Está en la página 1de 15

1

Resume For Ph.D. Thesis in the Faculty of Commerce (Business


Management)
of Dr. Babasaheb Ambedkar Marathwada University, Aurangabad

A Study of Finances of Urban Cooperative Banks in


Maharashtra with special reference to Cost,
Profitability and Utility during the Era of Globalization

Name of Candidate :- Smt. Madhulika Shahoo


(M)9763497686
020-20270405
Qualifying Degree B.Com-I Class
for Ph.D. M.Com-I Class
Registration

Name of Guide :- Dr. Dilipkumar Patil,


B.Sc., B.Sc. (Tech), M.B.A., Ph.D.
Director and Professor
Dr. D.Y.Patil Centre for Management
and Research, Chikhali,
Pune.412114
(M) 9860407381
Faculty :- Commerce ( Business Management )

Date of Registration :- June , 2009


& Fee Receipt No. To be completed on + December
2011

Dr. Dilipkumar Patil Smt. Madhulika


Shahoo
Guide Research Student
2

Content
 Rationale Behind the Study
 Major Challenges before the UCB:

 Objectives of Thesis
 Hypothesis
 Research Methodology:
Survey of Literature

Experience Survey

Descriptive method

 Reference Period & Scope of Research

 Chapter Scheme (Tentative )

Rationale behind the Study


3

Co-operative movement was founded in England in 1793, when


the ethics of co-operation were foremost propagated by Robert Owen,
a poor Welshman, who is called as the “Father of Modern Co-operative
Movement” The co-operative movement was first occurrence in
England. The commencement of co-operation was on 24th October,
1844, when the Rochdale Pioneers established the first consumers’ co-
operative store under the name of “Rochdale Equitable Pioneers
Society” at Rochdale near Manchester so that the flannel weavers of
Rochdale secure their household requisites at wholesale price to get
rid of from exploitation by the retailers. On historian of Co-operative
ideas, G. Mladenat has classified co-operatives into three main
groupings or systems. These three systems are the Rochdale System,
The Raiffeisen System and Schulze’ -Delitzsch System. These three
systems were adapted to the needs of particular social categories i.e.
Consumers, farmers, and independent artisans or traders.Mr. Schulze
founded his first loan society in 1850 to provide cheaper credit to the
artisans in the cities and to inculcate the habit of thrift among them.
Thus, there came into existence the first urban credit society in the
world.

The idea of co-operation or interdependence in India is not


entirely “a new device". However, the use of the word in the modern
sense is not native to the country. Co-operation in India has been
evolved since time immemorial. Our Vedas, Upanishadas, and
Bhagawat Purana have fully described to co-operative existence. In
Vedas, prayers have been made to the Almighty God to give the
human being power and desire to work together, to live together and
to think together. In Bhagawat Purana, individual ownership is
permitted only to the extent of requirement of food. The Arthashastra
of Kautilya also mentioned the co-operatives. Even a close study of our
present day village life in any part of the country convinces the deep-
rooted spirit of co-operation permeating all socio-economic activities

The Co-operative Credit Movement in India, in the former sense


is a State sponsored movement. The movement in progress to set
frees the farmers from i.) clutches of moneylenders, ii) to eradicate
poverty and to iii) provide credit to agriculture sector. Government of
India under British Rule had entrusted this task to Sir Fredrick
Nicholson in 1892. He studied the theory and practice of agricultural
land banks in Germany, Egypt and Europe and reported, “Every village
must find Raiffeisen”. In his two exhaustive Reports (1897 and 1899)
he recommended starting of credit co-operative societies in Indian
villages. The Famine Commission of 1898 also strongly advocated the
thought of co-operation for Indian agriculturist. At the same time Mr.
4

Dupernex of Indian Civil Service in UP., published a book named


“People’s Bank for Northern India”.

