Major Project On

“An Analysis of the Retail Asset Portfolio of

Kangra Cooperative Bank”

Submitted By
Manish Kumar Sharma,
2K16/EMBA/515

Under Guidance of
Prof. G C Maheshwari

Delhi School of Management

Delhi Technological University
Bawana Road, Delhi-110042

May 2018
 DECLARATION

The views expressed in this project are personal and not of the organization and this
project is done as a detailed study under the course from strategy perspective only.

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 CERTIFICATE

This is to certify that the project entitled “An Analysis of Retail Asset Portfolio of
Kangra Cooperative Bank” has been successfully completed by Manish Kumar
Sharma – 2K16/EMBA/515

This is further certified that this project work is a record of bonafide work done by him
under my guidance. The matter embodied in this report has not been submitted for
award of any degree.

Manish Kumar Sharma

2K16/EMBA/515

Prof. G C Maheshwari
Delhi School of Management (DSM)
Delhi Technological University

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 ACKNOWLEDGEMENT

I Manish Kumar Sharma, wish to extend my gratitude to Prof. G C Maheshwari,

Delhi School of Management (DSM), Delhi Technological University; for giving me all
the guidance and valuable insights to take up this Semester Project.

I also take this opportunity to convey sincere thanks to all the faculty members for
directing and advising during the course.

Manish Kumar Sharma

2K16/EMBA/515

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 ABSTRACT

Banking business has done wonders for the world economy. The simple
looking method of accepting money deposits from savers and then lending the
same money to borrowers, banking activity encourages the flow of money to
productive use and investments. This in turn allows the economy to grow. In
the absence of banking business, savings would sit idle in our homes, the
entrepreneurs would not be in a position to raise the money, ordinary people
dreaming for a new car or house would not be able to purchase cars or
houses. The government of India started the cooperative movement of India
in 1904. Then the government therefore decided to develop the cooperatives
as the institutional agency to tackle the problem of usury and rural
indebtedness, which has become a curse for population. In such a situation
cooperative banks operate as a balancing Centre. At present there are
several cooperative banks which are performing multipurpose functions of
financial, administrative, supervisory and development in nature of expansion
and development of cooperative credit system. In brief, the cooperative banks
have to act as a friend, philosopher and guide to entire cooperative structure.
The study is based on some successful co-op banks in Delhi (India). The
study of the bank‟s performance along with the lending practices provided to
the customers is herewith undertaken. The customer has taken more than
one type of loan from the banks. Moreover they suggested that the bank
should adopt the latest technology of the banking like ATMs, internet / online
banking, credit cards etc. so as to bring the bank at par with the private sector
banks.

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 TABLE OF CONTENT
CHAPTERS
S No Title Page Number
Chapter 1 Introduction 7
Chapter 1.1 Industry Profile 7
Chapter 1.2 Organization Profile 10
Chapter 1.3 Objective of Study 13
Chapter 2 Literature Review 15
Chapter 3 Research Methodology 26
Chapter 4 Data Analysis & Recommendation 28
Chapter 5 Findings 38
Chapter 6 Conclusion and Suggestion 39
Chapter 7 Annexure 41

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 Chapter 1
Introduction

1.1 Industry Profile:

Cooperative are systematized building block in the co-op sector which operate

in both urban and non-urban regions. These banks are conventionally

focussed on the social community, areas and employment position groups

and they essentially lend to small borrowers and businesses.

The term Urban Co-op Banks (UCBs) refers to key co-op situated in urban

and semi-urban regions. These Co-op, until 1996, could only lend for non-

agricultural designs. As at end of year 2011, there were 1,645 UCBs operating

in the country, of which majority were non-scheduled UCBs. Moreover, while

majority of the UCBs were operating within a single State, there were 42

UCBs having operations in more than one State. However, the subject

limitation is no longer prevalent today. These institutions in rural regions

primarily finance farming centred doings such as agri-business, cattle, diary,

personal finance, etc. along with units of small scale and self-employment

driven activity, home finance. These banks provide most services such as

savings and current accounts, safe deposit lockers, loan or mortgages to

private and business customers.

