AARMSS INTERNATIONAL JOURNAL OF MANAGEMENT AND SOCIAL SCIENCES RESEARCH

ISSN No: 2455-1422, Volume 1, Issue 2, December 2015

A STUDY ON FINANCIAL PERFORMANCE OF LOANS AND ADVANCES OF

GODAVARI CO-OPERATIVE BANK LTD. NANDED DISTRICT IN MARATHWADA
REGION 2009-2010 TO 2013-2014

Ratnaparkhe Gajanan
Research Scholar
DCRC, SP Pune University, Pune
Email: gratnaparkhe@gmail.com; Contact: 9604128054

Dr. A.B. Adsule

Principal
St.Vincent College of Commerce, Pune,
DCRC, SP Pune University, Pune

Abstract:
The exponential growth of Co-operative banks were credited mainly to their much better contacts with the local people, personal
interaction with customers and their ability to grab the nerve of the local clients. Rural areas, so far as agricultural & associated
actions were concerned, the cooperative banks have provided sufficient short-term and long-term institutional credit at
reasonable rates of interest. Co-operative banks were made a fundamental part of the institutional structure of community
growth and extension services which were assigned the significant role of delivering the fruits of economic planning at the grass-
root level. In this circumstance, the present study attempted to re-evaluate the functioning of Growth of Cooperative banking in
India. The particular purpose of the study was to analyze the performance of urban cooperative bank. The study has analyzed the
performance of the bank with regard to deposit mobilization, issue of loans and advances, recovery of loans, regarding the
overall working output of the Bank. The data required for this study were collected through imitative sources.

Key Words: Loans, Advances, Financial Performances, Godavari Co-operative Bank Ltd. Nanded.

1. Introduction
Co-operative Banks are much more imperative in India than anywhere else in the world. The distinguishing character of this bank
is service at a lower cost and service without exploitation. It has gained its magnitude by the responsibility assigned to them, the
hopes they are supposed to fulfill, their number and the number of offices they manage. Co-operative banks role in rural
financing continues to be essential day by day, and their business in the urban areas has augmented extraordinarily recent years
mainly due to the quick increase in the figure of primary co-operative banks. In rural areas, so far as the agricultural and allied
activities are concerned the contribution of credit was insufficient and moneylenders would take advantage of the poor people in
rural areas providing them loans at higher rates. It was the reason that co-operative banks mobilize deposits, deal in agricultural
& rural credit with a wider outreach, and afford institutional credit to the farmers. Co-operative banks have also been vital
instruments for various development schemes, particularly subsidy based programmers’ for the poor’s. The Co-operative banks
in rural areas primarily finance agricultural based performance like; Farming, Cattle, Personal finance, Milk, Hatchery. The Co-
operative banks in urban areas provide money to activities like; Small Scale Units, Social Services-Health, Education Home
finance, Consumers finance, Self-employment, Industries, Personal finance, etc. Some of the forward-looking Co-operative
banks have developed satisfactory competencies to the extent that they are able to face state and private sector banks.

A co-operative bank is defined as "a financial entity which belongs to its members, who are at the same time the owners and the
customers of their bank. The term Urban Cooperative Banks, although not properly and officially defined, refers to the primary
cooperative banks located in urban and semi-urban areas. These banks, until 1996, were permitted to lend money only to non-
agricultural purposes. This distinction remains today. These banks have conventionally been in the region of communities,
localities working out in fundamental nature, loans to small borrowers and businesses. Today their scope of operation has
expanded significantly.

31
© AARMSS INTERNATIONAL JOURNALS Website: www.aarmssjournals.com
 AARMSS INTERNATIONAL JOURNAL OF MANAGEMENT AND SOCIAL SCIENCES RESEARCH
ISSN No: 2455-1422, Volume 1, Issue 2, December 2015

