The Varachha Co-Op. Bank Ltd.

CERTIFICATE
This is to certify that project entitled PROJECT REPORT
ON THE VARACHHA CO-OPERATIVE BANK LTD by NISHA M.
MUNGRA Submitted in partial fulfillment of the requirement of VEER
NARMAD SOUTH GUJARAT UNIVERSITY, SURAT in record of
bona fide general study works carried out under my supervision.

by Prof.Bhargav Trivedi
The project or any part of it has not been previously submitted
for any degree.

I\c principal
Dr.yogesh N Vasiya
Ambaba commerce college & MIBM,
Sabargam
Date:
Place:

The Varachha Co-Op. Bank Ltd.

DECLARATION
I, NISHA M. MUNGRA hereby, declare that this summer training
report is the result based on my own research & hard work or published
matter used as reference has been duly acknowledged.
NISHA M. MUNGRA
Student of Maniba Institute of Business Management, Sabargam.
Training Period from 20th April, 2009 to 20th June, 2009 and prepared
report for the same and I assure that the information in this report is true and
reliable.
I submit this report to Maniba Institute of Business Management. I
assure that the same report has not been presented by me at any other
university or institution for any other examination and for any other purpose.

Place: Surat
Date

NISHA M. MUNGRA

The Varachha Co-Op. Bank Ltd.

ACKNOWLEDGEMENT
Every work or victory cannot be done or achieved by own, but
there are lots behind that work or victory.
Consequently, I take the opportunity to express the feeling of my
gratitude towards Veer Narmad South Gujarat University for keeping
practical project work as a part of B.B.A. course.
I also thankful to the Co-ordinator of Ambaba commerce college &
Maniba institute of business management for giving me an opportunity and
permission for project work on banking sector and also most thankful for
guiding me any time for project work .
I really and most thankful to chairman and board of directors of
Varachha Co-operative Bank and mostly to A.D. Bhalani (General Manager)
for allowing me to undergo the project work at Varachha bank next and most
feeling gratitude towards M.P.Malaviya (Kamrej branch manager) and all the
staff of bank who really encouraged me and give all information and training
as not student, but as a friend. So I again heartily thankful to all.
I would like to convey my feeling with most gratitude towards my
parents, God and friends, because they all motivated and fill the fuel or
support, directly or indirectly any time, any where, so my feeling and
gratitude by heart to all who helped me or not from project starting to end.

NISHA M. MUNGRA

The Varachha Co-Op. Bank Ltd.

INDEX
NO.
1
2

PARTICULAR
Introduction
About The Banking
1. Definition of Banking
2. Origin of Word BANK
3. Types of Bank
Introduction of Co-Operative Bank
1. Principles of Co-Operative Bank
2. Function of Co-Operative Bank
3. Structure of Co-Operative Bank
Introduction Of Varachha Co-Op. Bank
1. History & Developement
2. Board of Directors
3. Bankers
4. Organization Structure of Bank
5. Financial performance of the Varachha co-op. bank

PAGE NO.
6
8-12

13-18

19-28

6. Contribution of the Varachha co-op.bank to the

6.
7.
8.
9.

shareholders, the employees, the customers

Service Department
1. New Account Department
2.Clearing Department
3. Token Department
4. Transfer
5. Issue of Cheque and Passbook
6. Cheque System
7. Loan Department
Human Resource Management
Financial Management
Swot Analysis
Suggestion

10.

Conclusion

67

11.

Bibliography

68

29-44

45-50
51-63
64-65
66

The Varachha Co-Op. Bank Ltd.

The development of banking is usual pre-condition to the

correspond and prompt enhancement of the national economic formation.
Banking institutions have played a role much to the development of the
developed countries of the world. Today we cannot think of the business
world without banking institution. Banking is an important as blood in
the human body. Due to the development of banking advances are
increased and business activities are developing so it is rightly said,
THE DEVELOPMENT OF BANKING IS NOT ONLY THE ROOT
BUT ALSO THE RESULT OF THE DEVELOPMENT OF THE
BUSINESS WORLD.

Today in the modern world banking is a backbone of national

economy of any country. The progress of banking is an unavoidable
precondition to correspond, health and swift growth of the national
economic formation. Institutions of banking have donated much to the
growth of the developed countries of the world.

Today without banking, the business cannot run smoothly. Banking is

an important in economy as blood in the human body. Due to the
progress of banking, advances are increased and business activities
developing. So it is rightly said, the growth of banking is both root and result
of the development of the business world.

The Varachha Co-Op. Bank Ltd.

The progress of banking is both the cause and result of the business
growth. After 1947, the Indian government also has taken a series of steps to
develop the banking sector. Due to extensive efforts and considerable efforts
of the government, today we have a number of banks like as, RBI, SBI and
its Subsidiary Banks. Nationalised Banks, Private Commercial Banks,
Industrial banks and Co-operative banks. Even today the banking systems of
India retain certain limitation but one cannot doubt its important role in the
development of the Indian economy.

The Varachha Co-Op. Bank Ltd.

1.What is Bank :Bank is one type of institution which deals with the money
and takes money from the public in form of deposit and saving then give
money to other who have needed to develop the business or other trade.

Definition of Banking:

A Banking company is a company, which accepts money

with low rate, and investment at deposit of money with high rate.

- Bombay Provincial Banking Inquiry Committee.

A Banking company is a company, which transacts the

business of banking in any state of India.

- Section (5) of Banking Company Act (1949)

Accepting deposits for the purpose of lending or investment from
the public

2.Origin of word Bank:

The word Bank is originated by different views. Some
experts view that word Bank is derived from word Bancus
or Banque, which means Banch.
Some other experts view that word Bank is originated from
German word Banch which means Joint Capital. And that its Italian
version is Banco
3. TYPES OF BANK

The Varachha Co-Op. Bank Ltd.

After the independence, in India, lots of Bank are developed,

which is following.
1) Commercial Banks
2) Co-operative Banks
3) Central Bank
4) Saving Bank
5) Exchange Bank
6) Land-Development Bank
7) Industrial Bank
8) Exim Bank

(11 COMMERCIAL BANKS :The activity of Commercial Bank is collecting the money
from public (saving of public in the form of money) and which money
invests in their development They also carry out lending of money to
meet the need of Buyer, Seller, Traders and business houses. Banks
provides only the short-term loan to company, trade and industry.
They accepted deposits are always repayable on demand or on short
notice. Besides they also provide working capital, finance and number
of subsidiary services.

(11 CO-OPERATIVE BANKS:8

The Varachha Co-Op. Bank Ltd.

The main aims of Co-operative Banks are to reach actual

progress of agriculture sector and activity of granting advances and
loan. Co-operative banks meet the short-term financial needs of
farmers. For which borrower (farmer) has to follow the rule of Cooperative Bank. Co-operative Bank raise funds through various
means.
Co-operative societies came into being when the co-operatives
societies act 1904 was enacted. The movement was started with the
aim of interest so that exploitation by village moneylenders is foiled.
Under banking regulation act of 1949 co-operative banks have
been brought under control of RBI.
Three tier structure of Co-operative Banks in India:
i. State Co-Operative Banks
ii. District Central Co-Operative Banks
iii. Primary Co-Operative Credit Societies
1) State Co-Operative Banks:
This bank especially co-ordinates the activities of district
central co-operative banks and give them required guidance. It is
federation of central co-operative banks and its funds are obtained
from share capital, deposits & loans from RBI. State Co-Operative
bank is a chain between co-operative activity and countrys money
market.
2) District Central Co-Operative Banks:

The Varachha Co-Op. Bank Ltd.