The above milieu, briefs a root of corporatism in the human


history, especially Indian leaning. The cooperative banking along with
other types of cooperatives ,later on strengthens the cooperative
spirit .Co-operative banking is one of the most important economic
systems, run on self-governing lines to attain economic escalation with
social and economic egalitarianism both agro- rural and industrial
-urban sectors and people in them. In fact, urban people with a small
means are unable to offer any tangible security other than their own
personal security. They do not satisfy the standards followed by the
commercial banks, thus they do not get adequate credit. Thus, urban
people have obtained credit from moneylenders. The circumstances
needed an agency, which will provide cheaper and adequate credit to
extricate the urban people with a limited means from the clutches of
the usurers. From the inception of the planning era in the country, the
thrust of the government policy has been the development of
agricultural and allied activities as, initially, the rural areas deserved
urgent attention than the urban areas. Nevertheless, ameliorative
programmes concerning the urban lower middle and poor classes
could not receive due attention up to the First Five Year Plan.
Therefore, a large number of urban and semi-urban people were left
without any institutional finance agency.

The need for the provision of credit facilities to town-dwellers


was as much urgent as it was in villages in order to combat usury. Joint
stock banks were not interested in developing the business of small
loans, because the cost of advancing and recovering them was high.
Further, as joint stock banks were not likely to have under ordinary
circumstances full and intimate knowledge of the standing and
resources of persons of moderate means, they would not advance
loans on personal security. Ultimately, number of persons with small
means, residing in urban and semi-urban area like small traders,
artisans, townsmen, factory workers, servicemen, hawkers, feriwalas,
cottage workers, small industrialists, professionals, self-employed
persons, petty shopkeepers, retailers, etc. require credit for their
productive and consumption needs. This has given a rise to the
movement of developing urban cooperative banking for the use of
urban dwellers.

Although the urban co-operative banks operate under the


purview of Banking Regulation Act, they are philosophically quite
different from the Commercial Banks. They are smaller, their area of
operation is limited, and they have limited but particular and
committed clientele. The urban co-operative banks have less of "Walk-
5

in" customers. The deposit base of them generally does include


corporate and large institutional funds. The urban co-operative banks
being the co-operative institutions, they are abiding to follow the co-
operative principles and values (i.e. open and voluntary membership,
democratic management, equitable distribution of surplus, limited
interest on capital, co-operative education, co-operation among co-
operatives and concern for the community etc.) Considering the role,
importance and responsibility of urban co-operative banks, they must
be viable, productive and operationally efficient enough in performing
their socio-economic responsibility in an effective manner.

Looking to importance of Urban Cooperative Banks, it is decided


to concentrate the study on the Finances of Urban Cooperative banks
in Maharashtra with special reference to Cost, Profitability and Utility
during the Era Globalization. The Globalised economy has made
tremendous impact on various banking systems, including urban
cooperative banking

Under the diverse settings, the various experts, working groups


and committees with the help of financial parameters in general and
priority sector lending in particular, continuously do the financial
appraisal of commercial banks and urban cooperative banks. As
consequences, their financial performance appraisal has remained un-
masked and largely known to the banking community, users of their
services and Government. However, the qualitative information was
largely not given satisfactory treatment in the analysis based on the
financial statement especially focusing cost, profitability and utility. In
view of this, it is decided to explore not only the finances of these
banks but also more detection of qualitative facts under the caption as
“A Study of Finances of Urban Cooperative Banks in Maharashtra with
special reference to Cost, Profitability and Utility during the Era of
Globalization “. The study first time after 2000, covers the whole of
Maharashtra and will focus on the various financial parameters of UCBs
in globalised economy.

