks through quantitative & qualitative controls. It controls the banking system through the system of licensing, inspection, and calling for information. It acts as the leader of the last resort by providing rediscount facilities to schedule banks. Custodian of Foreign Reserves The Reserve Bank of India has the responsibility to maintain official rate of exchange. According to the Reserve Bank of India Act of 1934, the bank was required to buy and sell at fixed rates any amount of sterling in lots of not less than Rs.10, 000. After India became a member of the international monetary Fund in 1946, the Reserve Bank has the responsibility of maintaining fixed exchange rates with other member countries of the IMF. Besides maintaining the rate of exchange of the rupee, the Reserve Bank has to acts as the custodian of Indias reserve of international currencies. Further, the RBI has the responsibility of administering the exchange controls of the country. Supervisory Function In addition to its transactional central banking functions, the Reserve Bank has certain non-monetary functions of the nature of supervision of banks and promotion of sound banking in India. The Reserve Bank Act, 1934, and Banking Regulation act, 1949, have given RBI wide powers of supervision and control over commercial & cooperative banks, relating to incensing & establishments, branch expansion, liquidity of their assets, management and methods of working, amalgamation, reconstruction, and liquidation. Promotional Functions RBI performs a variety of development and promotional functions, which, at one time, were regarded as outside the normal scope of central banking. The Reserve
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Bank was asked to promote banking habit, extend banking facilities to rural & semiurban areas, and establish and promote new specialized financing agencies. Accordingly, the Reserve Bank has helped in the setting up of the IFCI and the SFC; it set up the Deposit Insurance Corporation in 1962, the Unit Trust of India in 1964, the Industrial Development Bank of India also in 1964, the Agriculture Refinance Corporation of India in 1963 and Industrial Reconstruction Corporation of India in 1972. These Institutions were set up directly or indirectly by the Reserve Bank to promote saving habit and to mobilize savings, and to provide Industrial finance as well as agricultural finance. Central Banking Functions The monetary functions also known as the central banking functions of the RBI are related to control and regulation of money and credit, i.e., issue of currency, control of bank credit, control of foreign exchange operations, banker to the government and to the money market. Monetary functions of RBI are significant as they control regulate the volume of money and credit in the country.
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FINDINGS & ANALYSIS
Particulars Deposit ( ` In lakhs) Saving Current Recurring Term Loans & Advances (` In lakhs) C.D.Ratio Net profit (` in lakhs)
31.03.2011
31.03.2012
Increase (+) or decrease (-)
3326.14 2065.86 100.07 7222.65 12039.99
3554.09 2409.01 119.45 10859.73 9589.59
(+) 6.80% (+) 16.61% (+) 19.36% (+) 50.36% (-) 25.55%
73.5% 382.11
69.92% 202.48
(-) 4.87% (-) 47.01%
Banks deposits has increased from last year but credit decreased against
deposit.
In the year 2011-12, ` 4227.56 lakhs has arrived through different deposits but
bank has provided loans & advances around ` 2450 lakhs which is less than 70% of total deposits due to which banks loans & advances reduced by 25.55% & also many last year loans recovered in the year therefore banks loans & advances reduced.
Banks net profit reduced 47% just due to provision made for MMCB deposit. Bank has made provision of ` 323 lakhs due to which banks profit reduced
from last year.
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SUGGESTIONS
Bank should open branches so that more customers can avail service. Bank should make contract with VISA or MASTERCARD so that customer
can withdraw their money from any other ATM & also can use as debit card.