It is the federation of the primary credit societies in the

district and thus having memberships of societies as well as in
individual and it is provide Share Capital, Deposit, Loans, Overdrafts
facility etc. from state co-operative bank & joint stock.
3) Primary Co-Operative Credit Societies:
Primary co-operative Credit Society is at the bottom of three- tier
structure of co-operative banks. Primary credit societies is related or
association of borrowers and non borrowers residing in a particular locality.
The fund of society one derived from the share capital and deposits of a
member and loans from central co-operative banks and also lower region
people has to provide loan for cultivation for provide subsidy loan.

(11 CENTRAL BANK:Whole banking structure of country is controlled and regulated by

the Central Bank. Central Bank tries to maintain monetary stability of the
country. So its called a special institution. The bank is also called as apex
bank of the country.

(11 SAVING BANK:Saving Bank pool the small saving of the middle and lower income at
the public. In other word, Saving Bank is specialized institutions, which
motivate the general public to save something from their earning. In India
the postal department runs the postal Saving Banks all over the country.

The Varachha Co-Op. Bank Ltd.

(11 EXCHANGE BANK:The main aims of Exchange Banks are to transfer or exchange money
from foreign bank into domestic bank and from domestic bank to foreign
bank. Because there is a difference in financing of foreign trade and
financing of internal trade. Generally a dealer in international trade requires
foreign currencies to meet his obligations. It is here that Exchange Banks to
play the role of financing the dealer for settling transaction involved in
foreign trade. In India, there is the export-import bank.

(11 LAND DEVELOPMENT BANK:There are very less numbers of such Bank in India. Such types of
Banks provide long-term advances and loans to agriculturist other
immovable properties. They provide long-terms funds for periods exceeding
6 years and up to 20 years.

Land Development Banks are earlier known as Land mortgage Banks.

(11 INVESTMENT OR INDUSTRIAL BANK:Investment Bank provides long-term credit to industrial units. They
raise their funds by way of share capital, debenture, and long-term deposits
from the public. They also raise funds by issue of bonds for business
corporation and government agencies.

11

The Varachha Co-Op. Bank Ltd.

(11 EXIM BANK:Exim bank means export-import bank. It gives the facilities to the
Indian merchants to export their goods and import the required goods and
materials and it gives financially support to the export of the country.

Co-operative banks were first introduced India in 1904 by passing

co-operative credit society act. This firm of organization was intended to the
agriculturists and artisans coming together and educating them in the case of
credit and inculcating the habit of saving co-operation and self-help.
The distinguishing feature of Co-operative banks is the absence of
profit motive. Co-operative banks are very helpful to meet the requirements
of small farmers, artisans, etc. In India, Co-operative banks have been
pioneers in mobilizing rural deposits. Today however, the Co-operative
banks have putting more weight on their lending activities than on deposit
mobilization.
All the Co-operative credit societies were brought under the purview
of the banking companies act 1966. The RBI has been vested with the
powers and controls the Co-operative banks. The government of India has
encouraged the Co-operative movement in Banking. Therefore, Co-operative
banks are developed from one place establishment to district level, state
level, and also the central level. Co-operative banks raise their funds through

The Varachha Co-Op. Bank Ltd.

various means. They receive all kind of deposits and make them available as
lendable fund to its members.
National Bank for Agriculture and Rural Development act, 1981 defines
Co-operative society as a society registered or deemed to be registered
under the co-operative society act, 1912 (2 of 1912) or any other law relative
to co-operative societies for the time being in force in any state.
According to section 5 of the National Bank for Agriculture and Rural
Development Act, 1981 that co-operative bank and a primary Co-operative
Bank.
In economy, co-operative banks have played a limited but important
role in the banking system of the country. In there are number of such banks
and societies, which include: State Co-operative Banks, Central CoOperative Banks, Primary Co-Operative Banks, Land Development Banks,
and Farmers Service Societies.
Quite a few expert committees have recommended far reaching
reforms for the banking sector that that has been grappling with perpetual
problems of the asset quality astronomical overheads, low productivity,
to name but few. The Narasimha committee report made radical
recommendation for banking sector by emphasizing the need for deregulation and liberalization. Some specific recommendations were:
1

Deposit interest rates to be reduced along with reduction of Statutory

Liquidity ratio.

A separate body under the auspices of RBI to monitor the functioning

of banks.

The capital base of banks should meet with international norms of

Capital adequacy.

The Varachha Co-Op. Bank Ltd.

The Statutory Liquidity Ratio and Cash Reserve Ratio should be

reduced to judicious levels coupled with the withdrawal of
confessional lending.

RBI should have centralized control over the banking system

The co-operative principles are as under: 1) Principle of Voluntary and open Membership: Co-operative is voluntary organizations, open to all persons able to
use their services and willing to accept the responsibilities of membership,
without gender, social, racial, political or religious discrimination.
2)Principle of Democratic Member Control: Co-operative is democratic organizations controlled by their
members, who actively participate in setting their policies and decisions,
men and women serving, as elected representatives are accountable to the
membership. In primary co-operative members have equal voting rights (one
member one vote) and co-operative at other levels are also organized in a
democratic manner.
3)Principle of Members Participation: Members contribute equitably to and democratically control the
capital of their co-operative. At least part of that capital is usually the
common property of the co-operative Member usually receive limited
1

The Varachha Co-Op. Bank Ltd.

compensation, if any on capital subscribed as condition of membership.

Members allocate surplus for any of the following purposes: developing
their co-operative, possibly setting up reserves, part of which at least would
be indivisible, benefiting members in proportion to their transactions with
the co-operative and supporting other activities approved by the
membership.
4)Principle of Autonomy and Independence: Co-operative is autonomous, self-help organizations controlled by
members. If they enter in to agreements with other organization,
including governments or raise capital from external sources terms that
ensure democratic control by their members and maintain their cooperative autonomy.
5)Principle of Education, Training and Information: Co-operatives provide education and training for their members, elected
representatives, managers and employees of society that, they can
contribute effectively to the development of their co-operative.
They inform the general public particularly young people and
leaders about the nature and benefit of co-operative.
6)Principle of co-operative Among co-operative: Co-operative serves their members most effectively and strengthens the
regional and co-operative movement by working together through local,
national, international structures.
7) Principle of Concern for Community: Co-operative work for the sustainable development of their communities
through policies approved by their members.

The Varachha Co-Op. Bank Ltd.

Co-operative Banks are formed on the principle of Co-operative to

extend Credit facilities to farmers and small scale industrial concerns and
promotes in general the habit of thrift and self help among the low and
middle income groups of the society.

Co-operative has been putting more weight on their lending activities

than on deposit mobilization.

The main function of Co-operative credit society was to provide cheap

credit to the members who are small people with small means and small
needs and finance.

