Ashok CKSB

MEWAR UNIVERSITY, CHITTORGARH
A
Report
Submitted to
Faculty of Management Studies
In
Partial Fulfillment of the requirement for the Management training in
Master of Business Administration Programme.
By
ASHOK KUMAR SHARMA
S.M II
MAWER UNIVERSITY, CHITTORGARH
A PROJECT REPORT
ON
TO STUDY THE LOANING PROCESS AND ANALYSIS OF

FINANCIAL CONDITION OF CHITTORGARH CENTRAL
COOPERATIVE BANK (CCB)
SUBMITTED BY
ASHOK KUMAR SHARMA
Mr.Soumitra Bhattacharya Dr.Rajesh Khothari
(Faculty) (Pro Vice Chancellor)

ACKNOWLEDGEMENT
The successful completion of this report would not have been possible without the
cooperation and support of our friends & colleagues who has helped us in preparing this
report.
I would like to thank respected Mr. Pradeep Sahay (M.D) of Chittorgarh Central
Cooperative Bank for giving me this opportunity to undertake this project work. I would
like to thanks to Mr. Dinesh Khatri,(Management section officer) who dedicated his
precious time and his input in defining, the project and his valuable contribution to the
design of the methodological framework, the management of the project, assistance in
review of the reports, and the organization of a series of dissemination meeting.
I would also like to extend my thanks to respected ALL EMPLOYEES and other
employees Hamza Hussain, of the bank for giving us valuable guidance.
Lastly a vote of thanks must be given to all the people who are directly or indirectly
involved with the project work.
Thanks
Ashok Kumar Sharma
MBA
PREFACE
Banks are regarded as the blood of the nation’s economy without them one cannot
imagine economy moving. Therefore banks should be operated very efficiently, co-
operative banks although a small part of whole banking system in India, but they are very
important not only from economical point of view but also from social point of view as it
is more concerned about common people’s welfare and development.
Advance is heart and recovery is oxygen for the bank and for the bank to survive it is
necessary to give advances and recover the amount at the appropriate time. Through this
project I have tried to cover the various aspects like credit appraisal, NPA management,
recovery management, etc. E.g. this project covers all the areas right form the beginning
like inquiry till the loan has been paid up.
Though Loaning is, a very vast topic, I have tried to incorporate to the best of my
capacity from all possible aspects in this project.
I do hope that institution will appreciate this project.
CCB- Central cooperative bank

INDEX
CHAPTER 1 –Introduction of Banking
1.1 Early History of Banking
1.2 Status Wise Bifurcation of Bank
1.3 Types of Bank

CHAPTER 2 - Profile of the Bank
1.1 2.1CCB - CENTRAL COOPERATIVE BANK
2.2 CCB at a Glance
CHAPTER 3 – Profile of the NABARD
3.1 Organization structure of NABARD
3.2 Introduction of NABARD
CHAPTER 5 – Loaning process of CCB
CHAPTER 6 – Schemes and Interest rate
6.1 Main Loaning sector & purpose
CHAPTER 7 – CCB Management

7.1 Term Loan
7.2 Classification of Assets
7.3 Findings of CCB
7.4 CCB Reduction Technique
CHAPTER 8 – Research Methodology
CHAPTER 8 – Data Analysis and Interpretation
REFERENCES AND BIBLIOGRAPHY

EARLY HISTORY OF BANKING
As early as 2000 B.C., the Babylonians has developed a banking system. There is
evidence to show the temples of Babylon were used as banks. After a period of time,
there was a spread of irreligion, which soon destroyed the public sense of security in
depositing money and valuable in temples. The priests were longer acting as financial 45
agents. The Romans did minute regulations, as to conduct private banking and to create
confidence in it. Loan banks were also common in Rome. From these the poor citizens
received loans without paying interest, against security of land for 3 or 4 years.
During the early periods, although private individuals mostly did the banking business,
many countries established public banks either for the purpose of facilitating commerce
or to serve the government.
However, upon the revival of civilization, growing necessity forced the issued in the
middle of the 12th century and banks were established at Venice and Genoa. The Bank of
Venice established in 1157 is supposed to be the most ancient bank. Originally, it was not
a bank in the modern sense, during simply an office for the transfer of the public debt.
Again the origin of modern banking may be traced to the money dealers in Florence, who
received money on deposit, and were lenders of money in the 14th century and also in
1349, the business of banking was carried on by drapers of Barcelona.
In India, as early as the Vedic Period, banking, in most crude from existed. The books of
Manu contain references regarding deposits, pledges, policy of loans, and rate of interest.
True, the banking in those days largely mint money lending and they did not know the
complicated mechanism of modern banking.
This is true not only in the case of India but also of other countries. Although, the
business of banking is as old as authentic history, banking institutions have since than
changed in character and content very much. They have developed from a few simple

operation involving the satisfaction of a few individual wants to the complicated
mechanism of modern banking, involving the satisfaction of capital slowly seeking
employment and thus providing the very life blood of commerce.
THE ORIGIN OF WORD ‘BANK’
The word ‘Bank’ itself derived from the word ‘bancus’ or ‘banque’ that is a French.
There were others of the opinion that the word ‘Bank’ is originally derived from the
German word ‘back’ meaning joint for which was Italianised into ‘banco’.
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 fulfils 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 facility at nominal rate
RBI gives remittance facility at par
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, avail of Reserve Bank of
India Remittance facility scheme, 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.
TYPES OF BANKS
Regional Rural Bank
Nationalize Bank
State Bank Group
Co-operative Bank
Private Bank
Foreign Bank
RESERVE BANK OF INDIA

The Hilton-young commission, appointed in 1926 has recommended the necessity of
centrally empowered institution to have effective control over currency and financial
transaction in the country. Accordingly, the Government had then passed Reserve Bank
of India Act, 1934 and established the Reserve Bank of India with effect from 1st April
1935. The principal aim behind this was to organize proper control over the currency
management in the interest of country benefits and to maintain financial stability. With
this, the RBI mainly looks after the following important functions:
To keep effective control over creation of credits and currency supply

To control the Banking transactions of Central and State Governments
To act as Central administered Authority of all other Banks in the Country.