Bank should star Net banking as well as mobile banking facility that will
influence customer for making more transactions.
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APPENDIX
THE GANDHIDHAM MERCANTILE CO-OP.BANK LTD. BALANCE SHEET AS ON 31st March, 2012
Liability
Share Capital Paid up share capital
Amount `
Total `
11,29,85,200.00
11,29,85,200.00
Reserve Funds & Other Reserves Statutory Reserve Fund Charity Reserve Fund Educational Reserve Fund Bad Debt Reserve Fund Building Reserve Fund Dividend Equilisation Reserve Staff Welfare Fund Member Welfare Fund Investment Depri.Reserve Fund General Reserve Fund UBC Equilisation Fund Provision For Standard Assets Provision For Housing Loan Provision For Fraud Case Investment Fluctuation Fund The M.M.C.B Ltd. (FD) Revaluation Reserve Land Revaluation Reserve Building 9,00,54,517.00 8,32,284.00 9,00,000.00 3,07,52,825.00 3,23,00,000.00 1,45,54,817.46 6,57,356.75 12,09,995.56 57,57,000.00 8,67,447.54 17,15,520.00 49,65,000.00 7,16,000.00 1,25,000.00 34,50,000.00 8,69,46,469.00 5,03,87,095.00 1,11,74,553.00 33,73,65,880.31
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Deposits & Other Accounts SDR (Below 1 Year) SDR Matured FDR (Above 1 Year non-cumulative) FDR Matured FDI Matured RD (Recurring Deposit) CDR (Fixed Deposit Double) CDR Matured KDR (Kuber Deposit) Saving Deposit Current Deposit Unknown Deposits SDV Security Deposit 73,31,726.00 12,71,358.00 12,03,55,325.55 3,21,591.00 8,09,827.00 1,19,45,001.00 92,93,46,004.68 2,61,50,836.00 3,86,438.00 35,54,09,887.91 24,09,01,292.55 89,979.23 1,82,31,000.00 1,71,25,50,266.92
Advances Credit Balance HYP BKD CCC FDO OGS GHO SOD REO 27,25,443.12 18,70,230.35 10,406.39 37,74,265.37 9,921.00 9,27,250.39 49,026.09 1,112.00 93,67,654.71
Borrowings
Bills For Collection Being Bills Liability for Outward bill for collection Liability for Inward bill for collection Bank's Liability for Guarantee Issue 16,20,590.00 21,94,164.00 2,40,24,000.00
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Overdue Interest Reserve
1,85,92,082.62
4,64,30,836.62
Branch Adjustment Interest Payable Interest Payable on SDR 1,70,379.00
1,70,379.00
Other Liabilities Dividend Payable Pay slip Issued (Bankers Cheque) Staff Group Insurance Staff Provident Fund Staff Gratuity Fund 22,77,892.00 32,20,718.90 2,66,770.00 83,74,288.00 33,66,910.00 1,75,06,578.90
Sundry Credits Sundry Creditors Cash Found Excess Service Tax Payable Provision For Expense Incurred Staff Bonus & Incentive Provision For Income Tax (10-11) Provision For Income Tax (09-10) Provision For Income Tax (08-09) Provision For Income Tax (11-12) 11,39,508.00 1,72,425.00 78,767.29 2,46,500.00 15,83,457.00 2,13,85,920.00 1,40,14,930.00 1,43,12,743.00 2,49,85,500.00 7,79,19,750.29
Profit & Loss Profit & Loss
2,02,47,860.66
2,02,47,860.66
TOTAL
2,33,45,44,407.41
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Assets
Cash Cash In Hand ATM Cash
Amount
2,44,79,611.00 37,11,800.00 2,81,91,411.00
Balance with Other Bank The K.D.C.C. Bank Ltd State Bank of India The G.S.C Bank Ltd Bank of India Central Bank of India Bank of Baroda Allahabad Bank Union Bank of India 20,000.00 2,22,24,623.01 6,91,508.26 3,50,965.36 1,49,35,813.00 12,61,615.00 5,03,873.00 3,57,879.00 4,03,46,276.63
Current Deposit TheBCCB Ltd (Bhuj) HDFC Bank Ltd (Rajkot) HDFC Bank Ltd (BCP A/C) Axis Bank Ltd Kotak Mahindra Bank Indusind Bank Ltd 59,055.24 3,31,598.67 44,565.28 30,45,576.95 11,97,092.73 7,44,892.33 54,22,781.20
Saving Deposits
Fixed Deposit (with S.L.R) The GSC Bank Ltd - A'BAD Government Securities Bank of India Allahabad Bank Ltd Central Bank of India 3,03,20,000.00 44,69,00,169.00 75,00,000.00 5,00,00,000.00 3,00,00,000.00
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Union Bank of India State Bank of Patiala Andhra Bank Bank of Baroda
5,00,00,000.00 99,00,000.00 1,00,00,000.00 1,60,00,000.00 65,06,20,169.00
Fixed Deposits (without S.L.R) The MMCB Ltd (A'BAD) Indusind Bank Ltd Non SLR Bonds Bank of Baroda 8,69,46,469.00 17,15,217.51 5,03,50,000.00 2,50,00,000.00 16,40,11,686.51