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These Co-op give most services like savings & current accounts, Bank lockers, loan

to non-public and business customers. For socio-economic class users, for whom a

bank is wherever they'll save their cash, facility like web banking or phone

banking isn't important.

Even though they're not higher than personal bank in terms of provided

services, their interest rates are undoubtedly reasonable. However, in contrast

to the personal banks ,the documentation procedures is extended if

not demanding & obtaining the loan permitted speedily is very very tough

and the standards for obtaining a loan from a Co-op are less demanding than

for a loan from a billboard bank.

In the urban parts of India, they principally do the work

for little business and freelance employees. They're registered underneath the

Co-op Societies Act (1912) . They're regulated by the banking

company of India underneath the Banking Regulation Act, (1949) and

Banking, 1965 which is application to (1912 Act).

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These bank provides loans and provides other financial services to

cooperatives and organizations owned by members

“A Cooperative bank, as its name indicates is an institution consisting of a

number of individuals who join together to pool their surplus savings for the

purpose of eliminating the profits of the bankers or money lenders with a view

to distributing the same amongst the depositors and borrowers.”

Native population is mainly focused by these banks and other focus is middle

income group population of the region.

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1.2 Organization Profile:

The Kangra Cooperative Bank Ltd. started with a small Credit Society in

March, 1960 by a group of people of District Kangra, Himachal Pradesh to

help out the Himachali people residing in Delhi to raise their economic

conditions and tide over the financial hardships. Through the commitment

shown by the members and associates the KCB grew up into big society

within a span of twelve years after its formation and it was converted into a

primary urban Cooperative Bank in 1972 by RBI and was permissible to

carry out banking activities including acceptance of deposits from public

(non-members) by opening their Saving, Current and RD A/c’s. :Twenty

three years there from in June 1995 it was granted a license to carry out the

banking business by the Reserve Bank of India:

Subsequently, Bank was granted license to open branches and

consequently eight more branches were added in February, May,

December 1996, June 1998 ,October 2008, July 2009 , April 2014 and the

last one in July 2014.

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 In may 1970 it purchased Paharganj building and reconstructed the same in

1993. In October, 1997 it purchased the present premises at Janakpuri to set

up administrative, arbitration and recovery department and HO. Central

accounts and Personnel department are functioning from this building.

Monetary position of the KCB as on Thirty first March, 2017 is as follows:-

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Kangra Co-operative Bank was rewarded “A” Grade and "Best Bank Award" for the

years 2004-05, 07-08, 29-10 & 11-12.

Annual General Body Meeting and Board of Directors elections, audits are as per

schedules. Bank Share holders or members of Bank are regularly and lastly receiving

dividend of 18% the highest declared/paid by bank so far. KCB has also introduced

three welfare schemes for its shareholders. There are many welfare schemes

introduced by KCB such as If any existing Bank member dies, his nominee shall be

given a grant of amount INR. 25,000/-- from Welfare Scheme and his loan interest

amount is also waived to the limit of amount 75,000/-- INR. Other then this KCB has

introduced welfare schemes for employees wards also such as scholarships for

students.

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FINANCIAL POSITION OF THE BANK DURING THE LAST SIX YEARS

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Membership 36918 37599 38648 39634 40782 41459

Clientele other than 108543 115814 119395 125474 132578 136594
membership

(Figures In lacs)

Share Money 2184 2305 2012 2374 2765 3108

Reserves/ Other funds 2033 2409 2716 3051 3525 6261

Deposits 40156 48290 54865 62004 73676 92422

Loans/Advances 28017 30776 35582 41563 45993 49340

Working Capital 47962 57227 63501 71325 84401 104657

Net Profit Before Tax 1208 921 976 1057 1347 1416

Net Profit After Tax 882 684 724 715 855 958

Others

Net NPA - 0.96% 0.96% 2.29% 1.40% 2.19%

CRAR - 14.08% 12.58% 13.01% 12.76% 12.51%

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1.3 Objective of Study

 To study the “role of Co—operative bank”.

 Study “different type of loans available for customers”.