To organize control over Foreign Currency Transaction
To assist for improvement in financial aspects of the country
Nationalize Banks
The Banking Company Act establishes it in July 1969 by nationalization of 14 major
banks of India. The sent percent ownership of the bank is of government of India.
State Bank Group

The State Bank of India was established under the State Bank of India Act, 1955, the
subsidiary banks under the State Bank of India (subsidiary Banks) Act, 1959. The
Reserve Bank of India owns the State Bank of India, to a large extent, and rest of the part
is some private ownership in the share capital of State Bank of India. The State Bank of
India owns the subsidiary Banks.
Old Private Banks
These banks are registered under Company Act, 1956. Basic difference between co-
operative banks and private banks is its aim. Co-operative banks work for its member and
private banks work for earn profit.
New Private Banks

These banks lead the market of Indian banking business in very short period, because of
its variety of services and approach to handle customer, also because of long working
hours and speed of services. This is also registered under the Company Act, 1956.
Foreign Banks
Foreign Bank means multi-countries bank. In case of India Foreign Banks are such
Banks, which open its branch office in India and their head office is outside of India.

Regional Rural Banks (RRB)
Regional Rural Banks are added in Indian Banking since October 1975. The Government
of India in terms of the provision of the Regional Rural Bank Act 1976 has established
these banks. The distinctive feature of Regional Rural Bank is that through it is a separate
body corporate with the Commercial Bank, which has sponsored the proposal to establish
it. The Central Government, while establishing a Regional Rural Bank at the request of a
Commercial Bank, shall specify the local limits within which it shall operate. The
Regional Rural Bank may establish its branches or agencies at any place within the
notified area.
Co-operative Banks
State Co-operative Banks
State Co-operative Bank means the principal Co-operative society in the state. The
primary objective of which is the financing other co-operative societies in the state.
Central / District Co-operative Banks

Central / District co-operative Bank means the principal co-operative society in a district,
the primary objective of which is the financing of other co-operative in that particular
district.
Primary / Urban Co-operative Banks

The primary objective of principal business of which the transaction is of banking
business and paid up share capital and reserve of which are not less than rupees 100,000
and bye-laws of which do not permit admission of any other co-operative society as a
member.

CCB – KENDARIY SAHAKARI BANK
CCB is a Co-Operative Bank in Chittorgarh district, India. Bank was established on 15,
Jan, 1959 Bank has made tremendous & real progress under the leadership of former
Chairman Late Shri Bhagirath Joshi.
Bank is celebrating its 42th anniversary this year. During past years bank has played
vital& leading role for the development of rural and tribal area. Bank has developed in
manifolds with the time.
Chittorgarh is a tribal district and CCB is playing a lead role in development of rural and
farmers. Approximately 65 % members of this bank are SC/ST.
CCB is providing many types of loans and charge different rate of interest on different
types of loans. CCB is a Co-Operative bank not a commercial bank.

CCB AT A GLANCE
Registration Number : 214H
Membership (31.3.09)
Total Member : 14268 (552)
Loanee Member 7490(199)
Share Capital
State Govt. : 791.31 lakh
Members : 38.28 lakh
Total outstanding loan(31.3.09)

On Member : 4638.42 lakh
On head bank : 17757.91 lakh
Working capital : 27245 lakh
Establishment Expenses : 48.57 lakh
Loan Disbursement (2008-09) : 4638.04 lakh
Recovery % (2008-09) : 75.03 %
Outstanding Demand (30.6.09) : 14470.31 lakh
NPA %31.3.08 : 47.02%
Profit & Loss Position (31.3.09) : 19023041.05 accumulated profit

Organization Structure of NABARD
Introduction Of NABARD
NABARD is set up as an apex Development Bank with a mandate for facilitating credit
flow for promotion and development of agriculture, small-scale industries, cottage and
village industries, handicrafts and other rural crafts. It also has the mandate to support all
other allied economic activities in rural areas, promote integrated and sustainable rural
development and secure prosperity of rural areas. In discharging its role as a facilitator
for rural prosperity NABARD is entrusted with:
1. Providing refinance to lending institutions in rural areas

2. Bringing about or promoting institutional development and
3. Evaluating, monitoring
4. and inspecting the client banks

Besides this pivotal role, NABARD also:
• Acts as a coordinator in the operations of rural credit institutions
• Extends assistance to the government, the Reserve Bank of India and
other organizations in matters relating to rural development
• Offers training and research facilities for banks, cooperatives and
organizations working in the field of rural development
• Helps the state governments in reaching their targets of providing
assistance to eligible institutions in agriculture and rural development
• Acts as regulator for cooperative banks and RRBs.
Some of the milestones in NABARD's activities are:

• With its effective overseeing and monitoring of the implementation of the
Government of India's programme to double the flow of credit to agriculture over
a three-year period from 2004-2005, the total disbursement of credit reached Rs
1,25,309 during 2004-2005. Ground level credit flow to agriculture and allied
activities reached Rs 1,57,480 crore in 2005-2006.
• Refinance disbursement to commercial banks, state cooperative banks, state
cooperative agriculture and rural development banks, RRBs and other eligible
financial institutions aggregated Rs 8,622.37 crore.
• As on 31 January 2007 through the Rural Infrastructure Development
Fund (RIDF), Rs,59,795.35crore have been sanctioned for 2,31,702 projects
covering irrigation, rural roads and bridges, health and education, soil
conservation, drinking water schemes, etc. Developing among hosts of other
infrastructures, RIDF will create 20971 schools, 6239 primary health centres and
provide drinking water supply in 7267 villages
• Watershed Development Fund , with cumulative sanctions of Rs.578.95
crore for 427 projects in 124 districts of 14 states, has created a People’s
Movement in rural India.
• Farmers now enjoy financial access and security through 582.50 lakh
Kisan Credit Cards that have been issued through a vast rural banking network.