There are various types of criterion to evaluate the performance


of any financial Institution including a bank. One of the important
criterion's for judging the efficiency of any business enterprise is its
profitability. However, there is a considerable difference of opinion to
yardstick by which the performance and efficiency of the banks and
particularly of co-operative banks may be assessed. The echelon of
deposits, the height of advances, the level of population covered by
rendering banking services, growth of membership, numbers of
beneficiaries particularly of weaker section etc., may be the measures
of performance of co-operative bank to make the real assessment.
6

The urban co-operative banks are working under the purview of co-
operatives, and hence the level of co-operative principles followed and
services rendered by the banks to their members may judge their
performance or efficiency. In spite of these numerous yardsticks used
in performance appraisal, the focal objectives set for thesis were to
assess the various facts, which are instrumental for fund procurement
and its productive/ efficient utilization by UCBs

Major Challenges before the UCB:


• The scenario of lowered spreads continued. Banking became
synonymous with technology. It was observed that all
technology driven banks were comfortable with lower spreads
but were offering a whole gamut of technology driven services
which could earn them fees.

• It is gradually becoming inescapable to utilize ATMs as a


distribution channel in a drive to come still closer to the
customers.

• Indian Banking is moving from being largely domestic to a truly


international one. Indian Banking costs are very high as
compared to other countries and this can be offset only if the
loom to economies of scale is adopted. Owing to this factor
Indian Banking saw mergers occurring, not the acquisition of
weak by the strong, but mergers between equals (HDFC Bank
and Times Bank) (ICICI Bank & Bank of Madura).

• Due to slackness in Industrial Sector and major industrial houses


going directly to the market, the portfolio of industrial advances
showed reduction and the overdue in industrial advances showed
increase. This also has necessitated a conscious shift in portfolio
from industry to service sector.

• Few UCBs have geared itself well for facing all these challenges.
With better-personalized customer service, efforts were made to
increase business by volumes. Owing to depressing industrial
growth, the emphasis was given on retail credit. Other areas
attracting instantaneous attention are:

(i) Low cost of Funds.


(ii) Implementation of total Bank Computerization in an
intense
7

(iii) Better Human Resource Management


(iv) Introduction of innovative services and products.
(v) Attainment towards Optimum Firm principles in
banking
(vi) Public VS private Good
(vii) Customers/Borrowers/Depositors Satisfaction
(viii) Internal, External and General Public/Govt. Controls

There are so many factors that determine the characteristics,


nature, scope and extent of Managerial Aspects Each factor
influences in its own way.. However, in this thesis some of the
significant factors having concern to management will be covered.
The same are as below

(i) Nature and Size of Business


(ii) Disbursement and Recovery Cycle (DRC)
(iii) Business Fluctuation
(iv) Loaning Policy
(v) Credit Policy
(vi) Availability of Credit
(vii) Growth and Expansion Activities
(viii) Profit Margin and Profit Appropriation
(ix) Price Level Changes
(x) Operating Efficiency
(xi) General Type of Business:
(xii) Size of the Business Unit financed or to be financed:
(xiii) Terms of borrowings and loan disbursement:
(xiv) NPAs and Scale of loan recoveries:
(xv) Process of loan disbursement and services provided:
(xvi) Importance of Political/cooperative workers:
(xviii) Cash Requirements:
(xix) Seasonal Variations:
(xx) Banking Connections:
(xxi) Growth and Expansion

In the perceptive of above intelligence, the following objectives are


frame for the thesis
8

Objectives of Thesis

Based on the previous discussion, the objectives of the thesis are set
as ahead

1. To bring to light through the survey of literature the views of


the various authors and committees on the topic selected for
the thesis
2. To Analysis the Assets, Liabilities, Profits, Losses, and
performances
3. To Evaluate Procurement and utilization of funds , their
social and economic utility and Customers Satisfaction