The Co-operative Banks have a three tier set up. The state cooperative bank, while central district co-operative banks function at the
district level and primary credit societies work of the village level.

The Varachha Co-Op. Bank Ltd.

Co-operative banks proceed on the principle of co-operation. CoOperative Banks maintain the cash reserve and liquid assets in relation to
deposit only.

To arrange the programs regarding the Economic welfare of its

members.
This bank supervises the functioning of primary credit society and gives training,
guidance and advice to the employee of credit society only

STRUCTURE OF CO-OPERATIVE BANK: State Co-operative Bank

Central Co-operative Bank
Primary Co-operative Bank
1.

CHART: -

Co-operative Bank
Co-operative Bank

State Co-operative Banks

Central Co-operative Banks

Agriculture Credit

Non-Agriculture Credit
1

The Varachha Co-Op. Bank Ltd.

Primary Agriculture Credit So

Urban Co-op.

Grain Banks

Banks

Farmers Services Society

Employees Co-op.
Credit Societies

1. HISTORY & DEVELOPMENT: The Varachha Co-operative Bank was established under Regn No. SA
2914 dated 27/1/95 with RBI license No. UBD Guj. 1153 dated 01.07.1995 .
The Registered office of the bank is at Affil Tower, L. H. Road, Surat-6
within the period of 4 month after obtaining license. The bank was started
its working on date: 16/10/95. The Swami Sachidanand did the opening of
the bank.
The Varachha Co-operative Bank was having 15 directors its initial
stage.
The Varachha Co-operative Bank is fully computerized and has made
a giant leap in the banking sector just in a short term of a six & a half year.
The Bank's branches located at Kamrej, Ring Road, Kadodara, Kapodara,
Katargam and Puna Gam Road are the result of great progress of the
Varachha Co-operative Bank. The Varachha Co-operative bank provides
speedy and quick service for customer who comes to the bank for any
reasons. Bank is giving attractive interest on deposits for its customers.
TIME KEEPING SYSTEM:
1

The Varachha Co-Op. Bank Ltd.

The Varachha Co-operative Bank is having biometric system for time

keeping. The Varachha Co-operative Bank has identity card system for all
those are related with the bank like managers, officers, clerks and peons and
all must sign the attendance register and these are sent to General Manager
of the bank occasionally.
THE TIME OF WORKING OF THE BANK:
Monday to Friday

10:00 a.m. to 6:00 pm.

Saturday

10:00 a.m. to 3:00 pm.

2. BOARD OF DIRECTORS:
Name

Post
Chairman
Vice Chairman
M. D.
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
GM
Asst. G M
Manager
Manager Admin.
Manager EDP
Manager
Manager
Manager
Manager
Manager

Shree B B Navapara
Shree K R Bhalala
Shree P B Dhakecha
Shree B K Ribadiya
Shree L N Nakrani
Shree K R Vadariya
Shree V P Savani
Shree P T Patel
Shree J K Patel
Shree K V Savliya
Shree B V Mangukiya
Shree M M Patel
Shree G R Asodariya
Mr. A. D. Bhalani (Head office)
Mr. V B Dhanani (Head Office)
Mr. H V Patel (Head Office)
Mr. S D Kakadiya (Head Office)
Mr. S M Chhaniyara (Head Office)
Mr. M P Malaviya (Kamrej)
Mr. S L Bhut (Ring Road)
Mr. N N Pandya (Kadodra)
Mr. A V Patel (Kapodra)
Mr. B C Sorathiya (Katargam)

The Varachha Co-Op. Bank Ltd.

Mr. P D Kelawala (Punagam)

Manager

3. BANKERS:
The Varachha Co-operative bank has some banker as follow:
The Gujarat State Co-op. Bank Ltd. HO.
The Surat District Co-op. Bank HO.
State Bank of India
State Bank of Travanore
Tamilnadu Mercantile Bank Ltd
State Bank of Mysore
Indus Ind Bank
HDFC Bank HO.
ICICI Bank Ltd.

Ahmedabad
Surat
Surat
Surat
Surat
Surat
Surat
Surat
Surat.

The Varachha Co-Op. Bank Ltd.

2.

Capital structure: (RS.IN

CRORE)
SR NO

PARTICULARS

2006

2007

2008

Share Capital

4.04

4.31

4.63

Total deposit

158.24

162.97

168.27

Total advances

59.67

73.26

80.23

Profit

2.38

1.51

2.81

Working capital

208.38

221.15

197.49
(Table:1)

The Varachha Co-Op. Bank Ltd.

BANK PROGRESS CHART

180
160
RS. IN CRORE

140
120

DEPOSIT
LOAN
PROFIT

100
80
60
40
20
0
2006

2007
YEAR

(Graph:1)

2008

The Varachha Co-Op. Bank Ltd.

Progress in number of Members: The no. of Members are: -

SR NO

PARTICULARS

2006

2007

2008

Members

9569

10717

11569

Account holders

93348

95783

99907

Borrowers

5153

6534

8999

Audit class

Dividend

12%
(Table:2)

12%

12%

MEMBERS PROGRESS CHART

120000

NO. OF
MEMBERS

100000
80000

MEMBERS
A/C HOLDERS
BORROWERS

60000
40000
20000
0

2006

2007

YEAR
(Graph:2)

2008

The Varachha Co-Op. Bank Ltd.

Chairman
Vice Chairman
Managing Director
Board of Director
General Manager
Branch Manager
Kamrej

Ring Road

Kadodra

Kapodra
Katargam

Puna Gam Road branch opened on 16.10.2009

The Varachha Co-Op. Bank Ltd.

6. CONTRIBUTION OF THE VARACHHA CO-OP. BAKK

TO THE SHARE HOLDER:
Accident Insurance Scheme For Its Share Holder:The Varachha co-operative bank is providing Rs.200000/- accident
insurance to its share holder.
Accident Insurance Scheme For Its Account Holder:The Varachha co-operative bank is providing Rs.50000/- accident
insurance to its all types of account holder like saving account, current
account etc.
Medical Relief Scheme: The Varachha Co-operative Bank is providing medical relief to its
shareholder Rs.2500/- of medical relief providing by the bank.
Assistance To Nominee Of Share Holder:In case of death of shareholder the Varachha Co-operative Bank is
providing Rs.5000/- to nominee of shareholder.
Scholarship Facility:The Varachha Co-operative Bank is providing scholarship to the
children of shareholder after 12th standard in his poor position.

The Varachha Co-Op. Bank Ltd.

Prize Distribution:
The Varachha Co-operative Bank give prize to the children of share
holder who get the maximum marks which are fixed by The Varachha COoperative Bank for obtaining the prize. The Varachha Co-operative bank
gives prize to the top ranker of S.S.C. and H.S.C. examination who lives in
Surat city.
Dividend:The Varachha co-operative bank is providing dividend to its member
or shareholder. The bank had given maximum 15% dividend to its
shareholder. Bank cannot give more than 15% dividend on share capital.

CONTRIBUTION OF THE VARACHHA CO-OP. BANK TO

THE EMPLOYEE:The Varachha co-operative bank provides different types of facilities
to its employee like,
Insurance Benefit:The Varachha co-operative bank is providing accident insurance
benefit to all employee of the bank. It also provides mediclaim insurance to
the employee of the bank.
Benefit on Deposit: The Varachha co-operative bank is providing additional 1% rate of
interest on deposit for its employee.