• District Rural Industries Project (DRIP) has generated employment for 23.34
lakh persons with 10.95 lakh units in 105 districts.
Genesis and Historical Background:

• The Committee to Review Arrangements for Institutional Credit for
Agriculture and Rural Development (CRAFICARD) set up by the RBI under the
Chairmanship of
Shri B Sivaraman in its report submitted to Governor, Reserve Bank of India on
November 28, 1979 recommended the establishment of NABARD. The
Parliament through the Act 61 of 81, approved its setting up.
• The Committee after reviewing the arrangements came to the
conclusion that a new arrangement would be necessary at the national level for
achieving the desired focus and thrust towards integration of credit activities in
the context of the strategy for Integrated Rural Development. Against the
backdrop of the massive credit needs of rural development and the need to uplift
the weaker sections in the rural areas within a given time horizon the arrangement
called for a separate institutional set-up. Similarly. The Reserve Bank had onerous
responsibilities to discharge in respect of its many basic functions of central
banking in monetary and credit regulations and was not therefore in a position to
devote undivided attention to the operational details of the emerging complex
credit problems. This paved the way for the establishment of NABARD.
• CRAFICARD also found it prudent to integrate short term, medium
term and long-term credit structure for the agriculture sector by establishing a new
bank. NABARD is the result of this recommendation. It was set up with an initial
capital of Rs 100 crore, which was enhanced to Rs 2,000 crore, fully subscribed
by the Government of India and the RBI.
Mission:
• Promoting sustainable and equitable agriculture and rural development through
effective credit support, related services, institution building and other innovative
initiatives.

In pursuing this mission, NABARD focuses its activities on:
• Credit functions, involving preparation of potential-linked credit plans annually
for all districts of the country for identification of credit potential, monitoring the
flow of ground level rural credit, issuing policy and operational guidelines to rural
financing institutions and providing credit facilities to eligible institutions under
various programmes
• Development functions, concerning reinforcement of the credit functions and
making credit more productive
• Supervisory functions, ensuring the proper functioning of cooperative banks and
regional rural banks
Objectives:
NABARD was established in terms of the Preamble to the Act, "for providing
credit for the promotion of agriculture, small scale industries, cottage and village
industries, handicrafts and other rural crafts and other allied economic activities in
rural areas with a view to promoting IRDP and securing prosperity of rural areas
and for matters connected therewith in incidental thereto".
The main objectives of the NABARD as stated in the statement of objectives while
placing the bill before the Lok Sabha were categorized as under :
• The National Bank will be an apex organisation in respect of all matters
relating to policy, planning operational aspects in the field of credit for promotion
of Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts
and other rural crafts and other allied economic activities in rural areas.
• The Bank will serve as a refinancing institution for institutional credit such as
long-term, short-term for the promotion of activities in the rural areas.
• The Bank will also provide direct lending to any institution as may approved
by the Central Government.

• The Bank will have organic links with the Reserve Bank and maintain a close
link with in.
Major Activities:
• Preparing of Potential Linked Credit Plans for identification of exploitable
potentials under agriculture and other activities available for development through
bank credit.
• Refinancing banks for extending loans for investment and production purpose in
rural areas.
• Refinancing banks for extending loans for investment and production purpose in
rural areas.
• Supporting credit innovations of Non Government Organizations (NGOs) and other
non-formal agencies.
• Extending formal banking services to the unreached rural poor by evolving a
supplementary credit delivery strategy in a cost effective manner by promoting Self
Help Groups (SHGs)
• Promoting participatory watershed development for enhancing productivity and
profitability of rainfed agriculture in a sustainable manner.
• On-site inspection of cooperative banks and Regional Rural Banks (RRBs) and iff-
site surveillance over health of cooperatives and RRBs.

Measure Points
1. GRANTING MEMBERSHIP
2. SELLING OF LOAN APPLICATION FORM
3. RECEIPT OF LOAN APPLICATION
4. LOAN SANCTIONING AND DISBURSEMENT
5. INSURANCE AMOUNT
6. LOAN RECOVERY
7. RECOVERYCHARGES
8. POSTPONEMENT
9. SUBSIDY
10. FIXED DEPOSIT
11. CASH TRANSACTIONS WITH CCB

GRANTING MEMBERSHIP
• the system.
• Only the particulars can be edited by the user, all other settings will be done by
the system.

SELLING OF LOAN APPLICATION FORM
• For getting the loan the member will have to purchase the loan application form
from the branch. In case of Joint Loan each member has to purchase a separate
form. There will be various type of forms, each having different fee. The form
will be sold to the purchaser and details will be specified according to following
form.

• Every Item will have a unique Item code.
• The facility will be available to choose the item from the list box.
• Various item codes will be unique CCB wise, so that there is a uniform inventory
system and track of item movement within the organization is easy.
• The price of items will be specified by the CCB and will be chosen automatically
by the system.
• It will be done automatically by the system.
• If very few items are less in the stock,
• a warning will be printed by the system.
• The form once sold will not be taken back.
• Cash a/c will be debited as cash will be received on selling of the form and Item
a/c will be credited, as item will be going out.
• The receipt will be generated automatically by the system and operator after
printing it will give it to the operator.
RECEIPT OF LOAN APPLICATION

• After filling the form, the applicant will submit it in his specified branch. The
receiving officers will enter the following form particulars in the Loan
Application form.