4. To Evaluate the role of UCB management in managing the


factors of production under the globalised settings

5. To assess the gravity of NPAs, Depositors’ security and the


interference by political leadership while managing the
banking business

6. To suggest a model for the best management of UCB business

Hypothesis

i. The Management of UCBs are problematic due to selfish motives


of the founder, directors and promoters

ii. Very few UCBs exhibit rational performance supported by profits


with minimum NPAs
9

iii. The depositors’ security is least considered by the bank


management

iv. An absence of MIS cripples the managerial decisions and


administration

Scope of Study
It covers the whole of the Maharashtra and based on the annual
reports of the UCBs and sampled/experience survey of the
respondents from the ten selected UCBs from the State of Maharashtra
. The key financial parameters given by the table no. 1 to 3 provide the
vision pertains to the range of the research work to be undertaken

Research Methodology:
The same consists of exploratory and descriptive types as given
ahead:
(i)Survey of Literature
This will be undertaken through the following sources:
a) Annual Reports, Audit Reports, other Documents and record of
UCBs.
b) Legal provisions relating to Cooperative Banking
c) Newspapers and magazines having concern with Cooperative
Banking.
d) Books, pamphlets, brochures, etc. relating to Cooperative
Development.
e) Reports on Cooperative Banking prepared by Government and
private bodies or individuals.
f) Office record of Cooperative Department
In order to get the above study material, the offices of
Government and various university Libraries will be visited for the
necessary information.

(ii)Experience Survey
There is a need to collect experiences of the people who are
directly or indirectly have concern to the subject selected for thesis.
Because of this need, UCBs Offices- Managers, / Directors / customers,
Government officers, etc. will be contacted for collecting the
information about working of UCBs. All these persons or authorities are
10

or were either working or


controlling/supervising/coordinating/participating the business of UCBs.

While selecting the respondents for interview, the care will be


taken to select only those who possessed a competence, relevant
experience and ability to communicate. Some respondents will be
contacted at their homes. Prior to get in touch with them, they will be
provided with the information about the objectives of the research
study. The respondents to be selected for interviewing will be from the
different classes or from the different social status. Efforts were made
to ensure an appropriate representations of the different types of
experiences, including the respondents from all categories i.e.
Managers, Bank Inspectors, customers, leaders etc. During the course
of interviewing, each respondent will be asked only the relevant
questions; having due regard to his relation with the Bank Business.

The number of persons to be contacted for enquiry will be kept


different for different purposes. For example, the queries about
motivation will be made with about dozen numbers of Bank workers or
borrowers. The queries about the role of Government in Banking
development will be made with about two or three officers, working in
the UCB.

The experience survey provides in-depth vision about the various


problems and dimensions of UCB business environment that exists and
also provides vision over the matters of employees & customers
having direct concern to Banks. Another advantage of experience
survey is that it facilitates the suitable formulation of questionnaire for
descriptive study method.

(iii) Descriptive method

The Survey of literature and the experience survey provide vision


over the problem selected for the study. It focuses attention on past
and highlights recent development in the selected research problem.
Descriptive research, in contrast, is present oriented; it describes and
interprets what exists at present. It is primarily concerned with the
relationship or conditions that exist, practices that prevail, beliefs,
point of views or attitudes that are held, processes that are going on,
effects that are being felt or trends that are developing. It is realized
that some data/information required resolving the Ph.D. research
problems did not exist. However, the setting or environment in which
those data could be generated did exist. Hence, the descriptive
approach is used to go to these setting i.e. employees, customers and
related environment, to manage appropriate data collection and to
11

analyze and interpret the same. Under this method of research,


sampled number of customers, officers & employees will be selected
by using appropriate sampling technique. The explanation of which will
be made at the necessary places of the thesis draft, depending upon
the objectives of the Chapters in the thesis.
However, the total 10 UCBs from the Maharashtra will be selected by
using the Judgment Sampling technique. Under this judgment, the
weight age will e given to the large size of working capital and tempo
of economic/regional development of the district in which the UCB
function.

Reference Period & Scope of Research


The year 2009 and five years preceding to that will be the
reference period for study; while geographical scope of the thesis for
micro analysis is limited to the Pune City, every efforts will be made to
relate the scope to the State and National Level in order to
substantiate the micro variables/analysis.

