A

SUMMER INTERNSHIP REPORT

ON

“STUDY ON FACTORS AFFECTING RECOVERY MANAGEMENT ”

At

Raj Bank

Submitted to

Institute Code : 759

Shree H.N.Shukla College of Management Studies , Rajkot

Under The Guidance Of

Asst.Prof. Jaygiri Goswami

In partial fulfillment of the requirement of the award of the degree of

Master of Business Administration

Offered By

Gujarat Technology University

Ahmedabad

Prepared By:

Sonal Parekh

Enroll. No. 177590592074

MBA(semester 3)
 STUDENT’S DECLARATION

I hereby declare that the summer inte3rnship project report titled “ study on
factors affecting recovery management in (Raj Bank ) is a result of my own work and
my indebtedness to other work publications, references , if any, have been duly
acknowledged. If i am found guilty of coping from any other report or published
information and showing as my original work, or extending plagiarism limit, I understand
that I shall be liable and punishable by the university, which my include “fail” in
examination or any other punishment that university may decide .

Enrollment No. Name Signature

177590592074 Parekh SonalAtulkumar

Place .......... .Date ...................

 ACKNOLEDGEMENT

To acknowledgement is very great way to show your gratitude the person who has
contributed in your success in one or other way .

First of all, I am extremely thankful to my college for providing me this opportunity and I
also express my gratitude to and highly thankful to my respected project guide Prof.
Jaygiri Goswami for giving me the encouragement and freedom to conduct this project
and helping in every queries and problems regarding project

I would also like to thank to manager of raj bank whose giving me whole information
which were I needed

I am thankful to my family ,relatives and friends for helping me.

Signature :
 PREFACE

Change in occurring at an accelerated rate. Today is not like yesterday and tomorrow will
not like be today’s market is how to succeed in the dynamic environment that surrounds
the corporate world. Bank is the blood of the nation’s economy without them one cannot
imagine economy moving. The cooperative banks are a small part of whole banking
system in India. It is concerned about common people’s welfare and development.

The subject ‘practical studies’ particularly helps students to know the actual corporate
world, the anxieties and stress associated with the job which cannot be understood sitting
in a classroom.

As a student of MBA we are required to do survey in any unit of national or international

repute, so as to gain practical knowledge about the prevailing market conditions, for this
purpose I have chosen “THE RAJKOT CO-OPERATIVE BANK” as banking business
today is rapidly increasing and is one of the most competitive business. I was fortunate to
get an opportunity to work with such a professional unit.

Master of Business Administration course is design with the objective of preparing the
most competent person with achieve this objective in the best possible manner.

It gives me immense pleasure to present this project report. It is of great opportunity for a
management student to get broad exposure to the cooperative will during training for 45
days .
 TABLE OF CONTENT

Sr.No. Particular Page No.

1. Executive Summary

2. Industry Overview :
2.1 Basic Overview of Banking Industry
2.2 Status Wise Bifurcation of Bank
2.3 Introduction of Co-Operative Bank
2.4 Types of Co-Operative Bank
3. Major Players :
3.1 The Rajkot District Co-operative Bank
3.2 Shree Dharati Co-operative Bank
3.3 Rajkot People Co-operative Bank
4. Bank Overview :
4.1 Introduction
4.2 Profile of Bank
4.3 Vision, Mission
4.4 Organization Chart
4.5 The Executive Committee
4.6 Product at Bank
5. HR Department :
5.1 HR Policy and Programmers
5.2 Recruitment
5.3 Employee Remuneration
6. Marketing Department :
6.1 Introduction
6.2 Marketing Research & Information
7. Financial Department :
7.1 Introduction
7.2 Financial Planning
 7.3 Capital Structure of The Raj Bank
7.4 Cash Management
7.5 Ratio Analysis
8. Review of Literature

9. Introduction to Topic

10. Research Methodology :

10.1 Rational for the study

10.2 Statement of the problem
10.3 Significance of the problem
10.4 Research objective
10.5 Scope of the study
10.6Research hypothesis
10.7 Research design
10.8Sampling design
10.9 Outline of analysis
10.10 Limitation of the study
11. Data Analysis and Interpretation

12. Findings

13. Suggestions

14. Conclusion

15. Annexure –questionnaire

16. Bibliography
 1. EXECUTIVE SUMMARY

This project report aimed is understanding recovery management of Raj Bank. And how
that will done and why NPA is grown. That’s all for I am conducting this study. Bank
are using many tools for recovery. Bank has many factors are reasonable for the NPA
.from that research they can overcome that’s all .

Raj bank also made always good systematic work that’s why that have net NPA is zero.
But gross NPA is 2.29% .in short we can say that Raj bank covered 100% NPA. From
that report we can get idea about how to make 100% recovery of loan.

The training was a great learning experience resulting in a better understanding of the
banking sector. we found that in spite of so many co-operative bank coming in, there are
still a large number of companies who still prefer to carry out their transactions with the
co-operative banks.

The report , which follows, is an outcome of my role efforts which is prepared in

partial fulfillment of the MBA course. The fact and figures mentioned in the report are
absolutely true to my knowledge. Reader of this report is hence requested to keep the
information confidential and not it use for any other purpose.
 2. INDUSTRY OVERVIEW

2.1 Basic Overview of Banking Industry

Indian banking is the lifeline of the nation and its people. Banking has helped in
developing the vital sectors of the economy and user in a new dawn of progress on the
Indian horizon. The sector has translated the wants and aspirations of millions of people
into reality. Today, Indian banks can confidently compete with modern banks of the
world.