• A unique loan number will be assigned to the newly received form, automatically
by the system.
• The operator has to specify the code of the branch, where form will be received.
• The checking of all the documents to be submitted along with application form
will be manual.
• There will be no upper limit on number of members applying for loan.
• The operator will have to specify only the member number the rest details will be
picked up automatically by the system. The system will also display the details on
the screen for cross verification.
• Initially Rs. 20/- is taken, as administrative fee if applied loan amount is less than
Rs. 5000. Otherwise Rs. 35/- is taken.
• Only the cash amount will be taken and receipt of the amount received will be
printed by the system.
• The amount of administrative fee to be taken will be parameterized; only the
administrator will be able to change it.
• Cash a/c will be debited as cash will be received on selling of the form and Loan
file fee a/c will be credited.

• Cash a/c will be debited as cash will be received on selling of the form and Loan
file fee a/c will be credited.
• In case applicant will apply again for the loan, the official concerned can easily
check his previous loan details by just entering loan number.
• But the decision regarding whether or not to grant additional loan will be manual.
• For taking loan farmer has to contribute some percentage as per scheme.
Borrower contribution involves:
• Share Capital
• ( upto 2 lakhs it is 5 % and
• above 2 lakhs it is 3 %,
• for women development schemes it is always
• 3% of loan amount).
• Down payment of Project
• 1 % of administration fee is charged
• The checking of Borrower contribution will be manual.
• The scheme, purpose and sector for which loan will be taken has to be specified.
• The scheme, purpose and sector details will be parameterized.
• The operator will only enter scheme, purpose and sector detail.
• The checking of the purpose, need, project estimate, property and land cost
estimate, and repaying capacity etc. of the loan applicant cannot be computerized.
• The approved sanctioned amount, LVO report dates will have to be specified by
the operator.
• The guarantors must be existing members of the banks. This requirement is not
there in case of witnesses.

• The official concerned of the bank will be able to obtain their details by just
entering membership number.
LOAN SANCTIONING AND DISBURSEMENT
• Details and various documents of the applicant are checked, and if everything is
found correct the loan is sanctioned and disbursement in single or multiple
installments.
• Before actually disbursing loan installments the mortgage deed will be executed
and the operator as per following form will enter its details

• The operator will enter complete details of the land of each member of the loan,
which will be mortgaged for taking loan.
• The mortgage letter to be sent to sub registrar will be printed automatically by the
system.
• The printing will be done on pre-printed stationery.
• The operator will have to mention branch code, loan number and member number
while entering land details.
• In some schemes like Farm Mechanization, the payment is only made to the firm
directly by the bank. In such cases the farmer must deposit the difference amount
in the bank. The bank will send consolidated cheque (difference amount + loan
amount) to the firm.
• If applicant will deposit the difference amount then its details will be entered in
the following form:

• Difference amount is down payment made by Borrower as his own contribution.
• The amount is shown automatically in respective accounts from the amount
Received from the Borrower.
• Various accounts heads will be updated automatically by the system as per the
above form.
• The accounts heads has to be finalized by the SLDB.

• The loan amount will be given in single or multiple installments as per the scheme
and purpose.
• In case multiple persons are collectively taking loan, the sanctioned loan amount
will be given to the main Borrower.
• Information regarding dates, on which loan installments will be disbursed, has to
be entered in the system.
• Total amount will be displayed automatically from the loan installment
disbursement form. The amounts will be adjusted into different accounts
automatically by the system as per the rules.
• Particulars will be modified accordingly.

• Share Capital will be in multiple of 100 only as per current parameters.
• If the loan will be distributed in multiple installments share amount will be

deducted from each installment.
• If the loan has to be disbursed in multiple installments, then next installment will
only be given after clearance of field officer regarding the proper utilization of
previously disbursed loan amount.
• Checking of utilization of loan will be manual.
INSURANCE AMOUNT
• The insurance is must in case of vehicles and animals.
• The branch will pay the insurance amount directly to the insurance company.
• It details will be entered by the operator as per following form.

• It will be as done per the above form.
But the amount given to the insurance agency would have to be equal to total
insurance amount added to loan account of various loaners as per the
following screen.
• The branch will pay the insurance amount directly to the insurance company.
It details will be entered by the operator as per following form
• The above entry regarding the payment of insurance on the behalf of the loaner to
the insurance agency.
• When actually the loaner makes payment its account is credited by that amount
and the accounts will be adjusted.

LOAN RECOVERY
• According to the demand notice sent, the borrower will deposit the installment
amount.
• The operator will enter the details of the amount recovered as per following form.

•

• The loan repayment period and type of repayment installment (monthly, quarterly,
half yearly, annually) will depend upon the purpose.
• The Demand notice will be printed automatically by the system.
• Interest will be calculated on the basis of number of days.
• No interest on interest will be charged.
Type of Installment Due Date
Annual 30th March
Half Yearly 30th September and 31st March
Quarterly 30th June, 30th September, 31st December

and 31st March
Monthly Last day of every month
Monthly/Quarterly/Half Yearly
– If loan will be disbursed in first half of the month, then principal will be
included in the installment demand of the month otherwise only interest is
included.
Annual
– If loan will be disbursed between 1st April and 30th September, then
principal will be included in the installment demand of the financial year
otherwise only interest will be included.
– But if there is grace period then again principal will not be included in the
installment demand.
– If loan has been disbursed between 1st January and 31st March, the
interest will be calculated but will not be included in the installment
demand.