 To analyse the “retail asset portfolio of Bank”.

 To study “satisfaction level of the different customers set”.

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 Chapter-2
Literature Review

Various examinations directed and numerous recommendations were looked to

acquire adequacy the working and tasks of money related establishments.

Narsimham Board (1991) underscored on capital sufficiency and liquidity,

Padamanabhan Advisory group (1995) proposed CAMEL rating (as proportions) to

assess budgetary and operational productivity, Tarapore Council (1997) discussed

Non-performing resources and resource quality, Kannan Panel (1998) opined about

working capital and loaning strategies, Basel council (1998 and overhauled in 2001)

prescribed capital ampleness standards and hazard administration measures.

Kapoor Board of trustees (1998) suggested for credit conveyance framework and

credit certification and Verma Advisory group (1999) prescribed seven parameters

(proportions) to judge money related execution and a few different councils

constituted by Hold Bank of India to get changes the managing an account segment

by underlining on the change in the budgetary wellbeing of the banks. Specialists

proposed different devices and strategies for successful investigation and

understanding of the money related and operational parts of the monetary

establishments particularly banks.

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ORIGIN OF CO-OPERATIVE BANKING:

Co-agent keeping money starting in India is in 1904, when endeavors were

made to make another sort of establishment in view of standards of co-agent

association and administration, which were thought to be appropriate for

taking care of the issues particular to Indian conditions.

The logic of proportionality, value and self-improvement offered route to the

perspectives of self-obligation and organization which thus brought about

production of co-agents. Source of such development emerging out of

occasion of emergency, abuse and sufferings.

OPERATION OF CO-OPERATIVE BANKING:

 Establishments:
• Co-agent bank does all elements of managing an account, for

example, stores activation, supply of acknowledge and installment offices

as done in fundamental banks.

• Co-agent Banks have a place with both cash and capital market.

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 • Co-agent Banks give constrained keeping money items, anyway these

banks are presently additionally giving lodging credits to it's clients.

 The essential standards on which a Co-op bank works are:

 Joint guide of credit conceded..

 Catering associates.

 Limit on the number individual votes.

ROLE OF BANKING

Co-op Banks plays a very important role in India due to distinctive character of

bank. These banks, give administration to their client at a lower cost and

administration without abuse of it's client. It has picked up its significance by

the duties relegated to them and the desires they should satisfy, their number,

and the quantity of workplaces, they work.

In provincial territories, as the farming and related exercises are concerned,

the credit supply was lacking and cash moneylenders would misuse the

destitute individuals in rustic zones giving them advances at higher rates. In

this way, Co-agent banks activate stores and furnish agrarian and country

credit with a more extensive effort and give institutional credit to the

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agriculturists. These bank give instrument to different improvement plans,

especially sponsorship based plans for poor.

Agricultural based activities largely financed by Co-operative banks in rural

areas are as below:

· Farming

· Personal finance

· Milk

· Hatchery

· Cattle

Urban areas financing activities by these banks are:

Self-business

Small scale industries

Home funds

Consumer loans

Personal loans

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A portion of the forward looking Co-agent banks have created satisfactory

center abilities, to such a degree, to the point that they could challenge state

and private segment banks.

The exponential development of Co-op banks is for the most part because of

their greatly improved contacts with the neighborhood individuals,

communication with clients, and their capacity to get the nerve of the nearby

customers. The aggregate stores and loaning's of these banks are

significantly more than the Old Private Segment and the New Private Division

Banks.

Current developments in India

 Co-op establishments constitutes the second fragment of Indian managing an

account framework, including around 14% of the aggregate keeping money

area resource (Walk 2007).

 Majority of the Co-operative banks work in the provincial districts with country

coop banks representing 67% of the aggregate resource and 67% of the

aggregate branches of every agreeable bank.

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 • Offer of rural cooperatives through and through institutional credit was 62% of

each 1992-93, 34% out of 2002-03 and 53% of each 2006-07.

• Co-op have an extraordinary arrangement of outlets for institutional credit in

India, particularly in nation (1 PACS for each 7 towns)

• Agreeable banks (both country and urban) take into account little and minor

customers.