The Varachha Co-Op. Bank Ltd.

Benefit On Loan: The Varachha co-operative bank is providing low rate of interest on
any type of loan for its employee.

CONTRIBUTION OF THE VARACHHA CO-OP BANK TO

THE CUSTOMER:
Attractive Interest on Deposit: The Varachha Co-operative bank is providing attractive interest on
deposit.
G.E.B. Collection: Gujarat electricity bills collection counter are available on the
Kapodara branch and Kadodara branch of the Varachha co-operative bank.

VAT Machine: The VAT machine also available in the Varachha Co-operative bank.
The VAT machine is very useful for the customer. Through the VAT machine
customer can know about the condition about his account it self. The VAT
machine is fully automatic. The customer can know about his banking
transaction without use any key or button. The customer can know about his
banking transaction by use of his fingers (touch screen system).

The Varachha Co-Op. Bank Ltd.

Totally Computerized Bank: The Varachha co-operative bank is totally computerized bank. The
work of the entire department is done on the computers. All the information
about the customer and the customers account are in the computer.
Therefore, the customer gets the condition of his account whenever he
wants.
Safe Custody: The customer gives sealed cover or a box to a banker to keep in a safe
custody. The banker writes a name of owner of a cover or a box and takes
customers signature of receipt on the counterfoil and keeps it with him.
When the customer demands the cover or a box then the customer has to
sigh on the back of receipt and to give to his banker. The bankers then tally
the signature on both the receipt and counterfoil and if he find both
signatures similar then return the cover or a box.
Safe Deposit Lockers: The Varachha Co-operative bank keeps lockers in their strong room
with small drawer. Every locker has different number and a locker with two
keys. Such lockers are given to customer on rent. The customer has a key of
locker and a master key is with the banker. The customer can keep or take
away his belonging during working hours of the Varachha co-operative
bank.

The Varachha Co-Op. Bank Ltd.

1. NEW ACCOUNT DEPARTMENT:

New Account is opened as well as old accounts are closed in this
department. Accounts are of three types:
i.

Current Account.

ii.

Saving Account.

iii.

Cash Credit / Overdraft Account.

Daily nearly on an average about 10 to 12 current accounts and 15 to

20 saving account are opened and 1 or 2 are closed everyday. The procedure
for opening new accounts in the bank starts with filling up the form given by
bank. The bank has requirements for opening a current account is two
photographs of the account holder and if the account is opened for company
or firm then the photograph of the directors, partners or proprietors or
administrator, the sign and account number of the person who wants to open
a new account in the bank and license of the firm. To open saving account
only one photograph of account holder, signature of account holder in the
same bank for introduction as well as papers or documents which give true
and fair residential address such as driving license, rationing card, light or
phone bill, school living certificate etc.
The minimum balance for current account is Rs.3000 and the
minimum balance for saving account is Rs.1000. Any account holder,
current or saving, cant close his account before completion of six months in
the bank. Closing of new account is some what difficult task as each and
every aspect of the account is to be noted. The charges Rs.210 are being
2

The Varachha Co-Op. Bank Ltd.

deducted and remaining amount is given back to customer through the issue
of cheque of the same amount. The cheque book of the close account is
taken back by bank is stored with the account close form. The bank provides
service of cash credit and overdraft against securities for the current account
holders.
At the bank is fully computerized and at the end of the day, scanning
of the signature of the new account holder is done. This is an important task.
The issue of cheque book and pass book department is informed to make
cheque book and passbook for new accounts which are opened on that
particular day. Thus the bank employees of this department are having their
end of the day with the process of scanning.
2. DRAFT DEPARTMENT:Draft is another department of the bank. As this bank is in cooperative sector it has limited branches in Surat. It does not have any branch
in any other part of the country. So in order to provide draft service of
different cities to its customers it has associated with certain banks.
If a customer wants a draft for Bombay, a bank must have its branch
which can honour the draft and if the bank do not have a branch than it has
to join with other bank.
The Varachha Co-operative Bank has arrangements with the following
banks for the issue of the draft in different cities of the country.
- The Surat District Co-operative Bank

Surat

- The Gujarat State Co-operative Bank Ltd.

Ahmedabad

The Varachha Co-Op. Bank Ltd.

- State Bank of India

Surat

- State Bank of Travancore

Surat

- State Bank of Mysore

Surat

- Indusind Bank

Surat

- ICICI Bank

Surat.

3 .CLEARING DEPARTMENT: The most important department of the bank is clearing department.
This department has maximum number of employees. Nearly about seven or
eight person are continuously working in this department. Clearing per day
is nearly about three or four crores. Clearing house of all banks in Surat is
situated at Sate Bank of India, MICR Centre, Surat.
Clearing which is collected from the customers and presented through
clearing house is known as outward clearing.
4. TOKEN DEPARTMENT:The next department of the bank is the Token department. It is small
but department with only one employee. The working hours of this
department is from 11:00 am to 3:00 pm. Token is issued after various strict
verification of cheque such as signature, amount in figure as well as in
words etc. This department is small but full of responsibility. Bank has a
special service for its customers that is up to Rs.10,000 for saving account
holders and Rs.20000 for current account holders can be withdrawn directly
from the cash counter without the procedure of Token system.
5 .TRANSFER DEPARTMENT: The next department is transfer. There is only one employee in this
department. In this department the cheque of the same bank is transferred
3

The Varachha Co-Op. Bank Ltd.

from one account to other account of customers. The entry of other

department such as OBC (counter Bill collection) and IBC (Inter Bill
Collection) etc. is done from this department.
6. CHAQUE SYSTEM:Cheque is one types of bill of barter which is writing on decided
banker and which is payable on the demand.
Cheque is the one promissory note to pay the debt to the creditors.
It is safe instrument to pay the payment to the others. There are two types of
cheques.

1) Bearer Cheque:Bearer cheque is not safe instrument than the crossed

cheque or account payee cheque. In this cheque the two cross lines are
not drawn. The a/c holder gives written cheque to the other party. The
receiver lodges the cheque to their bank and get the cash amount
from the bank. If the cheque is lost by them the receiver cant get
the money.

2) Crossed Cheque:Crossed cheque is the safe instrument than the bearer

cheque for the giver & receiver both. In this cheque the two crossed
lines are drawn. The receiver gives cheque to the bank. The bank
credited that amount in to their account

3) Third Party Cheque System:-

The Varachha Co-Op. Bank Ltd.

In this system one party give cheque to the other party. The
second party give same cheque to the third party. It is called third
party cheque system.
In this system the second party give cheque to the third
party but the second party give stamp paper to the bank to issue the
same cheque. After getting stamp paper the bank give permission to
the second party to issue the same cheque. If the second party has no
stamp paper , the second party have to fill up the Form 60 . The
bank takes charge on this system.
7. ISSUE OF CHEQUE BOOK AND PASS BOOK:This is important department of the bank. In this department new pass
book and cheque book are issued. The new account department gives details
of new customers and according to that new cheque book and passbook are
issued.
This department consists of only one employee who gives cheque
book and passbook to the customers. Customers who are in need of a new
cheque book have to apply a day before with a counter given in the old
cheque book. For each account holder it is compulsory to allow at least five
cheques to be cleared or presented to bank for issuing a new cheque book.
Daily 70 to 75 new cheque books are issued to the customers.
As the bank is fully computerized if changes are made by customer in
cheque book, the computer will reject the cheque number because the while
issuing cheque book the number of cheque are recorded in the computer.