Type of Installment Due Date Interest Period
Annual 30th April 1st April to 31st March
Half Yearly 30th September 1st April to 30th September
31st March 1st October to 31st March
Quarterly 30th June 1st April to 30th June
30th September 1st July to 30th September
31st December 1st October to 31st December
31st March 1st January to 31st March
Monthly Last day of every month Number of days of the month
• It will be recovered along with the loan installment at the loan interest rate.
• If the amount received from the borrower will be greater than the desired amount,
then additional amount will be considered as advance money.
• On the advance money interest equal to loan interest will be paid. The advance
money account will be created and maintained automatically by the system.
• The actual amount received in case of cheque will be cheque amount minus
clearance charges.
• The adjustment of amount received from the borrower against the demand will be
done automatically by the system.
• If a person pays more than the demanded money then an account will be created
for his advance payment automatical.
RECOVERY CHARGES
• In case the borrower will not pay the due installment, then recovery charges
would be taken from the borrower. If the recovery charges will be taken then its
details will be mentioned as per following details:

• It will depend upon the recovery officer, whether or not to take the recovery
charges.
• Whether or not to take recovery charge and amount of recovery charge to be taken
will be determined manually.
• But if recovery charges will be taken then its details must be entered in the
system.
• The adjustment will be done at the time of recovery amount received from the
borrower.
POSTPONEMENT
• The due installment of the loaner can be postponed due to various reasons like
drought, flood etc.
• The branch official according to following form will enter the postponement
details:

• The determination of whether or not a loan account can be postponed will be
manual.
• The type of postponement will be codified. Presently it is two types one in which
equal distribution will be done without increasing the period, in other the
repayment period will increase.
• The determination of type of postponement will be manual.
SUBSIDY
• The Government of Rajasthan will give the total subsidy amount, along with the
list of beneficiaries to CCB against the requests it will receive.
• it will be sent to the branch through Regional Offices and CCB.
• The branch will adjust the subsidy amount against the outstanding principal of
each beneficiary and its details will be done as per the following screen:
• Cash will be received form the CCB against Subsidy.

• Subsidy will be given to the loaner by just adjusting their accounts by the amount.
So the subsidy account will be debited and loaner account will be credited.

FIXED DEPOSIT
• Any person can deposit amount in FD.

• The user will enter FD details into the system as per following form:
• There is no need for the depositor to become a member. But the person will have
to give his photograph and proof for his permanent address like ration card/voter
id card/driving license etc. The checking of proof will be manual.
• The FD will be joint or individual.
• In case of old persons age certificate would be required. The operator will enter
the date of birth in the system. But the checking of age certificate will be manual.

• There will be no checking regarding amount of FD that can be deposited.
• The cash will be debited and FD holder account will be credited when the cash
will be received from the depositor for opening the FD account.
• The rate of interest to be paid on FD will be parameterized.
• Only the administrator having proper authorization will be able to change the
interest rate.
• The operator will enter the maturity payment details as per following form.

• Payment of matured FD will be done through cash or cheque. The operator must
enter the cheque details in the system.
• Even if he obtains payment after maturity date, the depositor will only get
payment equal to maturity amount.
• If interest of FD will be greater than prescribed limit (presently Rs. 5000) then
TDS will be done and TDS amount will be sent to the Income Tax office
• The amount must be deposited for at least six months in the bank otherwise no
interest will be paid. This checking will be done by the system automatically.
• On the deposited amount simple interest will be given. The rate of simple interest
that can be given will be parameterized.
• On the maturity date the cash will be adjusted to FD holder account along with
the interest if due and income tax will be paid against FD if interest will be more
than Rs 5000 /- .
• The operator will enter the details of interest paid on FD to depositor as per
following details:

• According to the wish of depositor interest will be paid quarterly, half yearly or
annually on the FD amount.
• No interest will be paid from maturity date to date on which FD amount was
actually received by the borrower.
• Bank account will be credited by the amount of Cheque issued against interest.
• The renewal of FD will be done.
• The operator will enter the renewal details as per the following form:
• If renewal will be done within 14 days after date of maturity, then FD will be
renewed with the same rate of interest.
• Otherwise the FD will be renewed with the current rate of interest, which will be
specified by the administrator and will be picked automatically by the system.
• The depositor would be able to obtain loan against FD.
• The operator will enter the loan against FD details as per following form:

• On the deposited amount the loan up to 80% would be taken.
• The loan interest will be 2% more than the FD rate of interest.
• These details will be parameterized and the administrator will be able to change
them after entering valid authorization code.
• The interest on FD will be adjusted against the loan amount automatically by the
system.
• The adjustment will be done automatically by the system according to above
screen.
CASH TRANSACTIONS WITH PLDB
• The branch will send the loan recovery amount, share money amount, accidental
insurance amount etc. to PLDB from time to time.
• Similarly the branch will receive the loan reimbursement amount, subsidy
amount, share money amount etc. from CCB.

• The operator as per the following form will enter the details of these amount
transfers to and from CCB in the system:
• In case cash will be received from the CCB, the cash account of branch will be
debited and CCB account will be credited.
• When cash will be paid to the CCB, the cash account of branch will be credited
CCB account will be debited.

Main Loaning Sector & Purpose

Many types of loans are provided by the bank some mainly given loans are:
Minor Farm Non Farm Diversify Rural Crop
Irrigation Mechanisation Sector Housing Loan
New Well Tractor SRTO Dairy New Crop
Houses Loan
Old Well Trolley Small Land Development House
Scale Repairing
Industries
Pump set Thresher High Plantation &
Education Horticulture
Sprinkler Other Ag. Tiny Sector Forestry & Waste
Equipment land Development
Field Swagojgar Poultry
Channel Credit Card
Generator Rural Sheep/Goat/Piggery

set Artisans/
Handicrafts
Light Handloom/ Fisheries
Security Powerloom
Drip Storage Godown/
Irrigation Cold Storage
Vermicompost
Bio Gas
1. Corp loan:
• Bank providing loan for crop.