Chapter Scheme (Tentative)

1. The Survey of literature and views of Experts having concern to


the objectives set for thesis
2. Analysis the Assets, Liabilities, Profits, Losses, and performances

3. Procurement and utilization of funds , their social and economic


utility and Customers Satisfaction
4. Role of UCB management in managing the factors of
production under the globalised settings

5. Gravity of NPAs, Depositors’ security and the interference by


political leadership

6. A model for the best management of UCB business

7. Conclusions, suggestions and recommendations


12

Table No.:. 1
Deposit & credit of all Semi Urban Banks
In Maharashtra State (Rs. In Crores)

Semi Urban
Sr. Year Deposit Credits
No. s
(1) (2) (3) (4)

1. 1971 N.A. N.A.


2. 1976 266.33 132.02
3. 1981 713.56 383.55
4. 1986 1190.2 669.06
3
5. 1991 2347.3 1354.43
8
6. 1996 4959.3 2408.91
13

2
7. 1997 5667.9 2344.08
8
8. 1998 6501.6 2638.55
1
9. 1999 7535.9 3088.63
9
10. 2000 8815.2 3649.93
5
11. 2001 10033. 4137.97
74
12. 2002-05 10911. 4567.24
triennial 60
average
Source : Economic Survey Of Maharashtra 2002-03.(MS)
Note: - Details may not add up to totals due to rounding

Table No.: 2
Deposit & credit of all Urban / Metropolitan Banks
in Maharashtra State( Rs. In crores)

Semi Urban
Sr. Year Deposits Credits
No.
(1) (2) (3) (4)

1. 1971 N.A. N.A.


2. 1976 2904.43 2396.16
3. 1981 6568.26 5320.98
4. 1986 15550.08 13872.7
9
5. 1991 36181.44 26935.5
14

2
6. 1996 82416.66 61059.3
5
7. 1997 94380.49 64209.8
7
8. 1998 110969.3 76912.4
8 6
9. 1999 120609.5 90031.1
2 9
10. 2000 135705.4 120595.
1 82
11. 2001 159198.9 134339.
0 88
12. 2002- 216620.0 207032.
05 9 17
trienni
al
averag
e
Source: Economic Survey Of Maharashtra 2002-03.(MS)
Note: - Details may not add up to totals due to rounding

Table No.:3

Deposit & credit of all Types of Banks in Maharashtra State


As per capita Incidence (Rs.. in crores)

Sr. Year Total Total Per Per


No. Deposits Credits capita capita
deposits credits
(in Rs.) (in Rs.)
(1) (2) (3) (4) (5) (6)
15

1. 1971 1460.06 1291.20 290 256


2. 1976 3249.29 2587.04 582 464
3. 1981 7590.33 5930.72 1204 940
4. 1986 17503.89 15125.30 2498 2159
5. 1991 40229.58 29646.85 5344 3580
6. 1996 90661.62 65513.19 10369 7493
7. 1997 103919.3 69,100.5 11,773 7,828
1 2
8. 1998 1,21,827. 82,338.3 13,626 9,209
22 5
9. 1999 1,33,246. 96,261.9 14,731 10,642
20 5
10. 2000 1,50,501. 1,28,355. 16,461 14,039
71 72
11. 2001 1,76,001. 1,43,506. 18,106 14,763
33 59
12. 2002 2002-05 2,18,448. 23,667 22,008
triennial 32
average
Source: Economic Survey Of Maharashtra 2002-03.(MS)
Note: - Details may not add up to totals due to rounding

Dr. Dilipkumar Patil Smt. Madhulika


Shahoo
Guide Research Student
Rs. 200000 + 30000 Patil
Paid 10,000 (12/6/2009)

Paid 30,000 (11/10/2009)

Paid 20,000 (14/11/2010)

También podría gustarte