The Varachha Co-Op. Bank Ltd.

8.LOAN DEPARTMENT
MEANING OF LOAN:
Loan is a such types of promises under which bank gets ready to lend
money to a borrower for a fixed period. Borrower needs it for specific
purposes so bank is ready for lending him a credit for a specified period. In
this period borrower has to repay it with interest and installments.
In other words when a banker makes a advance in a lump-sum which
cannot be paid wholly or partly and which the customer has permission to
withdraw subsequently, it is called a loan.
Loan are promises for future payment, they have to be repaid in
periods beyond a year and are therefore long-term liabilities.
Loan can play a significant role in times when borrower needs funds
for fixed assets or non-respective type of activities and thus seeks money
from the bank that is withdrawn in one lump sum. The loan amount is
normally repaid in installments. Loan may be short-term, medium-term or
long-term.
Loans and advances are classified in to secured and unsecured.
Secured Loan or Advance: Secured loan or advance means a Loan or Advance made on the
security of assets. The market value of which is not at any time less than the
amount of such loan or advance.
Unsecured Loan or Advance: An unsecured loan or advances means a Loan or advance not so
secured. A partly covered loan or advance is partly covered by the security
of assets, the market value of such securities being less than the amount that
has been lend or outstanding at any time.
3

The Varachha Co-Op. Bank Ltd.

LOAN PROCEDURE OF THE VARACHHA CO-OPERATIVE.

BANK:
The loan application passes through the following process: 1. First of all, there is submission of loan application with all relevant
documents normally required, and submitted by borrower to the bank.
2. After submission of application, needed securities be obtained by
bank and appraisal made on the security as well as on the loan
borrower and on its business.
3. The next step is that proposal being forwarded to Loan committee.
4. After clear scrutiny on the proposal, the board can give approval for
sanctioning a loan.
5. Many times, some specific conditions being received from board.
6. After fulfilling the conditions the borrower must make documentation
as required and signing of paper as needed by bank.
7. At the last stage, bank make disbursement of loan under various types
of loan scheme.
VARIOUS

TYPES

OF

LOAN

&

ADVANCES

ISSUED

BY

VARACHHA CO-OPERATIVE BANK:

The Varachha co-op. bank has performed good work by issuing many
type of loan. So bank also bring new changes from time to time for
increasing its effectiveness. The following are the various types of Loan
given by the Varachha Co-operative Bank:
1) Term Loan :
The Varachha Co-op. Bank sanctioned loan to applicant who wants to

The Varachha Co-Op. Bank Ltd.

purchase a new technology, Machinery, equipments and material or stock

for developing his business expansion, bank can give loan amount of
70% of the quotation.
Limit: - There is no limit for Term loan
Rate of Interest: Particular
Term loan

Interest rate

Rebate

Net rate

Up to Rs 2 lacs 14%

2%

12%

Above Rs 2 lacs 15%

(Table:3)

2%

13%

Margin: - Margin for Term loan is 25% to 35%.

Security: - Bank provides loans against mortgage and hypothecation
provided by applicant.
Requirement for Term Loan: All Basic documents: 1

Xerox of rationing card of proprietor as well as two guarantors.

Two photocopy of loan applicant and one-one photocopy of guarantor

Light bill/telephone bill Xerox of applicant as well as two guarantors.

Housing tax bill Xerox of applicant and two guarantors.

Evident of shareholders.

Other Documents: 1

Income Proof for loan applicant as well as two guarantors.

Directors signature is required for recommendation.

Photocopy of property file is submitted to bank.

Duplicate copy of city survey.

Last three years firms statements and Income tax return copy.

Quotation of purchasing new machinery.

3

The Varachha Co-Op. Bank Ltd.

2) Vehicle Loan :
The Varachha co-operative Bank provides loan for purchasing various
types of vehicle such as two, three and four-wheeler.
Generally vehicle loan is completed within 3 years but above one lacs
loan or generally for four wheelers loans is completing within 5 years with
monthly installments.
Limit: - There is no limit for Vehicle loan. Bank provide loan amount up to
70% of quotation
Rate of Interest: Particular
Vehicle loan

Interest rate

Rebate

Net rate

Up to Rs 1 lacs 13%

1%

12%

Above Rs 1 lacs 14%

1%

13%

(Table:4)
Margin: - Margin for Vehicle loan is 25% to 30%.
Security: - Bank provides loans against equitable mortgage and against
hypothecation of the proposed vehicle to be purchased.
Requirement for Vehicle Loan: 1

All basic documents.

Income evident of loan applicant as well as two guarantors.

Photocopy of property submitted to bank.

The Varachha Co-Op. Bank Ltd.

Register certificate (RC) book of vehicle is kept by banks. When total

installments of vehicle loan is paid and at that time RC book and
other original documents are given back to them.

3) Cash Credit/Over Draft Loan :

A Cash Credit is a facility by which a banker allows his customer to
borrow money up to certain limit against either a bond of credit by one or
more securities. This is most common mode of borrowing by large
commercial and industrial house in India because the advantage that
customers need not borrow the whole amount at one time but may draw
such amount as he requires at different times.
The bank provides these facilities to borrower for meeting their
temporary needs and to solve problem related to short-term capital.
Limit: - There is no limit for Cash Credit and Over Draft loan.
Rate of Interest: Particular
Cash credit &
Over Draft loan

Interest rate

Rebate

Net rate

Up to Rs 2 lacs 13%

13%

Above Rs 2 lacs 14%

14%

(Table:5)
Margin: - Margin for Cash Credit and Over Draft loan is 15% to 20%.
Security: - Bank provides loans against up to mortgage and hypothecation
provide by applicant.
Requirement for Cash Credit and Over Draft loan: 1

All basic documents.

Evident of other income of proprietor or partner.

Director signature.

The Varachha Co-Op. Bank Ltd.

Firms last three years balance sheet and income tax return copy.

Statement of last six month of firms account in the bank or other

banks.

To include certificate of company registration and articles of

association if applicant is private limited company.

4.)Machinery Loan :
The Varachha Co-operative Bank sanctioned a loan to applicant
who wants to adopt new technology, machinery, equipment etc. for
expanding his business.
Limit: - Maximum limit for Machinery loan is Rs. 30, 00,000/Rate of Interest: Particular
Machinery loan

Interest rate

Rebate

Net rate

Up to Rs 2 lacs 14%

2%

12%

Above Rs 2 lacs 15%

(Table:6)

2%

13%

Margin: - Margin needed for Machinery loan is 25% to 35%.

Security: -Bank sanctioning loans against up to mortgage and hypothecation
provided by applicant.
Requirement for Machinery loan: 1

All basic documents.

Machinery list and Xerox of bills.

Invoice of purchasing new machinery.

Evident of other income of proprietor or partner.

Director signature.

Firms last three years balance sheet and income tax return copy.
3

The Varachha Co-Op. Bank Ltd.