• The main crops are Maize, Mustard, Wheat, Groundnut and Soya bin
etc.
• Accordingly, the requirement of credit is estimated keeping in view
scales of finance and the area cultivated under each crop.
• Interest rate is 11 % at present.
2. Investment credit for Agriculture:
A. Minor irrigation:

• This financing is proposed for replacements of pump sets,
engergisation
of pump set and water conservation devices such as sprinkler and drip
irrigation system.
• During 2008-09 credit flow to this sector was Rs.14.39 lakh.
B. Land Development & Dry land Agriculture:
• Major activities covered under land development are land reclamation,

land leveling, bunding and soil conservation, farm pond, vermicompost
and integrated watershed development.
• These activities are needed for improving water management aspects of
irrigation.
• Vermicompost technology has immense potential to meet organic manure
requirement in both irrigated and rain fed area.Watershed development is
generally being done through Govt. funding.
• During 2008-09 credit flow to this sector was Rs 7.44 lakh.
C. Farm Mechanization:
• Farm mechanization is essential for increasing production, productivity

and adoption of multiple cropping.
• It also helps minimizing the cost of cultivation as also increasing cropping
intensity. There is good scope of financing tractors in the district.
D. Plantation and Horticulture:
• Major horticulture crops grown in the district Guava, Mango, Citrus and
Aonla.
• Farmers are showing interest towards horticulture activities.
E. Animal Husbandry:
• This sector assumes great importence as it forms integral part of rural

economy in the district.
• Dairy, Sheep, Piggery, Goat rearing, and Poultry farming are major
allied activities of the rural people.
• As there is frequent occurrence of drought conditions in the district,
animal husbandry sector becomes one of the main sources of
income for the farmers.
• During 2008-09 credit flow to this sector was Rs. 9.95 lakh.

F. Non-Farm sector:
• Promotion of rural non-farm sector is essential for creating employment

opportunities in rural areas..
• As per occupational pattern around 10% of the total work force in the
district is engaged in household industry, manufacturing processing,
service, repairs and other work.
• This sector offers immense potential in the district. There are good
number of large, medium and small scale industries in the district.
G. Rural housing:
• Bank is also providing the loan for built new houses and repairing.
• Borrower should have agriculture land.
G. Other Priority Sector:
• The activities grouped under ‘OPS’ or ‘Services and Business’ sector are
considered vital for sustaining the developmental activity in other sector of
the economy.
Interest rates

This rate of interest are Charged by CCB And CCB to BORROWER from 1, June, 2009.
Sr. Loan Rate of interest charged by CCB Rate of interest charged by CCB
No. Amount to BORROWER
MIS FM,Agri. NFS MIS FM.,Agri NFS
Purpose, Clinic, Purpose Clinic,
Org.Farming Cold Org.Farming Cold
, A&M, storage, A&M storage,
SGSY, Rural SGSY, Rural
SHG,RH. Godown, SHG,RH. Godwon
& &
Other all Other all
purpose purpose
A B C A B C
1. Up to Rs. 9.75 9.75 9.75 12.00 12.00 12.00
500000/-
2. Above 10.00 10.00 10.0 12.50 12.50 12.50
Rs.50000 0
/-
A. CORP 8.50 11.00
LOAN
Note:- In year 2009 the resetting scheme was announced by the bank. According to that
scheme all those loans which were disburse before 31.3.2008 and charged by more than
11% interest rate they will be charged by 11% interest rate from 1.4.2009.
CCB followed the rules and regulation of NABARD .

Term loans : Mainly there are three types of loan. And there due dates are like that:
Sr.no Type of loan Due date Grace period

1 Yearly 30,April of every year 1 month
2 Half yearly 30,Sep.and 31,March Nil
3 Quarterly 31,Mar,30,June,30,Sep,and Nil
31,Dec.
4. Monthly Last date of month. Nil
Classification of assets:
Category Agriculture Loan Non-Agriculture Loan Provision %
Standard Over due a/c from Over due a/c from 90 days .25 %
180 days
Sub Over due a/c from Over due a/c from 90 days to 10 %
Standard 180 days to 36 36 month.
month.
Doubtful Over due a/c from Over due a/c from more than 3 to 4 year 20 %
more than 36 month . 36 month. 4 to 6 year 30 %
More than 6 year 50
%
Loss Assets Account which are Account which are marked 100 %
marked by auditor by auditor and those which
and those which overdue from long time and
overdue from long less possibilities to recovered
time and less loan.
possibilities to
recovered loan.
Asset classification
The co-operative banks should classify their assets into the following broad groups, viz.

Performing assets
Standard assets
Non-performing assets
Sub-standard assets
Doubtful assets
Loss assets
Non-performing assets:
NPAs are loans given by a bank or financial institute where the borrower defaults or
delays payments of interest or repayment of principal. Asset here also includes a leased
asset. A NPA was defined a credit facility in respect of which interest and/or installment
of principal has remained ‘past due’ for a specified period of time.
Performing assets:
Which accounts are not in performing are performing assets. Which accounts are regular
or cover due installments are less than six is called performing assets.
Classification Of Non-Performing Assets