Generally, co-operative banks are governed by the respective co-operative acts of state
governments. But , since banks began to be regulated by the RBI after 1 st march 1966,
these banks are also regulated by the RBI after amendment to the banking regulation act
1949. The Reserve Bank is responsible for licensing in banks and branches, and it also
regulated credit limits to state co-operative banks on behalf of primary co-operative
banks for financing SSI units.

In present age in India there are many banks including foreign banks, public sector,
private sector, commercial banks &co-operative banks.

Meaning of “Bank” and “Banking” :

The word ‘Bank’ it derived from the ‘bancus’ or ‘banque’ that is a French. A bank
company is defined as a company, which transects the business of banking in India.

The term ‘Banking’ is defined as a ‘accepting’. For the purpose of lending of investment
of deposits of money from the public repayable on demand or otherwise and withdraw by
cheque, draft , order or otherwise.
 2.2 Status Wise Bifurcation of Banks

 Scheduled Banks
 Non –Scheduled Banks

 Scheduled Banks :

In first schedule, Government of India notifies the primary Banks, which are
licensed and whose demand and time liability are not less than 50 crores in 1987.

Government of India notifies the primary banks, which are licensed and whose
demand and time liability are not less than 100 crores can only qualify to be
included in the second schedule since 1993.

 A bank becomes scheduled when it fulfills the followings:

 ‘A’ grade rating from RBI

 Demand and Time Liability over 100 crores
 Satisfy the RBI guidelines related to CRR and SLR
 As per the norms priority sector wise lending

 Benefits of being a scheduled co-operative are described below:

 RBI would provide rediscounting at nominal rate

 The demerit of being a scheduled co-operative bank is that the bank will not
get 0.5% subsidy from RBI.
 The conferment of scheduled status on the banks has certain advantages like
refinance facility, directly industrial finance from Reserve Bank of India,
accept deposits from local bodies, quasi-government organization , religious
 and charitable institutions, guarantees and cheques issued by Banks are
accepted by Government Departments. At the same time, it casts greater
responsibility on the banks in the maintenance of books of accounts and
submission of returns.

 Non –Scheduled Bank :

The banks, which are not applicable as per the criteria of Scheduled Banks, are
called as a Non-scheduled Banks. These are very small banks.
 2.3 Introduction of Co-operative Bank

Over the year the difference between co-operative banks & commercial banks
they all have come under a common law. All products & services are offered by co-
operative banks are on the par with commercial banks, with a few exceptions related to
government business. In 1904 the co-operative movement started in India with a view to
provide finance to the agriculturist at a low rate of interest. The co-operative society has
to take the place of the money lenders & provide cheap loan to the farmers for productive
purposes. Even though many types of co-operative societies have been started
particularly for the artisans &others , the most common form of such societies deal in
rural credits. And today co-operative banks have started verities of services with different
technologies. Once the Mahatma Gandhiji has remarked that “there is sweetness in co-
operation; there is no one who weak or strong among those who co-operate. Each is
equal to other”.

So, after having such easy government policy, today many co-operative banks
have started in India. And they are catering to the all section of the society, & also today
co-operative sector has grown in all over the world, with globalization of the world they
have also started to implement new technologies & various management tools. Now, they
are in same market with all the other banks. So, by this way the co-operative banks are in
the key position in the economy.
 2.4 Types of Co-operative Bank

 State co-operative banks

 Central co-operative banks
 Urban co-operative banks

 State Co-operative Bank :

These banks are also known as apex bank and are registered under co-operative
society’s act 1912. In fact these banks are established to functions as a leading co-
operative financial institution of the state offer co-operative societies should grow. The
“apex bank” as they are called is they to render financial help as and when the co-
operative societies are in need of their help.

 Central Co-operative Banks :

A district level of co-operative bank is functioning as a commercial bank and that

two as an independent unit. They are there in order to strengthen the co-operative
movement in the country. In fact these banks are the key link between people and apex
bank and render valuable services to downtrodden and rural folk in taking them out of the
financial wood central co-operative banks get funds from

(1) share capital

(2) deposits

(3) financial help from state co-operative bank

(4) state bank of India

(5) commercial bank

Their working capital is usually provided by state government.

 Urban Co-operative Banks :

Urban co-operative banks are organized & established in towns on the patterns of
joint-stock banks but are established under co-operative society’s act – 1912. For funds
these banks depend on their own sources. However central co-operative banks are
helping them in financially viable. Central co-operative banks are directly links with the
co-operative banks.
 3. MAJOR PLAYER

3.1 The Rajkot District Co-operative Bank

(1) Bank was registered in 1959 and have commenced working in 1960
(2) Bank is having 127 branches in the district.
(3) Bank having 65 its own branch building including head office.
(4) 72 branches having its own safe deposit lockers facilities (including H.O.)
(5) Bank having 770 employees as on Dt. 31/03/2016 (118 in Head Office + 652
in branches )
(6) 101 branches including H.O. are computerized and remains will be covered
within quarter for 100% computerization.
(7) Last 31 years bank is obtaining audit class “a”
(8) The total deposit is rs. 677.68 Crores, which consist 57.03% law cost deposit.
(9) Bank having share capital of rs. 2135.01 lakhs, reserve fund and other funds
rs. 9735 lakhs,working capital rs. 9391-crores.
(10) Total investment is rs. 20,670 lakhs.(with building ,furniture and computer)
(11) Bank has obtained loans of rs. 11,906.90 lakhs.
(12) Bank is paying maximum dividend according to the provisions of the act,
since last 14 years.