2. Urban Co-operative Banks

The term co-operative banks although not officially and properly defined, refer to most important co-operative banks located in
urban and semi-urban areas. These banks till 1996, allowed lending money only for non-agricultural purposes. Urban Co-
operative Banks are an essential part of the financial system in India. It is, therefore, essential that the Urban Co-operative Banks
emerge as a sound and healthy network of jointly owned, democratically controlled, and decently managed banking institutions
as long as need based quality banking services, fundamentally to the middle and lower middle classes and marginalized sections
of the society. They essentially borrowed to small borrowers and businesses. Today their scope of operations has widened
consider. From its origins then today, the power of the Urban Co-operative Banks, traditionally, has been to mobilize savings
from the middle, grass -rooted and low income urban groups and supply credit to their members-many of which belonged to
weaker sections. The origins of the urban co-operative banking movement in India can be traced to the close of nineteenth
century. Inspired by the success of the experiments related to the co-operative credit movement in Germany and cooperative
movement in Britain, such societies were set up in India. Co-operative societies are based on the principles of cooperation,
mutual help, democratic decision making, and open membership.

3. Review Literature
Naushad Makbool Mujawar and Rohini Chintaman Shresthi article in “Management of NPA In Urban Co-operative Banks A
Case Study of Sanmati sahakari Bank Ltd Ichalkarnji” Southern Economist Volume 48 number 12 October 15,2009 page no.31-
40. It may be fairly expected as the prime responsibility of the management of UCB not to make the bank the political dense at
the cost of the detriment of public money and public interest. Many of the UCBS especially under the category of small banks
having the deposits below 50 cores may not hesitate to follow Sanmatis way. The efficient recovery performance may be
considered as the single pointer of successful loan operations of the bank. As the NPA drains the profitability and endanger the
very existence of the bank.

VasamAnand Kumar, Article in southern Economist February 1, 2006 Page no.13 to 16 volume44 (19) “Trend in Net NPAs in
Banking Industry-1996-2005” The RBI initiated a series of measures to reduce the NPAS which has yielded a very little results
during the last decade 1996-2005, and still a lot of measures have to be taken in the next 5 to 10 years to come..

P. Ramappa and M. Sivasankaraiah.Article in southern Economist February1, 2007 Page no.25 to 28 volume45 (19)
“Performance of Rayalaseema Grameena Bank: A study” The recovery performance of PGB improved as its overdue declined
from 34 percent in 2003 to 19 percent in 2004.

Ramakrishana and K.V.Aiyanna.Article in southern Economist June1, 2009 Page no.29 to 32 volume48 (3) “Agricultural Finance
and repayment Performance: a micro study” It is revealed that State bank of Mysore had played vital role in financing the
beneficiaries i.e.67,56 per cent of the total loan amount followed by Canara bank 17.60 per cent RRBs 12.07 per cent and
cooperative only 2.77 in the study area. Marginal formers have borrowed for crop loan and live stock while small borrowers
preferred to borrow for irrigational structure and live stock. The medium and larger farmers have taken more loans for equipment
and machineries.

4. Objectives of the study

1) To study and analyze the performance of Loans and Advances of the Godavari Co-operative Bank Ltd. Nanded District in
Marathwada Region.
2) To study the performance of Recovery and N.P.A. status of the Godavari Co-operative Bank Ltd. Nanded District in
Marathwada Region. To identify the important factors contributing to performance and suggest suitable measures.

5. Hypothesis
The Performance of institute under studies i.e. Godavari Co-operative Bank Ltd. Nanded. In relation to recovery of loans and
Advance of Non-Performing Assets has improved considerably during the period under study.

6. Methodology of the study

32
© AARMSS INTERNATIONAL JOURNALS Website: www.aarmssjournals.com
 AARMSS INTERNATIONAL JOURNAL OF MANAGEMENT AND SOCIAL SCIENCES RESEARCH
ISSN No: 2455-1422, Volume 1, Issue 2, December 2015

The methodology adopted for the purpose of project study was collectionof necessary data from secondary data. The secondary
data collected from annual reports, certain statements, the bye-laws, balance sheet, profit & loss account statement and relevant
records and various books of accounts. Study considerably during the period under study 2009-2010 to 2013-2014.
7. Tools Statistical techniques used
The data collected for the study by using various accounting and statistical tools such as percentage, ratios, different graphical
and diagrammatically representations for the data interpretation and presentations.