After identification of borrowed accounts as NPA the next stage is asset classification
Standard assets
Standard Assets is one, which does not disclose any problems and which does not carry
more than normal risk attached to the business. Such as asset should not be an NPA.
Sub-standard assets
In case of sub-standard assets, the current net worth of the borrower/guarantors or the
current market value of the security charged is not enough to ensure recovery of the dues
to the banks in full. In other words, such assets will have well defined credit weakness
that jeopardize the liquidation of the debt and are characterized by the distinct possibility
that the banks will 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
classified a sub standard and should remain in such category for at least 18 months of

satisfactory performance under the re-negotiated or rescheduled terms. If interest and
installment of loans have been paid regularly as per the terms of re-scheduled. 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.
Doubtful assets
An asset is required to be classified as doubtful, if it has remained in the sub-standard
category for 12 months. As in the case of sub-standard assets, rescheduling does not
entitle the bank to upgrade the quality of an advance automatically.
A loan classified as doubtful thus all the weakness inherent as that classified as sub-
standard, with the added characteristic that the weaknesses make collection or liquidation
in full, on the basis of currently known facts, conditions and values, highly questionable
and importable.
Loss assets
A loss asset is one where loss has been identi fied by the bank or internal or external
auditors or by the co-operation 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 asset is
considered un-collectible and of such little value that its continuance as a bankable asset
is not warranted although there may be some salvage or recovery value.
Findings for NPA
 Improper selection of borrowers activities
 Weak appraisal system for credit proposal industries problem/prospects not
locked into
 Managerial competence of borrower given less consideration
 Irregularities in deficiencies in documentation-
Undated
Not renewed
 Assessment of borrower and guarantors net worth on market opinion
 Lack of review of borrowed accounts
 Inadequate staff to contact borrowers frequently
 Lack of proper follow up by banks

 Failure to take punitive (strict and effective) actions against defaulters
 Bank’s failure to appreciate the acts of prompt repayers
 Under financing/non financing in time of projects
 Mentality and attitude to default willfully
 Non action/co-operation of government agencies in recovery
 Effect of agricultural debt relief scheme
 Inadequate monitoring of court cases and delays in execution
 Socio-physical pressure by some people/activities
 Target fulfilling under govt. poverty alleviation programme
 Lack of income generation due to natural calamities and other uncertainties
Suggestions NPA reduction techniques:
Small NPA loans (loans up to Rs.1 lakh)

- Repaying capacity can be easily gauged
- Mobilizing liquid cash for meeting the debt is not difficult
- Written remedies and repeat personal calls help mostly
- Legal action is time consuming
- Influence of other local persons’ contacts helpful
NPA-larger than small but medium (above Rs.1 lakh and up to 5 lakh)
- Branch team can talk to the borrower and work out the repayment programmer
- Debts can be settled through Lok Adalat
- Influence of trade professional circles, associates useful
Medium size NPA (once Rs.5 lakh and up to Rs. 25 lakh)

- SWOT analysis and analysis of security will be helpful
- Branches should take advice of H.O. from time to time
- Whether to have legal action or to go for compromise
- Take legal advice

Large NPA (over Rs. 25 lakh)
- Calls for intervention not only by head office staff but also specialists and
senior management
- Legal, technical advice called for
- of state govt. and SFC in selling assets
- Threat of winding up action would be useful

RESEARCH METHODOLOGY

There are many methods, which are well known today for research methodology, out of
which one I have chosen is “sampling method”, which is really easier, still producing
accurate results.
Sampling in laymen’s language, is nothing but selecting pockets or samples representing
the whole group and analysis of these samples gives the idea about the respective groups.
On the basis of this, prediction is done and full information about group is integrated.
Though this is not a first hand method, it gives sufficiently good outcomes if used
carefully by experts. It saves the time and energy. The only care should be taken, in order
to have great accuracy, is selection of sample should be such that it should represent the
whole group and information we get from them should be cent percent reliable.
Salient features of my chosen sample

 The Leading co-operative bank having head office in my vicinity enables me to
do my work efficiently. This is the striking feature of my sample.
 The exclusive schedule bank in Pratapgarh and hence gets priority over the others.
 Generally the new bank lacks the experience so it is mandatory to select a sample,
which has enormous experience. CCB has a gigantic experience of successful 42
years, under the lights of which work becomes easier.
Collection of DATA:
Data are only collected from secondary sources, Primary data has not been used.
Secondary Data :
Factsheets
Internet
Pamphlets etc

1. Share Capital:
Particulars 2006-2007 2007-08 2008-2009
Members 85-44 83-58 82.14
State govt. 28-39 28-39 28-39

total 113-83 111-97 110.53
Share capital
113.83 111.97 110.53

120
100
85.44 83.58
Amount (in Lakhs)
82.14
80
60 Member
28.39
State Gov.
40 28.39 28.39
Total
20
0
2006-07 2007-2008 2008-2009
Year
Conclusion: According to this figure and graph this is shows that the share capital of the
bank is regularly reducing and the reason behind is that the loan disbursement is also
decreasing from last few year.

2. Loan disbursement:
Particulars 2006-2007 2007-08 2008-2009

Target 150 150 150
Achievement 94.12 125 124.09
Loan Disbursment
150 150 150

160
140 125 124.09
120
Amount (in Lakhs)
100 94.12
80 Target
60 Achievement
40
20
0
2006-07 2007-2008 2008-2009
Year
Conclusion: Loan disbursement is not constant, in 2006-07 it was suddenly decrease but
in year it increase.

3. Recovery
Particulars 2006-2007 2007-2008 2008-2009

31,may,09
Demand 682.94 913.65 1086.87

Recovery 180.08 338.34 128.31
Balance 502.86 575.31 958.56
recovery% 26.37 37.03 11.81
Recovery
1200 1086.87
Amount(in Lakhs) & %
1000 913.65
800 682.94
600
Dem and
400 338.34 Recovery
180.08 Recovery%
128.31
200
26.37 37.03 11.81
0
2006-07 2007-2008 2008-09
31,m ay,09
Year
Conclusion: Recovery of Bank is not according to the demand because of many

reason like many rebates are provided by bank in between the recovery period,
many times people not pay the money etc.