So more competition of the market & face to many problems.

 3.2 Shree Dharti Co-operative Bank

Public Relation

A public is any group that has an accrual or potential interest in or impact on a bank
ability to achieve its objective. Public relations in voice a variety of programs designed to
promote or product a firm’s image or its individual services.

The wise company takes concrete steps to manage successful relations with its key
public. Dharti bank has their separate department for taking care of customers.

 They perform of following functions :

Service publicly :
Sponsoring efforts to publicize specific service.Corporate Communications
promoting understanding of the organization through internal and external
communication.

Counseling :
Advising management about public issues and company positions and image
during good times and bad time.

Preparing Reports :
Preparing reports annually, and providing information to out sliders and
helpful to shareholders to know the true position of the bank.
 3.3 Rajkot People Co-operative Bank

 Objectives Of Bank :

1. Accumulate deposit to the turn of rs. 100 crores.

2. Disburse advances to the tune of rs. 65 crores.
3. Achieve net profits to the tune of rs. 100 lac.
4. Acquires business per employee for rs. 200 laces for the year.
5. Reduce cost of deposit to 7%
6. Bring customers satisfaction to 100%
7. Reduce customers complaints to 100%
8. Educate customers complaints to bring banking awareness.
9. Train staff to become more effective.
10. Update present software.

 Policies Of Bank :

Bank is committed to achieving the customer’s satisfaction through

(1) Providing best services as per norms.

(2) Enhancing organization’s image and reputation for quality.
(3) Continuously improving service quality.

This commitment is met through nurturing quality culture in the organization and
the by constant adherence to laid down quality management system.
 4. BANK OVERVIEW

4.1 Introduction

The co-operative bank of Rajkot Ltd. Popularly known as Raj Bank is established
on 24-11-1980 under the strong , effective leadership of one of the national co-operative
hero honor Shri RamnikbhaiDhami with the intention of survive the common man.

The local intensity of the bank in its customer centric approach ,hassle free
execution of the decision & technologies are their main difference from commercial
banks, also high level of commitment at all levels of management & self –committed
ground level staff makes them different from other co-operative banks.

At present Raj bank has achieved a key position in the market of Saurashtra. It has
27 branch in all over Saurashtra including main branch with the advanced technologies
and educated staff, as it is said that “in the emerging competitive business environment
co-operative banks who adhere to strict financial discipline. Only will survive”. The Raj
bank 11 branches are providing ATM facilities.

 Some facts about co-operative bank in India :

 Some co-operative banks in India are more forword than many of the state and
private sector banks.
 This exponential growth of CORPORATION BANK LTD in India is attributed
mainly to their much better local reach, personal interaction with customers, and
their ability to catch the nerve of the local clientele.
 4.2 Profile of Bank

Name of Bank Raj Bank

Address ‘Sahakarsarita’ , Panchnath Road,

Rajkot -360001

Year of Establish 1980

Products Credit cards , consumer banking, corporate banking, finance

& insurance, investment banking, Mortgage loans , private
banking , wealth mgt.

Type of bank Co-operative Bank

Phone No. 02812234454

Branches 26
E-mail rajbank@yahoo.com

Website Rajbank.net

Chairman SatyaprakashKhokhre

Managing Director Kanji Viradia

Working Time 10 am to 6 pm
Working Days Monday to Friday
Saturday half day

Week Off Sunday and Public Holiday

 4.3 Vision and Mission

 Mission :

 Survive to the common man.

 Enhance the value of shareholders.
 Emerge as a symbol of public trust & confidence by creating a positive
image.
 Maintain excellence in operation & management by bringing in
transparency & integrity.
 Develop & motivate human resource there by cultivating professional
culture in the banking operation.
 Ensure speedy & satisfactory customers services through continuous
product innovation & aggressive marketing strategies.
 And the last but not least that is…..
 “To assist the weaker section of the society” is the primary motto of the Raj
Bank.

 Vision :

 To be the premier public sector bank of Gujarat aiming at growth profit with
central focus on customer delight by means of improved technology
excellence in services.
 More provide banking services of people
 All India provide ATM facility & more branch establish
 4.4 Organization Chart

CHAIRMAN

VICE CHAIRMAN

MANAGING DIRECTOR

GENERAL MANAGER

MAIN BRANCH OTHER BRANCHES

MANAGER MANAGER

ASSISTANT MANAGER
DEPUTY MANAGER

ASSISTANT
MANAGER CLERK

CLERK
PEON

PEON
4.5 The Executive Committee

Sr.no. Designation Name

1 GM & CEO SatyaprakashKhokhara

2 Chief Development Officer KAmalbhaiDhami

3 Deputy GM Kanji Viradia
4 Asst. GM VinodSudani
5 Asst.GM SanjivVirpariya
6 Asst.GM PragnaVaghela
7 Asst.GM Suresh Makwana
8 Manager Narendra Patel
9 Manager JitendraSolanki
10 Manager Vipul Mehta
11 Manager Jayshree Patel
12 Manager MahebubVaduivala
13 Manager Binna Chauhan
14 Manager BhaveshBabaria
15 Manager RinaRanparia
16 Manager DharmendraPujara
17 Manager DevendraParmar
18 Manager Dipal Patel
19 Statutory Auditors DiptiP.Tilala
20 Full Time CA Sanjay Nathwani
BhumikaKamdar
RajeshwariChavda
SwetaRachchha
21 Internal Auditors Somanath Pal
SudhirRajgor
JaydeepBudhdev
 4.6 Products