Statement of last six month of firms account in the bank or other

banks.

5)Fixed Deposit Loan: The Bank provides loan against fixed deposit. In fixed deposit loan
applicant takes loan against fixed deposit certificate. During this time
certificate will have lien under the bank. This loan is based on renewal
and any applicants invest his money in fixed deposit scheme with
different rate.
Limit: - Bank can give loan 75% of against fixed deposit.
Rate of Interest: Particular
Fixed Deposit
Loan

Interest rate

Rebate

Net rate

F.D. rate + 2%

--

F.D.rate+2%

(Table:7)
Margin: - Margin for fixed deposit loan is up to 25%.
Security: -Bank keeps fixed deposit certificate of borrower.
Requirement for Fixed Deposit loan: 1

All basic documents relevant to applicant. No need of guarantors.

Fixed deposit certificate of borrower.

6)Loan Against Government Security: The Varachha co-operative Bank provides also loan against government
security such as National Saving certificate, Kishan Vikash Patra etc. For
this loan, before making an advance on the securities of the NSC& KVP,
the bank should take an applicant in the prescribed form from the
borrower in whose name the certificate stand. This certificate should then
4

The Varachha Co-Op. Bank Ltd.

be sent to the concerned post office or the issuing authority for transfer to
the lending banks name. Banker should grant the advance after made on
the certificate or after new certificate.
Limit: -Bank gives advance up to 65% against the NSC/KVP certificate.
Rate of Interest: Particular

Interest rate

NSC/KVP Loan

13%
(Table:8)

Rebate

Net rate

--

13%

Margin: - Margin need for NSC/KVP loan is 35%.

Security: -Bank keeps NSC/KVP certificate of borrower.
Requirement for NSC/KVP loan: 1

All basic documents relevant to applicant. No need of guarantors.

NSC/KVP certificate of borrower.

7)Surety Loan: . The Varachha Co-operative Bank is issued this type of short-term loan.
Bank issuing loan with a few documents requirement for them
Limit: -Bank gives advance up to Rs. 30,000/-.
Rate of Interest: Particular

Interest rate

Rebate

Net rate

Surety Loan

14%

1%

13%

(Table:9)

Margin: - No need margin for Surety loan.

Security: - There is no need of any security.
Requirement for Surity loan: 1 All basic documents.

The Varachha Co-Op. Bank Ltd.

Employer must give present salary certificate, which is approved by

appointing organization.

Employer ought to two guarantors who work in same organization or

working under that organization and also necessary salary certificate
of two guarantors.

8)Gold Loan: Sometimes people need some financial help to meet their daily
requirements. In these circumstances the bank gives loan against the
pledge of their jewelry considering the value of the jewels. The bank
issued major part on gold because gold loan is safety one. Borrower has
no need to bring any guarantor.
Limit: - Loans sanctioned against the gold. So on the basis of gold
provide by applicant bank issued advance to him. Bank gives advance up
to 60% of gold value.
Rate of Interest:

Particular

Interest rate

Rebate

Net rate

Gold Loan

13%

--

13%

(Table:10)
Margin: - Margin need for Gold loan is 40%.

Security: - Loan provides against gold ornaments.

Requirement for Gold loan: 1 All basic documents and personnel information of applicant. No need
of guarantors.
1

As a security gold ornaments provide by applicant.

9)Self-employed Loan: This loan is given to the various self-employed people like doctors,
4

The Varachha Co-Op. Bank Ltd.

engineers, charted accountant, advocates, etc. This loan is provided for

starting their practices as well as to expansion the area of their business.
The bank is providing a loan to educated unemployed people for starting
their own business. Bank provides a loan amount of 70% required by
borrower.
Limit: -There is no limit for Self-employed loan.
Rate of Interest: -

Particular

Self-employed
loan

Interest rate
Up to 2 lacs.14%

Rebate

Net rate

1%

12%

2%

13%

Above 2 lacs.15%
(Table:11)

Margin: - Margin for this is 25% to 30%.

Security: - Bank gives loans against up to mortgage and hypothecation

provided by applicant
Requirement for Self-employed loan: 1 All basic documents and personnel information of applicant as well
as two guarantors.
1

Bank gives loan on the basis of certificate of degree.

Evident of shareholders.

10)Staff Loan: This loan is provided only to the staff members of the bank. This
loan is provide to staff members for meeting any financial needs, for any
social occasion in family and for purchasing any respective items such as
vehicle.
Limit: - Bank gives loan amount up to Rs 30,000/-.

The Varachha Co-Op. Bank Ltd.

Rate of Interest: Particular

Staff loan

Interest rate

Rebate

Net rate

--

6%

6%

(Table:12)

Margin: - No need of margin for Staff loan.

Security: - Bank needs salary slip of applicant required for staff loan.
Requirement for Staff loan: 1 One photocopy of applicant as well as two guarantors the work in the
bank.
1

Personnel information of applicant as well as two guarantors.

Submit the application form with salary slip.

The Varachha Co-Op. Bank Ltd.

Introduction:According to The Institute of Personnel Management ,

London , U.K. States that It is that part of management concerned
with people at work and with their relationship within an
organization. Its aim to bring together and develop into an effective
organization the men & women who make up an enterprise and
having regard for the well being of the individual and working
groups to enable them to make their best contribution to its
success.
In the HRM the recruitment , selection & induction , training &
development , promotion , wage & salary , personal records etc are
create an important role.

Recruitment and Selection:-

Meaning of Recruitment and Selection: Recruitment is generating of application or applicants for

specific positions through three common sources i.e., Advertisement,
state employment exchange agencies and present employees.
At present The Varachha Co-Op.Bank undertaking
Rationalization i.e. it selects candidates from inside the organization.
Therefore, there is no need to recruit or select more people from
outside the organization. But when there is any vacancy in the
organization, the selection process is as under:

The Varachha Co-Op. Bank Ltd.

If there is no applicant for that job in employment

exchange, they give advertisement in the newspaper.
o Interview
o Selection
o Induction
The Varachha Co-Op. Bank Ltd takes written test &
personal interview to recruit the employee.

The recruitment process

is handled by the Board of Directors. They recruit only post graduated

qualify persons and then give post to perform the duty.

Selection:Selection means the select the best applicant out of all the
application.
In The Varachha co-op Bank Ltd selection process are as follow.
A. Preliminary interview:
In this step bank can classified all the Qualified and unqualified
employee and decide which type employee are needed in our bank like skill,
knowledge, education experience etc. in this way bank decide the all
employees.
B. Application form :
In this stage bank can to print one form in this form. Bank
collect all the information about employees like
Identifying Information
Personnel Information
Physical Characteristics

The Varachha Co-Op. Bank Ltd.

Family Background
Education
Reference etc.
C. Selection Test:
In this step bank take some psychological test for checking
personnel mental level, some skill like intellectual etc. so by this test help
bank take selection test and select the employees.
D. Employment Interview:
In this step bank cover all the point which are not included in
application form selection test etc. bank give information about bank to
employees and take his personnel information or view about bank services.
E. Medical Examination:
The Varachha co-op. Bank Ltd. check physical feature of the
candidate and then can select them.
F. Reference Checks :
In this step bank can check the reference of candidate and
check which person or institution are known of candidate behavior then
decided other step.
G. Final Approval:
Banks sees all the above step very carefully then takes any
decision and selects the any candidate out of total application for job.