• Financial soundness of the helpful credit organizations, especially the

provincial cooperatives, has been observed to be poor by a few Boards.

Issues faced

• “Governance Issues – Dual Control and Borrower driven structure”

• “Management and HR Issues”

• “Issues relating to Finance”

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COOPERATIVE BANKING SIGNIFICANCE;

Co-agent bank frames a basic piece of Indian managing an account frame

work. These banks works for the most part for the advantage of rustic territory.

Co-agent bank activate stores and supply farming and country credit with the

more extensive effort. These are fundamental hotspot for the institutional

credit to agriculturists. They are basically in charge of breaking the restraining

infrastructure of moneylenders in giving credit to agriculturists.

They have generally assumed a vital part in making keeping money

propensities among the lower and center wage gatherings and in reinforcing

the provincial credit conveyance framework.

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FEATURES

1. They work with the goverance of "1 part, 1 vote". Capacity on "no benefit, no

misfortune" premise.

2. Bank plays out every one of the capacities that are performed by fundamental

Banks, for example, store preparation, credit supply and arrangement of settlement

offices.

3. Banks furnish constrained saving money items with the useful specialization

of agribusiness related items. Presently these banks are likewise giving lodging

credits to its clients.

4. Co-agent banks are the main government supported, upheld and sponsored

money related organization of India. They get bolster from the Hold Bank of India,

NABARD, focal and state governments. They constitute the "most supported"

keeping money part, with danger of nationalization.

5. Co-agent Banks have a place both with the cash and capital market.

6. Co-agent banks are just incomplete money related delegates.

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The wellsprings of their (assets) are:

(a) Focal government and state government,

(b) The RBI and NABARD,

(c) Other co-agent foundations,

(d) Possession stores and,

(e) Stores or debenture issues.

7. Some co-agent bank are booked banks, while others are nonscheduled banks.

8. These banks acknowledge sparing, current and settled stores from people and

foundations including banks.

9. Co-agents banks has very mind boggling financing costs structure and rates

charged by them rely on the kind of bank, credits and fluctuate from state to state.

10. Co-agent banks have assumed a principal part in the advancement credit

structure in India.

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Common features for their customer benefit;

 Customer's owned entities;

 Democratic member control;

 Profit allocation;

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 Chapter 3
Research Methodology

3.1 Type of Research; A point by point contextual analysis with a specific end goal

to distinguish the Retail practices of bank and deciding client's level of fulfillment.

The device utilized was organized poll.

3.2 Primary Data

a. Structured Questionnaire

3.3 Secondary Data;

a. Yearly report

b. Manual of guidelines on credits and advances

d. Articles and Exploration Papers

e. Websites

3.4 SAMPLING UNIT;

Examination populace incorporates the clients of bank and Inspecting Unit for Study

was Singular Client.

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3.5 SAMPLE SIZE; 50 Customers

3.6 Research Analysis

The researcher would analyse the data collected, as descriptive strategy.

3.7 Assumptions

Respondents of the study will answer truthfully.

3.8 Limitations

 No check to ensure if a respondent submits multiple responses.

 The study is based on a one bank only.

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 Chapter 4
DATA ANALYSIS AND IT’S INTERPRETATION

Table 1; Loans Preferences of the customers;

Kind of Loan Responses Numbers Percentage (%)

House 15 31%
Personal 14 30%
Consumer 7 13%
Educational 8 15%
Vehicle 4 7%
Other 3 3%
Source: Primary data

Figure 1: Preferences of the customers for the loans

Display ponder says that greater part of the respondents have taken house credits

less respondents favor shopper, instructive and vehicle advances.

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Table 2: Range of the loans amount

Loan Amount No. of responses Per (%)

> 20,000 3 7%
20k-50k 11 21%
50k- 1 lac 5 11%
> 1 lac 31 61%
Source: Primary data

Figure 2: Range of the amount of loans

Study uncovers that 8 % individuals lean toward advance under 20,000, 20 %

respondents - 20,000 to 50,000,12 % - in excess of 1 lac and 60% of the

respondents - > 1 lac.