Services At a Bank

Deposits Loans

Current Deposits (account)

Fixed Deposits (account)

Saving Deposits (account)

Term Loans Cash Credit

Loans to small scale Industry

Housing Loan Others
Business Loan
Vehicle Loan
Personal Loan
Professional Loan
 Other Services
Loan against NSC/KVP/LIC
 Locker
 Higher Edu. Loan
 Car Loan System
 Demand
Draft
 5. HUMAN RESOURCE DEPARTMENT

5.1 H.R. Policy and Programmers

As Raj Bank is one of the leading Co-Operative bank in the Co-Operative sector,
through its performance is very good but then also such policies for human resources they
cannot make by their own. It has to follow the rules of policies given by the government
and RBI so in the matter of the personnel policies Raj Bank is restricted to some level.
Then also the bank have adopted a policy of recruiting only CA and MBA their
management level for better management so, by this way where they get chance they are
making or improving personnel policies at Raj Bank.

In the Raj Bank there is a very educated staff as it is concerned with the human
resource planning recently they has adopted policy of selection only CA & MBA for their
human resource has as far as concerned with the human resource planning. There is no
long term planning but at a time or requirement of staff they used to recruit staff either
out side or from with in the firm through transfer or promotion.
 5.2 Recruitment

Among the function of human resource manager, one man function is to procure best
people for their organization, means search of prospective employees to suit the job
recruitment. A firm has to pass through well and good recruitment process for having
best human resource this recruitment two success recruitment sources these are as under.

Recruitment Sources :

 Internal Sources :

(1) Transfer
(2) Promotion
(3) Relatives & friends

 External Sources :

(1) Advertisement
(2) Education Institutes
(3) Placement Agencies
(4) Labors Contractor

In case of Raj Bank , the main source or recruitment is daily news paper
advertisement. They also recruit employees by transfer and promotion. Generally as per
the recruitment of the job they give advertisement in newspaper and collect the pool of
application.
 5.3 Employee Remuneration

Remuneration is the compensation an employee receives in return for his or her

contribution to the organization. Remuneration occupies an important place in the life of
an employee. Standard of living of employee, states in the society , motivation, loyalty
and productivity depends upon the remuneration. For the employee remuneration is
significant because of its contribution to the cost of production .for human resource
management, remuneration is the major function . The HR specialist has a difficult task
of fixing wages and wage differentials acceptable to employee and their leaders. There
are mainly three components of employee remuneration. These are as follows…….

(1) Wages and salary

(2) Incentives
(3) Non-monitory benefits

As far as it is concerned with Raj Bank , there is a specific policy of employee

remuneration formed by RBI and government ; and it self also. So and also for the
management of employee remuneration there is a specific administration department
which cares of wages and salary and all things about remuneration.
 6. MARKETING DEPARTMENT

6.1 Introduction

Today, marketing is spread in every field of like hospitals, services , goods even politics
and many more. In banking sector too the importance of marketing also can not
measurable, still it has not developed in public sector it is only limited to foreign banks
and private sector. The reason for success of foreign in India is only best marketing
efforts. Today in banking sector there is a cutthroat competition among public sector ,
private and foreign bank.

Marketing is a human activity directs at satisfying the needs and wants of customers,
there are five stages of bank marketing firstly marketing is advertising ,sales promotion
and publicity , secondly marketing is smiling and co-friendly atmosphere, thirdly
marketing is innovation like the ATMs or cheques with drawls on fixed deposits,
fourthly marketing is positioning. When all banks advertise and innovative , they look
alike so, they should try to position themselves differently , even through symbols, logos
or aggressive advertising so that the customer can distinguee between one bank and
another and finally marketing is analyzing , planning and control.

At Raj Bank though there is no specific marketing department. For marketing of

different services but providing best services to their customers and getting good
customer satisfaction , and doing such efforts of marketing like promotion activities they
are in directly getting benefits of the marketing . today they are also planning for suc2h
continuous marketing efforts. And within the few years they will have aggressive
marketing department.
 6.2 Marketing Research & Information

Good marketing decisions are not made in a vacuum. Hence , even in bank marketing .
we need marketing research and information to enable bank executive to make sound
decisions. The increase in the use of marketing research in bank marketing is due to two
forces :

Competition pressures to be right, and customer- orientation in marketing planning and

program. Banks are now establishing a separate marketing organization. Conduction
marketing research, setting up sales training program and adopting sales promotion
divides promotion devices to attach customer we have special bank advertisement
through radio. T.V. and newspapers . Marketing research may be defines as “ the
scientific and controlled process of gathering of none routing , marketing information,
helping management to solve marketing problems”

As far as it concerned with the marketing research process at Raj Bank. They have been
continuously doing such research from beginning .but one positive point for marketing
research and for executives. Bank’s staff member themselves goes to market and gathers
requited information or data. Such information or data they are collection from direct RBI
or other banks. So, by this way they are getting benefits by using marketing research
process.
 7. FINANCIAL MANAGEMENT

7.1 Introduction

Finance is the fuel of administration. Without adequate financing no business enterprise

can raise its potentials for growth and success. And it would be worthwhile to recall what
“Henry Ford” once remarked “money is an arm or leg. You either use it or lose it.” In the
modern money oriented economy finance is one of the basic foundations of all kind of
economic activities.