The Varachha Co-Op. Bank Ltd.

PLACEMENT:Placement means the assign any particular job of candidate for

doing it and approve him self.
The Varachha co-op. Bank Ltd. Take all the step for the select
good candidate then select good candidate.
After the select candidate give any task of candidate for
performed it.
In above way bank can placement of any candidate.

Training:Training means the changing of skill, knowledge, attitude or

social behavior towards the requirement of job and organization.
After selection and placement step organization give the
training of new candidate because new candidate are totally unknown of our
organization on so that person give the induction training.
So bank give the induction training and this training bank can
involve some point which are following.

Give history of bank.

Bank's ethics
Banks organization structure
Banks terms & conditions
Banks rules & regulations
4

The Varachha Co-Op. Bank Ltd.

Wages system
Discipline of the bank
Welfare facility
Health and safety measures
Job description etc.
In above way lot of information gives in the induction training
and can do support the new candidate for doing easy work with senior staff
member.
Promotion: The Varachha co-op. Bank gives promotion to their employees by
experiences, good efficiency with his work. The employees are entitled to
get promotion only when they have performed their service with good
respectable and with good efficiently.
Transfer:Transfer means that a literals shift passing movement of
individual from one position to another usually without
involving any marketed changed in duties , responsibilities ,
skills needed or compensation.
In the bank transfer must be given to employee, after 4, 6 and 8
month from one department to other department or one branch to
other branch. So that he can able to handle every department of bank.

Wages and Salary department:-

The Varachha Co-Op. Bank Ltd.

In the Varachha Co-operative bank wages and salary is given on

the basis of employee's designation such as manager, system officer,
officer, senior clerks, junior clerks and peons.
The Varachha Co-operative Bank give the wages according to
seniority of employees and give performance based . Bank gives the
monthly salary which are directly credited to the employees account before
the close of month.
The bank employee also given dearness allowance like
medical allowance, city allowance, house rent allowance etc. at the
rates which are decided in the meeting.

Personal records:

Name of employee
Local and Permanent address
Appointment of training
Detail about past
Previous employment
Qualification
Promotion
Awards
Accident Record
Disciplinary Record
Retirement
Photograph and Height, Sex, Marital Status, etc.

The Varachha Co-Op. Bank Ltd.

, Profit & Loss A/c

Particulars
No.
1
2
3
4
5
6
7
8
9
10
11
12

2006-07

Expenses
Deposit, Interest on borrowing
Salary Allowance, P.F. etc.
Director Fee
Tax, Rent, Insurance
Legal Fee
Postage, Telephone Expenses
Audit Fee
Depreciation Fund
Stationary, Printing,

8,62,48,917-27
1,31,01,168-00

7,35,66,402-00
1,61,86,090-50

23,04,459-00
48,876-50
5,60,838-84
3,10,161-00
64,93,453-00

27,22,634-42
84,309-00
8,98,622-60
3,02,000-00
80,11,492-00
14,38,804-19

13,67,217-45

Advertisement
Other Expenses
Income tax
Net Profit
Total

No.
Income
1 Interest and Discount
2 Commission
3 Other Receipt
Total

2007-08

2,85,97,584-12
1,00,63,652-00
1,51,26,133-99
16,42,17,461-17

4,60,30,349-24
1,01,08,861-00
2,81,43,605-51
18,74,93,170-46

14,63,05,886-94
1,18,64,871-87
60,46,702-36
16,42,17,461-17

16,53,54,038-50
1,16,06,492-41
1,05,32,639-55
18,74,93,170-46

The Varachha Co-Op. Bank Ltd.

Balance Sheet
Particular

No.
1
2
3

4
5
6
7
8
9
10

No.
1
2
3
4
5

6
7
8
9

2007

2008

4,31,21,300
7,64,17,763

4,62,56,500
8,07,73,220

48,89,96,977
55,52,52,307
41,35,98,028
44,55,342
85,42,287

47,50,22,327
64,83,92,996
42,59,64,682
49,95,685

Liability
Share capital
Reserve fund
Deposit:
- Fixed Deposit
- Saving Deposit
- Current Deposit
Borrowing
Bills for collection
Branch adjustment
Interest Overdue
Interest payable
Other liability
Profit and Loss A/c
Total:

2,92,40,161
17,38,10,610
3,79,40,559
1,51,26,133
2,09,04,20,275

3,70,55,434
13,33,05,712
2,92,19,117
2,81,43,605
2,17,73,65,159

8,13,02,320
29,26,84,686
83,50,55,100

8,60,57,978
30,60,35,495
83,50,55,100

26,83,26,606
44,14,32,206
2,27,98,434
4,77,91,227
85,42,278

30,18,64,313
42,59,04,238
7,45,17,012
5,68,08,509
49,95,685

Assets
Cash
Bank
Call & Short time Invt.
Investment
Loans and Advances
- Short term
- Moderate term
- Long term
Interest receivable
Bills for collection
Branch adjustment
Building premises

2,43,11,532
5

2,15,48,737

The Varachha Co-Op. Bank Ltd.

10
11

Furniture & Fixture

Other Asset
Total:

1,18,00,825
6,57,75,451
2,09,04,20,275

1,03,07,811
5,42,70,286
2,17,73,65,159

A Ratio is only a comparison of the numerator with the denominator.

The term ratio refers to the numerical or quantitative relationship between
two figures, and obtained by dividing the former by the latter. Ratios are
designed to show how one number is related to another. It is worked out by
dividing one number by another.
Ratio analysis is an important and age old technique of financial
analysis. Ratios are relative form of financial data and very useful technique
to cheque upon the efficiency of firm. Some ratios indicate trend or progress
or downfall of the firm.
Limitation:
Ratio analysis a widely used tool of financial analysis, it is because
ratios are simple and easy to understand. But they must be used very
carefully. They suffer from various limitations:
Comparisons are made difficult due to differences in definitions of
various financial terms lack of standard formula for working out ratios
makes it difficult to compare them.
Ratio analysis is based on financial statement which is themselves
subject to limitation. Thus, ratios calculated on the figures given in
financial statement.

The Varachha Co-Op. Bank Ltd.

It is very difficult to ascertain the standard ratio in order to make

proper comparison, because it differs from firm to firm.
Due to changes in price level of various years, comparison of ratios of
such years cannot give correct conclusion.
A single ratio would not be able to convey any thing. Ratios can be
useful only when they are computed in a sufficient large number. If
too many ratios are calculated, they are likely to confuse instead of
revealing meaningful conclusions.

CURRENT RATIO:
Current Ratio =

Current Assets
Current Liabilities

Particulars
Current Asset
Cash
Bank
Advance
Other Asset
Bills Receivable
Interest
Total

2007

2008

81302320
292684686
268326601
56374593
8542278
47791227
704311705

86057978
306035495
301864313
54270286
4995685
56808509
810032266

Current Liability
Bills Payable
Interest Payable
Saving Deposit
Current Deposit
Interest Overdue
Other Liability
Total

8542287
173810610
555252307
413598028
29240161
28540154
1208983547

4995685
13305712
648392996
425964682
37055434
29219117
1278933626

The Varachha Co-Op. Bank Ltd.