Money at Call & Short Notice Other Investment The GSC Bank (Share Deposit) The KDCC Bank (Share Deposit) 50.00 Investment Staff Gratuity Fund Investment Staff Group Insurance Investment Staff Provident Fund 33,66,910.00 2,66,770.00 83,74,288.00 1,20,13,018.00 5,000.00
Investment Out of Subsidiaries Loans and Advances Advances Cash Credit Hypothecation Cash Credit Book Debt Cash Credit Clean Overdraft Against Fixed Deposit Overdraft Against Kuber Deposit Overdraft Against Govt. Securities Deposit Overdraft Against General Housing Overdraft to Staff members Temporary Overdraft in Current Accounts 11,36,43,683.98 51,92,48,895.43 1,35,616.39 8,64,96,974.18 864.00 1,14,903.99 14,34,58,032.39 20,04,499.68 -
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Real Estate Overdraft
11,07,36,530.51
97,58,40,000.55
Loans Loan Against Fixed Deposit Loan Against Govt. Securities Machinery Loans Vehicle Loans Consumer Loans General Housing Loans Real Estate Loan Educational Loans Social Loans Staff Consumer Loans Staff Housing Loans Clean Cash Loan Festival Loan 1,67,86,549.00 2,81,604.00 4,49,67,400.74 9,71,03,819.33 1,40,750.00 77,34,648.65 5,43,46,975.00 21,37,044.72 5,72,154.00 7,94,449.00 31,10,583.78 9,989.00 1,74,000.00 22,81,59,967.22
Bills Rec. Being Bills for Collect (As per Contra) Outward Bills for Collection Inward Bills for Collection Customer's Liability For Guarantee Issue Interest Receivable on NPA a/c 16,20,590.00 21,94,164.00 2,40,24,000.00 1,85,92,082.62 4,64,30,836.62
Premises less Depreciation Plot Purchase a/c Building Construction a/c 5,90,30,975.00 1,95,03,621.00 7,85,34,596.00
Fixed Assets Furniture & Fixtures Interest Receivable Interest Receivable on Investment 1,82,57,864.00 82,35,706.00 82,35,706.00
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Accrued Investment on Government Security
1,50,423.61
1,84,08,287.61
Other Assets Stamps & Stamped Document on 300.00 Stock of stationery Franking Machine Stamp a/c 3,00,019.00 16,19,055.00 19,19,374.00
Suspense Debits Telephone Deposit GEB Security Deposit Tax Deduction at Source Sundry Debtors Advance Income Tax Paid (2009-10) Advance Income Tax Paid (2008-09) Advance Income Tax Paid (2010-11) Advance Income Tax Paid (2011-12) 23,550.00 85,000.00 15,00,888.07 1,15,209.00 1,50,81,670.00 1,32,22,130.00 2,13,81,850.00 2,50,00,000.00 7,64,10,297.07
TOTAL
2,33,45,44,407.41
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THE GANDHIDHAM MERCANTILE CO-OP.BANK LTD. PROFIT & LOSS FROM 1st April, 2011 TO 31ST March, 2011
EXPENDITURE Interest On Deposits, Borrowings Etc. Salaries & Allow. & Provident Fund 1,26,04,997.60 Commission, Exchange, Brokerage & Bank Guarantee Comm. Director's & Local Committee Member's Fees Allowances Rent, Taxes, Insurance, Lighting, Etc Postage, Telegrams & Telephone Chgs. 17,62,332.83 Income From Non-Banking Assets & Profit 1,96,921.57 From Sale Of Or Dealing With Such Assets, Stationery Auditor's Fees (Including Tax Audit) Depreciation On Property Stationery, Printing & Advertisement Loss From Sale Of Or Dealing With Non-Banking Assets Provision Against Risks Other Expenditure Balance Of Profit 6,76,56,994.00 29,45,604.21 2,02,47,860.66 22,65,537.13 Loss ( If Any) 20,50,318.00 2,43,000.00 Other Receipts 23,49,536.15 21,60,000.00 Subsidies And Donations -12,77,924.40 Amount ` INCOME Amount ` 20,13,94,787.45
9,72,08,682.00 Interest And Discount
TOTAL
20,71,82,248.00
TOTAL
20,71,82,248.00
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BIBLIOGRAPHY
Websites Books RBI Master Circular RBI Hand Book GMC Bank Annual Report,2011 Principles & Practices of Banking (Publisher : Indian Institute of Banking & Finance) http://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=6544 http://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=6524 http://www.gmcbank.org http://www.rbi.org.in/scripts/BS_ViewMasterCirculardetails.aspx
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UNDERSTANDING of BANKING OPERATIONS & CREDIT CONTROL AT GANDHIDAM MERCENTILE CO-OPERATIVE BANK A PROJECT REPORT submitted by Jitendra Parmar