Finance management is needed the key to successful business operations. Without

proper administration and effective utilization of finance, no business enterprise can
utilize it’s potentials for growth and expansion. Organization and control of these
function is important for all types of business units. Especially in public undertaking
massive investment has so far been much less productive.
 7.2 Financial Planning

Planning is very necessary for the smooth running of the business can not be carried on
without planning. Financial planning means deciding in advance the financial activities to
be carried on to organization. So, the basic purpose of financial planning is to make sure
that adequate funds are raised at minimum cost and they are used widely. A proper
planning of the business on one hand and to allow a fair return to their contribution on the
other.

 The financial planning includes the following …..

(1) Determination of financial objectives

(2) Formation of financial policy
(3) Development of financial procedure

In Raj Bank , the financial planning has been done through proper management in
various areas like liquidity planning, investment planning, profit planning, cash
management etc….
 7.3 Capital Structure of the Raj Bank

Capital structure decision is yet another important area under financial management.
capital structure refers to the mix or proportion of firm’s permanent long term financing
represented by debt preference must ensure the maximization of wealth of shareholders
so even the capital structure decision must be taken in the light of wealth maximization
objectives. The particular mix of debt and equity which maximizes the value of the firm
is known as optimum capital structure in simple word capital structure refers to the
composition of capital.

 Capital structure= Long term debts + Preference share

Equity share capital + Reserves

1 Capital Rs.4,60,00,000.00
2 Reserves & surplus Rs. 45,41,50,000.00
3 Deposit Rs. 2,86,41,00,000.00
4 Borrowings Nil
5 Other liabilities & provision Rs. 2,70,00,000.00
 7.4 Cash Management

Cash is the medium of exchange which allows management to carry on the various
activities of the business on day to day basis. And management of cash is one of the most
important answers of over all working capital management due to the fail there cases the
most liquid type of current assets.

The basic objective of cash management of are to reduce the operating cash balance
requirement to maintain possible extent without affecting the routine transaction. For the
management of cash flow statement is the most important tool cash low statement
provided information about the cash ratio payment of a firm for again period. It provides
important information that compliments the profit and loss account and balance sheet.
 7.5 Ratio Analysis

Financial analysis of an organization depends to a large extent on the use of ratios. The
technique is commonly known as financial ratio analysis. Ratio analysis is a very
powerful analytical tool useful for measuring performance of an organization the ratio
analysis helps the management to analysis the past performance of the firm and to make
further projection. Ratio analysis is a process of comparison of on figure against the
calculation of ratio relatively easy and simple task but the proper analysis and
interpretation of the ration can be made only be the skilled analysis.

The ratio of the Raj Bank of the last year is as under.

Net Profit Ratio = Net Profit /Total Income * 100

= Rs.27706000/Rs.326646000*100

= 8.48%

Gross NPV Ratio = Gross NPV/Total Advances

= 48.35/14211.80

= 0.34%
 8. REVIEW OF LITERATURE

1. VidyaPitre (2003) in their research paper titled “Urban Cooperative Banks:

Issues and Prospects” concluded the issues raised by the recent turbulence in the
sector typified by the Madhavpura Bank episode and its fallout.. This paper
further discussed on concept of cooperation and the trends in the financial
performance of Urban Cooperative Bank.

2. AnupamMitra (2011) in their research paper titled “NPA Management of Urban

Co-Operative banks - A Study in Hooghlydistrict of West Bengal” evaluated that
one of the vital problems which vitiate cooperative banking is inability of the
borrower to repay their contractual obligations of interest and principal, leading to
Non-Performing Assets (NPA). The presence of NPA has had an adverse impact
on the productivity and efficiency of UCB. He gave lot of recommendations for
improving the collection rate of loan and reduction rate of NPA.

3. Dr. K.V.S.N JawaharBabu (2012) in his paper titled “Performance Evaluation

of Urban Cooperative Banks In India” concluded that Urban Cooperative Banking
is a key sector in the Indian Banking scene, which in the recent years has gone
through a lot of turmoil

4. Shantanu Bose (2014) in his research paper titled “urban co-operative banks in
India: current scenario” concluded that the profitability of the bank will influence
recovery of Nonperforming Assets.

5. J. Nivethitha and G. Brindha (2014) in their research paper titled “Management

of Non-Performing Assets in Virudhunagar District Central Co-Operative Bank-
An Overview” concluded that. a high level of NPAs suggest high probability of a
large number of credit defaults that affect the profitability and net-worth of co-
 operative banks and also erodes the value of the asset. Thus reduction of NPAs is
essential to speed up the growth and profitability of banks. The NPA problem is
the result of monitoring over dues to various factors like weak monitoring, poor
credit appraisal system, loan waiver scheme and mis-utilization of loan etc.

6. Ms. Shalini H. S. (2013) in their research paper titled “A study on causes and
remedies for non performing assets in Indian public sector banks with special
reference to agricultural development branch, state bank of Mysore” states that a
careful appraisal of the project which involves checking the economic viability of
the project. A banker must consider the return on investment on a proposed
project.

7. ChandanChatterjee, JeetMukherje and DR.Ratan das(2012) in their research

paper concluded that the NPAs have a negative influence on the achievement of
capital adequacy level, funds mobilization and deployment policy, banking
system credibility, productivity and overall economy.

8. Ashly Lynn Joseph, Dr. M. Prakash (2014) in their research paper titled “A
study on analyzing the trend of NPA level in private sector banks and public
sector banks” concluded that NPAs are draining the capital of the banks and
weakening their financial strength. It is also as much a political and a financial
issue. The researcher found out that NPA will affect the profitability of the Bank.
 9. INTRODUCTION TO TOPIC

The topic of research report is “study on Factor Affecting Recovery Management at

Raj Bank”

The main purpose of that study is know that which factors affect the recovery
management .before studying that recovery we should know that which internal external
factors are made NPAs.