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Table 3: Preferable term of loan;

Figure -3: Preferable tenure

Study demonstrates that 64 % respondents take credit for over 3 years.

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Figure 4: What prompted the customers to take loan from cooperative banks

It demonstrate that 38 % people take loan because banks provide easy payment

facilities,

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Figure 5: Average time taken for the processing of the loan

Study uncovers that 68% customers says that normal time taken for handling of the

advance is under 7 days, 26% says that it takes 7 – 14 days and 6 % says that it

takes over 14 days.

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Figure 6: Ranking of the facilities provided by the co-op. banks

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Figure 8: Customer’s ranking for service of the bank

It demonstrates that 52% of the customer s says that client administration of

the bank is good,24% says that it is incredible and another 24 % says its normal

and just 2 % says its poor.

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Table 8: Amount & period of instalment satisfaction of clients;
No. of responses Per (%)

Y 35 67%
N 7 13%
Cannot say 10 20%
Source: Primary data

Figure 8: Satisfaction of the customers with the amount & period of instalment

Study reveals that 68% are satisfied with the amount and period of instalments, 12 %

are not satisfied and 20 % cannot say.

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Figure 10: Bank Preference for loan

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Figure 11: Customers who would like to refer the co-op. banks to their friends and relatives

78% of the respondents might want to allude the bank to their companions

and relatives which demonstrates that they are fulfilled from the

administrations and loaning practices of the bank.

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 Chapter 5

FINDINGS

1. Majority (33% ) of the respondent were having lodging advance from

this bank..

2. 63% of the general population want to take long haul advance which is

over 3 years.

3. There is an exceptionally basic technique took after by bank for credit.

4. Easy reimbursement and less conventions are the primary variables

deciding client's choice of credits.

5. Quality of administrations gave by the staff is palatable in light of the

fact that bank is obliging a little section just and the clients are

legitimately managed..

6. Members/respondents are happy with the method of reimbursement of

portions.

7. Bank consistently is announcing 18% of dividend to it’s individuals

8. These bank are possessed and controlled by their individuals who fairly

choose the top managerial staff.

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 Chapter 6

CONCLUSION

Co-operative banks plays a significant role in national development. Their essence in

the social, financial and popularity based structure of the nation is basic to achieve

amicable advancement and that maybe is the best legitimization for sustaining them

and fortifying their base.

Part of a bank is to give the most ideal item and administrations to it's individuals.

These bank are possessed and controlled by their individuals who justly choose the

directorate. The benefit is typically conveyed to individuals either through a profit.

These banks are from the general population, by the general population and of the

general population consequently are the need of the general public.

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 SUGGESTIONS

Research comes out with the following major findings;

1. Bank ought to receive the cutting edge strategies of saving money like web

based saving money, Mastercards, ATM, and so forth.

2. The banks required to plan, present new plans for pulling in new clients and

supporting the present ones.

3. Bank should make technique for extension of branches in Delhi – NCR

districts.

4. Bank ought to enhance the client administrations to a superior degree.

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 ANNEXURE: QUESTIONNAIRE

01. KCB clients loans preference?


 Housing  Top up  Customer  Education  Car loan
 Other

02. Range of the amount of loans?


 <=20 K 20-50K 50K- 1 lac > 1 lac

03. Preferable term of loan?


< 1year 1 – 3 year > 3 year

04. What provoked the clients to take credit from cooperative banks?

Reasonable rate of interest  More schemes  Less formalities

 Easy repayment Any other

05. Average time taken for the processing of the loan?


< 7 days 7 – 15 days > 15 days

06. Normal time taken for the handling of the advance?


Above average  Average  Below average

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07 Positioning for Bank services?

 Outstanding Decent Avg  Bad

08. Fulfilment of clients with respect to amt & tenure of instalment?


YesNo Can’t say

09. Most Preferred bank?


 Public  Pvt.  Cooperative

10. Clients who might want to allude the community. banks to their companions and

relatives ?


Always  Sometimes  Never

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