Tolani Institute of Management Studies. Adipur 370205 (Kachchh). JUNE 2012.

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103 110 111

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Tolani Institute of Management Studies

Tolani Institute of Management Studies

RBI UCB CAMELSC

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Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Sr.No. Category bank

of Minimum SLR holding in Government approved and securities other as

Tolani Institute of Management Studies

Public Sector Banks

Primary Credit Socities

Private Sector Banks

Central Cooperative Banks

State Coopeartive Banks

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History of GMC Bank

Tolani Institute of Management Studies

Tolani Institute of Management Studies

THE GANDHIDHAM MERCANTILE CO-OPERATIVE BANK LTD.

Security Staff S.D.V

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Tolani Institute of Management Studies

Tolani Institute of Management Studies

Loans & Advances

DD & Pay order

Term deposits SDR,CDR, FDR

Deposits in form of SA,CA

Tolani Institute of Management Studies

safe Deposits Vault

TYPES OF DEPOSITS SB CA RD SDR CDR FDR KDR

NO. OF A/Cs 19269 5233 367 121 4691 361 5

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Tolani Institute of Management Studies

Current account 2008-2009 2009-2010 2010-2011 2011-2012

Amount ` 16,53,64,537/` 18,69,32,722/` 20,65,86,149/` 24,09,01,292/-

Tolani Institute of Management Studies

Saving Deposits 2008-2009 2009-2010 2010-2011 2011-2012

Amount ` 20,90,83,776/` 27,58,00,568/` 33,26,14,787/` 35,54,09,887/-

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Tolani Institute of Management Studies

Recurring deposits 2008-2009 2009-2010 2010-2011 2011-2012

Amount ` 1,27,88,269/` 1,17,04,907/` 1,00,07,146/` 1,19,45,001/-

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Tolani Institute of Management Studies

Saving Account Current Account Recurring Account 15%

Term Account Advance credit balance

Tolani Institute of Management Studies

Tolani Institute of Management Studies

500 np 200 np 100 np 50 np 25 np 20 np 10 np

`1000 ` 500 `100 `50 `20 `10 `5 `2 `1 COINS TOTAL