From that study we can get idea about factors and their effect. From that company
can make change in these all factors according to our research.

Recovery has also affected by many firm features and borrower individual factors.
From that we can also getting this information perfectly.

As we know that Raj bank has net NPA is zero but still that have 2.29% gross
NPA so now they can reduced that gross NPA from that research.

From that research employees can also showing their suggestion towards bank.

And that topic only study for knowing factors which affect the recovery
management. And how to overcome.
 10.RESEARCH METHODOLOGY

Introduction

Research methodology is a systematic way to solve the research problem. It may be

understand how research is done scientifically research is an art of scientific
investigation. According to reedman and may defines research is a “systematic effort to
gain knowledge.”

In day to day life human being has to face many problem viz. social, economic,
financial problems. These problems in life call for acceptable and effective solution and
for this purpose, research is required and a methodology applied for the solution can be
found out.

The purpose of our project work was to study the factors affecting recovery
management at Raj Bank.

The purpose of the methodology section is to describe the research procedure.

This includes research design, data collection methods, sampling methods, fieldwork,
analysis & interpretation.
 10.1 Rational For the Study

The analysis of the factors affecting recovery helps the bank in taking NPA control
decision.

That give exact factors information which is most affect that bank’s profitability.

From that bank can also improve their internal factors which is affect that.

From that bank also knowing that how to allocate resources for various project.
 10.2 Statement Of Problem

The statement of the problem under the study to analyze which factors are affected
recovery management in Raj Bank .so analyze the different factors which also affect the
NPA or make analyzing to knowing which factors affecting more to recovery
management.

This problem tries to identify bank management for recovery and how they were survive
from the NPA.

Now a days competition gone be higher and higher and all people need to make loans for
making new business and for implement new ideas. That’s why they all taken these type
of loans. And after that both side have responsibility to balance that at right time.
Borrower have to paid interest regularly and amount of loan. If they were not doing in
90 days then is will become a NPA. After that bank has responsibility to recover this
NPA.

As we know that Raj Bank has net npa is zero because they were recovered all
time.

So here we have to just know that which factors affect are affecting the recovery
management. And from which tool they can overcome easily.
 10.3 Significance Of the Problem

The importance of the study is to improve the financial performance of Raj bank for
finance , improve the Raj bank operations and technology, therefore, this will lead to
improve the economic society and be more developed.

1. Recognize the importance of financial performance in general and the banking

sector Rajkot region of Gujarat in particular,
2. Emphasis on attention to the financial performance and financial ratios, including
analysis contributes to decision makers to take correct decisions.

From that study bank can also knowing that how employees suggestion towards
their bank according that suggestion bank can improve in that specific thing.
 10.4 Research Objectives

 To find out which type of factors are reasonable for NPA.

 To find out which type of firm features are affect the recovery management.

 To know that which type of borrower factors are affect the recovery management.

 To know the from which tool using Raj Bank can recover their NPA.

 To know the which recovery process more using by bank .

 10.5 Scope of the Study

The study has the following scope :

The study could suggest the measure for the bank to avoid future NPAs and to reduce
existing NPAs.

The study may help the government creating& implementing new strategies to control
NPAs.

The study will help to select appropriate techniques to suited the manage NPAs and
develop a time bound action plan to check the growth of NPAs.
 10.6 Research Hypothesis

The current study address the following hypothesis :

H0 – Income level and profession of borrower are not affected to loan recovery.

Ha – Income level and profession of borrower are affected to loan recovery.

Any study carried on for research or investigation purpose is based on certain assumption
and at the end of the study the correctness of the assumptions can be known.
 10.7 Research Design

A research design is only the framework or plan for a study, which is used as a guide to
collect and analyze data. In the context of this report on the project I have used the
descriptive research design.

The purpose of our project work was to study the factor affecting recovery management
at Raj Bank. We used following type of research methods:

1. Exploratory Research
2. Descriptive Research

Thus keeping this in mind we adopted the following research methodology.

1. Primary Data : Primary data was collected by means of following ways. –

structured questionnaire :our questionnaire was consisting of open ended as
well as close ended questionnaire .- Observations: personal touch of staff in
service & efficient service. Interview: interview schedules with the officials
and the employees of co-operative banks.
2. Secondary Data : the data was collected by means of review of literature
from books. We have also collected some valuable inputs for our project from
various text books, reference book, newspapers and from our college library.
The whole work finally all this information was collected, analyzed and
complied to prepare a final report. Conducting of personal interviews and
questionnaire methods were the major source of getting information for
conducting our project work.
 10.8 Sampling Design

 Sample Size
 Sampling Method
 Sampling Unit

 Sample Size :

It is conducted to describe the business or market characteristics. The descriptive

research mainly answer who, what , when , where and how kind of questions.
Descriptive researches are generally used in segmenting and targeting the market.
In this research design understand the demographics and other characteristics of
the population.

 Sampling Method :

Convenient sampling

 Sampling Unit :

Questionnaire is filled by 100 employees of Raj Bank. The questionnaire was

filled in the office and vital information was collected which was then subjects.
 10.9 Outline Of Analysis

There are so many tools and techniques used to analysis data collection for different
purposes and investigation.

Through these tools and techniques when the data are applies on there tools and
techniques some conclusion is being derived.

These different tools and techniques are statistical analytical tools mathematical models
etc.