8. Scope of the study

Scope of the study has been restricted to performance of the loans and advances. The performance of the quality of assets also
been analyzed A Study on Financial Performance of Loans and Advances of Godavari Co-operative Bank Ltd. Nanded District in
Marathwada Region 2009-2010 to 2013-2014.

9. Limitations of the study

The limitations of the study are as follows
1) The study is made exclusively with the reference of Godavari Co-operative bank Ltd Nanded District in Marathwada
Region
2) The accuracy of the conclusion was limited to the accuracy of the information received from the interviewed and data
available in the records.

Table : 1: Credit / Deposits Ratio Godavari Co-operative bank Ltd Nanded District in Marathwada Region
*(Rs. in Lakhs)
Year Total Loans Total Deposits C.D. Ratio
2009-2010 486.4 1034.37 47.02
2010-2011 677.06 1305.27 51.87
2011-2012 792.38 1371.3 57.78
2012-2013 902.89 1655.77 54.52
2013-2014 948.3 1837.15 51.61
Total 3807.03 7203.86
Average 761.4 14407.72
Sources: Godavari urban co-operative Annual Report During period 2009-2010 to 2013-2014

Graph No. 1
Credit / Deposits Ratio Godavari Co-operative bank Ltd Nanded District in Marathwada Region

1837.15
2000 1655.77
1305.27 1371.3
1500 1034.37 948.3
902.89
1000 677.06 792.38
486.4
500
0

10. Suggestion & Conclusion

1) The bank has to be required to make simple its loan procedure.
2) The recovery department should review the recovery performance weekly instead of monthly.
3) The bank must adopt Asset Liability and Risk Management techniques in day to day operations.
4) Better supervision of loan is needed for increasing the productivity of borrowers.

33
© AARMSS INTERNATIONAL JOURNALS Website: www.aarmssjournals.com
 AARMSS INTERNATIONAL JOURNAL OF MANAGEMENT AND SOCIAL SCIENCES RESEARCH
ISSN No: 2455-1422, Volume 1, Issue 2, December 2015

5) The main function of the banks is mobilizing deposits and provide loans to members. To provide adequate with reasonable
rate of interest, the bank should be attract local depositors.
6) Repayment installment should be small so that marginal and small borrower can pay it easily.
The analysis of the source of funds and the loans and advances performance of the bank combined with the historical profile of
the bank clearly demonstrates the strength and the commitment. The business indicators of the bank starting from the own fund to
the total funds and the percentage of recovery non performing assets clearly shows the performances of the Godavari urban co-
operative bank Ltd. Nanded district in Marathwada Region.

References:
1. Bhorali, Devadas (1987), Co-operative Banking and Economic Development Deep & Deep Publications, New Delhi.
2. Mathur, B.S (1993): Co-operation in India, SahityaBhawan, Publishing House, Agra.
3. Agarwal, Monika and Ranganadhachary, (2007): Banking Theory and Practice, Kalyani Publishers, New Delhi.
4. Reserve Bank of India (2011-2012): Reports on Trend & progress of Banking in India.
5. Naushad Makbool Mujawar and Rohini Chintaman Shresthi article “Management of NPA In Urban Co-operative Banks A
Case Study of Sanmatisahakari Bank ltd Ichalkarnji”Southern Economist Volume 48 number 12 October 15,2009 page no.31-40.
6. VasamAnand Kumar, Article in southern Economist February 1, 2006 Page no.13 to 16 Volume 44(19) “Trend in Net NPAs in
Banking Industry-1996-2005”
7. P. Ramappa and M. Sivasankaraiah.Article in southern Economist February1,2007 Page no.25 to 28 volume45 (19)
“Performance of RayalaseemaGrameena Bank: A study” 24 Satpal and Sunil Phougat, Article in southern Economist September
15, 2009 Page no.35 to 39 volume48 (10) “Performance Appraisal A comparative Study of SBI and PNB”
8. By Ramakrishana and K.V.Aiyanna.Article in southern Economist June1,2009 Page no.29 to 32 volume48(3)”Agricultural
Finance and repayment Performance : a micro study” By Ramakrishana and K.V.Aiyanna

Websites
1) Google.com
2) Yahoo.com
3) Rediff.com.

34
© AARMSS INTERNATIONAL JOURNALS Website: www.aarmssjournals.com