Current Asset Ratio :

=

704311705
1208983547
1.10 : 1

810032266
1278933626
1.12 : 1

Interpretation:
An ideal current ratio is 2:1. The ratio 2:1 is considered as a safe
margin of solvency due to the fact that if the current assets are reduced to
half i.e. 1 instead of 2 then the creditors will be able to get their payments in
full.
Here, it shows that the bank has been always between 1:10:1-1:12:1
which is quite satisfactory but can be improved by better turnover and profit
and also by decreasing liabilities.

Cash Position Ratio:

Cash Position Ratio

Cash + Marketable Securities

Current Liabilities

The Varachha Co-Op. Bank Ltd.

Particulars
Cash
Marketable Securities
Total

2007
81302320
292684868
373987188

2008
86057978
306035495
392093473

Current Liabilities

1208983547

1278933626

Cash Position Ratio:

=

373987188
1208983547
0.31:1

392093473
1278933626
0.32:1

Interpretation:
In cash position ratio 0.75:1 ratio is recommended to ensure liquidity.
This test is more rigorous measure of a firms liquidity position. If the ratio
1:1 then the firm has enough cash on hand to meet all current liabilities.
In this ratio 1:1 is satisfactory result. In 2002 to 2003 in all years ratio
is lower then 0.75:1.

The Varachha Co-Op. Bank Ltd.

In this ratio 2002 to 2003 cash is increase in 2003 and market

securities also increase.

PROPRIETARY RATIO:

Proprietary Ratio

Shareholders Fund
Total Asset

Particulars
Shareholders Fund
Capital
Reserve
Subsidiary Fund
P&L Account
Total

2007

2008

43121300
76417763
15126133
171543896

46256500
80773220
28143605
18816825

Total Asset

2090420275

2177365159

Proprietary Ratio:

171543896
2090420275
=
0.12:1

18816825
2177365159
=
0.16:1

The Varachha Co-Op. Bank Ltd.

Interpretation:
This ratio shows the general strength of the company. It is very
important to creditors as it helps them to find out the proportion of
shareholders funds in the total assets used in the business. In this ratio is
always down from the good position and low ratio indicate greater risk to
creditors. A ratio below 50% may be alarming for the creditors and heavily
lose for company and its account is liquidation.

DEBT EQUITY RATIO:

Debt Equity Ratio

Particulars

Long Term Debt

Shareholders Fund

2007
5

2008

The Varachha Co-Op. Bank Ltd.

Long Term Debt

Fixed Deposit
Other Borrowing
Total

488996977
4455342
49452319

475022327
475022327

Shareholders Fund

25433747

182473686

Debt Equity Ratio:

49452319
25433747

475022327
182473686

3.82

2.61

The Varachha Co-Op. Bank Ltd.

Interpretation:
In this ratio, it is decrease from 2002 to 2003. It means that the ratio is
low debt equity ratio implies a greater than creditors from the point of view
of creditors, it represent a satisfactory capital structure of the bank. Since a
high proportion of equity provides a larger margin of safety for them.
It indicates the margin of safety to long term creditors. A high ratio
shows the claim of creditors is greater than those of owners.
NET PROFIT RATIO:

Net Profit Ratio

Net Profit X
Net Sales

100

Particulars
Net Sales
Interest Receivable
Commission
Total

2007

2008

47791227
11864872
59656099

56808509
11606492
68415001

Net Profit

15126133

28143605

Net Profit Ratio:

59656099
15126133
24.23%

68415001
28143605
=
22.55%

The Varachha Co-Op. Bank Ltd.

Interpretation:
In the net profit ratio, higher ratio of net operating profit to sales better
is the operational efficiency of the concern. It is very useful to proprietary. It
is an index of efficiency and profitability when used with net profit ratio and
operating ratio.
In this ratio, in 2002, 24.23% and 2003 decrease in 2003, 22.55%. It is
more useful for the further condition of the firm.
CAPITAL TURNOVER RATIO:
Ratio

Particular
Net Sales
Capital Employed
Equity
Reserves
Total
Return on Asset =

Net Profit
Capital Employed
2007
15126133

2008
28143605

80000000
76417763
156417763

80000000
172655919
160773220

15126133
15617763
= 1.45%

28143605
160773220
= 1.02%
6

The Varachha Co-Op. Bank Ltd.

Interpretation:
In this ratio no sale that is income (interest + commission).
Income is increase in two years but capital employed is also increase in last
two year. Capital employed is increase in one and half time income. The
ratio ration of 2002 is high but low in 2003 that means expense is very high
and income is less and it becomes lower the ratio profit for the firm

The Varachha Co-Op. Bank Ltd.

During the project work two months at Varachha co-operative

bank, I find out some strength, weaknesses, opportunities and threats by
SWOT analysis are as under:
Strength:Customer segmented, trained staff and

effective implementation of Customer Relationship Management and

Quality Management System.
In the uneducated area of Varachha bank is

the bless for uneducated people by friendly advice and better services
and really it yield lumsum amount of profit and deposits.
Varachha bank got award of excellence of

the best co-operative bank in Surat city. It shows the best banking
operation.
Weakness:-

The Varachha Co-Op. Bank Ltd.

Rules for deposits and loans are very strict

opening deposit is high and they require perfect documents, it can be

reduced for slow inflow of deposits.
In recent competitive era, Varachha bank is not

providing some modern facilities like ATM service, debit card credit
card.
There are lack of linking performance and

1
reward.
Opportunities:-

In coming soon, varachha co-operative bank

launches three branches at citilight, adajan and sachin. Its great

opportunity to cover most power area of Surat.
because of continues growth strategy, it build

good image among the customers and public and reliance on varachha
co-operative bank, so it has opportunity to prove the proved growth
pulls growth
Threats :1

There are strict rules and deposit for opening

saving or current account is high in compare to other co-operative
banks, so it can create bad image among customers and public and it
can be limitation for slow inflow of opening account.

The Varachha Co-Op. Bank Ltd.

In the modern era, varachha bank is not

providing ATM facility, internet banking and also credit and debit
card, so it can be dangerous threats for varachha bank.

The Varachha Co-operative Bank is required to increase its

network.
The Varachha Co-operative Bank is required to open his branches
out of city.
Bank is needed to provide ATM facility for his account holder, so
the account holder can easily receive money from his account.

The Varachha Co-Op. Bank Ltd.

The Varachha co-op.bank Ltd. is completing 14 years. During this period

bank achieved much progressive stage. This bank has a head office and other
six branches. At this way its branches are spreading in different area of Surat
city.
In last six year survey we find that the reputation of the bank is very
good among their customer. The bank also provides a new scheme of ANY
BRANCH BANKING in this scheme most of person are agree with the
scheme and also want to join the bank and save their money.

The Varachha Co-Op. Bank Ltd.

Management Accounting
o RSN Pillai & Bhagavati
(S. Chand)
Banking & Insurance
o N. D. Gami
o Sunil H. Rajani
(New Popular Prakashan )
Annual Reports of the Bank

The Varachha Co-Op. Bank Ltd.