For my study purpose I have used “Rational Analysis”

And used “chi-square Test” applied

 10.10Limitations of the Project

 1. Sample size is 100 which is the very small sample size for study .

 2. Time is main constraint of research.

 3. Research is self financed so money is constraint.

 4. The respondent may not give correct answers due to personal bias.
 11 .DATA ANALYSIS AND INTERPRETATION

Here I am given tabular data , charts and analysis and interpretation for each question.

11.1 Tabular data, Charts and Interpretation

(1) How many years have your work with Raj Bank ?

Years No. of Respondent In %

Below 5 yrs. 58 58%
6 to 10 yrs. 40 40%
11 to 15yrs. 2 2%
Above 15 0 0%
Total 100 100%

2%
0%

Below 5 yrs.
40%
6 to 10 yrs.
58%
11 to 15 yrs.
above 15

 Interpretation :From that research we can interpret that 58% employees are
working with that bank in below yrs.,40% employees are in 6 to 10 yrs between
and 2% are work with that between 11 to 15 yrs.

(2) Below is a list of Internal factors for NPA (plz tick this factor which is most
affect the Raj Bank)
 Factors No. of Respondent In%
Diversion of funds 73 73%
Business Failure 0 0
Inefficiency in mgt. 0 0
Slackness in credit mgt. & monitoring 1 1%
Inappropriate technology problem 26 26%
Lack of coordination among lenders 0 0
Total 100 100%

0% Diversion of fund

Business failure
26%
Inefficiency in mgt.

1% 0% Slackness in credit mgt. &

0% monitoring

73% inappropriate technology

problem
lack of coordination among
lendes

 Interpretation :

From that research we can interpret that 73% of diversion fund , 26% inappropriate
technology and 1% slackness affected to the NPA as a internal factors.

(3) Below is list of external factors for NPA (plz tick which is most affect the Raj
Bank)
 Factors No. of Respondent In %
Recession 17 17%
Input/power shortage 0 0
Price escalation 0 0
Accident & natural calamities 32 32%
Exchange rate fluctuation 0 0
Change in Gov. policy 51 51%
Liberlization of economy 0 0
Total 100 100%

0%

Recession
17% 0%
input /power shortage
0%
Price escalation
accident & natural calamities
51%
Exchange rate fluctuation
32%
change in gov. policy
liberlization of economy

0%

 Interpretation :

From that research we can interpret that 17% recession, 32% accident & natural
calamities and 51% change in gov. policy are affected NPA as a external factor.
 (4) Below is a list of some firm features that affect the recovery
management (plz tickthis factor which is most affect )

Factors No. of Respondent In %

Amount of loan taken 27 27%
The interest rate charged 0 0
Firm performance 23 23%
Inflation level in the economy 50 50%
Total 100 100%

27%
Amount of loan taken
The interest rate charged
50%
0% Firm performance
inflation level in the economy
23%

 Interpretation :

From that research we can interpret that 27% amount of loan taken, 50% inflation
in the economy , and 23% firm performance affected recovery as a firm features.
 (5) What is the major individual borrower factor that affect the recovery
management?

Factors No. of respondent In %

Gender 0 0
Age 0 0
Profession of the borrower 26 26%
Educational background 0 0
Income level 74 74%
Nature of business operated 0 0
Total 100 100%

0% 0% 0%

Gender
26%
Age
Profession of the borrower
0% Educational background
Income level
74%
Nature of business operated

 Interpretation :

From that research we can interpret that in borrower factor profession of

borrower 26% and 74% of their income level affected to the recovery
management.
 (6) Here, given two dimensions for process of recovery (plz tick this dimension
which is using by Raj Bank)

Dimensions No. of Respondent In %

Voluntary Recovery 100 100%
Forced Recovery 0 0
Total 100 100%

0%

voluntary recovery
forced recovery

100%

 Interpretation :

From that research we can interpret that Raj bank used 100%

voluntary recovery dimension.

 (7) If Raj Bank is using voluntary dimension , then in which percent?

Use No. of Respondent In %

1% to 20% 1 1%
21% to 40% 0 0
41% to 60% 0 0
61% to 80% 0 0
81% to 100% 0 0
None 99 99%
Total 100 100%

1%
0%0%
0%

1% to 20%
21% to 40%
41% to 60%
61% to 80%
81% to 100%
99% none

 Interpretation :

From that research we can interpret that 81% to 100% used voluntary dimension.

(8) If Raj Bank is using forced dimension, then in which percent ?

 Use No. of Respondent In %
1% to 20% 0 0
21% to 40% 1 1%
41% to 60% 0 0
61% to 80% 0 0
81% to 100% 0 0
None 99 99%
Total 100 100%

0%
0%
1%0%
0%
1% to 20%
21% to 40%
41% to 60%
61% to 80%
81% to 100%
99%
none

 Interpretation :

From that research we can interpret that Raj bank hasbeen not using forced recovery
dimension at 99% level.
 (9) Here, different tools for recovery of NPA are given (tick this tool which is
most taken by the Raj Bank)

Tools No. of Respondent In %

Lok adalat 0 0
Debt recovery tribunal 45% 45%
Asset recovery construction industry 0 0
Securitization act. 55 55%
Total 100 100%

0%
Lok adalat

Debt Recovery Tribunal

45%

55% Asset Recovery Construction

Industry
Securitization act.

0%

 Interpretation :

From that research we can interpret that Raj bank 45% used debt recovery tribunal tool
and 55% used securitization act. Tool for recovery .
 11.2 Statistical Test

 Chi – Square Test :

H0 - Income level and Profession of

Borrower are affected to loan recovery.