4. Loan from CCB
Particulars 2007-2008 2008-2009 2008-09
Outstanding 1384.93 1417.19 1407.08

Overdue principal 30.77 97.4 107.35
OD% from totalo/s 2.22 6.87 7.63
Loan from SLDB
1600
1384.93 1417.19 1407.19
1400
1200
Amount & %
1000
800 Outstanding
600 OD principal
OD %
400
97.4 107.35
200
30.77 2.22 6.87 7.63
0
2006-2007 2007-2008 2008-2009
YEAR
Conclusion: Many time CCB borrow money from LOAN to lent their customer.
From last three it is increase regularly and overdue is also increasing every year.

5. Establishment Expenses:
Particulars 2006-2007 2007-08 2008-09

Working capital 1922.25 1999.99 2014.47
Total Est.exp. 11.9 14.59 15.53
% 0.62 0.73 0.77
Establishment expenses
2500
1922.25 1999.99 2014.47

2000
Amount & %
1500
W.C.
1000 Total est.exp.
%
500
14.59 15.53
11.9
0.62 0.73 0.77
0
2006-2007 2007-2008 2008-2009
Year
Conclusion: Total working capital requirement of bank is increasing and total

establishment expenses is also increasing. But the total establishment expenses is less
than 1 it is the good thing about the bank.

6. Profit & Loss Position:
Particulars 2006-2007 2007-08 2008-2009

Profit during the
year 29.06 28.48 -34.18
Accumulated P & L -301.67 -273.21 -307.39
Profit & loss Position

29.06 28.48
50
0
Amount(in Lakh)
-50 -34.18
-100
-150
Profit during
-200
the year
-250 Accum ulated
P&L
-300 -273.21
-301.67 -307.39
-350
2006- 2007- 2008-
2007 2008 2009
Year
Conclusion: In 2006-07 & 2007-08 the in profit but in 2008-09 it in loss and bank
incurred accumulated loss because of NPA provisions.

LIMITATION OF THE STUDY
Though I have selected the co-operative bank for my study and no doubt here I have
learnt a lot, but compared to nationalize bank, its network is BIG. The procedure of credit
appraisal, various interest rates on different schemes, recovery programmes are specific
to CCB.

CHITTORGARH KENDRIYA SAHKARI BANK LTD.CHITTORGARH
AUDITOR’S REPORT
I have examined the foregoing Balance sheet of the Chittorgarh Kendriya Sahakari
Bank ltd. Chittorgarh as on 31march2009 and profit and loss account of the year
ended on that date with the account relating thereto of the Head office and with the
returns submitted and certified by Branch Manger which returns have been
incorporated in the foregoing Balance Sheet and Accounts subject to my separate
report data we reportthat
1. In my opinion the balance sheet is full and fair one containing all the
necessary particulars .
2. Where I hve called for any explanation or information such explanation and
ioformation have given to me and have been found satisfactory
3. The transaction of the bank which have come to my notics have been within
the competence of the bank
4. The returns received form the branches of the bank have been found
adequate for the purpose of our audit
(JAGDISH PD. CHAUHAN)

INSPECTOR (AUDIT)

BIBLIOGRAPHY
BOOKS:
• Shekhar K.C. Banking Theory and Practices.
• Bedi H.L.; Hardikar V.K. Practical Banking Advances.
• The Cooperative Banking Acts.
Pamplets .
Factsheets and
Guidence of bank member.
www.rsnindia.com
www.nabardbank.com


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MEWAR UNIVERSITY, CHITTORGARH

TO STUDY THE LOANING PROCESS AND ANALYSIS OF

Mr.Soumitra Bhattacharya Dr.Rajesh Khothari

(Faculty) (Pro Vice Chancellor)

CCB- Central cooperative bank

CHAPTER 1 –Introduction of Banking

1.1 Early History of Banking

1.2 Status Wise Bifurcation of Bank

1.3 Types of Bank

1.1 2.1CCB - CENTRAL COOPERATIVE BANK

2.2 CCB at a Glance

CHAPTER 3 – Profile of the NABARD

3.1 Organization structure of NABARD

3.2 Introduction of NABARD

CHAPTER 5 – Loaning process of CCB

CHAPTER 6 – Schemes and Interest rate

6.1 Main Loaning sector & purpose

CHAPTER 7 – CCB Management

7.2 Classification of Assets

7.3 Findings of CCB

7.4 CCB Reduction Technique

CHAPTER 8 – Research Methodology

CHAPTER 8 – Data Analysis and Interpretation

REFERENCES AND BIBLIOGRAPHY

CCB- Central cooperative bank

CCB- Central cooperative bank

THE ORIGIN OF WORD ‘BANK’

STATUS WISE BIFURCATION OF BANKS

CCB- Central cooperative bank

RESERVE BANK OF INDIA

To keep effective control over creation of credits and currency supply

CCB- Central cooperative bank

State Bank Group

New Private Banks

CCB- Central cooperative bank

Central / District Co-operative Banks

Primary / Urban Co-operative Banks

CCB- Central cooperative bank

CCB- Central cooperative bank

Registration Number : 214H

Total outstanding loan(31.3.09)

Working capital : 27245 lakh

Establishment Expenses : 48.57 lakh

Loan Disbursement (2008-09) : 4638.04 lakh

Recovery % (2008-09) : 75.03 %

Outstanding Demand (30.6.09) : 14470.31 lakh

NPA %31.3.08 : 47.02%

Profit & Loss Position (31.3.09) : 19023041.05 accumulated profit

CCB- Central cooperative bank

1. Providing refinance to lending institutions in rural areas

CCB- Central cooperative bank

Some of the milestones in NABARD's activities are:

CCB- Central cooperative bank

Genesis and Historical Background:

CCB- Central cooperative bank

CCB- Central cooperative bank

CCB- Central cooperative bank

CCB- Central cooperative bank

CCB- Central cooperative bank

CCB- Central cooperative bank

• If very few items are less in the stock,

• a warning will be printed by the system.