Ha - Income level and Profession of

Borrower are not affected to loan recovery.

Observed Frequency

Particular Income Level Profession of Total

Borrower
Below 5 yr. 43 15 58
6 to 10 29 11 40
11 to 15 2 0 2
Total 74 26 100

Expected Frequency

Particular I.L. P.B. Total

Below 5 yr. 74*58/100 26*58/100 58
= 42.92 = 15.08
6 to 10 74*40/100 26*40/100 40
= 29.6 =10.4
11 to 15 74*2/100 26*2/100 2
= 1.48 = 0.52
Total 74 26 100
 Calculation Value

Particular O E (O-E) (O-E)^2 (O-E)^2/E

Below 5 Yr. I.L. 43 42.92 0.08 0.0064 0.0001
P.B. 15 15.08 -0.08 0.0064 0.0004
6 to 10 I.L. 29 29.6 -0.06 0.36 0.0122
P.B. 11 10.4 0.6 0.36 0.0346
11 to 15 I.L. 2 1.48 0.52 0.2704 0.1827
P.B. 0 0.52 -0.52 0.2704 0.52
Total 0.75

DOF = (C - 1)(R – 1)

= (3 – 1)(2 – 1)

= (2) (1)

= 2

At 5% of degree of error the table value is 5.9915

Null = Rejected

Alternate = Accepted
 12.FINDINGS

On the basis of the study and on the basis of their responses that I have received the
following observation.

 Most of employees have no any suggestion to make more better service

because they all are satisfied and agree with that recovery process.

 Raj Bank has no need to make any forced recovery for loan recovery.

 Raj Bank easily cover that loan recovery.

 Raj Bank has no need to make any strong strict actions against borrower
with any tool of recovery.
 13. SUGGESTIONS

The Raj Bank has qualified staff. Working style of Raj Bank is quite efficient. The small
changes should be required to taken by the Raj Bank as:

 The net NPA of the bank is zero so now bank should try to maintain it.

 Bank has gross NPA 2.29% so now that will have try to make zero level.

 Raj Bank has also make better technology system for their bank.

 The staff should be motivated towards maintaining recovery and awarded for the
same.
 14. CONCLUSION

I also have found that , there is a very good commitment in the entire staff member.
After having all the required for preparing my report, I have tried to analysis each and
every function of the bank. During my report all the staff member of the bank had well
co-operated me.

I have tried to cover each& every information of the bank and after having clear
idea about everything in the bank, and with advance technologies and educated staff to
trying to positioning in the banking market. So at last I concluded that the Raj bank is
being leader in the market and due to great leadership of chairman of the bank, is getting
great goodwill in the market and also great goodwill of the other member helps to the
bank in creating good image in the field of the bank.

For that all my wishes always with the Raj Bank . I wish them for better
achievement.
 15. ANNEXURE- QUESTIONNAIRE

QUESTIONNAIRE

Factors Affecting Recovery Management At Raj Bank

Dear Respondent,

I, ParekhSonal – A student of MBA Sem 3. As a part of my Research Study, I am

conducting the survey and it would be grateful if you spare some of your precious time to
fill this questionnaire. Information provided by you would be kept confidential and it will
be only be used for research purpose.

1. Name

2. Gender

 Male
 Female
3. Age
 Below 20 yrs.
 21 to 30 yrs.
 31 to 40 yrs.
 41 to 50 yrs.
 Above 50
4. Contact Number

5. How many years have your work with Raj Bank?

 Below 5 yrs.
 6 to 10
 11 to 15
 Above 15

6. Below is a list of Internal Factor for NPA (plz tick this factor which is most affect
at Raj Bank)

 Diversion of Fund
 Business (marketing, product) failure
 Inefficiency in Management
 Slackness in credit management and monitoring
 Inappropriate technology problem
 Lack of coordination among lenders

7. Below is a list of external factor for NPA (plz tick this factor which is most affect
at Raj Bank)

 Recession
 Input/ Power shortage
 Price Escalation
 Exchange Rate Fluctuation
 Accident and Natural Calamities
 Change in Gov. policy /excise duty / import duty /pollution control orders /etc.
 Liberalization of economy /removal of restrictions /reduction of tariffs
8. Below is a list of some firm features that affect recovery management (please tick
this factor which is most affect)

 Amount of loan taken

 The interest rate charged
 Firm performance
 Inflation in the economy

9. What is the major individual borrower factor that affect recovery management?
 Gender
 Age
 Profession of the borrower
 Educational background
 Income level
 Nature of business operated

10.here, given two dimensions for the recovery process(please tick this dimension
which is used by the Raj Bank)
 Voluntary dimension
 Forced dimension

11.If, Raj Bank is using voluntary dimension , then in which percent?

 1% to 20%
 21% to 40%
 41% to 60%
 61% to 80%
 81% to 100%
 None
 12.If, Raj Bank is using forced dimension, then in which percent ?
 1% to 20%
 21% to 40%
 41% to 60%
 61% to 80%
 81% to 100%
 None

13. Here, different tools given for recovery of NPA(tick this tool which is most taken by
Raj Bank)

 Lok adalat
 Debt Recovery Tribunal
 Asset Recovery Contribution Industry Ltd.
 Securitization act.

14. Do you have any suggestion to make more better system for recovery and make more

better product ?
 16. BIBLIOGRAPHY

 C.R. Kothari (2008) “Research Methodology – methods & techniques”,

 I.M. Panday (2008), “Financial Management” Vikas Publishing house Pvt. Ltd.
New Delhi ,9th Edition.

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